A possible new startup “order”

9 Sep

If it’s true that Lean Startups product more output with less input and that the definition for the “big win” hasn’t changed, then there’s only a couple of ways to get big: (1) hope you fund the right startups, or (2) smartly combine startups.

via Welcome to the new startup

Recent events have shown that startups do not need more early-stage capital, they need less.  More and more startups in niche markets show that its possible to actually be profitable and be a relatively new company–a phenomenom that used to be considered rare.  However, the combination of cheaper startup costs and quicker profitability seems to be disappointing the startup community.

This seems to be because there aren’t the big wins that there used to be.  But maybe we need to change our definition of what constitutes a “win” by asking a win for who?

  1. A win for an investor that put in $25,000?
  2. A win for an investor that put in $500,000 or more?
  3. A win for the entrepreneur that hopes to take his one year investment of 90 hour workweeks and cash out at least $5-10 million?
  4. A win for newly happy customers?
  5. A win for our community because there is a new small business that generates jobs and profit?

Too long we’ve been defining a “win” in the technology startup community as requiring annual return of 5-20x.  But in a business that requires less than $300k to actually generate $1 million or more of annual profitability, couldn’t a “win” be defined by metric #5?

There is a valuable place for small technology companies just as there is a place for small restaurant chains.  The difference is that the latter are less profitable for more investment.  Yet we still consider our local 3-location restaurants to be wins, in fact big wins, for our community.

Maybe instead of inculcating a culture of entrepreneurship that demands $50 million exits, we should be encouraging the next generation of entrepreneurs to build innovative and sustainable businesses that generate actual profits.  Maybe the new startup order is actually just a focus on building a business to last not designing a company that’s easy to sell.


Democratizing manufacturing

2 Sep

Ponoko is part of a wider DIY product movement which includes companies like 3D printing service Shapeways or T-shirt maker Threadless where users design and manufacture their own products. This democratization of manufacturing parallels the user-generated content explosion unleashed by content-sharing sites like YouTube. Ponoko users have made 60,000 items to date covering everything from steam-punk couture to furniture.

via Make your own gadget with Ponoko and SparkFun | VentureBeat.

This is probably the most exciting and least reported development in our society.  For the first time, everyone has access to the means of production.  What still remains (and may never change) is the ability to get people to see what you have created.  This is quite possibly the biggest opportunity for empty retail spaces.  What I imagine is small storefronts where independent owners select the best of these products, display them, and sell them to the customer.

This brings the idea of a boutique to an entirely new level, especially if our newest designers give boutiques a commission for what they sell.  Indeed, if I was a designer that used Ponoko to manufacture my products, I would gladly give a boutique a 25 or 30% commission to display my products so that I could actually market and distribute my creations.

This is the only way I can see to practically market these tens of thousands of new items that are being created every day.  Despite its efforts, Etsy still needs an editor or someone that suggests and helps people choose products.  60,000 variations on a wallet is too much for anyone to wade through.  But style-conscious folks should be able to help me make this choice and they should be compensated by the manufacturer / designer for doing so.

Josh Barro on limited government and the mosque “controversy”

16 Aug

Part of supporting limited government is understanding that sometimes, things you don’t like will happen, and the government especially the federal government won’t do anything about it. Getting to do what you want comes at the price of other people getting to do what they want—including build mosques where you’d prefer they didn’t….

There is even a strip club three blocks south of Ground Zero, but nobody seems to have noticed that it is sullying the memory of the place.

via A Very Long Post on Cordoba House – The Agenda – National Review Online.  Thanks to Tyler Cowen for the link.

I’ve yet to read a persuasive argument for why a law-abiding group of Americans ought to be prevented from building a religious house of worship.  If you come across one, please let me know.

Afflictions in the healthcare system

12 Aug

Drug sales are hospitals’ second biggest source of revenue, and many offer incentives that can lead doctors to overprescribe or link doctors’ salaries to the money they generate from prescriptions and costly diagnostic tests. Some pharmaceutical companies offer additional under-the-table inducements for prescribing drugs, doctors and experts say.

via Hospitals Are Battlegrounds of Discontent – NYTimes.com.

