Just read the news that Bloomberg is buying Business Week see here.
According to the news, Bloomberg is paying $5M in cash plus the severances for 400 people. Lavishly assuming 3 months severance, at $10K/mo, that's another $12M of costs. That's $17M of total costs to Bloomberg.
What do they get in return? The same article suggests that Business Week had a circulation 921,000 readers. So here is the sad fact. Each reader of Business Week is worth less than $20.
That's a very unfortunate number.
On mother's day we got a Kindle for my wife and she hasn't been able to live without it since. Thank you Amazon. In many more ways than one, it is a wonderful device, so good that it makes me debate whether every family member should have one. But for now we are sharing it. I am reading the kids "The Treasure Island" every night, and for myself, I am reading the Russian Classic "The Brothers Karamazov" by Dostoyevsky. I chose that book because, it was well recommended by a few friends, and one in particular who called it the best book he's ever read. So much for that.
Here is how this story about new technologies for old habits gets funny.
Unlike a book, The Kindle is a tablet so you don't really know how far you are into a book, unless it tells you. With a physical book, you can, with one look kinda know where you are. The Kindle solves that problem by putting a progress bar in the bottom that tells you what percentage you are into the book.
So when I started "The Brothers Karamazov", it started by showing me that I was 1% into the book. But after 3 weeks of reading, I noticed that I was still at 1%. I slowly got nervous. I was hoping that every time I pressed "next page" I'd finally get to 2%, but no, I seemed to be stuck at 1%.
Then I started thinking: "How long is this book for God's sake?". At this rate, it will take me 3 years to finish it. I knew these Russian's wrote long books, but holy cow.
Then finally I asked my wife, about this bizarre phenomenon, and she took one quick glance at the Kinde and threw it back at me saying something like: "look at the title of the book you ordered, you..."
I did and there was the answer. I had not downloaded The Brothers Karamazov, but instead:
"The Complete Works Of Fyodor Dostoyevsky"
D'oh! No wonder I'll be stuck at 1% for a lot longer.
So here is the lesson for Kindle and new technologies for old habits. With an Electronic tablet, you may not know exactly what book you are reading!! On a physical book, you get that confirmed every second you look at the book. With a download, mistakes can happen. Something as basic as knowing what you are reading is a potential failure point with a digital tablet. Who would have thunk it?
Last Saturday I was a panelist at the TABCON 2009 conference talking about mobile apps. It was a good panel where the last question was "can you give us an example of a radical mobile application". It was one of those open ended question that challenge the user to have to be insightful and creative at the same time.
While I was waiting my turn, I got stuck on the word "radical". Not "new" application, not "great" application, not "fun" or "popular" but radical. As a birdwatcher, I love the iBird application but that's not radical. Radical means radical.
In the 2 minutes I had to think, I thought of this one. It's not one app but the combination of a bunch of things.
Government 2.0, as I've written earlier is what Obama is doing: building a direct relationship with the voter through technology. Getting emails from the president, viewing him on youtube are all part of it. Ariana Huffington (one smart woman) said rightly that he looks more like an "independent candidate with the support of the democratic party". He has 20M emails of his supporters. Imagine if he had 5-, or 75 million emails. That's a new an interesting kind of power.
Now combine that with Google Latitude, that lets friends share where they are. Imagine a political leader had direct access to 50M people and at any given time KNEW WHERE THEY WERE. That to me is radical. You can do very interesting things with this. You can ask them to show up at places or do things together. You tell not 1M, not 10 thousand but 1000 people to show up somewhere with one email, you got yourself any protest you want. You can block things, stop things without using guns.
Any why shouldn't you use guns? I hear in Texas, a popular iPhone app is the "NRA app". The Apple ads on TV goes like this: "Imagine you wanted to tell your friends what kind of assault weapon you just put in your trunk. There is an app for that."
But seriously. 50M people, you know where they are, just figure out a way to know what kind of weapons they have and pal, you got yourself an army.
Now that's a radical app.
Thanks Efe for another great conference on Saturday.
I recently got this email sent by an office assistant to every employee in her company. I found it inspiring. People like the person behind this email make a difference between something remarkable and something ordinary. Enjoy the weekend & Happy Birthday Oya!
Sent: Wed Apr 08 16:49:41 2009
Subject: we are abundant
I want to take a moment to acknowledge how abundant we are. Right now, I know many of us are faced with the scarcity in our lives, what we are lacking, what we don’t have, but I am here to tell you, we are not lacking.
