Welcome Aboard: Fodor's!

I love travel secrets....insider knowledge, local flavor, underground places, and so forth.

At IB, we own a few killer travel brands, such as FlyerTalk and Wikitravel.  And now we're simply delighted to add Fodor's to our family.

A WWII hero and renaissance man, Eugene Fodor began his guide book dynasty 80 years ago working on French Cruise Ships.  Today, Fodor's l00+ travel books and a massive website join our portfolio-- and we proudly welcome Fodor's employees, writers, and readers to our family.  You're a huge group of travel enthusiasts and we look forward to the journey with you!

We thank PRH for its long-time stewardship of the brands and beginning the long trek to an even more digital-centric future for the business.  Yes, we will continue to print the books-- just like at Nolo Press.  But we will also greatly expand the digital offerings.  Welcome aboard!

p.s.  I haven't posted in eons.  Apologies to many of our recent and not-so- recent acquisitions: such as DemandForce, ACE, NetDriven, nGage, and UnityWorks.  You're all doing very, very well and despite the fact that I like travel insights, I like the amazing and synergistic combination of businesses we've put together even more.  I have to say that.  But it's still all true.

I

Internet Brands Welcomes KKR

Today at Internet Brands we announced that KKR will be assuming Hellman & Friedman's role as our primary financial sponsor and Board members, as we look to build upon our success and extend the Internet Brands franchises in the years ahead. Our management team will continue to run the company and will participate as meaningful minority shareholders.

At Internet Brands we have tremendous growth opportunities in front of us. We believe the KKR technology team understands our strategic plans and shares our excitement to extend our leadership in vertical solutions in markets such as Automotive, Legal, Health, Home and Travel.

Our partnership with H&F has been very constructive. As measured by a number of important metrics, we have roughly doubled in the last four years: revenues, ebitda, personnel, number of customers, and so forth. The H&F team challenged us, encouraged us, and supported us. We will miss them in our Board room.

At the same time, we warmly welcome the partnership with the KKR team and global brand and have a renewed sense of vigor as we pursue our mission with them.

To the entire IB family of employees (now 1,600+ strong), I congratulate you on what we have achieved together. And I believe the best is ahead.

From Passion to Mission

Passion ignites and creates.
But passion alone often flames out. Passion fights process, hates to be patient, and often tramples teamwork.

Mission scales.
Mission aligns passion to purpose and to people.

Mission is the source of the endurance, alignment, and resolve needed to win for the long-term.

Journalism's Emergent Renaissance

Is professional journalism dying?

I've always found this line of thinking to be nostalgic. I believe the contrary: journalism isn't dying, but changing and expanding in ways that may ultimately make it more powerful than ever. The changes in the profession, as in so many, are disruptive and painful. But the changes are inevitable and likely lay the foundation for a better approach.

For most of history, journalists didn't give a damn about their professional standing-- they were happy to be craftsmen, in the tradition of ink-stained wretches. As late as the 1950's, more than 50% of reporters lacked college degrees. At its core reporting was (and is) dressed in overalls: it's about unearthing facts, eliminating noise, assembling context, and building insight. It's hard, honorable work.

The scaling of "big" professional journalism-- investigative teams, large budgets, and relatively leisurely deadlines-- was a modern development, fueled by the big profit growth of traditional media in 1970's and 1980's. "Big" journalism had business success (Newsweek, 60 minutes) and journalistic success (a la Woodward and Bernstein). The fruits of that era were sweet: I miss Ted Koppel's nightly explorations of the world and the heft of the weekly news magazines.

But "big investigative journalism" was never a model that scaled very far. Only a very small subset of media outlets had the resources to fund true investigative staffs of any real scope. Big investigative journalism was mostly not commercially viable, but the beneficiary of cross-subsidies amongst a few powerful traditional media outlets.

There is absolutely no way I would trade my current cornucopia of internet news sources for those "glory days". In the digital world, the reach, breadth, depth and timeliness of coverage is improving at a fantastic rate. It scales.

