James Hong

I've moved my blog to a new URL

2008-01-31T13:37:00.001-08:00

the new address is http://blog.jhong.org

please make a note of it.

[beep!]

(apache keeps dying on my james.hotornot.com machine, and i'm too lazy to continue restarting it all the time or write a cron job to do it. plus, i presume running on blogger/google's servers leads to a faster site than serving it myself.)

if you subscribed to my blog via feedburner you should be ok. if you subscribed directly to james.hotornot.com, you might need to change your subscription. the feedburner feed to use is, as always: http://feeds.feedburner.com/jhong

Interesting opportunity

2008-01-29T09:49:00.000-08:00

My friend is moving on from his gig as Jet Li's assistant. Interesting position as Jet seems to utilize his assistant in meaningful ways. If I know you (or we know someone in common) and if you fit the qualifications, i can forward cover letter/resume.

Area of Focus:
film, non-profit (in order of work priority)

Location: Based in Asia

Job Description:
You are invited to explore the opportunity to learn and work with high level Chinese celebrity/philanthropist and learn the inner workings of the film industry in both the United States and China. The majority of work will involve hands-on involvement in building a world-class foundation from the grounds up. This will involve meetings with numerous high-level business and government officials to build and develop philanthropy in China and on a worldwide basis.

Employee will perform all the usual and customary duties of a personal assistant, including, but not limited to, review and respond to correspondence; scheduling appointments; translation of conversations and correspondence; organizing personal matters; and other duties that may be assigned.

Please visit one-foundation.com to better understand the world of this high level Chinese celebrity/philanthropist.

Desired qualifications:
-Fluent in Mandarin Chinese and English
-Degree from top-tier university with high GPA
-At least 2 years of work experience in consulting, banking, a large multinational, studio or equivalent experience
-Strong attention to detail
-Strong analytical ability
-Ability to follow through with projects and follow instructions as given
-Ability to travel frequently (50%)

The secrets of running a social network

2008-01-22T16:18:00.000-08:00

I guess the word is out, my best friend Max just raised a $50 Million dollar round on a valuation of about $500 million dollars for his company Slide.

An interesting thing about Max's position as the world's largest widget/app maker is that he has data about all the social networks that nobody else has... what has made some grow, and others not. Max has more data about the social networks than anyone else in the world, and beyond that he has the mind to turn that data into information.

I'm not sure how much he plans to share, but looks like he's starting to talk on a new blog. It will be interesting to see what kind of information he starts to divulge.

I'm not sure how well this idea scales, but..

2007-12-20T11:09:00.000-08:00

A+ for creativity and effort!

Check out FreeRice.com

basically it's a website where you play a word game, and every round you see another ad.. they take the money from the ad to donate money to the world food program. right now, each turn you take accounts for 20 grains of rice. neat!

james

ok, i admit it, i am a starwood points junkie

2007-12-19T22:54:00.000-08:00

last year i realized that all the frequent flyer miles i had accumulated on United Airlines were pretty much useless. I don't have enough status to ever use them, and their allocation for us normal people is pretty limited. i basically decided they were a waste.

so i started looking into other cards. i heard the amex from costco was pretty good, as is the fidelity visa.. but the one i heard about the most, and the one i settled on, was the starwood american express. i calculated that it was the best bang for buck, and you can pretty much use the points any time. on top of that, they will convert 20,000 points into 25,000 airline miles with a bunch of participating airlines.. so if you are into those airlines, there's really no reason why you wouldn't use this card anyway.

if anyone is thinking of switching cards, take a look at the starwood card here... you get 10,000 points (which is enough for 3 free nights at a lower end hotel, or 1 free night at a W in many cities)after you use the card once.. and please use my unique ID so i get some referral points too! :) My unique id code is 3073875980 :) :)

I know, it's kind of pathetic how much i love this card, that i'm basically falling for their multi-level marketing schemes... but really, it's an awesome program! :)

Web 2.0 parties are getting more pimp.. what does it mean?

2007-10-19T12:39:00.001-07:00

Three years ago at the first web 2.0 conference, My friend David Hornik and I both commented, "you know a bubble is coming when you start seeing more women at these things!"... at that conference, the ratio was still probably only 4:1.. but in silicon valley it's noticable when the ratio gets better than the standard 10:1.. (As a society, we really need to do something to encourage and support more women to go into the sciences, but that's another story!)

Whether it is a sign of a bubble or just that our industry is becoming cooler/more interesting to be in.. This week I went to a ton of company parties that also showed signs of something. The Myspace party at SF MOMA looked like they were trying to bring LA to San Francisco, complete with fancy decor, big banners for photogs to take pictures of hot women in front of, and.. hot women (clearly arranged for by the party promoters and co-host 7x7 magazine, because i didn't see any of them at the conference!)

Then last night, almost as if to out-LA LA, SF company BitTorrent had a small party at fluid to celebrate the launch of their CDN network (brilliant business move!). They apparently arranged in conjuction with a local radio station for Ashanti and Sean Kingston to perform to the tiny crowd. I took a picture of BitTorrent's founders Bram and Ashwin to memorialize the moment, sensing that it denoted SOMETHING.. whether it's a sign that the bubble is getting bigger, or the more likely conclusion that techie work is now getting more main stream and therefore a lot cooler remains to be seen! :)

Note: The photo above wasn't the actual one i took with my crappy cameraphone, it is a much nicer version taken by BitTorrent's Pierre Joubert!

Flash Game Developers, Mochi Ads is now open for business!

2007-10-15T17:02:00.000-07:00

You almost can't help but love the guys over at Mochi Ads. They are basically building an Adsense like system for game developers to finally make money off their flash games. Traditionally, all the money in that world has been made by websites that steal (or license for peanuts) the games and stick them on their own site, and they make money showing ads on those sites. In other words, the developer gets little to nothing for all their hard work.

