Thursday, June 22, 2006
Wednesday, June 21, 2006
ZT: How to build a bulletproof startup
(Business 2.0 Magazine) - It's the spring of 2006, and the sweet scent of entrepreneurship is in the air. Growing numbers of Americans are pursuing their startup dreams. According to the National Venture Capital Association, seed-level VC funding nearly doubled in 2005. This year, based on current trends, it could double again. In Delaware, the country's incorporation capital, new business formation was up 19 percent last year, the highest one-year growth rate on record.
In other words, there's never been a better time to start your own company. New technologies are creating new business opportunities on the Internet, on mobile phones, in consumer products, and in information services. At the same time, many of these technologies have radically reduced the costs associated with launching a new venture. In the late 1990s, a typical VC-funded startup needed roughly $10 million to amass the infrastructure and staff required to carry the company from its first business plan to its first product launch. Today that cost has been reduced to just $4 million--and in many cases way, way less. The barriers to entry have never been lower.
While birthing a company is easier, succeeding is as difficult as ever. The general rule in the investment community is that only about a third of all startups ever turn a profit. Another third limp along at a break-even level, and the rest end in failure. Top among the reasons young companies fail are problems such as incorrect market focus and misguided executive leadership. With that in mind, we wanted you to have all the benefit of hard-earned experience without having to actually endure the pain of making your own mistakes. We spoke to dozens of experts--seasoned entrepreneurs, early-stage investors, venture capitalists, and first-time CEOs--to understand what they've learned about the art of getting a new company off the ground. Then we set out to create a set of blueprints describing just how to do it.
There are no guarantees in the world of entrepreneurship. But there is a right way to go about it, and we've mapped the process out for you here. As for the rest--well, that's entirely up to you. You can thank us later.
$$$ Required: $15K to $25K
Your role as a spectator who merely watches as other adventurous souls launch their own startups is about to end. The decisions you make at this early stage of the game will do much to shape the long-term destiny of your venture. Most of all, don't procrastinate. If you don't act on your burst of business insight, someone else surely will.
Tools you'll need:
Whiteboard: Treat it like an incubator for your best thinking. Write. Revise. Erase. Repeat.
Mobile phone: The one you have is fine, but make sure you've signed up for 1,000 prepaid minutes.
New credit card: American Express's Platinum Business offers zero percent interest for six months.
Accounting software: Nothing fancy for now. QuickBooks Simple Start does the trick for $50.
Step 1. Stress-Test Your Big Idea
Objective: Debug and perfect your business brainstorm.
You have a brilliant idea. It's shrewd. It's timely. You think about it so much it keeps you up at night. It might even make you rich. There's just one thing left to do: Make sure it really has legs. The only way to do that is by bouncing your idea off as many people as possible. Friends and family probably can't provide the critical insight you need.
Track down at least a dozen people with expertise in the market you intend to enter. You want candor and honesty, not diplomacy. Understanding why your idea is flawed is as useful as knowing that it's pure genius. Many will likely express support, but the real question is this: Would they pay money for your proposed product? Use each conversation to sharpen how you explain what your company will sell--if you can't describe the product clearly and concisely, how can you possibly sell it? Finally, before saying goodbye, always get the name of another person with whom you can discuss your idea.
Words of wisdom:
"People pooh-poohed our idea for more than a year. We took that to mean either we weren't explaining it well or we were dead wrong. Yet the more we studied the problem, the more clear it became that we weren't wrong. What you forget--because you've been living and breathing this idea for so long--is that others may not see what's obvious to you. You need to connect the dots for them. We did that by finding a metaphor that explained what our company would do." -- Gibu Thomas, CEO and co-founder of personal media synchronization startup Sharpcast
Step 2. Build Your Founding Team
Objective: Join forces with other execs to navigate the challenges ahead.
Starting a company isn't just a full-time job; in many cases, it's three full-time jobs. The ideal founding team is a triumvirate that includes an ace technologist, a big strategic thinker, and a dealmaker who focuses on sales and marketing. Although everyone must have relevant industry experience, a good Rolodex, and the willingness to wear many hats, trust and good judgment are the most essential ingredients.
Expectations should be clearly laid out, and the founders' financial interests should be mutually aligned. "You need to feel confident that your co-founder will fight for a deal as hard as you would," says Dan Gould, co-founder of online news aggregator Newroo. It's tempting to partner with good friends, but that's not necessarily a pathway to success. In fact, it's dangerous--under the stress of running a business, your friendship will surely be tested and quite possibly destroyed.
Tip: Five Qualities to Look for in a Co-Founder
1. Loyalty to the business idea.
2. Honesty, including the ability to acknowledge errors and mistakes.
3. Versatility to focus on more than one aspect of the company.
4. Connections and the ability to attract talent to the team.
5. Flexibility in the face of changing circumstances.
Step 3. Draft a Business Plan
Objective: Map out the market and explain how you fit in it.
A business plan is neither a core asset nor a sacred text. It's just a tool to help focus your ideas and a conceptual summary to share with potential investors, advisers, and employees. The business plan sells your vision for the company: why it's viable, why it's better than anything else out there, and why your team has what it takes to make it happen. It should also detail key factors that relate to the company--target markets, goals, product attributes, revenue projections, competitive differentiators, and founders' resumes.
Visit the Small Business Administration's website (www.sba.gov) or Bplans.com for an overview of the structure and components of a typical business plan, as well as links to dozens of sample plans. But the most important thing is a well-honed executive summary that's no more than three pages long. Grab the reader's attention by starting with a simple two-sentence description of your company and what it will do. (Rest assured, you'll use those two sentences often.) And no matter what, don't fall in love with your business plan--it'll change many times in the months ahead.
Things to avoid: Four common business plan mistakes
1. Asking potential investors to sign a nondisclosure agreement. It's a rookie move. Besides, they won't sign anyway.
2. Spending too much time describing the market. Instead, provide lots of detail on your strategy to dominate it.
3. Making wildly optimistic projections and assumptions. Nothing will get the door slammed in your face faster. Save the hockey sticks for the NHL.
