Startups and the role of capital and investments

Posted by David N. Welton Fri, 18 Jul 2008 11:43:00 GMT

One of the most exciting things about the computer industry these days is the ease with which can get started. Decent computers can be had for well south of $1000, hosting is cheap, services like Amazon EC2 make it ever easier to scale rapidly should the need arise, and the only other things you need are an internet connection and a place to sit. This is leading to more people, like 37 Signals to question the need for investment entirely and others, like YCombinator to successfully make very small investments (thousands of dollars, rather than millions).

Sometimes, however, I wonder - is it just a passing moment in time, a window of opportunity, or is it a long term trend? Historically, to set up something like a factory required a great deal of money, putting it beyond the reach of anyone unable to obtain financing. Even in this day and age, there are plenty of endeavors that require large amounts of capital, and a lot of time, prior to seeing returns: that's how things work in my wife's field, biotech. Some fields have even become more expensive with time. High end computer games are very expensive propositions in this day and age, compared to the low budget stuff typical of, say, the Commodore 64 era, although it's also true that the market has also grown a lot, and that there is still space for smaller-budget operations.

How does all this look historically? Have there been industries in the past where it was so easy to get started? Anything that was able to scale? By which I mean: it might have been relatively easy to start some kind of small business, but it would most likely always stay small, whereas things like Craigslist or 37Signals have the means to grow a great deal without adding lots of people. Will things change in the future so that one or a few programmers can't compete with a big team? Or perhaps things will go in the other direction and more industries will become like computing is today and it will be possible to a biotech startup in your home office?

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Misquoted

Posted by David N. Welton Tue, 15 Jul 2008 18:53:00 GMT

Well, to be charitable, it was a bit late and so perhaps what I said came out wrong, but in this article:

http://www.theregister.co.uk/2008/07/14/android_developer_unrest/

I'm quoted as saying the problem is with "upper management", which I don't really believe to be the case, going by snippets of conversations and things I've read. Frankly, at this point in time, I have no idea why Google can't talk about Android.

Also, I had several other positive things to say to the reporter, but I guess the 'focus' of the piece was about the problems that Android is currently experiencing. Notwithstanding the recent weirdness, I'm quite happy that someone with a lot of money and muscle is going to be backing an open source mobile phone system, and hope that the current troubles are merely a small speed bump.

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Squeezed Books Contest

Posted by David N. Welton Fri, 11 Jul 2008 12:07:00 GMT

I'd like to announce a modest contest on the Squeezed Books web site: the person who contributes the most to existing or new summaries wins a free business book + shipping, from Amazon, courtesy of Squeezed Books.

Yeah, I know that it doesn't really compare with the millions that big companies can give away, but I thought it would be a nice way to reward people who work on the site. If it works out well, we'll repeat it every month.

So, if you're the kind of person who already takes notes when you read a book, or you've read a lot of business books and can distill their key points, this might be a good opportunity to take a chance at a free book, and share your knowledge with others (summaries, unless otherwise noted, are under a Creative Commons license).

Questions and comments welcome: it's an experiment, so ideas on how to improve it are welcome too.

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Google, Android, and the case of the missing communication

Posted by David N. Welton Wed, 09 Jul 2008 12:11:00 GMT

Like many people, I participated in the Google Android contest this spring, and like most of them, I didn't win, but I did enjoy working with the platform, and am very excited about the idea of an open source mobile platform that's relatively powerful.

From the outset, due to the lack of actual source code for a lot of the system, there have been "doubters" about what Google is really up to. I'm not one of them, and am largely ok with their reasons for holding back: I buy their reasoning that the long term benefits of a strong, properly QA'ed launch probably outweigh the possibility of failure that might come from the press and the public at large that doesn't care much about software freedom seeing phones come out with half-baked, early implementations. I think most of us working with Android were ok with that strategy, and the ones who weren't self-selected out of the platform, most likely.

However, lately Google has made something of a mess of their communications regarding Android. The problem stems from the fact that they gave an updated version of the SDK only to the winners of the competition, which for a lot of people felt like a bit of a slap in the face: they helped popularize the platform by participating in the contest and writing applications for it, and in return got excluded from the upgrade path. Personally, it's not really any skin off my nose, as I'm sanguine about the Hecl port proceeding apace when the new SDK is public, but I can see that if you were, say, a company porting your app to the platform and now are left behind the competition winners, you might be a bit irritated.

