April 28, 2007
Human development, part 15
Pascale did two big things this week.
- Today she turned over. She was laying on her back, we left her alone for a sec, and we came back to see her on her stomach (with a little pool of spitup in front of her too!)
- She slept from about 830pm to about 8am. Granted, there was some awake time as we took her to the wine bar in the neighborhood, but not much complaining. Crucially, she passed that nearly 12 hours without feeding! Then she had lots of milk sessions in the morning to catch up. But this is the key -- sleeping long means going without milk for long.
Update: she turned over a couple more times. She's doing it! (April 30)
April 27, 2007
I'm trying out an alternative to Flickr for posting pictures here. If it's cool, maybe I'll stick it on the right side of this page.
He's coming to town June 30.
April 25, 2007
The Gallery project
The Gallery project, to make an open source web app for storing and sharing your pictures, really sucks. It is a pain to install -- a multi-hour process because of all the stupid dependencies like Mysql and image libraries that are themselves hassles. And it is not able to keep up with the features of Flickr and the online web services. And what about video?
All in all, Gallery is increasingly frustrating and out of date. Please, someone, create a MovableType of pictures to match the many Bloggers of pictures that are floating around.
Human development, part 14
Junior has hit a few milestones in the last couple of weeks.
- She went to Iceland for 7 days with Urs and her parents. International and Scandinavian travel, done
- She calms as soon as we start putting the swaddling blanket on her. She knows to expect it. Before she just cried straight through
- Her bowel movements are now only once daily. It used to be like a leaky faucet!
- She can turn onto her side
- Her head is very stable, and she can almost sit up (if you support her lower back). Not as much tottering in the wind like a stack of dishes
April 19, 2007
Music sites, like Lala.com
I liked Lala.com when it launched and I traded something like 40 CDs using it. But I lost interest -- way too much work! Not at all like Netflix. Netflix, you just get CDs and you pack 'em up and mail 'em. Lala, you get CDs -- OK. But then you have to log onto the site, find the CDs people want you to mail, write their address on the envelope, mail, order more envelopes when you run out. It's kind of closer to Ebay than it is to Netflix. Which sucks!
So I was not surprised to see the downward curve on this chart.
To be fair it is likely in part seasonal -- late Winter ain't hopping.
But compare this chart to some services I actually like -- Last.fm, Pandora, iTunes. Those are up up and away.
Effective tax rates
Poor "working" people assume that the rich care about income tax rates. 33%! Can you believe it used to be 70%! And so on. But rich people don't pay income tax. They pay capital gains only. Like this guy - one of the richest - whose effective rate was 18% for 2005 on his 1.5B earnings.
Jay Rosser, Pickens’ veteran public-relations aide, returned from an adjacent office with the 2005 personal-income figure his boss had requested. “You made $1.504 billion last year,” he reported. “That’s adjusted gross income?” Pickens asked.
Rosser nodded and went on to add, “You paid the I.R.S. $279 million in taxes.”
April 17, 2007
Every year, this time of year, I feel such warm feelings for my accountant and even warmer feelings for our tax laws. I am seriously amazed at what a thoughtful and expert tax strategy can achieve. Seriously!
Man, I have spent a lot of the last 6 months talking about/contra convergence.
This is one link that just ends the conversation: what's in your bag? at Flickr
April 15, 2007
Criteria for opportunities
My friend Fabrice has this obsessively structured approach to life (read his blog, you'll see what I mean), and I was reminded of this as I ran across this post and an interview with him on Venture Voice. Pretty random really -- the interview is pretty old (18 months old) and it just turned up on popurls.com due to Odeo (here is the link). What a long chain of cultural re-packaging.
