2012.startupiceland.com

Native Monetization

[Original post written @http://startupiceland.wordpress.com] 

I dont get banner ads, let me be very honest with you I am Ad blind. If you really think you care going to get me to click on a banner, you are very wrong. I am not the only one thinking this way. We have become oblivious to all these flashy things shown on the websites. I wish we would have a cleaner web. I go to a website to do something, i.e read gossip, read news, watch a video or read about something my friend thought was cool, important whatever, I get sorely disappointed when I go to these site which have these ridiculous advertisements that really turn me off. Fred Wilson, had a very interesting post about 6 months back here is that video. The video is 22 minutes long, so check it out when you have some time. The summary of the video is that the online advertising medium is fragmenting, You have Google Ads which is based on searched content, Social Ads that is based on emotional/social sharing content, Internet Video Ads, Mobile Ads, Location based Ads, Streaming Audio based Ads etc. Managing the advertisement budget is not that simple anymore. I specifically want to emphasize there is a difference between Marketing and Advertising. I don't want to go into that discussion in this post. This post is about Advertisements. I believe websites need to focus on Native Monetization, I think that is the way to ensure you don't turn off your user base. What do I mean by Native Monetization? Look at the ads by Google, they don't sell banners they specifically encourage their advertisers to do the work on deciding how, when, what and where the ads needs to show up. More specifically, what search words are linked to the ads, what geography etc this actually enhances the experience of the ads consumer. The same is true of many of the platforms, like promoted ads on Twitter, location specific ads on FourSquare, promoted ads on Tumblr etc I am not so sure that it has been implemented that correctly in Facebook and that is probably the reason they are not able to monetize ads effectively. I hear through the grapevine that Facebook is having challenges in converting advertisements. I may be wrong in this assertion. One more titbit of information that I got out of Jonah Peretti of BuzzFeed (video below) is that the Content Management System that renders your websites contents needs to be used for the ads that you display in your website. Actually just following that advice you will be forced to do Native Monetization. [youtube http://www.youtube.com/watch?v=-oMBs9Uk9Ds&w=560&h=315]

Related articles

• comScore Media Evangelist on Monetizing Web Video: Increase Ad Load and Embrace Brand Advertising (beet.tv)
• Making The Switch To Online Video Advertising (socialmediaexplorer.com)
• After 200M+ Views in 2011, The Decorah Eagles' Live Stream Is Back For "Season 2″ (techcrunch.com)

EVE Fanfest 2012 - EVE Forever trailer

[Original post written @http://startupiceland.wordpress.com]

This was EPIC to say the least. It was my first EVE Fanfest, thank you Hilmar for inviting me. I got to see the true awesomeness that has been created by the CCP team. Congratulations! I was mesmerized, and it took me back a long time when I was fascinated by video games and how I spent endless hours playing games although I did not have access to the latest or the greatest, I got hooked. I have been resisting the temptation of getting back to playing games. I have to say EVE Online and Dust 514 look incredibly attractive. First of all, there were a couple of announcements that I think was incredible,

1. DUST 514 will be the first AAA game to be totally free on Sony PS3 platform
2. DUST 514 and EVE online are linked, what does this mean? this means CCP has really broken ground in integrating a first person shoot out game with a massively multi player strategy and battleship game. It has never been done before! In addition to that the level of details that has gone into developing the avatars, the space ships, the engine, the missile launch systems is just simply mind blowing. CCP has truly shown leadership and broken new ground in gaming.
3. What was fascinating to me was how involved the gamers were in the entire show. CCP has shown incredible strength and maturity in allowing the players in the game dictate how the game should be run. To seal that strategy they have formed what is called as the Council of Stellar Management, which is a democratic way in which the players in the game get elected to represent all players. The CSM meets with the CCP leadership and the Game development teams to provide feedback and raise issues. This is truly innovative and I would like to say a small company called Clara which has been working with CCP for more than 18 months is helping CCP. Full disclosure, I am one of the investors in Clara, made me really proud looking at Jon Lander, the Product owner of EVE online show the word cloud generated from CLARA to describe how CCP takes Community interface seriously and how they engage with their players. It basically validated our business hypothesis that gamers and players of the game really are the true heroes in this new world. The gamers define the agenda and develop the eco-system.

Related articles

• EVE Fanfest to livestream keynotes from tonight (vg247.com)
• CCP shifts gears from DUST to EVE at Fanfest 2012 (massively.joystiq.com)
• EVE Fanfest talks Inferno, World of Darkness panel later today (massively.joystiq.com)
• Eve Online Fanfest 2012: Watch It Here! (rockpapershotgun.com)
• CCP premieres new Dust 514 gameplay at EVE Fanfest keynote (vg247.com)

When Harry met Sally...

