

Xobni releases new investment details - drusenko
http://venturebeat.com/2007/09/07/roundup-singularity-hype-xobni-rapleaf-selling-your-data-vudu-seedcamp-and-more/

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zach
Wow. My curiosity is piqued. I look at this list and wonder, what are we
missing? I don't doubt Xobni is really onto something. But it's hard to get
fascinated by an Outlook plugin. Clearly there's a lot more going on.

I also find it a little curious that there's a disconnect between the "put
something in front of the public as soon as possible" meme and the long lead
times that Loopt had first and now Xobni has before their product reveal. Is
the better growth strategy to put something in front of investors first and
see if you can hold off on the public launch?

~~~
nostrademons
> But it's hard to get fascinated by an Outlook plugin. Clearly there's a lot
> more going on.

Gabor's posts here have indicated that they're doing stuff with NLP and
machine-learning. There's a lot more you can do with that than what we'd think
of as a simple Outlook plugin. Think of a smart personal assistant that
understands each email, can file and classify them, trash the spam, send out
canned responses to common queries, and flag your cell-phone or PDA for urgent
messages from trusted folks. It could replace secretaries.

That, and investors are likely the people who have the most need for such a
tool. So it'd naturally look better to investors than it would to the rest of
us. That's the risk of putting all your ideas before a certain group of
people.

> Is the better growth strategy to put something in front of investors first
> and see if you can hold off on the public launch?

I doubt it. Historically, that approach has had very few successes and many,
many failures. Once in a while you may get an Amazon.com or an Akamai that
takes tons of capital to get started but then has a wide moat and enormous
profits. But more likely you'll end up with a Go or a Value America or any one
of a number of dot-com flameouts. (Even that's misleading, as Amazon got users
and went profitable _before_ taking outside investment, then operated in the
red for like 7 years while they built up infrastructure.)

Personally, I'd put Xobni at the top of the YCombinator deadpool, with Loopt
in the top quarter, even though those seem to be some of PG & investor's
favorites. But then, they're swinging for the fences. If they succeed, they'll
also be among the most lucrative.

(Incidentally, I'd put Wufoo, VirtualMin, and DropBox at the bottom of the
deadpool, i.e. most likely to succeed. You may all publicly pillory my
predictions later...)

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tx
Care to elaborate more? I am 100% with you in case of VirtualMin, but it is
interesting to hear why you're more skeptical of Xobni. I am personally very
intrigued: a lot has been said about lack of innovation in "electronic mail"
but these guys are doing something about it and what they're doing happened to
impress a lot of people.

Unless you know something we dont' :)

~~~
nostrademons
I know nothing that anybody else doesn't. This is all pure speculation.

My skepticism about Xobni is:

1.) They're doing a lot of things that are commonly regarded as mistakes, i.e.
launching too late, writing desktop software, making things complicated.

2.) A friend of mine did something _very_ similar in 2003 - it was an Outlook
plugin to categorize and organize your e-mail. He gave up on it because it
seemed very difficult to get people to pay for an e-mail organizer unless it
saves them the expense of having to hire someone to deal with e-mail, and it
better be damn good if it's going to take over the job of a person. He perhaps
didn't carry it through as far as he could've (he was coming off another
failed startup and was running low on cash), but his observations seem valid.

3.) E-mail analytics seems to be an all-or-nothing product: either your
software is reliable enough that you can just run it and trust it'll get the
right answers, or it does more harm than good. If you have to double-check the
program's results and/or approve every action, it'll cost you more time than
it saves. I've heard that NLP has gotten much better recently, but I still had
the impression that it's far from perfect. The Xobni founders and Gabor seem
like sharp guys, but I kinda doubt that they're good enough to take what's
basically bleeding-edge research and make it into something that business
execs can just count on.

4.) They've taken a lot of money without users, revenues, or any proof that
their market exists. As a result, they have, basically, one shot at this. If
they blow it, they can't really flounder around until they find the right
angle of attack; they're basically screwed.

I'm certainly willing to be proven wrong - really, I make these predictions so
everyone can say "Don't you feel foolish now?" when I'm wrong. I learn better
when it's humiliating. ;-)

But one thing I don't put much stock in is the "Well, lots of investors think
it's good, so therefore it must be." Lots of investors is an idiot. (The
subject/verb disagreement is intentional.) There've been cases - like Go, or
the dot-com bubble - where everybody was certain that this was going to be the
future, and it never ended up going anywhere.

~~~
jsjenkins168
4) This is why you raise capital through equity rather than debt. The
investors know there is risk, and that they can lose everything if the venture
fails. If they do fail, the Xobni's founders images may be tainted, but they
will not be screwed.

And these are big name investors who are SMART people. Dont think they take
their investments lightly. I can guarantee you they thought about it carefully
and deemed that there is potential with this company (probably more than what
people on the outside see right now).

~~~
nostrademons
Equity investors still generally won't let the founders say "Okay, it turns
out we were wrong, let's go back to square-one and find a new product idea."
They certainly aren't going to say "no", but they probably won't put up more
money either - and if you're burning money in accordance with the cash you
have from investments, that effectively means death.

"Screwed" is with respect to this present venture. I have no doubt that the
Xobni founders will be successful with _something_ , I just would bet against
it being with Xobni.

And investors are smart - individually. Groups of investors, however, are
generally dumber than the individuals that make up the group, hence my use of
the plural. There are also a few conflating factors that may affect their
assessment of Xobni's prospects, namely that VCs are pretty close to an ideal
market for Xobni's product (inflating their estimate of its usefulness to
other markets) and that their risk tolerance is higher. 5% odds of success
isn't too bad for a VC, but it's terrible for an entrepreneur.

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brezina
We've been iterating on our product with a small group of users. Integrating
with Outlook and throwing around the amount of data that we do is no small
challenge. When we open our beta to the public we don't expect it to be
perfect. It will be usable, and we will be actively seeking news.yc reader
feedback.

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bharath
Very impressive! Its good to see YC having grown from an experiment to
something thats represents a 1st step towards marquee VC funding. Khosla does
not invest in a whole lot of web based ideas these days (mostly focused on
alternative energy type of stuff) and the fact that xobni is one of a handful
of exceptions speaks for itself I think.

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portLAN
> _The San Francisco company announced in March a first round of $4.2 million
> in capital, naming only Khosla Ventures and Y Combinator._

Is that $4.18 million from Khosla and $0.02 million from YC?

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rokhayakebe
OK. Can someone tell me what are they going to release? And I do not want he
classic "email analytics" answer

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herdrick
Holy crap, that is an impressive lineup. Nice work, guys.

But then what happened to Khosla Ventures between the initial announcement and
now?

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ereldon
herdrick, sorry if this wasn't clear. khosla's name was made publicly
available in march when another blog found it in a regulatory filing
concerning xobni's latest funding round.

xobni has sinced decided to release the names of its other investors, as well.

