What’s a chumby? The quick answer is this: chumby is many things, and the list never stops growing.

We last wrote about chumby in April 2008, when they raised $12.5 million in a Series B round in order to “accelerate growth of the company, and expand and broaden the Chumby Network to other screen-based Internet connected devices such as LCD TVs and digital photo frames.”

Well, it looks like they are accomplishing their goal.

Chumby Industries, Inc. recently announced a new partnership with Broadcom to integrate the chumby network into devices, such as internet-connected TVs, set-top boxes, and Blu-ray players, featuring Broadcom’s chipsets.

Chumbys of all shapes and sizes

So, that means chumby is:

• chumby, a huggable, Wi-Fi-connected clock/radio/widget-playing device
• the chumby network, freely providing over 1,000 widgets in more than 30 categories, such as weather, social networks, photos, sports, news, entertainment, videos and more
• chumby-enabled, internet-connected digital photo frames
• chumby-enabled portable media players and portable TVs
• now, chumby-enabled, internet-connected TVs, set-top boxes, and Blu-ray players
• … and surely more to come

Video: Sneak peak of upcoming chumby integrations

What do all these different manifestations have in common? Answer: an open source, Linux-based platform and a cloud-based content network. The open source platform runs on a local device, chumby industries hosts the widgets, and the ‘net connects it all.

Not only does the chumby network provide live information to devices, but a user’s widgets are synchronized across various devices, providing a coherent experience from one screen to another. Many chumby widgets are social-enabled, allowing for sharing of content, photos, video clips, games or messages with friends who own a chumby-powered device.

Chumby Change

The chumby device. (Credit: chumby industries)

If the chumby network is free for users, then where is chumby making money? Selling chumby devices?

No, the iconic, padded chumby, currently selling for $200, is reportedly priced at a break-even point. (If you’d like to learn more about the manufacture of chumbys, and back-stories on Chinese society, read eye-opening accounts about setting up production in China from Andrew “bunnie” Huang, chumby’s VP of Hardware Engineering here.)

Instead, chumby aims to profit from the chumby content network, including:

• Sponsored advertisements, both interstitial (yes, they’re skippable) and embedded (like “this widget brought to you by Coca-Cola”)
• Service fees for subscription content
• Referral fees (pointing users to media, stores, products, etc)
• Payment fees (taking a cut from purchases)

Video: Preview of chumby on Broadcom-powered TV

What’s Next?

There’s no doubt that content previously confined to the internet is moving (finally) to other screens, particular TVs, but Chumby is facing serious competition for those eyeballs. It’s like there’s a piñata full of eyeballs, and chumby + Broadcom, Yahoo! + Intel, Sigma, Sony, and, without a doubt, Google and Microsoft, are all swinging sticks wildly in an attempt to crack that donkey open.

The battle has begun. But can chumby carry enough a big enough stick to the fight? They’ve made important partnerships and progress to date, but as they shift their focus away from their iconic chumby device (aka “iPod touch knocks up a hacky sack and has a baby”), can their brand compete with the mighty Yahoo!?

Chumby is the nimble lightweight in this fight. It’s small, nimble, and quick, and it can use its smaller size to take advantage of deals that companies like Yahoo! can’t afford because of it’s required rate of return.

It’s still early in this sage of convergence, probably just midway through Round 1, so sit back and enjoy the show.

In February of 2008, six guys in San Diego decided to fundamentally change the software community for the better.

You need only read the first sentence of OpenCandy‘s About us page to learn a telling amount about the new company: one, they carry a grand vision for the impact their product will have on the software business, and two, there are a lot of dudes at this place.

Let’s tackle the latter characteristic first.

Who are all these guys?

Well, they’re ex-DivX employees, particular those who were building Stage6, a high-quality internet video sharing service that never escaped the gravitational pull of beta, despite its popularity.

What’s their grand vision?

