How to engineer “a liquidity event from God”

March 30th, 2011

One of my heroes, Steve Blank, has just given a terrific interview over at Giga Om. Here’s the money section that starts almost exactly at the 14 min mark:

What is that I want to do in this bubble? As I said, in this one, the valuations are not going to be based on concepts. I think they are going to be based on either large networks of 10s or 100s of millions of users, or they’ll be be based on high revenue growth, or maybe a combination thereof. I would use the money to buy scale as quickly as possible. I would use the money to buy visible as quickly as possible. Not for BS, but to promote the first two items. And that’s an opportunity that can easily be squandered if you don’t think about it strategically. The goal in this bubble is to be the largest possible business, not to become Boy if you are smart entrepreneur with a big pile of cash, I believe you can engineer a liquidity event from God.

Here’s the entire video, cued to the right spot. Enjoy!

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How Facebook can attack Google’s Ad Words castle

March 25th, 2011

Bill Gurley has posted a great piece about Google’s business strategy that has turned into today’s “must read” post. In it, he accurately describes Google’s ad words as its “castle” and its open source strategy as its “moat.” Simply put, Google creates, supports and gives away platforms like Firefox and Android that enable Internet access in order to ensure its lead position as the default search engine everywhere.

As Bill rightly points out, direct assaults on Google by land look pretty hopeless. It looks pretty dark for direct competitors like Bing. It also creates collateral damage by destroying any business that wants to make money building a phone operating system or browser. But does that mean the castle is perfectly defended?

I believe that Google has a massive vulnerability, but it isn’t from a direct search competitor. Essentially, Facebook is substitute for search, not a direct competitor. As people discover products and services socially, they will go directly from intent to purchase–bypassing search entirely. This threat is not theoretical; indeed, one of customers at SocialFeet has truly zeroed its SEM budget in 2011. While dramatic, I think this move is a leading indicator of where smart merchants are moving. If so, this is very bad news for Google’s adwords castle.

This dynamic is an air attack, and Google’s castle, despite its incredible land moat, looks entirely defenseless against it.

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Will Facebook dominate Social Commerce?

February 13th, 2011

Facebook is a monster of a company, no doubt. It seems that world domination is its ambition, and it is well on its way towards that goal. But will it dominate social commerce, as it has so many other areas?

It turns out that social networks like Facebook “are not structurally well-suited to be networks of sellers,” according to a fascinating study done at Columbia (download pdf). The problem? Social networks like Facebook and Twitter end up being too clustered. When I click on a high school classmate from Hunter, I inevitably find that we have 60+ friends in common.

Why is this a problem? If you start traversing the social graph from my profile, you’ll likely to get stuck in a Hunter cul-de-sac. I love my classmates, but after a while, it’s a deadend that eventually gets boring. And empirically data from a social shopping site in France support this explanation.

The solution is to foster a network that looks more like a web than a cluster. More links are better, but you want to make sure that they take to different places. In my opinion, this structure can be induced through proper incentives, but it does not occur naturally. Herein lies the opportunity.

But it is likely to be tricky, because such “strategic attempts to alter a social network’s structure can lead to unintended consequences.” Unfortunately, the researchers don’t provide much detail into what alternative incentives are worth trying or what consequences they are concerned about.

Since the opportunity involves creating a new network, it seems to me that it is not only large but defensible. A difficult problem, perhaps, but what a nut if you can crack it! Given how different it is than building a global social network, I think it is one that Facebook is unlikely to crack by itself.

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What entrepreneurs can learn from Christopher Columbus

October 11th, 2010

I think Christopher Columbus day is really a celebration of discovery. I also believe that the goal of entrepreneurs is to discover a repeatable business. So, what can entrepreneurs learn from Christopher Columbus?

1. The most transformational ideas are crazy. I mean, reach the far east by going *west*?
2. The funding for most grand discoveries often comes from angels, who do so for commercial reasons principally
3. You will probably discover something different than what you originally set out to find (and it may take awhile before you figure out what it is that you’ve discovered!)
4. Even when you find something amazing, you won’t necessarily end up rich

Draw your own conclusions!

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Cliff Notes for the Facebook Effect

October 7th, 2010

I just finished reading The Facebook Effect by David Kirkpatrick. I enjoyed it a lot. It is very thorough, both on the inside scoop but also in terms of analysis. Since not everyone may be as interested in every last detail about Facebook as I am, i thought that I’d post a brief summary of the highlights. Cliff notes, if you will.

