Getting to Dome! Hemispheric dome speaker project
March 31, 2008
If I had a dollar for each idea I failed to execute on I would have quite a few dollars. This afternoon the four of us (Big in Japan guys) were sitting in our bullpen and it occurred to me that it would be nice if we could listen to music without headphones on. Almost a year ago (April 10th) Scott Bauer and I came up with a solution, sound isolation speakers made from acrylic hemispheric domes. I even ordered the domes, which have been sitting in a corner of our data center since then. If only I could execute! Anyone want to help me build four hemispheric domes? More pics here.
Texas Startup Profile: GameWager
March 29, 2008
Sarah Lakhani, of the Texas Entrepreneur Association, turned me on to a startup called GameWager. She described GameWager as an online platform that matches gamers wanting to play each other for money, prizes, and recognition in existing PC and Console games. George Giannukos and Thomas Marriott, co-founders of the company agreed to answer a few of my questions:
Alexander Muse: What convinced you to leave your job at the hedge fund (Sasco) to start your own business? How did you settle on the pc gaming competition market? What is your favorite game?
George Giannukos: I have always enjoyed finance. While in school, I worked at a hedge fund my entire sophomore year in college. Also spent my summers doing private equity, however, my ultimate goal and focus in life is to be financially free and in charge of my own life. Since the age of 16, I’ve wanted to be an entrepreneur. I believe making the jump while your costs are low and you have relevantly little responsibility (no wife/kids) is the best time to start something. As they say – entrepreneurs live like no one else in the beginning (ie eating ramen noodles) to live like no one else in the end (ie yachts, private jets, etc.). When I was in high school and beginning of college, I was a big gamer. I enjoyed First-Person Shooters and Real-Time Strategy games most. Also played sports games when I owned a console. So at one point in my life I loved playing games. It’s a little more difficult these days to find time to play, but I still enjoy learning about new games coming out and this industry is pretty freaking cool (beats going to say waste management industry conventions!). The game of choice right now is Counter-Strike.
Thomas Marriott: I was born an entrepreneur and can’t think of a better way to spend my life. I started my first company – Penny 3000 – at 13 and couldn’t imagine working for someone else longterm. I left my employer of 5 years, Woodforest National Bank, and Texas A&M because the timing and opportunity was right. I am still an active gamer and playing COD4, Crysis and CS:S.
Alexander Muse: How has your experience at the hedge fund (Sasco) colored your view of the pc gaming business?
George Giannukos: I think pretty much everyone understands video games is big businesses and adding poker-style wagering to these “skill” games isn’t a hard concept to get. Almost everyone sees the potential immediately. The hard part is executing and tweaking the model just right for success (just ask Google).
Thomas Marriott: My financial work experience was irrelevant as it relates to gaming but invaluable with the business skills I obtained – something a textbook couldn’t begin to explain.
Alexander Muse: Why did you partner with each other?
George Giannukos: Yes, GameWager has two founders. We both knew each other from college and had been involved with a few different organizations. This was a good way for each of us to see the other person’s follow through. Without execution you have nothing and I think that’s our greatest strength when compared to almost everyone else that wants to start something but doesn’t – no follow through. I’m convinced of that. As they say, ideas are worthless without execution and that’s completely right. As of now, there isn’t a market to buy and sell ideas.
Thomas Marriott: As George mentioned, our prior relationship validated our interest and commitment in business and entrepreneurship. We are both executers – the single most important key to entrepreneurship – and partnering on GameWager was a logical next step.
Alexander Muse: What are you long term plans for growth at GameWager? IPO? Sale?
George Giannukos: The goal is to create long-term value for my shareholders, myself, GW employees and the gaming community. So whatever route achieves those objectives is the route I’d prefer to take the company.
Thomas Marriott: The day I walk into Best Buy and see the GameWager chip on every box with “GameWager Supported.”
GameWager Profile
Year Company Founded: 2007
Co-Presidents: George Giannukos and Thomas Marriott
Company URL: www.gamewager.net
Number of Employees: 5
Yearly Revenue (2008): in development
Amount of Outside Capital Invested to Date: undisclosed (closed Seed round)
Primary Investors: Texas-based angels (including Todd Wagner)
Founder Credibility, You Need It!
