Safeguard Security Comments
September 27, 2007
Earlier this week I wrote about my father’s new post at Safeguard Security (OTC:SSHS). More than twenty five readers of this blog posted detailed and specific comments on the entry. Many of the comments were critical of the previous management team, other comments detailed specific issues facing the company, while other comments were positive. I shared them with my father who indicated his interest in talking to many of the people who made comments. Instead I offered to write a second post (i.e. this one) providing his contact information. So if you are interested in sharing your comments with someone who CAN make a difference go ahead and call Ralph Muse at 214.393.6990 or email him here. Check out the press release here.
ServiceGuy Update
September 26, 2007
The ServiceGuy team is growing with the addition of our new City Manager, Randy Baguinon. Our Dallas trial went well and we recently launched service nationwide with installations in Atlanta, Boston, Chicago, Dallas, Detroit, Houston, Los Angeles and Philadelphia.
Most recently I have focused my efforts on the sale of private label installations of ServiceGuy for various referral networks and brands. If you have an idea how we could leverage our technology and platform feel free to give me a call or send me an email.
72° ~ another Coudal Partners movie
September 25, 2007
On a lark I signed up as an Executive Producer of 72°, Coudal Partners current film project. Learn more about the film on it’s weblog: From the Very Beginning or Even Before That ~ A Film Project.
Thirteen months of hell! (Repost)
September 25, 2007
Several people have asked me to send them a link to my post titled, "Thirteen Months of Hell!" I wrote the post almost exactly one year ago and the timeframe and experience seems to ring true for many entreprenuers. I thought I would repost for those of you who missed it:
I run across people who want to start their own business all of the time. Sometimes I even hire them (typically a bad idea). Most people have no idea how much hard work and time it takes to create a new business. In most cases I think it is impossible to start seeing returns before the first year (if you are getting returns before then it is likely you are not investing enough of your money or time in the venture). Most people are not prepared to work long or hard enough to make their business viable. The ones who are usually succeed.
Ironically, by the time things seem hopeless and you begin to think about getting a job your business is usually poised to start working. Most people start to argue with their partners, friends and family at this point and they are focused almost exclusively on failure. Called negative target acquisition, this phenomenon ensures that you will fail. If, instead, you can keep focusing on making the business work you have a good chance of success after the first 12 months.
Why? There are a million reason why, but here are three:
- Most clients don’t take you seriously during your first 12 months. There will be lots of potential clients that will wait in the wings to see if your company is going to make it.
- It is likely you won’t even know what business you are for the first 12 months or so. You need time to figure out who is going to pay for what you do or make.
- Everything takes longer than you assume. Your website won’t get done on time, your projects will take longer, you will be busy focused on the wrong things at first and so on.
Our Big in Japan/Weblogs Work business is a great example of a business that took a year to figure out. Just before our year anniversary (after almost ten months of work) we lost a key contributor because they gave up on the business. They began focusing on what wasn’t working instead of focusing on what could work. Two months after they left the remaining team figured out how to make the business work and signed up major clients who turned the breakeven business into a big money maker. Let me tell you, it got really hard to see how the business was going to work until August of this year. My advice to anyone considering starting a business?
- Commit 13 months to making the business a success.
- Prepare your family for the 13 month committment and get their buy-in.
- Work on and in your business for 12 hours a day (including weekends).
- Be prepared not to make any money for the first 13 months.
- Be prepared to change your business plan over and over until you get it right.
- Be prepared to do everything yourself.
- Be prepared to fight with your partners, spouse, friends and family.
- Realize that before you succeed it will seem like you have failed - don’t give up.
- Realize that if it was easy everyone would do it…
- Oh and read Rick Segal!
Cautionary tale for investors: Parakey
September 25, 2007
Earlier this year we considered selling one of our investments and it came to light that the buyer would need our involvement in the deal on a go-forward basis. We only own half of the business and our partner (the money) owns the other half. Our partner was concerned that we would be able to negotiate a non-50/50 deal due to the fact that we had something the buyer wanted or needed (i.e. us). Then I read about the Parakey/Facebook deal that took place this summer.
