[Yeah, it’s real.]
When Should You Make the Jump to Work for Yourself?
Should I Start My Own Business?
The Lean Startup [book]
Author Eric Ries defines a startup as an organization dedicated to creating something new under conditions of extreme uncertainty. This is just as true for one person in a garage or a group of seasoned professionals in a Fortune 500 boardroom. What they have in common is a mission to penetrate that fog of uncertainty to discover a successful path to a sustainable business.
What is the best business to start with the lowest overhead?
I want to become an entrepreneur, where do I start?
OLIVER EMBERTON (founder of Silktide): You don’t need qualifications, money, a planet-sized-brain or even a particularly good idea. All an entrepreneur ever does is create something that consistently makes money.
Think of a company as a machine you design and build. Your ‘machine’ always has certain parts. It sells something to someone, and re-invests some of that to help make more sales in the future. What’s left over is profit for the owners. If you can design, build, own and care for such a machine, you can become very rich indeed. That doesn’t mean it’s easy, but most of the barriers that you think will stop you won’t. Interested?
Let’s talk about you
Are you young, poor, unqualified - a student, or hating your job? Maybe a touch rebellious? Perfect. You have no bad habits, and will work until your fingernails fall out and your eyeballs roll onto the desk. The world awaits you.
Older, wiser, bit of money saved, experienced with a stable job? Maybe a mortgage and kids? Your job is much harder. It can be done, but it might feel like you’re trying to dance backwards through quicksand.
The most important qualities of a good entrepreneur are energy and determination. It doesn’t hurt to be persuasive, but this can be learned. I started as a shy uber-nerd aged 21; I soon learned how to sell when it was the only way to feed myself.
Enough preamble. Let’s make you a bajillion dollars:
Please forget all of the terrible deluded nonsense you’ve heard about the value of ideas. Ideas are cheap, fleeting things; by itself a business idea is worth less than a half-eaten sandwich. At least you can eat the sandwich.
You do need an idea of course. But understand that even the most successful companies were not founded on wild or brilliant ideas. Starbucks chose the brazen path of selling coffee in Seattle. Facebook built a better MySpace. Google built a better Yahoo search. Microsoft copied Apple - who copied Xerox.
Original ideas are overrated. What isn’t overrated is timing. Google chose the perfect time to build a better search engine - good luck trying to do that now *cough* Bing *cough*. What you want, therefore, is an astute awareness of a need that is currently underrepresented in the market. You want to spot a product or service that can go places - original or not. It’s usually easier to refine an existing idea that isn’t fully realised than to create a wholly original one.
People fear setting up a business wherever there’s competition, but competition can be a good thing. The best place to setup a new restaurant is right next to another successful restaurant; they’ve kindly done the hard work for you of building an audience. Many a good business has ridden to success on the coattails of another - it is usually better to have some rivals over none. You just need to become 10% better.
I personally recommend trying to deliver something that you and your friends would buy in a heartbeat. You’ll know more about your field, you’ll understand your customers, and you’ll be passionate about what you do. If you can make your company about a why - not a what - you’ll inspire yourself and those around you. And to survive the next step, you need a fair sprinkle of inspiration:
Starting a company is a bit like parenting; everyone assumes you know what you’re doing, but babies and companies don’t come with instruction manuals. You stumble through it, learning as you go.
It’s at the start where you’re most likely to fail. Your aim is to build that magical money-making machine, but you probably don’t have all the parts and the ones that you need may cost more than you have. Your idea is probably at least half wrong too, but you won’t know which half yet. All of this is normal.
A big part of starting a company is convincing people to believe in you before they probably should. When Steve Jobs founded Apple, he had no money and no customers; what he did next is the hallmark of a great entrepreneur. First he convinced a local computer store to order his non-existent Apple computers, with payment on delivery. He then convinced a parts supplier to sell him the components he needed to build them - using the order he just obtained as proof he would be able to pay them back. Jobs and a small team worked in their garage to build the first computers, delivered them on time and made a tidy profit. Apple was born from nothing.
Most new entrepreneurs play a few gambits early on like this. If it sounds scary, that’s because it is. I once had to pay staff salaries on my heavily burdened credit cards when an early order fell through. You fake it until you make it.
