Archive for the ‘General Discussion’ Category

I wish this was my library

Several who have read my blog contact me concerning reference materials and textbooks that I would recommend.  I must admit that I am a biblio-maniac.  I am unable to go into a book store especially a used  bookstore and walk out empty handed.  Even in this day and age of iPads I still love the visceral aspects of the printed form.  Call me a luddite. That said I do have have somewhat of an interesting per-view on the world of books.

For the software world the people that are doing the creating are not writing books per se.  Thus if your reading books your not necessarily creating anything novel.  Let me be more specific.  Many use books to find an answer.  Many use books as a catalyst or reference.  I fall into the latter.  There are no “give me a shipping product” books – no “what is the answer?”  – for some of the stuff that we create.  Yes there are several ‘cookbooks’ and recipes for say learning a language or a new framework but there are no books that will provide answers to production level novel solutions.  As a very succinct example I was having a discussion in NYC with a very respected Executive Engineering Director and we both decided that there were no books that dealt specifically with hiring great talent in the tech world.  Why?  Because most are not going to tell you exactly what it really takes to hire great people and to build great teams.  That said few are going to explain how they came up with great coding feats – they will explain it after the fact for reference see Coders At Work.

So without further “waxin all philosphical‘”  here is a laundry list of books that I have found useful over the years.  I will try and categorize them according to subject matter.  Its by no means comprehensive.  I will also utilize this same list format in the future.   I would love to hear feedback or your thoughts – please share your list, if you are so inclined – after the fact.

Machine Learning, Data Mining and Knowledge Discovery

Scaling Up Machine Learning (Cambridge University Press)

This book is phenomenal and is at the very for front of issues we are all trying to solve in the areas of large scale learning systems. The book contains everything from parallelization of Support Vector Machines to details of how one designs hardware architectures for the next round of highly scalable machine learning algorithms.  Note this is not an introductory text.  Also the book takes a very interesting view in that it is written mainly by the best in the field.

Machine Learning,McGraw Publishing

This is a seminal text in the areas of Machine Learning.  There is  enough verbiage if your not a mathematician and enough algorithmic pseudo code to follow the development of the explanations.  I find myself going back to this book over and over.  Covers most everything from Bayes to Boosting.  It also has updated chapters on his web page.  I also like this writing style.

Business Modeling and Data Mining  (The Morgan Kaufmann Series in Data Management Systems)

Some purest might not like this book but I think it is a great read because it discusses why we actually need to consider a paying customer.  The book goes deep enough in the explanations and marries them to great scenarios for business models.  It also discusses in a ‘mind map manner’ how to design systems and algorithms.  The text also has a great bibliography.

Collective Intelligence, (O’ Reilly Press)

This is a great book that gets your toes in the water for differing aspects of “DataScience”.  Basically statistics and machine learning for data.  The book has examples for simple crawlers,  Bayes Theorem, Adaptive Neural Networks, Similarity Functions, Distance Metrics, and workhorse algorithms such as Support Vector Machines and Non-Negative Matrix Factorization.  Written in a pragmatic fashion.  Code in Python is included on the author’s website.

Artificial Intelligence: A Modern Approach 3rd Edition, (Prentice Hall Books)

Seminal book on the subject.  Spanning is the word I think of when reading this tome.  The book covers the usual suspects but goes on to a ‘meta-level’ to discuss varied fields of Logic, Qualitative Physics, Spatial Reasoning, Psychological foundations and fundamental mathematics.  The appendix and bibliography are worth the price of entry (expensive) for this oracle.

Introduction to Evolutionary Computing (Natural Computing Series, Springer)

I am a proponent of the ‘get it and go’ format.  This lives up to the title.  It is a good introductory text.  It starts off with a good introduction to Genetic Algorithms, not to be confused with Evolutionary Computing and proceeds to Learning systems and deeper issues as Non-Stationary classification systems, multi-variate parameter selection as well as a chapter on applications.

Machine Learning – An Algorithmic Perspective (CRC Press)

This book takes a novel approach that have an online presence and a hard text reference.  Stephen Marsland updates the code and book online and provides access much like the O’Reilly series.  Of particular interest is the format for review of such areas as probability, eigenvaules and fundamental algorithms.   The book also provides code examples mainly in the areas of Python.  This book takes exactly that approach, with each topic being presented both mathematically and in Python code using the Numpy and Scipy libraries.  As most know SciPy and Numpy resemble Matlab and is sufficiently high level that the book code
examples read like pseudocode.  SciKits would also be a good addition.

Semantics and Natural Language Processing

Programming the Semantic Web (O’ Reilly Press)

With the same eye towards ‘get in and get done’ Seagram wrote this because there was no middle ground for    Semantics or if there were such a text it was voluminous.  Great introductory text on Semantics with succinct code examples in Python.  The text emphasizes that you are not constrained to using data from only one database or server, but when the data is organized and stored in a standardized semantic format such as RDF, it may be made available for reading by anyone (if desired) without any risk of it being overwritten by using a query language like SPARQL instead of the better known SQL.  Once again complete code available via the InterWebz.

