June 14, 2011


The passive startup founder

We sat in the bus travelling down the long California road. On either side houses drifted by. The city was like a a huge suburb, the last 20 minutes had been a series of unique houses, but which blended together to create a faceless and silent city. Occasionally, you’d see the random person out in the yard, seeming alone and frail in this empty city. Opposite me, an old man sat with a worn and leathered face, and beside him sat an overweight women, her shoulders drooped with that unique weight that poverty seems to drop on peoples backs.

Opposite me sat the smiling startup founder. He was speaking excitedly to me, his voice was strong and energetic. His shirt was plastered with the proud logo of his engineering school, the mexican man sitting across us looked at blankly at it, slowing mouthing the letters.

The founder said many words, his words were the only sound in the bus apart from the jumping sound of the engine. The other silent people probably were listening to him also. Suddenly, I too started listening to him.

“The difference between me and all these other people”, he waved his palm across, meaning perhaps the other bus passengers, and perhaps the rest of the world, “is that I am active, and they are passive. They wait to be pushed into position, they apply for jobs and sit down and wait for the result, they read books and then do what the books tell them to do. People give them advice and they follow. Someone insults them and they feel hurt, some rejects them and they feel worthless.”

“These people are like a boat without an engine in the middle of the storm. The wind and waves push them first one direction, then in the other direction, and they end up spinning around in a circle and they end up in this bus broken and down.”

The founder jabbed his finger in my face and his voice went high pitched.

“All they have to do is switch on their engines! All they have to do is stop being buffeted by external opinions and start deciding how they will feel and how they will react. When they get rejected, they can choose the emotion they will feel! When things go wrong, they can choose not to be hurt by them. When they want something, all they have to do is go get it and stop waiting for someone to give it to them. Then they are in control, and suddenly they start moving.”

The bus ground to a halt beside the caltrain station. We got off and he looked me in the eye and said: “Take control of your destiny”. He entered his car, a yellow Maserati, and with one last wave, sent the car screaming down the road, several times over the speed limit.

June 11, 2011


The angel investor trick to quickly get rich in the valley

I sat alone in the donut shop in the middle of the seedy San Francisco mission district, a large suger covered donut on the plate in front of me. I was waiting for this unknown investor to arrive.

An unkempt and dirty looking man stirred his coffee and looked sullenly at me. Outside the big glass windows, other wretched looking people slowly moved past, the strange bouncing walk and blank faces making them look like zombies dragging missing legs.

A man excitedly burst in and held up a key to the donut seller. “I got an apartment now, man”, he said, his voice rough. “I got my own place”. The donut seller nodded non-commitally. “This is my ticket, man, I got my place.” The last part of the sentence was mostly muttered to himself – everyone in the shop ignored the homeless man who now apparently had a home. I looked at him with interest, the man glanced at me and quickly looked down and away.

A big black car slowly pulled up outside the window. Out of the car stepped a smiling short man – he looked in and waved! I recognized him from his twitter icon – the same half smile, the slightly drooping eyes.

He dropped himself into the seat opposite me and beamed. He had the hearty confidence of successful men – and we got to talking quickly about the tech industry. He told me a number of stories, and one in particular struck me, because it reminded me of some articles I had read recently.

The story was about a company that he had help setup. There was a little trick that one could use to grow rich quickly, and that a few of his friends had used. He gave an example: What you would is simply to spend all your income on selling more of your product, and repeating over and over again, which would lead to insane growth.

You’d start off by finding a product that is selling well and that is used by business, for example Anti-Virus software. Raise a small amount of money and start selling the software by spending all this money on adverts and direct calls. With all the revenue you gather, re-invest it back into your adverts, and sell even more. Sink back all the revenue again into adverts. You are selling a large number of copies, so you go to an investor and raise some amount of money. Use this money to hire more sales staff, pay for more ads and sell even more copies. Reinvest all your revenue. This way, your growth is going to be explosive, allowing you to raise even more money. Once you raise a huge amount of money, then pay yourself out. Instead of re-investing in sales, simply sell your shares and take out the cash. You’re now a millionaire.

If people still believe in your company, you can go raise some more money. Once the investors start asking too many questions, you can do an IPO and the gullible public will buy your shares at a high price. You could even become a billionaire!

May 13, 2011


How to avoid being a one-hit wonder

Most people, at some point, have a hit. Some hit blog post, some hit song, some hit startup, some great party and so on. But then that’s it. They try again, but it just doesn’t work the second time around. They try to do things exactly the same way, but it just does not work. Why is this? Why do some people have consistent hits and keep growing and getting better, while others just have one hit that they can never reproduce?