4. Exaggerating your experience. They'll eventually learn the truth, and when they do, your credibility will be compromised. Permanently.
Step 4. Play the Name Game
Objective: Give your startup a handle that works.
What's in a name? Plenty. It will make a first impression, carry brand equity, and provide a foundation for every marketing effort you'll ever launch. Naming gurus like David Placek of Lexicon Branding argue that startups should look for names that are either simple and easy to understand (like Salesforce.com) or quirky and memorable (like Google).
Some names combine the two: Narendra Rocherolle settled on 30Boxes, an easy-to-remember name for his calendaring startup that also alludes to a monthly datebook. But creativity is only part of the naming challenge; there are legal concerns as well. Before you become attached to any name, check the U.S. government's trademark website (www.uspto.gov) to make sure no company serving an overlapping market has staked out a similar moniker. You don't need a lawyer to file a trademark of your own, but the $500 to $700 you'll spend for a professional trademark search--from a company like Thomson CompuMark--is a smart investment before you sign papers that make your name official.
Tip: Become master of your domain.
About 30 million new dotcom domain names are registered each month. Which means that coming up with a name for your company and matching it to an available Internet domain is very difficult. Check Instantdomainsearch.com to see what's available. If your preferred domain is in use, you have three choices:
1. Adapt. In the Google age, it's not quite as important to get a URL that exactly matches your company name. Come up with a relevant adaptation, like acmewidget.com, instead of just acme.com. The Nameboy.com website generates lists of available permutations.
2. Buy from a broker. Some names are owned by squatters who sell online real estate through brokerage services run by popular domain-name registrars. Prices range from $10 to the tens of thousands. Discounters like GoDaddy.com and 1and1.com offer brokerage services, as do Networks Solutions and Register.com.
3. Make an offer. If your desired name is already in use by an individual, politely inquire about buying it. Tony Conrad, co-founder of search company Sphere, spent months tracking down the owner of Sphere.com, which he then bought in exchange for cash and equity. "The equity was the important part, because it allowed [the former owner] to stay connected to the name," Conrad says. If cash is your only currency, don't overpay: $25,000 should be your absolute top end.
Step 5. Incorporate Thyself
Objective: Adopt the corporate form that's best for your growth plans.
Your startup may consist of just a few warm bodies crammed into a living room, but you still need to establish it as a legal entity. A formal corporate structure solidifies the standing of the founders and provides potential investors with the assurances they need to participate in the company's financial evolution. Incorporation also provides tax benefits and all-important liability protection. Hire an experienced lawyer who specializes in setting up startups--many will even defer payment until the first round of financing. If your lawyer likes your business plan, he or she may also become a crucial source for later introductions.
The fine print: What's Right for You Inc.
There are three main types of incorporation. Here's how to figure out which is most appropriate.
S Corportaion: Fine if you don't plan to raise money from outside angels or VCs. Only one class of stock is allowed. Taxed at a lower rate than larger corporations, but enjoys the same liability benefits.
Limited Liability Company: Functions like an S-corp, but with no outside shareholders. A good choice for professional services firms that don't need to solicit investment. Can be converted to a C-corp later.
C Corporation: Preferred by most medium-size to large companies. Allows for multiple classes of stock (a common requirement for angel and VC investors). Taxation rates for C-corps are higher than for S-corps.
$$$ Required: $100K to $500K
A prototype is where the rubber starts to hit the road: It's the first physical embodiment of your business idea, and a tool you'll use to attract the resources you need to grow. Don't confuse a prototype with the final product--a distracting and potentially fatal mistake. Pretty looks aren't important. A good prototype is just a working demonstration that showcases what your product will do. Show your finished prototype to a dozen or so potential customers and investors who can validate your idea, define key features, and guide your product development.
Tools you'll need:
Spec-document software: Omni Outliner and Microsoft Visio simplify writing product definitions.
Development server: Lease one for $300 a month from a Web hosting company like ServerBeach.
Collaberaton tools: Basecamp is a cheap Web-based application for sharing files and documents.
VOIP Calling service: Skype is a free application that lets you make long-distance calls from your PC.
Step 1. Stake Out Intellectual Property
Objective: Avoid infringing on others patents and secure some of your own.
Patents and patent law are a major headache for tech and Web-based startups, so you'll want legal guidance. Gordon Davidson, a partner with Fenwick & West in Mountain View, Calif., warns that the most important thing is to avoid falling afoul of a "blocking patent"--one that defies any engineering work-arounds. Just ask Research in Motion, maker of the BlackBerry, how onerous that can be.
As you start to share your ideas with outsiders, you also want to protect your intellectual property. For that, consider filing for a provisional patent; it doesn't require the formal claims of a full patent but allows you to lay claim to an idea as "patent pending." Submitting a provisional patent application costs about $200 if you do it yourself, while a full patent application costs $12,000 to $15,000, including legal fees.
The fine print: Patent Law 101
The U.S. Patent and Trademark Office will grant a patent to any new and useful process, machine, manufacture, composition of matter, or new and useful improvement thereof. Confused? Just remember there are two main types of patents:
Technology patents describe and protect how a particular device, mechanism, or software program works--the classic "better mousetrap."
Business process patents describe and protect a mechanism for making money and how it interacts with underlying technologies. Amazon.com holds such a patent for its one-click shopping feature.
Step 2. Create an Advisory Board
Objective: Formalize the network of people who can help you most.
Your advisory board is a group of six to 12 people who will provide expertise in the industry you hope to tackle, useful connections, potential funding, or (ideally) all three. At this early stage, it makes sense to load the board with people who can provide technical insight about your product, but you'll also want a few startup veterans who can answer questions about running a young company. In exchange for equity in the company--typically 0.1 to 1 percent--you should expect at least four hours a month of their time. Avoid big group meetings; they're inefficient. Instead, bring in specific advisers for task-oriented discussions as needed.
