Facebook End Game

I am a Big FAN of Facebook and like thousands of internet enthusiast I see Mark Zukerberg as a HERO . He has created a Giant distribution Platform called Social Graph . He did it on his vision of Internet and social media . Some of his moves like Newsfeed, Opening up the platform for Third party application developers , Not doing a revenue split deal with Application developers and finally Facebook Fund are nothing short of a Masterstroke .

He has turned down the deal from Yahoo and he insist to maintain FB as an independent company . Cyberspace is abuzz with the Fear,excitement and anticipation of next move of this Boy wizard . Most Frequently Asked Question is

How will he plan and time his Exit ? Will it be through IPO or through Acquisition ?

Most of the folks think that Facebook will go public at a valuation of some where between the range of 25-35 Billions USD . Thats a lot of money .IPO Advocate says that FB will go public because there is no one who can afford to buy them at the valuation FB team want .

I think it will not be a good move for FB to go public . They should sellout .

Why ?

Short and sweet answer is Due to unrealistic expectations . When Google decide to go public and filed S1 . Their earning details came as a pleasant surprise to many folks . This is not the case with FB . No matter what number they put as their revenue , it will always be a disappointment . In a hyped environment reaction to the same hype machine will work against him and it can spiral FB to doom . This is not to say that Mark and VCs who invested in FB will not get good ROI if they go public . they will , but Mark's vision of FB will be lost .

You may say that haven't we seen this before ? with Netscape ? YES . But Netscape was a pioneer and back than there was no history behind internet , things are different today we have a DOT COM Bust behind us . Netscape too got some MAD money valuation but they have a good revenue from their enterprise clients . This is not the case with FB .

Fact is that in spite of all his greatness ,Mark can't be exempted from the BIG question about viability of FB as a business and Once FB file for IPO they will have to face this Question every quarter .They have created a seemingly"Perpetual Motion Machine" . If they stay independent they will have to feed it with something . that "something" is not apparent as of now .

Why Sellout??

I think for FB ,biggest advantage of selling is that selling out would give them a reason [ Excuse ] for course correction .

FB is a Great distribution platform ,they have done a great job by separating application and Social graph . Now they control the social graph and you and I can write application to ride over it . thats all very good . but This was not something which could not be copied by My Space or Orkut . so in order to differentiate their offering Mark played a Brilliant move by opening API for free. Whole world was at their feet.

This limelight comes with its own price tag . There were many instances where a one man company made a popular service . FB user started to use it but it was hard for the programmer to sustain it , and company went bust . Leaving FB with an unsupported application and unhappy users. Our Hero made another master stroke "FB Fund" .

What worry me is that He is doing all this with VC money . not from FB Revenues . VC Funds will not last forever and in absences of a massive revenue these Question will haunt FB too . if not now than may be some years down the line .

Opening platform for free was good move but moving away from "Free" under Marks Leadership will take sheen from his image . so they need a scapegoat . and i feel impact of such policy shift are moderate if there is a change in ownership .

We have an example of GrandCentral , a startup which offered a telephone number for life , Once you have a Grand Central Number you need not to change it when you change service provider , move to a new city or whatever . They promised "One Number for One Life " very romantic .Grand Central got acquired by Google . with in few weeks of selling out . Google changed the policy and issued new numbers to existing GC users . There was a small outcry but Google silenced them by offering money for reprinting Biz cards .

Grand Shift in ideology , little flutter , little money and things are going on smoothly since , GC is still signing new users .

If Tomorrow FB wants to take a corrective action like say a 5-10% revenue split with its existing app developer or they want to sell Flash overlay adds on small widget based TV on every profile . Given his image , doing this will be hard for Mark. So he may collect the money and run to do next venture . but if some other company say Google or MSFT do it ?

Like grand central there will be little unrest and people will abuse MSFT for greed and FB will keep going . In my opinion that will be a Good End game for Facebook exit .

Extra :

Now that i am at Crystal Ball Gazing i can't resist temptation to talk about some thing else

Who will buy FB ?? Microsoft

at What valuation 16-18 Bill.

Why do i think so ? I don't think so its a guess .

