Sundog has been using short clips featuring billionaire Richard Branson, actress Kate Winslet, actor Gael Garcia Bernal and rapper Dizzie Rascal to draw attention to it ahead of its online release.

The strategy seems to be working: The official Breaking The Taboo YouTube channel has clocked more than 300,000 views since its launch on November 16. But why would Sundog release the entire film for free on YouTube ahead of its TV broadcast? I got in touch with the company to find out, and a spokesperson sent me the following response:

“We have decided to go with a YouTube release as the important thing for us as a company is not monetary gain but raising awareness and spreading the word on global issues — we aim to educate and inspire people and we can do that best through a free, social medium like YouTube where so many more people will be able to access it.”

The movie will be available for free for one month starting December 7. It is part of a larger campaign to change drug policy that has attracted support from a variety of people including Mexico’s former president Vicente Fox, Napster co-founder Sean Parker and Sting.

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And yet, the man is unfazed. Here is what he told Liz Gannes:

Running a start-up is like eating glass. You just start to like the taste of your own blood. We are iterating on our approach… Airtime is finally getting around to some of the bigger ideas that got me interested in this project in the first place… Now is the most toxic time ever in Silicon Valley…Startup team are always in flux, so like all startups we’re always talking to candidates for various key roles… At this point nothing definitive has been decided….It’s only 12 weeks from launch…I’ve only been running the company since March.

I added up all those random quotes from Gannes’ post so you can see what he is saying: absolutely nothing. Airtime really is a house of cards standing on a handful of matchsticks. The company has 10,000 monthly active users — and that is generous by any stretch of imagination. There is a steady exodus of executives, co-founders and smart people. Madness, I say!

And no, it is not just an opinion. I have talked to folks intimately familiar with the company and have heard similar stories Liz has outlined in her post. Parker in the past has attached himself to working and growing concepts, most famously Facebook and lately with Spotify. His talents helped those companies, but frankly, starting a product from scratch and building into a have-to-use fast growing service is easier said than done. In other words, let’s just face the facts: growth happens, for inexplicable reasons and you can’t draw it on a whiteboard.

Airtime suffers the same malaise as Color, the other liberally-funded startup: they don’t really solve a problem that is acute or hasn’t been solved before. Sarah Lacy in a post about Color wrote:

People no longer get told what products to use in a Web 2.0 era, they use them and spread them to their friends if they’re good. Color wasn’t– as was evidenced by its two-star rating. Money and grand articulations of a vision can’t shortcut that. The Web has become too crowded and users are too smart.

She might just be writing about Airtime. If Color’s Bill Nguyen boasted about the $41 million he raised from Sequoia Capital, then Airtime talked about its $33 million in funding, celebrity launch event and bold claims that sounded hollow from day one.

I didn’t really see what Airtime was for when it launched — I am sorry, there are already many tools that do a better job than that service. Skype, Facebook and Twitter – they were like nothing before and hence they grew so fast and swept the world. They were communication revolutions and the consumers rewarded them with attention.

For now, Airtime wants to be a next generation Skype! Sure, and I want to be a latin lover. The fact is that in today’s attention starved world, if you miss the chance to make an impact, the world moves on to something new. It doesn’t matter who you were, how great your resume is and how many billions you have in the bank.

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And so, a report that Spotify plans to release a browser-based version of its service makes a fair amount of sense.

TechCrunch reported Saturday that Spotify–the brainchild of Daniel Lorentzon and Daniel Elk–will release a web service in the near future that will allow users to log in to their Spotify accounts from any PC or Mac to stream music. The report said that the service will likely add a few new music-discovery features as well.

While the apps-vs.-web question may still be an ongoing debate in mobile development (with apps leading the way in most cases), web-delivered experiences have come to define most of what we do on PCs and Macs these days. Going to a browser-oriented version could help Spotify sign up more users and could also make for a more interesting experience when playlists can be accessed from any computer with an internet connection.