Semantic Web Programming (Wiley)

This book is a larger text that spans the areas of Semantics: FOAF, Reasoners, SPARQL, Linked Data, Microformats without getting too far in the weeds with theoretic gymnastics (read axiomatic proofs etc).  Written in mainly in JAVA.  The discussion of Semantics from a ‘non ivory tower’ standpoint is worth the purchase.  Then again it has been said in order to program semantics one has to believe semantics exist.

Natural Language Processing (O’ Reilly Press)

People often confuse Semantics with Natural Language Processing.  While the two are close cousins you can do one without the other and visa versa.  Historically NLTKas it is now known in the industry is becoming the “goto” Python Library for performing textual gymnastics.  This book is a wonderful introduction to Python, Text Analytics and analysis of grammer.  For example entity extraction which historically is extremely difficult is:

entities = nltk.chunk.ne_chunk(tagged)

I mean (pun intended) how nice is that?

Python Text Processing with NLTK 2.0 Cookbook (PAKT Publishing)

This is at a much lower level and assumes that you need to do perform basic NLP and is more text analytics based than extracting meaning, linguistic and grammatical behaviors.  One novel aspect to this book is the addition of creation of a corpora reader via MongoDb.  The book even addresses nuances like FileLocking during corpora edits.  It uses PyMongo as the front end interface with Python examples.  The examples go on the look at various aspects of NLTK and NoSQL architectures.

Network and Dynamic Systems

Network Crowds and Markets: Reasoning About A Highly Connected World (Cambridge University Press) 

At the moment this is one of the tomes that I am immersed within.  The book has a good introduction on Graph Theory but then quickly heads into territory such as calculations of Social Capital with emphasis on Closure within Networks.  The text also does a grand job of tying (pun intended) Graph Theory and Game Theoretic applications with emphasis on arbitrage environments.  The chapter on diffusion in networks is worth the price of purchase.  For anyone performing work in the area of Social Networks this text is a must.

Social and Economic Networks (Princeton University Press)

This book is a great mix of statistics, linear algebra and game theory as applied to social networks.  The economic emphasis is particularly cogent.  The detail and depth is world class.  The analysis of Stochastic and Random graph models is of particular interest for anyone dealing with adoption models in network environments.  Further the mathematical analysis of imitation in social networks is especially enjoyable. This is also one of the few text that I have seen that tie together Fat Tail, Long Tail and Poisson Distribution analysis.

Introduction to Dynamic Systems (Wiley)

This is an older text published in 1979.  Funny how those “maths” do not change much – eh?  I have owned this book since I have been involved with creating software systems.  The book while not “out of print” is commanding extremely large sums of money.  The objective as stated in the preface is: “to help one develop the ability to analyze real dynamic phenomena and dynamic systems.”  Seems very appropriate in this day and age of online behavior.  The book starts off with a review of differential equations, linear algebra and state space equations.  Then text then goes on to address both mechanical and electrical constructs with applications with tools such as markov models and control systems with z-transform theory.   You read this book and honestly you realize not much as changed with the InterWebz.

Math

Numerical Analysis, Sixth Edition  (Brooks/Cole Publishing)

Years ago when I was working on my Phd in Applied Science we had several levels of Numerical Analysis.  I love the aspects of Lagrange Polynomials, L2 Norms, Splines and the like.  This book covers them all and has a really cool glossary and index of defined terms for that moment when you literally forgot what a term means because your cross eyed.

Probability Random Variables and Stochastic Processes (McGraw Hill)

This is/was a text for a class at c on – Probability  Random Variables and Stochastic Processes.  The book is written by Athanasios Papoulis who is a legend in signal processing. I will tell you this is not for the faint of heart and neither was the class.  Now more than ever it is an important part of anyone doing data science.

Matrix Algebra for Engineers (Von Nostrand Company)

This is a straight ahead approach to Linear Algebra.  Written in a straight ahead fashion addressing fundamentals of matrix theory like simultaneous equations, determinants and eigenvalue analysis.  I probably have a high affinity for this book because it is a first edition published in 1965.

Programming and Code Development

The Art of Computer Programming Vol 1-4 

Colloquially known as TAOCP, I am not going to say much about these tomes except you should at a minimum know what they are and have in them.  Not for the faint of heart if you just want to do some PHP or ruby on rails. Having had the experience to take a class from Professor Knuth with variations of these via class notes being the backdrop, I cannot say enough about the text.  For the true software engineer a must for the arsenal.

Code Complete (Microsoft Press)

IMHO this is a great book for the thought processes that lead to creating production products.  It was a seminal work in the area before all of the Agile books hit the market.  While I myself am not a big proponent of ‘software process’ this book gets you in the modus operandi of how to think not just code.