[Original post written @http://startupiceland.wordpress.com] 

I saw this clip in Reuters Tech Tonic TV, it was so simple yet profound. It described the relationship between a VC and the Entrepreneur. I want to ask the question, how is your relationship with your Investor? Would you be proud to have a video done this way with your Investor? I strive very hard to build respectable relationships with everyone I meet so one day in the future our paths may cross and you would look at me and say, hey I know you, my previous experience with you was a good memory and I would love to see if we can do some business together. That never happens if I don't follow some principles:

1. Win-Win or No deal - The concept of a win-win deal is quite simple, I try very hard to listen and understand what a win is for the person who is sitting in front of me. If I let you win without putting my interest up front, when the time comes my hope is you will do the same. Actually, if I make my Win your Win then it is hard for you to not let me win. This concept is so counter intuitive to so many people, my sincere hope is everyone realizes the incredible opportunity in front of us everyday. I think we all need to work on it. I am by no means suggesting that I am great at this, but I try very hard not to let my interest get in the way of the problem at hand, it is a constant battle and a penance in personal growth and sacrifice. It is assumed that both parties need to think Win-Win, but that is not true, only one party needs to think Win-Win... you see No Deal is a perfectly acceptable alternative.
2. Believe in Karma - What is Karma? well, it is the belief that everyone even children know what is Right and what is Wrong. If one gives oneself to the truth, ie. look at yourself in the mirror everyday and say I lived this day truthfully and I did my duty (karma) to the best of my abilities without any expectation on the return, the Universe usually rewards you with a lot more than what you would have originally asked for. It is the belief that serving without any expectation of return results in far greater returns for the ones serving and to the entire universe. It is a hard pill to swallow, because we are always thinking about whats in it for me? well, I gave that up long time back. I just want to serve and help anyone who cross my path, the rest is usually taken care off. For those of you readers who don't know I am the President of the Reykjavik Rotary Club, the only English speaking Rotary Club in Iceland. I joined the Rotary for two reasons:
   1. Rotary's Service Motto: Service Above Self
   2. Rotary's 4 way test: of the things we think, say or do
   • Is it the TRUTH?
   • Is it FAIR to all involved?
   • Will it bring GOODWILL and BETTER FRIENDSHIP?
   • Will it be BENEFICIAL to all concerned?
3. Balance the 4 elements of self, Body, Mind, Heart and Spirit. There are many books written about this and I really should dedicate a whole blog post to write about this.

I really did not start to write this post to write about philosophy but in the last analysis everything is about Relationships with people. I don't care if you are the President of the largest nation in the World or a peasant working in the fields of a remote country, those who rise above and serve humanity are those who realize their purpose in life is to serve their fellow human being. I sought my God and my God I could not find. I sought my soul and my soul eluded me. I sought my brother to serve him in his need, and I found all three—my God, my soul, and thee. ~ Anonymous Here is the original trailer of When Harry met Sally, a classic [youtube http://www.youtube.com/watch?v=V8DgDmUHVto]

Business Model vs. Business Plan

There is a fundamental difference between a business model and business plan. A Business Model defines how you will make your product or service economically viable. A business plan describe how you are going to make your business model work. One does not always know how the plan is going to evolve, so building detailed plans although a great thought or intellectual exercise adds no real value because you are wasting time making assumption about the world out there and hope that your strategies or "plans" will address those assumptions and hypothesis. The truth could not be far from it. Most people confuse this with the product development road map and the classic example I get is people saying "hey, Steve Jobs did not go and interview his customers before he created the iPod, iPad, the Mac Air or any of the products that has come out of Apple..." to that I have only one answer, unfortunately there was only one Steve Jobs and how do we know that Steve did not do that? he had a keen eye for design and detail, he spend considerable amount of time in Silicon Valley being part of the information revolution and he had many fails to learn from. I try to remind those I am talking to that they need to spend 30 years in Silicon Valley, formed 2 or 3 multi-billion dollar companies, have the same network and experience of Steve Jobs before being able to compare themselves to what Steve Jobs did. There is a simpler way, Steve Blank, has written books, taught classesand has done many things to showcase the Customer Development Methodology, which is nothing but a Business Model. If you approach problems with the Customer Development method, you can build a pretty good hypothesis and once you have an hypothesis, it can be validated and based on the results you can build a business. The trick is to get through that cycle as fast as you can and then execute based on the learning. It is never simple and straight forward you have change your hypothesis several times and build and re-build your business model that is why it is a startup.

