Archive for December, 2007

Having lived through the first Internet bubble I see as many differences with “Web 2.0″ as similarities to the madness of the ’90s. Still, this video from nextNY.org is too funny and timely not to share. So enjoy your tiny bubbles tonight, let’s avoid making another big one, and see you next year!

I decided to publish a readers “best-of-2007″ list for my final post of the year based on a Google Analytics site report. Here are a dozen plus two of the best stories on this blog in 2007 (click on the title to go to that post) ranked by number of visits:

Games Meet the Social Web

A handful of US and European developers have been working in stealth mode on game engines and frameworks with low barriers of entry: inexpensive or free, browser based, pre-built components and code. Now that these products are beginning to come into view it’s notable that most are using social media as an integral part of their business model and banking on users to build a good deal of the content.

Sony Eyes Club Penquin

You may have liked my original post but boy was I all wet on this one! I seized on a news story and wrote, “Bringing new meaning to the phrase global warming Sony is in talks to acquire Club Penguin, the virtual world for kids from British Columbia. Sale price is rumored to be in the range of $450m, a 7.5 multiple of Club Penguin’s reported $60m sales… a healthy increment and further evidence of the rapidly growing interest in mmogs and virtual worlds appealing to young kids, a market that includes the educational and social Whyville, purely social worlds like Habbo Hotel and Nicktropolis among others.” As we know now it was Disney and not Sony that ate the Penquin. Still, according to Lane Merrifield who I met at Dust or Magic, it’s all going down quite smoothly.

IBM Gets Torqued

It’s no secret that IBM has been experimenting with Second Life and other virtual world platforms for some time. More recently the “desire to have a more secure intranet environment where we can meet and explore the potential technology and social implications” has prompted the addition of Garage Games’ low-cost Torque engine to their arsenal, according to the eightbar blog this week.

Games, Learning & Society

In his opening keynote at the Game, Learning & Society 3.0 conference in Madison, WI last week, Professor James Gee set the stage for the year’s most substantive conference on learning games and simulations. Among other points made in his opening remarks, Gee observed that:

> The game business has managed to profit from selling products that present extremely challenging learning experiences which players willingly master — the stuff that’s extremely difficult to get kids to do in school.

> Games encourage performance before competency, the opposite of the dominant pedagogy in today’s schools that stress the ability to recite facts in order to pass the test before actually demonstrating competence in a particular domain.

> Games are problem-solving spaces that cultivate a culture of learning, and learning complexity is an altogether legal drug that humans can’t get enough of. The gamers attitude to failure is “fail early, fail often” if it is in the service of learning something critical to success.

> Gamers learn to look past the eye candy to solve the underlying puzzle of the quest or mission that they’re on — just the kind of discriminatory abilities that are core 21 Century skills.

> Games, particularly MMOGs, are highly social systems where players are driven by a common passion or agenda, just as they must be on the cross-functional teams that are cornerstones of today’s globalized businesses.

Serious Game Engine Shootout

Serious games and educational simulations are an unique product category with functional requirements that are different from platform and casual games, MMOGs, and drill-n-skill learning games. The gameplay itself is only the tip of the iceberg: hidden out of sight is an engine the player doesn’t see. As an emerging market, however, little has been written about the best engines for building serious games. This lack of transparency makes it difficult for publishers to choose development partners, and for developers to scope new projects. My article “Serious Game Engine Shootout: a comparative analysis of technology for serious game development” and panel discussion on March 6th at the Serious Games Summit is intended to help address this deficiency. For more on the topic visit my new Resources page.

Web 2.0 Deconstructed [kml_flashembed movie="http://www.youtube.com/v/6gmP4nk0EOE" width="425" height="350" wmode="transparent" /]

Gamer-Centered Design

I’ve championed user centered design for years and in part that’s behind the argument for using educational games and simulations for teaching: meeting and engaging students on their own terms. Now I’m seeing a gamer-centered design aesthetic begin to emerge in some surprising places, like business software, where you might least expect games to have an influence.

Web 2.0 Mindmap

This is an amazing illumination of the Web 2.0 space that’s worth downloading (8920kb) and spending some time with. One caveat: there are links out to many of the influences he mentions so exploring this could keep you busy for a while.

Moodle Mashup

If you combine the open source Moodle.org learning management system with lesson plans that use Linden Lab’s Second Life you get something like Sloodle.com, a vision of how to use virtual worlds in the classroom. Besides, talking about Moodles and Sloodles turns heads so it’s a great conversation starter
Investing in Education

Part one of three reports on the SIIA’s Ed Tech Business Forum, the leading business and finance conference for the K-12 and postsecondary education technology market that wrapped up a few days ago in New York. This annual event attracts senior management from education software companies, platform technology firms, solution providers, publishers, private equity firms and venture capitalists.