Signal Processing

Adaptive and Digital Signal Processing (International Series on Signal Processing)

I was having discussion the other day with some I respect in the audio, semantics and data science field and we noted that long before you could spin up a virtual machine in the proverbial cloud there was a field called real time signal processing  – where you didnt have a database.  All the processing of streams were in real time – in memory.  Funny how the vissistudes of cyclialty come back to haunt you think Big Data.  I highly recommend this text.  Great examples of frequency and array based processing.  When everyone was teaching time domain behavior Professor Lindquist was teaching the law of dual domains and easier math.  It also covers various kernel transforms never covered in other text before the term “wavelet” came in to vogue.

So there is a first cut in a multi volume blog that I will continue.  I trust this was helpful.  If you find any of these text useful feel free to contact me with what you are working on or considering.  Also if there are recommendations that you find particularly informative as far as a certain text goes drop me a line.

Until Then,

Go Big or Go Home!

@tctjr

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Passion comes in many colors

Recently I received an award for best presentation at a BarCamp entitled “Quick and Dirty Startups.”  I had a blast both creating the slideware and presenting it – although during the presentation the projector was intermittently shorting out which I feared would cause the audience to enter into epileptic fits.  Maybe the gnashing of teeth and wringing of hands during my presentation was that or maybe the audience members realized how damn difficult it is to create company from the spark of an idea.   In the presentation I said do not create a company if the number one reason is to make a ton of money (that confused many…).

Hail to the Champ

At the same time I have been in varying degrees of discussions in and around the T’s of a Startup: Talent.  Most who have followed my blog realize the importance I place on talent.  I have also been speaking with various software engineers of varying skills sets from those who love CSS, to those who love HDFS, to those who love creating ensemble machine learning algorithms.  These two events had me reflect on something that I used to consider seperate entitites.  It was though I had an epiphany.  What if what you do to create and who you are –  in fact are one in the same?

I wrote another blog on the great human endeavor of software.  I would also consider music to be in that league as well.  The two closely align.  There are rules yet there are no rules.  There are fundamental symbolics and syntactics that allow singular and crowd sourced orchestration to create great works of art.  Those that truly create great music and software have one thing in common: Passion.  Which is the number one attribute I look for when either wanting to work with someone or adding someone to a team.  I also reflected on the views people have of software engineering writ large and realized that most like the music world look at as us as though there is no work involved.  Why?  If you look at anyone who loves what they do and who they are within the same instance performing a task for the pure desire of doing it – is not work.  It is what you do and who you are that create that perception.  I have had the extreme pleasure of working in many aspects of the music industry as well as the software industry and in fact some cases one in the same.  No one sees  the 25/8  (25 hrs a day – 8 days a week) schedule.  All anyone sees are the end results: Concert: On stage women and men throwing themselves at the stage, Software Company: Pulling up to your yacht in your Modena with a personal assistant. They do not see the massive amount of preparation, practice and planning involved.  However while it is grueling for those that love the process it is not work.  On the contrary for us it is pure adulterated freedom.  Why do i say adulterated?  Many would consider that to do what we do with as much fun as it is – IT MUST BE  A CRIME!  Sure there are incredibly difficult situations, many that are life changing, but what of it?  For those that are truly passionate about creating we really dont know what else to do.  I will leave you with a great clip by a legendary guitar player Steve Vai as he discusses the secret to his success.  Know what you want.  See it happen and the “Is To Be” will ring true.

Get into a line that you will find to be a deep personal interest, something you really enjoy spending twelve to fifteen hours a day working at, and the rest of the time thinking about.”~ Earl Nightingale ~

Until then,

Go Big Or Go Home!

@tct

The USS Sand Lance Nuclear Submarine

I have been doing some work lets say ‘out of the ordinary’ as of late.  I have also been extremely honored to be working around some former people who were directly involved “when peace broke out” during the Cold War.   I have also had the opportunity to work with people who have backgrounds in literature who now work in the technical industry.  Also, dear readers, as most of you know I am fond of the entrepreneurial spirit.    This  led me to thinking about how they all interrelate and then like magic!  Submarines, Shakespeare and Startups.

Submarines

So lets pick the first one: Submarines.  Some of submariners that I know were directly involved with designing, building and operating submarines.  Specifically Nuclear Powered submarines.   In listening to the stories I noticed how much in common Submarines have with Startups.   Let me be specific herewith:  I am referring to fast attack nuclear submarines.  Here is a wikipedia page for reference: Fast Attack Nuclear Submarines – Los Angeles Class.  I am also referring to problems areas posed as to why Russian Submarines were quieter than USA submarines (if your interested do the google grunt work).

So first let me explain why I believe in this day and age of Lean Startup mentality why we can learn a great deal from those that travel below the ocean surface.

Submariners are consumate planners.

Submariners are by definition – independent operations.  From the perspective of information and physical support the design, building and operation places a premium on planning.   The Commanding Officer (CO) must “go with what they know and have got”.  Efficiency is key.  Space is a premium.  Intelligence at the highest level are mandatory across all aspects of the design, operation and mission.