The fundamentals
Think of some guy cooking dinner. He goes crazy, throwing various ingredients in the pot, roasting the meat on an open flame, flinging whatever he finds in the fridge into the pan, and randomly selects some red wine from the shop.

He invites his friends for dinner, and they are astounded. The meal is perfect – the meat is just right, the wine works perfectly, the soups are just perfectly flavored.

That guy just landed a hit. But it’s a hit he cannot reproduce. He does not know why that meal was so good, because he was just throwing things into the pot. He got lucky with a bit of intuition and some luck. Give him different ingredients, a different stove and he will make a terrible meal.

Contrast that with a professional cook. He can consistently give you a good meal, independent of what he has available to him. Sometimes, even the pro will make a dud, but most of the time, it will turn out right.

The core difference between them is simply that the professional cook has a good knowledge of the fundamentals. He has studied the theory behind what he is doing, or he has a huge wealth of experience. He knows how to sear meat, he knows the correct spices to mix with a particular dish. So what the other guy did by chance, he can consistently do.

Most one-hit wonders just don’t have the fundamentals. They work based on instinct and even though it may guide them to make a single hit, they will not understand how that hit came about. A person who has studied the fundamentals will see the hit like an insight that has opened new opportunities to him – he will recognize new things, but the other person will take nothing new from the experience.

The social network
The world is filled with a bunch of extremely smart people. And these people don’t want anything to do with you. They don’t have the time to talk to any guy off the street. But when you have your hit, they will all want to talk to you. For a while.

The person who wants to make more than a single hit has to grasp this opportunity to force his way into the midst of this society. Because these very smart people are what will make your next hit.

You can’t keep repeating one thing that worked. It gets boring. You can’t sing the same song twice and expect it to be another hit. You can’t keep cooking the same dish. You can’t keep making the same website. You will need to make something new. And your new social network are what will make that second hit for you.

It’s like Lady Gaga trying to have a hit record. Hundreds of songwriters want her to sing their song. It’s easy for her to land another hit, because all the best producers will want to work with her. Her album has taken her into a new social network that she can now leverage to keep her fame high.

Some people, after landing their hit, don’t attempt to get to know the important people in the new social network. They remain at the same social level that they were at. That means they have to recreate a new hit all over again. That’s very difficult.

The hit factory
The person who makes hit after hit does so by a combination of two factors – he has the necessary knowledge about the fundamentals, and when he lands that hit that makes him visible, he leverages the new social network this opens to him. He uses the newly available brainpower to him to make the next hit.




My company: 5 months work from home, one month work in a 5 star hotel

I’ve been having a big problem in my company. We’re making very good money (close to 40k last month), and everyone is paid excessively well, but morale is dropping massively. The income we make is very passive – even if we did no work at all, we’d still make about the same amount, but we’re trying to grow, so we are working on new products all the time.

Well, we would be, if we were not so bored out of our minds.

You see, we’re working from different contintents. I’m working from London, my partner is working in singapore, the programmer is working from romania, and we have a couple of guys doing manual labour in china. We communicate using google wave mostly, and we have a skype conference every couple of weeks to discuss what needs to be done.

But the less we see each other, the more of a drudge the tasks become. Where in the past I would be excited to implement a new feature or to share what I have achieved with the others, now it seems like there is very little direct feedback when I try to type out what I have done. Nobody is there to share the little triumphs over stubborn code with me.

And for the others, when they have to do the boring but neccessary things, they are finding it more and more difficult to concentrate and focus.

Shit hits the fan
3 weeks ago, the situation got terrible. I lost motivation, everyone else lost motivation and we hardly got anything done for an entire week. And nobody cared enough to remind anyone else to get to working. We’d just half heartedly post an update with things like “replied two customer emails”, and the other guy would reply with “took a look at the website”. And that was the progress for an entire day for two people. This could not go on.

So I called a meeting. In Bangkok.

Everyone booked a flight, and we all flew down to Bangkok to have a face to face meeting and spend seven days together. (We met the awesome Dustin Curtis there at the same time, by the way).

In Bangkok we checked into a five star hotel and we all went out to one of the infamous Bangkok nightlife spots, and over glasses of whiskey mixed with soda water, had a long discussion. That single face-to-face discussion solved more problems than a two week skype session had.

The next day, we woke up and got to work beside the hotel pool. The productivity was incredible. Each person got ten times as much done as he had alone, even with the distractions of other people talking. Programming went much quicker because I could directly explain what I meant.

We had a lot of other fun together as a team during the days we spent in Bangkok, including swimming on the rooftop of a hotel, partying with tourists, eating street food, going to expensive restaurants and having boat rides. You could have a movie montage at this point of us doing all these activities.