With MochiAds, they stick the ads IN the game, so the developer no longer gets screwed when someone steals their stuff. In a nutshell, the people making the games make money, and they don't get screwed by the big guys anymore. Very cool!

Congrats to Jameson and the whole team there for finally opening up and letting everyone off the waitlist in!

In case anyone wants to play some fun games, here is a link to a page with some games that use Mochi Ads.. I personally like Bloons.

A lesson on life...

2007-09-28T13:36:00.000-07:00

This post is being written more for myself than for anyone who reads this blog.

Work has been pretty stressful lately as we had to make the unfortunate decision to undo going free. There are a bunch of other massive changes that have happened to compound the stress, but i won't go into that here.

What I do want to write about is the story of a trip i took 3 years ago with my friend Camilla. What I learned from that trip is something I don't ever want to forget, and at stressful times like these, it's good for me to remind myself of it.

Camilla and I both pride ourselves on being impromptu adventure travelers. Three years ago, Camilla said she was going to have 4 days off and wanted to know if i was up for a quick trip somewhere. We quickly honed in on Cuba as the destination of choice, bought our lonely planet guide books, and got housing arranged. All was good to go, the plan was for me to meet up with Camilla in Toronto and fly together to Cuba on Air Canada (you can't fly directly from the US to Cuba).

When we got to the Air Canada counter, they had bad news for us. The flight was oversold, and presumably because we had really cheap fares, we were being bumped. The conversation went like this:

"We have another flight available tomorrow that you can go on. In exchange for the inconvenience, we are prepared to give you a $300 Flight Voucher"

"Tomorrow!?!? Tomorrow is no good! We don't want a voucher, we want to get on this plane. It's not our fault that you oversold the flight, and why didn't you OFFER this voucher to other people instead of just forcing it on us???"

"Sir, it's $300! That's a lot of money!"

"I don't care if it's $30,000, we only have 4 days of vacation time, and you are going to make it 3! That's not worth any amount of money to us!"

"Well I'm sorry, but we can't get you on this plane."

"Ok, what other planes do you have going out to that region today?"

"The last one is a flight leaving for the Bahamas, but it leaves in 20 minutes, you won't make it"

"We'll make it, just do it!!"

In reality, the conversation was much more difficult than that. Getting the Air Canada people to do ANYTHING was a nightmare, and every step of the way they were rude and antagonistic. (I have a lot of canadian friends who are really cool so i'm not going to make blanket statements about an entire country.. but i will say that i got an eerie feeling the Toronto Airport does NOT like Asian people. When I returned later, I was forced to go through a higher level of immigration security, and i noticed that everyone else in there was Asian too. But that's another story)

Anyway, out of breath, we got to the plane just as they were closing the door.. we were off to the Bahamas! No plans. No arrangements. Not even a guidebook. Once we were on the plane, Camilla and I agreed that even though things were not going as planned, we would maintain a positive outlook and try to make lemons out of lemonade. We decided at that point that the theme of our trip would be "Go with the flow", having no idea how many more times on the trip we'd have to repeat that mantra.

Once on the plane, we borrowed someone else's guidebook and found that the city we were landing at, Nassau, was NOT where we wanted to be. We wanted to go somewhere with more culture, and less strip malls and resorts catering to tourists. So we decided that as soon as we got off the plane, we would try to fly to a different island.

We ran to the ticketing counters only to find that all the flights were full, and we were like #20 on the waiting list for an already TINY plane.

Unwavering in our resolve to maintain a positive attitude, we talked to the nice lady at the ticket counter and made friends with her. What should we do instead, we asked her? We told her about our situation of not having any plans because we were supposed to be in Cuba but got screwed by Air Canada. We made a lot of small talk with her.

After at least an hour of just standing around, not quite sure what we would do, the ticket counter lady called us over and whispered, "hey, you know what, i am going to get you on this plane. I think some people are not showing up, and i am going to get you there!" This was amazing, this complete stranger basically decided to scrap the waiting list entirely and just give the seats to us. "Go with the flow!" Everything was working out.

So we end up on a flight that landed roughly around dusk. When we landed we started calling every hotel on the island.. everyone was sold out, as it was a holiday weekend. crap.

finally we found one that said they had room. we rushed over in a cab and tried to check in.

"I am sorry, but we do not have any rooms."

"What!??! we just called though!!"

"I do not know.. who did you talk to? they were mistaken because we don't have any rooms available.. but if you would like to use our phone to call other hotels, you are welcome to do so."

It wasn't a huge island, and we quickly came to the conclusion after 15 minutes of calling that we were screwed. By this time, it was like 9pm. We were tired, a bit exasperated from all the changes, but again... we kept telling ourselves that this was part of the adventure. Maybe it might be fun to camp out on the beach or something?

All the roadblocks we'd been hitting all day were becoming almost comical to us at this point, like we were the protagonists of a bad movie where everything goes wrong. The fact that we were somehow stranded on some random island we'd never heard of instead of drinking mojitos at a specific hotel in Havana was a bit surreal.

Then the hotel manager came back.

"It appears that some people did not make their flight here, so we DO have a room available."

Amazing. By good fortune, we had happened to go to the same hotel that was booked by the people that missed the plane, which opened their seats up for us. We were essentially living out their vacation.

In the end, there were a few other things that happened over the trip that did not go as planned, and just like magic, things always ended up working out really well. If we hadn't been so determined to keep our spirits high, I'm pretty certain that trip could have become one of my worst vacations ever.. but instead, it beame one of the best ever.

So just remember.. when life is not going as you planned, don't stress out too much over the unexpected. No matter what happens make a conscious decision to go with the flow and have fun, because life may not always go as planned... but that is precisely what makes it such a great adventure.

On going (NOT) Free...