The criticism of the digital journalistic age is that quality is declining, specifically in these areas:
1. More amateur reporting
2. Less objective reporting
3. Less serious new coverage
4. Over emphasis on frivolous "newsertaintment" coverage

Let's look at each of these issues.

More amateur reporting. Yes, that's true. But there's also far more expert reporting now. I follow dozens of niche bloggers whose expertise massively outstrips that of the traditional media journalists they might have displaced. I mostly ignore the legions of new amateur "journalists" and find the true experts. Many of these experts had no voice before, as they had no access into the very limited "newshole" of traditional media outlets. My news and info diet is richer than ever.

Less objective reporting. This criticism rides with the amateur argument: that only professionally trained journalists that can be objective. While this argument has some merit at the margin, there is a counter argument as well. Since the digital era opens the media to more expertise, that expertise often comes packaged with a better brand of objectivity-- informed by much deeper subject matter knowledge.

Less serious new coverage. This argument says we are now lacking in coverage of the most important issues, like Middle East peace processes or inner city economic woes. I'd again make a counter argument, that as the costs of producing and distributing coverage have declined, there is more of it-- at all levels.

Over emphasis on frivolous coverage. Or, put less delicately:"we're now drowning in crap". Sigh. This criticism is true. Such is the inevitable sprawl of growth-- you get more of the good stuff and more of the bad. Both weeds and flowers multiple in the Spring. The good news is that this profusion will be mitigated by emerging "filtering technologies" that leverage human curation.

Now that the bottlenecks of printing presses and TV towers have been removed, journalism's finest days are ahead. I say this in the same way that musician's best days are ahead. The traditional work of studio musicians may have disappeared, but with the bottleneck of record labels removed, the innovative work of distributed auteurs is multiplying at a terrific rate. Making a living is certainly becoming more difficult in many fields. But this is the consequence of global competition and equal access, not signs of devolving, but evolving.

Perhaps a profession's greatest moments are when gatekeeping collapses and the market sorts out the talented influx of para-professionals and allied professionals. As exclusivity of knowledge and tools propagate, the definition of a "professional" becomes determined by the level of mastery, not by the issuer of one's diploma, license, or paycheck.

With this admittedly optimistic outlook, I say journalism's finest moments are ahead.

I chat with Ray Kurzweil about replicating Ray

As I chat with Ray Kurzweil after a private screening of Transcendent Man, I'm equally awestruck by his genius and his certitude.

As you know, Ray's primary message is that computers will soon be much smarter than humans. In fact, orders of magnitude smarter. Period. End of discussion.

No hedging on definitions of "intelligence". Nor any hedging on timing. It will easily happen in the next 40 years, most of it in the next 20-30 years.

Bam, next question, my friend?

I feel aligned with much of Ray's logic and conviction. Compared to puny human brains, computers have:
1. More memory
2. Better memory
3. Faster processors
4. Faster networking capability
5. Better power supplies (our biology)
6. Less noise (emotional, chemical, etc)

I know the long "last mile" for AI is judgment. I know AI is moving very quickly on many dimensions, but slowly on others. As we chat, I start to wonder what would be the last bastions of "human-ness"? I imagine my computer telling me, "I told you so!" I hear Ray's voice....

He is sharing his hope that he will live long enough to "transition" to a perfect digital copy of himself. You read that right, a perfect, thinking, "feeling" digital version of himself.

As Ray and I chat, my feelings of cynicism rise less than I expect. His confident, warm manner invites dialogue.

I check myself for perhaps thinking too small and I try to suspend my disbelief, as if I were still watching a movie. Then I quickly decide it's time to get in the game.

I ask Ray, "In your future world view, couldn't the "real" you be infinitely replicated? What are your thoughts on version control and on counterfeit Rays?"

I get a thoughtful, optimistic response.