The biggest mistake they've made though, is a big lack of communication regarding this business. As I said, I don't really have that much skin in the game, and if they explained in a convincing way why they needed to do things that way, they would go a long ways to allaying the frustrations felt by many.

I'm not much of a believer in conspiracy theories and plots, especially where companies are concerned. Inept bumbling is a far more likely explanation in most cases, including this one. What is odd, though, is that Google has a lot of people who "get it". I met Dan Morrill at the Munich Android event, and he definitely gets it. He writes about his frustrations as a developer advocate and all the crazy things people say. Well, one way to reduce the number of batty internet theories (eliminating them is clearly impossible due to the alien mind control rays) is to consistently communicate quality information about what's really going on, something that has been lacking with regards to the SDK question. Here's another Google employee who understands this need to communicate, and apparently does so despite being worried about being "slapped for talking publicy about all this":

http://groups.google.com/group/android-developers/msg/244edfad99870c63

But the root of the problem is certainly not licensing but that there hasn't been a new public SDK release since M5, while at the same time a small group of people received updated versions privately.

I really don't know precisely why this happened; but I'm sure it has more to do with logistics and reducing the burden of support while we shift priorities (to shipping real devices) rather than politics or any will of our part to "hurt the community" (come one guys, we are not that stupid... !)

While others in the team may disagree, I think it was very very unfortunate; some of us are trying to prepare a new SDK release, but it's a lot harder than I can comment on here, so don't hold your breath because it might not happen that soon.

This explains things in part, but still leaves us in the dark, and leaves me with the feeling that someone in power, somewhere at Google, despite his or her clued in colleagues, really doesn't get it with regards to open source.

I'm still unconcerned about the Android source code: I think we'll see it, but to be a true open source project, Android will need an open community as well, not one where decisions are taken exclusively at Google, and not even communicated to the development community at large. All in all, this mistake is more molehill than mountain, but however you look at it, in terms of open source, it is a step backwards.

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Cache it all

Posted by David N. Welton Fri, 13 Jun 2008 21:21:00 GMT

I recently redid my personal web site, at welton.it. Wanting to be quick about it, and make the look and feel a bit more uniform than it has been in the past, I hacked together some pages in Rails. Despite this being sort of a "killing a fly with a bazooka" situation, I've been doing lots with Rails, so it was quick to use. Here's the thing, though: Rails is definitely overkill, as the site is basically static. I don't need to calculate anything or fetch stuff from a database - I just wanted a reasonably good template system, and I am quite comfortable with Rails these days.

But the idea of leaving Rails running for a static site was of course no good: I basically need to cache the entire thing, so that Rails is simply not involved. How to do this as quick as possible (in between diaper changing and other baby duties!) ? Ideally, it would be possible to introspect Rails in order to know exactly which pages are present, then cache those, and avoid Rails on the server entirely (just generate them locally and put them in subversion), but that proved to be fairly hacky, so I settled for this code, which simply caches all pages which comes across, when caches_pages is placed in application.rb:

class CacheFileName
  include ActionController::Caching::Pages
  include ActionController::Caching::Pages::ClassMethods

  def cachedname(path)
    page_cache_file(path)
  end
end

def caches_pages()
  return unless perform_caching
  after_filter do |c|
    res = c.cache_page
    cfn = CacheFileName.new
    cf = Cachedfile.new :filename => cfn.cachedname(c.request.path)
    cf.save!
  end
end

It simply caches everything. To be able to easily clear out the cache if there are any changes to the site, we record the changes in the Cachedfile model, which is defined like this:

create_table "cachedfiles", :force => true do |t|
  t.string   "filename"
  t.datetime "created_at"
  t.datetime "updated_at"
end

with this model:

class Cachedfile < ActiveRecord::Base

  def Cachedfile.clean_cache
    Cachedfile.find(:all).each do |cf|
      begin
        fn = ActionController::Base.page_cache_directory + cf.filename
        File.delete fn
      rescue => e
        logger.error "Error deleting #{fn}: #{e.inspect}"
      ensure
        cf.destroy
      end
    end
  end

end

which has a class method to go through and clean out all the cached files. I call it manually from ./script/clean_cache:

#!/usr/bin/env ruby

ENV['RAILS_ENV'] = ARGV.first || ENV['RAILS_ENV'] || 'development'

require File.dirname(__FILE__) + '/../config/boot'
require "#{RAILS_ROOT}/config/environment"
require 'console_app'

Cachedfile.clean_cache

It's not a beautiful system, but it gets the job done.

