Without us, you are nothing!

01 October 2007

economics events vc web-20

Browsing the website for the Web 2.0 Summit coming up in October, I tripped across the Launch Pad portion. The introduction says, in part

do-not-enter-sm.jpgWhile it’s great to be chosen to launch your new company at a conference like Web 2.0 Summit, the reality of the market is that the majority of successful Web 2.0 companies do more than just launch products. They also often pass the test of VC scrutiny— that's how the market determines who wins and loses in the world of startups.

I may simply be reading it wrongly, but the implication is that the VCs decide the winners and losers in the world of start-ups.

Or maybe having a VC approve of your idea, and vote with his dollars means you have a better chance of winning in the market (of consumers, not venture capitalists).

But I thought VCs acknowledge they only pick one winner out of ten, and hope it goes big. It's also said that 90% of all new businesses fail. Seems like the odds are the same regardless of VC scrutiny.

Mix in the whole web 2.0 concept (this is the Web 2.0 Summit, after all), which implies that we're reaching a point where venture capital means less and less, and it starts to make even less sense to me. Web 2.0 is trying to relight the mythology of two guys bootstrapping in a garage (or trendy downtown condo).

Am I missing the boat, or is this just a case of someone taking themselves a tad too seriously?

Economics of Gold Foil Stars

02 April 2007

behavior economics

foil_star.jpgAs a youngster, I did the things normal youngsters would do. I went to school, church, camp, scout meetings. At all of these places, if I did what was expected, many times I'd get a gold foil star.

When you're very young, the gold foil star itself is the reward. Do something good, get a star. Awesome!

Look! I got a gold star!

You'd lick it and slap it on your chest. Or your forehead. Or your hand. You wanted to show off that star. The star was recognition of your accomplishment in stacking blocks or singing a song. You wanted others to see it and recognize your coolness, too. It was mostly a boolean thing; you either had a star, or your didn't.

A little bit older, and the teacher started keeping a chart, proudly displayed beside the chalkboard. If you received a star, you didn't get to keep it and paste it on your body, though. Instead, you'd march up to the chart, and put it in its place next to your name. The gold foil star had become a measurement of competition.

Dude, Todd, I've got 4 more stars than you do.

It might ultimately culminate in a party at the end of the year, or a special field-trip for people with enough stars on the chart. In the idea of inclusiveness, it's normally a threshold model with the bar set relatively low.

A few years further down the road of life and the gold foil stars advance to being a type of currency. It even has its own exchange rate involving select real-world goods.

I'll give you a star every day you finish your homework before dinner. If you have 20 stars, I'll take you to the store to buy a CD.

Work becomes measured by the number of stars received compared to the value of the items available for "purchase" with them. Ultimately, it's a parentally-constrained currency system with a very limited market.

While gold foil stars are easily counterfeited, the reality of living with the treasury department makes it impractical.

The Dad Threshold

09 March 2007

economics marketing technology web-20

dad_threshold.pngToday Ning crossed the dad threshold. This is the point in time when someone like your dad might actually cross paths with the work you (or your friends) do.

Without you having to say "hey dad, look at this".

I've personally never crossed this point with my own father. He has a rough idea of what I do, in general terms, maybe, kinda, sorta. But my work has never directly impacted his life in the least.

Anyhow, I'm a listener of Neal Boortz, a syndicated libertarian radio talk-show host. I also read his daily news page. Today he announced BoortzSpace, his online community type of thing. Hosted at boortz.ning.com. This is the sort of thing my own father probably noticed and might actually participate in.

I offer congratulations to Brian "Ning" McCallister and the other guys over there at Ning for hitting the beginnings of a possible mass adoption. They've taken this Web 2.0 thing and seem to have created something broadly useful with it.


20 January 2007

economics google north-carolina

LenoirGoogle decided to plonk down a $600 million dollar data-center in Lenoir, North Carolina.

You know Lenoir, it's right north of Hickory. Oh, you don't know Lenoir? It's been in the news lately, mostly with folks whinging about how Google, with its billions of dollars in market capitalization, is getting a pretty sweet tax break.

But Lenoir was bidding on this facility, in competition with other municipalities, and apparently thought $100 million in tax breaks would be a small price to pay. The upshot is that Google will bring 200 new direct jobs, plus untold number of indirect jobs, to the area. The average salary in Lenoir is $16,000. The average Google salary will be closer to $40,000. And these folks will be spending their wealth in the community. As will the workers who build and maintain the facility. Lenoir only has 17,000 people.

While Google may have been trying to decide simply the best place to drop a data-center, they were ultimately selling prosperity to the highest bidder. Lenoir won.

Good for Lenoir!