Entrepreneurs are overconfident, more so than risk tolerant

According to a Wharton doctoral student: link

Great quote from Marc Cuban

"All that matters in business is that you get it right once.

Then everyone can tell you how lucky you are."

Super interesting letter explaining the current economic policy from Peter Thiel

This was released by Clarium Capital Partners (run by Peter) and goes nicely in-depth about the current economic conditions, trends, and policy reactions. Gives a chilling feeling as to how things are - but I still subscribe to the philosophy that it's impossible to tell where things will go. The most you can do is bet. :)

Here is the gem.

Amazing reference for Entrepreneurs!

I've had the pleasure of speaking to Vinod Khosla from Khosla Ventures. Vinod has seen it all when it comes to entrepreneurs. Especially in the early days of finding Sun Microsystems.

After being pointed to his site, I discovered amazing material for entrepreneurs. All here for us to consume:

http://www.khoslaventures.com/resources2.html

Topics on product management, sales, people and more. Thanks Vinod.

On the latest economic news:

South Park clip on the financial troubles

Why hiring is even more difficult in a down turn

A great post by Auren Hoffman as to this paradox.

One of the best OP-ED pieces I've seen on the financial crisis

This is a great interview with Gary Becker. I'm not an expert in economics - but I do enjoy the subject and have spent time reading many editorials on the latest events. I tend to side with Gary the most. Specifically in the belief of free markets and their ability to correct themselves. The mistake of having an inconsistent policy at the Treasury and the hard questioning of "Keynesianism."

On top of that, I'm always reminded what Leo Tolstoy taught me from War and Peace. "The human mind is not capable of understanding colossal events." He was attributing that to war, but I think it's also applicable here.

Alan Greenspan further confirmed this view by saying "we are just not smart enough" when he testified in the congress last year.

Great read: Here it is.

Android Netbooks coming in 2010

Venture Beat reports Google Android Netbooks will come out likely in 2010. Article is here. I’m a skeptic in this move. Fred Wilson wrote a great post on the ‘wishes’ for 2009 – and one of the things he says:

“Google starts cutting products and services - This is a bit of the same wish as the last one. But very different in some other ways. Google can do almost anything they put their mind to because they have the engineering resources, the infrastructure, the balance sheet, and the huge revenue stream to support it. But that doesn't mean they should try to do everything. As a shareholder, as a VC active in the internet market sector, and as a fan of the company, I think Google needs to "rationalize" their business in 2009. I don't know how much cost they could cut if they really tried to get serious about a Jack Welch/GE style business unit analysis, but I know it would be significant. I wish they'd pick five to ten businesses they want to be number one or two in and invest heavily in them and forget about everything else.”

I was optimistic that Linux would hit the desktop market hard – but that turned out quite difficult. Believing that Google can penetrate the netbook market with a mobile operating system seems skittish. Let’s see how it goes with the ‘G’ phone first. 

FinGad update

So they say that one learns by failure. We have worked on FinGad for quite some time and have finally concluded that the model is fundamentally flawed. Not that the idea is bad or would not work, but that it would require an intense amount of capital for advertising to get the word out. It seems that the site in its current form is not viral – and generally folks find finance boring. One exception to that theory is PayPal – which brilliantly executed on making finance ‘cool.’ Greg Galant at Venture Voice has excellent interviews and one of them is with David O. Sacks. David was the COO at PayPal and also produced a movie I enjoyed, Thank You for Smoking. David talks in great depth about how PayPal was started and what led to its growth.

For FinGad, we have essentially changed our focus. The one key word that came out of working on the startup is ‘focus.’ One interesting VC told me once that focus means taking a lens and burning something with it. You know how you get the tiny dot that’s very powerful and burns wood? He made that analogy to a focus of a company. We are finally beginning to learn.

With that, we have developed interesting new technology and made substantial changes to our team. The objective is to make investing a lot easier. I’m not ready to divulge the product yet, however this is by far the most challenging and interesting thing we’ve done so far as a company.

So stay on the lookout J

A friend of mine published a book

I've had the pleasure of reading the work before it reached publication and enjoyed it a great deal. Check it out here. 

Summary below: 

"The Stock Market Philosopher: Insights of a Soviet-Born, New York-Bred Hedge Fund Trader is an entertaining examination of a successful Wall Street trader s thoughts on the stock market, starting with his early attraction to risk-taking endeavors. It's a thoughtful book on trading strategy masquerading as a memoir. Favel draws the reader in with tales of his early years in Soviet Ukraine, followed by his high school and college years in New York. Favel s interest in market strategy was piqued as a youth playing fantiki, a Russian children s game involving Bazooka Joe gum wrappers. His family emigrated to the United States while he was still in grade school and he continued his quest for quick riches through his college career. Favel s youthful exploits eventually paid off, as he began his Wall Street career and began mastering the art of trading. Explore the author s evolving out-of-the-box trading philosophy and strategies, including his thoughts on fundamental vs. technical analysis, modern portfolio theory and the random walk school of analysis."

Google taking over with Chrome

Google going into this direction is quite interesting and not surprising. Yesterday was a big day in the tech sector with the release of Google Chrome. The development took over two years and this project has been done in secret. I wonder how many other projects Google is working on right now that the public is completely unaware of. For example, my imagination tells me they're going to create 'boot software' - as some would say an "OS." On Techcrunch, there is a big debate going on between an 'OS' and a 'Browser.' Some have taken the opinion that the browser is the 'OS.' 