While doing all this you need to juggle between making the perfect company (idealist) and paying your bills (realist) - an absence of either will eventually kill you. I believe it’s one reason why realist / idealist partnerships are so common in business.
Do not scale prematurely. Don’t try to be a big company early on - just aim to be one. Be slow to spend and to hire at first. Don’t waste time writing mission statements and policy documents. You’re small, nimble and on a mission. Make and sell things. There’ll be time for a HR department later.
Don’t be surprised if you change your company entirely. It’s a rare business that survives first contact with its customers. Try to avoid doing this more than once though, it doesn’t pay well.
Survive long enough, reinvest your meagre successes and compound them. Eventually, you can move on to:
This is the step most small businesses never accomplish.
Up until now, your magical business machine almost certainly contains one irreplaceable part: you. If your background is accounts, you’re probably the head accountant. If you’re a programmer, you’re probably the best coder. Whatever you do, chances are you’ll feel essential and somewhat overworked.
Here’s the hard part: you need to make yourself redundant. If you dropped dead tomorrow, your business should carry on working just fine. All of your time needs to be spent working on your business, not for your business. The alternative is you’re basically self-employed with assistants.
Some businesses can’t escape this trap. If you’re a brilliant copywriter - say - you’ll struggle. It’s because what makes you a great company is you, and unless you can bottle up you into a business model, you can’t grow.
McDonalds built a business that works even if they hire almost entirely minimum wage workers. Their process makes it work: every burger is efficient and nearly indistinct, and nothing is left to chance. Their brand is so strong people line up worldwide to eat there. Your business may be radically different, but it should be similarly robust.
If you accomplish this, you now own something that is self-sustaining. You should be able to pull a good salary even if you never go into work. Your time is now free to tweak your business endlessly into something better. Now to conquer the world, all you need to do is:
The final step is a bit like playing Who Wants to Be A Millionaire. Each question you get right doubles your money, or you’re going home.
Do not make the naive mistake of assuming a big company is like a small one but bigger. Oh, nevermind. That’s like telling your kids to listen to you, really, drinking doesn’t make you cool. You’ll learn the hard way.
As a company grows the rules and your culture change completely. You may even find yourself disliking the company you created (many founders feel conflicted like this, eventually). If you’ve made it this far, you have many options: hire help, sell, or double-down and see where the ride takes you.
Remember no business can grow indefinitely. Most industries are more efficient at different sizes - it’s easy to be a two-man plumbing company, but near impossible to build a 1,000 man plumbing corporation. Know the limits of yours well in advance. Software is an example of an industry that scales exceedingly well, which is why it creates so many young billionaires.
It’s never been easier to start a company. You can create a killer product in your student dorm without even registering any paperwork - that was enough for Facebook.
I think entrepreneurship is a form of enlightened gambling. Skill and tenacity are big factors, but luck plays a big part. However, as long as you can keep picking yourself up when you get knocked down, try different things and keep learning, the odds are in your favour. You just have to dare to chance them.
What are the early symptoms that a startup is going to fail?
William Pietri (serial entrepreneur): Fear of testing hypotheses:
It hurts to find out your ideas are dumb, so you have to really want to know the truth more than you want to feel comfortable.
David Litwak (CEO of Mozio): Lack of domain knowledge / not being the customer you are building a product for, which often leads to mentor whiplash:
We got completely conflicting advice at many points, but I was the consumer, so when we had equally smart people telling us opposite things, we went with our gut.
That gut feeling I think can really only be developed by being the consumer who will be using the product. Build it for yourself. When someone doesn’t have enough knowledge about the market they are targeting, more often than not they’ll take bad advice.
Jason T Widjaja (business plan competition judge and mentor): Building for self, not customers:
There’s a difference between what the founders think is a ‘must have’ feature and what the customers will pay for.
Matt Rutkowski (CEO and co-founder of Fusion Sheep LLC): The investor is against you:
The fact that the investor gives money does not mean that he wants your company to fare well. For many reasons, mainly personal, the investor may want to get rid of the shares in your company.
Phil Greenwood: Many are making this way too complicated. It’s when the CFO leaves (assuming not fired). The CFO knows the money and the condition of the firm. If he/she doesn’t believe the startup will work, they’ll be the first out the door.
