The Big Winner

June 30th, 2008 by admin

I found this interesting interview with Mort Zuckerman from a few months ago:

Here are the main points from the billionaire publisher and real estate investor:
I think we’re in the 4th inning of a nine inning ball game. We’re nowhere near the bottom of this problem and nobody knows exactly where the bottom is but we’re going to have a very serious recession that’s going to go on for a couple years.

I think the fundamental strategic flaw in our economy these days is housing prices. This is two thirds of the balance sheet of the average American family. Housing prices have been going down at an extraordinary rate. They’re going to continue to go down because we had a bubble in housing that was unprecedented, a bubble that was once in a century. And we will see, I think, continued decline in the value of homes. It’s going to affect the sixty nine percent of American families who have homes. Right now you have nine million mortgages that are greater than the value of the homes and it’s going to go up to fifteen million, which means there will be negative equity or no equity in those homes. Nobody knows what people are going to do when they find out their mortgages are more valuable than their homes and we can have a major drop in consumer spending as people feel the net worth they once had in their homes has gone down dramatically.

Keep in mind that billionaires can make wrong bets. Still, it’s always interesting to hear the thoughts of someone who made it big like Zuckerman.

June 29th, 2008 by admin

I found a post from the Freshly Tilled Ideas blog that’s a few years old. Still, the advice is timeless. The blog author dealt with a wealthy investor who mentored him and helped keep the business on track by asking a series of questions. The blog post linked below has more information regarding each point, but here’s a quick cheat sheet:

1. Who will be involved?
2. Is this a people thing or an idea thing?
3. Are they the same people that will ultimately run the company?
4. How much money will you need before you make a profit?
5. Do you really need a chief financial officer or can you get away with a good accountant?
6. Can you raise your capital from somewhere other than venture capitalists?
7. How can this business be scaled?
8. What’s the difference between a hobby and a business?
9. Are you wetting your bed and or are you facing facts?
10. Do you have an exit strategy?

Source:
http://freshtilledsoil.typepad.com/fresh_tilled_ideas/2004/10/what_a_billiona.html

June 28th, 2008 by admin

Before Facebook, before MySpace, and before Friendster, there was TheGlobe. TheGlobe.com was a community-focused site that experienced the rise and fall of the dotcom boom. The book “A Very Public Offering” describes the process Stephen Paternot went through to get the site running.

I read through the book a few years ago and found it to be an exciting first-person account of starting a business during a time of structural change. Now, via Private Equity Hub comes an interview with Paternot. Whether they’ve had huge successes or not succeeded and simply moved on to other opportunities, I love advice from entrepreneurs who’ve seen it all.

Here’s a couple of great quotes:
* The Internet goes through evolutions. People couldn’t see beyond Yahoo for a long time, and suddenly there was Google. I couldn’t see what was beyond the tools that were available to me [at TheGlobe] at the time. But as markets get bigger, they fragment, then gel around more specific ideas. It will re-fragment again. I’m an active Facebook user and have loved it since using it a few years ago. But Facebook has something like 80 million users. Not everyone wants this one homogeneous experience.

* My advice would be that if you’re company is worth anything, $5 million or $15 million, and you have the chance to take some money off the table, do it!

Also, check out Paternot’s advice about succeeding big by replicating a successful business in a different country.

The whole interview is great:
http://www.pehub.com/wordpress/?p=2653

June 27th, 2008 by admin

The New York Times has an article about author Malcolm Gladwell’s new book. The title is “Outliers: Why Some Succeed and Some Don’t.” Here’s the article:
http://www.nytimes.com/2008/06/28/technology/28online.html

The 800 CEO Read blog provides some more information based on a summary from the publisher’s catalog:
In this stunning new book, Malcolm Gladwell takes us on an intellectual journey through the world of “outliers”–the best and the brightest, the most famous and the most successful. He asks the question: what makes high-achievers different? His answer is that we pay too much attention to what successful people are like, and too little attention to where they are from: that is, their culture, their family, their generation, and the idiosyncratic experiences of their upbringing. Along the way he explains the secrets of software billionaires, what it takes to be a great soccer player, why Asians are good at math, and what made the Beatles the greatest rock band. Brilliant and entertaining, OUTLIERS is a landmark work that will simultaneously delight and illuminate.