The keynote speaker for this years conference was John Martinson, Managing Partner of the Edison Venture Fund. With 31 years of venture capital experience, including 8 investments for Edison from $3-10M and 12 investments from $250K-12M as an individual, Martinson has significant experience and a unique perspective on investing in the educational technology market.

Kerpoof: 3 Seconds to Fun

Krista Marks has a bold vision to change the way kids interact with the computer and learn about creativity, and her new site Kerpoof is a giant leap forward in that direction. A unique blend of Web 2.0 goodness, user-generated content and social media savvy combined with brilliant design and some of the best Flash programming around, Krista and her team have created a place where fun is not separate from learning but integral to it, where kids can create art, write their own stories, create their own movies, and share them. True to her educational intentions the site offers teacher resources and lesson plans as well. Krista shared her vision in this videotaped presentation at Dust or Magic. For more, visit Kerpoof’s website and see for yourself, or read what TechCrunch and Colorado Startups had to say.

Easy Coding for Kids

Scratch is a new programming language developed at the MIT Media Lab that’s aimed at kids from 8-up. According to the BBC story and video out earlier this week Scratch “does not require prior knowledge of complex computer languages. Instead, it uses a simple graphical interface that allows programs to be assembled like building blocks.”

A Taxonomy of Serious Games

Ben Sawyer’s presentation of a serious games taxonomy at the Annenberg Workshop on Learning Games was picked up on by the Serious Games Blog and 360 Kid’s Scott Traylor, who writes in his post, “Ben began the presentation with a very fitting poem by John Godfrey Saxe about six blind men who went to see an elephant. Each blind man found a part of the elephant — its sturdy side by one, a tusk by another, an ear by yet another, and so on. Each blind man thought they had come to understand the true meaning of what an elephant is. Each person was partially right about what they thought was an elephant, yet all of them were wrong in their understanding.” Though the finished version won’t be published until mid-year Ben will present the latest working draft at the 2008 Serious Games Summit this winter.

Children’s Technology Trends in 2008

Robin has been translating technology into consumer friendly terms for more than 25 years. Today, as a writer, new media consultant, and speaker she spends a great deal of her time focusing on family life in a digital world. Currently she’s featured as a columnist on Yahoo! Tech. She’s been the Editor in Chief of FamilyPC, editor of PC Magazine, and columnist for USA Today Online and the Gannett News Service, winning numerous prizes for her coverage of technology. Robin has authored 6 books about parenting in the digital age for publishers including Random House, Simon and Schuster and Hyperion. Visit Robin’s website to learn more.

I’m betting that like me, most of you didn’t attend Nokia World last month where Chris Anderson gave the keynote and a preview of his next book, Free.

For those who don’t know him, Chris Anderson is the editor-in-chief of Wired magazine as well as the author of The Long Tail (book, blog) on niche marketing. He’s also worked at The Economist, has served as an editor at the premier science journals, Science and Nature, and he qualifies as wicked smart in my book.

I stumbled across a video of his Nokia keynote and thought it was as important as his earlier work — if not more so — so am shouting it out here. You can view or download high quality QuickTime and mp3 audio files here. Load it up on your iPod or iPhone and have a listen — ideally before finishing your next product pricing plan.

The Los Angeles Times reported this morning that several groups of striking writers are meeting with venture capitalists about funding the production of straight-to-the-web programming — independently of Hollywood studios and at odds with the union — a move not unlike the way United Artists (now part of MGM) was founded by Charlie Chaplin, Mary Pickford, Douglas Fairbanks and D.W. Griffith who also felt the need to break away from the studio system.

Silicon Valley investors historically have been averse to backing entertainment start-ups, believing that such efforts were less likely to generate huge paydays than technology companies. But they began considering a broader range of entertainment investments after observing the enormous sums paid for popular Web video companies, including the $1.65 billion that Google Inc. plunked down last year for YouTube, a site where users post their own clips.

They also have been emboldened by major advertisers, which prefer supporting professionally created Web entertainment to backing user-generated content on sites such as MySpace that can be in poor taste.

“I’m 100% confident that you will see some companies get formed,” said Todd Dagres, a Boston-based venture capitalist who has been flying to L.A. and meeting with top writers for weeks. “People have made up their minds” (story continues here).

To the studio bosses — even the writers themselves — this has to have been an unexpected consequence of the two-month-old strike. Honestly, though, it’s something I’ve been expecting ever since I “discovered” Mosaic and thought I saw the future.

Fact is, like a lot of people working on the Internet I came up in the old media business of film, TV and multimedia, beginning as cameraman and editor, then director, then producer, raising in the food chain in search of greater certainty and control of my work. About the time I came to the conclusion I would forever be at the mercy of studios, distributors or networks, the web came along and looked like a direct path to my audience, so I jumped on board at the first chance.