Related articles

• Challenge: Can You Tell a Business Model from a Business Plan? (timberry.bplans.com)
• Who dares wins - Business Plan vs Business Model (vator.tv)
• What is a Business Model Anyway? (zentrepreneurship.wordpress.com)
• Burn Your Business Plan! (forbes.com)

LLC vs C-Corp vs S-Corp

There was a good discussion around Icelandic Startups planning to establish a company structure in the US and which company structure is most appropriate. I believe that it depends on the investor group. I found a very interesting blog post that basically went into all the details that I wanted to go in this post... then I thought why am I trying to re-invent the wheel. Here is the link to the post. The biggest items while forming legal entities is related to ownership structure, how much effort you want to put into maintaing books and accounts and tax planning. LLC is the simplest, is best suited for a small ownership group, C-Corp is the preferred route if you want to build a company have stock option pool, many capital raises i.e Series A,B,C etc. C-Corp and S-Corp have statutory legal and accounting book keeping requirements and have more complicated (read more taxes) tax structure. My own personal suggestion is to setup a LLC while you are building the business and when you are ready to issue stock options, raise capital and or bring new investors on-board convert the LLC to a C-Corp.

Related articles

• Get Your Business Structure Fit For 2012 (smallbiztrends.com)
• LLC vs. S Corp: Which Is Right for Your Startup? (mashable.com)

Senate Approves the CrowdFunding Bill

[Original post written @http://startupiceland.wordpress.com] 

It is not law yet, but yesterday the Senate voted 73-26 in favor a bill that loosens SEC regulations in order to permit small businesses easier access to capital. I am not sure if "easier" is the term that I want to use, I think SEC rules were made a long time ago and we need to constantly review them and see if the underlying problems are being resolved through regulation. The capital raising rules as stipulated by SEC are draconian and demanding and is biased towards those with lots of resources and financial institutions (read money and BIG BANKS!). It is counter intuitive because those with money don't really need to raise money, but the system is so biased towards those with resources that it is unbelievable. It was similar to the discussion Muhamed Yunus the founder of Grameen Bank in Bangladesh had when he approached a bank to request them to lend money to the poor people. The bank manager said poor people were not credit worthy, it sparked a fuse in Muhamed Yunus and he got the approval to start his own Micro Lending Bank. He found out that poor people are credit worthy and today that bank serves many million customers. If you want to read the story of transformation go read the story of Mohamed Yunus. If you make it harder then you just prevent those without resources to raise capital, i.e small business owners and entrepreneurs. 

Forbes has an article that I thought was interesting, the article refers to Carl Esposti, founder of a consulting and market research firm Crowdsourcing.org, who is part of a group that has created a Crowdfunding Accreditation for Platform Standards (CAPS) program “to ensure a secure and reliable experience” for investors. I think the thought of something like this is important but I believe they are jumping the gun. I think more credible sources need to do the auditing of the platforms, should be interesting for the Big 4 Accounting Firms as this what they do, gives them a new product line, market and revenue stream. I need to reach out to my Partner friends in Deloitte, E&Y and PWC, if they have not already started thinking about this. I am not even sure if we know all the challenges of CrowdFunding Platforms, I wrote about 3 big challenges, but I a pretty sure there are many. In my perspective are there going to be challenges ABSOLUTELY! will there be fraudsters? CLEARLY will people loose money? WITHOUT A DOUBT. These things should not stop us from trying to solve a problem and enable real, sincere and hardworking entrepreneurs from raising money. We don't follow the rule of Napolean, we say everyone is Innocent until proven Guilty, should that not apply to Entrepreneurs too? No Entrepreneur I know wants to cheat and take money, well 1 maybe :) I digress... I think this is very interesting and precisely the reason I want to devote my energy towards solving this. If it was easy everyone would do it. I will be pushing the team at KarolinaFund.com to align with the movement and make sure they are trying this out in the local market and scale it globally.

