Try to see how difficult it is to run a start-up in this awesome little Flash game. My one gripe - why does a Flash designer cost more than an Ajax coder? And why do PR people make so much more than both of them? In my experience that is not the case.
And here is someone who wants to do a reality show type thing to determine who gets funding and who doesn't. The "wisdom of crowds" is a well established fact but we also have notable exceptions, like George Bush and most of the American Idol winners.
Some other random stuff:
Top Ten Joe Pesci Beatings (from Cracked)
This is what it's like to be Britney Spears - no wonder she is so crazy. Poor girl.
I don't eat meat and this is pretty much why...
And for my own personal reference, how to get a book published.
Friday, September 28, 2007
Thursday, September 27, 2007
Startups and Funding (A Cautionary Tale)
I am thinking about the Microsoft/Facebook deal and the absurd valuation it places on Facebook. Then I started thinking about my experience with start-ups. The previous start-ups I worked for I am not familiar with how the financing worked exactly, but my current employer I have been with since before the beginning so I am intimately familiar with all of the details.
What strikes me the most is how an unscrupulous investor totally screwed us over by formulating a deal which would allow him to pocket millions while screwing us. He had obviously been planning this since the beginning since the terms of the deal contained many bizarre terms that, to me, screamed out "I am going to screw you over!" But I guess the "founders" were too blinded by the site of a couple million dollars to really think about the future. This guy's plan was to "financially engineer" an artificial valuation for our company, and everyone thought he was the bee's knees until he screwed us over, except for me - I never really trusted him at all.
Once the plan put in place by this investor (who has a reputation for doing this with companies) and the company and stock structure was in place the "founders" went out and started finding other investors. They did the whole dog and pony roadshow thing, at a ridiculous valuation for our company of $600 million. But they raised a good amount of money - most of which went right back into their pockets. It seems that the "founders" were not quite as stupid as one might have thought, and had arranged for themselves to be owed money by the company, payable either in monthly installments or once $x million had been raised. Some of the founders went even further and did their own private placement, the proceeds of which were ostensibly to pay off debt from their old company, but which actually went directly into their pockets.
So the "founders" made millions of dollars, in addition to their high salaries and ridiculous severance packages, right off the bat. I should have gotten 5% of those millions but they kind of screwed me out of that. Nevermind though, because they ended up giving me .5% of the company instead of the 5% I had originally been promised, which under the initial ridiculously high valuation of the company was worth several million dollars.
The plan put in place by this devious investor involved bypassing an IPO and becoming public through a reverse merger which allowed us to bypass FCC regulations and become public way before we were ready. We became public well before our stock was even registered to be able to be traded, which kept the valuation artificially high. Once the registration statement went through the price immediately dropped as 99% of the shares became tradeable.
Since then the price has dropped to 0.0167% of it's original price, the price which had been used for the first round of financing. A bunch of people lost a lot of money, including me, because I foolishly held on to 95% of my stock hoping it would go back up after the initial dive. I wish to god now I had sold more of it, even 10% would have made for a nice cushion and savings that would come in really handy now, but no, I just sold the bare minimum I needed to pay off my credit cards and other loans. The only people who made money were the initial investors and the founders, who had to defer their fat salaries as the company started to run out of money and the creditors came knocking. The problem was that since we were public, and so thinly traded that anyone can move the stock price around with a few hundred shares to trade, and the stock price was so low, they couldn't raise money anymore. If we were private I am sure we would have a high valuation and VCs lined up out the door as we have a great idea and a great product. But being public, and having this first investor holding the share price down, we would have to sell 1/2 of the company to raise even a couple million dollars.
The next chapters in this book are yet to be written. The company recently got its main new backer to extend the terms of the deal which we used to borrow money from them. Other people have been interested in the company but the terms of the deal with this new backer make it ridiculously stupid for anyone to invest in us. As far as I know the "founders" salaries are still deferred, though they may have paid themselves once the new deal was put into place.
This makes me think that they way to get rich is to start a company and make sure you have deals in place that ensure you get paid no matter what happens with the company. It might scare off some investors (I nearly peed my pants when I read the first 8k and finally learned about all of these backroom deals) but as long as you can get someone to invest you can still make money without having to do anything. Of course the people who lose are the people who invest in your company, but they presumably have enough money that it's not going to hurt them too badly.
As soon as I come up with a salable idea this is exactly what I am going to do.
