I honestly don’t get all the buzz about Gmail, Google’s new email service. I took a look at it today to see what the the big deal was.

It’s got a few features which are marginally better than other webmail services, but not too many and not massively better. The free storage is not a big issue for most users, although it may cause a few power users to switch over. The most interesting feature in my mind is the ability to use Google Search on your own email file, which is very useful.

All in all, it’s a good product, but all these people talking about how 30mm people are going to switch over to it must be seeing something I don’t. My prediction (and I’ll happily and publicly acknowledge defeat if I am misreading this) is that they will get a few million new users initially, many for a second or third address as opposed to their primary address, and that many of them won’t stick with it to become active users over a longer period of time. After that, they’ll grow at the same rate, with the same type of characteristics, as Yahoo, Hotmail, and other webmail providers.

Email and email addresses, unlike search engines, are pretty sticky things.

How to Negotiate a Term Sheet with a VC, Part III

Brad has kicked off his blogging year with a a good new post on VC valuations.  It’s along the lines of the ones he, Fred, and I have written over the past six months and has the wonderful line in it:

If you are negotiating a deal and an investor is digging his or her feet in on a provision that doesn’t affect the economics or control, they are probably blowing smoke, rather than elucidating substance.

Happy New Year!

Gmail – I Don’t Get It, Part II

Back in June, I blogged about Google’s new Gmail service, how I didn’t understand the fuss, and how its features would ultimately be replicated and true usership stalled at a couple million.  I stand by those assertions (just look at what Yahoo, Hotmail, and Lookout have done to the landscape since then), but my company Return Path published some data today that’s interesting on this topic.

We run the largest Email Forwarding and Email Change of Address service around, so our data on email switching is pretty solid — we’ve had about 16 million consumers register a change of email with us in total, and about 25,000 new ones come in every single day to report a new ISP.  So our numbers are probably pretty good relative to each other (ISP to ISP or month to month at the same ISP), but they’re certainly not meant to be correct on an absolute basis.

– In July, we saw 375 people join Gmail, in August, 802, and in September, 2,396.  To put these numbers in context, we see 50,000-100,000 new users every month at Hotmail  and Yahoo, and even 5,000-15,000 new users every month at smaller ISPs like AOL, Earthlink, Comcast, and Roadrunner.  These numbers are obviously on the rise, but they’re still pretty small.  In all fairness, though, G-mail is still invitation-only, at least in theory.

– Gmail is mainly stealing share from Hotmail and Yahoo, twice as rapidly from Hotmail as from Yahoo — and twice as rapidly from Yahoo as from AOL.

Read the full article in eMarketer here.

After I saw the article this morning, I asked my colleagues Jack Sinclair and Jennifer Wilson to tell me how many people we saw leaving Gmail every month, an interesting metric to offset the one most people are interested in covering.  The answer at this point is also revealing.  While we recorded 2,396 new Gmail users in September, we also recorded 741 people leaving Gmail in the same month.   That’s a sign to me that a lot of people are trying it out to see what the buzz is all about, but many are quickly switching back after a little experimentation.

And yes, we also took a look at how many people are leaving Yahoo, Hotmail, and AOL every month relative to the number of people joining those services.  Hotmail and Yahoo do a lot of treading water (lots of people leaving, lots of people joining), but let’s just say I wouldn’t want to be the guy in charge of AOL subscriptions these days.

Giving Away State Secrets

Ed Daciuk, one of my subscribers, questions me:

“I am wondering how a CEO who blogs balances the disparate goals of giving enough insight to be interesting but not give away trade secrets like positioning or financial drivers.”

Good question, and one that I thought about along with my prior posting. It’s a tough balance sometimes, but the goal is to stimulate thinking and communicate in broad strokes more than it is to detail things out, especially with non-public information.

So for example, in the prior posting, I didn’t mention the client’s name, industry, or location; the data was close but not exact; and I refrained from discussing some of Return Path’s efforts to solve this problem for clients. Despite those maskings, hopefully it was still an interesting posting with a couple of useful themes for marketers to stimulate their thinking.

Political versus Corporate Leadership, Part III: The First Debate

Well, there you have it. Both of my first two postings on this subject — Realism vs. Idealism and Admitting Mistakes — came up in last night’s debate.

