Incentives and Asset Allocation

One question that frequently comes up when looking at a financing round is the asset allocation for current investors (usually Friends and Family or Angel Investors). If these sources of funds are fully allocated, there is a clear justification for looking for additional, new investors. One aspect that I have yet to hear considered is the asset allocation for the Entrepreneur.

The following post from Flow of Time discusses the unusually high risk that entrepreneurs take.

“From the risk management perspective startup investing is anyhow risky. It’s less than one third of all deals that are worthwhile even for the management. Portfolio management methods scream red when considering the case of a CEO & founder in a startup. First of all, the person has dedicated considerable amount of time and effort for the case from 0-2 years before the seed investment. When the seed investor comes in the founder can be required to invest some more personal wealth for the case. In this phase the entrepreneur earns the living from the venture, has invested additional money for the case (or taken another mortgage for the house) and is required to keep the company in the very steep growth track for several years for the optimal growth.”

It seems that in certain cirucmstances, reducing an entrepreneur’s risk in a venture might actually improve that venture’s returns for all parties involved.

Sillywood, Part 3: All The Money is in Sequels

There is an amusing post on VentureBlog into the whys of multiple stage investing:

Sillywood, Part 3: All The Money is in Sequels: “There is a reason both Silicon Valley and Hollywood are mostly about sequels.

One additional point to is the timing associated with those “sequel” investments. A few months of continued development can drastically reduce the risk associated with an investment, even though the valuation of the company is essentially the same. Which, of course greatly increases a company’s attractiveness to a VC.

Using your mobile to find wi-fi hotspots

Totalhotspots.com has joined up with phone services firm Mobile Commerce to let people consult a directory of hotspots while on the move.

Anyone using the service can find their nearest hotspot by texting the word “hotspot” to the 84140 SMS short code number.”

From BBC NEWS

It’s not clear whether or not it provides a distinction between free and pay hotspots, or if any free hotspots are included at all. If this service gains any real momentum, you can believe they will begin charging to be in the directory.

Symbian Expo 2004

Symbian’s clear vision for the smartphone market is based on an inclusive and shared strategy across the mobile industry. Mobile phone manufacturers are now shipping Symbian OS phones in increasing volumes, and from its standard-setting position at the center of the smartphone market, Symbian OS has taken a worldwide lead in mobile operating systems.

This year’s event focuses on the expanding business opportunities in the Symbian ecosystem, with a new tradeshow arena designed to allow delegates to network with the smartphone industry. Attendance is FREE OF CHARGE if you register in advance.

The event is October 5 & 6 in London and you’re still in time to register for free. More information

New iPod mini

On my recent visit to the US, I picked up a silver iPod mini at the Apple Store in Memphis.

I had a 10GB 1st generation iPod that died in January (thanks again for selling me a bum iPod, CK) and have really needed a replacement since then. It was a tough decision between a new 20GB Click Wheel iPod and the iPod mini, but in the end the mini won out because I felt it would the best fit for life in London.

Most people would say that I’m crazy for having bought a 4GB device when I could have purchased a 20GB device for $50 more… but, I move around a lot in the city, and my iPod is always in my pocket. The 10GB was like carrying a brick in the breast pocket of my jacket while the mini is like having a small phone.

And that’s really the what tipped the scale in the mini’s favor: size and weight. It is always with me and I want the lightest device possible. My trips are relatively short (even the occasional trip to Spain takes only 4 hours), so the mini’s capacity isn’t a problem.

Also, I used to backup files to the 10GB iPod. I don’t use the mini for backup purposes anymore. That is what DVDs are for and should I lose my iPod, I really don’t want all those files available to anyone with a firewire port. (Yes, I know they can be encrypted).

4GB of music is more than enough for the morning commute and the occasional trip. Intercontinental flights are a bit more problematic, but I only fly to the US once or twice a year. It’s pretty hard to justify carrying around a larger iPod 363 days a year so that I have a bit more storage space the other 2 days.

My orignal reaction to the iPod mini after its announcement:

Well, I think Apple blew the price point on this one…$249 is simply too much for this iPod. As CK said you can get a 15GB for $299…

However, I think this little guy is a good indication of where the iPod is going over the next few generations- particularly size-wise. I’m glad they got rid of those awful buttons at the top of the iPod. One of my main reasons for getting the “old school” iPod from CK was the form factor. The new miniPod has improved on the original- instead of taking a step backwards like the current 3G iPods.