Submarines are the epitome of stealth

Submarines have been recognized as the preeminence of contributions to stealth and survival.  For instance the greater degree of enemy’s knowledge of the submarine – in both space and time – the greater the diminsihment of the submarines effectiveness.  Stealth relates to safety and the mission of the ship relates to efficiency.  Signature Management is the term given to the ability to lower the footprint of detection.  It ia also known as Stealth Technology.  Stealth technology also termed LO technology (low observable technology) is a sub-discipline of military tactics and passive electronic countermeasures,which cover a range of techniques used with personnel, aircraftshipssubmarines, and missiles, to make them less visible (ideally invisible) to radarinfraredsonar and other detection methods.  Stealth Startup anyone?

Submariners are Concise and Focused

Submariners need to be extremely consice in all matters of communication.  In most cases receiving communications may always be accomplished but it may need to be managed around mission critical requirements.  These mission critical requirements are in most cases time sensitive  In many cases communication transmission may not always be available without mission impact.  Thus one needs to be concise and make decision in-situ at the moment and go with what they know.  Communications are minimized while maximizing the ability to war-fight.

Shakespeare

Nowadays, literature folks abound in the technical sector.  I also include english majors and people who dig 17th century poems like Milton’s Paradise Lost in the group.  Why?  They know how to communicate and weave disparate information.  They also know how to tell a story.  They also know how to use commas accordingly.   Shakespeare being the preeminent example of author and playwright wrote stories that naturally mirrored life’s twists and turns.  What does this have to do with startups?  Let us take an example from Hamlet (NOTE: this a cliff notes exceprt from SparkNotes)

” On a dark winter night, a ghost walks the ramparts of Elsinore Castle in Denmark. Discovered first by a pair of watchmen, then by the scholar Horatio, the ghost resembles the recently deceased King Hamlet, whose brother Claudius has inherited the throne and married the king’s widow, Queen Gertrude. When Horatio and the watchmen bring Prince Hamlet, the son of Gertrude and the dead king, to see the ghost, it speaks to him, declaring ominously that it is indeed his father’s spirit, and that he was murdered by none other than Claudius. Ordering Hamlet to seek revenge on the man who usurped his throne and married his wife, the ghost disappears with the dawn.” ~ SparkNotes on Hamlet

Ok so how does this relate to startups?  Or submarines for that matter?  Inquiring minds want to know!  We have Stealth, Revenge and Strategy all rolled into one simple paragraph! Notwithstanding the whole sword fighting thingy (technical term) between Hamlet and Laertes! This!  This is the stuff of true competition!   Moreover Shakespeare mirrors life, life is about humans, humans are bat-house crazy, ergo startups are crazy!

So lets look at three aspects of many of the characters in Shakespeare’s plays and stories:

Shakespeare characters are consumate planners

Revenge usually takes planning.  Lets take the character Fortinbras, who has led an army to Denmark and attacked Poland earlier in the play, enters with ambassadors from England, who report that Rosencrantz and Guildenstern are dead (ok think all that took some planning by Fortinbras or he just waltzed in?) . Fortinbras is stunned by the gruesome sight of the entire royal family lying sprawled on the floor dead (Ok Fortinbras time to make a quick decision). He moves to take power of the kingdom. Horatio, fulfilling Hamlet’s last request, tells him Hamlet’s tragic story (how nice of him).

Shakespeare characters are the epitome of stealth

Ghost and Witches.  Need I say more?  Don’t we create apparitions when we sell our pitch deck?  How about the reality distortion field?  Yes?

Shakespeare characters are consise and focused

Well they are  when it comes to salient aspects such as revenge, de-throning and well murder!   Things that carry high price tags if you really that can go off the rails – people get really motivated.  Kind of like startups.

So let me be specific here on startups.  I really like the terminology Lean Startups.  The book is great if you havent read it.  That said its really nothing new.  Incremental feedback based on whether a customer could really use something is a basic business premise.  We all have gotten caught up in making something “kewl” because we could but so what?  A little known fact is that process doesnt make great companies or great software.  Getting stuff done is about making a great startup.    Also having the ability to NOT PANIC is a good attribute for your founders and initial team.   Think a submariner stuck under the ice can afford to panic?  What good will panicking do?

Which in turn leads me to another issue on a recent development in the startup arena and that is the issue of Aegism and Founder Prejudice. Yep I said it.  It also cuts both ways.  Older founders and employers are seen as dinasours or cannot go the distance and younger persons do not have the pedigree to get through the tough times.  You need both.  Its a syncopated system.  I do prefer to work with those that have been stuck under the ice and do not panic.  If your in a startup you will get stuck under the ice.  Then what?  I dont care how many lines of ruby,perl,python etc you can write.  So can the next person.  Be calm.  Always remember to breathe and use the restroom, head or latrine.  Take your pick.

Remember:  To do a dangerous thing with style is the mark of a professional.  – #TCTRules.

For those that are interested here are some references:

1) Submarine Plans  from Alexander the Great to 1994

2) Submarine Technology for the 21st Century by Zimmerman

until then go big or go home!

