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Author Archives: thoughtbasket
Jolly Spot
Posted in Uncategorized
Lean Startups Aren’t So Lean
There was recently an article in PE Hub (that’s Private Equity Hub, for those of you who don’t subscribe) about the breakneck growth of internet darlings like Groupon, Zynga and LinkedIn, and about the massive hiring and marketing spending required to support that growth. Written by the ever insightful Connie Loizos (disclosure: I know Connie and her husband both socially and professionally), the article pointed out that these companies are forced to raise huge private equity rounds (as in hundreds of millions of dollars) to pay for the marketing that drives growth and the hiring that supports it.
As Connie points out, this is a great flaw in the “lean startup” model. Sure, you can build a company with $3 million now instead of $30 million. Open source software and cloud hardware resources allow you to bring a product to market without raising gobs of venture money. But those same trends allow anyone else to bring a competing product to market just as cheaply. So then the race is on to see who can grow the fastest. And that race demands capital, lots of it.
So startups can be lean, but growth companies are fat. All this trend has done is move the locus of capital raising competition a little later in the lifecycle of companies.
Posted in Business, Technology
Tagged Business, lean startup, Technology, venture capital
Folder People vs. Non-Folder People
In reading reviews of the new Apple OS X (Lion), I was struck by how many reviewers mentioned the All My Files, Mission Control and Launchpad features, all of which display files and applications in a way so that users don’t have to organize their work in folders. I was reminded of when Gmail first came out, and everyone talked about how it didn’t have folders, because you could just search for whatever email you wanted to see.
This was alien to me. I have always organized my work in folders, both in my computer and in real life. When I worked in finance, each new deal got its own accordion file into which went a series of manila folders: due diligence, projections, legal issues, etc. So organizing my computer files and email into folders and sub-folders seemed completely natural to me. How else could you display your work on a computer?
And there I went, blithely assuming that everyone was comfortable with the folder metaphor. Sometimes I would look at someone’s computer where the desktop was a mass of unorganized icons, but I assumed that was an aberration; I must have just caught them in the middle of a crazy project.
It wasn’t until I read about computer scientist David Gelernter that I realized there might be other ways to look at your information. He developed something called Lifestreams in order “to minimize the time users spend managing their documents.” Lifestreams dumped the file and folder metaphor in favor of “a time-ordered stream of documents.” That seemed crazy to me – I would much rather look for documents “from Project Neptune” than “from sometime in 2003, which I think is when I worked on Neptune” – but it was clear that other people, even computer science people, didn’t think that way.
It appears that lots of people don’t think the way I do. Maybe most people. But whether the count is lots or most, clearly many would prefer to avoid the folder metaphor. To quote from one review of Lion, “The addition and prominence of “All My Files” is yet another vote of no-confidence in the user’s ability to understand and navigate the file system.”
So let’s add another dichotomy into which we can divide people: folder people vs. non-folder people. While improvements in search technology may eventually make this distinction obsolete, right now it seems like the non-folderites have the upper hand, with user interface designers catering to them. That’s fine, as long as folder capability still exists. But if that capability disappears, folder thinkers will have no choice but to rise up and let the Lifestreamers tremble. We have nothing to lose but our files!
Posted in Business, Pop culture, Technology, Trends
Tagged apple, Business, david gelernter, folders, mac os, organization, Technology, thinking, Trends
More Tech Bubble Datapoints
Here are two more items showing that Silicon Valley is in the midst of another startup bubble:
- TaskRabbit, which has A) a dumb name; B) a terrible premise; C) the ridiculous idea that it won’t need to staff up in order to grow (because it has a terribly inexperienced CEO); and D) NO REAL BUSINESS MODEL.
- A WSJ article about how PR firms are now turning down clients and taking equity in lieu of cash compensation. Since the main value of PR firms is hiring cute young women who flirt with male reporters to ensure that their clients get press coverage, any time PR firms start feeling as powerful as VC funds (like they did in 1999), you know that you’re in a bubble.
- San Francisco apartment rents are skyrocketing, to the point that local real estate people are calling it a bubble.
Posted in Business, Technology, Trends
Tagged bubble, Business, silicon valley, tech bubble, Technology, Trends, venture capital
More on Tipping Point Flaws
A new study out of RPI shows that when 10% of a population shares a belief, that belief will inevitably be taken up by a majority of society. And when less than 10% has a belief, it will never be taken up. This conclusion was reached by running many scenarios through various computer models of societies. Most interesting, and most daggerly through Malcolm Gladwell’s theoretical heart, is that no matter what sort of connection scheme the researchers put in their models — equal connections, some highly connected “influencers,” promiscuous connections — the results turned out the same. Yet again, Gladwell’s concept of important trend setters falls under the weight of experimental data.
Posted in Business, Pop culture, Technology, Trends
Tagged beliefs, Business, influencers, malcolm gladwell, marketing, Pop culture, Technology, Trends
Wisps of Spanish Memory
I recently returned from a week’s vacation in Spain, and here are some thoughts:
1. iPhone mania is international. I would estimate that iPhones (mostly 4′s) represented 60-70% of the phones I saw in use in Madrid and Valencia.
2. Spain is really pretty. See below.
3. It turned out to be Gay Pride weekend in Madrid. This looked exactly like Gay Pride weekend in San Francisco, but with a Spanish soundtrack.
4. Picasso’s Guernica is amazing. The photo below doesn’t do it justice.
5. Spanish hotel chains have a weak grasp on grammar, as indicated below:
6. They eat a lot of ham in Spain. Jamon. Serrano, Iberico, and many other types. It’s all delicious. I want some right now.
7. High speed trains. 200 mph from Madrid to Valencia. Awesome.
We All Get Government Help
OK, maybe not all of us. But a lot of us. Really a lot. Cornell political scientist Suzanne Mettler has an article in the Washington Monthly about what she calls the “submerged state,” or the massive amounts of money at play in various tax deductions (eg. the mortgage interest deduction) that benefit particular populations.
As the chart below shows, there are all kinds of tax deductions that many people take, but those same people continue to insist that they don’t get any help from the government. Mettler’s point, backed up by her survey data: despite their cost, these programs are invisible to the public, making the public more susceptible to claims that government is too big.
How Businesses Really Think
James Fallows posts a comment from a businessman on what really creates jobs:
“IT’S DEMAND, STUPID!…A few more customers and I’ll hire another worker. Look, guys, that’s what we do out here! Don’t worry about cutting my taxes, don’t concern yourself with over-regulating me, don’t fuss about the “death tax” depriving my progeny of the joy of running my business. That is all trivia! This is all about Demand Side Economics.”
Exactly. Businesses don’t base their hiring decisions on taxes or uncertainty. They invest (in people or machines) to meet demand.
Also in the economic vein, here is Joe Stiglitz on the failure of pure free market economics.