Simply put, their goal is to improve the distribution and monetization of downloaded consumer software. They aim to do this by helping increase software distribution volumes, by monetizing this distribution through referrals, by providing marketing data to software creators, and by helping consumers find relevant applications. To fund their pursuit of this goal, they’ve raised $3.5 million in Series A funding from Bessemer Venture Partners, O’Reilly AlphaTech Ventures (OATV) and angel investors including Reid Hoffman (Chairman of LinkedIn, Board of Mozilla), and Jordan Greenhall (Former CEO and Co-Founder of DivX).

How’s this work?

The OpenCandy plug-in is bundled with an existing software installer. Let’s call this software Orange. While Orange is being installed, OpenCandy recommends to the user another application that is, in theory, relevant to the user. Let’s call this recommended software Banana.

Banana is picked from a fruit basket pool of applications chosen by the publishers of Orange. Orange Co. can hand-pick free recommendations (no charge to Banana for being recommended), can allow OpenCandy to select paid referrals (a “bounty” is paid to Orange if the user installs Banana), or a mix of the two.

The user can then choose to opt-in and install Banana. I emphasize opt-in because the recommended software will not be installed by default, an important distinction from annoying installers like RealPlayer that try to stick the user with 20 extra programs.

Another important note is that the Banana software is not included with the Orange installer, so the size of the installer is not noticeably increased (only by the negligible size the OpenCandy).

In fact, it is not determined what software will be recommended until the Orange installer runs. When it does run, OpenCandy scans the user’s registry for installed programs, operating system details, and chosen language. This information is sent to the OpenCandy servers where some magic happens (including consideration of which recommendations are converting best), and then a personalized recommendation is sent back to the installer in response.

For example, if a user has several already developer tools installed, OpenCandy might recommend Notepad++, a popular text editor. If a user is installing Miro, an open source video player, OpenCandy might recommend Audacity, an open source audio editor.

(If this process threatens your sense of privacy, then you’re not alone. Several blog comments have echoed this sentiment, so OpenCandy’s CEO, Darrius Thompson, answered some of the frequently asked privacy questions here.)

If the user opts to install Banana, or whatever juicy personalized software is recommended that day, OpenCandy will download the necessary installer and handle the installation process. Opting in will not interrupt the in-progress Orange installation.

You can see screenshots of the process here.

Let’s talk money

OpenCandy is aiming to charge between $1 and $2 each time an application is installed through a recommendation. It then splits these revenues with the publishers of the original software.

The OpenCandy team learned a lot about sponsored recommendations at DivX, where the company was reportedly raking in around $20 million annually for bundling software like the Yahoo! Toolbar with the DivX player.

Trick or treat

So, what’s it going to take for OpenCandy to find success and change the software world?

Fundamentally, there needs to exist a strong, profitable market for downloadable consumer software, because OpenCandy’s business is built upon that ecosystem. Downl

It's all a big social media circle

It all started when I decided to apply for the position of Founder’s Associate at Twitter. Rather than a standard cover letter, I submitted a strategic analysis outlining Twitter’s current competitive state and its options to win the microblogging battle and larger social communications war. The primary tools used were scenario planning and Porter’s 5 Forces.

I then presented this analysis in a session at BarCampSD (San Diego) on November 12, 2008 to an audience with great interaction and sharing of thoughts.

Fast forward to the present. I have been a bit off the grid the last couple weeks while traveling home for Thanksgiving and working on the family business. So, just yesterday I read the news that Facebook had, so far, unsuccessfully negotiated an acquisition of Twitter.

About time. Their partnership was my first recommendation in the strategy presentation.

In my mind, at least an attempt by Facebook to acquire Twitter was inevitable for these fundamental reasons:

It’s a mutually beneficial relationship

Twitter gets a business model, as tweets are displayed amongst advertisements in users’ feeds.

Facebook buys Twitter’s large, existing userbase and brand recognition rather than battling Twitter head-on with a modified status feature.

They need each other

Twitter has, by far, the largest userbase of all microblogging services. But yet its size pales in comparison to the number of people using Facebook. It’s hard to imagine another way Twitter could scale its userbase so quickly.