@tctjr

Recently Mark Suster presented a writeup at TechCrunch here: Whom Should You Hire? Of interest is the following extraction:

If you’re doing a great job at continually recruiting and if you have a company ready to hire several people, at some point when you have enough of a pipeline of talented people you need a way to separate them. I have a long-standing mantra, “attitude over aptitude.” This is assuming a raw minimum of MIPS in the candidate. They need to be seriously smart / talented in their field to make the minimum grade.

But within this “minimum acceptable talent level” you still have a wide variance of “employee types.” Let’s be honest – some uber talented people are PITAs. I never hire them. One bad apple spoils things for everybody.

You don’t see it coming. You figure, “sure, they’re a pain but they produce such high quality work I’m willing to put up with them.” Don’t. The last thing you need is some rat bastard fomenting trouble.

They’re the ones who are talking pop at cocktail parties when they’ve had one too many. They’re having private lunches with other employees talking about how they’ve lost faith in your vision.

When you hit internal moments of doubt you need the team members who say, “Guys, we can do this! We’re up against the ropes but we’re not down. Let’s dig in.” You need team members who do that when you’re NOT there.”

Truer words were never spoken.  We haven’t really changed much in our habits via our short time of evolution here on Earth.  Our survival instincts kick in and usually people freak out and do weird stuff.  I could write tomes on the things I have seen people do within times of tech world crisisdom.  There is an old adage “Do Not Panic and You Will Live.”  Most panic and freak out – but those that adapt and hang in there usually win out.  I wrote sometime ago about the The Three “T”s of a StartUp.  I also wrote sometime ago about the companies bidding on talent way before Zuckerburg bid on twitter for teams: Revisiting The Three T’s. I then wrote about the obvious talent shortage and how how we are going to see a swarming affect of teams much like the days of clans in Quake: Mercanaries For Hire.

Yet even with the best of the best of the best.  One thing still stands true: At some point the attitude does over shadow that compiler count.

Go Big Or Go Home.

@jaxsoncreole

Agreements.  Yes you need them.  In fact you need many types but you do not have to pay an arm and a leg to a lawyer for them.  For some this will be rather pedantic yet I will add a nuance or two concerning these matters so maybe you will pick something up.  Remember even experts should do the basics over and over just to keep sharp.

The reason I am writing about this seemingly pedantic and rather boring subject is that many companies and people take HUGE amounts of valuable time and money going over and over and over these documents.  Yes you want to get the basics down but a startup SHOULD NEVER SPEND EXORBITANT  MONIES AND TIME ON THESE DOCUMENTS.  If your dealing with someone who is being overly difficult concerning getting all of the minutiae detailed up front and perfect – get rid of them and get someone else – unless they are writing a really big check!  I have seen several companies spend two much time working on these documents when they are essentially free.  TheFunded (http://www.thefunded.com/) has a great set of documents that were gifted by Wilson Sonsini Goodrich and Rosati.  Don’t know who they are? Do some homework.

Here is a short list:

  • C-Corp Filing: Ok for some of you I can hear the groans or rebuttal.  Yes YouTube was a special case of and LLC.  Nowadays I am asked if companies are Del C Corp.  So please get the 250.00 or so put 2000.00 in and create your 20M shares.
  • Non-Disclosure Agreement – basically says you wont tell the world everything about the latest NewCorp.  A gentleman’s agreement if you will.   I would cap it at 3 years which actually should be 1 year but hey just sign it and get talking.
  • Offer Letters: Do not make it overly complicated.  State the basic work items of what you expect, meeting granularity, percentage equity stake, strike price based on current valuation, vesting schedule and retainer if any.  For employees also list salary if applicable
  • One Pager”: This discusses the company in a snapshot and allows you to quickly intro your company.  Here is what you want in the one pager: Who are the Founders, Industry, Business, Accountants, Current Investors, Your Ask in Dollars, Use of funds, Number of Employees, Clients, Exit Strategy, Contact information, Summary of Company, Market, Products, Company Management, Board Members (list companies they worked for and advise) and your Logo with address
  • Convertible Note: This eases the pain of raising seed and angel funding.  I am not going into the specifics here but suffice to say there are ways for debt financing and equity financing that can be clean no muss no fuss. Sign seal and get to coding.
  • CAP Table: This is who has what and at what price.  Important for raises.  It should be a very simple excel spreadsheet allowing you or others to put in raise amounts and compute dilution as well as percentages.  This also lists founder, restricted and common stock issuance
  • Your Deck: The pitch deck.  Know it love it and recite it in your sleep
  • Business Plan: What do those forecast look like and why are you going to take on Google, Apple, Microsoft and Facebook?
  • Stock Plan: This is usually referenced in the offer letters so at least have some version so the SEC wont freak out when you file your raise with them!

I have found that some people will try and get fancy with these documents because well honeslty they do not know any better and they want to appear smart.  Please if your faced with any of these documents just say you dont know what such and such is and get an answer instead of negotiating around the points.  Also just ask for what you want.  Say I want to have 10% restricted shares that vest immediately upon me hitting such and such milestone.  Especially if you’re a founder or a coder.  You have the ideas and the coding ability so you control the show.  I would recommend one item at the very least is ask for restricted stock for tax consequences.  If you’re a founder you should have founders shares.

