This has got to be a showstopper in a crowded singles bar. This guy must get chicks like crazy making kopff covers out of the stuff you sweep off the floors of hair salons. I especially like number two with it's faintly Egyption warrior fez feel. But you can see how stylin they are. Makes you wonder how the Canadians can do without?
Fight Club met last night at Fiddlers Elbow for dinner.
Ryan and I have had a few discussions about what we might do to make it better but we like the format and atmosphere so much that whatever we do will just be minor tweeks. I did have a request for a change of venue so we'll meet somewhere else next time. (We might also do a lunch since the Provo crowd whines that their wives won't let the out after dark.)
Here's what I think I learned.
Alex Lawrence wasn't posting about me when he complained about prolific bloggers. (He signed a disclaimer to that effect after I sat on him and threatened to take compromising photos of him in a Papa Johns.)
Bob Barnes (Zonder.com) drinks what I thought to be an odd concoction of half regular, half diet Coke. He referred to this as Mormon crack i think. Bob's looking for love and has offered a $1000 reward to any Fight Club Member who finds him a wife. I think this bounty is payable after the marriage although he might be willing to pay half up front for an engagement. I tried to find a photo of Bob on the web but was unsuccessful. I'll look harder later as I want that geld.
Ryan Money (HireVue.com) needed an anniversary present so I told him I'd give his wife a $1000 gift certificate to Surface to keep him out of the dog house in exchange for him buying my dinner. That seemed like a good deal to me (save $1000 vs $25 dinner) but the blackard ran out before the bill came leaving me to fend for myself. Nice. (Note to self: Don't sit on Alex in front of Ryan. It scares him.)
Jordy Gunderson needs a cell phone charger if anyone has one. Jordy's over at overstock.com using GeekSpeek to translate Python, C# (C-pound) wiki, java, and such for the accountants. Jordy's half nerd / half business / half something else. I'll be interested to read his fight story when he submits it. Still waters run deep.
Colin Kelly (Connect Magazine) sat on the opposite end of the table but I was able to move down and talk to him for a while. Colin was a Fight Club Virgin but held his own. (Everyone know that if it's your first night at Fight Club you have to fight.) I think I saw Colin wrestling with a salad. I'll be happy when Connect Blogs are scraping something other than Chris Knudsens blogger blog. (I have to read him twice and it's warping my mindshare.) Lumin is coming out with a mag specifically for entrepreneurs. My wager is that it will be good. Connect is by far the best business mag in the mountain west.
Geoff Osmond was there but I think it was just to park Colins car.
Richard Tripp from Yepic came in. His hair cut was the first of it's kind at a Fight Club Event:
Richard's cut is an "inverted Dorothy Hamill" that looks rather good on him. Richard came without his Yepic sidkick Cory which is a shame. Cory's a nice guy I've met before and worth adding. Besides, they make a nice couple.From a previous Fight Club recap:
Haircuts: During dinner I commented that there are a number of popular hair styles at the table that included:
- The Flowbee: One length all over... aka Jordy.
- The Hedgehog: Spiky all over. This seems to be extremely popular with Connect Magazines Geoff Osmond. I've also seen it sported by others including Brock Blake from fundinguniverse.com.
- The Sissy Mohawk: Kind of a ridge running the entire crest of the head. Ryan Money of HireVue had one on this time.
- The Ducks Ass: This is the name of that little 'flip' haircut that you see all the Neumont and SUVC youngsters with.
- 'Warnock Porn Hair': This was one that I'd never heard of but Money labeled me as having. My own name for my hair style is 'disheveled elegance'.
I don't mean to give short shrift to others there but even I cant dig everyone.
Fight Clubs something of a surprise to me. It's become a really fun event that's already made a number of connections that I know of. The relaxed atmosphere leads to a comfort level that you don't get with a 'what do you do - what do you do" event where you don't have time to actually talk.
Now if we can just get Bob married.
Silicon Valley receives more than twice as much venture capital as a share of its economy as does Seattle, the next-highest metro. This is clearly because the area remains the technological innovation capital of the globe, with a strong presence in a host of high-tech sectors, including biotech, Internet, telecom, computers, and devices. In contrast, other top-ranking metros, including Seattle, Austin, Raleigh-Durham, San Diego, and Washington, D.C., are much more specialized on one or two high-tech industries. The presence of strong university engineering and science programs, in places like Silicon Valley, Austin, and Raleigh, is also associated with venture capital investments.
 |  | 100th-76th Percentile |
 | | 75th-51st Percentile |
 | | 50th-26th Percentile |
 | | 25th-1st Percentile |
Amazon's own own PPC program, Clickriver.Clickriver Ads is an advertising program (currently in beta) that allows businesses to place sponsored links on Amazon.com, next to search results and on product detail pages.
