Sling’s Series B(ig) Financing

As has been reported on CNet, Om Malik’s Broadband Blog, Silicon Beat and elsewhere, and discussed in the blogosphere, today Sling Media announced they have raised $46.6M from the likes of Liberty Media, EchoStar and Goldman Sachs. Of course, the Series A lead investors, my firm Mobius Venture Capital and co-lead Doll Capital Management participated in this round as well.

Adding Goldman Sachs, Liberty Media and EchoStar to the investor roster is a great milestone for the company and I view the involvement of media and broadcasting players Liberty and EchoStar in particular as a great validation of the potential that place-shifting in general and the Slingbox in particular have going forward. To date, working with the folks at Sling Media has been a VC’s dream: they’ve exceeded expectations every step of the way, delivered a great first product to the market in record time which has delighted users and has sold ahead of the company’s own aggressive targets, and, last week, they closed this ambitious Series B financing that brought in excellent strategic investors who will be great partners for the company going forward. Congrats to Sling’s founders Blake, Jason and Bhupen on a job well done!

Naturally, as a VC, I also feel compelled to mention that a big financing, by itself, does not make a successful company, but it does put Sling Media in a position to continue doing on an expanded scale what has served them very well thus far: building excellent and innovative products while maintaining their maniacal focus on a great user experience that starts from the moment a Slingbox is picked up off of a retailer’s shelves.

After walking the halls in January at this year’s CES, one theme was crystal-clear: this is year that video content begins to find a home beyond the living room TV. Many of the big media content players deserve credit for embracing the internet as a means of distribution far more willingly than the record industry ever did, and they appear to have applied the lessons of history to their business. Of course, they had more time to figure it out since only now have broadband penetration, increased processor speeds and the evolution of video codecs made video distribution over the internet a real possibility, while the record labels were caught quite by surprise when they got Napsterized back in the late 90s.

At this point, however, as forward-thinking (relatively speaking) as content-owners and networks seem to be acting, thus far their forays into internet video distribution with the likes of iPod/iTunes, Google Video or services like Comcast’s On Demand (in my mind, a cousin to internet video distribution and IPTV) are merely experiments with the medium, just a dip of the toe to see if the water’s warm enough. In clear violation of the now well-worn long tail principle, they are only releasing a minute fraction of their libraries and are not yet broadly embracing the vision of the infinite video-jukebox-in-the-sky that provides access to all current and past television and movie content ever produced. Surely that is the end-game that would cause consumers to embrace VOD and internet video distribution services en masse, but today’s first offerings aren’t even close to that lofty ideal.

Which brings me back to one of the reasons I got excited about the Slingbox in the first place: it provides an elegant shortcut on the path to this vision of the future. As a consumer, why mess around with new online services, new subscription fees, new download models and limited and balkanized selections of programming when you can buy a Slingbox today and have anytime, anywhere access to the hundreds of channels of video programming you already subscribe to?

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Green is the new Red, White and Blue

Apologies in advance for linking to a page that requires a subscription, but Thomas Friedman’s recent piece in the New York Times hits the nail on the head as far as I’m concerned. Our country desperately needs to move aggressively towards energy independence through conservation efforts, efficiency programs and investment in the development of alternative energy sources.

Certainly, everyone can take individual action to help matters by making sure their next car gets twice the mileage as their existing one or by putting a PV system on their roof, but without national-level leadership, we’re not going to get there through altruistic individual actions alone.

The bumbling Texas oilman in the White House is not the guy to do it, but the simple fact is that that our national security and economy are enhanced far more by reducing our dependence upon foreign oil than by invading a country that (surprise, surprise) had no WMDs after all. As Mr. Friedman eloquently concludes, “green is the new red, white and blue.”

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Fully Hybrid

Dsc00576[1]I’m happy to say that the McIntyre family automotive fleet has now gone fully hybrid. Back in May, we got the Lexus 400h, which is Katherine & Quinn’s primary car, and in December, I got the new 2006 Toyota Prius. I snapped a shot of the cousins parked in our driveway in the midst of the recent and very big Northern California rainstorms, so pardon the dreary and grey photo. We love the Lexus and it gets great mileage for an SUV and is a great car for transporting a toddler and the family dog, but I wanted something even more fuel-efficient for my daily commutes throughout the Bay Area.

I was driving around our old 1998 Toyota Land Cruiser before the new Prius arrived and was paying $75+ to fill the tank and had to do so nearly every week. Now I get well over 400 miles per tank on the Prius and it only costs me $20 to fill ‘er up, so I save time and money. I feel I am finally making eco-restitution for having owned the Land Cruiser for so long.

My favorite feature of the new Prius: an 1/8″ audio input jack that lets me run my iPod through the factory stereo system, which is actually quite good, thanks to a bunch of JBL speakers spread throughout the car. I don’t know why every car manufacturer doesn’t provide a jack to input audio into the stereo. A little thing, but so user-friendly. I also really like the GPS system and the integrated Bluetooth, but, I have to admit, neither gets me as excited as the audio input jack.

