Thomas Hawk Censors Valleywag!
June 30, 2007
According to Nick Douglas Thomas Hawk, who has been railing against Flickr for censorship, sent a take down notice to Valleywag for posting a picture of Kris Tate (the founder of the company Thomas is the CEO of ~ seen to the right) getting his credit card declined when trying to purchase the iPhone yesterday.
My thoughts? People who live in glass houses…
iPhone Arbitrage?
Assuming Steve Jobs didn’t make enough iPhones has ruined the plans of more than 1,000 people who are trying to sell iPhones on ebay. Anyone who wants an iPhone can simply walk into any AT&T or Apple store and walk out with a 4gb or 8gb iPhone this weekend. Evidently, a lot of people assumed that the iPhone would sell out.
Ars Technica wrote about the "sell-out that wasn’t" writing that, "once the dust had settled, once the fog of war had cleared… there were still giant piles of iPhones left. I imagine Phil Hartman on a giant mountain of Colon Blow, except it’s Steve Jobs laughing maniacally on top of a hill of iPhones. Only Steve Jobs could get people to wait in line for something that, well, you didn’t need to wait in line for." Ebay even assumed there would be a wait list (note promo from ebay’s website to right).
Ironically, someone didn’t tell ebayers you can simply buy an iPhone at the store. Check out the highest prices for iPhones on ebay this afternoon:
Anyone buying these? I hope not. These guys are officially iLosers…
iPhone Update from Dallas, TX
June 29, 2007
Got home around 6PM this evening and took the family out for dinner. We were done around 7:45PM and headed over to the AT&T store near Park and 75. I was number three in line and by 8:12PM (i.e. right now) I was home having set up my new iPhone using iTunes (now just waiting on AT&T to activate). Update: it is now 8:13PM and the iPhone shows that it is activated. I am going to set it up. Very nice work Apple, great integration ~ very easy setup! Very cool. More later…
iDay in Dallas!
The line outside of the Knox Apple store here in Dallas is already wrapped around the store (these pictures were taken at 8:45AM today):
more photos here: http://www.flickr.com/photos/alexmuse/tags/iday/
Sales Tip: Never answer an unasked question.
June 28, 2007
This afternoon I received a bit of unsolicited email from Larry Poe, with the following tip for you sales folks:
The STORY:
I’m reminded of a salesperson in a furniture store helping a young couple look for a dining room set. After the couple picked out the set that they loved, and the salesperson had checked and confirmed that it was in stock, and the order form had been written, the salesperson decided to show the young couple how easily the drawers opened and closed on the buffet.
He let them know that the smooth ride of the drawers was due to ball bearings. The wife lost all enthusiasm for the furniture. She then told her husband that she couldn’t possibly have anything with ball bearings in their house because she had swallowed a ball bearing as a little girl and nearly died. She turned and left the store. The husband mumbled his apologies and followed her out.
The RESULT:
Canceled order. Salesperson frustration. And the lesson this salesperson may learn is that you never say there are ball bearings. He may be convinced that the sale was lost because of those ball bearings. And if I come into the store specifically looking for a dining room set with ball bearings, what chance do you think there is that I’ll ever be told about them? The sale was lost because an answer was given to a question that was never asked. Ball bearings had nothing to do with the sale being lost.
Answering unasked questions is a trait that many salespeople have taken to heart as the way to get a prospect to buy. Knowing about your product/service and wanting to tell anyone who will listen is what drives the need to answer unasked questions. Unfortunately, many salespeople wind up giving answers that cause the prospect to further question whether or not he is doing the right thing by considering your product/service. Unwittingly you are giving the prospect more information upon which to raise objections. Why give the prospect the information to raise objections? This only makes closing that much harder.
Most answers to unasked questions occur when there is a lull in the conversation. The salesperson decides to fill in the lull by explaining more, hoping that some of what is said will connect with the prospect. This is a form of “Let’s throw it on the wall and see what sticks.” And if the prospect shows any signs of “connecting” to what has just been thrown on the wall, the typical salesperson’s response is to throw even faster.
Stop answering unasked questions. When the lull occurs, and it will with every prospect, ask him a question. Don’t make a statement! And once you ask the question, wait for a response.
Don’t give the prospect reasons to raise objections by answering his unasked questions. Your job is to ask the questions and then evaluate whether the answers the prospect gives qualify him for your product or service.
iDay is here!