A day before we were about to leave, our programmer remarked – I wish we could do this again. We looked at each other, and I thought – we SHOULD do this again!

An ambitious plan
Seven days together, with all the fun we were having were extremly productive. The dullness was wiped out of the team and we were refreshed and recharged and we regained that energy we had when we started first. We had also made plans and timelines and schedules and everyone now knew exactly what he had to do when he got back home.

We sat down and came up with a plan for our company: We would build our company like this – everyone works from home for five months of the year. The sixth month, everyone gets together, flys out to a cheap country and we all work together. Just like ship captains have to leave their families to go out to sea, workers in our company have to leave their home and family for a month to work with the team. We sleep, work and have fun for an entire month. We do all major planning, demo everything, attend conferences and all that during that period, and when it’s over, everyone goes home and works as he pleases again.

The month together will give us the direction we need to be going in, and create a clear task list for everyone.

Costs
A good hotel in a cheap country would cost $2000 for a month. The flights would cost $700 per person. That’s $10800 base costs for the month. Then entertainment, food and drinks could come to $200 a day, that’s another $6000. So the entire budget would be $17.000 for a month together.

Spread out over 6 months, that’s $2800 a month the company keeps aside for this meeting. That’s just 7% of our monthly revenue, so it’s very doable.

Is it neccessary?
After coming back from our 7 day trip to Bangkok, everyone was refreshed and eager to work. Morale has once again spiked and our energy levels are back to what they were. Having the idea of another jam session to look forward to makes working alone a lot less dull and there is a clear goal that is coming reasonably soon. Without this, I believe our company will fall apart from demotivation. So in so many ways, it’s worth it.

We’re already planning our next trip, this time to Mongolia.




Being unhappy running a successful business

I sat at the top of the tower in hong kong and looked out over the bay. The view was awesome, the room was awesome – everything was expensive and great. Except that it wasn’t. I felt no different than before – the money I had earned had done nothing to make me any happier.

I’d worked so much, and sacrificed so much to be able to sit in this room, but I felt as miserable as ever.

I sat up there, looking at the bay below, watching the big machines work on the land reclaim project. The ferry picked up people from one side, and took them to the other side, a task it had been doing for years, and will continue to do for a long time to come.

There was a tap on the door. I stood up, arranged the smile on my face and opened the door. He strode in, a round man with a constant smirk, and his confident loud presence seemed to immediately change the dynamic of the room.

The man who had taught me everything I knew. The man who had showed me how to be confident, who had taught me how to sacrifice to get what I wanted. I needed him once more, and had called for him once more, but this time, the task was different.

This time, he was to teach me, not how to become rich, but how to make true value in my life. How to make the kind of wealth I really wanted, and not the wealth I had mistakenly gathered.

When I had told him, he had confidently and loudly assured me on the phone that he would show me the missing element. He said he knew the thing I was missing and the money could not fill.

He said he would take me into the belly of hong kong, and I would find what I was looking for that night. He clapped his hands and laughed out loud, as he usually did, and I looked at him, wondering what lay behind that laugh.

Art
The room we walked into was filled with many men in suits. They all sat on sofas in groups that included young pretty girls. We sat at the back, a single bottle of whiskey filled out in front of us.

Then a spotlight shone on the stage. Two girls walked out, holding a big sheet of a paper. A thin, dapper man strode out from the side, picked up a paintbrush and quickly drew a chinese character on that sheet of paper. He was done in 20 seconds.

Then the bidding started. That sheet of paper sold for US$9000.

He looked at me and smiled. That’s art. It’s not in the paper, it’s in the man. Your art has to be in you for you to be happy. Be proud of what you make, and you will be proud of yourself.

Discipline
We walked and looked at the people doing tai-chi in the night. He looked at me and said : this is not a sport for the impatient. When you do this, you have to be disciplined – you have to repeat yourself everyday, when you fail, you don’t blame yourself, you just stick with it.

Know what you want, keep training yourself to strive for it correctly.

The kung-fu house had men punching in the air, and I marvelled at the way they jumped. He looked at me and said, they have spent their lives in controlled discipline, to get this far. Do you think they feel confined during all those periods they had to practice? No, they felt free.

Be humble in what you want to do and what you want to do. Your sacrifice should be your greatest joy, and not something you lose.

Beauty
Later in the night, we sat in a Karaoke Lounge, voices screaming around us, whiskey splashed in glasses and on the tables, someone yelling out for another bottle. He pointed to the girl sitting beside me and said – look at the perfection of her face. Look as her smile curves, as she glows and is radiant. You laugh and you are enjoying yourself – that’s because you are surrounded by beauty, or an approximation of beauty. Around you is song and pretty girls.