He has these "9 rules" for picking an opportunity (in my order):
1 - a big potential market
2 - with a rapidly growing actual market
Attractive execution model
3 - with a clear business model at the outset (not speculative)
4 - high scalability of growth model (no friction)
5 - potential to "win" or lead the market (not intrinsically fragmented)
6 - low supplier/distributor pressure (i.e., risk of disintermediation or supplier leverage)
7 - I know how to do it or can learn how
8 - needs less than 15mm in funding
9 - will be fun (the key driver through adversity)
How his first major venture went:
A European Auction site.
350K cash invested to start Aucland and Terremate
sold 50-60% share for 120mm capital
Locked up value of 400mm+
QXL/Ricardo all stock - couple of hundred mm.
Terremate - 170mm
Stocks all crashed 90%+
Left with 700K cash by October 2000.
1 - Gave 50% to cofounder giving him too much shared control. Better to act fast
2 - Overbuilt scalability b/c Ebay was crashing a lot. Took us 9 months to build. With Zingy we were fine crashing a lot
3 - All competitors were free but VCs forced us to make business model from the start. Slowed growth
4 - Wrong investor -- high net worth guy -- Arnault. Didn't like him, very arrogant but offered 2x money at 2x valuation. Long story - reminds me of my O'Brien story. He refused to sell when Ebay came to offer. Very interesting - listen to minute 22 and following on this - the interview. Didn't have a right to force the sale.
Started looking for "the next idea".
Second big venture:
Zingy, starting in 2001. Essentially a copy of Jambo and Kiwi from Europe -- b2c telecom service company.
Tried to raise venture and couldn't. Looked for friends and got several increments of 100K. Ended up reaching 1.4mm from friends and family in increments, supporting a run rate of 100K per month. Couldn't raise anything else from them as they were not seeing any traction. Started investing his own money -- all the 700K + 100K of credit card debt. And then just ran out of money and missed payroll for months in early 2002!
Fixed the errors. Started in June 2001 and was live by September 2001. Free. Had 1mm users a year later. When they started charging, they had a big base and 50K staid on.
With volume growing, were getting meetings at lots of carriers. But no deals. Got the first deal -- with MSN and lots of PR. The terms of the deal -- paid them a minimum commitment.
Motorola called, as they were running the ringtones site for Nextel. Had a strong result with them in first month trial.
Sprint calls -- they want help licensing all the hip hop sites. Get a deal.
Earning 100K revenues but spending 200K per month. End of summer 2002 -- cut the staff down. Several of the senior guys leave. August 15, Sprint's first check arrives and its 500K. Saves the company; they are instantly positive. They know the business works and now they are growing.
August 23 they launch on AT&T. They see the daily revenues (real time billing system).
October 1 - MTV and Virgin Mobile launch. 10K per day. 20K per day.
October 15 - Nextel. October 19 - AOL. Launch 14 US, 4 Canadian, 4 Latin American carrier launches over the next year up to 4mm per month in revenues.
VCs start calling. Company is generating 3-4mm per month. Acquisition offers come in for 8-9mm valuation. Fabrice has 53% of the company. Offers are rising -- 10mm, 20mm.
They decide to simply focus on growth with their profits -- add polyphonic tones, color wallpapers, ringback tones, bigger offices.
By April 2004, a Japanese company approaches them. They offer 40mm cash. Serious offer.
Hires a bank -- you should do this! Have them be the bad guys on the deal. They get a higher valuation -- 80mm in cash to the original bidder, of which half up front the rest in earn out. 20x the expected earnings for 2004.
Decided to sell. Was worried about supplier and distributor leverage. Wanted to take money off the table.
Stayed on as CEO with them and blew out the earn out targets. Acquired Vindigo, added games, prepared for S-1, etc.
In retrospect, maybe the risks at the time were not real.
Lessons learned on how to build a multi-billion dollar company
- invest more in consumer marketing
- invest more in exclusive licenses
- more in product development
- LESS in profitability
- the public company owner was not aligned on that target
Looks like lots of my friends are getting into the babies wave now. It's actually overlapping with the tail end of the weddings wave.