Related articles

• Amended JOBS Act Passes The Senate (startupstats.com)
• Crowd funding Startups in Iceland (startupiceland.wordpress.com)
• Senate passes small business start-up bill (vator.tv)
• Crowdfunding passed in the Senate and here's what they changed (scottbrown.senate.gov)
• Soon Even Your Mom can Invest: Senate Passes Crowdfunding Bill 73-26 (with protection) (techcrunch.com)

SXSW update - 8th Lean Startup Meetup

[Original post written @http://startupiceland.wordpress.com]

Kristjan Freyr Kristjansson was at SXSW2012 and he gave a brief talk about the show and more importantly shared his thoughts on attending many of the Lean Startup Panel. The summary of the SXSW update was:

1. It is very noisy, crowded and advertisements everywhere - it would be impossible to get your startup noticed or even to meet someone and follow up on the conversation. It is a fantastic place to get connected for the first time through the parties hosted by various brands, Kristjan particularly liked the one hosted by Startup Weekend, TechStars and Google.
2. Have a plan with regard to what you want to achieve when you attend SXSW, and it is something every startup/entrepreneur should experience once
3. There is an opportunity to have a big Icelandic contingency in the next SXSW, as the planners of the SXSW really liked the Thojdfunder National Assembly that was organized in Iceland and they would like to tap into the crowd of brilliant entrepreneurs and people focused on solving challenging problems attending SXSW next year and apply the same approach that was applied in Iceland. Gudjon Mar and Gunnar Holmstein were the instigators. I fully support the initiative lets see if we can gather enough people in Iceland to support this initiative and show some strength from Iceland next year in SXSW.
4. There were some very exciting interactive advertisement focused software that had face recognition software and based on your online profile was able to display ads that were targeted. The technology is here and it is just a matter of time before it becomes mainstream. The advertisements on the subway in Minority Report when Tom Cruise was running is going to happen sooner than you think.
5. There were many formats for the Lean Startup sessions, some of them were led by Eric Ries, but there were others where different startups shared their examples of applying the Lean Startup Principles. Kristjan, thought it was so incredible to be see so many startups starting to apply the lessons and are learning fast and pivoting into valuable solutions. It is amazing to me why this has not caught on sooner here in Iceland, we have a long way to go here.

The general discussion centered around how we can experiment and validate hypothesis, Kristjan shared the link to the Lean Startup Experiment website lean.st. The 5 minute corner was taken by Helgi þor Jonsson, Helgi has been following a blog site Unicornfree.com and how he has taken the first step to becoming an entrepreneur. He has started working on a prototype of a Project Management Platform for volunteers and non-profit activities. His insight working with this blog site is the concept of 30 x 500, which is get $30 from 500 people then you have a business or $500 from 30 people. He has been taking the online course which is almost over and he would be ready to move on to the next stage of launching his product. We discussed a lot about how to raise the bar on Startups being created in Iceland. Of course there were many suggestions, Gudjon Mar was of the opinion that we need to have big wins to establish a precedence that successful and profitable startups can be created out of Iceland. I feel we need to go one step further, successful and profitable startups need to created in a faster pace. We need to accelerate the process to actually make an impact and change minds in Iceland. I believe that if we can focus the entire startup community to pick topics from Paul Graham's Ideas that YCombinator will invest in and basically build companies for those problems we will get somewhere with the culture here. We need to make it attractive for someone to invest in, nothing against someone wanting to start a coffee shop it just does not create a buzz for Angel and Venture Investors to get excited about.

Maximus Musicus - A Startup Profile

[Original Post Written @http://startupiceland.wordpress.com]
Hallfríður Ólafsdóttir came to our Rotary Club and spoke about her journey in creating Maximus Musicus, a little mouse and a very popular character with children in Iceland and 6 other countries. She is an accidental entrepreneur because she is the lead flutist with the

Icelandic Symphony Orchestra and she recalled just waking up one morning with the idea to use a Little Mouse character to get Children engaged in Classical Music. She shared with us her adventures and development of her business. Two books with music examples have been published and the third is on the way. She is on her way with the Iceland Symphony Orchestra to perform her Maximus Musikus at Kennedy Center in 2013 at the Nordic Cool festival! It is fascinating to think about the teachings and learnings that goes on in an Orchestra and most children don't really know what happens behind the scene until they are taken to a show. Hallfridur, has through her books, symphony composition, songs, apps and other media has connected with Children and during the first symphony orchestra that was conducted in Iceland, there were more than 600 children in the audience and they already knew about the Maximus and they followed through the entire narrative, the music and the experience of being in an Orchestra concert.
It was great to hear Hallfridur talk about how the energy of the children invigorated the musicians and the performers. There were a number of questions, and the most popular one is how did you find the time to keep your day job and also produce the music score, the books, the stories, the art works, the website etc etc etc and Hallfridur's answer was very simple, She just knew she had the energy to do this because she was so passionate about the project... sounds familiar! The common trait of every entrepreneur, there is something that we cannot explain that drives us, it is not riches, it is not money it is something far more important... a sense of Purpose.
It was inspiring to hear Hallfridur's journey, but what was even more interesting to me was her success has be curtailed by Content Brokers i.e Book Publishers, for example the English version of the books are not available in Iceland but only available in Australia although it would probably sell the most in Iceland because of all the tourists who come to Iceland would like to take something as a local gift to their children, grandchildren or nieces and nephews. All the tourists visit Harpa where there is a Maximus Musicus Corner, but the tourists probably will not buy an icelandic version because they don't speak Icelandic. She was passionate about the creation but did not have a very good advisor against the group that relies on "Scarcity as a Business Model", Fred Wilson has written about it. I just don't get it! why the heck can't the book publishers understand that their customers should dictate how they want to consume the books rather than them dictating how they will allow the content to be consumed? Such a waste, I bet Hallfridur is probably loosing a large amount of sales that she could possibly do in Iceland during the peak tourist season. I can think of so many ways to market and sell this great product. They have games and apps in the app store etc. So go check it out!