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The service, which went into alpha last September, had been building for a while around a simple-yet-complex idea: talking with your friends while you all watch a premium video online. Then along came Google+, with its hangouts. And then came Airtime, with its idea of videochats around shared experiences.

Suddenly things looked a little trickier. Ahmed’s response?

Change direction and raise $500,000 from a syndicate of private investors to keep pushing the service into a new shape. The new, reinvigorated Lutebox — which goes into open beta on Wednesday — is no longer organizing itself around video, but instead wants to tap into another buzzy trend: social shopping.

“What we realized,” Ahmed told me, “Was that we didn’t have incredibly valuable content, and that we couldn’t afford to get it. We’re not Netflix, who can afford to pay millions to Warner Bros or Fox to get the latest movies.”

Instead he took cues from Pinterest and Fancy, developing a platform where you can talk to your friends about things you want to buy. You can see where he’s coming from: shopping in real-life is often a social experience, where you show your friends what you’re interested in and make collective decisions. What if that could apply online too?

To be honest, though, this is not actually as radical a change for Lutebox as it may seem: the core of the product is still a videochat service, where you can talk to up to six friends simultaneously about what’s on the page in front of you. The difference is what the subject of your chat can be. Now the site has added a shopping mall, where you can search for items from a range of different retailers (all U.K.-based at the moment) and discuss them with friends.

That means it’s got a better commercial model (Lutebox doesn’t have the same up-front costs as it did for video, and earns affiliate fees on every purchase made through its service) but it still faces some substantial obstacles.

The first is a broad one: is videochat really what people want to do? So many people have thrown themselves onto this bonfire, and yet — unsurprisingly — they’ve nearly all ended up being burned. While they may prove useful from time to time, videochats remain a niche pursuit. And videochats about specific topics narrow the field even more. Even Airtime, which had been hyped thanks to the involvement of Facebook investor Sean Parker and Napster creator Shawn Fanning, met with a muted response.

And then there’s the platform problem.

Lutebox is not a plugin that allows you to launch a chat on, say, an Amazon page. No, it requires you (and your friends) to be signed in to its service, and looking through its own catalog of stores. That means it has to become a destination, something which will require some serious and work to reduce the friction. The search needs a lot of work, the discovery requires some deep thinking, and the inventory needs to be carefully managed.

And if wants to follow in the footsteps of Pinterest and the like, I suspect that is going to need to appeal deeply to a specific user base, which means it is going to have to narrow itself even further to get more items in from specific, more popular stores. For example, I can see it having some use for fashion retail, but probably not for purchasing electrical equipment. Right now it’s a grab bag of items from across the board.

Still, it’s only just gone into beta — so there is clearly time and now money to work on improvements. If the site can overcome the natural inertia of videochat — perhaps by allowing people to talk not just with their friends, but also trusted guides (why not launch a chat with a fashion stylist, say, for advice on the dress you’re looking at?) it may be able to carve out a corner of the market.

And if it can partner with a retailer to produce a white label service, that may have some value too. (Ahmed says it’s a possibility, but he is not talking to retailers about it yet).

So, plenty of challenges. But I’ll give them time to take a breath: right now they’re still reeling from the decision to shift from video to shopping.

“The stress around the decision to pivot, it’s tough because you’ve invested so much time and energy and belief into something,” Ahmed told me. “We had 250 testers in alpha, who were using it a lot — but it was a realization, more than anything, that it wasn’t useful for users. It all boils down to that.”

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Celebrities pose at the Airtime launch, which came to mixed reviews, but highlighted a particular launch strategy for new startups.

You might not have noticed, but two different Facebook-integrated video chat clients opened their virtual doors to the public this week.

Both services allow users to sign in through Facebook, hold video chats with friends, and search the internet for strangers to talk to. Both make it easy for new users to sign up and get started, and both use Facebook data to match random users who might want to chat. Their goals are the same: to prove that video chatting isn’t just for creepy dudes on Chatroulette.