Mike Arrington wrote about the deal earlier today in a post titled, "Parakey: Did Investors Get Left Out in The Cold?" Parakey’s investors sold the business to Facebook for $4MM after pumping slightly less than $2MM in the company six months earlier. Not a bad return, but as Mike explains they weren’t ‘popping the champagne bottles.’ Why not? Turns out Facebook paid cash for the business (no stock), but hired the founders Blake Ross and Joe Hewitt with very handsom stock options (based on Microsoft’s recent valuation of the company $10B+ they are worth a fortune). Fair? Mike explains,
Some of those investors clearly weren’t happy with the fact that they were getting a 2x cash return while the founders received different, and likely far more lucrative compensation. Their preference would have been to receive Facebook shares or simply to have kept Parakey as an independent entity with a chance for a larger liquidity event down the road. But reputation matters in silicon valley and they made the decision not to disrupt the deal to avoid being labeled as difficult investors. Clearly, though, it left a bad taste in their mouth.
In this case I am not sure this isn’t a fair result. The investors received a 2x return in six months (hardly time to build much of anything) and the founders got a great new job at the hotest web property on the net. Basically Facebook was buying Blake and Joe out of their ‘contract’ and offering the investors a $2MM placement fee (Heidrick & Struggles would be proud). Of course in our case we have spent years building the business and it wouldn’t seem fair to negotiate a separate deal. But I can assure you it isn’t a cut and dry process. The deal, to close, must include our future participation. Should we share our future compensation with our investors? Should we negotiate away future compensation to be shared on the frontend? Mike sums up his post,
It is often hard to muster up much sympathy for the venture capitalists that fund all of the startups popping up in silicon valley and elsewhere. But their money keeps the system running smoothly. If they don’t see a fair return based on the risk they are bearing (most startups fail outright and are a write off), that well oiled machine could come to a grinding halt. In this case its not clear that investors were treated unfairly. They did get double their money back for a six month investment, after all. But the Parakey acquisition is an important data point that will be considered by others in the future. Just because Facebook comes knocking on your door doesn’t mean its going to be a big payday for everyone involved.
New Directors and CEO at Safeguard Security
September 24, 2007
Dallas based Safeguard Security Holdings Inc. (OTC: SSHS) has elected three new board members including Ralph Muse, Dean Cubley and Dennis Orsi. Ralph Muse is also serving as interim CEO. According to the press release:
Ralph Muse is a senior level executive with extensive technology management experience, expertise in general management, manufacturing, and multinational sales / marketing, and operations. Mr. Muse is a former Principal Consultant with Booz–Allen & Hamilton with extensive background in wireless data, networking, systems, electronics, energy, and consulting, with industry leaders including GE, ABB, Exxon and du Pont. In addition Mr. Muse has served as the CEO, COO, or GM of three high tech venture backed startup companies and two high tech manufacturing public companies. Mr. Muse has raised a total of over $1.1 billion in equity financing.
Dennis Orsi has spent over thirty years in finance and management. He is currently President of Sunshine Greeting Cards, a greeting card manufacturer controlled by Mr. Orsi and his family. During his career, he has served on public Boards, spent several years as an M&A finance executive for Pulte Corp., served as Senior Vice President and Treasurer of Ensign Bank, a $2 billion New York Savings bank and spent more than ten years in the New York Corporate Finance Departments of Kidder Peabody and Nippon Credit Bank’s U.S. Investment and Merchant banking subsidiary Eastbridge Capital and Asset Management. At Eastbridge, he was the Senior Vice President and co-head of Corporate Finance.
Dr. H. Dean Cubley has served as a President or Chairman of ERF Wireless, Inc. since 1996. Dr. Cubley worked for the NASA Manned Spacecraft Center in the Electromagnetic Systems Branch of the Engineering and Development Directorate. Dr. Cubley holds a Ph.D. in electrical engineering from the University of Houston and B. S. and M. S. in electrical engineering from the University of Texas.
FYI - Ralph is my dad… [via]
Guns in Cars in Texas
September 23, 2007
The ACLU and the NRA made strange bedfellows on this one, but the two groups got together and championed a new law clarifying the legality of carrying a handgun in your car. Starting September 1st you can legally carry a handgun in your car without a license. The previous law required that you be “traveling”, but the new law drops this requirement. You must keep the gun out of plain view. Of course, if you are committing a crime or are a member of a street gang you can’t carry a firearm. Here is the revised section of the Texas Penal Code Section 46.02 “Unlawful Carrying Weapons.“
Rails can make you a better programmer!