Crowd Funding - Challenges and Opportunities

[Original Post Written @http://startupiceland.wordpress.com]
I have written about Crowd Funding and how I want to throw my weight behind this. I think this is an important topic in the blog sphere and many lawyers are weighing in on the challenges. Here are a couple:

1. Crowd Funding – A Critique for Entrepreneurs and Investors by Bill Payne, Angel Investor
2. The Great Crowdfunding Train Wreck of 2013 by Antone Johnson, Business Lawyer

Both these articles are good starting points to think about the challenges of building a Crowd Funding Platform. Antone goes on to say that this whole Crowd Funding thing is going to end in a disaster and Bill is a little bit more balanced in his critique. I think both of them have valid points to make. Antone, actually starts with defining what he construes as the Crowd Funding a.k.a Crowd Investing platform, the definition is as he describes it is very similar to the ones in the IPO documentation definition of a company going public. So, what are the main challenges in building a Crowd Funding Platform?

1. Radical Information Asymmetry
2. Valuing Early Stage Companies and evaluating the Risk-Reward can be done only by Experts
3. Cost of Transparency and Accountability is too high for small early stage companies

I will go into the details of each one of the below.

1. Radical Information Asymmetry: The Securities and Exchanges Commission (SEC) in the US or in any other country basically have a number of requirements that protect the small investor, i.e defining all the Risk factors, ensuring that companies wanting to raise money from the public are not fraudsters (the perception is that but there have been exceptions and I have always wondered how do they ensure that?) etc. The most important of all these requirements is that the Founders/Company Managers have more information about the company than the general public so they could potentially "hide" the detrimental information from the investor thereby "cheating" money away from the investor. On a theoretical level I agree with this information asymmetry, but practically I don't think this is a problem because companies in their early stage don't have any complications in their accounting or operational procedures, so it should be simple enough to basically share all the information that the company has and most early stage companies usually do.
2. Valuing Early Stage companies is hard and measuring Risk-Reward ratio is best left to experts and experienced professionals. I could not disagree more with this assessment. Valuing companies in their early stage is very hard and I have written about it. That is the reason why private placement of securities i.e shares in a company require the investors to be accredited investors, the definition of who an accredited investor is weird, according to the federal securities laws define the term accredited investor in Rule 501 of Regulation D as:
   1. a bank, insurance company, registered investment company, business development company, or small business investment company;
   2. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
   3. a charitable organization, corporation, or partnership with assets exceeding $5 million;
   4. a director, executive officer, or general partner of the company selling the securities;
   5. a business in which all the equity owners are accredited investors;
   6. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person;
   7. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or
   8. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.

So basically if you are not rich or work for a Financial Institution you cannot be an investor! what a bunch of baloney! It really makes me mad they actually put Banks and Financial Institutions above Individual Investors. I have worked in a Bank and I know many of the people who make the investment decisions, I think an Entrepreneur would be more careful and weigh the options better than what I have seen done. So I don't buy this argument. I also think there is too much emphasis given to "protecting" the small investor, I am not so sure that is such a problem. I also do not believe a person working in a financial institution has better understanding of Risk than a person who has nothing to do with finance. I am big fan of Nassim Taleb and Daniel Kahneman. Go and read their books if you really want to understand how we as humans just don't have a good grasp of probability which in Financial jargon is Risk.

3. Cost of Transparency and Accountability for smaller companies will be prohibitively high that would prevent them from actually going through the exercise of full disclosure.