These are my view and I admit that there is a possibility that I might be wrong and Mark and his team can come up with some new strategy to address these issues and stay independent . I will be a happy man if thats the case .

Whats your take on FaceBook Endgame ?

My Journey Through QLC @ Crescendo

When I posted here last time it was Feb 15th 2007. It’s been more than 60 days since then & I haven't updated my blog. I got a lot of emails from a lot of folks. Some known and some unknown, asking if I was well and why I was not posting frequently? I was touched by the fact that there are people out there whom I never met and who care about me. I gave a lame excuse of being busy but you guys deserve to know the truth. My sincere apologies for what I told you.

So why was I absent? What was keeping me busy? As I admitted above, my work load was not the real reason. Actually, I was upset, I was frustrated, I was cribbing, I was angry with the whole world, I was not able to focus on anything, I fought with my girlfriend a lot without much fault of hers [I am sorry, Sweetheart ].

You must be wondering why?? I was not happy with the pace at which things were moving. Life was getting lethargic, routine and I am getting old. Regular readers of my blog may know about this as I have talked about it here and Here. This time, this feeling was a bit more intense and long lasting.

I turned 29 this march i didn't celebrated my Birthday . Only six people wished me on B'day and three of them were too busy to attend the party. Eventually i had to cancel the celebration . Me and my room mate Jitu went to a restaurant in neighborhood and had some Thai food .

We were planning to launch our website [my dream project] and for a while. We worked hard for it but things came to a standstill as we are still struggling with some design level issues.


Every time I talk to my parents they make it a point to tell me that I am getting older and it would be hard for me to find a girl and get married in next 1-2 years. [Darn!! As if it was easy to find a girl in last 28 years].


What is it that is happening to me?? I think I am suffering from Quarter Life Crisis and now it has reached its peak. That’s why I call this post QLC @ Crescendo.

What Is QLC ???

QLC is a very keenly studied and deeply researched topic in Psychology. You can read a detailed article on Wikipedia here . In layman's language you can define QLC as

" It is when you stop going along with the crowd and start realizing that there are a lot of things about yourself that you didn't know and may or may not like. You start feeling insecure and wonder where you will be in a year or two, but then get scared because you barely know where you are now."

I am feeling exactly like this these days . i want to do a lot of things but sometime i Question myself "is that what i want to do Actually ??, is there any point In long term ? " .

My friend and roommate who was suffering form the same feeling reached the limit of his patience and resigned from his job at world's number one software company. He is study Cinematography now . sometime he is scared , sometime he is thrilled some time he is in deep thoughts but he is alert and not passive . At least life is not passing by for him . He is living it .

But Why I am like that ? or Why i become like that ? i know one thing for sure "I am not the only one . i may be the only one who is outspoken but i am not the only one . "

My Tryst with QLC [story so far..... ]

Don't tell your problems to people: eighty percent don't care; and the other twenty percent are glad you have them.
- Lou Holtz

I tried very hard to fight this. I tried every trick I knew or could think of. I tried many things to get a kick. I am writing some of them here.

• I called my friends and asked them to have dinner/lunch with me. I think I was sort of looking for solace in crowds .Few guys did come but it was a temporary solution.

• I went for a trekking and rafting holiday at Rishikesh. I was under the impression that all the adrenaline from rafting will break the inertia. It worked for a day or two but a few days down the line it was same old story again.

• I went to "The Big Chill" an exotic restaurant at Khan Market, Delhi. A friend had told me that food there is great. I thought of "Food Therapy" and ate few good dishes [like Smoked Chicken Caesar salad with Tuna dressing, Chicken in Red Wine and Rice and Grilled Chicken Breast smeared with Exotic Oriental Gravy]. The food was out of this world but not of any therapeutic value.

• On the recommendation of a friend I tried acupuncture to invoke the source of hidden energy inside me by pinching my self with a pin at three points. It was of no help. Either I didn't pinch hard enough or there was no hidden energy to begin with. But most probably my friend was a lunatic.

• I posted thrice on www.tired.com just so that some holy soul can answer but no response yet.