But which product can you name? Chances are good it’s Airtime, Sean Parker and Shawn Fanning’s video chat service that launched Tuesday amid plenty of buzz. The Napster founders filled their launch party with celebrities like Jimmy Fallon, Snoop Dogg, Olivia Munn, Joel McHale, Julia Louis-Dreyfus, Ed Helms and Jim Carrey, who all attempted to video chat with each other through the new service.

Airtime received mixed reviews, with critics noting the shaky product launch and lack of mobile apps. But the upside, for Parker and Fanning, is that Airtime got plenty of positive reviews, and you’ve probably heard about it. You and your friends might even go check it out.

On the other side of the launch spectrum is Nyoombl. The service, pronounced “nimble,” also opened to the public this week, but without any celebrity chats or splashy debut. Founder Oladayo Olagunju, who wants to create a platform for recording and archiving conversations between people, actually launched the service last November. Olagunju has been testing and releasing Nyoombl slowly to work out bugs before widespread public use.

“I’m not a star. I’m not an billionare. I don’t know Ashton Kutcher,” Olagunju said.

The dual launch raises an interesting question: How much does startup launch buzz affect long-term success? Can a service like Nyoombl, which appears at least as useful and intresting as a service like Airtime, challenge the more hyped competitor?

Obviously there are success and failure stories for both launch tactics.

When it comes to buzz-worthy launches, plenty of celebs have successfully translate their stardom to product success. There’s Beats by Dr. Dre, the incredibly popular headphones. There’s Jessica Simpson’s clothing line, which is much more ubiquitous than her pop songs. And the Justin Bieber-approved social video-sharing app Viddy is gaining users and funding.

But plenty of celeb startups are just as likely to flop as those from unknowns:

• There was the Ashton Kutcher-promoted Ooma, which promised high upfront hardware costs in exchange for unlimited web calling. The service didn’t exactly catch on.
• There was MC Hammer’s “DanceJam,” a website with slow-motion dance tutorials and social media components. It was to be “like MySpace without guardrails,” the company told Wired in 2007. The website now notes that DanceJam has “come to an end.”
• There was Robo.to, the video status message system publicized by Justin Timberlake in 2009. It seems users weren’t totally into video statuses.

So what does this mean for someone like Olagunju, a passionate enrepreneur without Snoop Dogg at his launch?

Slow-growing, surprise social media hits like Instagram and Pinterest have shown the possibility for word-of-mouth growth. And DanceJam and Ooma prove that it doesn’t matter who’s promoting your idea — if consumers don’t like the product, it’s probably not going anywhere.

Over time, the best products tend to stand out from the crowd, and one nice thing about technology is that passionate early adopters help winnow that field relatively quickly. But first impressions are still important, and choosing a name that’s difficult to pronounce and harder to spell probably doesn’t help anyone understand why your product is as cool as the one Snoop Dogg uses.

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Today’s launch event for Airtime, the Sean Parker and Shawn Fanning social video chat service, was a good metaphor for the product it was showcasing: the star-studded event was poorly planned and showy without enough depth. After starting more than 40 minutes late, the press event turned into more of a celebrity-spotting spectacle with stars like Jim Carrey, Jimmy Fallon, Julia Louis-Dreyfus, Joel McHale and others clowning around as they tried to divert attention away from demos that continued to run into technical problems.

That’s not to say that Airtime can’t succeed at some point, but I came away feeling like the service needed more seasoning and substance to be really interesting. Now, after spending more time with the application, I feel like Airtime is more of a shallow roll-up of other familiar services: there isn’t enough there there yet.

Here’s a synopsis of Airtime:

• It’s a one-to-one, web-based video chat service built using Facebook as a social layer. The chats happen at Airtime.com but users can get notified of incoming chats through a message in Facebook when they’re logged in.
• Airtime offers a service for watching video simultaneously: users in a chat can start playing a video that both participants can view similar to Google Hangouts. Users can share only YouTube videos for now, either the stuff they’re previously shared on Facebook or they can find other videos through a YouTube search function.
• The final feature is taken from Chatroulette, allowing people to jump into random video chats with strangers. They can filter by their current location, friends of friends, shared interests or some limited trending topics or they can just look for anyone to meet. The service reportedly has humans monitoring screen shots of conversations between strangers and the system uses machine learning and computer vision to flag potential bad behavior.

