Archive for the ‘Money’ Category

Capital Factory 2011 Accelerator

Saturday, March 19th, 2011

Capital Factory is an Austin incubator somewhat like Paul Graham’s Y Combinator.  They run a 8 week summer program each year. In their own words:

Capital Factory is an early stage accelerator program for tech startups that provides a small amount of seed capital and weekly mentoring sessions by entrepreneurs who have founded successful companies. Startup companies apply to participate in our 10 week summer program intended to get a startup pointed in the right direction with a clear path to profitability and growth. In 2011 the program runs from May 25th to August 11th. On September 7th, we will host more than 250 investors and entrepreneurs for Demo Day and stream it live over the Internet.

I dropped by the meet-the-folks session on Sunday morning during SxSW Interactive.  Over a 2+ hour period, a 2010 alumni (doing well),  a 2009 mentor, and a 2011 mentor gave me and a couple of other interested people some very good advice and mentoring.  And it wasn’t generic advice, but some ideas specific to our ideas and how we might adapt them to something more likely to succeed.  Their advice to me fit in with some little ideas I was thinking of trying (that I hadn’t mentioned) and building a service business around them (more in later posts).

A common theme across all of us potential mentees was instead of this huge business that will require massive amounts of capital and go head-on against some established players (i.e., your idea isn’t that original and/or your edge isn’t enough to overcome the incumbents), run with a smaller idea that is unique and really plays to your strengths.

I’ve decided to not go for the 2011 program. If the new idea plays out well, I can see coming back for the 2012 summer program for help scaling it.  I already received value from the program without even being in it.  Impressive and helpful folk.  Thank you.

The Y Combinator program runs twice a year.  The application deadline for the next program is March 20. The 2011 Capital Factory Summer Program application deadline is March 27.  If you’re running late or would rather be in Austin than Silicon Valley, give them a try.

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America is Ceasing to be a Capitalist Economy

Tuesday, March 8th, 2011

Once upon a time (i.e., when I entered the work force), the profits of a business were divided between Labor (those that did the work) and Capital (those that put up the money).  Technology increased the productivity of Labor and the increased profits went increasingly to Capital.  I was okay with this, since I increasingly had Capital to invest, e.g., 401(k) plans and IRAs.  But on Wall Street, profits go to the C level and their cronies.  One Wall Street firm paid out more in bonuses as they were being bailed out by taxpayers than they made.  So what did those who supplied the capital get?  More debt between them and any profit.  And it isn’t just Wall Street that is adopting this model.

So where’s a budding capitalist going to invest his/her retirement money?  Not in or on Wall Street.  The game is rigged against shareholders, and the earning reports lie.  I’ve moved a fair chunk of my savings out of investments and into the local credit unions.  With the Federal Reserve manipulating the bond market to keep Wall Street’s con game going, savers are subsidizing speculators.  Not a game that will end well for anyone except the liars and thugs in suits.

Increasing I am looking at investing in businesses directly, bypassing the stock market, either by starting them, buying them, or buying equity in them.  It’s an older model that’s looking worth a revival.  My wife’s grandfather lent out money for short terms.  Mr. Carlisle down at their local bank knew all his customers and did not securitize the loans to pawn off on unsuspecting investors.  Old-fashioned, but looking better than investing in “financial innovation”.

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Quantitative Models and Change

Saturday, July 3rd, 2010

For a time such as this. This is a long blog and only partially about Amethyst.  It pulls together threads from several areas of my life so I need to spend some words on setting the context.

Amethyst uses a quantitative model to measure how close a particular post is to posts a user has read in the past (along with up and down votes).  If the model was really good, they would see more and more of a smaller and smaller part of the Web.  The up side presumably is that they see the posts that had the most value.  That’s what Amethyst promises.  The down side is that they would only see posts that agree with what they have already read.  Amethyst isn’t there yet.

An obvious way around this is to frequently at least glance at the latest or the bottom scoring posts.  Of course, it only contains posts from the feeds you have added, but it is a wider view than the top scoring posts.  And you might just throw in some blogs or news sites with opposing views.

Many quantitative models are like this, they winnow through a mountain of possibilities to find more like a particular example or examples, i.e., more of the same.  When the world isn’t changing much, this works fine.  I own several mutual funds that use quantitative models to winnow through thousands of stocks to find more like some model of a good stock.  They have own hundreds of stocks and have delivered good performance through the good times and through the recovery.  But times are changing and their performance is dropping.  One is up 22% for the last 12 months and down 9% for the last 3 months.  I think it is time to change.

Many economic preditions models (e.g., the US Bureau of Labor Statistics jobs birth/death ratio) behave fine through economic booms and busts, and badly at the changes from one to the other.  As the fine print at the bottom of every investment brochure or newsletter says, “Past performance is not indicative of future results.”  Nothing goes up or down forever.  Most are “mean reverting” meaning they swing back and forth around an average.  Often a big swing in one direction will be followed by a big swing in the other direction.

A species too specialized for a specific ecological niche is vulnerable to changes in that niche.  In economics, unused capacity is not good.  In life, you had better keep some reserves to deal with emergencies.

So maybe I don’t want Amethyst to become too good are showing me more of the same.  It isn’t there yet, but I am seeing a pretty narrow view of things in the top scoring page.

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SXSWi: Co-Working

Saturday, March 14th, 2009

Informative session on co-working, shared workspaces: coffeehouse groups, incubators, labs, studio spaces, etc.  One thing that came up repeatedly is people looking for the business model.  A very useful model I found for many things is a metaphor from Fritz Lieber’s sword and sorcery fantasy series.  In the main city there is a street that runs from a city gate all the way to the main temple at the center of the city.  Someone comes in from the desert with a vision and begins preaching.  If he/she attracts a crowd he/she stays and expands the vision and the crowd/congregation.  If not, back to the desert for a better vision.  Congregations and the preacher may expand until they move into a building.  There is continual movement of congregations moving up and down the street as their size/wealth/etc. increase and decrease.

I’ve found this a useful business model, a fine grained spectrum of niches.  None of the “You Must Be This Tall For This Ride”.  In Austin, someone may start selling tamales out of their truck, progress to a taco trailer where you can touch all four walls without moving, then a taco truck, a bigger taco truck, then a permanent location while building a restaurant on the other end of the property.  One big stumbling block is downsizing as gracefully.

If tacos are your thing, BBQ.  Start selling the meat and meals out of the back of a truck, then a BBQ pit on a trailer, etc.

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Manufacturing Applied to Software Development Makes Me Nervous

Monday, January 26th, 2009

There is a rash of recent software development methods (e.g. Lean, Kanban) that are based on manufacturing, usually Japanese.  Manufacturing is doing the known over and over, trying to squeeze the last nickel out of the recurring costs.  Software development is largely exploring the unknown.  There aren’t repeatable, consistent tasks.  Many of these methods strike me as attempts to replace expensive, talented individuals with cheap, generic labor.  And sacrificing long-term viability (and costs) for short-term gain.

There are consistent, repeatable parts of software development and where they exist they have been pushed into compilers, scripts, and code generators.  Valuable effort has gone and is going into squeezing another couple of percent performance out of the optimizer in compilers.  This is so successful that few projects generate assembler/machine code by hand any more.  The repeatable parts of well run projects are automated, compiler back-ends, scripts, automated builds, automated tests, etc.  Much more cost-effective than hiring poorly paid, poorly educated, unexperienced people.
Or not bothering with documentation, comments, and clean code because it doesn’t provide immediate “customer value”.

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