I’ll have to see the aluminum finish in person to judge that, but I can imagine it will be beautiful. And the fact there there is no white miniPod could mean no more white Apple products…I can’t wait for the second generation of this little guy….

I will say that the alumnimum finish is great, and after two weeks of use it looks like it just came out of the box. I think it’s going to hold up much better than the scratch-magnet original iPod.

The click-wheel is a great piece of engineering as well. It’s much better than the original scroll wheel with the buttons around it and light years ahead of the awful 3G buttons-above-the-wheel model.

The only problem I have encountered is the famous “stuck menu button”. For some reason the Menu button decides to not work and the only way to get it working again is a soft reset (hold down menu and select for 10 seconds). Aside from that one (software) glitch, it’s a fine replacement for my original iPod.

The Art of the Start

Words of Wisdom from Guy Kawasaki’s new book The Art of the Start:

There are seven milestones that every startup must focus on. If you miss any of them, your organization might die.

• Prove your concept.
• Complete design specifications.
• Finish a prototype.
• Raise capital.
• Ship a testable version to customers.
• Ship the final version to customers.
• Achieve breakeven.

It seems simple enough, but some companies can’t seem to move through this seven step plan.

Grab a PDF or MP3 for your morning tube commute at Guy’s website.

How to disassemble and clean your iPod’s mechanical scroll wheel [UPDATED]

[UPDATE]
This post was getting so much traffic on my old site, I thought I would repost it here and add the fact that I also bought iCleaner to get rid of the scratches on both the plastic and the metal.

The iCleaner worked more or less as advertised, however it did *not* return my iPod to a factory-like finish. Also, the cleaner has now separated eight months on, so I’m not sure how effective it would be cleaning an iPod or iBook now. The short shelf life of iCleaner is disappointing and the results are mediocre. Think long and hard about it before you spend your $20…

Guess who got an old-school iPod for Christmas? That’s right. And what was the first thing I wanted to do? Restore it to factory conditions. I have *not* followed this article yet to clean my iPod, so proceed with caution.

From iPodlounge.

Warning: Do not attempt to disassemble iPods with non-moving, touch sensitive scroll wheels. The following methods are only for iPods with mechanical, moving scroll wheels.

Step 1
Here you have your iPod, Looking pretty and in one piece. Not for long.

Step 2a
Get yourself a length of tape. We are using Pressure Sensitive Scotch Tape, but masking tape will work just as good. Place the tape either top-to-bottom or side-to-side covering the scroll wheel as shown in the photo at left.

Step 2b
Gently pull the tape taught from both ends until the scroll wheel "pops" up.

Step 2c
As you can see this is an easy, safe method for removal. We spotted this method at iPodingand tried it ourselves and liked the results. I’m sure you’ll agree once you give it a try.

Step 3
Here you have the disc and center button completely removed.

Step 4
A closer view of behind the scenes. Notice the steel ball bearings in which the scroll wheel tracks on.

Step 5
Take a look at how thick the disc is. Suprising build quality. Now your ready to clean your scroll wheel. I recommend using a can of Dust-Off or Endust compressed air for electronics. Spray the compressed air in short bursts to remove any dust. If there is any dirt or grime, clean it with a slightly damp (with water), soft cloth then dry it off completely. You can also use the can of compressed air to dry it. Give a quick cleaning to the inside of the iPod with the can of compressed air. Now it’s nice and clean and ready for reassembly. Note: You can buy Dust-Off or Endust at any large electronic stores.

[Update August 2006]

Three further posts that might be of interest to you:

1. Sony MDR-EX71 Review
2. Shure Ec2 Review
3. iPod HiFi Review

[Update February 2007]

As you read through the comments, you’ll see people talking about the iPod mini, iPod nano and video iPod. There is a new how-to site that offers videos to walk you through your repair process step by step. If you’re going to operate on your pod, you might want to watch these videos first…

Jason Ball's TechBytes

Technology & Venture Capital

Month: September 2004