Words of wisdom:
"We wouldn't be here today without the advisers we picked specifically for their expertise in our technology. They led me to my co-founder and CTO and were able to help on technical issues. It doesn't work to bring on general, name-brand technology people as advisers. They end up frustrated that they don't have much to contribute, and though you think they'll impress potential investors, they don't." -- MUNJAL SHAH, CEO and co-founder of photo search startup Riya
Step 3. Build Your Prototype
Objective: Take your product out for its first test-drive.
Prototyping is an iterative process. Start simple, with a basic mock-up, artist's rendering, or Photoshop screen shots. Show these to a few potential customers and use their feedback to define the specifications of your working prototype. Hire independent contractors if you need specialized expertise to build or code the thing, but it's best to stay local. You'll be gathering input on a daily basis and making revisions almost as often, so you'll want your contractors nearby--in town, if not under your roof. Keep them close, but be paranoid. Your attorney should draw up confidentiality agreements and noncompete clauses; make all contractors sign them.
Tip: Finding Contract Talent
Design: Scour local schools. The American Institute of Graphic Arts (www.aiga.org) and Creative Hotlist (www.creativehotlist.com) list designers looking for work.
Hardware: If you need help with the electronic, mechanical, or physical configuration of your prototype, try the directory at Coroflot (www.coroflot.com) to find freelance professionals.
Software: You can post jobs to Craigslist, Dice.com, Monster.com, and SimplyHired.com. Marketplaces like Elance, IPswap, and RentACoder match talent with projects.
Parts List
Prototyping Essentials
Design and photo editing: GIMP is an excellent and free alternative to expensive programs like Adobe Photoshop.
Product design: QCad is an open-source, 2-D computer-aided design package that sells site licenses for $260.
Collaboraton software: Subversion is an open-source tool for tracking changes in files or code.
Searching for angels: What to look for in early-stage investors.
The right time to raise the first round of money varies from startup to startup. Some companies--mostly software or Web-based ventures--need little cash to get off the ground. But if you're building a physical product, you'll be looking for funding earlier in the game. That's where angel investors come in: Unlike venture capitalists, who usually wait until a company has a working product, they specialize in early-stage startups.
The main thing to understand is that not all money is the same. Friends and family are a natural place to start, but keep their investments modest to avoid throwing your relationships off balance. Never take investments from anyone who is not a so-called accredited investor--an individual with a net worth of at least $1 million. Remember, it's not just money you want; you also want brainpower, connections, and experience. "You always want at least one heavy hitter in an angel round," says veteran Silicon Valley angel Jeff Clavier. Instead of treating their investment as a loan, some angels may expect a stake in your company, so set aside 10 to 15 percent of your equity to allocate among early-stage investors. Get used to giving away ownership: In a venture-funded startup, the original founders may ultimately retain as little as 5 to 10 percent of the original equity.
$$$ Required: $500K to $1M
If a prototype is the first manifestation of your big idea, the beta transforms it into a product you might actually sell. The focus here is on usability and design. Your task is to create something so simple, so powerful, and so effective that people beg to become beta testers. As you amass comments and feedback, look for opportunities to simplify production and keep your cost structure lean--that's much harder to do after the product is released.
Tools you'll need:
Entreprise-level e-mail: Providers like the Message Center offer hosted exchange service for about $10 a month per user.
Phone service: A hosted system from M5 Networks costs about $50 a month per extension for unlimited calling.
T-1 Broadband: $500 per month buys you heavy-duty service from a provider such as AT&T, Covad, or Verizon Business.
Feedback collection: SurveyMonkey is a handy tool for setting up online questionnaires and compiling user comments. Prices start at $20 per month.
Step 1. Start Staffing Up
Objective: Build the core team that will carry you into the future.
You're ready to make some permanent (or semipermanent) hires. For most startups, the bulk of your hiring here will be technical--people who can get your product to beta. Although it's shrewd to source talent globally, your core product-development team should be local. Enthusiasm is a precious commodity; look for people who are excited about your planned product. Hire the best you can afford, but as a general rule, Silicon Valley startups assume a burn-rate cost of $11,000 per person per month.
Tips:
Better Living Across Time Zones
Contract talent is a global commodity, but location matters if you want to avoid middle-of-the-night teleconferences. On the East Coast, that means hiring in Eastern Europe, where the end of their workday corresponds to the middle of yours. West Coast companies should opt for China and India, where your day ends as theirs is getting started.
Where to Find Workers
Contracting: Part-timers can help get a company started, but director-level staff should be permanent hires. Always visit new overseas contractors to launch the relationship. Nasscom.org provides listings of India's top outsourcing shops. Russoft.org does the same for Eastern Europe.
Recruiting: Job boards can be useful, but old-fashioned networking often yields better results. When you interview, go with your gut: If the potential hire doesn't feel right, it probably isn't.
Poaching: Snatching workers away from rivals is ideal for adding sales staff or senior-level talent. You'll need to offer better compensation than they have now, but the most effective lure is the opportunity for them to put their stamp on an all-new venture.
Step 2. Assemble Your Back Office
Objective: Let pros handle the admin so you can focus on the rest.
Accounting, payroll, and benefits administration aren't glamorous, but they're important parts of maximizing limited resources and keeping staff motivated. Early on, many startups tap one of the founders to keep the books using software like QuickBooks. That's fine when you have fewer than a dozen employees, but as you grow, a part-time bookkeeper or administrative assistant can help. Call in professionals for the heavy lifting, in the form of outsourced payroll and benefits administration services. Staffing is the opposite: In a small company, each personality impacts the team, so avoid using outside recruiters and headhunters.
Parts list: Who's Who in administrative outsourcing
Paycycle automates payroll processing and tax reporting. Best for smaller companies.
Paycheck works with small to midsize firms to manage payroll and tax compliance.
Ceridian provides services ranging from payroll to benefits administration.
Trinet provides health-plan and benefits services to larger firms. May be too expensive for early-stage companies.
Step 3. Launch Your Beta Test
Objective: Solicit the comments you need to perfect the product.
