Insane in the Wayne

Goodbye Blogger

2010-05-15T20:28:00.003-04:00

Well, this isn’t really a “Goodbye”. I haven’t been consistently posting on this thing for a good long while now so I guess I said “goodbye” a long time ago.

But you can consider this more of an “I’ve Moved” notice.

That’s right, I’m not retiring from my weak attempt at blogging completely. I’m just setting up shop somewhere else (at tumblr to be exact).

So if you’re a subscriber to this blog, no worries, I’ll switch the feed over to the new location today.

And if you want to check out the new shop, the address is:

http://www.ExperienceBlogger.com

A “Funny Thing” Happened on My Way to Building My First Company...

2009-12-11T15:56:00.000-05:00

Better late than never (I guess). I finally got around to writing a quick blog post on a press release that came out a few weeks ago...

I’m happy (and proud) to finally announce that Tycoon Publishing, the leading provider of premium online investor education, has acquired TickerHound.

Before I say anything else, I really have to take a moment to thank the New York technology community for all of the help, support and advice over the last few years.

Thanks to those who believed in us when we needed it. Thanks to those of you who gave us guidance when we needed it. And thanks for offering some constructive criticism when we needed to hear it.

Bringing a start-up from napkin to sale is an incredibly difficult process. Add that to the fact that I had the “brilliant” idea to start a finance-related company right before the "greatest financial crisis since the great depression," and the challenge becomes almost comical. But a large part of our success is due to the outpouring of support in the New York start-up community. So, thank you.

In particular I wanted to thank Philip James and Mark Angelillo, Rikki Tahta and Perry Blacher, Matt Milner, Brett Petersel, Jay Levy, Ari Weinberg, Justin Tsang and David Ambrose, Gary Vaynerchuk, Vin Vicanti and Jim Moran, Nate Westheimer and Jonah Keegan – thank you for all of the awesome insight, advice, referrals and support!

And for everyone else who took the time to chat with us or answer some of our questions at an event or on the nextNY Google group, THANK YOU!

I’m humbled and honored to be part of this community.

Lessons Learned

The other night some friends insisted we go out and celebrate – “How happy are YOU!?” was the question of the evening.

But what's so surprising to me is that while I'm certainly happy about this, I’m happy for different reasons than I would have ever imagined when we started the company. I thought I'd be thrilled by being able to say "my company was acquired”.

But the “funny thing” is, that's not what made me happy at all. That old cliché comes to mind:

“Success is a journey not a destination.”

What made these last few years so amazing was simply the experience itself and most importantly, the lessons I learned along the way.

While there are probably more takeaways than I can count, these have to be my top three:

1. Principles, not Methods:

I can’t think of a better way to say this myself, so I’m simply going to quote Emerson:

“As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.”

It’s easy to get lost in the day-to-day grind of running a start-up. But as long as you have a solid framework from which to make decisions, evaluate opportunities, etc. , you’ll be just fine.

2. Know Your Numbers:

More specifically, get your financials down cold.

Know how big your market is. Know what it costs to acquire a user. Know how much revenue you can generate from that user.

To even begin to calculate these numbers you’ll need to constantly test, measure and optimize every single step in your marketing funnel: various marketing channels, conversion rates, retention rates, landing page design, etc. Constantly testing, measuring and optimizing every step along the way is what will ultimately bring acquisition costs down and lifetime value up.

It’s something we should’ve been doing from Day 1, but like many start-ups, we probably made every mistake along the way and still managed to do “ok” in spite of ourselves ☺

Luckily, we eventually got our act together but I have to say, the sooner the better when it comes to knowing your key metrics and how they relate to your financial performance.

3. Chickens & Eggs:

One of the biggest challenges when developing a social or community-powered site is the old "chicken & egg" problem. People won’t come to your site if there’s nothing there, but if people don’t come to your site then nothing will ever be there – what’s an entrepreneur to do?

There are a few solutions to this problem, some more difficult to implement than the others. You could, of course, develop an app that is “viral” by nature, but what’s the likelihood of that happening (and working just as planned)?

You could also go for the whole “Utility->Network” model. This is where you build the first version of your app so that a single, lonely user finds it valuable. And once you have thousands of individual users, you break down the walls between them and form a “network” (the whole is greater than the sum of its parts). You’ve probably seen this on sites like Del.icio.us.

That’s obviously tough to do with a Q&A site, so what we ultimately did was inject our solution into existing communities. We white-labeled TickerHound and allowed our partners to use it as a knowledge and interaction tool within their websites. This meant we had traffic, an engaged audience and activity right away.

However, not all of our white-label initiatives were as successful as others, which I’ll go into in a separate blog post because there are some serious issues to think through with this strategy as well.

The Next Act…

I also always thought that exiting the business would be the end of the process – hence the term, “exit”. But I'm realizing that while it was the end of one process, it is the beginning of an entirely new one.

We founded TickerHound because people need answers to their questions and working on Wall Street taught me that it wasn't the place they could go to get them. I come from a "blue-collar" working class family and culture, so do my new partners at Tycoon. As opposed to the folks on Wall Street who are making 8 or 9 figures a year, we have a pretty good idea of what most Americans are going through right now.

We can relate to their fears and anxieties. We also know what it takes to make something from nothing.

Together we're hoping to change the world.

So I'm on a new mission now, I’m moving onto a new phase in my professional and personal development and I couldn’t be more grateful.

NYC Start-up TickerHound Partners with NASDAQ

2009-04-09T14:24:00.000-04:00

Having recently celebrated TickerHound's 1-year Anniversary as a public site, I couldn't be happier to announce our first significant technology partnership with a financial media/tech company: The NASDAQ OMX Group (Symbol: NDAQ).

If you go to www.nasdaq.com you can now find TickerHound's Q&A widgets sprinkled across the site. To dive into the co-branded application we built for them just go to http://answers.nasdaq.com.

This is a big moment for the entire team here and we can't wait to roll out some of the other partnerships we have on deck!

Press release is below:

NEW YORK, Apr. 9, 2009 -- TickerHound.com and the NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today introduced NASDAQ Answers on Nasdaq.com. This new, real-time Question & Answers platform provides Nasdaq.com users with unbiased, community-powered education for the individual investor.

“We’re very excited that NASDAQ, which has a long history of technological innovation in finance, has chosen TickerHound as one of its first social media offerings,” said Wayne Mulligan, TickerHound’s CEO. “NASDAQ’s implementation of TickerHound is a strong endorsement of our brand. We welcome Nasdaq.com’s support in fulfilling our mission of educating and empowering individual investors.”

"NASDAQ Answers provides an intuitive way for individual investors to ask questions and get answers from other users," said Bruce Hashim, Vice President, NASDAQ OMX Interactive Services. "TickerHound made it easy to integrate their robust software suite and we’re confident these social media features will significantly improve the NASDAQ.com user experience."

Now live on Nasdaq.com, Nasdaq Answers allows users to freely browse questions and answers across a variety of investment-related categories. Free registration with a valid email address is required for users to post or respond to questions. Visit http://answers.nasdaq.com to participate in the discussion.

For more information on NASDAQ Answers, visit http://answers.nasdaq.com.

About TickerHound:

TickerHound is a community-powered education website for individual investors. Launched in 2007 the company has focused on creating a scalable and extensible Q&A platform and partnering with top-tier financial media brands. TickerHound’s goal is to provide unbiased, community-powered education for the individual investor. TickerHound provides its partners with a turnkey solution that will allow them to create, customize and quickly deploy their very own Q&A Community. The company plans to announce more white-label community-powered education features on other websites in the near future. For more information, visit www.tickerhound.com.

Cautionary Note Regarding Forward-Looking Statements

The matters described herein contain forward-looking statements that are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about NASDAQ Market Pathfinders and NASDAQ OMX Group's other products and offerings. We caution that these statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements involve a number of risks, uncertainties or other factors beyond NASDAQ OMX Group's control. These factors include, but are not limited to factors detailed in NASDAQ OMX Group's annual report on Form 10-K, and periodic reports filed with the U.S. Securities and Exchange Commission. We undertake no obligation to release any revisions to any forward-looking statements.

# # #

Serendipity, Discovery and Digital Media

2009-02-08T19:34:00.000-05:00

So I saw a tweet from Fred Wilson earlier today with a link to an op-ed piece in the NY Post titled: "The Future of Television".

It was a well written piece and has a great flow-chart depicting the capabilities and limitations of many of the video offerings currently available to consumers (on both traditional television and the web). It really gives a clear picture of Boxee's position in the digital video market.

I have yet to try the service (no spare macs right now) but it looks pretty damn cool. Think iTunes if it had no DRM and allowed you to pull from a dozen other services.

At the same time I was reading the NY Post piece I had my XM-radio in my house pumping some Brian Eno. While I LOVE listening to Eno while working this was completely coincidental, I just had the channel set to "Chill" and Eno came on.

That got me thinking about new content delivery services such as Boxee and iTunes and how they've fundamentally altered our experience in discovering and consuming content.

When you use a service like Time Warner's Video on Demand, Boxee, iTunes, YouTube, whatever, it requires that you:

Actively seek or search for a particular piece of content
Make a concious to decision to view that piece of content (relative to other options)
Commit to viewing (or listening) to it for at least a little while

Think about that for a minute - those are A LOT of steps. They all require a level of thought, comparative analysis and some element of stress when determing which show/song to select.

Now think about what usually happens when you come home after a long day at work (or on a lazy sunday) and you flip on the tube (or your radio). You can sit back, flip through a few channels randomly and through a divine act of serendipity, you stumble upon one of the greatest movies you've ever seen -- FYI: this is exactly how I first found The Shawshank Redemption.

There's something so pleasurable about accidentally finding a great song or movie. The process of accidental discovery - serendipitous content discovery, if you will - adds so much to the content consuming process. The level of enjoyment just seems to increase dramatically for me - not only did I get to enjoy a great piece of content but I also got to feel like I just won at the craps table too.

However, many of the newer services being built today are ignoring this concept.

It's what makes services like Digg so fun, it's why I keep Twitter open all day and it's why no matter how big the Video on Demand selection is on Time Warner, I'll ALWAYS default to channel surfing before heading to Channel 1000.

I'd love to see more mechanisms for serenedipitious content discovery baked into some of these new media services.

But don't get me wrong here either, services like Boxee and Video on Demand are amazing for their intended purpose: quickly browsing a catalog of content, finding the video you were looking for and having it delivered quickly and elegantly. But I think that before anything becomes the "future of TV" or radio, the recognition and utilization of serendipity in the content discovery process will be critical.

Chris Anderson's Amazing Ability to State the Obvious

2009-02-01T22:55:00.001-05:00

The web has been abuzz all week with Anderson's latest treatise in the WSJ - The Economics of Giving it Away.

Here are some of the comments the article has generated across the web:

"Chris, what a fabulous perspective! I have been wondering how the changing economy might impact many of these web-based companies"

"Chris, great commentary on the current and future state of online business."

"I wanted to make a quick post this morning to point my readers toward a great piece in the Wall Street Journal [...] He talks about making money in this economic climate. "

Want a quick summary of Chris's "Fabulously Great" article?

If companies want to succeed, they'll have to sell something.

Hmmm...ya don't say, Chris?

That's some enlightening commentary right there...sure taught me a thing or two about a thing or two.

Ok, maybe I'm being overly critical here but I just don't get all the hubbub when someone who should be seeing ahead of the curve is pretty much reciting standard industrial-era business acumen. Am I missing something here or did Mr. Anderson pretty much regurgitate most media companies' business models (advertising) and the model for most software companies for the last 15 years (shareware)?

Chris states, "digital economics have spurred entirely new business models, such as "Freemium," a free version supported by a paid premium version. This model uses free as a form of marketing to put the product in the hands of the maximum number of people, converting just a small fraction to paying customers.", as if this were something new.

I was writing shareware when I was 15 years old - we'd give away a "Lite" version of the application and charge for the "Pro" version - it's been a pretty common practice for a long while now but for some reason if you slap a new brand ("freemium") on an old box and tell people it's new, they really think it is.

And when Chris talks about advertising-based models I really want to crack up. Network television has been 'free' for decades and is supported by ads - what's so unique about applying this model to media businesses on the web?

I just feel like it's 2000/2001 all over again and I'm reading some of the same articles for the 1000th time.

Let's get some fresh thoughts going on out there...stating the obvious isn't gonna help anyone out of the current predicament this country is in. It's as good as saying "banks should've done a better job at managing their risk" and hoping that will change things the next time around.

Chris, give us something we can really sink our teeth into next time!

Thumb Blogging...

2008-12-28T15:22:00.000-05:00

I haven't tried this before but I've been seeing more and more bloggers posting via their BlackBerry's. I definitely don't enjoy this mini keyboard for drafting long form copy but if it helps me post more frequently/consistently then I can certainly make due.

My new phone, BlackBerry Bold (thanks baby!), is also a lot easier to type on than the older model BlackBerry I had been using. They've done some amazing things with this keyboard: better "bounce" when you press a key, ergonomic keys, etc. I've definitely been enjoying the experience all around.

The phone's camera is also pretty tight, I'm not sure what the specs are off the top of my head (I'm typing this while on the train) but it was good enough to inspire me to (finally) setup a TwitPic account. I see so many random, bizarre or funny things in a typical New York day, I'm pretty psyched about having a way to capture and record them now.

Almost at my stop on this train...let's see if this "test post" actually goes through now.

Sent via BlackBerry from T-Mobile

Happy Birthday TickerHound!

2008-12-18T09:03:00.000-05:00

I can hardly believe it's been a whole year! But WOW, what a year it has been.

12 months ago to the day, George Zhao and I pulled back the curtain and brought TickerHound.com to life...

...and within 15 minutes the site crashed.

Needless to say we've come a long way since then.

Instead of the single cheap-o box we were running on when we launched, the site is now 100% hosted "in the cloud" on Amazon's EC2/S3 platform.

Thousands of investors have asked thousands of questions and submitted thousands of answers to the site. Our members are the best in the world - and I can say that because I've personally met and had drinks (alcoholic and non) with dozens of them this year.

We've forged partnerships with a handful of financial media companies such as Investor Place Media, Agora Financial Publishing, Business Financial Publishing, Tycoon Publishing and the list goes on.

And the best part is, we're just getting started!

We made our 3rd hire only 2 short months ago -- welcome aboard Lou!

We have our largest partnership to date launching in a few weeks -- you won't want to miss this one -- which is why we've been absent from most of the NY Tech events for the last 2 months.

So it goes without saying that we're VERY excited about TickerHound's prospects for 2009.

But this won't be an easy year. Then again, when is it ever easy running a start-up? :)

Our country is entering one of the most challenging economic times we've ever faced. The crisis before us started in the financial markets, so for a financial-tech company like TickerHound the impact of these tumultuous times becomes apparent very quickly.

We're witnessing a fundamental shift in the financial services industry and I'm excited to be a part of it, but at the same token it's certainly added a level of complexity to our business that we hadn't aticipated when we first launched. However, the important thing to remember is that in times like these we're presented with once in a lifetime opportunities to really make in impact on our market. Some of today's greatest companies were forged in the fires of the last downturn.

I firmly believe that now, more than ever, individual investors need to become better educated investors. Relying on stock brokers and money managers (and even $50 billion-dollar-stealing hedge fund managers) has to become a thing of the past.

With tools out there like Covestor, StockTwits and Wikinvest, an individual investor can level the playing field and manage their money as they see fit. They have unprecedented access to data, stock ideas and educational material that was once trapped behind high-priced pay walls.

Times they are a changin' and I'm proud and honored to be playing a small part in it.

Here's to another 12 months of sleepless nights, tumultuous markets and some of the most exciting times of my life!

Happy Birthday TickerHound!

Steve Forbes & Eric Schmidt Look Like the Head Vampire!

2008-12-15T09:11:00.000-05:00

Here's a picture of Eric Schmidt (CEO of Google):

Now here's a picture of Steve Forbes:

And now here's the Head Vampire from the 80's classic, The Lost Boys:

Any questions? I think not.

Feature Sequencing

2008-12-01T18:59:00.000-05:00

One of the biggest mistakes I've seen companies make over the years is improper sequencing of feature sets.

For instance, if the users themselves are the hubs of a social network, then why would you launch a social networking application before giving people a reason to come to the site in the first place? That's like saying, "Hey, come to my nightclub tonight...nobody's here, you won't meet any women/men, but it'll be popular one day so just drop by and keep coming back until we get hot!"

FAIL!

I prefer to think through feature roll outs in a very methodical way -- I don't take any credit for this either, it's been done many times by many successful entrepreneurs over the years. I just happen to enjoy copying what successful people have done in the hopes of one day becoming successful as well.

In fact, I once attended a talk given by Joshua Schachter of Del.icio.us fame and he pretty much said the exact same thing I'm about to share with you...building the right features at the right time is critical to the success of a product.

In my mind this can be boiled down to a three step framework and if applied properly, could mean faster roll outs, higher quality products, greater user satisfaction and more opportunities for revenue generation.

Here's the framework in a nutshell:

Utility - First create a product that's useful for a single user. For instance, Del.icio.us was valuable long before you were able to see other user's bookmarks. In its first iteration Del.icio.us simply allowed members to store their Favorites/Bookmarks remotely, thus allowing them to retrieve these pages from any computer they happened to be on. Later on they exposed the social content discovery components that turned the service into the viral success it has become today.

Network - After you've made a product that's useful for a single person, there's a good chance that MANY individual people will find it useful. When you attract a large audience of individual users then all you have to do is pull back the curtains and allow them to start interacting with one another. It's obviously more difficult than that, but you get my drift.

Ideally you'd want it so every piece of data one of these users contributes to your site somehow adds value back to the whole network. For instance, on Del.icio.us, each time a user bookmarks a URL it adds to that URL's popularity across the system which provides all kinds of useful information for new users, visitors and members who already have that URL bookmarked. It also allows like minded people to find one another and use these new connections as a way to discover new content (e.g. if another member has a handful of the same bookmarks as me then there's a good chance I'll want to see what else he has in his favorites).

And then this leads to (hopefully) the final step in the feature sequencing framework: Revenue.

Generating revenue has become an all elusive component of this framework. I think there are a number of reasons for this but first and foremost it's because most people save this step for last while it should probably be right up there with the problem you're trying to solve.

While this may be the final step in this particular framework, it should be one of the first things a businessman thinks about. Granted, you can have a wildly successful product (and ultimately, a wildly successful business) by simply building something people love, locking them in through the network effect and allowing the revenue model to reveal itself as time goes on, but in my experience you'll dramatically increase your chances of monetary success if you think this through from the beginning and iterate on it just like you would the software.

Ultimately you'll want your utility, network and revenue models to dovetail nicely into one another - e.g. Google and contextual advertising - so it'll pay to think through this framework in a holistic manner.

What This is NOT

This is not a bullet proof way of thinking through your product development plans. It doesn't even begin to address the many nuances of conceptualizing, building and launching a product. It doesn't address user needs, market size, etc.

Simply, think of this as a "back of a napkin" way of testing your product roadmap. Conceptualize your utility, then figure out how that contributes value back to a network and then think about how to monetize that.

I know it may sound simple and probably pretty obvious, but I can't tell you how many times I've been sitting in on product development meetings and someone is pounding the table demanding that every feature plus the kitchen sink be included in "Product Version 1.0".

By testing your product roadmap against a time-tested framework like this one, you'll stand a much better shot at getting a successful product out the door in a shorter period of time, period.

Legacy and the Web

2008-11-26T11:38:00.000-05:00

I know I haven't updated this blog in forever, but with good reason. We've been working our asses off at TickerHound -- I wish I could share the big secret with you now but you'll just have to wait a bit longer.

In any case, I was finally inspired to write a new post as I was on the train this morning.

I had my headphones on and two of my favorite songs played back to back:

Big Pun's: You Aint a Killer
The Notorious B.I.G's: Warning

Aside from the fact that they both have "Big" in their names (and rightfully so), the other thing these two talented artists have in common is that they've both passed away -- too young, might I add.

