When we were raising our first fund, the founders of Ribbit decided to take a chance on us. They accepted the terms for our financing of the company before we had even completed the first closing of the fund (which happened in August, 2006). Now, just two years later, BT (British Telecom) has bought the company. This is bookends: The founders of the company helped us raise our fund by showing our investors that experienced entrepreneurs would agree to work with us and now they have made us look good by creating our first outcome. We feel pretty good about these four guys, the cofounders: Ted Griggs, Ramani Narayan, Peter Leong, and Crick Waters, not to mention the other 25 employees of the company.

More important to us, however, is what happened between the bookends. From our point of view, there were two key events in the development of Ribbit in which we believe we played a role. First was finding out about the company; the founders discovered us because of the very first post I wrote on our web site, “I Want To Buy Phones“. In that post, I bemoaned the state of office telephony based on the experience that I had trying to get a telephone system for our office. We wanted a telephone service that didn’t require old proprietary hardware or that didn’t obligate us to a particular service. The founders of Ribbit were just beginning to develop a platform for delivering just that set of services. (One thing that’s true: We will be customers for Ribbit, even if we no longer own equity in the company!)

Second was pushing the company toward a riskier strategy when it wasn’t clear that that was the right thing to do. We pride ourselves on being risk-oriented, big-idea investors looking for the most impactful, world-changing business plan. Last summer and fall, Ribbit was struggling with how much it believed it could accomplish: Should it be a platform for developers? An enterprise services company? Or a consumer services company? Classic venture investing would argue that the company should focus on one thing that it knows it can accomplish. Gilman and I talked about it between ourselves and decided that we should take the chance to push the company toward doing everything at once; Gilman, as the director of the company and lead for our investment, pushed hard for the company to take on the developer platform as a path toward providing both enterprise and consumer applications of the technology.

The company took up the challenge. It introduced its developer platform in September last year; its enterprise application, Ribbit For Salesforce, in October, and its consumer service, Amphibian, in January of this year. And, thanks to the chief marketing officer, Don Thorson, the company adopted a position as “Silicon Valley’s First Phone Company”. We think it’s the combination of all of these things that lead BT to see so much value in the company so early.

Ribbit isn’t just bookends; it’s a demo for our style of venture capital: aggressive, risk oriented, go-for-broke investing looking for ways to change the world we live in. Thank you, Ribbit!

I am a deep domain expert in Scrabulous. At least, I’m a deep domain expert if expertise is defined as spending hundreds of hours playing the damn game. I spend more time playing Scrabulous than I do playing PackRat and I could make millions of dollars from that game (since we invested in the company).

You would have to have been asleep for the past year not to know that Scrabulous was developed by a web development firm owned by two brothers in India and that the brothers were sued by the owners of the official Scrabble game for violation of copyrights and tradmarks. Speculation has run rampant about what the owners of Scrabble, Hasbro and Mattel, both giant corporations, would do to the Indian company, which clearly did violate their intellectual property. Whatever is going on is not known to the general public, but Scrabulous has continued to be live on Facebook. (Actually, truth be told, the game experienced glitches for a number of months while the brothers scrambled to keep up with the popularity of the game, but it has been working really well for the past few months.) Real Networks introduced an online version of Scrabble earlier this year for non-U.S. users, which I haven’t seen because I’m in the U.S. And Electronic Arts just introduced the official version of Scrabble for Facebook, on a license from Hasbro.

What’s totally interesting is the difference between Scrabulous, developed by an Indian outsourcer that stumbled into the opportunity, and EA’s Scrabble, for which 25 people are given credit for design and development (most of whom seem to work for an outside studio).

Scrabulous works really well because it is a minimalist interpretation of the board game: Same color scheme, same board design, same mechanics: If you know how to play Scrabble IRL, you can start playing Scrabulous without even thinking about it. The game comes with resources that make sense, like the ability to interactively check the spelling (and therefore existence) of a word and Scrabble functions like the ability to swap tiles and challenge other users. The game comes with several helpful resources, like a move list, a two-letter word list, and a way to resign games. And if you’ve been playing the game (as I have) since it was first introduced, you’ve also gone through the process of watching the game develop and have developed a fondness (often known in marketing circles as brand loyalty) for the work the Indian firm has done to improve on their original design.

