TheWaterRat

From Charlie O’Donnell

I know you’re out there. I can feel you now—corporate recruiters at career fairs, sending offer letters to work at banks and consulting firms.  I know that you’re afraid.  Google is.  You’re afraid of startups. You’re afraid of change.  You’re afraid that students and young people are going to realize that you’re not the best place for them to learn, grow, or gain in responsibilities.  I don’t know the future. I didn’t come here to tell you how this is going to end. I came here to tell you how it’s going to begin. I’m going to publish this post, and then I’m going to show these people what you don’t want them to see. I’m going to show them a world … without you getting in the way of their amazing careers.  A world without rules and controls, without borders or boundaries; a world where anything is possible. Where we go from there is a choice I leave to them.

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I read blog posts by Don Dodge and Glenn Kelman today about people jumping from Google to Facebook and it got me thinking about entrepreneurs.

Most people have an aversion to risk, my college economics professor told me. Which means they have to be rewarded to take on that risk. The higher the risk, the higher the possible payout has to be for people to jump.

We make risk/reward decisions every day, all day. Do I go skiing, and enjoy the rush of flying downhill even though there’s a small chance I’ll blow out a knee? Should I go to college or just get a job and start earning money now? Should I eat the high fiber and generally healthy thing on the menu, or go for the cheeseburger? Should I hit the restroom before the movie starts? Etc.

Every time we do something, or don’t do something, there’s a risk/reward algorithm being calculated in our brain.

Entrepreneurs, though, are all screwed up. They don’t need to be rewarded for risk, because they actually get utility out of risk itself. In other words, they like adventure.

Continue reading on TechCrunch

Another brilliantly awesome post by Steve Blank – this guy rules.

My two daughters are now in college and have put their toes in the working-world with summer jobs. As they’ve grown older, they’ve heard their parent’s advice about women in the workforce.

This post is not advice nor is it a recommendation of what you should do. It’s simply my interpretation of what I observed watching my daughters grow up. Our circumstances were unique, times have changed, and your conclusions and opinions will most certainly differ.

Gender Differences
Growing up in the 60’s and 70’s when women were struggling against inequality in jobs, pay, etc., my wife and I came into parenthood with an unconscious bias that gender differences were mostly cultural. So how we raised our kids was an unintended science experiment
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An interesting tale on the evolution of the Search Business Model, interesting for whoever is in the technology space, ineresting, in fact for everybody living in this century.

The article, originally published on TechCrunch, is from Ali Partovi, an angel investor, startup advisor, and serial entrepreneur. He co-founded iLike, acquired by Myspace in 2009, and previously LinkExchange, acquired by Microsoft for $265mm in 1998. His portfolio has included such successes as Zappos, Tellme, Ironport, and Facebook. He was among the first to recognize the importance of the Facebook Platform, and, as this article suggests, also among the earliest to grasp the business opportunity of search.

Earlier this month, Paul Graham wrote a terrific article, “What Happened to Yahoo,” blaming Yahoo’s demise on two factors. First, “easy money” from banner ads led Yahoo to ignore search in the late ‘90s. Second, ambivalence about being a technology company meant Yahoo hired sub-par engineers and didn’t empower them to innovate. While I agree with Graham’s points, there’s a broader story to be told.

The story begins in 1996 with an 18-year-old college dropout named Scott Banister, who came up with a simple but elegant concept that turned out to be one of the best business ideas in history.

This is the true story of the search business model — a concept that John Battelle and other search historians have erroneously attributed to Bill Gross for Goto.com. Although Gross deserves the lion’s share of credit for recognizing a good idea and more importantly for implementing it, the credit for developing the idea itself belongs elsewhere. But first, let’s recall the world of search in the late ‘90s.

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I really like to read Chris Dixon’s blog and I wish he posted more often. Sometimes his insights are really awesome, others are nothing new, but all the times you can be certain that he’s speaking his mind out, giving you his very personal unadulterated view. And that is what it is.

Here’s a recent post with some valuable insight on strategy. You may argue that he’s talking more about tactics and execution rather than strategy, but I think the debate on this is academic, while the points made here are valuable for every business, start up or not.

A huge challenge for user-generated websites is overcoming the chicken-and-egg problem: attracting users and contributors when you are starting with zero content. One way to approach this challenge is to use what Geoffrey Moore calls the bowling pin strategy: find a niche where the chicken-and-egg problem is more easily overcome and then find ways to hop from that niche to other niches and eventually to the broader market.

