Hucksters, Suckers, and the Cue:Cat

Someone in the Know writes: "Now that it's almost completely over for Digital:Convergence, D Magazine (Dallas) unveiled the investments and the suckers surrounding the Cue:Cat and its creator J. Jovan Philyaw. I especially liked the Coca-Cola executive's observation: "... said listening to Philyaw made him feel like his hair was on fire". This was passed around ex-employees and we all got a kick out of it. The company is still alive, apparently, but not doing much anymore."

Comments

RIAA, take note

[AntiNorm]

The company is still alive, apparently, but not doing much anymore.

Just goes to show you what happens when a company tries to make its living by suing people.

I'm using my cue cat...

[hartsock]

as a door stop. It truly changed the way I used the internet... my office is cooler!

Re:I'm using my cue cat...

[Grape Shasta]

I use just a standard cat for this and it works perfectly well. I don't need one of these fancy hi-tech models!

Not every device is worth billions of dollars

[Faldgan]

One of the problems that a lot of the 'dot-bombs' have seen is that their product is just fine, but occupies a niche that just isn't a large market. I worked for a company that had a half-way decent product, and the revenue of this product could have supported a dozen people, or even twenty or so. But our CEO (who couldn't add 13 and 7 correctly) was hyped, and thought we needed a 100+ employee company, and millions of dollars in investment, and that we could make billions of dollars. NO. Not every product is a revolution. Not every product needs to have a "225-person workforce"
Advice to executives: Don't hire unless you need some work done that your current employees can't handle.

Re:Not every device is worth billions of dollars

[gwernol]

One of the problems that a lot of the 'dot-bombs' have seen is that their product is just fine, but occupies a niche that just isn't a large market. I worked for a company that had a half-way decent product, and the revenue of this product could have supported a dozen people, or even twenty or so. But our CEO (who couldn't add 13 and 7 correctly) was hyped, and thought we needed a 100+ employee company, and millions of dollars in investment, and that we could make billions of dollars. NO. Not every product is a revolution. Not every product needs to have a "225-person workforce" Advice to executives: Don't hire unless you need some work done that your current employees can't handle.

This is right on the money, but remember why the phenomenon has come about. Many, if not most, of the dot bombs were funded by venture capitalists. VCs gamble large sums of money on young comapnies, knowing that only 1 in 10 of them will ever make it to a "liquidity event" (i.e. an IPO or sellout to Microsoft). So those 10% of comapnies that make it have to be worth enough to cover the investments in the other 90% of companies, plus make a big return on the total investment. That, like it or not, is how VCs work.

The upshot is that VCs are not interested in, and won't invest in, companies that aren't going to rapidly (within 5 years) grow to a large size (at least $250 million a year in revenues). The only way to get VC money is to pitch your company as that kind of opportunity. If you go to a VC with a plan to build a small but profitable company, they will politely show you the door.

This is a major cause of ridiculous business plans that have no basis in reality.

If you want to build a small, niche business you can, just don't expect to get VC money to do it - you have to find your seed capital elsewhere; rich friends or parents, huge credit card bills or another mortgage on your house.

Re:Not every device is worth billions of dollars

[RobertFisher]

A lot of the scaling of companies was fed by the desire to obtain venture capital funds, and hence, on the way that venture capitalists operate. A large VC firm might receive say, $500M in funds to partition off to individual investors. They simply cannot manage 5,000 different investments of $100,000 apiece -- once you add up their overheads, and the typical failure rate of a startup, there is no way they could be profitable on such a small scale. So they typically fund a few tens of companies from anywhere from a few million to tens of millions of dollars apiece. The bigger, the better.

Of course, a lot of this had to do with the notion that one had to rush to market to get the most market share, which is an idea that has come to be closely scrutinized today.

Bob

Great Quotes!

[Dr Caleb]

From the article:

Philyaw is a self-proclaimed "luminary figure in the world of direct marketing."

