Ontario government gives LSIFs one more year

In its 2007 Economic Outlook and Fiscal Review, the Ontario government announced that it will extend the LSIF tax credit one more year to 2011. The current 15% credit will now continue until 2009 before the credit is reduced 5% each year, vanishing entirely for the 2012 tax year.

The government is also boosting to $7,500 the amount that you can invest in an LSIF and qualify for the tax credit, up from the current $5,000. It says this "will provide an estimated $38 million in additional financial support to the industry over three years."

That may be an optimistic figure, but it's a bit of a reprieve for the LSIF industry. They must see that as a good sign since hardly anyone took up their cause during the election, and Roger Martin's Institute for Competitiveness and Prosperity in its recent annual report [PDF] implored the government not to back down on the phase-out of the tax credit (and even to speed it up).

Government delays onerous IP legislation ... for now

Responding to a wave of protest from across the country, the federal government has decided not to introduce its U.S.-DMCA-styled legislation -- at least not today.

The legislation was a product of some intense lobbying, particularly from the U.S. This would be the country that gave us NTP vs RIM and which recently fined a woman US$220,000 for having 24 songs in a shared folder on her computer. Yes, they're now lecturing Canada on our IP laws, trying to keep the 21st century at bay for as long as possible under the guise of being anti-theft. This lobby even managed to get the Ontario Chamber of Commerce to endorse its position.

Fortunately, the pro-legislation lobby has been overwhelmed over the last few days by critics, which include many high-profile members of Canada's high-tech community. It's a story that's been gaining momentum in the media as the outrage has built throughout the country.

It's way too early to think of this as a victory -- the legislation could still be introduced later this week or some other time soon.

Meanwhile, Michael Geist's Facebook group, Fair Copyright for Canada, has now grown to more than 15,000 members, including several names that will be familiar to people in Waterloo tech circles.

Hamilton chamber gets it right

Kudos to the Hamilton Chamber of Commerce for doing what the Greater K-W Chamber should have done but didn't. Michael Geist reports that the Hamilton Chamber has dissociated itself from the Ontario Chamber of Commerce's call for far-reaching and onerous new intellectual property legislation -- a call that was largely based on dubious claims and fabricated data.

Unfortunately, it's looking like the federal government is about to introduce U.S.-DMCA-style legislation to Canada. Like the PR pros they are, lobbyists for these additional laws like to refer to "piracy" and "counterfeiting" -- who would defend activities with those labels? (Johnny Depp fans, maybe.) For people who only read headlines and lead paragraphs, intellectual property protection sounds like something to support. It's only when you go deeper that you see the oppressive measures some lobbyists are championing. Michael Geist's blog is a great resource if you want to dig deeper, and the Facebook group he created -- Fair Copyright for Canada -- has links to other blogs and websites with informative content.

On a related subject ... Matthew Ingram writes that the Songwriters Association of Canada is asking the government to pass legislation that would tax everyone in Canada $60 a year per Internet account, with this money somehow to be split between music "creators and rights holders." In return, there would be no threat of legal action against people sharing music for personal use in Canada as P2P file sharing would be explicitly permitted.

On the one hand, I suppose I can commend the SAC's efforts to create an environment where P2P filesharing is an accepted practice while, at the same time, artists are compensated for their work. But they quickly lose my support -- a mandatory, government-collected $60 a year charge to every Internet account is not the way to go about achieving those goals.

And it was disappointing to see bogus statistics yet again being quoted to support this position. The SAC even provides footnotes, but in this case it just makes it easier to see how weak its "facts" are. One line that grabbed my attention said that "Virtually every song ever recorded is available through P2P file sharing (more than 79 million recordings)." A careful reading of the footnotes revealed that both claims in that sentence are misrepresentations of the cited source material (which, in one case, seems only to be one person's off-the-cuff commentary). And those aren't even the worst examples. Just more made-up statistics and phoney facts that will no doubt be repeated many times.

