Archive for May, 2011

How to start a business. How not to start a business.
May 17, 2011

DO have a grand vision about what you want your business to look like.
DON’T plan on having every piece of that vision unfold together neatly.

DO pick the most basic MONEY MAKING aspect of your business to focus on early.
DON’T pick the thing that looks the most fun or interesting if it doesn’t create any revenue.

DO charge a price that is fair for the product or service you offer.
DON’T charge a price too low because you are scared no one will pay what you think you are worth.

DO find a customer willing to commit to giving you business before you spend a penny on product development.
DON’T max out credit cards or spend your life savings on an “idea” that you think other people might like.

DO pursue world changing concepts in huge sectors.
DON’T ever think you are the “next” Google, Facebook, AMazon, Zappos, Yelp, Yahoo, VMWare, etc. None of those companies were the “next” anything – they were unique, building on what came before to a factor of ten.

DO steal good ideas and work hard to make them great businesses.
DON’T act like you thought of this on your own. As Jimmy Page said, “all the good riffs have already been played.” If you are copying Groupon, be proud to say, “They had a great idea but we saw ways to do it differently/better.”

DO work harder then everyone else involved in your venture, harder then your partners, competitors and CUSTOMERS.
DON’T leach on to other people as partners, co-founders and employees looking for a free ride.

DO celebrate your first sale. Starting a business that grosses any money is hard and should be acknowledged.
DON’T be frivolous with the money you make. Every dollar is worth the same amount of money, whether it’s the first or the billionth.

DO pick fights with competitors.
DON’T trash them or their products without being able to clearly explain why your offering is superior.

DO. (Actually, that’s really the only thing you need to know.)

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Affirmation
May 13, 2011

Sometimes people need approval. Or affirmation. Or input Or whatever it is you call it when you say, “we need a decision here and pretty much any decision will be sufficient.”

*****

Yesterday, one of the sites I write for had a discussion break out regarding how long certain date-sensitive information should remain on the site. A person had emailed the staff (It’s a small company and we have a lot of company-wide discussions) and said, “Is there any way to erase my comments about project X after a certain time?”

The person that makes these types of decisions and implements the code fired right back, “How long should we leave it?”

I was in the toothpaste aisle at Wal Mart but replied, “30 days.” Ten seconds later, the admin replied: “We’re good to go – thirty days.”

The answer was actually fairly arbitrary. 10 days would have been fine. 60 days would have been fine. Pretty much any answer would have satisfied what we needed…but we did need an answer.

****

Sometimes it isn’t important what the answer is (“Where should we go for lunch? What time should we have this meeting?) All that is important is that there IS an answer….then you can move forward.

Is Microsoft Buying Skype a good deal?
May 10, 2011

Absolutely. Positively. Yes. It would have been a good deal at twice the price. Well, maybe not twice the price but it would be hard to overstate how good of a move this is for Microsoft.

If you read TechCrunch or other similar blogs, you’ve no doubt read plenty of negative comments about MS overpaying. The argument is that Skype took money recently at a ~2 Billion dollar valuation, so how could it be that the company is now worth 4x as much? Some of these posts incorrectly point out that MS had no competition to buy Skype, so it overpaid by virtue of that fact alone. This is all poppycock. MS STOLE Skype for 8.5 Billion. Here is why…

Reason 1: They had to do SOMETHING. Microsoft’s growth has waned in recent years. True, they still make tons of money. But anyone with a brain and a keyboard knows that their fortress is becoming more and more vulnerable by the day. As I type this, Google is launching their Chrome OS and if their seige on mobile (via Android) is any indication, Windows is not safe in the long haul. I doubt MS Office will be obsolete any time soon, but with the speed of technology (and the willingness of young consumers to try new technologies) it is foolish to think that MS is in a safe position in ANY sector right now.

Reason 2: They get a bigger value from Facebook. One of the most asked-for features in Facebook is video chat. Seems like a no brainer. Many people think that FB building something like Skype would be easy. ANd it probably would be easy. But getting it to “play nice” with 600 million near-synchronized users is a MASSIVE undertaking. Would it cost less then 8 Billion to build? Probably. Would it happen overnight (like a Skype integration)? Not even close. And since MS is a big investor in Facebook, leveraging their new video-conf toy in to FB only makes that investment go up and makes their partnership even more entrenched. Hitching your wagon (or part of it) to the hottest tech company on earth is typically a good idea.

Reason 3: Phone calls. 10 years ago, almost all phone calls were made via “land line”. 5 years ago, VOIP had gained major traction. Now, there are countless applications that allow people to use their cell phones to make calls via 3G and 4G connection – using data instead of “carrier minutes.” It’s only a matter of time until ALL phone calls are done this way. And now MS controls the largest, most proven pipe for those calls.

Reason 4: Facetime. Windows Phone 7 is about to get a built in experience like the iPHone’s Facetime. And the experience is likely to be REALLY good (unlike Qik on Android). One of the main selling points of the iPhone 4 was Facetime, and while new technologies will bring new bells and whistles to the next generation of phones, MS has to feel pretty good about having the pieces in place to deliver on a video-call experience on mobile phones.

Reason 5: Cisco. Most people don’t realize (1) how big the teleconference sector is and (2) how much MS has invested in this sector. While their current technologies are nice, the addition of Skype allows them to play even better in conference rooms around the world.

Reason 6: Integration. Google and FB have been angling to be the “one stop shop” for the web for consumers. The SKype addition signals the same move in the enterprise for MS, in my opinion. In fact, I continue to believe they should buy RIM to take advantage of RIM’s solid enterprise footprint and patent portfolio. While Google and the iPad are trying to pull in some enterprise business for themselves, MS just took a major leap forward in integrating a person’s “work” identity with their entire work day. From phone to email to office documents to a conference call to a webinar, a person can have a single sign in across all MS products and truly power their entire business-day without ever leaving the MS platform. THAT is powerful.

Reason 7. The Guys at Techcrunch hate the deal. That, above all the reasons above, is enough for me.

But what about the objections being stated? Well…

1. MS could have built their own version for less then 8.5 billion. Maybe, but they also got 600 million users with it, or basically $12 per user. Consider: Facebook is valued at 70 billion $$ for 600 million users. People are focusing on Skype’s monetization strategy and the price without focusing on the users. In other words, I’d be willing to bet that if I called up my buddy Mark at FB and said, “I’ll give you 600 million users for 8 billion bucks..” he’d be interested. And if I called up my pal Larry at Google, a company that has been trying (and failing) to get in to social with the same offer, he’d practically come through the phone with a satchel of cash. (WHich of course begs the question of why Google didn’t bid seriously for Skype).

2. There were no other serious bidders! Of course there was. His initials are I.P.O. Skype was going to go public, and once that happens the takeover price would have been even higher. MS had to make a bid that got the board to halt the IPO plans and take them seriously. Mission accomplished.

Kudos to MS for having the cajones to go after something that could pay HUGE dividends for them in the future. If they are able to spin Skype in to a “hit” for ANY of the reasons above, this acquisition will pay for itself. And if they hit on all of them, well, they have a real chance to reemerge from their Steve Balmer-led slumber.