Hope you all have a great Holiday! I'll be taking next week to spend time with the family in Oahu. Bhairavi has found a house on a quiet beach where we'll be playing with the kids. I hope all of our clients take the week off as well so we can collectively catch a breath.
Will be posting some pictures next week.
I do have a data card, so I will be in touch.
Friday, December 22, 2006
Thursday, December 21, 2006
2006 UNH CEPS Distinguished Alumni Award recognizes Silicon Valley entrepreneur
Earlier this year, UNH surprised me by giving me this award. It was quite an honor. It is posted below:
2006 UNH CEPS Distinguished Alumni Award recognizes Silicon Valley entrepreneur
Electrical engineer finds new applications for innovative technologies
DURHAM, N.H.— Silicon Valley entrepreneur Rajiv Parikh is the recipient of the 2006 University of New Hampshire College of Engineering and Physical Sciences Distinguished Alumni Award.
Originally from Goffstown, Parikh now lives in Palo Alto, Calif., where he is currently founder and CEO of Position2 Inc., an online performance marketing company that combines search engine marketing with ad networks to generate sales leads for companies around the globe.
“Twenty years ago, when I first came to UNH, I never thought that I would someday receive an honor like this,” Parikh said after receiving the award at a dinner co-hosted by the New Hampshire section of the American Society of Civil Engineers and the CEPS Alumni Society on April 21. What’s amazing is that a lot of the professors I had are still here, and the passion is still here for uplifting students and taking them to the next level.”
The annual dinner meeting was also attended by engineering seniors just inducted into the Order of the Engineer. “You are taught a structured way of thinking, and that is something that offers tremendous value, not only to yourself, but to society,” Parikh told them. “As long as you are passionate about what you do, you’ll succeed.”
Since earning his bachelor of science in electrical engineering from UNH in 1990, Parikh has been an entrepreneur and executive in the high-tech and life sciences sectors, specializing in matching innovative technologies with new applications. “I had a hard time trying to determine how to describe Rajiv’s career because he has been so successfully involved in so many different ventures,” said Mike Dalton, chairman of the society’s award selection committee. “Passionate, dedicated, entrepreneurial and innovative are some of the adjectives that can be used to describe him.”
After graduating from UNH, Parikh worked as a sales manager at AT&T Global Information Solutions, before earning an MBA from Harvard Business School in 1997. He then held senior positions at Sun Microsystems and AltaVista Company before co-founding Aperon Biosystems. He led the venture-backed medical device startup, which has so far raised more then $20 million in investor capital, for two years. He has also worked in the software, hardware and wireless industries.
While visiting UNH, Parikh toured the newly renovated portions of CEPS’ home in Kingsbury Hall. Currently under construction, Phase II of the project includes a computer cluster that Parikh and his wife Bhairavi Parikh ’91 helped finance. “I was really excited to walk through the new Kingsbury,” he said. “I saw the same great professors, but a much better facility, making it more fun to work in the labs.”
PHOTO CAPTION: Rajiv Parikh accepts the 2006 UNH College of Engineering and Physical Sciences Distinguished Alumni Award from Mike Dalton, chairman of the CEPS Alumni Society award selection committee.
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Copyright 2006 The University of New Hampshire • College of Engineering and Physical Sciences
UNH is part of the University System of New Hampshire.
Kingsbury Hall • 33 College Road • Durham, N.H. 03824
Phone: (603) 862-1781 • Fax: (603) 862-2486 • E-Mail: ceps@unh.edu
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Big Win at Position2
Today we secured a significant new client at Position2. This firm is a significant, public software company. Since we did this through a partner, we can't mention the name yet, but we will be able to leverage our experience with db40bjects and Pathworks Software to grow their base of leads.
The best part is that the client chose us over a major SEM firm that did not expend the resources required to properly serve them. This is for PPC and SEO.
There will be even greater momentum next month.
The best part is that the client chose us over a major SEM firm that did not expend the resources required to properly serve them. This is for PPC and SEO.
There will be even greater momentum next month.
Why Goodbye to Nixon
As a fan, it's sad to see dedicated, hard-working players like Trot Nixon are not re-signed. He gave the team everything he had and it's probably why he injured himself so often. I'm sure he would have re-signed with a hometown discount.
I'm sure the Red Sox were looking at Nixon's stats and the declining number of games and power. His slugging average has dropped from the .500s to the .400s though he's maintaining his OBP (maybe the A's will want him). Meanwhile JD Drew has stayed in the .500s even coming off of an injury year.
There's one thing that most don't factor in is that Nixon does poorly against left handed pitchers (LHP). Typically, Nixon is not played on days with a lefty starter. This reduces managerial flexibility and pumps up his statistics. Drew vs. Nixon against LHPs is .814 vs .620 OPS and .263 vs. .207 BA over the last years. That's a huge difference.
The one thing is character and Nixon has it in spades. It is telling that someone is willing to opt out of a $11 mil/year contract for a $14 mil/year one. We hope the atmosphere of the team is contagious.
If you want a real in-depth analysis, go to the Dec 6 post of the Weekend Sports Page. It's really well put together.
I'm sure the Red Sox were looking at Nixon's stats and the declining number of games and power. His slugging average has dropped from the .500s to the .400s though he's maintaining his OBP (maybe the A's will want him). Meanwhile JD Drew has stayed in the .500s even coming off of an injury year.
There's one thing that most don't factor in is that Nixon does poorly against left handed pitchers (LHP). Typically, Nixon is not played on days with a lefty starter. This reduces managerial flexibility and pumps up his statistics. Drew vs. Nixon against LHPs is .814 vs .620 OPS and .263 vs. .207 BA over the last years. That's a huge difference.
The one thing is character and Nixon has it in spades. It is telling that someone is willing to opt out of a $11 mil/year contract for a $14 mil/year one. We hope the atmosphere of the team is contagious.
If you want a real in-depth analysis, go to the Dec 6 post of the Weekend Sports Page. It's really well put together.
Wednesday, December 20, 2006
Managing an Operation in India
Today over dinner I was asked a number of questions about running an operation in India. Many hear the press reports about call centers where people "fake" being an American or where getting an Indian technical support rep means incomprehensible service. What people do not hear about the success stories: large scale, successful technology projects that deliver quality deliverables on-time and on-budget or successful services delivered by American sounding customer service operators. These examples are occurring over and over with greater frequency. The media would rather focus on examples of failed implementations run by poor management teams who did not hire, train and operate based on the realities of the people and market.
If you are used to hiring US high school graduates for a call center or highly scripted technical support operation and are experiencing high turnover, what would you expect with Indian college graduates? There are cost and quality advantages with an Indian team, but if there's a labor cost advantage of 10:1, it is unlikely to translate into a 10:1 total advantage. Why? Buildings and computers cost the same. Quality management will not mirror the cost advantage. There will be training and communications costs. While 2:1 or 4:1 is certainly achievable, you have to account for other costs, especially in the beginning. As you grow, the cost advantage can be signficant.
From a quality standpoint, I have seen equal or better quality. People coming out of Indian colleges are well versed in their field. We get the best of both worlds as many on our team have advertising, marketing and business backgrounds and also have a strong comfort level with math and statistics. Moreover, they enjoy the challenge of working on an international client. There's a strong desire to prove how good they are. While many are accustomed to a hierarchical system that does not encourage thinking in the workplace, when people are "given permission" to think, quality of work and efficiency soars.
I've seen this already in my team. People really enjoy their work. They are always coming up with creative ideas. Supporting groups find ways to buttress line operations. Our senior management is so strong that I don't need to be there more than every other month or so.
This requires a lot of work, trust and calls on Skype. So don't believe everything you read. There are a lot of quiet success stories that far outweigh the failures. Failures have more to do with poor execution than anythign else. I can tell you that my Indian team can go toe to toe with anyone.
I'm going to spend a lot more time on this subject, so feel free to comment.
If you are used to hiring US high school graduates for a call center or highly scripted technical support operation and are experiencing high turnover, what would you expect with Indian college graduates? There are cost and quality advantages with an Indian team, but if there's a labor cost advantage of 10:1, it is unlikely to translate into a 10:1 total advantage. Why? Buildings and computers cost the same. Quality management will not mirror the cost advantage. There will be training and communications costs. While 2:1 or 4:1 is certainly achievable, you have to account for other costs, especially in the beginning. As you grow, the cost advantage can be signficant.
From a quality standpoint, I have seen equal or better quality. People coming out of Indian colleges are well versed in their field. We get the best of both worlds as many on our team have advertising, marketing and business backgrounds and also have a strong comfort level with math and statistics. Moreover, they enjoy the challenge of working on an international client. There's a strong desire to prove how good they are. While many are accustomed to a hierarchical system that does not encourage thinking in the workplace, when people are "given permission" to think, quality of work and efficiency soars.
I've seen this already in my team. People really enjoy their work. They are always coming up with creative ideas. Supporting groups find ways to buttress line operations. Our senior management is so strong that I don't need to be there more than every other month or so.
This requires a lot of work, trust and calls on Skype. So don't believe everything you read. There are a lot of quiet success stories that far outweigh the failures. Failures have more to do with poor execution than anythign else. I can tell you that my Indian team can go toe to toe with anyone.
I'm going to spend a lot more time on this subject, so feel free to comment.
Tuesday, December 19, 2006
How Entrepreneurs Look at Things
My wife and I were driving with an executive of one our companies. We were joking about how every time someone talks about a problem, we see a new company.
Later on, Bhairavi brought up an idea she had. I saw great potential. In fact it would be more of a clinical trial situation than technology hurdle. Meanwhile, you could see the, "Here they go again," rolling of the eyes with our exec. As sharp as she is, all she sees is risk.
When most people see risks, entrepreneurs see great potential. We like 10% probabilities because there are great rewards if and when we make it work. And we feel we can make things work.
If you are going to think, think big.
Later on, Bhairavi brought up an idea she had. I saw great potential. In fact it would be more of a clinical trial situation than technology hurdle. Meanwhile, you could see the, "Here they go again," rolling of the eyes with our exec. As sharp as she is, all she sees is risk.
When most people see risks, entrepreneurs see great potential. We like 10% probabilities because there are great rewards if and when we make it work. And we feel we can make things work.
If you are going to think, think big.
Thursday, December 14, 2006
effinfunny live!
I'd like you all to check out effinfunny.com. It a new site started by Sandeep, an improv comedian, director and now entrepreneur over in LA. The site will add a new original clip a day by up-and-coming comedians that were shot with a live studio audience over at The Empty Stage in LA. One of Sandeep's friend, Rich Kuras, finds great comedians and books them. Then the team puts the whole event together and edits the clips.
My team at Position2 put together the site. We worked with Sandeep on the strategy, design, development and marketing. We put together an amazing content management system for the site that is flexible and powerful enough for a new media content and community site. We are operating and running the marketing of the site. I must say that the group did an amazing job.
It started as a brainchild of mine when I was thinking about cool new media projects. Imagine having comedy clips that you can view anytime you want. Sandeep gave life to it by focusing on edgy, intelligent comedy and running the operation. Some of the stuff is over the edge. Other stuff is just really clever. You'll never look at an ATM or your wife the same way. Many times, I find it even funnier the second time - it's that good.
Check it out and leave comments. We want to improve. We wouldn't mind if you click on an interesting ad either :).
My team at Position2 put together the site. We worked with Sandeep on the strategy, design, development and marketing. We put together an amazing content management system for the site that is flexible and powerful enough for a new media content and community site. We are operating and running the marketing of the site. I must say that the group did an amazing job.
It started as a brainchild of mine when I was thinking about cool new media projects. Imagine having comedy clips that you can view anytime you want. Sandeep gave life to it by focusing on edgy, intelligent comedy and running the operation. Some of the stuff is over the edge. Other stuff is just really clever. You'll never look at an ATM or your wife the same way. Many times, I find it even funnier the second time - it's that good.
Check it out and leave comments. We want to improve. We wouldn't mind if you click on an interesting ad either :).
Sunday, December 10, 2006
Landing Pages - Gotta Have 'em
When you've been in this business for a while, you simply expect people to understand the value of landing pages. A meeting with a client the other day really brought this to life for me because it's hard for people to get away from the home page mentality of website development.
What is a landing page? It's a place that you land after you click on a PPC ad (there's value in SEO, but we'll focus). It's the place that tells your prospect more about the ad they clicked on and encourages them to contact you or buy your product or service. The page is different than your home page where you are trying to give the visitor the ability to find whatever they are looking for. This includes products, services, management info, press, contact info and so on.
Landing pages are different. You paid for the click. You have every right to limit their choices. Using your home page as your landing page offers too many choices and only delays a decision. Or worse, people forget about why they are there in the first place. Searchers have ADD. Either give them what they are looking for or go elsewhere.
Make sure the landing page is consistent with your ad. It seems intuitive but many do not do that. They forget to repeat or build on the messages of the ad. For example, if your ad says “2 easy steps to sign up. Hassle free” in the ad. The landing page should clearly show step 1 and step 2. It should have a box with benefits that would highlight why it is hassle free. We've seen dramatic improvements in conversion rates (rate at which you click turns into a lead or sale) when the landing page is aligned appropriately. Moreover, it is said that it improves your quality score with Google. That means you pay less or get higher position on your ad.
Keep it simple. Do not clutter your landing page with all kinds of information. Less is more. There's no need to confuse people.
Don't forget about the big red or green button. You know, the one that tells people to contact you or buy now. Study after study shows that this works. So use it and make sure it is front and center. This was a key area of discussion with a client.