We’ve found that in practice the Lexus 400h gets about 25 mpg (quite good for an SUV) and the Prius gets about 45 mpg.

I think I have a peculiar car ownership history over the past decade: 1980 Pontiac Sunbird (college car, courtesy of Granddad), Volkswagen Golf (post-college, first-job car), Porsche Carerra 4 (post-IPO car), BMW 540i (post-Porsche, comfort-over-speed car), Honda Civic Hybrid (good mileage, but oops, should have bought the Prius) and, finally, the 2006 Toyota Prius.

Katherine tells me I need to wait a few years before buying another vehicle, but unless BMW or Porsche can create a high performance car that gets 40+ mpg, I’m not going to be tempted for a while. There’s certainly no chance that American car manufacturers are going to pull their heads out of their asses and build such a thing, but maybe there’s hope for the Germans.

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Sonos Update

This morning, Sonos impressed me once again. Shortly after I posted my review of the Sonos system, I was contacted via email by one of their support personnel, and another Sonos person left a comment in my blog explaining to me how to solve the problem I was encountering with linking zones together during playback.

It turns out that Sonos handles the linking of zones as one would hope (without interrupting playback), but that I was simply getting confused about the subject vs. the object, i.e. which zone was linking to which. I was linking the playing zone to the non-playing zone, hence the resulting silence. So the functionality was there, but the UI was (to me) unclear and I assumed the opposite result would occur. More than one person who tried to do this on my system made the same mistake, so I think they need to tweak the UI a bit or at least warn the user when the result of linking zones is going to be silence, but this is admittedly a nit that could be easily fixed in a future software update.

But the more impressive fact here is that Sonos is being very smart about listening to their customers by monitoring the blogosphere for mentions of their product. Being responsive to users who take the time to write about their product builds customer loyalty and buzz in a way that nothing else can. Kudos to Sonos for being on top of this.

As an investor in and avid user of Technorati, I use Technorati’s watchlists to monitor mentions of each of my portfolio companies out in the blogosphere. Another one of my investments, Sling Media, maker of the Slingbox, has been particularly adept at using Technorati as a tool to listen to their users and respond to satisfaction and displeasure brewing out in the wild. At present, it is only the clueful and forward-thinking companies who are doing this, and they are reaping the rewards and using it to their advantage. In the very-near future, companies that do not listen closely to what’s happening out in the blogosphere will do so at their own peril.

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New Gadget: Sonos Digital Music System

Sonos System

Santa (OK, it was really my Jewish wife) brought me a wonderful new toy for Christmas: the Sonos Digital Music System. Our good friends Sam and Rebecca were in town all the way from Wales, and Sam helped me set it up on New Year’s Eve, just in time for the dinner party we were hosting.

I’ve run through several products in an effort to find a perfect multi-room digital audio solution for my house, including the Turtle Beach Audiotron, the SlimDevice’s Slimp3 Player, TiVo’s Home Media and Apple’s AirPort Express. Each of these solutions has significant flaws in their design and/or usage model. Sonos comes as close to ideal as any system I’ve tried. I’ve been reading about Sonos since before their product introduction at last year’s CES, and David Cowan gave it a plug a while ago that spurred me to walk into Magnolia in Palo Alto and give it a try. Finally, my friend Andrew Gray bought one a while back and he’s run through more digital audio gear than me, so his hearty recommendation really pushed Sonos across the finish line.

I quickly abandoned the AudioTron because it wasn’t Macintosh-friendly and because it had limitations on the number of songs it could handle in its index. AirPort Express and iTunes/AirTunes didn’t quite work for me either — although it handled the multi-room problem in a decent way, it forced the use of iTunes as a playback interface, and when you are in the living room or kitchen, you don’t necessarily want to lug your Powerbook around — it is a clunky remote control. TiVo for music is OK, but I don’t have (and don’t want) a TV in every room I want to listen to music in. And while I’ve been a satisfied Slimp3 user for a couple years (I have four of them), ultimately the two-line text-only UI is just too limiting.

Sonos has the best usage model of any of the digital music systems I’ve encountered. The controller is wireless and handheld and has a rich user interface that can display album art and comes complete with a iPod-like scroll wheel for navigating a large music collection. And the controller can easily handle multiple zones or can merge zones together for a house-wide “party mode”. The UI on the player is simple enough that a novice can figure it out and this led to real-time manipulation of the playlist by various guests at our dinner party.

Setting the system up was quite simple and I’m already looking forward to buying a few more nodes (Zone Players in Sonos-speak) to bring music to the back deck and into the master bedroom. As a geek, I really like the fact that each Zone Player is a self-configuring node in a wireless mesh network that routes music around the house, expanding the network coverage with every node added.