Beta testing used to be a drawn-out ordeal, but for software, Web services, and online media companies, "agile development" has redefined the rules by emphasizing the release of fully functional products, asking end users for input, and addressing suggestions quickly to iron out bugs or add features. The lessons of agile development apply to other kinds of startups as well. Physical objects are obviously harder to alter, but the important thing is to solicit large amounts of user feedback (often by e-mail), respond to each comment, and incorporate changes quickly. Keep in mind that the factors that distinguish a successful product from a dud aren't always obvious. Guidance comes from highly granular research that measures the effectiveness of individual attributes and features.
Words of wisdom:
"Test everything with real people--it's unbelievable how helpful this is. Go find civilians, real people who use [products like yours] because they have to and not because they love to. Find them in Starbucks or at the library or in a college computer lab. Give them $20 for 20 minutes, and you'll be paid back a hundred times over." -- "Entrepreneurial proverb" from MARC HEDLUND, entrepreneur-in-residence at O'Reilly Media. (For more of Hedlund's proverbs, visit radar.oreilly.com/archives/2006/03/entrepreneurial_proverbs.html.)
Step 4. Revisit the Business Plan
Objective: Translate all that you've learned into a more realistic blueprint.
The product your company was created to sell may not be the thing you later unveil in the marketplace. "You're going to change your business three times by the time you're ready to launch," says angel investor Jeff Clavier. "Get used to it." You may be focused on the wrong market, or even the wrong product. Listen carefully, keep an open mind, and revise your projections and analysis accordingly. The assumption these days is that software and Web companies should break even after $20 million in investment; a hardware or consumer product company should do so with $30 million.
Case study: Flickr's New Image
Ludicorp, the original parent company of online photo site Flickr, began as a startup developing a massively multiplayer game called the Game Neverending. As part of the initial software development, the company developed a tool that allowed people to share photos and chat about them. As more and more of the internal team and their friends began to use the tool, it became clear that providing technology to share photos in a unique way was the real opportunity--a shift that led to the creation of the Flickr website and an all-new business model. The Game Neverending was never launched, but Flickr was acquired by Yahoo in 2005 for an estimated $30 million.
What a VC wants to see in you: How to woo those fussy venture capitalists.
Most venture capitalists will tell you that they invest in people, not business plans. They like experienced entrepreneurs they've worked with before. With luck, you've got one of those people on your team, preferably as CEO. But if you're not a veteran and can't find one, don't fret. A common misstep is to pitch the wrong partner at a VC firm--that will get your business plan nixed immediately. Find the partner whose expertise aligns with your business and send that person your well-honed executive summary. (Save the full-blown plan for later.) If you get a meeting, highlight your experience and what differentiates your startup from others, but keep your ego in check. In such a close-knit business relationship, VCs much prefer to work with people they get along with easily.
In an early-stage round, VCs will want 40 percent of the company in return for their investment. VC term sheets are notoriously demanding, but the place where entrepreneurs can suffer most is in the liquidation preferences. In essence, liquidation preferences determine how money gets divvied up if your company is sold. Your VCs are entitled to protect their downside, of course, but not to the exclusion of common stockholders--management and employees--who also want their equity to be worth something. Proceed with caution.
$$$ Required: $1M to $3M
The testing is done, the product has been refined, and it's almost ready for release. Now you need to find paying customers, which means it's time to reassess your staffing needs. A rule of thumb is that a company should have about 20 employees at the time of launch, with roughly 60 percent of its headcount devoted to product development and engineering and the rest focusing on management, sales, and marketing. Ideally, this is just the first of many launches to come. Try to nurture the momentum your team will need to think beyond the excitement of the initial release.
Tools you'll need:
In-house networking: Make it your own. You'll need networked storage, commodity servers, and a place to put it all.
E-mail/collaboration software: Zimbra is more affordable than Microsoft Exchange.
A PBX phone system: Asterisk PBX is a free telephone exchange that can be installed on any cheap server.
Business process software: NetSuite and Salesforce.com offer monthly subscriptions for customer-relationship management tools.
Step 1. Build a New Board of Directors
Objective: Expand your network and create the perfect brain trust.
You have new investors, a broader network of contacts, and a slew of enthusiastic backers. Put the best of them together to create a formal board of directors. Your board will likely include at least one representative from your funders. Angel investors may not demand a seat on the board, but most VCs insist on it. The rest of your board should consist of people who understand your business, have practical operating experience, and can leverage their relationships to open doors with potential customers. Cultivate a range of expertise on your board, spanning finance, technology, marketing, management, and merchandising. The excitement of being involved in a red-hot startup is usually the main incentive for prospective board members. Equity is secondary, but here's a general guideline: Board members should receive the same equity package as your director-level employees.
Words of wisdom:
"The people on my board are people I would love to hire but could never afford. They sit on our board because they're excited about our company and want to have a real impact." -- BRAD OBERWAGER, CEO and founder of startup juice and produce company Sundia, who just landed outgoing Sunkist CEO Jeff Gargiulo to serve on the board of his year-old company
Step 2. Develop the Sales and Marketing Plan
Objective: Establish a team to implement a targeted strategy.
As you get ready to come to market, your staffing priorities will shift from the technical team that built the product to the marketing and sales team that will sell it. Your VP for sales and marketing should need only one or two salespeople to start pounding on customers' doors. It's great if they can close a few early deals, but the initial emphasis should be to assess how potential customers respond to your sales pitch. Once they find the pitch that works, institutionalize it throughout your company. Marketing efforts should have a specific goal that supports your company's strategic objectives. Make sure all your sales and marketing initiatives are precisely targeted to achieve them.
Case study: Focus! Focus! Focus!
When Krugle launched at the Demo conference in February, it became one of the great successes of the semiannual startup dog-and-pony show--not so much for what happened at the show, but for what happened afterward. Krugle is a search company that helps programmers find open-source software code. Most startups at Demo don't have a marketing strategy for the event, beyond just showing up. But the Krugle team had specific goals: Position itself as the most formidable player in the market, attract beta testers, and secure additional investment. With its VCs in tow, Krugle came to the show, trumpeted $1.2 million in funding, and wowed everyone with its polished demo. The result? The company signed up more than 35,000 beta testers, landed another $5 million in funding, and is now recognized as the market leader.