Jonathan Campbell: If the founder/CEO won’t listen to what the market wants from their product and adjust (within reason of course) then the product won’t last. One mistake I’ve seen several times is the CEO is certain that direction X is the right way to go because that’s what he/she thinks when there is no data to support it or the market is telling them otherwise but they don’t want to listen. It’s a slow and painful death.
John J. Henderson: The most difficult issue for me when I knew my startup would fail was how to call a timeout. You are heavily invested in the product. You’ve hired a team. You’ve made promises to venture capitalists. You made contractual commitments, e.g. leased space.
What I did was prepare an analysis that I presented to our Board. I basically told the Board we needed to stop development on the current product which users did not want, and create a new product that users did want by recycling technology from the failed product. Fortunately, the Board gave me their blessing, and we were able to save ourselves by recognizing and admitting our delusion.
Should I Keep My Personal and Professional Identities Completely Separate Online?
Mixergy: Learn form proven entrepreneurs
In Venture Capital Deals, Not Every Founder Will Be a Zuckerberg
IT’S the dream of entrepreneurs to sell their company for millions of dollars. But the dirty secret of venture capital is that the dream can be dashed as the venture capitalists make millions in a sale, leaving the founders with nothing.
A recent Delaware court case arising from the 2011 sale of Bloodhound Technologies illustrates how this happens.
Bloodhound was founded in the mid-1990s by Joseph A. Carsanaro to create fraud-monitoring software for health care claims. After several years of going it alone with a handful of colleagues, Mr. Carsanaro was able to raise Bloodhound’s first venture capital round for $1.9 million in 1999, followed by a second $3.1 million round in 2000.
When the Internet bubble burst, the company underwent rocky times. It was then that the venture capitalists seized control. Mr. Carsanaro was pushed out as chief executive. By 2000, he was gone from the company, as were four other members of his founding team.
For the next decade, Bloodhound recovered and slowly grew, raising seven more rounds of financing. In April 2011, the company was sold for $82.5 million. It was a time for Mr. Carsanaro and his founding team to celebrate their millionaire status.
But venture capital investments are structured to ensure that the venture capitalists are paid before founders and employees. When venture capitalists invest, they typically demand preferred shares that accrue a yearly dividend of about 8 percent. The dividend goes unpaid until the company is sold. In a sale, the original amount and the interest all come due. It must be paid out before the common shares, which are typically held by the founders and other employees.
The requirement that the venture capitalist be paid first, and with interest, can sometimes hit founders and employees in a brutal manner, as Mr. Carsanaro and his colleagues discovered.
The venture capitalists took almost all of the sale price. Bloodhound also paid a $15 million bonus to its current management team. The five founders of Bloodhound were paid in total less than $36,000. One received all of $99.
There is not much information on payouts to founders and employees when a company backed by venture capital is sold. But from the few studies on the subject, it appears that the situation involving Bloodhound is all too common.
The most recent study, by Profs. Brian J. Broughman and Jesse M. Fried, found that among a sample of venture capital deals, the common investors in roughly half the cases were entitled to nothing when the company was sold, even when the sale was for tens of millions. And in all but one instance, the majority of the sale proceeds went to the venture capitalists and other holders of preferred shares.
An unpublished study by Shikhar Ghosh at the Harvard Business School found that three out of four companies backed by venture capital did not return the investment. Again, it is in these cases where the founders and employees typically are entitled to receive no payment.
For those entrepreneurs who think they will be the next Mark Zuckerberg and ride their company to riches, think again. A number of studies have found that most chief executives of companies that take venture capital investments end up being replaced.
These are the successful businesses. The rule of thumb among venture capitalists is that some 20 percent to 30 percent of companies fail, returning nothing to any investor, including the venture capitalists.
The Bloodhound case is a reminder that the founders of start-ups backed by venture capital often end up nothing like Mr. Zuckerberg. Instead, they find themselves thrown out and without significant profits even if their company is sold.
Venture capitalists will argue that this is the price to pay to get their money and services. Cash is king, and in order to survive, venture capitalists will demand a high price and return.
Yet entrepreneurs can protect themselves. Professors Broughman and Fried found in their study that founders who negotiated greater control rights ended up receiving on average $3.7 million more. They did this even when the common shareholders were not entitled to a dime. By negotiating board seats or other representation, the founders were able to ensure that a sale happened only with their approval and a demand for some payment in return.
