Update on biz planning process to insiders

Progress with Plans - update for April 1997

From: Mark Rauterkus, @sportsurf.net

Here is a splash of news to catch everyone up to speed on recent activities. Sorry for the lengthy period of silence, but it was necessary to get a few internal things back in order before moving forward. Some quiet strides on many fronts have occurred in the past number of months.

In the near future, you and the other insiders are going to be able to take a gander at the re-launched public WWW site and the private plans. These notes do not cover the core parts of the actual business, but rather provide you some insight into our planning progress and recent activities.

At this time, nobody needs to make any promises. Hopefully you and the others are going to say, "Sure - keep me under consideration."

As always, thanks for the time and consideration. If you'd like to be removed from future correspondence and updates, or if you would like to widen or increase this communication to you and others close to your operation, please let me know.

Update News with New Partner - MDI.NET

A deal is about to be constructed with a local firm, MDI.NET. This established Pittsburgh firm is an ISP with a T1 line and a SUN reseller status. MDI is going to help with the SportSurf.Net efforts by providing in-kind services on a long-term basis. This new "partner" is considered a final cog that is going to allow these projects to advance to the next level.

Timeline Construction

Phases, goals and milestones with specific time-lines of implementation are now being charted for the future.

Next steps include:

1. a re-write of my business plans.
   1. The plans will appear on a newly constructed private WWW site.
   2. The plans are going to set the stage for a new corporation with investor financing.
   1. Angel investors are needed to secure trademarks and retainers, but we quickly seek
   2. Venture capital funding (>$2 million) - to come in stages of access.
2. a reconstruction of the public WWW site (http://www.sportsurf.net).
   The site is going to include offers for sales/services in both a freeware and cash-producing manner. Many chat rooms, forums, mailing lists, and book-content things and such are going to be free. Our product line-up for the near-term is going to be catered to the sports business marketplace and start with small, specialized items -- not comprehensive bundles.

Some of the short-term goals include:

The sale of the book publishing business.

Opening the public WWW site with >10,000 pages of mostly free goodies (forums, chats, link pages, etc.)

Promotions on the net to get visitor count to more than 1,000 per day and 30,000 per month.

Opening of a "Proving Ground" section

• The Proving Ground is going to be the mechanism for creating alliances with developers/resellers/consultants.
• The Proving Ground activities include satellite services and value-added tech-support. This more formalized line-up of service offerings should provide for the short-term common ground between the smaller, cutting-edge software developers and this organization. Plus the Proving Ground activities are going to expand into future resale operations with the pending bundles.

Bundles of Tomorrow

The future bundles are going to be called:

1. Sandlot Servers and
2. Stadium Servers.

These will be turn-key server bundles (to include software, hardware, customization, integration with the headquarters, leasing options, extra support meetings, value-added content offerings) are to be marketed to the 6,000 sports magazine publishers in North America.

Sandlot and Stadium Server packages provide server platform options for the customers. The servers are going to be built for the following operating systems:

• Macintosh,
• NT,
• Linux and
• SUN

Without Investor Strategy

At this time, there isn't any "investor strategy." However, I am starting to craft a draft INPUT strategy. Without the legally formed business organization, and paperwork for the new one is expected to be filed in the late spring of summer of 1997, talk of "investors" is premature. Instead, these ideas only relate to Input Contributors.

The A-B-Cs of Input...
Begin with "Angels"

The finance input strategy is soon to turn to the discover and solicitation of much needed "Angels." The input from Angles can fund the next phases. Early finance requirements project a need of approximately $50,000.

The Angel-level-finance amount, given the scope of these plans, is modest. A great distance has already been traveled through our collective careers and with these associated plans and prototypes. Great cost reductions are in place from lots of sources including family. Present day overhead is low, and nearly all of the tools we've been utilizing are getting crafted to fabulous levels of power and sophistication.

Furthermore, the pending sale of the SSS book business could yield additional income and turn back the tide on some debt issues. The prospective income from the transfer of the SSS book business is a tenuous situation however and not to be counted as a liquid asset.

