Wednesday, January 27, 2016

Quick Hits: January 27, 2016

More highlights.

THE DRAGNET: How a man accused of million-dollar fraud uncovered a never before seen, secret surveillance device

"On May 6th, 2008, a package containing $68,000 in cash arrived at a FedEx store in Palo Alto, California. The bills had been washed in lantern fuel, as per instruction, then double-vacuum-sealed and placed inside the cavity of a stuffed animal, which was then gift wrapped. The store had been chosen carefully: it was open all night, and located just 500 feet from a Caltrain station. The package was general delivery, to be picked up at the store by a man named Patrick Stout. 
The money was being closely watched. The package had been prepared by a criminal informant, working in cooperation with a joint task force of agents from the FBI, IRS, and US Postal Service, who were investigating a tax fraud scheme. The informant had been arrested and flipped months earlier, betrayed by yet another informant. Now they were after the mastermind."
Really fascinating story about how use of the Stingray surveillance device was being used (illegally, without warrant) by law enforcement.

I have a job and a house. I can vote and join the military. Why can’t I drink?

"I'm a 19-year-old loose in Pittsburgh, living on my own, working in an industrial apprenticeship with a great company. Instead of college — too expensive, too much time, too little payoff — I'm attending a liberal arts academy online. I drive, pay bills, make meals, and have a social life. Yes, I'm trying out adulthood, and mostly succeeding. 
But there is one huge hangup. The law doesn't allow me to buy anything alcoholic: not in stores, not at bars, not anywhere. No beer, no wine, and certainly not my favorite drink, which is bourbon. In almost every area of life, I'm expected to be an adult. In this one area, I'm not allowed to behave like an adult."
Op-ed by a teenager questioning the strange U.S. phenomena of a 21 year old drinking age; a place where "Prohibition still applies to us [18-21 year olds]".

How To Tell Whether "Antique" Furniture Is Really Antique

Just an interesting video on dating antique furniture.

"The video above provides a great introduction to dating antique furniture and what areas should be examined. Take note of the shape of the screws used to hold the furniture together. Are they tapered and pointed with smooth grooves, or are the ends cut and the slots offset? Any combination of these features can help place the age of the furniture. Nails are also a strong indicator of age, as cut nails weren't replaced in construction until the 1880s.  
Examine any locks and look for file marks or any signs of irregularity, which would indicate something that was handmade and therefore probably older. Check out the condition of the finish on the exterior as well as the drawers. Look for areas that have been worn down or replaced.  
Lastly, compare the design of the furniture to other pieces from the same period. Glaring differences are suspect, and a signal that this particular piece might not be what it seems."

Un-PC Lego Making Toys Girls Like

"Lego — the company that makes stackable toy bricks — has become a toy powerhouse in recent years, even surpassing Mattel in toy sales during 2014. Lego has become so popular, in fact, that the company has problems avoiding “brick shortages.” 
Lego’s success has been helped along by the fact that — finally — Lego has managed to find success with girls." 
"Perhaps predictably, Lego has been condemned by feminists and culture warriors for making Lego too “girly.” Those familiar with the Friends line already know how, instead of red and blue bricks for making fire stations, the new line designed for girls features purple and pink blocks (among other colors) for constructing yachts, homes, and restaurants."
Explaining why claiming that a toy is too "boyish" or "girly" makes no sense if it is selling well (very well) to its targeted demographic.

Not all boys like trucks or girls like dolls, but a large percentage of each do and it is not wrong or amoral to sell to children what they prefer. Along the same vein, is it wrong to target yoga pants for women or baggy cargo shorts for men? Shouldn't they advertise and create product equally across genders? Sure there are men who like the snug feel of leggings and women who prefer the utility of cargo pockets, but a large majority of each would not buy these products. If companies were forced to market and product products equally, they would lost a lot more money and be less efficient.