Especially in our little world of supplies:
We have enough post-it note pads for our XXX Office, XXX Office, and potential XXX Office for 2 years, including internal and client meetings.
We have enough sharpies for us and the entire building to use for the next 6 months.
We have enough pens to use for both offices combined of XX people and the entire XXXX Building for the rest of the year.
We have enough binder clips for at least 10, 200 person off-site summits.
We have enough paper clips to donate to 50 non-profit organizations in XXXX
We have enough clippies to last us through the year for both offices.
We have enough CD sleeves to hold all of our archive CD’s for the next 5 years.
We have enough Staplers for each employee and 5 off-site summits.
We have enough scissors for an entire pre-school arts and crafts project.
We are abundant.
Please be mindful. In our efforts to be a conscious company, please help us use our supplies and use them wisely.
Before throwing paper into the shred bin with its clippie attached, know that each clippie is shipped to us from Japan and costs close to $1 each.
Before ordering a pack of only blue and green post it notes, understand that each pack comes with 4 colors, and the 2 other colors almost never get used (pink and purple).
Before ordering your favorite pen, look in the MISC. PEN bin, you may find one in there floating around or something similar that will get you through.
Before asking for something brand new, think, can I re-use, re-think, re-cycle?
And always let us know what item you like to use, we can keep that in mind as we work our way through our current supplies.
I am happy to place a special order for you, all I ask is that you take a moment to see what we have in the office, first. I am happy to help you find what it is you need. I am sure we have something here that will work for you, right now.
Thank you in advance for taking a moment to be mindful and conscious.
One of our up and coming portfolio companies, one I am personally involved in, recently got written up on ReadWriteWeb. Twine is growing fast, and I am happy it is getting noticed. The article is a great read on where the web could be going. I highly recommend.
P.S. Now you guys know where my "technology prediction #5" came from :-)
I got an email from President Barack Obama this morning. It has all the ingredients of putting government and social media together. There are has links to where I can submit questions, where I can watch videos. Very progressive, very interesting.
My prediction of mywhitehouse.gov is not there, yet. But we are close.
Here is the email
The economic crisis is growing more serious every day, and the time for action has come.
Last week, the House of Representatives passed the American Recovery and Reinvestment Act, which will jumpstart our economy and put more than 3 million people back to work.
I hope to sign the recovery plan into law in the next few weeks. But I need your help to spread the word and build support.
It's not enough for this bill to simply pass Congress. Americans need to know how it will affect their lives -- they need to know that help is on the way and that this administration is investing in economic growth and stability.
Governor Tim Kaine has agreed to record a video outlining the recovery plan and answering questions about what it means for your community. You can submit your questions online and then invite your friends, family, and neighbors to watch the video with you at an Economic Recovery House Meeting.
Join thousands of people across the country by hosting or attending an Economic Recovery House Meeting this weekend.
The stakes are too high to allow partisan politics to get in the way.
That's why I've consulted with Republicans as well as Democrats to put together a plan that will address the crisis we face.
I've also taken steps to ensure an unprecedented level of transparency and accountability. Once it's passed, you will be able to see how every penny in this plan is being spent.
You can help restore confidence in our economy by making sure your friends, family, and neighbors understand how the recovery plan will impact your community.
Sign up to host or attend an Economic Recovery House Meeting and submit your question for the video now:
Our ability to come together as a nation in difficult times has never been more important.
I know I can rely on your spirit and resolve as we lead our country to recovery.
President Barack Obama
P.S. -- If you can't host or attend an Economic Recovery House Meeting, you can still submit your questions for Governor Kaine and then share the video with your friends and family this weekend. Learn more here:
Last year, when I wrote this same post for 2008, it was much easier to make predictions because everything was on the up and up, people took more chances. We no longer have that environment. When people are in survival mode, they care less of long-term trends, and care a lot more about very very short-terms trends that affect them quickly and directly. So this year I will make predictions that will affect us in the here and now.
1) White House 2.0: Two years ago, when I postulated that social networks would develop political structures within them, I never thought that the political structure would develop a social network. That was, indeed what happened with the Obama fundraising juggernaut, and there is no reason to think it will stop with the election. The Web 2.0 summit had a fantastic panel with Gavin Newsom, and Arianna Huffington, that touched on a lot of the things I will write about. First, Americans will start getting emails directly from their president.
They will be able to respond, and their opinions collectively gathered, and delivered to the public. There will be a direct line from you to your president and you will be able to log on to your myWhiteHouse.gov, or something similar.