Chamber's counterfeiting gaffe

It was disappointing to see the Greater Kitchener Waterloo Chamber of Commerce's misguided endorsement of the Ontario Chamber of Commerce "Protection of Intellectual Property" [PDF] report, issued this morning.

Protection of IP might sound like something non-contentious, but this report is filled with misrepresentation and fabrication and makes the OCC look like a stooge for the copyright lobby.

Chambers of commerce usually like to make themselves out to be champions of smaller government, but the OCC is lobbying for significant increases in government power and bureaucracy, along with additional layers of legislation -- all in response to a problem it defines with made-up statistics.

As Michael Geist writes, "With today's report, the Ontario Chamber of Commerce has done little more than embarrass itself and its members."

Skapinker on venture capital in Ontario

Brightspark's Mark Skapinker discusses Ontario's shrinking VC industry and plans future posts on "the strengths and weakness of the Canadian market and ways that we can fix it by adopting some new models."

I'm not sure about his claim that Silicon Valley is the only healthy VC market in the U.S. It's clearly the top dog, but Massachusetts and Texas seem to be doing pretty well. Money usually follows results, and according to CVCA data, of the states with 20 or more VC funds, 75% of them outperform Canada for returns. UK, Germany, and France are also shown significantly outperforming Canada. But, since "go get better results" (and do it retroactively) isn't a very helpful piece of advice for the Canadian VC industry, looking at new approaches is likely the best route to take. They can complement the traditional VC model, which isn't going to vanish but might have a different look a couple of years down the road.

Interesting comment on MaRS: "great building ... but the absolute wrong way to create an industry."

Waterloo more angelic than Toronto?

Mark Evans finds it notable that a Toronto company closed an angel round of funding. That's interesting because, in the Waterloo area, we've seen a wave of angel deals over the last couple of years. Most of them have involved local business people, although it looks like another one might be closing soon with Toronto's Maple Leaf Angels.

It could be another example of the differences between the Waterloo and Toronto tech environments, although I wouldn't be surprised to learn that there's a lot more angel activity going on in Toronto than what we hear about. Certainly, most angel deals here never get announced.

But Mexicans do thumb BlackBerrys

Andrea Mandel-Campbell, author of Why Mexicans Don't Drink Molson, gave the first talk of Laurier's Innovation & Entrepreneurship speaker series tonight at the Schlegel Centre for Entrepreneurship.

Mandel-Campbell paints a depressing picture of Canadian business from a global perspective, pointing out that Canada has never produced one of the world's top 100 brands -- something that Switzerland has done a few times, even with population about three-fifths of Ontario's. We're not home to any "globally-relevant" multinational companies, generally show little entrepreneurial spirit, and are much better at coming up with ideas than in making money off them.

There's no disputing that Canada has a pretty sad track record. Run through the list of Canada's largest corporations and there are very few which have products well-known outside of this country. That's certainly not a new observation, and Mandel-Campbell seemed to be more interested in using it to promote a cardboard-conservative ideology than in offering suggestions about what can be done to make things better. It came as no surprise to learn that she used to work at the National Post or that The Fraser Institute was quick to have her as a featured speaker.

Mandel-Campbell didn't say anything about lowering taxes during her one-hour talk, but she managed to hit most of the other standard talking points: Canadian businesses are mollycoddled by government protectionism, we need fewer regulations on foreign ownership, our country suffers from dysfunctional attitudes toward money where people are more interested in dividing up wealth created by others than generating it themselves (she was not pleased that Tommy Douglas came out on top on the CBC's The Greatest Canadian competition a few years ago). She even said that almost all of Canada's great companies were "built, funded, and managed" by Americans that we bribed to come here. You've heard most of this many times before (and I'd want to look into that claim about Americans -- it sounded far too universal; I can think of iconic Canadian businesses that had no American involvement).

