Craig's posterous
Filed underMoney
Exciting announcement
Groupon’s original business plan, written on a napkin
courtesy of Amanda Peyton
Most Valuable Chinese Brands
MailChimp Fund
In a world with fully functional, self-service API’s with standardized legal terms -- companies can partner and integrate with one another with virtually no friction. Caterina Fake coined the term “BizDev 2.0″ to refer to this idea.
In a similar vein, MailChimp recently announced a new $1 million dollar fund for startups building products that integrate with the service’s API.
Interestingly they are not taking equity in exchange for their investment. Just hoping to spur usage and development. This is an exciting way for them to work closely with entrepreneurs and leverage their marketing dollars to drive traction and collect valuable feedback from their most important customers. If done correctly, it aligns their interests with their customers and that is a recipe for success.
Obviously other companies have created funds - such as: GE, Intel, Motorola, Google, Hearst, among others.
But I am particularly excited to see a smaller, less established player taking the risk and am hopeful it works out.
Below are my raw notes from the Y Combinator startup school
Andy Bechtolsheim
>> number of transmitters per chip will double every two years (predicted in 1969)... Moores Law has produced 1 million times the number of transmitters per chip than we had 40yrs ago... most amazing thing is this is projected to keep going for another 20yrs (Another factor of a thousand). There has never been anything in mankind where we have had a billion fold improvement for the same price. What do you do with a trillion transmitters per chip? >> browser history:
- 1990 Tim Berners-Lee at CERN
- 1991 First browser on UNIX and DOS
- 1992 First browser than can display graphics
- 1994 Marc Andreessen releases Mosiac
- 1994 Marc Andreessen founds Netscape
- 1995 Netscape goes public (Most peoples first experience with the web was Netscape)
>> historical browsers: Active Works, MacWb, Air Mosiac, AMiga, NetCaptor, NETCOMplete, NetCruiser, NetPositive, PlanetWeb, HotJava, IBM WebExplorer, internetMCI, WWWC..........Netscape!>> how do you find things?
- 1993: W3Catalog, Airweb, Jumpstation
- 1994 Webcrawler, Infoseek, Lycos
- 1995 AltaVista, Open Text, Web Index, Magellan, Excite
- 1996 Dogpile, Inktomi, HotBot, Ask Jeeves
- 1997 Northern Light, Yandex
- 1998 Google
>> lessons from web innovation: time from innovation to adoption is short; what matters most is to sole the right problem>> which large high-tech co spends the least % of revenue on R&D?
- Apple** = $1.6B on 62.8B... 2.5% of their revenue & 6.5% of their margin
- IBM = $5.8B on $95.13B... 6.08% of rev, 13.24% of margin
- Intel = $5.7B on 35.1B... 16.2% of rev, 29.14% of margin
- Microsoft = 8.3B on 76B... 11% of rev, 13.5% of margin
>> "Building a company is one of the most efficient ways in the world to align the interests of a lot of smart people towards making a change."
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RANDOM THOUGHTS:>> Facebook should buy Microsoft & Zuckerberg should be CEO (I might blog about this idea later)>> Sometimes I forget that Yahoo invested in Google ($10M); In exchange for giving Yahoo 2.7 million shares, Google got a perpetual license to Yahoo's patent on matching online advertisements to web-search results. Yahoo was also given warrants to purchase shares that Google granted it under a partnership signed in 2000.>> What is the statistical chance that you will a) one of your cofounders will adversely effect the business b) you will have a falling out with your cofounder? b) you will never speak to your cofounder again?
A (true) story on the amazing rise of Colombia
BCP Securities recently released a report documenting the dramatic rise of the Colombian economy and its vast potential from an investment perspective. Investment stuff aside, this is a pretty remarkable story.
