To colorful, delicate bubbles of 2007, 2008 and beyond

bubbleThere have always been bubbles. There will always be bubbles…”

And thank god for the bubbles!

Judge Posner, one of the figures I admire the most, has written a very insightful piece on the Subprime Mortgage crisis, but the part that grabbed my attention was his eloquent description of how bubbles form.

A bubble begins when prices, in this case of housing, begin rising at a rate that seems inexplicable in relation to demand. No one knows how high they will rise. In conditions of uncertainty, there is a tendency to base expectations on simple extrapolation: if prices are rising, they are expected to continue to rise-for a time, but no one knows for how long a time. There is a reluctance to act as if they will not continue rising, for by doing so one is leaving money on the table. As a bubble expands, the rational response is to reduce risk, without forgoing profit, by getting in and out of the market as quickly as possible. The increased trading may keep the bubble expanding.

His observations and reasoning about how the housing, and subsequent investment bubble, got created are equally applicable to the web 2.0 properties and explains the valuation of many of the companies that we see around us. I have marveled over the valuation of Geni ($100M) and Tagged ($117M) and Facebook ($15B). In 2007 we saw the valuation of these companies rising at a rate that seems somewhat inexplicable.

Judge Posner also notes that the Bubbles are more likely to occur when downside risk is less than upside risk. In the Tech word, because the potential of “up side” is perceived to be very high, (e.g., Peter Thiel’s 500k investment in Facebook turning in to 1B+), the valuation of many Web 2.0 companies gets skewed.

But at the same time, as Judge Posner notes that even with the valuations that may seem skewed or inexplicable, it is not the time to walk away from the deals. The optimal thing to do might be to extract the up side from the expansion of the bubble. If the valuations of the start ups are rising, they are expected to continue to rise-for a time, but no one knows for how long a time. The bubble will continue to get fed and will continue to grow during this time. Hope you are participating in that growth.

There is a lot to be done over the next few years; open social, always on connection, moving office products to the web, more touch screen gadgets - and more specialized applications for the touch screen gadgets, HDTV, higher quality audio, DRM free music and each of these fields will spawn new startups, new Googles, and new Facebooks. There are opportunities abound and I hope the right one knocks at your door in 2008.

Happy New Year!

Image



Google is stronger than God! Will Google acquire God?

Here is the proof that the Google is better/stronger/more powerful than God and comments on Google acquiring God.

God Vs. Google:

God is omnipresent.* 1 Google is omnipresent. 1
God is omniscient.* 1 Google is omniscient. 1
God is omnipotent.* 1 Google is omnipotent. 1
God embodies
simplicity, timelessness, immutability, and impassibility.
*
.25 Google embodies simplicity, timelessness,
immutability, and impassibility.
.5
God is infinite. 1 Google is infinite. .5
God is generally considered benevolent. 1 Google is generally considered benevolent. 1
God lets you
(sometimes commands you) to kill other people in its name.
-10 You can find websites to hack using Google
and deface them, but no violence is tolerated.
1
God guides you when you don’t know what to
do.
1 Google guides you when you don’t know what
to do.
1
An intermediary, like a church, a temple, a
priest, a guru is helpful in reaching God.
0 An intermediary, like AT&T, Verizon,
Comcast, are helpful in reaching Google.
0
God made everything in
6 days and then rested.
0 Google has been working non-stop for many
years.
0.5
God creates a lot of new products in beta
and keeps them in beta for a long time.
0 Google creates a lot of products in beta and
keeps them in beta for a long time.
0
God uses Digg like voting to decide what new
functionality to add to the products (
some people call this process
evolution, but it has clearly been copied from the Digg concept. Each
offspring equals one vote.)
1 Google uses some
internal secret methods to release new products and decide what
functionality/features to add and when.
0
God has an affiliate program where you get
paid if bring more people to join (but the payment is in some dubious,
after life currency.)
0.5 You get paid in real money if you bring more
people to Google.
0.5
God is random at times. 0.5 Google is random at times. 0.5
If you ever cross him/her, God is the
prosecutor, the judge, the jury and the executioner.
-1 If you ever cross her, Google is the
prosecutor, the judge, the jury and the executioner.
-1
If you send a prayer message to God, he doesn’t
always listen to it. Most of the times your prayers
are ignored.
-1 If you send a message to Google, Google
doesn’t always listen or read your messages. Most of the time the
requests are ignored.
-1
It is hard to find
God. He doesn’t even own God.com or God.net or God.org.+
0 Easy to find Google. Try Google in any
country. Also Google.org offers even more love to its subjects by doing
philanthropic work.
0.5
If you pray to God, he
never affirmatively acknowledges your prayers.
0 Google always sends an (automated)
acknowledgment of your prayers/requests. Even though the outcome is the
same as praying to God.
0.25
God is pro-clothing.
Request for information about humans in their natural state is frowned
upon.
-0.5 Google is clothing-neutral. Google will
provide all the information you need about human activities regardless
of how much clothing is required.
0.5
God can not help you
with your computer problems.
0 Google will help you solve your computer
problems
0.5
God will not tell you
which way to turn when you are lost on the road.
0 Google will always steer you right. 1
God will not relay a
message from you to another person.
0 Google will reliably deliver a message from
you to another person.
1
God will not tell you
what your friends and enemies are doing.
0 Google will tell you a lot about your
friends and your enemies.
.5
Even though God knows,
he will never tell you who is thinking of you and who is visiting your
house.
0 Google will try to tell you who is thinking
of you and who is visiting your website.
.5
God will not find any phone numbers for you. 0 Google tries to find the

phone numbers for you
(800-Goog-411)
.25
Life without God is hell. 1 Life without Google is hell. 1

* From Stanford Encyclopedia of Philosophy.