In other words, the rights negotiated by entrepreneurs when taking venture capital money really matter. Many entrepreneurs are so excited to get money that they don’t push for such rights or just don’t know to ask. Yet those who negotiate to keep a say in their company have a future, while those who don’t are more likely to be tossed aside. And it can be that this happens even in lucrative situations. Remember that Mr. Zuckerberg would have been forced by his venture capital investors to sell Facebook had he not kept control.
In the case of Bloodhound, its founders were pushed out of the company about eight years before the sale. During that time, they lacked control or ability to stop the venture capitalists from financing the company on the venture capitalists’ terms. The only substantial communication the founders had after they left was when they found out that the company had been sold for a huge price and that they would receive almost nothing.
The five founders sued in Delaware court, claiming that Bloodhound’s board and the venture capitalists had structured later rounds to favor themselves and dilute the payout of the founders. In a motion, the defendants countered that they acted fairly and that the plaintiffs’ claims were untimely because they were brought years later.
J. Travis Laster, vice chancellor of the Delaware Chancery Court, found that the claims that the venture capitalist had favored themselves to the detriment of the founders could be a viable claim claim if the facts they stated were true.
If Bloodhound’s founders are successful in their lawsuit, the case could change practices. It might require boards that take venture capital money to consider the founders and their interests before taking the next round. This could force boards to lean against diluting the payout of the founders and employees to avoid litigation.
Yet even if Bloodhound’s founders prevail, other entrepreneurs will sometimes find that their company is sold with nothing going to them. The sad reality is that there are times when the price demanded by the venture capitalists for the company to survive means that the founders will lose. Let’s face it, sometimes the company survives only because of that money and the skill and effort that the venture capitalists put in. This may have been the case in Bloodhound.
But the Bloodhound case publicizes this practice and will perhaps push boards to think harder before the founders are discarded. This may foster caution among venture capitalists, but the only thing that will truly save entrepreneurs is negotiating harder in the beginning. They may otherwise find themselves like the Bloodhound founders, left with nothing.
I’M an entrepreneur having started and sold a very successful dot com. It took me 9 years from start to sale. One simply has to wear lots of hats successfully…management, marketing, finance, accounting, legal, intellectual property and the list goes on. We had hundreds of competitors during that time many of them much smarter than I was in any one or more of those disciplines. But they drop ONE hat and that kills them. I was not the engineer or MBA prodigy coming out the gate with the billion dollar idea. I was a seasoned business person with experience from schlepping hamburgers to my own small business. I simply had only a good idea, business experience and worked like a dog for 9 years.
THE guys on Sand Hill Road have the exact same DNA as the guys on Wall Street but their khakis and soothing talk make them seem kinder and gentler. VCs who have never made a payroll or taken any other kind of risk in their lives read a little Michael Porter in business school and start telling CEOs who strap ‘em on every day and go create jobs how to do their own.
They hit one deal out of 100, but a big hit and the big payday that comes with it makes them the smartest guys in the room.
And they are, after all, the smartest guys in the room. They are the ones who perpetuate the myth of the massive founder’s payday, when more often that not they end up with ownership while the poor founders get diluted, diluted, diluted, smaller, smaller, smaller, gone. Only really smart guys could do that to a whole generation of entrepreneurs and still be standing.
FOUNDERS have to be extremely vigilant. These “VCs”, “Angels”, “Hedge Funds” etc, everyone is looking to make a buck, and shift the risk elsewhere, that is how it really goes down. I repeat NO ONE LIKES TO TAKE RISK, no matter what they actually say in the media. They are shifting the risk, as much as possible, to YOU, and looking to maximize their take.
That is why they write these contracts this way to seize control of your company, and if they are unscrupulous to boot, you are in deep kaka with no recourse when they start diluting you and handing over management to their buddies, and remember you have no control and no way to know which type of investor you brought on board until they show their fangs.
Exhaust all your funding alternatives, use the trade, banks, etc, grow slower. Do not let the shiny VC or Angel money and promises of exponential growth lure you into signing away your company (unless you already cashed out at least a minimum and you can risk the rest). They will tell you all kinds of feel good stories, lies, damn lies, and they will try to use every other trick in the book, don’t buy it.
