I picked up The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup by Noam Wasserman after he spoke about it in the ETL speaker series at Stanford back in November (see my study notes of that week here). With all the regular school reading in parallel it took me 2 months and 2 vacation trips to dig through the material, but coming out on the other side it is a highly recommended read for anyone in the tech startup scene. Doesn’t matter if you’re just contemplating bootstrapping your first company or want to take a step-back look at the impact your term sheet demands as an investor can have on entrepreneurs on the receiving end.
Basically, what Noam has done is to take a whole sequence of inevitable dilemmas every founder has no way of escaping while building their startup, gone back to about 3k companies and 10k people and surveyed the hell out of them to quantify both the triggers as well as the indirect results down the road after they have made their choices on these issues so often just considered a “gut feeling thing”. Should I found a company now? Should I do it alone, with friends or strangers? What happens to my likely CEO tenure time if I take external money? What kind of side effects can different outcomes of horse trading over boards seats practically have? What are the hidden costs (and benefits) of hiring youth over experience, and vice versa?
Looking back at 2008 I discovered that it was a quiet one — travel-wise that is. Mostly I have to thank Etta for her appearance in May and becoming a good excuse for some no-fly-zone right before and paternity leave after, running into the summer.
- Number of business trips: ~15
- Flight legs: ~32 (+ 3 international trains)
- Days away from home: ~67
- London: 41 days (including one almost-a-month with whole family again)
- Luxembourg: 11 days
- San Jose / San Francisco: 7 days
- Prague: 3 days
- Brussels: 2 days
- Paris, Athens, Helsinki: 1 day each (the latter only due to a canceled flight)
All-in-all, I was away 30% less and took almost 50% less flights than the year before. More video calls, logistical efficiency and less carbon footprint…
It was really nice to spend most of vacation time in Estonia, adding just over a week in Italy (first time there, btw) with two more flights. I am a bit sad not to make it over to Asia this year, those trips have always been a delight, especially Tokyo.
Mõned juhuslikud märkmed selleaastaselt ITL visioonikonverentsilt.
- Heido Vitsur: 2000. a tõi iga täiendav välislaenukroon kaasa 2 krooni SKP kasvu. 2007 toodab laenukroon 0.5 krooni SKP-d. Ehk siis laenatud raha tarbitakse kohe ära, mitte ei investeerita.
- Singapuris on huvitavalt kombineeritud teemad: Informatsiooni, Kommunikatsiooni ja Kunstide ministeerium.
- Singapuri 2015. a eesmärk on 90% kodudest broadbandiga varustada… aga 100% kodudest, kus on lapsed. Mõistlik sisend prioritiseerimiseks.
- 2007 Eesti IKT turg on 1.5b EUR, ca 50/50 IT vs Telecom. IT osakaal kasvab.
- 28.9% elanikkonnast kasutab Eestis e-riigi teenuseid. Huvitav, mis see number oleks kui e-tuludeklaratsioon välja arvata?
- IKT kasutus Eesti firmades:
- e-mail on mööda läinud post/telefon/faks kategooriast (vastavalt ca 95% ja 90%). Ehk siis meil on juurde tulnud ettevõtteid, kelle kontoris on internet, aga puuduvad telefonid?
- kõige masendavamad protsendid on kasutusvaldkonnsa “product planning”. 50% kasutab IT-d, 20% plaanib hakata kasutama, 30% ei plaanigi?!
- Jaan Pillesaar: Kui vaadata meie maksusüsteemi, siis Eestis ei ole mõtet tööd teha. Kapitali liigutamine on sisuliselt maksuvaba, aga kui inimene hakkab tööd tegema, siis on maksukoormus ca 80%.
- Alates 2000 aastast on Eesti riigi kulud kasvanud +200% ja SKP +150%
- Idee Inglismaalt – poekäru mille küljes on vöötkoodilugeja. Võtad mingi asja riiulist ja paned korvi, samal ajal seda ära skännides. Kassasse jõudes loeb müüja selle info sealt välja ja maksad kohe, mitte ei passi lindi juures. Samas – Selveri kaheksa aasta taguse e-kaubanduseksperimendi tagasitoomine oleks veel mõnusam.