April 7, 2007
Child-rearing as a nativist
I spent a lot of time in graduate school being a "nativist" in a theoretical way and now that I actually have a baby my Ph.D. is finally practical.
Now I'm a nativist in ways that actually matter. Well, the big way is that I have the view that babies "develop" much more than they "learn" in their process of getting going. Stimulus helps it happen, the way the Spring weather and day lengths help flowers bloom. But language and motor function and proper digestion are things that babies just sort of unfold from their back pockets and do.
That's my slightly too-theoretical view, of course. I haven't read any of the infinite "how to make your child successful" books, and I suspect that the *whole point* of such nonsense is to play up the natural inclincation (or fear?) that a child's development depends on you, the parent. If you go into it believing that -- and who wouldn't, given all the "play Mozart" and "teach them Swahili" crap you hear every day on the Oddly Enough pages of the newspaper -- then you will be laden down with worry that you are under-performing and constantly racing to keep your kid on track/ahead.
So, dear reader, my bottom line assertion is: all that is wrong. The kid will be fine as long as you present "normal" stimulus (like you feed it, are around a bit, whatever).
I have a second view that's perhaps more controversial. It's that raising children is a lot like being "fit". Many people live with the myth that dieting or a new workout regime or whatever will turn them from slightly or very fat to trim and terrific. In general, people are wrong. I have seen this endlessly -- people start working out, time passes, they are pretty much the same as before. Sorry to be cynical but most people do not undertake transformational programs of change and actually change. (Excluded from this are the transformational life changes of "your early 20s" or "getting married" or whatever. Big structural changes do have impact. But my point is few people wake up on January 1 and go on to lose 30 lbs and run marathons.)
Given this "diets are futile" view of the world that I have, consider it's implication for your child-rearing. Insofar as the child's development is not simply innate (i.e., the baby learns English rather than French because of stimulus you provide), the pattern and quality of that development depends on you. Big studies have shown that children of rich or smart people turn out to be rich and smart. Why can't a try-hard illiterate and indigent person produce an Ivy Leaguer offspring? Probably because they don't use many SAT words in every day life, construct weak logical argument, have little interest in esoteric pursuits, and so on. Nevermind the kiddo's intrinsic capabilities, how well will they be filled with relevant content and experience during youth?
In my case, for example, we got the New York Times every day but we didn't get the New Yorker or debate fundamental physics at the dinner table. I kind of missed out.
Back to the point though -- since diets are futile, there is little plausibility in radically transforming your Archie Bunker existence into a Murray Gell-Man type of household. My parents were good to get the NYT but it would have been tough for them to deliver chess grandmasters or global political leaders to the kitchen table. That diet would be futile -- a child's life is long and filled with innumerable experiences. The one off discussion of Philip Roth after an NPR story isn't the kind of thing I'm talking about.
The short of it then is: kids develop mostly innately, so don't feel so bad. And even the parts that draw from exposure to you are 95% those parts of yourself you can't reasonably change.
That will be my strategy with Pascale. Let's see how she turns out (though you can't blame me...)
P.S. More pictures of weeks 10 and 11
Human development, part 13
Statistical progress is earlier than threshhold progress, and this week we had a meaningful result. 5 nights of 7, she slept for a 5-6 hour stretch. She went to sleep around 10-11pm (which is earlier than her normal midnight), and then slept until about 4-5am. She essentially skipped the 2:30am wake up call. Interesting (and merciful)! I feel more rested already.
Coming soon is the Iceland trip, which will be an intriguing experience. I wonder how that will scramble her patterns.
In addition, her "looking around" has really developed. Just a few weeks ago, it seems, her head was nearly stationary and barely looking at anything presented to her. Then she started to follow primary objects of focus -- like us as we moved around. Today, she sits on my knee and looks around the room at various things of interest. She likes the dot picture on the wall so looks there, or maybe she looks at Ursula, or somewhere else. Today she was looking at the writing on my sweatshirt.