Date: August 11, 1999

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The "Herring on Hollywood" conference was held
August 1-3, 1999 at the Century Plaza Hotel, LA
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Dear Readers, Clients, Partners, Friends:

After landing in LA Sunday morning, I did the only natural thing--headed for the beach (Santa Monica in this case....named of course after Monica Lewinsky)....where I'd planned to meet a friend for a California-gourmet lunch. (Wow, the fish tacos at the Crocidile Cafe on Ocean Blvd near the pier were outta sight, dude!). We hit the beach for a while....then I tooled back up the 405 doing--what else?--my normal routine....which, you may recall, is singin' Randy Newman's "I love LA" with all the windows rolled down in my.....

Buick? Okay, I couldn't afford a nice BMW or Benz for the two days--gimme a break! But if I squinted my eyes enough while listening to oldies station K-Earth 101, I could almost feel like I was driving the classic California "woody" I'd just acquired the day before, by chance-opportunity, back in Minnesota. "Geez, what I'd give to have that here now," I mumbled. I'd show all those California drivers sneering at my rental car a thing or two....what are you lookin' at buddy!?

Anyway, so I arrives at the site of the event, the Century Plaza, in--where else?--Century City, about mid-afternoon with bells on.... actually, sandals, a tank top, and my surf shorts. So, first I had to do the Superman-phone booth thing to upgrade my appearance a bit (I wasn't staying there, since I have my west coast digs in Pasadena)....then it was into the pre-conference workshop for entrepeneurs, which I joined in progress.

Here are some highlights of that session....not the most dynamic of events, but if you listened real hard, you could pick up some interesting tidbits of what's on the minds of Tinsel Town's entertainment-content experts as they converge with the Brave New World of the Internet (and even a couple of cool sound-bites):

* The first speaker I caught was actually a Silicon Valley guy, John Lee of Cisco Systems, director of their new program called "Built for Broadband," who was at the event seeking alliance partners. He talked about Cisco and their history of establishing alliances, reminding us that his firm had revenues of only about $30 million in '89, while ten years later they're north of $6 billion--so they must be doing something right, since doing their first alliance only in '93-'94. He said that Cisco CEO John Chambers regards all alliances as being "for life". And the nice thing about alliances? Well, you get just the strengths of the partner....unlike those messy acquisitions, where you get the strenths *and* weaknesses. He talked about the "Broadband Builder's Alliance"program he'd set up, and encouraged entrepreneurs to come see him later......and I actually ran into him at his table on Tuesday, talking to local success story Ryan Magnussen, CEO of Zentropy Interactive (who had some interesting news himself--more later).

* Speaking of Cisco....that reminds me I should say something about the moderator of this pre-conference workshop, Mariana Danilovic of KPMG's LA office. (Because, lo and behold, this week we read in the Wall Street Journal that Cisco's investing $1 billion, as in B, in KPMG's consulting business. Huh?) Anyway, not that this has anything to do with the Cisco deal--but Mariana was a real piece of work. You had to be there--this was as Hollywood at it gets. Every person she introduced was "a client"....in fact, every person she *mentioned* was a client,who she knew personally, if not from childhood.

* At the next panel discussion, "Stars of the Digital Universe," we heard five experienced Hollywood entrepreneurs, three from the music and movie business, talk about their latest ventures. Rand Bleimeister, CEO of MusicNow.com (an Idealab company, with Kleiner an investor), describes his business as a network of web sites to help artists and labels market their wares on the web. The first site was a partnership with Woodstock.com (I didn't ask him if it turned out a little "hotter" than they planned)... which was basically a 24x7 virtual concert, with live presentations... a 3-day festival with some 700,000 streams. Their next site, to debut in September, is called Top20.com.

* Jeff Sydney, President/COO of The Left Bank Organization, and COO of Beyond Music, was the best spoken of anyone at this event. A very solid, major Hollywood player. He described the old music business as "a very comfortable, middleman business, with no consumer marketing." But changes are here, he said: "an aging population, with more fragmented subcultures...radio is now basically only three major chains...retail is highly consolidated into a few regional players and the big mass merchandisers....the record companies are now basically five, who've gobbled up all the independents (though more of the latter are coming on as the Big 5 get bigger).....and the new audience "is not 'Net, but broadband". But the biggest thing coming of all is "the power shift from the big companies to the artist." His take on the new world is that it's not a retail model, not a broadcast model, but a marketing model. [Yeah--right on, Jeff!] "Pure-play companies will need the bricks-and-mortar companies for at least five years." But "the artist is the brand." And the Web "is the biggest opportunity since the advent of rock n' roll!" Jeff also said later that, "the 'Net will become the new platform for marketing." And that "before the audience can vote, there has to be a campaign"....meaning marketing has to take a leadership role in the Internet business, to communicate to targeted audiences and enable them to respond and become part of the process.