The 4 Tech Trends That Will Explode in 2016

"1. Virtual reality: The world of virtual reality has been blossoming for years, but in 2016, it will go big on a mass commercial scale." 
"2. Consolidation tools: Devices or software that can help improve both business and individual productivity will explode this year." 
"3. Increased security solutions: From identity theft and data privacy to counter-terrorism efforts, improved security tech will remain an area of tremendous growth and focus in the coming year." 
"4. Conversion of aggregate data into useful information: It's one thing to possess data, but it's quite another to access the right data and make it useful to leverage."
Sure it's fun to read these lists, but more fun is to go back and see if their predictions were correct. Hopefully I'll remember to check back and review this list next year.

Tuesday, January 26, 2016

The Fast-Food Wars are Alive and Well

There was a recent article in Inc. about McDonald's resurgence led by their "breakfast anytime" campaign and rapid experimentation with different foods. (Kale salads, anyone?)

This rejuvenation, has put McD's back in the mix where it had, up until recently, lost significant market share to Burger King and other chains like Arby's and Wendy's.

The rest of the Inc. article did not provide other examples or reasoning for McDonald's comeback, but did make this observation regarding health-consciousness (or lack there of) that I thought was funny:
"I conclude, therefore, that Americans aren't necessarily trying to lose weight. They simply in love with sausage and want to eat it all day."
Sausage, egg, and cheese McMuffin (

While the author starts to get a bit judgmental of others' food choices, the deeper point is interesting. Despite the crusade to place blame and accountability on the food & drink companies, instead of the individual, people still choose to buy fast food.

Unrelated to McDonald's recent success, but still in the world of fast-food, was this funny exchange (albeit, one-way) involving Burger King and Wendy's.

If you've been paying attention to recent fast-food commercials, you'll notice a lot more "4 for $4" deals. I believe it was started by Wendy's and, considering its proliferation, it's been a successful campaign. Burger King decided to up the ante and started to offer a "5 for $4" deal.

Being the country of one-upping another (see: number of blades per razor cartridge), someone asked if Wendy's would respond:


Monday, January 25, 2016

Quick Hits: January 25, 2016

A few articles/news pieces of interest:

Investor Chill Hits Technology Sector

"As investors and entrepreneurs gathered at the World Economic Forum, many are now wondering if the tech boom is finally cooling off"
More evidence to my previous post of decreasing VC/investment into startups and deflating the startup valuation bubble.

How to Make Extreme Numbers Resonate

"Both colossally large and infinitesimally small numbers can be hard to fathom, because they’re so abstract. Visualization can make data at the extremes easier to grasp. The key to doing it well is finding the right scale and the right approach. Here are three examples of visuals that make huge numbers, tiny numbers, and moving numbers easier to grasp."
Too often, people create images with data that makes the data just as hard to read as the raw numbers or, even worse, misinterprets the data and leads to incorrect analyses. This is a great quick read (with images!) on how to create effective and easily readable visualizations/infographics.

San Francisco’s Biggest Taxi Operator Seeks Bankruptcy Protection

"Yellow Cab Cooperative Inc., San Francisco’s largest taxi company, filed for bankruptcy protection Friday, the latest in string of traditional taxi companies to turn to chapter 11 amid the rapid rise of ride-hailing rivals like Uber Technologies Inc. and Lyft Inc. 
Pamela Martinez, the co-op’s president, said in court papers that her company faced a host of challenges, including a high number of accidents-related claims and liabilities, a steep decline in ridership and competition from newer app-based ride-sharing services, namely Uber and Lyft, which have also increasingly poached Yellow Cab drivers."
Innovation continues to weaken established companies (despite government enforced monopolies/oligopolies) to the benefit of consumers.

Science Says There Are 4 Types of Introverts: Which One Are You?

"Being an introvert isn’t a bad thing — sure, small talk might not be your favorite activity, but you’re definitely a pro at making your alone time rock. Thanks to Susan Cain’s bestseller Quiet, the whole world learned what many of us already knew: Introverts are awesome. Wellesley Psychology Professor Jonathan Cheek took it a step further when he categorized four types of introverts in his paper, “Four Meanings of Introversion: Social, Thinking, Anxious and Inhibited Introversion.” He said that each type is unique and, like all human differences, each possesses a secret power. Scroll to discover if you might fit into one of these categories."
I always enjoy learning about personality-types (particularly on my own introversion), this goes further to dissect and analyze.