She made several references to Molson, Noranda, and Dofasco, but, surprisingly, never mentioned RIM, even though she was giving her speech about a three minute drive from RIM's headquarters. The BlackBerry just missed making the list of world's top 100 brands this year, which -- if Mandel-Campbell is correct -- would have been a first for Canada. Now, RIM is not a rebuttal to Mandel-Campbell. It's an anomaly in Canada (as is/was Nortel) and really is the exception that proves the rule. But it's one that needed to be acknowledged in Waterloo, especially when one of your key messages is that Canada has never produced a top global brand. It would probably be more helpful for the next generation -- which Mandel-Campbell said is the her primary target -- to celebrate RIM and try to understand how it became a global success without being acquired. It's certainly too late for Molson, Noranda, Dofasco -- or any companies in their industries -- to be our flag bearer and inspiration.

Canada's record in building global brands can be embarrassing, infuriating, and depressing. Mandel-Campbell gave a pleasant enough talk, even if it seemed heavier on ideology than information or insight. She certainly came across much better than her two would-be debaters who asked the first two "questions" during the Q&A. A thumbs-up to Benson Honig for moving things along.

Overall, it was a successful event and was certainly worth attending. Up next in the series is NuComm International CEO Réal Bergevin on November 7.

A look back at Entrepreneur Week

The fourth annual Entrepreneur Week wrapped up Friday with a talk by Jim Estill. I missed Doug Hall, the guy from the first season of American Inventor, but attended all the other "Startup Camp" sessions, as well as BarCampWaterloo. Larry Borsato provided some terrific summaries in his blog entries, and there will be video (edited) of all the presentations available online soon, so I won't review the content.

There were early-stage entrepreneurs from a wide age range -- which I was glad to see, since it's been a peeve of mine when entrepreneurs are segregated by age. You can start a company at any age, and there were entrepreneurs born in the 1950s, 60s, 70s, and 80s all sitting together (maybe some older than that, and it won't be long until the 1990s are represented). The speakers also covered the same age range, from their 20s to their 50s.

Almost all of the sessions addressed a key topic for startups. There were sessions on life as an entrepreneur (that's what it was supposed to be, anyway), financing, marketing, and business strategy, which are all essential. I'm sure some people would have liked to see other topics covered too -- Web 2.0 or n.0 is always popular -- but you can only shoehorn so many events into one week and this was as full as I'd want it to be (and Web 2.0 was a major topic of this year's Tech Leadership Conference).

The two Thursday sessions were notable for presenting viewpoints that were about 180 degrees removed from each other: Tim Jackson in the morning and Bill Tatham in the afternoon. Guess which one didn't have a very high regard for VCs.

Tim's term sheet session was interesting, and one I'd recommend that everybody watch once it's online. You may not agree with all his conclusions, but it's useful for entrepreneurs to understand why investors ask for -- or demand -- certain terms.

Using the label "Startup Camp" might not have been the best choice, since that name is becoming strongly associated with unconference-style events, which Entrepreneur Week wasn't. Initially, it was being called "Startup Bootcamp" and that was shortened. In the end, Entrepreneur Week wasn't a bootcamp (maybe the Doug Hall event was, amd Tim Jackson's session was very interactive) and it wasn't an unconference (although BarCampWaterloo was, and it was part of EWeek), and maybe more elements of each could be integrated into next year's events.

It was unfortunate that Ray Simonson's "life an an entrepreneur" event got turned into a session on structured interviews. It was okay, but Ray has great stories to tell, tells them well, and isn't shy about giving his opinions. The audience only got a taste of that near the end. There are few people more enjoyable to listen to than Ray.

Overall, the turnout was very good, and the people who came -- with very few exceptions (other than sponsors) -- were real entrepreneurs and not people looking to sell services to startups. The "Chapter" event had been the anchor of the first three Entrepreneur Weeks, and we saw that you could give it a year off and still have a successful week.

Still looking for an alternative for LSIFs

Continuing on LSIFs ...

Some background: LSIFs operate like VC funds except that they raise money from individuals (or "retail investors") instead of institutions. They have been a popular option for Ontarians at RRSP time, since -- in addition to the usual benefits of putting money into an RRSP -- LSIFs have also offered a 15% federal tax credit and a 15% provincial tax credit. They began in Quebec and federal tax credits were introduced in 1987. Four years later, Ontario tax credits were added under Bob Rae's government.