It's a closed beta at the moment. I've applied and if they let me in I'll post a review after I tinker with it.
Assuming that you are planning on raising VC money some time in the future, there are two different typical structures for the first angel financing: (1) convertible debt and (2) preferred equity.
Convertible Debt: This is the easier approach of the two. In this case, the investment is in the form of a promissory note that converts into equity on the terms of a “qualified financing” (where qualified financing typically is defined by having a minimum amount – say $1m of total investment.) The note will either convert at a discount to the price of the qualified financing (usually in the 20% – 40% range), will have warrant coverage (usually in the 20% to 40% range), or both. This discount and/or warrant coverage gives the angel investors some additional ownership in exchange for taking the early risk. This note should be a real promissory note with the conversion and redemption characteristics clearly defined to protect both the investors and the entrepreneurs from any misunderstandings.
Preferred Equity: This is also known as a “light Series A” – it’s preferred stock that is similar to that a VC will get, but usually with lighter terms due to the relatively low valuation associated with it. For a very young company, a $500k investment can receive between 25% and 50% of the equity in the company and, as a result, many of the terms associated with a typical VC investment are overkill.
an entrepreneur wants a seed-investor who can add real value, it is not productive to economically penalize that investor when they add it. Structuring a seed-round as equity allows the investor and entrepreneur to be completely aligned and share one goal - to create as much value as possible for the company.
From Charles River Funding: QuickStart Seed FundingCharles River Funding (Boston & Silicon Valley) is launching a new program looking to move them down the food chain and get into companies while the gettin's good. Read the NY Times article: Venture Firm Is Giving Loans A Try. (registration required)
Here is how the loan works:
- A standard interest bearing loan will be made to a corporation, which we will help you establish if you do not already have one in place. This arrangement eliminates any personal liability for the loan.
- It is our intention to convert our debt into equity if and when your company closes its Series A round. If the company successfully raises its Series A, in exchange for sharing the risk with the entrepreneur, CRV receives a discount on the conversion price when the loan is rolled into the Series A. The discount will be a maximum of 25% (determined ratably at five percent per month, depending on how long it takes to create a Series A financing, up to the maximum).
A simple example: if CRV loans your company $100,000 with a six percent interest rate, and six months later the company closed a Series A round, at that point the loan balance (with interest) would convert at a 25% discount (value = loan dollar amount plus interest / .75) into $137,333.33 worth of Series A stock. Given that seed funding amounts are typically very small compared to the amounts one might expect to raise in a Series A round, as the example illustrates, the aggregate discount amount, in this case $37K, is a tiny fraction of what is likely to be a multimillion dollar Series A financing.
- In addition, CRV would like the opportunity to support the Series A financing and thus retains an option to contribute up to 50 percent of your Series A funding. For example, if you raise a $3M Series A round, we can contribute up to $1.5M of the round.
It also is a recognition of some of the challenges that larger venture funds face. Take a hypothetical traditional $400M VC firm. In order to achieve a 20% IRR, the fund must return 3x their initial capital over a 6 year term -- or $1.2B. Now say this hypothetical VC firm typically owns 20% of their portfolio companies at exit (an industry average). That means that at exit their portfolio needs to create $6 Billion dollars worth of market value (ie, $1.2B / 20%). Assuming that their average investment size is $20M, that means that they invest in 20 companies -- this assumes an average exit valuation of $300M PER COMPANY. Given the tight IPO Market and an average M&A exit value of less approximately $150M, this math creates some real challenges.
The advantage of a seed round is that it done as a “convertible” loan, which means the $250,000 is essentially a no-strings-attached loan to an entrepreneur. There is no equity stake claim by the investor at the time, which is good for the entrepreneur, who can see how good his idea is first. If the idea gains traction, he can raise money in the series A and negotiate a high valuation for his company. If he can command a $5 million valuation, for example, the investor’s $250,000 seed money converts into only 5 percent of the company.
Zachary says he sees too many entrepreneurs giving away between 10 to 20 percent of their company in the seed round. They have fewer shares to give to employees, and they’re less attractive to venture capitalists.
There is almost no liability for the entrepreneurs, because the loan is made to a corporation formed around the entrepreneur. If the company fails, the company goes away, and the founders aren’t liable. “We’re all big boys,” says Tai, explaining that CRV doesn’t mind when this happens. “We go into this with eyes wide open.”