Then there’s EA’s Scrabble. I’m assuming that EA has a license to develop an online version of the board game without design restrictions. If there are restrictions on the game design, then just blame Hasbro instead of EA. As it stands, EA should just be ashamed for having released this game. In order to get started playing, you have to first endure an animation that highlights who made the game and then you have to name the game! Once you’ve done those irrelevant actions, you can start playing the game. But it doesn’t look like Scrabble! The board is colored differently and, obnoxiously, every single multiplier square is labeled TL, DL, DW or TW. Yup: You, dear user, are too dumb to remember which one is which, so they are labeled! The designers didn’t bother to provide any resources at all! So you have to go to cheat sites to look up words before you place and play them. And if you do play a word successfully, you have to endure an animation that counts up your score. And all this software that got developed makes the game slow to load and play. I measured that startup time for EA Scrabble is more than 10 seconds, while Scrabulous loads instantly (given the same network).

It feels as though the development team needed to show how good it is at software development, rather than focus on what made a Scrabble enthusiast happy. EA Scrabble functions, but it feels more like a project done to prove to Hasbro that EA was the right company to which to license the game. It is not a pleasant experience if you’re used to Scrabulous or indeed if you’ve played the Scrabble board game.

I can imagine the dynamics of being the team tasked with developing the “official” game that will compete with the two brothers: “Oh, boy; We get to be the agents of the mammoth corporations that will crush the poor Indian brothers who stumbled into developing the version of Scrabble that everybody actually loves.” Wouldn’t you want to work on that team? Whatever the situation, the project went awry and it’s only amazing that the game got introduced to the public. It’s too bad that big companies get so wrapped up in themselves. Scrabulous should be the official version; it looks and feels and plays like Scrabble. Hasbro and Mattel should be thrilled that they could get such great development for one of their key brands without even trying.

They should have just rewarded the two brothers for their excellent work. Buy the darn thing and give the brothers millions of dollars for showing respect for the game. Instead, they tried to compete and now look like fools.

I love this quote from the news story I linked to above: “Mark Blecher, general manager for digital media and gaming at Hasbro, said his company has been working with EA to make the look and feel consistent across platforms, giving the authorized version what he called an advantage over Scrabulous.” Go ahead and tell me that the official Scrabble looks just like the board game and that that’s an advantage over Scrabulous. Whatever you do, don’t tell Mr. Blecher!

I have hundreds of friends I’ve never met. Being a gentleman of a certain vintage, I like the idea that attractive young women will accept my friendship without having ever actually met me. So you might notice in my Facebook profile that I have quite a few such “friends”. Other Facebook users seem to want to be friends with famous people or visible people or whatever.

I have been hearing the drumbeat about FriendFeed recently, so I signed up in an idle moment a week ago. Little did I realize that I unleashed a frenzy of new friendings; immediately, I started getting “subscription requests” from people I had never met and who did not identify themselves by their real name. (Since June 30, when I signed up, I have received 38 such subscription requests from people such as “miguel”, “Mrsth”, “Georges” and “Jassim”.) I had thought that this was a service that consolidated various feeds from my real friends into one place; now I’m thinking that it should be named “StrangerFeed”. I searched for a way to remove myself from FriendFeed, but there isn’t. And once you identify a service and give FriendFeed your credentials, you can’t remove the service.

This is the Social Graph? When I hear people talk about the social graph, I shudder. I had thought that the idea of a “social graph” was that you could map your social network in terms of how close different people are to you (one degree, two degrees, etc) in different contexts (parties, sports, passions, etc.). That is not what is actually happening; what is happening is that these so-called social networks have discovered that they must grow or die. So they are abusing the social graph to incent you to connect to as many people as possible, so that they can advertise or promote to those people.

I have not actually met Mark Zuckerberg (and we are not Facebook friends, either), but I have heard him talk several times with confidence about the social graph. What he talks about and what I experience when I use Facebook are two different things. For me, Facebook is entertainment — I play Scrabulous, see how many pretty girls will accept my friend requests, try to steal icons from my “friends” in Packrat. And FriendFeed has innovated by introducing a whole new kind of spam, social spam. Remember Gator?