So main point is that the document are out there and you don’t have to spend a ton of money.

My other point is if you run into someone that wants to grind on these documents instead of working them out in concurrence with taking your Idea To The Bank then tell them you don’t have  time and need to get someone who wants to start creating.

I would love to hear from others out there or any comments and questions.

Until Then,

GO BIG OR GO HOME!

 

Per the Song: Money

Why We Do IT

If you ask me to name the proudest distinction of Americans, I would choose- because it contains all the others- the fact that they were the people who created the phrase “to make money”. No other language or nation had ever used these words before; men had always thought of wealth as a static quantity- to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. ~ Ms. Ayn Rand

I’m not sure about you but every time I am asked why I do what I do – I always think it sure beats digging ditches.  I mean really folks lets be honest here.  Would you be doing anything else?  Software is the most scalable profession this world has ever known and in this post July 4th blog I was thinking – wow America created the industry.  The Epicenter of it all.  I believe that creating software is the epitome if The American Dream.  An Idea, A Computing Device and a Connection.  It is complete freedom.  There are no rules.  The only rules are mandated via the compilers and processors.  The one to many multi-cat aspect of creating software and now DataSpaces is completely scalable.  Doctors, Lawyers, and in some cases Stock Brokers are not scalable as many times it is a one to one relationship and is a time allotment with respect to target audience.  If your creation is a hit then there is a non-linearity for scale that cannot be duplicated.  Then comes the after affect.  Money.

Most do not set out to say – “Hey I am going to make some money.”  Nope in the software world you say, “Hey wouldnt if be cool if <insert idea here>.”  I am really getting tired of people trying to soften the aspect of the Extreme Capitalism in the software industry.  So for arguments sake which I enjoy let us do a little play acting:

Entrepreneur: I am creating a Data As a Service company for Socnets

Venture Capitalist: So why did you found the Acme DaaS Corporation?

Entrepreneur: To save the White Hooded Wood Owl from extinction.

Venture Capitalist: Wow that is great I can definitely see my 10x return on this $10M Series A investment.  Whoo Hoo!  Lets do it! Woot!

Not realistic huh?

So lets step back here in a minute.  If you want to be a philanthropist and have not inherited a ton of money then creating a really hot software company with a great exit is a way to get there so you can save the White Hooded Wood Owl. (DISCLAIMER: We are not being selective of wood owls please find the brown one here. In fact I do not think there is such thing as a white hooded wood owl).

So what should you say?  Well Mr./Ms. VC I want to sell this and make a ton of…wait….keep guessing…. MONEY!

Don’t posture.  Money Rules the game.

Until Then,

Go Big Or Go Home,

@jaxsoncreole


Over the past year there have been some great moments in the history of the company that I co-founded.  For context this is my fifth endeavor into the world of start ups.  The other four had very nice outcomes and I have been involved with all sides of “The Process”:  Raising money, advisory boards, venture capital technical due diligence, acquisitions, acquiring (at large corporations) and making the tea (of which I just made a refreshing batch…).   I have seen and heard some amazing comments and have seen some amazing stunts.  I remember one VC who fed his wolf hybrid dog biscuits during pitches.  The time allotted to present was three dog biscuits and then at the end they would decide whether or not to move forward.  Very efficient no muss no fuss.  Do or Die.  The proverbial elevator pitch had better be novel, succinct and efficient.  Each VC has their own process.  One must adapt either apriori (if possible)  or in the moment to what particular moon phase or bio-phase is occurring with respect to the particular partner during the pitch or hopefully further due diligence.  Associates are always nice to deal with as they are usually excited to be talking to you either because 1) they dig the technology 2) they are trying to make an impact on the new ‘found’ company.  Hopefully you will make it past the associate, get a second meeting and get a couple of partners on the phone.

This past year we have met with no less than 75 potential funding partners.  That in and of itself has been amazing to me but given the global train wreck of the economy it needs to be put in perspective.  Given this large footprint of meetings we have had to be extremely adaptive in the moment much like the software we are creating.  Here is a list of  the usual suspects of responses during an initial meeting or subsequent meetings:

  • Interesting, looks like it has legs
  • We are intrigued
  • Great! (multiple times)
  • How will you monetize?
  • Interesting (said with added emphasis)
  • What is the specific business model?
  • Are the engineers all FTEs and in the office?
  • What do you think your pre/post/exit valuations are?
  • How do you compare to XYZ company?
  • Hitherto, other and etc…..

OK so you say big deal been there done that got the t-shirt – swag city.   So here we were cruising along answering question after question in the relentless Chinese Water Torture of Due Diligence and Elevator Meetings – one after the other – after the other.  This is the process.  If your dealing with disruptive technology you need that money amplifier to succeed and get a jump on the competition as fast as possible  First one ships usually wins in this space.  Its the give and take of the game.  It is a great game.  As far as I am concerned it is the only game.

So as we are grinding along  and the following questions are the ones that still to this day have slack jawed me in amazement:

  • Is it done yet?