* Anthony Greenberg, CEO of Den.com, formerly "one of the founding members of Exodus' marketing group," is targeting his new firm at Generation Y--14 to 24 year olds--which he says is a market numbering 55 million today. Their site, which was launched as a beta in May, is doing "local programming and experiences," which he says will be narrowly targeted "to be as cool as our clients." [He didn't say anything about the very uncool 14 year olds I've known or where they might go for entertainment.]

* Niel Afromsky, Founder and Chairman of WorldOnWater.com, is a third-time entrepreneur, six weeks into this one--which is focused on the sailing market. "I was amazed it wasn't better represented on the 'Net," he said. "It's a $50 billion market." He's looking for--guess what?--VCs and alliances. [Crew, anyone?] Details we didn't get...

* Jeff Pollack is Founding Partner of Handprint Entertainment, which manages some 100 artists, and is the creator of "The Fresh Prince of Bel-Air." His firm has been one of the top 4 or 5 firms in their field, programming to a specific demographic in such a way that the networks were coming to them. A new web business he recently launched is called Thirsty.com., aimed at 12-24 year olds, which "brings together top artists and thinkers in a media immersive, community site." Jeff had aninteresting comment about his management business: "Managers are the gatekeepers of the artist/brand." He also noted that agents "have essentially handed off the personal relationships to managers, because they have too many clients to do that."

* In the next panel discussion, "The Seven Deadly Sins of Startups," two other startup founders joined two of the previous guys, plus a Digital Coast association director and the head of a major consulting firm's LA office to talk about what 'Net and e-commerce entrepreneurs do wrong. Lance Trebesch, GM of Viant's burgeoning LA office (now 300+ employees), blurted out right away: "Too much emphasis on technology. People don't buy because of technology. They buy because of psychology. Management must have the power of persuasion." Not the least of which for raising money to begin with, he noted.

* Adam Tom, cofounder and VP of iMedia, came out with a few choice pointers (even if he couldn't quite make seven): "Pride--it can get in the way of your goal...your own sense of righteousness. In hiring, realize that *anyone* who you hire can and does make a huge difference. And watch out for running off at the mouth--especially with the press."

* Michael Terpin, the next guy to take a shot, is a former PR guy made good. He's CEO of Internet Wire (now 30 employees), which runs vertical sites--the first of which is "Entertainment Wire." Being a writer and all, this guy came prepared: "Raise too little cash. Take money from the wrong sources. Raise too little (under-estimating). Measure once, cut twice. Spend too slowly in a changing market. And throw good money after last year's ideas." [Whew, missed some, but that was as fast as I could write.]

* Jeff Pollack, the artist's manager and "Fresh Price" creator, again offered up some very thoughtful comments, and a good sound-bite as well: "Remember that competition is not like the traditional world--you must learn to look at others as partners. Much requires instinct, not logic. If you're waiting for the perfect time, it will never happen."

* Which is where his best sound-bite just sorta happened:

"Hey, Hollywood moves quickly, but it looks like the tool & die industry compared to the 'Net!"

[The message to Digital Coasters, I guess: those who hesitate will get stomped on or stamped out.]

* Jeff continued: "Be prepared to evolve your thinking and your plan. Keep going, keep dancing! Don't worry about your competition--they aren't you, and may end up as your partner. Finally, you must have *passion*--not just greed from seeing so many others making money."

* Brad Nye, Executive Director of VIC (shortened from the original Venice Interactive Community), heads one of the top organizations in the LA area for new media professionals and Internet entrepreneurs. His tips for LA based startups: "Human capital is critical now. Also, learning how to create a culture in your company. You need visibility in the community-- don't keep to yourself. Word of mouth is the best way. Passion on your part will affect how you hire--employees see that and look for leadership. Practice flat management--people need to feel part of a team. Don't grow too fast and displace some of the people who emotionally helped build the firm. And don't be afraid to hire inexperienced help! Finally, cruise VIC events for new hires!"

That was the wrap on the workshop, with thirsty participants then spilling outside to the courtyard for a major cocktail party/schmoozing session that went on for close to two hours...where I first met a UK-based VC, now about to set up a US beachhead. We chatted about some of the deals he's looking at and what's going on in the UK. Turns out the guy attends Herring events regularly, including their gig in London. I also met the new CFO of Red Herring, Doug Jeffries, who'd just relocated from San Diego, and wished him well. [Impressive background, and a very nice guy--another great addition to a top-notch team.] And I said hi again to Ike Lee, a former investment banker I'd met in Silicon Valley, now CEO of his own 'Net starup, iPopcorn.com, a site for Asian youth.

