Introducing Earl

This is my new roommate Earl the bearded dragon.

The Nigerian Mergers and Acquisitions Scam

Let me tell y'all about the Nigerian M&A scam. Here's how it goes, a small company (Smallco) gets an offer to be acquired by a large company (Bigco) and all the founders are thrilled because they're about to become multi-millionaires. Bigco feeds on Smallco's greed to rub out Smallco. Here's how the burn works;

• Smallco spends hundreds of thousands in legal fees during due diligence
• Bigco ties Smallco down in a 'no-shop' agreement that means Smallco can't go get re-financed
• Bigco stresses everybody out at Smallco and Smallco's business suffers because everybody is working hard on retiring
• Smallco employees and founders are shopping for yachts, watching Bigco stock prices and ignoring their business
• Bigco examines all of Smallco's customers, technology, share structure and decides that there's patent/intellectual property/scalability etc. issues and drops the offer by half at the last minute
• Bigco now decides that the offer is all stock and the shares are restricted and are in escrow (i.e. very hard to sell for a long long time)
• Smallco is out of money and accepts the offer
• Smallco founders get stuck with shares in Bigco that they can't sell for years and watch the stock drop to pennies
• Smallco founders likely owe significant taxes based on the capital gain at the time the acquisition took place and not at the time the founders can sell their paper

All in all, the Smallco founders are fucked and lost a crazy amount of real money (vs make believe stock money) and are probably broke and demoralized. Variations of this story happened a thousand times over in the dot com days and will keep happening in more subtle variations over time. This is just like a corporate version of the Nigerian scam.

Things to learn from this scam:

• Find a lawyer/firm who'll spot these problems and let you know about them on day 1 of your deal
• Don't confuse shares for cash
• Escrow sucks, get at least 2 X cash value of the Company in cash and enough cash to cover taxes & legal fees
• Restricted stock sucks
• Cap gains taxes suck, get good tax advice
• Get a deposit from Bigco
• Find 2 Bigcos and let them bid against each other

As for me, I've been burned by escrow, legal fees and no-shops. Luckily I never sold my company for Bigco stock, it would mostly be good for toilet paper today. As my NDA's have expired, I can tell you that my Bigco's were Intervu, Akamai, Yahoo and Microsoft. Intervu sucked us dry and luckily I told them to keep their paper which is why my I no longer have any business partners. We never got very far with the others so I can't say if they would have tried all of the dirty tricks but from what I've heard Cisco made the playbook.

My New Friend Earl

My GF and I adopted a bearded dragon this weekend named Earl. Pics to come. Who knew that a lizard could have a personality?

This is pretty cool

My Startup Rules

Here my first crack at a list of startup tips:

1. Love what you're doing passionately enough to not sweat the short term pain of things going wrong and not having much cash.
2. Learn how to explain what you're offering to non-industry people in under 10 plain English words and make that your whole company's mantra.
3. Love your customer and provide something of incredible value to them. If you would be a passionate buyer of your product/service then you're probably on the right track.
4. Hand pick a team that really believes in what they're doing and confront them with kid gloves regularly if they seem distracted or disinterested. Discard bad apples QUICKLY!
5. Build a cult around what you're doing. If you, your team and your customers believe strongly in what your doing then nothing can stop you (See point #1).
6. Read as many books as you can about your field and people that have succeeded, learn from others successes and mistakes.
7. Buy cheap stuff and have an ugly office if you never have customers come over. You can buy tables for $100, chairs for $250 and computers for $1000. Get furniture at office refurb/recyclers cheap if you need a pretty office. Get as much software as you can for free/cheap from Microsoft/Oracle/Whoever dev programs.
8. Get to cash flow positive as quickly as you possibly can unless you are ready to hand over some of your company to investors.
9. Don't give everybody a phone extension until they are talking to paying customers regularly.
10. Forget about hype and tons of tiny customers and find yourself a really nice big reference account that loves what you're doing and will fund your new projects. This is of course assuming you're not starting a dollar store or micro commerce business.
11. You don't need a full time accountant but you'd better have tight control over your pennies because they'll evaporate quickly.
12. Try to do the rounds and talk to everybody in your office at least twice a week to see how they're doing.
13. Pair people up in teams that depend on each other so people don't slack off on their own moods as much.
14. Experiment with variations of what you're doing if it isn't working well.
15. Don't work crazy hours + weekends non-stop all the time unless you want to miss out on life and be a bitter rich asshole, there's a time to walk and a time to sprint. Choose them wisely. Same goes for your team, don't burn them out unless its worth it for everyone. At the same time, don't let opportunities pass you by because you don't want to work nights and weekends.
16. Ignore trends, listen to your customers pain (needs) instead.

