Category: Thoughtmarket

How useful will AOL data muckup be?

AOL blindly released a “noc-list” of sorts, a set of history files on their search results spanning several months, which was freely available on their site for several hours. Now the files are floating around on the internet. People are crunching the data, and some are shouting eureka for the SEOs and PPC arbitrage critters.

Stop and think. While everyone is perusing this data on their MySQL enabled laptops, Google has this stuff too, and a heck of a lot more processing capability to boot. It wouldn’t surprise me if the use of the data isn’t already primed to set off alarm bells in Mountain View the moment some search engine spammer/Adsense junkie starts getting greedy.

The talk is 30 million queries and 20 million click throughs on search terms, from 650,000 AOL users. That’s a heck of a good sample size, if you want to trust the opinion of someone who got a “B-” in Fundamentals of Business Statistics (ok, I partied my ass off that semester).

Yep, someone will get greedy, and I’ll bet they pay for it.

What does “limiting growth” mean?

If it is your waistline, it means your health. If it is your neighborhood, it means maintaining a friendly atmosphere. If it is your startup, it means being careful not to blow all your cash too quickly.

If it is the second largest financier of home loans, it means you are getting the heck out of dodge, just like your big sister.

Where Vonage’s trouble came from

vonage.gifVonage’s troubles keep getting worse, but why?

Questionable business plan – everyone has one of those. It wouldn’t be a plan if everyone wasn’t questioning it, hoping to get their money in at a discount. It is really all about execution, and you have to give the guys credit for getting all those little boxes plugged into those cable modems, and actually working.

Then there was the IPO – first touted, then despised by institutions, followed by a grassroots effort (a little stinky). Give ’em credit again for getting ingenuitive when adversity was staring them in the face.

Now, earnings are faltering – the incumbents are running at the space with reckless abandon, and those established telcos have the sales infrastructure to make it happen much more cost effectively than the upstart.

This doesn’t add up for me. Scrappy startup makes waves with end-around technology. Incumbents scream bloody murder about net neutrality, barely mentioning step-brother VoIP, instead targeting the likes of Google (which actually do pay for bandwidth at their end). Lobbyists rally on behalf of incumbents. Startup gets pummeled.

What’s wrong with this picture? The timing is just too good.

VCs pouring cash, just not into Colorado glasses (yet)

Fortunately, I think happy hour should be longer, even if it does have to start a little later.

According to yesterday’s report from E&Y and DJ’s VentureOne, venture capital investing hit its best quarter since the first of 2001. That’s great for startups. Unfortunately, the party doesn’t seem to be happening in my neighborhood.

You could provide the standard reasoning that local funds are more mature, and they are doing more follow-ons and portfolio consolidation right now. You could also go out on a limb by saying there is a “right brain drain” going on, so there are less ideas floating around. I don’t buy any of the notions, and I think the phenomena is actually a good thing.

First, less capital floating around means only the choice opportunities get funded, and the chance of success of any given deal should jump a notch or two. Getting more wins (and less fiascos) under the belt will attract additional capital over the long term. And it’s the “left brain” that usually keeps the books anyway.

Second, I suspect a big part of the local economy has been real estate driven, at least that’s my guess based on the impression that all people seem to want to talk about is their new houses, and all everyone seems to be doing is getting real estate licenses. Time to wake up there – the housing party looks like it is ending, and while it could actually get really ugly, at least that will prime a lot of people to get down to the business of creating value instead of waiting for someone or something to conjure it for them.

In summary, a little restriction of liquidity gets the juices flowing. We’ll see more bootstraps, more ideas popping up out of the woodwork (I love those kinds of surprises) – more ingenuity, and less waste. And that is really the entrepreneurial way.

Cheap tools require expensive minds

Inexpensive hardware and software leads to quick time to market – on that there is no doubt. This, in turn, allows burgeoning new business ideas, and as Rich Karlgaard (and Glenn Reynolds) surmise, small business benefits the most. Big companies move slowly to the first investment, and they are still a bit scared of open source – they are more inclined to invest in proven opportunities. Chalk up another for small business, as solid models will get eaten up just as quickly as they launched.