Facebook is missing out on all the conversations that occur outside its walls on Twitter. It would be beneficial for Facebook user frequency and volume to have Twitter conversations integrated with profiles, the Facebook platform, and the rest of the user’s social graph.

I called this scenario “Slap in the Facebook World”, describing a situation where Twitter must either partner with Facebook or watch as Facebook builds a Twitter clone and leverages its size to bully Twitter out of the ring.

Other scenarios included in the presentation:

• “Twitter in the Cloud Behind the Curtain” — Twitter as a service provider, with revenue coming from premium API access
• “Microblogging the Microsoft Way” — The microblogging platform with the largest corporate userbase wins the consumer game
• “Open Sesame” — Open standards and open source win (e.g. Laconica) and no company makes significant revenues directly from the product

If you’d like to check out the strategy presentation, I’ve embedded it below.

Disclaimer: I made this presentation quickly and for the purpose of sharing indirectly, not for delivering a speech. Therefore, I don’t advise following my example in such text-heavy slides and lack of graphics. You will put your audience to sleep!

(For a concise summary of Detroits economic woes over the last few decades and through the recent loan requests, read here.)

The government has two fundamentally different questions on its hands in making these loan decisions.

Car Company CEOs at Bailout Hearing

For the Big (and shrinking) Three, the question is,

“Should the government bail out an industry that, regardless of the current recession, is responsible for driving itself to the brink of bankruptcy because of poor strategic decisions in product offering and labor management?”

For Tesla, the question is,

“Should the government bail out a high-tech startup that perhaps overreached in its goals for reinventing the automobile power system?”

Tesla Roadster

While all the companies concerned are “US automobile manufacturers”, the two questions are drastically different in reasoning.

Many have argued that bankruptcy is just the medicine Detroit needs to cure its financial woes. Others feel the painful restructuring process will do more damage to the local and national economies and related industries than is worth suffering, including the auto executives requesting the assistance.

I think the correct response lies somewhere in between. Now that the government has significant leverage over the auto companies, let’s use this bargaining position to our advantage. The EPA has always butted heads with auto industry lobbyists over fuel economy standards. Now the government can write the standards on its own terms. For example, we could model new standards after those in Europe with regulated CO2 emissions.

I’d like to avoid bankruptcies, if only for consumer psychological reasons. Consumers will avoid purchasing cars from bankrupt companies, and this will only exacerbate market share losses to foreign competitors.

But if Congress needs to send Detroit back home a couple more times (driving in their hybrids!) until they return with appropriately detailed and significant plans for their use of the loans, so be it.

Tesla is in a separate universe from the established companies. With its small size, it does not have the gravity in the national economy and its failure won’t send the US plummeting into an economic black hole.

On the other hand, its lofty vision of selling all-electric autos is a force far beyond its fleet size. While the sale of a few hundred Tesla roadsters will not make a significant impact on greenhouse gas emissions, the same bunch of battery-powered cars will exert undeniable pressure on the Big Three to respond with similar offerings.

Sure, Tesla’s only product costs $100,000 and is far out-of-reach for most Americans. But consumers will look at that vehicle and then walk into a Ford, GM, or Chrysler dealership and ask for the same thing at a third of the price. They’ll figure that with the R&D capabilities and scale of a major auto manufacturer, a plug-in auto at a reasonable price should be feasible.

Let’s face it. History shows that American auto companies lack the foresight to take longer-term, strategic factors (like the inevitable rise in cost of oil) into consideration when they do research and design vehicles. So, if they don’t possess the internal initiative to develop cleaner vehicles, then maybe Tesla is just the thorn in their sides we need.

Is it worth $400 million in loans to keep Tesla in place as a carrot to lead Detroit?

I think that is some produce that will really produce.

(Sorry, I couldn’t resist!)

Here’s the description of the event from MITEF:

Come for the excitement!

Come for the thrill of the competition!

Come to find out about some of the most innovative ideas in Chicago!