March 29, 2008
When I was raising money I thought of myself as ‘Captain Answer’, able to answer any question, any time. Turns out that might not have been such a great idea. Josh Kopelman’s post titled, “I Don’t Know” is a great reminder to entrepreneurs that saying those three special words can mean the difference between getting funded or having to go find a job. Josh tell’s the tale of two entrepreneurs he met with last week. One knew everything and the other was more thoughtful and suggested that he didn’t know everything. You can guess which founder he thought was more credible.
Lets face it, you think you know everything. That is a fact, right? Who knows you may be right, but knowing everything creates an immediate credibility gap between you and the investor. Be smart, no investor expects an early stage company to have all of the answers. Not having all of the answers, ironically, creates a level of ‘founder credibility’. Josh recommends, “Before you go out to raise money, make sure you know what your don’t know…” He doesn’t recommend, “Know everything, not knowing is preferable sometimes”. Check out Josh’s post on the a) known knowns, b) known unknowns, and c) unknown unknowns. My advice? Don’t be Captain Answer!
Higher Gas Prices = Higher Router Sales
March 27, 2008
The maximum number of routes most all upstream routers (running BGP) can handle is 256,000 unique routes. In December the world hit 238,000 routes and today the number is around 244,000 routes. The growth expectation is 2-4K per month meaning most routers will hit their limit in July. The big carriers have been upgrading all year, but there is a huge number of businesses and smaller internet businesses running BGP that won’t be able to handle the routes by the end of the year. There will be a mad dash to buy new routers (don’t bother checking eBay you won’t find a compatible upstream router and if you do, buyer beware lots of people trying to dump their old routers to unsuspecting folks).
What is going on? Turns out all of those folks in India and China are getting jobs, making money, buying cars and browsing the internet. We have achieved peak oil and now that Chinese and Indian consumers are filling their tanks full of gas we will continue to see oil prices to increase for the foreseeable future. Those same people weren’t on the internet a few years ago, but as they get on new routes are created. Those routes are having a huge impact on the entire internet infrastructure.
What will happen to unsuspecting businesses and ISPs in July? First, they will start freaking out, dropping random routes, taking new routes, dropping more random routes and taking in new routes ~ “a cup spilleth over”. Older routers will lockup or become so unstable they might as well lockup. My advice? Buy CSCO. (note: I know the picture to the left is a ‘wood router’ and not an internet router, I thought it was funny).
Texas Startup Blog Traffic
March 27, 2008
The new Texas Startup Blog theme (i.e. this one) was launched in January. Traffic went from a steady state of 28,000 unique readers, to more than 53,000 so far this month.
Startups are hard!
March 27, 2008
If you are like most type-A guys running a startup you get stressed out. Scott Ryan (CEO of Architel) came in my office seriously freaking out about a number of major/minor issues. Instead of dwelling on them I suggested that we all put on sumo wrestling costumes and go visit the Architel help desk to lighten the mood. He resisted at first, but after we finished he was in a much better mood. Check it out here: Read more
DIY Guided Missle Technology
March 27, 2008
Did you know that by using readily available consumer technology you can build the guidance-control group for a guided missle? Here is your part list:
- GPS - Boost Mobile Phone
- Accelerometer - Wii or iPhone
- Linux Server - Picotux
Using your iPhone or Wii remote you have access to data from advanced 3-axis accelerometers included in both devices. If wireless access to your accelerometer is important the Wii remote might be your best bet, but only for weapons of mass destruction as it rounds the g-force readings down to two decimal points. If you need greater granularity, necessary for targeting specific targets, I would go with the iPhone and its highly accurate accelerometer, but I recommend using a USB interface for your connection to the iPhone instead of relying on the built-in bluetooth connection. Next you will need to pick up a cheap pre-paid Boost mobile phone and download a simple Java application and you have your GPS (reporting position data via serial cable or via phone). Finally, connect all this to a tiny Linux server like the Picotux and do a little hacking and you can have a crude, but effective guidance-control system for your home brew missle.The guys over at Aerotech can sell you the rocket (try out the Mojave Green), but of course you will need to modify the rocket to accept your guidance package. What will they think of next?
