Why we’re not like Silicon Valley

The next time you hear someone say, “Hey, software can be developed anywhere, so why not here? Why can’t we be like Silicon Valley”.

Your answer: “Because Hawaii doesn’t do $5.26 Billion (that’s with a B) of venture capital investing every 3 months to over 714 companies for an average of $7.4M per company.”

One day, we might get there. But today, we have to “get real” and realize that our deals are going to be much, MUCH smaller. And this is why our model of about $200k-$500k (TOPS) per company that brings a 10x return in <= 5 years is a winner.

Built to be bought vs. built to license IP

David Hornik wrote a good piece, “Built to be Bought (Bubble 2.0)” which warns that the large volume of companies being started w/ the express purpose of getting acquired is a strikingly similar trait to what was going on right before Bubble 1.0.

As you may know, I advocate the IP licensing model for Hawaii startups which means that you build up a good product, generate revenue, and then partner with a company that has sufficient resources to really take your idea/product to the next level. You might also get lucky and get acquired which is what happened to my company TitanKey Software.

David’s post is a good read. I disagree with him in that the goal should be to go IPO because while that may be true in SV, it’s quite the rarity here in Hawaii. However he does help define a fine line between creating a really cool product that can succeed vs. creating a feature that another company might want to acquire.

Using Ajax on your next Web app?

Ever wonder how Google did that cool UI for gmail and for it’s mapping service? They used Ajax which stands for Asynchronous JavaScript and XML.

Some people think that Ajax has the potential to let people write simple applications that might replace many common functions provided by Microsoft Office. This is kinda ironic because Microsoft is the inventor of Ajax.

Anyway, if you’ve got a pretty complex UI problem, you might consider adding some Ajax to make it work a little better. Read this Wired article, “Web Software Challenges Microsoft“.

Geek-prenuers: got salesmanship?

OK, so you wanna be an entreprenuer. Cool. Can you sell? Your answer better be “Yes!” or “I’m gonna!”.

Simple truth: if you can’t sell, you won’t succeed. Plain and simple. Now, this really strikes most geeks really bad because any good engineer knows that sales is really the art of getting paid to spew bullshit, right? There’s nothing a geek quite hates as much as marketing people or sales people.

But at the end of the day, you, Mr/s Geek-prenuer, are going to have to sell. You’ll need to sell yourself, your product, your idea, and hopefully, finally, your company.

If you’re having a hard time swallowing that you’re going to need to be one of those bullshitters, let me give you something to think about: True salesmanship is an engineering exercise whereby the salesperson’s job is to fully understand the customer’s need and then engineer a solution using products and services supplied by the company. Once you understand that the very best sales are done as a full-on engineering exercise, it all becomes quite easy to do. But you’ll still have to shower.

Here’s a Forbes article, “Sales Lessons For Tongue-Tied Techies” that’s good food for thought.

Is 3 billion customers enough?

If you aren’t thinking about developing mobile applications, think again. This Forbes article, “Mobile Content As Popular As TV?“, talks about how in 5 years, 3 billion people will watch content on their cell phones instead of their TVs.

Create a handly application for a cellphone and the numbers just can’t go wrong. I wonder if we can leverage our very own Henk Rogers to spawn a whole collection of mobile phone apps…

Small is big

Here’s a great article that really supports my position that we can stay microscopically small here in Hawaii yet belt out really successful companies.

Guiding wisdom for startups-to-be (or being)

Paul Graham is a great writer and a good guy. I’ve met him personally and really liked him. Here’s a really good essay he wrote that talks about how to come up with ideas for a startup.

If you desperate want to start up a company but are not entirely sure what the product or service is, read that essay.

Interesting model

I had the honor and pleasure of meeting Paul Graham a few years ago when I presented Titan Key at MIT.

Since then he’s started a different kind of venture capital firm, “Y Combinator” . And I think he’s got some very good ideas that can apply here in Hawaii as well.

One really, really neat thing they did was to fund a collection of founders during summer break. The idea was that they would spend the summer to develop a prototype and then go for funding at the end. The results were pretty impressive. I think we can do this in Hawaii.

Apparently their summer efforts were so successful they are going to do it again in the winter. Here’s some details on their program. I think this approach deserves pretty serious consideration.

Launch

Well, today’s the day we start this puppy and I’m presenting at the University of Phoenix. Lets see how she goes!