But here I am -- along with thousands of other hip-hop fans -- listening to these young men weave rhymes that are over 10 years old and still thinking to myself, "Damn, these guys are good". I'll be 90 years old one day (god willing) and I'll still be thinking, "Damn, these guys are good".

And that right there is the LEGACY these two men have left to this world. Their ability to take concepts, events and emotions from their lives and craft beautiful rhythmic sentences out of them.

The same applies to many creative people:

Visual artists
Film makers
Actors and Actresses

These people, 100 or 200 years after they're gone, will have left a legacy here on earth that all future generations will be able to appreciate.

But what about us?

The rough and tumble entrepreneurs who are creating, crafting and weaving beautiful web experiences and products each and every day.

Sure, we make an impact now but what about 100 years from now?

Will our works of art (read: "our web sites") even be around then? What happens if we have to close up shop and shut down our sites?

All that creative energy just fades into oblivion.

And I know what most people would say: "that's business". And while I agree to an extent I have to imagine that the web is more than just business. The very nature of it makes it so that content can persist.

Our designers and developers put just as much creative energy into building a site as a Director would into making a film -- where's their legacy?

Sure, the "Portfolio" section of a designer's personal page or an item on an entrepreneur's resume/bio gives a viewer a brief glimpse into a product that no longer exists...but don't we deserve more than that?

Shouldn't someone be able to EXPERIENCE the sites and products we've built as we originally intended? Shouldn't they be able to ask a question on TickerHound, or vote for a story on Digg or find a great wine on Snooth?

I think sites like The Way Back Machine do a decent job at preserving a site's content, but not so much the experience.

I also think sites like Blogger, Wordpress, Flickr and YouTube have also greatly helped keep legacies alive - albeit in a static form.

But I think we need a new type of web archive -- one that allows a site's experience to persist throughout time. I want my grand kids to be able to go to TickerHound (even if it no longer exists as a business) and experience something I created when I was in my 20's.

What would a "legacy" service like this even look like? How would it function? Is it even possible?

I don't know.

All I know is if there were a way to make it so a young man, 25 years from now, could use TickerHound, Digg or Snooth (whether or not the businesses were still "alive") and say, "Damn, these guys are good", then I'd be one happy entrepreneur.

Chinese Word of the Day

2008-10-10T17:46:00.000-04:00

The US economy is going to shit and China is buying up most of our debt.

We're slowing down, they're still accelerating.

Bottom line: China is the going to be the largest economy in the world within the next generation or two, period.

Being that we operate web-based businesses that have a global reach, I think it's reasonable to assume we'll either have Chinese:

Customers
Investors
or Business Partners

at some point in our careers.

I grew up in Flushing, Queens here in New York:

That's where I first picked up Chinese (Cantonese and Mandarin). Then I went on to Major in East Asian Studies in college where I studied Chinese for 3 years solid (spoken and written) and spent several months in China.

While I'm far from an expert, I can definitely get by.

So in the spirit of global business and global communities, I decided to start teaching Chinese one word at a time to all those who are interested.

I'll be doing this via my twitter account: @WayneMulligan

So if you'd like to pick up a new language, I'll be posting a new Chinese Word of the Day each and every day. I'll write the word out in Chinese characters, give the romanization/phonetic spelling and provide a little context.

I'm going to try and make most of the words market/business oriented but if anyone has requests or suggestions just @reply me or DM me on Twitter.

Enjoy!

Twitter Power

2008-09-29T14:53:00.000-04:00

So I rattled off this quick Tweet this morning as I was venting over a slow net connection here at the office:

"#Sunshine Suites: These internets is running sloooow today"

And then I get this e-mail from our management company a couple of hours later:

"Hey Wayne,

Saw your post on twitter, let me know the details...

What seat are you sitting in and which floor?
How are you testing?
You are using ethernet?

- Jake"

That's some smart customer service right there!

The Current Financial Mess - Simplified!

2008-09-21T10:44:00.000-04:00

The whirlwind of news surrounding the current financial mess we’re in has my head spinning.

First it’s foreclosures, then it’s Fannie and Freddie and then it’s Merril Lynch and AIG - when will it stop?

But more importantly than that, this rapid destruction of the American financial system has many people wondering how it got started to begin with?

That’s why I decided to write this week’s article in response to this question on TickerHound:

How did this financial mess get started in the first place?

So let’s go through it step-by-step, from the beginning until this weekend when the Government announced a $700 billion bailout of the financial services industry. It’s our tax dollars that will be financing this bailout so I think it’s important that we all understand how and why it happened.I. It all started in the housing and mortgage market:

Basically, lenders were loaning money to whoever wanted to buy a home. Credit score, income and assets became irrelevant terms as brokers and local lenders rushed to issue new mortgages.

It seemed like a relatively “low risk” strategy at the time to many banks. Reason being, they figured that even if people stopped paying their mortgages, the housing market was doing so well that folks could just sell the house for a profit and pay back the remainder of the mortgage.

And that’s really where the trouble started.

II. Then the Investment Banks Got Involved:

Mortgage Backed Securities (MBS) are nothing new on Wall Street. They’re sort of like bonds, meaning there’s a “principle amount” (the amount being loaned) and interest coupons (or payments) that would be paid monthly on the loan. However, MBS’s aren’t single loans.

Instead, these loans were really thousands of individual mortgages all pooled together to create a single, tradable security.

This is another reason why many lenders were happy to keep giving out mortgages to folks (even if they didn’t qualify). Local lenders knew that they’d be able to package up all those mortgages and just sell them right to the big investment banks and not have to worry.

The banks then turned around and would trade these Mortgage Backed Securities like they would a stock or a bond - trying to pocket profits in between each trade.

III. Bubbles

The basic assumption in this whole mess was that housing prices would continue to rise each year.

In fact, that assumption turned out to be pretty accurate. According to the S&P Case-Schiller Index, home prices nearly doubled across the country from 2001 - 2006.

That’s because it was so easy to get a mortgage, everybody wanted to buy a home. Thus spurring demand and in turn driving up prices further. It sort of became a self fulfilling prophecy, which in turn became a full-fledged housing bubble.

And just like any good bubble, it eventually had to pop!

IV. The “After-Pop”

So after the housing market finally started to tumble, the financial services industry went into a year-long death spiral. Here’s the basic sequence of events:

People couldn’t afford their mortgages anymore.
They couldn’t sell their homes for more than they paid due to falling prices
So they defaulted on their loans - this happened to millions of people!
The big investment banks which now owned all the mortgages suddenly realized that these “assets” were virtually becoming worthless in a very short period of time.
So the banks had to take massive write-downs on these loans. The way this works is the banks were considering these baskets of mortgages as assets on their balance sheets. Once the assets went from being worth $100 to $1, the banks basically lost 99% of their value.
When that happened it made it very difficult for the banks to get loans themselves (imagine applying for a loan when all you have is a pack of bubble gum and the clothes on your back - it’s not likely to happen).
When the banks couldn’t get their own loans they were either going to be forced into bankruptcy (Lehman Brothers) or had to be swallowed up by healthier firms (Bear Stearns, Merrill Lynch, etc.)

V. How the Government Got Involved

Ever since Bear Stearns went under the government has played a fairly prominent role in this whole mess.

But it wasn’t until we almost saw the implosion of Fannie Mae and Freddie Mac that the government really made its presence felt.

Fannie Mae and Freddie Mac are sort of like “buyers of last resort” in the mortgage market. They were established to maintain liquidity in these markets in the event of the large banks being unable to trade their Mortgage Backed Securities.

So in the end, Freddie and Fannie were sitting on trillions of dollars in bad home loans.

And while these companies were private organizations they were however government sponsored organizations. So if the government had let either one of these companies fail then it might’ve made it very difficult for the United States to keep selling debt to big foreign buyers, like China. Remember, it’s our ability to sell our debt to other countries that has been funding our country’s operations (e.g. wars, etc.) for the last several years.

VI. How AIG and Insurance Fit In

AIG came into the picture when it began selling “insurance” to the big banks.

This technically wasn’t insurance, but that was mainly due to clever wording on the part of AIG management. Because for all intents and purposes, they were basically insuring the mortgages held by the banks - this type of insurance was called a “Credit Default Swap”, or a CDS.

Basically, the banks would pay AIG a monthly fee and in turn AIG would promise to make the bank whole on any mortgages that defaulted (sure sounds like insurance to me).

At the time I’m sure this sounded like a good idea because everybody assumed housing prices would continue to rise.

Well we all know how that turned out and that’s why in the end AIG was left holding the bag for billions of dollars in bad loans.

VII. The Bailout

So that brings us to where we are today: On the eve of the largest government bailout of the private sector in the history of this country.

The implications for these actions are vast and complex.

On the one hand, the government has to do this; the alternatives are too disastrous to even comprehend. On the other hand, what type of message does this send to the banks going forward? That it’s ok to engage in risky, reckless behavior and they’ll always get bailed out in the end?

I think I’ll save the rest of my commentary for another post.

I hope this gives you a clear picture of why and how we got into our current predicament.

If you have any other questions on this topic feel free to go to TickerHound for the answers!

The China Adventures...Finally!

2008-08-28T19:32:00.000-04:00

I know, I know, I promised to post these 2 months ago but I've got a good excuse.

TickerHound's been going surprisingly well this summer and it's been monopolizing the vast majority of my time. So now my blog AND my girlfriend hate me and my entrepreneurial spirit :(

j/k

In any case, here are my pics from June's trip to China...we had an AMAZING time!

Beijing is much cleaner than it was 3 years ago, but it also lost some of its "edge". There were no more gypsy cab drivers at the airport trying to drag me into their overpriced cabs, no more fake DVD's being sold on the streets of Beijing and my white T-shirts didn't turn brown from the rain anymore.

I guess some would call this progress, but for me, I missed my Beijing funk.

Don't get me wrong, there were still some funky sights to be seen, but China definitely got its act together for the Olympics.

Shanghai was great too, but then again, it always has been. I think on my next trip to China I'm staying out of the cities and heading into the countryside. It's high time I see what the vast majority of the country lives like, not just the wealthier (comparatively speaking) city folk.

So without further ado, heeeeeeere's China!

This was my friend Winston's wedding. His wife's mother was one of the higher ups at China's CCTV. Therefore, there were more people manning cranes, cameras and fog machines than there were guests!

Great wedding though! Congrats again Winston!

Who's ready to drink??

My boy Mao lives here.

I don't know why but I thought these outdoor, branded food/drink kiosks were so cool.

A spot of tea?

And now for the food!

I'll post more pics soon enough...this just made me reeeeeally hungry!

Hagel's So Far Ahead of the Curve...

2008-08-23T13:25:00.000-04:00

"Stories offer potential to communicate some elements of tacit knowledge. They help to provide enough of a sense of context to reconstruct and extend parts of the tacit. Stories, properly told to communicate the richness of context, do not reduce to snippets."

From a recent John Hagel article that talks about where the internet might be headed.

For a long time I've been thinking about the concept of narratives and how they can be somehow structured and distributed to not only provide a new means of self expression but also to transfer knowledge. It's clear that it's on the mind's of other folks in this space and I can't wait to see some of the start-ups that begin to explore it.

We have a ton of narrative out here in the blogosphere -- who will dig through it to extract and present it all in a meaningful way?

A Quote I'm Pondering...

2008-07-23T12:33:00.000-04:00

From Brad Burnham at Union Square Ventures:

All of this means that you will see subtle changes in the way we invest our new fund. We will be even more selective about the early stage Web services we back, looking for compelling differentiation, a discrete market focus, and clear evidence of sustainable user growth. You will also see us invest selectively in later stage opportunities that we believe are poised to grow as more users become more dependent on the Web to manage their daily lives.

I concur...

It's About Education, NOT Information

2008-07-17T10:27:00.000-04:00

For investors, a proper education and investing framework should always trump access to "immediate information".

I know that automated information aggregation, synthesis and analysis is all the rage on Wall Street these days. Banks, traders and hedge funds are all jockeying to get the news first, fastest and interpreted in the most efficient manner.

But with the announcement that financial "intelligence" firm, Monitor110 will be shut down, it gives me reassurance that TickerHound's on education as opposed to information was the right path.

Case in Point:

This is currently the top headline on Yahoo! Finance (the largest financial portal on the web in terms of traffic):

Stocks trade higher on upbeat earnings results - Stocks are opening higher after stronger-than-expected quarterly results from names like Coca-Cola Co., JPMorgan Chase & Co. and United Technologies Corp. gave investors some reassurance about the health of the economy.

Ok, now if I were a regular Joe, I'd look at that headline and think, "Oh wow, looks like JP Morgan is pulling through and doing well despite all the turmoil in the financial markets."

But that wasn't the case at all.

In fact, the company's year-over-year profits were off by 53%!

And the comments from the company's CEO, Jamie Dimon, weren't particularly optimistic either:

"the economic environment to continue to be weak -- and to likely get weaker -- and for the capital markets to remain under stress." He added that "since substantial risks still remain on our balance sheet, these factors will likely affect our business for the remainder of the year or longer."

I don't know about you, but that doesn't sound very encouraging to me.

But the stock still rallied - all because analysts expected JP to do even worse than they did!

Trying to trade stocks based on the assumption that "maybe this company won't do as bad as everyone thinks", is a sucker's game. The media creates headlines like this to get people to read their articles and watch their TV shows...fuck that!

Investors need to tune out and rely on their own experience and their own education to make money in this market.

Mr. Dimon pretty much said, "things aint gonna get better for a while now, so don't expect much from us." The CEO of a company says that and what I really hear is, "Hey, don't buy our stock right now, you can buy it later this year for much cheaper."

Education, not information my friend...play this bear market, don't let it play you!

And I'm Back!

2008-07-05T07:40:00.000-04:00

For those who don't know, I haven't been "State side" for the last few weeks.

I've been in China hanging out with Yao Ming and his crew preparing for the Olympics.

Ok, maybe it wasn't Yao Ming, but I was definitely hanging out hard in the Middle Kingdom with some old friends. I have plenty of pictures on the way, so sit tight.

All in all it was a great trip. I managed to eat food from over 10 different provinces, drink alcohol from over 15 countries and gain 10 lbs. in the process!

I even managed to get some work done. You can now see TickerHound prominently featured on OptionsZone.com's Question of the Day.

This is our 2nd widget partnership with many more on the way throughout the summer.

I hope everyone's having a great 4th of July weekend and I'll be back Monday with my first set of pics!

Paul Graham Missed the Mark on This One

2008-05-28T14:11:00.000-04:00

Let me start by saying that Paul Graham is the man...the guy is doing a lot for the start-up community in this country and I truly enjoy reading his essays.

Furthermore, I give all the respect in the world to anyone willing to candidly discuss their thoughts, ideas, etc. in public view. They open themselves up for criticism, ridicule, etc. - so I don't want this blog post to be taken in the wrong way...

I'm NOT "Graham bashing" here, but something has to be said about his most recent post on "Cities".

In his latest essay Graham essentially talks about the "messaging of cities" -- in his opinion, the same way a brand or company projects a message to the public, so do cities. It's his contention that these cities project the following messages:

Silicon Valley: Power is important
Boston/Cambridge: Knowledge/ideas are important
New York: Money is important

This is probably one of the first times I've ever read anything from Graham and thought to myself, "Holy fuck, how did this guy reach such generalized conclusions that show such a clear lack of depth in thought!?"

I mean, seriously...money does NOT matter in Silicon Valley!? Are you freaking kidding me? I guess Sand Hill Road is known for its charities and its many not-for-profit initiatives. And entrepreneurs only go there to take in the scenery.

And I love this one:

This suggests an answer to a question people in New York have wondered about since the Bubble: whether New York could grow into a startup hub to rival Silicon Valley. One reason that's unlikely is that someone starting a startup in New York would feel like a second class citizen. [3] There's already something else people in New York admire more.

The "something else" Graham refers to here is, of course, money. Hmm...I wonder why New York has been a hot bed for artists, musicians, actors, actresses, writers and various other occupations that are done more out of passion than for compensation for decades now?

While I do agree that it's probably easier to find more people who are interested in participating in (financing, partnering, working for) start-ups on the West Coast, I certainly don't think the "New York only cares about money" message is valid and it's borderline ignorant. Tech start-ups are far from the only industries out there that require boot strapping, ingenuity and creativity.

Arguably, one of the most influential (on ANY level) movements over the last 20 years was born and bred in the streets of New York: Hip-Hop music!

In fact, another guy I really admire, Gary Vaynerchuk, has even compared the web industry to Hip-Hop, circa 1985. And to tell you the truth, I couldn't agree more!

Granted, certain cities maintain a certain culture, but trying to pick a specific message for a city as large, deep and diverse as New York is like trying to say Moby Dick was just about a guy who went fishing.

Paul, not sure where or for how long you lived in New York but next time you come through, we need to hang out so I can show you around a bit. Might teach you a thing or two about a thing or two ;)

Offline - Where the Real Cheesecake Is

2008-05-24T11:16:00.000-04:00

So we have FriendFeed, Twitter, Facebook, MySpace, Digg, Google and all sorts of other cool, fun and sometimes useful tools.

FriendFeed lets me know whenever one of my friends uploaded a new Flickr photo, Twitter keeps me up to date on whenever a handful of people I know are taking a dump, Facebook makes me a better friend (haven't forgotten to e-mail someone for their birthday in 2 years) and the list goes on. These tools are pretty damn amazing - I love them all. But while they've made a meaningful impact on my online life -- which is taking up the vast majority of my day lately, but that's another sad story -- they haven't done nearly as much for my off-line life.

I guess what I'm trying to say is that while these applications have changed the way I use the web, they have NOT changed the way I live my life. Facebook was coming close, in fact, while I was in College and the network was still closed, it was an integral part of my life...invaluable even.

And THAT is what I'm really looking for. I'm looking for a service that becomes indispensable to my REAL social life. Something that changes the way I live my off-line life!

Because that's what this is really all about - search engines, social networks, social news, etc....these aren't tools that are supposed to keep us locked into our chairs all day and our eyes fixed on a monitor. They're supposed to help us derive meaningful value for the other parts of our life: work, school, social, etc.

At the moment the only site that's truly integrating with my real life in a meaningful way is Meetup.com - mad props to Scott - I've met more people, learned more things and have gotten more value out of signing up for that site, than ALL of the other sites combined. And the kicker is, I don't even go on the site that often!

I see a link for a Meetup somewhere else, usually in a tweet or an email, and then I hit up Meetup for 2 seconds to RSVP for the event, and that's it! Brilliant!

So that's what I'm looking for - more "Meetup-like" sites. That's what I'm challenging the start-up community to put together.

Sites that change REAL LIVES and in doing so, will change the world.

Why Google Opening up AdSense is Important

2008-05-19T19:07:00.000-04:00

For some reason the Microsoft-Yahoo! news got a lot more coverage on Monday than an announcement that came out of the Google camp…an announcement that I’d argue is much more significant to all three companies than Microsoft “possibly” buying Yahoo!’s search business.

Google is announced that it would be opening up its content network (AdSense) to display ads from 3rd party advertisers and networks.

That means other advertisers can now tap into Google’s publisher network and start serving up display ads. The advertisers have to be certified by Google, of course, but this is a fantastic move for Google even with a limited number of certified ad networks.

Here’s why:

The move diminishes the possible effects of a combined Microsoft-Yahoo! display ad business. Any type of closed ad network Micro-hoo would’ve created has just become much less valuable.
By Google giving its publishers more ways to make money the company stands a better chance of being the primary ad platform used by millions of web publishers (why go to the ad networks if the ad networks are already coming to them?). This is makes me think of Warren Buffett’s ideal investment: “a toll booth in a one bridge town”.
I haven’t seen any details about monetization yet but this could also be a monster revenue driver for Google, especially when you look at it in the context of the Double Click deal.

In any case, it’s a major move for Google and I think the implications are going to be huge for Google and especially for Microsoft and Yahoo!.

Got my visa for China!