2007-09-27T21:08:00.000-07:00

I've been meaning to write a blog post about HOTorNOT's recent action to undo going Free, and i think this blog comment i just got says a lot about why:

"I like what you have set out for hot or not. I am also wanting to thank you and Jim for making it. I meet my soul-mate on hot or not and we want to get married in 2 years and were wanting to know if you two would like to attend?! THank you soo much. sincerely" -Jacqueline Nelson

Our hope was that by going free, we would get more letters like this because more people would be meeting new friends on our site. Instead, we got hit hard by scammers, and we instead started getting more complaints about how the site wasn't working as well anymore.

We tried to fight the scammers, but it's hard to use automation to model and fight scammers when they are not using bots, but have actual people working all day. Its amazing, but i guess in countries where wages are low, it is worth their time to spend all day looking for targets.

The level of sophistication of some of these outfits is astounding. It is not a few amateurs here and there doing it as individuals, they are organized outfits that operate like call centers. We found that there were people whose job it is specifically to get IM addresses out of people, at which point the target is passed along (like a call center escalation) to someone who speaks better english to work on chatting the person up and eventually extracting money. In a nutshell, they train specialists on each step of the scam! Because these are actual human beings doing it, they can pretty much get around automated detection systems, and they usually do the dirty work once they are off our system and on IM (where we can't model them anymore).

We know that fakes are becoming a bigger and bigger problem at other sites as well, and for the time being we would rather go back to a model that works (and reduces economic incentive for the scammers) than be a free but decreasingly useful service. I'm told this is the reason eBay was successful charging (to this day) listing fees... it basically kept the crap out, which made the marketplace work. Apparently the same thing happens in dating.

Every dating site i know and talk to tells me they are dealing with the same issue. Markus at plentyoffish seems to be doing a good job of fighting it, but tells me it gets harder and harder every month to maintain. I agree with him that combating scammers is a competitive advantage in the dating game.

So that is why we are going back to a paid model for the time being. Despite our explanations, only time will tell if people are not super pissed at us for giving them something, then having to take it back. Hopefully they will understand we did it for the right reasons. Our goal was not to make more money, but to make HOTorNOT bigger and hence more useful as a dating service (if were were profit minded, we would have never gone free at all)

Humorously, we've gotten supportive emails from women saying they wouldn't want to date a guy too cheap to spend $6 anyway, lol

In the meantime, I guess we'll have to figure out a different way to reinvent HOTorNOT!

If I could go back in time and change my major..

2007-09-27T19:24:00.000-07:00

One of my friends from business school is a fellow named oren tversky. Oren is low key and modest to the extreme, and he is also in my estimation one of the most intelligent people i know. he thinks about (and worries about) things that most people don't.. which i'm not sure is a blessing or curse, to be honest.

I later found out that Oren's dad was a famous professor named Amos Tversky, who pioneered a lot of research in the decision sciences and would have won the nobel prize had he not unforunately passed away. His partner in crime on the groundbreaking research, Daniel Kahneman (who did receive the nobel prize for their work), spoke at an EDGE conference recently, and they have some transcripts of parts of his talk here. I enjoy reading this stuff so much, i had to link it.

If I could go back in time and change my major, I would absolutely join their field. Understanding their research is probably one of the best ways I can think of becoming a better innovator of products. I also recommend a book called Influence. and The Game (interestingly, pick up artists use a lot of technique based on academic theory.. i recall the author of the game even cites the influence book a couple of times.)

Cute video listing a bunch of funny things on the web

2007-09-13T13:04:00.000-07:00

Did I just miss it, or did they forget to include Hamster Dance?

Go Zero G!!!

2007-09-04T14:53:00.000-07:00

Last year, my close friend S invited me and a bunch of other friends to join him on Zero G, an airplane that simulates the weightless of space by following a parabolic flight path. (15 times in a row, it nosedives for 10,000 feet then pulls back up just as fast) It was easily one of the best experiences of my life. This past weekend I was lucky to go a second time for my buddy G's bday party.

For an experience that lasts about 15 minutes the price is steep (but makes sense it would be expensive considering it is basically you and 30 other people renting out a specially modified Boeing 727 for 2 hours). That being said, it is definitely worth the price to experience zero-g some point in your lifetime. It is UNREAL.

In other words, DO IT!!!!!!! It is awesome!!!!!!

The Zero G people are smart, apparently they are now going to be flying the plane mostly out of Las Vegas.. sounds like every bachelor party now has something cool to add to the agenda! VC/Private Equity shops should probably start doing this as a team bonding thing too.

You can learn more about it on the zero-g website here.

why i didn't move to china

2007-08-27T02:36:00.001-07:00

My sister and niece were coloring in a coloring book recently. My sister was coloring the sky blue when my niece yelled "mommy, stop it! the sky isn't blue... it's white!!"

They live in Beijing. The pollution is so bad there, it's fairly rare to see a blue sky. (Last summer while visiting, i saw it 3 times in almost 3 months). Instead,what you usually get is a pollution induced overcast, and sometimes what feels like a dense fog (much thicker than a San Francisco fog).

My niece thinks the sky is supposed to be white by default. That is a problem.

Today, the NY times had a scary frontpage story about how bad it is.. Read it. It's bad, and it's not just China's problem, their pollution reaches us in the States! (of course it is us buying their goods, so we are not faultless in the situation)

Here are a few excerpts:

The level of such particulates is measured in micrograms per cubic meter of air. The European Union stipulates that any reading above 40 micrograms is unsafe. The United States allows 50. In 2006, Beijing�s average PM 10 level was 141, according to the Chinese National Bureau of Statistics.

Much of the particulate pollution over Los Angeles originates in China, according to the Journal of Geophysical Research.

Oh man.. First apps then this? Game. Over.

2007-08-21T15:06:00.000-07:00

"Now, when you're writing messages, you can send the message to people on Facebook, and to people not on Facebook. " - from Facebook Blog

I think this innocuous little move is really, really big.

