Disqus - Latest Comments for Jens

Re: Venture Fund Economics

Jens — Sun, 03 Aug 2008 08:09:18 -0000

This is an important point.

Venture Xpert etc have no way of measuring net returns, they can only look at a money invested vs. exit volume multiple. This is highly misleading. It ignores transaction costs (lawyers, bankers, etc), the shares that goes to founders and management, and it ignores management fees and carry. I have put together a quick spreadsheet that includes the costs here:

http://jenslapinski.wordpress.com/2008/08/03/ve...

Would love to hear your view on this.

Re: Venture Fund Economics: Gross and Net Returns

Jens — Sun, 03 Aug 2008 08:25:45 -0000

For carried interest, you mean that you net 20% of the money distributed to LPs after you have returned $100m to LPs?

Re: A Feature Request For Facebook

Jens — Mon, 29 Sep 2008 02:22:59 -0000

What a great acquisition pitch. :) Let's see what happens.

I personally think it would be interesting if Facebook bought Twitter and integrated it. However, Facebook would need to become more open than they currently are, how likely do you think that is?

Re: Always Treat Money Like It Is Your Own

Jens — Mon, 05 Jan 2009 12:31:14 -0000

Agree 100%

Reminds me of what Milton Friedman once said:

There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you're doing, and you try to get the most for your money.

Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I'm not so careful about the content of the present, but I'm very careful about the cost.

Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm sure going to have a good lunch!

Finally, I can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it is, and I'm not concerned about what I get.

Re: The Venture Capital Math Problem (continued)

Jens — Thu, 30 Apr 2009 12:53:41 -0000

Fred,

this is a 'black swan' issue. Extremely wild swings in exits are part of the game. By calculating them out, you miss everything that is important about VC as an asset class.

LPs want exposure to this asset class exactly because of this situation. In what other asset class can you get a 100x on investment when you hit a real outlier?

The average is not the point. It is the extremes at the positive end of the 'value at risk chart' that make VC as an asset class interesting.

Let me put it another way: take Twitter out of your portfolio. Let's see how happy your investors would be with your job then ;) But seriously, by calculating VC the way in which you do it, you do everything that Taleb tells people not to do. Have another look at the black swan book, it has big implications for what you try to do.

BTW: I twice calculated the money in vs. money for a parts of the UK VC ecosystem. Once for biotech, once for the Cambridge Cluster. In both cases, there was more money going in than money going out, if you excluded the outliers. It is the outliers that make this asset class.

Re: My Google Talk On Disruption

Jens — Mon, 11 May 2009 09:34:57 -0000

Politics. And public administration in particular.

Both are ripe for disruptive change. At the politics end, the Obama campaign was just a start. At the administration end, I expect to see far more local, regional and national public sector administration to get impacted by the Internet. This is just starting to happen, you blogged about it just a fed days ago.

Re: My Google Talk On Disruption

Jens — Wed, 13 May 2009 14:06:56 -0000

Good question!

I think it can certainly make things more efficient. I see these things to be operated by NFP, or by governmental organizations themselves.

Re: LinkedIn Bug: People You May HUH?!

Jens — Mon, 09 Jun 2008 06:16:18 -0000

Information providers regularly 'seed' their databases with fake records. In that way, when somebody steals the data, they can always demonstrate that it was generated by them.

Re: What Andy Grove still gets wrong about the life sciences — and how he could help fix them

Jens — Fri, 09 Nov 2007 10:39:12 -0000

The key aspect that differentiates the human therapeutics industry from all others is the extensive regulatory environment. Just imagine that every new semiconductor that was developed had to undergo a 5-10 year testing process in which the developer had to proof that it was:

- safe to use (because something people drop dead when they come in contact)
- it worked better than any other semiconductor in the same field (maybe you just made it up?)
- it still worked when you gave it to a lot of people who used it in a near real life environment (strange thinsg happen when you give new stuff to a lot of people in an uncontrolled environment).

After you have done all that successfully, you still needed to:
- convince the regulatory committee that it is really a good idea to approve this semiconductor (BTW, this step alone would take about one year)
- then you have to manufacture the semiconductor (actually, you probably need to build the fab first)
- then you can sell it (you hope that people really want it).

If you think this through, you will understand why therapeutics is different in many respects from all other industries.

Re: Dow Jones Acquires Generate

Jens — Thu, 09 Oct 2008 12:25:11 -0000

Barry, do you happen to know for how much Generate was actually acquired for?

Re: Twitter as full-fledged publishing platform

Jens — Fri, 12 Dec 2008 07:01:56 -0000

Have been thinking along exactly these lines just this week. I guess this might be the tipping point for twitter.