Read the entire article, its actually not about the United States, it’s about China.  Although at least this portion applies equally to our healthcare delivery system in the United States.

Why Charlie Rangel should defend himself

11 Aug

In an unprecedented 31-minute speech on the House floor done against the advice of lawyers and friends, Rep. Charlie Rangel, attacked head on the allegations against him and the process under which he said he’s suffered unfairly.

via Rangel’s Rant – Swampland – TIME.com.

I won’t comment on Charlie Rangel’s guilt or innocence but I will say that his trial will be an incredibly positive event for the country.  Trials are instructive and cathartic events.  While a plea deal only tells us that an individual did wrong, trials teach us about the systems and processes that created the person’s conduct.   Trials are sunlight on a wound whereas “apologize and resign” is a band-aid.

If Charlie Rangel defends himself, we, the American people, will learn about what goes on in our government and what favors are considered normal.  Through tales of other representatives, we’ll get to judge the normality or abnormality of Rangel’s actions.  Rangel or his witnesses will surely tell us what his colleagues do and we’ll get some insight into what’s tolerated.

There is no question that a trial could be very bad for Democrats, and maybe even Republicans, but that’s probably because the truth will be uncomfortable and maybe even a little shameful.   The lives of powerful politicians come with special privileges and unimagineable burdens.   It is a world that 99% of us know nothing about.  A vigorous Rangel defense is a good way for us to find out.

I ask Charlie Rangel to defend himself as (maybe) his last act of public service.  He may end up teaching all of us a powerful civics lesson that it seems only trials or powerful investigative journalism can bring out.  With the latter largely dead in the popular press, we’ll have to hope that Congressman Rangel chooses to fight.

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Do people want all-purpose?

11 Aug

That said, if Facebook introduces its own check-in service, the companies and investors that have been dominating geolocation to date may be in trouble.

via Facebook tiptoes closer to launching geolocation | VentureBeat.

I’ve often thought about whether consumers want an all-purpose anything.  Do we want one search engine for every type of search?  Google’s dominance suggests the answer is yes.  Do we want one auction site for anything we wish to buy or sell?  Ebay appears to be the dominant player with just a couple of specialty competitors.  How about price quotes, do we want one site where we can get a quote for anything?  The answer on this seems to be pretty clearly no because we have LendingTree for mortgages, uShip for shipping, Cars.com for cars, and many many more.

If we narrow our focus to social networks or how we manage our social relationships, I wonder if we really want to do everything at Facebook, our Wal-Mart of social networks, or if we prefer to go boutique at Gowalla or Foursquare for our check-ins.

The key here is in determining how most people actually use facebook as it is and social check ins as they are.  Facebook’s central bet with starting their own check-in service may be that when you share your location you want to do this for all 1,100 of your friends.  But I’m willing to bet that lots of people will be turned off by this and that they will prefer to circulate to a much smaller group of friends.

At the end of the day, all-purpose solutions in social networks may just come down to whether we prefer intimacy or efficiency.  So far Facebook has made a bundle on efficiently keeping up with your friends.  But close friendships don’t thrive on this type of behavior and I do think that one of the points of check-ins is to enjoy quality time with friends, not just share your location.  Social networking with intimacy as its goal may be the very reason why Facebook shouldn’t create its own services but rather opt to allow–as it has thus far–its users to broadcast their Foursquare location through facebook.

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More Lessons from Japanese Architecture

10 Aug

The boom in quirky small homes was fueled by new design and materials technology, which have slashed the price of a custom-built home by as much as two-thirds, making these homes affordable for singles and middle-class couples.

via In Japan, Living Large In Really Tiny Houses : NPR.

This made me wonder about when we will have quirky and affordable new home construction in the United States.  It would seem that the advances in design and materials technology is something we could duplicate in the United States, but could we duplicate the price?  Does anyone know of modern home builders that are using these methods or are this creative in the United States?

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