I wouldn't assume that an expert in their field, someone with the expertise to potentially achieve global recognition, would care about a half-assed company not handling their security properly. More responsibility? They probably want less. They don't need or want anymore power than they already achieved with their own mind. That's how introverts roll.
> They increased the price of this domains from $28 to $140 without sending any notice. The domain was configured for auto-renewing, and I just got charged for $140.
That is most definitely a violation of their merchant agreement. Probably some consumer protection laws too.
You can make neither of those definitive statements without reviewing the contract terms he agreed to during the purchase and creation of the auto-renew subscription. It is entirely possible to authorize recurring charges even if prices may change.
Sweden is good for copyright, but they could extradite you to the US for just about anything else, especially any form of financial crime. And if you're a US citizen, the TLD of your domain name doesn't matter at all. You would have to leave the country and give up your citizenship for it to matter.
My sugguestion is to not end up in prison like the founder of ThePirateBay.
Section 107 of the U.S. Copyright law sets out four factors to be considered in determining whether or not a particular use is fair.
* The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
* The nature of the copyrighted work
* The amount and substantiality of the portion used in relation to the copyrighted work as a whole
* The effect of the use upon the potential market for, or value of, the copyrighted work
You don't have to prove all four factors. You just have to prove that the use is fair. For example, if I write a haiku and someone writes an article analyzing my haiku for educational purposes, the use may be considered fair, even if they use the entire poem.
Ideas are a dime a dozen. It's the execution that matters. Show investors traction, growth, or profit — if you can't reach any of those milestones, rinse and repeat until you do — now you're ready to talk to investors, but wait, now you've reached a point where you don't need investors anymore.
I actively avoid entrepreneurs that are looking for an investment as a form of business validation. An entrepreneurs job is to validate ideas, to find something that sticks.
> Ideas are a dime a dozen. It's the execution that matters.
And you are right. And if I had done absolutely nothing in my life. If I was a kid either dropping out of school or just out of school your sermon would be well applied. I'm not.
After over thirty years of entrepreneurship I tend to use "idea" to really mean "opportunity". Most ideas are utterly worthless. They are great as thinking tools. Never stop generating ideas! A few ideas are worth millions, o billions. Instagram started as an idea. Of course, that idea happened thousands of times. One team executed it well and at the right time.
What this means is that ideas are not always obvious identifications of market opportunities. To over-use Instagram, I know I would have thought that was a stupid idea. I wouldn't have given the Instagram idea the time of day. I would have discounted it as useless and moved on. So, here's an idea, worth billions when matched with the right team, timing and execution, that most people would think was just plain stupid.
As I got older I've tried to be less critical of ideas. I listen to them and I log mine assiduously. I allow myself to generate and consider ideas that, on first inspection, seem utterly ridiculous. I try to review them from time to time. What happens is that sometimes two or three combine into one. That's the case of the quadcopter opportunity I have uncovered. It's the combination of a number of thoughts and an interest in a couple of market segments I've had for years, decades, possibly. Now it's just about execution.
Still, inspired by your comment I edited my post and replaced "idea" with "opportunity". That's what I am talking about, opportunities, not ideas. I have hundreds of ideas, the vast majority of which are not opportunities.
The problem isn't the word "idea". It's the fact that you haven't gotten past the part that's in your head. You can't be sure that an idea is an opportunities until you've put them out there and seen if you can get them any traction.
With respect, I think you are drinking too much of the cool-aid. Yes, in general terms you are right. The difference is that if you have thirty years of entrepreneurship under your belt, having tried, failed and succeeded you should develop a good sense of the good, the bad and the ugly. I am not coming here as an idealist who's never done a thing to proclaim I can save the world.
No. I have logged somewhere in the range of 500 ideas over the last three years. Most are not what I would consider to be opportunities. And that's the way it usually goes. I am fairly certain there are a few that are very interesting and, yes, they are true opportunities waiting for funding and execution. One of them is based on years of using similar services in the context of running my own business and then realizing there's an interesting approach that could do very well. The other, as I said in another comment, is one that's the result of constantly thinking and being involved in one way or another in a couple of market segments and finally having "seen the light" that connects the two worlds. The markets are there for the taking. It's all about funding and execution.