An executive of Coca-Cola said listening to Philyaw made him feel like his hair was on fire. --June 27, 2001, Wall Street Journal
"It fails to solve a problem which never existed." --Debbie Barham, The Evening Standard
"Are these folks kidding?" --Sandra Brown Kelly, Roanoke Times & World News
"You have to wonder about a business plan based on the notion that people want to interact with a soda can." --Jeff Salkowski, Chicago Tribune

Was this the "Edsel" of the Internet age or what!

Question

[ocie]

"listening to Philyaw made him feel like his hair was on fire"

Being an engineering type and not a marketing type, does having ones hair set on fire represent a good thing?

Infomercials

[Accipiter]

Anyone remember those dumb-ass infomercials that Digital Convergence ran during the CueCat's inception days?

They were set in a classroom something like 200 years in the future. The teacher was telling the class about the wonderful beginnings of "convergence" - the era in human history (heh) that saw the merging of barcodes with the internet. It changed human existence forever, and made the world a happier place. The kids were asking questions like "What happened before 'convergence'?"

"Ha Ha, silly little student...They had to TYPE their URLs in...By HAND!"

The actual quote was something like "a long time ago, people had to get around on the Net by typing in each individual character of a Web address manually!"

Future's gonna be a bit different than expected, eh Jovan?

They had another infomercial with angels ranking the CueCat up there with the wheel and fire, but for the sake of good taste, I won't go there.

It never passed the "Wife Test" (tm)

[shreak]

All technology has to pass the "Wife Test"(tm) even if it's Open Source.

True Story:

[Wife is in office finishing up finances with Quicken]

[Enter Husband with "great" idea]

Husband: Hey, hon! Look at this stupid thing I just got from Wired. I found some software on the internet that will let us hack it to scan stuff and record the UPC codes.

[Wife's productive work preempted by husband interrupt. Wife visibly reworking priority tables while "listening"]

Wife: So?

Husband: Well, when we go grocery shopping we can scan all the stuff before we put it away and maintain an inventory so we know how much stuff we have and .... nevermind.

CueCat is brilliant compared to their other ideas

[Anonymous Coward]

People always talk about how dumb the CueCat was. Did you guys notice these idiots' other thing, CUETV?!?!?

Here's their proposition:

You pick up this free cable and software from Radio Shack. (yes, they didn't learn from the cuecat debacle)

You bring your computer out of your study and set it up next to your TV (or TV next to your computer) and plug the audio out of your TV to the audio in of your computer using said cable.

Install crazy software on your PC.

Dial up your PC to the internet.

Tune your TV to NBC, and wait....

When a "CueTV Enhanced" commercial plays, at the end of the ad ther is a jarring burst of static. WHOA! My PC just went to the webpage for that ad! THIS IS SO WORTH ALL THE TROUBLE! GOD BLESS DIGITAL CONVERGENCE, THOSE MORONS!

Yes, NBC actually fell for this, for about a month or so this summer (I think June or July) they were broadcasting ads and other stuff with these annoying bursts of static that the CueTV software would pick up and decode and cause your browser to go to certain URLs. That was just about the same time D:C laid off all employees and folded up. It took NBC a few weeks to clean their programming up to get rid of the CueTV pollution after that.

Here's the URL that proves that as ridiculous as this sounds, I'm not making this up.


CueTV! Yay!

Re:Interesting uses?

[StaticLimit]

The night "Enterprise" premiered, my TV was still in the garage, and we didn't have cable. My wife and I rushed to assemble a cabinet we got for the TV and hooked it up, but all we got was static.

"We need an antenna!", sez I. But we only had 15 minutes before it started, and where can we find something that will fit into the cable jack on the back and be a long, conductive thing...

We tried an old phone cable, but the wire inside was crap (one tiny strand braided with nylon or some crap), so I pulled out the CueCat... *snip* *snip* *strip* and I had a wire that fit right in, a long cord to act like an antenna... and a little cat-scanner-thing to set on top of the TV, which happened to be the position that gave us the best reception.

- StaticLimit