Tuesday: Killer idea of the Week

Although there is much debate who will be the next Steve Jobs.  Most people point to  either Elon Musk or Jeff Bezos.  Elon Musk former cofounder of Paypal, current founder of SpaceX,and Tesla.  Musk shoots for the moon, and is willing to risk everything to follow his gut.

On the other hand Bezos built Amazon from nothing into a worldwide ecommerce machine that has put many retail stores out of business and is about to put another one out of business. Bezos can be considered the father of ecommerce.  Bezos style is different from Musk’s.  Bezos is more methodical, data driven, and all about solving real world problems for the average consumer.

Today’s killer idea of the week goes to Bezos.  A patent he filed for back in 2010 has been made public.  An airbag for cellphones.  Genius. The mobile phone thanks to Steve Jobs has quickly turned into the center of people’s digital lives.  Consumers spend billions on cases.  Consumers spend billions more on insurance.  An airbag would be an simple practical solution that would completely disrupt a major market that is central to consumers lives.

Jeff Bezos just killing the game.  Well done.

 

Rainmaker

Previously at Nuqudy we have used the word Rainmaker to foster both competition and as a joke.  It started something like this “Danny you might be a Rainmaker, but I am the father of the Rainmakers”.  Naturally my response was “I am the grandfather of the Rainmakers”.

This conversation got me thinking of what a Rainmaker is.  Anybody can be a CEO.  There are tens of millions of CEO’s on every street corner.  Over the last 2 years, I have met hundreds of CEOs.  However, I could count on one hand the amount of rainmakers I have met.

In addition a Rainmaker does not have to be in charge and can be anybody from a janitor to engineer.  After searching here is a definition that I came across that I like:

“In everyday usage, the term “rainmaker” can apply to anyone – from the salesperson who always finishes first in sales to the engineer who consistently finds innovative ways to present a company’s products. In the purest sense, a rainmaker is a difference maker”

Recently a former investor at a top venture capital firm who saw my profile on LinkedIn wrote:

“danny, do you really have rainmaker in your profile?  obviously you’re new to the area.  word of advice.”

Although my definition of a Rainmaker is different than the commonly thought of definition, this guy had a solid point.  Over the years I have done some cool startups in a few different countries but now that I am in Silicon Valley it is sort of like being in the Major Leagues. So far I have done nothing compared to some of the people before me.  (Only a month ago a 19 year old raised 7 million Series A for his startup)

So now at 23 years young, I am changing the title on my LinkedIn to Rit.

 

Tech Agents: Silicon Valley Style

Last Friday night I dropped by a Hackathon in downtown Palo Alto.  Standard Hackathon rules applied: food and programing into the late hours in order to build something new and hopefully cool.

However, something stood out at this event.  2 tables full of High School kids who where all there to build on on ideas.  A few of these kids started telling me what they where working on.  Some showed me sites they have built in the past.  After I finished speaking with one Junior, a woman approached me and introduced herself as the students mother. (Out here Friday Hackathons are the new movie nights for High School kids).

After introducing herself, the students mother, asked “what do I do”.  After I responded, the mother states:” you are speaking to the wrong son. You need to meet my younger son, he is in Middle School and sitting over there”.  She goes on to say even though her younger son has not graduated Middle School he is already a better mobile developer than her middle aged husband.

Obviously I spoke to her younger son.  After he finished demonstrating/explaining what he is working on I started thinking.  Although this kid could not be older than 13 or 14, he is already more articulate than 99% of people I meet on a daily basis.

 

Self Motivating Mondays:

Last week I failed.  I had a list of 4 goals to get done or else I would donate $ 50 to a charity.  I failed on 2 out of the 4 goals.

To keep my promise this week I will buy $ 50 worth of food and distribute it to homeless people in the Palo Alto area.  I will videotape and post here so you can see.

New simplified list for this week.  Same penalty if I don’t accomplish goals but I am bringing it down to $ 25 donation.

1) Improve front end engineering ablities

2) Mobile version of this blog

3) Complete deal for side project I am working on

Only In The Valley

When I am driving there is a strong chance that I am on the phone. About a month and half ago I got a ticket and had to pay close to $ 200.  Yesterday, a cop pulled me over for speaking on the phone.

At first I tried different excuses.  The office responds: “execuses are for girls, I am a Green Beret”.  At this point I knew I was dealing with a Grade A Jackass.  Then the officer proceeds to ask for insurance card which I did not have on me.  He then tells me: “missing an insurance card in California is a $ 1,000 fine”.  Now I knew I was fucked.

I tried one strategy after another, and then I mentioned that I am working on a startup.  Then the Green Beret/Police Office responds that he is also working on a startup.  A startup that kills animals in order to teacher first responders how to perform first aid in real situations.

Soon we were talking startups on the side of a major road for the next 10 minutes.   Afterwards my fine went from a range of $300-$1000 to a more manageable $40- $60.

From taxi drivers to developers to police officers everybody out here is working on something.

Why Quora is Undervalued at 400 Million

Signal to noise ratio.

Google had over 10 billion dollars in revenue in the previous quarter because people have questions and they look for instant answers on the world wide web.  Google has came up with a genius way to rank the best results and make money off advertisers who offer products similar to those results.

