28 June 2013

Business Models and the Singularity

Business Models and the Singularity | Digital Tonto: "Diminishing Returns to Scale - Besides technological progress, there is another factor in the shortening life spans of business models: the diminishing advantages of scale. It used to be that big companies could protect their business models by exploiting their size and incumbency. They had the infrastructure, the client lists and the marketing budgets to crush new competitors. To a large extent, that’s not true anymore. Infrastructure can cheaply leased (e.g. through cloud services) and the Web is making it easier for small companies to find customers. Digital technologies are also enabling cooperation between small firms to compete with larger ones. That’s the essence of the new semantic economy. We’ve become accustomed to start-ups like Facebook and Instagram becoming billion dollar companies within a few years while established firms like GM and Kodak come crashing down in the same timeframe. Past performance of a business model is no longer a guarantee of future success."

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26 June 2013

Chinese firms buying firms worldwide

Chinese firm to buy British yacht maker Sunseeker | Business | guardian.co.uk: "The Chinese conglomerate Dalian Wanda Group is buying the British yacht maker Sunseeker, whose yachts have appeared in several James Bond films, in the latest example of a trend for Chinese companies to acquire top luxury global brands. The company said on Wednesday it had agreed to buy a 91.8% stake in privately held Sunseeker for £320m. Chinese companies have started to acquire top international brands as a shortcut to global success. There is also growing demand for luxury in mainland China, where new marinas line the country's southern coast. Set up in the 1970s, Sunseeker employs around 2,300 people in and around Poole in Dorset on the south coast of England. Following the acquisition, the firm would retain the base and existing workforce, Wanda said. Prices for its luxury boats start at £400,000 and its new top-of-the-range 155 Yacht costs £20m, with the former Formula One boss Eddie Jordan the first customer." (read more at link above)

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24 June 2013

Hire the Google Way: Behavioral Interviewing

Google: GPAs are worthless | Technically Incorrect - CNET News: " . . . Google is now tending toward something called "behavioral interviewing." This seems to involve actually wondering what you're really like and how you really live, think, and act. Explained Bock: "The interesting thing about the behavioral interview is that when you ask somebody to speak to their own experience, and you drill into that, you get two kinds of information. One is you get to see how they actually interacted in a real-world situation, and the valuable 'meta' information you get about the candidate is a sense of what they consider to be difficult." So now you know how Vince Vaughn and Owen Wilson managed to even squeeze into consideration at America's largest-brained organization. Google now knows what it really needs. Said Bock: "You want people who like figuring out stuff where there is no obvious answer." Yes, indeed. It's just like trying to find the perfect lover."

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21 June 2013

Risk-Averse Culture Infects US

Risk-Averse Culture Infects U.S. Workers, Entrepreneurs - WSJ.com: ""The U.S. has succeeded in part because of its dynamism, its high pace of job creation and destruction, and its high pace of churning of workers," said John Haltiwanger, a University of Maryland economist who has studied the decline in American entrepreneurship. "The pessimistic view is we've lost our mojo.""

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19 June 2013

Quantitative VC and Data

The Quantitative VC | TechCrunch: " . . .What are the kinds of data that VCs are parsing through? There’s the basic signals like Compete and Alexa data, as well as App Store and Play Store data and rankings. VCs are also combing through sites like LinkedIn to scout talent on who could be starting a company and paying for data streams of SEC filings, and other forms of public financial data from sources like CB Insights, Venture Source and others. And VCs have been flocking to our own CrunchBase, which now has 1.6 million data points on companies, entrepreneurs, fundings, exits and more. CrunchBase President Matt Kaufman recently announced the CrunchBase Venture Network, which gives VC firms access to the CrunchBase API and team in exchange for information on their portfolio companies, including funding updates, staffing changes, product launches and acquisitions. Eleven firms signed up for the data partnership at launch a few weeks ago, including Greylock, DFJ, Softtech VC, SV Angel, Sequoia Capital, Andreessen Horowitz, CrunchFund, 500 Startups, Betaworks, Foundry Group and TechStars. In two weeks, Kaufman says over a hundred firms, including Google Ventures, have joined the network to access CrunchBase data. There’s no doubt that every well-known VC firm is trying to figure out how to use data intelligently. Some want to talk about it and some don’t, obviously for competitive reasons. . . ."

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17 June 2013

Entrepreneurial Personalities, Entrepreneurial Places

In Search of the Entrepreneurial Personalities of Specific Places - Richard Florida - The Atlantic Cities: "In other words, entrepreneurial places, like individual entrepreneurs, reflect a combination of three key personality traits: openness to new ideas and experiences, diligence and conscientiousness, and the extrovert's ability to connect with and motivate people. . . .You have to have leaders who are entrepreneurs. They have to have a long-term view. They have to be inclusive of anyone who wants to engage.""

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14 June 2013

Why the Internet sales tax bill is such a bad idea

Why an Internet sales tax is such an incomprehensibly bad idea | ZDNet: " . . . Now, here's the biggest irony: Who are the small online retailers? In many cases, they're stores that have also set up shop on the Internet. They showcase their inventory, not only in their brick and mortar storefront, but in their online store as well. With complex, convoluted Internet-based sales tax in place, these local brick and mortars will have to close their online stores and concentrate only on local sales. Amazon will once again be strengthened at the expense of local brick and mortars. . . . If the economy is to get stronger, charging consumers more when they're already struggling to afford goods and services is not a wise move. Well, I guess nobody has ever accused Congress of wisdom. It's just so sad. It will be much harder for small online retailers to start, set up shop, and keep up with the paperwork demands . . ."