Thought I would run down to the Cingular (now AT&T) store tomorrow evening and pick up an iPhone to replace my Cingular powered Blackjack. As it turns out you can’t put the iPhone on your corporate account. Ug. So I have to keep my original ATT rate plan and get a new ATT rate plan! Nightmare. Don MacAskill the CEO of SmugMug had the same problem as he writes here:
Holy. Crap.
I’m so bummed. We’ve got our sleeping bags ready to go so we can get iPhones for the SmugMuggers. We even have SmugMuggers who flew in from out of town so they could join the party on University Avenue (click that link, it’s worth it). Like most companies, we have a corporate plan with AT&T so we can share minutes, save money, etc etc.
They won’t sell us iPhones. Not one phone, not twenty phones. For any price. At all. Neither will Apple.
Why on earth isn’t anyone covering this? Isn’t this a big deal to anyone but me? Yes, ok, I realize I’m coming across as a fanboy, but I’ve hated my mobile phone for decades now. I think there may finally be one that I don’t hate - only they don’t want to sell me one.
*sigh*
You don’t see TV shows called “Flip this perfect house.”
June 25, 2007
Bill Burnham’s latest explaination of Yahoo’s aqusitions of Rivals.com got me thinking. It is ironic that the VCs offered Rivals to Yahoo for $25MM in 2001. The company was out of cash and had a ridiculous cost structure. The deal fell through and the VCs liquidated the company. The founder of Rivals.com bought the assets and began building a sustainable business. Six years later Yahoo is buying the same company that went to $0 for $100MM.
Whats next? The CEO is a rich man. Yahoo will now clean house, reduce costs and integrate the operation into its own corporate structure. Ironically, Yahoo could have done the same thing six years ago for $25MM. You don’t see TV shows called "Flip this perfect house." Yahoo’s biggest advantage six years ago was its ability to clean up the asset. Who knows, it might have been worth $500MM today with Yahoo’s investment. (or they could have screwed it up…)
Bill takes the time to point out four great ivestment lessons:
- Even if good products are damaged by bad business decisions, they are still good products.
- The time to buy is when everyone else is selling.
- You can always reduce expense more.
- Don’t give up on a good product too soon.
Tired of Travelocity? Me too…
June 19, 2007
I want someone to take responsibility for my business and pleasure travel. The internet seemed to spell the end for travel agents, but I suspect more and more people yern for the days when a human being managed their travel arrangements. I recommend Glen Donovan’s and his firm Earth for your couture travel needs.
Capitalization Table Template
Whenever I am putting together a deal I struggle to find a capitalization table template. I have cap tables for other deals, but I am a little uncomfortable with the whole ‘track changes’ meta data in old files. Nivi posted a nice Excel cap table template on his website. He writes about the template here, the actual file is here and a screencast explaining the template is here.
What is a cap table? "A cap table shows you who owns what in your company. It calculates how the option pool shuffle and seed debt lower your Series A share price."
iPhone Update
June 18, 2007
We are getting excited about the upcoming iPhone launch (June 29th). So much so that three of our developers are attending the iPhone Developers Camp being held in July 6-8th in San Francisco. I use the Blackjack today, but plan to migrate to the new platform on the 29th. My only concerns have been answered by Apple today:
Profit is the new Revenue
June 16, 2007
Timothy Ferriss’ ‘Margin Manifesto‘ was a great read. He suggests that, "The financial goal of a start-up should be simple: profit in the least time with the least effort. Not more customers, not more revenue, not more offices or more employees: more profit."
Earlier this month a deal I was working on fell apart for a number of reasons, but the major reason was revenue. Since around September of 2001 our businesses have focused almost exclusively on generating profits. What about revenue? It didn’t seem to matter much after the IPO market fell apart. The company we were talking to had around 3x the revenues Big in Japan has, but generates less than half as much profit. To make matters worse, the company has as much debt as profit. Throughout the process I began to doubt our strategy of controlled, profitable growth. Perhaps things had changed while we focused on building our businesses.
Timothy provides an interesting ‘return-to-basics’ call to achieve consistent profitability in three months or less. He describes five of his elevent commandments:
- Niche is the new big
- What gets measured gets managed
- Pricing before product, plan distribution first
- Less is more, limited distribution to increase profit
- Net-o, create demand vs. offering terms
Check out his guest lecture at Princeton on . Thanks Tim!
Need a secret door?