Though a proper mash-up of video and Web technology took longer than I thought it would, and the scope of my work has expanded considerably during that time, the explosion of web video during the past 12 months — Google & YouTube hooking up, Joost launching its P2P service, a profusion of stock media sites, now the writers getting restless — suggests we may finally be seeing the day when creatives and audiences can be directly connected.

So was the move to cut the studios out of the food chain predictable? I’m not going to say “I told you so” though I do believe it’s timely, in harmony with the relentless  democratization of media technology and disaggregation of content that I’ve experienced during my career. And it’s surely not the last we’ll see of the edges forcing inefficiencies and bloat out of the middle.

Speaking of bloat in the middle, it’s nearly Christmas and I have a week of dinners ahead of me. See you at the gym!

On Dec. 12th the John D. and Catherine T. MacArthur Foundation hosted Totally Wired, a public forum at the Brattle Theater in Cambridge on how digital media is changing how young people learn and play, featuring:

Henry Jenkins, Professor, MIT, and author of Convergence Culture,will talk about his latest work on media literacy and skills young people need for the 21st Century.

Katie Salen, Professor, Parsons the New School for Design, and game designer, will discuss the new public school based on design and games she is opening in New York City.

Howard Gardner, Professor, Harvard University, and author of Five Minds for the Future, will talk about the ethical implications of growing up online.

Although I wasn’t able to attend, a friend that did raved about it and told me the panel discussion was posted on Blip.tv (note there’s a l-o-n-g intro so fast forward past the first 20% if you’re short for time). For another perspective the forum was also webcast into Second Life and saved as machinima. You could watch them here but, like previous videos I’ve tried to post, all the .flv and .mov players break the page layout. If any WordPress or web video hackers reading this have a solution please shout it out.

A client of mine called this week in in full crisis mode. It seems that while editing their WordPress blog using IE7 the site’s pages were transformed into a typographic nightmare and any attempt to re-format only made it worse. A quick scan of the user forums showed this is a known problem with IE7 so I suggested he use Firefox instead. An hour later the phone rang again, this time because after installing, rebooting, and loading Firefox he couldn’t authenticate on his Comcast account. Adding insult to injury Comcast customer service (sic) curtly asserted “We only support IE7 so you can’t use Firefox with our Internet service.”

Say what? Hearing this made me sputter and after a few searches for IE7 and WordPress, then for Comcast and Firefox, I found we were hardly alone. “Pure corporate arrogance. Don’t they @#$%!^& get it?” I fumed, and remembered an illustration of the Web that I saw recently that mapped it all out.

This graphic is just a fragment from The Web is Agreement that Flickr hacker Paul Downey created, and it’s full of sly humor. There’s also an annotated version on Paul Downey’s Flickr page and a high-resolution version available from Internet Archive that prints very nicely if you need a holiday gift for the geek on your shopping list who has everything.

The point of this rant is that the web works only because of a mutual agreement to use the World Wide Web Consortium’s interoperable specifications and guidelines that define how web pages are built, transmitted and displayed. To the degree those standards are followed by everyone the Internet is an invaluable platform for business, education and fun. Likewise, when those common standards are ignored we all suffer, ultimately including Microsoft, Comcast and other fast-and-loose players who will also reap what they sow. Or as John Wayne might deadpan, “Go back on your agreement, Pilgrim, and you’ll face web justice.”

I’ve written summaries of most of the sessions at SIIA’s Ed Tech Business Forum including the two previous posts, below. Those that I missed were covered by Ileana Rowe, and all of them are (or will be) posted on SIIA’s website here: http://www.siia.net/etbf/2007/presentations.asp. The presentations covered myriad topics in the business of educational technology including:

• Investing in Educational Software
• Acquiring Innovation
• Capitalizing on Innovation
• Profiles in Innovation
• Seeing Innovation at Work
• Taking Innovation to Market
• Corporate Positioning to Impact Revenue and Value
• Making a Business Out of Disruptive Technologies
• Generating your First 1000 Customer Sales
• Using Associations to Support Your Business Strategies

Though most of the written summaries are not verbatim transcripts, if you look at them with the PowerPoint slides you can glean some clear insight into the changing opportunities in educational technology, as I did while attending the conference. Finally, I know I’m not alone in sending a special thanks to Karen Billings and her staff for all their work that made the event possible.

In this second report from the SIIA’s Ed Tech Business Forum I’ve combined highlights from two lively panel discussions into one Q&A about how investors and publishers acquire and capitalize innovation. Though longer than my normal posts, the conversation is essential homework for anyone on the sell-side who is planning, pitching or negotiating an investment, strategic partnership or acquisition deal.

Question from Robin Warner, Managing Director, The Van Tulleken Company - If you’re considering an investment to acquire a new product what are you looking for?