Startup rules

Two really smart guys have posted their tips for starting up a new business. Read what Jason Calacanis and Mark Cuban have to say on this subject. Personally, I been part of about 5 or 6 startups including 2 that went public so I've got my own opinions. On the whole I agree with about half of either of those guys observations.

Jason is a guy who starts blogging companies for a living so buying Macs and a $5000 espresso machine might work for him but I think its just plain dumb for most business models. Mark starts and invests in varied technology businesses that he scales out rapidly in a hurry (or at least hopes to) so he's got a different spin that's a little closer to mine.

Myself, I tend (recently) to start 'old fashioned' profitable, private software start ups and I don't tend to sell them in any hurry.

I haven't thought of my rules yet but I will post them soon when I compile them. A lot will overlap with what Jason & Mark say.

Across the universe

I never had an astronomy class when I went through school but I can imagine that it would be pretty dry. It takes a leap of faith to visualize a night sky in three dimensions, especially when the scale of what's out there is so incredibly enormous. In fact I don't even know if the human mind is capable of imagining how huge the universe really is.

All that to say that this Microsoft World Wide Telescope project is pretty staggering. Essentially they've composited pictures from the best telescopes that mankind has and put them together in some software that lets you navigate the universe in 3d. I guess over time as the imaging gets richer, so will the visualizations.

It's hard to look up at a nighttime sky and see a swirling mass of millions of stars when all you see is a little white dot. This software lets you zoom into the swirling masses and read up on what's there. Check it out;

Another Zune

It's no secret that I really like my Zune 30 better than my iPod touch and so did my GF and we were timesharing the thing to the point that it became really irritating and finally broke down and bought her a new red 8GB Zune of her own.

She would have killed me if I bought an iPod and I understand why because she's used to the Zune and gave away the free iPod that she won because frankly it sucked for what she used it for. Most Apple people are equally or probably even more religious about their products and I guess it's easy to see why when you look at how nice the industrial design and form factors are and how easy they are to operate. Unfortunately, it seems they're also a little out of date with certain features for active users and the iTunes UI is really out of date.

That brings us to the new Zune and what's cool about it:
- Same zippity/fadey/glowy UI as the Zune 30 - super easy to use and great for sports/etc
- Squirt songs, albums & playlists wirelessly between devices but with a 3 play limit
- Wireless sync (GREAT!!)
- Flick through big lists with a feather touch flick vs. multiple clicks or click&hold

What's bad
- Software is maybe a bit too simple
- Firmware didn't update right away, I had to switch to a second USB port after a few cryptic errors
- Harder to get add ons

So in short, if you're an of the Church of the Fruit then don't bother because you've already got a great way of working but if you're starting from scratch it seems to me like a much more functional and modern alternative but not quite as pretty as the fruit. Then again looks are deceiving.

Where the hell am I?

I'm not sure if anybody even noticed but I've been out of sight for a while. You see, I've been busy - real busy. For the last couple of weeks I've been on the west coast in Victoria and then in Silicon Valley. Victoria was a straight up business trip, customer signoff and training. California on the other hand was some pretty exciting stuff. We've been working on a project with a major broadcaster on the Bejing Olympics. I can't say much about it but it's pretty cool stuff and I'm pretty stoked to have the contract. Now I'm back in my office and hopefully will get back in gear with blog updates soon.

I got my SO one of the new tiny Zunes and it's been a pretty cool addition to the toy department, deets soon...

Googopoly

The pressure is starting to mount on Google.

Another Flight Finder

Try Momondo, I've been using it and Kayak to find flights these days.

More Winehouse

I feel a little guilty for dropping that Winehouse video where she mauls through it so here's a little redemption. Winehouse and Ronson. Sorry, Columbia don't want no embedding.

Oh the Hypocracy

Here in Quebec/Canada, we have a bunch of pissed off French politicians trying to get elected by singling out immigrants and anglophones for all of the historical linguistic woes of the past, present and future.

This is particularly repugnant because they've singled out immigrants as the cause of decline of the French language and hence are gaining popularity by fanning the flames of intolerance against cultural and religious values that are different from their own.

This is very similar to what the National Front (UK/FR) has been trying to do in Europe for the past few decades.

It's particularly frightening when the leader of a major federal political party can say this in public:

"I say to all the Uncle Toms from Quebec that are in Ottawa who say to us, 'If you want to enforce French, do it in Quebec,' that the federal Labour Code is a federal jurisdiction. It's for them to act ... if they are serious about
recognizing Quebec as a nation."

Gilles Duceppe - Bloc Quebecois

BTW an "Uncle Tom" is an extremely offensive racial pejorative also known as a "house n****", in this case referring to French people who cooperate with the rest of the country. So that's what it's come to in Quebec, politicians are working overtime in Quebec to unite the masses against the threat of immigrants while the local economy slides down the toilet and the Chinese methodically chip away at our manufacturing and processing industries.