2008-05-17T18:31:00.000-04:00

Wow, I can't even begin to describe what kind of f*%kin' production it was to get this thing!

The first time I went to China all I had to do was show up at the consulate with my visa application and a passport - 4 days later, POOF my Visa appeared. But this time they're making people jump through hoops (almost literally) to get a Visa.

I show up on my first day and it's obviously more packed than usual due to the Olympics. So I waited for 4 and a half hours only to be told I need the following:

1. Copies of my plane tickets
2. Copies of my hotel confirmation so I can prove I have lodging when I'm there
3. Bank statement showing I have enough money to spend in China
4. A letter from my employer (or a business license if self-employed) stating I'm allowed to take vacation

I couldn't believe it!

My bank statement!?

A letter/business license!?

These people were out of their minds.

But, I did what I was told, came back later in the week and waited another few hours before handing in my "permission slips".

I guess all's well that ends well...my flights, hotel and visa are all in order and on June 19th I'm heading back to China!

I wonder if I can reach out to some Beijing tech bloggers before I land...

Where Does Facebook Go From Here?

2008-05-16T11:22:00.000-04:00

I was lucky enough to have been in college when Facebook first launched. Luckier still, I was at one of the first few universities Facebook opened up to, Columbia.

I watched as the site evolved from a place to either:

A) Hook-up
B) Find out who else was in your anthro class

to a world class social utility that has not only helped redefine social networking, but also the web as a whole. It's one of the most well designed products I've ever seen...the company seemed so focused on solving real problems for real people. And that's certainly what propelled them from niche social network to one of the largest web sites in the world.

But where do they go from here?

What's the goal of the company now?

They've certainly changed the way we use the web, but have they changed the way we live our lives? Once upon a time I would've made the argument that, "Yes they have!". But I don't find that to be the case anymore.

When I was using it as an on-campus utility to engage classmates, attend a random meet-up over at Lerner Hall, or to find out where the next party was, I thought, "Wow, now this is a useful tool for my day-to-day life." But not so much anymore.

Now I get friend requests from people I've never met, I get updates when my friends comment on photos of people I don't know. I hear about parties I would never care to go to all because I added a stupid app to my account.

I feel like Facebook is becoming Starbucks. Too big for its own good. A man without a country. A cause that lost its way somewhere.

I know Umair isn't very fond of Facebook and makes a number of compelling arguments with respect to strategy and competition. But I think the reasons for Facebook's uninspiring performance as of late could be put much more simply - they've lost their reason for being.

And that begs the question, how does ANY company, once they get to be a certain size, maintain the core values, mission and vision they originally started with?

Is it a fallacy to even think that this is possible?

Which BIG, ultra-successful companies have stayed true to their users and to their original mission and values without being corrupted by their scale and size?

Google?

Disney?

I don't know the answer, but I'd love to hear some opinions.

On another note - and probably a separate blog post - which companies ARE changing how we live our lives?

Meetup.com?

FILL IN THE BLANK??

Wrestling with Midgets...oops, I mean Widgets...

2008-05-13T17:16:00.000-04:00

I'm a big believer in the web trending towards disaggregation.

I have this vision of the web as a gigantic supermarket with all of these different items on the shelf. And we, as consumers, get to stroll up and down the aisles picking and choosing what we want our dinner plate to look like.

But, picture life before supermarkets - before America operated as a surplus economy. We ate what we killed or what we were given. Same goes with how we used to consume content...

In the mid-late 90's it was all about the "portal" and the aggregation of as much content as possible. We would go to the portal that had the most content (e.g. Yahoo!) because chances are we'd find something we liked there.

Then we slowly evolved towards the aggregation, indexing and searching of content via sites like Google, Digg, etc.

But now we're at the point where people are savvy and willing enough to take charge of their experience on the web and decide what their "dinner plate" will look like. And if the web is the super market, then the widgets are the groceries.

For those that don't know, a widget is basically a small software utility that resides within another web site...think of it like having a site within a site. Some widgets play music, others allow visitors to communicate with one another, etc.

For entrepreneurs of today, widgets will play an increasingly important role in how we build our respective businesses. The game has changed from, "How do we get the community to come to us?" into, "How can we go to where the communities already are?".

The most popular application of widgets has obviously been on sites like Facebook and MySpace where widget developers have been able to build monstrous followings in very short periods of time - I've seen some Facebook widgets explode from 0 to 5 million registered users in a few short weeks. That's unprecedented in the "destination" web, but when you go to where the audiences already are, you really begin to leverage the physics of the "widgetized web".

So how does this apply to me and TickerHound?

Well, since we have such a belief in the web becoming more decentralized, we want to capitalize on that trend and position ourselves to take advantage of it. So we're building a suite of widgets for TickerHound that other financial publishers, content providers and communities can use to enhance their sites and make their lives easier.

We've already kicked off development on a couple of the widgets but now that we're approaching the more complex stuff, we've been wrestling with some tough questions.

I'll be sharing some of those issues here and on the TickerHound blog in the coming weeks. I hope to get some great feedback from all of you!

Microsoft's Best Move Yet

2008-04-23T20:01:00.000-04:00

A TickerHound member asked:

“If Microsoft can't get Yahoo! then what's next for the company?”

Normally I might’ve shrugged my shoulders, suggested another acquisition candidate and considered the conversation over. Microsoft (Nasdaq: MSFT), while still a very successful company, hasn’t yet shown me that they really “get” the web.

That is until Tuesday night!

Let me explain…

Now when I first heard that Ray Ozzie was joining Microsoft I was thrilled, to say the least. Ray Ozzie has been innovating in the tech space for decades and has really been one of the few consistent hitters when it comes to emerging technologies.

But after watching (quite frankly) a series of disappointing product launches come out of Microsoft for the last few years, I began to lose faith in Oz.

Had he lost his touch?

Did being stuck in the confines of Microsoft rob him of his mojo?

Well he must’ve taken some notes from Austin Powers, because as of the other night, the “Great and Powerful Oz” has finally gotten his mojo back!

Lately, much of my focus has revolved around web-based services. For example, a couple of weeks ago I wrote about Google’s new web application platform (Why Microsoft Should be Shaking in Its Boots): App Engine.

This is was a HUGE move for Google and one that I think will serve the company very well in the future.

At the end of the article I asked if this was “check or check mate?” for Microsoft. Well, I think Microsoft just answered my question…and it is most certainly NOT the end of the line for the boys in Redmond.

On Tuesday evening Microsoft announced its most ambitious plan since the launch of Windows 95 – Microsoft’s upcoming “Live Mesh” service.

Similar to Google’s application platform, Microsoft hopes developers will make use of its toolset in order to develop robust web-enabled applications. But Microsoft is taking the vision a bit further. Instead of giving people a backbone to host their web-centric software on, Microsoft is providing a fully integrated platform that connects web applications directly to a user’s device(s).

Ozzie’s vision is to have a service in place where Microsoft’s products – and anyone else who wants to develop applications for the platform – can be synchronized across all devices (phones, PDA’s, game consoles, etc.)

How About an Example?

Ok, let’s say you have your trusty camera phone out at a ball game and decide to snap a quick photo of your favorite New York Yankee, Derek Jeter. Instead of just saving the photo to your phone, Microsoft’s Live Mesh will instantly beam it to your PC back home and your online photo album (along with any other connected device).

Then when you get home, you decide you want to edit the photo a bit because it’s a tad blurry (i.e. you can’t see the ball flying over the Red Sox outfielder’s head clearly). So you touch the photo up on your PC and instantly, the photos on your PC, your phone and your online photo album are all updated at the same time with no other action on your part.

And that’s just a silly example with photos…

Now imagine what that means when it comes to calendars, contracts and other business documents?

The array of services and solutions that can be built on top of a holistic platform like this are endless.

Microsoft’s also launching community features into Live Mesh, which in my opinion, makes it dramatically more powerful than anything else taking shape on the web right now.

Imagine you’re working on a team with several other people and you’re trying to edit a Power Point presentation or a Word document.

The Old Way:

You make a change to the file

You email it to everyone and wait for feedback

Then you realize that somebody else changed a part of the file that doesn’t quite match yours and now you have to work their changes in on top of your own

The New Way:

Everybody makes changes in real time, regardless of what type of device they’re using

Everybody’s copy is synchronized

There’s a record (visible to everyone in the group) of every change that was made so it’s easy to rollback and clean things up

Think about the productivity gains here! Think about the types of services that can be built on top of this platform. Think about the amount of commerce that this will drive – and not just for Microsoft, but for every web, desktop and mobile application developer out there!

Plenty of people would argue that this isn’t a direct competitor to Google’s platform, but I think if we examine the implications of a universal application platform, that bridges the device-to-internet gap in a seamless way, we’ll see that this is definitely Microsoft’s best move yet!

So even if Google’s platform is the foundation that the cities of the web are built upon, then Microsoft’s Live Mesh will be the roads that bind them together.

E-mail needs to get Socialized

2008-04-20T23:52:00.000-04:00

There have been several blog posts over the last few months about how hard it is to keep track of, read and reply to all the e-mail that we get bombarded with. I don't personally have a big problem with that but folks like Fred Wilson and Mike Arrington, who have to field 1,000+ emails a day, are certainly going to find it hard to maintain a decent response rate.

So in reply to a post Fred made today on the topic, here's what I think needs to be built:

There's a big opportunity here if someone could do it "right"...not to jump on the "social graph" bandwagon, but what if we could use our social graphs to help prioritize email. For instance, if someone created an email client (better yet, an add-in for existing clients) that would give you a way to sort mail based on how "connected" you are to a person. Could be a point based system and it would use criteria like:

1. Email history (e.g. have you corresponded with this person before, how long ago, how many times, etc.)

2. Connect to your Facebook or LinkedIn profile and assign points by how well connected the person is to you (degrees of separation + number of mutual connections)

3. See how engaged the person has been with your digital presence (have they commented on your blog posts - could pull the data from disqus - or your flickr photos, or sent you a tweet on twitter, etc.)

I'm sure there are some other relevant data points here but the main idea is that getting through 1000 emails a day is always going to be tough no matter what. But there are some emails that really can wait and there are some emails that deserve a quicker read and reply. How we organize those emails is what will ultimately determine which ones will get read and replied to quicker.

Anybody have any thoughts on this or know of an add-in that does it already? Might actually be fun to go out and just build it if it doesn't exist.

Any ideas?

Is There a Monster in Your Portfolio?

2008-04-15T12:08:00.000-04:00

Yesterday on TickerHound.com, a member asked: “What do you think about Monster.com?“.

I haven’t thought about this company for a long time. But once I started to really take stock of our current economic climate and Monster’s business model, I began to see why I needed to tell all my friends to double check their portfolios and make sure they weren’t holding onto any shares of this one.

Monster Worldwide (Nasdaq: MNST) is one of the world’s largest online job databases. The company is one of the few successful holdouts of the dot-com era and performed rather well after the market began to make a comeback in 2003.

The stock went from a low of $8.57 per share in March of 2003 to a high of $57.40 in April of 2006 - that’s a 569% return in under 3 years. Not bad, not bad at all.

But to keep all this in perspective, the stock was at $91 a share in March of 2000. So over the course of 6 years, the stock was actually down about 37%. Reason being: the recession of 2001 and the subsequent multi-year bear market that followed.

Monster, being so tightly correlated to the job market, got hit so hard because as unemployment went up and companies stopped hiring, their site provided very little value to employers and employees alike.

So now, we’re at the beginning of 2008, it’s pretty obvious we’re heading into a recession (no one knows how bad this could get) and I feel like I’ve seen this movie before.

Many people would tend to agree - Monster’s already down about 30% since the beginning of 2008.

Some may call that oversold, I call it “the tip of the iceberg“.

If we were simply talking about an equities market “correction”, then I’d say we’ll be coming out of the downturn by the 3rd quarter. But we’re talking about a crisis in the credit markets here - we haven’t had to deal with this since the 70’s and when you stack inflation on top of it we’re looking at a “perfect storm” scenario.

So this isn’t even a matter of performing deep financial analysis or picking apart the chart to identify a pattern. Let’s use some common sense (an underused asset in many investors’ tool boxes) here and see if we can figure out what’s going to happen to Monster…I think asking ourselves a few questions will be a good way to proceed:

Do you think companies are going to be hiring aggressively or laying people off?
Do you think they’re going to want to pay to list their jobs or will they simply use word of mouth to attract the relatively small number of employees they might hire?
Is it a good sign or a bad sign when 3 - 4 top executives leave the company over the last 3 months?

I feel like I’m watching a rerun of 2001 here and Monster’s on its way to $10 per share!

Now, I’ve never been one to go short a stock…it’s just not something I’m comfortable doing.

But you should definitely have a look at your portfolio, because if you have “a Monster” lurking in there, it’d be a smart move to rid of it and get rid of it quick!

I Got a Google App Engine Account!

2008-04-08T01:51:00.000-04:00

Sorry, I might be running a company right now, but I'm still a geek at heart.

Scoble had the Qik cam going during this evening's Google Campfire event where they announce Google App Engine - a direct competitor to Amazon's AWS (S3, EC2 and SimpleDB) offerings. Unlike Amazon, however, with Google App Engine you don't have to worry about instantiating machines, adding new ones, clustering, etc. You just create an app, upload, tweak a bit and Google takes care of the rest. Scaling, clustering, backup, etc.

For a small company without a SysAdmin, this solution is going to be extremely important!

Right now they only support Python and since TickerHound was developed using PHP we won't be able to use the service right away. But we're creating some other mini-applications at the moment that this will be perfect for.

Good news though - according to Google, "Python is simply the FIRST language we'll support, it won't be the ONLY language." So as soon as this thing supports PHP, TickerHound is going to be moving.

The one negative I see right off the bat is that it's still a proprietary platform - it doesn't seem like it'll be easy to move to another service (if one ever wanted to). That doesn't give me the old "warm n' fuzzy", but if this platform is as good as it sounds, I doubt I'd want to move anyway.

Built in analytics, trouble shooting, version control, roll backs, monitoring, etc. - Google App Engine seems pretty tight to me! Psyched to have an account and I'll be posting updates and links to our apps as we build them.

Google to Buy Expedia? No Way!

2008-04-06T19:19:00.000-04:00

Re-blog from TickerHound Blog:

I saw this question come up on TickerHound the other day and just had to write a post on it.

A member asked, “Expedia’s been up this week on Google acquisition rumors - what do you think?” read more>>

Ok, now I might have to eat my hat on this one but my gut (and plain business logic) makes me think otherwise. Anybody who is saying different, I won’t mention them by name, is probably doing so out of ignorance, desire for attention or a bit of both.

One has to understand that Google isn’t some “dot com” growth engine that’s looking to build at any cost. This company is extremely disciplined when it comes to its finances and it shows in the bottom line – but more on that in a moment.

The point I’m trying to make is that Google is not going to swallow up a company simply to add eyeballs, revenue or whatever else to the Google pie. They’ll only acquire a company when it compliments their core business of search and search advertising.

For example, YouTube.com – Google acquired the company for $1.6 billion last year and hasn’t looked back since. YouTube serves up roughly hal the videos on the web right now and I really believe Google has the wallet, connections, etc. to deal with the copyright issues the service faces. The other thing to recognize is that YouTube wasn’t just some online video site. The service fit within Google’s model of content aggregation, indexing and search – and then monetizing that through advertising.

YouTube doesn’t create content, they aggregate it, index it and make it available to the public…strangely similar to Google’s search engine. The same applies to many of the acquisitions, albeit smaller, that Google has made over the years…

Writely.com which formed the foundation of Google’s Office applications: users publish documents and Google hosts and indexes them.
Blogger.com: Bloggers post tons of content which Google indexes and monetizes with advertisements.
And the list goes on…

Now if Google acquired Expedia they would be entering an entirely new business: E-Commerce.

This might make you say, “Well, why does that matter, money is money, right?”.

WRONG!

Money is always money, but the question is, what does it COST to get that money? In other words, what’s your Return on Capital?

Right now Google has an average Return on Equity of 21%.

Expedia: 5%

Why on earth would Google take on a business that would make its margins worse off?

Answer: They wouldn’t!

Like I said, this is just my opinion and if Google comes out next week and announces that they’ve taken over Expedia, I’ll issue a public apology on TickerHound.com. But, as I said before, my gut and business logic are telling me otherwise.

The one travel company I could realistically see Google taking over would be Kayak.com – it’s a privately held travel SEARCH company. They index and search over 140 travel sites in an effort to find you the cheapest airfares, hotels, etc.

While I “think” this would be a match made in heaven, Kayak is a privately held company and I have no idea what their financials look like. But from a synergistic perspective, Google-Kayak makes a lot more sense than the Expedia story.

I Love Saturday Mornings

2008-04-05T10:52:00.000-04:00

Routine:

9:00 AM - Wake up (that's right, I like to wake up early on Saturday's, see item 3 for why)
9:30 AM - Head to my new favorite west side bagel shop, Brooklyn Bagels (go figure). I highly recommend the Oat and Raisin mini bagel...coming from a former bagel boy, you need to take this recommendation seriously!
10:00 AM - The cartoons begin, starting with none other than Teenage Mutant Ninja Turtles!! Sorry, but I can't stop watching Saturday morning cartoons, I imagine I'll be doing this until I'm 90.

After some cartoons I usually end up working for a few hours before we figure out a good spot to head to for lunch. I'm thinking Flushing today...nothing like Taiwanese food from flushing!

3 Problems with the Financial Services Industry

2008-03-26T00:00:00.000-04:00

Here are the main problems with the financial services industry as I see it:

1. Broker/Client Interests are NEVER Aligned

You may be asking, “Well if I make more money doesn’t my broker make more money? And isn’t that good for the both of us?”

Theoretically, yes. However, as long as an adviser is paid based on the number of trades you make or the amount of money you keep in your account then he or she is NEVER motivated to do well for you.

They are not paid based on how well your stocks perform – whether or not your account goes up or down they still get paid a commission every single time you buy and sell a stock.

That’s like having a car mechanic who gets paid for the number of times he fixes your car – he’ll just make sure it stays broken for as long as possible and will continue to steal your money!

2. It’s Never About Making You Wealthy

The other thing to realize is that the people who work on Wall Street don’t want you to become insanely wealthy. If that happened then there’s a chance you’d leave them.

There’s a chance you’d stop playing the game.

So why would they try to make you wealthy? Answer: they won’t!

Instead they feed you products like Mutual Funds and Index Funds so you’ll just mimic the market and do average! Not good, not bad, just average.

3. They Always Keep Control

And one of the biggest scams that Wall Street has going for them is that they convince the investing public that investing on their own is dangerous. They convince everybody that in order to do well you need an army of analysts and bankers to tell you which stocks are good and which stocks are bad. Then, and only then, can you profit in the market!

If that were the case then why do most Mutual Funds have a tough time beating the market? And on the flipside of that argument, why does the most successful investor in the history of the world have an office of only 8 people?

Bottom line: There’s no good reason why you can’t do just as well investing on your own if you equip yourself with the right information!

Blurring The Line

As you can see there’s a serious problem in this business – there’s always a clear line in the sand: “you” and “them”. It’s never “us”.

We need to change that and we need to change it fast. We need to come up with a way where you and those you take advice from are sitting on the same side of the table.

The only way that gets done is if we change the nature of the client-advisor relationship – it can no longer be a “one way relationship”, it has to become a relationship of reciprocation, a “two way relationship”. Let me explain what I mean…

As of right now what happens when you buy a stock?

Your broker calls you (or vice versa) and rattles off a couple of stocks – you pick the one that sounds best and you buy it. That’s a one directional relationship – your advisor pushes information toward you.

Now, think about it this way – what if you could sit down at the same table as your advisor and have him teach you his process for digging through stocks?

Well, we know that would never happen due to the reasons we talked about before – if they gave away the “secret sauce” then you wouldn’t need them anymore. If they showed you how to invest, then you could go off and do it on your own.

Well, for most established companies in this industry that logic makes a lot of sense – it wouldn’t be in their best interests to make you a great investor. It would be in their interests to make you dependent upon them.