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New "Jim" Maintainer

Posted by David N. Welton Fri, 13 Jun 2008 16:46:00 GMT

Tcl is a fairly old language, nearly 20 years old this year. It's also quite widespread, even if it's not as popular as it once was. This means that a lot of things are fairly set in stone, and not likely to change short term. It also means that with time, it has grown quite a bit as a system, and has lots of pieces.

Several years ago, my friend Salvatore "antirez" Sanfilippo set out to create his own version of Tcl, something smaller and more flexible, and under his control so as to avoid being tied down with baggage from the past. The result was Jim, which, according to the web page:

... implements a large subset of Tcl and adds new features like references with garbage collection, closures, built-in Object Oriented Programming system, Functional Programming commands, First class arrays. All this with a binary size of about 85kb (that can be reduced further excluding some non-vital commands, and commands not available in Tcl itself).

which has made it popular with people who need a small scripting language for things like embedded systems.

Unfortunately, Salvatore hasn't had as much time to work on it as he might like, being busy with money making web things (it's tough to make money on programming languages), so it's good to see that he has added Øyvind Harboe as a maintainer to the project in order for it to move forward. Good luck!

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The Google street view team is putting in some miles

Posted by David N. Welton Tue, 10 Jun 2008 20:12:00 GMT

I'm impressed at how much Google street views are growing. From a high level view, it looks like some sort of 1950's B movie alien invasion: link.

What's even more impressive are some of the out of the way places they've been: link. I can't imagine what they were doing up that road. Perhaps they wanted someplace secluded to go smoke a joint, and they left the camera rolling? It's sure a beautiful road in any case - it looks like a great place to go for a bike ride.

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Startups: government help and hindrance

Posted by David N. Welton Mon, 09 Jun 2008 18:53:00 GMT

Aaron Swartz writes about what government might do to encourage entrepreneurship:

http://www.aaronsw.com/weblog/prostartup

As an American who has lived in Europe for a while, I've seen both sides of the coin (or pond, as it were), and feel qualified to add a few things to the conversation, even if many of these points merit a discussion of their own.

  • He's right about health care. It's one of those things with a huge downside risk that people in Europe simply don't have to think about. You can change jobs, take a break from a job, start a company...whatever, and you never have to think about "what if". Even if you have the sort of preexisting condition that can hang like a stone around your neck in the US. How to implement such a system (which of course has potential disadvantages as well) is well beyond the scope of this journal.

  • Universal education. I don't think it's as great as Aaron seems to think, but I don't think it's very influential one way or the other on startups. People get good educations in both places, although, by and large, the best Universities are in the US because they have more money, and have in the past attracted highly qualified people from all over the world. In both places, students manage to meet other like minded people with whom they can start companies. There are definitely improvements to be made to the US system, but that's really just a political discussion: like I said, differences in universities are not the limiting factor.

  • Minimum income without having to work or even having to look for work sounds like an enormous can of worms. Might be good for startups, but has big risks associated with it, and wouldn't be politically feasible in the US. Even in most European countries with that sort of thing, you don't just get money: you have to look for work, do job training, or prove that you're just not capable of doing anything productive.

And here are some thoughts of my own:

I think it's best to focus on the startup "curve", and costs associated with various points on it: when people are just getting started, keep state-imposed costs low. If someone makes a lot of money, worry about taxing it then.

