In my last post I discussed talent.  Most companies buy companies either for a defensive move or for talent.  Few and far between are the exemplar purchases for intellectual property.  Although it is mandatory you have those ideas at least patent pending with some form of provisional application – yet i digress.

It has become very apparent to me we are heading into a talent shortage.  Specifically in the areas of Data Science.  It reminds me of the glory days of signal processing in the early to mid 90’s.  We couldnt find people who knew how to code a (fast) Fast Fourier Transform let alone think about distributing that processing.  I see Data Science related careers in that same situation.  I also see the physical and soft sciences merging with the two as it pertains to gaining knowledge from the data.  Need to find a lot of people and do not want to outsource it?  Do not have the cash to make a company acquisition?  Call in a team.

The above picture is of the good folks at Blackwater.  Most people or companies do not like mercenaries.  Why? Mercenaries are usually not very fun.  Most people enjoy pithy campy fun.  Mercenary teams are not the type of consultants you find in Office Space.  On the contrary, these guys and gals know what they are doing – get in – get out and move on.  They are expensive but will usually overhaul any situation.  They have a huge amount of experience and are very calm under chaotic conditions.  I am reminded that those who do a dangerous thing with style is a professional.  I see a day when teams of Mad Max Mercenaries are plying their trade on Craig’s List or eBay.  eBay is probably a better venue as then they can have a cover LLC and incorporate subdivisions as needed based upon specialty.  Sound crazy?  Maybe.  Sounds like a possible Idea2Bank to me.

Until Then,

Go Big Or Go Home!

This is great news on many fronts. First its about the data – in fact – the metadata associated with the company. Its is also about the almanac nature of the data. MetaWeb was also Resource Description Framework (RDF) based which bodes well for the future of the Semantic Web. Third they were a startup that was purchased. Empowerment. Entrepreneurship. Ideas-2-Bank.

Google Acquires Metaweb To Make Search Smarter

Until Then,

Go Big Or Go Home!

@jaxsoncreole

I usually don’t track “the news” or “chatter” but the recent Facebook acquisition of NextStop is about talent.  Possibly geolocation and hyper-local data but more about who is there and why they are there.  I was having this discussion with several persons the other day.  Companies buy other companies for talent, data aggregation and possibly technology.  The reason I say possibly technology is that most companies do not care about the tech – mostly talent.  I have a term for the companies that move our tech world:  The Folks Inside The Firewall.  The Folks Inside The FireWall (TFITF) already have a long term strategic view of where they want to go 5,10,20,50 years.  Take this to the bank.  In a blog a couple of years go I discussed the Three T’s of a Startup.  I listed talent as number one.  Why?  I prefer quality over quantity.  I prefer the elite performers.  I’d rather have two A game coders than 10 posers.  I located a recent plot of distributed and related coding jobs.  While the plot focuses on Casandra rest assured that the areas of machine learning, data mining, natural language processing and semantics are going to skyrocket.  10 years ago we were worried about connections, storage and compute resources.  This is no longer the case.  We are revisiting this world – yet again – same algorithms – more data.  It reminds me of the hey day of digital signal processing engineers.

As I discussed in my previous blog Three T’s of a Startup many times the companies do not even use the acquired technology.  So please do not take it personally when your great code base is destroyed.  Philosophically Art is meant to be created and destroyed.  The money and vesting schedule will make the destruction worthwhile – trust me.  If you want to go be idealistic go right ahead.  The smart ones wait and vest.  Colloquially called resting and vesting (RnV).  It is a great way to past the time.   That said this brings up the question of is it really about the software now?  Clearly, GOOG does not need a geo-loc technology nor are they going to be a travel agency.  Patents?  Possibly.  In that same blog I discussed how many executives at these companies just say put together a team, write some code, create some provisional patents.  If the stuff halfway does what your roadmap says we will probably buy you.   Look for my next blog on this subject called Mercenaries For Hire – Have compilers – will not travel.

Until Then,

Go Big Or Go Home!