Step 3. Open an Office
Objective: Bring everyone under one roof as cheaply as possible.
Although seasoned entrepreneurs recommend toiling in your proverbial garage as long as possible, there comes a time when working remotely begins to take a toll on productivity--typically when your company has more than 10 full-time employees. In theory, opening an office should be cause for celebration: It's an opportunity to hang your shingle over an actual front door. In practice, it's perilous: Many young companies go belly-up after locking themselves into expensive real estate deals.
Treat your first office as a temporary expedient. Figure out the minimum total square footage you need today, and how much you might need in the next 12 months. (Assume 80 to 100 square feet of floor space per worker.) Executive suites aren't prestigious, but the leases are flexible, and most come with high-speed Internet connections, phone systems, printers, and copiers. (Searchofficespace.com is a good one-stop resource.) Another option is to share space with another startup or sublease space from a more well-established company--moves that can reduce leasing costs by as much as 50 percent.
Things to avoid:
The Four Deadly Sins of Office Real Estate
1. Overpayment. Rent should be no more than 4 to 6 percent of total operating costs.
2. Overimprovement. Resist the temptation to renovate an existing space or splurge on furniture and fixtures.
3. Overcommitment. Assume that your first office is temporary. Try to avoid signing a lease for longer than 12 months.
4. Overoptimism. Plan conservatively. Short-term overcrowding is less troublesome than paying for unused space.
Step 4. Hit the Market
Objective: Stop fiddling and start selling!
There are two ways to bring a new product into the world. With the quiet approach, a price tag is attached and beta customers transition into paying customers. That's great if you have a clear notion of who your customers are and your sales team has a comprehensive list of them. More likely, however, you need to attract a little attention. Industry trade shows are a common way to introduce yourself, but the best reason to launch at a show has nothing to do with making a grand entrance: It's the hard deadline a trade show creates. A public launch imposes a drop-dead completion timeline for everything your team is working on, and that counteracts the impulse to keep tinkering. Set specific but realistic publicity goals: a short list of journalists to reach, the number of blog mentions you want, a target for website hits and registrations. Treat early customers like VIPs. (Each early adopter is typically in a position to shape the buying behavior of 10 prospective customers.) Then pause for a moment to appreciate all that you've accomplished. It's probably too soon to know what happens next, but you've successfully reached the end of the beginning. Good luck!
Tip: Building Buzz on the Cheap
No money for an elaborate marketing campaign? Here are three relatively inexpensive ways to jump-start sales.
Give it away. If you're selling a physical product or fee-based service, compile a list of the people you'd most like to have as customers. Then give them the product for free. That's how Brondell built buzz for the launch of its Japanese-style electronic toilet seats. Everyone on a marketing agency's list of "the 100 most influential people in Silicon Valley" received one of Brondell's seats for free, and the product is now sold in Home Depot and Bed Bath & Beyond.
Think like a blog. Weblogs are the obvious guerrilla route to publicity, but don't treat them like other media outlets. Online, it's essential to hone your message to an easy-to-digest length and keep it consistent. For example, Krugle's "Find code. Find answers." Says marketing consultant Don Thorson, "Three words is ideal, seven is OK. If it's 15, you're screwed."
Create a clever gimmick. A simple stunt can generate a major splash if it's surprising, focused, and well targeted. In the early days, Salesforce.com employees "picketed" competitors at industry events, marching and carrying signs emblazoned with the hosted application provider's battle cry: "No more software." 
Tuesday, June 20, 2006
Theatre Review: RENT
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When you find yourself humming the tunes of a show you’ve seen, while picturing the scenes in your mind, for hours, days, weeks, and, in some cases, months after you’ve seen it, the performance must have been that good. This is how many young people today feel about Jonathan Larson’s Broadway musical RENT, an ebullient and riveting show whose music, plot, and performance are unforgettable. 
ZT: Bill Gates' Legacy: Microsoft's Top 10 Flops
| Friday, June 16, 2006 |
| By Mary Jo Foley |
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| Gates will be remembered as a visionary and PC industry leader. But even Microsoft's Chairman hasn't been right in all of his bets. |
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| The Chairman isn't always right. While Microsoft's outgoing Chief Software Architect Bill Gates has been ahead of the curve in predicting many technology trends, he also has backed some notorious flops.
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Microsoft Expands Internet Research Efforts With Founding of Live Labs
MSN and Microsoft Research co-found applied research lab; Live Labs and Silicon Valley Search Labs will lead the next evolution of innovation in Internet products and services.
Related LinksMicrosoft Resources:
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REDMOND, Wash. — Jan. 25, 2006 —Microsoft Corp. today announced the formation of Microsoft® Live Labs, a research partnership between MSN® and Microsoft Research. Under the leadership of Dr. Gary William Flake, noted industry technologist and Microsoft technical fellow, Live Labs will consist of a dedicated group of researchers from MSN and Microsoft Research that will work with researchers across Microsoft and the academic research community. Live Labs will provide consistency in vision, leadership and infrastructure as well as a nimble applied research environment that fosters rapid innovations.
“Live Labs is a fantastic alliance between some of the best engineering and scientific talent in the world. It will be the pre-eminent applied research laboratory for Internet technologies,” Flake said. “This is a very exciting opportunity for researchers and technologists to have an immediate impact on the next evolution of Microsoft’s Internet products and services and will help unify our customers’ digital world so they can easily find information, pursue their interests and enrich their lives.”
The Live Labs — a confederation of dedicated technologists and affiliated researchers in pre-existing projects from around Microsoft — will focus on Internet-centric applied research programs including rapidly prototyping and launching of emerging technologies, incubating entirely new inventions, and improving and accelerating Windows Live™ offerings. This complements the company’s continuing deep investment in basic research at Microsoft Research and product development at MSN.