That's why I'm so excited about what we're doing at TickerHound - we have a distinct advantage here and that’s why our perspective on the situation is dramatically different from most. Our business isn’t predicated upon keeping you (and other individual investors) under our control.

We want to set the information free and allow you to live up to your fullest investing potential!

There are other companies in this space doing the same thing - Covestor.com, CakeFinancial.com, Wikinvest.com - all great companies and all looking to do the same thing: level the playing field so the individual investors out there have a shot at taking their financial futures into their own hands and making better financial decisions today!

Why Buffett Would Never Buy Google

2008-03-17T16:53:00.000-04:00

Yesterday on TickerHound.com, a member asked, “Would Buffett really buy Google?”

The question was based on a Fool.com article (click here to read it) that quoted this year’s Berkshire Annual Shareholder Letter where Buffett writes, “It's far better to have an ever-increasing stream of earnings with virtually no major capital requirements. Ask Microsoft or Google.”

I could see why this led some to wonder – and the Fool.com even wrote an article about it – if Buffett could potentially invest in Google. This made me laugh if for no other reason than Buffett mentions Microsoft in the same sentence…a company he knows intimately (considering Bill Gates sits on Berkshire’s board) but has yet to ever invest in.

But let’s leave that part out of the equation for a moment, let’s just look at the “Google angle” and try to answer the question: Would Buffett really buy Google?

For consistency’s sake, I’m going to analyze this in the exact same way the Fool.com article did:

Is The Business Simple and Understandable?

Definitely!

Google is an ad broker – plain and simple.

We can talk about their technology all we want – and believe me, that’s what makes their ability to broker ad dollars so effective – but at the end of the day, the way the company makes 99% of its money is by putting publishers and advertisers together.

That’s a pretty plain vanilla business to me (regardless of all the sophisticated search technology they have on the backend).

Do They Have Favorable Long Term Economics?

I’m going to skip this for a moment and come back to it at the end. You’ll see why below.

Is Management Candid and Competent?

I’d have to give the affirmative answer on this one as well.

The founders, Larry Page and Sergey Brin, both have the better part of their net worth’s tied up in Google stock. That means management’s interests and the share holders’ interests are certainly aligned – something Buffett always looks for in a company he’s buying.

And in terms of candor and competence – their execution speaks for itself and if you’ve read Google’s annual reports and even their S-1 filing, you’d know that they’re candid and up-front about how they manage their business.

So this item gets checked off the list as well.

Is The Price Right?

Here’s where we run into problems…

Buffett’s brilliance isn’t based on the fact that he knows how to value an asset…I know a lot of folks who can value an asset.

My father knew exactly what we should pay for our home when I was a kid.

I could tell you right off the bat how much I’d pay for new car.

In fact, Finance 101 teaches people basic asset valuation models – more specifically, Discounted Cash Flow analysis.

The ability to value an asset isn’t difficult…you just plug some numbers into the equation and you get your value.

The difficult part is making sure the NUMBERS themselves are the right numbers.

So now you’re probably asking, “How do we know if the numbers we’re using are correct?”

Well, you’ll never be able to tell if the numbers are EXACTLY correct – you’ll have to use your best judgment (and even then you’re probably going to be off, and that’s why in Ben Graham’s infinite wisdom he taught Buffett – and thousands of other value investors – to apply a “margin of safety” approach to business valuation…but that’s another story).

But here’s the caveat (and this goes back to the “Does the business have favorable long term economics?” question)…according to the Fool.com article, because the internet has favorable long term economic characteristics, and Google is by far and away the leader of the internet pack at the moment, they assume that Google will therefore have favorable long term economic characteristics as well.

But that just isn’t so…the tech sector is predicated upon the process of creative destruction. Companies must find new and innovative ways of doing things or they’re destined to become obsolete. I mean, how many times have we seen this happen in the last 10 years?

To argue that Google will ALWAYS maintain a competitive advantage in a space that changes by the hour is foolish (no pun intended).

That’s why Buffett only invests in mature companies that compete in mature industries. It makes the tough part of business valuation (using the right numbers) much, much easier.

So to answer the original question as simply as possible, would Buffett ever buy Google?

In my opinion...Not anytime soon!

Click here to leave your answer to this question.

Integrating user feedback...

2008-03-16T11:20:00.000-04:00

Today we launched our new and improved TickerHound design!

Well, the design isn't very "new", it's just been updated a bit based on all the feedback we received from the TickerHound community over the last 10 weeks.

From the get go we told ourselves that we wanted to build a site that our users absolutely LOVED to visit. Our goal was to create the iPod of financial education sites - and no, I don't mean it would play music when you visited, I mean that we wanted the user experience to be so damned compelling and so pleasurable that every visitor felt like the site was built just for them.

So in order to do that we knew we'd have to be in constant communication with our members. We knew we'd have to actively solicit feedback from and actively LISTEN to what they were telling us.

Now, when requesting feedback, it's very easy to take the stuff you want to hear and throw out the rest. I believe it's what psychologists call the "confirmation bias" - you tend to only pay attention to the data that supports your predetermined hypotheses. Being that this predisposition is hardwired into our brains, we knew we had to be OVERLY conscious of it and integrate it into our decision making process on a regular basis.

So as we worked with our design team over at nclud, LLC. (great guys, super talented, I highly recommend them) we would constantly revisit older feedback surveys. We would reexamine data we originally tossed out and we'd revisit features we decided not to add - some of them stayed in the trash can, others ended up on the site.

The point being - while you can't take every single suggestion from every single member, you are doomed to failure if you don't actively examine and reexamine what your users are telling you. Those who fail to ACTIVELY LISTEN will die!

Ok fine, I'm being a little over dramatic here but the point is still the same - listen to your members and they will help you succeed.

The other thing we had to remember was that sometimes our members will tell us more through their actions than their words. For instance, when I saw that we were getting a higher percentage of user activity per day on older questions (questions not on the first page of the questions list), I knew we had to add more numbers to our pagination scheme (it used to be 3, now it's 9).

We also relied HEAVILY on our Google Analytics data - yes, we're cheap, we use Google Analytics. Here's a perfect example:

One of the goals with the redesign was to increase the amount of time visitors spent on the site. It's not particularly low or anything but it'd be great to get it higher (obviously). So I examined the pages that have gotten the highest exit rates over the last 8 weeks. Then I used Google Analytics to track the visitors' paths through the site until they hit the high-exit pages.

It turns out that the pages they exited on tended to only be the 2nd Question page they visited (these are the pages that contain the full question and the associated answers - if any). And they would tend to exit more often than not if it was a question page that didn't have an answer yet (seems intuitive but it just didn't occur to us until we examined the data).

So now we reworked the code for displaying the "Related Questions" in the right-column of the Question pages. Now, the top 2 "Related Questions" will be questions that have at least 1 answer.

While we don't have a lot of data yet, it's clear from early tests that our strategy is paying off in terms of "page views per visit" which I feel will ultimately translate into more time spent on the site.

We'll be adding more features throughout March and we've also made it a company mission to add 2 new features (that have been requested by our users of course) each and every month.

We might not be the sharpest tools in the shed, but we want to be the best LISTENERS on Wall Street!

Muncipal Bonds...

2008-03-12T08:58:00.000-04:00

Should we be buying General Obligation muni bonds en masse, right now?

The failure rates on GO bonds, historically speaking, are so small that it's highly unlikely that an investor with a diversified muni-bond portfolio would experience a catastrophic loss of capital. On top of that, Warren Buffett just created an insurance company for the sole purpose of insuring these bonds. Typically companies like Ambac would insure muni bonds, but they've got themselves into a fine mess now.

So for Buffett, this is a lay up. He gets to insure low risk bonds that he'll probably never have to pay off and in turn will collect a nice revenue stream from the insurance premiums in the interim...so if the Oracle is in it, I've got this gut feeling that I should be too.

I really can't see any state governments letting any large municipalities default on their debt, especially given the current economic climate.

I don't think I'd go near any revenue bonds right now, but anything backed by the full faith and credit of a city I lived in would be just fine by me.

Stock Chart Widgets...

2008-03-06T22:56:00.000-05:00

Had a great talk with Paddy Mullen tonight. Paddy is the founder and developer of ChartWidget.com - a dynamic JavaScript stock charting system that is still in development, but is already an amazing product. Think Google's stock charts, minus the flash requirement.

If anybody is looking to add some sleek charts to their site with a tight UI, I highly recommend checking out ChartWidget.com and dropping Paddy an email.

Stock charts are definitely something we'll want to integrate into TickerHound in the very near future - and in all likelihood, we'll be using a solution from Paddy.

BarCampMoneyNYC

2008-03-03T13:35:00.000-05:00

While there are college courses already being dedicated to developing social networking and Facebook apps, there's very little in the way of structured data or information on how social media is affecting the online financial services industry.

So here is the deal...everybody and anybody who is involved in Financial-Tech (e.g. software engineers, entrepreneurs, UI designers, investors, rubber-neckers, etc.) is cordially invited to the first BarCamp associated with the convergence of finance and technology...BarCampMoneyNYC!

Unlike the recent O'Reilly Money:Tech conference, this little conference of ours will be based on the BarCamp format. All attendees will also be presenters...yes, that means you either have to present or participate in the presentation. But don't be "scurred"...we're all here to learn, teach and help one another navigate these unchartered waters.

TickerHound and a number of other NY based financial-tech start-ups and industry veterans will be in attendance. I'll post more details as we get closer to the event, but just so you can mark your calendars now, here's the 411:

BarCampMoneyNYC Event Details:

Date: April 12, 2008
Time: 9am - 5pm
Venue: Wilson Sonsini Goodrich and Rosati, 1301 Avenue of the Americas (between 52nd & 53rd street), 40th Floor.

What is BarCamp?

BarCamp is an international network of user generated conferences — open, participatory workshop-events, whose content is provided by participants — often focusing on early-stage web applications, and related open source technologies, social protocols, and open data formats. For more information, visit http://en.wikipedia.org/wiki/BarCamp and barcamp.org

About BarCampMoneyNYC

BarCampMoneyNYC 2008 is an ad-hoc gathering for the people who work in, cover or seek to revolutionize the finance industry to share and learn in an open environment. It is an intense event with discussions, demos, and interaction from all attendees. It costs nothing to attend, but there is a price: all attendees must lead a discussion, give a demo, a session, or help with one. For more information visit, http://barcamp.org/BarCampMoneyNYC

BarCampMoneyNYC Sponsorship Information

BarCampMoneyNYC is a free event to attend. In order to keep the event free, organizers rely on sponsorship from businesses. Sponsorship donations will be used for food, t-shirts and miscellaneous expenses incurred during the hosting of the event. Sponsors of $500 or more will have their logo added to our t-shirt. All sponsorships will receive signage at the event, and collateral at registration desk. For additional information contact BarCampMoneyNYC organizers.

We already have an impressive roster of attendees, so if you'd like to come, participate and meet some of the movers n' shakers in this industry in New York.

Google Ads - The Real Story

2008-03-01T16:41:00.000-05:00

So the talk of the tape last week was obviously Google (Nasdaq: GOOG). The Mountain View search giant has been on a downward spiral since the end of last year and showed no signs of letting up now.

In fact, the stock is down over 33% in 2 months alone – that’s over $70 billion dollars in shareholder value completely wiped out in a matter of weeks.

Last week was no exception – after a negative report came out from web traffic reporting company, comScore, Google’s stock slid from $505 on Monday down to $471 by the close on Friday. That’s a decrease of over $10 billion in market value in a single week based on a single report.

I can’t begin to tell you how many news articles and blog posts I read that had the, “See we knew Google’s success couldn’t last forever”, feel to them. The basis for this insightful, albeit untimely conclusion: the comScore report. On a side note: I bet the vast majority of the analyst and editors behind those articles were probably the same people who predicted Google would go to $800 per share only 3 months earlier.

In any case, the real issue here is the comScore report.

Was it accurate?

Did the media draw meaningful conclusions from it?

Were the conclusions accurate?

Nobody seemed to bother asking those questions – well, if they did, those weren’t the folks getting all the publicity last week. The only articles making the front page or the “most popular” lists were those calling for Google’s head on a platter, so to speak. So let’s fast forward to the end of the week when comScore published a post on its blog that pretty much read, “Oops, we might’ve given you the wrong impression”.

My favorite excerpt with respect to the report:

“The information triggered a flurry of reactions in the media and the financial community that centered on two concerns: 1) a potentially weak first quarter outlook for Google, and 2) an indication that a soft U.S. economy is beginning to drag down the online advertising market.

While we do not claim that these concerns are unwarranted, we believe a careful analysis of our search data does not lend them direct support.”

If you’d like to read the entire blog post, click here.

The basic gist of the blog post was that while total click-throughs may have been down, it was due to a conscious effort on Google’s part to eliminate ineffective ads. Meaning, there was less opportunity for clicks because Google was proactively displaying less ads, thus increasing the dollar return on the ads that were displayed.

Bear Sterns’ analysts aside, I think most folks realized that this report was overblown – at the end of the day, 3rd party data doesn’t mean everything…money does. And according to many Google clients, some of whom I know personally, Google is still their primary advertising solution and they’re seeing more and more money from the company each month.

Check out this report from Alley Insider which talks about one of the larger ad buyers on Google and why they’ll continue to use Google as one of their primary marketing tools:

Ad Buyer: No Slowdown In Search Or Google

All in all it was a rough week for the company and the stock may not be out of the woods yet, but there’s a valuable lesson to be learned here: It pays to do your own homework!

That’s why I was so happy to see a few TickerHound.com members ask questions on this exact topic…one of the recent questions: “What will happen to Google now? Is the selloff going to continue, or has it bottomed out?”

Click here to weigh in on the situation.

While I couldn’t tell you when Google’s stock will be on the rise again, I can say for sure that this company isn’t going to be another “dot bomb” sob story. I’m definitely a long term bull on this stock.

Is Hershey the Value Play of the Year?

2008-02-24T19:29:00.000-05:00

A great question appeared on TickerHound the other day that really caught my eye. One of our members asked:

“Is Hershey going to be the biggest value play of the year?

This has to be something Buffett would be licking his chops over - and not just because the chocolate is good - Hershey looks like Coke did back in the 80's. Getting hit by competition and internal problems but still has this ridiculous amount of brand equity and consumer reach.

My only question is, when do we buy?”

Click here to read some of the answers or submit one of your own.

Being that I’m a chocolate fanatic and an avid Buffett follower, the question immediately had my attention – I was even tempted to post a quick answer to it, but I decided to dig a little deeper and do my homework on this one.

Full disclosure: I do NOT own any shares in Hershey or any other company I discuss in this article.

So the story behind Hershey’s recent decline is this:

Back in January of 2007, Hershey’s CEO at the time, Richard Lenny, met with his counterpart from Cadbury, Todd Stitzer. Stitzer was proposing a merger between the two consumer food & beverage giants that would create a global candy making powerhouse.

Cadbury was willing to give up its beverage business (a huge point of contention between the two companies in the previous merger discussions they’ve had) as well as incorporate in Delaware, maintain a US stock listing and keep the headquarters in Hershey, PA.

Somehow, after that meeting, Mr. Lenny got into a major dispute over the merger with Hershey’s largest shareholder – The Hershey Trust Co.

The Hershey Trust was formed by the company’s founder, Milton Hershey, as a school for orphans which he eventually transferred all of his assets to, including his stake in Hershey’s chocolate. The trust currently owns almost 30% of Hershey’s stock, controls 79% of the voting shares and can remove 5/6 of the company’s board if it saw fit to do so…in fact, that’s exactly what they did do, as well as force Mr. Lenny out along with a number of other top ranking executives.

They say it had to do with Mr. Lenny’s withholding information about the proposed merger and Hershey’s growing financial problems. This is all disputed by a number of parties on both sides of the fence, so I won’t go into it here.

Now, the stock is down 31% in the last 12 months – the stock hasn’t been this low since 2000 – 2001.

For me, when a brand name like Hershey’s is getting beaten up in the market, it smells like an opportunity to make some money. So here are the pro’s and con’s for Hershey as I see it.

Positives:

Largest candy maker in the US
One of the strongest consumer brands in the country
Aggressively moving into global markets
In the process of integrating a massive overhaul of its supply chain in order to improve efficiency and reduce costs
Stock has been hit hard and is at historically low prices

Negatives:

80% of its sales come from the US
Brand reach doesn’t extend outside of the country
International probe from US, Canadian and European regulators into whether Hershey (and several other candy makers) engaged in a concerted price fixing scheme
Revenue and profits fell short in 2007
Recent management and board shakeups have left the company in untested hands
Still going to see roughly $200 million in operating charges next year in relation to its supply chain overhaul

Potential Outcomes

So the negatives seem to be outweighing the positives…for the moment, at least. The chart is in a solid downward trend and while it might’ve found support where it is now, I can’t see it moving dramatically to the upside anytime soon, especially with all the other uncertainties surrounding the company.

The new management and board have me concerned as well. Reason being, the folks who control Hershey’s Trust are all local Hershey, PA elites – not veterans from the candy business. It doesn’t give me that “warm and fuzzy feeling” knowing that the largest shareholder is making such dramatic changes based on one bad year and for feeling like they’ve been kept out of the loop.

So to answer the original question – the time to buy is not right now. I’d wait until this stock builds a base and starts trending upward. However, if you’re already a Hershey shareholder, I wouldn’t be too alarmed at the moment. We’re still talking about the largest candy maker in the US with one of the oldest and most powerful consumer brands in the country.

If the company doesn’t recover on its own, here are some other potential outcomes that will help shareholders see some serious upside in the stock:

Merger with Cadbury: The Hershey Trust isn’t opposed to a merger with Cadbury – in fact, as they were planning to shakeup the company they held additional talks with Cadbury in New York late last year. While the two companies didn’t come to an agreement, I don’t see why the conversation couldn’t be picked up again, especially if Hershey’s stock continues to languish.

Merger with Wrigley’s: A few years back Mr. Lenny architected a merger with Wrigley’s – the gum maker – again, Hershey’s Trust nixed the merger at the last minute. But again, if the stock continues to languish we could see some of these conversations pick up again.

At the end of the day I think it’s fairly clear to all parties that Hershey needs to diversify its business away from the US market. They need a partner overseas, especially in Europe, and Cadbury would be a fantastic fit in my opinion.

So while I wouldn’t be a big buyer just yet, my guns will be locked and loaded because at some point in the not-so-distant future, Hershey’s stock will become a part of my portfolio.

Click here to read some of the answers or submit one of your own.

It's About the Process

2008-02-15T10:38:00.000-05:00

Will Price over at Hummer Winblad writes a great post (Will Price: Embracing Uncertainty) about "design thinking" and how it applies to a start-up and even investing.

The bottom line is, it's about the PROCESS and NOT the product (in the early stages at least). Rapid prototyping, A/B testing, constant iteration and improvement! That's the only product road map that truly makes sense.

It really sucks that if entrepreneurs want to raise money from an investor, they have to show these multi-year product road maps and financial projections.

There's no way any of that will come to fruition, and the messed up part is, EVERYBODY KNOWS IT! So why do it?

My only conclusion: Conventional Wisdom is convenient.

I'd love to see a business plan that had no financials and a product road map that read like:

1. Launch bare bones prototype - get feedback.
2. Improve, relaunch.
3. Get more feedback.
4. Do it all over again.

Anybody that thinks they can create a "silver bullet" product right out of the gate is kidding themselves.

My gut tells me that the consistently successful founders are the ones who focus on their process for developing the product - as opposed to coming up with a concrete vision for what the product will be and sticking to it no matter what.

I really liked Fred Wilson's series of posts on his venture capital investing history and how many of his successful portfolio companies actually stuck to their original business models. It turns out that the vast majority of them (17 out of 25, I believe) ended up with entirely different business models in the end.