The goal of the Angel finances is to allow for the growth of the on-line activities to a self-sustaining level while allowing for the completion of the business plans. Angels are needed before any serious audience with the Venture Capital crowd can occur with confidence. For instance, angel income would allow for fees associated with obtaining trade-marks for program-specific names, business plans re-writes, law-team retainers, and expert accounting consulting.

After Angels

After the Angels come the Venture Capital investors. This progression from one to the other can occur quickly.

The pending pitch to Venture Capital people includes two main points:

almost all the development is already COMPLETED.

The full extent of the service offerings can be taken into the marketplace in a matter of weeks -- almost everything has proven to work!

Today's venture capital crowd is NOT interested in funding long-term internet research and development efforts. Funding for Sport Surf Net is a sure thing as all the computer systems are proven to work as advertised. The venture funding is needed to enter into the marketplace and handle the resulting demands.

If there are incomplete elements of the project lurking, they can be completed in one quarter and can be tested just before sales get underway.

Very low RISK. Only small amounts of up-front cash is needed for early risks.

The first stage of expenditures comes as these plans and finished prototypes head to focus group research stages.

A respected local focus group company that works with advertising agencies is ready to help. The fee is about $100,000. Focus group research is a wise investment.

If these products and services should pass through the rigors of independent demographic-type studies, the the organization is going to need additional funds for marketing (advertising, seminars). The advertising/marketing campaign for dealers and consumers for the new product roll-outs could cost $500,000 or more.

Both of those investments (focus groups & advertising) are "short-term investments" and can offer a quick returns.

Modest Infrastructure Costs

Some venture capital money is going to be needed for infrastructure support. The organization will need back-ups, engineer staff, demo units, telephone operators, mailings to magazine publishers, meeting reservations. As far as the net transactions are concerned, today's access capacity is already strong.

The full product launch is going to require available cash for overhead, plus there is the matter of acquiring or retaining our key partners -- with and without stock equity.

Jack, I'm counting on you to be the one who is going to be able to provide the Linux server packages.

Furthermore, this is a pipe dream at this stage now, I'd like to be able to have a section in the pending business plan that is going to deal directly with the acquisition of your services -- either in a retain basis or more -- so that you can be fully-funded and a part of our total mission. I don't think these venture capital people are going to be in the mind set to invest money into this project unless we have a good amount of control/ownership and assurances that things are going to get done/happen at a top priority. Obviously, for this type of control to happen, $ needs to come into play first. Plus, my present business and capabilities are not nearly big enough to engage the type of market-cap potential that is going to lure the interest of venture capital types. We need to have proven assets that are worth the investment dollars or else those guys just are not interested. I feel that my team of cutting-edge developer buddies -- all small guys when you look at the likes of Fortune 500 companies -- could band together in some manner and be able to command a sizable equity investment.

To make this work, we're going to need to go on some type of "acquisitions" spree and be able to circle our wagons and say -- hey -- for $10-million you get A, B, C, D and so forth all the way to L,M,N,O, P -- or Z. But, as you might guess, the hand-holding is going to get to be a chore - and we are going to need to have everything pulled together in tight, neat packages for this to succeed.

So, you can see how it is of prime importance that you work these days with this in-mind for the future. All the players will have to have an eye toward this "summary day" and would be able to present some valuable plug-and-play business facts and figures for inserting into the master plan. I'll create the overall master plan but include parts of your data. I'd even say a 1-page executive summary would be too long for the Venture Capital Crowd to digest.

Then comes the matter of $ amounts. Part of this could be with "funny money" in the form of equity, stock options, etc. But, it will also need to boil down to knowing the following:

1. How much is your present business worth in real money at that point in time?

2. How much value does your contributions bring to the overall value of the whole business?

3. How much (on the low, medium, and high side) would you be willing transfer in your venture's ownership -- given that you are still going to play a most valuable role in the continuation of your efforts.

4. How much investment is really needed to take your products and services to the next level of profitability for the short-term and long-term.