Most times it is better to build your company slowly and top out at $10MM vs. take the money and reach $50MM. $50MM with VC money with the way they write these contracts, you get nothing they get everything. $10MM without them you still have $10MM, only when the company is a spectacular success do you get paid. What are the odds of that?
THE “shenanigans” are standard practice. I am an entrepreneur and I personally know many company founders who were similarly left with nothing after a sale despite many years of work. It’s almost always their first deal when they don’t know any better at the start. It leaves them very bitter.
Sometime the temptation to take VC financing is overwhelming. In many circles having financing is the emblem of success. And it does make your life easier if you can pay people salaries and spend money on technology, marketing, etc.
But most of the rich company founders I know avoided taking VC financing for as long as possible (or forever), when their backs weren’t pressed against the wall. I believe about 85% of the fastest growing private companies in America have never received VC financing, based on the Inc. 5,000 list over the last several years.
Venture capital (VC) is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology, IT, software, etc. The typical venture capital investment occurs after the seed funding round as growth funding round (also referred to as Series A round) in the interest of generating a return through an eventual realization event, such as an IPO or trade sale of the company. Venture capital is a subset of private equity. Therefore, all venture capital is private equity, but not all private equity is venture capital.
In addition to angel investing and other seed funding options, venture capital is attractive for new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering. In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, venture capitalists usually get significant control over company decisions, in addition to a significant portion of the company’s ownership (and consequently value).
Meet the First Digital Generation. Now Get Ready to Play by Their Rules
THIS isn’t a generation of technophiles. This is a generation of mindless consumers. Everyone wants to be a star - it’s all about amassing Twitter followers, rather than building something in your parents’ garage. And when it comes to real work they are completely useless: our forty year old programmers get more done than the “millenials” who are checking Facebook every six minutes. In five years, we haven’t hired a single person under thirty for an entry level programming position, because they have the attention span of a fruitfly.
WHAT a work of drivel. Are these captions meant to imply achievements? Newsflash Magellan, none of this matters, the world is NOT changing and if it is, certainly NOT for the better. I’m 26 and gay rights are just about the only thing that have made a step forward during my lifetime. Corporatocracy, plutocracy, obfuscated revolving door government, continued archaic drug laws, the destruction of multiple creative industries due to a tragedy of the commons, infinite war. THESE are the things that will define our generation and all these kids are so incredibly lame to agree to allow their entire worth to be presented as owning two kindles or playing 10 hours of minecraft at a time. I remember reading wired as a young kid and being blown away by the stories of real technological achievement and imagining the realms humanity could enter and instead we have this ugly advertisement of a world thanks to those same humans and ‘social media.’ Thanks but no thanks.
I’M sorry but this is so god damned average, is there a generation that doesn’t live this way now? Someone invented the toilet paper roll and guess what, yes the process of ass wiping is easier but does that mean society has been propelled forward or significantly changed in some way? All this social media masturbation is not true change, its just an uptick in convenience.
If a generation tells you they identify more with a website than a political party or nation, this is not valuable information, that tells me that is a generation of suckers, of dead weight consumers, an uninformed set of drones ready to suck the Zuckerberg billionaire pole! They didn’t build an iPhone, or land a mars rover, all the internet rich did was beat someone to the punch, run of the mill lottery winners, I applaud these people for entrepreneurship, but wealth is not a measure of contribution to change.
But its ok, I have hope!, there are some of us that have valued resilience over attention seeking, persistence over inattentive banter, and they are young! Reading scientific papers before high school, building and hacking electronics, learning like fiends while others are drooling and texting! They are coming and they will be tomorrows gods and define our future!
All Hail ANONYMOUS! (Wolves among Sheep) the rest of you can keep posting pics of your stupid piercings and tattoos, they are changing the world, making rapists worry, making power brokers crap their pants. I am not worthy.
I HOPE these youngsters look up from their cell phones soon. There is alot going on right now in Washington that will affect them as they mature. Many things will change to make their life much more difficult. Pay attention (I know), vote and influence your representatives. Don’t wait 20 or 30 years.
AND that’s the thing. The power does go off. Sandy showed that quite well.
Do “digital skills” compare with basic survival skills when the power goes off?
What’s more impressive? Skills in getting your tweet to spread as far as possible, or skills in being able to live in sanitary conditions without electricity?