The funds ended up coming under attack from the left and the right, from sources as diverse as Buzz Hargrove and the C.D. Howe Institute. Within the investment community, the most common complaints were that LSIFs delivered poor returns while spending a high percentage of the invested funds on management fees.

Dalton McGuinty's government declared a moratorium on LSIFs in 2004, saying it would review the program to see if LSIFs were still "an appropriate vehicle" for increasing VC investment. In August 2005, it announced that the tax credits would be eliminated. Initially, this was to happen right away. Some people cheered the decision, but after an outcry from the LSIF industry and some parts of the tech business community, the government adjusted its plans and decided to phase out the tax credit over several years. The 15% tax credit is now scheduled to drop 5% each year starting in 2009, disappearing entirely in 2011.

According to the government, LSIFs were no longer needed because "Ontario's venture capital market is much healthier now" with "200 private sector venture capital funds and close to 200 U.S. funds investing in Ontario companies over the past six years." It had no plans to replace LSIFs with another government-supported program to help raise venture capital from individuals.

The main defender of LSIFs, not surprisingly, has been the LSIF industry, initially under the banner of the Association of Labour Sponsored Investment Funds -- a name that was changed earlier this year to the Canadian Retail Venture Capital Association after LSIF had become a tainted term.

The most prominent critic, at least as far as writing full reports attacking LSIFs, has been Douglas Cumming. He first started getting attention years ago with a paper he wrote claiming that LSIFs unfairly "crowd out" other VCs from the market. He's been repeating the same message year after year since then and found a receptive audience, particularly among those with an ideological predisposition to support his views.

The two have debated each other, sort of, in their respective reports and responses and in the pages of the National Post. They often seem to be talking past each other. Responding to Cumming's C.D. Howe paper, CRVCA gets off to a poor start, flipping out over Cumming's comparison of the return on treasury bills to that of LSIFs. Somehow, the CRVCA completely misses Cumming's point and suggests that he doesn't understand the difference between no-risk t-bills and high-risk venture investments. Of course he knows the difference, in fact, it forms the entire basis of his point: the so-called "high-risk, high-return" LSIF couldn't even match the lowly t-bill for ROI over a 12-year period. Like back in the bust era when people would say they should have kept their money under their mattress. I'm sure Cumming would have used that, but his data show LSIFs slightly outperforming mattresses, so he moved one step up to t-bills. It's such an obvious point that it's hard to believe the CRVCA report was vetted by many eyes before its release. (This is supported by its use of "light years" as a measure of time. You'd think that it wouldn't take too many reviewers to spot this error.)

Cumming talks about the inefficiency of LSIFs, with a higher percentage of the funds being spent on management expenses than you'd find in other VC funds or with mutual funds. The CRVCA lists some of the added expenses of an LSIF versus an institutional VC fund -- all true, but not speaking to Cumming's point that it's an inefficient system with money going to administrative expenses instead of being invested. He wasn't accusing LSIFs of throwing the money into a bonfire and his charge of inefficiency isn't answered by receipts.

But the CRVCA does provide weightier rebuttal, particularly in its discussion of Cumming's "crowding out" accusations, which were never strongly backed by evidence. With the future of LSIFs in doubt, we should be seeing institutionally-backed VCs expanding their market presence, if they were previously being crowded out. We haven't seen anything like that -- just the opposite, actually, as the CRVCA points out. Buried in the last paragraph of a section on page 5 is an interesting statistic that deserves much more prominence. The CRVCA says that of all reported VC deals of $10 million or more in Canada between 2005 and 2007, 61% of them were with companies that already had an LSIF investor. If accurate, it's a statistic that should be highlighted in any attempt to persuade the Ontario government to change its mind about LSIFs, or at least about retail VC funds.