Part of the appeal of Airtime is that it brings together these different video-chat features into one tool. But a roll-up really only works if people are genuinely excited about doing all these things in one application. I might not be the target audience here, but I don’t actually see myself wanting to talk with other people just because we happen to live in the same city or have one thing in common. And I’m not sure a new destination site is going to get me to stop doing video chats over Skype, Facetime or Google Hangouts. These feelings became more apparent as I used the service.

When hopping into chats with strangers, I first of all had problems with Airtime’s filters. When I narrowed my filters down to only friends of friends, it offered me people I have no connection with. When I tried to just meet people with shared interests, I got a couple people that I have nothing in common with. One time on this setting, I was told I was talking to someone who lived in New York like me. But that person was actually in India and had never been to New York.

I understand if Airtime is willing to be flexible with the filters at the start to ensure people get a match but it can lead to awkward moments where you realize you don’t even have one thing to really talk about.Another time, I was paired with someone only after I said I liked the New York Times. But sitting there with this guy, I don’t see how this connection could spark anything interesting. The conversation ended quickly.

There are things I do like about the service. The video quality is pretty good and it seems to hold a connection well. I can get up and going pretty quickly and the video sharing feature is seamless.

But after spending more time with the service, it feels like it needs more. I can understand getting something out the door, but it feels like it should have a launched with a mobile app or multi-party support. Right now, it’s a Flash-based application and it runs primarily on desktops. I’m told mobile apps are coming soon but I think it should have been there at the start considering how mobile people are these days. Or Airtime should have brought some Google Hangouts multiparty chat features to the party. That would make watching videos together more interesting and fun. Right now, I can’t imagine going through that many videos together with one person. And since the videos are only limited to YouTube videos, I can’t share anything I’ve uploaded directly to Facebook or other services.

One of the issues I’ve noticed so far is that it’s a lot of guys on the service. This may change over time, but it also brings up some of the same questions with Chatroulette. Are women going to be as eager to show their faces to strangers as men? Some might but many single women I’ve talked to said they’re not interested in meeting people this way. It’s too early to say if we’re going to see bad behavior or if Airtime’s security features will ferret out exhibitionists. But I still think that even if everything is PG, it still can be creepy for a lot of people.

A couple of other small gripes and observations:

• There’s a system for awarding a fellow chat participant with stars. But there’s no limit to what you can give someone so it’s pretty meaningless.
• In addition to multiparty chats, I’d like to have the ability to share files during video chats and also record conversations as well. That could be useful for conducting video interviews that I can integrate into blog posts.
• I’d also like the ability to zoom in on a particular location besides my own or search for someone to talk to about one specific topic. That would be cool for larger events or to get a man-on-the-ground report from some big event. Right now, there is a ticker that runs along the chat window showing some recent trending interests so you can chat with someone about that particular topic. But you can’t pick out your own topic.
• I did have some problems connecting with a couple of friends, who were on Facebook but somehow couldn’t receive my calls.
• While watching shared video, there doesn’t seem to be a way to adjust your own voice separately from the video’s sound levels. I found myself shouting a little to be heard over noisy parts in the video.

I think Parker and Fanning are too smart to let Airtime stumble around for long. And I think they have some interesting ideas around real-time interaction and how video can be an expressive and humanizing medium. I’ve been thinking about video lately and how it’s become more casual over time, as people find it easier to video chat or broadcast their lives without having much to say. But what’s driving some of those trends is really mobile and multi-party interaction, something Airtime doesn’t have yet.