- GPSid on suuremates riikides on keeranud vaikseid elukeskkondi nässu. Nt vanur kolib väiksesse külla, et rahu ja vaikust nautida ja siis ostavad 200,000 kohalikku endale TomTomi, mis juhatab nad iga päev sealt külast läbi sõitma, kuna see on efektiivseim tee…
Kui ürituse slaidid võrku jõuavad, soovitan lugeda Jaan Pillesaare (ettepanek radikaalselt muuta teabetöötajate maksustamist), Allan Martinsoni (sissejuhatus riskikapitali) ja Kristjan Rebase (Arengufondi IT-seire vahetulemused) omi.
Üldiselt on kümneaastaseks saanud konverents kuidagi väsinud, et mitte öelda lausa morbiidse olemisega. Vaadates suure saali tühjasid rõdusid, tekkis mõte, et sinna oleks võinud tuua nt 6-7 bussitäit abituriente või tudengeid. Oleks ehk nendest visioonijuttudest rohkem kasu kui kitsas IT-inimeste ringis omavahel heietades.
Some while ago an online media outlet ran a poll, asking the readers where do they think Estonian language falls among the languages of this world by “usefulness”. Many Estonian-speakers do tend to think that a million speakers means… nothing. That the language is on the verge of going distinct. About 2/3rds of answers ranked the language to the bottom third of worlds’ 6000 languages.
There was a linguistics forum in April that surfaced some interesting data of the contrary, which I thought are worth sharing… in English as well:
- By the speaker count, Estonian ranks at 274th place out of 6000
- Higher education is available in just 100 languages in the world (including Estonian). 30 in Europe and just 3 out of the hundreds of African languages.
- There are about 200 countries in the world, where state language is the same as majority of population’s mother tongue.
- Estonian ranks among top 30 IT-languages. For example, Microsoft products have been localized to 35 (Skype is available in 28), including Estonian.
- Human to computer speech synthesis exists for 25 languages, Estonian included.
(source: Sirje Kiin at Eesti Ekspress)
So, we’re well alive and kicking in that weird and complicated tongue. Good to know, even when the reality of globalizing world has brought the dire need for becoming an English bilingual to communicate and ultimately succeed. I will keep blogging in both.
Played around with some simple queries in my active Skype chats database, which weighs 215MB in plain text and has data since May 16th 2006. Probably I did a computer migration around then and earlier history (since I started using an early beta of Skype in mid-2003) is buried somewhere in backups.
Found out that I have sent 59709 and received 273715 messages during this time. And respectively 27389 outbound and 140505 inbound messages in the year of 2007. That’s an average of 75 / 385 messages per calendar day. I don’t even want to think if these numbers were my e-mail traffic…
I also found out that a week of vacation has a 5x lowering impact on my Skype communications – 132 messages out /1980 in last 7 days, versus a random weekly sample from a month ago 587 out / 2658 in.
And I also found out that my SQL skills have gone really, really rusty even compared to the mediocre level they used to be at.
Thomas L. Friedman wrote in the Herald Tribune a few years ago a column that acknowledged, and probably injected a lot of self confidence to innovators outside of the usual suspect American hightech hubs. Written from an angle of criticism towards the American high school system, I found his text much more useful read upside down – thinking about how the more remote areas previously known for their cheap labour and mass quantity low tech production are winning share on the global innovation arena. “In a flat world people can now innovate without having to emigrate,” as Friedman put it in rhyme.
Now in one of the recent issues of FastCompany, Richard Florida took a look back and found that the innovation world has not gone flat afterall. Highly recommended read as a whole, but I picked out a few interesting facts for myself:
- Of the roughly 170,000 patents granted in 2003 in the United States–which gets applications for nearly all major inventions worldwide–nearly 80% went to Americans, Japanese, and Germans. The next 10 most innovative countries–the usual suspects in Europe, plus Taiwan, South Korea, Israel, and Canada–produced another 15%. The rest of the world accounted for only 5%, with India and China responsible for just 0.4%.
- Indian and Chinese entrepreneurs founded or cofounded roughly 30% of all Silicon Valley startups in the late 1990s, generating $20 billion in annual revenue and about 70,000 jobs.