What strikes me the most is how an unscrupulous investor totally screwed us over by formulating a deal which would allow him to pocket millions while screwing us. He had obviously been planning this since the beginning since the terms of the deal contained many bizarre terms that, to me, screamed out "I am going to screw you over!" But I guess the "founders" were too blinded by the site of a couple million dollars to really think about the future. This guy's plan was to "financially engineer" an artificial valuation for our company, and everyone thought he was the bee's knees until he screwed us over, except for me - I never really trusted him at all.
Once the plan put in place by this investor (who has a reputation for doing this with companies) and the company and stock structure was in place the "founders" went out and started finding other investors. They did the whole dog and pony roadshow thing, at a ridiculous valuation for our company of $600 million. But they raised a good amount of money - most of which went right back into their pockets. It seems that the "founders" were not quite as stupid as one might have thought, and had arranged for themselves to be owed money by the company, payable either in monthly installments or once $x million had been raised. Some of the founders went even further and did their own private placement, the proceeds of which were ostensibly to pay off debt from their old company, but which actually went directly into their pockets.
So the "founders" made millions of dollars, in addition to their high salaries and ridiculous severance packages, right off the bat. I should have gotten 5% of those millions but they kind of screwed me out of that. Nevermind though, because they ended up giving me .5% of the company instead of the 5% I had originally been promised, which under the initial ridiculously high valuation of the company was worth several million dollars.
The plan put in place by this devious investor involved bypassing an IPO and becoming public through a reverse merger which allowed us to bypass FCC regulations and become public way before we were ready. We became public well before our stock was even registered to be able to be traded, which kept the valuation artificially high. Once the registration statement went through the price immediately dropped as 99% of the shares became tradeable.
Since then the price has dropped to 0.0167% of it's original price, the price which had been used for the first round of financing. A bunch of people lost a lot of money, including me, because I foolishly held on to 95% of my stock hoping it would go back up after the initial dive. I wish to god now I had sold more of it, even 10% would have made for a nice cushion and savings that would come in really handy now, but no, I just sold the bare minimum I needed to pay off my credit cards and other loans. The only people who made money were the initial investors and the founders, who had to defer their fat salaries as the company started to run out of money and the creditors came knocking. The problem was that since we were public, and so thinly traded that anyone can move the stock price around with a few hundred shares to trade, and the stock price was so low, they couldn't raise money anymore. If we were private I am sure we would have a high valuation and VCs lined up out the door as we have a great idea and a great product. But being public, and having this first investor holding the share price down, we would have to sell 1/2 of the company to raise even a couple million dollars.
The next chapters in this book are yet to be written. The company recently got its main new backer to extend the terms of the deal which we used to borrow money from them. Other people have been interested in the company but the terms of the deal with this new backer make it ridiculously stupid for anyone to invest in us. As far as I know the "founders" salaries are still deferred, though they may have paid themselves once the new deal was put into place.
This makes me think that they way to get rich is to start a company and make sure you have deals in place that ensure you get paid no matter what happens with the company. It might scare off some investors (I nearly peed my pants when I read the first 8k and finally learned about all of these backroom deals) but as long as you can get someone to invest you can still make money without having to do anything. Of course the people who lose are the people who invest in your company, but they presumably have enough money that it's not going to hurt them too badly.
As soon as I come up with a salable idea this is exactly what I am going to do.
Thursday Assorted Junk
A dumb idea or stupidly brilliant? Either way it's stupid but it may or may not be brilliant. This site creates a custom sound for you based on your answers to some basic personality questions. Here is mine, which is actually pretty accurate:
Wednesday, September 26, 2007
Random Stuff on a Wednesday
In bizarre business news today Nike announced a sneaker designed specifically for American Indians. The shoe will only be sold to tribes and reservations.
Comcast says what everyone else is thinking. I actually have never watched the show and have no intention of ever doing so.
More on cheating Japanese housewives. To quote Ari Gold "I love a liar but I hate a cheat."
Comcast says what everyone else is thinking. I actually have never watched the show and have no intention of ever doing so.
More on cheating Japanese housewives. To quote Ari Gold "I love a liar but I hate a cheat."
LL Bean
I actually just ordered something from LL Bean... I guess I know why I am ostracized by my black friends now....
African-American Boycott of L.L. Bean Enters 80th Year
African-American Boycott of L.L. Bean Enters 80th Year
Tuesday, September 25, 2007
The Degeneration of the English Language
Gawker has a slightly interesting post about the degeneration of the English language as it relates to LOLcats. I have been thinking about this topic myself recently, as I saw on some kids TV channels this weekend that they were using "text speak" to spell out a lot of the self-promos. Like they would say "Now: Show 1," "Next: Show 2," "L8r: Show 3." And instead of "after these messages we'll be right back" they did "BRB."
