I love infographics that depict all sorts of useful information. Information is Beautiful has recently published an interesting one that illustrates how many music tracks or albums (in different formats) a musician would have to sell to make minimum wage.

Go here to check out the full post and more awesome insight.

I just finished reading Rework and am pumped to continue working on my side projects. I also just read an interesting post titled ‘I am a racist’ by Mark C. Chu-Carroll and they both really got me thinking.

I am a huge fan of 37signals (who isn’t these days?), and typically agree with their business philosophies and software development approach.

DHH recently had an interview with Jason Calacanis, where there was an interesting face-off between the two schools of thought. DHH is a major proponent of building your company from internal cash-flows and eventual profits, while Jason C. believes you should take outside funding when you can (I am simplifying here, so please don’t send hate mail if this doesn’t spell out their philosophies exactly).

During this interview, DHH mentioned that you should always be working on your best idea – i.e. there is no reason for you to want to sell your company because there is no guarantee that you will come up with as good an idea, or even a better idea, the next time around. In his case, he can see himself still with 37signals in 20 years, because he is confident that he is working on his best idea now. He has no plans to exit. Jason Fried even went so far as to write a blog post blasting the sale of Mint.com to Intuit because Aaron Patzer (Mint’s founder) ‘sold out’.

During another interview with Jason Fried on Mixergy, Andrew Warner (the interviewer) challenged him about wanting to build a large business and Jason pushed back defending his stance about staying small.

There is a certain zen-like quality to these notions that Jason & DHH espouse, and I whole-heartedly adopt many of them. I understand, and agree with, Jason & DHH’s point about focussing on building a solid company based on profits and real customers rather than VCs and eyeballs. I also agree that large companies tend to be inefficient, cumbersome and slow-to-respond. I do acknowledge that there are inherent risks with leaving one successful venture behind. In that, it is possible that you will never be able to ‘strike gold’ twice and come up with more than one businesses that are as successful as the first.

However, where I fundamentally disagree with them on is the notion that we should never sell and stick to one company for many, many years (if not our entire entrepreneurial lives).

The reason I disagree is because by the very nature that I have the ability and wherewithal to build a large successful company and sell, there is a high probability that I can do it again (when I say I, I mean anyone – not me specifically, but hopefully me in the future:) ). This ability is so rare, that those that have it, should not squander it – for the advancement of our civilization and the betterment of society. I once heard, can’t remember from where, that the most effective poverty-reduction mechanism that mankind has ever seen is capitalism. Capitalism has raised the standards of living of more people than any other initiative and system before it – by a factor of many multiples.

As Warren Buffet said, the mere fact that we (able body entrepreneurs) won the ovarian lottery and were born to the right vagina comes with a certain amount of responsibility. Lady Luck (nothing we did to deserve it) allowed us to go to school, meet the right people, have access to information and resources – which hundreds of millions were not so fortunate. On top of that, we were given the ability to create companies that can create wealth for many shareholders, customers, clients & employees. I believe, this obliges us to build the best businesses we can (grow as much as we can – not necessarily in terms of bulking up employee count, but grow revenues and profits). If we get an offer to sell, which could have a material impact on improving the financial security of said stakeholders, it should be seriously considered. Then do it again.

So, while I understand that they (Jason & DHH) are basically pushing back against the Silicon Valley ethos of coming up with an idea, seeking VC money, hiring a bunch of people, selling to the biggest gullible buyer and then chilling on mojito island for eternity. I think they tend to be a BIT too overzealous with the opposite stance.

Aaron Patzer (of Mint fame) is now free to start a foundation and have a more significant impact on many lives, than he had before, all the while investing in other companies and starting another one for himself.

The fact that he can, and hundreds of millions can’t, I believe means he has a fundamental responsibility to maximize his capabilities as much as possible.

 

[caption id=”attachment_376” align=”aligncenter” width=”300” caption=”iPad”] [/caption]

I just removed all four wisdom teeth, my experience going through this process has proved to be very familiar with doing a startup - remember this is just my experience, actual results may vary. [caption id=”attachment_361” align=”aligncenter” width=”300” caption=”Image provided by Wolkenkratzer from Flickr”] [/caption]