So again, it's the intellectual framework for making these business model changing decisions that differentiates most successful companies for the unsuccessful ones. Please note that this hypothesis is predicated on the assumption that any entrepreneur worth his salt is smart enough to at least be playing in the right ball park - for instance, somebody who wants to create an everlasting gobstopper that can also be used as a hat is not only out of their mind, but won't succeed no matter how many times they prototype and iterate.

Obviously if you just happen to catch the right wave, at the right time and have the right board (read: product/application) under your feet, then you'll do very, very well!

But I'd put my money on getting the process right than luck any day of the week :)

A Personal Touch

2008-02-10T15:59:00.000-05:00

I'm a big proponent of using Return on Invested Capital (ROIC) as a primary benchmark for business success. And not just at the end of the year when sizing up our P&L statements. ROIC has to be used for every business function in order to know if it was "worth" it or not...period.

That's why we use tools like email newsletters and blogs to communicate with our members at TickerHound. It's a "one to many" device - meaning, we write a message once and it reaches many people (at the same cost). It's what makes software and the web such a highly profitable medium.

But I think that in the search for increasing ROIC, we might lose that personal touch that helps build businesses. There's something to be said for appearing to be a "big company" - customers want to feel like they're part of something bigger than they are, they want a feeling of security, credibility and reliability that comes with being aligned with a large company.

But I can't help but feel like "being big" might not be an advantage sometimes - especially on the web. Striving for increasing ROIC in the short term might hurt a business over the long term. So I've been thinking a lot about the web and how it was supposed to "level the playing field" and put small companies on the same level as big companies...and it's certainly done that.

The other thing it's done is it has made this world a much smaller place to live in. I can chat with my friends in China, California and New York just as easily as the person next to me. I know what they're doing via their "Status" on Facebook. I know if and who they're dating, what bar they went to this weekend and I even get to see the tan they got on their latest vacation.

So with that being said, should web start-ups continue to adopt "big business" images or should we start to look at what makes "small businesses" work?

And I don't just mean "small" in terms of revenue or number of employees...I mean "small" in terms of the community the business serves. So the small businesses I'm thinking of are those that serve local communities - the pizzeria down the block from my house, or the dry cleaner at the corner - those small businesses.

Now, the most successful small business I know of was Tony's Deli - an Italian Deli owned by my friend's parents in my old neighborhood of Whitestone, Queens. Tony's was a typical Italian deli - fresh cold cuts, great hot food prepared by my friend's mother and every single time you'd walk in they'd shout your name from across the counter and ask how you were.

It didn't feel like you were walking into a store - you didn't feel like you were walking into a place of business. It felt like you were walking into a friend's place, grabbing some food and by coincidence leaving a little money on the counter. They knew your name, your family's names, the names of your pets. It was great.

But then one day this MONSTEROUS Italian Deli opened up just 3 doors down! They had more food, more selection, fresher produce, etc....AND, they were charging 50% less than Tony's.

So here you have a situation where a competitor enters the marketplace with a better product at a cheaper price - most "business strategists" would say that Tony's would be done for.

But that's not what happened - no sir.

Without Tony's asking for help or even bad mouthing the competition, the community rallied around the local deli. The lines got longer, people bought more things more often and whenever you would walk in you'd be able to hear at least one customer mention that they'd "never shop at the place down the block, hope they go outta business!". It was amazing - Tony's actually did better when the new competitor hit the markerplace because they had captured the loyalty of the community they served.

The "Tony's Community" became champions of Tony's success - the "bigger" company was considered a common enemy that the community could rally against. And boy oh boy did it work out well for Tony's...within 6 months the competing Deli was out of business and in the last 15 years not a single new Deli has tried to open in that community.

Tony's became the king because the community decided it should be so.

And that's what prompted me to do the first truly "small" business tactic that I've done since we decided to launch TickerHound last year.

I began to personally e-mail "thank you" letters to every TickerHound member...and not the standard, "Welcome to TickerHound" e-mails everybody gets. I e-mailed them thanking them for joining and for their contributions to the site. These aren't copy & paste, mass production e-mails either. These are letters I personally typed and sent, from my personal e-mail address, to our members.

This is obviously going to lower our ROIC in the short term, but over the long haul I have this belief that it'll help TickerHound become the "Tony's Deli" of the financial education market. And even if it doesn't, I know that at the very least I'll have made some friends, built some loyalty and have gotten some invaluable feedback on our product - so no matter what, it's a win-win for me, for TickerHound and for the community.

So here's my message to other entrepreneurs out there - "think small".

Yahoo! Rejects Microsoft's Bid

2008-02-09T14:16:00.000-05:00

As I’m sure you know these companies have been making a ton of headlines this week. After both found themselves unable to successfully compete against the leader in internet search and advertising, Google (Nasdaq:GOOG), Microsoft (Nasdaq:MSFT) made a $44 billion unsolicited bid for Yahoo! (Nasdaq:YHOO) last week.

Yahoo!’s board was set to meet on Friday to decide what, if anything, they would do about the offer, about Google and just about Yahoo!’s overall problems in general.

Well, as of Saturday morning the Wall Street Journal was reporting that “someone familiar with the matter” (I love how there’s always one of those) stated that Yahoo! would reject the offer and wouldn’t consider anything lower than $40 per share. That would put Yahoo! at a $53.6 billion valuation – a 20% premium to the current offer and 35% premium over Yahoo!’s current stock price.

So that wasn’t an out-and-out, “No, we think this is a bad idea”. It was more of a, “This is a good idea, but only at the right price.”

But the question is, would that price be “right” for Microsoft?

Yahoo!’s stock hasn’t come anywhere near $40 per share in over 2 years which basically means that even though the company has been going on a software development spree – releasing new versions of its ad system, it still hasn’t been unable to come close to competing with Google.

And if I were Microsoft, I’d certainly take that into account. In fact, let’s pretend I am Steve Ballmer for a second (and thank the lord that I’m not), here’s my logic for evaluating the Yahoo! deal:

1. How much more money could we make in online ads by having Yahoo! on board?
2. How much could we save?
3. And most importantly, what would Yahoo! do if we didn’t buy them?

You may be wondering why number 3 is the most important – wouldn’t it be more logical to think of it all in dollars and cents? Well, yeah, I’m sure it would be more “convenient” but here’s my logic in putting so much emphasis on number 3.

Yahoo! as a standalone company cannot compete with Google, or Microsoft for that matter, in terms of capturing greater market share of the search advertising business – the crown jewel of online advertising. Which means the company is destined to become a laggard in this space (assuming lightning doesn’t strike) which will leave it ripe for picking at a later date.

Yahoo! could also decide to partner with Google for its search engine ad technology – which in the short run would definitely bolster the company’s financial situation, but longer term would leave it strategically vulnerable. I mean, what value would this company have as a technology company (one that thrives on innovation) if its most popular division was powered by somebody else? It would be like Budweiser putting Coors into its classic brown bottles and hoping no one would notice – certainly a tough hole to crawl out of.

Neither of these alternatives would give me a warm n’ fuzzy feeling if I were a Yahoo! shareholder.

So back to Microsoft – here’s a company that’s willing to give Yahoo! shareholders something for their patience. It would give both companies the ability to actually compete with Google for the first time and the scale they would gain in terms of traffic, reach to publishers, etc. would put the combined company in a prime position to increase ad rates and revenue across the board.

Granted Yahoo! employees might not be ecstatic about it, but Microsoft said they’d retain the Yahoo! brand and probably much of the culture. I don’t think regulators will have any problems due to the fact that the combined “Mahoo” (as it’s being called) still wouldn’t completely eclipse Google in terms of traffic or scale.

So if $31 is too low and $40 is too high – what do you say we split the difference, call up Ballmer and Yang and tell them to settle on $35.50? Then everybody’s happy and Google can finally get a run for its money!

Who’s with me?!

Califoolya!

2008-02-05T01:29:00.000-05:00

The long overdue photos of my long overdue trip out to the West Coast.

Got to drink a ton of great wine, eat 2 tons of great food, hang out with my girl's family (amazing people, always a good time) and got to meet one of my social media heroes, Shel Israel.

So here are a few pics that hold a special place in my heart from my latest journey out west:

The Pier in Santa Barbara:

Baked Brie @ The Los Olivos Cafe (as seen in Sideways)

Roasted Veggies @ Los Olivos - it was only vegetables, but you have no idea how good this was!

Sea Bass with baby spinach @ Los Olivos

Drive home from Solvang - I wish it were summer, this New Yorker would've been laying in the middle of those vineyards downing a bottle of vino.

Jumbo Prawns @ McCormick & Schmick's

Blackened Fish Tacos @ McCormick's - 10 out of 10!

My love and I at McCormick's - amazing place, I highly recommend it. Looking out over the bay during a nice lunch...nothing beats it.

Yeah, now we're about to get New York Beast-Status on this Ghirardelli Hot fudge Brownie Sunday...you know how we do.

That was gone in about 37.5 seconds...

And now I'm paying for it dearly - it's a terrible feeling when you have to drop a notch on your belt because it's too tight. But oh well, the pictures have certainly made me feel much better.

California - see you soon!

Psychics, Fortune Tellers and Investment Advisors

2008-02-01T23:20:00.000-05:00

You may be looking at the title of this article and scratching your head wondering: what do Psychics, Fortune Tellers and Investment Advisors all have in common?

Well, for one thing they all try to predict the future in one form or another. Psychics and Fortune Tellers supposedly use some type of extra-sensory perception to see into the future. They use tools like tarot cards, crystal balls and chanting in order to tell you what your future holds.

Will you be rich? Will you live a long life? Plenty of people out there turn to psychics and fortune tellers for answers to these questions.

Now you’re probably thinking, “Ok Wayne, what does that have to do with investment advisors?”

Answer: PLENTY!

Instead of using crystal balls and cards with funny symbols on them, investment advisors use charts and financial statements. Now, I’ll be the first to admit that investment advisors, stock brokers and money managers are a far cry from the 1-900-PSYCHIC people you see on TV. But that’s not what’s important…what’s important is WHY people feel the need to rely on these “predictors of the future” in the first place.

Why do we, as human beings, feel the unending need to know about the future?

In fact, I’ll share a little tidbit of information with you – human beings are the ONLY animals that conciously plan for the future. And not knowing what our future holds gives us a TREMENDOUS amount of anxiety. So much so that we do everything in our power (and mostly through the “power” of others) to plan for, predict and try to control our futures.

And that’s why fortune tellers, psychics and investment advisors are so successful – they truly understand human nature and they PREY UPON IT! They prey upon your desire to know your future, they prey upon your desire to profit or protect yourself from your future…and most of all, they prey upon your anxieties and insecurities about the fact that you CANNOT control your future.

They tell you that since you can’t protect yourself from, predict or control your future that you should rely on them, “the experts”, to do that for you. And there’s something very comfortable in doing that. It allows people to relieve themselves of the responsibility of their future circumstances.

Didn’t become rich? Well the fortune teller was wrong, not you.

Lost money in the market? Your broker was wrong, not you.

And that is precisely the psychology that MUST change in order for individual investors to break free from the shackles of the “Wall Street Regime”. Investors must realize that they have the power, the intelligence and the ability to do better than the rest of the market.

Your brokers, your money managers and even the “professional mutual fund managers” all try to mimic the market. If they performed as well as the S&P, they brag about it and are given monstrously large financial incentives to do so. In what other profession does somebody get so handsomely rewarded for simply doing AVERAGE?

My friend, we are taught to do AVERAGE in grade school!

If you want to do ABOVE average…if you want to be an extraordinary investor…if you want to unlock those shackles and break out into the world of TRUE FINANCIAL INDEPENDENCE then you have to stop relying on these “stock market fortune tellers” and start empowering yourself!

And maybe you’ve already made that leap – maybe you’ve already taken the responsibility, shed your fears and made the decision to take control of your financial future. If you have, then congratulations! You’re one of the rare few and you deserve all of the rewards coming to you.

But if you haven’t made that leap yet, if you haven’t decided to put yourself in a position to prosper then I ask you – in fact, I CHALLENGE you to make that leap today.

The only way to shed those chains and become an independent and successful investor – one who outperforms the “herd” – is to equip yourself with as much information as possible. You have to take the time and make the effort to educate and empower yourself as an investor.

In fact, at the end of this article I’m going to give you a list of sites and services that I personally think can put you on a path to financial independence. And these aren’t sites you have dole out tens of thousands of dollars to be a part of. These sites are all free and are all there to help put the power back in the hands of the people – namely, you!

But it won’t be easy…no, no, no. The journey to financial freedom is certainly not the path that’s paved with gold. It’s a rough road ahead of you, but I promise that the destination is more fulfilling and rewarding than you could ever imagine.

So begin that journey today, and drop me a line from your yacht once you get there!

Websites Dedicated to Educating and Empowering Individual Investors:

1. TickerHound.com
2. Wikinvest.com
3. Covestor.com
4. Caps.Fool.com
5. SeekingAlpha.com
6. Marketocracy.com
7. TheStreet.com
8. Investopedia.com
9. BullPoo.com
10. TheTycoonReport.com

Good luck to you and God bless – you’ve undertaken an enormous responsibility and while it might be tough at first, you’ll ultimately be a better investor and a happier person for it. Congratulations!

Feedback Forum

2008-01-30T09:18:00.000-05:00

So I went to my first feedback forum last night - hosted by Jonah Keegan. The presenters were the co-founders of a new online dating site, CupidsLab.com.

CupidsLab is hoping to take dating to a new level by empowering not only those who are looking to meet that special someone, but by also empowering the lesser known and drastically underappreciated "match maker" population. You all know you have a friend or two out there who has a certain knack for hooking two people up. (NOTE: my previous match maker extraordinaire did such a wonderful job that she ended up matching herself up with me! Good job baby!)

So CupidsLab is going to provide a tool set for empowering the match makers to help them do their "jobs" more effectively.

Last night we all met in a conference room with about 8 other technology entrepreneurs, marketers, journalists and even a VC to listen to some of the challenges CupidsLab is facing. Then everybody started to give feedback...and brainstorm...and give even more feedback.

It was, quite frankly, an AMAZING 3 hours.

You have to understand, I come from a background in traditional finance (brokerage, analysis, etc.) and it is such a rare thing to find people who genuinely want to help each other on Wall Street. Most of the time it's because they either want something immediately in return or because they're working some sort of shady angle.

In any case, last night was the complete opposite of that. We had a room packed with a group of fairly intelligent guys (I'd like to consider myself one of them) who wanted to do nothing more then sip a couple of beers, eat a slice of pizza and brainstorm about business. Not only did CupidsLab come out of it with great ideas and feedback, but it forced me to think through some of the issues I was having with TickerHound in some new ways.

I'll definitely be attending these in the future and I highly recommend it to anyone who has a genuine desire to help other entrepreneurs and learn more about this industry that we're in.

I'm going, going, back, back, to China, China!

2008-01-28T21:39:00.000-05:00

Ok, maybe a Biggy Smalls verse wasn't in order here but that's all I could think of and I'm so damn excited I feel like I could rap about it. So I booked my tickets today for a trip back to the motherland...ok fine, it aint my motherland but I can't help it if I'm an ethnically confused caucasian (just kidding).

But in any case, I loved my first trip to China...best summer of my life...so I'm hoping this one, although shorter, will be just as fun.

I can't wait to get my hands on some naihuangbao:

Or some Beijing-style Huoguo (Hotpot - lit. "Fire pot"):

You have no idea how good this stuff is until you've actually eaten it in China!

So here's my tentative itinerary:

June 19th - Depart for PEK out of Newark
June 20th - Arrive (jet lagged) in Beijing
June 21st - Winston's Wedding!!!
June 22nd - 26th - Chilling, eating, drinking and partying in Beijing (maybe a little work too).
June 26th (evening) - Depart for Shanghai (train of course!)
June 27th - July 1st - Chilling, eating drinking and partying in Shanghai (maybe a little work too).
July 1st (evening) - Head back to Beijing
July 2nd - July 3rd - Eat and buy as many bootlegged DVD's as I possibly can!
July 3rd - Homeward bound!

And since Beijing is 12 hours ahead of New York, I'll leave at Noon on the 3rd (China time) and arrive at 1:30 PM on the 3rd (Eastern time)! Just in the time for the 4th of July the following day - who's better than me?

I hope my Chinese is still up to par - haven't had much opportunity to practice here in the States. It's a damn shame too, I studied it hardcore for 2 years and spent 3 months in China studying it every single day. So if anybody reading this wants to help me get my game back, please drop me a line in the comments.

The Wire

2008-01-27T22:58:00.000-05:00

For the record...so there are no misunderstandings, confusions or other forms of miscommunication...HBO's The Wire is by far and away the greatest, grittiest and realest crime drama to have ever blessed our televisions. If you want to know what it's really like on:

1. The Streets
2. The police force
3. Back room politics

Then this show is it!

Some may dismiss it as being another voilent, shoot 'em up, cops vs. robbers TV series, but it's much, much more than that. The Wire has taken the American living room and brought it into the street's of Baltimore (the largest open air drug market in the world). I can't begin to describe the depth of this show, nor would my words do it justice if I could.

It must simply be watched, absorbed, re-watched and then watched again.

For those who disagree - I feel sorry for you.

Content and Community

2008-01-25T10:21:00.000-05:00

Two of Hagel's 3 C's of the web - Content and Community - are the cornerstone of all User Generated Content (UGC) sites. They are their biggest asset and at the same time their biggest liability - well, maybe not a liability but definitely a challenge.

I mean, think about it:

1. A UGC site's (social networks, blogs, etc.) value is solely predicated on the participation of its members.

2. In some instances like community dating or classified listings sites, there are two classes of users. Think of it like Supply & Demand. On a classified listing site you have those posting ads, but you also need a commensurate amount of people viewing those ads. Like on eBay - you need both buyers and sellers otherwise the site is worthless to both groups.

So here are the inherent difficulties with a model like this:

1. What's the value for an early adopter? In the beginning there's limited content on the site and limited community activity.

2. What if demand (eBays buyers) exceeds supply (eBays sellers) - or vice versa - in a dramatic way?

Those are the two challenges that face most User Generated Content sites.

Here's how TickerHound has addressed some of these issues in the early stages of our Beta period:

With respect to adding value to the early adopters, I've partnered up with InvestorWords.com - an investing and finance dictionary - basically, I've converted their word/definition items into question/answer records in my database.

So even if nobody is on the site we have a minimum number of questions and answers that at least cover the "ever green" type content (e.g. What's a stock option?, What's the dow jones?, etc.). That doesn't solve the community issues, but it certainly helps with the content (which could keep people there long enough to develop a community). So far it's proven to be fairly successful.

But the supply and demand issues are rough. Too many questions not getting answered and you have a lot of unhappy first time users...and they won't care how great the service "could" be, they'll just walk away. So I'm trying very hard to cultivate the community slowly:

- No intensive marketing just yet
- Writing a weekly newsletter highlighting certain members and their contributions
- Reaching out to "power members" individually to thank them and ask what else we can do to make their experience on the site better.

It's been working well and I'm going to continue doing many of these things as I go forward.

There are other issues that are beginning to creep up, however. Now I have to start thinking about SPAM issues - how can we effectively keep stock scams off the site as traffic begins to build? How do we quickly get SPAM off the site when it does appear? How do we evangelize our community so they'll also help police the site?

These are questions that I - and every other UGC site owner - has to answer if we hope to be successful. That's primarily why I decided to attend a meet-up on Tuesday that's going to be hosted by Cupid's Lab where some other NY tech entrepreneurs are going to meet and discuss some of the very issues I just raised.

Here's to reaching some conclusions on these issues!

TickerHound is on Facebook!

2008-01-24T13:55:00.000-05:00

TickerHound is now on Facebook!

You can become a fan of TickerHound on our Facebook company page. Simply click here and then click the Become a Fan link on the right side of the page.

We put up some pictures of TickerHound Head Quarters too - so check it out to see where we work and what we do all day to make TickerHound a great place for you.

Enjoy!