What I found is this: Twitter by itself is actually unusable. BUT, when you use it with all the 3rd part apps such as TweetBeep and Twitterific, then it suddenly becomes very very interesting.

I see Twitter as a platform now. But the value arises out of the apps. In a sense, Twitter could be like an email standard. A standard that allows people to communicate in particular way. But if you want to have that really cool Email program: then you gotta pay...

Re: Ignorant Customers Happier With Their Choices

Jens — Sat, 01 Mar 2008 08:24:00 -0000

This is very interesting. Reminds me of the experiment where people who were told wine was much more expensive that it actually was, thought the wine tasted better. Seems to me the same fundamental psychological underpinnings are at work here.

It also reminded my of the Bettgar's seminal book on sales (from the 1930s I think). He stated that people simply like to arrive at their own conclusions, that they have a genuine dislike of being told things, and much prefer to be asked questions.

I would be very interested to see this exact same experiment repeated with people not being told stuff, but just being asked questions on the same subject area. Would it actually change their evaluation of the product?

Re: Mission-Critical Presentation Advice: Dump Powerpoint

Jens — Fri, 04 Apr 2008 08:12:39 -0000

I agree that a bad presenter is a bad presenter no matter what.

Let's not forget that humans are visual animals. "A picture says more than a 1,000 words" comes to mind.

I think a PowerPoint has got the purpose to VISUALIZE what the speaker is talking about. It can be extremely useful when used well.

For me that means that there should be as few words on a PowerPoint as possible. Use graphs, tables, pictures, etc to get the point across. Speak the words yourself.

Re: Jaiku rises from the dead, but is it too late?

Jens — Thu, 28 Aug 2008 07:24:03 -0000

IP, what IP?

Re: Nice advertorial for Union Square Ventures in the NY Times

Jens — Mon, 22 Sep 2008 05:05:42 -0000

Good article. I think USV play it very smartly. Not many VCs do the many small deals that they do (e.g. Zemanta), so they can play in later rounds. BTW, it is Covestor (no Coinvest).

Re: What is a startup? - Paul Walsh, the Irish Opportunist

Jens — Tue, 11 Nov 2008 05:25:38 -0000

@ Jonathan Lister

I understand the principle notion of what you mean. This is a good subjective way of putting it.

If I remember this correctly, the formal or objective definition of a start-up is that of being younger than 3 years. I think this is the definition that most academics and governments use when dealing with this subject.

This is not a question of being small or large or how fast you grow or don't or whether you are cash flow positive or not.

BTW, this is not to be confused with SMEs or SMBs, who are exclusively defined by their size, not by their age.

Disclosure: I used to work at Libray House and I am still a shareholder, but I have no direct involvement with the company anymore. I track LH on Google Alerts, and found this discussion that way.

Re: Personalised news based on your socnet profile

Jens — Tue, 22 Jul 2008 05:13:00 -0000

Just imagine if the RSS reader companies did that deal: they actually know what I am reading...

Re: What a new search engine should be about

Jens — Tue, 29 Jul 2008 07:22:11 -0000

A new search engine makes sense when it does something unique that is of great value to the user. And it better be hard or not interesting for Google to copy this for either technical or business reasons.

Cuil doesn't (seem to) have anything unique that is of great value to the searcher. Maybe they have something that is of great value to Google, Yahoo or Microsoft. Who knows...

@ Paul Walsh: Competing with Google is okay. But only if you are significantly better and there is nothing that Google can do about it. That is obviously a pretty difficult combination, as nobody has cracked that, yet. I agree that focusing on other areas is easier.

Re: What a new search engine should be about

Jens — Tue, 29 Jul 2008 08:20:44 -0000

@ Paul Walsh

I actually believe that at some point somebody WILL come up with something that is better than Google. Or can you imagine that in 100 years time search will be the same as it is now...? :)

Would I want to take on Google in their own game? Probably not right now, but who knows what technologies I will have access to in a few years time.

Re: There is space for innovation in search, but challenging Google will be tough

Jens — Mon, 04 Aug 2008 11:17:31 -0000

I agree 100%. For people who want to read up on the topic of how to compete in this kind of situation, I suggest you have a look at "blue ocean strategy":

http://www.amazon.co.uk/Blue-Ocean-Strategy-Unc...

Great book.

Re: Ebay’s decline

Jens — Mon, 01 Dec 2008 12:08:54 -0000

You should also check out their stock price, it has reflected this decline for several years:

http://finance.google.com/finance?q=ebay

Embeddable widget here:

http://www.wikinvest.com/stock/EBay_(EBAY)

Re: Facebook options debacle shows lack of liquidity is an issue for startups

Jens — Mon, 08 Dec 2008 13:43:23 -0000

Nic,

am sure you are right. It will affect not just morale, but his credibility as a leader.