I think the above 3 major hurdles are the biggest opportunities for a Crowd Funding Platform. I believe we can solve these above challenges, I believe too long we have waited to be told that you cannot do something because it is not good for you. I say lets jump into the pit and wrestle with the beast, no I do not mean your lawyer! I am going to devote time, effort and money to solve the above problems because I think there is a huge global opportunity. To start with I am committing to work with a team in Iceland... they have good ideas and are thinking about the right things but they need to solve the above problems before they can be a platform. Check them out Karolina Fund, the Star of the Crowd Funding movement ProFounder.com just shut shop and the reason they gave was the regulatory environment is not conducive for Crowd Funding Platforms, something to think about.

Related articles

• Developments in Crowd-funding (growthology.org)
• Crowdfunding and the ninety nine percent (sciencetoprofitsblog.com)
• Crowd financing in return for start-up equity? (thesuitblawg.wordpress.com)
• Should Equity-Based Crowd Funding Be Legal? (online.wsj.com)

What if it fails?

[original post written @http://startupiceland.wordpress.com]
This is based on a link my buddy Scott Guillory from Louisiana sent me. It was an opinion piece on the Wall Street Journal by Douglas McCollam with the title "The Big Easy's Business Leap Forward". For those of you who don't know I did my Dual Master of Science in Economics and Information Systems & Decision Science from Louisiana State University, Baton Rouge. The Big Easy i.e Nawlins or New Orleans brings back good old memories of Mardi Gras and night out at Pat O'briens... I digress. Anyways, the article starts with one Mr.Tim Williamson who was asking for help with the Chamber of Commerce in New Orleans to start an Incubator called Ideal Village. The answer from the person in charge in the Chamber was "What if it Fails?", it made me think... I have had many conversations here in Iceland with financial institutions and banks, lobbying them to join with me to launch the Startup Iceland Initiative and TechStars Accelerator program. I spent a good 4 to 5 months talking to one of the banks, only to find out that they were internally asking the same question "This is risky, What if this thing fails?" and here I am thinking Man, what if Startup Iceland Works and we are able to create fantastic new companies out of Iceland. As they say it all depends on the perspective of how you look at the world. I think everyone has their reasons to doubt, fear and say No, but it is not my place to question or judge them I will continue to do what I believe in. If I fail, so be it. As Steve Jobs said in his memorable speech to the Stanford Graduating Class, here is the transcript of the speech

Lesson 1:
"It is impossible to connect the dots looking forward, it was very very clear looking backward 10 years later. Again, you cannot connect the dots looking forward you can only connect them looking back. You have to trust the dots will somehow connect in the future, you have to trust in something, your gut, destiny, life, karma, whatever... because believing that the dots will connect down the road, will give you the confidence to follow your heart, even when it leads off the well worn path and that would make all the difference"

Lesson 2:
"You've got to find what you love, that is as true for work as it is for your lovers. Your work is going to fill a large part of your life and the only way to be truly satisfied is to do what you believe is Great work and the only way to do great work is to love what you do. If you havent found it yet, keep looking and don't settle, as it is with all matters of the heart you'll know when you find it. And like any great relationship it gets better and better as years roll on, so keep looking. Don't settle"

Lesson 3:
"Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary."

Stay Hungry, Stay Foolish 

If you did not go and read the WSJ Article, the summary is that New Orleans in the aftermath of Katrina has turned into a Startup hub. The nonprofit incubator Idea Village has grown into an engine for the New Orleans economy. To date it's helped raise about $2.7 million in seed capital for more than 1,100 local entrepreneurs, creating more than 1,000 jobs and $83 million in annual revenue—and these days helping the city's unemployment rate stay about a point to a point-and-a-half below the national average.

Ideal Startup Team Composition

[Original post written @http://startupiceland.wordpress.com]
A Startup team composition is like putting together a winning sport team. You need to balance the strengths and weakness for every team member so that the Whole is greater than the sum of the parts. It is easier said than done. I learnt this very early on in my career, I started working for a startup in India that was developing database applications for the Financial Services industry. Even though we were small, I started as an intern and I was 20th employee or something like that, the account teams that had the right mix of people seems to out-perform the other account teams. I did not realize that then but when I look back, it is obvious. I started seeing this in lot more detail when I joined Ernst & Young Management Consulting Practice in Houston, Texas after my Graduate Program at LSU. E&Y did not put a lot of emphasis on the majors, we had team members who were recruited with English or History major. I learnt that diversity was very important in a team. I got very involved in the recruiting teams for E&Y, we would visit many universities and take part in identifying, scouting and recruiting talented individuals to form high performance teams. If you think about it E&Y, had no product but Professional Service, so the team basically was the product. I also learnt the power of mentoring, coaching and on-the-job training. Every project that I took on while at E&Y was like a startup, I learnt very quickly that rapid prototyping is the key to keep your customer engaged, in our case it meant whether we continued to have billable hours or not. If you have been part of a professional services organization you know that you live or die by your billable hours or sold billable hours. I also got trained on performance management, goal setting, executing and metrics. If we could not communicate our value to our clients we just got fired as simple as that. I think Startups are just like that. So, what is an ideal team composition for a startup? I want to say it depends on the stage you are in. Lets assume you are starting up and you have this brilliant idea and you have done enough work to see there is a market potential and you can validate the hypothesis. 

