Google’s acquisition of JotSpot is a great little trick or treat surprise for Joe Kraus. Tons of blogs out there are already covering their predictions of what the incorporation of this wiki platform will bring to the already significant suite that Google has been piecing together… spreadsheets, word processing, online collaboration, and more - all under the umbrella of Google with their uncanny knack for optimal monetization. But that’s only moderately interesting to me. If I got incredibly interested and surprised every time Google made a move that sounded potentially groundbreaking and innovative, I wouldn’t have time to do anything else. The networks involved, however, do interest me.
What I see when I map Google and JotSpot together is the fact that they’re not exactly connected in any direct and profound ways. Let’s add a couple of caveats in there… Joe Krauss (formerly Excite.com as well as many other ventures of interest) is an extremely well connected individual in Silicon Valley, so it is doubtless that there are links that exist beyond what can be seen in these network images. Let’s take a look.
Relational Map of Google, JotSpot, Infrasearch, and Joe Kraus
(click to see full size)
I have to mention that the Mets just won to extend the series to it’s final game. Not that I’m such a huge baseball fan, nor a Mets fan, but including the word “Playoffs” in the title allowed it to roll off the tongue. On to the networking…
Miguel Helft, who used to be often read in the Mercury, is now a tech writer for the NY Times and had an article on the front page business section on Tuesday about the pals from PayPal and their microcosmic Silicon Valley networking effect, and how that small group has hatched and reared some of the most successful companies (and exits) in the tech world. However, Helft is not yet familiar with our LinkSViewer tool that does visual networking for Silicon Valley tech and VC networks. As such, I can’t blame him for the illustration from the times - a network of sorts, but I can credit him with the inspiration to put up some of my own constructed networks of this power cluster that has achieved the kind of success to which we all aspire.
Here is the first network view. It shows the network formed by including Peter Thiel as an investor, Reid Hoffman as an Investor, and PayPal as a company. Simply including these three nodes creates a network that includes most everyone mentioned in Helft’s article.
Relational Map for Thiel, Hoffman, and PayPal (click to see full size map)
The recent acquisition of YouTube by Google for $1.65B highlights the importance of the growing relational capital of Google. First we look at the relational map of YouTube, then we examine the combined relational map of YouTube and Google. Click on each map to enlarge the image in a separate window.
The combined Relational Map (Specs: Internet and Computer Company filters; Drop Pendants) demonstrates the relational capital of Google and how this adds potential value to YouTube’s network. The lesson here is that the role of the acquirer is often to grow the network of the acquired. Three key points:
1. Sequoia Capital as a linking investor between Google and YouTube
2. Apple Computer and its board interlock with Google
3. YouTube now links to Kleiner Perkins (John Doerr), Angel Investors, Ram Shriram, and Al Gore
Discussion on Key Points:
1. The linking role of Sequoia provides common ground between Google and YouTube. One cannot ascertain how important this linkage was in the acquisition, but it can be reasonably inferred that this helped facilitate the deal.
2. Apple Computer provides an interesting link for YouTube. Earlier in this blog we reported about the increasing strength of the board interlock between Apple and Google with the addition of Google CEO Eric Schmidt to Apple’s Board of Directors. Now consider how this interlock can aid YouTube as a growing company in the online video business, given the increasing role of Apple and its video download business.
3. The addition of key players in Silicon Valley and an ex-Vice President can only help legitimize the role of YouTube as it continues to gain marketshare. Perhaps more important is the relational capital that these key players add by forming partnerships with key companies, people, and investors in the Silicon Valley.
Often acquisitions make sense from a business perspective, but one must also consider the combined network that forms from the acquisition and how this can help the acquired company grow beyond its initial means. It makes sense that YouTube will continue on its own (at least initially), it will be interesting to see how it leverages its newly acquired network (particularly in future alliances with Apple). Consider the following as a summary: Google acquired YouTube, but YouTube acquired the network of Google.
Scopie Awards are GroupScope-generated Relational Capital lists which translate into “We hope you have a great product, because your connections facilitate success! I defined Relational Capital in an earlier blog entry as the value-added worth of a network or the strategic advantage afforded by key relational ties. Scopie Awards serve to stimulate exploration by pointing toward potential gems. Because networks focus on relationships, such lists allow our customers to think outside the box using key connections between companies, people, and/or investors. These lists are analytically driven and LinkSViewer network maps provide new ways of seeing and exploring.
This particular list is generated for an investor interested in private companies in the Biotech Sector. The goal is to identify those companies that are prime for IPO or merger/acquisition. At GroupScope we have the ability to perform similar analyses for any person(s), company(s), or investor(s). We further restrict such searches on filters such as company sector, type of company or investor, rounds of capital, amount of capital, start date, etc.
The below list is a sample of private biotech companies that demonstrate strategic investor alliances - they are connected to well-connected and inter-connected investors. The list is generated from what I call a Relational Capital Index that indicates how well companies (or investors, or people) are strategically connected. The main point is that by being well-connected, companies have a better chance to succeed in the real world based on the potential resources, partnerships, and experiences of their investment teams. Whether a company is at an early or late round of financing, its connections will play a key enabling role. And the winners of the first Scopie Awards for excellence in connectivity in the Private Biotech Sector are… (1) Bayhill Therapeutics; (2) Portola Pharmaceuticals; (3) Novacea; (4) FivePrime Therapeutics; (5) Alexza Pharmaceuticals. Continue reading Scopie Awards - Top 5 Connected Private Biotech Companies in SV…