Join the Chicago innovation community as we celebrate the best and brightest new ideas that will shape our future.   Come cheer on 15 [actually 13] carefully selected presenters as they compete for a $5000 cash prize! [Split amongst the top 3 places: $3k, $1.5k, $500]

The presenting finalists will have 5 minutes and a whiteboard to describe their innovative concept in front of a panel of Chicago’s most experienced judges and an audience of 200 [I heard about 141 showed up].  No powerpoints, no props, no kidding.

As a participant, you’ll be a part of the process as your vote, over your mobile phone [if you had reception in the auditorium], will account for 20% of the total overall score.

The Whiteboard Challenge is the most exciting innovation event in Chicago and you don’t want to miss out.

The winning presentation was delivered by Dan Masterson for the Guardian Angel Outlet. See a video of the concept demo here.

Rather than talk give reviews of the concepts themselves in this quick post, I’m going to point out 3 helpful tips for delivering a less-formal whiteboard presentation as compared to a more-typical PowerPoint slide sleepfest presentation.

1. Embrace the whiteboard’s unique visual characteristics

By nature, an image on a whiteboard appears gradually as the presenter draws it, one line at a time. This has advantages over a digital presenation where it’s easy to overwhelm the viewer with too much information too fast. It also adds a subconscious suspense component as the viewer waits to see what’s going to show up, like Pictionary on business steroids.

When you’re presenting in front of a whiteboard, add visual information to the board gradually, at approximately the rate you’re divvying oral information. What you want to avoid are the extremes: talking for 4 out of 5 minues without drawing anything (you’ll lose the viewer’s attention as their eyes drift around the room to the captivating carpet stain) or drawing a complicated graphic in silence for 3 minutes (you’ll overwhelm the viewer as soon as you start talking again because you’ll have so much to explain at once).

2. Always write or draw the most important points on the board

If you’re telling the audience how many lives your product will save, or how many 100′s of millions of future customers are lining up at your door step ready to buy (must be hard to sleep at night), then make sure you write this number down (and include the zeros for big numbers — it adds drama as you draw them out, one Cheerio at a time).

And make sure you write the company or product’s name on the board. This is probably the most important thing a viewer should remember, right?

3. Watch game film — in this case, UPS commercials

What can brown do for you? In this case, it can teach you how to give a strong presentation when you’re writing on a board.

The gentle, Bob Ross-with-straight-hair presenter in these commercials (here, here, more here, and here, and on UPS.com here) can teach you a few presentation skills: even though you’re writing on a board, try to do as much talking as possible while facing the audience (people remember faces, not haircuts); draw neatly so that people can concentrate on the message (and not how you scribble like a 3rd grader); and finally, if you’re going to break tip #1 and draw something complex, at least do it right at the beginning so there aren’t interruptions to your flow for the rest of the presentation (the UPS guy gets a head start drawing during the preceding commercial, apparently).

What can whiteboard do for you?

$3,000, at least.

That’s a lot of dry erase markers.

The relatively low risks to launching a new Internet business, compared to physical ventures with higher capital requirements, also leads to exciting, experimental ventures that can afford to launch in a less-than-perfected state and then polish and revise their product as users provide real-world feedback.

But these same qualities that attract attention of aspiring startups, like honey for entrepreneurial bees, also leads to the recurring bubbles and hype that seem inextricably tied to the Internet business world.

The low up-front investment requirements and accompanying cheap maintenance costs lead to ventures with uncertain, and often completely unknown, revenue prospects. But this itself is not the problem. I won’t dispute that a business with hundreds of thousands or millions of passionate users has a realistic possibility of eventually discovering a method to monetize those customers — even if that business model is not apparent up-front.

The problem is that a profit-producing business model is not the only wrench missing from these companies’ strategic toolboxes. On the contrary, some of these ventures are so far from defensible profitability, they’re bringing a standard wrench to a metric party.

Let’s look at Slide, the social network widget company, as an example. In its fourth round of financing, they raised $50 million, valuing the company at around $550 million. They just opened an office in New York City from which to sell more advertising. If you need more background on Slide, read here.