The TickerHound Battle Station

2008-01-24T10:13:00.000-05:00

Ok fine, it isn't a battle station, but we love our offices nonetheless. So, we figured we'd share some photos of our lovely office space with you today. If you're ever in lower Manhattan please let us know - we're only a couple of blocks off of St. Marks Place and are always up for a cup of coffee with other TickerHounds.

The view! Silicon Alley at its finest!

The TickerHound conference room -- where all the planning for world domination (oops, I mean for creating a useful site) begins. :)

George, our technology guru, explaining the finer points of how the site works...go George!

The WHOLE office!

Wow, we do have some funny looking people working here ;)

We hope you've enjoyed our little tour of the TickerHound office...come back again soon!

Back in the Building!

2008-01-19T11:25:00.001-05:00

So I'm finally back and feeling great!

Had an amazing time out on the West Coast - I definitely spent way too much money and time drinking wine, but what the hell, it's not everyday I get to sit in the middle of wine country and sip a glass of vino while the sun is going down.

But now I'm back and ready to get down to business.

My "tech" new year's resolution was to begin blogging more often...once or twice a month just isn't cutting it. The main problem has been lack of time. I've been blogging a lot over at the corporate blog: http://blog.tickerhound.com.

That really eats up a ton of time each week.

But I'm in the process of hiring 1 - 2 interns, which will hopefully leave me with more time do other things.

Actually, that reminds me, if you know anybody looking for some part-time internship work please send them my way. I'd prefer a college student with some experience in finance/investing. They can e-mail me at HireMe at TickerHound dot com.

I'll be posting pics from my trip soon - along with a few posts about some of the crazy thoughts that have been racking my brain as of late.

Good to be back!

California Here I Come!

2007-12-21T23:58:00.000-05:00

I can't wait to get out of this New York weather for a little bit. Don't get me wrong, I love my city but I could really do without 30 degree days and 20 degree nights for a little while. I know it's not 80 degrees and sunny in the Bay Area right now either, but I'm just in the mood for a change in atmosphere.

The sun's a little brighter, the streets are a little calmer and the smell of the Pacific just puts me in the right frame of mind.

Last year was my first trip to San Fran for the holidays and I'm thinking of making it a tradition. I feel like my year just starts off on the right note.

Who knows, maybe one day I'll make the move out there. My Dad was born and raised in San Mateo - he moved out here when he met my mother. Now I've met a woman whose family is from - believe it or not - San Mateo! So I guess I'd just be coming full circle if a ditched the East Coast and moved (back) out West.

I'm also pretty psyched because I get to meet some friends who I've only had the opportunity to communicate with over the phone.

So I'm leaving Sunday - farewell New York City (take care of her while I'm gone people!).

TickerHound.com has Launched...Finally!

2007-12-19T12:56:00.000-05:00

So we finally did it, we got TickerHound outta the dog house and back on the street!

For those who don't know, this is the project I've been working on for the better part of this year and I can't even begin to describe how happy, relieved and stressed I am (yes, all at the same time).

Happy - that the site is finally out there and getting used by investors for the first time.

Relieved - that it actually got launched on time (we set a pre-Christmas deadline and we beat it by a week!).

Stressed - we had our initial burst of traffic yesterday (not even a lot compared to other sites) and the site started to lock-up. We've got some code optimization to do! But not to worry, we have such talented people over here that I know this will get taken care of sooner than later.

Now my goal is to spread the word about what we're doing and get as much feedback as possible from our members. I really want to include them every step of the way in our planning and product development process.

That's the beautiful thing about doing business on the web - there's never been a time in history where businesses could rely on REAL TIME customer feedback to augment their product development process and strategy. Before the web we had focus groups -- people would come in, use a product in a controlled environment and answer a questionaire. This took time, money and you never got a very clear picture of how a product was used in a more "natural" setting. Don't get me wrong, focus groups are a useful tool and they have their place in a product development process (even a digital one). But, when I can use an automated tool to tell me exactly which links, features, and text are the most appealing to my visitors then I feel that I'm operating with information that will help me make the best possible decisions.

And forget bringing people into a room to answer questions - we have polls, blogs and forums where we can get information from customers right away. Not only d we get great information but our members now have a vested interest in the success of this product because they helped build it! Think about how powerful that is.

That's really what this is all about - building a service that will solve a problem for real people. If we keep listening to our members, giving them what they want and solving problems for them then I'm sure we'll do just fine in this market.

So definitely give TickerHound a look - I'd love any and all feedback.

And check out the official launch post on TickerHound Blog's by clicking here.

Look mom, TickerHound's on TV!

2007-12-07T10:21:00.000-05:00

I finally got the clips from my Fox appearance two weeks ago (thanks CriticalMention.com). It's a bit weird seeing yourself on TV. I feel like I talk funny, look funny, move funny, etc...and just for the record, that isn't an invitation to agree and start cracking jokes on my blog ;)

It was definitely a fun experience and I'm looking forward to doing it again - in fact, I'll be on Monday December, 10th. So for all of those early risers out there, check out Fox Business on Monday between 5 - 7 AM and you'll see my ugly mug up there.

My real hope is to turn Fox onto the idea of using content from TickerHound (once we open the site up in a couple of weeks) so I can feature members and their contributions to the community. Hopefully they'll be into the idea.

I mean, Fox Business is part of News Corp. and all, but it's essentially a start-up media company focused on finance here in New York. TickerHound is a start-up media company focused on finance here in New York. That sounds like a match made in heaven to me :)

Launching a Start-up is Hard Work...

2007-11-29T23:57:00.000-05:00

Sorry I haven't been posting much lately I've been working my a$$ off on my latest venture, TickerHound.com

It's hard work getting a new site off the ground!

I know that may seem obvious to most folks, and being that this is my ump-teenth start-up venture, you'd think I'd be better at it by now. But seriously, each and every time I've ever gotten up to the "2 weeks and counting" phase of a launch, I just get overwhelmed with the "detail work" that needs to get done.

Most people think you spec the app out, get it designed, get it built and then launch...very simple. But the reality of the situation is much, much different. The saying, "the devil's in the details" doesn't even begin to do this process justice. In the last 2 weeks alone I've had to do everything from tightening up the copy on the site's registration page to integrating the weekly newsletter with our e-mail service provider.

Not to mention having our developers try to catch all the last minute bugs, optimize SQL queries and load test the app...I've gotta say, I'm exhausted. I almost need a vacation after all this, which is obviously impossible considering the REAL work starts after the launch.

I'm planning on posting a bit more this weekend.

I really want to write the follow up post to my Wall Street Sales Strategies and I'm dying to weigh in on some of the Facebook Beacon news.

Hope everybody is doing well!

Mixed Feelings on Facebook's new Ad platform

2007-11-07T10:23:00.000-05:00

So yesterday at ad:tech Facebook announced its long awaited ad platform. Here's a quick recap:

New services:

Beacon - Beacon gives site owners the ability to integrate a user's actions on their own site into Facebook's newsfeeds. So if you have a customer who is also a Facebook user and they buy something on your site, it'll get displayed in their news feed.

Social Ads - The social ads tool allows you to take Beacon a step further by having these "social actions" broad casted to people outside of your customer's network on Facebook. It's also highly targeted - you can target by gender, age, location and even political affiliations.

Facebook pages - Now businesses can set up a page on Facebook where they can recruit fans/customers (new phrase: fansumer), and use FB as a new point of contact. The pages allow you to set up photo areas, discussion boards, a wall and even a messaging center so it's easy to keep in touch with your following. It's basically a souped up version of Facebook Groups.

Insight - Facebook Insight is an analytical tool that helps you measure your reach and penetration into your target market on Facebook.

I must say, it's a pretty comprehensive suite of features and it definitely shows some forward thinking on Facebook's part.

But in light of Google's OpenSocial announcement last week, I don't see this as being a killer app.

If you look at the argument I laid out in my last post, you'll quickly see how Google has the potential to cripple Facebook's ad platform. I mean, all Google has to do is get the rest of the social networks (and it's network of existing publishers and advertisers) to line up behind a new social ad platform, and then POOF, Facebook's value is greatly diminished. It becomes just another site to advertise on as opposed to a category killer like Google's AdWords.

Just as a side note, Google's AdWords is a category killer for a number of reasons. It's ease of use is just one reason, but the real value is in Google's reach (the network effect). The more publishers that serve Google's ads the more valuable the service becomes to an advertiser because they no longer have to reach out to all those publishers individually. The same will apply to any social ad platform that Google creates.

So all in all, Facebook showed some real vision due to the fact that this was a platform that had probably been in development for quite some time (definitely prior to the Google announcement). But they'll have to do a lot more if they want to protect their castle.

Snackbyte: Google's Best Move Yet - OpenSocial

2007-11-03T00:17:00.000-04:00

Google's latest move in its fight to dominate all things web is one of its savviest moves yet.

With the launch of the OpenSocial platform Google basically commoditized the online application platform space.

Everyone expected Google to roll out a social network of its own, or make a bigger push for Orkut in the States. But instead Google decided to redefine the value proposition, side stepped the all out battle with entrenched competitors (i.e. Facebook, MySpace, etc.) and instead created a universal platform for all social networks.

Google has effectively become the fabric that will weave all of these networks together. Social networks have effectively become "portable."

Here's how:

If an application can function and reside on all platforms (thus, pulling data from each) then this application can effectively unify a user's social networking experiences. So my data on Facebook will now be accessible on MySpace or LinkedIn. This adds a tremendous amount of value to my web experience without requiring me to become loyal to a new brand - in this case, Google.

Here's where the money comes in:

Let's say Google decides it's going to leverage its reach in the advertising and publishing markets in order to start a type of "product news feed" - similar to Facebook's Porject Beacon, but on a global scale. So if I buy something on Amazon, then all of my friends on Facebook, MySpace and LinkedIn will know.

If I'm an influential member of these networks then it might cause other people to buy this book as well. Google can then take a cut of the revenue generated through the sale or on a CPC basis and even decide to cut me in (the same way it does its network of publishers). This would be phenomenal and truly be the first global application to monetize social networking.

I can't wait to see what Facebook's next move is!

Financial Sector Ravages the Dow

2007-11-01T18:54:00.000-04:00

I hate to be the one to say it, but I told you so!

If you take a look at my "Beware the Banks and Brokers" piece I wrote back in September, you'll see just what I'm talking about.

Today we saw massive downgrades across the financial space - starting with Citigroup (NYSE: C) and ending with the Dow dropping over 362 points!

Like I said in my Sept. 19th post - the banks/brokerages (Wall Street) are always several months ahead of the curve. They feel the brunt of an economic downturn first, then it spreads to the rest of the market.

Now, this isn't to say that we'll have an all out crash like 2001 - my feeling is that if anything we'll see a mild dip in economic activity and capital investments.

My main concern for my fellow entrepreneurs is if this will trickle down to private equity financings as well. We've obviously been experiencing a bit of a bubble on the private equity front as of late - pre-money start-up valuations haven't been this high in over 6 years and VC activity is continuing to rise as money gets cheaper and cheaper.

I think we'll come out of this just fine but overall I feel that financing activity could start to see a dip as next Summer approaches. That still leaves time to get some money together but I would definitely be looking to keep my burn low, look for creative marketing strategies and execute my a$$ off! So pretty much what most start-up junkies have been doing, but this time leave "getting funded" out of your business plan :)

10 Wall Street Sales Secrets (Part I)

2007-10-31T10:28:00.000-04:00

Since I've started writing this blog I've mainly been focusing on my current venture, technology, etc. I haven't really dug down deep and talked about many of my past experiences, especially about my time on Wall Street.

I was only on "the street" for a few years as an analyst/broker, but I learned my fair share about what it takes to succeed in that business. Reason being, I was working through the worst Bear Market we've seen since the depression.

While everybody was socking their money away under their mattresses, I was on the phone, cold calling and telling investors that now was the time to be buying stocks (considering the market has doubled since then, I guess I was right). Needless to say it was an uphill battle, but it taught me some of the most valuable sales secrets Wall Street has to offer. Secrets that enabled me to open more new accounts than even the most seasoned professionals in my firm.

I guess these aren't really "secrets", they're more like sales tactics that have been proven to work. I didn't invent these, but I made it my business to master them.

And now, in the spirit of blogging and open communication I'm going to pass on these proven, battle-tested sales strategies to all those who care to learn. So whether you're a broker on Wall Street selling stock or a door to door salesman hocking vacuum cleaners, these tips will help you take your business to the next level.

So here goes...

1. Welcome and Expect the Rejection - I know that this may sound counterintuitive to anyone who believes in the law of positive attraction. However, the reality of the situation is that out of the new accounts you've landed over the years, 90% of them probably didn't say "yes" the first time you asked them for the order. It's just a fact.

So when you go in there to land a new account, walk in there expecting them to say "no" right away. Because if you go in there assuming they'll say "yes", and when they don't, you'll not only be unprepared for the oncoming "verbal wrestling match", but you'll also psych yourself out wondering why they said "no" to begin with.

But if you go in there expecting them to say "no" then you'll be ready to follow up with appropriate questions and rebuttals. And that's when deals get closed - not after the first 10 seconds of your presentation, but rather after the 1 hour conversation you have with the prospect.

2. Just Listen - All too often I see novice salesmen who are so eager to "say the right thing" or tell the prospect just one more feature about their product that they don't simply shut-up and listen to what the potential client is telling them.

You have two ears and one mouth, you should listen twice as much as you speak.

Even if you're not totally buying into what the prospect is telling you (more on this in a minute), just listening and not chewing their ear off makes them think that you really care about them and what they have to say. This is so important because this is how you go from having a client to having a friend - and at the end of the day, people don't fire friends.

3. They're all Liars! - You might be scratching your head right now wondering why I just told you to listen to your prospects, but then in the next breath I'm calling them liars.

Well, let me explain...

They're not really "liars" in the sense that they're trying to trick or deceive you. But they are lying to you (and to themselves) when they give lame excuses for why they can't buy what you're selling. Excuses like:

- "I don't have money"
- "I have to talk to my wife first"
- "I'll think about it and call you back"

Those are all lame excuses...and it doesn't mean that they're simply "not interested".

In salesman's vocabulary, "not interested" really means "not convinced". Because if you did your job of pre-qualifying these prospects properly then you should know if they have money or not or if they are the decision maker for this type of transaction.

So when they use these excuses, listen to them because they might inadvertently tell you what you'll have to say to close them, but assume that for the most part they're just making excuses and lying to you.

By keeping with this mentality you won't get bogged down trying to give them advice on how to "come up with the money". Instead you'll start talking about the benefits of your product and why they can't live without it. And that my friend is how you close new accounts!

(NOTE: The first 3 Sales Secrets were basic principles, now we'll get into specific tactics)

4. Completely Ignore the First 3 Objections - That's right, this is another one of those "contradictory" statements when taken at face value. Let me explain...

If you're pitching a guy who gets lots of sales calls everyday - procurement managers, CEO's, individual investors, etc. - then they're conditioned to screen out the weak salesmen. Don't get me wrong, it's not like they sit there and go "I'm only going to buy from the best salesmen", but at the end of the day, it's the best salesmen who close the deals.

So chances are, his first 3 objections are just standard objections he gives to every salesman that calls. Most will go, "Ok sir, I'll call you back down the road." But that's not what he wants to hear...people are always looking for ways to make or save money. If you have a good product and you really believe in it, then you'd be doing this customer a HUGE disservice by not continuing to try and pitch him.

When I was recommending stocks I REALLY believed in what I was doing and that's why I would stay on the phone and pound the table until I got the deal. And that brings me to my next tactic...

5. Click or Close - This is an old Wall Street saying and I'm sure it applies to other sales jobs as well. The phrase basically means that the guy has to either hang up the phone on you (the "click") or open an account with you (the "close").

This is a tough principle to stick to but it's the difference between a million dollar producer (a broker who earns $1 million per year in commissions) and a guy who takes home less than $100k a year on Wall Street. It was the one characteristic I saw the million dollar producers consistently display.

They all had different sales pitches, they all had different ways of asking for the order, and they all even had different ways of approaching the market - but what they ALL had in common was the ability to stay on the phone no matter what. They would stay on a single sales call for over an hour (sometimes they got the account and sometimes they didn't) and would stay on for another hour if the guy let them. It was an amazing display of discipline and it paid off ten-fold when compared to the guys who would hang up after 3 or 4 objections.

Once you overcome the psychological barriers of rejection, this discipline is easy to put into practice and could mean millions in extra income for your firm and family.

Part II coming soon...

I feel that this is enough for one blog post - there's a lot of information to digest up there. Would love any and all feedback you might have so feel free to comment or e-mail me.

Happy hunting!

I Won! And so did children across the world...

2007-10-16T13:44:00.000-04:00

So, it looks like I was one of the winners for the contest Shel Israel was holding last week.

It started out as a Facebook flyer test and it turned into over $1500 being raised for Room to Read. This money may not seem like a large sum here in the States, but in Sri Lanka it could build more than half a library, or put a number of Nepalese children through school for a year.

I'm honored to have been part of this process and in return I not only got 2 hours of consulting time from Shel (who I'm a huge fan of), but I also got to do something good for an amazing organization.

This "contest", if it could even be called that, inspired me so much that I'm actively speaking with my partners on how we can use our web sites, blogs and newsletters to help this organization and others like it. So I want to put it out there to other bloggers reading this (especially my NYC blogging brethren) - this amazing medium we have and the ability to self-publish must not be used solely for selfish reasons.

We should be focusing on "self-less" publishing as well.

So if you have it in you to write posts about your company's current marketing strategy, or a new product you're launching, then take some extra time to write a post about a charity that you'd like to get involved in. And it doesn't have to be a global charity like Room to Read, there are plenty right here in New York that deserve our attention too.

Look at what Fred Wilson has been doing with Donor's Choose.

Or check out New York Magazines list of local organizations that could use our help.

If Shel was able to raise $1500 in one week by himself, what could everybody in the nextNY community raise together over the course of a month or two? $15,000? $150,000?

I don't know the answer - but I do know that with the collective creativity, brain power and reach of this community, something very special could happen here.

I'm definitely going to be doing plenty on my end to contribute to some of these causes. But if anyone is inclined to get the ball rolling on something like this on a larger scale, I'd be happy to help in any way I can. Would love to hear your thoughts - I can be reached at: wayne at tickerhound dot com.

Microsoft OneNote = AMAZING!

2007-10-16T13:27:00.000-04:00

For starters, let me just say that on principle I'd never call any software that Microsoft comes out with "AMAZING"...up until now.

Don't get me wrong, I'm not a Mac guy or anything - I've been a die hard Windows users since 3.0. But I think all die hard Windows users will agree that Microsoft isn't the greatest software company in the world. It might be the biggest, richest, etc., but the software they produce is less than stellar.

Windows Vista is a prime example. A day doesn't go by where I don't kick myself for not getting XP installed on my new ThinkPad. It's buggy, unstable, lacks a lot of the usability features that make Macs great, etc. etc.

However, this new version of Microsoft Office is off the hook!

Not so much for what they did with the standard set of tools (utility bar, easy document integration, etc.), but for a simple program that has changed my work life in a profound way - Microsoft OneNote.

This little baby made me toss my stacks of yellow legal pads in the garbage. It's the equivalent of a yellow legal pad on steroids.

Now I can have several note books in front of me at the same time - work, personal, brain storming, etc. And within those notebooks I can have different sections - Personal: cook books, blog posts, etc. Then within each section I can have various page that are also segmented however I want.

It's super easy to add, rearrange, and reformat whole chunks of text - you can even drag them off the page and put them into another application.

It saves as you type so you never have to worry about it crashing and losing all of your data. And unlike most Microsoft products, it runs super fast - the memory footprint is only about 4,900 K.

I use this thing for every little task, whether it be for when I'm talking to vendors and I need to keep notes, or when I'm compiling a task list for my developers...it really is very useful, usable, well designed and so "non-Microsoft" that I'm surprised that it wasn't copied off of something Apple already put out.