Startup Blogging Network
March 26, 2008
We have been ‘talking‘ about launching a blogging network focused around startups, venture capital and entrepreneurship for years. Evidently, David Cohen (Techstars) has been thinking about doing the same thing for a while as well. David and I chatted last week and we are talking about joining forces to launch a network of startup related blogs. Our vision is somewhat different, but our mission is very similar: to foster and promote entrepreneurship throughout each of the 50 United States of America.
My former colleague, Jake McKee, spent a lot of time asking our clients, “What is your higher calling?” I never really asked myself the question, until my call with David. Back in 2005 we talked about launching a blogging network using WordPress MU, but I never really got that excited about it. Why not? There was no higher calling. I spend more than 10% of each day talking to entrepreneurs and aspiring entrepreneurs, sharing my experience, my ideas and my advice. It occurred to me that ‘my’ higher calling is very simply to ‘promote and inspire entrepreneurship’. Building a blogging network to assist and promote similarly minded people is something that won’t generate significant treasure, but it very well might make a difference. Too existential for you?
Status: Earlier today I engaged a local WordPress guru to build the network backend using WordPress MU. He suggests that he will be finished in 7 to 10 days. More recently I drafted an application for potential ‘Entrepreneurs in Residence‘ for each state as well as a blogging agreement (hat tip to the B5 guys). Finally, I stole Randy from the ServiceGuy team to help me manage the backend as well as deal with customer service issues.
Action Items: We are going to need to find a ‘Entrepreneur in Residence’ for each of the 50 states. If you are interested in running the startup blog for your state, please take a moment to fill out the Application and review the Blogger Agreement. Email your application to amuse (at) m-ven.com and I will get back to you shortly. If you know of someone i should go after please let me know how to reach them. David and I are scheduled to chat next week about how we might be able to work together and I will keep you posted on those conversations.
Islam and Venture Capital
March 26, 2008
You might be surprised that Islam has more than 1.5 billion followers on the planet (there are 2 billion Christians) and they have money to buy things you make and money to invest in your business (and they won’t fire the founder). Turns out the Islamic world is an untapped market for entrepreneurial activity. We are evaluating the possibility of launching a new business in Dubai and raising money from various sources in the UAE. From what I can tell, Islamic venture capital is in an evolutionary state, but there are some basic things you should think about when considering raising money from Islamic investors:
- Sharia (Islamic law) will govern ALL investment activity. Spend some time making sure your proposal and planned activities will be consistent with Sharia. For example, a typical preferred stock offering may not pass muster if it includes the collection and payment of riba (interest). Also, don’t bother attempting to raise money for any business if you intend to service businesses that are considered haraam (unlawful) such as companies that sell pork, alcohol, porn, gossip and so on.
- Capitalism was developed between the 8th and 9th century in the Islamic world (medieval Europe didn’t pick up these concepts until the 13th century). My point is that instead of thinking you (as an American) invented capitalism; realize that the Islamic world invented various concepts including contracts, partnerships, limited partnerships, credit, debt, profit, loss, capital, revenue, promissory notes, trusts, startup companies, savings accounts and so on long before anyone knew America existed.
- Mudarabah (profit sharing) is the most common arrangement between a rabal-maal (Islamic investor) and the mudarib (entrepreneur). The entrepreneur provides expertise, labor and management. Profits made are shared between the bank and the entrepreneur according to predetermined ratio. In case of loss, the bank loses the capital, while the entrepreneur loses his provision of labor. It is this financial risk, according to the Shariah, that justifies the bank’s claim to part of the profit. The profit-sharing continues until the loan is repaid. The bank is compensated for the time value of its money in the form of a floating interest rate that is pegged to the debtor’s profits.
- Musharakah (joint venture) is the most common arrangement between an Islamic company and a Western company. Musharakah is a relationship between two parties, both of whom contribute capital to a business, and divide the net profit and loss pro rata. This is often used in investment projects, letters of credit, and the purchase or real estate or property. In the case of real estate or property, the bank assess an imputed rent and will share it as agreed in advance. All providers of capital are entitled to participate in management, but not necessarily required to do so. The profit is distributed among the partners in pre-agreed ratios, while the loss is borne by each partner strictly in proportion to respective capital contributions.