>With respect, I think you are drinking too much of the cool-aid.
With respect, anyone that has ever said "its not an idea, its an opportunity" shouldn't be accusing others of "drinking too much of the cool aid."
I wish you luck, but I think you will find it difficult to attract attention when you have given virtually no information at all about either of your ideas. Then again, I'm not a VC so what do I know?
Anyone serious enough wanting to have a conversation about what I've got on the table can easily contact me off-list and have detailed discussions. I've already had a number of them with people who reached out.
I understand you might want to see more info exposed publicly. Sorry. Not going to happen. I suppose you might not understand this until you experience what it is like to be open and have a good opportunity taken away from you by a competitor. Having lived that wonderful experience I chose to conduct things using a different approach.
I don't see why your opportunities are any better than ideas, aren't they just your really good ideas? The opportunity is surely for you to execute it now, because to everyone else it's just a really good idea?
No. An opportunity is an idea connected to a market need.
There's more than one way to connect an idea to a market need.
One case is where the market already exists either entirely or to some degree and you have a solid idea of how to make it better: iPhone.
Another is where you are the target market yourself and know the market very well. You see the need. You see the pain points and you are equipped to address them. I could argue that might have been the start of Hewlett and Packard.
FedEx is a case of an idea that was discounted and then proven to have been right on the mark. Some ideas can't be tested with $15,000 over a summer.
There are other cases where the idea and the market opportunity reveal themselves during some kind of an instant or event that provides the necessary clarity, if you will, that connects the two. A friend of mine and I had the idea for what eventually became LoJack a year or two before that company came out with their product. We were young, making very good money at our respective jobs and simply didn't have enough of that "clarity" (for lack of a better word) to take the idea seriously. To this day we laugh about it.
Ideas that are just ideas with no connection to a market happen at least two ways.
One is the case of a well established or entrenched set of players against which it'd be almost impossible to compete. It'd be hard to go up against Google or Facebook. The insight an idea would have to have in order to connect with a market opportunity in search or social would have to be so incredible that people would literally want to throw money at you. Even with that, it would cost hundreds of millions of dollars to even begin to have a shot at that. For all intents and purposes you can say that ideas in social or search really don't have a market because you really can't get that market.
The other category are ideas that really don't have markets, at least in the context of what makes for a good scalable company. Local restaurants. Great idea if you want to work 20 hours a day seven days a week, have huge risk of failure, no real scalability and no prospects of any kind of an exit that makes sense. For some people that would be a market. If it weren't there would be no mom-and-pop local restaurants. For most ventures that are looking for or need scale in order to be considered successful a mom-and-pop restaurant idea is an idea without a market.
I could go on. There are, of course, ideas that really lead to nothing useful. Most of those are obvious to most except for the guy married to the idea.
>Ideas are a dime a dozen. It's the execution that matters.
Bad ideas are a dime a dozen. Ideas that are good
and early on have solid evidence that they are good
are rare.
Here are some ideas that, just as ideas, should be
valuable to VCs:
(1) An algorithm that shows that P = NP and is fast.
Why? Because it could commonly save 5-15% of
costs in transportation, logistics, Internet
backbone design, manufacturing, and allocation of
resources more generally.
(2) A computer operating system that is nearly
100% compatible with Windows and can run any
software safely, even malware.
(3) An algorithm that can implement the
fundamental theorem of arithmetic, that is,
factor integers of thousands of digits into
a product of prime numbers quickly.
> but wait, now you've reached a point where you don't need investors anymore.
Not exactly true in all cases, but there is a major
point here. E.g., recently I added the cost of
high quality parts for a server in a mid-tower case --
8 core processor at 4.0 GHz, 32 GB of ECC main memory,
10+ TB of hard disk -- ~$1500. Can get a wire rack
shelf unit from Sam's Club, 18" x 48" x 72", and
could put about 12 of those servers on a rack. That's
a LOT of computing. If have a Web site that can
keep that computing busy and send with the Web
pages ads at, net, $2 per 1000 ads sent, can support
a family in style:
Suppose can send a Web page for 400,000 bits, have 4
ads per page, half fill upload bandwidth of 15 Mbps
24 x 7, and get paid $2 per 1000 ads displayed.