So by now I hope it is obvious that I really like this product and would recommend it to others. That being said, there a few things that bug me after having spent a few days with the system. I think the system is a little on the expensive side, which may limit the appeal to gadget freaks and high-end consumers. The components feel very substantial and are obviously well-engineered, though I think they may be a bit over-engineered.

While I like the simplicity of a two component product line, I’d really like to see Sonos offer a Zone Player that did not include an amplifier and also offered a digital audio output option. While most of the zones in my house require an amplifier to power the speakers, my main home-theater system in the family room has its own amplifier and audio processor and it is frustrating that I had to pay $500 for a Zone Player that contains an amplifier and A/D conversion that I’ll never use. I suspect that almost every Sonos owner has at least one zone in their house where the built-in amplifier is superfluous. I’d be a happy guy if there was a $200 ZonePlayerLite that did this for me.

The controller unit needs to be recharged on a regular basis and comes with a rather cheesy AC adapter to accomplish this task. Sonos now sells a good-looking and much more convenient charging cradle, but asking me to pay an extra $50 for the charging cradle after I’ve spent well over $1000 on a system makes me feel nickel-and-dimed.

Finally, the music queue paradigm that Sonos uses takes a little bit of getting used to and it doesn’t always behave as one would expect, and it took me a while to figure out how to add an entire album to the queue. And when I merge playback zones, the music stops streaming on both zones and the queue that was built up disappears, at which point I have to rebuild a queue and restart the music. Ideally I’d like to see the queue persist and simply have the zones continue streaming music rather than stopping, which is surprising, not to mention aurally jarring. Also, the software-based controllers which work quite well on both the PC and Mac platforms are handy, but why can’t I stream music to my PC using the client software?

And a last suggestion to the good folks at Sonos would be for them to offer a rich meta-data integrated service that would automatically download cover art, lyrics, liner-notes, reviews and other relevant data to enhance my music listening and browsing experience. Since the controllers have such a rich UI, this would be very cool indeed. And who wouldn’t like the option to browse a music collection by cover-art, which returns some of the visual and tactile pleasures of the bygone days of music tied to physical media.

Way to go, Sonos! I’ve listened to more music at home over the past few days than I have in quite a while.

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The Treadmill

Once you start blogging, people (hopefully) start reading and subscribing, but then they notice when you haven’t posted in a while. Last week at Postini’s board meeting, David Cowan mentioned to me that he hadn’t seen much activity on McInblog recently. While I’ve actually posted several times in the past few weeks, he is right that I’ve slowed down a bit lately.

I caught up on David’s blog after the board meeting and smiled as I read his confession that he is a grammar nerd. I suffer from the same affliction. Since I’m now mindful of upping my activity here, I’m not above recycling an old post called Grammar Crime that I’m sure at least one of my readers will enjoy. Ironic grammar nerds, untie!

My Favorite Pickles

Ah, pickles. I’m a big fan. After unfocused yet exhaustive research, I’ve decided that my favorite brand of jarred pickles is Kruegermann Frischgurken – Fresh Pack Pickles. Perhaps it my German heritage or my repeated ingestion of German foods since the womb, but I fancy a pickled vegetable of all sorts, be it cabbage, ginger, or cucumber. Kohl, Ingwer oder Gurken. And I’d be remiss if I did not mention Rotkohl and good ol’ Sauerkraut. If you live on the Peninsula, you can get the pickles at the Schaub’s in the Stanford Shopping Center, or online at the Bavaria Sausage Shop.

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You Really Need a Slingbox

Clearly I am biased, but if you’ve got a gadget-lover on your holiday gift list, you really ought to consider buying them a Slingbox. Watching my TiVo while at the office, in a coffee shop or on the road is still amazingly cool to me, even though I’ve been doing it for months now. I came across an incredibly good in-depth review of the Slingbox today by Matt Whitlock which I discovered while browsing my Technorati watchlist that keeps track of mentions of the Slingbox out in the blogosphere.

The Day I Served Rosa Parks Dinner

BerlinWall_1 When I was an undergrad, I worked as a hasher for Stanford University Food Service in Wilbur Hall. One day, probably in 1990, Rosa Parks was in town visiting Stanford to speak at a campus event and was visiting one of the dorms in Wilbur. She was with a group of students and came through the cafeteria to eat dinner on the line I was working that night, and I helped assemble her dinner plate for her. I’m glad her act of defiance many years ago helped bring about change in the world so that it didn’t strike me (or anyone else) that it was odd that a young white kid was serving dinner to an old black lady.

A year later, I was studying in Berlin and came across a section of the Berlin Wall that had been left standing and took a picture of it. I’ve always remembered the words painted on the wall, which are apparently an old African saying, “Many small people, who in many small places, do many small things, can alter the face of the world.” When I read the news that Rosa Parks had passed, this turn of phrase popped in to my head. Farewell, Rosa Parks.

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