Facebook 2 All others 0

Whoa.... speed of light broken?

2007-08-16T15:00:00.000-07:00

A pair of German physicists claim to have broken the speed of light - an achievement that would undermine our entire understanding of space and time. (Think they can mount their contraption into a Delorean?)

http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2007/08/16/scispeed116.xml

Man Versus Wild and Survivorman

2007-08-14T17:01:00.000-07:00

About a month ago, i got hooked on the tv show Man versus Wild. Then I heard there was a more hardcore show where the dude didn't have a film crew and just filmed himself, called survivorman.

the biggest difference i noticed between the 2 shows is that after 3 days of not eating and being out in the wild, the survivorman seemed to often get really lethargic and somewhat depressed, while the man versus wild guy seemed to always have lots of energy.

i also noticed that in man versus wild, the host is labeled as "presenter" in the credits, while someone else is always labeled as "survival expert"

all of this, plus the fact that things always happened to happen just a bit too conveniently for the man versus wild host (i need water.. oh look, here's a spring!! how lucky!!), led me to believe the show must be staged... which is fine, nothing wrong with saying "this show will educate you on what to do", but they actually claim that he is surviving out in the wild somewhere.

today, somebody sent me this awesome video confirming everyone's suspicions:

Thank god i'm not in this one

2007-08-07T01:15:00.000-07:00

There was an article in the NY Times yesterday about how people in silicon valley who have millions of dollars don't feel rich. I was interviewed for the piece, but thank god i wasn't included. Perhaps I didn't sound whiny enough?

Of course, I doubt the people interviewed were actually being whiny.. it just sounded that way a bit (to me) because of the angle Gary was taking. But one thing i think people miss is that it is possible for someone to say "I don't feel rich enough" and to recognize that s/he is fortunate at the same time. I think the people in the story surely realize that they are more fortunate than most, and they aren't asking you to cry for them.. their only point is that they still feel the need to make more.

heck, i'll be the first to be honest and admit it. I am in a good enough position that it is silly for me to worry too hard about my financial well being, but out of sheer silliness, i do still worry. The truth is if you are reading this post, you probably fit that description too because worrying about the fact that you might not have enough is pretty much human nature, and if you are reading this post you are definitely better off than the average person in this world.

It's easy to speculate what life would be like, if only you had some arbitrary sum of money.. "oh man, if i had X dollars, my life would be so different and i would feel great about life, and i'd just retire." But what most people don't realize is that if they ever got to x million, they wouldn't necessarily be happier. The old cliche is true, money doesn't equate to happiness and retirement usually drives people nuts.

(However, I also believe that not having enough money DOES suck and does make your life more stressful and problematic. Nobody ever mentions that when they talk about how having more money doesn't make you happier.. having less DOES usually make one sadder.)

ps. if you watch the video of mr. steger on the article page, you learn that one reason he is so driven to make more is because his daughter had a kidney operation and probably won't be covered by insurance should it pop up again in the future... and he wants to make sure he has the money to pay for her medical bills.. that part didn't sound so silly to me, but that's more a testament about the state of our healthcare system than the real-world-disconnectedness of silicon valley.

Japanese Gameshow Madness

2007-08-02T14:10:00.000-07:00

Human Tetris.. Awesome.

Who says a Facebook strategy is pointless?

2007-07-13T17:34:00.000-07:00

Thanks to my buddy who has access to Comscore's MediaMetrix, it's nice to see the effects of all our hard work!

A significant portion of our Facebook traffic is actually from our Hotlists product rendered as a Facebook Application.. It sure would be interesting to start targeting brand ads based on specific user brand preference data ;)

Right now we don't have any in-house ad salespeople.. anyone interested? contact us at hotornotjobs (at) gmail.com

we are also looking for a few more good coders.

Reinventing HOTorNOT, Part III

2007-07-09T19:04:00.000-07:00

This was actually the beginning of Part II, but I realized it was a bit too long and so I cut this part out.. In the interest of keeping it, I've made it a separate post. This gives the higher level explanation of how we came to our strategy

---

To explain how we came up with our new strategy, I need to first explain how we think about our business. There are actually 2 points I want to cover:

1. The way we see our business is different than how most people see it
2. Our name is extremely valuable, not only as a brand but also a context setter.

Point 1: The way we see our business is different than how most people see it

When we first launched HOTorNOT, we used to wonder if the site would die quickly like many other web memes. After all, we saw it as most people saw it:an a fun but silly site where people looked at other people�s pictures and said if they were Hot.

Fun and innovative? Yes. Sustainable? Not as likely.

But then one of our former advisors, the late Richard Newton (former dean of Berkeley Engineering, venture partner at Mayfield, pioneer of SPICE simulators, and advisor to the founding teams of Cadence and Synopsys) said something so insightful it made us realize that HOTorNOT was more than we had originally thought...

�PEOPLE are the killer app,� he said. Richard realized that what we had was a platform that attracted people and could connect them. Around those words, we decided that our company�s goal would be to become �the ultimate people router�.

Our focus on connecting people, not just on showing pictures, would be the core of HOTorNOT�s sustainability. Connecting people around dating was the first obvious extension of our service, so we launched a dating section on HOTorNOT just 3 months after launching the site� but dating is only a subset of the types of relationships people have an interest in, so to keep it generalized we named the section �Meet Me at HOT or NOT� instead of something like �Date Me at HoN� or �Find your soulmate at HoN�. It was our hope that people would use the system not only to find their soulmate, but also just to meet new friends around common interests.

Richard saw the potential of the Internet, and of our site in particular, as a means to deliver something more important to people than even information or search. We want to deliver people, because people are the killer app.

So as I mentioned, how we see our company is not how most people have seen it over the years.

Our company is not about rating people, it is about connecting them.

Point 2: Our name is extremely valuable, not only as a brand but also a context setter.