Then get monthly revenue of
I agree. The reason people think ideas are "a dime a dozen" is because everyone overrates their ideas and you can't really measure the value of an idea unless it's executed. However, I must admit that after years of experience I must say the statement is not really true. 80% of the ideas suck. Plain and simple.
It doesn't matter if you are in the Valley or if you are super smart, some people are not made to create/innovate, only execute based on someone's idea. But those people who are able to create are an exception.
Have you ever met someone without a degree or any experience, looking at your product and telling you 100 ways to improve it?I met a guy/wonderkid or whatever that was able to do just that, and he is working for a hedge fund now as far as I know. It took him 20 min to give us an entire improvement plan on how to increase revenue without any papers or anything prepared.We had even backup plans and future competitor moves. He basically humiliated my A+ employee stars who were struggling for months.I was shocked.
> you can't really measure the value of an idea unless it's executed
Well, thankfully for US national security,
the US DoD has been doing just this with
batting average much higher than for VCs
for 70+ years. Examples include the
proximity fuse, sonar, radar, the atomic
bomb, the U-2, the SR-71, GPS, and more --
all of these were funded just from proposals
just on paper, without any 'execution',
and came out fine.
For projects by entrepreneurs, my guess
to do something similar is (1) pick a
big problem, one where clearly a new and
good or much better solution will be
warmly embraced by the market, (2) do
some research, original, powerful,
valuable, to get the desired solution
and a high barrier to entry. (3)
Do (1) and (2) so that the solution
can be delivered by software in a Web
server costing $2000-. Then go live,
get the revenue, grow the server
capacity, etc. It's what I'm trying
to do. Current obstacle: Windows
and trying to use XCACLS and CACLS to
delete a file system directory that
doesn't want to be deleted. Previous
obstacle: Poor Microsoft documentation
for the differences between GUIDs and
SqlGuids and how to convert between
them. Previous obstacle: A virus
from the security problems with Flash
and the fact that Windows doesn't
know how to run malware safely.
Previous obstacle: The fact that
Microsoft's ASP.NET is much easier
to work with when inserting Namespaces,
DLLs, and source code than Visual Basic
.NET. Previous obstacles: A long list
more from Microsoft. The work uniquely
mine has all been fast, fun, easy, without
delays. But I'm getting past the Microsoft
nonsense.
Problem sponsors at DoD, DARPA, and NSF
are used to being able to evaluate projects
just on paper with high batting average.
Apparently VCs don't want to do any such
things.
> 80%
All the percentages on what arrives in
a VC's in-box don't mean much because
what a VC has to find are exceptional
projects; that is, what the average
project is, or what most of the
projects are, is not very relevant --
again because what's required are
exceptional projects. How exceptional?
There has been a claim by
A16H that there are only about 15
projects a year worth a Series A.
If VCs would learn to read as well
as, say, NSF problem sponsors, then there might be a few
more, not a lot yet, but a few.
A problem of information technology
entrepreneur project 'ideas' is that
they are usually just a short description
of what the product/service does,
a description like might be given to
a prospective customer/user. So, with
such an 'idea' and description, usually
there is no good way to evaluate it.
E.g., how the heck, early on, to evaluate
Twitter? Twitter fails my (1) about
solving a big problem. Since it was
not clear that Twitter would solve
a big problem, it was difficult to
evaluate.
What is wanted for (1), for
an extreme example,
is, say, a safe, effective, cheap
one pill cure for any cancer -- there
we don't have to wait for 'traction'.
As in my (1), a 'good' information
technology project should have
significant value as easy to
see. And as for such a pill, want
to stand on some research for
an especially powerful, valuable
solution with barrier to entry.
The VCs just are not thinking this
way.
It is quite possible for a person
to be bright without education.
If the field they are working in,
e.g., computing, doesn't really
require a lot of formal education,
then a person can be bright and
good in that field without formal
education. But, doing really well
in a Ph.D. program in a top research
university tends to confirm
that someone is 'bright'!