And an excerpt from the book:
OUTLIERS is a book about success. It starts with a very simple question: what is the difference between those who do something special with their lives and everyone else? In OUTLIERS, we’re going to visit a genius who lives on a horse farm in Northern Missouri. We’re going to examine the bizarre histories of professional hockey and soccer players, and look into the peculiar childhood of Bill Gates, and spend time in a Chinese rice paddy, and investigate the world’s greatest law firm, and wonder about what distinguishes pilots who crash planes from those who don’t. And in examining the lives of the remarkable among us–the brilliant, the exceptional and the unusual–I want to convince you that the way we think about success is all wrong.

The book doesn’t come out until November and it already has a Amazon.com sales rank hovering around 2000 (and it was like this when I first checked the book’s Amazon page a couple weeks ago, so it’s not just a bounce from the New York Times article). I thought Gladwell’s previous books Blink and The Tipping Point were ok, but I already knew about most of the psychological studies he referenced in the books. I’m really excited about his new book. I’m guessing he will probably interview Anders Ericsson, one of the top researchers regarding expertise and deliberate practice. Overall, the book sounds exciting and I can’t wait to get it.

June 26th, 2008 by admin

Via newteevee comes this video of YouTube CEO Chad Hurley speaking at a startup conference and giving his advice on starting, building, and selling a company:
http://www.newteevee.com/2008/06/27/chad-hurley-how-we-did-it/

He covers most of the important points in a fast-growing startup’s life:
* Narrowing the field of ideas to find the best case for starting a business
* Raising outside funding
* Locating hosting, storage, and fulfilling other technical requirements
* Inspiring employees
* Monetizing a large audience
* Automating legal requirements
* Architecting and scaling a system with a huge number of users
* Deciding whether to grow the company or sell it
* Developing a service that changes the world
* How to react to competitors

Update:
This site has some great notes from Chad Hurley’s talk:
http://bub.blicio.us/?p=1037

June 25th, 2008 by admin

Despite the tease offered by the title of this post, I wasn’t the one who met him.
The Audion creators were.

This story is an excellent retrospective on building a business from the co-founder of Panic Inc:
http://www.panic.com/extras/audionstory/

Like the earlier post on Geosign, it offers a cautionary tale of what happens when relying on a single company for success. In this case, it involved negotations with AOL, and later the possibility of an acquisition by Apple. The Audion retrospective also includes a couple of passages when the founders meet Steve Jobs, which give some good insight’s into Jobs’ strategic thinking and the company’s attitude towards acquisitions.

I’m glad this story has a happy ending too. From the conclusion:
If we could do it all over again, would we change anything?
You know what? No, we don’t think so. Panic is still here — almost quadrupled in size! (Okay, so that’s from two people to eight as of this writing, but next stop: NASDAQ!) And while we may not be rich, we consider ourselves incredibly fortunate — we’re doing what we love, making enough money to at least pay the bills, and enjoying every minute of it. Not everyone on this Earth is in such a lucky position. And while we may not have made iTunes, or the iPod, or retired to Antigua, we continue to follow our hearts, learning new things daily, and we consider ourselves seriously lucky bastards.

June 24th, 2008 by admin

Canada IT has a great story about the web company Geosign and the firm’s competition with Google:
http://www.canadait.com/cfm/index.cfm?It=106&Id=26146&Se=0

It’s unfortunate that the founder wasn’t able to comment due to pending legal action. Maybe he would have had a different perspective than the one offered by other insiders and investors. But that’s neither here nor there. With the information that’s given in the article, there are a couple of good points related to strategy and success.

1. Have a concrete business model. Business models always change and investors know that. Still, it seems easier to develop a compelling value proposition and make incremental improvements after tests.
From the article: Retracing Geosign’s origins through old news stories, Nye sounds like he spent considerable time searching for a business model. In early interviews, he described Geosign’s business in vague terms, suggesting it was somehow linking online consumers with local businesses. “The market is connecting buyer to seller, and up to now, the consumer has been left out,” Nye told the Guelph Mercury in 2001. He called his new technology “geosearching,” and added that his company had inked an arrangement with an Internet search engine, but wouldn’t disclose the name. Still, he told confidantes and investors that he had grand ambitions for Geosign extending far beyond Guelph, concepts that would create a business with huge upside.

2. Promote your business and how it will generate a return for customers, investors, and other stakeholders.
From the article: Not that anyone outside of a small circle knew of Nye’s plans. For the next five years he stayed out of the limelight. Even in a small city like Guelph, he and Geosign garnered no media attention.