The word HOT is interesting because unlike most other words that are used to describe something as being really good (like awesome, killer, tight, rad, groovy), the word HOT is not a fad. According to an article I once read, the word hot has been used in that context for at least a millennium. In other languages, the equivalent word for hot is often used in the same way.

The article hypothesized it is based on your human physiological response to anything you find exciting: your heart races, you start to sweat� quite simply, you feel hot. This is why spicy foods are also often referred to as being hot.

In a nutshell, because we are all human, the word HOT is not a fad.

And then there�s the NOT part. Not rhymes with Hot, which makes HOTorNOT insanely easy to remember. Rhyming may very well be the best mnemonic device we have, and it makes things catchy.

All of this makes HOTorNOT a great name� sustainable and memorable. But there�s one other thing that HOTorNOT does really well� it sets the right context.

Countless companies, many of them huge megacorps, have tried copying our picture rating service under different names. AOL tried, Myspace tried. But none of them really got their products to take off. Somehow, for some reason, the name HOTorNOT sets just the right tone of being fun and puts people into the context of sharing opinion on things in a way that the names �rank� and �rate my buddy� don�t.

But is HOTorNOT limited to setting the context around rating pictures of people? No. The word HOT can be used to describe lots of things as being good� a movie can be hot, a car can be hot.. Almost anything can be HOT. So, it turns out, HOTorNOT is a great name to create a context for sharing opinions about ANYTHING.

So this got us thinking... HOTorNOT as a picture rating/dating site could certainly be a profitable business, but an empire could be built on top of the brand HOTorNOT once we start extending it and applying it to everything.

Reinventing HOTorNOT, Part II

2007-07-02T15:58:00.001-07:00

1 + 2 = 3. Our new product strategy

ok, enough blabber about why we needed to change, let's talk about what we are doing.
These 2 points are the genesis of the long term strategy for our company, which I explain in part 3 of this post.

1. We are about connecting people
2. Our name sets wonderful context for sharing opinion on anything

Add these together and you get

3. HOTorNOT enables people to share their opinion on anything, and helps connect people around those opinions.

(You�ll note that our prior business fits into that category, if you replace �anything� with �pictures of people�.)

We are confident that if we stay true to this mission, we will make products that will impact a large number of people�s lives in an utterly positive fashion.

Plus, the timing is right. Based on the way we plan to monetize these communities, the main thing really missing to support this empire was the emergence of online brand advertising. Last year we realized this last remaining piece was starting to happen.

Overview of HOTorNOT Hotlists

3 years ago, we started testing our current rating interface and had friends rate pictures of shoes on a scale of 1 to 10. Not surprisingly it was pretty boring, so we quickly realized our future might involve building a different interface. To that end, we came up with our new Hotlist product.

The concept: wouldn�t it be cool if users could, as a means of self expression, display pictures of the things they think are HOT on their HOTorNOT profile? Kind of like how people like to put posters of things they like on their walls, or how people like to wear t-shirts with logos of things they like.. it can be anything.. bands, tv shows, movies, clothing brands, colleges, products, even non-tangible ideas!

Each picture (what we are calling �Stylepix ��) can be anything that a person associates with as an element of his or her own style.

In essence, Hotlists are a form of having visual keywords. Visual keywords are different from text keywords (�aka tags�) in that with text, the more information a user adds, the less anyone else wants to read them. With pictures, people are more likely to look, they are able to comprehend the data faster, and they will remember the list better than they would a text list.

For example, here is a screenshot of my HOTorNOT profile with my top 8 �Stylepix� at the bottom. If you clicked on the �Show All� link, it would take you to a page with my entire Hotlist

One cool part about the system is that when you are looking at someone else�s Hotlist, if you see something that you like, you can add it to your own Hotlist simply by clicking on a plus sign that appears over the stylepix. You can try it out yourself by taking a look at my Hotlist.

We recognize of course that this sort of functionality should not be limited to HOTorNOT users alone so we created exportable widgets too. Here is an example of one:

By enabling people to add Stylepix to their profiles, people are able to define themselves through a collage of entities that already have well known attributes. In other words, I am expressing my �james hong brand� as a mashup of many other well known brands that I identify with. It doesn�t have to be just brands, by the way� we encourage people to list anything they identify with. If you hate corporations, then be sure not to stick any company brands on your Hotlist. That�s cool with us.

So HOTorNOT is now enabling everyone on the web to define themselves with pictures. As a Hotlist user, all you have to do is browse other people�s Hotlists or search our directory and hit plus signs. Yes, you could do this yourself manually if you wanted to, but doing so is prohibitively tedious whereas building your Hotlist is actually a lot of fun. The beauty is that only one person has to bother submitting a picture to create a stylepix, but everyone benefits. Because of this, the directory is already fairly comprehensive.

How does the User benefit?

1. Hotlists are a means of self expression. In a world where everyone�s social networking page starts off looking exactly the same as everyone else�s, this concept becomes very important. The response in usage we have had so far indicates that many users like this product a lot.

2. By understanding what a user likes and doesn�t like, we are hoping to do some serious data analysis to start letting them know what other things they would probably think are HOT and NOT. In a world where users are willing to tell us more about them, we should be able to give them more tailored information back. General lists are cool, but tailored lists are cooler.

For example, remember how America�s Funniest Home Videos used to always be a highly rated show on Nielsen�s lists? I pretty much hated that show. On the flipside, I loved Veronica Mars, a show that just got canned. People are individuals who have individual taste. Lists should honor and respect that individuality.

In doing so, we are going to connect people not only to other people, but to other things that they would like too.

3. We are building communities around each Stylepix, enabling people to find and communicate with each other.

This is actually the coolest part about what we are doing. It is still super rough around the edges, but I think the concept is demonstrated a bit by what we�ve built already.

