Entrepreneurship 101 - Value add to existing items

Since the last year, Stanford has been sponsoring Entrepreneurship week contest of being creative and “adding value to existing items.”

And, the drum roll please; this year’s secret item to add value to is: Rubber Band.


The 2008 Innovation Tournament is open to teams of Stanford students, as well as students around the world. Teams can be of any size. Your challenge is to create as much value as possible using rubber bands. You can use as many as you want, of any size, shape, or color. Value can be measured on any scale you choose. Remember, value comes from actually implementing your ideas and delivering results. To be successful, challenge assumptions, seize opportunities, be creative, and Make it Happen!

Last year, the secret item was Post-it Notes. And some of the entries were creative and business worthy.


My favorite entries from the last year were: Braille Note - A Braille Navigation System for Sight Impaired; selling ads on the Post-it was obvious, most sustainable and probably fundable idea; and selling the preemptive prize of the event on Ebay was gimmicky, but a cool thought.

You can see the complete list of winners for 2007 here.

Here are my ideas for the rubber band:

High tech ideas:

  • Rubber band with a ring tone built in. There is already a strip of paper available that can be made to hum any tune. Use the rubber band instead to create a ring tone. Perfect for a packaging for a ring tone card or for birthday card.
  • A rubber band rocket launcher. It might be possible to launch less than 2 lb rocket with rubber band canon. Do it right and win this competition and the Lunar X prize at the same time! :-)
  • Rubber band to monitor the temperature of your computer system. This should be easy to implement. If the temperature goes up, the band becomes softer and stretches more.
  • Use rubberbands to generate energy while you are walking. Essentially, it stores a part of the energy when you are walking and then delivers it back when you need it.

Low Tech Idea:

  • Make a rubber band music video (either as a story to existing number or create music using rubber bands.)
  • If done right, rubber bands can be used as a filteration device. Additionally, they can be self cleaning. After using a bundle of rubber bands as a filter, stretch and release the bundle to auto clean.
  • Rubber band with writable sleeves (ready for ads or customization) would be too obvious, but I think it will work. Printable friendship bands are all around so that doesn’t count.
  • Make crossed rubber bands. I find that to secure something, I need to use two to four rubber bands and attach them in two different directions. A pre-arranged rubbers cluster might be helpful. Also, I hate those metal twist ties on bags. I end up using rubber bands to secure those bags any way. A custom designed rubber band suited to tie bags would be nice. Or, make adjustable rubber bands. When I want to use rubber band, they are never of the right size and don’t provide the right amount of force.

So what can you do with a rubber band? You have a less than a week to come up with an idea, implement it and document it.


Leave a comment if you can think of any other ways to add value to a rubber band.

Hot or Not Valuation - $20M is way too low and is very likely wrong


I am intrigued by the metrics and the factors related to the valuation of online enterprises (see here, here and here). Every time there is a new major acquisition, it gives us a new data point to calibrate the dynamics of the current market conditions and expectations.

Blogosphere is reporting that Hot or Not was acquired for $20M by a Canadian company, Avid Life Media. HotorNot is an online photo rating site that has a dating component to it.

HotorNot’s web strategy gives some insight in to the free vs. paid service models. HotorNot had a paid "premium services" model and they claimed that the conversion rate was very high (as much as 15%; typically it is 1 to 3% for similar sites). Then last April, in a very bold move, they changed their business model and decided to go the completely free route.

The site did see a huge jump in traffic; from 6M visitors per month to 10M visitors/month; the revenue from advertisements and virtual gifts increased, but not to the level that would make up for the lost receipts from the membership plans. Of course, a period of few months is not enough time to gauge the effect of a major transitions, but it was interesting to watch them go through the transformation.

With the free service, came spam; and I understand that they have gone back to the paid premium service model, mainly to protect the users from getting junk mail.

From the Alexa traffic graphs, it seems that they did experience a huge traffic boost but it was not a sustained one; the traffic is back to the pre-free-model levels.


There are reports that HotorNot was acquired for $20M but I hesitate to believe these figures.

Some of the available stats about the site are as follows: Annual Revenue(est.) $5M; profit (est.) $2M; the current visitor count has stabilized to around 5M visitors/month. They also have an established brand and a significant presence on Facebook.

Given these numbers, where would one peg the valuation of HotorNot?

As a comparison, Face book has about 100M monthly visitors (theoretically valued at $15B) and Plaxo has about 2M visitors/month, and was looking for a valuation in the range of $200M.

Another variable that goes in here is that HotorNot is a risqué dating site, and traffic on similar sites does not monetize well.

Even after taking this in to account, I find it hard to believe that HotorNot would receive a valuation of $20M, I think there are some multiples missing here.