Heather Myers - Senior VP, Strategic Planning & Business Development, Scholastic - Efficacy is important for us, either proven through research or by customer satisfaction. Then there’s the business fit, the economic upside, and - more important than profit to start with - the quality of the management team.

Steve Siegel - Group VP, Strategy & Business Development, Follett - For us it’s the valuation, the innovation factor, the people and the partnership strategy, and whether it can be licensed rather than acquired.

Rita Ferrandino - Founding Principal, Arc Capital Development - We’re looking for successful, proven business models that are performing in the $3M-15M range that we believe can grow to $20M-30M. We have a formal evaluation process, and if we do invest we stay involved, working with the company, getting to know their current customers and helping position them for success.

Question from Robin Warner - How do you decide whether to build or partner or buy?

Steve Siegel - I think speed is important, so is an evaluation of our internal expertise. If it’s going to be faster to market we’re more inclined to purchase. If it’s aligned with our core competencies, our expertise, and if speed isn’t an issue then we build.

Heather Myers - Scholastic’s preference is to build products internally, but if there’s compelling innovation and speed to market that swings us towards the purchase side.

Robin Warner - Who decides whether to go forward with an investment?

Heather Myers - Acquisitions are “owned” by the head of the division where the product is going to live, plus CEO approval.

Kurt Gerdenich - VP, Director of Technology, Cengage Learning - For us it’s formalized, but every deal has a champion and they’re a major influencer in the decision making process.

Question from Robin Warner - What are your “Do’s and Don’ts”?

Heather Myers - Making sure we have our corporate staff in order. Making sure the IP is protected is critical. Making sure there’s a well articulated business plan. Making sure we don’t loose focus and get spread too thin. And we try not to be encumbered by partnerships in the short term if we’re really seeking an acquisition.

Rita Ferrandino - Making sure you set aside enough time so the team can focus — it’s tough work. The CEO needs to build relationships 12-18 months ahead of when they’re eeded, and understanding where you fit in the market. Don’t be afraid to spend on the best professional advice available, and never be afraid to walk away.

Question from Frank Catalano - VP Marketing at Pearson Education - How many deals do you actually do, and how many do you walk away from?

Heather Meyers - It’s a funnel process. Probably 10% of what comes in the door looks interesting and 10% of those survive the initial vetting, but if something comes along that isn’t as we expected we’re apt to walk away.

Kurt Gerdenich - We’re pretty conservative and will break off a late-stage deal if the price is coming in too high or something comes up in our due diligence. We want to make sure you can can hit the numbers you’ve put out there.

Question from Michael Johnson - Chief Operating Officer, Follett - How do you decide which product innovations to pursue and why?

Robert Fiance - Chief Executive Office, Software Technology, Inc. - Strategic focus is important and so is the customer base. We always ask, where is the customer demand? We look at what advantage we’ll gain, we want to make sure it will be cash-flow positive so we don’t get mired in daily problems, and of course the management team is key and is integral to our decision.

Question from Michael Johnson - How do your acquisitions evolve? What are the typical challenges?

Todd Brekhus - VP Product and Market Management, PLATO Learning - We make sure there is buy-in before an acquisition is competed. Rumor control is important too so we try to get ahead of the curve. But the single biggest success factor is how the leadership in both the acquired and acquiring companies work together. For that, we find that joint monthly briefings work for us.

Michael Golden - VP of Administration and Planning, Pearson Education - Common goals abd aligned interests are crucial. You have to put ego aside. From Pearson’s experience the scale and scope vary so much it’s hard to generalize. You’ve got to figure out where’s the common goal, where’s the — sorry, I’m going to use the word — where’s the synergy that allows the whole to be larger than the parts.

Michael Johnson - How do you decide whether to build, buy or partner?

Robert Fiance - Sometimes a strategic partnership opens the door to acquisition because of extraordinary cultural fit and the strength of the team once we can see them up close. Acquisitions can also change the whole face of the company so we have to be careful.

Todd Brekhus - With SaaS (Software as a Service) platform integration is critical so that’s a big factor so making the decision to acquire is more likely when SCORM an SIF are non-issues. Regardless of the deal structure, however, SaaS can spur the innovation we need.

Michael Johnson - Things don’t always go as planned. When that happens after the acquisition and integration what do you do?

Robert Fiance - We move rapidly to get involved operationally so the deficiencies, if there are any, are understood as soon as possible. Waiting has always been a problem. We try to structure half of the deal as an earn-out, 25% each year. The lesson for us has been to structure a short earn-out, react quickly, get involved, and don’t wait.

Todd Brekhus - Retaining the talent is key so we use the earn-out to incentivize the management team. The deals that have been less successful for us are when we’ve lost that talent. Not alienating but retaining the customer bases is important too and requires an investment in that relationship, which is partly a function of keeping the management team engaged.