• I went out and met a few of the so called established, successful and enlightened people in and around Delhi. Hoping that this will give me some perspective on success. i met a leading investment banker from Goldman, an Ex-Mckinsey, a one-time entrepreneur turned VC and all three of them seemed phony to me. They were not inspiring. Of course, they were confident, intelligent and successful but I saw a vacuum.

Some other suggestion which i got from my Well wishers and i [thankfully] never tried

• Try horse riding. It will give you a sense of controlling a living thing. You will feel good and powerful. [ Thank God, they didn't suggest bull fight.]
• Go for a walk in the Himalayas….alone.
• Watch Kill Bill Part 1 & 2 in the same day.
• Become a Buddhist monk.
• Format your hard disk without taking backup. So that you will learn that you can stay alive without anything. Nothing is indispensable. :{E
• Get a tattoo on my arm saying "This too Shall Pass".
• Consult a Vaastu pundit for purifying my room and wear some Astro Stone.
• Spend some time with school going children answering their questions.
• Nurture a plant and talk to it as it grows.

[You see, the world is full of self-confessed psycho-analysts and I am blessed with the company of some of the selected specimen among them.]

A Movie , A Bridge , A White Board and A Fresh Start .

Living here day by day, you think it's the center of the world. You believe nothing will ever change. Then you leave: a year, two years. When you come back, everything changed. The thread's broken. What you came to find isn't there. What was yours is gone. You have to go away for a long time... many years... before you can come back and find your people. The land where you were born. But now, no. It's not possible. Right now you're blinder than I am.

Do as the solider did Totto.....Run away

Alfredo In Cinema Paradiso

Thou shall Follow Me , Let the dead, bury the dead
:~ Jesus Christ

As I was going through all this, Mother Nature was taking its own course and it was dropping a hint, ever so subtly. Trust me, when you want something badly the solution is just around the corner. You just need to want it badly enough. So, one day my roommate, a movie buff, downloaded an Italian movie from Bit Torrent. Its called Cinema Paradiso. This movie was exactly what we needed to see all this time.

Essentially, the message of this movie was that if you want to stand out from your surroundings you need to step out of it first. You can't keep proving yourself by "their" standards and benchmarks and then expect to end up being different from them.

Don't cling to mediocrity. Take risks. Challenge yourself. And most importantly- burn the bridge so there is no way you can go back. When there is no way to go back only then you will fight with your 100%.

So I decided to burn some bridges which were holding me to mediocrity & cemented those bridges which inspire me to move ahead and move up.

I didn't answer phone calls from some of my "friends" who were more of a social liability. I was being used by them time and again but somehow I was not able to prove it. This time I didn't care a damn to prove anything to him. I just decide that I had had enough of him in the name of decency.

I was building some bridge to future. I decide to work hard on our start-up idea. We [me and Jitu ] bought a white board so that we can discuss and brainstorm our start up plans in more details. This white board has in fact become a harbinger of a lot of positive energy and enthusiasm for both of us. We decided to fix some hours for brainstorming daily.

I decided to talk more to my GF and be more caring :) . Apart from my family and a few very close friends, she is the only one from my past I am carrying forward to the future.
There are a few more resolutions like regularity with exercises, regularity in calling mom and a few more.

I realized that I have waited enough for life to start. I will NOW do what I always wanted to do. And friends, I have been into it for a week and the experience so far is very good. I was feeling especially good today. So I decided to share this with you guys.

It's a fresh start. I think it will be a good journey. I will keep you guys posted.

Welcome to the Joyride !!!
:)

Trying SlideShare

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Yesterday I signed up as a Beta Tester for Slideshare . [Thanks to Amit & Jon for sending the invite] .

Slide Share is a free service launched by Uzanto for sharing presentations and slide shows. You can upload presentations, tag them, embed them into your blog,search presentations uploaded by other users . In short its a perfect solution to circumvent the email attachment way of sharing your presentation . you can read a more extensive review of service here .

I am impressed by slideshare . I admired the Ease of sign up , use and sharing it offer This is what we come to expect from folks @ uzanto . Though it still lacks in some functionality like Custom Animations are lost (you only get one slide at a time as a single object), and downloading the hosted presentation . still as they are in Beta yet so Its really a neat Application by any yard stick.