I see two sides to this argument: Those that are tech savvy understand what an OS means: the I/O, driver, filesystem, process, and other components. The other side envisions an 'OS' as a platform where to run applications, which is quite possible with Google Apps or other apps online. 

In my view, advanced hardware is becoming obsolete in the personal computing space. Of course it's hard to predict how things will go, but my thinking is as follows: 

Fast hardware on PCs (high speed CPUs, memory, video cards, mother boards, etc) will be necessary to run video games and resource intensive software such as video editing. 

For the majority of PC users that use the PC to surf the web, there will be little need for all that power. If the hardcore processing is done on the server side (where this high speed hardware matters) - that leaves the client to be a simple device running a browser like Chrome. Which taken a step further, Chrome is designed to run Internet applications, which get better and better with time. And as Google is moving to the direction of running 'everything' in a browser - what's left is only a browser is needed - which is where the evolution starts to a new 'OS.' I think this will require more time, specifically in the engineering effort required to improve browser based apps. We would potentially see a shift of computing resources going away from the PC and more to the server. 

This is interesting, as I've seen posts on Techcrunch to the effect of "Chrome will kill Windows." But my take on it is broader. If it's really possible to create GREAT APPS in a browser, will there really be a need for OS X?  

This is truly an exciting time to watch what happens. 

US Open Experience

Thanks to a friend, I had the privilege of attending the US Open on Sunday night. We watched Elena Dementieva play Na Li and Marin Cilic play Novak Djokovic. The men's match proved more interesting as it lasted for 3 hours and 52 minutes! It was great to see the battle between Cilic and Djokovic, as both are great players. It's also amazing to me that some of these players are in their teens (Cilic is 19) and play so amazingly well. This photo was taken by an iPhone - not bad when no other camera is handy. Now both my friend and I are considering taking tennis lessons :)

If you had/had access to $10 million, $100 million or even $ 1 billion, what would you do with it today?

A friend of mine has asked this question in a Facebook thread, and I thought I'd post my answer here as well.

With oil prices running to extreme highs, we are starting to see shifts in consumer behavior. In the US, people have started staying away from large cars and SUVs. We are witnessing a change in the US auto market. Big US auto companies are posting huge losses with no improvement in sight.

After looking at the oil crises and discussing it with folks more experienced then I, it appears the price does reflect the supply and demand curves. I was always wondering if the pundits claiming oil speculation drives up prices and if it should be curtailed. Now it appears clearer to me, yes they inflate the prices, but their participation is still a part of the supply and demand equation. Which means regulating them may prove more damaging then not.

So my position is oil prices will continue moving up higher due to supply and demand forces.

In my view, this would cause a shift in consumer behavior, and likely will cause consumers to evaluate other options. The auto makers due to their failing positions have an interest in maintaining sales volume. The market will have to adjust.

Times like these create opportunities for creative destruction.

I would seek to fund businesses that fit this criterion.

I would fund startups bringing alternative energy to the market. This would include biofuels and electric type energy vehicles (and others). There is a time where people will say enough, and I think it will happen in my life time. Disruption will occur here led by market forces.

For this reason as well, as more and more experts agree that global warming is real and will have catastrophic consequences, I would look at startups focusing on the Green movement. Kleiner Perkins looks at this is a major opportunity with the fantastic speech by John Doer at TED here, and my position is consumer behavior will continue to evolve and these are the businesses that will provide for that shift. This leaves plenty of creative destruction to be done.

Then we come to the drastic fall of the stock market, the continuing fall of the dollar and the housing market continuing to worsen. No one really knows, I would argue, how all these combinations will play on the economy. The most interesting thinking I've seen on this came from Greenspan (surprise) and the view he holds is when people start to lease as opposed to sell their houses, we will finally experience the bottom. In his view, that will take place in the second half of 09' and possibly later. Then we have the government saving Fannie and Freddie, in a potent risk to the value of the Fed system and value of the dollar. (If the government owns worthless subprime mortgages, it will reflect on the value of the government banking system).

We've seen 10 banks go out of business this year, and the stocks of major banks have declined in price.

Some really experienced folks have told me Wall St. will not be like it was before.

I always wonder, what are going to be the next Wall St. engineered financial instruments?

Having seen what happened to Bear Stearns impressed me. I will never listen to an analyst or a Moody rating, period.

But it’s important to note that when there are losers, there are also winners. Goldman has continued to fascinate me with their leadership position.

I think this turmoil with banks is so bad, their balance sheets so inflated and questionable, that I would stay away from investing in this sector all together. Enron was a sneeze compared to what these folks do on paper. Roger Ehrenberg (Monitor 110 co-founder) wrote a great post on the risks involved here.

Having said that, because I'm an internet entrepreneur, I believe we will see a next wave of internet businesses. The businesses that not only provide social networking and user generated content, but internet technologies that aim to solve real world problems. Union Square Ventures holds this view and just funded meetup.com - but this is only the first step. I would fund companies that aim to tackle big ‘real’ problems. And the large push for mobile, and higher transfer speeds, we sill see all kinds of new technologies in this area.

The next area I’d look at is emerging markets. Specifically, looking at businesses that worked in the US or other developed countries, and funding companies that build similar businesses in undeveloped economies. This provides great arbitrage opportunities.

A company's launch quickly going sour

Living up to the hype is not easy.

http://www.techcrunch.com/2008/07/29/how-to-lose-your-cuil-20-seconds-after-launch/#comments