Place a form on your landing page. Try to make it simple and unobtrusive. It allows you to track the success of the campaign, have a lead to contact and have another prospect in your database for newsletters, updates or special offers.
Use references to increase your credibility. This could be customer testimonials, parter quotes, logos of the Better Business Bureau, etc. Anything that makes that decision easier, especially if you in a very competitive market.
Use human faces, especially for services. Nothing sells and increases comfort more than the happy face enjoying the benefit of your product or service. Notice how Apple uses the gyrating dancing men and women to push the iPod. We have seen dramatic improvements with this. So much so, that we put people on our front page.
For easier tracking, use confirmation or thank you pages to complete the contact process.
Try to use text over text images. It makes it easier to make modifications, especially if you do a ton of pages to tune your campaign.
This goes without saying but keep with the look and feel of your brand. You customers will see you again. Don't confuse them into missing you.
Finally, test and retest. Never stop testing. Use split testing or even better Taguchi testing (see Andreas' slides on the beta of Google's MultiVariate Testing software). You would be amazed how many times the page that you considered as the worst, turned out to be the best in conversions.
Thanks to Soumya for helping with her comments!
What is a landing page? It's a place that you land after you click on a PPC ad (there's value in SEO, but we'll focus). It's the place that tells your prospect more about the ad they clicked on and encourages them to contact you or buy your product or service. The page is different than your home page where you are trying to give the visitor the ability to find whatever they are looking for. This includes products, services, management info, press, contact info and so on.
Landing pages are different. You paid for the click. You have every right to limit their choices. Using your home page as your landing page offers too many choices and only delays a decision. Or worse, people forget about why they are there in the first place. Searchers have ADD. Either give them what they are looking for or go elsewhere.
Make sure the landing page is consistent with your ad. It seems intuitive but many do not do that. They forget to repeat or build on the messages of the ad. For example, if your ad says “2 easy steps to sign up. Hassle free” in the ad. The landing page should clearly show step 1 and step 2. It should have a box with benefits that would highlight why it is hassle free. We've seen dramatic improvements in conversion rates (rate at which you click turns into a lead or sale) when the landing page is aligned appropriately. Moreover, it is said that it improves your quality score with Google. That means you pay less or get higher position on your ad.
Keep it simple. Do not clutter your landing page with all kinds of information. Less is more. There's no need to confuse people.
Don't forget about the big red or green button. You know, the one that tells people to contact you or buy now. Study after study shows that this works. So use it and make sure it is front and center. This was a key area of discussion with a client.
Place a form on your landing page. Try to make it simple and unobtrusive. It allows you to track the success of the campaign, have a lead to contact and have another prospect in your database for newsletters, updates or special offers.
Use references to increase your credibility. This could be customer testimonials, parter quotes, logos of the Better Business Bureau, etc. Anything that makes that decision easier, especially if you in a very competitive market.
Use human faces, especially for services. Nothing sells and increases comfort more than the happy face enjoying the benefit of your product or service. Notice how Apple uses the gyrating dancing men and women to push the iPod. We have seen dramatic improvements with this. So much so, that we put people on our front page.
For easier tracking, use confirmation or thank you pages to complete the contact process.
Try to use text over text images. It makes it easier to make modifications, especially if you do a ton of pages to tune your campaign.
This goes without saying but keep with the look and feel of your brand. You customers will see you again. Don't confuse them into missing you.
Finally, test and retest. Never stop testing. Use split testing or even better Taguchi testing (see Andreas' slides on the beta of Google's MultiVariate Testing software). You would be amazed how many times the page that you considered as the worst, turned out to be the best in conversions.
Thanks to Soumya for helping with her comments!
Saturday, December 09, 2006
My Asthma Returns... There's Hope
When I came back from India in late November, I returned with that familiar feeling in my chest. I have been starting to feel it as of my last couple of trips from India. It's that tight, coughy feeling - that shortness of breath. There's a feeling you get when you breathe in too deeply. You can't go all the way. A number of times I had a difficult time in the rickshaws breathing in the soot from other rickshaws. It's a long way of saying...the asthma is back.
It's a sad feeling - been over 25 years since I last felt symptoms. The memory never goes away, but I really thought I beat it. Well this time when I went to see my doctor, he listened to me describe my symptoms and prescribed Advair - inhaled corticosteroids with a long acting bronchodialator. Usually I despise medication, but I took it as I felt a great deal of chest tightness. There was some impact within days but it's still there. I know that a low dose of Advair takes a while to have impact.
The story twists here... Well I went over to the Apieron office this weekend to measure my exhaled nitric oxide (eNO) levels. As many of you know, Bhairavi and I started Apieron. We are building a device that measure exhaled nitric oxide or eNO at the parts per billion level. eNO is indicative of inflammation of the airways. High inflammation leads to symptoms. If you can catch and control inflammation early, you are much less likely to feel symptoms. In my case, I've been typically measured at in the low 30s over the years. Today, I was at 46 ppb - this is after 3 days of Advair. Much much higher than normal. While there is no established protocol for treatment in conjunction with eNO measurement, it's clear that lowering eNO and inflammation is the way to go.
I was happy about one thing - eNO works. My measured level is much higher than normal. As a mild asthmatic, my normal level is higher than non-asthmatics. To see it this high really hit home. It is one thing to hear presentations on studies that have been conducted. It's quite another to feel it directly. The measurement works - our device has value.
Every week, I plan to go back in to see the decline. When it gets low enough, I plan to see if I can switch to a pure inhaled corticosteroid vs. Advair.
In one way, this stinks. In another way, it's heartening that our collective hard work can truly help the world.
It's a sad feeling - been over 25 years since I last felt symptoms. The memory never goes away, but I really thought I beat it. Well this time when I went to see my doctor, he listened to me describe my symptoms and prescribed Advair - inhaled corticosteroids with a long acting bronchodialator. Usually I despise medication, but I took it as I felt a great deal of chest tightness. There was some impact within days but it's still there. I know that a low dose of Advair takes a while to have impact.
The story twists here... Well I went over to the Apieron office this weekend to measure my exhaled nitric oxide (eNO) levels. As many of you know, Bhairavi and I started Apieron. We are building a device that measure exhaled nitric oxide or eNO at the parts per billion level. eNO is indicative of inflammation of the airways. High inflammation leads to symptoms. If you can catch and control inflammation early, you are much less likely to feel symptoms. In my case, I've been typically measured at in the low 30s over the years. Today, I was at 46 ppb - this is after 3 days of Advair. Much much higher than normal. While there is no established protocol for treatment in conjunction with eNO measurement, it's clear that lowering eNO and inflammation is the way to go.
I was happy about one thing - eNO works. My measured level is much higher than normal. As a mild asthmatic, my normal level is higher than non-asthmatics. To see it this high really hit home. It is one thing to hear presentations on studies that have been conducted. It's quite another to feel it directly. The measurement works - our device has value.
Every week, I plan to go back in to see the decline. When it gets low enough, I plan to see if I can switch to a pure inhaled corticosteroid vs. Advair.
In one way, this stinks. In another way, it's heartening that our collective hard work can truly help the world.
Friday, December 08, 2006
Bonds Signing - More Than Meets the Eye
Today, it was announced that the SF Giants would sign Barry Bonds for $16 million base and earn up to $20 mil for one search. Given that Bonds seemed to have no other place to go, various writers in the SJ Merc and SF Chronicle are talking about how crazy it seems.
And it does seem crazy except for one thing. The Giants do need Bonds more than he needs them. A comment from a good friend and season ticket holder gave the answer - personal seat licenses and a big price increase. The 7 year personal seat licenses for season ticket holders are up. They have a choice of either renewing for some ridiculous rate + the game package or a much higher per game ticket price.
By keeping Bonds, the Giants are more likely to get the renewals and keep cash flows going before Bonds leaves.
Why not pay less like $7 mil? Well even if Bonds accepted it from the Giants, he would probably be unhappy and spread that around the clubhouse. That would wreck the season and turn off the fans. So Magowan had no choice but pay extra, get the big personal seat license and season ticket renewals, and then let Bonds go after the season.
I'm sure Bond's agent knew a little bit about this as well...
And it does seem crazy except for one thing. The Giants do need Bonds more than he needs them. A comment from a good friend and season ticket holder gave the answer - personal seat licenses and a big price increase. The 7 year personal seat licenses for season ticket holders are up. They have a choice of either renewing for some ridiculous rate + the game package or a much higher per game ticket price.
By keeping Bonds, the Giants are more likely to get the renewals and keep cash flows going before Bonds leaves.
Why not pay less like $7 mil? Well even if Bonds accepted it from the Giants, he would probably be unhappy and spread that around the clubhouse. That would wreck the season and turn off the fans. So Magowan had no choice but pay extra, get the big personal seat license and season ticket renewals, and then let Bonds go after the season.
I'm sure Bond's agent knew a little bit about this as well...
Tuesday, December 05, 2006
PPC for More Traffic, More Sales
For those who previously visited our site, you will see a new look. We have changed our tagline and added a whole host of content. We found that many clients did not really understand PPC or Pay Per Click Advertising with Search Engines.
So we asked them, "What do you want?"
"More traffic, more sales." That became our tagline.
Here's why... because we've been delivering. Here are some recent examples:
Why? We've adapted our knowledge to build worldwide infrastructure, technology and processes to offer high quality services for a wide variety of clients.
Contact Position2 to learn more.
So we asked them, "What do you want?"
"More traffic, more sales." That became our tagline.
Here's why... because we've been delivering. Here are some recent examples:
- MIT OpenCourseware: We recently grew traffic over 100x with the same daily ad spend.
- Finance Business: Grew their sales volume 4x while maintaining cost of acquisition.
- Enterprise Software Firm: Doubled their lead volume while cutting lead cost in half.
- Internet Membership Firm: Grew their paying members 6x in 3 months while maintaining cost per acquisition.
Why? We've adapted our knowledge to build worldwide infrastructure, technology and processes to offer high quality services for a wide variety of clients.
Contact Position2 to learn more.
Monday, December 04, 2006
Aviator - Inspired Entrepreneurship
Many people like to use pro sports as a means to release stress. Yell at the team. Yell at the refs. It's a lot better than yelling at the kids or your employees. Well, I'm definitely there for the Pats and Red Sox. I was definitely at that point for Aviator, starring Leonard DiCaprio as the eccentric entrepreneur, Howard Hughes. This was especially during the Senate hearings where Senator Owen Brewster tried to smear Hughes for war profiteering and all sorts of seemingly unsavory practices. He was basically in the pocket of the CEO of Pan Am.
If you want to get me going, talk about anti-competitive policy in the national security or interest realm. The Senator used his office to hold back competition from a visionary player.
Though Hughes was definitely over the top, he was a true innovator in the aviation and film industry. His story reminded me of the movie, Tucker: Man and His Dreams. Preston Tucker was an innovator who's ideas later became part of automobiles years later: disk brakes, fuel injection, seat belt, safety windshields and padded dashboards. Like Hughes, the established players tried to run him out of business using the Congress as their stick rather than innovations. That backward attitude is why the US auto industry suffers today against Japanese competitors.
Our government should find ways to foster innovation and not prevent it. It should not allow corporate money to stifle entrepreneurialism.
For me, Hughes inspired me to continue creating innovative business. Nothing's more fun than holding the "tiger by the tail."
If you want to get me going, talk about anti-competitive policy in the national security or interest realm. The Senator used his office to hold back competition from a visionary player.
Though Hughes was definitely over the top, he was a true innovator in the aviation and film industry. His story reminded me of the movie, Tucker: Man and His Dreams. Preston Tucker was an innovator who's ideas later became part of automobiles years later: disk brakes, fuel injection, seat belt, safety windshields and padded dashboards. Like Hughes, the established players tried to run him out of business using the Congress as their stick rather than innovations. That backward attitude is why the US auto industry suffers today against Japanese competitors.
Our government should find ways to foster innovation and not prevent it. It should not allow corporate money to stifle entrepreneurialism.
For me, Hughes inspired me to continue creating innovative business. Nothing's more fun than holding the "tiger by the tail."
Monday, November 06, 2006
Please Vote
As many of you know I have strong views on just about everything. I love a good rigorous debate on just about any issue. Whether we are on the same side or not, one thing I'd encourage you to do is get out there and vote.
It is your right. It was fought for by our Founding Fathers. It is what our soldiers do for us every day. It is your responsibility. You do not have the right to complain about what your government is doing or not doing for you and your country unless you lend your voice.
In California where there is a plethora of initiatives, your vote can have tremendous impact - whether it is on access to abortions, funding for infrastructure or taxes on oil and cigarettes. You can sit back and say it is all too confusing or you can do some research and make a decision.
Please don't make a call based on a TV ad. Most of them are appealing to base fears or are distortions. Read what the legislative analyst wrote. Read both sides on the web. Check up on a few newspaper sites (San Jose Mercury or San Francisco Chronicle). It may take a couple hours, but it is your money and your children's money. Make sure it is spent on things you care about.
Also, if its too much of a hassle to remember to visit your polling booth on Election Day, then become a permanent absentee. You can sit there in your own living room, fill it out and mail it in. If you don't get around to it fast enough, you can still deliver it to your polling place.
No excuses - just vote.
It is your right. It was fought for by our Founding Fathers. It is what our soldiers do for us every day. It is your responsibility. You do not have the right to complain about what your government is doing or not doing for you and your country unless you lend your voice.
In California where there is a plethora of initiatives, your vote can have tremendous impact - whether it is on access to abortions, funding for infrastructure or taxes on oil and cigarettes. You can sit back and say it is all too confusing or you can do some research and make a decision.
