The Digg Effect: The Avalanche hits!

 On October 18th the BizOrigin site got Dugg! We went through it all, the sudden “swarm” of traffic on the site, the almost inevitable server crash, some quick maneuvering to keep on top of the blizzard, and then the final post game analysis.

Every day of this week, we will dedicate one post to “The Digg effect”. We put together some information on the Digg effect, how to recognize it, what you can do ahead of time to keep from your server from crashing, and what you can do to Digg yourself out, if you do go under - wish we knew all this before the storm hit!

The sequence of Digg events:

1. We posted a story around noon, on the 18th. It seems to have gotten onto Digg at around 2 pm. We saw a steady stream of visitors for an hour. The number of Diggs on the post was about 40.

Technorati Tags: bizorigin, digg

 

2. At 4 pm the avalanche hit. At peak, the number of visitors was about 200 times the normal hourly rate.

3. An hour into it the storm, the server crashed. The number of Diggs was around 120.

Someone set up a mirror site for the post. The serious diggers appeared to be going to this site. Some traffic was recorded on the mirror site. The graph shows the actual activity along with a curve depicting the likely traffic if the server were up. It is possible the traffic would have even gone higher but we assumed that it started to ebb at the time the server went down. 

4. At 6pm the Bizorigin server was still down with the ominous message “This server has been suspended”. We changed it (once we realized what was going on) to the somewhat cooler - “The server is down. Could be Digg effect“. A couple of folks called us to High-Five us over the crashed server!

5. At about 8 pm, with our site still down, we redirected the domain to the mirror page that had been set up (on a mirror page, the original post can be viewed but the rest of the site cannot be accessed).

6. At 9 pm, the server folks had our domain back up. We pointed the Bizorigin site back to our server. We considerably “lightened” the post page, reduced image sizes, and cashed the page to minimize the impact on the server - see forthcoming post for “What to do to digg yourself out”.

7. 36 hours later we were still seeing a constant flow of traffic, about 5 times the pre-digg level. The number of Diggs had by now settled to about 280. 3 days past the event, there is still a long tail of traffic which is higher than the original level.

Digg is quite an interesting phenomenon in itself - the swarm effect and the underlying group dynamics.

In our follow up posts we will look at the following:

How to recognize that the Digg storm is coming
How to Digg yourself out from under the avalanche
How to keep from going under when you get Dugg



Momentum Ventures: Helping start-ups start up

Momentum Ventures is a Venture fund in Los Angeles, CA, that funds early stage start ups, to get them ready for traditional VC investment. Rabinder Sekhon of Sekhon Advisers, writes about the fund, its investment strategy, and the work it does in getting start ups to the next level.

momentum ventures logo

As some first time entrepreneurs may already have experienced, attempting to get through to a VC with the hopes of securing a Series A round is really tough to do right now. There is a funding void left by VC firms shifting their investments downstream. This has left many unseasoned entrepreneurs to fend for themselves to bring great ideas to fruition.

Filling this void is Los Angeles based Momentum Venture Partners, founded in 2004 by a pair of veteran start-up executives - Matt Ridenour and Andy Wilson. Momentum works closely with a company’s founders to shape their business plan, find experienced management, finalize a product and gain customers - a process that typically takes about nine months to complete. At that point, they pitch the company to VCs with hopes of securing a $4 million to $5 million Series A round.

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Picture courtesy Momentum Ventures

Momentum’s distinctive model dedicates far more time than a typical angel or seed-stage investor while also assuming considerable risk. A typical assignment begins with a six weeks first phase - usually for a fee of less than $20,000 - validating a business plan, building chemistry with the founder and carrying out due diligence before committing to the start-up. Upon approval, one of four Momentum partners then takes on an interim CEO role, moving the founder to the chief technology officer role. During the process, Momentum provides a bridge loan - typically $250,000 to $500,000 from a bridge fund pooled from high net worth individuals - to keep the company operating, all for a ‘nominal’ monthly stipend.