Each Stylepix submitted to the system (they are ALL user generated) has a Stylepix page that will become the basis of a community. Want to find a NY Yankees fan who might have tickets to sell? No problem. Want to find a Hot Girl that likes Linux? Believe it or not, also not a problem.

Not only will the Stylepix page connect people to other like-minded (like-styled?) individuals, it will also provide a place for people to talk about the Stylepix and share their opinions. Over time, we plan to do some really cool stuff on these pages to make interaction more fun and more interesting.

Here�s something else a bit different: our goal is not to build these communities for HOTorNOT�s users only. We are happy to overlay these communities on top of existing social networks and connect them all. In fact, we already have over 500,000 people on Facebook are already using the Hotlist product, and they can communicate on the Stylepix page with any other Hotlist user whether she comes from Facebook, HOTorNOT, or anywhere else we distribute the system to. There are a lot of cool things we are going to do with the data in addition to the cool communities we are building, and we are fine with the entry points to the system being distributed rather than centralized.

If you want to try building a hotlist for your Facebook profile, click here.

How is this a business?

Turning away from a subscription model is hard because it is a simpler business. We know we created value for our users because over 15% of free members ended up paying for it. How does our new strategy fit in with making money?

1. Improving Ads on HOTorNOT

First, making this move will enable us to raise the effective CPM rates on our site. If I know you are interested in computers, I can show you techie ads instead of random "punch the monkey" ones. Even better, if you happen to be on a stylepix page, that ad can become even more targeted. Are you on the Verizon Wireless page asking people if Verizon has good coverage in Memphis? Maybe Sprint would like to show you an ad. In essence, HOTorNOT pageviews used to have little context for targeting and few themes for channelization. With this data and with these communities, we will have plenty of both.

2. Use the data collected to build a superior Brand Ad Targeting Engine

The way brand ads are targeted today is based on inefficiencies of historical media platforms. Making advertising decisions based on the information that I am an Asian male, aged 34, living in San Francisco, with a 60% chance of being in the $75-100k income bracket is better than nothing, but still limited. The industry evolved to that standard because that was the best targeting publishers could provide.

We think the future is a lot richer than that, and we think knowing what someone�s style is (what bands they like, what clothing brands they like, what beers they like, what music they like, what whatever they like) can help us give them a better experience. If you are going to be shown ads, the ads might as well be interesting ones that start bleeding into being content. (Ever notice how fashion magazines are often half ads... and how people actually ENJOY looking at those ads?)

We know from experience that brands cluster. People also cluster (remember high school?) And finally, people-clusters cluster around brand-clusters. By utilizing a wealth of explicit user preference data, we think we can ultimately make your advertising-supported experience on HOTorNOT suck less. In fact, maybe we can make it useful and enjoyable. And if we�re really ambitious, we can do it outside the confines of our website too.

3. Helping Buyers. By connecting people who may be able to answer questions about the products they love to people who might be making purchase decisions, we can start helping people who are in the market to buy things. We believe the conversations that will happen in our Stylepix communities can be used to extract a lot of valuable information for people who are trying to decide, for instance, whether the iphone is
worth getting now or not.

4. Market Research. There is a large industry centered around giving marketers high level, aggregate data about their brands. Who likes their brand, what other things correlate with their brand, how is their brand trending over time, in specific locations or among a specific demographic. Most interestingly, we can also figure out who the trendsetters are.. which people tend to add the next big things first, and what are they adding now? We think we can bring Coolhunting to a new level.

In closing...

So there you have it! :) We believe the shift we are making is pretty large. It was emotionally more difficult than we thought it would be to pull the trigger on so drastically reinventing our company. But we�ve gotten some encouragement along the way.

We�ve gotten a lot of validation on our new plan from people that we respect immensely. We�ve gotten a lot of interest from big companies that want to get involved, both from the data side and from the community building side. But the best sign of validation comes from our users who are signing up like crazy and telling us they love what we are doing. Fundamentally that is what matters most.

If you are a programmer and are interested in joining us, please check out our jobs page! Not only will you get involved in our plans, you will have the opportunity to learn everything you need to know to create and run your own web company.

This post was part 2 in a series, to learn more about our company's changes, be sure to see part 1 too.

Reinventing HOTorNOT, Part I

2007-06-27T12:04:00.000-07:00

Ever since I came back to HOTorNOT in October 2006, people have been asking me what the company is up to. For the previous 6 years, HOTorNOT had pretty much been steady along the same course: A picture rating site with a dating-like application built on top (without the seriousness of a dating site) that generated healthy amounts of cash for my cofounder Jim and I. For the first 3.5 years, it was Jim and I working about 10 hours a week each, with the company earning many millions of dollars per year.

Then 2 things changed, and we realized we had to change with them:

1) Startup economics improved, making it harder to keep good people
2) The Online Advertising Market improved, making free competitors a reality

1. Startup economics improved, making it harder to keep good people

Three and a half years into running HOTorNOT, Jim and I grew tired of having our personal lives dictated by the health of the website. So we decided to hire employees to help us run the cashcow� but as I have mentioned in the past, getting really smart people to be happy running YOUR cashcow in silicon valley is nearly impossible. You have to either decide to grow a large organization and institutionalize things (but also recognize that the average caliber of the team is likely to drop� and these are the people you have to work with every day), or you have to recognize that those people are going to eventually leave. By late 2006, all of our employees wanted to leave to go do their own things. They recognized that the costs of doing a startup had gotten so low, it made less sense for them to stay at HOTorNOT than start their own startup.

This was of course our own doing.. after all, we hired them BECAUSE we thought they were smart and entrepreneurial. Most of our employees were also younger and have nothing to lose, due to the fact that we mostly recruit straight out of Berkeley. We learned a big lesson here: don�t expect smart, young people to do anything that you wouldn�t do yourself. Jim and I both had to admit, if we were 22 years old, we wouldn�t stick around running someone else�s cashcow for no equity, even if we earned salaries 2-3x the normal wage. We either had to let them go or give them equity.

