Business

Business / Cloud Computing — No Comments
12
Nov 14

Data as a Barrier to Entry

telecom-largeI originally wrote this down as an idea for a blog post back in 2008, but I never got to it. Last week I heard someone talking about how computing would move closer to data since computing power is cheap and moving data around is still expensive.

Storing large amounts of data locks customers in since moving data around is still slow. Part of the reason is that Moore’s Law tells us computing power will double in 18 months, but it takes longer to upgrade the infrastructure needed to move data around. If a company, like Amazon for instance, houses a customers data they can easily deploy more processors near that data. This makes operating on the data at Amazon more attractive, while the cost to move that data to a new data center drops at a slower rate.

For SaaS and cloud companies, having large amounts of their customer’s data stored there is a natural barrier to entry to competitors.

Business — 8 Comments
23
Sep 14

Biggest Losers – My Top 5 Over Hyped Tech Failures

A friend and I were talking about making an anti time capsule; essentially listing technologies that were super hyped at the time but quickly sank into oblivion. So here is my top 5 list with a bonus phoenix at the end.

Segway

Segway

This may be the king of the hype cycle with no less than Steve Jobs claiming that it was going to change the way cities were built.

“If enough people see the machine you won’t have to convince them to architect cities around it. It’ll just happen.” — Steve Jobs, quoted in a book proposal

Google Wave

google_wave_logoWhen Google first announced Wave people clamored for invites. After they released the first 100,000 there were blog posts about how one could get invited. Having a Wave account showed you were on the cutting edge and in the know.

Google Wave was only around for a year, but we will all remember it as a hugely hyped failure from Australia.

Webvan

webvan

Webvan, the grocery delivery service started by the founder of Borders books stores, took $1.2 billion in funding during the dotcom bubble. To be fair, today Fresh Direct seems to be doing just fine, so this is a failure in execution over vision. But it is still a pretty spectacular failure.

Zune

zune

Discontinued in 2011, Zune was Microsofts ill fated attempt to compete with the iPod.

This product was probably DOA due to the DRM imposed my Microsoft. You could either buy an iPod that would play any mp3 you had, or a Zune player that would only play WMA files. Apparently you could convert an mp3 to a WMA file, but at the time I remember thinking it was a brain dead decision to require DRM on all files.

A Small World

asmallworld

For a time the early social networking site that billed itself as Myspace for Millionaires garnered attention and investment. The exclusivity and high society angle made it good fodder for newspaper and magazine articles:  W Magazine, The Wall Street Journal, and their long list of press articles.

But then Facebook came along.

While the company has pivoted several times it now has a bit of a sordid history of lawsuits.

YouTube ???

YouTube_logo_2013.svg

As an special bonus, while researching the Zune failure, I found this 2009 Time Magazine article declaring the 10 worst failures in tech including YouTube.

Failure to Launch – YouTube

In November 2006, Google (GOOG) bought YouTube for $1.65 billion. There is a fairly good chance that the search company will never get a return on that investment. 

Oops. I guess it isn’t a good idea to call the fight before it’s over.

There are others that should probably have made my list, but these are the ones that were most personal to me. Which tech disasters do you remember most vividly?

Business / Startups / Web/Tech — 2 Comments
24
Sep 13

Should CEOs Code?

coding_punch cardsI recently sat down with Peter Bell, an excellent tech trainer, to discuss an array of things. I had in my mind a prototype for this blog post that Peter promptly sunk.

My original idea was to write about outsourcing development and why I hate it ( I still do), and the stance I was intending on taking was “Hey ‘business-guy’ learn to code!”

So how did Peter change my attitude? He pointed out that much of learning to program is syntax, and neither of us thought this was important for a CEO to know. What I wanted was for the business guy to be able to speak the same language as the devs, and to have some intuition about which problems are hard and which are easy. In my CS program at Purdue this was mostly covered in the 2nd or 3rd CS course, after we had taken an intro to programming course.

Peter is actually working on a class to teach these skills to business folks, and I respect that a lot. He actually has a couple of questions he suggests people ask when trying to find a technical founder.

What revision control system do you use and why did you choose it?

One doesn’t need to know the answer but instead listen to the thought process of the engineer. A good engineer will have tried a few solutions and have chosen the system for a couple of salient reasons. A bad or novice dev will have chosen based on ‘everyone else uses it’  or ‘ it’s what I was taught’.