Please don't make a call based on a TV ad. Most of them are appealing to base fears or are distortions. Read what the legislative analyst wrote. Read both sides on the web. Check up on a few newspaper sites (San Jose Mercury or San Francisco Chronicle). It may take a couple hours, but it is your money and your children's money. Make sure it is spent on things you care about.
Also, if its too much of a hassle to remember to visit your polling booth on Election Day, then become a permanent absentee. You can sit there in your own living room, fill it out and mail it in. If you don't get around to it fast enough, you can still deliver it to your polling place.
No excuses - just vote.
Monday, October 30, 2006
Patriots: Win
Yeah baby! Another blowout Patriots performance. Beat the Viks 31-7. The Pats totally threw the Vikings off their game with tons of passing and a swarming defense. When Bollinger replaced Johnson at QB, he was sacked all three downs, losing 20 yards. Ridiculous!The great part is after the victory, there was little celebration on the Pats side. Belichick was already looking towards the Colts. Same with Brady. They talked about mistakes they made in offense. That's right - after 372 passing yards.
This is what makes a great team. Always being ready for the next challenge. Never get too high or too low. Always looking to learn and improve.
Just let the fans celebrate!
Saturday, October 28, 2006
New Comedy Site: EffinFunny.com
Today marks the beginning of a new era... when robots take control over the world of comedy...OK, so I'm not as funny as Sandeep, the man behind the robot.
Wouldn't you like to get your comedy fix every day? It's just like what has happened with music, now we can see and laugh at material that we truly enjoy. There will be a new clip every day, with a huge archive of material. Fans can rate and comment, even communicate with their favorite comedians. Moreover, there will be sketch comedy, improv, and maybe even a few shows.
This new site opens a new world for up and coming comedians. EffinFunny is what you'd expect - edgy comedy that makes you think. The comedians are hand-selected and filmed at the Empty Stage in LA. Then the material is edited down to its sharpest material. This site will redefine comedy by giving great opportunity to high quality comedians by giving their material great exposure. There will be profile pages and schedules where you can see them live.
And yes, my crew at Position2 had a lot to do with this. We conceptualized it with the creator, put the pieces together and even got one of our clients to sponsor the site. Next we'll help spread the word. The name is a hit...the site will be even better. Call us to learn more.
Right now, the site is in beta so we're still testing and fixing a number of items. The clips work, the functionality will get there quickly. So be a little patient and give some constructive criticism. Click on the ads, too.
Check it out at http://effinfunny.com
Ok, if you don't it there, try http://beta.efinfunny.com/beta
Tuesday, October 24, 2006
Best Line of the Day
This was the most memorable line I've heard in a while,
"I'm not going to chew yesterday's breakfast,"
-Jim Leyland, manager of the Detroit Tigers about "the Smudge" on Kenny Rogers' hand in Game 2 of the 2006 World Series.
"I'm not going to chew yesterday's breakfast,"
-Jim Leyland, manager of the Detroit Tigers about "the Smudge" on Kenny Rogers' hand in Game 2 of the 2006 World Series.
Thursday, October 19, 2006
Newspaper Ad Sales Decline
A number of articles in the Wall Street Journal and the NY Times discuss the decline in newspaper advertising. Here's a quote from today's NY Times article:
You can even see some desperation on the part of newspapers. I still get the Wall Street Journal paper delivered at home (there are certain places where the laptop is not feasible). I noticed that the vaulted Journal now has cheesy color ads on the front page and editorial section. The need to make up for lost dollars is so great that ads show up where no self repecting editor would have ever allow them. The next thing is to have paid logos/mini-ads of the reported companies in the actual article.
Still, if the content can be of high quality online, smart journalists will do well. The distribution infrastructure will diminish and the online ads can be tracked more effectively. That would command a premium vs. other sources for ad placement. Moreover, like nytimes.com, wsj.com and ESPN Insider, subscription fees can go directly to the bottom line as opposed to subscription fees that only pay for the actual paper and distribution. In the end it is about strong content, the normal AP reporting has less value online unless it is breaking news.
The challenge will be for the traditional newspaper will be to find it's strongest niche. Today, it was reported that the NY Times is losing money on the Boston Globe, a paper it purchased in $1.1 billion . Why read the Boston Globe when the NY Times general online content is better? So, the Globe has to focus more on deep local analysis and sports outreach online. This is something that it really has not tapped. While there are good articles, polls, and chat online, I know the ads are tuned effectively to the reader. The current online Globe Sports section has this awful bowling ad that eats the screen. If they were smart, they would know I'm a Sox fan from California and give me something more relevant to me - ad to buy 2007 A's - Red Sox tickets.
Because things that were forecasted in the mid 90s are finally happening this whole area will be very exciting to watch.
"Advertising sales continues to sag at major newspaper publishers, judging by the quarterly results reported today by The New York Times Company and the Tribune Company, owner of the Los Angeles Times, Chicago Tribune and Newsday.
For the third quarter, The Times Company’s overall revenue declined to $739,6 million, 2.4 percent less than the comparable quarter last year, mainly because of a 4.2 percent fall in advertising revenue, the company reported. At Tribune, revenue fell to $1.35 billion, a 2.5 percent decline from a year earlier; revenue from print advertising fell 2.2 percent, mostly because of weak sales at Newsday."
The explosion of online media, advertising and classifieds is reducing the share of spend in newspapers. For example overall advertising spend is forecast to be in the low single digits whereas search advertising is in the 20-30% growth range. This makes sense. First, the eyeballs are moving. Fewer and fewer read the newspaper when there is searchable and customizable content on the web. Second, why bother culling through a reams of tiny print when you can search for a car, home, or baseball tickets using a local search engine or a free listing service like Craigslist.You can even see some desperation on the part of newspapers. I still get the Wall Street Journal paper delivered at home (there are certain places where the laptop is not feasible). I noticed that the vaulted Journal now has cheesy color ads on the front page and editorial section. The need to make up for lost dollars is so great that ads show up where no self repecting editor would have ever allow them. The next thing is to have paid logos/mini-ads of the reported companies in the actual article.
Still, if the content can be of high quality online, smart journalists will do well. The distribution infrastructure will diminish and the online ads can be tracked more effectively. That would command a premium vs. other sources for ad placement. Moreover, like nytimes.com, wsj.com and ESPN Insider, subscription fees can go directly to the bottom line as opposed to subscription fees that only pay for the actual paper and distribution. In the end it is about strong content, the normal AP reporting has less value online unless it is breaking news.
The challenge will be for the traditional newspaper will be to find it's strongest niche. Today, it was reported that the NY Times is losing money on the Boston Globe, a paper it purchased in $1.1 billion . Why read the Boston Globe when the NY Times general online content is better? So, the Globe has to focus more on deep local analysis and sports outreach online. This is something that it really has not tapped. While there are good articles, polls, and chat online, I know the ads are tuned effectively to the reader. The current online Globe Sports section has this awful bowling ad that eats the screen. If they were smart, they would know I'm a Sox fan from California and give me something more relevant to me - ad to buy 2007 A's - Red Sox tickets.
Because things that were forecasted in the mid 90s are finally happening this whole area will be very exciting to watch.
Monday, October 16, 2006
Russian Power
After many years as a superpower, Russia has risen again. While not superpower that previously threatened the US and the Free World, but Russia is definitely in a stronger position with its special form of centralized democracy and capitalism. 2 areas define its power - oil + military weapons.
As oil and natural prices have risen, Russia has used its position to take control of Russian energy companies (e.g. Yukos) and surrounding states like Georgia and the Ukraine. This new energy wealth has strengthened a country that was once seen as a step-child at G-8 meetings.
An overlooked area is military weaponry. While traditional Western powers like the US, Britain and France supply much of the world weapons, Russia has not necessarily reduced its capability or sales. In fact, take a look at the bottom of this page to see the list of high tech arms sales to China, India, Indonesia and Nepal. There's everything from a new destroyer which China could use to threaten Taiwan (and by proxy the US), helicopter sales to India, warplanes to Mexico and Brazil, and anti-aircraft missiles to Nepal.
Military weaponry not only provides jobs and hard currency, it also funds the development of high technology and of course...new weaponry. Moreover, the client country is bound to the weapons supplier for spare parts. As we've seen in Iran with its airplanes - no parts, lots of problems.
Combined with the ability to withold energy, you now can influence countries in ways that may not make sense to a rational outsider. Would Mexico or India side with the US on proliferation is Russia is against it? If the West wants to isolate a country for belligerent activity, Russia can prevent action if that country is a client.
It's all an intertwined set of interests that grow more complex every day...
When Putin came to power, Bush said he could read into his soul. He felt that Putin was trustworthy. Interesting...a former head of the KGB running the country. With no democratic tradition in the country, did anyone believe he would tolerate free speech. Today (10/17) I heard on NPR that many NGO's in Russia are now illegal because they were late in applying for permits. Permits. If you don't register, you are now illegal (check out the NYTimes article on it). With many of the media outlets now state controlled, it is hard to see how democracy can exist or grow.
Again, more complex...
For example (on 10/17) I heard on NPR that many NGOs in Russia are now illegal because they were late in getting permits
As oil and natural prices have risen, Russia has used its position to take control of Russian energy companies (e.g. Yukos) and surrounding states like Georgia and the Ukraine. This new energy wealth has strengthened a country that was once seen as a step-child at G-8 meetings.
An overlooked area is military weaponry. While traditional Western powers like the US, Britain and France supply much of the world weapons, Russia has not necessarily reduced its capability or sales. In fact, take a look at the bottom of this page to see the list of high tech arms sales to China, India, Indonesia and Nepal. There's everything from a new destroyer which China could use to threaten Taiwan (and by proxy the US), helicopter sales to India, warplanes to Mexico and Brazil, and anti-aircraft missiles to Nepal.
Military weaponry not only provides jobs and hard currency, it also funds the development of high technology and of course...new weaponry. Moreover, the client country is bound to the weapons supplier for spare parts. As we've seen in Iran with its airplanes - no parts, lots of problems.
Combined with the ability to withold energy, you now can influence countries in ways that may not make sense to a rational outsider. Would Mexico or India side with the US on proliferation is Russia is against it? If the West wants to isolate a country for belligerent activity, Russia can prevent action if that country is a client.
It's all an intertwined set of interests that grow more complex every day...
When Putin came to power, Bush said he could read into his soul. He felt that Putin was trustworthy. Interesting...a former head of the KGB running the country. With no democratic tradition in the country, did anyone believe he would tolerate free speech. Today (10/17) I heard on NPR that many NGO's in Russia are now illegal because they were late in applying for permits. Permits. If you don't register, you are now illegal (check out the NYTimes article on it). With many of the media outlets now state controlled, it is hard to see how democracy can exist or grow.
Again, more complex...
For example (on 10/17) I heard on NPR that many NGOs in Russia are now illegal because they were late in getting permits
Position2: MIT Open Courseware Project
Nothing gets me more excited than to announce our latest client, the MIT OpenCourseWare Project (OCW). We are providing Search Engine Marketing (SEM) services including Search Engine Optimization (SEO), Pay Per Click Advertising (PPC) and Link Building to improve visibility to the over 1400 courses that are part of this project. Our team is especially proud to do this work because students and educators can get free access to super high quality MIT course material.Already, as a result of Position2's work, MIT OCW has received more clicks in 1 day than they had in the previous month. Even critical works like this need to be marketed to the world. People need to know you exist when they search for your topic.
About MIT OCW
In 1999, MIT Provost Robert A. Brown asked a committee of MIT faculty, students, and administrators to provide strategic guidance on how MIT should position itself in the distance/e-learning environment. The resulting recommendation -- the idea of MIT OCW -- is in line with MIT's mission (to advance knowledge and educate students in science, technology, and other areas of scholarship that will best serve the nation and the world in the 21st century) and is true to MIT's values of excellence, innovation, and leadership.
Now over 5 years from conception the MIT OCW has grown into a large-scale, Web-based publication of the educational materials from the MIT faculty's courses. MIT OCW provides users with open access to the syllabi, lecture notes, course calendars, problem sets and solutions, exams, reading lists, even a selection of video lectures, from 1400 MIT courses representing 34 departments and all five of MIT's schools. The initiative will include materials from 1800 courses by the year 2008.
OCW Accolades....
"Students need to know about this," says Kunle Adejumo, a student at Ahmadu Bello University in Nigeria. "I couldn't find the information I needed (for a metallurgical engineering course), so I went to OCW.
"Your OpenCourseWare is an amazing and remarkable step! I am currently a student of computer science at BRAC University of Dhaka, Bangladesh, and I find it very much useful to learn about my courses. I have always had a dream to study at MIT, since I came to know about the institution, its unique teaching methods, but for many reasons I am not able to do so. This initiative gives me the opportunity to self-teach myself. At least I can reach what MIT teaches to their students. I feel better to access your course materials, to enrich my knowledge. To be truthful, I cannot find words to explain how I feel! Kind of unexplainable feeling, like the feeling one feels when someone falls in love!" - Maruf Muqtadir, student in Bangladesh
"OpenCourseWare expresses in an immediate and far-reaching way MIT's goal of advancing education around the world. Through MIT OCW, educators and students everywhere can benefit from the academic activities of our faculty and join a global learning community in which knowledge and ideas are shared openly and freely for the benefit of all." - Susan Hockfield, President of MIT
Read more stories about MIT OCW's impact...