But the point is really this: Zuckerberg can't 'cash out' his employees. He just doesn't have the cash. Or let's put it the other way round. Let's just imagine he bought out his employees. He would essentially tell his employees: "Look, I am cashing you out, this means your shares are undervalued, thanks a lot for giving them to me."

What you need is a market for the shares outside of the company's control. Where people can trade their shares with other people. Oh, wait, that is called a public market...bugger...back to the drawing board.

What it essentially shows is that companies that should actually be publicly-listed aren't. Maybe Obama is intelligent enough to understand this problem and remove Sarbanes-Oxley. It sure didn't prevent the credit crunch. All it does is slow everybody else down.

Re: Traction or revenue

Jens — Wed, 17 Dec 2008 09:56:19 -0000

I don't understand the difference, but maybe I am not thinking straight:

1) I think you should ALWAYS try to get to the point of generating meaningful revenue as quickly as you can, however,
2) If you are an advertising-based company, then generating meaningful revenue might not be possible until you reach a certain point. In which case 'as early as you can' simply means somewhat later. So, obviously you should focus as much as you can on getting to that point as quickly as you can. That means focusing on traffic.

The current environment doesn't change this one bit.

What has changed though is that 'meaningful' is suddenly somewhat less than it was before, so people are trying to bring money in earlier than a few years ago.

Does that make sense?

Re: Ten reasons why startups fail

Jens — Thu, 26 Feb 2009 09:38:03 -0000

Out of interest - which ones?

Re: 2008/08/04/mobile-tv/

Jens — Mon, 04 Aug 2008 14:29:19 -0000

I actually disagree.

I can actually watch mobile TV already. It is called YouTube. Many TV stations are starting to stream their content online. So I can watch that, too. Well, provided I have a speedy connection.

The point is: mobile TV is simply Internet TV watched on a mobile. We don't need to re-invent the wheels, they are already on the car.

But yes, why would I pay for a second set of wheels when the ones that I already have for free work just fine?

Re: Microsoft Announces Engagement Mapping ROI Black Box, Technology Companies Taking Over Advertising Industry

Jens — Tue, 26 Feb 2008 07:59:52 -0000

These are good points. I have some additional doubts whether this works which you can read on my blog. Overall, as you said, doing this analysis is difficult enough. In addition, just focusing on the online side of things will make quantification very hard.

Let's see what Microsoft comes up with, maybe the amaze us all with a great product.

Re: Radical Idea For News Sites: Show What’s New On Your Homepage

Jens — Fri, 14 Mar 2008 04:56:03 -0000

This is a great article. By far the best structure of an online newspaper I have seen so far is by German magazine Der Spiegel http://www.spiegel.de

The problem with reverse chronological order is that when you have high-throughput sites, 'news' disappears too quickly from the homepage. Der Spiegel uses a combination of a blog (newest 'big' stories at the top) and after that has a short pre-view of posts by category. It works beatutifully, which is why this is the No.1 german news site and all other German news sites have adopted this style. Amazing that Anglo-Saxon sites are not copying it, yet.

Der Spiegel is not perfect though. They don't allow comments on articles. Instead, they rely on old-fashioned discussion forums. Also, their RSS feeds simply suck, as you can't preview the firest few sentences of a story.

Nonetheless, it is still the best I have ever come across.

Re: Dow Jones Acquires Business Networking Tool Generate

Jens — Tue, 22 Apr 2008 08:02:46 -0000

Do you know how much Dow Jones paid for Generate?

Re: Microsoft Hopes To Lure Searchers By Paying Them

Jens — Thu, 22 May 2008 13:03:59 -0000

You can't find Cashback on Microsoft Live. In order to find it, you need to search for it on Google:

http://jenslapinski.wordpress.com/2008/05/22/li...

I guess that as long as the search result quality on Live is at that level, Google won’t have to worry too much.

Re: Peter Liguori, CEO, Fox Broadcasting, On Content That Matters

Jens — Mon, 03 Nov 2008 11:34:25 -0000

True. Content is important.

But the nature of the pipe can fundamentally change:

- type of content distributed
- user experience of the content
- which content creators are enabled to distribute
- who controls/profits from the distribution

If Peter Liguori really thinks that the pipe doesn't matter, then I would be amazed.

Re: Microsoft Makes $44.6 Billion Cash And Stock Bid For Yahoo; 62 Percent Premium

Jens — Fri, 01 Feb 2008 15:17:23 -0000

Interestingly, this comes one day after Semel has stepped down as Chairman (31 January). The timing of this is very significant. It basically means that the new chairman can't put a strategy in place, but has to consider this offer first - or come up with a strategy that offers better shareholder value - which is very tough.

I think he will take the easy way out.

Very very clever timing by Microsoft.