Using this direct line, the president will be able to fundraide directly from the people and create a budget outside the budget. Now, lets get realistic. Raising $1B for a campaign was big an impressive. Raising $1B given the scale of the government isn't. We will see how far this can go, but I think it will start and it will affect you. Technology will make this easy and possible. As Arianna said so well, Obama will look more and more like "an independent candidate with the backing of the Democratic Party." A lot of social networking innovation will be created by, or embraced by the new administration.
2) A Big Twist on Social Games: It's very easy to say that social games will be big in 2009 because they already are (which was my prediction for 2008, and that was right). It is also easy to say that in recession years, cheap games are what people will want. I am not saying either of those. What I am saying is that social games become the new pick-up place to find a girlfriend, wife, friend with benefits whatever you. fancy. Why do I think this? Very simple, a lot of people are playing social games, and 100% of those people are horny. That simple. The more time people spend doing one thing, anything, the more it gets used for sex.
So this is finally the golden age of gamers! For years you have been told you are geeky for playing games, now you can actually benefit from it. So show your potential girlfriend how articulate you are by playing scrabble. Doesn't matter if you are young or old. If you are in your twenties, you are a word whizz which will impress somebody, if you are in your 60's you are an opsimath, even more impressive. Either way, get out there and play. Show how big your brain is, or how well you know geography or how good your mouse flicking skills are. It will impress somebody on the opposite sex. The numbers are on your side. Finally.
The dating sites will have to take notice of this and if I am right, they will start offering casual games.
3) Two Companies To Watch in 2009: We are in a recession and everybody knows that increased government spending is one way out of it. Across the world, from Istanbul to Sand Hill Road we will have new roads, bridges, more infrastructure. Our cities and roads will get newer and prettier, but will they also get smarter? They most certainly will. That's my prediction. With ubiquitous computing and petaflop supercomputers, it is about time our infrastructure gets smarter and IBM is the best positioned company to do it. Not only they have the resources, but the vision, as outlined at the Web 2.0 conference earlier this year. The presentation is here. They give the example of Stockholm, that deployed a smarter traffic toll system that reduced traffic by 22%, emission by 12-40% and increased public transportation use by 40,000 people. With sensors practically everywhere, M2M (machine to machine) communication will grow and make everything more efficient. Another example IBM gives is a pack of meat that has a sensor that tells the store when it is going bad. In the last two decades comptuers replaced labor, they did the job, now they will start doing it better and better.
Google is the other company to watch. Not because how well they'll do in search, not because of ad revenue they will get when others are losing (which both may be true), but because of their non-search products. In 2009 we will see big wins in their products such as Picasa. Why? Their competition like Shutterfly, has to spend money to acquire users, they have marketing costs (look up their 10-Q if you want to confirm), they lose money because of it. Google leverages search and the massive traffic it generates and acquires users relatively free. They can focus their money not on marketing but building a great product. And they have, Picasa is getting better every day. In tough economic times, their compeittors will not be able to keep up the user acquision engine because they'll have to conserve cash and deal with their issues. Google won't have this problem, and I expect big growth to come from Google's non search products in 2009 as their competitors (including Yahoo) start feeling the pain. Coincidentally, Techcrunch has a post today on up and coming Google products. They will be the winners.
4) Android will continue its success: I called this one last year when many wireless pundits didn't believe. It is already a success, with a phone launched less than a year from announcing the platform. 2009 will make it clear that it is the ONLY alternative to the iPhone. Expect to see 10+ phones with it, and most importantly, I am expecting fantastic new apps to come.
5) Friendly bots/Semantic Web: We need these and we need them bad. Luckily they will start showing up in 2009. Why? We simply generate far more information than our ability to analyze it. Lots of entities help us organize this information, but we need our own. We need semantic technologies that summarize things for us. Twine (disclaimer a Velocity portfolio company) does this well. We need bots/crawlers/agents that get us better information and search for it while we are sleeping. We need "Google Alerts" on steroids. For example, I need a bot that scours every travel site every night and give me results summarized for me on the best deals. I need a bot to scour every soccer site and forum with my criteria and get me what's new. This may sound like RSS but it is not. RSS subscribes me to content. I need to subscribe to information. A startup will figure this out and get funded in 2009. I'd like to meet them.
Trends, predictions they may happen they may not. But one thing is certain about 2009. It will be a tough year, and everybody has to figure out how to do more with less; everybody, all the way from Obama to you.
I've been thinking more and more lately as to what problems in the world can be reduced to a math problem solved by analyzing massive sets of data. It's along the lines of Chris Anderson's fantastic Wired cover story, The End Of Science. Some hard problems become easier if there was a lot of data collected about them. It's been a major theme of this blog. I suggested in 2006 that math can even be applied to better understand history.