Im very confused about what you are trying to prove with your server example. The hard part of your example has nothing to do with building a cheap server rack and everything to do with the fact that it is very difficult to build a website that attracts 50mm hits a month, a point you completely hand wave around
We agree on what has been said, but
the point I was making was so obvious
I didn't say it! Point: Servers are
so cheap that don't really need VC
equity funding to buy a good one. So,
if the 'idea' is good in the sense that
it can get the coveted 'traction', then
the 'funding' the entrepreneur needs is
essentially just the food, shelter, etc.
to write the software plus $2000- for
hardware, then go live. The if the
idea is good, can get $300,000+ a month
from a $2000- server. So, tough to
see just there the VCs have a role.
The OP made a similar point.
Then, the next obvious, so far unstated,
point is, to play in the game, the VCs
will have to do something much like the
entrepreneur does -- evaluate the 'idea'
long before 'traction', i.e., VCs will
have to actually read the 'business plans',
think about what they are reading, and
be able to do an accurate evaluation
instead of just waiting for traction,
significant and growing rapidly and
for some strange event that then has
the entrepreneur wanting to take equity
funding, go from 100% ownership to
0% ownership with his 50% +- on a
four year vesting schedule and report
to a Board that can fire him before
much of the vesting has been done
and take the company.
Cash is like the blood running through the veins of a venture. You need it to survive. You also need it to walk and you need more of it to run. There are web businesses that can certainly be entirely bootstrapped, sometimes by a single coder/designer/everything.
On the other hand, most businesses that scale need more people and more resources and more of everything. This is where the "it's just a server in a rack" model breaks down quickly. Scaling means, at the very least, hiring people and providing them with all of the resources they'll need to do their work. You could very easily be at a $50K per month burn rate very quickly after launch, say, thee months. That doesn't account for legal fees and other expenses that might not be obvious on first inspection.
If you have the money and the ability to scale a business and are willing to risk it all, by all means, do it. You don't need external money for this.
Most of the young folks who seem to make-up the HN audience there are lacking three things: money, experience and the business network. All three of these are critical when you need to press on the accelerator and go. Learning while doing is possible but far less than ideal. If a VC can offer smart money this is probably the best bet for young HN'ers. In this context "smart money" means that a VC makes an investment and also contributes experience, guidance and contacts to the process. This can often mean the difference between success and failure.
In many ways this concept of a good vs. a bad idea has to be qualified with a set of variables. Off the top of my head:
Startup cost
Market
Competition
Barrier to entry
Cost of sales
Capital intensity
Regulatory landscape
Technology risk
Intellectual property ownership
Intellectual property minefield
Domain expertise
Funding
Business operating expertise
Marketing expertise
Local labor requirements
I could go on and I could expand on all of the above but that's besides the point which is that a business that isn't a hobby and can scale is far more than a server in a rack.
You seem to be explaining the common theme that
(1) an entrepreneur has some work done that is
sufficiently promising as the beginning of a
big, successful business and (2) needs equity
funding to scale quickly.
My response: So, when a Web site got popular
and a good Sun computer as a Web server cost
$200,000, which had to be paid long before the
entrepreneur could have received the checks from
the advertisers, then equity funding was needed
for the servers, room to put them in, HVAC for
the room, high speed Internet connections, etc.
Okay, but now a much more powerful server is
available for $1500 in parts and can be plugged
together in a day the first time and
an hour or so for similar servers after that.
For the room, use a basement or spare room
in a house. For HVAC, get a window
unit AC.
For the Internet connection,
15 Mbps upload bandwidth appears to be common
in residences, and that is plenty for enough
revenue for much more.
Growing quickly? Why do that? There are some
cases, e.g., to exploit a fad, but it's not so
clear just why it is necessary.
Cash? Right, it's crucial, but getting that
first 8 core, $1500 server live with 15 Mbps
upload bandwidth doesn't take much cash.
Then if the project is good, that first server
should throw off enough cash for growth to
2, 4, 8, 16 servers, which, if kept busy
should throw off enough cash to make a common
Series A look a bit silly.
Growth in head count? Sure, but that's for
later. For a good project, in the first year
of doing well the project should have put
enough cash in the bank to start hiring,
slowly.