+God.com and God.net are fan sites and God.org is owned by a cybersquatter.

Since Google is ahead in so many categories, I don’t even need to count the points. Google is stronger than God!

Some columnists have (wrongly) suggested that Google is God. There is no God at Google. (http://god.google.com leads to a server not found error.)

There are rumors that Google is in talks with high ranking officials at Vatican, Jerusalem and Mecca to possibly acquire God. In recent job posting, Google looked for candidates with extensive religious background, which could be a hint.

Since “God” has G as the first letter in its name, some have argued that Google might have already acquired God, and it is already a done deal. Analysts disagree whether Google will release an improved God (God 2.0) or an open source God (renamed as gOD).

google is god 2.0

You can also visit The Church of Google, where they believe that Google IS God and suggest taking a pledge Do You Accept Google As Your Default Search Engine?. I disagree with their conclusion and refuse to take that pledge.

Please visit next week (or subscribe to the RSS feed) for an article on Why I am scared of Google, and what am I doing about it.

Do you have additional reasons to prove/disprove the hypotheses? Does God talk to you sometime? Do you have any inside information? Pl. leave a comment.

Happy Thanksgiving, May God Google be with you!


Tags : , , ,


Crowd Sourcing : Digital Wall Calendar & Origami Folding Machine

ImageThe Digital Wall Calendar combines calendars for every member of a family, no matter what program or website they are on, into one gadget.

What a neat idea! Where can I buy it?

Well, it’s almost there, all that’s left now for this concept is the software, hardware, and design experts, as well as investors.

ImageThis is a classic example of crowd sourcing for ideas. The idea is the first finalist picked by the members of CrowdSpirit, a new gadget-by-committee project.

A pre Web 2.0 site that has been doing the crowd sourcing of ideas has been around for a long time, the halfbakery.com. Their latest suggestion- Paper Money Origami Folding Machine:

Some tourist attractions have those machines where you stick a penny and 4 quarters in and it squishes the penny into a medallion with an imprint of the Golden Gate Bridge or something as a souvenir.

I think the same idea applied to paper money would be even cooler. Have a machine that folds the dollar, pound note etc. into some location specific trinket like the Eiffel Tower or the Sidney Opera House. I’m pretty sure you can make anything out of origami. It would also be more exciting to watch than a penny being squished.

And lets not forget the cream cheese rings - Pre-packaged, preformed, cream cheese rings separated by thin plastic sheets. Just peel and toss on the bagel. (I did find at least one paper on robotic origami folding on the net and I am sure there are techniques developed for metal sheet folding which can be applied here and of course peanut butter has been available as slices for a while.)

Lets get the crowd sources and crowd chipin folks together.

Tags: crowd spirit, crowd sourcing, halfbakery, origami, crowd chipin

Via Gizmodo



Stealth mode: Great for the B2, not so much for startups

Folks at Path 101 are doing a very interesting experiment. They are liveblogging their start up. Everything about the start up is out there, including their to-do list from Monday meetings - with items such as preparing presentations for investors, etc. Fred Wilson at Union Square Ventures wrote about Path101 in his blog A VC. The company calls themselves pre-monster - it is a place for college students to figure out what they want to be.

Companies that are developing their products or sites entirely in stealth mode might be missing out on a very valuable opportunity - to get opinions and critiques on their products before they are built. Great entrepreneurs tend to treat their startups like a bowl of spaghetti - they build a prototype and throw it out there. Whatever does not stick, they rework and taste test again.

The reality is that there are few, truly radical ideas. For every person who has a notion regarding a ground breaking product, there are 10 more out there who have the same idea. While great ideas have a lot of value, what wins the race in the end is the execution.

I recently encountered three web 2.0 companies that were building the same product. Each of the groups believed that they were the only ones that had the product! When they finally got out of stealth mode, and launched, they were a bit surprised to find that there were about 5 other companies in that space, two in the same city.

In this day and age when people are using Crowdcasting (we wrote about Innocentive which uses crowdcasting to outsource R&D for companies) for everything from personal advice, to building a product, trying to start and build a company in stealth mode carries a certain amount of risk. One needs to get outside information - particularly from people in totally unrelated fields as they are very often able to look at a problem very differently, and might even come up with radical solutions.

One of the big ironies of life is that you must have a lot of whatever it is you are looking for. A friend’s dad who was a banker always used to say “Don’t go to the bank looking for money when you need it. Go to them when you don’t need money”. Good advice when you are looking for funding for your start up.

Similarly, ideas are like a currency for start-up companies. The more you are willing to give or put out there, the more you will get back!

Technorati Tags: stealth mode, crowdcasting



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