At one point, in response to Kerry’s attempted criticism of him for expressing two different views on the situation in Iraq, Bush responded that he thought he could — and had to — be simultaneously a realist and an optimist. And a few minutes later, Kerry admitted a mistake and brilliantly turned the tables on Bush by saying something to the effect of “I made a mistake in how I talked about Iraq, and he made a mistake by taking us to war with Iraq — you decide which is worse.”

So each candidate exhibited at least one of the traits of good corporate leadership, but on this front anyway, I think Kerry did a better job last night in turning one of his mistakes into a zinger against his opponent.

Jeff Nolan has a great post entitled Pick Your VC Carefully. A must read for any entrepreneur (or VC for that matter).

It’s worth the full read, but his main points are:

1. Pick the right type of investor — big, small and specialized, financial, corporate.

2. Check their references!

3. Make sure you understand how much pull your investor has within his or her firm.

All good advice, some overlap with my posting on How to Negotiate a Term Sheet with a VC. My only addition beyond what’s already in that post is that if you’re adding a new investor into a syndicate, make sure you have your existing investors spend time speaking with the prospective investor, both with you present and without you present. You’ll learn a lot about your future board dynamics that way.

Spam: Crisis, or Approaching Denoument?

A few interesting comments on this front today. Fred says the crisis is over, everyone should just calm down. Pamela says spam filtering technology is getting really good now. And I had lunch with Saul Hansell from The New York Times today, who thinks that authentication will make a monumental difference.

[For those of you who read OnlyOnce and aren’t super technical, authentication is the newest trend that ISPs are starting to employ to snuff out spammers. In a nutshell, it’s a technology like Caller ID that lets an ISP verify who’s sending the mail so they can shut it down if the mailer is clearly a bad guy (or someone who blocks Caller ID).]

I’m not sure as Fred says the crisis is over — but I think it’s on the way to being minimized. And Pamela’s right — filters like Cloudmark are pretty darn effective. Things like that just need to be rolled out to broader audiences. And Pamela’s also right that mailers will have to work on managing their identity and reputation in order to cope with new technologies like authentication and beyond. That’s a posting for another day.

But before we declare victory, let’s remember two things:

– First, these things take a LONG time to trickle down to a broad enough audience to say “problem solved.” I mean YEARS.

– Second, the bad guys aren’t going to give up without a fight. This is war! They’ll be back and they’ll find us. They’ll get better at avoiding filters, and they’ll infiltrate things like authentication and exploit loopholes in CAN-SPAM and other legislation. Remember, spam’s economics still work.

So I’m happy to say Spam isn’t still in Crisis Mode, but it’s not resolved either — how about Approaching Denoument?

RSS and Email’s Demise, Continued

Thanks to my colleague Tom Bartel, I discovered two good postings this week that I thought I’d pass on.

The first one by Ed Brill talks about Email vs. RSS and is a great contribution to the debate. It has some similar thoughts to my original posting about Prepping RSS for Prime Time.

The second one by Christopher Knight is entitled 22 Reasons Why Email Is Not Dead and is a great contribution to the dialog I contributed to in my Rumors of Email’s Demise posting a while back.

In this Olympic Season, Brad gets the gold medal and possibly world record for longest post with his excellent posting on Participating Preferred securities. Fred gets the silver with his contribution on The Double Dip. Dave Jilk and others share the bronze for their many comments.

I won’t add more to the debate but will try to close it by tying together a few of these postings. Fred and Brad both wrote subsequent postings on the related themes of If It Looks Too Good to Be True, It Probably Is and Fantasy vs. Reality. These comments could easily be applied to my thoughts on VCs being silly about bidding up crazy long shot concepts and committing Venture Fratricide.

And of course, it begs the new media version of the age-old question: if a web service costs $25 million to build and then falls into the ether while investors and management sheepishly turn their backs, does it make any noise?

Steve Bayle has a similar posting to my How to Negotiate a Term Sheet posting from a couple weeks ago. While he has a lot of good points, his view is far more cynical than mine. I think an entrepreneur can be friends with his or her investors and board members and that their interests for the company are more often than not aligned. Of course an entrepreneur’s personal career goals may differ from an investor’s goals for the company, but that’s apples and oranges.

As long as both parties behave like grown ups, have a healthy dose of self-awareness, communicate openly, regularly, and clearly, and realize that successful business relationships require no less effort than successful marriages, the entrepreneur/VC relationship can work brilliantly. Call me an idealist (or maybe it’s just that I have great VCs), but entrepreneurship is all about making things a reality, isn’t it?