I think that's a very fair deal. The loan is structured very similarly to what some angels are doing these days (loans that convert at a discount) and Charles River gets to take up to half of the round on the same terms as the other new investor.
Read the first bullet: There's also no personal liability. Something that Utah investors could take note of.
From VentureBeatSpock is getting ready to launch a new engine for search based on 'people' by scouring profiles on the web. As a LinkedIn user, I'm wondering if the added benefits of Spocks search will outweigh privacy needs. If ths becomes a tool for stalkers, watchout.
From the Venture Beat post:
When Spock launches, it will have 100 million profiles of people in its database, by far the largest open repository of profiles anywhere. Spock delivers a mixture of facts and research on a people, but also opens a profile to social input, giving it a touch of Wikipedia.This move is a no-brainer, and it makes you wonder why no one has done this yet.
LinkedIn, ZoomInfo and other people-contact related sites were built in different eras, and have focused on specific subsets of people (LinkedIn and ZoomInfo on business execs, for example). Spock, however, exploits all the latest tagging technology and the exploding number of public profiles on the Web since social network sites like MySpace became popular last year.
Scrubbing millions of profiles from the Web wasn’t an obvious thing to do when Palo Alto’s LinkedIn launched several years ago. LinkedIn began as a contact site, allowing people to request meetings through their layers of relationships. It has since tried to move toward a more open model. Indeed, LinkedIn is aggressively building out its people profiles even as we write. (Last week, it also kicked off a major expansion into Europe and Asia as part of a land-grab, with a German version to go live soon.)
Spock starts from the other end. Spock dispenses with the “contact” element of LinkedIn. It is an open site, for people seeking information about other people.
From the Scientific ActivistYesterday's Washington Post reported that several environmental groups have obtained strong evidence that Bush Administration political appointee and deputy assistant secretary of the interior for fish and wildlife and parks Julie MacDonald has actively censored scientific information and given elevated and inappropriate consideration to non-environmental concerns in order to prevent the adding of new species to the Endangered Species list. The Union of Concerned Scientists, one of the original organizations to make the revelation, has detailed information on the actions of MacDonald and other appointees at the Department of the Interior on its site. Here at ScienceBlogs.com, The Questionable Authority and Thoughts from Kansas put in their two cents on the issue as well.
The evidence is pretty damning but should anyone really be surprised? Hardly. This is just another item in the long list of political interference in science scandals that have characterized the current administration. Hmmm... this sounds a little too familiar.
Via: arstechnicaFormer intelligence officer Robert David Steele recently appeared on the Alex Jones show to make the provocative claim that Google is currently cooperating with secret elements in the US government, including the CIA saying, "Google has made a very important strategic mistake in dealing with the secret elements of the U.S. government. That is a huge mistake and I'm hoping they'll work their way out of it and basically cut that relationship off."
Steele has made these claims for some time; back in January, he said the same things at a conference organized by his company at which several sources came forward and spoke about the alleged cooperation. According to security site HSToday.us, which had a reporter in attendance at the conference, one unnamed security contractor "said three employees of an intelligence agency he declined to identify are in Mountain View, Calif. where Google is based, working with the company to leverage the search engine company's user data monitoring capability in the interests of national security."
It's clear that the company is not opposed to working with the intelligence and defense communities in principle. Products such as Google Earth are explicitly marketed to such industries, with Google claiming that its products allow "analysts and operatives to get the job done effectively and in record time."
How it works: every Wiffiti screen displays its own unique screen ID and the number to text one's message to. Texted messages show up in seconds. Besides replying, other users can also grow or fade messages by texting commands and a message's tag to the same screen.
The first Wiffiti screen was installed inSomeday Café in Boston, MA, a city that now has three additional Wiffiti screens. Other screens can be found in Chicago, Denver, Seattle, Knoxville, Boulder and New York. Costs for a user are the same as for sending a standard text/SMS message.
Makes for a great conversation starter, pick-up tool or interactive soapbox, and should go down well in other cities , especially as the rest of the world is truly SMS obsessed. And don't forget, there's ALWAYS money to be made the moment you figure out how to get consumers to start sending text messages.
Website: www.wiffiti.comA facinating read on Google's purchase of YouTube. Evidently the Google mantra of 'do no evil' has some flexibility built in.
> The media companies had their typical challenges. Specifically, how to
> get money from Youtube without being required to give any to the
> talent (musicians and actors)? If monies were received as part of a
> license to Youtube then they would contractually obligated to share a
> substantial portion of the proceeds with others. For example most
> record label contracts call for artists to get 50% of all license
> deals. It was decided the media companies would receive an equity
> position as an investor in Youtube which Google would buy from them.