Less than a decade ago, Colombia was on the verge of becoming a failed state. During the 1980s and 1990s, the country was systematically destabilized by the well-funded narco-cartels and insurgency movements. Colombia's judiciary came under open attack in 1985, with the armed assault against the Supreme Court-which left almost half of the justices dead, more than 120 casualties and the country's judicial archives in flames. Newspapermen, political candidates and policemen were gunned down with impunity. Car bombs destroyed major urban centers in Bogota, Medellin and Cali. Trade and commercial routes were systematically cut. Hundreds of people were kidnapped, thousands fled the country and many more were extorted and assassinated in what degraded into a bloody civil war. Businessmen and landowners funded private militias to counter the narco-insurgency that was laying waste to the countryside. Unfortunately, many of these groups eventually became armed brigands, who took the law into their own hands and turned against the population at large. By the end of the 1990s, Colombia was on the verge of collapse. Narco-influence penetrated deep into the political and judiciary systems, the police force was in tatters, and a large swath of the country was officially in the hands of the guerrillas. It was at this time, that the administrations of Presidents Andres Pastrana and Bill Clinton decided to put together a military program, known as Plan Colombia. Under the arrangement, the U.S. government provided $7.5 billion for the acquisition of new helicopters, riverine craft and communications equipment to allow the Colombian military to penetrate deep into the jungle and confront the insurgency. Likewise, the U.S. also provided tactical training to effectively deploy the new equipment in the most effective way. Plan Colombia was a huge success, and it eventually allowed the government to take the initiative against the guerrillas. Fortunately, the transition period has ended, and Colombia is reinvigorated and brimming with life. A tidal wave of capital is pouring in to take advantage of the country's vast natural resources, enormous talent pool and strategic geography. To mark the new beginnings, the country elected a new president, Juan Manuel Santos, who promises to exploit Colombia's full potential and transform it into one of the fastest growing economies of Latin America.The Colombian economy is roaring, with GDP expected to crest over 5% y/y in 2010. Industrial production surged 8.5% y/y in June, up from 7.5% y/y the month before. Construction is on a tear. The Colombian Construction Chamber of Commerce (Camacol) reported that building permits were up 14% year-to-date. A glimpse out of any high window in Bogota will reveal a veritable forest of cranes and building sites. In addition to home construction, major infrastructure projects are transforming the landscape. A new metro rail system in Bogota, the revitalization of the airport and a series of major highways will improve the economy's level of efficiency and productivity. Billions of dollars are also pouring into major investment projects in energy, mining and agriculture. Ecopetrol is modernizing its refinery at Barrancabermeja. Foreign firms are digging new mines, and farmers from Brazil and Argentina are rushing to take advantage of the fertile llanos that lie just a few hours from Bogota. President Santos promised to raise the country's growth rate to 6% y/y by the end of his term, and it looks like the country is right on track.
Provocation: The Most Underrated Tech Company is...
I recently read this response on Quora from Amazon's CTO (Werner Vogels) on why they got into the web services business.Virtually every entrepreneur I speak with hosts their web and mobile applications with either:
- Amazon Web Services (S3, EC2, etc); or
- RackspaceI don't think the investment market has fully realized the value in this business. As more and more companies "grow-up" in the cloud; as more and more CTOs become comfortable with the cloud; as more and more large companies trust the cloud, this market is set to explode over the next decade.UBS analysts Brian Pitz and Brian Fitzgerald released a report which projects Amazon's Web Services business to do about $500 million in revenue in 2010, $750 million by 2011 and close to $2.54 billion by 2014.My gut says they are underestimating - by a lot.The time, energy and resources Amazon has invested in this space far outpaces any of their competitors (including Google, IBM, Apple and MSFT). Commerce will continue to be a big business for Amazon - but this will be much bigger.Also, one of the big dogs listed above will scoop up Rackspace to try and compete with Amazon. Two other things to note:
1) Amazon's recent upgrade to their flexible payments is a big step up and creates real competition to PayPal. This is also a very big market and they have the leadership, capital and engineering talent to compete.