This was in response to “Are there any further questions?”.  The question was entirely reasonable with one exception:  This was ONE MONTH after we had opened doors.  I have been involved in some eureka software moments, as well as quick turning some builds – but nope – sorry to say I ain’t that good.  We went through the checklist, passed the checklist for their process and was told, “Well we can’t give you a reason why we are passing, we just aren’t going to invest.” Wow maybe I need to change my deodorant.

  • Where do your ideas come from?

This was a during technical due diligence.  So we are going through ‘The Process”.   I was a little taken back that the tech due diligence team wanted to look at our code during a series A raise.  yet the good folks at this institution assured me that if the tech due diligence team gave us a thumbs up they would proceed to a term sheet as they only do deep tech due diligence to close.  Here is our build process,  here is  our code, here are our specifications, provisional etc.  Then they asked, “Where do your ideas come from?”   I thought this person was kidding then I realized this was FOR REAL.  Oh yea we forgot tell you about our process,  the idea fairies come and leave the answers to the grand unified field theory on my chair every night so I can write up the architecture and specifications.  We ended up passing the tech due diligence with flying colors, yet no term sheet materialized.  Maybe the idea fairies took it and left being that I haven’t seem them around.

  • This is a Flash Demo right?

Well no it is not, in fact it is running software.  As I was demo-ing our real time software and explaining what was occurring,  one of the partners said, “This is a Flash Demo right?”.  This was after an hour of discussion of what we had up running.  I was standing in front of the 60″ HDTV with the current date and time showing from the results of our software, I then hit enter again and again the current date and time changed to the appropriate current data and time.  The discussion then centered around if the current date showing was the actual date.  Why yes it was and no this isn’t a Flash demo thank you very much.

  • What about Google, Microsoft, IBM, Oracle Apple etc.?

I always love this one.    I do not consider “thoughting” to be working on or competitive to your current endeavor.    “Thoughting” is what happens at many companies.  Have you worked on that?  Oh yea we THOUGHT about that a decade ago.  These companies are concerned about huge issues like Net-Neutrality, data privacy, anti-trust concerns, identity and cyber-security.  Of course you need to consider what (insert large software company here) is doing in the current tech your involved with creating, but that does not mean you shouldn’t go out and work on the “Next Big Thing”.  Is that what this country is built upon?  I cannot stand people who play to failure.  I try to be extremely self critical and one of my faults that I try to work on is solipsism.  I generally believe people will strive to win at adversity and I end up placing my ethics and value system upon them.  Case in point when we were starting our current endeavor we were told by a large software company engineering executive, “It would not matter if you were making pencils.  You and your team will make great pencils.   We are investing heavily in (current tech).  Go off write come code, file some provisionals and we will probably buy you.  We are buying everything in (current tech) not nailed down.”.  So yes what about the “guys inside the firewall” as I like to call them.  Go do something don’t just sit there and be scared.  You have speed and agility on your side (and no rules).

  • It’s not just Timbuktu, it’s beyond nowhere.

This was in response to location.  Lest anyone think that location does not matter.  It does.  Sandhill, Embarcadero, 1st Street Pioneer Square, Newbury St.  Having to get on a plane and leave requires time and time is money especially in disruptive software.    Geography makes a difference:  Menlo Park, Seattle,Cambridge, London, Bangalore, Israel.  You can make the argument all day about burn rate and easy access to talent but it is much easier to go where the money is to begin with and not have to compete at a disadvantage.

  • Will this Angel Round get you to profitability?

As entrepreneurs we strive to be optimistic in all endeavors.  Yet somehow this inquiry is even a stretch for me.  Yes, it would be great if you could just put in some angel funding and the next thing you know out pops a Microsoft, Google or (Insert Large Publicly Traded Entity Here).  Times have changed. World markets have changed.  There is a conflict with the requirements of experience and basic needs of becoming more experienced.  What is wanted is the 15 year experienced multiple company, multiple exit founder or initial team with little or no salary or living requirements much like say a new college graduate.   It is also interesting in light of the recent market that large VCs are now looking at angel type investments due to lower valuation and better values due to market pressures which put pressure on  traditional angels because 1) the large VCs can afford the risk 2) it will probably squash down the angels on the series A raise.  So many angels are trying to posture as though they are institutional investors and asking conflicting questions in the same instance,  “Can you go off and be self sustaining so we make unbelievable gains, higher than 10x on an exit in the near term” and “We do not want to get crammed down on the valuations during an institutional round.”  A couple of weeks ago I had an interesting discussion with a C-level executive of a large software corporation concerning our company which they had already pushed down to corporate M&A.  I asked them how it was coming along and they said they are trying but we aren’t expensive enough, go raise some more money.

Aint that always the truth.

Startups are an amazing process.   It all starts with an idea or “what if” scenario: a blank white board and an empty room, a discussion of like minds. Specifications are written.  Code is prototyped.  Boom!