> This shelters all the up front monies from any royalty demands by
> allowing them to classify it as gains from an investment position. A
> few savvy agents might complain about receiving nothing and get a
> token amount, but most will be unaware of what transpired.
I guess Google's got bigger fish to fry.
> The second request was to pile some lawsuits on competitors to slow
> them down and lock in Youtube's position. As Google looked at it they
> bought a 6 month exclusive on widespread video copyright infringement.
> Universal obliged and sued two capable Youtube clones Bolt and
> Grouper. This has several effects. First, it puts enormous pressure on
> all the other video sites to clamp down on the laissez-faire content
> posting that is prevalent. If Google is agreeing to remove
> unauthorized content they want the rest of the industry doing the same
> thing. Secondly it shuts off the flow of venture capital investments
> into video firms. Without capital these firms can't build the data
> centers and pay for the bandwidth required for these upside down
> businesses.
From the BBC: Evidently Briton's can't legally copy their own CD's.
According to research from the National Consumer Council, more than half of British consumers are infringing copyright law by copying CDs onto their computers, iPods or other MP3 players.
The Institute for Public Policy Research (IPPR) is calling for a "private right to copy".
It would decriminalise millions of Britons who break the law each year by copying their CDs onto music players
We're going to have a Fight Club Dinner next Wednesday. Read about FC here.
Here's a partial list of previous fighters: My appologies to everyone not appearing here yet. This list is taking longer than I thought. (I'm going to start collecting business cards as this list is at least 30 names short.)
- Ryan Money, HireVue - Money Talks
- Josh Steimle, MWI - Don Loper
- Alex Lawrence, Pizza Hut (wink)
- Devin Thorpe, Thorpe Capital - MidMarket Maven
- Judd Bagley, Overstock.com - Business Jive Podcast
- Chris Knudsen, Podango - blog
- Blake Snow, 10 Speed Media? - Smooth Harold
- Jordy Gunderson, Overstock.com - Jordy Blog
- Shawn Nelson, Lovesac - Lovesac's Rebel CEO
- Ryan Coombs, Audio Archives - Ryans Fight
- John Wright, Powercode
- Jason Barber, Seatability
- Derek Perkins, Seatability
- Justin Bergener, VIP Bloggers
- Geoff Osmond, Connect Magazine
- Allan Young, University Venture Fund
- Jacob Hanson, HireVue Jacobs Blog
- Jeremy Neilson, Utah Fund of Funds
- Nate Thurgood, BelleHavens
NOTE: I've been emailing people individually in the past and it's a headache so I've created a list. I don't think I've got everyone who's attended so if you don't receive an email let me know.
If you'd like to be added to the invite list just email me.
Via Wired: See Also Orrin Hatch, the entertainment industry-affiliated Republican who made it a federal crime to play a DVD on a Linux computer and tried to enable copyright holders to destroy the computers of suspected copyright infringers, is accustomed to representing Utah in the United States Senate.
After voters head to the polls on Nov. 7, he will most likely continue to do. But it won't be because there was no young, straight-shooting, idealistic, tech-savvy candidate there to oppose him.
His name is Pete Ashdown, and if anyone can clue Congress in to technology before it legislates the internet into a bunch of pneumatic tubes, it's Ashdown, who breathes bytes and exhales bits. He founded XMission (the first and largest ISP in Utah), deejayed raves and posted a Wiki version of his campaign platform for anyone to edit. One contribution to that Wiki formed a cornerstone of his platform: that the Iraqi people should vote through a referendum on whether U.S. troops should stay in their country.
In an age where energy magnates meet behind closed doors with elected officials to determine policy, Ashdown posts a calendar showing every meeting he takes in a day, and thinks other politicians should do the same.
This political transparency comes as a breath of fresh air to Ashdown's supporters, many of whom reside outside the state of Utah. The New York Times pegged Hatch as the "overwhelming favorite" there, but that hasn't stopped Ashdown from fighting for every last vote in a state he considers to be full of Democrats who just don't know that they're Democrats.
This week we saw Evan Williams launch Obvious Corporation.
Obvious is a place where Evan and other developers can build web services and launch them. They can do this in parallel as they have already done with Odeo and Twitter. Buying out the investors in Odeo means that Evan and his colleagues are doing this with their own time and money.
I think its a smart model. Build a network of web services (Evan calls them web apps), use the popularity of one service to launch another, keep the services that are small but successful, shut down the ones that don't work, and spin off the ones that really take off. I like it.