In fact I wouldn't even be writing this post if it weren't for the fact that it came out of camp Microsoft - if it had been an Apple product I wouldn't just chalked it up as another reason I'm thinking of jumping ship.

So score 1 for Redmond...great job guys!

Here's some advice for Bomber (Balmer):

I'd go so far as to argue that they completely replace Notepad with this product. Notepad is the same as it has been since the first version of Windows that carried it...no innovation whatsoever. Let one of your two million developers redesign the Notepad app along the same lines as this and you'll keep a few extra users around.

Then apply the same principles you put into building this application into all the others you build from here on out...it aint rocket science guys: make useful, usable products that help people work smarter...then you'll win. :)

Portable Social Networks

2007-10-09T22:33:00.000-04:00

Been thinking about this topic a lot lately...

In the wake of the tremendous success Facebook's application platform has had, many people have been wondering what the next "big" application platform will be. It seems like Facebook is doing for the web what Microsoft did for the desktop -- so in order to understand what might come next, we need to recognize why these companies were successful to begin with.

Facebook and Microsoft were successful because their platforms had 3 key characteristics:

1. Created an easy to use API (Application Programming Interface).
2. Opened up their system to anyone who wanted to build on it - no partnering necessary.
3. Created an effective distribution mechanism (Facebook really nailed this more than Microsoft ever did).

So what's next?

Many argue that the web itself is the next great application platform. However, I think it's clear that in order for this to happen there needs to be some type of social network weaved into the fabric of the web. That's the only way the crucial distribution component will work -- developers are going to need a frictionless mechanism for promoting and distributing their software.

Rockefeller had it right -- it didn't matter if you hit oil, if you couldn't distribute it then you couldn't make money. So he focused on distribution...and the rest is history.

So what could be done to make this vision of frictionless distribution occur on the web?

Well, the first thing we'd need is a portable social network - or a network that wasn't bound to a particular web site. It would require a standard to be developed for social networks, much like the standards that were developed around SMTP (e-mail), HTTP (web sites), FTP (files), etc.

Brian Oberkirch recently wrote one of the most compelling outlines I've seen for the necessary "ingredients" in a portable social network. Really amazing stuff there.

But I don't know how much of a reality this vision will become. OpenID has been around for a while now and even though more and more sites are becoming OpenID compatible, we're still not seeing a lot of traction.

I think we'll see the same when it comes to creating open social networks.

Maybe it would take the backing of a major internet company to get this off the ground, but then again Microsoft had tried pushing the Passport system for quite some time before raising the white flag last year.

We'll just have to wait and see, but if a distributed social networking platform were created and reached some level of considerable scale then I think we'd be seeing the advent of "Web 3.0" (I know, I hate using the version numbers for the web too).

Facebook App Idea - Study Aid

2007-09-30T13:40:00.000-04:00

Although I've always wanted to add something to the Facebook Application community, I don't feel that my target audience will be found in abundance on Facebook. So I've always put most of my ideas in a notebook and tucked it back into my desk drawer.

But after reading about all the amazing stuff that went on at Startup Weekend, I thought I'd dust off my notebook and share an idea with the people out there who have the desire, time and resources to build an app. This isn't some blockbuster idea that's going to change the world, but I think it solves a problem for students and could be something fun to work on for those who are interested.

The only thing that I ask is that if you find this idea compelling and want to take it to the next level, that you share your development experiences/process with me so I can write about it here (obviously write about it on your own blog as well) :)

So here goes...

The Problem

There are a ton of applications on Facebook that allow members to track the classes they're currently taking and find out who else is taking them. Then you can connect with other students, possibly friend them and message them through Facebook's existing infrastructure.

This obviously adds some value, but it definitely misses the mark on what we could be doing with an application like this. The social graph exposes a lot more than just simply connections between people, it also allows for communication and collaboration between community members as well - so we should be leveraging that within the applications themselves and not relying on Facebook's communication tools.

For instance, what happens when 2 or more students taking the same class are all having a problem with that week's homework assignment? Or what if they're in a study group but one student gets sick and can't make it? Or while they're in the study group they want to share a single source of study notes after the meeting?

What if we could build a "Courses" application that really took advantage of the communication and collaboration features found in many other applications on the web, but brought them into Facebook?

The Solution

Create an application where students taking a course can join an associated group on Facebook for that course. Then within that "Course Group" they can utilize a number of collaboration utilities:

1. General White Board - I'd keep this fairly basic: no advanced formatting, basic text stylization (underlines, bolds, and italics) and allow for HTML links. No advanced permissions: basically anyone in the group can edit the write board. This will be good for keeping ongoing notes, ideas, and general assignments posted.

2. Files - This is where I'd allow students to upload any and all files related to the course they're in. This would also be a perfect place to charge for premium services (e.g. anything over 50 MB and if they want a direct URL so they can access them outside of the system and it'll cost $X per year/month).

3. Advanced White Board - This is the place where users can create multiple collaboration spaces based on the assignment they're working on. For example, if you're in the same study group for a particular class all semester, then you'll obviously be working on different projects. Here you'll be able to create a white board for each project and it'll have some advanced features.

Instead of just basic text editing you'll be allowed to import files - from the files section or linked to from 3rd party sites - add descriptions, easy PDF creation and printing, etc. A 3rd party HTML editing tool will be necessary but those are a dime a dozen now.

4. Deadlines - Simple calendar module with built in reminders and notifications (e-mail, Facebook message, Facebook notification, etc.).

5. Privacy and Preferences - The name of the game these days is privacy and control when it comes to social media applications (Case in point: See TechCrunch's piece of Facebook's new "friend grouping"). So the same must hold true for this application as well. I don't think ALL of these privacy controls need to be incorporated on the first build, but they should be included at some point in future iterations.

Group Creator Preferences - Allow/disallow members (ie. only members can see content in this group). Group expiration - meaning, will the group die out after this class is over or should it be kept up for future collaboration and/or use by future students in this class.
Member access - All members can/can't edit specific pieces of content, upload files, etc.
E-mail notification - let members know about updates, new files, etc. via e-mail.

Technology

I'd host this thing on EC2 and Amazon S3 hybrid solution - all of the files could be pulled from multiple S3 instances and perform weekly/monthly backups to a physical server to ensure data is never lost. Use multiple EC2 instances to serve up the application and keep 1 physical web server to act as a load balancer and admin for the instances.

Obviously folks out there with more infrastructure experience than me will likely poke holes in this setup but I think it's a good, low-cost starting point -- especially if you slap a flash front-end on this, then an Amazon AWS solution would definitely be the way to go.

Summary

As you can see this is a mix of Facebook groups and Basecamp - in fact, it's more like Facebook groups on steroids! This is something that students will definitely find useful if it eliminates the friction found in Facebook's infrastructure and has an intuitive interface. I mean, Zuckerberg himself talks about building an app like this while he was still in school. And even if that's just PR fluff, it still illustrates the value something like this would bring to the community.

Making it go viral wouldn't be difficult at all because the application relies on invites and group collaboration for its most basic uses. That takes a lot of pressure off of thinking about marketing and will allow the developer to focus on the user and on the product.

And picture this application in the next year, 2 years or even 3 years. The data assets that will have been built from the millions of students putting up course material, study notes, papers, pictures, etc. will be a study tool in and of itself outside of Facebook.

I'd like to hear any thoughts and feedback you may have. And like I said, if you decide to go ahead with this please share your experience with developing it.

Good luck!

Creativity Defined

2007-09-26T00:40:00.000-04:00

Been thinking a lot lately on what makes a "great" start-up.

You obviously need a good idea and to solve a real problem for a large amount of people.

You need a talented team and access to resources (technology, capital, etc.).

But what else gets a company from a pipe dream to a multi-million dollar enterprise?

Rock solid execution, that's what!

And I guess that's one of the things I've been wrestling with as my product gets closer and closer to launch. There's so much inherent risk in operating in unchartered waters; how is a founder to know what to do every step of the way? How can we mitigate this risk?

Well, there's no formula - if there were then everybody would know it and successful founders would be no different than anybody else.

My feeling is that many successful start-ups and founders all operate within a certain unteachable thought framework - a framework that marries logical reasoning with creative problem solving. Now, the "logical" part of that framework isn't very difficult to grasp....

If we have this much money, then we can buy this many servers and hire this many staffers, etc. etc. No sweat...

But the "creative" aspect of this framework is where one founder shines and another flops.

When a founder, a CEO or any stake holder in a project thinks creatively and critically about a problem they tend to not only find new solutions, but they gain an edge over other players in their space.

For instance, when James Hong, et al. first launched HotorNot.com they got so much traffic that their server was crashing all the time. They had no money and no time to raise capital. So what did they do?

They got creative!

They negotiated a deal with Rack Space where they gave Rack Space free advertising on their site and in turn Rack Space gave them free hosting for a year!

A month or two ago Hong participated in a panel where he quoted somebody else (I forget who) as defining "creativity" as:

"Creativity is what happens when you chop a zero off the end of a budget".

I was reading Shel Israel's blog tonight and he had a great quote from Steve Larsen:

"Constraint spawns creativity"

And I really have to say that both of these quotes are amazingly accurate - and why shouldn't they be, they're both spawned from experience in the trenches.

I think most entrepreneurs would agree -- our best decisions have been made under less than ideal circumstances. We've created the most successful features, we've cut the best deals (sometimes) and we've hired the best people all under circumstances where others might've just folded their cards and went home.

And that's what I think differentiates a successful businessman from a bad one - the ability to creatively construct solutions to problems.

Some may call it luck, but Sam Goldwyn said it best, "The harder I work, the luckier I get."!

fbFund - What does it really mean for Facebook?

2007-09-25T08:04:00.000-04:00

So about a week ago Mark Hendrickson at Tech Crunch reported that Facebook (along with a number of high profile VCs) will be launching a $10 million fund for Facebook application developers. However, instead of investing in these applications and taking an equity stake, the fbFund will simply be giving cash "grants" to these budding entrepreneurs -- very similar to the cash grants many students receive while attending college.

So what is the fbFund?

Is this is an education fund for would be entrepreneurs -- the principle being to teach them to develop on the Facebook platform before deeming them worthy to conquer the rest of the web? Or is Zuckerbeg such a "good guy" that he just wants to throw money at ideas and see what sticks? I mean, it's a win-win for Facebook anyway - a tremendous amount of value gets added to their system each and every time an application gets developed. So they're just adding fuel to the fire that's burning within this hot mini-market of companies.

This must've thrown a bucket of cold water (no pun intended) on Bay Partner's idea to start a fund to do the exact same thing -- however, Bay Partners would be looking for equity right away while fbFund simply gets right of first refusal on any follow-on financing that takes place.

But is that the only benefit for Facebook?

Could these guys simply be looking to add incremental value to their product and possibly invest in some of these start-ups before anyone else can get their hands on them? That sounds possible - it seems like a sound business strategy...

But yours truly has a conspiracy theory hatching in his sick, twisted brain.

As some of you may or may not know, Facebook recently acquired web-OS company, Parakey. Parakey was founded by the same dynamic programming duo that built the oh-so-popular Firefox web browser.

And while most folks thought that the investors who put $2 million into Parakey walked away with a handsome reward of Facebook stock, that just wasn't the case. According to Arrington, it turns out Facebook paid only $4 million for the company - considering the previous round was done for just under $2 million, which probably had a much higher post-money valuation. In fact, I'd be surprised if investors made anything at all on this deal (read Mike's post to see his ideas on why investors even let the deal happen).

The founders of Parakey, however, walked away with a Facebook employment contract that included Facebook stock and options compensation agreements!

So it looks like these guys sold themselves AND their company...so even though Facebook came out of pocket for $4 million (not a large sum of money for this company), they in turn got two rock star developers.

Conspiracy Theory

Facebook isn't only looking to add value to their platform by encouraging people to develop great applications. Nor are they simply looking to invest in those companies down the road.

Facebook is looking for developers that know how to create very popular consumer software applications.

It's like a publisher being able to find an author like J.K. Rowling -- someone who already has a following and can consistently write list-topping best sellers over and over again.

Think about it: the relative cost for acquiring top talent is huge. By funding some of these companies for a comparatively small amount of money, Facebook sees some tremendous upside:

1. They add value to the Facebook community by making it easier for new applications to get launched.

2. They have the ability to invest directly in these applications as they become more successful and potentially move away from the FB platform.

3. They have the ability to acquire top talent after already seeing them in action (a HUGE cost savings along with a tremendous benefit).

So while I called this a "conspiracy", it's more of a very savvy business move on their part.

Go Facebook!

Beware the Banks and Brokers!

2007-09-19T07:49:00.000-04:00

After reading a post by Fred Wilson yesterday, I started to get a little concerned about an impending economic downturn. While it's always been in the back of my head - considering we've been in a bull market for the last 4 years - I haven't paid it much mind in a while.

Now Fred was talking about a downturn specific to the web - I mean, that's where he makes his bread and butter so it's something that is near and dear to his heart - but my concern is more broad based. I think we can see a major downturn hit the stock market and that will have a reverberating effect throughout the economy, and especially in the fragile tech space.

Here's my take:

After working on Wall Street for a few years you learn a couple of tricks. One of which is, if you want to know which way the market is headed six months in advance, keep an eye on the banks and brokerages.

Once you see the banks and brokerages start to take a dive, you know that the rest of Wall Street isn't too far off - we'll call them a "leading indicator". Every major bear market was preceded by sub-par results in the banks and brokerages.

Now, much of this is going to have to do with the recent mortgage crisis the country has plunged into. A lot of these banks are going to take a monster hit on all of these defaults we're seeing.

In fact, the Wall Street Journal just reported that Morgan Stanley (NYSE: MS) took a 17% hit to Net Income this quarter. Lehman Brothers (NYSE: LEH) showed an increase in profits but took a hit in fixed income due to the mortgage issues.

I also think that many of the banks and brokerages have been reaping the benefits of an unsustainable bull market - the market has been up almost 20% a year for the last 4 years - that means that when this market heads south (or stops rocketing higher) these companies can no longer use their trading and investment banking fees to compensate for losses in other divisions. And that my friends means the brokerages will be headed south for the winter.

When that happens many of the IPO dreams and lofty valuations for many of today's web startups will go into hibernation for the winter as well. But in all fairness this "dot-com renaissance" we've been seeing isn't solely predicated on the public equity markets. But at the very least I think we'll see VC's and other private equity firms tighten the purse strings a bit.

Like I said in my comment to Fred's post, I don't think we're headed for an all out crash in the Internet space, but with the market looking like it might take a bath, investors and entrepreneurs alike need to be cautious now and prepare for a potentially tough winter.

Some steps to take:

1. Batten down the hatches and lower your burn rate: If you're currently supporting high fixed costs figure out ways that you can right-size your Income statement if revenue suddenly takes a hit (i.e. if revenue drops 25%, how can you cut costs by 25%?).

2. Stockpile your supplies: For investors and entrepreneurs this means you need to get capitalized! If you've got enough cash on hand and this downturn isn't "too" bad, you'll be just fine. But for those operating on a shoe string budget already, you might be in for even tougher times if this downturn hits.

3. Focus on the Fundamentals: At the end of the day most of this stuff is beyond any of our control, so there's not much we can do by worrying. So focus on your business - continue to execute on all fronts and proceed with your plan. Don't take your eye off the ball for a single second.

I think James Dean said it best - "Dream as if you'll live forever; live as if you'll die tomorrow."

I prefer, "Act like your company will be around forever; but plan like it could be gone tomorrow."

On the road...

2007-09-17T09:40:00.000-04:00

Sorry for the lack of posts - I've been on the road, mainly down in South Florida.

Surprisingly there's a bit of a hustle n' bustle down here - not in the tech sector, but rather in sectors like mortgages (well not so much here anymore), finance, insurance, etc. The standard of living is so cheap that if you make a moderate 6-figure income you can live like Puff Daddy.

There's also a booming adult entertainment sector in Miami - mainly for online-only companies, but these guys are doing big business nonetheless.

On a whim I decided to check out home prices - not that I'd ever move down here, I'm a New Yorker all the way - and I couldn't believe what I found.

I checked out a 5 bedroom, 3 bathroom, multi-floor home with a built in pool, court yard and jacuzzi with a 2 car garage...price tag?

$1.5 million!!

Do you know what $1.5 million would get you in New York? Maybe a 1 bedroom in a decent building in the West Village.

It blows my mind at how overpriced New York Real Estate is. However, the situation may be changing soon, for renters at least. Over the next 12 months there's going to be roughly 160 new buildings going up in some of the trendier (highest demand) areas of New York. In my opinion, this is likely going to cause a drop in rental prices across the board, especially in these areas (West Village, Chelsea, Midtown west).

So anybody thinking about renting, sit tight for a few more months and I think you'll be pleasantly surprised.

I don't really have enough expertise to make any calls with respect to the home buyers market in New York, but with interest rates where they are I wouldn't be so quick to take a mortgage out right now.

Hopefully the Fed will do something to fix that this week.

On another note, I'll try to post more this week. I've been busy working on the front-end for my new web project and it's been taking up a heckuva lot more time than I thought it would.

Hope you're all doing well...Wayne, over and out!

Community Management

2007-09-06T16:13:00.000-04:00

I'm not sure if I like this term "Community Manager" or not . Something about "managing" people - and in this case, managing how people interact with your product - just seems counterintuitive to everything that's going on in the social media space.

Granted I'm fairly new to blogging for myself, but I've studied the medium, participated in it and have developed relationships with people who helped shape the blogosphere. You see how I said developed "relationships"...that's what this thing is all about!

If one were to "manage" all of their relationships then wouldn't the authenticity and underlying importance and value of those relationships diminish? They'd become nothing more than numbers on a progress report at the end of every quarter.

Granted, some relationships are purely business and thus have to be consciously managed, but when you're trying to build a sense of community and evangelism around a product then why on earth would you use the title of "Community Manager".

It's like calling yourself the "Mayor", indicating everybody else is beneath you.

Sorry to go on a tirade here but I couldn't get over all of the posts I had read on Jeremiah Owyang's blog. Just to be clear, I have the utmost admiration and respect for Jeremiah, I've been reading his posts for a long while now and I think he's probably one of the most well versed people in this space. Furthermore, he's not the only one who uses that title. Look around, it's almost become "conventional wisdom" to use that as a moniker for the employee who reaches out to the customers. However, the implication of using a title like that is far reaching in the impression it gives to:

- Corporations
- Other bloggers
- And (most importantly) the consumers

After having worked in sales and owned a number of my own companies, I know that the only way to get people involved and to become excited about something is to get them on the same side of the table as you. The only way to do that is to present the opportunity for an equally beneficial relationship - EQUAL!

So what would a more appropriate title be?

I think Jeremiah used this term several times in reference to his various roles at different companies, but he didn't use it as his official title. I propose all "Community Managers" officially change their title to: "Customer Advocate".

That's really what you should be doing if you're reaching out into your community of customers, you should be their advocate -- their voice in and outside of your company. Take their input, give them credit for it and make the changes that they want.

It seems like a facile statement but we all know that this is something most companies just pay lip service to - but the ones who practice what they preach are the ones who will succeed.

Mark my words!

Your Face(book) on Google!

2007-09-05T10:37:00.000-04:00

After reading Michael Arrington's post about Facebook allowing non-Facebook members to use its People Search feature, I decided to sign into my account and see what's what.

I wouldn't have been concerned at all until I read the announcement a bit more carefully:

Now people can search for this listing from Facebook's Welcome page. In a few weeks, it may also be found through search engines like Google.

What!?

People might be able to search for me, see my photo and personal information directly on Google? That's a little weird for me and I really think it goes against some of the early values of Facebook - privacy and control!

I understand what they're doing from a business perspective, but I just don't agree with it.

I'm sure they'll give us the option of changing our privacy preferences - which I'll be sure to do - but for people who don't check their accounts very often, or who simply don't pay attention to these sorts of developments, this could come as a HUGE shock to them to see their face plastered across Google.

Maybe I'm blowing this out of proportion but it just doesn't sit well with me.