Ray Ozzie, Craig Mundie and David Vaskevitch, Microsoft’s chief technical officers, will serve as the Live Labs Advisory Board. Ozzie sees Live Labs as an agile environment for fast-tracking research from the lab into people’s hands. “Live Labs is taking an exciting approach that is both organic and consumer-driven,” Ozzie said. “Within the context of a broad range of rich usage scenarios for Windows Live, the labs will explore new ways of bringing content, commerce and community to the Internet.”
A Breadth of Research Areas
Live Labs will investigate a broad and comprehensive set of research topics such as multimedia search, machine learning, distributed computing and data mining, and will engage in rapid prototyping and the incubation of disruptive technologies. Unlike basic research, which is geared toward visionary discoveries that may or may not end up in actual products, and product development, which is feature-focused and geared toward solving tactical engineering problems, Live Labs’ applied research will study the relationship and applicability of theories or principles to the solution of a problem or an actual product or service.
Search Labs in Silicon Valley
Microsoft also announced the hiring of Dr. Ashok Chandra, a notable industry and academic researcher, as general manager of Search Labs, a new organization devoted to innovation and incubation that will be closely aligned with Live Labs. Search Labs will be stationed in Redmond and at the Microsoft Silicon Valley campus in Mountain View, Calif. Search Labs will focus on areas such as personalization, socialization and improved user experiences while maintaining strict regard for user privacy. In addition, Chandra’s teams will build technologies for data mining, vertical industries and parametric capabilities to go beyond the search bar experience.
Live Labs: Committed to World-Class Research and Open Publication
Because strong academic engagement with the research community is fundamental to the lab’s overall goals, Live Labs’ scientists and technologists are encouraged to actively and openly engage with the academic research community and publish their research findings.
Many of Live Labs’ founding members are highly regarded Microsoft Research scientists who have been longtime MSN collaborators. These include Dr. Eric Brill, senior researcher and the head of the Text Mining, Search and Navigation Group; Dr. Paul Viola, senior researcher in the Document Processing and Understanding Group; Dr. Susan Dumais, senior researcher in the Adaptive Systems and Interaction Group; Dr. Jim Gray, Microsoft technical fellow and head of the Scalable Servers Research Group; Dr. Christopher Bishop, assistant director of Microsoft Research in Cambridge, England; and Dr. Chris Meek and Dr. Max Chickering, senior researchers in the Machine Learning and Applied Statistics Group.
Supporting the Academic Research Community
Beyond collaboration, Live Labs will extend Microsoft’s existing engagement with the external academic research community through new opportunities for grants, sabbaticals, internships and fellowships. As one example, Live Labs announced today that a total of $500,000 (U.S.) is being made available through a new request for proposals to further encourage academic research in areas such as data mining, discovery and analysis as they relate to Internet search. Proposals can be submitted through March 24. Microsoft will make 10 to 14 awards ranging from $35,000 to $50,000 and will announce the awards on May 17.
In addition, Microsoft yesterday awarded to 10 outstanding students two-year fellowships worth a total of $1,000,000 (U.S.), as well as the opportunity to do an internship on the topic of their choice.
More information about Live Labs can be found at the Web at http://labs.live.com.
About Microsoft Research
Founded in 1991, Microsoft Research is dedicated to conducting both basic and applied research in computer science and software engineering. Its goals are to enhance the user experience on computing devices, reduce the cost of writing and maintaining software, and invent novel computing technologies. Researchers focus on more than 55 areas of computing and collaborate with leading academic, government and industry researchers to advance the state of the art in such areas as graphics, speech recognition, user interface research, natural language processing, programming tools and methodologies, operating systems and networking, and the mathematical sciences. Microsoft Research employs more than 700 people in five labs located in Redmond, Wash.; Silicon Valley, Calif.; Cambridge, England; Beijing; and Bangalore, India. The External Research and Programs group within Microsoft Research is dedicated to building world-class relationships with colleges and universities that enhance the teaching and learning experience, inspire technological innovation, and establish Microsoft as a valuable technology partner for higher education. More information can be found at http://research.microsoft.com.
About MSN and Windows Live
MSN attracts more than 440 million unique users worldwide per month. With localized versions available globally in 42 markets and 21 languages, MSN is a world leader in delivering compelling programmed content experiences to consumers and online advertising opportunities
to businesses worldwide. Windows Live, a new set of personal Internet services and software, is designed to bring together in one place all the relationships, information and interests people care about most, with enhanced safety and security features across their PC, devices and the Web. MSN and Windows Live will be offered alongside each other as complementary services. Some Windows Live services entered an early beta phase on Nov. 1, 2005; these and future beta updates can be found at http://ideas.live.com. MSN is located on the Web at http://www.msn.com. MSN worldwide sites are located at http://www.msn.com/worldwide.ashx.
About Microsoft
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.
Wednesday, June 7, 2006
Remarks at Gary Kopec's Memorial by Dan S. Bloomberg
Remarks at Gary Kopec's Memorial
I've been asked to say a few words about Gary's professional life, from the viewpoint of a colleague and a friend.
Gary and Marcia's first formal contact with Xerox was in 1981, when they were offered jobs at PARC by Dick Lyon. They decided instead to accept offers from the Schlumberger research lab, also in Palo Alto. When they arrived there, they were surprised to find that their new boss would be -- Dick Lyon!
Gary and Marcia finally arrived at Xerox, together, in 1988, and in the following years both Gary and Marcia have been, at different times, my first-level managers. I could not have been more lucky. When Gary arrived, the plan was for him to manage an eclectic and essentially unmanageable group of individuals. It was a thankless job, but Gary gamely took it on. Over the next ten years, Gary had several opportunities to recruit people to work with him at Xerox, and he patiently staffed up a group of colleagues, all with a mathematical and statistical bent, to work on document image analysis.