5. How much of your day-to-day challenges, work-load and management can be better optimized with OUTSOURCING to the Headquarters staff - resulting in increased productivity for all? ---- As to the EASY-Server side of things: Here is what I'm thinking.

It is going to be great to be able to go to any magazine publisher and say, you need to buy into either our Stadium Server ($50,000) or Sandlot Server $15,000. You'll get everything you need, plus full integration into our headquarters' site databases, traffic, resources. And, our server line-up comes with many different flavors: Macintosh, NT, Linux, SUN -- with many options. On the low end, a publisher can just rent rooms on our site. So, the Linux solution is more of a middle-line-up product. The Easy-Serve gives great bang for the buck. Plus, it allows for local dial-up support for the magazine staff out of the office. Heck it uses the #1 server in the world wide web - Apache. This is important to our efforts.

subscribers dashboard for mailing lists - code

Welcome Members of the E-Mail Marketing Digest

Subscribers' Dashboard Examples to Empty Locations

The following buttons show the various supported servers. The server matters as some discussion groups are hosted on Majordomo servers, while others are hosted on ListServ. There are plenty of others too. The commands for each server host are not the same. You'll need to know what type of list-server software is being utilized.

These buttons are empty, so the end-user needs to type in not only his or her email address, but also the list address and the list name. The slightest typing error shows the unforgiving nature of the internet and the commands fail.

A better set-up puts hidden content inside the code so that the Subscribers Dashboard can open with various elements already in place.

Tip:

1. Select the right server from the buttons below.
2. When in doubt, view source on this HTML page (and others) to see how everything is accomplished.
3. For long-term security reasons, this page is not going to be kept up on the net. Get this info now.

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Create an HTML form like the following:

<form method=POST action=http://www.SportSurf.Net/cgi-bin/MailServ/server> <input type=submit value="This button's description"> <input type=hidden name=errors value="err_address"> <input type=hidden name=to value="list_addr"> <input type=hidden name=list value="list_name"> </form>

Make the following substitutions in the above code:

1. server

   One of the following:
   • listserv
   • listproc
   • majordomo
   • mlp
   • smartlist
   • subscribe

2. This button's description
   • Suggested Name: Subscribers Dashboard for the expanded name of the service.
   • Avoid jargon and short names to lessen confusion.

3. err_address

   • The address to which bounced messages should be sent.
   • Use your full email address please.

4. list_addr

   • The address of the list server.
   • For example: Majordomo@SportSurf.Net

5. list_name

   • The exact name of the mailing list.

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Make Your Own Subscribers Dashboard for your favorite discussion groups

You can make your own subscribers dashboard without the need for your own web server. Use the SportSurf.Net server instead. Simply visit the SportSurf.Net site -- or -- build your own HTML form to kick-start the communications with the SportSurf.Net server. The HTML form can be a button place on a public or private HTML page. These instructions contain the specifics for that form. Once the dashboard is built, you don't have to remember and re-type remote server email addresses and user commands.

Local Operations - because you have to master these various groups yourself.

• Use a text editor to cut-and-paste the code between the snips.
• Save the text into a new file. Create the file in an obvious place within your hard-disk drive's file directory.
• Name the file something like, "subskey.html."
• Make the necessary changes to the code. The section on this page tells you how to create the form. The form needs some advance knowledge so that it can remember the location and commands.
• Connect to the intenet and have your web browser open. You have to be able to visit other sites on the web.
• Within your web browser, use the pull-down menu and "open file" -- and select from your hard disk drive, "subskey.html."

Questions:

Please feel free to contact the List-Clerk, Mark Rauterkus, for additional help if needed.

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Other Pointers

• Article #2
• MajorCool Interface at SportSurf.Net
• SportSurf.Net Home Page
• Smartbounce Home Page

Email about the Avatar Book and concepts with author

Date: March 18, 1997
From Mark R (helper guy)
To Peter Small - Author of the Web Avatar Project

Hi Peter,

All along one of my biggest pushes for you have been to "write some example, real-world avatars." In a selfish way, I've got some needs for them now. But I was thinking that the avatars would be good end of book example cases. I said you should start working on the end of book now, getting an income, and getting those all-important examples working, filtering, generating results. The examples are going to take time.

