Professor Raiton’s Inside Perspectives: Entrepreneurship, Creativity, Innovation

Jeff Jarvis compiled a bunch of stats on Google :

-  Google is the “fastest growing company in the history of the world.” – Times of London, 1/29/06

-  Google controls 65.1% of all searches in the U.S. at the end of 2007 and 86% of all searches in the UK, according to measurement company Hitwise.

-  Google was searched 4.4 billion times in the U.S. alone in October, 2007 (three times Yahoo), says Nielsen. Average searches per searcher: 40.7.

-  Google’s sites had 112 million U.S. visitors in November, 2007, says Nielsen.

-  Google’s traffic was up 22.4% in 2007 over 2006, according to Comscore.

-  Google earned $15 billion revenue and $6.4 billion profit in 2007, a profit margin of 26.9%. Its revenue was up 57% in the last quarter of 2007 over 2006, says Yahoo Finance. As of late 2007, its stock was up 53% in a year. The company has a market capitalization of $207.6 billion.

-  Google controls 79% of the pay-per-click ad market, according to RimmKaufman. It controls 40% of all online advertising, according to web site HipMojo.

-  Google employed almost 16,000 people at the end of 2007, a 50% increase over the year before.

-  Google became the No. 1 brand in the world in 2007, according to Millward Brown Brandz Top 100.

Cash in its purest form is basically a commodity. A million dollars is a million dollars is a million dollars, regardless of where it comes from. Except you don’t usually get a million dollars in a briefcase with no strings attached. Instead, you get a million dollars in the form of a wire transfer with all kinds of conditions, strings, caveats and riders. So often, cash is not a commodity cause a million dollars from person A may represent a totally different proposition than cash from person B.

If it’s true that there’s an unprecedented influx of cash into new internet investments (and I don’t know that this is necessarily true, but it seems to fit in with the overall narrative), then it makes sense that investors (ie VC firms) would have to compete more aggressively to market their cash to investors. Hence the interest in stuff like The Founder Fund, which was profiled this weekend in the WSJ. Among its differentiators: the award of “FF” shares, which allow a founder to cash out before the big liquidity event (acquisition or IPO). The fund, reflecting its name, exhibits its pro-founder stance in other ways as well, at least it does in rhetoric

(WSJ: Venture capitalists often can be too quick to fire start-up founders and replace them with professional managers, Mr. Thiel says. He blames a cultural divide: Many VCs “have these very cushy jobs, they get paid a lot,” and often can’t relate to founders, he says.)

(Read More)

 by Troy Wolverton, Mercury News

Apple Chief Executive Steve Jobs promised a revolution when he unveiled the iPhone in January - and he delivered.

“Apple reinvents the phone,” Jobs boldly declared at the time. While “reimagining” might have been more accurate, it’s clear less than a year later that in ways both obvious and not, the iPhone has had a profound impact on the mobile phone business and likely will keep on influencing it for years to come.

Which is why the device was probably the most talked about new gadget of the year and a strong contender for the most important tech story of 2007.

“It transformed the phone industry,” said Rob Enderle, principal analyst at the Enderle Group, a San Jose technology consulting firm.

The hype about Apple’s expected entry into the phone business had been building for years. Part of what excited analysts and fans was the anticipation about how Jobs and company would apply Apple’s renowned design skills to a mobile handset.

Jobs didn’t disappoint. With its large, full screen-display, its notable lack of a keypad and its simple black-on-silver color scheme, the iPhone instantly became an icon - and a model for the rest of the industry. Even before it debuted in stores in June, big cell phone makers such as LG and HTC were already rushing look-alikes to market.

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LINKEDIN AIMS TO HELP PROFESSIONALS ADVANCE 

by Mark Boslet, Mercury News
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LinkedIn has been called the social-networking Web site for adults.

Facebook grabs the headlines, but LinkedIn continues to quietly plug away, letting business people string together networks of friends and associates.

The company is motivated by the belief it can make professionals more successful and help them shape their careers. And it is on the cutting edge of trying to integrate advertising and features to allow people to better communicate.