On a second thought Exclusion of These feature might be a conscious choice as Jon is a Getting Real Fan and Know that "It is human nature to be unsatisfied ".

TechCrunch described Slideshare as a YouTube of PowerPoint and i agree with him . With wirtely and Google Spreadsheet in their stable Google Guys will be looking for a Application to complete the G Office jigsaw . In fact they have started the process of Backward integration . Google is famous for snapping promising start up in Beta . So stage is set for slideshare . Good Luck for Team Uzanto .

Godspeed

P.S : "I am trying to embed My Presentation on "Web 2.0 & Power of Default" using Slide share . I used this presentation during my session at BarCamp Delhi . Surprisingly that's where i meet Jon for the First time . is it just a co-incidence ? May Be May Be Not ."

Green Ocean ,Blue Ocean ,Astronomer & Astrounaut

This saturday i attended a event organized by Tie-BoA . Agenda of this event was to announce a collaboration /Alliance bitween Tie and Band Of Angeles as an initiatvie to nurture a Silicon Valley like Eco System in india.

I am writng this post to highlight one aspect of any such event which i have seen in all of the gathering sometime under the surface sometiem openly .

Its the Silo or Communication gap bitween Investor and Enterprenuer .

Be it VC or Angel , Institutional or Individual there is always a conflict of interest bitween both of the parties . As a matter of fact this phenomena is not confined to this country . Even in developed economies tales of VC-enterprenuer conflict is commonplace.

This used to baffel me when i started attending such gathering around a year back . by every logic i can think of , VC and Enteprenuer should work togther and it should be a win-win deal . but after one year and 10-12 such gathering i can safely say that this is hardly the case .

what is suppose to be a "Meeting Of Minds " often Turns in to a "Clash of Heads" :) why ?

As an aspiring enterprenuer i have a significant interest in exploring answer to this Question.So that when i approach potential investor in my venture i can avoid all that .

Before i start let me tell you a very interesting but true story to set the context

After three moths of talks and many presntations when it was time to decide . A leading Ex-i banker Turned VC said to a budding indian enterpreneur "u seems to have a good idea and i don't really doubt your credentials , team is ok . but your IDEA can be easily copied by big guys ".

He answered "yes sir! it s very likely that they can . but unlikely that they will" .

VC said "what stops them to enter in your space. ?"

He said "Well only thing which stops me is lack of money to hire programmers and run my operation but big guys don't have that constraint so i guess nothing will prevent them if they want to ,but they will not ."

but VC was ex I Banker and Ex MBA with the habbit of throwing TLA (Three letter Accronym ie ROI,NAV,TVC,TQM,EBIDTA etc ) in every sentence and enterprenuer was a street smart guy who despise all the "Theory " about business.

so VC said " what i am worried about is how you will create a Blue Ocean ? "

By this time enterprenuer was totaly frustraed and decided that he will not work with this guy even if he give me a million $ . so he said in a mocking tone

" i will take a "Green Ocean " of Money from you and Turn it into Blue Ocean of Commpetieve Advantage and thus we will have an ROI which will show dissporoptinate value creation .We will disrupt the existing eco system of our Industry and we will alter the risk reward equilibrium for ever . [LONG PAUSE]

Sir I don't want to work with you now so I am telling you the truth , I don't want your GYAN . you can't run a kirana shop with all your TLAs. Truth is, idiot like me come to you for your money Because thats what you are good for.

don't trust me ?? ask your wife why she married you . "


Needless to say he didn't get the funding :) .


I don't think that the gentelman's response was justified by any yardstick .NO MATTER WHAT THE PROVOCATION WAS . But still i choose this example because i wanted to highlight the deep rooted despise an Enterprenuer have toward all this management lingo. if there is a story which show it in true color this is the one . The silo we are talking about is very very big .

Green Ocean :

Marriage is the only war where you sleep with the
enemy.                                     

- Gary Busey

I think this Gary fellow never raised money from a VC

-annonymus enterprenuer

About a year back, i attended a talk by legnedary VC Jhon Doerr of KPCB. He said that in every booming market where there is a possibility of making quick money ,there are two type of people . Mercenary and Missionary .