Idea: Content Delivery Network powered by ‘opted-in’ desktops - i.e. a legal botnet CDN. This post was inspired by this comment on Hacker News. Explanation: CDNs now, are traditionally powered by data centers scattered all over the globe - that in many cases have edge networks where blade servers cache the most frequently requested content (i.e. content requested in the last 15-minutes). The good thing about this model, as opposed to downloading from a centralized server, is when you request content you can be downloading from the closest server to you - which results in faster download times. The problem is that CDNs nowadays are still only able to have a handful of these datacenters all over the world. Some people estimate that Amazon (the great Amazon) only has data centers in approximately 14 cities. I know that many CDNs have arrangements with major ISPs to house local edge servers, so users that belong to those ISPs can get access to those data much quicker. That is a step in the right direction, in terms of reducing total amount of network hops to the source file, but can’t match the distribution network of an illegal P2P service. Suppose when you wanted to download a large file, though, you could download it from everybody in your neighborhood - at the same time. This drastically changes the equation. That’s what P2P networks and clients kind of allow you to do. Even some games allow you to search for the closest server (hosted by an individual) to your IP. So, back to the billion $$ idea. If you were able to create a CDN that distributed content (you would have to determine whether or not the content would be encrypted and the trade-offs therein) to a major network of peers all over the world. Think of a legal botnet. Not a spyware botnet, where users are tricked into installing ‘Anti-virus 2010’, but a network that people register to join and are paid per GB of disk storage and bandwidth used. Let’s look at some math. From the company’s perspective - using Amazon’s price sheet as benchmark (as of Jan 8, 2010):

• Charge $0.15/GB for storage
• Charge $0.17/GB for bandwidth

For calculations sake, we are only going to use these figures. The calculations can also be applied to a graduated scale of bandwidth used and storage consumed - for the user.

• Pay a peer $0.01/GB for storage
• Pay a peer $0.02/GB for bandwidth

The main issues we can see with this model are that for the lower allocations of disk space - provided by the user - and slower internet pipes, the user takes home a pittance (approximately $4.83 for a 1mbit connection with 50GB storage space).  However, for more powerful connections with higher quantities of space, a user can be more than doubling or tripling the cost of their internet connection every month (with prices falling so rapidly, especially in the US). With a 50mbit connection, and 50GB storage, a user can be taking home approximately $220 per month. Assuming 50mbit will be $50 throughout the US, following the lead of a town in Minneapolis, they have quadrupled the cost of their broadband connection - assuming the CDN uses their connection for the amount of time they allocate it for (and also assuming their computer is left running 24x7). Note: The Discount Factor in the spreadsheet model above is used to reflect the amount of time the user will allow the CDN to use their computer and bandwidth. So a 0.70 discount factor means that 70% of the time the CDN will have access to the users computer and bandwidth. Just to do a quick comparison to the large CDNs (in terms of their cost structure), here is something to think about. As far as I can tell, the largest line item expenses that the ‘non-fibre-owning CDNs’ have is the cost of bandwidth. Looking at Limelight Networks (LLNW), we see that their Cost of Revenue was approximately 64%. An unscientific comparison with the above model highlighted, shows our Cost of Revenue being 6.7% for storage, and 11.8% for bandwidth = approximately 18.5% of Revenues. Even if our model inputs were doubled ($0.02 for storage, $0.04 for bandwidth) cost of revenues would be approximately 37% (i.e. 50% lower than the traditional CDN). The CDN business is a multi-billion dollar business. With a model like this, scaling becomes more of a software problem - than a hardware problem - which is a beautiful place to be. You scale on the backs of ISPs and users are responsible for maintaining their machines. It’s Google’s Adsense business model implemented as a CDN - in short. Please feel free to tinker with the numbers, and leave comments for how I can improve the model. Disclaimer: This post assumes a number of variables, all of which are not fully fleshed out - due to the difficulty in fully conveying the complete picture in a simple blog post.

[caption id=”” align=”aligncenter” width=”427” caption=”David Plouffe - Obama for America”] [/caption]

Following the usual high quality graphs that Mint.com usually puts out, they have added one more feather to their hat. They have done a nice illustration of the differences between the US and Russia using simple bar graphs. Two of my favorites are listed here. [caption id=”” align=”aligncenter” width=”491” caption=”Russia Through My Eyes - St Basil’s Cathederal by BudaKedrova”] [/caption]

On the heels of House Democrats releasing yet another health reform bill, I stumbled across an interesting case study when government intervention in the marketplace (in the form of presenting a competitive option - e.g. the ‘feared’ public option) has the intended effect of significantly driving down costs and benefiting the consumer. [caption id=”” align=”aligncenter” width=”223” caption=”Taken by RyanWhiteHealth @ Flickr”] [/caption]

Interesting take on how we got into the current economic crisis by our dear friends at Calvin and Hobbes.

[caption id=”attachment_351” align=”aligncenter” width=”518” caption=”Calvin & Hobbes - Explain the Financial Crisis”] [/caption]

[caption id=”” align=”aligncenter” width=”280” caption=”Taken by 阿朱 Paris @ Flickr”] [/caption] Here is a nice graphic that compares internet speeds and costs around the world. The numbers are in nominal terms, for easy comparisons, and all in USD.