I think we are seeing more and more parallel entrepreneurship. It makes sense. Entrepreneurs realize that serial entrepreneurship means putting all their eggs in one basket. VCs get to leverage a portfolio effect and I think we'll see more entrepreneurs try to do the same."
It seems that MySpace isn't cool anymore, but my daughter could have told you that.MySpace is going to go the way of Cabbage Patch Dolls and Pet Rocks. The spam, negative press, worried parents looking over teen shoulders. The unbelievable rise of MySpace feeds right into the fad phenomenon. What they should have done is slow the growth and 'trend' their way upwards. Fads by nature are not sustainable.
Of course, they sold and cashed out to the tune of $580 million and left News Corp. holding the bag.
- How to Start a Startup.
Build something users love, and spend less than you make.- Hiring is Obsolete.
The market is a lot more discerning than any employer.- How to Make Wealth.
To get rich you need to get yourself in a situation with two things, measurement and leverage.- Ideas for Startups.
The initial idea is not a blueprint, but a question.- Why Smart People Have Bad Ideas.
A hacker who has learned what to make, and not just how to make, is extraordinarily powerful.- The Hardest Lessons for Startups to Learn
Some things about startups are kind of counterintuitive.- How to Fund a Startup.
Venture funding works like gears.- How to Present to Investors.
Explain what you're doing and why users will want it.- The Venture Capital Squeeze.
Why not let the founders have that first million, or at least half million?- The Other Road Ahead.
You may not believe it, but I promise you, Microsoft is scared of you.- What Business Can Learn from Open Source.
There may be more pain in your own company, but it won't hurt as much.- What the Bubble Got Right.
Even a small increase in the rate at which good ideas win would be a momentous change.- A Unified Theory of VC Suckage.
If you're not one of the very top funds, you're condemned to be the bad guys.
Tag Jungle has scored a big win in the visibility wars before it's even launched. The Tag Team has been pushing hard to go live with the site while Phil has been scrounging around trying to keep everyone fed.
The Tag Team announced tonight that Tag Jungle has been invited as one of only 30 tech startups to present at Launch: Silicon Valley Venture Showcase. This is a big win for the wonderbread boys.
Tag Jungle will be showcasing their solution to make sense of the blogosphere. With a bazillion blogs up and running and Google and Technorati hitched to a linear search strategy of back links and keywords, there's room for a better solution. Tag Jungle thinks they're it.
I've seen it. They might be.
Tag Jungle uses some novel approaches to make sense of the millions of blog posts and sorts them using recognition patterns developed at BYU. (Help me out here if I get off base here Phil.) This new context recognition ability allows Tag Jungle to determine what the salient points of the post are and what the post is about without the keyword cha-cha. It also determines what other relevant tags might be of interest to the user and displays them as a tag cloud along the right. I've seen this in action and it is mucho impressive. The user can use filters to target the information they're interested in including a cool 'sentiment' filter. (I'll let Phil describe that.) The relevance of the search results promises to be an order of magnitude over what's available.
If you're blogging and don't have any hardwill towards the Tag Jungle Tarzan Team (ie. If they don't owe you money.) throw them a bone and link to their site. You'll also want to jump on as a new user and try out the cool little gizmos they've built in.
Uncle Web 2.0 want's you! Erick Schoenfeld over at Business 2.0 is asking for input.
For the past couple of weeks I've been putting together an impromptu roundtable tied to our current Disruptors cover story. And the response has been amazing, considering the last-minute notification I gave the attendees. A coupel of them are even flying in from Europe. The roundtable will be this Thursday in San Francisco, and about 40 entrepreneurs, CEOs, VCs, researchers, and bloggers will all come to talk about how to build a disruptive business, and the pros and cons of doing so.
The guest list includes CEOs, founders, and VCs from nearly all the companies profiled in the story (Zopa, Jajah, Netvibes, Coghead, Salesforce.com, NextMedium, Applied Location, Blue Lithium, Nanolife Sciences). It also includes other disruptive entrepreneurs like Craig Newmark of Craigslist, Digg CEO Jay Adelson, Prosper CEO Chris Larsen, Rebtel co-founder Greg Spector, GigaOm Malik, TechCrunch blogger Michael Arrington, del.icio.us founder (now Yahoo employee) Joshua Schachter, Writely founder (now Google employee) Sam Schillace, as well as VCs David Cowan, David Hornik, and Christine Herron. These folks are all practioners of the fine art of shaking up established industries.
But here's where I need your help. How can I shake up these folks? What questions should I ask them? What do you want to know about the ins and outs of taking on industry giants? What can I do to make the event as constructively disruptive as possible? (Please give me your suggestions in comments).