Keep in mind that good business models require good ideas. Good ideas come from creative, intuitive minds that understand rigor. It is that resource that requires investment, and it is that resource that is slightly more dear.

I suspect we are going to see continuing business launches as a result, and a lot more failures as a percentage of the total. Only this time, the majority won’t lose their shirts in the process, and those that can bear the risks will move on to the next superior management team.

I wanna sell books even if I’m full of crap

There is this compilation of best business books, supposedly “known to mankind,” which looks a hell of a lot like a pack of book writers (and Amazon affiliates) trying to hock their wares under the guise of good information. Give me a fricken break! Every book within the links is something new age, from some author within the last decade. What are you saying? Everything new in terms of process and ideas has been created in the last couple of years?

Throwing up a list of Amazon links does not a “must read” list make. You want good business books? Then start with the basics – everything else is a derivative. Pick up Mises’s Human Action, Charles Mackay’s classic Extraordinary Popular Delusions…, Ann Rand’s Atlas Shrugged. Read John Maynard Keynes and Adam Smith, and roll up Karl Marx for comparison purposes. Read Hank Greenberg’s Memos from the Chairman, or just about anything from Peter Drucker (a genuine monarch mentioned in the linked poll – someone with a real track record).

This recent stuff? Yea, read it if you must, but keep in mind that fundamentals are where it’s at. Use what you absorb from them to stimulate new ideas of your own. That’s where it’s really at.

Note: references are provided without links to Amazon, even though I am an affiliate, so you know I’m not just trying to sell you something.

Dell doesn’t screw everything up

Like my memory of their once superb support.

I am not going to debate Dell’s now inherent negatives – Jeff Matthews has a lock on that – instead, I’ll speak to the experience I last remember, and it was a good one.

The Dell C840 I purchased (and subsequently hacked up) was a refurbished device. When it arrived, the screen had a ding in it, and the LCD was blurred as a result. Bad. I called Dell support, and they immediately scheduled an onsite repair. Two days pass, and no tech arrived. I called Dell again.

I remember not one, but two fine humans taking the case. Once I was transferred from entry level to “priority,” the tech wasted no time telling me they’d help, and help bigtime. Solution – pull a brand new machine off the line and send it my way. No replacement refurb, mind you, a brand new machine. I received it four days later.

That is what I remember about Dell, and the pundits can’t take that away from me. Unfortunately, Apple Computer can make that memory less significant, as my time on the phone with them (due mainly to my early unfamiliarity with the OS), was met with cordiality, patience and rigor as well.

I wish them all luck, as that is where value is headed in the computer age – towards kindness, consideration, and a take-action attitude with the customer.

If only the rest of the world followed that path.

Bernanke caves to the housing sector’s PR teams?

bernanke.jpgThe housing sector, including the companies involved, is experiencing “a slowdown” complete with rapidly rising inventories, rising debt, and P/Es reminiscent of a back alley beating.

Who cares, because the Fed Chairman says it looks ‘orderly’.

You have to love how for years the markets swayed on one man’s statements. Does that kind of magic still exist, or is someone saying what someone else tells them to say?

Truth, or summer doldrums before hurricane season. Retail performance heading into the last quarter will tell us if the ATM on every street in America has run out of money. Until then, stay tuned.


Maybe you don’t have to stay tuned quite as long as I originally thought. Just don’t sit there wringing you hands – get creative instead.

Save the internet, and drown in the process

A really technical guy talks net neutrality, and how all the partisan positioning may wind up killing the internet altogether.

Death of the internet, or just a slowing of its growth via lack of innovation – it makes no difference. None of this bodes well for the web hermit.

Signs liquidity is about to disappear from your market

FannieMaeLogo.gifLiquidity makes markets. Without a fair share of buyers and sellers to keep the spreads reasonable, nothing works. If you were to suck a big player out of the market, say one that provides a lot of “insured liquidity,” the same thing would happen, inefficiency, if not wholesale disruption.

What are some of the signs that a big player desperately needs an exit door?

Start with some fraud. Toss in backing out of early stage deals. Throw in a mass exodus of its managers.

I think that is plenty in the way of signs.