The “occupy” sorts managed to rig chargers for their iDevices only because they tapped into lamp posts that someone else built and maintained. They couldn’t even manage basic camp sanitation, their camps were filthy and reeking, and they would been felled by dysentery if they had been forced to live in those conditions.
Nature doesn’t care about your social networking skills. Nature happens. It’s more impressive, to me, if someone can revert their existence back to a civilized 1910 or so with oil lamps and heated-water bathing and clean clothing, rather than instantly devolving to a filthy, helpless stone age the moment power goes out.
If there were ever a massive scale natural disaster that took out infrastructure for a long time, the “millenials”, I’m afraid, would die by the millions, utterly helpless. The “rednecks” and “old people” they like to deride would be out working their gardens, playing cards around a fireplace in the evening, and getting along just fine.
MILLENIALS are the marketer’s dream. They share every personal detail about themselves on Facebook, and could care less that even their “private” posts are analyzed by consumer metrics systems by looking for keywords, sorted, filed, and sold to everyone from direct marketers to credit card issuers and insurance companies.
There’s no such thing as a cold call anymore, a blind attempt at sale. Thanks to their own blabbering about the minutiae of their lives, every salesperson can get a complete profile of them, what they like, what they dislike, and how to close a sale to them before even contacting them. Every credit card company can determine their credit risk by their sob stories. Every insurance company can see how much they babble about travel to dangerous countries or prattle about extreme sports, and adjust their rates accordingly. Every mailing, every email, every targeted ad on their blogs is tailored to them because of the TMI they spill in every waking moment.
And they’re so freaking naive that they don’t even understand that they are nothing but prepackaged products to be sold and sold to, not individuals in any way.
“TEXTING is perhaps the most efficient form of communication ever invented.”
As opposed to talking to someone in person, I presume. God forbid that facial cues, tone of voice, and body language have anything to do with effective communication.
THIS article should be subtitled: “Now get ready to play by your 60 year old boss’ rules.” For the vast majority of college students out there they are going to have to rapidly learn how to conform to the rules of their chosen workplace. The millions that don’t get a coveted job at a cutting edge software company are going to have their worldviews shattered when they learn they are NOT the center of the universe and management doesn’t care one bit about your Q rating, only results. The internet has bred unjustified mass narcissism to a level we’ve never seen before, I fail to see how this can be a good thing for us as a species going forward.
I REMEMBER in 2001 getting out of college thinking I’d just glide right into a well paying and engaging job in my field IT, and I’d be programming and doing Systems Administration in no time, the Rude awakening was that it would take 10 years of “Clawing”, because despite whatever preconceptions I had, the previous generation was already dug in, worked their way up the ladder and had put in the time, when I was still in braces and flipping burgers on the weekends. I still answer to those 60 years old, they just have a healthier respect for me now.
I fear though for even the current Gen Y’er that are entering the workplace, I see the worst qualities just in the entry level people we bring in, and a sense of apathy that’s appalling, they literally don’t know how to solve problems unless someone gives them a linear process which is it’s own paradox, and rather than holding them to the higher standard I was held to, the bar was lowered and less is expected.
The worst part is the lack of drive or ambition, I remember basically competing with my colleagues waiting for positions and new challenges to open up, and being rejected multiple times on hair thin margins, only to pick yourself up, harden your resolve, and get a lesson in humility, the old adage “I’m gunning for your job”, pretty sure with these folks, they could give a shit about my job, couldn’t do it to save their lives, and luckily the people I report to are still able to see that.
SINCE you asked, I’d rather see the Taj Mahal in person. If, however, these up-and-coming so-called technocrats can guarantee me delay-free travel to India, a luxurious suite and hot meal upon arrival, followed by an appointment with a masseuse before I’m whisked off to the site in a gridlock-beating vehicle, then I’d say, yes, they have a place in the convenience-obsessed, life experience-as-entertainment marketplace of the future. FYI: 6 hours of game play doesn’t cut it as a profitable skill and it certainly won’t pay the rent.
From what I’ve skimmed, these young hopefuls aren’t prepared for the upcoming global economic/social/political upheavals set to shake their world to its foundations, but they DO make great mugshots. If they represent the future pillars of society, we’re all in a shitload of trouble. I sense, however, they’re just bubbles in a puff piece that could’ve instead introduced to a wider audience developers such as 23-year-old Stephen Lake of MYO armband, or 18-year-old Simon Tian of the Neptune Smartphone watch, but decidedly, did not. In Internet-speak, “I haz disappoint”.