You seemed to want to delay avatar creation.

Well, after seeing these reviews -- I think my original ideas were on the money. I should speak it even louder. You need to give Avatar Examples (specific case studies with big results) right away before anything else. Do the book in reverse order. All the philosophy, A-Life examples and wonderful things you've already expressed need to be headed to the back of the book.

This is a how to book. Even better, learn how the sport surf network put avatars to work on its web site and became the #1 web-site in the world.

NEW BOOK OUTLINE:

1. This is me and my "client". (who)
2. Here is what we did:
3. Here is what could be done in general for your business.
4. Here is how we did it:
5. Here is why we did it:
6. Back of book timeline (when)

7. Here is why you too will be faced with avatars today and tomorrow. (your book goes here)
8. Prepare yourself so you can sell these ideas to your organization.

Peter asked:
I now appeal to you for you help in getting this book across. Where am I >going wrong? Where do I go from here?
Examples: Working Models. Prove it from the get go. You gotta put the cart before the horse. The good get delivered - and it is easy to see that the goods are good. Put some avatars right into their faces from the get-go. Then, you can put chapter 1 as chapter 10 (nine examples later). Proof of what I'm thinking is found in the reviewers notes:

>without a strong endorsement from people more expert in the field than I am, I cannot pursue this book.
Have them endorse the avatar or the agent. Not the concept of the avatar book.

> I need books that are cutting edge, yes, but also books with a clear purpose, tight focus, and solid grounding in available technology.
Clear purpose! - this pathway for this avatar is x --> y --> Z. Very clear. Very focused. Very tight. The grounding is solid in a commercial endeavor.

>I could find no interesting technical insights
The technical insights are right in the example avatars. Put the avatars and agents in there first and then you have interesting technical insights.

> I think the majority will be broadly interested in the techniques and applications,
Let's do a book on the interesting techniques and applications that you applied to Sport Surf.

>In my experience people buy technology books to understand technology on a high level (business managers), or to solve technical problems on a detailed level.
Give the readers the - solved problems on technical level first - I did X, Y, Z with sport surf - . Then give them the high level business manager for the later part as to the wave of the future.

>This book doesn't state what it will help you achieve.
The Sport Surf site is going to jump from nothingness to greatness with avatars. Your site can do the same. Let's make a fairy tale come true and then people will know it is not a fairy-tale any longer.

---

Nuff said on that.

Now what. I think I need to give you a better tour as to what I have in mind with my mega site and my plans.

There are areas in my plan where I can see you playing a key role. I visualize this whole operation. How to share all of these ideas (mine and yours) is another matter that would best be solved with a face to face visit of a few days.

How are your frequent flyer miles? Can you come to Pittsburgh, PA, USA?

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Things to still talk about:
• Peter building a list of lists
• Peter building the list avatars for Sport Surf.

Take care.

Mark Rauterkus mrauterkus@pittsburgh.net

Reviews of avatar book

Subject:     Reviews of avatar book
Received:    3/18/97 10:10 AM
From:        Peter Small, peter@genps.demon.co.uk

Avatar book reviewers,

Being an author is not the fun life everyone would believe.  Below are some
of the comments from a rejection slip I have just received from one of the
publishers I've been talking to. The comments are not untypical as I have
received many similar comments in the feedback I have received from many of
you.

Fortunately, I've also had a whole batch of complimentary posts which have
stopped me dragging everything I've written over to the trash can and
starting again.

However, it does indicate that the way I am explaining this avatar stuff
just isn't getting through to a lot of people, so, I need your help in
trying to find a way to do it more successfully .

What I am writing about is the implications of a technology which is only
just starting to come on stream - the protocol engines which allow
documents to communicate over the Internet.