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There are three features in Airtime:

• There’s a simple one-to-one, web-based video chat service that doesn’t require registration or a download. You just log-in through Facebook. You can talk to other Facebook friends and get notifications for chats through Airtime’s Facebook integration.
• Users can watch shared video together in real time and stay in a video chat as they view the video. For instance, you can watch a YouTube video together with a friend while also being able to see each other. Videos that a user previously shared on Facebook are listed under their Airtime profile and can be clicked on for live viewing. Or users can find new videos with using YouTube video search.
• And there’s the Chatroulette-like feature that allows strangers to meet outside of their Facebook connections. Users can talk to other people in their area, friends of friends and people with common interests. And chat users can share their interests with each other easily and see what they have in common.

Sean Parker said Airtime is meant to be a network service similar to Facebook or Skype. The goal is to build a service that taps the real-time potential of the Web and lets people find others and express themselves in ways that are often constrained when relying on existing social graphs.

The live chat feature is built in with security to flag abuse and monitor for bad behavior, Parker said. Human reviewers monitor screen shots of chats between strangers, while machine learning and computer vision help aid reviewing in spotting abuse. The Facebook log-in, with real profiles attached to behavior, is also meant to keep people in line. Parker repeatedly stressed Airtime’s security features, trying to make a distinction between Chatroulette, which became known for guys showing off their junk.

A parade of stars including Snoop Dogg, Julia Louis-Dreyfus, Alicia Keyes, Ed Helms, Joel McHale and Olivia Munn helped Parker show off the service during a very glitchy demonstration. But despite the celebrity endorsements, Airtime faces plenty of challenges. The video chat service will compete with Skype, Oovoo and a host of mobile-focused chat services. The service sounds more safe than Chatroulette and the interest-based matching is helpful, though many people aren’t clamoring to talk to strangers. As someone next to me said, “I don’t even like to video chat with my friends.”

The social video sharing feature is nice and taps into some of the popularity of services like SocialCam and Viddy with the ability to watch together live. That’s interesting but again, it requires people to be on together. It’d be nice if groups could view videos together in a group chat but that’s not available at launch. And Airtime overall doesn’t support mobile devices for now, so smartphones and tablet users need not apply.

Still, I’m interested to see how this all pans out. As I wrote recently, live “ambient” video is becoming a new form of communication, allowing people to be more casual and spontaneous with friends. Just as pictures have become a simple language of their own, video has the potential to be a much more powerful way for people to interact, share and be creative.

But I think Airtime will need to evolve some more to make it clear why people want to spend their time there. A big splashy launch event is helpful in drumming up attention and it shows that Parker and Fanning definitely have some big-time pull. But the proof will be in how many regular people show up and use the service, a factor that doomed the initial launch of Color, a photo and video-sharing app that is trying again through a partnership with Verizon.

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Airtime has been very good at keeping things quiet, with very little information leaking out during its closed alpha test this spring. However, here are a few things we already know ahead of Tuesday’s launch:

• Airtime will allow video chat both with people from your social graph as well as like-minded strangers, and it allows a bit of a blind date atmosphere by offering semi-anonymous interaction. The site’s Terms of Service were recently changed, but before revealed: “Your name is not shared when you are paired with a stranger. However, your Airtime and Facebook friends will be able to directly call you and see when you are online.”
• Airtime ties any  participation to a Facebook account and allow users to block others in order to avoid unwanted nudity.
• The company has been conducting regularly-scheduled trials with participants of the closed alpha test every week. A closer look at the site’s HTML code reveals that people who were lucky enough to get access to the private beta were told to “come back during user test time” after a successful sign-up. At times, access was also throttled, with testers being told that “the site is currently full.”
• Airtime was originally called Supyo. The company has raised a total of $33.5 million in funding over two rounds, with investors including Kleiner Perkins, Andreessen Horowitz, Accel Partners, Google Ventures and a bunch of well-connected including Mike Arrington, Ashton Kutcher, will.i.am and others.
• Clear Channel CEO Bob Pitmann is joining the board of the company, according to All Things Digital.
• Airtime’s artwork has been done by San Francico-based graphic design artist Shyama Golden.
• Airtime acquired social event tracking startup Erly two weeks ago. The deal can best be described as an aqui-hire and brings three Hulu veterans, including the video service’s founding CTO Eric Feng, to the Airtime team.
• The launch event will include appearances by a “a seemingly random group of celebs,” as the New York Post put it Monday. A-listers in attendance will include Snoop Dogg, Kristen Bell, Ed Helms, Julia Louis-Dreyfus, Joel McHale, Olivia Munn and Martha Stewart, according to the paper.