– scalability was perhaps the central concern in the early days. Zuckerberg clearly understood the lesson of friendster
– Zuckerberg was very explicit about having profiles represent real people. Identity warranting is a key value of Facebook today IMO
– the launch of the photos application within Facebook is fascinating. Two core features of photo sites were — and still are — left out: high res versions and the ability to order prints.
Zuckerberg bet that social photos with tags were what people really wanted and he was right. More photos are viewed on Facebook thten all other sites combined. Photos are truly the killer app.
– the newsfeed was incredibly controversial. Zuckerberg bravely stuck to his guns because he saw the site engagement skyrocket even as 10% of the site protested the new feature!!
– Zuckerberg is supremely confident. He is not swayed but money — he turned away a $10mm offer only 4 months after founding Facebook at age 20 and has since turned down multi-billion offers. He marches to his own beat, and has control of the board of Facebook.
– Zuckerberg is ambivalent about ads and it shows. The second half of the book is blah, because Facebook has neither been wildly successful nor a complete failure at making money. This story remains unfinished IMO.

I am immensely impressed by Mark Zuckerberg. He has gone ‘all in’ perhaps 3 times with innovative and controversial features that have revolutionized the web and society. He has executed extremely well where many others tried and failed.

I eagerly await the next chapter as it unfolds! As well as the movie soon to be released, ‘the social Network’, with its fictionalized account of the human drama behind Facebook. UPDATE: It sounds that the movie is a start contrast to the book. The movie is entertaining but totally misses any of the real points of Facebook.

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The alphabet according to google

September 9th, 2010

Robert Scoble tweeted this: “Heh, @techcrunch’s @Arrington must be proud. If you go to and type “tech” it suggests “crunch.” #thenewSEO.” That got me thinking: what is the alphabet according to google?

So, here is the google alphabet as of today on my computer (while logged out of google):

a – aol (then amazon, aim, apple)
b – bank of america (best buy, bing, bed bath and beyond)
c – craigslist (chase, cnn, costco)
d – dictionary (droid x, dell, drake)
e – ebay (espn, expedia, eminem)
f – facebook (facebook login, fifa, fandango)
g – gmail (google maps,, glee)
h – hotmail (hulu, homedepot, hostop)
i – ikea (iphone, imdb, inception)
j – jetblue (jet blue, jfk, jersey shore)
k – kmart (kayak, kohls, katy perry)
l – lirr (lowes, lost, linkedin)
m – mapquest (myspace, msn, mta)
n – netflix (nj transit, new york times, nordstrom)
o – orbitz (oovoo, old navy,
p – pandora (paypal, petco, people)
q – quotes (qvc, queens college, quest diagnostics)
r – realtor (rite aid, run, radio shack)
s – staples (sears, skype, sprint)
t – target (twitter, td bank, ticketmaster)
u – ups (usps, utube, univision)
v – verizon (verizon wireless, victoria secret, vlc)
w – weather (walmart, white pages, wikipedia)
x – xbox (xm radio, xe, xkcd)
y – yahoo (youtube, yahoo mail, yelp)
z – z100 (zappos, zilllow, zip codes)
1 – 105.1 (1010 wins, 103.5, 101.5)
2 – 2010 calendar (24, 2012, 25 to life lyrics)
3 – 311 (30 rock, 3ds, 3m)
4 – 4chan (411, 4th of july, 4shared)
5 – 50 cent (50 cent weight loss, 500 days of summer, 5 guys)
6 – 60 minutes (6pm, 6th ave, 6 flags)
7 – 7zip (7online, 7chan, 7 eleven)
8 – 8 mile (80’s music, 800 flowers, 808 drum)
9 – 92.3 (97.1, 90210, 92nd street y)
0 – 007 (0, 02, 0-60 times, 06880)
@ – @kingjames (@font-face,, @bpglobalpr)
& – &nbsp (&lt, &, &hearts, &amp)
. – .net (.rar, .net framework, .mkv)
-,+,!,#,$,*+,=,{,},|,[,],\,?,/,<,> — “your search did not match any documents”

Apparently these results are supposed to be based on frequencies of past queries, with some sort of time element too, and surprisingly to me, your physical location. In other words, the alphabet according to google may evolve over time–a new element of the “google dance”.

Some quick impressions:
– don’t expect to win the letter “g” easily! droid x also looks like intentional self-promotion
– who is katy perry? what is xe?
– some interesting local results: mta, 1010 wins, queens college, nj transit, 6th ave
– potentially “dangerous” results: 4chan
– some shoutouts to competitors: bing, .net, twitter, facebook, etc.

I have to say that the feature can be a little bit distracting too, but I suppose that is part of the point. In any event, very interesting. Go to to check it for yourself, and please comment if you find anything interesting in your google alphabet.

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Team players

July 8th, 2010

I really liked this interview because Dwayne Wade and Chris Bosh seem to care more about winning championships than personal glory. Here’s the interview:

Actually, it reminds me most about pickup ball in NYC. Pickup ball had a few key rules to determine who could play. First, winners stay on, losers leave. Second, one person had “next,” and was responsible for forming a team to play the winners. Third, anyone who wasn’t playing or included on a “next” team could become the leader of claim the next “next” team, and so on.

The interesting dynamic is that sometimes a good player would forgo the opportunity to play “next” because they preferred to sit out a little longer in order to play with their friends and form a really great team of their own choosing. In the long run, this strategy could lead to a winning streak that yielded more court time despite the longer wait to start.