About Position2
Position2 is a leading provider of search engine marketing services, serving clients around the globe. The VC-backed company improves lead generation, customer acquisition and brand visibility through pay per click advertising management (PPC), search engine optimization (SEO), and web analytics. With operations in Silicon Valley and Bangalore, Position2 offers a full service, performance-driven approach to agencies and a diverse array of growing companies. Position2 was formed in 2005 and is funded by Erasmic Venture Fund, an innovative US/India VC fund. For more information on Position2, please go to www.position2.com.
Thursday, October 12, 2006
Iraq Comments
Listening to the current administration's "Stay the Course" and denunciation of "Cut and Run" is getting tiresome. Being a Republican does not mean that you support every military adventure, nor does it mean that a change in tactics is not necessary to fit with the circumstances. With US troops dying every day in Iraq and the continued lawlessness, you have to wonder if we have learned anything from history.
No matter how benevolent, no one likes an occupier. Pick any foreign occupation at any time in the last couple hundred years and this fact is clear. Look at American history. After a while, the British occupation made us weary until we found a way to expel them. The people of a country need to run their own land.
Adjusting tactics. By now everyone acknowledges that US post war planning was disasterous. Sen Biden discussed this at length prior to the attack. Iraqis are not able to control their country, so the government continues to rely almost solely on the US (and UK). The logic is that if we just stay in or hell, send in more, eventually we will wear them down and they will be readied. This is clearly not working. We have bred a cycle of dependency where the democratically elected government cannot raise and effective military or police force. So we step into the breach and continue to no end. This makes no sense. Having a deadline will allow the people to know that we are leaving and will force the government to deal with the situation.
Highly leveraged force. With the billions of dollars that we have spent on equipment, material, training, we are still not able to fight decisively against a guerrilla army with cheap remote controlled hand grenades and IEDs. Why? Because they see us and we can't see them. Remember Vietnam - we couldn't find where they were coming from. Remember our own Revolutionary War - we fought behind trees and rocks. The British would march in formation, stand in an open field and shoot. Even their uniforms were designed to stand out. American troops were smart - hide behind, trees, rocks and bushes. Attack, then fall back. The British won just about battle, but kept losing people. Remember our surprise attack on the Hessians at Trenton - same deal. Guerrilla tactics. Eventually, it became too expensive for the British to continue, so they left after the one battle that the Continental Army could win. It didn't hurt that we had some help from the French.
People will not adopt democracy at the barrel of the gun, yet our administration believed that it was true. In our early history, we went through the Articles of Confederation before we signed the Constitution. Our framers added many protections for minority rights and a slow, inefficient, yet thoughful government. However, they were concerned about mob rule. They did not want uneducated people voting. Neither the Senate nor the President were directly elected. Look at other successful nations like South Korea, Japan and Germany. Democracy took time after dictatorship.
Yet we think people will go to democracy because we think it is the right thing for them. We are now missionaries who seek to push our cause by force. This is what happens when you have an unsophisticated attitude toward Foreign Affairs.
We think there is a loss of prestige if you talk to an enemy. This is silly. Nixon's opening of China was pivotal to driving a wedge between Communist China and Communist Soviet Union and is the basis our current symbiotic relationship. Even Reagan held talks with Gorbachev, leader of the "Evil Empire." Pick a country where this non-communicative stance has been taken - Cuba, North Korea, Iran, Syria Venezuela and you can see the negative value of the approach.
Watching what is occurring is painful - $300 billion of our treasure, countless lives, more terrorist recruits - yet no change in approach. Reagan "Cut and Ran" from Beirut, Bush I left after expelling Iraq out of Kumait. I remember Kosovo bombing called "Clinton's War" by many Republican leaders. No one thought the US could win by solely utilizing an air war. But it worked. The leadership turned over. While there is a UN and NATO force in Kosova, it is far less expensive than Iraq. $300 at 6% is $18 billion a year in interest that we and our children need to carry as a result of Bush's War.
What is wrong with declaring victory and moving on? Every country knows that if the US wanted to take action, it could. Why do we have to be responsible for cleaning up? No one could match US military power. Why should be be an occupying force? Countries like Iran, Iraq and Venezuela know that the US is bogged down. If we are freed, then some aspect of leverage will dissipate.
In summary, patriotism is one thing. Foolishness is another. Bush came to the President talking about a humble power with limited presence abroad. Now the US is protecting the world and "saving" 25 million people. For what? They don't want us. It is time to start the process.
No matter how benevolent, no one likes an occupier. Pick any foreign occupation at any time in the last couple hundred years and this fact is clear. Look at American history. After a while, the British occupation made us weary until we found a way to expel them. The people of a country need to run their own land.
Adjusting tactics. By now everyone acknowledges that US post war planning was disasterous. Sen Biden discussed this at length prior to the attack. Iraqis are not able to control their country, so the government continues to rely almost solely on the US (and UK). The logic is that if we just stay in or hell, send in more, eventually we will wear them down and they will be readied. This is clearly not working. We have bred a cycle of dependency where the democratically elected government cannot raise and effective military or police force. So we step into the breach and continue to no end. This makes no sense. Having a deadline will allow the people to know that we are leaving and will force the government to deal with the situation.
Highly leveraged force. With the billions of dollars that we have spent on equipment, material, training, we are still not able to fight decisively against a guerrilla army with cheap remote controlled hand grenades and IEDs. Why? Because they see us and we can't see them. Remember Vietnam - we couldn't find where they were coming from. Remember our own Revolutionary War - we fought behind trees and rocks. The British would march in formation, stand in an open field and shoot. Even their uniforms were designed to stand out. American troops were smart - hide behind, trees, rocks and bushes. Attack, then fall back. The British won just about battle, but kept losing people. Remember our surprise attack on the Hessians at Trenton - same deal. Guerrilla tactics. Eventually, it became too expensive for the British to continue, so they left after the one battle that the Continental Army could win. It didn't hurt that we had some help from the French.
People will not adopt democracy at the barrel of the gun, yet our administration believed that it was true. In our early history, we went through the Articles of Confederation before we signed the Constitution. Our framers added many protections for minority rights and a slow, inefficient, yet thoughful government. However, they were concerned about mob rule. They did not want uneducated people voting. Neither the Senate nor the President were directly elected. Look at other successful nations like South Korea, Japan and Germany. Democracy took time after dictatorship.
Yet we think people will go to democracy because we think it is the right thing for them. We are now missionaries who seek to push our cause by force. This is what happens when you have an unsophisticated attitude toward Foreign Affairs.
We think there is a loss of prestige if you talk to an enemy. This is silly. Nixon's opening of China was pivotal to driving a wedge between Communist China and Communist Soviet Union and is the basis our current symbiotic relationship. Even Reagan held talks with Gorbachev, leader of the "Evil Empire." Pick a country where this non-communicative stance has been taken - Cuba, North Korea, Iran, Syria Venezuela and you can see the negative value of the approach.
Watching what is occurring is painful - $300 billion of our treasure, countless lives, more terrorist recruits - yet no change in approach. Reagan "Cut and Ran" from Beirut, Bush I left after expelling Iraq out of Kumait. I remember Kosovo bombing called "Clinton's War" by many Republican leaders. No one thought the US could win by solely utilizing an air war. But it worked. The leadership turned over. While there is a UN and NATO force in Kosova, it is far less expensive than Iraq. $300 at 6% is $18 billion a year in interest that we and our children need to carry as a result of Bush's War.
What is wrong with declaring victory and moving on? Every country knows that if the US wanted to take action, it could. Why do we have to be responsible for cleaning up? No one could match US military power. Why should be be an occupying force? Countries like Iran, Iraq and Venezuela know that the US is bogged down. If we are freed, then some aspect of leverage will dissipate.
In summary, patriotism is one thing. Foolishness is another. Bush came to the President talking about a humble power with limited presence abroad. Now the US is protecting the world and "saving" 25 million people. For what? They don't want us. It is time to start the process.
A's: Tough Losses, Great Games
Last night I went to the second ALCS game. This time, with my friend, Andy. The A's losses over the past 2 days have been tough. It's no fun to be down 2 games. However, I was encouraged by quite a few things:
- The team had many many opportunities to turn it around. It was not like they were completely shut out at any point.
- The bullpen was largely able to hold the Tigers - only 1 run given up outside of starting pitching.
- Great pitchers in Haren and Harden coming up.
- Every hitter but Thomas and Swisher are getting hits. If those 2 start up, the whole thing turns.
The crowd was electric last night. It was almost as if we willed Kendell, Kotsay and Bradley onto base. No one gave up. It was incredible.
We can take this to 7...
This is all about heart. Are you guided by the moment or the past? After the 2004 Red Sox, I'm convinced nothing is over.
The pics were shot by Andy Drexler using his professional grade Canon from our seat up in Sec 209. Incredible zoom on Loiza and George - a fixture at the park.
Friday, October 06, 2006
Thursday, October 05, 2006
SEM: New PPC Whitepaper
Andreas has released a new PPC whitepaper from his book: Insider SEO & PPC. It is for all those that want to learn about PPC with some nice case studies. We plan to load it on our company website, but until then, download from his book's site.
It is essentially a chapter from his book, so you are getting an important section of his book for free. Now that's a great deal.
We discussed internally whether we should get your contact info before sending you the chapter. It's one of the things we discuss a lot with our clients because some want to capture the lead. Others want to make it freely available (like db40 where you only enter info in if you want info from the message boards). We decided to let people grab it for free without any personal info required. If you want to contact us about ways in which we can help you, then great. If not, we hope that you or your friends consider us in the future. Enjoy and hey, buy the book!
It is essentially a chapter from his book, so you are getting an important section of his book for free. Now that's a great deal.
We discussed internally whether we should get your contact info before sending you the chapter. It's one of the things we discuss a lot with our clients because some want to capture the lead. Others want to make it freely available (like db40 where you only enter info in if you want info from the message boards). We decided to let people grab it for free without any personal info required. If you want to contact us about ways in which we can help you, then great. If not, we hope that you or your friends consider us in the future. Enjoy and hey, buy the book!
Wednesday, October 04, 2006
Palo Alto: Our First Rain
This is for my friends who live in the East Coast. Today was our first rain. Usually, it's a November thing, but this time it was early. This year, there was a May rain, but usually from April through November, there's no rain. It blows me away. I'm still used to those weekends in New Hampshire when it rains for a whole weekend. That only happens here in the winter.
The good news is that it clears the air. I believe one of the reasons that pollution is such an issue is that particulates tend to linger longer in the air. It's nice every now and then to have it cleared up.
The good news is that it clears the air. I believe one of the reasons that pollution is such an issue is that particulates tend to linger longer in the air. It's nice every now and then to have it cleared up.
Monday, October 02, 2006
SEM: Myths vs. Reality About PPC (Paid Search Advertising)
Given the prolific amount of opinions on Paid Search Advertising or PPC, I thought it would be helpful to share what we've learned about the field given our wide client base. Since there's a lot of business out there, we thought this would be helpful:
Myths/Reality
You will see results right away.
This is the greatest myth. Many think they will put in a budget, set a keyword price and then hope that it works right away. When it doesn't, they walk away. Others put in really high budgets and burn lots of cash quickly. Sometimes, budgets are not reached and they think there's not enough market for their area.
The reality is to do this in an optimal fashion, there's a disciplined process that can take 1-2 months to get up to speed. During this time, budgets should be set low (but not too low) to learn which keywords and ads pay off. You need to developing and tune landing pages (pages specific to your ad campaign). Many search engines reward successful groups of keywords and push up lower bid keywords to higher positions. Done well, this is a rigorous process that in many cases yields unexpected and surprisingly good results. Sometimes an obvious keyword or ad does not perform well or the "ugly" landing page performs much better than beautiful one.
This is an area that you should see as a long term process that unfolds. It can achieve tremendous results and give you better customer insight. You just need to approach it methodically.
Just use whatever keywords the search engines give you
It's a place to start, but there's a lot more to do. Search engines like Google, Yahoo and MSN have keyword creation tools that will help you turn a few words about your products and services into a wide range of keywords. While helpful, most campaigns suffer from too few keywords rather than too many. Most competitors bid up the most obvious. It is the "long tail" or the somewhat obscure keyword that can make you real revenue and profits. One thing to do is use keywords from one tool and push it into another. Another is to read magazines in your target market and drop those in. Use competitors to search for more or your own log files for how people find you. After you have a wide set of keywords - usually thousands, you have a place to start, group and then cull as part of your setup and optimization process.
It's really easy to run a campaign yourself
You would think that is true after looking at the search engine tools. At first, with a small firm, it may seem easy. However, over time as your campaigns grow, you will find that you spend a significant amount of time managing the campaign. This is especially true in a highly competitive field. Running a search engine marketing campaign involves your site and purchasing process. Skilled operators know advertising, copywriting, design, bid management, optimization statistics, process flows, and analytics. There are firms that will provide a small business version if budgets are modest. There are many firms that will work with you (including ours) if you monthly search ad budget is over $20k.
It's the least expensive form of marketing
It can be very expensive if you do not run your campaign in a methodical manner. There are folks like a kitchen equipment supplier that spent over $100,000 with no benefit. I know another firm that set a $5000 daily budget and blew it in a day with no impact on sales. It can be worse than going to Vegas if you are not careful. Many first timers do not have a landing page or an analytics system to track traffic.
A few years ago, it was different. There was less competition. In fact there was a Piper Jaffrey study that stated that search engine marketing was less expensive than all other forms of marketing: email, banner ads, direct mail. Now that search engines have gained greater prominance, competition has increased and with it, keyword bid costs. The days of penny or nickel bids are over. It is a consequence of greater demand for keywords.