Facebook executed the bowling pin strategy brilliantly by starting at Harvard and then spreading out to other colleges and eventually the general public.  If Facebook started out with, say, 1000 users spread randomly across the world, it wouldn’t have been very useful to anyone.  But having the first 1000 users at Harvard made it extremely useful to Harvard students.  Those students in turn had friends at other colleges, allowing Facebook to hop from one school to another.

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I have been working on and following the local and travel space for about 4 years now. And although I have yet to make a dent in the market I am trying to break – I’ll write a long post at some point on why – I think I understand the space decently and I have a fair idea of what things may work or won’t and who are the players who are going to shape that market.

In my view, Hunch is one of those for a number of reasons I’ll try and explain later and I think they finally made a move that is taking them into the right direction. The UI and how they fit into the users behavious are still to work out, but what they are doing is certainly worthy of notice.

TechCrunch has an article about it and here you can go directly to Hunch Local .

As published on Steve Blank’s blog

As a founder I fought with VC’s over vesting as they brought in a new CEO and walked me out the door. As a board member I negotiated with founding CEO’s over vesting when I thought it was their time to go. At best this is an argument where no one wins, at worst it’s like a nasty divorce.

I’ll offer that both entrepreneurs and VC’s have the wrong model for founding CEO equity compensation. The customary vesting model has founders vest their stock over 4-years, and when the founding CEO gets in over their head the VC’s bring in professional management. More often than not the founding CEO leaves the company. The fallacy is believing that a founders value is evenly distributed over four years. We now have three decades of experience that says otherwise.

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As published on Doug Richard’s School for Startups

The first outside money an entrepreneur gets usually comes from friends and friends of friends. Why? Because they know the entrepreneur personally and they know where he lives.  They are the father that buys a company a new computer system for video editing, the sister who gives a new developer enough to buy an IPAD, the long lost uncle who comes up with the first fifty thousand pounds for a new hair salon.  These first investors are crazy enough to take a risk on a business with no assets, no income, no customers, and no provable business model.  Properly put, your first “investments” should usually be called gifts.

After that first money in, your next request for money will probably go to an “angel investor”. They come in when your business needs a few hundred thousand pounds to a million pounds to grow.  By the time you approach angels, you usually have something to show for yourself.  Maybe it’s a patent. Maybe it’s a few customers.  Maybe its a few extra dollars in income every month.  Maybe you just have a great team and a great business plan. The important thing is that you can demonstrate you’re ready to launch what lots of people think will be a properly profitable business.

As you begin to approach angel investors, you need to know one thing about them.  They are crazy.  You need to know this so they don’t drive you crazy too.

Here’s a quick overview of just how and why most angel investors are insane.

As published on FeldThoughts

One of the side benefits of blogging is the various inspiring emails I get from readers about different topics.  I got a great one yesterday that I thought addressed the question of “Why am I having so much fun with challenges in my personal life and at the same time am so bored with work.  And – more importantly – what can I do about it?”  This morning, the New York Times had a great article which compliments this titled An Entrepreneur Who Took A Chance on Herself. If you are going to take a chance on something, why not take it on yourself?  The email I received follows with minor edits to anonymize the writer.  I hope it’s as inspiring to you as it was to me.

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As published on Business Insider

Google is preparing another attempt to crack the social networking world owned by Facebook, and to a lesser extent, Twitter. Why is Google traveling down this path once again? Aren’t the failures of Dodgeball, Orkut, Jaiku, Buzz, Wave, etc. enough for Google to realize that it just doesn’t understand social networking? Maybe, but Google can’t afford to watch the web become social without it. As Google researcher Paul Adams explains in a huge deck of slides getting passed around on the web, people buying things are more inclined to trust their friends than strangers – or search ads.

Do you think Facebook or Google is more trustworthy if you’re thinking about buying the new Prince CD? What about a new toaster? Or a new golf club? Today, it’s probably Google, but soon enough you could be asking Facebook friends what to buy. It’s this threat that should (and probably does) scare the pants off Google’s executives.

Adams revealed some of these threats in his presentation –  a great read in the context of him presenting these results to Google execs who are plotting “Google Me.” A couple things to keep in mind: This presentation isn’t new. And it’s not necessarily indicative of how Google feels. The company has hundreds of researchers. Still, we think this is instructive for people wondering why Google wants to get in the social network business.

Click here to see how social networking is changing the web, and could affect Google