For each of the points you mentioned that
need cash and, thus, perhaps equity funding,
there are plenty of example projects. And
generally your points hold for the 'usual'
projects or 'most' projects. But as
entrepreneurs, VCs, and HN readers all
have learned, projects with good VC funding
are like hen's teeth, in a recent comment
by A15H, only about 15 such projects a year.
So, instead of 'most' or 'usual', we have to
be assuming 'exceptional'. Essentially
everything about a successful information
technology (IT) project is 'exceptional'.
So, I was trying to describe some of what
an exceptional project could do. Net, net,
from all I can see the VCs want to fund
only projects that don't need the money.
E.g., one well known Silicon Valley
VC firm wrote me that they want "100,000
uniques" before writing a check. Okay,
let's see: 100,000 unique users of
a Web site in a month might mean
300,000 users with, say, an average of
4 visits a month. Suppose each visit
sees 8 Web pages with 4 ads per page.
Assume get paid $2 per 1000 ads displayed.
Then the monthly revenue would be
300,000 * 4 * 8 * 4 * 2 / 1000 = 76,800
dollars. One guy. He's now awash in
free cash unless he has 50 Lamborghini
cars, a 200' yacht, and a Gulfstream
G650. Instead, if his car is old and
rusty, then he's in line for a new
SUV and a new Corvette. A few more
months, especially if he is seeing
significant revenue growth, and he
can be hiring.
Here is a 'sanity check': I know; I know;
IT startups are the big, hot, new things.
Right. But they didn't invent either
sex or business. Instead, the US is just
awash, coast to coast, village to big city,
in sole proprietorships and family businesses.
When one of those gets to $76,800 a month
in revenue, with only one or a few workers,
they are not out looking for
equity funding. Not a chance.
Such busiesses? Actually, can buy a house
and support a family just being an electrician.
When I needed one on a Thursday, I was up all
night getting names and phone numbers and calling,
trying to get the work done on Friday instead
of Monday. I left about a dozen messages.
Only one called back, near dawn, because
he was on his way to his Friday morning golf
game, but he gave me a name I'd not found.
That name came and did well. Look, those guys
are working 4 day weeks, don't bother with
publicity, and still are being bread winners.
E.g., when I was a B-school prof, one of my
students had a good career going managing
Wendy's -- so, right, you can guess the
B-school. He explained some of how to
do well running a Wendy's: Have the staffing
meet the demand, not too much (waste money)
and not too little (lose business). To do this
well,
have to watch the weather hourly and watch for
special events, say, B-ball games, daily. He
said the difference is about $200,000 a year
in the pre-tax bottom line, at one Wendy's.
So, a guy who is running 5 Wendy's can bring
in an extra $1,000,000 a year pre-tax just
from careful staffing. He's not interested in
equity funding. Instead, banks are perfectly
willing to loan him money for new restaurants.
In what little time I spent in yacht clubs,
I saw people in rental property, several
retail dry cleaning shops, independent
insurance, etc., but I never saw anyone
in IT with equity funding!
Bringing up a Web site will make
any auto body repair guy, auto
repair guy, pizza shop owner,
coin laundry guy, etc. highly
jealous because that $1500
server is chump change compared
with the equipment they need to
be ready to serve their first
customer. Heck, on my street,
the guys mowing the grass arrive
in a truck with a trailer with
their gas powered mowers --
truck maybe $40 K, trailer maybe
$10 K, and mowers maybe $15 K each.
Gee, for just one of their mowers
can buy 10 of those 8 core
servers at $1500 each.
It is looking to me that bringing
up a Web site that runs ads
is a much nicer business than
nearly any of the millions of
successful small businesses in the
US. Yes, the Web site needs traffic,
and if it is to be really successful,
say, $1+ billion market cap,
some careful thinking and/or a lot of
luck. I do suspect that somehow the
guys mowing grass, and speaking poor
English, are getting by without
a lot of legal expenses! If they
can, so should a guy running a
Web site.
What I'm describing, has it been
done? One example is the Canadian
match making site Plenty of Fish.
For some years it was one guy,
2-3 old Dell servers, ads just
via Google, and $10 million a
year in revenue.