My customer understands what I'm offering
As simplistic as it sounds, many think it is true. You build collateral based on what you believe customers think. You do focus groups. Your marketing team comes up with clever ways of stating your value proposition - redefine the market. The search environment is different. People search for certain sites with particular terms. A TV is a TV, not a next generation viewing sensation. Your message needs to be framed in terms of what people are looking for. The best way to learn about it is to conduct keyword research and then run a campaign where various combinations of keywords, ads and landing pages are tested. You may be surprised with what you discover.
Every search engine runs PPC the same way
This is absolutely false. Each search engine utilizes different algorithms. Some are closed bidding systems like Google and MSN. Some are open bidding like Yahoo. All use previous history to varying extents in their algorithm. Some turn on very quickly. Others take time to get your campaign fully operational.
There's a good reason for why the search engine rejected my ad
We run into this all the time. Some are very tight with trademarked words as keywords or in ads. Others are not. Policies can be inconsistent with the same search engine. This is especially an issue when companies have common words in the company names. One argued with us about using words like "lower, my, or bills." It's good to know someone on the inside.
Myths/Reality
You will see results right away.
This is the greatest myth. Many think they will put in a budget, set a keyword price and then hope that it works right away. When it doesn't, they walk away. Others put in really high budgets and burn lots of cash quickly. Sometimes, budgets are not reached and they think there's not enough market for their area.
The reality is to do this in an optimal fashion, there's a disciplined process that can take 1-2 months to get up to speed. During this time, budgets should be set low (but not too low) to learn which keywords and ads pay off. You need to developing and tune landing pages (pages specific to your ad campaign). Many search engines reward successful groups of keywords and push up lower bid keywords to higher positions. Done well, this is a rigorous process that in many cases yields unexpected and surprisingly good results. Sometimes an obvious keyword or ad does not perform well or the "ugly" landing page performs much better than beautiful one.
This is an area that you should see as a long term process that unfolds. It can achieve tremendous results and give you better customer insight. You just need to approach it methodically.
Just use whatever keywords the search engines give you
It's a place to start, but there's a lot more to do. Search engines like Google, Yahoo and MSN have keyword creation tools that will help you turn a few words about your products and services into a wide range of keywords. While helpful, most campaigns suffer from too few keywords rather than too many. Most competitors bid up the most obvious. It is the "long tail" or the somewhat obscure keyword that can make you real revenue and profits. One thing to do is use keywords from one tool and push it into another. Another is to read magazines in your target market and drop those in. Use competitors to search for more or your own log files for how people find you. After you have a wide set of keywords - usually thousands, you have a place to start, group and then cull as part of your setup and optimization process.
It's really easy to run a campaign yourself
You would think that is true after looking at the search engine tools. At first, with a small firm, it may seem easy. However, over time as your campaigns grow, you will find that you spend a significant amount of time managing the campaign. This is especially true in a highly competitive field. Running a search engine marketing campaign involves your site and purchasing process. Skilled operators know advertising, copywriting, design, bid management, optimization statistics, process flows, and analytics. There are firms that will provide a small business version if budgets are modest. There are many firms that will work with you (including ours) if you monthly search ad budget is over $20k.
It's the least expensive form of marketing
It can be very expensive if you do not run your campaign in a methodical manner. There are folks like a kitchen equipment supplier that spent over $100,000 with no benefit. I know another firm that set a $5000 daily budget and blew it in a day with no impact on sales. It can be worse than going to Vegas if you are not careful. Many first timers do not have a landing page or an analytics system to track traffic.
A few years ago, it was different. There was less competition. In fact there was a Piper Jaffrey study that stated that search engine marketing was less expensive than all other forms of marketing: email, banner ads, direct mail. Now that search engines have gained greater prominance, competition has increased and with it, keyword bid costs. The days of penny or nickel bids are over. It is a consequence of greater demand for keywords.
My customer understands what I'm offering
As simplistic as it sounds, many think it is true. You build collateral based on what you believe customers think. You do focus groups. Your marketing team comes up with clever ways of stating your value proposition - redefine the market. The search environment is different. People search for certain sites with particular terms. A TV is a TV, not a next generation viewing sensation. Your message needs to be framed in terms of what people are looking for. The best way to learn about it is to conduct keyword research and then run a campaign where various combinations of keywords, ads and landing pages are tested. You may be surprised with what you discover.
Every search engine runs PPC the same way
This is absolutely false. Each search engine utilizes different algorithms. Some are closed bidding systems like Google and MSN. Some are open bidding like Yahoo. All use previous history to varying extents in their algorithm. Some turn on very quickly. Others take time to get your campaign fully operational.
There's a good reason for why the search engine rejected my ad
We run into this all the time. Some are very tight with trademarked words as keywords or in ads. Others are not. Policies can be inconsistent with the same search engine. This is especially an issue when companies have common words in the company names. One argued with us about using words like "lower, my, or bills." It's good to know someone on the inside.
WikiNews - Good Archive of Objective News
Citizen journalism takes root...
If you blog about various events and use news sources, you use links to the source sites. The biggest problem with it is that the sites tend to archive the article after a relatively short period of time. This allows them to make some cash as the article is then available to Lexis Nexis or other paid archival sources. Wikinews changes all of that. Since the articles are written by voluntary contributors, there's no issue with copyright protection. Also, because it is meant to be open and collaborative, bias can be removed to the extent possible.
As a blogger, it makes life easier, because you do not have to worry about dead links. Learn more about it. It's really cool.
If you blog about various events and use news sources, you use links to the source sites. The biggest problem with it is that the sites tend to archive the article after a relatively short period of time. This allows them to make some cash as the article is then available to Lexis Nexis or other paid archival sources. Wikinews changes all of that. Since the articles are written by voluntary contributors, there's no issue with copyright protection. Also, because it is meant to be open and collaborative, bias can be removed to the extent possible.
As a blogger, it makes life easier, because you do not have to worry about dead links. Learn more about it. It's really cool.
Sunday, October 01, 2006
Politics: Pak ISI Mumbai Bombing - I was in India on their 7/11
The recent news story on how the July 2006 Mumbai bombings were planned by Pakistan's intelligence service, ISI, is worrisome. See the below quote:
“We have solved the July 11 bombings case,” Anami Narayan Roy, the police chief of Mumbai, said during a televised news conference. “The whole attack was planned by Pakistan’s I.S.I. and carried out by Lashkar-e-Taiba and their operatives in India.”
I would be amazed away if this were actually true. Why would Pakistan do such a thing? What do they have to gain? Does this allow them to have internal peace? Does it allow the military to keep control of the country. The whole thing does not make any sense as peace between the 2 countries furthers their economic development. Businesses require security and stability when they make investments. Most make a high level call based on gut feel. While those who are already invested will dig deeper to understand the impact, many just read the headlines. There are 180 countries, just go elsewhere.
I was in India during that week. On Tuesday I was in Bangalore having dinner with my team and investors. We heard about the bombing. I was advised that this would trigger riots and reprisals. It was a good idea to go home. I was scheduled to go to Mumbai on Friday. I called Manju to check into getting me home quickly.
Then the next day, the whole environment changed. There were no riots, Mumbai was functioning. Even the trains were running. There was a state of calm in Bangalore. The streets were full of traffic. We decided to continue with the trip to Mumbai as the airports were running.
After flying over on a full Jet Airways plane, I went to our new offices across the street from Shivaji park. This was in the same area in which there were riots a week earlier over the smearing of mud on a statue (apparently everyone has an ax to grind). Everything was calm. That Friday, plenty of people were walking the streets - same with Satuday and Sunday. People were not even talking about it on the streets - this is, except for on the news channels.
I found Indians to be a resilient people. It was a bit eerie to see restaurants and streets completely full a few days after the bombing. There were no extra checks at the airport. Nothing. It was as if life just went on to the continuous whirling beat. In a city of 18 million where homes and apartments are relatively small, there is really no place to go but to the street. It's too hot and there's too much going on. People have their work, kids have to go to school...people need to live life. A train bombing was not going to stop things. Heck, the trains were running literally hours after the explosion.
In the US, we are not used to life like this. We have had 9/11, the first foreign attack on US soil in 50+ years (no one died in the first one). We are used to relatively calm and safety. Our homes are big enough to stay in for quite a while. In India there has been 3 wars in 60 years. There have been bombings in Kashmir, Delhi and Mumbai. There has been communal violence as well. However, nothing seems to slow down there.
Now that there is this allegation. I hope they have their facts straight. The last thing we need is another threat of war between the 2 countries. It would chill the air and hurt progress in both nations. If it is true, I hope Musharraf takes action. I hope they can move forward towards peace. Let the continuous march of progress move on...
“We have solved the July 11 bombings case,” Anami Narayan Roy, the police chief of Mumbai, said during a televised news conference. “The whole attack was planned by Pakistan’s I.S.I. and carried out by Lashkar-e-Taiba and their operatives in India.”
I would be amazed away if this were actually true. Why would Pakistan do such a thing? What do they have to gain? Does this allow them to have internal peace? Does it allow the military to keep control of the country. The whole thing does not make any sense as peace between the 2 countries furthers their economic development. Businesses require security and stability when they make investments. Most make a high level call based on gut feel. While those who are already invested will dig deeper to understand the impact, many just read the headlines. There are 180 countries, just go elsewhere.
I was in India during that week. On Tuesday I was in Bangalore having dinner with my team and investors. We heard about the bombing. I was advised that this would trigger riots and reprisals. It was a good idea to go home. I was scheduled to go to Mumbai on Friday. I called Manju to check into getting me home quickly.
Then the next day, the whole environment changed. There were no riots, Mumbai was functioning. Even the trains were running. There was a state of calm in Bangalore. The streets were full of traffic. We decided to continue with the trip to Mumbai as the airports were running.
After flying over on a full Jet Airways plane, I went to our new offices across the street from Shivaji park. This was in the same area in which there were riots a week earlier over the smearing of mud on a statue (apparently everyone has an ax to grind). Everything was calm. That Friday, plenty of people were walking the streets - same with Satuday and Sunday. People were not even talking about it on the streets - this is, except for on the news channels.
I found Indians to be a resilient people. It was a bit eerie to see restaurants and streets completely full a few days after the bombing. There were no extra checks at the airport. Nothing. It was as if life just went on to the continuous whirling beat. In a city of 18 million where homes and apartments are relatively small, there is really no place to go but to the street. It's too hot and there's too much going on. People have their work, kids have to go to school...people need to live life. A train bombing was not going to stop things. Heck, the trains were running literally hours after the explosion.
In the US, we are not used to life like this. We have had 9/11, the first foreign attack on US soil in 50+ years (no one died in the first one). We are used to relatively calm and safety. Our homes are big enough to stay in for quite a while. In India there has been 3 wars in 60 years. There have been bombings in Kashmir, Delhi and Mumbai. There has been communal violence as well. However, nothing seems to slow down there.
Now that there is this allegation. I hope they have their facts straight. The last thing we need is another threat of war between the 2 countries. It would chill the air and hurt progress in both nations. If it is true, I hope Musharraf takes action. I hope they can move forward towards peace. Let the continuous march of progress move on...
Injuries in Sports - Rising or Not?
I'd love to find out if someone has done a study on whether there has actually been a dramatic injuries in the last 10 years. Doesn't it seem like half of a team is out due to one injury or another. Look at the Red Sox this year: Manny, Coco Crisp, Wakefield, Papelbon, Nixon, Clement, Pena, Gonzalez, Varitek, Wells, etc. I could go through a similar list for almost every pro team.
So what's the cause?
In pro sports, there seems to be a rash after all the stuff about steroids came out. It still is present after drugs were banned.
If someone finds a cool article on this, it would be much appreciated.
So what's the cause?
- Too much practice
- Not enough stretching
- Use of performance enhancing drugs
- Starting competitive sports too early
In pro sports, there seems to be a rash after all the stuff about steroids came out. It still is present after drugs were banned.
If someone finds a cool article on this, it would be much appreciated.
Position2: Client Testimonials
Given our rapid build-up, I thought it would be useful to list some of the testimonials we've received from a few of our clients.
“Position2 helped us take our business to the next level. By introducing
innovative ideas, fromSEO opportunities to new paid search strategies, Position2 helped us drive tremendous growth while beating our internal ROI measures. The team dedicated to our account works tirelessly to help us succeed... and always seem to have our best interests in mind when driving traffic and growth in our company. Their passion to help us win makes success guaranteed."
-Bradford Stroh, Co-Founder and Co-CEO, Freedom Financial Network
"Position2 has been an essential partner to
db4objects success to become the world’s most popular object database. In only 6 months, they have increased our SEO/PPC software downloads by over 100% while keeping customer acquisition cost within the narrow constraints of our low-cost business model. With their help, we have expanded our reach across the globe, especially with campaigns in Asia. Position2 is an integral part of our marketing organization."
- Christof Wittig, CEO, db4objects
our worldwide membership base very quickly and effectively. Our cost per new user dropped dramatically, we reached our goal months ahead of time. With SEM, we were able to attract high quality members. On top of that, we were offered high quality service at a cost that fit our budget."
- Anu Nigam, CEO, 411Sync.com
And yes, this will make it to our site. We are going through a redesign.
Why did we wait so long? Clients came first.