Gary's most recent vita lists 12 issued patents and 68 publications. Most of his patents are related to the field he founded with Phil Chou - document image decoding; other patents will issue later. His prodigious output of publications spans signal processing and recognition, for both speech and images. However, not all of his work has been published. For example, Gary received an infamous rejection letter when he submitted his 1992 Xerox technical report on ``Row-major scheduling of Image Decoders". The editor could not find any reviewers for the paper! There were several reasons, but perhaps the most important is that such rejections are an occupational hazard for pioneers. Gary lived on the edge. He understood and used all the techniques that were available and required, from formal grammars to statistical pattern recognition, machine learning, and signal processing. And he needed them all to move from 1-dimensional hidden markov models used in speech recognition to formal methods for solving 2-dimensional image problems.
Gary was also a consummate technician. Whereas a program to decode a line of text is not too difficult to write, a decoder for a musical score can be a hundred times more complicated. How was Gary to write such a program? It would have been too painful to do it by hand, so instead he wrote a lisp program to write the decoder. Programs that write programs that write programs. He understood the subtleties of ``going meta." Graphs, parsers, grammars ... the stuff of discrete mathematics and computer science. Sampled data, stochastic models, nonlinear optimization, maximum likelihood ... the stuff of electrical engineering. Gary needed it all, and he did it all. He was a Renaissance man, and he fit perfectly into the digital processing renaissance of the last 25 years. He went ``meta" at low levels, too. The lisp code was too slow for the inner loops that did the image convolutions, so he wrote the convolution code in C. It was still slow, because of the immense amount of computation required. So he wrote a lisp program that would write a C program, with the specific template convolutions hard-coded. Loops were all unrolled; computation was minimized. After compilation, it ran about 5 times faster than the generic C version.
Everyone who came in contact with Gary had the opportunity to learn. Gary enjoyed sharing his thoughts with inquiring minds, and he had a sequence of students that worked with him on image decoding. Several of these students - Anthony Kam, Mauricio Lomelin and Jesse Hull - were MIT students that did masters theses under Gary's supervision. These theses are required reading today for anyone who wants to understand the field. Gary succeeded so well with the very brightest students because he had the ability to communicate the beauty and generality and, perhaps above all, the inevitability of his methods.
I was a bit slow to grasp this inevitability, but I remember when it struck, it was like a flash of lightning. To explain why, I should go back. When Gary came on the Xerox scene in 1988, I was an old-timer, relatively speaking, but had recently switched from magnetic and optical engineering to the strange world of image analysis. At my first and only computer vision conference, I was puzzled that people in the field were complaining that so little progress had been made in the past 25 years. I had already decided that for analysis of the large images you get when you scan documents, image-based operations, as opposed to sets of rules on non-image structures, were the most productive direction to proceed. Rules just didn't work well. Gary placed it all in perspective. The same problem had occurred in speech recognition: people tried for 20 years to build rule-based systems, but progress was slow. The big break came with the introduction of hidden markov models, which had both sufficient internal complexity and could be trained automatically using input data. And speech recognition never looked back. Gary predicted that data-centric statistical models, particularly hidden markov models with an underlying grammar, would likewise eventually dominate among successful image recognition techniques. For 1989, this seemed to be a radical suggestion.
I have persisted in using ad hoc methods and parameters to get quick results, but Gary consistently followed his principled approach for image recognition: use the data to build the models for image production, and then use the models to find the most likely generating source for a particular observed image. This was elegantly described by his ``communications model" of image recognition, and his use of the term ``decoding" to describe it. Inevitability! The best models are constructed using the image data, and for any image, Gary's decoders then give you the best possible guess for the input (that is, the best recognition output), given the model.
The best is hard. But Gary would never settle for anything less than the best. I think that is the most salient characteristic of Gary's approach - to everything. His technical talks were marvels of clarity. I invariably had the feeling that it would have been impossible to improve on them. Gary thought so deeply about his work that it was easy to believe that he had everything figured out. But he was also able to formulate the outstanding problems in a way that attracted students by their practical and fundamental nature.
Gary set out his document image decoding research agenda in an internal talk in 1992. ``Radical" is a favorite word with upper management at PARC; we're constantly reminded that it comes from the Greek for ``going to the root". Well, this was as radical a research proposal as I'd ever heard. He emphasized that it was important to focus on the problem, and to find general and formal solutions, as opposed to ad-hoc ones. He said, ``It's better to do the wrong thing well," by which I believe he meant that if you have a general formal approach, your solutions will improve as you eventually fix your models. Gary demanded generality by the unification of a common architecture, not by the aggregation of ad-hoc approaches. He believed in learning from shortcomings (he called it ``ignorance modelling"), where you focus on the gap between what is known and what needs to be known - in his words: ``tailor, train, tune". And he put his methodology in stark contrast to the current ad-hoc approaches, where the systems were complex, and thus often lacking peer review and validation; they were idiosyncratic, and thus lacking points of commonality; and they were strongly self-interacting, where changes in prior knowledge have unpredictable system effects.
Gary's respect for data was unwavering, and it went beyond image decoding. For example, I was working on a fast method for detecting skew in scanned document images. Henry Baird had previously approached the problem by finding the connected components and looking for alignment of their lower edges. I'd tried using binary image operations to select instead a subset of edge pixels, from which to search for alignment, and the results were good. Gary immediately said: ``you don't know which pixels are best, so why not use all the pixels!" Use all the data. I did, and - yes - the results were even better. And this is the basis of our standard method.
Gary affected all of us in many ways. He had a gentle and thoughtful personality, and was always available to consider issues, whether technical or personal. And, when things got irrational, as they sometimes did, he was a forceful advocate for sanity.
Gary mentored everyone around him in a quiet way, and he was respected for his intellect and wisdom by his colleagues in many fields. He could just as easily have been a university professor. Xerox gave him the opportunity both to pursue his research with few distractions, and to have students and colleagues to work with. But Gary also had very strong ties to colleagues in both industry and universities. His most ambitious academic collaboration was with with the NSF-funded Berkeley Digital Library Project, in which he played a major and virtuoso role. He scanned and decoded a huge database of dams in California, that had originally been typed, and was only available as 600 pages of tables on paper. He then generated links between several different views of this data for a web browser interface. This was immediately useful to state water resource employees. And using it, in five minutes Gary could demonstrate to anyone the value of special recognizers, and how such automatically generated hyperlinked web documents made it so much easier to find information.
