Simon’s Blog

Everyone wants to know what Project X actually is… as in the Project X that Jason Calacanis is working on. Not long to find out - he’s officially launching on 14 July. What do we know so far?

Well, we know that Sequoia Capital is investing (at least, I think we know that). That tells us quite a lot already. What does it tell us?

• Sequoia wouldn’t be investing if they didn’t think it was a big opportunity. That means it’s got to be something can achieve a value of at least $200M over a few years.

• It must be a business idea that requires significant amounts of money. I’d have thought Sequoia would want to put at least $40-50M of capital to work over the lifetime of the investment.

What else do we know?

• We know that Jason has already hired a pretty big team - around 40 people, maybe. That might mean there’s a significant amount of custom software development required before they can launch
• We know that VCs often like “more of the same” from their Entrepreneurs In Residence. In other words, what Sequoia see in Jason is someone that knows about blogging networks, social news, internet advertising.

The thing is: I’m a bit dubious whether a blogging network, or social news site can really achieve the kind of valuations that Sequoia will be looking for. So I don’t think it can be either of those. But, what the hell… maybe Jason is going to do some kind of mashup of his favourite Web 2.0 sites: Digg, Twitter and Engadget… you know like Truemors, but just for gadget rumours… No, perhaps not…

No, if you want my best guess, it’s this…

Jason understands Internet-based, targeted advertising. He made a lot of money using Google Ads on his blog network. But, Google got most of that cash. Perhaps he wants a bigger slice of the pie for his next venture. Now, Google Ads dominate with text ads on the Web, so there’s no mileage in competing with that. However, there are other opportunities. For example, a mobile phone targetted ad network is one thing he could do - connecting mobile phone application developers and content publishers, with advertisers and end users in compelling ways is a multi-billion dollar opportunity…

Except… that may be too far from Jason’s area of expertise to deliver real value as a startup CEO. Or it might not be. I don’t know him well enough (at all, in fact!) to make a call on that.

Perhaps, then, we can learn something from his video podcasts…

• Number 1 - the very fact that Jason is now interested in producing video shows might be relevant
• Number 2 - Jason is very interested in how successful Wikipedia is

So, the obvious conclusion you would draw from that is that Project X is like Wikipedia, but with lots of video and perhaps focussed on gadgets (the most popular blog topic for Weblogs Inc). That certainly fits into the “more of the same” category that VCs love.

Ho hum… time will tell…