“We think we have gigantic potential as a company,” said Allen Blue, a co-founder and vice president of product strategy. “We think that spells a big and important business.”

For 2008, LinkedIn has set a revenue target of $75 million to $100 million. As to rumors the Mountain View company’s success has interested Rupert Murdoch’s News Corp. in a possible takeover, Blue says he cannot comment.

Blue spoke recently with the Mercury News:

QSocial networks are one of the hottest areas of technology. What is behind the excitement?

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After a year full of buzz-worthy releases, Tech Talk looks at some items you still may be talking about over the water cooler.

by Dean Takahashi, Mercury News
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This year will go down as an exciting one for technology. Here are 10 things that caught my attention in 2007:

1. Apple iPhone: It was missing a few features but no other product generated as much hype and attention. Apple tossed out the design parameters for cell phones and came up with a device based on what you wished cell phones would be. The phone has a 3.5-inch display, a touch screen that makes it easier to use your fingers to browse Web pages, an instant link to YouTube’s top videos and an easy way to call contacts or create group calls. The price started out high at $600 but now seems like a bargain at $400. Oh, and it doubles as an iPod, too. It is shaking up the industry and inspiring numerous copycats. You can expect more converged devices, competition from Google, and open networks that accommodate innovative devices such as the iPhone. (Read More)

by Janet Rae-Dupree

It’s a pickle of a paradox: As our knowledge and expertise increase, our creativity and ability to innovate tend to taper off. Why? Because the walls of the proverbial box in which we think are thickening along with our experience.  

Andrew S. Grove, the co-founder of Intel, put it well in 2005 when he told an interviewer from Fortune, “When everybody knows that something is so, it means that nobody knows nothin’.” In other words, it becomes nearly impossible to look beyond what you know and think outside the box you’ve built around yourself.

This so-called curse of knowledge, a phrase used in a 1989 paper in The Journal of Political Economy, means that once you’ve become an expert in a particular subject, it’s hard to imagine not knowing what you do. Your conversations with others in the field are peppered with catch phrases and jargon that are foreign to the uninitiated. When it’s time to accomplish a task — open a store, build a house, buy new cash registers, sell insurance — those in the know get it done the way it has always been done, stifling innovation as they barrel along the well-worn path.

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… it would crash repeatedly for no obvious reason, refuse to restart until you rebooted the engine, then lock you out until you simultaneously pulled the handle, turned the key and yanked on the radio antenna.

OK, so this was originally a joke told at Microsoft’s expense, but it also points to a truism about a development process widely favoured in the Valley: ship products before they are ready, then rely on rapid improvements to bring them up to scratch. Now it seems that Silicon Valley upstart Tesla Motors is doing its level best to keep the old joke alive.

The electric car company set up by PayPal co-founder Elon Musk has been struggling for some time to produce an advanced transmission for its hotly anticipated sports car. Rather than put off the launch of its first vehicle yet again, it has now opted for a familiar Valley alternative: a beta version.

This is how new Tesla CEO Ze’ev Drori explains it in a blog post this week:

To help speed delivery of cars, we will begin production in 2008 with an interim transmission design. These transmissions will meet high standards for reliability and durability, but the car will not meet the original performance spec for acceleration, reaching 60 mph in 5.7 seconds instead of the promised 4 seconds. When the final transmission is ready, we will retrofit all cars, at Tesla’s expense, to meet the promised performance specifications.

Valley luminaries like Larry Page and Sergey Brin, who top the Tesla waiting list, shouldn’t mind - they know all about putting out products before they are ready (In fact Google Product Search, formerly known as Froogle, is still in beta after more than five years, which must go down as some sort of record.)

Thiel Seeks to Change Old Habits by Investing Small on Start-Ups
by Rebecca Buckman
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Three years ago, Peter Thiel, who runs a small venture-capital concern called Founders Fund, plowed $500,000 into a little-known social-networking Web site called Facebook Inc. Later on, his company invested a bit more.