The CRVCA also makes some good points on portfolio size and governance. It does what it can to respond to accusations of high management fees. The CRVCA would be able to discuss in detail how those fees are spent, but it doesn't do so in its report, which suggests that it doesn't believe it would be helpful to its case. In discussing LSIF performance, the CRVCA cites a 2006 report from the Canadian Venture Capital & Private Equity Association (CVCA) which includes a graph showing retail VC funds outperforming other VC funds in 10-year returns. But that report also showed LSIFs with a -1.4% return (while U.S. VCs were said to have a +27.6% return over the same period) so it may not be much to brag about. But the numbers do underscore how important the tax credits have been for LSIF fundraising.

But the problems of LSIF returns and management fees are familiar criticisms. We didn't need to read an academic paper (or six variations on the same paper) to know about these issues. What is original in Cumming's papers seems to be a weakly-supported ideological stance built on spinning data that is dubious when it's not stale.

At the same time, the familiar criticisms are still valid and it's easy to see why many investors had soured on LSIFs -- even before the moratorium in Ontario (not to mention the Crocus experience in Manitoba). It's not as easy to understand why the government would pull the plug on the tax credit, especially at a time when it was creating a new innovation ministry and making investments into the infrastructure to support new tech companies. Trying to increase the number of these companies while simultaneously reducing the funding options they'll have seems like odd policy. We have an election coming up shortly in Ontario and none of the parties has said that it would keep the LSIF tax credit or replace it with something similar. Institutions have been pulling back from investing in Canadian VC funds, and now the retail market has taken a big hit in Ontario.

I wasn't sad to hear the Ontario government's announcement that it was discontinuing the LSIF tax credit, but that was partly because I thought the industry and government would work together to figure out a replacement. The LSIF tag had started to carry a lot of baggage, both with investors and with government, so this seemed to be a good opportunity to start pitching an alternative. But that was two years ago, and there's been little apparent movement in that direction. It was encouraging to see ALSIF change its name to CRVCA and start using the term "retail venture capital" -- that's what needs to be promoted, not LSIFs, which is just one form of a RVC fund. The whole "labour-sponsored" gimmick could certainly be scrapped. In Ontario, at least, these funds have little to do with unions or unionized workers. But it seems that most of the focus has been on saving LSIFs as they are instead of coming up with a more palatable replacement. It will be a shame if we lose an entire pool of potential investors for early-stage technology companies in Ontario.

LSIF critic spins tales for Fraser, Howe instututes

The Fraser Institute just published a report on labour-sposored investment funds (LSIFs) that is almost identical to a report published earlier this year by the C.D. Howe Institute. And with good reason: both papers have the same lead author -- Douglas Cumming.

Cumming doesn't think much of LSIFs and thinks governments in Canada at provincial and federal levels should discontinue the tax credits provided to LSIF investors. Ontario has already announced that it is phasing out the LSIF tax credit.

There are legitimate criticisms that can be made of LSIFs, but for years Cumming has been augmenting these bona fide critiques with ideologically-driven spin on what is often dubious data to begin with.

Reports from Howe and Fraser are usually so driven by ideology that you rarely have to read past the title to know what they're going to say. That's particularly true for these reports, since Cumming has been distributing different versions of the same report for the last seven years.

The Canadian VC industry has seen a lot of changes over that time, but as an ideologue trying to support his views, Cumming is always able to draw the same conclusions. To use a Stephen Colbert line, "he believes the same thing Wednesday that he believed on Monday, no matter what happened Tuesday." And, in this case, Tuesday is the last seven years, and a lot has happened, but Cumming has been a rock of consistency throughout these wildly-changing times.

Which isn't all that surprising, seeing how stale much of his data is. He has claimed for years that LSIFs "crowd out" other VC funds from the market. The most recent data he uses in this analysis is now six years old. He actually uses data from more years in the 1970s than in the 2000s.