That's the very best part about Ray-- his optimism. It cuts through cynicism like a knife and drives both his genius and his audacious certitude.

As you may know, many computer scientists agree with Ray that computers will eventually become more intelligent than humans and Marvin Minsky's 1982 essay is still a fun read: "Why People Think Computers Can't". Minsky addresses the issue of whether computers can be creative and writes, "We shouldn't intimidate ourselves by our admiration of our Beethovens and Einsteins. Instead, we ought to be annoyed by our ignorance of how we get ideas."

AI scientists completely disagree about end game states, along the widest imaginable spectrum between Utopia and Dystopia. While some worry deeply about how AI could run seriously amok (see NYT story), Kurzweil's unflappable optimism makes him the spiritual leader of the Utopian view.

I thanked Ray for the chat via email the next day and received a lovely response, and autographed copies of his two latest books.

Is Twitter an Upper Division Facebook?

Awareness of Twitter is > 90%. But usage is < 10%.

Why the huge gap?

Because @Twitter is #funky for the #mainstream.

But this could/should change as:
-- Mainstream social usage become more sophisticated
-- Twitter evolves
-- Apple (and others) push the platform

Wikipedia seemed exotic and not trustworthy to many people as little as 5 or 6 years ago. In a similar way, I think Twitter still seems exotic and strange to many. But this could change as more graduate into upper division social media.

Is a new killer app needed for Twitter to close the gap? I'd argue Twitter's current role as a "real-time, social, news/info aggregator" is pretty killer, where wisdom of the crowds meets personalization meets messaging/social (digg meets rss feeds meets facebook). But relatively few people outside of the "tech enlightened" know how to use Twitter very well. It's quirky, with its own protocols, and complexities. But some of the peccadillos will fade with familiarity and others will be eliminated with product evolution.

In the future, I expect the Twitter ecosystem to birth a few more killer apps as well.

FB is likely to remian the 800 pound gorilla. But Twitter's still got some interesting runway ahead.

For more on this, here's a great post on the Twitter Paradox by @BrianSolis

Some of My Favorite Twitterians

Here's what I look for in a great everyday twitter follow:
-- High signal to noise ratio
-- Insightful links
-- Enlightened POV
-- Humor

Here's some of my current AAA list:

Best Economist
@pkedrosky Paul Kedrosky is a freak of human capital: a witty, insightful, prolific economist, whose ironic take on the markets resonates with me. I find his digesting of financial news to be without peer. I almost always deprecate tweeters of his velocity (a 40,000 tweet corpus so far), but not Paul.

Best Correspondent
@Bill_Gross Among his many talents, Bill is the Edwin R Murrow of elite conferences, brilliantly reporting from his ringside seats with the rich and hyper-intelligent at Davos, TED, Web 2.0, All Things D, Milken Global and others. Following Bill's insightful and voluminous conference streams is like sitting next to Vin Scully or Chick Hearn-- you feel like you're at the game, without ponying-up the 6 figures required to join the glitterati circuit.

Best I-Banker (really, there is one)
@EpicureanDeal He uses a pseudonym for his piercing commentary, because in his line of work you must be in disguise to be honest.

Best Startup Team Tweets
#FRC The @firstround hash is fun as they canvas the world making dozens (ultimately hundreds) of seed investments, producing a consistently insightful and witty trail. And their Holiday videos are unrivaled. @joshk @hlmorgan @chrisfrc @kentgoldman

Best Social Scout
@ryanspoon Ryan's got extremely sharp eyes on what's happening in everything "social", from platforms to advertising and marketing. I learn a lot from him.

Most Eclectic
@jhagel A colleague of mine twenty years ago, John's vision of where the digital world is headed has been uncanny and prescient. His tweet stream, a favorite of mine, is robust and eclectic, unearthing all manner of wonderful things.

I'll add to this list and I'd like to hear your favorites @BobBrisco.