- There are about 150 million (!) people in highly mobile, global creative class who migrate freely among the world’s leading cities–places such as London, New York, Paris, Tokyo, Hong Kong, Singapore, Chicago, Los Angeles, and San Francisco
What Friedman originally called for as producing a comprehensive U.S. response – encompassing immigration, intellectual property law and educational policy – is more valid than ever in this situation… but maybe even more so for the “receding valleys between spikes” as described by Florida. Umm… like Estonia?
Small and medium businesses form a dominant part of any economy. Countries, governments – in some more progressive corners in the world, whole societies – work hard to create fertile environments where new startup companies could spawn from. Just a tiny percentage of them will become the next [insert your favourite global brand here]. But we couldn’t live without even those who don’t. As a random example, SME’s give over 50% of the jobs and turnover of the UK economy – and the UK is supposed to be the most “large corporate” one in Europe.
Given this, it is no wonder that you hear the “we need more startups!” rally cry, especially in innovative and more value generating fields promising a brighter future. Depending who you talk to, there is always a different benchmark to look up to. Estonians feel that we should get to Finnish level. Finns feel that they don’t have as many startups as in Sweden or Singapore. Anywhere in Europe you can’t escape the discussion on when and how we get to where Silicon Valley is without startup culture and volumes.
And now a scary though from Silicon Alley, in the context of the MSFT-YHOO acquisition:
For $44 billion, Microsoft could buy every Silicon Valley and Silicon Alley venture-backed start-up in existence. That includes Facebook at $15 billion. It includes Slide, RockYou, and every other elemental company. It would be a Moe Green kind of scene like at the end of the Godfather when Michael Corleone takes out all the heads of the five families. It would turn Microsoft’s Internet business around overnight. It would be the ultimate coup.
Just $44 billion (well, I know it’s no pocket change, but remember the times when AOL paid about $182 billion for Time Warner? and US dollar has become a lot cheaper as well since then.) and for a second there are no more startups in the Valley? Nor the Alley. That is scary.
At the same time, the venture capital market looking to invest in those startups is better financed than ever. VC investments reached $40 billion globally in 2007 (why does this number look so familiar?), high since 2001. And the result? Sellers market, of course.
Paul Graham‘s essay The Venture Capital Squeeze from 2005 is a must read now. To understand why having rich employees is a benefit, how post-Enron SOX rules are suffocating the IPO market and how VC industry has gone head to head with corporate acquisitions.
Kuna [eelmise aasta postitus sellelt ürituselt](http://sten.tamkivi.com/2007/02/paar_paeva_eesti_majanduspolii.html) on üks selle blogi läbi aegade loetumaid, jagan ka seekord oma märkmeid [Eest Tööandjate Keskliidu](http://www.ettk.ee/) aastakonverentsilt [Tuulelohe lend 2008](http://www.ettk.ee/et/koolitus/tuulelohelend2008/programm2008). Kui eelmisel aastal oli üritus pühendatud ETTK, siis seekord Vabariigi enda 90ndale juubelile.
Alltoodud värvikamad arvamused ja huvitavad faktid eri esinejatelt on toodud toimetamata ja analüüsimata. Soovi korral võite viimast teha kommentaarides.
On Monday I was in Helsinki, speaking at a seminar organized by Tekes, Finnish funding agency for tech & innovation. They are launching a new generation of integrated startup financing schemes – which I do not know much about, as my Finnish is below par to fully understand their published materials. But it was a nice half-day event to provide context around their announcements.
The guest speakers included Dr Orna Berry who shared the Israeli innovation financing experiences, Quatar Capital’s Mikko Suonelahti’s talk on venture capital markets. In between them, I was asked to share the story of Skype as a recent startup.
I would like to thank all of you 8332 unique visitors (yes, you too Teller) coming from 106 countries for finding this blog in 2007 and for reading through those 29372 pages.
The fact that over half of you have come back more than once is great. The 239 of you who have over 200 visits per year under your belt – really, I wish I managed to post that often… Make your life easier and subscribe to the feed, like 171 loyal readers have already done.
A year ago there were zero hits and no feeds here. Your time spent means a lot to me. Especially as I know you are not numbers, but real people.
Have a great 2008 and talk to you soon!