This is quite different than what has previously been the norm in many places in Europe, which have policies akin to slaughtering the goose before it lays any eggs, let alone golden ones. Italy is a particularly bad example, but it's the place I know best, and not too far off what happens elsewhere in terms of policy: fixed, sunk, startup costs are in the order of 10,000 Euro, which for most people is a lot of money. This creates a bias towards people who already have a lot of money, and away from random people who happen to have good ideas and a strong desire to execute on them. This is something that the US more or less gets right: it cost me $55 in state fees to start DedaSys LLC as a limited liability company (even throwing in money for lawyers and the like, you're still far under the thousands it costs in many European countries).

Incidentally, it looks like Germany may be on the right track, if you look at the "Mini-GmbH" mentioned in the article. It's progress, if nothing else.

Beyond that, there is a lot more red tape in Europe, and that, I think, rather than a bit higher taxes for companies that are profitable, is the thing that, outside of culture, probably weighs most heavily on European startups.

Culture, however, is also a very key factor, and not something that will change soon or easily. In Italy, there's a lot of pressure to land a permanent job, from which you can basically never be fired. The idea of striking out on your own is probably simply not on most people's radar screens. I think culture is what means that Europe produces tons of great open source software, for example, but relatively fewer startups (if you're just counting open source startups though, Europe does ok). Perhaps this is slowly changing, but it will take a while, and without some policy changes, the incentives won't even materialize.

Returning to things that government can do, something critical that many people don't get is that government funded startups are usually big failures (see the French "Google competitor") and a big waste of money that would probably simply be better to spend in lowering taxes, improving education, or other "level playing field" initiatives, rather than having government employees attempting to "pick winners". This is a common problem in Europe, but also in many areas of the US that want to replicate Silicon Valley's success.

Going back to the US, which was Aaron's original point of focus, beyond health care, what could the US improve? At the moment, immigration seems to be the big problem: people from all over the world want to go to the US to work and start companies, but look at what kinds of hoops someone (who is coming to spend money and create jobs!) has to jump through to do so:

http://www.techcrunch.com/2008/05/02/coming-to-america-getting-visas-to-do-business-in-silicon-valley/

Embarrassing and shameful.

In conclusion, I think the common theme is that the government can't really do much to actively promote startups, but can certainly hinder them by setting too high a bar in terms of bureaucracy and fixed costs. Lowering those fixed costs for new companies, be it through at least basic health care for everyone, or lower taxes and less paperwork should be what governments aim for. Given the right conditions and incentives, bright, hard workers will do the rest.

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indent-region-as

Posted by David N. Welton Fri, 06 Jun 2008 20:35:00 GMT

At times, when I'm working with an HTML file - an article about programming, for instance - I need to include a snippet of code inside a <pre> tag or a <code> tag. It's very annoying to have to indent that code by hand, and since the language may be anything from Hecl, to Erlang, to Java to C, I don't want to use something like two-mode-mode for Emacs, so I threw the following elisp together:

(defun indent-region-as (other-mode)
  "Indent selected region as some other mode.  Used in order to indent source code contained within HTML."
  (interactive "aMode to use: ")

  (save-excursion
(let ((old-mode major-mode))
  (narrow-to-region (region-beginning) (region-end))
  (funcall other-mode)
  (indent-region (region-beginning) (region-end) nil)
  (funcall old-mode)))
  (widen))

To use it:

  1. Put it in your .emacs file.
  2. Select the region to indent according to the other mode.
  3. M-x indent-region-as - which will prompt you for the other mode to use. You need to give the function for that mode, such as tcl-mode, java-mode, ruby-mode or whatever.

My elisp is a bit rusty, so I'm sure it's possible to improve the code above, but it does the job for me.

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Craigslist not in Yahoo Search index

Posted by David N. Welton Wed, 04 Jun 2008 19:23:00 GMT

Probably not that interesting to most people, but Yahoo Search doesn't seem to have craigslist in its index:

http://search.yahoo.com/search;_ylt=A0geu5xC60ZI8BgB5Byl87UF?p=site%3Acraigslist.org+jobs&ei=UTF-8&iscqry=&fr=sfp

Google does, of course. This matters to me because I use Yahoo Search's API to collect statistics for http://www.langpop.com, and one of my sources is craigslist. I let craigslist know about the problem, and hopefully it will be fixed soon, so I can collect the stats for June!

Update

Looks like it's being indexed again, but still isn't back to where it once was, so it'll probably be a few days until I update langpop again.

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