While Cumming will occasionally mention techniques like regression analysis to provide a veneer of legitimacy, his favourite tool is spin. For example, Cumming says that LSIF managers -- on average -- have more than twice the number of companies in their portfolio as VC managers. The conclusion he chooses to draw from this is that LSIF managers are just too swamped to become involved in meaningful ways with their companies and, therefore, fall behind on the learning curve compared to VC managers.

But this is one of those great "facts" (and it's questionable whether it's a fact at all, even though it would be fairly easy to check) that can be used to support whatever you want it to. If you're an LSIF supporter, you can conclude that LSIF managers, by being involved with more companies, get to see more situations, interact with more entrepreneurs, and deal with more business issues in a shorter period of time than their VC counterparts. That would put them ahead on the learning curve. It's not any more reasonable than Cumming's position, but neither is it any less-supported by the data he cites.

Another example: Cumming says that LSIFs don't have to be as concerned about ROI as other VCs (because investors get the tax credits no matter how the fund performs), and this enables them to spend more to attract deals in a non-level playing field where VCs can't easily compete. Okay, but if it's true that LSIFs can spend more, then -- for the same reasons -- they should be able to outbid VC firms for management talent. That would mean that LSIFs should be able to attract a more talented team than VCs. But that's not a conclusion Cumming wants to promote, so he doesn't mention it -- even though it's as much a consequence of his assumptions as the point of view that he does want to support.

One more, and then I'll stop. Cumming points out that individual LSIF investors only account for a tiny percentage of the amounts put into any fund, as opposed to a limited partner of a VC fund, who would account for a far higher percentage of the total fund. The conclusion he wants to promote is that LSIF investors have much less control over fund management than VC investors and exert less pressure on managers to perform. And that's reasonable enough, but an LSIF supporter could take that very same data, and point out that LSIFs have to raise money on a continuing basis (or, more realistically, an an annual basis when RRSP season comes around) and, therefore, have to face the market every year and convince them to invest. The pressure to perform would be continual. And LSIF investors typically commit for a slightly shorter period than LPs with VCs, which again makes it easier for them to walk away from a poor performer. I don't buy that argument either, but it's as reasonable as Cumming's.

That's the great thing about "data" -- with a little selectivity and spin, you can reach just about any plausible conclusion you want ... as long as you're not too thorough or rigorous.

I'll continue with this topic -- and the LSIF industry's response to Cumming (also flawed) -- in a future post.

How much funding for Canadian startups?

How much money have investors poured into Canadian startup companies so far in 2007? You may think you've read that number recently, but you haven't. The actual answer is "nobody knows." Of course, no one likes that response, so they go count the things they can count and then pretend they know the answer. It's like the old joke about the guy looking for his car keys under the street light -- "this isn't where I lost them, but the light's so much better here."

Whenever you read about the aggregate level of venture capital investment, the main source of that information is news releases and other voluntary disclosures, either from the company receiving the funds or their investors. There are also securities commission filings for some investments -- some funds have to put their financial information on SEDAR and, in Ontario, many deals will will be listed in the OSC Bulletin. But most investors are not required to make any public disclosure. They often choose to do so because it would be good for the company and its image as a growing business with dependable financial backing.

In Waterloo, I work with companies every week that have closed rounds of funding that were never publicly disclosed. One of them just raised about $2 million, but you haven't read about it and it's unlikely that you ever will. Several have raised between $0.5-2 million, but those numbers won't appear in any reports you'll see.

Several months ago, Industry Canada told me they were dissatisfied with the existing estimates of venture capital deals and were going to try to come up with their own reports. So far, they're still just publishing the same numbers you'll see elsewhere. Maybe they've found that it's not easy to measure these kind of investments. I wouldn't be surprised if most -- maybe all -- of the eight-figure deals get disclosed somewhere, but there are many six- and seven-figure deals that are just between the company and their investors, and whomever they happen to tell.

In the summer I read somewhere that only one deal had been done in Waterloo Region over the first half of the year. I had no trouble coming up with six that had been publicly disclosed, and know of others worth millions of dollars that weren't. If the reported numbers are that far off for Waterloo, how inaccurate must they be for all of Canada?

