2010 budget

below is a letter from me to one of our CEOs re 2010 budget. but i think it is good general practice.

1. SLOW

go slow until your figure things out, then go fast. we are in a learning and discovery phase, the market is in motion. let’s learn before we spend big.

marketing budget at this point in time comes to mind. let’s set ROI goals for $ in marketing and leads. let’s take a phased approach. do something. analyze, learn, do again. we will win by how many cycles we have, not how hard we try in each cycle

2. STRETCH money over time

this round should last for at least 10 quarters, not 7.

if it last for only 7, you need to fundraise in 5 quarters. perhaps 6. to have an up round, say at 2x valuation,  you would need to get revenues up 8x in less than 2 years. hard to do.

3. EXPOSE your assumptions

to start communicating about the budget, start communicating about the assumptions.

there are no more than 10 main assumption that drive all else. can we start communicating about them?

droption

an option you do not intend to use, but you still see value in getting it, rather than dropping it.

Q: “want to go to a movie Friday night?”

A: “i usually stay home and watch tv, but lets discuss Friday eve”

as human beings, we know it ain’t going to happen, but we still want to obtain the droption, not realizing its value may be close to zero, and usually negative

VCs are a prime example of people obtaining and using droptions. especially not getting to back to a company with a ‘no’ early. they think that by waiting a week to a month something good will happen

tactually

as part of the new words series:

tactually

tactics to change reality.

e.g today is the first day of the rest of my life.

final 3 ? השרדות עונה 3, הגמר: ליעד, טלכו ושי

our family watches survival/survivor “השרדות” avidly.

realities are good for all ages and all levels of interest.

my 4 year old, Tal, is facinated if she knows/recoginizes the names of contenstens and something about them or their character.

what i like, is the family discussion about the characters and the plots contirved in the social dynamics.

 

this season of the Israeli Survivor is wonderful. the characters are fun, especially after Ziv is out.

and there is plenty of room for surprises as there is no Trinity or Iron Axis.

therefore,  IMNSHO, in my (not so humble) opinion, now is a great time to starting a contest for guesses about who the final 3 contestants will be.

if you agree that now is a great time to make the guess, please read on.

i doubt that i will be able to guess, but it would be fun to try.

my initial Key is that a strong threesome can make it to the final.

why?

a bit of backwards induction.

the final 3 can be an alliance of 3 out of the final 5.

the final 5 can be a dominant alliance of 8. (not 9 because of veto)

so, a strong 3 (with 2 others) can dominate a tribal counsel of 8 even without the powerful Veto power.

since that 3 with 2 others can make it to the final 5, IF (and this is a big IF), they keep their alliance they are in the final.

note there is some game theory involved. human emotions. psychological scratches. behavioralism. this is fun (and very hard to predict).

note that at this point, the fibonacci series is highly significant, and 2,3,5,8 are dominant numbers to some degree on how alliances can unfold.

this final 3, especially in order to survive the final 5,  is composed of  a strategist,  a capable person (usually wins a hasinot/immunity – not just for physical abilities),  and a cute person who tags along (this rule is an attempt to find order in chous and i do not think it will hold water over time).

dan mano, naama, noam,

arik, nata-li (atam meshaker, meshaker), and mirit.

talco, shai, and liad?

i have a lot of doubt about this, but think it would be fun to discuss. if there are enough comments, i will try and introduce other theories

 

 

 

googol it

The name “Google” is an accidental misspelling of the word googol which was invented by a 9 year old boy, Milton Sirotta (who does not have a wikipedia entry – so much for words, coining them,  and fame).

A googol is the large number 10¹⁰⁰, that is, the digit 1 followed by one hundred zeros.

Columbia University Mathematics Professor,Edward Kasner is perhaps best remembered today for introducing the term “googol” in or about 1920^[2]. In order to pique the interest of children, Kasner sought a name for a very large number: one followed by a hundred zeros.

On a walk in the New Jersey Palisades with his nephews, Milton and Edwin Sirotta, Kasner asked for their ideas. Nine-year-old Milton suggested “googol.”

Kasner popularized the concept in his book Mathematics and the Imagination (1940). A googol is of the same order of magnitude as the factorial of 70 (70! being approximately 1.198 googol, or 10 to the power 100.0784). In binary it would take up 333 bits. A googol has no particular significance in mathematics, but is useful when comparing with other very large quantities such as the number of subatomic particles in the visible universe or the number of possible chess games. Edward Kasner created it to illustrate the difference between an unimaginably large number and infinity, and in this role it is sometimes used in teaching mathematics.

News it!

Lately i am fascinated by words.

it is remarkable to me that we actually understand each other.

usually, when we talk, we understand each other quite well.

despite the fact that our brains and souls are very individual.

my appeal to you is let’s invent new words.

comments and suggestions are highly welcome. perhaps we can make some words really popular?

if i understand correctly, ‘quiz’ was invented in the University of Chicago in the 60s.

Wikipedia adds this note:

There is a well-known myth about the word “quiz”, which says that in 1791 a Dublin theater owner named James Daly made a bet that he could introduce a word into the language within twenty-four hours. He then went out and hired a group of street urchins to write the word “quiz”, which was a nonsense word, on walls around the city of Dublin. Within a day, the word was common currency and had acquired a meaning (since no one knew what it meant, everyone thought it was some sort of test) and Daly had some extra cash in his pocket. However, there is no evidence to support the story, and the term was already in use before the alleged bet in 1791.^[1]

my new word for this post is:

‘News it’.

what does it mean? ‘

news it! – something you say to someone who just bought a new item. ‘תתחדש’ in hebrew

perhaps the salespeople at Banana Republic will great you on the way out with ‘News it’,  instead of ‘have a nice day’ or ‘thanks for shopping with us’

a note from an entrepreneur to VC

below is a one-line note i got one friday afternoon from a friendly entrepreneur who wanted advice over the weekend:

“Is it hard when people love you for your money ?”

about masks לא כל יום פורים

from wikipedia

A mask is an article normally worn on the face, typically for protection, concealment, performance, or amusement.

This stone mask from the pre-ceramic neolithic period dates to 7000 BCE and is probably the oldest mask in the world (Musée de la bible et Terre Sainte )

i have written previously what not to do in a VC presentation

i would like now to flip the coin and tell you what to do.

to perform. to succeed, to get good money. so your idea can spring into life.

here is my first rule, or piece of advice

before your start your performance, your presentation with a VC, decide

are you putting on a mask, or taking off a mask?

 

 

what is duty free about duty-free?

what is duty free about duty-free?

The fact that I do not have the duty to buy?
It is expensive, hostile, and comes in ’special’ packages so that it is more difficult to compare to earthly products
Almost any item is less expensive on-line, and you do not need to carry the damn things with you

Better yet, rather than buying duty free, support a local merchant

green hotels

Ever got one of those ‘consider the environment’ cards while staying at an hotel? usually it is on your hotel bed or next to the sink in the hotel bath room asking you to consider mother earth?
And unless you throw the towels in the toilet or write a note on the linen they will not be changed?

Ever saw a hotel:

• Offer you a $1per day discount for accepting a different standard than contracted, reducing their costs, or making earth a better place?
• Offer you to watch a free movie (minimal variable costs) instead?
• Offer to make a  donation to a green charity for the costs saved?