The Damn Bubble in Bubble Analogies

Dear patient readers, apologies for this newest missive in the expanding "pet peeve" department.

I'm calling for an international cease-fire in the usage of the term "bubble".

Suddenly there are bubbles everywhere: an internet stock bubble, sovereign debt bubbles, an education sector bubble, commodities bubbles, and consumer consumption bubbles.

Enough already.

We've had a few legitimate bubbles in the last 80 years. One instance in 1929. Another in 2000. And again recently with real estate/credit. Who knows, maybe there is another in the wings. But not around every corner.

Economists reserve the term bubble for the real thing-- a massive collapse of value that takes something like decades to recover. The term is not used as a synonym for corrections or potential crises, or for trends, drops, dips, or blips.

Nosebleed valuations on a few internet IPOs should not qualify as a bubble. Rapidly rising costs of education should not constitute a bubble. They are serious issues and troublesome trends.

Below I offer an example of the rise of bubble speak using Google Ngram. For 50 years people referred to "home prices declines", but now they deploy the b-word. (Perhaps bubble is appropriate for condos in Las Vegas or Florida, but in many parts the phrase "painful correction" would fit better.) You find this escalation in vocabulary in many other markets as well-- and the trend appears to be accelerating.
Obviously sensationalism sells, so people reach for a bazooka, rather than precision ordinance that might be more helpful to understanding.

Ka-boom. Make big claims or go home.

Internet Brands Welcomes Nolo

I am delighted to welcome Nolo to our Internet Brands family. Nolo is the leading legal publisher for consumers-- both in print and online.

We are proud of Nolo's 40 years of publishing excellence, outstanding content team, powerful author network, and mission-driven culture.

It's been a pleasure getting to know Nolo's visionary founders Jake Warner and Toni Ihara.

What are our plans?

1. Expand Nolo's lead as the best consumer legal publisher in all formats (print, ebooks, web, mobile)

2. Invest strongly in the digital parts of the business

3. Capture synergies with our existing online businesses

Nolo continues Internet Brands' tradition of acquiring best-in-class assets in vertical markets, such as in automotive, careers, health, legal, and shopping. Nolo's print assets are more extensive than our previous acquisitions, but those business lines are performing well, have expansion opportunities, and are essential to the Nolo brand.

We see great opportunity with Nolo and welcome the company to our family.

The Soul of Grit

Why are some people more passionate, more determined, more gritty? Why are some better leaders? Why do some master the secret of success?

A big part of the explanation is because they believe. They believe in themselves and in their mission. They believe they will be successful.

A Stanford researcher, Carol Dweck, conducted a controlled experiment that suggests people who believe in an expandable theory of intelligence learned faster than those who have a fixed mindset and are concerned with how smart they are. Outperforming students were simply taught that the brain is elastic, like a muscle that gets stronger by using it.

Even a brief change in mindset can produce results. In one study people who consumed a "brain stimulating drink" (actually a placebo) immediately performed better on tests-- like 40% better.

If believing in ourselves works so well, why don't we?

Perhaps we are taught to doubt. Perhaps we learn to accept failure. Perhaps we need better mentors and coaches.

Perhaps summoning our inner grit begins with straightforward choices.

"Some things have to be believed to be seen."
-Ralph Hodgson

Stay gritty, my friends

Think of it as a magical state we could call "perpetual start-up mentality".

As your company scales, enjoys escalating profits, and attracts genius employees, you need to fight to hang on to your fiery, edgy, start-up impulses.

Without a doubt, developing a scaled enterprise requires moving beyond pure scrappiness-- like those constant late-night banzai work sessions with cold pizza.

However, remaining a thriving, scaling enterprise requires preserving your sharp edges, perhaps bundled with a bit more elegance.

All companies are vulnerable to the negative side effects of maturation, and technology companies especially so, if they lose their hunger. Fight to keep:
-- Urgency for innovation and reinvention
-- Distaste for bureaucracy
-- Courage to pivot
-- Raw intensity

Which brings us to the tricky balance: scaling, while staying gritty, my friends.