## Why We Do IT

“If you ask me to name the proudest distinction of Americans, I would choose- because it contains all the others- the fact that they were the people who created the phrase “to make money”. No other language or nation had ever used these words before; men had always thought of wealth as a static quantity- to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created.” ~ Ms. Ayn Rand

I’m not sure about you, but every time I am asked why I do what I do – I always think it sure beats digging ditches.  I mean really folks let’s be honest here.  Would you be doing anything else?  Software is the most scalable profession this world has ever known and in this post-July 4th blog I was thinking – wow America created the industry.  The Epicenter of it all.  I believe that creating software is the epitome of The American Dream.  An Idea, A Computing Device and a Connection.  It is complete freedom.  There are no rules.  The only rules are mandated via the compilers and processors.  The one-to-many multi-cast aspect of creating software and now DataSpaces is completely scalable.  Doctors, Lawyers, and in some cases Stock Brokers are not scalable as many times it is a one to one relationship and is a time allotment with respect to target audience.  If your creation is a hit then there is a non-linearity for scale that cannot be duplicated.  Then comes the after affect.  Money.

Most do not set out to say – “Hey I am going to make some money.”  Nope in the software world you say, “Hey wouldnt if be cool if <insert idea here>.”  I am really getting tired of people trying to soften the aspect of Extreme Capitalism in the software industry.  So for arguments sake which I enjoy let us do a little play acting:

Entrepreneur: I am creating a Data As a Service company for Socnets

Venture Capitalist: So why did you found the Acme DaaS Corporation?

Entrepreneur: To save the White Hooded Wood Owls from extinction.

Venture Capitalist: Wow that is great I can definitely see my 10x return on this $10M Series A investment. Whoo Hoo! Lets do it! Woot! Not realistic huh? So lets step back here in a minute. If you want to be a philanthropist and have not inherited a ton of money then creating a really hot software company with a great exit is a way to get there so you can save the White Hooded Wood Owl. (DISCLAIMER: We are not being selective of wood owls please find the brown one here. In fact I do not think there is such thing as a white hooded wood owl). So what should you say? Well Mr./Ms. VC I want to sell this and make a ton of…wait….keep guessing…. MONEY! Don’t posture. Money Rules the game. Until Then, “Wow must be nice, you’re lucky!” For the successful entrepreneur how many times have you heard this? In the world of “ustas” I used to get really mad about that when someone would say this to me or someone that I knew. I suppose jealousy and envy cloud the mind. I have a good friend who is an accomplished martial artist and weapons expert with multiple level black belts in various forms. He is fond of telling his advanced students training up in the hills in some remote local, “Luck has nothing to do with why you are here.” There are some who say that having an exit for your startup is complete luck. Ok fine. So be it. We can argue that one later. What I want to discuss today is what happens post-acquisition with the founders and principles of a startup that has been acquired with the proper frameworks in place. Lets take a recent example of the high profile IPO of Tesla. The PayPal Mafia is a great example of how to take care of the people that make the company successful. It is also a great example of how the machine works. During my last startup here on the right coast I was continually asked why I started the company? Well lets see: take an idea, create some software, sell it, make money. Money, Oh yea Money. Actually what I stated was to create a proper venture capital firm much like a Y-Combinator but with more cash. A good rule of thumb is to not create a company specifically for the company but create it for the next scenario. the paypal founders rewarded their people. Musk only had 11.5% at the time of the 30B in tech funds and companies. I continually see people who have founded company or are founding companies saying they will not give up the equity. Your choice. You must give to get, Yin and Yang, Push Me – Pull You. PLEASE READ: REWARD THE ELITE PERFORMERS – HEAVILY – THEY WILL NOT LET YOU DOWN! During the last go around I had a good friend of mine who has amazing experience come up from a semi-retirement from St. Marteen Island. He called me from the harbor club where he landed and said, “I dont need a salary or contract I just want Equity. We can figure it out later, lets start coding.” Take that to the bank all day. I gave him multi-digit percentages. So for those that are trying to get something off the ground or after years cannot scale because you cannot find the right people. Give the blood. Give the equity. It is not luck. I’ll leave you with a quote: ” The inferior man’s reasons for hating knowledge are not hard to discern. He hates it because it is complex — because it puts an unbearable burden upon his meager capacity for taking in ideas. Thus his search is always for short cuts. ” ~ H.L. Mencken Until Then, Go Big Or Go Home! @jaxsoncreole The machine in action: ITA hammered it. Massive 700M after a year long bidding war with the usual suspects. Read it here: ITA Exits at$700M

That said notice why they were bought:  The Data.  Data provisioning and categorization in a nice neat package.  Fluid data that empowered other sites.  Also note the nature of this deal.  People wonder why The Valley will always be on top.  Most will say because they had a head start.  I say because they will continue to invest in people and ideas.

Until Then,

Go Big Or Go Home.