Peter has a number of other such questions but the principle remains the same: ask a question about technology and listen to the process the developer used to come to the answer. If that process was rigorous and thoughtful then you’re probably talking to a pro.

While I still think outsourcing development is a terrible idea, I am now less convinced that an intro to programming class is a complete answer. One really needs to understand CS design rather than a programming language. Of course, if you’re young you should still learn to code before Skynet takes over.

Business / Investing / VC / Web/Tech — 1 Comment
06
Jan 11

FB: Take the Money and Run

Tyler Shields (@txs), an old friend and colleague,  asked me the following:

I know you have some education and experience in the business world so I was curious what your thoughts were on something. I was debating with some folks about the Facebook valuation and what the results of this Goldman’s Sachs back channel IPO is going to be. If you had the chance would you throw money into the pile or would you wait and hold? Also do you think they are overvalued or fairly valued at approx 50B$?

So I first took this to mean would he invest if he had access to GS, then I figured maybe he meant would you dump if you were an FB employee. So I have both answers.

Let’s start with value. (Since that will inform whether you want to put money in.)

Some context-

  • Google is worth 200B.
  • AOL is worth 2.5B
  • Yahoo is worth 21B

Now everyone who has bet against high FB valuations in the past has been wrong. And I can see that FB might be worth twice what Yahoo is, and they have just surpassed Google in traffic. So Maybe 50B is a fair price. BUT, part of the Goldman valuation has to do with the fact that they can make fees by selling parts of that 1.5B fund to their clients. And they will likely get to do the eventual IPO, which will earn them more fees. So Goldman has a revenue stream that most of us can’t count on.

Possibly the most telling data point would be Digital Sky Technologies, the Russian firm. They are already an investor, and they have a pretty big stake. If anyone has a decent idea of what’s really going on it’s them. If they put in more money, then you’d hope they did their due diligence. So if I’m arm chair quarterbacking I say it is probably a fair valuation.

On the other hand, if I really had 10 million and GS came to me I’d say no. The reason is simple, you don’t get to see the books (the way GS and DST did). If you can’t do your own due diligence then you’re a sucker; pure and simple. Sure, you might make a lot of money, but you can also make a lot by betting on red in Vegas. Doesn’t make you smart.

Now, if you’re asking what I’d do if I’m an FB employee:

This is actually an easier answer.

6a00e55386e48488340148c74fdb51970c-800wi

Though it always depends on your personal situation, most people would tell you to take some money off the table. What happens if the company explodes? You not only lose your job, but also your nest egg. That’s not smart. The common answer is to not hold your companies stock (everyone cites Ennron here). But this is FB, the hottest investment in the world. So maybe you limit yourself to 10% of your nest egg… If you’ve got 10M in stock, I’d dump as much as they let me. (I think it is 10-15%) Why not take some of that risk away.

Also, you have to expect that you have a ton of unvested options. (Maybe not, but my guess is they use ’em to keep you there.) So even if you sold your vested portion, you still have plenty of exposure.

There you have it, my un-asked-for advice to current FaceBook employees.

Business / Web/Tech — No Comments
15
Jan 10

Crowd Sourcing Tools

A couple of days ago Jason from FlightCastr put me on to a new crowd sourcing service PickFu. They charge 5 bucks to get 50 responses to an A/B question. (Who is more provocative Lady Gaga or Madonna?) They then put it out to Amazon's Mechanical Turk and get you 50 responses, each with demographics and a comment. Pretty cool.

Today I came across Eyeka which is like 99 Designs but for ad campaigns. I like the idea of crowd sourcing both the content as well as the decision making. Pretty cool what you can do on the cheap these days.

Business — No Comments
07
Jul 08

It was that last shot of tequila that made the night fun

I have long said that the next day no one has ever said: "You know, it was that last shot of tequila that really made the night fun, that was a wise choice." But that the opposite phrase is uttered every single day. Another phrase I heard today that fits in that category is "Emails never come back to help you." The partner here that is mentoring me and showing me the ropes said that to me today, and I just really like the way he phrased it. We all know that anything one puts in email has the potential to get out, but I think this is a whimsical way of driving that point home.