THE “reality” of day-to-day life for the young men and women mentioned in the article may be true for them…at the moment…but it will all change when they have to enter the “real” world of responsibility, working for a living, paying bills and being responsive to the needs of other people, both those they work for and those who one day may work for them. The only people I know who seem willing to “play by their rules” are their parents.
Who’s Worse Off Financially - Baby Boomers, Generaton X or Millennials?
Aereo: The Online Streaming Start-up That Will Change the Way You Watch TV
[Aereo’s dime-sized antenna]
Why Would You Pay $12 a Month for Free TV? Aereo CEO Chet Kanjia Explains
The core question is why someone would use the service: Assuming it works as advertised, would you use it to supplement your existing TV service, or use it to replace some of the TV you’re already paying for?
The former, for now. And maybe, down the road, you could do the latter.
Today, Aereo makes the most sense as an add-on for TV super-consumers — the ones who have digital cable and HBO and Netflix and Apple TV and want to watch even more stuff on more screens.
Since it’s only delivering broadcast TV, Aereo won’t let you get lots of shows you like. But it will let you get a lot of shows you do like, and it will let you access them in new ways.
For instance: For various odd reasons, the broadcasters haven’t been able to figure out how to serve those people live TV on the go, to their iPads and iPhones, and Aereo will do that.
But Aereo’s ambition is much bigger. IAC CEO Barry Diller, who led a $20 million funding round, says Aereo will eventually be a “wedge” that will force the TV industry to give up the bundle: The idea is that eventually you’ll start by paying Aereo $12 a month for a bunch of TV, and add a series of channels and programs that you like on top of that. In theory, you’ll still end up paying much less than you do now.
CEO Chet Kanojia is slightly more diplomatic: “It’s going to start the process of putting the thought in people’s mind that says ‘I have other options.’”
Alternate scenario: If Aereo isn’t shut down by a legal challenge, it will act as a loud starting gun in the ear of cable TV providers and broadcast networks, prompting them to get their act together. […]
Spreading Disruption, Shaking Up Cable TV
Barry Diller has lived through various paradigm shifts in the television business. Indeed, he has helped create some of them. He worked as a young man at ABC, rose to head Paramount Pictures while inventing the made-for-television movie, helped make shopping a televised activity, and, most famously, created a fourth network at Fox.
A chronic deal maker and financial engineer who has aggregated a number of Web-oriented businesses at IAC, including Match.com, CollegeHumor, The Daily Beast and Vimeo, he has made many friends and enemies along the way — and in Mr. Diller’s world, it’s often difficult to tell them apart. […]
Aereo is what has been called a loophole start-up because it is structured to comply with regulations even as it disrupts the current model. The company was started by Chet Kanojia, a Boston technologist and entrepreneur, and became operational in New York last year. It is built on a relatively ancient technology, with coin-size antennas assigned to each person in the coverage area who signs up for the service. Customers can then use an Internet connection to stream any program from broadcast stations, or have them stored by Aereo for later streaming.
“I met with Chet Kanojia and spent an hour challenging him and understanding the technology, and I couldn’t find a flaw,” Mr. Diller said. “I knew there was going to be controversy, but I couldn’t find a flaw because I felt that the existing law was so much on the side of what Aereo was doing, and that’s what intrigued me.”
Having watched Mr. Diller on and off for over a decade, I suggested he was enjoying the opportunity to roll a grenade into businesses run by people whom he might otherwise invite to his home for cocktails — people like Leslie Moonves of CBS and Rupert Murdoch, for whom he built out Fox Broadcasting.
“That’s not right,” he said. “In this environment, your friends really are your enemies. Anything you’re going to do more than likely disrupts somebody’s business. There’s no grenade thrill in it.” […]
“It’s as if the mirror cracked and you can see these changes are starting to happen all over the place,” Mr. Diller said. “Programming over the Internet is going to happen, and cable is only now waking up to the fact that everybody hates them. I think we’re on the side of the angels.” […]
Why Do a Startup if You’re Rich? Aereo CEO Chet Kanojia Explains