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12 June 2013

Michigan example in venture capital

Tom Still - Wisconsin could follow Michigan's example to nurture venture capital: " . . . Venture Investors opened an office in Ann Arbor, Mich., in 2007 after receiving an investment from Venture Michigan Fund I. With the University of Michigan a stone's throw away, it was a strong fit with the Wisconsin firm's practice of investing in technologies and companies tied to academic research. Venture Investors was not the only investor firm from outside Michigan to be drawn to the state because of the state-leveraged fund. Since 2008, the number of venture capital professionals in Michigan has grown from 43 to 62, and the number of firms headquartered in the state has risen from 15 to 20 — with nine out-of-state firms opening offices there. Total venture capital under management in Michigan has grown to $3.7 billion, up $700 million in one year alone. The amount of money available in those funds for new investments has climbed from $367 million in 2011 to $456 million last year. . . ."

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10 June 2013

Entrepreneurs Build Multiple Start-Ups Simultaneously

a growing group of professed company builders who are parlaying past successes — along with their own capital and thick Rolodexes — into operating companies and venture funds that work on multiple companies at the same time-- 

Entrepreneurs Help Build Start-Ups by the Batch - NYTimes.com: " . . . What is new is the number of prominent entrepreneurs and investors who are now going this route rather than staking their fortunes on single follow-up acts or taking less active roles as angel investors or venture capitalists. “Venture doesn’t allow us to explore, only to accept and deny,” said Michael Jones, chief executive of Science, a builder platform in Santa Monica, Calif. He and a longtime entrepreneur, Peter Pham, started Science in 2011 with $10 million in venture backing, followed by $30 million from the Hearst Corporation. Most of these investors-cum-inventors are motivated by personal passion to create companies. Under this model, entrepreneurs often tap their own networks and wallets to finance their ideas. “I don’t have any hobbies,” said Max Levchin, a co-founder and former chief technology officer of PayPal. “This is what I do.”. . . "

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07 June 2013

Quantitative VC

The Quantitative VC | TechCrunch: "It’s no longer sufficient in venture capital for firms to wait for companies, people and trends to come to Sand Hill Road. Seeing a startup on Demo Day at Y Combinator used to be the pipeline for scouting an early deal. But these days, YC companies are raising from angels before demo days. This is a sign of the times in the venture world. To start competing for deals, VCs have to be prospecting people, companies and trends well before events like Demo Day. And how are VCs trying to do this? Through complex data mining and pattern recognition. . . ."(more at link above)

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06 June 2013

Silicon Valley Venture Capital Survey

Silicon Valley Venture Capital Survey - First Quarter 2013 | Fenwick & West LLP - JDSupra: "It also appears that more hedge funds and private equity investors are doing later stage "venture" deals, which provides additional capital, but also creates more competition for venture capitalists (VentureWire, Shira Ovide and Pui-Wing Tam, March 7, 2013). The interest of these alternative investors is likely driven by the increased time to IPO, and increased amount being raised prior to IPO, by some of the most promising venture-backed companies. For example, the median time from initial equity to IPO increased to 9.4 years in 1Q13, and the median amount raised increased to $105 million, both the highest amounts in at least eight years (VentureSource)." read more at link above

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05 June 2013

China's Tragedy

In the space of four years, from 1958 to 1962, China experienced a disaster of historic proportions - the death by starvation of more than 30 million people. . . .

RealClearMarkets - How Hayek Helped Me Understand China's Tragedy: " . . . while China has accepted some of Hayek's thinking on markets, it continues to insist on "socialism with Chinese characteristics." The powerful run and control the market in a system I call the "power market economy." The greatest problem with a power market economy is its inequity. Hayek noted that "a world in which the wealthy are powerful is still a better world than one in which only the already powerful can acquire wealth." In today's China, only the well-connected can acquire great wealth; society's riches are concentrated among those in power. This is the source of the current popular resentment against officialdom and the wealthy elite. A power market economy cannot possibly meet the Chinese government's vaunted objective of a stable and harmonious society. . . ."

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04 June 2013

You Don't Necessarily Need VCs

You Don't Need VCs - The Accelerators - WSJ: ". . . “VCs are calling us, what should we do?” My response is always the same, “Take the meeting. Explain where you are in the process, and never under any circumstances accept an exclusive term sheet from a one-off investor.” Well, unless you are three months behind in rent and can’t make payroll. That’s a different blog post. Back to capital raising. The capital-raising process is a marathon, not a sprint. Entrepreneurs should prepare for the race by researching all capital sources – equity, debt, and of course the cheapest capital of all: customers’ cash. If you don’t know about crowd funding, you may be living under a rock. . . ."

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03 June 2013

Yahoo, peanut butter, ecosystem

Wired got it wrong--it's an ecosystem, not "portal"--

Marissa Mayer Is Bringing Back the Internet Portal. Here's Why | Wired Business | Wired.com: "At one point in 2006, a top Yahoo executive even issued a famous memo comparing Yahoo’s extremely broad offerings to peanut butter, “a thin layer of investment spread across everything we do and thus we focus on nothing in particular… We lack a focused, cohesive vision for our company.” Interestingly, that executive, Brad Garlinghouse, has since recanted his diagnosis of Yahoo, saying the company’s real problem was a lack of “passion and entrepreneurial zeal.”"

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The 7 Habits of Highly Effective Mediocre Entrepreneurs | TechCrunch: " . . . . persistence is not the self-help cliche “Keep going until you hit the finish line!”. The key slogan is, “Keep failing until you accidentally no longer fail.” That’s persistence." - James Altucher

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