“Position2 helped us take our business to the next level. By introducing
innovative ideas, fromSEO opportunities to new paid search strategies, Position2 helped us drive tremendous growth while beating our internal ROI measures. The team dedicated to our account works tirelessly to help us succeed... and always seem to have our best interests in mind when driving traffic and growth in our company. Their passion to help us win makes success guaranteed."-Bradford Stroh, Co-Founder and Co-CEO, Freedom Financial Network
"Position2 has been an essential partner to
db4objects success to become the world’s most popular object database. In only 6 months, they have increased our SEO/PPC software downloads by over 100% while keeping customer acquisition cost within the narrow constraints of our low-cost business model. With their help, we have expanded our reach across the globe, especially with campaigns in Asia. Position2 is an integral part of our marketing organization."- Christof Wittig, CEO, db4objects
"As a new contender in the healthcare space, Search Engine Optimization (SEO) is a crucial marketing strategy for Flagship. Position 2 guided us through our website desig
n and copy, ensured that we are indexed constantly by the major search engines and designed and maintained our PPC campaigns. Stephanie Cota and her team have provided excellent and expeditious service throughout. Their services are both cost-effective and of the highest quality. We continue to expand our business relationship with Position 2 and would be happy to recommend them to anyone who is looking to improve their search engine marketing."
-Katharine Tilston, Director of Marketing, Flagship
our worldwide membership base very quickly and effectively. Our cost per new user dropped dramatically, we reached our goal months ahead of time. With SEM, we were able to attract high quality members. On top of that, we were offered high quality service at a cost that fit our budget."- Anu Nigam, CEO, 411Sync.com
And yes, this will make it to our site. We are going through a redesign.
Why did we wait so long? Clients came first.
Monday, September 25, 2006
Asthma: The First Aperon Biosystems Article
Unfortunately, this article is not available anymore, so I've put it here. We did this interview a long time ago while still in the early days of the company. As you can tell, I enjoy history, especially my own :). I hope the folks at the Merc don't mind:
PERSONAL CRISES BROUGHT 3 BAY AREA FIRMS TO LIFE
When illness leads to innovation
By Michele Chandler
San Jose Mercury News
9/21/2003
Entrepreneur Paul Lovoi of Saratoga was pushing ahead with his latest company, which is developing a device to treat people with a condition that causes blindness. Then, in March, tragedy hit.
His wife of 26 years, Janice, died suddenly after a weakened artery in her brain burst. At his wife's wake, Lovoi vowed to their friends that he would find an easy way for others to detect life-threatening hemorrhagic strokes before it's too late.
[ . . .]
Few inventors create medical devices because an up-close calamity pushes them. They face the same hurdles as other entrepreneurs: needing experience, documenting a void in the market and getting cash.
``Most people who have a personal tragedy aren't adept enough to start a medical device company. They don't have the right background or training. It's a special situation to end up there,'' said Casey McGlynn, a San Jose attorney and prolific fixer of medical device
deals in the Valley.
On average, it takes five years and tens of millions of dollars to get a would-be device from the drawing board to everyday use -- if the Food and Drug Administration gives its approval. And these days, venture capital firms are skittish about putting their money on ingenue developers. They favor business plans, market analysis and sales projections above emotion and personal drive to make a difference.
Perhaps they should consider those other factors, said Patrick Lynn, co-founder of Palo Alto's Rinat Neuroscience.
``Often times, people can make up for that with the passion derived from their personal experience. You don't count them out,'' said Lynn, who has both founded and invested in young health care companies.
Here's a look at three Bay Area firms started by entrepreneurs whose personal crises served as a springboard to invention:
[diabetes content omitted]
MONITORING ASTHMA
Asthma dictated life for Rajiv Parikh as a boy. He vividly recalls the wheezing, the inhalers and an ill-fated vacation to India at age 10 spent riding on his father's shoulders because he couldn't catch his breath in the pollution and heat.
Parikh eventually outgrew the condition. Today, along with his wife, Bhairavi, he's developing a breath analysis device to enable asthmatics to monitor their airway inflammation so they can take the appropriate medicine and ward off a full-blown asthma attack.
It's the first start-up company for Parikh and Bhairavi, who founded Aperon Biosystems two years ago. While they lack prior experience bringing a business online, they both have credentials -- Rajiv earned an MBA from Harvard University, while Bhairavi received a doctorate in biomedical engineering from Worcester Polytechnic Institute in
Massachusetts.
In early 2001, Rajiv had his sights set on founding a wireless company. Bhairavi had a job doing research and development for Natus Medical, a San Carlos maker of products to detect common disorders in newborns. One device under development there screened babies for
jaundice by analyzing the infant's breath.
Bhairavi had done related research involving gas analysis while working on her doctoral thesis. She saw potential for using that technology to detect lung inflammation experienced by asthmatics. So, in 2001, the couple licensed the gas analysis technology from its
inventors -- two UCLA physicians -- and founded Aperon.
``She had worked on this back in her days as a Ph.D., and I had the personal experience'' with asthma, Rajiv said. ``I don't know if it was fate or faith, but it worked very well together.''
The couple set up a small shop in Santa Clara and began lab experiments, bankrolled with $100,000 from the couple's savings, plus $200,000 loaned by family and friends.
One venture capital firm turned down Aperon's funding request. But representatives there put the Parikhs in touch with John Kaiser, a retired executive who had also headed a Sunnyvale start-up. Kaiser became Aperon's CEO late last year.
In May, the company received $4.6 million from two venture funds. So far, the money has been used for a larger office in Palo Alto, to hire staff and to develop a prototype device.
``The intent today is to build a great company that helps lots of people,'' Rajiv Parikh said.
Unbeknowst to me, there was some discussion about this article on a medical info site. Check this out with my response many years later. It's cool because it's a way to catch history online and then reach a current state quickly.
PERSONAL CRISES BROUGHT 3 BAY AREA FIRMS TO LIFE
When illness leads to innovation
By Michele Chandler
San Jose Mercury News
9/21/2003
Entrepreneur Paul Lovoi of Saratoga was pushing ahead with his latest company, which is developing a device to treat people with a condition that causes blindness. Then, in March, tragedy hit.
His wife of 26 years, Janice, died suddenly after a weakened artery in her brain burst. At his wife's wake, Lovoi vowed to their friends that he would find an easy way for others to detect life-threatening hemorrhagic strokes before it's too late.
[ . . .]
Few inventors create medical devices because an up-close calamity pushes them. They face the same hurdles as other entrepreneurs: needing experience, documenting a void in the market and getting cash.
``Most people who have a personal tragedy aren't adept enough to start a medical device company. They don't have the right background or training. It's a special situation to end up there,'' said Casey McGlynn, a San Jose attorney and prolific fixer of medical device
deals in the Valley.
On average, it takes five years and tens of millions of dollars to get a would-be device from the drawing board to everyday use -- if the Food and Drug Administration gives its approval. And these days, venture capital firms are skittish about putting their money on ingenue developers. They favor business plans, market analysis and sales projections above emotion and personal drive to make a difference.
Perhaps they should consider those other factors, said Patrick Lynn, co-founder of Palo Alto's Rinat Neuroscience.
``Often times, people can make up for that with the passion derived from their personal experience. You don't count them out,'' said Lynn, who has both founded and invested in young health care companies.
Here's a look at three Bay Area firms started by entrepreneurs whose personal crises served as a springboard to invention:
[diabetes content omitted]
MONITORING ASTHMA
Asthma dictated life for Rajiv Parikh as a boy. He vividly recalls the wheezing, the inhalers and an ill-fated vacation to India at age 10 spent riding on his father's shoulders because he couldn't catch his breath in the pollution and heat.
Parikh eventually outgrew the condition. Today, along with his wife, Bhairavi, he's developing a breath analysis device to enable asthmatics to monitor their airway inflammation so they can take the appropriate medicine and ward off a full-blown asthma attack.
It's the first start-up company for Parikh and Bhairavi, who founded Aperon Biosystems two years ago. While they lack prior experience bringing a business online, they both have credentials -- Rajiv earned an MBA from Harvard University, while Bhairavi received a doctorate in biomedical engineering from Worcester Polytechnic Institute in
Massachusetts.
In early 2001, Rajiv had his sights set on founding a wireless company. Bhairavi had a job doing research and development for Natus Medical, a San Carlos maker of products to detect common disorders in newborns. One device under development there screened babies for
jaundice by analyzing the infant's breath.
Bhairavi had done related research involving gas analysis while working on her doctoral thesis. She saw potential for using that technology to detect lung inflammation experienced by asthmatics. So, in 2001, the couple licensed the gas analysis technology from its
inventors -- two UCLA physicians -- and founded Aperon.
``She had worked on this back in her days as a Ph.D., and I had the personal experience'' with asthma, Rajiv said. ``I don't know if it was fate or faith, but it worked very well together.''
The couple set up a small shop in Santa Clara and began lab experiments, bankrolled with $100,000 from the couple's savings, plus $200,000 loaned by family and friends.
One venture capital firm turned down Aperon's funding request. But representatives there put the Parikhs in touch with John Kaiser, a retired executive who had also headed a Sunnyvale start-up. Kaiser became Aperon's CEO late last year.
In May, the company received $4.6 million from two venture funds. So far, the money has been used for a larger office in Palo Alto, to hire staff and to develop a prototype device.
``The intent today is to build a great company that helps lots of people,'' Rajiv Parikh said.
Unbeknowst to me, there was some discussion about this article on a medical info site. Check this out with my response many years later. It's cool because it's a way to catch history online and then reach a current state quickly.
Personal Finance: Managing Money and Getting Out of Debt
I consider myself lucky to have been raised by parents who were obsessed about saving money and keeping spending low. That allowed me to save a lot early in my career - we used to live on base pay and bank our bonuses. That saved us when I went to HBS and started companies in the Bay Area. I must say that we did rack up a lot of debt. A lot of folks have asked me about strategies we used. So instead of reinventing the wheel, I'll let you read some articles by my friend Brad Stroh, co-founder of Bills.com - a site that gives practical advice & tools on personal finance (listen to his podcast). If you need a particular service like debt consolidation or refinance, they hook you up with a host of trusted independent firms. They even have this Ask Bill feature where you can ask questions and get personal responses. Brad's passionate about this stuff.
Check these out:
Hone Your Debt Consolidation Savvy -Top 10 situations when debt consolidation is a smart move-
When Second Mortgages Make Sense
- Making the most of home ownership – without betting the farm
6 Steps to Getting Out of Credit Card Debt
Level the Playing Field With Collections Agencies for Fair Debt Payment
- What to do when a debt collector calls -
Home Loan Tips: Avoid Mortgage Troubles, Other Pangs of Rising Interest Rates
- Bills.com outlines 9 tips to prevent problems, avoid foreclosure -
Before ‘Medical Bankruptcy’: Consumer Options Can Salvage Credit
Check these out:
Hone Your Debt Consolidation Savvy -Top 10 situations when debt consolidation is a smart move-
When Second Mortgages Make Sense
- Making the most of home ownership – without betting the farm
6 Steps to Getting Out of Credit Card Debt
Level the Playing Field With Collections Agencies for Fair Debt Payment
- What to do when a debt collector calls -
Home Loan Tips: Avoid Mortgage Troubles, Other Pangs of Rising Interest Rates
- Bills.com outlines 9 tips to prevent problems, avoid foreclosure -
Before ‘Medical Bankruptcy’: Consumer Options Can Salvage Credit
Friday, September 22, 2006
Position2: greendimes - end junk mail & plant trees
I have to talk about this new client... Today we signed up greendimes, a business with a significant social benefit. For a dime a day, they will eliminate your junk mail and plant a tree for you every month. That's is, $36 a year - a ridiculous value.I was one of the 1st customers, not because they were a potential client, but because it was a slam dunk. Get rid of the junk mail nightmare, lower the number of trees chopped, energy consumption and the bonus is to plant a tree. It drives me crazy to have so much junk mail. A lot of times, it overflows out of our mail box. We've actually thrown away real mail - checks and bills.
Pankaj Shah, the founder and super successful entrepreneur, has gotten the attention of the socially conscious Hollywood. Lot's of well known names will become members.
We are running the SEO, PPC and Blog Outreach campaigns. It's fun for us because the value proposition is so strong. There's so much excellent content in this area. I can imagine tons of people signing up with the company. Check out their blog as they are putting together great articles.
I really hope that we can sign up more like this - great businesses with strong societal benefits.
Sign up and give a dime!
Position2: How People See Us
Want to know a little more about Position2? Here are photos of the Position2 management team.
Rajesh Sule is sitting to the left. He heads Business Development and Marketing. Vinod Nambiar (standing) heads our Global Delivery or Operations group. Super guys - highly experienced execs. They build very loyal teams and are creatively brilliant.
Here is Andreas Ramos who is our Search Engine Marketing expert on PPC and SEO. He comes up with a lot of new ideas for us to build technologies and processes. He and Stephanie wrote the seminal book on Search Engine Marketing: Insider SEO and PPC. He's written a ton of other books as well. Andreas' website and newsletter has a huge following. He writes about anything in an engaging way and is a true Renaissance Man. By the way, he rarely dresses up as he's still a Valley engineer at heart.
Here is Stephanie Cota who is our Analytics and E-Commerce expert. She's an out-of-box thinker who is great with clients. If you buy her book from here, she might even sign it.
Unfortunately, I do not have Soumya Ravi and Rakesh Varma's pictures. They are so busy with Clients (Soumya) and Technology (Rakesh) that neither have time for pictures. Both are stars in their own right and minds :) .
I also do not have a picture for Manju yet. She keeps the trains running on time around the world for the company. Manju is invaluable to us.
Here's me in a suit. This is an unusual thing since now I'm a Silicon Valley guy. It reminds me of my old days in sales at NCR. I'm sure they would have objected to the fact that I didn't have a white shirt :)
I had these shot when I was in India. The price was the same in currency units at a Bangalore professional studio as it was in the US. The only difference was the rupee was 45 to 1. That's right, the cost was about 98% off. Too bad you can't build a startup off of that.