Problem: We needed top talent, but working at HOTorNOT sucked. Employees shared no upside. To make matters worse, they were encouraged not to take risks because Jim and I were overly concerned with preserving cashflow, making the job boring.

Solution: We finally created a stock option plan for our employees. I will explain in greater detail in a future post why we did not give options to employees in the past, but for now I will just mention that we were an S corporation and that that caused complications. Giving the team a large cut of equity has aligned their interests with ours and we�ve seen it breathe an incredible amount of new energy into them� as it should. They are now working for themselves now and not for us, and we think that is a better situation for everyone.

The other thing we did is start encouraging innovation again, rather than squelch it in fear of our any changes hurting the cash cow. Changes are now made to the site that I don�t always agree with, and in some cases I don�t even know about� and as long as the team is measuring and testing the effectiveness of everything, that�s ok.

(as an aside: our original vision was to become an incubator and to enable our employees to work on new ideas, and let them spin those off as separate companies.. basically let our employees graduate into becoming funded entrepreneurs at a time when funding was hard to get. Our first and only attempt at this was back in 2003 when we hoped to work with Steve Chen and Mike Solomon to start Yafro.com, which was going to be a social networking site with media sharing applications built on top.

In the end things did not work out because some members of our board were uncomfortable with the idea of giving the employees of a spinout majority share and control� so Jim and I agreed with Steve and Mike that it was a no go. It�s hard to say what would have happened if things had moved forward with them, but given Steve and Mike�s huge success with YouTube, it is easy to presume that this was a huge mistake. In general, Jim and I both believe (especially now) that it is better to find people you believe in and take a chance on them than in trying to control and own them. People will work a lot harder if they are working for themselves and feel in control of their own destiny than they will for you.

In the future of the web, the majority of value is in innovation and the quality of execution, not in the funding resources a company can provide� giving employees a healthy share, and a majority share in the case of spinouts they are primarily responsible for is not only not a bad idea, it�s the BEST idea. Another example of this is Yelp, which was a spinout of Max Levchin�s incubator.)

2) The Online Advertising Market improved, making free competitors a reality

The second thing that changed was the development of online advertising. When we launched HOTorNOT, we had no choice but to charge subscription fees for it. That was the only way to pay our server bills because CPMs on ad networks for sites like HOTorNOT dropped to about 3 cents (that�s 3 cents per 1,000 ad impressions shown). So we developed a subscription service on top of our dating service, and that quickly became very profitable.

But what happens when an advertising model DOES provide an adequate amount of revenue, even if just for 2 or 3 people? That means it is now possible to offer the same scale of services and still be profitable, entirely on an ad model� and from the customer�s standpoint, if they can do something for free versus the same thing for charge, which do you think s/he is going to pick? This has enabled free sites like Myspace, Facebook, and PlentyofFish.com to pop up, and it is a real long-term threat to most subscription sites.

There is no doubt in my mind that HOTorNOT�s traffic started to drop around 2004 due to free alternatives, primarily social networking sites. It�s not that these services made HOTorNOT worthless to users, it�s just that they had alternatives occupying their time.

While HOTorNOT�s profitability was still extremely strong thanks to a large loyal base of paying users we�d built up over the years, we saw the writing on the wall.

Problem: Free competitors

Solution: We decided we had to stop being conservative in our actions, and in our desire for cashflow. Earnings became like a drug addiction to us, to the point where we stopped innovating and we became more focused on making sure our next dividend check was coming (and to hell with longer term trends!)

So the first decision we made was to go cold turkey and make HOTorNOT free. If Subscriptions were our past and Advertising and Digital Goods were our future, we had to take the plunge at some point, no matter how painful.

This has much broader implications than you think. First, we now had less to lose by being aggressive (countless right moves were killed in the past because we were worried about what it would do to our bottom line). The other thing this did was it enabled us to let users create more user generated content on the site. User generated content is the real power of the web... but when you run a dating site, one of the things you have to do is screen ALL content to make sure nobody is hiding their contact info in their profile somewhere. Screening all content on a UGC site doesn�t scale�. but under an advertising based model, letting users upload more data doesn�t threaten the business model, it helps it. If a user wants to put their contact information in there, so be it.. it probably only helps us now.

Stop Clinging to the Past and Jump into the Future

While these changes may sound small and incremental in theory, in practice they are not. HOTorNOT is a completely different company to work at than it was just 6 months ago.

It used to be a cashcow where the employees didn�t hold any equity, and where innovation generally took a backseat to income preservation. It was so miserable to be at, even the founders left.

Today, it�s a pretty different story. Things are not boringly comfortably, they are more risky and exciting� but that�s ok because employees now hold equity, so they work hard and they think about and build things for HOTorNOT with general guidance but low supervision... They take more initiative now and are encouraged to take risks� and they feel a larger sense of ownership and pride in their work. On the side, they�ve even built 2 major Facebook apps (Moods, which has almost 2 million users in only 3 week, and Pets, which has 200k very active users). Both of these products may be spun-off as separate companies in the future, with employees involved likely keeping a substantial amount of equity in order to give them a majority of the control and a majority of the upside.

Most importantly, working at HOTorNOT is a lot more fun. Traffic has doubled in the past 3 months (doing about 20 million pageviews per day now), people are building cool new things that users love, our newer employees are learning more here than they could ever learn at a big company, and people are now working hard for their own upside.

Making these internal structural changes was essential to reinventing the company for our employees. Once these changes were in place, our newly motivated team started getting to work on reinventing the company for our users. We are now pointing HOTorNOT in a strange new direction that some have called crazy, others have called brilliant, and a few have called both crazy and brilliant at the same time. I�ll be following up on this post shortly with another blog entry revealing those changes.