And then there are companies that receive offers but turn them down. I don't mean they choose another offer instead, they just decide not to take funding. Sometimes they come to regret it, but often they're happy to grow their business without additional equity investments. You can't count that in your investment totals, but it's something that needs to be taken into account when discussing the number of companies being funded.

So, when I say that the actual answer is "nobody knows" the follow-up question would be: is that "nobody knows precisely, but we have a pretty good estimate" or is it "we really don't know, other than it's at least $X." I'm sure many people will say that it's the former, but having seen how badly the numbers have been underestimated in my area, I'm not confident that it is.

Going gold at 65

Bob Lefsetz suggests that Paul McCartney should have given away his recent album, Memory Almost Full, because it's only going to sell about 550,000 copies in the U.S. There could be some good arguments to support that view, but Lefsetz constructs a bizarre case for giving songs away. He says McCartney fans found the price of the album too high and that "everybody" would listen to it if it was free. The knowledge that "all [his] fans" would be listening would have motivated McCartney to put out a great record.

Okay, even if it was free, there's no reason to think people would be tripping over themselves to download the new album. Neil Young gave away all of Living With War. What percentage of people who consider themselves to be Neil Young fans downloaded those songs? (And Living With War turned out to be a pretty good album.) Memory Almost Full is available from eMusic for $3.50-$4.30, depending on your subscription level. That's less than $1 in 1973 dollars -- to use a frame of reference that most McCartney fans can identify with. You could buy the album for about what it cost to buy "My Love" as a single. Whatever McCartney's challenges are in selling his album, cost seems to be a minuscule factor.

And McCartney was perfectly capable of phoning it in even back in the days when "everybody" was listening. Remember Red Rose Speedway? Wild Life? Memory Almost Full was stronger than many of McCartney's albums from his commercial peak (post-Beatles), so -- for once -- we can't accuse him of being unmotivated.

And 550,000 units in the U.S. alone sounds pretty good for a 65-year-old pop musician. That probably translates to over a million albums sold, worldwide. The last.fm numbers for "Dance Tonight" -- the lead track on the album -- are very impressive, leading all other McCartney or Wings songs in number of listeners over the last six months.

Maybe it really is Web 2.0

Apparently, it was more than 14 months since I posted anything on my blog. Between writing a bunch of proposals, position papers, and funding pitches last year, as well as having the Waterloo Tech Digest and my column in Rex Magazine, the last thing I wanted to do in my spare time was write anything. Okay, not really the last thing, but it never came close to the top of the list (although I did seem to find time for a few thousand Wikipedia edits before moving on).

I didn't even read any blogs in that time, at least not any personal ones. I kept track of updates to a few websites through their RSS feeds, but that was about it. I can see that RSS has come a long way over the last year. Not the technology, but its use. When I posted through my blog a backlog of 10 Waterloo Tech Digest issues from the past year, the traffic to my website jumped nearly 500% that day. Two days later, it was still up about 300%. The extra traffic was all generated because the content of the Tech Digest issues had been distributed and discovered through various RSS-based tools (and, in some cases, shared through sites designed for that purpose). For people who worry that using RSS feeds will cannibalize your web traffic, my experience so far has been just the opposite. After seeing those numbers, "Web 2.0" feels like much less of a silly cliché than it did a year ago.

A lot of cool tools have sprung up that I'll have to look into. And some of the ones that were a big deal 14 months ago are museum pieces now. Does anyone still use Technorati? One of the big names 14 months ago, it looks like a search engine for spam these days.

Now comes the challenge of making use of these tools in my website, and in the watstart.ca site that I also oversee. Simon Woodside has been working to integrate Web 2.0 technology into the WatStart site -- look for a relaunch early in the fall -- and I've started getting back up to speed after a 14-month hiatus. (I never even thoroughly rewrote my site for CSS, let alone RSS. It still has some HTML code going back to 1996!) Should be fun, and make for some much better sites.