That’s human life, my friend, if you give that up, in the end what will you have?

Violence
The man punched at him, pleading even as he fought, that we should just pay the bill. They screamed at each other and a few punches were thrown. The police came, and a few notes were flung on the floor.

In the taxi, he looked at me smiling and said : I enjoy fighting every now and then.

Friendship
The next morning, I woke up with my head splitting in two. The headache was awful, I had no idea where anyone else was. I was in the room, the sun was cheerfully peeking through the window blinds. The air was fresh and the view was awesome.

On my phone was a text message: “Enjoying life has nothing to do with what you have, it has to do with who you are hanging out with”.




How angel investors are destroying young gullible programming talent

Dark Angel

For young smart programmers who study a bit about the basic principles of making money, it’s pretty easy to get a steady income from the internet. It’s almost trivially easy, particularly at this point in time where there are many consumers of internet-based products and few producers.

But many people who try to make money on the internet are failing – and one of the main reason they fail is because of angels. Dark angels, flying about and preying on fresh minds.

You see, the angel investors, however benign the name may sound, are not investing money to help businesses get off the ground. They are not investing money so that others will get as rich as they themselves are. They are not doing a nice and social service – they are investing money because they want even more money back. That’s all they are – they are hawks looking to see where they can prey.

And one of their main bait methods is in their writing. Angel investors and others in their eco-system are writing on the internet about how to make money on the internet. These articles are what young programmers read, and the methods that these people write about is what the programmers end up using. Not knowing that they have fallen into a deadly trap that will maximize the potential profits of the angels, while rendering them nothing but statistical nothings, to be discarded at any time.

Angel investors are not interested in companies that create value and that can hire one or two people, while making a steady profit. The investors are interested in blow-out companies – companies that either grow huge, or that will be bought by other companies. Those are the only types of companies interesting for the angels.

And these are exactly the hardest types of companies to build, and the ones most likely to fail. But the angels will write and convince the programmers, and build this system where it seems like this is the right kind of company to build. Yes, it is, but only for THEM!

For you, young programmer, the right kind of company is not that insanely difficult, high risk company! It’s a simple product company that has a large market and that will pay your bills quickly. That’s EASY to build with the talents you have, and it WILL satisfy your needs.

The angels don’t want you to do this. It’s exactly what they don’t want, because those types of companies are taking away from their potential pool of candidates. They will write and talk as if those types of companies don’t even exist. Don’t let them sucker you into wasting the best years of your life trying to build something ambitiously dumb.

They will tell you to change the world, because you’re young and you still think you can. What they really mean is that you should join the ranks of their small investments, reducing their risk slightly, while increasing slightly the probability that they will make another 5 million. You’re just a statistic to them.

There is an easier path to the money you want. Good stand-alone product, big market. Execute well, the money will come. It starts slow, but it gets faster a couple of years down the line.

Don’t see venture capital as your aim. Don’t see seed investments as your aim. Don’t build only things that google may acquire. Don’t start unrealistically ambitious companies.

Don’t let those venture capital and angel blogs sucker you into doing stuff that is rather unlikely to work. Just make a good product for a big market, and ignore the vultures. When they smell the meat, they will come flying around anyways.

March 17, 2011


The end of the poll internet

There is a fundamental change happening on the internet right now that is not visible to everyone, but that is slowly changing the very nature of the internet.

The internet used to be a place where you searched out websites, you visited them, and read what was on them. A pull model – you basically polled the internet for changes. That has changed – the internet is becoming event oriented – it pushes changes to you now.

The core facilitators of this change are twitter and facebook. Almost all popular websites have a twitter account or a facebook page where they push their articles towards you. If you subscribe to these, like I do to all of my popular websites, there is no need to visit the actual websites any longer, except to read the particular articles that interest you.

So people are increasingly looking at their twitter streams and their facebook pages for changes to the internet – they are no longer actively searching out websites to see what is new.

Am event notification model is much more efficient than a poll model, both in programming and in the real world. It makes sense that the event oriented internet is quickly coming to dominate and replace the poll internet over time.

This change is going to represent the next iteration of the web, and all websites, including yours, have to prepare themselves for this.

—

Follow me on twitter

February 6, 2011


Don’t ask *why* you were rejected

I’ve noticed something that is not immediately obvious – rejections without explanations can be supremely helpful.