Rajesh Sule is sitting to the left. He heads Business Development and Marketing. Vinod Nambiar (standing) heads our Global Delivery or Operations group. Super guys - highly experienced execs. They build very loyal teams and are creatively brilliant.
Here is Andreas Ramos who is our Search Engine Marketing expert on PPC and SEO. He comes up with a lot of new ideas for us to build technologies and processes. He and Stephanie wrote the seminal book on Search Engine Marketing: Insider SEO and PPC. He's written a ton of other books as well. Andreas' website and newsletter has a huge following. He writes about anything in an engaging way and is a true Renaissance Man. By the way, he rarely dresses up as he's still a Valley engineer at heart.
Here is Stephanie Cota who is our Analytics and E-Commerce expert. She's an out-of-box thinker who is great with clients. If you buy her book from here, she might even sign it.Unfortunately, I do not have Soumya Ravi and Rakesh Varma's pictures. They are so busy with Clients (Soumya) and Technology (Rakesh) that neither have time for pictures. Both are stars in their own right and minds :) .
I also do not have a picture for Manju yet. She keeps the trains running on time around the world for the company. Manju is invaluable to us.
Here's me in a suit. This is an unusual thing since now I'm a Silicon Valley guy. It reminds me of my old days in sales at NCR. I'm sure they would have objected to the fact that I didn't have a white shirt :)
I had these shot when I was in India. The price was the same in currency units at a Bangalore professional studio as it was in the US. The only difference was the rupee was 45 to 1. That's right, the cost was about 98% off. Too bad you can't build a startup off of that.
Blogging and Content Management
Blogging has been the latest craze on the web. There has been an explosion of information available through all kinds of people blogging about a wide variety of subjects. Of course, businesses see opportunity as well as risk. By influencing expert bloggers, there's the ability to engage in viral or buzz marketing. There's also the risk that your customers can kill you on the web. Do a search for "Dell Hell" and you'll see what I mean.
I totally enjoy blogging as I can post something as it comes to me and improve it as I go along. There's not that pain of, "Oh, I need to make sure it's perfect before I publish."
This post will focus on some of the cool technology platforms we are looking at for implementing a blogging type of architecture for our site and client sites. In many ways, blogging is a form of content management. You don't have to worry about knowing html, style sheets, web architecture. Blogging platforms allow you to organize your articles and have a consistent yet somewhat customized format.
The term content management used to scare me way back in 1999. These were expensive enterprise systems that large publishers used to implement complex systems. Nowadays, just sign up for Blogger or Typepad and off you go.
You can implement blogging on your website. Check out how Sandeep did it. He took his site and added some code to connect Blogger to his site. He's thrown in some YouTube videos that he likes and now people can see content filtered by him. On top of that, he's thrown up some Google AdSense code and he's even making a few bucks.
What do I do for my website? Well Blogger may not be enough. There are 2 open source (meaning free) platforms that my folks have checked out. One is WordPress, an open source blogging platform. Another is Drupal, an open source blogging/content management system. Rakesh, my tech chief, has tested both. He prefers Drupal for a website because it is more flexible and has some more features. We plan on using it to do the initial build of EffinFunny because it will allow the team to quickly add content without needing a technical team. It also has some cool features like voting, discussiong, video downloads, and categorization. I understand that both make it easy to drop in Google AdSense.
This is a new era where new tools are making it far easier to set up and run a content business. Stay tuned...
I totally enjoy blogging as I can post something as it comes to me and improve it as I go along. There's not that pain of, "Oh, I need to make sure it's perfect before I publish."
This post will focus on some of the cool technology platforms we are looking at for implementing a blogging type of architecture for our site and client sites. In many ways, blogging is a form of content management. You don't have to worry about knowing html, style sheets, web architecture. Blogging platforms allow you to organize your articles and have a consistent yet somewhat customized format.
The term content management used to scare me way back in 1999. These were expensive enterprise systems that large publishers used to implement complex systems. Nowadays, just sign up for Blogger or Typepad and off you go.
You can implement blogging on your website. Check out how Sandeep did it. He took his site and added some code to connect Blogger to his site. He's thrown in some YouTube videos that he likes and now people can see content filtered by him. On top of that, he's thrown up some Google AdSense code and he's even making a few bucks.
What do I do for my website? Well Blogger may not be enough. There are 2 open source (meaning free) platforms that my folks have checked out. One is WordPress, an open source blogging platform. Another is Drupal, an open source blogging/content management system. Rakesh, my tech chief, has tested both. He prefers Drupal for a website because it is more flexible and has some more features. We plan on using it to do the initial build of EffinFunny because it will allow the team to quickly add content without needing a technical team. It also has some cool features like voting, discussiong, video downloads, and categorization. I understand that both make it easy to drop in Google AdSense.
This is a new era where new tools are making it far easier to set up and run a content business. Stay tuned...
Thursday, September 21, 2006
Patriots: Articles about my Favorite Team
I did promise Patriots stuff in my byline. Well let this page be my listing of cool articles.
This Boston Globle article about the Denver's 11 man blitz has a really cool flash graphic of how it works. I'd be really interested in finding out more of these things on the web. Football strategy makes the game more exciting to watch, though nothing beats screaming and yelling at the TV with a loyal group of family and friends.
This Boston Globle article about the Denver's 11 man blitz has a really cool flash graphic of how it works. I'd be really interested in finding out more of these things on the web. Football strategy makes the game more exciting to watch, though nothing beats screaming and yelling at the TV with a loyal group of family and friends.
Wednesday, September 20, 2006
SEM: Justify your Search Engine Marketing Investment
Why spend money on marketing? To achieve a positive return on investment. If I put $1 in, how much do I get out? Does the return justify the risk? This is why Google Advertising or PPC is so powerful. You can estimate your return or ROI before you get involved in a campaign. And you can track and tweak as you go.
Even though search engine marketing is results oriented and completely measurable, many sites and tools given an inaccurate analysis of profit and ROI. I have seen tools that consider new revenue to be profit, many of which do not even consider the cost of the cost of goods. If you are not going to offer an appropriate measurement mechanism, then you should not have one at all. It is deceptive.
Let me walk you through how I run the numbers step by step...
Know your revenue per customer (Rev). This is easy if you are a mortgage broker, a consumer software firm or anyone that has a product or service with a 1 time fee. This is a bit more work if you bring in a certain stream of revenues per customer. Then you need to know churn, average time of a customer, what typically a customer buys. The best is if you understand the notion of Lifetime Value of a Customer (LTV).
Know your average gross margins (GM%). GM% = Rev - COGS.
Estimate your cost per click (CPC). CPC = Average bid price over all clicks.
Estimate your conversion rate (CR%). CR% = Lead/Clicks
Estimate your quality lead rate (QLR%). QLR% = Quality Leads/Leads
Estimate your close rate (CloseR%). Close R% = Sales/Quality Leads
Estimate your search engine budget (Ad Spend) and your campaign management fees (Fee).
Now it is time to make some calculations:
Clicks per Month (ClickMonth) = Ad Spend/CPC
Leads per Month (LPM) = ClickMonth * Conversion Rate (CR%)
Quality Leads per Month (QLM) = LPM * Quality Lead Rate (QLR%)
Closed Sales per Month (CSM) = QLM * Close Rate (CloseR%)
Gross Margin per Customer (GMC) = Revenue per Customer (Rev) * Gross Margin (GM%)
Monthly Lead Cost (MLC) = Ad Spend + Fees
Cost per Lead (CPL) = MLC/LPM
Cost per Quality Lead (CPQL) = MLC/QLM
Now for what really matters:
New Sales per Month (RevM) = Rev * CSM
Cost per Sale or Action (CPA) = MLC/CSM
New Profit per Sale (PS) = GMC - CPA
New Profit per Month (PM) = PS * RevM
ROI% = PS/CPA * 100
Now this is something a businessperson can work with because it includes real cost per sale including your cost of good and your cost of sales. With search engine marketing these types of metrics are completely understandable and trackable. It's why I got into this business.
Having this data in detail is very helpful to you and your search engine marketing agency, because they can control for certain steps in the process to help you arrive at your projections. Soumya (from our firm) has done a nice job defining the terms you should know about PPC or Search Advertising.
Different businesses will have to make some adjustments to fit their situation. If you need some help, please let me know.
And yes, I do plan on releasing a spreadsheet tool to help you do the analysis yourself. Just contact me and I'll send you a beta version.
This is a work in progress, so comments are appreciated.
Even though search engine marketing is results oriented and completely measurable, many sites and tools given an inaccurate analysis of profit and ROI. I have seen tools that consider new revenue to be profit, many of which do not even consider the cost of the cost of goods. If you are not going to offer an appropriate measurement mechanism, then you should not have one at all. It is deceptive.
Let me walk you through how I run the numbers step by step...
Know your revenue per customer (Rev). This is easy if you are a mortgage broker, a consumer software firm or anyone that has a product or service with a 1 time fee. This is a bit more work if you bring in a certain stream of revenues per customer. Then you need to know churn, average time of a customer, what typically a customer buys. The best is if you understand the notion of Lifetime Value of a Customer (LTV).
Know your average gross margins (GM%). GM% = Rev - COGS.
- Average Gross Margins are expressed as a percentage and is Revenue minus Cost of Goods Sold (COGS). For a services company, COGs is the cost of producing or providing a service. This is the key missing item in most analyses. Not listing this is the difference between investing in your business and putting your money into slots. For example if someone tells you that for an average $12 cost of acquisition (CPL), you get $8 in "profit." This is fool's gold if the cost of producing the product (COGS) is $10 or a gross margin of 50%. You lose $2 for every product sold through this medium. That can add up to the thousands or millions fo dollars in losses.
Estimate your cost per click (CPC). CPC = Average bid price over all clicks.
- There are many tools to estimate this number - some are on the search engines themselves. Generally a less competitive arena is less than $0.50. More competitive is around $1. Highly competitive areas like mortgages can be over $2.
Estimate your conversion rate (CR%). CR% = Lead/Clicks
- This is your conversion rate to a lead. That is, what percentage of people who click, do something that you want them to do? This is typically filling out a form to be contacted, downloading software or a white paper, or purchasing something directly. This number varies substantially from 1% all the way up to 25%. I would be conservative in this number. The output this number will cost per lead or CPL.
Estimate your quality lead rate (QLR%). QLR% = Quality Leads/Leads
- Not every lead is quality. Many filled forms are garbage info, duplicates, tests, etc. Some forms are not filled out at all. Numbers vary widely here as well. We've seen as high as 90% and as low as 30%. Having a quality keywords, ad copy, and landing pages make all the difference in the world here. Now if someone is purchasing something directly, neither conversion rate nor quality leads count.
Estimate your close rate (CloseR%). Close R% = Sales/Quality Leads
- Every company with a different business has a number here. Some are 3-5%, others are 30-50%. As they would say in The Holy Grail, "100% is right out."
Estimate your search engine budget (Ad Spend) and your campaign management fees (Fee).
- If you are doing this yourself, then only your monthly search engine ad budget matters. If you are paying a firm to manage this, enter this data in - typically its a percentage of ad spend or a lead based fee.
Now it is time to make some calculations:
Clicks per Month (ClickMonth) = Ad Spend/CPC
Leads per Month (LPM) = ClickMonth * Conversion Rate (CR%)
Quality Leads per Month (QLM) = LPM * Quality Lead Rate (QLR%)
Closed Sales per Month (CSM) = QLM * Close Rate (CloseR%)
Gross Margin per Customer (GMC) = Revenue per Customer (Rev) * Gross Margin (GM%)
Monthly Lead Cost (MLC) = Ad Spend + Fees
Cost per Lead (CPL) = MLC/LPM
Cost per Quality Lead (CPQL) = MLC/QLM
Now for what really matters:
New Sales per Month (RevM) = Rev * CSM
Cost per Sale or Action (CPA) = MLC/CSM
New Profit per Sale (PS) = GMC - CPA
New Profit per Month (PM) = PS * RevM
ROI% = PS/CPA * 100
Now this is something a businessperson can work with because it includes real cost per sale including your cost of good and your cost of sales. With search engine marketing these types of metrics are completely understandable and trackable. It's why I got into this business.
Having this data in detail is very helpful to you and your search engine marketing agency, because they can control for certain steps in the process to help you arrive at your projections. Soumya (from our firm) has done a nice job defining the terms you should know about PPC or Search Advertising.
Different businesses will have to make some adjustments to fit their situation. If you need some help, please let me know.
And yes, I do plan on releasing a spreadsheet tool to help you do the analysis yourself. Just contact me and I'll send you a beta version.
This is a work in progress, so comments are appreciated.
Thursday, September 14, 2006
Environment: Global Warming and Alternative Energy Articles
Beyond Fossil Fuels by Robert Semple is A Talking Points feature in the NY Times. It is an excellent essay that discusses the multiple alternative and renewable energies along with the cost, environmental, carbon emission impact. Semple then delves into subjects like energy efficiency, ethanol, hydrogen, solar and wind. It is well linked. The only issue you may run into is that it is for subscribers only. I have printed it out and will put it online after I move this blog to another spot.
Low-Sulfur Diesel Fuel Is Reaching Market: It's a good NY Times article on the new low sulfur diesel fuel that finally comes to gas stations this Sunday 10/15. It's an exciting development as it reduces particulate emissions in new engines by 95% and in older engines 10%. While the Bush administration is taking credit, it was actually delayed by 2 years. While smog creating sulfur content is down 97%, it is still not to European levels. For some reason, the technology exists to get super low in Europe, but it has not made its way here. Nevertheless, any progress on this front is good progress. Another article in this area, A Love Hate Relationship Bears a 50 State Diesel, is on Honda's new diesel engine that is coming in 2008 that meets emissions requirements in all 50 states and gets a combined 42 mpg. This is based on a diesel Accord that is already on sale in Europe. That 2 mpg less than what people say they realistically get in a Prius.