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(L to R) Walt Mossberg, Daniel Ek, Sean Parker

It took Spotify two and a half years to enter the U.S. market amid complicated licensing discussions with record labels, and Apple played a role in trying to keep the company out of the country, Spotify director Sean Parker said Wednesday.

“There were some indications that that happened,” Parker said, rescuing Spotify CEO Daniel Ek from having to answer a question about Apple’s role in Spotify’s long march to the U.S. market at the D: All Things Digital conference. “You hear things, people send you e-mails… there is definitely a sense in which Apple was threatened by what we were doing.”

This isn’t an entirely new notion: my former colleague Greg Sandoval at CNET reported in 2010 that Apple was talking smack about Spotify’s business model in discussions with record companies, implying that it could hurt sales of downloaded music. But Parker’s acknowledgment is still quite interesting when considering whether or not Apple ever plans to introduce a subscription service for music, something the company has long resisted but has long been rumored to be considering.

Back in 2011, when Spotify launched in the U.S., Ek told Om that “people tend to overdramatize this tension with Apple.”

Regardless of Apple’s role in Spotify’s negotiations with record labels, Parker said that Spotify has broken through where others have failed because of a focus on the product. “You have to lead with the product, and that informs your licensing,” he said, whereas other services cut the licensing deals first and then got around to building a product.

Image credit Asa Mathat | All Things Digital

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Dave McClure speaking at the US Embassy in Mexico City. Photo by David E. Weekly

It’s around 8:30 on a warm Friday night in Mexico City, and we’re all milling around a podium set up in the lobby of the private residence of the U.S. Ambassador to Mexico, Earl Anthony Wayne. Dozens of Mexico’s tech entrepreneurs and investing elite are mingling with more than 40 members of Geeks on a Plane, a traveling tech-revue of sorts organized by the Silicon Valley investment group, 500 Startups. Just outside the lobby, an expansive manicured lawn leads up to a massive, high rock wall. Guards with bullet-proof vests ushered the group through the fortress gate only about an hour before.

The Ambassador gives his polished remarks, followed by one of Mexico’s rare venture capitalists. Now it’s time for Dave McClure, the investor behind the two-year old fund and accelerator group 500 Startups, to say a few words. He is decidedly non-descript – glasses that are thick, jeans that sag, a t-shirt that says “500 Startups: We’re kind of a big deal,” flip-flops, and a black blazer as a gesture to the formal occasion (“hiding his hillbilly” as he calls it). McClure is a throwback to a Silicon Valley of the time before the brogrammers.

McClure thanks the Ambassador for the special night and starts to speak. He throws down his first salvo:

“For the last two heads of states that I met with I was also wearing flip-flops, so please don’t take it as any slight. If it’s good enough for the President of Chile and good enough for Hillary Clinton, it ‘s damn well good enough for Mexico.”

McClure is trying to do something a little bit different. What Billy Beane is to baseball, McClure is to technology startups. And like Beane, he is willing to go anywhere in the world to find a slight edge to beat his richer, bigger and fancier rivals on Sand Hill Road. He is quirky, offbeat and unconventional, which is one of the reasons why entrepreneurs love him, and he’s also a marketing machine that can turn out slogans and brands like a finely-tuned copy shop on Madison Avenue.