Just when I was thinking of problems, the biggest and baddest, the current financial crisis hit in September. How could this have been avoided? Could big data help us here?
Could the answer be in linguistics?
Here we digress for a second. One of the more brilliant CTO's I've worked with (most MIT PhD's are), suggested over dinner once that there was a theory that English was the language most suited for deception. The language where you can say a lot and mean nothing, and more importantly conceal your real intentions. It was postulated at that very same dinner that it was this language advantage that made the English speaking world dominate the world. You can tell we had some really good wine that night.
Let's assume that there is no such theory that says English is better suited for deception, but let's accept that some languages may be better or worse in hiding emotions and intent. Even the position of the verb in a sentence could make a difference. In Turkish it's at the end, in English it is at the second place, and in German it is both. If languages can be analyzed this way for the ability to lie, with enough data can computers determine whether a person is prone to lie, or whether a certain paragraph is likely to be misleading?
Can Google, if looking at enough data of somebody's spoken or written text, tell whether the person is misleading, naive, or powerless over his/her own BS?
Could the Google computer see through Madoff, and the Ponzi scheme he pulled?
If you can make the leap of faith, that this is possible, the rest is easy, we are almost there. Surely getting the data is not a problem. One day every spoken word by any public speaker will be indexed. Quotes in articles, speeches, radio talks all of that will go into the computer to be analyzed. All that data be used to extract indices of emotions, quantified and relevant.
Why stop at individuals either? People can be grouped together and collectively analyzed. A common honesty coefficient can be found for them as a group. Then perhaps, some questions like "Are the bank CEO's being honest?", "Does this administration believe what they are saying about the effect of a stimulus package?" can be conclusively answered.
Would that help figure out if a crisis is coming? It just might. What do you guys think?
If you are right handed, protect your right arm and move your work mouse to your left hand.
If you are left handed, protect your left arm and move your work mouse to your right hand.
I am serious. I did this two years ago, and now at work I use the mouse with my left hand and at home I use the mouse with my right hand. It is so seamless at this point that I don't even think about it. It didn't take long to adjust either, a few days maybe a week at most.
We will be using computers and mice for a long long time, and there aint no better user interface coming any time soon. So don't put all the burden on one of your arms, diversify away your carpal tunnel risks. And that my friends, is better diversification advice than any Jim Cramer has ever given.
Now is the time to find something you are thankful for.
Especially now, when the whole world seems to be falling apart.
Stocks are down.
Economy is bad.
Terrorists are still on the loose.
Bankers are still on the loose. Still often wrong. Still never in doubt.
Limited partners want return of capital instead of return on capital.
Nothing seems easy, no breaks.
But you find something to be truly thankful for, you know it is something nobody can take away from you.
And that is important.
Find it and remember it.
Yesterday, I saw a GM banner somewhere on Yahoo finance that said how good and necessary the Auto Industry Bailout would be for America. I wish I thought to hit PrntScrn so I could show you the ad.
But do you all see how ridiculous this is?
GM has a problem selling cars, so it uses its marketing spend not to sell more cars but the convince people of the bailout.
Does that behavior, simply show why they got into trouble in the first place?
The Web 2.0 Summit started today. If there was one word to describe the overall atmosphere and mood is that it was 'muted.' Despite the new president, the mood lacked the spark and feeling of being part of something big. It was definitely there two years ago. That was then, this is now. We'll see how the rest of it goes.
I heard one good stat. Even though the iPhone is only 5% of the smartphone market, it represents 74% of the mobile web traffic. That's an eye-popping number. Once again proof that if you design something well, like the UI of the web surfing experience, people will use it. Welcome to the design era of technology. AT&T must be very happy with its deal and the data revenues its getting as a result.
Also, Mary Meeker gave her state of the internet presentation. Lots of good data in there. Whou would think that Skype is about to become the world's largest carrier? You can get it here.
I've been traveling to Canada a lot for work lately. Air Canada has shown me many movies on demand, United has not given any choice, and both have shamelessly asked for $3 for headphones I haven't paid. None of the movies I saw moved me except for one. Ironically, it was the one I thought would be the worst and avoided consistently until the last leg of the final flight that I am writing this now.
I watched "Hancock", barely finished it. I watched "The Incredible Hulk", didn't finish it. I watched "Sex and The City" and couldn't finish it. The plane was landing. I watched Indiana Jones again, and again didn't like it as much as the previous one, "The Last Crusade".