Recently an article was written how Google is a “Magic Money Making Machine” and how Facebook ads suck.  Despite close to 1 billion users, Facebook is only making four billion dollars a year on advertising.  Google makes close to that in one month.  The article described Facebook ads as “It’s like you’re at a party, standing around, talking to your friends, and someone made the posters on the wall advertisements

With only 4 billion in advertising revenue Facebook was initially valued at 100 billion.  Google is valued at 188 billion.  Quora is valued at 400 million.

What is Quora: A high quality question and answer website.  Ask  questions and receive quality responses from experts.  Numerous people could respond and the community curates the responses by upvoting and downvoting answers. Quora offers a symbiotic relationship: you need credits to ask questions and you earn credits from answering questions.

Last night I watched season finale of Game of Thrones.  At the end, all I could say is WOW.  I wanted to know how HBO time and time again creates the best shows on TV (Entourage, Curb, Sopranos).  Instead of doing a Google search I posed the question on Quora.

Today I got a response that completely answered my question and then some:

“They find a really talented person named David (David Chase, Larry David, David Milch,  David Simon and David Benioff) and then they give them some money, tell them to make great TV shows and then get the hell out of their way. 

Networks use focus groups, committees, layers of executives etc to dilute a show and try and give it mass appeal. The end results lack creative vision and have no original bite. But HBO (and Showtime) trust a talented person to deliver them a great show and they pretty much leave them to it. The results are usually fantastic.”

Future of Quora- More than Facebook or any other company Quora has the potential to become the Google 2.0 .  A fully mobile near instant search company (nobody wants to wait 12 hours for responses even if high quality).  A search company that display high quality responses to anything that the average person would normally go to Google for.  In order to prevent gaming such as SEO the Quora community would be essential in order to curate, upvote and downvote, the best and worst responses.

Quora does not have to revinvent the wheel to monetize.  All they have to do is follow Google’s playbook with relevant ads alongside the community response.  Or people can pay a virtual currency to send questions directly to the best experts (similar to Zynga).

With time and executed correctly Quora has the potential to be the next big Silicon Valley company that changes the world.  Instead of asking about HBO television shows somebody could ask “how to use social media to start the next revolution in Palo Alto”.

Self Motivating Mondays

Going to list a set of goals for the week.  If I do not accomplish all of them I will donate $ 50 to a charity.  Either somebody can suggest one or I will pick.  I have until this Sunday night where I wil let you know if I have accomplished the goals and if I did not which charity it will go towards.

1) Learn how to do basic front end programming.

2) Test out and deploy two new concepts.

3) A solid good deed of the week for somebody random that I a have never met.

4) Create a mobile friendly version of this blog with StumbleUpon sharing.

Losing 30k: When is A Deal Done?

When is a deal done? Is it complete when you shake hands, sign a contract or money is exchanged?

About 4 months ago I had closed a venture deal for a Middle Eastern company.  The company was going  to land a 1 million dollars investment in return for giving away a set percentage of equity and relocation of the company HQ.

We agreed to terms in December.  In January,they began to work on the due diligence behind the investment.  The investor group visited the company offices, went over the books, and met the senior team.  Subsequently, they started working on the final legal due diligence and then the money had been allocated to be transferred once the deal closed.

As of a week ago, the firm  more or less is closing down; the director is stepping down, and they are now freezing any new investments.

Venture Deals

Burning Contract

I consulted on the entire project and have spent time both on the phone and traveling to lead the deal, negotiate the terms, and make sure all parties agree on terms.  Now that the deal is over, I am out the $ 30,000 I was set to receive on the final terms.

This saga focuses on my original question.  When is a deal done?  If you say a handshake, it is only as good as a person’s word.  A person’s word is only as good as the person, considering most people are liars, and those that are not, will put their own welfare above any agreement or handshake then a handshake is useless.

Most of the time a contract is worth less than the paper it was signed on.  In order to enforce a contract you will have to pay very expensive lawyers who charge by the hour.  After adding in lawyer fees any amount you would have made will go to a lawyer’s next European vacation.  In addition, if a company goes bankrupt, there is nothing even the best lawyers can do.

Unless you are dealing with a major public company, a deal only closes when money is transferred into your company’s account.

A deal is not done until the “Fat Lady Sings” and the “Fat Lady” is only singing once the money reaches your bank.

 

An Idea for Somebody to Do

Around 12 years ago the Washington Post company bought Atlanta based Quest education commonly known as Kaplan for $ 165 million dollars.  Fast forward 10 years and now the education company accounts for majority of Washington Post profits and is worth billions of dollars.  Although commonly known as a test prep company, Kaplan earns the majority of its money operating both in person and online vocational schools for low income students.

In Silicon Valley everybody is speaking about low cost online education.  You have seen many startups that are supposed to teach people to code and program.  Two well funded sites are: http://www.codecademy.com/ and http://teamtreehouse.com/ .  Millions of people have tried, but what is the real number of people that actually learned to code from these sites.   Nobody has published them and if the numbers were good, both of these startups would find a way to get the word out about these success stories.

On the other hand, there is a startup called Dev Bootcamp which is an in person 10 week program that offers 400+ hours of teaching how to code in a structured program format.  Here is the kicker: at the end of the program 14 out of the 17 that complete where offered jobs.  Now where this gets wild: the average starting salary for these first time coders was $79,000.  Wow.

The idea is a similar program in the format of Kaplan rolled out on a national level.  A centralized guide and format with decentralised teachers and classrooms along the same lines as Kaplan.  Unemployment rate is 8.1%.  Not only is this a billion dollar company as demonstrated by Kaplan, but it could make a major difference in quality of life  for millions of non/under employeed people.