Gary hired Phil Chou in 1990, and one of Phil's most cherished memories was from his first day on the job. Gary and Phil had a long conversation about the technical problems of building consistent probability models for images built up of characters on a page. After a pause towards the end of the conversation, Gary nodded in satisfaction, and remarked about the prospect of their future collaboration, in his typically understated way, ``This is going to be good ..." And it was!
Beyond all his talents - his ability to find the most important problems, and his optimism and energy to attack and solve them - Gary had an inner strength that confounded me. He was probably in better condition than anyone in the research center. He exercised every day, typically running about 5 miles in all weather conditions. I never tried to run with him, because it would have been impossible to keep up. And when he got sick a year and a half ago, he approached his fate with a courage I still cannot imagine. He forewent drastic invasive procedures that might have prolonged his survival, because he believed that every day counted and the quality of his days was paramount. He retained his interest in all things, mundane and profound, up to the end.
All of us who were touched by his gifts, and by his generosity, have been enriched in special ways that we will never forget.
-- Dan S. Bloomberg, January 24, 1999
Tuesday, June 6, 2006
手机辐射爬行榜
辐射一直是人们使用手机过程最担心影响健康的重要因素。在使用手机时，手机会向发射基站传送无线电波，而任何一种无线电波或多或少的被人体吸收，从而改变人体组织，有可能会对人体的健康带来影响。虽然目前还没有证据有够证明手机辐射会导致用户患上脑瘤等疾病，但辐射仍然是所有手机用户所关心的问题。
早在2000年，美国移动通讯工业协会(CTIA)就通过了一项规定，要求拥有CTIA认证的移动电话都要向消费者做出对电话的无线电波水平或者有效吸收率(SAR)的提示。同时，CTIA要求在联邦通讯委员会 (FCC)的站点提供SAR数据，以帮助消费者查询到SAR数据。SAR数据即为生物体(包括人体)每单位公斤容许吸收的辐射量，这个SAR值代表辐射对人体的影响，是最直接的测试值，SAR有针对全身的、局部的、四肢的数据。SAR值越低，辐射被吸收的量越少。
辐射量前十名手机清单
排名手机型号 SAR值
1. Motorola Slvr L6 1.58
2a. Motorola V120c 1.55
2b. Motorola V265 1.55
4. Motorola V70 1.54
5a. Motorola C290 1.53
5b. Motorola P8767 1.53
5c. Motorola ST7868 1.53
5d. Motorola ST7868W 1.53
9a. Motorola A845 1.51
9c. Palm Treo 650 GSM 1.51
9b. Panasonic Allure 1.51
ZT: Google高管狂抛股票的思考
2006-05-24 09:23 作者： 小刀马 来源： eNet硅谷动力 [收藏到E起摘]
【eNet特约评论】据纳斯达克的SEC文件内容显示，在5月中旬到现在不到10天的时间里，Google管理层抛出了大量自己持有的股票，这些股票交易价格一般处于在345至394美元之间，将这几天抛出的股票加在一起总价值达到了65亿美金。其中Google创始人佩奇个人抛出的股票最多，在几天的时间里他交易数十次，最高一笔交易卖出14多万股套现5400多万美元。另外包括首席财务官在内的其它Google高层都抛出为数巨大的股票，据消息称有的内部员工甚至将股票全部售出，而在这整个过程期间Google管理层始终没有回购一股股票。
这种举动说明了什么呢？Google管理层觉得Google的股票已经不可能有更好的表现了？对自己的未来难道产生了怀疑？他们这样做难道不怕Google的股票发生雪崩？要知道资本市场是最容易翻脸不认人的。之前，Google还爆发出“点击欺骗”的事件，在这种节骨眼上，Google管理层的任何风吹草动都有可能引来更大风暴的，难道Google管理层根本就没有意识到这一点？还是认为在资本市场的行为仅仅是一种个人行为？事实上，如果一个管理层对自己的股票都没有信心的话，那还如何让投资人对自己的公司，对自己公司的前景充满期待呢？
同时，市场也有传闻称，这可能预示着Google看到了新的投资机会，毕竟之前有消息称，Google正计划建立一个覆盖全美国的Wi-fi无线网络平台，当然这仅仅是一个猜测。值得一提的是，除了Google管理层在狂抛自己的股票，即使是微软和苹果这样的公司高管也在抛出各自公司的股票。如果这种风气弥漫的话，那资本市场相信很快就会遭遇一个倒寒春了，嗅觉灵敏的投资人当然能从中嗅出一些味道的。
当然，如果仅仅单纯地认为Google选择新的投资的话，显然也很牵强。众所周知，Google的重心其实一直在搜索，无论Google寻求什么样的变化，但搜索占据的份额还是独一无二的。据调研机构Hitwise统计结果显示，尽管Google推出了一系列搜索以外的其他服务，但Google的访问量仍主要来自搜索服务。 据Hitwise数据显示，截至今年5月13日，Google 79.98％的流量来自Google.com搜索服务，排名首位，Google Image Search吸引了9.54％的流量，位居第二。
很显然，在搜索市场，Google根本无法撼动。即使微软这样的大鳄在网络方面不断投入，随着Windows Live Search品牌的推出，新版浏览器IE7的即将上市，以及新一代操作系统Vista将集成企业搜索功能等等，都表明了微软对搜索市场的重视，但即使这样人们对Google的前景依然看好。在市场对Google的前景还充满期待的时候，却传出Google管理层频抛自己的股票，这会不会让投资人寒心？进而带动Google股票开始走下坡路？或许Google管理层已经想到资本市场不可能花红百日，早点出来是不是更稳妥一些呢？无论怎样讲，公司管理层对自身股票的抛售对稳定自己的股票价格显然是不利的，相信很快就有负面作用显现了。