The last movie I saw was "Swing Vote". It was a painful movie to watch in the beginning. It was also bad in the middle...but the ending. When Bud asked that question I couldn't help but cry. We need a president who wakes up every morning and asks himself the same question and spends his whole life building a legacy around answering it. I am not going to tell you what question that is. You need to watch the movie if you haven't yet. But this blogger believes that the candidate who can devote his life to answer it is Barack Obama.
P.S. This is not a political blog, but around this time, once every four years, there may be a politically inclined post :-)
For a new mobile technology, let alone an operating system, to go from announcement to shipping product is, however you look at it, a spectacular success. That's exactly what happened to Android with the G1 phone available from T-Mobile. It normally takes years for any technology to get in a carrier's network. Android did it in one year.
In addition, Walt Mossberg called it "a worthy competitor to the iPhone". Given the iPhone is one of the most impactful technology innovations of the last 3 years, that's is a big statement.
Now we are also hearing that Motorola is reorganizing around Android. Yet another sign of success in such a short period of time.
Last year I predicted that Android would be a success, I consider that prediction to have come true. Here is what I wrote then, still quite valid:
"1) The Success of Google's Android and the Open Handset Alliance: This means that handsets will become more like PC's and wireless carriers will become more like landline DSL providers. This is a bold statement because both handset makers (like Nokia) and carriers (like Vodafone) don't want this to happen. So why do I predict a change in an industry where dinosaurs were surviving for such a long time?
Because a meteor the size of Texas hit the wireless industry in 2007 and it was called the iPhone. For the first time in the wireless industry, the handset chose the carrier as opposed to the carrier choosing the handset. The product was so impactful and well designed that some carriers agreed to share 30-40% of their data revenues with Apple in order to have the device on their network. That could be a very meaningful $200 dollars to Apple. Why did carriers agree to that? Because the carriers did the math and the revenue share probably made up the customer acquisition cost that they no longer had to pay which, in the US, is about $200. In return for that bargain they gave up ALL revenue from applications, ringtones etc. The consumers wanted it, they gave it, and doing so opened up the market an catalyzed the next innovation which came from Google.
Android and the Open Handset Alliance, enables other people to quickly create new iPhones. It creates an environment that let's developers focus on what they do best, which is writing innovative applications. So that somebody can come up with a device so compelling that it too will chose their carrier (if carriers need a nudge Google can share search revenues, if they need a punch they'll fund an open carrier). Once that happens, the carriers become a dumb pipe, but a dumb pipe with similar economics and no worries for churn.
The second reason carriers may embrace Android, is so they don't have to be hostage to Nokia which is exerting a bigger and bigger pressure on carriers. They are even building an ad network and making carriers pay them a piece of their ad revenues. Especially European carriers, are so dependent on Nokia that they may just welcome a cheap, Android phone that has a few killer apps built by young application developers.
Which brings me to my third and final reason why Android will succeed; the developers. They are frustrated. It is frustrating to write mobile apps if you have to test them with 100s of handset each running a slightly different OS, in slightly different carrier networks. Getting apps and phones certified is a big daunting, time consuming and frustrating task. Palm will attest to that as they lost 25% of their market cap because they missed certification. Android, sets these developers free.
So between, independently innovative products, a tough supplier to the market, frustrated developers and a tough carrier business model, this industry is ripe for big changes, and I predict it will start happening in 2008."
If you disagree, comments are open.
Congratulations Munjal and the rest of the like.com team on the fundraising! It is just one more testament to the fantastic product you are building. As an angel investor, it is a great pleasure to see the team grow, mature and become that great business that it deserves to be. What a wonderful ride to be a part of.
Why Paulson is Wrong
Robert C. Mc Cormack Professor of Entrepreneurship and Finance
University of Chicago -GSB
When a profitable company is hit by a very large liability, as was the case in 1985 when
Texaco lost a $12 billion court case against Pennzoil, the solution is not to have the
government buy its assets at inflated prices: the solution is Chapter 11. In Chapter 11,
companies with a solid underlying business generally swap debt for equity: the old equity
holders are wiped out and the old debt claims are transformed into equity claims in the
new entity which continues operating with a new capital structure. Alternatively, the
debtholders can agree to cut down the face value of debt, in exchange for some warrants.
Even before Chapter 11, these procedures were the solutions adopted to deal with the
large railroad bankruptcies at the turn of the twentieth century. So why is this wellestablished
approach not used to solve the financial sectors current problems?
The rest is here