Wednesday, May 30, 2007

Incubators That Incubate Incubators, Part II

[The below is an email written this morning by my brother who has always been very insightful when it comes to Internet and business trends. He wrote the email to a number of friends and colleagues.]

Hello. Hope you're doing well. It's me again and unfortunately, I am here today to rain on your parades, your fantasies, your business models, or your investment portfolios once again. It's happening again and so I will put up or shut up as several of you said I must back in March of 2000.

First a little history........In the lead up to March 2000, I saw a proliferation of signs that the end was nigh for web 1.0. Though painfully obvious at the time, hallucinations of the mass variety can exert quite a strong hold on one's faculties - my RealNames IPO net-worth mental masturbation calculator stands as a testament to that fact. As the Launch-Party summer of 1999 became the Fall of RealNames withdrawn S-1 registration, I knew it was over and began to search for the perfect contra-indicator that would become that final stake in the ground upon which one could sell short the entire Nasdaq with impunity. To those of you copied on this email who were actively discussing tech stocks with me back then, you will remember those days well. To those of you who were not, welcome to Incubators that incubate Incubators, Part II.

One month before the march of 2000 Nasdaq crash I made an offhand, grabass comment to the effect that we'd know the top when a venture capital firm would fund an Incubator that would incubate other incubators, which in turn would incubate web start ups. I was really just talking trash as the idea was clearly too stupid for even the worst venture firm.

Fortunately, about two weeks before the crash, Bill Romans (who is once again a recipient of my usual blather via this email) sent me an email with a link to a CNET story describing just such an incubator that incubated other incubators, which in turn would incubate web start ups.

So that's the history. So why do I bring this up today? Well, for those of you who haven't noticed, web 2.0 has gotten pretty nuts again. Silly people, doing silly "socially-conscious" social networks. All sorts of crap. And to be honest, its really quite embarrassing. Lately i've found myself laughing at start-ups more than I ever have before. The names of these things.... I mean every time I read Arrington's site I see names that sound as if they were made up by my 2 year old son's play group. Its funny and sad at the same time.

So I'm reading the SF Chronicle this morning (which by the way, is seriously the world's worst newspaper) only because I can't read the web while I'm taking my morning doompha. And there it is - its happening all over again:

I've got to take my daughter to school now so I'm going to let you all read this article first before I explain why James Currier and his Ooga Labs*is 2007's version of the flashing "Danger Will Robinson, Danger!" signal that we got in March of 2000 with incubators that incubate incubators, which in turn would incubate web start ups.

Talk to you soon,


p.s. and if you think I'm wrong, please tell me why.

* I have not looked up the names of the VCs who funded Ooga Labs, so apologies to any and all who may have funded this turd.

[CZ May 2009 post-script: here's the 'Incubators that Incubate Incubators' article that covered this insanity.]


Blogger DavidZHawk said...

Great post Chris (er, Chris' brother).

In Bubble 1.0, the key to a successful dot-bomb was having a great looking logo.

In Bubble 2.0, it's having a non-sensical name, like twitter, flickr, or ooga.

The good news for you is that start-ups with lots of funding always want to spend lots of money on service providers, such as eFrontier. It's like selling Levis to 49ers!

1:40 PM

Blogger Trevor Parscal said...

I met with the self-proclaimed "talent czar" Jon Wong at Ooga Labs recently about a developer position and something was odd about that place. As my wife and I discussed my feelings on the matter, we decided to type "ooga labs scam" into Google. There were lots of blogs and articles which exposed Ooga for what they really are, including this one. And to each of these articles, the CEO of the debatably 100 million dollar company found the time to not only find the articles, but read them, and then answer personally in a long-winded and highly defensive manner. So don't be surprised when the CEO leaves you a message here too.

The key thing here is that in our meeting I asked the burning question, "So, you plan to keep these companies and run them, or just sell them?". His response was that they play games with teasing release dates and use "viral" techniques to generate interest in the projects (like GoodTree or MedPedia) so that they can be sold, and Ooga can focus on the next new thing.

In reading responses to this article from Eddie Nguyen of Ooga Labs, he says "The goal is not to sell this company, that’s why we’re not taking venture capital investment into GoodTree or Ooga. Our goal with GoodTree is to change how money is directed to social causes we all care about and run it for a long time."

So what's the real story? They are without a doubt an incubator of incubators.

I loved your article, I would like to hear more from you on the subject.

11:00 PM


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