Imagine you are applying for a job, or for funding for a project of yours. You are confident going in – everything seems to be in place, and you are sure you will get accepted. But then you get rejected. The first question you will ask is : why? You want to know from the person exactly why you were unsuitable.

If the other party, however, does not give any reasons why you were rejected, this can be valuable to you. When people get rejected, they tend to reevaluate their initial concept under very critical eyes. What seemed perfect going in now seems riddled with flaws that could have been responsible for the rejection. The scales fall of their project and they can see it clearly. They fall out of love, and suddenly the lines on their lovers face are visible, and the once charming idiosyncrasies have become ugly flaws.

Being rejected without explanation allows people re-see their project and potentially abandon it or change it into something better. Being rejected with explanations gives them false hope – they focus then on only that small flaw that was pointed out to them and think fixing it would solve the problem.

But often, the explanation given is diplomatic and designed not to burn bridges, it’s not actual helpful advice that one can work on. So a rejection *with* reason can unnecessarily extend a project that should rightfully be dead. Or it could cause an over-focus on this one area, and all of the other flaws that were not listed in the reason (like personality flaws), go completely unworked on.

Getting rejected without reason is the best type of rejection, because it forces you to improve all aspects of your project. For a while, it allows you think and actually understand the problem. That’s because you’ll discover the problem by yourself.

January 19, 2011


The one thing Apple can add to the iPhone to change the world

There is a very small and very simple feature that is going to change the world. It’s technically possible right now. It is surely going to be implemented in the coming years by someone or the other. And when it comes, the personal computer world is going to be fundamentally different.

This feature is this: Mini-DVI  on the iPhone and iPad. Yes, a plug that allows you plug your 27″ monitor to your phone.

This is how it would work: You bring your phone home and stick it in your docking station. Your universal apps immediately switch from the iPhone version to the desktop version. It’s the same app, but it has two user interfaces. All your data is still there, all your music, but now you can use a big screen to work with everything. How difficult would this be to do? If based off iOS, it’s not difficult at all. Mini-DVI can be added pretty easily, and software with multiple Guis are already being used for apps that are both iPhone and iPad. Keyboard and mouse would work via bluetooth, and that’a already implemented.

How would it change the world? It would make desktop devices pretty much obsolete. All you need is a screen, keyboard, mouse and your phone. There is no point having a big box anymore. Laptops would them simply be a screen and a keyboard, with minimal electronics inside it.

The biggest effect, however, would be in developing countries. Many of those countries have bypassed the desktop age and the laptop age and have jumped directly into the smartphone age. However, the current generations of smart-phones have small screens with no way of viewing the content on bigger screens. When the DVI-output is added, every sold smartphone is then basically a full-fledged computer as soon as one purchases a screen.

Smart phones are relatively cheap, and are small enough to be shipped in bulk to countries all over the world. In-built GSM means that there is no need for WiFi – internet goes directly over towers. Long battery lives means that their computers work even when electricity supply is erratic.

Already, smart phones are becoming the main computing device for people all over the world. With this addition, there really won’t be a need for any other computing device.

January 10, 2011


If you’re a successful bootstrapper, don’t get stuck managing your server

Tinkering, that’s what I’d spend most of my time doing. I’ve seen so many other successful bootstrappers doing the same – their site is running fine, money is coming in, growth is steady. The owners are fixing bugs, making things a bit nicer, doing some A/B testing, migrating servers, changing database, managing users and killing spam.

Basically, they’re just tinkering about and keeping the business running.

You know what, this approach works fine for companies that are looking to get their product acquired, but if you are intending to actually grow your business, I’m not so sure it’s the best strategy.

Every product has a certain size. It sells in a certain manner and at a certain magnitude, and as a bootstrapper, you will quickly reach that level if your product is good. You can now start tinkering about if you want, but that’s not the path to growth.

If Microsoft had been tinkering still, we’d be using DOS 20.0, which would probably be a great product, but it would still be DOS. If Ford had been tinkering we’d be driving the Ford Model T 12 Cylinders. If Apple had been tinkering, we’d be using the Apple 17.

Companies that are on a path that does not involve getting their product acquired have big jumps when they take what they have, and reinvent it in a way that actually jumps forward. DOS becomes Windows. Microsoft Office is made. Netscape becomes Firefox. The iPod inspires the iPhone. The iPhone inspires the iPad.

When your product levels out, stop tinkering about and wasting time with marginal improvements. Think about how to make a new product that takes what you learned from the old product and makes something that breaks new ground.

All the mega-large companies now always had huge steps forward with new products, not with optimizations of old products.

If you’re bootstrapped and things seem steady, then make something new. Use your income and use your momentum to drive the next product. That’s where your growth will come from.

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