3. Don’t make your revenue dependent on a single company
From the article: Instead of buying ads and keywords from Google, Geosign had always purchased keywords from the search engine company and directed the traffic to sites filled with ads from rival Yahoo! That meant Google was receiving millions of dollars from Geosign for access to its keywords, but didn’t know where the traffic was directed. Given the amount of money flowing to Google, most in Geosign thought the search engine would turn a blind eye.

4. Structure your company so your personal investments aren’t impacted.
From the article: Those close to Nye say he did very well financially with Geosign even before the American Capital deal, has a home in Barbados, and often uses a local service to charter private jets.

I don’t know the full story of Geosign, but from this interview Tim Nye sounds like an innovative leader:
http://frankschilling.typepad.com/my_weblog/2007/03/evocative_qa_wi.html

I wish him and his fellow Geosign people the best of success in the future. They had an innovative concept and I can’t wait to find out what Tim Nye and the other Geosign employees will be up to next.

June 23rd, 2008 by admin

In an earlier post, I presented a slide show from Marshall Brain on how to make a million dollars. Marshall originally founded the company HowStuffWorks, which grew to a valuation of $250 million. I just remembered that he also wrote a book called The Teenager’s Guide to the Real World. There are many excerpts from the book and free resources available here:
http://www.bygpub.com/books/tg2rw/tg2rwtoc.htm

I originally got the book as a gift when I was a teenager. I remember skimming through it once and then promptly ignoring it. Now, however, I recognize there are tons of excellent tips for adults as well. Of course, there is also plenty of material for people to disagree with.

My whole blog sometimes comes close to the logical fallacy of argumentam ad crumenam (the appeal to wealth, or in other words, concluding a statement is correct because it comes from a successful person). It’s important to keep in mind that just because a person is successful, they may not necessarily be correct about everything. On the other hand, I’ve read hundreds of books written by successful people. I’ve also read hundreds of books written by unsuccessful and unfulfilled people. In my experience, the advice from people who did something great (made tons of money/invented something awesome/saved the world/etc) tends to be of much higher quality.

June 22nd, 2008 by admin

The Socialmedian blog has a great overview of some lessons learned from Jonathan Abrams, the CEO of Socializr. He was the founder of Friendster, the company that originally introduced social networking to a broader audience.

Here are the guidelines (from the Socialmedian blog):
1. Focus is difficult but crucial. Until your product is complete, your technology solid, your customers or users happy, and your sales or traffic growing and near critical mass, most other things do not matter. A startup CEO can waste a lot of time on premature marketing, business development, partnerships, PR, consultants, board maintenance, etc. before the company is really ready for those things.

2. Hire based on passion, not resumes. If you attract candidates based on your prestigious investors, be wary. If you lose candidates because you don’t have prestigious investors, they weren’t the people who you needed anyways.

3. A startup can get more done in the same amount of time than a large company, and needs to, but a startup is still more like a marathon than a sprint. Things will still take longer than you expect to get done, and you will make mistakes. Making mistakes is ok, as long as you get more things right than wrong each week, and correct the things you get wrong. Avoid irreversible mistakes.

4. Losing control of a startup to investors puts founders and common shareholders in a vulnerable position and may not improve the company’s execution or increase the company’s chances of success. Surrendering the corporate governance of a company to the wrong people is typically an irreversible mistake.

5. For a software or Internet company, overall execution depends on engineering execution in the first few years — make sure your stuff works! A technical founder should stay involved in the technology until it does.

Source: http://blog.socialmedian.com/2008/01/lessons_learned_from_startup_c_2.html

Abrams’ site also has some awesome advice regarding technical matters:
http://www.jabrams.com/ramblings/

June 21st, 2008 by admin

I am always searching for information written by successful individuals. Whether they are multimillionaires or leading divisions of the world’s largest companies, I want to learn as much as possible from them. This is how I go about locating new sources of information.

Google and LinkedIn are some of the best resources. The search query that I use contains the following parts:
* the name of a large company (such as Goldman Sachs) or the name of a growing startup (like Powerset or Zoho) combined with the term “at”
* the term “blog”
* site:linkedin.com search operator to find results on LinkedIn
* eliminating extraneous search results like duplicate updated profiles or results from LinkedIn Answers

Here is a sample search query:
“at goldman sachs” blog site:linkedin.com -intitle:recently -intitle:answers -intitle:”Linkedin Blog”

The next step is to go through the search results to find blogs written by top people:
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=qsZ&q=%22at+goldman+sachs%22+blog+site%3Alinkedin.com+-intitle%3Arecently+-intitle%3Aanswers+-intitle%3A%22Linkedin+Blog%22&btnG=Search

Happy searching!