Cool beans, a NY Times article on plug-in hybrid vans that are going to deployed over the next year. Daimler-Benz plans to offer them under the Chrysler nameplate. This vehicle is mostly designed to be of value in short distances with a lot of stop and go.
An interesting NY Times article on wind power. It's an article how an Indian company, Suzlon has experience fantastic growth by starting in an emerging market like Indian and then expanded rapidly throughout the world. Because the power grid is disconnected and dysfunction, wind power has value because it can be place closer to the user. India has benefited by wind power - generation is up 49% over the year earlier. Stories like these are great because they demonstrate environmental benefit while offering greater value to people than conventional sources.
GM released info on its Sequel hydogen fuel cell vehicle in this NY Times article. It sounds impressive as they have promised a commercial vehicle by 2009. The vehicle is based on their Chevy Equinox platform and claims to get 300 miles on a single tank (hydrogen tank). GM says that the product does not become competitive until 1 million vehicles are produced. The big issue is how do you produce hydrogen and how does it get distributed? In any case, at least GM is not playing the old game of resisting every innovation and then getting beaten when the trend favors fuel efficiency or new technology.
Richard Branson made a huge $3 billion commitment to finance projects to reduce global warming. Most of these are investments in companies related to cellulosic ethanol. It's over a 10 year period and represents all projected profits from his transportation groups. I bet this investment will end up making him a lot of money. Check out the article.
Saw this article on CNET about cellulosic ethanol technology that Honda has developed in conjunction with the Research Institute of Innovative Technology for the Earth (RITE). It's pretty cool as it is carbon neutral and can eventually offer greater benefits in terms of production and efficiency than corn derived ethanol. Best of all, they are talking about a pilot plant in 2008.
This article on Brazil's sugar ethanol breakthough eloquently describes how oil will be displaced. - again in a carbon neutral way.
Here's another reason why someone should live in California. Check out the first well written and detailed NY times article on how California is taking the lead on carbon emissions and global warming. This should not be a partisan issue. It is probusiness, proconsumer and pro-National Security.
In the NY Times, check out the Energy Series of articles. It's fascinating.
Low-Sulfur Diesel Fuel Is Reaching Market: It's a good NY Times article on the new low sulfur diesel fuel that finally comes to gas stations this Sunday 10/15. It's an exciting development as it reduces particulate emissions in new engines by 95% and in older engines 10%. While the Bush administration is taking credit, it was actually delayed by 2 years. While smog creating sulfur content is down 97%, it is still not to European levels. For some reason, the technology exists to get super low in Europe, but it has not made its way here. Nevertheless, any progress on this front is good progress. Another article in this area, A Love Hate Relationship Bears a 50 State Diesel, is on Honda's new diesel engine that is coming in 2008 that meets emissions requirements in all 50 states and gets a combined 42 mpg. This is based on a diesel Accord that is already on sale in Europe. That 2 mpg less than what people say they realistically get in a Prius.
Cool beans, a NY Times article on plug-in hybrid vans that are going to deployed over the next year. Daimler-Benz plans to offer them under the Chrysler nameplate. This vehicle is mostly designed to be of value in short distances with a lot of stop and go.
An interesting NY Times article on wind power. It's an article how an Indian company, Suzlon has experience fantastic growth by starting in an emerging market like Indian and then expanded rapidly throughout the world. Because the power grid is disconnected and dysfunction, wind power has value because it can be place closer to the user. India has benefited by wind power - generation is up 49% over the year earlier. Stories like these are great because they demonstrate environmental benefit while offering greater value to people than conventional sources.
GM released info on its Sequel hydogen fuel cell vehicle in this NY Times article. It sounds impressive as they have promised a commercial vehicle by 2009. The vehicle is based on their Chevy Equinox platform and claims to get 300 miles on a single tank (hydrogen tank). GM says that the product does not become competitive until 1 million vehicles are produced. The big issue is how do you produce hydrogen and how does it get distributed? In any case, at least GM is not playing the old game of resisting every innovation and then getting beaten when the trend favors fuel efficiency or new technology.
Richard Branson made a huge $3 billion commitment to finance projects to reduce global warming. Most of these are investments in companies related to cellulosic ethanol. It's over a 10 year period and represents all projected profits from his transportation groups. I bet this investment will end up making him a lot of money. Check out the article.
Saw this article on CNET about cellulosic ethanol technology that Honda has developed in conjunction with the Research Institute of Innovative Technology for the Earth (RITE). It's pretty cool as it is carbon neutral and can eventually offer greater benefits in terms of production and efficiency than corn derived ethanol. Best of all, they are talking about a pilot plant in 2008.
This article on Brazil's sugar ethanol breakthough eloquently describes how oil will be displaced. - again in a carbon neutral way.
Here's another reason why someone should live in California. Check out the first well written and detailed NY times article on how California is taking the lead on carbon emissions and global warming. This should not be a partisan issue. It is probusiness, proconsumer and pro-National Security.
In the NY Times, check out the Energy Series of articles. It's fascinating.
Tuesday, September 12, 2006
Business: Get to Breakeven - Help! My Business is On Fire!
I was sitting with a Marketing Partner CEO yesterday. Joe's services business is losing money. He's in a panic trying to figure out how to turn it around. "Everytime I sell more, I still don't catch up, " Joe says.
Joe can't afford to hire people, but tries to sell more through his own services and partner services. Then he hits a wall. To service the business, he needs to hire more people. Then he needs to sell more. He thought he was only a short distance away, but he has a long way to go. It never seems to get close, but there's no time for sit back. "Just keep pounding away," he says.
I ask, "Well how much do you need to sell to breakeven?"
"Well, I'm losing $20,000 a month, so, uh, $20k," Joe replies.
"Are you sure?" I respond.
Hmmmm....
Remember algebra, remember y=mx+b. Well that's how business functions. In a product business, it's pretty easy. It cost me a certain amount to buy raw material. Add that to the cost of production and then tack on a profit margin.
It's no different in a services business. There's the cost of providing a service - COGS or cost of goods sold (you can even call it cost of service or COS). This is a variable cost: it includes employee costs directly involved in providing your services and if you have to pay a vendor for a service that becomes part of your offering. In a web development firm, it's the designers and developers. In a technology services firm, its compensation for those that deliver on projects. It goes up as you sell more.
Then there's gross margin or GM. This is what you care about. This matters more than anything else. This is what you get after you take away the cost of offering the service. I t's how you pay for all your other expenses.
So...
Gross Margin = Revenue - COGS
Expressed as a percentage it is:
GM% = (Revenue - COGS)/Revenue
In my friends case, if Revenue is $100,000 and COGS is $60,000, then the Gross Margin is $40,000 or 40%.
Now everything else is a fixed cost, then you know your breakeven. Since this is a stylized example, we will not include variable costs of sales like sales people or advertising in Search Engine Marketing. We are going to pretend the main salesperson is the CEO and he can't hire any more. Nothing new there :)
From Gross Margins or Gross Profits we subtract operating costs like:
From here we get Net Profits which are also called Net Margins, Profits Before Tax (PBT) or EBIT (Earning Before Interests and Taxes).
PBT = GM - S&M - R&D - G&A
Or expressed as a percentage:
Net Margin% = PBT/Revenues
Now let's get back to my friend, how far should he go before he breaks even?
Revenues: $100k
COGS: 60k
Gross Margins: 40k or 40%
S&M: 30k
R&D: 5k
G&A: 25k
PBT: - 20k or -20% Net Margins
Again, how much does it take to get profitable?
Well, if your fixed costs are $60k, then you need to receive enough gross margin to get to $0 PBT or:
Operating Expenses => Revenues - COGS => Gross Margins = $60k
He must overcome $60k in fixed expenses. Solving for this can be made easy by using the Gross Margin equation above
Breakeven Revenues = (Operating Expenses)/GM% = $60,000/.40 = $150,000
Given that current sales of $100,000, our CEO friend needs to sell $50,000 more! That's to get to breakeven.
Remember: We are not including cash flow issues or the fact that our CEO probably needs to do a variety of things that probably include going after high value deals, closing more profitable deals, hiring sales help or cutting expenses.
Joe can't afford to hire people, but tries to sell more through his own services and partner services. Then he hits a wall. To service the business, he needs to hire more people. Then he needs to sell more. He thought he was only a short distance away, but he has a long way to go. It never seems to get close, but there's no time for sit back. "Just keep pounding away," he says.
I ask, "Well how much do you need to sell to breakeven?"
"Well, I'm losing $20,000 a month, so, uh, $20k," Joe replies.
"Are you sure?" I respond.
Hmmmm....
Remember algebra, remember y=mx+b. Well that's how business functions. In a product business, it's pretty easy. It cost me a certain amount to buy raw material. Add that to the cost of production and then tack on a profit margin.
It's no different in a services business. There's the cost of providing a service - COGS or cost of goods sold (you can even call it cost of service or COS). This is a variable cost: it includes employee costs directly involved in providing your services and if you have to pay a vendor for a service that becomes part of your offering. In a web development firm, it's the designers and developers. In a technology services firm, its compensation for those that deliver on projects. It goes up as you sell more.
Then there's gross margin or GM. This is what you care about. This matters more than anything else. This is what you get after you take away the cost of offering the service. I t's how you pay for all your other expenses.
So...
Gross Margin = Revenue - COGS
Expressed as a percentage it is:
GM% = (Revenue - COGS)/Revenue
In my friends case, if Revenue is $100,000 and COGS is $60,000, then the Gross Margin is $40,000 or 40%.
Now everything else is a fixed cost, then you know your breakeven. Since this is a stylized example, we will not include variable costs of sales like sales people or advertising in Search Engine Marketing. We are going to pretend the main salesperson is the CEO and he can't hire any more. Nothing new there :)
From Gross Margins or Gross Profits we subtract operating costs like:
- Sales & Marketing (S&M)
- Research & Development (R&D)
- General and Administrative (G&A)
From here we get Net Profits which are also called Net Margins, Profits Before Tax (PBT) or EBIT (Earning Before Interests and Taxes).
PBT = GM - S&M - R&D - G&A
Or expressed as a percentage:
Net Margin% = PBT/Revenues
Now let's get back to my friend, how far should he go before he breaks even?
Revenues: $100k
COGS: 60k
Gross Margins: 40k or 40%
S&M: 30k
R&D: 5k
G&A: 25k
PBT: - 20k or -20% Net Margins
Again, how much does it take to get profitable?
Well, if your fixed costs are $60k, then you need to receive enough gross margin to get to $0 PBT or:
Operating Expenses => Revenues - COGS => Gross Margins = $60k
He must overcome $60k in fixed expenses. Solving for this can be made easy by using the Gross Margin equation above
Breakeven Revenues = (Operating Expenses)/GM% = $60,000/.40 = $150,000
Given that current sales of $100,000, our CEO friend needs to sell $50,000 more! That's to get to breakeven.
Remember: We are not including cash flow issues or the fact that our CEO probably needs to do a variety of things that probably include going after high value deals, closing more profitable deals, hiring sales help or cutting expenses.
Monday, September 11, 2006
Cool Anti Spyware Tool
Nothing is more annoying than after you buy a really fast laptop that it starts to slow down and show an annoying set of popups. Worse, many spyware and adware makers were watching your every move and could steal your credit card info. Years ago I downloaded the freeware of Spyware S&D. Just yesterday I bought MaxSecure's Spyware Detector. After the initial scan, it seemed like my freeware didn't do the job. Moreover S&D had a clunky interface. Many times, I would have to download multiple times and run the scan many times, because it would freeze or have errors. It was painfully slow.
I looked at some other packages, but picked Spyware Detector. It had a lot of awards and good references. Plus, the scan and quarantine was superfast. So I took the plunge and dropped the $30 and removed the 80 or so spyware infections on my PC. I was happy to see my computer's performance pick up again. On top of that, it moved lightning quick through the scan and removal. Now every other day I'm still pickup spyware, but it automatically cleans my machine. It updates itself too. The GUI is real easy as well.
This stuff is worth the money - peace of mind and better performance.
Saturday, September 09, 2006
Successful Red Sox Prospects Traded Away
A lot of folks have been fretting aloud about Theo's trades of Anibal Sanchez and Hanley Ramirez for Mike Lowell and Josh Beckett. Both have done incredibly well over in Florida. Sanchez with the no hitter and Ramirez with 44+ steals (see this search result and this Providence Journal article). There are two reasons why those folks should cool down. Beckett has had a hard time in Boston this season, but Lowell has been a real winner. Beckett is a young known winner who will find a way to adjust. Lowell has had an excellent season offensively and defensively.You have to remember, Boston is a hothouse. There's tremendous pressure to perform. You can't avoid the scrutiny over every move. Plus, the NL is like AAAA ball. The top teams just can't match up against the AL. Players who leave Boston tend to do well because fans are more forgiving. There's less attention. In baseball you need to focus on the moment and forget the world around you. Boston media and fans do not allow that to happen. Neither does New York. Look at how Renteria has done in Atlanta, Lowe in LA, and Payton in Oakland. Whether you like it or not, pitchers will not do as well in the AL East and only big game hitters do well.
So folks, calm down. Yes, we got hit with a rash of injuries, but Theo's doing well by allowing the system develop a great crop of young players.
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