As I said earlier, the problem for Slide isn’t necessarily that they haven’t cracked the humongous money nut that is their 170 million unique monthly viewers. Hearsay evidence says that their CPMs aren’t anything spectacular. But they will probably figure this out eventually.

The problem for Slide isn’t that they don’t already make tons of cash off their sky-high viewership numbers.

The problem for Slide is that they aren’t going to last long enough to solve the business model puzzle.

Let’s grab a few of Michael Porter’s 5 Forces out of the strategic toolbox and start wrenching on the broken machine that is Slide — let’s say, barriers to entry, threat of substitutes, and degree of rivalry, for starters.

Barriers to Entry

The barrier to entry in Slide’s industry, producing widgets for social networks, is like a speed bump in front of a monster truck. The driver might feel it, if he’s sitting just right.

Brand identity:

Almost nonexistent. No user cares who wrote the tool that allows them to chest bump their friends. They just care that they can now do it online and no longer have to risk pecular injury or social embarrassment should their super chest bump end in a super pile of flailing arms and legs.

Capital requirements:

Lunch money. It doesn’t cost anything to put your application on a social network and the network does the hosting for you. You might even have change left over for a rectangular piece of lunchroom pizza.

Threat of substitutes

Switching costs:

Again, almost nonexistent. What keeps me from uninstalling your application from my profile and never using it again? The years of experience I’ve accumulated and deep integration of my workflow with your software? Oh wait, that’s Photoshop. Nope, I can learn a new application in the time it takes to super fart on a friend.

Degree of rivalry

Product differences:

Does Slide possess a unique ability in the industry to design a widget user interface that revolutionizes the marketplace, a la the iPod in a sea of mediocre MP3 players? Nope. Their viewer advantage is due to moving first, network effects, and questionable practices in recruiting users’ friends to add an application. But now that Facebook, for example, has cracked down on runaway app invites and is redesigning the profile page layout, Slide’s previous advantages have melted away like a chocolate bar errantly placed near my laptop’s cooling fan. (I swear it’s about to burn up.)

Now Slide needs to rely on actual product development talent to provide useful, long-term solutions for their customers — not flash-in-the-pan fads, which will never scale into a large, predictable revenue stream. Investing in venture capital is already like gambling. Slide’s investors have either steel balls or empty skulls to want to scale up the risks even greater and bet big on a company, like Slide, whose fortunes ride on something as unpredictable and finicky as consumers’ flavor-of-the-week poking preference.

Not to mention that the social networks themselves can quickly duplicate Slide’s applications on a whim and erase Slide’s business model. The next day, what were the basis of an entire company are now one of a hundred features of someone else’s product.

Sliding into home (aka The Conclusion)

If you’ve made it this far, it’s should be sufficiently clear that the strategic flat tire that will drag many Web 2.0 companies off the information super highway and into the ditch of dot-com blowouts isn’t simply their lack of a business model.

The fact that companies like Slide can build huge viewership numbers isn’t a freestanding sign of success. McDonald’s gives away millions of free toys every year. But with every one, it’s selling a burger-like hockey puck or nuggets that taste like chicken. And making money off of them, too.

Right now, Slide’s products are the equivalent of Happy Meal toys I didn’t ask for. If I show up at Facebook and find a Kung Fu Panda figurine in my Inbox, I’ll probably have fun with it for a while. I might even tell my friends to get one so we can start a big plastic-throwing fight.

But just because you’re good at getting millions of people to play with your free toys for a while doesn’t mean you’re the next Google.

Slide, if you’re listening, remember this:

You need to do something unique and useful.

Uniqueness is different than novelty. Novelty wears off quickly because it’s replaced quickly. Uniqueness comes from solving a problem in a way no one else can.

Usefulness is different than full of users. Making decisions expressly to grow your viewership, when you aren’t making much money off viewers, is aiming at the wrong target. Aim to be useful, first, to just a small number of people, and your audience will grow as everyone realizes your product is indispensable.

Be unique and useful first, and eventually you will find your proverbial chicken-flavored nugget of gold.