momentum ventures Andy Wilson, Stuart MacFarlane, Katic Cameron, Matt Riedenour, Dan Tamkin, Scott Shapiro of Momentum
Andy Wilson, Stuart MacFarlane, Katie Cameron, Matt Ridenour, Dan Tamkin, Scott Shapiro of Momentum Ventures

Unlike a traditional VC who might split his/her time with many companies, Momentum partners typically work with, at the most, two companies at a time spending half of their time on each, with an operating associate subbing in the other half as a project manager and director of operations. Momentum’s ultimate goal is to deliver the company to venture capitalists and secure that first round of capital, when the firm’s bridge investment converts, often at a discount, into Series A preferred stock. It’s at this point the firm gets paid for its work after having deferred the majority of its management fees during the previous nine months.

So far all seven of its start-ups have made it to the Series A level, focusing on Los Angeles-area technology companies that require less than $10 million in funding to break even on a cash-flow basis. The seven have raised a total of $30 million in Series A funding. The firm had its first exit in 2006 when Discovery Communications Inc. acquired Academy123 Inc., which had raised a $5 million Series A round the year after Momentum brought the company to venture firms Arcturus Capital and Hanseatic Group.

Momentum is especially beneficial to VCs because it’s bringing only companies with proven business models and customers. From the point of view of the entrepreneur, Momentum understands what VCs want and helps clear up legal and other issues that prove invaluable to companies who make the grade to be part of the Momentum portfolio.

WSJ also covered Momentum Ventures this morning.



TriTech Fast Pitch Competition

The next TriTech Fast Pitch competition is being held at the UC Riverside Campus on November 29, 2007.

12 startups, selected through a competitive process, will present their pitches to 12 judges who will grade them on their presentation and funding potential. The prize for the top 3 companies will be the chance to present to the Tech Coast Angels, for possible future investment.

The 2006 Fast Pitch winner in the best presentation category was MaMoCa, a southern California company that has developed marker-less motion capture technology for the video, TV and movie animation business.

The Fast Pitch winner in the Best Investment category was Clupedia, which has an innovating social bookmarking tool Clucast, that we have covered before. Clupedia went on to receive $1.3M in funding following last year’s fast pitch competition.

Following the last Fast Pitch competition, we had written about the Art of the Fast pitch and what judges are looking for in the 1 minute presentation.



Science Sunday: Using Magnetic Sensors for Global Positioning.

earth_magnetic_poleIf birds do it, and even hamsters do it, I am sure we can figure out a way to do it too; I am of course, referring to the use of magnetic sense to navigate on a long journey.

The method is called Magnetic Global positioning. The idea is simple; the earth is like a giant bar magnet placed along the it’s axis. All we need to do is to take precise measurements of the earth’s magnetic field around the globe and then when you want to find out where you are, just check the magnetic field of that location!

Where do you get the magnetic field data around the globe? Well, it turns out that the United States Geological Survey has already done the work. It has tabulated the Earth’s mean field and its inclination at many points over much of the Earth’s surface.

To measure small magnetic fields, we simply rely on the two guys who just won noble prize in physics for discovering Giant Magnetoresistance Effect. They showed that for certain materials, a small change in a magnetic field makes a large change in the associated electric field. In fact, your hard drive and the IPods , work the same way too!

So to find your location, you measure the magnetic field and its inclination , and compare it with the known value and you know exactly where you are! No satellite needed.

magnetic_sensor

Although less accurate than satellite GPS, the new sensor’s use of the magnetic field means it is more reliable in certain situations. For example, in remote areas that have no satellite reception, or in bad weather conditions where the connection is temporarily lost.

The accuracy of the positioning accuracy is dependent on the accuracy of the magnetic data for a location and that can be significantly improved. The next time when Google or Amazon is doing a “street view” perhaps they can carry a magnetic sensor with them too!

I am not even suggesting that we use it instead of GPS, we might want to consider using it in conjunction with the GPS . In downtown areas where the tall buildings are blocking access to the GPS satellite, the magnetic positioning will take over. The magnetic position can also be used indoors, like in a parking structure or a building.

Via NewScientist



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