Technology in you DNA - Maven One of the team member has to have technology in her DNA, I don't care which business you are creating if you don't have one of the founders with a technical background, I strongly encourage the team to go and get one. There is no substitute, you cannot outsource it and I don't care how efficient or skilled the team you have outsourced your solution to, it will not work so don't bother. Find and convince a technical team member to join your effort. I am big fan of the book Tipping Point by Malcom Gladwell. The technical team member should be a Maven in the technologies that you are using to build the solution.

Vision, Spokesman - Connector and Salesman The second team member should be a Connector and Salesman, she should be able to communicate the vision, the solution and why you are doing what you are doing in your Startup in any medium. She also needs to be a fantastic networker and connector, she needs to know everyone and be able to relate to different cohorts in the community.

Discipline, housekeeper and operations This team member should be the one that takes care of all the other stuff i.e. are the books in order, are we making sure our legal stuff is in order. Is everyone being fed, is our house clean. Keep the other members in line with regard to executing and being disciplined about the milestones and tasks as it relates to the overall agreed objective of the Startup. This is in my opinion one of the important and over-looked role within a Startup, understandably because you have so many moving parts that it is hard to be efficient and disciplined, but it is a paramount requirement. All the team members need to have the qualities as described by Paul Graham in his post on How to Start a Startup, look under the heading People. Or try to have your team members like the A-Team.

Why Some Countries Succeed

[Original Post written @http://startupiceland.wordpress.com]

I read this post in New York Times with the title "Why Some Countries Go Bust" and I just finished watching Shawn Achor talk about how we focus so much of our efforts on describing the negative things and topics. I was wondering why did the author not make the title in the New York Times article to focus on the positive aspects of the research work done by the Economist Daron Acemoglu. It is so strange, it is a simple switch in how you look at the world and you pretty much communicate the same story but the reader walks away thinking hey, we should do these things in our country rather than thinking, how we are starting to see America go to dogs or for that matter any country. I guess that is why I would never be a journalist, I want to focus on the positive aspects of any challenge in front of us, it gives me the energy to tackle it and if it is something that is beyond my circle of influence then I try very hard to just smile and move on. I am not saying I am great at it but I am trying very hard to make a habit of it. So coming back to the article, the research work done by Daron categorically outlines why certain elements drive a country to prosperity and some others to poverty. Daron and his collaborator James Robinson, argue that the wealth of a country is most closely correlated with the degree to which the average person shares in the overall growth of its economy. The authors go on to outline that when a nation’s institutions prevent the poor from profiting from their work, no amount of disease eradication, good economic advice or foreign aid seems to help. I wonder how is the current situation is Iceland? Are the institutions preventing people from profiting from their work? I don't know and I am not trying to be political. The reason it is important is that the legal operational framework in an economy needs to be fair. What do I mean by Fair? well, anyone with the product or service should be free to profit from it, there it is I have said it. Profit. Why is this such a bad thing? I believe greater the value from your product or service greater should be you profit potential.

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Starting Up Iceland

[Original Post written @http://startupiceland.wordpress.com]
I have been frantically meeting and organizing the Startup Iceland Conference, here is the Facebook Event Page. While we are organizing this, the constant question that I get is will we be able to fund this conference can we raise the money needed to hold the conference. I am totally transparent about how I am trying to organize this. The cost of putting up this conference is quite a bit but many of the sponsors have stepped up, namely Arion Bank, Icelandair, Kosmos and Kaos, Reykjavik University and the US Embassy in Iceland. If we can pull this off it is going to be the start of something awesome, but as I promised before if we crash and burn it is going to be totally out in the open for everyone to see :) The website design has come out really nice, I am hoping that we can finish all the fine touches and launch it in the next couple of days. I have a talented team who are a startup in their own right, who have stepped up to sponsor the website... how cool is that? A Startup Sponsoring the Starting up of Iceland. I digress, but we have our major sponsor also committed to sponsoring Eric Ries to participate in the conference. I have sent the agreement to Eric's Agent lets keep our fingers crossed and hope he agrees to come. I already have an awesome speaker list lined up:
His Excellency Olafur Ragnar Grimsson - The President of Iceland
Brad Feld - Partner Foundry Group
Brad Burnham - Partner Union Square Ventures
Rebeca Hwang - CEO youNoodle.com
Hilmar Veigar Petursson - CEO CCP Games
Hilmar B. Janusson - EVP of R&D Ossur
The Computer Science Department in Reykjavik University has agreed to host the Hackathon, the Recktor of Reykjavik University has been awesome and totally wants to support the effort. So far, I have been very excited about the developments and I think we are well on the way... but we need more people to participate to make this an awesome event so please share the links to signup with your network and Lets Do This! My vision is to make Startup Iceland like Iceland Airwaves, in the first quarter of the year. A yearly event that is focused on Startups, Entrepreneurship and Starting New... hey! it is Spring after all! although it does not seem like it when I look out of the window.