He’s more like a man with a mission or a preacher with a sermon than an investor trying to make a living. 500 Startups partner George Kellerman describes McClure as being so driven it’s as if his bucket list has just one item: to find the undiscovered entrepreneurs across the furthest reaches of the globe.

These principles are also where Geeks on a Plane comes in. The group brings together dozens of entrepreneurs and investors on a jam-packed, brain-jolting tour to meet with the local investors and innovators in cities throughout the world. Little sleep is had and much geeking (and partying) is done.

Geeks on a Plane Latin America kicked off last Thursday night in South Beach Miami — where the Mayor of Miami-Dade County, Carlos Gimenez, presented McClure with a plaque for tech industry excellence – and continues through Mexico City, Sao Paulo, and Buenos Aires over the next week. I’m traveling with the group (yeah, I have a rough life) and will be reporting on tech innovation across Latin America.

Moneyball for startups

So how exactly does McClure plan to disrupt tech investing? The group is starting out with what McClure calls a more “scientific” and “systematic” approach: essentially, it’s a numbers game. Instead of making a few several million dollar investments into promising early startups, 500 Startups is making smaller — $50,000 to $250,000 – investments into a lot more early stage startups; hence the “500 Startups” moniker.

The idea, as McClure puts it, is to fail more cheaply. And with more bets, the odds of hitting a winner is higher. The not-often talked about dark reality of the tech entrepreneur ecosystem is that it is wrought with failure. Some 70 to 80 percent of software startups fail, but if they fail cheaply and quickly, the heartache is a bit less.

For the 20 percent of companies that do hit some kind of stride or scale, 500 Startups offers follow-on rounds. For the couple of startups that are able to break out, 500 Startups helps usher them along to the venture stage, where more traditional venture capitalists step in. McClure points to a company like TaskRabbit as an example of a company that broke out and went on to raise successive venture rounds.

500 Startups’ first fund was for $29 million and I’ve heard that the group is currently raising another larger fund. By the end of 2013, 500 Startups will likely hit its namesake and will have backed about 500 companies, estimates McClure. Already they’ve closed on almost 300 companies.

Platforms & international markets

Part of the reason that more, smaller bets could work is because $50,000 is now enough to test out a Web or mobile idea and begin the scale-up process. Five to 10 years ago, before cloud computing and Web and mobile distribution platforms like Google, Facebook, Apple and Android, the costs to build and scale a tech startup were significantly higher.

McClure’s investing thesis is all about the low cost of building on these platforms. For example, Wildfire sits atop Facebook, SendGrid is about cloud-based email, and 955dreams is a product of iOS. He once taught Stanford students how to tap into these new Web and mobile platforms through his now famous Facebook class and later went on to make investments in the Facebook Fund.

International – and underserved — markets are another investing thesis. 500 Startups is one of a few firms that is willing to go more than 30 miles away from Sand Hill Road to find a deal. The truth is that the more traditional venture guys are scared to pursue this global strategy – the lifestyle is hard (constant travel). McClure, who is married with two children, says he spends close to three to four months on the road traveling. Geeks On a Plane is a large part of this international strategy.

Of course, 500 Startups isn’t all about McClure. His partners travel, hustle, party and forgo sleep (almost) as much as he does. Paul Singh somehow is able to keep up with McClure’s exuberance for entrepreneurs and is leading the fund’s work in India. Bedy Yang, who tells me that she “has the best job in the world,” can speak Chinese and Spanish and is heading up investments in Latin America. Newer partners include Christen O’Brien, who leads all of the Geeks on a Plane trips, conferences and corporate partnerships and Kellerman, who has a long history with the tech industry in Japan and was once a firefighter (really).

A marketing machine and a cult of personality

500 Startups is also as much about Moneyball as it is about marketing. McClure’s partners say his penchant for naming things and branding ideas is one of his invaluable skills – 500 Startups, Geeks on a Plane, the family-tech focused Mama Bear conference, the designer’s Warm Gun conference. As a marketer at heart, McClure is able to help companies think through growth better than pretty much any investor.