That was a good call. The paper value of Mr. Thiel’s initial stake has increased more than 50 times. Facebook now ranks among the hottest online properties, with some 59 million users and investors such as MicrosoftCorp.

Mr. Thiel, the former CEO of online-payment company PayPal, is making waves in Silicon Valley with an investment strategy that differs significantly from the traditional approach. His company invests only modest amounts of money, sometimes just a few hundred thousand dollars, and focuses on entrepreneurs Mr. Thiel and his partners often know personally. He also takes an uncharacteristically hands-off approach to company management.

Already, the gambit has yielded several potential winners like Facebook.

The venture-capital world “definitely needs to be shaken up,” says the 40-year-old Mr. Thiel, an avowed libertarian who helped bankroll the movie “Thank You for Smoking,” a satire about improving the reputation of cigarettes.

His company also reflects how a new type of venture capitalist is emerging, as start-up costs for Internet companies decline sharply. Many start-ups now need a bankroll of no more than a few hundred thousand dollars to get rolling, compared with the millions of dollars required a few years ago.

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by Lilla Zuill

Merrill Lynch has bumped Goldman Sachs from the No. 1 spot on an annual ranking of U.S. IPO bookrunners.

Goldman, placing first last year, is now in third place for 2007, while Merrill narrowly beat Morgan Stanley for the top honor.

The rankings, which exclude “blank check” and real estate investment trust offerings and were compiled by data tracker Dealogic, measure deal value divided among bookrunners.

Merrill placed first based on its involvement in 47 deals, or about 14 percent of all IPOs on the Nasdaq or New York Stock Exchange this year, for a total of $7.23 billion, according to Dealogic.

Merrill and other top underwriters have done well as IPO activity surged. Total new issues in the U.S. stood at 234 for 2007, an 18 percent jump over the prior year, and making it the busiest year for new issues since 2000, according to research firm Renaissance Capital’s IPOhome.com.

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by Sundeep Tucker and Justine Lau in Hong Kong

Chinese companies are set to defy expectations and raise another $100bn next year through stock market listings, Ernst & Young has forecast.

Next year will again see large numbers of mainland companies list on domestic and overseas bourses in search of capital to fund expansion plans, according to the professional services firm.

This is in spite of the recent turnround in investor sentiment for Chinese stocks that has led some to perform badly on market debut. Shares in Sino­trans Shipping, Sinotruk and Anton Oilfields all ended down on their first day of trading in Hong Kong this month.

“Despite uncertainty, there is a strong pipeline of IPO-ready companies planning to list in 2008,” said Paul Go, E&Y partner.

E&Y predict that Rmb330bn ($45bn) will be raised from A-share listings in Shanghai in 2008 while a further HK$260bn ($33bn) will be raised from H-share listings in Hong Kong.

More than $20bn could also be raised by listings on the mainland’s smaller Shenzhen exchange and on bourses in London, Singapore and the US.

Shanghai this year raised more than $60bn from A-share listings, outstripping New York and London for the first time. Two-thirds of the total was via first-time domestic offerings by China’s largest companies – PetroChina – that had previously listed overseas.

E&Y said the fall in the number of “returning home” Chinese offerings would be offset by the listing in Shanghai of “red chips”, Hong Kong-listed companies based on the mainland but incorporated overseas that have not yet been allowed to list domestically.

Rising numbers of privately owned companies are also tipped to join the stock market from sectors as diverse as property, retail and technology.

E&Y said 55 private mainland companies listed on exchanges in the US and Singapore this year, raising a combined $8bn.

“We expect the amount raised by mainland companies outside greater China to be similar to this year. Chinese companies will continue to list in the US now some of the regulatory issues have settled down,” Mr Go said.

Dealmakers also report that foreign-invested enterprises are considering listing Chinese assets on both the mainland and Hong Kong bourses.

Chinese authorities are studying reforms that will make it possible for multinationals to list in Shanghai. HSBC is among those signalling an interest in doing so.

Bankers say state-backed groups likely to come to market next year include infrastructure and finance as well as media.