June 15, 2007
Most of my Flickr friends know we are remodeling a home in Preston Hollow. Due to the unpleasant fact that we have not sold our other house we have had lots of time to ‘trick’ out the new place. One of the items I have always wanted is a secret door. Turns out there are a couple of firms that specialize in secret openings:
Power of the Blog!
June 14, 2007
I am always suprised by the ‘power of the blog’. On June 9th I asked three companies why they were, "Using our trademarks in Google AdWords?" As seen below:
After asking my question via the blog and a few comments later all three companies stopped buying our name on Google as seen below:
One of the companies has contacted us, apologized, quantified the number of ‘click-throughs’ and agreed to pay a small cash settlement to include our legal fees. The other two simply stopped. Another interesting note, the number of links to our name increased by 3,000 in just a couple of weeks…
Are VC Payoffs Bad?
June 13, 2007
Ron Conway is upset that "third-rate VCs are paying off entrepreneurs." He suggests,
What’s happening is third-tier VCs are trying to get deals away from Sequoia and KP and offering entrepreneurs some cash as part of the deal. I firmly believe that all the cash going into a company belongs in the company. I don’t want entrepreneurs to be bought off.
Ron is a well known angel investor and he is frustrated that we are in a buyer’s market. But what is really happening? Perhaps these cash payments are a way to align the interests of entrepreneurs and venture capitalists. How? Simple, lets say you raise $1MM from a VC in exchange for half of the company. Now lets say that someone offers to buy the company for $5MM. After some complex math the entrpreneur realizes that he can make $2MM if he sells. The VC wouldn’t consider selling the business for less than $10MM and only after a certain number of years trying to turn their investment into a $50MM company. The $2MM payday for the entrpreneur is likely lifechanging, but it is unacceptable for the VC.
It is well known that Facebook’s Mark Zuckerberg was paid out during the financing round by ‘third-rate VCs’ like Accel and Greylock. With a little cash in their pockets, Mark and his team have been able focus on the long term success of the platform, pushing aside billion dollar offers. Wow, everyone is happy. Ironically, Ron is an early advisor to Facebook…
Ron calls these payment ‘payoffs’, but they aren’t payoffs at all. In most early stage deals the entreprenuer owns 100% of the outstanding shares of the company. He can either sell his shares or agree to dilute his shares by issuing new ones or a combination of both. Interestingly Ron works hard to get the most for his money, typically by getting an entreprenuer to accept the lowest valuation possible. Entrepreneurs try to get the highest valuation possible. Why? Buying a small percentage of an entrpreneurs shares for cash is a great way to reduce the entrepreneurs downside, while preserving the venture capitalists upside.
Ron’s primary arguement is that "The entrepreneur taking a million bucks out of the company that should have stayed in the company says the company doesn’t have as much a potential for success." This may be true if cash is scarce, but as Ron pointed out it is a buyer’s market. There is too much cash chasing too few deals. If a VC can afford to pay an additional $1MM over what the company needs to succeed what is wrong with that? It is not like the VC is going to underfund his investment, surely he is too smart for that. The truth is that deals are getting more expensive and that is bad for angels like Ron…
Using our trademarks in Google AdWords
June 9, 2007
Are you using one of our trademarks in your Google AdWords account? For example, do you pay Google to show an advertisement for your company when someone types Architel® into a Google search field? If you do, my question is: why?
We registered it years ago and have used and actively promoted it; investing considerable time and money establishing our rights and goodwill in the mark. I can only assume that by using our mark in association with your own competitive services, you are attempting to divert traffic generated by our name to your own brand. What does the law say?
Keyword advertising utilizing a competitor’s trademark has been held to constitute “use” of a trademark under the Lanham Act. See e.g., Hamzik v. Zale Corp., 2007 Westlaw 1174863 (N.D.N.Y. April 19, 2007) and International Profit Associates, Inc. v. Paisola, 461 F.Supp.2d 672 (N.D. Ill. 2006).
Using Architel’s mark creates initial consumer confusion and unfairly capitalizes on the goodwill and reputation embodied in the mark. See Picture It Sold, Inc. v. iSold It, L.L.C., 199 Fed. Appx. 631 (9th Cir. 2006). The public may be confused that your company is somehow authorized by, sponsored by, or somehow affiliated with Architel and our mark.
From my point of view, this type of deceptive trade practice constitutes trademark infringement under Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1), a false designation of the original and false description under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and violates the state trademark and dilutions statutes as well as Texas law prohibiting unfair competition and misappropriation.
What do you think?