He’s also honed a cult of personality around a profanity-fueled, take-no-prisoners character that yells and swears when presentations get boring and writes brightly-colored rants on the company’s blog and Twitter feed. One of the most memorable scenes from the Geeks on a Plane India trip in December was when McClure shook up a startup demo event in Bangalore by telling the unpolished, young and earnest Indian entrepreneur presenters to “stop being so f*cking boring.”

The created personality is the branded Dave McClure. The real Dave McClure is much more mellow and thoughtful. He’s also first and foremost entrepreneur-friendly. In international markets like Mexico City and Delhi, McClure likes to tell local investors that it’s their fault if the tech ecosystem isn’t producing many quality startups — it’s not the lack of entrepreneurial talent in the regions, says McClure.

Will it work?

McClure can be entrepreneur-friendly to a fault. Kellerman described him as bordering on altruistic. That’s one reason why he doesn’t have a shortage of deal flow, but that could be another reason why a Limited Partner might feel more comfortable giving funds to a more cut-throat crew.

Another question is whether or not the return on the fund’s breakouts will be high enough to make back the desired amount of money. The traditional VC model is that one or two companies out of dozens can make back the entire fund. But if the fund’s stake in the firms that make it big is too small, 500 would need many more hits to collectively win big.

McClure acknowledges the risk, but says they’ve helped solve that problem by having 500 Startups do follow-on investments as well as the initial seed stage. And McClure can point to some breakouts that they’ve ushered along through that process like TaskRabbit, Twilio, SendGrid and Wildfire. His most famous exits were personal investments including Mint.com and SlideShare.

Another potential downside could be the pace of the investments. While globetrotting, red-eye flights and constant networking and mentoring can be exhilarating, they come with sacrifices, like being away from family and mental and physical burnout. Such a rapid pace could also cut down on the time for a decent amount of due diligence. Yes, many of 500’s first seed investments are experiments, but the partners need enough time with the entrepreneurs to make a somewhat smart bet.

From here to there

McClure grew up in West Virginia and about two decades ago joined the ranks of Silicon Valley as an engineer and programmer. He ran marketing for job search engine Simply Hired and joined PayPal as its Director of Marketing in the early 2000’s, which he describes as a time where “everything was going to crap but Google and PayPal were doing pretty well.” PayPal doing pretty well meant that when he left he had some funds to use to experiment with angel investing.

In 2007 McClure gained fame when he taught a  Facebook platform class, and then went on to manage two small funds for the Founders Fund and the Facebook Fund. While he had less than $3 million to play with, he made about 43 investments. And that’s where he says he began to hone the idea of the 500 Startups model.

The bigger question is why. Why does McClure have a burning passion to scour the world for undiscovered entrepreneurs? McClure says:

“It’s because I f8cked up. I was Billy Beane. I spent 20 years in the Valley and didn’t make it. Then I discovered I was a lot better at helping other people make it.”

Today, 500 Startups is just two years old, so it’s got a bit of time before it will prove out whether its model will become the future of tech investing. But the coming Facebook IPO could actually become a transformative act for the group.

In the late 90’s, Ron Conway was just another Silicon Valley angel investor. But with the Google IPO, he was transformed into the godfather of Silicon Valley start-ups. Likewise, Facebook’s IPO could act as an accelerant for McClure’s group.

As Facebook grows and also seeks to fill the positions of departing execs, it will look around to buy companies. It’s already started to increase its acquisitions. 500 Startups has backed companies with some of the top product and design people in the Valley, and many of their companies have the Facebook platform baked into their DNA. It doesn’t hurt that McClure spent years teaching and investing in the Facebook platform effect either.

Perhaps next week’s Facebook IPO could turn out to be the fund’s undercover lynchpin to remaking the landscape of tech investing.

Disclosure: Dave McClure was compensated by GigaOmni Media with stock and cash for his consulting efforts during the early days of the company. We have not had a business relationship since the end of 2006.

Image courtesy of Steve Nagata.

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