2) Today's announcement about partnering with American Express - so that you can use your rewards points to make purchases on Amazon is awesome. Less friction means more purchases. Amazon = BUY.
- Amazon Web Services (S3, EC2, etc); or
- RackspaceI don't think the investment market has fully realized the value in this business. As more and more companies "grow-up" in the cloud; as more and more CTOs become comfortable with the cloud; as more and more large companies trust the cloud, this market is set to explode over the next decade.UBS analysts Brian Pitz and Brian Fitzgerald released a report which projects Amazon's Web Services business to do about $500 million in revenue in 2010, $750 million by 2011 and close to $2.54 billion by 2014.My gut says they are underestimating - by a lot.The time, energy and resources Amazon has invested in this space far outpaces any of their competitors (including Google, IBM, Apple and MSFT). Commerce will continue to be a big business for Amazon - but this will be much bigger.Also, one of the big dogs listed above will scoop up Rackspace to try and compete with Amazon. Two other things to note:
1) Amazon's recent upgrade to their flexible payments is a big step up and creates real competition to PayPal. This is also a very big market and they have the leadership, capital and engineering talent to compete.
2) Today's announcement about partnering with American Express - so that you can use your rewards points to make purchases on Amazon is awesome. Less friction means more purchases. Amazon = BUY.
Omidyar's Flexible Approach
Matt Bannick (Managing partner at Omidyar Network) recently wrote a blog post for the Harvard Business Review outlining ON's flexible investment approach. They define their bottom line as driving "societal value" and utilize grants and for-profit investments to support their mission.
Since 2004, ON has invested +$350M in over 150 companies. 57% of those dollars have funded grants and 43% for-profit investments. Omidyar has pioneered this space -- utilizing philanthropic capital to drive large scale, catalytic impact. Some of the organizations they've supported include: Digg, Wikipedia, MeetUp, DonorsChoose, Creative Commons, Code for America, among others.But as Matt illuminates in his post, Omidyar Network is an anomaly. Less than 1% of the capital U.S. foundations disbursed in 2007 (the last year of complete data) supported for-profit ventures. Moreover, only 4% of that 1% was invested in equity — precisely the kind of risk capital than can nurture businesses. With hundreds of billions of dollars flowing into philanthropy over the next few decades, a big question (and opportunity) will be: How can we best deploy these funds?More to come on this topic...
Since 2004, ON has invested +$350M in over 150 companies. 57% of those dollars have funded grants and 43% for-profit investments. Omidyar has pioneered this space -- utilizing philanthropic capital to drive large scale, catalytic impact. Some of the organizations they've supported include: Digg, Wikipedia, MeetUp, DonorsChoose, Creative Commons, Code for America, among others.But as Matt illuminates in his post, Omidyar Network is an anomaly. Less than 1% of the capital U.S. foundations disbursed in 2007 (the last year of complete data) supported for-profit ventures. Moreover, only 4% of that 1% was invested in equity — precisely the kind of risk capital than can nurture businesses. With hundreds of billions of dollars flowing into philanthropy over the next few decades, a big question (and opportunity) will be: How can we best deploy these funds?More to come on this topic...
Investment strategy
Theory: Forget the market (up or down)... cost averaging great companies over a sustained period of time will produce great results.Action: Buy 100 shares of Amazon ($AMZN) and Netflix ($NFLX) on the first of each month for the next 10 years. (starting September 1st 2010 -- September 1st 2020) Jeff Bezos and Reed Hastings are great entrepreneurs. They are on the right side of the macro shift towards digital consumption and commerce; well capitalized, and haven't enjoyed the spotlight Steve Jobs or Eric Schmidt have. I am long digital. I am long great products. I am long great leaders.
Below is a chart looking at the past 10yrs.
Below is a chart looking at the past 10yrs.
p.s. check out Jeff's recent commencement speech at Princeton and Reed's presentation on a Freedom & Responsibility Culture.