I have been on all four sides of the startup equation: creating/founding, VC technical due diligence, acquiring at software corporations and being acquired by software corporations.    What does it take to create a chance at a successful Startup? I like to call it the Three T’s: Talent, Technology and Timing. I believe this is what creates the 1% of startups – the successful entities.  The Big Idea of your NewCo coalesce the three T’s together.   So lets break down the Three T’s:

•    Talent

One common thread that I see is The Team, The Crew, The Clan.  The Team is core to any of the startup functions.   Take a well seasoned and technically strong team that can execute on a code base in a very efficient manner and all of a sudden a grade B idea turns into a grade A idea.  I do not care if your making pencils.  If you have a great team it will make the pencils into pens!  I wrote in a previous post concerning talents of people who exist in the world of technical startups.  Most are multi-faceted over-achievers.  Let us look at very basic core description of some of the attributes I look for in a member of a technical team:

Must have the ability to:

  • Translate business requirements into system design and implementation.
  • Breadth of knowledge in several areas and stretch beyond current models.
  • Understand a variety of constantly evolving business requirements, tools and platforms.  (I am willing to bet that idea or business model will change)
  • Speed and Agility. Can you work intelligently with speed? You will be prototyping systems that have never built before with little or no technical documentation/requirements
  • Keep Theoretical Rhetoric at the door.  It is good over a beer not somewhere that equates to running production code.
  • Do It All constantly with little or no assistance or answers.

Oh, did I mention constant ridicule from people that say The Big Idea is not possible or they already thought about it?  Most companies like Google, Microsoft, Apple, Oracle, Yahoo! or IBM (the folks inside the firewall)  acquire companies for two basic reasons: 1) talent or 2) technology.  Ok, pretty obvious yet what is the underlying motivation?  The talent play is human resource recruiting on steroids.  I was talking to an executive at a software corporation somewhere in The Wild West and they said they really do not like acquisitions but look at it like they get an in place department ready to kick start onto something else.  Wait what happened to your lovely Big Idea?  That is modus operandi and “T” number two.

•    Technology

In many cases the technology is acquired for defensive reasons.  Why you ask?  The good folks inside the firewall usually do not want the other folks inside the firewall to have the latest and greatest creations.  Is it really all that important to them?  Not really.  It is adjunct to the core businesses of the companies inside the firewall.  Be careful here – do not fall in love with the technology you are creating.  It is very easy to do so.  The technology is just a means to an end that enables the idea.  That said, sometimes new technologies are created to create the idea.   Reduction into practice is what it is all about.  I cannot tell you how many times I have heard, “Well we have THOUGHT about that technology.”  Ok well glad you have thought about it, thanks we are going to go off and build something to drive a business model to fruition.   Given a great team that can execute a clean concise code base (complete with specifications and provisional patents) makes a very attractive package for said corporations to pick up. They get more minds on the keyboards.  Possibly your ever changing Big Idea will be used on the corporation.  I must say making money off some code you wrote via an acquisition that is deployed via one of the folks inside the firewall is cool.  In fact so cool it feels criminal.  Especially when it is at the right TIME.

•    Timing

This is a tricky one.  A very smart professor once told me, “Timing is Everything.”  The tech world operates, as do most things in life, within the vicissitudes of cyclicallity.    What comes around goes around.  It just looks and smells slightly different. In the startup world if you think it; it may have already been accomplished and the terminology quick follower may not be quick enough.  In most cases they who ship first usually win although a good Rolodex™ of contacts help as well.  Knowing when to launch or deploy or even start the Big Idea is everything.  Given a great team and some good technology when do you pull the trigger to deploy the Big Idea?  Recently, there has been much discussion of semantic intelligence and predictive analytics.  Information Retrieval and Knowledge Discovery were extremely hot 1998 to 2001.   Many of the same tools and methods for performing natural language processing, machine learning, data mining and a host of other adaptive methods were alive and well yet much of the infrastructure was not in place.  Today we have infrastructure technologies with REST, Hadoop, EC2 and the like and it makes getting down to business of creating Societal Mathematics so much more enjoyable because one does have to worry about the pipes.  Also we have so much more data in the areas of digital born goods via the World Wide Wait (ah Web – excuse me).  Is it truly different?  Not in an academic sense.  The timing is important.    A great idea or a great team to far ahead or far behind could spell disaster for a startup.  In most cases it is better to be a “front-runner” than a “quick follower”.  In a startup hours are days and days are months.  So it is very important to get out of the gates quickly.  Analysis to paralysis can be a death knell.  A grade B idea timed correctly with great execution will magically turn into a grade A exit.

Is this a concise cookbook? No.  Yet I hope you found it helpful and thought provoking.  There are no panaceas for idea2bank monetization but that doesn’t stop me from trying to find one!

Remember:  your ideas are your own until you tell someone.

First welcome to my “blog”. I finally stood up this blog in order to assist others in the maze of creating and making money from ideas. Thus the Idea2Bank moniker. What better way to make money than from a simple two sentence idea, some slideware, a specification then software? It is truly amazing. I hope to see you back and I will be posting daily. Y’all Come Back Now – Ya’ Hear?