Another Nero keeps fiddling while our Rome burns.

Mongoose Mouth

There's something really fascinating about a trainwreck, you cringe and squirm but you can't look away. This one is my fave. It just never fails to crack me up.

The Synthetic Genome - This is Staggering

These scientists have gotten yeast cells to build arbitrary DNA. This is pretty scary because any DNA pattern can be created.

The yeast can build any DNA from a database such as the Human Genome project. From any DNA pattern on file, the DNA created by the yeast can then be dropped into a DNA-less cell and set in motion to start reproducing.

This means that your DNA (and mine) can be stored in a computer and sent somewhere else to be booted up into a cell that might one day become another person. Staggering. This will have major implications for pretty much everything having to do with genetics and molecular biology.

Yikes! Read more here.

New skin

I reskinned to add a twitter panel. I'm not crazy about this new skin but then again the old one was kind of clunky too.

Amory Lovins

I never heard of him either. As it turns out he's one of the smartest guys on the planet and he's funded by the Pentagon (of all places) in his quest to end the oil endgame. He's an extremely pragmatic dude and makes a ton of sense without flinging tofu at anybody.

Here's a video and here's the website.

Job hunting hints

I put an ad on Craigslist last week for some part time marketing help and then asked the applicants to write me a pitch in under 100 words.

Here's what I got:

• 52 applicants in 4 days
• only 9 bothered sending their pitch, 5 had bad grammar (IE: worse than mine)
• about 15 sent a CV with nothing else in their email
• about 20 couldn't spell or compose a sentence
• 1 was an aggressive Internet marketing guy who started blasting me about commissions (WTF??)
• 1 applicant told me (unsolicited) how confusing my website was and how horrible the color was and proceeded to send me a pitch targeted at geriatric people interested in surfing (double WTF???)
  

Only one was really enthusiastic, followed my instructions, was professional and wrote a decent pitch. The bar was pretty low but she did a great job and will probably get my business.

So here's some tips for any of you trying to get business from somebody else, this includes you guys/gals who are looking for jobs, selling companies, cars, services, websites, bandwidth, tomatoes or whatever;

PC = Potential Customer

• Read every word of what was asked and reply with exactly what the PC asked for
• Even if you have a form letter, add a personalized note that shows you actually understand what your PC wants
• Be professional, enthusiastic and positive
• Check your grammar and use your spell checker
• Throwing a compliment helps but don't blow too much smoke up your PCs ass
• Criticizing your PC really doesn't help even if you think it was constructive unless they specifically asked for it and even then you should be very careful with your words not to ruffle feathers
• Stand out without being a clown

Sounds simple right? Then why did only 4 out of 52 MARKETING applicants follow this? I could understand if the job was VP of Cleaning Earwax out of Phones but for fucks sakes why can't a marketing person market themself?

If they aren't professional with me, how are they going to be with my customers?

On Design

I've always thought that Frog Design, SGI, Bang and Olufsen and Porche had the best industrial designs. I never really liked the Apple design vocabulary even though Frog concocted some of it, and I really don't understand why everybody thinks they're so amazing. The thing that I like best about OS/X is the fluidity of motion within the UI but overall I really don't think the ecosystem is as intuitive as most people think it is. The thing I like most about the iPod is that I don't have to use one.

Then again, I've grown up with computers and mainframes from a deep chips & boards and soldering iron perspective so the dummied down metaphors like throwing a drive in the garbage to eject it doesn't make much sense to me. Honestly, I think that glass buttons are like faux hawks, mullets and moustaches. Maybe they were cool in high school once upon a Camaro but they're embarrassing now much like a 50 year old with a pierced ear and a tribal barbed wire armband tattoo.

Having said that, I am really glad that Microsoft mostly ignored Apple when it designed the XBox 360 and Zune and that Nintendo ignored everybody when they designed the Wii. These products are great on their own and despite a rough start, will have a pretty big influence on industrial design going forward.

Another company that I totally forgot about was Braun. As it turns out Apple has been as deeply influenced by Braun as it had been by Xerox back in the day. Check out this article.

Supply and Demand

Market theory states that prices will go up when supply contracts and reverse when the opposite is true. I'm happy to say that I've rented out my villa for 8 weeks at mostly full rate and I've removed my standard discounted ratecard from my website so that I can charge the agents a few percent more to absorb their commissions.

So far I have some upscale clientele who think that the rates are really cheap, a few friends of friends who think that it's fair but pricey and total strangers who want to pay less per person than what a backpacker pays at a campground. My tactic has been to stick to referrals only and even at that, upscale only. I figure that I'll get less business but more upscale repeat business and my team can spend more time making fewer people more happy.

Lets see how this goes - Hilton strategy versus HoJo.

Speaking of market forces, read this.