September 23, 2007
More and more programmers are switching from legacy languages to Ruby on Rails. Our own Big in Japan team works exclusively in the rails programming framework. Derek Sivers dumped PHP two years ago in favor of Ruby on Rails. Yesterday he wrote a post titled, "Seven reasons I switched back to PHP after two years on Rails." Derek switch from PHP because his PHP code looked like crap. Over the past two years Rails Derek realized he had become a better programmer. Turns out his PHP code didn’t have to look like crap, his new PHP code looks great. Did PHP get better or did he? He explains,
Rails was an amazing teacher. I loved it’s “do exactly as I say” paint-by-numbers framework that taught me some great guidelines. I love Ruby for making me really understand OOP. God, Ruby is so beautiful. I love you, Ruby. But the main reason that any programmer learning any new language thinks the new language is SO much better than the old one is because he’s a better programmer now! You look back at your old ugly PHP code, compared to your new beautiful Ruby code, and think, “God that PHP is ugly!” But don’t forget you wrote that PHP years ago and are unfairly discriminating against it now. It’s not the language (entirely). It’s you, dude. You’re better now. Give yourself some credit.
Turns out Rails might be a great framework to adopt, but it might be a great way to improve your programming skills in any language. My thoughts: If you are a manager it is much easier to manage resources coding using Rails.
First legal test for GPL (common open source license)
September 21, 2007
The GNU General Public License (GPL) is going to be testing in a U.S. court for the first time in its history. The Software Freedom Law Center is suing Monsoon on behalf of BusyBox. Monsoon admits they use BusyBox’s source code, but they do not provide users with access to the underlying source code as required by the GPL. Eben Moglen, Founding Director of the SFLC, explains:
"Free software licenses such as the GPL exist to protect the freedom of computer users. If we don’t ensure that these licenses are respected, then they will not be able to achieve their goal. Our goal is simply to ensure that Monsoon Multimedia complies with the terms of the GPL.
The lawsuit is styled, "Erik Andersen and Rob Landley V. Monsoon Multimedia Inc." Case No. 07-CV-8205 US District Court for the Southern District of New York. It will be interesting to see how this case plays out. Stay tuned. [via]
Scared of supporting Open Source software?
September 21, 2007
You better get over it. Gartner is suggesting, "You can try to avoid open source, but it’s probably easier to get out of the IT business altogether. By 2011, at least 80% of commercial software will contain significant amounts of open source code, according to Gartner." Jon Brokin explains,
Open source isn’t quite as good as some of its proponents would have you believe, and not as dangerous as some detractors might suggest, Driver said. The important thing is to plan an open source strategy, to set guidelines on where and when open source products are to be used. IT shops are scrambling to set open source policies, but almost no one has implemented one with any teeth, he said. It’s better to avoid open source altogether than to not supervise its adoption with something like a don’t ask, don’t tell policy, according to Driver. "You’ve got to know what’s in your organization. If you can’t manage it, you can’t control it,” he said.
Jeff Clavier’s New Seed Fund!
September 21, 2007
Jeff Clavier is perhaps the best known and most successful angel in the consumer internet space in recent years. Last year I had the opportunity to hang out with him at his house during the World Cup, I wrote about our meeting in a post titled, "Jeff Clavier - The Web 2.0 VC!" Singlehandedly, Jeff has funded more than twenty startups, having sold five in the last three years. He left Reuters Venture Capital a few years ago because as he explains, "my passion was working with early stage entrepreneurs, supporting them with time, cash and connections." His new seed fund, SoftTech VC II, LP, has $12MM to work with. He explains:
- invest in 30 to 40 seed stage startups
- average “bite size” of $250K, ranging from $100K to $500K
- able to lead, co-lead or follow other firms or angel syndicates
- focusing on consumer Internet, but with a great flexibility to enter new sectors opportunistically • open to a few non Silicon Valley deals
- capital efficiency, great teams, differentiated ideas and flexibility on “how big it can become” will be common characteristics shared by the companies we invest in
- working hand in hand with the best firms in Silicon Valley, and the usual suspects in the acquisition gang, to build a successful outcome for everyone involved
- I would be the sole Fund Manager of the fund, with the support of a fantastic advisory board: my friends Jon Miller, Josh Kopelman and Reid Hoffman
Layered Technologies Hacked! Clients urged to change passwords.
