Readings

My Homemade Technology Column

I follow the technology markets, a lot.  Call it passion, obsession, or just plain weird, but I find it interesting to read about the constantly changing technology landscape.  For anyone else interested in tech here’s a snapshot of my favorite websites/blogs.   Some are more news focused and others more analytical.  You might already be reading some of these sites, but hopefully you gain at least one new information source from the list below.

Note that a number of VCs don’t update their blogs often, so I would recommend using an RSS reader to stay up on those blogs (because you don’t want to have to constantly check a site that doesn’t get updated). (more…)

Steve Blank on Start-Ups vs. Large Corporations

Here is a speech by Steve Blank, a professor at Stanford and Berkeley, and a thought leader in the start-up community.  Blank’s talk is from the Staford Graduate School of Business Entrepreneurship Week.  Below is a great quote; maybe I like it so much because it helps me cope with the one-size-fits-all solutions that I’m hearing over and over at business school…

“Everything you learn in the business school about large company management is destructive for an early-stage venture. Big idea.  It’s not kind of useful, or geez I’ll just change it.  What you’ll hear later and I’ll explain why, it’s desctructive. Good news is, in the entrepreneurial group at GSB, we teach the right things about early-stage ventures.  But they are not interchangeable.  And you’ll hear me say this throughout this talk: Large corporations execute existing business models, start-ups search for them.  The tools needed, techniques needed, and people needed for execution versus search is what we now know to be radically different.

Blank goes on to say: (more…)

Book Review: You Can be a Stock Market Genius, by Joel Greenblatt

During my first Winter Break since 2003, I had the chance to read You Can be a Stock Market Genius, by Joel Greenblatt.  This book seemed like a logical step after reading The Intelligent Investor, by Benjamin Graham, and Value Investing: From Graham to Buffett and Beyond, by Bruce Greenwald.

Graham, and by extension Greenwald, focus on the analysis of cheap companies, or put another way: They focus on Value Investing. Often, this means analyzing, and potentially purchasing companies with low P/E multiples. To me, Graham and Greenwald’s discussion of value investing is intellectually interesting, but frankly, I find its application practically elusive.  It is difficult to discern whether a (more…)

Charlie Munger on Picking a Career

Warren Buffett’s right-hand man, Charlie Munger, has a great 18-page article on the art of stock picking.  The first half of Munger’s article turns out to be more about broad business principles than narrow number crunching. As someone who’s searching for the next career step, I particularly like this quote.

“Every person is going to have a circle of competence. And it’s going to be very hard to advance that circle. If I had to make my living as a musician…. I can’t even think of a level low enough to describe where I would be sorted out to if music were the measuring standard of the civilization.

So you have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction that you can make. You have to figure out (more…)

Free Video Content and Cutting the Cord

The intersection of television and the Internet is quite interesting.  It has Hollywood shivering, fearing that its industry is going to head the way of the record industry; it has technology entrepreneurs giddy, excited by the prospect of using Internet-connected TVs to disrupt content providers by providing free video content; it spells trouble for cable providers; and it reads opportunity for streaming video services.

Here are a few great articles and thoughts on why this “inevitable” switch to free video content might not happen so quickly (or at all), and how Netflix is evolving to become a potential threat to cable operators, while at the same time it’s a slave to the very cable firms that it is disrupting. (more…)

Readings: Solar, Terra Firma vs. Citi, Dividend Recaps, Facebook + Bing, Management Consulting

Silicon Valley’s Solar Innovators Retool to Catch up to China: Selling energy (a commodity) is all about price, which means in order to turn a profit in a competitive market when prices are driven down, one has to be able to produce at the lowest cost (or at least within a competitive low-cost band).  Competing with China’s subsidies, cheap labor, scale advantages, and not to mention depressed currency, is a hell of a battle.  I’m glad that I didn’t pick this fight at Solyndra with $1B riding on it.  But then again, as a U.S. tax payer, I guess I do have an interest in this fight by promising to lend Solyndra  $1.74 ($535M loan guarantee / 307M U.S. Pop.), so I do have a stake in this fight.  We better use technology to close the cost advantage, it’s our only hope.

Terra Firma, Citi in Spat over EMI: Wow.  This is an ugly tussle between a PE firm with buyer’s remorse and a bank double-siding a deal.  Kudos to Citi for a job well done; Terra Firma should just fess up to it’s mistake (but then again, if I were Terra Firma, I would be (more…)

Readings: Sourcing Investments, Tablet Computers, The 5% Rule, Electric Cars

Where are the Deals?: Finding (good) investments is a challenge in any investing discipline, and even more so in private company investments, either PE or VC.  This article shows the inefficiency in the sourcing process and provides strategies for improvement. Two items standout: 1) the benefits of building a specialized outbound origination program (e.g. TA Associates and Summit Partners) and 2) the concept of openly discussing your investment strategy via blogs (e.g. Fred Wilson at AVC, Jeremy Liew at LightSpeed Venture Partners and everyone at True Ventures).

Tablet Computers – Chasing King Apple: The tablet boom (or at least anticipated boom) is in full swing.  After years of being ahead of the technology curve, Motion Computing is now seeing some serious competition (and growth) in the market.  Apple is leading the pack, and others are jumping in head-first, including: Samsung, H-P and now BlackBerry.  I see a lot of parallels to the early PC market.   (more…)

Readings: Dilution, Products vs. Features, and Distressed-Debt

Employee Equity – Dilution: A great read for entrepreneurs wondering what will happen to their capitalization table post-financing.  From experience, this looks about right and can inform decision making of those seeking VC financing.  I will look forward to a day when Fred Wilson expands on the interplay between VC ownership percentage, company pre-money valuation and round size.

Product vs. Features – The Lesson of XMarks: Great advice from Mark Cuban about building companies with defensible competitive advantages.  Be afraid of (more…)

Readings: How to Lose Time and Money

How to Lose Time and Money: Paul Graham, co-founder of Y Combinator, a venture firm / incubator, provides a great piece of food for thought about time and money management (two very valuable skills in my opinion).  I’m working on managing my time, and I promise, if  I earn a fortune (operative word if) I will try to heed Paul’s words about the psychology of not losing a fortune.

Paul’s thoughts are a good segue into an upcoming post about rationality.  Stay tuned.