10 Hilarious Signs You Should Not Take That Job (Infographic)

"No, when you interview, you’ll be on the lookout for red flags. You’ll scope out the office for telltale signs of a toxic boss and burnt out employees, and you won’t end up in a job that sucks."
Just a fun infographic (though it's more like a comic than infographic) on job interview warning signs (click for larger):

Wednesday, January 20, 2016

Reports of the Startup Valuation Bubble are Greatly Exaggerated

... Or not.

Along with many others, over the past few years, I've been worried about the growing dissonance between startup valuations vs. the actual (intrinsic) value they were creating. (This is the definition of an economic bubble). However, many in both the startup and financial/VC world have been consistently downplaying the high valuations and amount of money being pumped into the industry. (There are now 229 unicorn startups, with $175B in funding and $1.3T valuation).

I don't think this bubble popping would result in a total economic collapse like the Dot Com or Housing crashes (it is a much smaller, private market and not as many people or as much money is involved), but I'm surprised that more people were not worried about how high valuations are for relatively young companies and products. Last year alone, a record $128.5 billion was invested into startups and 71 became unicorns (valuations of $1 billion or more).

Fortunately, it seems the angels and VCs investing in startups are smarter than those investing in sub-prime mortgages and internet IPOs, and there are strong signs that valuations are coming down and investments are decreasing. One report estimates a sharp decrease in VC funding from $38.6 to $27.2 billion, Q3 to Q4 in 2015. However, there is often reduced spending late in the year; I suspect the holidays have something to do with that.

Slightly off topic, but this was a surprisingly good post by Tucker Max on "Why I Stopped Angel Investing (And You Should Never Start)". It does note the fact that a large portion of VC firms lose money and the most successful VCs owe their success to their network which leads to having the "first pick" of emerging startups.

Further off topic, but for those who grew up in the late-90s/early-00s, will remember Tucker Max's name from his well-written and incredibly amusing, but vulgar/graphic blog about his exploits with liquor and women. His turn-around into a successful businessman, entrepreneur, and VC is the surprising part of his post.

Anyway, that's not to say there won't be blood spilled on the way down. As I wrote about before, unicorns like Theranos will be increasingly pressured to validate their valuations and investors will feel the pain and lose money in the next round or when IPOs open at less than private valuations. The New York Times also had an interesting piece on LivingSocial's downfall as a cautionary tale to current-day free-spending startups flush with cash.

He-who-must-not-be-named hunts for unicorn (and Theranos?) blood (Harry Potter, Warner Bros. Pictures)

Jason Calacanis's most recent post agrees that the valuations are being deflated in a controlled fashion, but I disagree that they are completely back to earth and that all the "kvetching" about the bubble has been annoying. I don't want to be Chicken Little on this, but I believe the worrying has been fully warranted and has, rightfully, worried investors to be more conservative about valuations and investments.

Side note: It is interesting that in this private market, with little government oversight, investors are able to correct themselves; whereas in public, heavily-regulated markets, there is a significant boom-bust cycle. But that is a subject for another post and its causes are vigorously debated.

Another interesting coincidence, to start the year, is decreasing valuations and falling global stock markets. I'm no expert on global markets, so I wonder how they will affect each other. An obvious, impact will be on the number and size of IPOs. There is already a debate surrounding startups and when they should go public. Most investors, not surprisingly, push to file earlier; but that is countered with founders' desire to stay focused on product, not profits, and keep control of their companies without having to report to shareholders. 

Without getting into a whole other topic, HBR has an interesting article on finding that "sweet spot" based on a company's age.

I think there's consensus that there was a startup valuation bubble (I think it's still partially inflated), but it is continuing to correct itself.

I don't know how this will affect startups seeking funding in the future, but I doubt we will see as many unicorns develop this year.