Allegiant have started this all off with Marionet. Director 6 is coming out
in June with a whole lot of Web tools which will achieve a similar effect.
SuperCard and HyperCard are soon to be brought out as cross platform
multimedia authoring packages which will have similar Internet
communication tools built into their players. The burning question now is
how to use them.

They is going to make a large difference to the way the Web will be used
and the point is that this is not some "airy fairy" idea for the future,
but, is going to happen within a few months.

The second important issue is that the ability of applications and
documents to communicate with each other opens up a completely new way to
think about and apply communication techniques and information processing.

This is no bull-shit theoretical stuff - it is a real need for an eminently
practical way to think about and design new applications and services for
the Internet. The only problem is that it involves a novel and, to most
people, unfamiliar mind set - namely object oriented thinking.

Understanding this stuff is about conceptualizations and mental modeling
and *cannot* be taught using conventional step by step instructions. This
presents a huge problem as to how to explain it. Do not be confused by the
CC+ use of object oriented programming. Although similar, this conception
of OOPS is mostly applied in top down situations and is quite different
from the bottom up approach needed for the design of Internet stuff.

One way to describe OO thinking, would be to explain the construction of a
complex interactive working model as a proof of concept. The only problem
with this approach is that it would involve masses of technical code and it
would bore most readers to death before they ever got around to getting the
gist of it.

The alternative is to use metaphors. However, the ephemeral nature of the
concepts needed to explain OO requires the use of metaphors which appear
completely unrelated to any practical application.

The use of biological metaphors is, to my mind, apt for this new Internet
technology. Biologists are now getting around to thinking of cells and
biological mechanisms (even life itself) in terms of information transfer.

Those of you who have read "Lingo Sorcery" will be aware of the way in
which complex applications can be constructed from interacting software
objects. Those who have read "How God Makes God" will be aware of the way
in which complex mechanisms of life can evolve from very simple interacting
"objects" which evolve from the mixing of elements in a gene pool.

The point is, this book I am working on is not about some fanciful theories
which I have dreamed up by myself. It is about applying a practical
conceptual framework to the Internet which calls upon recent developments
in a whole number of related areas of science.

Evolutionary biology, medical research into drugs and theories about the
nature of life have changed dramatically over the past five years. These
new ideas and methods are only just beginning to filter through. It is the
application of these new idea to the Internet which I am trying to explain
in this book.

Unfortunately, many older unsuccessful ideas get in the way. In particular
I refer to the concepts of "life" and "intelligence". Up until fairly
recently, MIT have been seen as the leaders in these fields with their huge
research into Artificial Intelligence (AI). This has not produced the
expected breakthroughs or practical applications. It has now been
superseded by the concept of artificial life - or "A-Life" as it is
commonly known as - where the creative center is at the Santa Fe Institute.

A few years ago, all of this A-Life stuff was pooh-poohed as irrelevant
nonsense by the AI world. Now it is providing the answers and breakthroughs
which AI so dismally failed to do (BTW An excellent primer and background
to all this A-Life research is Steven Levy's book "Artificial Life" Penguin
Science ISBN  0-14-023105-6).

I now appeal to you for you help in getting this book across. Where am I
going wrong? Where do I go from here?

I am now working on a third chapter where I am going to try to bring out
the biological metaphor more strongly, give a more accessible explanation
of the object oriented concept and define the principle of "intelligence"
as it applies to avatars and software objects.

I shall also be arranging with a number of universities and private Web
site owners to set up ftp sites for biotelemorphic cells and will be
arranging a list serve to allow the exchange of programming documents as
described in chapter 2 (if any person or group would like to come in on
this please let me know).

In case any one asks, I shall not be getting onto the direct Internet
communication of cells using protocol engines until later in the book.
There is a lot of interesting stuff to cover before this which would be
overly complicated by bringing in Internet communication too early.

Please, I need your help and feedback on this. Take a look below at the
excerpts from my recent publisher's reject slip and see what attitudes I
have to contend with.

Regards

Peter

-----------

The Avatar book can now be read on the Web at:

USA

http://192.41.36.58/avatars/Index.htm

UK

http://www.obsolete.com/dug


-----------------------------------------------

Below are snippets of the rejection slip I have just received from a
publisher. You may well agree with the comments.