The "Secret"

In basketball it's simply known as the "secret". You can't find it on stat sheets. You won't hear players or coaches talk about it. You won't see awards or trophies for it.

No one talks about the "secret", because it's more fun to exalt blinding talent and individual heroics. But the great ones know. It's about their team's performance.

Some of the best in the game never learned the "secret" and the ultimate success eluded them. Bird, Magic, and Russell understood it, mastered it, but rarely described it.

The "secret" is about willing your team members to overachieve. About caring so much about your mission that you inspire your team to push the envelope, competing at the highest level. About refusing to fail and making the sacrifices needed to win.

To assess whether you're beginning to comprehend the "secret", I'm suggesting these criteria. Do you:

1. Set high standards for your self and your team?
2. Personally execute to those standards with intensity?
3. Help others on the team reach those standards?
4. Upgrade the team, identifying necessary changes in roles?
5. Upgrade your own skills continually?
6. Ensure great teamwork?
7. Consistently win over time?

The "secret" ain't easy. It requires extraordinary passion and grit.

Got Grit?

Our company will hire considerably more than 100 new full-time employees this year.

What do we look for?
1. Talent
2. Grit

We hire only if we believe you have both. Grit works hard. Grit overcomes obstacles. Grit plays well on teams. Grit gets better over time. Grit perseveres. Grit leads.

In our hiring, we attempt to measure talent by administering tests, reviewing accomplishments, and conducting case interviews.

Unfortunately, it's more difficult to measure grit. We probe by understanding work history, interviewing references, and getting to know candidates as much as possible as people.

Unlike talent and smarts, you can't directly "show us" your grit. But you can help us discover it.

I knew you would read this post...

...since my personal intelligent agent interacted with yours and calculated a 73% likelihood that you would visit this page.

Your personal agent, using algorithms learned from your online behaviors, made the prediction based on:
-- Your social graph linkages to me
-- Your interest graph linkages
-- Your prior content consumption behaviors

So you're not sure how you feel about your agent yet-- is this going to be annoying? Invasive? Insipid?

Or, is your agent potentially a best friend? A source of discovery? Of convenience? Of joy?

Like all new relationships, only time will tell. If you've chosen a high quality, sophisticated agent and invested the time to work with it, you might develop a long-term, trust-based relationship.

You might respect your agent's nuanced recommendations for navigating the web, making purchases, and finding business contacts.

Your agent is related to the current "you may also like this" suggestion engines at Amazon, Facebook, and Linked-In. But your agent is far more powerful. And your agent works for you, not for them. Your agent follows you through your web experiences like an assistant, and also works independently, interacting with APIs and other agents.

Your agent's behaviors are under your control. You tell your agent what information you like and how to deliver it to you. You tell your agent how much privacy you require and under what circumstances. You send your agent on critical missions. If your agent fails you, you might hire another.

How long before you can hire and develop an agent you trust?

Probably surprisingly soon.

Agile Organization

We try to grow agile leaders. We mostly follow agile project management.

But we're still not fast enough. So, now what?

We're now implementing a homegrown method of agile business management.

At its core, agile process simply means faster adaptation to change. By more rapidly iterating toward solutions, often in smaller steps, you drive faster overall progress.

Why not the same with overall business governance? On one hand, almost all forms of governance tend to move slowly-- and by design. Since governance relates to consistent management, cohesive policies, and repeatable processes, rapid iteration seems a contradiction. Governance is supposed to be deliberative and careful.

But we're finding that making rapid adjustments to governance are just as effective in management as in software development. These changes relate to people deployment, hiring, performance feedback, project assignment and prioritization, role definition and oversight-- in short, the "messy" people issues that are less comfortable to talk about than the status of projects. The messy issues involve changing the team itself, not debating project variances.