In the meantime, if you are a coder and want to work somewhere that doesn�t suck (in fact it�s downright fun now), be sure to check out our job postings. We are trying to add 3 more coders to the team. (We are about 14 people now.. the jobs page is outdated :) ). We are also looking for a business hire to help run things, as well as an ad sales person.

The 300 Baud Club

2007-06-20T11:05:00.000-07:00

I met up with Josh Kopelman yesterday. Josh was the founder of Half.com, my favorite story about him is how he got the attention of Meg Whitman (CEO of ebay, who eventually acquired half.com): He plastered every stop sign between meg whitman's house and the ebay office with Half.com bumperstickers. Genius.

Anyhow, 2 questions i always ask people in the internet industry around my age are:

1. What was your first computer? (Mine was an Atari 400, although I played more on the Apple IIe)

and

2. Did you play with modems, and what kind did you have? (My first modem was the Hayes Internal 300 baud Smartmodem, followed by the awesome Novation Apple-Cat II.) This question sometimes follows into a test of recollection of the Hayes AT command set

Josh started with an Apple II and also had the Hayes Internal Smartmodem. We also geeked out about what games we were into, Josh liked Taipan, I was an Ultima Fanatic.

Ok, what's my point.

It seems to me like amongst all the successful web entrepreneurs I know, a high proportion played fairly early with computers, and more importantly, with modems. I'm not just talking small companies like HOTorNOT, I mean the founders of a lot of BIG internet companies too. The biggest, in fact.

My guess is that the same set of nerds that were tying up their family's phone lines downloading warez, wardialing, and trying to build blue boxes were also the earliest people to grow up immersed in online communities. They were the first generation that grew up online. (Incidentally, Jobs and Wozniak, the founders of apple, first got into the business of building blue boxes before they built the Apple I)

I often tell people that in a connected world, an online identity can mean as much to a person as his/her offine identity. This seems to surprise some people, but the truth is, it was already true of me and a lot of other people trolling around BBS's back in the 80s. It's probably because we were so dorky offline and could feel cool online, but that's another story..

It's funny, but whenever I meet other entrepreneurs, the thing that we usually bond over most is not the Internet today or where it's headed... we usually bond over the old days, talking about the Apple II or how exciting it was when the capability for 8-bit color came out (which meant we could now download porn, basically)

I guess it's official.. when you bond with people over the good old days, it's a sign you're getting old. :)

Yahoo for Yahoo!

2007-06-19T09:12:00.000-07:00

Terry Semel is out and Jerry Yang is now CEO of Yahoo.

This is such incredibly good news for Yahoo, I can't express in words how strongly I feel this is a good move.

Let's be honest. The companies of the future are not big media companies that force feed content down user's throats. That was only true in an old world where 2-way communication could not economically exist. TV, Magazines, Books, they are all very compelling, but not as compelling as conversations. The biggest companies of the future connect users, they don't speak directly to them.

The biggest companies of the future also let other people make money off of them, they don't try to do everything themselves. They are ecosystems for other excited companies.

Ebay. Paypal. Google. Facebook... these companies all fit that bill. (yes, notice Myspace is not there.. I hope they are working on an app platform)...and now with Yang at the head, hopefully Yahoo will regain its rightful place as an innovator and a company to watch.

I have no doubt that with him at the top, and folks who "get it" like Bradley Horowitz involved in product development, Yahoo's future is bright. It's going to be a painful transition though, over the last 5 or 6 years Yahoo has gotten bloated with lots of "big company" types who think a certain way. Yahoo management is going to have to be VERY strong and adamant that the culture is changing, and if people don't like it, please leave. Heck, they should probably set up a career center to help those who don't fit in leave faster.

So in a nutshell, Yahoo for Yahoo! Change is good, and in this case, it's REALLY good (and needed).

Facebook Apps

2007-06-12T19:28:00.001-07:00

I've been evangelizing Facebook Apps so hard to people lately, people have actually come up to me and asked me if I own stock in them or something. (Sadly, I do not)

I will write a bit more down the road about how successful our company has been at proliferating random apps on Facebook (the most notable others that have jumped into building apps beyond their core apps are slide and rockyou), but suffice it to say it is CRAZY. It took us 8 days back in 2000 when we first launched HOTorNOT to break the "1 million votes counted in a day" milestone, and that was with the help of a lot of press. On Facebook Apps, we achieved the same goal in 4 days, with absolutely no press and no hype. There are some even crazier stats than that, but I will save those for another post.

Someone I have a lot of respect for (despite his poor taste in college football/basketball teams) is Marc Andreessen. Marc just wrote an interesting blog post about Facebook Apps that I think is pretty much dead on.

I only take exception to one thing he wrote:

the Facebook Platform is primarily for use by either big companies, or venture-backed startups with the funding and capability to handle the slightly insane scale requirements.

I disagree with this. iLike's application may have been particularly heavy, but it is not inconceivable (in fact I think it is more likely than not) that people will come up with massively popular apps that are not as machine intensive as ilike's particular application might have been. Combine that with the fact that facebook allows advertising, and the fact that managed hosting companies exist, and i think it is quite feasible for 2 guys and an idea to scale.

Granted, they have to be REALLY good.. but really good people out there do exist.

Jim and I scaled HOTorNOT by ourselves, with no money injected. There are plenty of sites out there that have grown to sizable scale with no money taken. There's a saying I heard recently that "creativity is what happens when you take a zero off the budget." (Sorry i can't remember who said that, but if it was you please let me know so i can credit you!!)

I am betting there are a LOT of really smart, creative people out there who WILL be able to make large scalable apps on facebook without taking in money. If any of you are exploding right now and need help, feel free to contact me.

Marc, I want my dollar back. Care to wager on this, timeframe is by end of year, milestone is an app with 5 million users by a company with no funding, running profitably :)

james