Got Picked up on Found+READ

2007-09-05T10:31:00.000-04:00

I feel like a kid who just got a "gold star" on a spelling test. I submitted my last blog entry to Found+READ late last week and it appears that they liked it. The article is still on the homepage at FoundRead.com and I've included a direct link below:

http://www.foundread.com/view/choosing-the-right

I'm an avid reader of the blog so I was pretty proud/happy to be featured there. Hopefully I'll get a chance to put more entires like my last one together so I can submit a few more to the site - I'd be thrilled if other entrepreneurs found my advice helpful.

On another note, we're kicking off the design of TickerHound.com this week with our new design partners, BlueFlavor.com - I can't begin to tell you how excited I am!

More news coming soon...

Choosing the Right Vendor

2007-08-29T13:28:00.000-04:00

When it comes to the topic of building and designing a web application, I can really say that I've been on both sides of the fence.

I've owned and operated a development studio before and now that I've gone through the tedious process of finding the right people to help build my own web property, I feel that I have a unique perspective on this (possibly) tortuous process. So, I wanted to impart my knowledge (or lack thereof) upon you and hopefully it'll be helpful as you go forth and try to take over the world.

I. Define The Scope and Goals

The first mistake that many people make when hiring a new development or design firm is that they fail to accurately convey the scope and goals of their project.

It's easy to say "I want this feature and that feature" - and I'm sure many out there have fallen victim to the "Design by Metaphor" (e.g. "I'm creating a MySpace for rock collectors") trap. Thinking the project through, from how it will function all the way to how the end-user will actually interact with it, is where the first step in a successful project begins.

For example, on my latest application I wanted there to be a notification system on the site to tell users when new content specific to them appeared. So instead of trying to describe the feature or relate it to something I saw on another site, I busted out my yellow legal pad and sketched it out, then I scanned it and pasted it right into the RFP (Request For Proposal). My developer literally thanked me and we haven't had to go through the usual "back and forth" on that feature once.

The other thing that's very helpful is to define end goals for the application. Right at the beginning set up success metrics for the app. This is easier to do if you're enhancing or redesigning an existing web site because you'll actually have benchmark metrics to compare it to, but even if you're building something from scratch try to conceptually think about what would define a "successful project." Then pass those goals onto your developer or designer - they'll now know what they need to do in order to make you a happy customer.

What this all really boils down to is expectation management -- if you expect one thing and get another you won't be satisfied. And when you're not satisfied it leads to a vicious cycle: you pass revisions back to the developer, they try to fix it, you're still not happy and now the project is late and you're getting angry and impatient. But now the developer is going over budget and they are getting angry and impatient and before you know it you're in their offices about to punch the project manager in the face...ok fine, maybe that was just me and it was only once, but you get the point.

Plan properly and set goals - that's the bottom line.

II. Finding Firms

This is probably one of the most difficult parts of the whole process. There are several ways to go about finding a firm to build and design your web application, some more effective than others. So for those of you who don't have a friend in the business or have never worked with anybody before, I'll go over some helpful ways to find a number of firms to send your RFP to.

1. Personal Referrals

This is by far and away the most effective way to find a quality design and development partner. If someone you personally know is willing to recommend a firm, then chances are they do quality work. Think about it, why would someone risk the screaming match you'd get into afterwards if the firm they recommended to build your "dream" sucked?

So before trying the next few options, tap your personal network first. Ask why they liked the person(s), what level of service was provided post-launch, etc. I've found designers and developers 8 years ago that I still work with to this very day by going through my personal network of contacts.

2. Favorite Sites

This one is a little harder, but also very effective. If you have web sites that you absolutely love then you should check out their "About Us" section - they sometimes list their development and design vendors there.

If they don't, your best bet is to Google the site along with terms like, "Clients", "Portfolio", "Design", etc. That'll help you nail down the firm(s) that they worked with to get their site built. You can even e-mail somebody at the company, if they worked with an outside firm they usually don't mind referring business to them.

3. Blogs

Once you find a few design firms you like (either through your network or via Google) you might want to check and see if any of the head designers, developers or owners have their own blog. This can be one of the biggest assets you have in selecting a firm - you get to take a peek inside the mind of the people that might be building your web application in a few months. You'll immediately know if they share the same values as you, if they have a similar personality, etc.

It's very good for filtering out the good from the bad.

Case in point: We recently contracted with BlueFlavor.com to design the user interaction and information architecture for our upcoming application. How did I find BlueFlavor you might ask...through their blog!

I read through a ton of posts from every employee there and just knew that these guys were a quality shop.

The other thing that you can gain from a blog is access to other people in a firm's field. If they have a fairly popular blog then there's a good chance other developers and designers comment or post on it as well. I can't tell you how many other firms I found by bouncing around the comments section on some of these blogs.

The bottom line: Do as much research on a firm you're considering before you ever contact them. It'll save you a lot more time and heart ache in the long run -- and even if you don't like the firm, they might lead you to a firm that you love.

III. Make Sure the Shop is "Suitable"

It's very easy to say, "I want to find a great developer and a great designer", but what's "great" for one client might not be great for you. So you really need to find a company or person that shares the same vision and principles as you do.

I'll bring this back to my current venture to illustrate my point.

I have this big belief in minimalism in design - I think it's easy to make complex functions on web sites. On the other hand, I think it's very difficult to make a complex function appear to be a simple one. And that's the beauty behind many successful web applications, they make the complex appear to be easy. So that was the first thing I wanted to make sure my design shop was focused on: minimalism and simplicity.

So when I was going through various portfolios I would tend to get a knot in my stomach when all I saw were Flash sites or pages with crazy colors and graphics everywhere. On the other hand, if I saw a portfolio that was filled with sites that had a lot of white space, small logos, were quick loading and yet had a high degree of interactivity, I'd be very pleased.

What helped me the most was sitting down with my partners and actually writing those principles down. It really helped us and our design/development firms decide if we'd be a good fit - or "suitable" - for one another.

IV. The BIG Decision

Ok, so now you've put together a tight RFP: it outlines the features, how the user will interact with them, the goals for the site and what your core principles and values are.

Then you went out and found a handful of quality shops that you sent your RFP out to. They all came back with bids and now you have to make the BIG decision - which firm do you go with?

They've all demonstrated an understanding of your application, you know they have the right experience and principles and after a couple of phone calls you should know which people you get along with on a personal level (very important as well by the way).

So now how in the world do you choose one proposal from another?

This can be gut wrenching - you're about to drop a substantial chunk of change on a single firm...it's like betting on "Red17" at the roulette table and crossing your fingers -- but it doesn't have to be. If you come up with a strict set of selection criteria beforehand, then you'll find it easy to choose the right firm. For me, I find that the following criteria really helps me narrow down my choices:

1. References - If a firm can't provide me with several quality references then I can't do business with them. With that being said let me make something else very clear, a firm will obviously only give you access to people who will say good things about them. However, you can tell from the quality of those references whether or not to take them seriously.

For example, if they give you the number of the CEO of XYZ Company, and XYZ's website is hard to use and gets no traffic then I'd take that less seriously than if they used Digg.com as a reference. Maybe it wasn't the design/development firm's fault the site wasn't successful, but why take any chances?

2. Transparency - If a firm can't clearly tell me why they're charging what they're charging then I won't use them. I'm a numbers guys and I break my time down to the minute each day - I expect vendors I work with to do the same.

So when a firm says that they can't tell me what their hourly rate is because they work on a "per project" schedule then I automatically assume they're trying to hide something. At the end of the day they may work on a per-project schedule, but they must use some type of time-based calculation to come up with their estimates. If they say they don't then they're either stupid or lying, either way I wouldn't want to work with somebody like that.

For me transparency is equivalent to honesty - and when it comes to honesty in business, I'd pay a premium for it!

3. Accountability - A firm that is willing to be accountable for their work is a firm I want to do business with.

For instance, we used an overseas development shop to write the core code for our latest application. In the agreement we put together with them they were the ones who added the "financial penalties" section - so if they were X days late on a particular milestone, the final cost dropped by Y%.

I can't even begin to describe the warm and fuzzy feeling I got in my stomach when I saw that.

Happy Hunting!

So in conclusion I wanted to wish you happy hunting in your quest for a quality developer and designer. It's a tough decision to make and it's arguably one of the most important ones.

If you work with someone good then you can focus on building a business and not playing "baby sitter." You also get your product out the door on time and it'll work and look how you wanted it to. Also when you feel comfortable with your site you'll be able to go out there and be confident when pitching customers, partners and investors. That's why some of the suggestions I've made may seem time consuming and tedious, but in the end the upfront time investment will pay off in spades down the road.

Good luck!

Random Thoughts...

2007-08-27T09:40:00.000-04:00

I've been trying to come up with a really good topic for my next blog post - the last few were just sort of ramblings about current news - but I can't seem to think of anything that is "entertaining, enlightening and informative. " There's a ton of stuff coming out in the news these days about mergers, rounds of funding, new gadgets, etc., etc. But with all the other blogs out there covering this stuff in depth why should my take on the situation matter so much?

The real question that's been racking my brain is, "how do I differentiate myself from the millions (ok maybe not millions) of other blogs covering the EXACT same topics?"

I'm not quite sure of the answer yet but I have a few ideas in mind.

What I'll do for the time being is simply jot down a few of the memes that have been popping up on my radar as of late.

I. Wall Street Journal: To Fee or not to Fee

There are a number of VC's/Bloggers/Entrepreneurs that I really admire who have been talking about the reasons for WSJ.com to go for a free model . BusinessWeek writes one of the most interesting pieces for why it may or may not make sense for WSJ.com to go free. Fred Wilson over at Union Square Ventures has also been writing about this topic since the News Corp./Down Jones merger was announced.

In the end this is going to boil down to a math equation on Mr. Murdoch's desk that will look something like this:

$65million = Annual subscription revenue from WSJ.com online

So the question becomes: At a $30 CPM rate (WSJ could probably get more but we'll be conservative) how many page views would it take to make up for the lost subscription revenue?

Well, let's do the math...

$30 * X CPM's = $65 million
X = 2,166,666 CPM's

Which translates into 2,166,666,000 page views (2.16 billion for those who have a hard time processing that many zero's).

Over the course of 12 months, WSJ will have to serve up 180.5 million pages per month in order to hit that mark. FYI: Compared to some of the larger social networks out there, 180 million page views isn't a lot.

WSJ currently does 1.5 million unique visitors per month - that's a joke when we compare it to some of the larger online financial sites. According to comScore, the top financial sites had the following unique visitors and page views during the month of June:

MSN Money: 12.7 million uniques and 180 million pages viewed
Yahoo! Finance: 10.4 million uniques and 327 million pages viewed
AOL Money: 10.5 million uniques and 206 million pages viewed
CNN Money: 5.4 million unqiues and 50 million pages viewed

Based on this data it's clear that WSJ stands a good chance of replacing its lost subscription revenue with advertising dollars. But, it's still not as "safe" as sticking with a subscription model. The thing that none of these bloggers/magazines have taken into account is the nature of investors.

I was a broker for a number of years and I know from firsthand experience that investors don't mind paying out the nose for good information. And WSJ undoubtedly has some of the best financial editorial on the planet. And with subscription revenue you don't have the ups and downs of ad-based revenue - it's like a utility company, you can reasonably predict how much revenue you'll do each year...that's very comforting for company owners.

Now, that isn't to say that WSJ.com shouldn't begin giving some of its content away for free - I mean, it's pretty obvious that there's going to be a dramatic shift in the investing demographic. As the baby boomers get older, stop investing aggressively (and sadly, begin passing away), this whole web-savvy demographic will take their places as the "investing demographic". This audience won't have a tough time navigating a web site and will be used to getting free access to content.

So to preempt this shift and gain tomorrow's investing audience today, I think WSJ should begin giving free access to some of its content.

Which content should it be? I'm not quite sure.

At the end of the day, yesterday's news is less valuable than today's so maybe giving away older articles would be helpful. It'll allow them to maintain the subscription revenue for those who want their information in a timely manner while still allowing bloggers and those in the non-mainstream press to openly cite and link to WSJ content (which will be very important for building loyalty, brand and traffic).

II. The State of the Web

There has been a ton of talk on this topic...Everybody from Mavericks owner Mark Cuban to the guys over at Read/Write Web have been talking about where we are in the evolution of the web as both a technology and a media platform.

They both raise interesting issues - Read/Write Web focuses more on where we are in the "technology cycle" and Cuban focuses more the entertainment value of the web with respect to its current infrastructure.

The argument that Read/Write Web puts forth is interesting in that they try to map the standard "business cycle" to an underlying phenomenon they view as a "technology cycle". Joseph Schumpeter and other Austrian economists would definitely find this to be a compelling case for their theories with respect to business cycles and economic fluctuations.

Cuban looks even deeper into the technology by arguing that it's not the software that needs innovating but rather the infrastructure (or internet access speeds into the home) is what needs to be upgraded before we'll see another wave of innovation on the web.

I'm not sure who (if any) I agree with yet. I'm still pondering these issues myself but it's definitely forcing my brain to think in a different direction (which I always enjoy).

That's about it for me today, but expect more posts about the "state of the web" throughout the rest of this week/month/year. :)

Playboy Goes Social

2007-08-22T19:45:00.000-04:00

Just saw a TechCrunch post about Playboy launching a social network - smart move Hef!

Here's why:

1. The way most adult content sites work is through a network model. They'll start with one site, build others and use them all to cross promote the other. It's what enables the smart companies to earn 30%+ margins and the dumb companies to earn under 10%.

Building a social network around a brand will allow Playboy to create a great funnel effect to their "pay for" services and sites.

2. On top of a reality show (which they already have) a social network is the next logical step for Playboy to hit the mainstream audience that might not otherwise get exposed to the Playboy brand or content. This is primarily due to the fact that as a paper magazine Playboy has lost a bit of its luster amongst the millions of online destinations that offer more raw, real and free content.

I think this puts them right back in the game.

3. They now have a HUGE talent pool to scout from.

Before, young girls aspiring to visual "deposits" in many a young man's "spank bank", had to submit photos and ID information directly to the magazine in order to be accepted for consideration.

Now they just post a few provocative profile pictures and their on their way!

To what? I don't know - as long as it's not my daughter or girlfriend I could care less.

All in all, well done Hef -- you've combined two of my favorite topics into one: Tech and Porn!

Gotta love a guy that can date 5 women at once while in his 80's.

Where did Friendster go wrong?

2007-08-21T08:50:00.000-04:00

In my personal opinion - which, in the grand scheme of things, doesn't amount to much - one of the most important things one can do as an entrepreneur is to learn from past mistakes. Not mistakes of one's own doing, but rather from the mistakes of the countless entrepreneurs that came before us.

"Standing on the shoulders of giants" is a phrase that comes to mind.

Now we all know of the well documented technology problems over at Friendster, along with the internal VC and management conflicts - lessons to be learned from those two issues alone but we need to dig deeper here.

Here was one of the very first large scale social networks - this company had the world in the palm of its hands but somehow watched it all slip away (like my shot at becoming a professional basketball player when I never grew taller than 5'11'').

And while this company is starting to pick itself up by its boot straps it still has never manged to "get it right" -- what are they doing wrong?

Here are some of my thoughts:

1. Poor Information Architecture and Usability

I've brought this up to a number of people and while some agreed, there were many who didn't. But I really stand behind this one and I'll talk about why.

First off, why do ads take up almost a third of the profile screen? They have a massive leader board at the very top and then two big boxes on the right. I can see how that may benefit the bottom line but how does it add value to a user's social networking experience?

And have you ever tried using Friendster's photo feature? Forget the fact that you still can't tag other people in photos, click on a photo to go to the next one, etc... those things are annoying enough, but have you ever noticed this:

If you hit the back button in your browser while looking at an individual photo it'll take you right back to the gallery view of all of the photos (usually causing me to lose my place, say "Oh fuck it" and go elsewhere). The site is essentially forcing us to go against conventional wisdom in favor of Friendster's desire to use AJAX in their code - sorry guys, big "no no".

The list goes on but I'll stop here.

2. Day Late and a Dollar Short

Contrary to popular belief, Facebook didn't originate the idea of a news feed in a social network. The originator of social networks did - that's right, in case you forgot, Friendster was the first to offer users a peek at what their contacts had been up to on the site.

However, until recently the social news feed wasn't very "social". Let me explain...

When Friendster first released this feature it would simply tell me that one of my friends added a new friend, but it wouldn't say who. It would tell me my friend added a new photo, but it wouldn't show it to me. It would tell me they got a new comment but not tell who wrote it and what it said.

Essentially, the system was designed to promote click-throughs, page views and revenue. It wasn't designed to increase the utility of the site - again, another big "no no".

They did finally started to head in the right direction recently - now I can at least see who my friends are becoming friends with - the comments and photos are still off the mark though.

By releasing a half-assed feature that was meant to increase revenue and not utility, Friendster was once again passed over and Facebook reaped all the glory and benefits of the social news feed.

3. No Platform, No Traction

My friends are probably sick of hearing this one but history has proven that the companies who help other companies make money are dramatically more likely to succeed than those who don't.

Microsoft, Wal-Mart, Google, MySpace, Facebook - what do they have in common?

They all created a platform that allowed other individuals and companies to make money.

Microsoft allowed software vendors to create software that could be marketed and sold to millions of users on a standard operating system.

Wal-Mart made it so people from all walks of life could afford to buy DVD players and TV sets.

Google helped start-ups monetize their traffic and gave marketers the ability to advertise in every corner of the web.

MySpace and Facebook both allowed application developers to piggy-back their networks and market their wares in a viral manner - Facebook is unarguably doing a better job at this than MySpace which is why I think they'll eventually "win" but I'll save this argument for another time.

Friendster just hasn't caught onto this concept - they're operating a closed social network (which is mediocre at best) and not allowing for the third "C" in Hagel's "3 C's" of the web. They have the Content, they have the Community but they just don't have the Commerce!

Lessons

And the moral of the story kids: Don't be a "Friendster"... j/k ;)

But in all seriousness, these are the things that go through my head as I toil away in my crappy office space building my latest company.

How can I make my web application as easy to use as possible? How can I reduce friction, clutter, excess, etc.? How can I make this site as elegant as the iPod?

How can I use the technology I'm building to solve a real problem for people - how can it become a utility for my target audience?

How can I give other people the opportunity to benefit from this service monetarily?

Tough questions - but I think if we keep them in mind we'll at least avoid many of the mistakes made by those that came before us.

And those are my two pennies for the day!

Welcome to my World

2007-08-20T23:13:00.000-04:00

I've always done "corporate blogging" and while it was fun - it always had a purpose or agenda behind it. I never felt like I gained anything from doing it and therefore it was ineffective as both a creative outlet and as a "corporate communications platform".

So I said to "hell with it"...from now on, when I blog, I'm blogging for me and for me alone.

Well, obviously not "alone" - I do hope people read what I write and gain something from it.

I've been in the tech space since I was 15 years old - definitely not a "seasoned veteran" but I have my share of battle scars...

Did the whole 90's dot-bomb thing - started a web consultancy, raised money, went outta business...yeah, you know the story.

Then for some strange reason I decided to work on Wall Street - my timing couldn't have been worse. Trade center went down 2 days after I started and I was on the phone pitching people to open new stock trading accounts.

Wanna talk about beating you head against a wall?

But I did learn a thing or two about a thing or two. And I finally smartened up and went back to school.

Now, I'm a Columbia University graduate and instead of doing the "safe, smart thing" like my parents hoped, I'm back in tech business!

I'm grinding it out on a new start-up here in my hometown of New York City. I'm having the time of my life and I'm really enjoying this new wave of web based businesses cropping up. I really dislike the term "Web 2.0", especially when applied to social media, but for the sake of simplicity and continuity you'll hear me use the term quite often.

So that's my first post....most of my writing will have to do with technology, finance, the current state of hip hop music, my favorite adult actress of the moment and whatever else enters into my head at any given moment.

So I hope you read, enjoy, discuss and give me honest and candid feedback whenever possible.