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• Starting Up Iceland (startupiceland.wordpress.com)

DataMarket - A Startup Profile

DataMarket.com is a startup out of Iceland. I have met with Hjalli a couple of times, spoken to him quite a bit and used DataMarket services on some of the presentations and have been following the company. The company started in June 2008 and Hjalli has been around the block in the startup journey a couple of times, he successfully created and sold a company in Iceland and I believe he is a 3rd time entrepreneur. You can read all about him in his blog, he has a distinct voice within the Icelandic startup culture and he is a big proponent of Transparency and DataMarket was way to address that issue. Although a lot of his opinion and comments are in Icelandic, so I glaze over them :) Initially, I really felt that DataMarket's business model was weak because you don't see the light of the day if you are an intermediary for data and given the advent of new visualization technologies it is quite easy to hack a graph from structured data. The customers of data want data from reliable sources and you had to be a source of data to be able to sell data and typically people buy data from a Credible and Authentic Source like the IMF or the World Bank or The Economist etc. I believe the market for data is big but probably getting smaller with all the publishing tools out there. I could not put my fingers on the Value Proposition of DataMarket.

DataMarket just announced that their portal and services can be utilized by third parties to publish data, I believe that is a very interesting value proposition. In addition, they are getting credible sources to use DataMarket's portal to channel their data. I don't know the financial performance of DataMarket to comment whether they are able to make progress or not but given that they just announced they were able to secure a significant round of funding in Icelandic terms, I presume they are on track. I think breaking into the international market needs a different kind of thinking. The team composition that Hjalli has put together needs work IMHO. I have a big issue with Startups who emphasize to much of their importance on the idea and very little on the team, the strategy for customer acquisition and putting together a truly international team.

Waste vs Value - 7th Lean Startup Meetup

We had our 7th meetup on the Lean Startup and the topic of discussion today was Determining Waste vs Value. The biggest reason for waste in any process is big batches. The book refers to a number of examples where batching things in smaller sizes actually resulted in the overall job getting done faster and in addition to that reduced waste in the process. Here is one example, where the batch processing of stuffing envelops vs stuffing each envelop had a show down.
We discussed how the product development cycle if done in a lean way could result in getting feedback faster from the customers by getting a usable product to the market. We also spoke about the Lean Manufacturing Process of Toyota, how the Pull method is used to replenish inventory rather than storing a large stock. Although my experience with Toyota in Iceland is very different, my Toyota 4Runner rear wiper broke and when I wanted to buy a replacement I was told that they need to order it for me, it took a couple of days but when it came I realized I needed to get the wiper unit as well once again it was not in stock. I basically informed them that I was not interested to wait another couple of days for the wiper, I will just find the old one and try to fix it to the new arm. So, it is not consistent that Toyota has the same process world over. In manufacturing, pull is used primarily to make sure production processes are tuned to levels of customer demand. Without this, factories can wind up making much more or less of a product than customer demand. Lean Startup models do not work this way, as customers often don't know what they want. The goal of any lean startup in building products is to be able to run experiments that will help us learn how to build a sustainable business. Thus, the right way to think about the product development process in Lean Startup is that it is responding to pull request in the form of experiments that need to be run. It is not the customer, but rather our hypothesis about the customer need, that pulls work from product development and other functions. Any other work is waste. 
There were a number of questions and examples of how testing was done to validate hypothesis. Kristjan shared some examples that Eric Ries, the man himself was sharing in SXSW last week in Austin, Texas. Kristjan will talk about SXSW experience next as it relates to the book and how the whole conference was organized. During the discussions, there were  a couple of questions related to how to apply the lean methods in established conservative organizations. I tried to give examples of how hypothesis testing can be done in any process. The end result is the key and defining success and/or failure is also key to test hypothesis.

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