NOW THE FUN PART...WHAT YOU REALLY WANTED TO KNOW!

But, hey, the real party started later in Hollywood--the official opening reception for the Herring event, at the trendy Mondrian Hotel "Sky Bar," just across the street from the House of Blues on Sunset Boulevard. Buses started lining up in front of the hotel about 8:00 pm for the 15-minute ride, during which time I talked media business with Hugo Traeger, director of marketing at Ziff-Davis' Interactive Week, based in San Francisco. Longtime publishing guy, with a lot to say.

Once at the Mondrian, wow--yeah, this is cool, all right. They weren't kidding. Beautiful people everywhere, just what you'd expect--sort of hopeful actors/actresses/models slinking about, draped across couches in the lobby, etc. But the Sky Bar itself--even wower! (Named because it's open air, a multi-level courtyard/deck thing surrounding a pool, fountains, etc, with a great view of the Hollywood lights.) The place was packed already, shoulder to shoulder. Trust me-- this was a top-drawer function. [Tony Perkins has done this a few times--Herring gives good party.] We're talking a synchronized swimming team in the pool, waiters and waitresses offering up tasty tidbits at every turn, and of course every conceivable libation flowing at the many bars.

I, however, spent most of my time smoking a really fantastic cigar, sipping Chardonnay, and talking with a nice young Chinese-American guy, Yaping, who I'd met earlier and who has an interesting Web startup in the LA area--basically emptying my head, telling him everything he should and shouldn't do (he kept asking, so I kept telling). It's a B-to-B commerce site with a Chinese connection. At the question of how to raise more money, I did the best thing I could do--told him that I'd just seen Chris Alden, Herring's cofounder and president, talking to Ron Conway, of Silicon Valley Band of Angels fame...and said, would you like to meet them? Maybe get Ron's email address? He says hell yes (or something like that in Chinese), we fight our way over to find Chris (Ron's gone already)--so I introduce him and they end up chatting for some time, and I'm sure he got the lowdown on Ron (who, by the way, recently launched another fund, Angel Investors LLP, which I learned later invests only in the Valley... so maybe Yaping has to move--big deal!).

Then, a bit later, as we continued at a table by the pool, up walks Jason Pontin, editor of Red Herring magazine. So I says, wanna meet him? Yeah, yeah (or something that sounded like that). And talk about propicious! Jason's just returned from--guess where?--an extended tour of China. And he is *higher than a friggin' kite* about it! "So much opportunity, so much entrepreneurial spirit!" This is one animated Brit...it's his absolute passion now (and you'll for sure read about itin his next column). So, anyway, it's a great discussion. And Yaping must think I'm, well, God by this time. While I'm wondering, who the hell do I introduce him to now? He's already been to the mountaintop. So, we vow to catch up again tomorrow (which we did). And I figure it's time to mix--so I make the rounds, watch the incredible LOAD Media launch announcement, complete with a hovering helicopter and huge spotlight shining up the side of the hotel to about the 8th floor where there's a big sign and screaming bikinied lovelies on a room balcony, touting this new Hollywood Web company, who picked one hell of an audience to get their name in front of. [These Tinsel Town guys do know how to get attention.] They announced *another party* just down the street after the Mondrian party, which was about to wrap. [Hey, Herring has to turn off the spigots at some point or they'd go broke!] Unfortunately, the LOAD party was a dud....and, after I'd hoofed it down the three blocks, which turned out to be a half mile, *I* felt like a LOAD...but, what the heck, Sunset Blvd at night is...well...interesting.)

Grabbing a quick cab back up the heavily trafficked Boulevard of Dreams, I make sure the bus wasn't leaving yet...and dash back into the Mondrian for one more look. Finding the gift shop, I decide I just gotta have a souvenir of this place--no one'll believe me. So I goes right for the cheapest item I could find....a basket full of little 1" diameter pin-on buttons, four bucks each. I immediately grab for the best one, the one that was just soooo Hollywood, which I wore proudly on my badge the whole rest of the conference:

"Well, La-De Fuckin' Da."

I was now squarely in the mood.

Stay tuned for more....

Your Hollywood reporter,
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Graeme Thickins, Founder & Principal Consultant
GT&A Strategic Marketing Inc.
*Twin Cities *LA *San Francisco *Seattle
Voice Mail: 612/944-1672  Fax: 612/944-1673
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