Peter,

The reviews are in, and I'm afraid I will not be able to offer you a
contract on "Web Avatars". Of the three reviewers and myself, I believe that
my enthusiasm for the project is the highest, but without a strong
endorsement from people more expert in the field than I am, I cannot pursue
this book. I tried, as I do on every proposal, to get a team of reviewers at
least as qualified as the author. The three reviewers on your proposal have
impecable credentials: one is an expert on virtual communities, one was part
of the original CERN-NCSA-industry coalition that created the Web, and one
is a Web master for a major online search engine. I have included their
reviews below; you will see that they range from disgusted to luke warm.



I am at liberty to take risks, much more
than editors at larger publishing houses. But in terms of image, I cannot
afford risks. Our first few books in this area will determine how customers
and future authors perceive us. I need books that are cutting edge, yes, but
also books with a clear purpose, tight focus, and solid grounding in
available technology. Your book may evolve to meet those standards, but it
does not meet them yet.





Review One:
---------------------------------
>Well, I think it's bullshit.  I could find no interesting technical
>insights in the "Web Avatars" material.  Apparently the guy has
>written an interesting book on Lingo tips, and now has "second-system
>syndrome": he feels his next book should be some great vessel of wit
>and wisdom.
>



Review Two:
---------------------------------

>The audience these days is pretty large. I think the majority will be
>broadly interested in the techniques and applications, but not to the
>depth of a book.
>
>After reading of the proposal, it's on-line comments, and chapter 1,
>I believe that only digital media people, with an interest in the Web,
>and, at a push, online comunity people are going to be sufficiently
>intrigued and excited.


>I feel the main use of the metaphors is to attach questionable validity
>to the author's models and claims. Some of them are contrived, some
>distract from the topic and make it appear complicated.



>There is no clear purpose. In my experience people buy technology books
>to understand technology on a high level (business managers), or to solve
>technical problems on a detailed level. This book doesn't state what it
>will help you achieve. Worse, it talks about its techniques as the new
>True Way, to be embraced by everyone. The Internet doesn't work that way.
>I don't have time to invest my attention into a fairytale.
>



>>The author makes use of philosophical parallels. Is this helpful.
>
>They [philosophical parallels] suffer from similar problems as the
>metaphors -- they distract, they
>complicate, and worse, the have an attitude: "I have enreached enlightenment,
>if you can understand this subject and agree with me you are also a cool dude,
>otherwise your brain must simply be missing something". Give me a break.
>
>I find language like "it does not take long to realise",
>"triggered some form of enlightenment", and
>"perhaps you have already clicked on"
>condencening.
>
>Also, there are always limits to anything. Describing the limits to
>your approach is helpful, and shows a deeper understanding. The material
>I have reviewed is positioned as limitless, with a holy ring to it.
>But there is no philosophy involved. You need not be a guru to think this up
>or understand it. It is not "life". It is not a standard. It is limited.
>It is not cross-platform. It is not language independent. Security/privacy
>issues are not addresses. Efficiency and performance is not addressed.
>This does not instill me with great confidence.
>
>
>Finally I'm not that impressed with the author's writing. Of course it has
>not gone through editorial control, but some of the language just doesn't
>flow very well. My own spelling skills are not the best (as a non-native
>speaker), but I am pretty attentive when it comes to parsing sentence
>constructions on paper (maybe because I'm a non-native speaker).



>
>In summary, thumbs down, some salvageable material, eccentric/dubious author.
>

Review Three:
---------------------------------



>However, the general population
>of Web professionals is highly unlikely, in the beginning of
>something this new and technically difficult, to purchase
>this text.



>This reviewer would not initially purchase a text of this
>type. With limited resources, proven, existing tools are
>preferred. Eventually, if "Web Avatars" prove fruitful, a
>purchase of this text would be likely.
>

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Reactions from Mark Rauterkus and reply to Peter. The letter is titled, the cart goes before the horse.