For one more, when my cable TV
and ISP guys were last at my house,
they looked at my software and
mentioned that they know of another
customer who bought three houses
in a row. Why? Just to get the
residential price for their upload bandwidth for
their Web site.
For now, I'm glad I'm an entrepreneur
and not a VC: I get to design my
project just from a clean sheet of paper
while a VC is essentially forced to
wait for something good to arrive in
his e-mail inbox. Yes VCs like to
try to map out the promising 'spaces'
for the future, but to me that is
a form of intellectual self-abuse.
And nearly no VCs have backgrounds
that are exceptionally good
as a foundation for
picking and executing a good project.
It's true that the VCs can't evaluate
my project, and that's beginning to
look like good news; that is, the
entrepreneurs the VCs fund couldn't
understand or compete with my project
either.
I'm failing to see much of a future
for US IT VCs: Computers are too
cheap, and the VCs are insisting
on buying a ticket on the planes
after they have already left the ground.
Besides, as in a Fred Wilson post
at his AVC.com a year or so ago,
on average US IT VC returns over
the past 10 years suck.
Well, I think we can agree on some points. There are tons of web businesses that can be started and run with $100 per month...you don't even need to buy the hardware. All you need is a few Linode's and you are good to go.
At the same time, there are web businesses that need cash, people and resources. VC's can be a good match for that type of business.
The other variable is time to market. This is something I did not fully appreciate when I was younger. There are lots of cases where time to market can make or break a business. This is yet another variable or qualifier on the concept of good vs. bad ideas. An otherwise good idea can be rendered bad simply because of an inability to get to market fast enough. Often times this is a matter of the money necessary to bring to bare the resources necessary to accelerate execution.
As is often the case, there are tons of ways to approach a problem.
Some of my arithmetic is off; I typed
too fast, and it's too late to edit now.
But broadly the lesson remains: 100,000
uniques can yield enough revenue so that
a one person company will be comfortable
financially, i.e., enough to pay the
rent, buy groceries, take a pretty
girl to a movie, and have cash enough for more
servers, and if those servers stay busy,
then he is on his way to more servers and
revenue and, then, hiring.
I, too, did mention that there are cases where
have to be in a hurry so that then some equity
funding could be crucial.
For the young, inexperienced readers of HN,
I'm sorry: HN is helping them get educated,
and there is a lot on the Internet, e.g.,
at Fred Wilson's AVC.com. But help for the
young or not, the projects VCs are interested
in are exceptional which, we have to expect,
filters out a lot of people for various reasons.
Tough to make a $1 billion; the economy is
not big enough for everyone to make $1 billion.
For being slow to market, my approach is to have
done some original research that few others will
want or be able to do, and until I am successful
nearly no one will try to do. Then if I am
successful, they will be too late.
But I've
had a long time, e.g., mud wrestling with
Microsoft's software, learning that VCs
don't look at projects anything like I do,
etc., without any significant progress by
competition.
A common claim is that any idea
entrepreneur A thinks of some entrepreneur
B thought of before. Of course, this is silly
because among all people who thought of
the idea, there has to be a first person
and, then, for that first person there wasn't anyone before. Again,
that first person is exceptional, as is usually
necessary to make $1 billion.
In picking projects, I would recommend
picking one where can do some original
research that few in IT are able to do
and have that research be an 'unfair'
advantage and a technological barrier
to entry.
Of the "tons of ways to approach a problem",
I would urge others to pick some ways
that help make the path to success easier.
E.g., now and for a few years, exploit
an 8 core server for $1500. E.g., if
have to be in a mad rush to get to market,
then pick another project. If have much
doubt about 'product-market fit', then
pick a project that right from the beginning
has very little such doubt, e.g., like
a safe, effective, cheap one pill cure for
any cancer. If need a big team long before
revenue enough to pay them, then pick
another project. My project, about to
have all the software needed to go live,
has several simple Web pages, two
more complicated ones, and
two internal server programs with a total
of 24,361 source code lines and
6,615 source code statements.
Not a lot of code. There is a little
more code that runs maybe once a
day in 'batch'. So, it's a one person
project.
There is an old piece of advice that
a key to success in research is
good project selection -- similarly
for entrepreneurship.