Mercenary wants to create quick wealth and Missionary wants to create a great product /company. Mercenary is driven by greed & Missionary is driven by sense of achivement . and trouble is that Often It is not easy to differentiate bitween the two .

In the context of our story the mercenary is the one who is only interested in "Green Ocean" of money .
I have seen some enterprenuer who are so much obssesed with funding that for them success of venture equate to securing funding only. On the other hand we have heard that in some of the greatest success stories of our times Promoter end up having only a minority shares at time of exit .

Collective equity founders of yahoo or Excite or even SGI were less than 25% at the time of IPO/acquisiton . sadly in india we don't even have these numbers available with us . i really don't know what to dedeuce from this observation . i am in a fix .

In the light of these fact when VC and Enterprenuer approach each other they always seems to believe that the guy on the other side of the table is interested in "Green Ocean" only. This leads to a feeling of mutual distrust. I seriously believe that its a job of enterprenuer to take initiatvie to comfort the VC and Clear the mist .

Blue Ocean :

"Big companies are good at extracting the value from existing products, but bad at creating new ones. Why? To start with, most big companies have some kind of turf to protect, and this tends to warp their development decisions.

For example, Web-based applications are hot now, but within Microsoft there must be a lot of ambivalence about them,because the very idea of Web-based software threatens the desktop. So any Web-based application that Microsoft ends up with, will probably, like Hotmail, be something developed outside the company."
Paul Graham

BLUE OCEAN .This is the latest buzz word in venture circle :) . Very often investors ask this Question .

What stops Yahoo or Microsoft or Google or IBM (Darn !!!) from entering in your line of business ?

and the only correct answer i can think of is Nothing .

Nothing can stops Microsoft from opening a Hamburger joint in Subway and compete with Macdoanld . but the Question is will they do it ?

May be ,May be not ? Will they be doing it before a small nimble footed startup ? certainly not .

It takes a month to put a server in server farm at Redmond ,so much for flexibilty and agile business.

Funny thing is investor talk of having Blue Ocean of Competetive advantage . in my view unless you are in to very very hard core technology ,startup can have only one advantage .
Advantage of size and low cost operation.(not sure if its a "Blue Ocean" or not ) startups are basically experiment . and experiement can go wrong .

Yahoo should defintley come in my line of business .that is the last think we should worrry about . i will be a fool if they don't .

Million dollar Q is if they came ..will they Buy me or Copy me or Buy my competietor ? well i think this depend on three factor

1) When they discover me ? Pre Launch or Post Launch

2) How good a job i have done ? (userbase ,scalability,Brand etc)

3) Do i have the right connections to close the deal ?

I think if VC really wants a "Blue Ocean" they should create one by Taking care of #1 & #3 so that enterprenuer can focus on #2 . That is the only "Blue Ocean" a startup can afford . :)

So i strongly believe that the concern about "Blue Ocean" and fear of being copied by Big guys are baseless. isn't that the opportunity for which all of us are here ? isn't it the fun ? :)


Astrounaut & Astronomer :

What is the diffrence bitween an Astromomer and Astronaut ?

Astronomer study the space from a distance , chart a path for ship , do the calculations, warn about any possible metroide which may hit and then clears the way for astrounaut . Once in outer space astraunaut is on his own . He steer the ship on his own judgement with ocaasional input from ground station .sometime all the collective wisdom of astronomers won't help him and he will have to act on his gut instinct if he wantto come back safely .

Yet every kid want to be a astronaut and hardly any one know about astronomer till he start preparing for his voyage .

launching a venture is like a space voyage where VC is like astronomer ( because of his experience) and enterprenuer is astronaut . This is the best analogy i can come up with to expalin my understnading of an ideal relation ship bitween VC & Enterprenuer . Both are equally important for a succesfull space voyage .

There should be an exchange of ideas and clarity of communication bitween them . Tendency to one up each other won't help any of them .

I admit enterprenuer enjoy moe lime light but if you remove the exception of Microsoft i am yet to see a success story where VC was not significantly involed in shaping the destiny of venture (and his own by side effect:) )

This is my Two cents on this issue , i would like to have your feedback on this .Please help me to get it right :)

P.S .I know it is a very long post so if you are still reading . Thanks for your patience .I hope it was worth your time :)