September 19, 2007
Dallas based hosting company, Layered Technologies announced a major security breach potentially exposing up-to 6,000 usernames and passwords for their hosted accounts. The Register reports that the company’s help desk software was to blame. Clients include Mobilestorm, Mixsic, Tuyu, Planetwide Media and Silkfair. Layered sent out the following email to its clients:
Confidential
<Customer Name>
Protecting our client’s account information is a top priority, and we value the trust you place in Layered Technologies. Regrettably, criminals are increasingly using the Internet for illegitimate purposes. As is the case with many companies that maintain databases of information, Layered Technologies is from time to time subject to attempts to illegally extract information from its databases.
The Layered Technologies support database was a target of malicious activity on the evening of 9/17/2007 that may have involved the illegal downloading of information such as names, addresses, phone numbers, email addresses and server login details for 5 to 6,000 of our clients. Layered Technologies responded immediately to this specific incident by conducting a comprehensive security audit of internal processes and procedures.
Due to the significant amount of uncertainty in determining which accounts may have been impacted, Layered Technologies felt that it was in your best interest to take the precautionary steps of reaching out to you and all clients regarding this issue. In addition, we are asking all of our clients to change the login credentials for all host details they have submitted in the past 2 years. This includes any login credentials for the following: Cerberus, Modernbill, Encompass, and all servers you own and operate with LT, all services that may have submitted passwords in the past for such as Webmail, Remote Desktop, SSH, MySQL, cPanel WHM, FTP Backup storage or similar services. Please utilize the ‘reset password’ features on all of our tools to reset and send a new random password. Any LT customers needing assistance with resetting passwords should contact our technical support team via our ticketing system for methods for how we can assist with resetting them and not providing the updated passwords in the tickets.
We are committed to maintaining an ongoing dialogue with all of our clients about Internet security and the steps Layered Technologies is taking to protect its clients. LT has launched a series of initiatives to enhance and to protect the information you have entrusted to us. Some of these steps are being immediately implemented, while others will be put into place as appropriate.
We believe these actions are the responsible steps to protect the trust you place in LT. We will continue to share information with you about the enhancements we are making.
Sincerely,
Todd Abrams
President and COO
Layered Technologies Inc.
Yahoo buys Zimbra!
September 17, 2007
Yahoo just announced they are buying my favorite email company, Zimbra for $350MM. Looks like the Benchmark guys are getting 10x on their money! This is great news for everyone involved. We are very excited about the prospect of an even more powerful email system (Yahoo, don’t screw it up). Mike reported the news earlier today in a post titled, "Breaking: Yahoo Acquires Zimbra for $350 million in Cash." Architel and Big in Japan have used Zimbra for more than a year with great success. I wrote about the platform a couple of weeks ago here.
Best place to get appliances in Dallas: DHS
September 15, 2007
I know I usually focus on tech startups, but I found a great little business just outside of the design district. It is called Designer Home Surplus, and before you spend a lot of money buying your Viking oven or Asko stove, check out their ebay store or warehouse location at 1234 Motor St. in Dallas (I saved a bundle buying my Viking double oven, compactor and ice maker from these guys).
It is hot and messy, but stocked full of great buys. These guys buy, sight-unseen, high-end appliances from major retailers. Often they are returns, scratch-n-dent or open box items. They test, repair and repackage these units and sell them for a steep discount. When you pull up be prepared to say hi to their golden lab who will make it a point to smell you. Oh and if you end up going tell them Alexander Muse referred you (perhaps they will cut me a break on my new bathtub next month). Good luck (oh, and you never know what you are going to find so add them as a favorite seller in ebay so you will get alerted when they get new items).
Link round-up from Architel
September 13, 2007
- Don’t buy a SonicWall or Watchguard firewall.
- Free T1s for Architel clients?
- Load testing for websites.
- Exchange to Zimbra Migration.
- Wiki Access.
- Also, here are the latest photos from Architel.
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