At the end of the day you need to understand that the core of any Islamic venture capital funding is an agreement to share in the risks of the business venture in return for the profits derived from the venture. Interest-bearing lending is a violation of Sharia. The good news for entrepreneurs is there is no such thing as ‘personal guarantees’ under Sharia; specifically because it is unlawful to lose what you have not contributed (i.e. if you didn’t invest any money in a deal, you can not owe any money in the event the venture fails). Additionally, under a typical mudaraba financing structure the investor is prohibited from involvement with management of the business, under Sharia, day-to-day and overall management must be left to the entrepreneur.
Looking for resources? The DIFC (Dubai International Finance Center) and the DFSA (Dubai Financial Services Authority might be good places to start. Major Islamic venture capital firms include: Injazat Capital Limited and Venture Capital Bank BSC. Good luck!
CBS turns against Clinton
March 25, 2008
Things at CBS have changed since the good old days when Dan Rather was the Clinton’s lap dog. Yesterday CBS effectively went to war against the Clinton’s by calling Hillary a liar and proving it. Check out the video on : Read more
The Big ‘Open Source’ Give
March 25, 2008
Oprah’s ‘Big Give’ doesn’t have anything on the ‘big give’ going on in the open source space. Building software for free is a huge business. According to Wired Magazine, in 2007 30 open source companies were sold for more than a billion dollars. The benefit to society has been huge (representing an increased economic benefit to the world of approximately 4% according to the EU). The benefit to the founders of open source project has reached a tipping point, with more than a hundred ‘open source millionaire’ minted in the last twelve months.
I like to think about open source in terms of the ‘parable of the faithful servant’:
Be dressed for action and have your lamps lit; be like those who are waiting for their master to return from the wedding banquet, so that they may open the door for him as soon as he comes and knocks. Blessed are those slaves whom the master finds alert when he comes; truly I tell you, he will fasten his belt and have them sit down to eat, and he will come and serve them. If he comes during the middle of the night, or near dawn, and finds them so, blessed are those slaves. ‘But know this: if the owner of the house had known at what hour the thief was coming, he would not have let his house be broken into. You also must be ready, for the Son of Man is coming at an unexpected hour.’ Peter said, ‘Lord, are you telling this parable for us or for everyone?’ And the Lord said, ‘Who then is the faithful and prudent manager whom his master will put in charge of his slaves, to give them their allowance of food at the proper time? Blessed is that slave whom his master will find at work when he arrives. Truly I tell you, he will put that one in charge of all his possessions. But if that slave says to himself, “My master is delayed in coming”, and if he begins to beat the other slaves, men and women, and to eat and drink and get drunk, the master of that slave will come on a day when he does not expect him and at an hour that he does not know, and will cut him in pieces, and put him with the unfaithful. That slave who knew what his master wanted, but did not prepare himself or do what was wanted, will receive a severe beating. But one who did not know and did what deserved a beating will receive a light beating. From everyone to whom much has been given, much will be required; and from one to whom much has been entrusted, even more will be demanded.
Where are the Super Delegates?
March 24, 2008
Caution: Phone Lines HOT at ServiceGuy
March 24, 2008
Trying to get through at ServiceGuy? Hopefully everything is working well for you, but if you have a hiccup please let us know. The curators of cool at the Thrillist have picked up ServiceGuy in their latest Thrillist Edition. The editorial is accurate, funny and best of all ‘we didn’t have to pay for it’. Check it out here.
WhiteBox Update
March 21, 2008
The biggest fear at WhiteBox, is that auto dealers will forget to use the WhiteForm website to finance extended auto warranties. WhiteBox provides each dealer with one or more USB electronic signature pads. It occured to me that instead of keeping the bezel provided by the manufacturer of the signature pad, we could replace it with our own offering our logo, support number and URL. What do you think?
LinkedIn is a Data Goldmine!
March 21, 2008
I have been saying for years, LinkedIn has the potential to be a data goldmine. You can learn the most amazing things without too much work. Louis Grey spent some time showing us how LinkedIn’s new company detail ‘shows silicon valley’s carousel‘ :
How Select Tech Titans Stack Up
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