In effect, Wade and Bosh have claimed “next.” And heaven help the other teams in the NBA if LeBron joins too!

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Good on paper!

June 23rd, 2010

Mark Suster (a former entrepreneur who is now a VC at GRP Partners) writes this post describing the background of his ideal candidate for his VC positon:

computer science undergrad from MIT (or any other great school), 2-years at McKinsey but no more than that (I love the analytical framework that the top strategy consulting firms provide. BCG, Bain, LEK – they’re all great), a few years at a start-up or a few years somewhere like Microsoft, Google, Amazon or Apple. MBA fine, but not required.

Compare that profile to my background: Computer science at Princeton, 3 years at Oliver Wyman (top strategy consultancy to the financial services), Fulcrum Analytics/ (e.g., start ups), Ph.D. at Stanford. Looks pretty good, at least on paper, right? Right?!? :)

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Inspired teaching

June 17th, 2010

Using YouTube, this one man has become the most watched educator in the world. His story is pretty neat, as is his pedagogical philosophy. Doesn’t hurt that he appears to be incredibly smart and curious. I plan to check out some of the instructional videos, and see if it would be good for my kids!


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PCs are for farmers!

June 2nd, 2010

Steve Jobs has a terrific quote about the true disruptive potential of the iPad:

When we were an agrarian nation, all cars were trucks. But as people moved more towards urban centers, people started to get into cars. I think PCs are going to be like trucks. Less people will need them. And this is going to make some people uneasy.

He wants to undermine PCs, but also Macs! Wow.

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The connection between Elana Kagan and Young MC

May 10th, 2010

Break it down, fellas! Malcom Gladwell criticized my alum mater asking “Why are Hunter’s results so disappointing?” Hunter students have IQ scores three and a half standard deviations above the mean and are given the best classroom resources, so they are not as distinguished as they should be: “Although most of our study participants are successful and fairly content with their lives and accomplishments,” the authors conclude, “there are no superstars . . . and only one or two familiar names.” Thank you, Obama, for providing yet another piece of evidence against this unfair criticism.

First, I present to you, Elena Kagan, Obama’s pick for the Supreme Court. Is that a big enough superstar for you, Malcom?

Elena Kagan with Obama

Second, I present to you Young MC. Watch this video to be reminded how great he is. No gimmicks just hip hop. Bust a move!

Want to see more Hunter superstars? I rest my case!

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How Facebook will change the face of the Internet

April 23rd, 2010

Facebook made some huge announcements yesterday.

At its core, Facebook’s unique capability is identity warranting, i.e., proving that a person is who she says she is. This proof comes in three ways. First, Facebook profiles have an enormous amount of personal information that is difficult to create without intimate knowledge of the person. Second, the network of friends interlinked provide social proof that the profile is indeed who she says she is. Third, Facebook has information about interactions among these real people. The most important of these interactions are group photos, which firmly establish individuals and who they associate with.

With this core in place, Facebook is now unveiling the scaffolding necessary for every site to be social. Imagine if you can always see who the real people who are visiting a site at the same time as you. Imagine if your newsfeed on Facebook contained the highlights of everything your friends are doing anywhere, online or offline. Within five years, these visions will be so real you will not remember what our current anonymous Internet looks like.

Many individuals and sites may want to resist. This change is scary, no doubt! But I see it as inevitable because the immediate benefits to individuals and sites far outweigh the immediate costs. It is unclear whether the longer-term risks are worth it or not, but the short-term economics are too powerful in my opinion to resist.

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Debi Nova

April 10th, 2010

Maria and I had the pleasure of seeing the debut of Debi Nova’s new solo act in NYC last night. Debi is a sister of our neighbor, which is why we were invited to the event, but more relevantly she backed up Ricki Martin and the Black Eyed Peas. I am posting two videos here, the first one professionally produced for MTV and the other one captured by me with my iphone on Thursday night night. Enjoy!

Live video captured on my iPhone – pretty nice quality!

3. et cetera

iPad – so crazy it just might work

April 2nd, 2010

Here’s a great analysis of the iPad, by the former chief evangelist of Apple and famous VC, Guy Kawasaki:

“The first five million will be sold in a heartbeat,” said Guy Kawasaki, a Silicon Valley entrepreneur who was a marketing executive at Apple in the 1980s. “But let’s see: you can’t make a phone call with it, you can’t take a picture with it, and you have to buy content that before now you were not willing to pay for. That seems tough to me.”

I find the argument completely persuasive.

Except that it ignores the Steve Jobs reality distortion field. His brilliance is turning everything on its head. People will love the content *more* because they have to pay for what was previously free. People will love it because it has *less* freedom than other computers. Perhaps people will particularly love it because it does *not* have a phone or camera.

Whether Kawasaki or Jobs is right, I am fascinated to watch how the iPad experiment unfolds.

3. et cetera

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