If I were to throw out some numbers, I think the total package that HotorNot sold for, might be about $40M, may be $50M (but definitely not $100M).

Well, we will know in a couple of days.

You can add your estimate of the valuation in the poll (current poll is on the sidebar, see here for the results of past polls)

I support the Microsoft-Yahoo merger because Google is my frenemy

microsoft Yahoo combined

I fully support the Microsoft and Yahoo merger; mainly because I consider Google to be my frenemy.

Frenemy is defined as:

Someone who is both friend and enemy, a relationship that is both mutually beneficial or dependent while being competitive, fraught with risk and mistrust.


And without a doubt, Google is my number one Frenemy. I love some of their products, but I worry that they have so much information about ever body and it is just a matter of time before their privacy policy crumbles.

As I said a while ago, Google is so much ahead of the competitors that Google is skewing the market and tilting the playing field for innovations. If you ever cross Google, Google is the prosecutor, the judge, the jury and the executioner. Google is stronger than God, and I don’t like any entity wielding so much power over me.

And as the old adage goes, the enemy of my enemy is my friend.

I want to see a real alterative to Google for online ads, web search and online office applications.

google_ballsYahoo couldn’t compete with Google and I was concerned that they have essentially conceded to Google in the field of web search. Microsoft couldn’t compete with Google, because well, they are Microsoft and they have their own ways of doing things. But combined Microsoft and Yahoo, Microshoo, might provide real competition to Google in some important fields.

Microshoo might not be able to catch up with Google in search technology, but there is a real chance that Yahoo and Microsoft combined will provide a viable alternative to ad-sense and online advertisement market. Online office application could go either way, but I do expect Microsoft+yahoo to put up a robust defense before they concede that domain.

ImageIn some of the websites I maintain, 80% of the traffic comes from Google. I think that is just wrong - it means that I am not in control of my website, Google is. Anything that can be done to bring that ratio down, to reduce my reliance on Google, is a good thing.

NewYork Times is reporting that CEO of Google placed a call to Yahoo chief, offering the company’s help in fending off Microsoft’s offer. One of the ways that Google can help is by having Yahoo outsource the web search to Google. NO, NO, I don’t want to see that happen and believe me, you don’t want to have Google the only provider of web search - if that happens, you might as well wear shackles with Google logo on it.

I am convinced that the Microsoft and Yahoo merger is good for Microsoft, good for Yahoo and most importantly, it is good for the internet community; both in the short term and in the long run.

Go Microshoo, Go!

Notes from the AlwaysOn OnMedia NYC : Content vs. Connections

alwaysOn Onmedia NYC

Do you go to the internet for the content or for the connections?

Drew Lipsher of Greysoft says that “The perceived economic value of content is approaching zero.” Jim Spanfeller of Forbes.com says that the reason people come to the internet is the content.

People get fired up about one or the other concept, and there is a big debate going on. Jeff Jarvis has a good wrap on it.

I don’t see it as “either-or” proposition. One needs content, one needs connections, one needs content generated by the connections, and one needs connections generated by the content.

Today I spent more time on the internet reading WSJ and XKCd then visiting my LinkedIn or Facebook profile page. I also know a person who spent all her time today on Myspace, reading and writing and drafting clever messages and posting animated gifs. I went online for the content, she went there for connections and, I would argue, the content generated by the connections.

There are various forums and bulletin boards that I frequent. I have never posted in many of them. Forums are THE place for user generated content; but I don’t go there for connections, I visit them because of the high quality content that the users generate on the forum.

The main reason why one even needs to make a distinction between content and connections, is that the old way of serving ads on the internet are not working as well. For the longest time, the ads were tied to the content. There was a website with specific content, which attracted a particular type of reader and the ads were served from the webpage to the user. Publishers always thought it was too risky to trust their brands to “user generated” contents.

In new social media environment, the ads need to be dissociated from the content and need to follow the user. Don’t follow the content, follow the connections.

Each method of advertising, TV, radio, Print, content, or connection, presents a different slice and blend of the user base. Different demographics follow different trends and different media. Once you know which group you want the exposure to, an optimized ad strategy will tell you which media, or which content or which connection to use.

Coming back to the notes from the AlwaysOn OnMedia, AbleBrains has a summary of the CEO pitches. Most notable presentations were from AzoogleAds, which is a performance based ad network and relies on CPA (cost per action) to generate revenue and not on CPM or CPC.


and UnisFair which provides virtual events and virtual worlds for marketing or virtual interactions with a user group. Cisco has “Cisco Partner Space” where facilitates collaboration between customers, partners and Cisco.

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