Who cares if a project is on schedule if learnings indicate the project should be 10X bigger in scope? Who cares if a project is on schedule if the learnings indicate the project is doomed? Who cares why a project is badly behind schedule if the learning is the people on the project are over their heads?

In all of these cases, it's difficult to project manage your way to the best outcome. You need bigger moves, like a change in strategy, structure, and people.

These changes are less risky than people fear. Change keeps people fresh, spurs innovative thinking, challenges policies that need to change, and sharpens execution. Agileness keeps things moving.

As with agile development, we closely monitor the business management changes. When the tests work, we continue and potentially accelerate. When they fail, we try something else.

The keys to this approach are honesty and trust. Management must be courageously honest about what is not working and what can be done better. Management must trust one another to facilitate change.

I'm hoping we can make our governance as agile as our project management.

My $0.02 of Career Advice

When I'm asked to give career advice, I say four things:

#1 Focus. You have to choose to be great at something very specific, probably more specific than you'd like. I'd love to be good at more things. But you can't focus on too much, as mastery requires a ridiculous level of hard work.

#2 Hard work (grit). To achieve mastery, you have to outwork others in your field. You need roughly 10,000 hours to master a craft and that's just the ticket to play. Gladwell writes eloquently about this-- there are no exceptions, even among the Mozarts, Einsteins, Kobes, Gates, and Jobs.

#3 Passion. Given the required level of focus and hard work, you have to love your craft. I've never met an exception to this rule.

#4 Course correction. Paths to success are messy, not merely emerging from the logging of 10,000 hours of focused, passionate work, but from making good lifetime choices against a backdrop of tradeoffs, ambiguities, and complexities.

Now I'm looking back over this list. It sounds hard. But I'd say great results typically come only with great effort.

INET To Go Private

We may have completed, in but 3 years, the roundtrip:
Private--------->Public--------->Private

Oh, what a trip it’s been.

Today's news is that Internet Brands has agreed to be acquired by international private equity firm Hellman & Friedman.

We became a public company three years ago, just as the global financial markets began to falter—and ultimately crater. We’ve prospered, despite the most difficult economic, financial, and advertising market backdrop in about 85 years.

We take pride in our NASDAQ performance and shareholder returns. At the $13.35 offer price, our stock appreciated 67% from our IPO. That compares to an overall NASDAQ decline during the same period of roughly -10%. Our management team is proud of our performance and I am proud of them. We are blessed with a great team.

So, why go private again? Because we believe this would be a good deal for our shareholders. Because we would continue to build one of the finest New Media companies in the world and become even more focused on long-term growth. Because H&F would be a great partner. H&F has impressed us with their knowledge of New Media, and with their professionalism, focus, and intensity. H&F Managing Director Andy Ballard has been an absolute pleasure.

Without a doubt, we would miss many of the friends we have made along the way. INET will miss the brilliant, 11-year Chairmanship of Howard Morgan. (While we will lose a great Chairman, we retain a great friend.) We will miss the support and inspiration from all of our friends at Idealab, from Bill Gross, and from our terrific Board of Directors. We will miss some of the loyal shareholder relationships we have developed.

As we prepare to embark on the next leg of our journey, we express deep gratitude for those who have been with us.

-Bob

* All of this assumes the transaction is approved by our shareholders and clears regulatory processes. See INET press release for more detail.

6 Trends That Change Everything

I've been speaking about the combinatorial power of 6 massive trends, rapidly becoming mainstream, which are reinforcing each other and reshaping every aspect of the internet.

1. Vertical.

2. Local.

3. Social.

4. Accountable.

5. Mobile.

6. Cloud.

As they interact, these are complete game changers-- I will post about each. I believe we are now experiencing the third era of the internet: the platform era (which follows the portal era and the search era).

In this platform era, the combinatorial power of these trends rule (such as social meets mobile meets vertical meets smbs).

(A seventh massive trend,Video Convergence is its own game changer-- that's for a later series.)