I've read about how some schools have been allowing students to submit papers and essays written in text speak, and this bothers me. It hurts my ears to hear someone say "I ain't never seen it" when they want to say "I did not see it" or "I don't want no more of that" or even "seen" instead of "saw," as in "I seen it earlier." Those all hurt my ears and offend my delicate sensibilities because of their blatant abuse of the English language and proper grammar.
When I interview people for jobs if someone came in and said any one of the things I listed above I would immediately reject them off hand. And my step-son speaks like that. At first I thought it was just a phase but then I realized that that is how his grandparents and great-grandparents speak so why would he speak properly? It embarasses me if we are out in public and he or my wife uses improper grammar.
Yes, I actually sit around and think about this stuff. It reminds me of the controversy in the late 80s about the measures France took to preserve the integrity of its language. At the time it seemed ridiculous and closed-minded but now it seems very prescient. I don't know anything about the use of "text speak" in France but I would wager it is nowhere near what it is in the US.
Hopefully as phones get more advanced and get full keyboards some of the advantages of abbreviating everything will be lost. But by that time the laziness of text speak will probably be irreparably engraved in the minds of a good number of Americans.
They say that due to the obesity epidemic we may, for the first time in history, have a generation with a shorter life-expectancy than its parents. I would say that it appears that our culture is degenerating pretty rapidly as well. People are just plain stupid these days and most of them do not get a decent education. I have some other theories about degeneration, specifically de-evolution of a biological nature, that I don't want to get into as it might be considered somewhat sensitive and offensive.
Bottom line - we are all going to hell in a handbasket.
I've read about how some schools have been allowing students to submit papers and essays written in text speak, and this bothers me. It hurts my ears to hear someone say "I ain't never seen it" when they want to say "I did not see it" or "I don't want no more of that" or even "seen" instead of "saw," as in "I seen it earlier." Those all hurt my ears and offend my delicate sensibilities because of their blatant abuse of the English language and proper grammar.
When I interview people for jobs if someone came in and said any one of the things I listed above I would immediately reject them off hand. And my step-son speaks like that. At first I thought it was just a phase but then I realized that that is how his grandparents and great-grandparents speak so why would he speak properly? It embarasses me if we are out in public and he or my wife uses improper grammar.
Yes, I actually sit around and think about this stuff. It reminds me of the controversy in the late 80s about the measures France took to preserve the integrity of its language. At the time it seemed ridiculous and closed-minded but now it seems very prescient. I don't know anything about the use of "text speak" in France but I would wager it is nowhere near what it is in the US.
Hopefully as phones get more advanced and get full keyboards some of the advantages of abbreviating everything will be lost. But by that time the laziness of text speak will probably be irreparably engraved in the minds of a good number of Americans.
They say that due to the obesity epidemic we may, for the first time in history, have a generation with a shorter life-expectancy than its parents. I would say that it appears that our culture is degenerating pretty rapidly as well. People are just plain stupid these days and most of them do not get a decent education. I have some other theories about degeneration, specifically de-evolution of a biological nature, that I don't want to get into as it might be considered somewhat sensitive and offensive.
Bottom line - we are all going to hell in a handbasket.
Tuesday Morning Round-Up
100 Ice Breakers to avoid (from Radar)
Top Ten Worst 80s Cartoon Adaptations (from Cracked)
Stills from the Simpsons and the movies they are from
Apparently Friendster is still big in China... I didn't even know it was still around. MySpace and Facebook should really be paying royalties to Friendster or whoever did that first.
This is possibly the stupidest idea I have ever heard of. I thought the credit crunch was supposed to hamper the private equity companies to the point where they don't have millions to throw at stupid ideas:
This, on the other hand, seems like a good idea, if Google hadn't bought it. And I also heard that the "phone number for life" was really only a "phone number until they decide to change it on you or the company goes out of business or gets sold." But it's a good idea.
And I've seen this before, and maybe even posted it here, but it is still very funny:
Top Ten Worst 80s Cartoon Adaptations (from Cracked)
Stills from the Simpsons and the movies they are from
Apparently Friendster is still big in China... I didn't even know it was still around. MySpace and Facebook should really be paying royalties to Friendster or whoever did that first.
This is possibly the stupidest idea I have ever heard of. I thought the credit crunch was supposed to hamper the private equity companies to the point where they don't have millions to throw at stupid ideas:
This, on the other hand, seems like a good idea, if Google hadn't bought it. And I also heard that the "phone number for life" was really only a "phone number until they decide to change it on you or the company goes out of business or gets sold." But it's a good idea.
And I've seen this before, and maybe even posted it here, but it is still very funny:
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