Thursday, January 14, 2016

Oculus Rift: Consumer Perception vs. Industry Reality

I had originally started my last post (Technology Adoption Lifecycle) to focus on and discuss Oculus Rift and the wild expectations people had for it, but it started to get too long so I decided to split it up into two posts.

Obviously, being an emerging technology market, I've been interested in and monitoring the development of Virtual Reality (VR) for a while. One of my classmates in business school had an early Oculus headset and I was able to play around with it for a few minutes. From the one basic simulation that I tried, I wasn't too impressed with it, but can definitely see the potential it has.

Similar to what I saw on my demo (image via Martin Caine)

For those not familiar, Oculus VR is a company that grew out of a highly successful Kickstarter campaign which raised almost $2.5 million. (The Updates page of the Kickstarter has a great timeline of events, from the launch of the campaign way back in 2012 to the present). The goal of the founders was to develop VR headsets for gamers, but grew into something much bigger with the campaign's success. 

When Oculus opened up pre-orders for the production version of the Oculus Rift last week, may were surprised and displeased with the high price. At $599, it was significantly higher than the Kickstarter "developer kit" price ($275 for Early Backers, $300 after that); not to mention this did not include the computer required to process graphics and software (PCs with the recommended specs cost around $1000), or the still-in-development controllers (if I had to guess, I'd price them between $100 and $200).

Oculus Rift headset and forthcoming 'Touch' controllers (image via Metro)

The negative response to the relatively high price is directly correlated to my last post because of the disconnect between what the founders had originally intended and the inflated expectations that arose with the increase in media attention and speculation.

An article that I found spelled this out well explained, "This isn’t a massive consumer-focused launch — it’s more of a slow rollout to the eager early adopters with deep pockets." (ExtremeTech)
That is, we are much closer to the right of the Technology Adoption Lifecycle curve and barely out of the Technology Enthusiasts zone (Kickstarter backers are firmly in this camp).

As I'm thinking about it, maybe there isn't a true shift as I previously wrote; rather, its an aspirational shift. Whether it's due to social media or other pressuring factors, consumers want to be considered Early Adopters, but are still pragmatically constrained to wait until products hit the mass market. 

In short, the Rift is not bringing VR to the general population as many thought. The product and industry are still very much in its infancy and will take a great deal longer to mature. Unless it gets lost in the Chasm, of course; which I believe is a real possibility and Augmented Reality (AR) simply leapfrogs it.

If the industry does survive the jump, I think we'll know in the next 18 months or so.
Everyone else will know it's here when Apple makes a headset.

Thursday, January 7, 2016

Shift in the 'Technology Adoption Lifecycle' Bell Curve

With CES in full swing and the recent pre-sales launch for Oculus, it got me thinking about the Technology Adoption Lifecycle and the apparent shift in the bell curve.

For those who are unaware, the Technology Adoption Lifecycle is a rough outline of how the consumer market buys into or "adopts" a specific technology.

Here is a simple version of it:

The x-axis is time and the y-axis is adoption rate. You don't have to be too familiar with it, but the significant portions are:
- Early Market: where the so-called Early Adopters are and where products are tested for market response.
- The Chasm: where most products die because they are unable to make the jump between those interested in the technology and those who are interested in the product as a whole. This is right about where Google Glass is now.
- Mainstream Market: here is where product strive to be and where companies will make money.

Hopefully it is pretty self-explanatory (maybe I'll have another post about it in more depth) but, as an example, recall the iPod and the portable MP3 player market.
Initially, there was reluctance to purchasing them over the existing technologies like the Walkman or portable CD player (Discman). There were a few Early Market buyers and sellers, but the majority of people did not purchase one until the launch of the iPod. Apple was able to jump the Chasm; through successful marketing and design and, in particular, the iTunes music store; and made MP3 players mainstream.

A Shift in the Curve

Historically, most product followed this conventional, normal bell curve. However, I think this is starting to shift to the left.
More and more people are being drawn to the allure of being considered an "Early Adopter" for a number of reasons, the biggest effects coming from: social media, crowdfunding, and company relationships.

While I don't want to go on for too long, I'll go into a bit more detail on each of these effects: