kid mercury http://kidmercury.posterous.com Dedicated to solving poverty by re-building the world's money supply. posterous.com Tue, 22 May 2012 10:42:00 -0700 Mapping Out the Virtual Currency Revolution http://kidmercury.posterous.com/mapping-out-the-virtual-currency-revolution http://kidmercury.posterous.com/mapping-out-the-virtual-currency-revolution

As those who have been following me for years now will know, I'm all about the virtual currency revolution. It is, quite literally, what I live for. 

So I find it very frustrating that there has been almost no real progress on this front. 

Well, that's a bit unfair. We have seen some progress. Such as:

1. Paypal. The fact that we have a real Internet payments solution is step one. Props to "the Paypal mafia" -- Peter Thiel, Max Levchin, Elon Musk, Jeremy Stoppelman, etc -- for getting Step One of the revolution accomplished. It is worth noting that Thiel's original vision for Paypal was to create not just a payments solution, but rather an Internet currency. Regulation thwarted the dream so they had to settle for building a billion dollar payments company. Not a bad deal for them, but a warning for those who are interested in picking up where they left off: regulation is the big obstacle. If you're not up for the political challenge, you've lost already. 

2. Global sovereign debt crisis. The past 12 years in the US and even longer in other parts of the world have been characterized by significant price inflation, deterioration of savings, and obscene levels of debt that cannot be repaid unless the debt is formally cancelled (unlikely) or is inflated away (in the process of happening). This crisis is important because it illustrates the need for monetary reform. If it weren't for this problem, there would be no need for a solution in the form of the virtual currency revolution. 

3. Political tension. Related to the aforementioned point is that the political climate around the world is much more tense. Arab Spring, Occupy Wall Street, Tea Party, etc. Granted, none of these things have made much of a dent in anything, but the anger is there. And that's the first step. I will note that the banksters who own the nation-state currencies will not simply give away their empire easily. It will not be like, "oh, you guys want a fair currency.....okay fine we'll stop stealing via inflation and give you sound money." It will be more like, "Don't even think about complaining. If you try something we'll put you in jail. We own you." This is why I harp on 9/11 all the time, because that is the kind of non-violent political intensity that is needed. Much more than mere intensity is needed, though; the right political strategy is needed. More on that later, although the short answer is that you need lots of small organizations working together to take down a big centralized monetary system. 

4. Gold. Bitcoin will never work. Why? Three reasons, the first of which is electricity. What happens if the lights go out and stay out for a while? If we have a monetary system that is ENTIRELY digital, that means we're in trouble if the whole grid goes down. Moreover, try explaining Bitcoin to your grandmother, or to a pre-schooler. Actually, try explaining it to a cryptography expert, lol. Lastly, something can only be a viable currency is the super rich people -- richer than anyone reading this, and probably all the people reading this combined -- believe in it and are committed to it. Right now, the inventor of bitcoin, a guy allegedly named Satoshi Nakimoto who is suspciously anonymous, is the largest owner of bitcoins. So what happens if Bitcoins rally and he decides to sell? The same thing that happens to any asset when the major shareholders sell: the price goes down. The super rich are commited to gold and fine art. A digital currency that is somewhat relational to gold is needed. Moreover, though, the monetary policy that emerges out of virtual networks must be coupled with a fiscal policy as well. In other words, Facebook or whoever doesn't just need to have a currency that is relational to gold; they need to have a fiscal policy for how they are taxing users and what they are going to do with this tax money. This is how the major crisis in governance gets resolved as well, and how Internet companies do things like revolutionize urban transportation, end homelessness, and reform education. 

5. Game play. You can now pay for digital media with Facebook Credits. I'm not very bullish on Facebook, as recent blog posts illustrate, though if there is one hope for the company, it's in Facebook Credits. More importantly, we are now seeing how a virtual currency can be introduced that can get mass adoption. Game play is the meal ticket. 

The good news is that this is the plan and all the elements are within reach. The bad news is that we are still so far off, so much education is needed, and, most importantly, we need a lot more political will. 

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Sun, 20 May 2012 18:34:04 -0700 Now that bubble 2.0 is popping, the real fun can begin http://kidmercury.posterous.com/now-that-bubble-20-is-popping-the-real-fun-ca http://kidmercury.posterous.com/now-that-bubble-20-is-popping-the-real-fun-ca

After fridays weak IPO for facebook it seems like bubble 2.0 is popping. Apple has also been tumbling and so did all the social media stocks.

I believe capital will begin to flow out of the tech sector. As the IPO window closes, expect the secondary market to get hit hard. The whole game is still designed to fuel the IPO ponzi scheme which simply is not viable. Dividends are the only real option.

As the IPO window closes, the secondary market will lose funding, and so will the whole tech VC sector. So what happens to startups?

Its simple: they have less capital and so they will need to focus less on scaling and more on immediate revenue. This is exactly what should have been done were it not for the temptation of easy money that always pulls folks in to bubbles.

So now we begin the transition to smaller, niche opportunities that require much less funding to get to profitability. Crowdfunding will also begin its ascent.

For those looking for the next bubble, my money is on the mining sector- - specifically gold and uranium miners, but also graphite, rare earths (again!), and eventually base metals like copper, nickel, and iron. Uranium in particular is the best opportunity I have ever seen.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Fri, 18 May 2012 14:28:48 -0700 Long Media, Short Software http://kidmercury.posterous.com/long-media-short-software http://kidmercury.posterous.com/long-media-short-software I spent a year out in San Francisco -- I just moved to Chicago at the beginning of April. I spent a fair amount of time trying to weave my way into the tech scene, and to get the attention of investors. 

There were a number of reasons I had trouble fitting in, although one of the biggest reasons is that I'm not a software developer. There is this mentality in Silicon Valley and in the cities trying to copy the valley (New York) that software development is the be all end all. That is why there is this big shortage for developers and and developer salaries are very high. Designers are commanding a premium too. 

I'm not convinced in the value here. Great developers are great, but industry-wide, I see too much clamoring for anyone who can somewhat call themselves a coder. Instead, I believe a better focus is on media production. Media production, sometimes called content marketing, is the key to search engine optimization and social media optimization. 

Facebook is a software development company. Google is a software development company. Apple is hardware, and Amazon is a platform company. But I'm increasingly convinced that "the next big thing" is going to have its roots as a media organization. Such a company will have a marketing advantage that the big players cannot compete with. Media companies will also do much better relative to software-centric companies as we enter the Age of Fragmentation, in which it becomes understood that 1,000 niche social networks are collectively far more valuable (for all stakeholders) than one mega social network (i.e. Facebook and Twitter) -- and that the real way to build the mega-network is to combine a thousand independent small ones, not try to create one big one with 1,000 different sub-groups. 

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Fri, 18 May 2012 06:15:14 -0700 Thoughts on How to Value Internet Companies http://kidmercury.posterous.com/thoughts-on-how-to-value-internet-companies http://kidmercury.posterous.com/thoughts-on-how-to-value-internet-companies Today is the much heralded Facebook IPO. I expect the valuation to go to at least 150 billion, perhaps much higher. Not to say that I think the company is worth that much, only to say that I think the valuation will go there. 

But that is Facebook. Of far greater concern to me is my startup, which I'm in the process of selling. I have a meeting with a prospective investor today. (Wish me luck!) This is the fifth prospective buyer I've come across. The good news is that there is decent interest and I think I can get a price and terms that I like. Here are some thoughts I have on the valuation process and the process of selling in general:

1. Know your metrics -- daily unique visitors, recurring visitors, revenue, profits, etc. Then find comparable companies, find the metrics and valuation for them, and then apply that to your startup. For instance Yelp is worth 1.2 billion and has 66 million unique visitors; this comes out to about 18.20 per unique visitor. Of course, I think it is better to find companies from the same niche as yours. If you run a property that is largely about advertising, know what a lead is worth in your neighborhood. 

2. Know your options. The more options you have, the more leverage you have to negotiate. Having multiple prospective buyers gives you options. Having positive earnings and positive cash flow gives you options too. I'm fortunate that I have both, and so I have some options here. If I'm not able to get a price I find satisfactory, I can simply hold on to it. With many social media properties, valuation has potential to continue increasing as the property acquires more links, more registered users, and more user-generated content. 

3. Get help. I've got a company I work with, run by some close friends, that is managing the sales process for me and talking to prospective buyers. I found this to be very useful as sales is hard work and requires lots of contact to get in front of the right people. I think there is a great opportunity in being a web broker -- sort of like how there are many real estate brokers in the real world, and how it can be useful to work with qualified, honest, talented, diligent ones.   

I suppose these ideas are nothing new, and in fact can be applied to almost any business. 

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Sat, 12 May 2012 10:43:37 -0700 Selling My Startup http://kidmercury.posterous.com/selling-my-startup http://kidmercury.posterous.com/selling-my-startup In the five years since I co-founded InformedTrades, I've had a number of offers to buy the site, some of which progressed into fairly deep talks, but none of which came to fruitions. I'm now in the process of listing the site on Flippa.com to try once more to sell the site. I believe it's an outstanding property for the right owner, but as I'm just one person, it's too much work to grow it. I simply need more resources; without them, I'm not making meaningful progress, and so it is better to sell it to someone who has the resources to make it grow and live up to its full potential. 

The value of InformedTrades is that it is attracts community-generated content in the lucrative and competitive forex niche. If you're looking for an SEO/social media foothold in this space, I think a property that can generate quality user-generated content is valuable -- perhaps even necessary in light of how competitive the niche is, and how expensive alternate strategies are in comparison. 

Ideally the buyer would keep me on to help manage the transition, or would be content acting as an investor. 

I have a co-founder who is not involved though still a shareholder, so there is the option of buying him out and re-capitalizing the company.

If you're interested, please email me at actolearn [at] gmail [dot] com. I think this has potential to be a great opportunity in the right hands -- such as a forex broker or an established and ambitious SEO firm. It is not a big site (2,500 unique visitors per day, 30,000 registered members), so there is an opportunity to buy it at a fairly inexpensive price (a few zeroes shy of Instagram's billion dollar price tag :)), invest in improving and marketing it, and reap the rewards accordingly. 

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Thu, 10 May 2012 18:36:09 -0700 New york hard assets conference http://kidmercury.posterous.com/new-york-hard-assets-conference http://kidmercury.posterous.com/new-york-hard-assets-conference

Ill be in new york city for the new york hard assets conference may 14 and may 15. If you're attending, please feel free to introduce yourself. Ill be the 31 year old indian guy there.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Thu, 26 Apr 2012 13:33:51 -0700 Situations Where People Want to Pay http://kidmercury.posterous.com/situations-where-people-want-to-pay http://kidmercury.posterous.com/situations-where-people-want-to-pay Situations where people want to pay more are something I spend a fair amount of time thinking about. 

One such situation is when hanging out with friends. For instance, last night I went out with a group of friends to a bar. The bill came and we went through the usual nightmare-ish process of dividing the bill. Because it is poor form to be anal about the bill -- doubly so in the group that I was a part of, in which many people were meeting for the first time through friend of a friend connections -- we all chipped in too much. So then we had to go through the process of giving cash back. We ended up in a situation where there was a $20 bill that no one felt comfortable taking because it would have met someone didn't pay enough. 

That was interesting. But it gets better!

I was probably the poorest person there, bunch of rich people I was rolling with last night. Not like I'm starving but I'm still working way too much for too little and they are all doing better than me financially. Anyway, one guy who knows me well enough to surmise that I was probably the poorest person there tried to push the extra $20 on to me; I'm not 100% sure, but I suspect he was doing this out of "hey, you're the poor one here, so you take it" -- of course it would've been bad form to say that explicitly, so he was trying to gently and politely suggest the idea (or at least that is how I interpreted it). I still felt uncomfortable taking it because it would've meant I got a bunch of drinks and food for a net cost of $5, which is simply too low. So, he ended up reluctantly taking it since no one else would, although vowed to buy drinks for folks next time. No one really cares and all suspect it will get worked out evenly in the long run anyway. 

I think this dynamic is worth considering when asking what types of revenue models will work in the context of social networking. Here are some ingredients:

1. Loose ties. When I'm hanging out with my older brother, who is much wealthier than I am, I don't even offer to pay. Because he's my brother so there is no shame and no expectations to the contrary, that is possible. With a loose social network, though, that type of behavior is uncomfortable for everyone. So incentives to spend more for reputation purposes are important in areas where there are loose social ties. I think that's an important idea for social networks.    
2. Small group. If this was a group of 300 million people, no one would care and people might feel more comfortable not paying because they could get away with it and because they do not have a connection to the group. Consider, for instance, tax avoidance. This is another piece of evidence suggesting that when it comes to social networks, bigger is NOT better. That's something Silicon Valley and those immersed in Bubble 2.0 do not really get. 
3. Bill complexity. It helps when there is bill complexity; when food is being shared, when one person only has a credit card, when some folks order more drinks than others, when meal prices vary, etc. The more complexity and ambiguity there is, the more people will want to make sure they cannot be accused of being cheap; they will put in extra as insurance. 

Three ideas is enough for now. I'm going to dwell on this a lot more. 

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Sat, 21 Apr 2012 15:44:00 -0700 Slide Deck for The Business Plan That Saves the World http://kidmercury.posterous.com/slide-deck-for-the-business-plan-that-saves-t http://kidmercury.posterous.com/slide-deck-for-the-business-plan-that-saves-t

Well, I don't really think I'm appropriate for investors, and I've stopped making any meaningful efforts at securing funding. But I still dream of building a business that changes the world, so I thought I should at least put up the slide deck I made last year, and archive it on this site. It's extra bad ass to self-fund a revolution, but realistically speaking, external capital is usually required to do something world changing. 

Anyway. Some of the stats in the slide deck below are outdated, but the basic story holds true.

If you're an investor in the Internet space and are up for this challenge, please feel free to reach out. I don't fit into the Silicon Valley mold -- which is precisely what should pique your interest! But it will come with its own set of challenges, for sure.   

 

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Sun, 08 Apr 2012 04:21:44 -0700 crowdfunding infographic http://kidmercury.posterous.com/crowdfunding-infographic http://kidmercury.posterous.com/crowdfunding-infographic
Here's a great infographic on crowdfunding.

<img src="

Media_httpcrowdfunder_vxtik
" width="903" height="2481" alt="Equity Crowdfunding - crowdfunder.com"><br><p><a href="http://crowdfunder.com/equity-crowdfunding-infographic.html" >Equity Crowdfunding - crowdfunder.com</a></p>

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Fri, 06 Apr 2012 17:09:00 -0700 Crowdfunding Makes Venture Capital Scalable http://kidmercury.posterous.com/crowdfunding-makes-venture-capital-scalable http://kidmercury.posterous.com/crowdfunding-makes-venture-capital-scalable

JOBS Act signed into law today. So far it looks decent, people are
moving on the crowdfunding part and are excited about it. That's
important, that people believe in it and see the dream. That's what's
going to make it happen.

Dave McClure has a post saying he wants to make venture capital scale:
http://500.co/2012/04/06/scaling-venture-capital/

Crowdfunding is what does that.

Traditional VC cannot scale. It is a high touch business, they are
investing a lot of money and that is not something you can do
frivolously. That is quality, it is luxury, it is prestigious, it is
select. Crowdfunding, on the other hand, is none of that. Crowdfunding
is mass market, retail, generic. The right crowdfunding model makes VC
scale.

But what is "the right crowdfunding model"? It goes a little something
like this......

1. You still have general partners that are smart and know what's
going on. So this is not about some random person plopping down a
C-note on some stupid startup.
2. Rather, the general partner has a broad framework they operate
from. If a startup meets XYZ criteria, and if after a 30 minute
interview with the founder the general partner in the fund is feeling
a good vibe, they get funded. We see this is A LOT like the
YCombinator model. And that's all Crowdfunding ultimately is, just
YCombinator on steroids.
3. Well, there are a few differences. For one, the selection criteria
is going to be very rigid. It's not because they need super high
quality founders, but rather each fund will invest in a very specific
type of company -- this is needed to create network effects, which is
what ultimately enables scalability. For instance, my dream, and what
I'm ultimately hoping to build some day if I can get to that point, is
a fund that invests in subject matter experts. We give them very
standardized, rigid terms; for instance, they must use XYZ software,
they must incorporate game play in such a manner, etc. Basically, the
general partners in the crowdfund are responsible for crafting all the
scalable elements that each startup in the fund will use. For funds
making engineering investments, this means dictating API policies,
what software languages and databases are used, etc.

At this point there are likely to be a few gripes. Such as:

1. Doesn't this kill entrepreneurial spirit? Isn't this the Man
holding the entrepreneur down? Sort of. Crowdfunding will not be about
finding the next Steve Jobs or the next Jeff Bezos. It's going to be
about taking hardworking people and letting them be entrepreneurs.
Think more like a franchise operator.
2. Why can't a traditional VC fund do this? How does this relate to
Crowdfunding? A traditional VC fund is about investing in brilliant
people. Traditional VC funds are looking for the next Jeff Bezos. You
don't want to put too many rules on a genius like that. You want to
invest in only a few of them, and you want to invest a lot in them. In
other words, traditional VC funds are going to be the luxury, high
quality option for premium entrepreneurs. For your run of the mill
entrepreneur, they go to crowdfunding.

And crowdfunded entrepreneurs aren't going to get a lot of hand
holding. Ultimately, some may get as little hand holding as customers
of Amazon get. The general partners of the crowdfund, if they do it
right, will enable the funded entrepreneurs to solve their own
problems via peer production. That is, of course, how it is supposed
to be.

This will change the game for angels too. Right now an angel puts down
what, something like 50k in seed money? Now an angel is going to put
down 5k, and you're going to get 10 of them -- or maybe even 100 of
them -- in on a deal. So an angel who would normally put down 50k, or
25k, in a single company will instead put that same amount spread
across 50 or 100 companies.

Which leads to the next point: what's the exit here? There's only one
acceptable answer: dividends. Well, at some point crowdfunding will
lead to new financial exchanges designed to make shares liquid, and
that is a very important development. But first, these businesses need
to get to cash flow positive very, very soon. And when they do,
they're going to need to initiate a dividend policy. This is not like
Twitter or Facebook where you have a few bazillion rounds and you
raise a few bazillion dollars. You raise one round and you need to be
able to get users and issue dividends off that. Now, there may be an
opportunity for some especially promising crowdfunded startups to flip
to accredited investors, but I don't think that's the real opportunity
here. The Internet is getting fragmented and the real opportunity is
in creating lots of small markets. Crowdfunding will create less
flipping and more small businesses that get to modest profits and
positive cash flows quickly.

That's the dream. That's how funding becomes scalable. That's how jobs
are created and wealth is created, bottom up style. It's going to
change the world.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Sun, 25 Mar 2012 16:07:57 -0700 Crowdfunding the creation of new cities http://kidmercury.posterous.com/crowdfunding-the-creation-of-new-cities http://kidmercury.posterous.com/crowdfunding-the-creation-of-new-cities

The crowdfunding stuff is all I been thinking about lately. Im marvelling at how it looks like its going to pass and be fairly in tact.

Anyway, like I mentioned in my last post, crowdfunding will start with filling the gap and funding businesses to small to be of interest to VCs. One strategy I been thinking about is a fund that invests in local businesses in a given region. I think this is how new cities can be created, and how old cities can be taken over by new funds. It also sets the stage for everything to be well integrated into a single network managed by the fund/platform that crowdfunds the new city.

The business I am working on is designed to go down this trajectory (if I can gather enough momentum and profits in building niche subject matter communities online first). But im confident someone will go down this path, and that it is a vital part to how the global economy gets rebuilt.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Sat, 24 Mar 2012 07:06:49 -0700 Crowdfunding starts with lifestyle businesses http://kidmercury.posterous.com/crowdfunding-starts-with-lifestyle-businesses http://kidmercury.posterous.com/crowdfunding-starts-with-lifestyle-businesses

Crowdfunding is immensely disruptive. All disruptions start by finding a customer group that is currently not being served by existing solutions.

Venture capital is looking for huge businesses they can deliver to their bosses in the banking industry (ie Goldman sachs). They are not designed to fund lifestyle businesses. This is where crowdfunding steps in.

After iterating and gaining momentum with lifestyle businesses, the right crowdfunded platform can swim upstream and disrupt the bigger markets venture capital and Goldman sachs target.

The end result is a complete transformation of how businesses are financed and a move to more power outside of SEC controlled public markets.

Of course, as Goldman sachs recognizes this situation, they will strike back. So the regulatory battle is far from over.

Prior to the passage of the JOBS act in the US, I thought crowdfunding would take off outside the US. I still think this is very probable, but the JOBS act makes the US competitive here. Of course corwdfunding is ultimately an international game, and thus serves as another milestone towards the world beyond the nation state.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Thu, 22 Mar 2012 19:26:17 -0700 Why the Crowdfunding Bill is Something Special http://kidmercury.posterous.com/why-the-crowdfunding-bill-is-something-specia http://kidmercury.posterous.com/why-the-crowdfunding-bill-is-something-specia Textbook disruptive innovation here. It opens up a new market --
individuals who want to invest but are not accredited investors. The
creation of new markets, new customer groups, is what drives jobs and
wealth creation. It's what makes economies more efficient.

On a long enough timeline, this will change everything. First, because
the Internet makes it easy to crowdfund anything -- as Kickstarter
illustrates -- this changes the way ALL businesses will get funded.
That's why the SEC doesn't like it and why a lot of established
incumbent investors will not like it, because they are going to face
the innovator's dilemma. A crowdsourced fund is going to get all the
small money the accredited funds cannot get, and will eventually be
able to swim upstream to disrupt huge billion dollar funds.

This will bring more liquidity to markets. It will enable more
financial acquisitions and mergers -- investment banking type stuff --
at a small level.

For any entrepreneurs out there, one huge business opportunity will be
in creating the "covestor of crowdsourced investing" -- meaning a
platform that will allow me to follow another individual who is making
lots of small bets in companies taking on crowdsourced financing and
copy his/her investments. the "covestor of crowdsourcing" will also be
in a position to enable these securities to be traded in some way, so
that the liquidity public markets offers will be available in
crowdsourced financings.

There are likely to still be some regulatory issues, but this is a
major breakthrough, and suggests we could actually get more victories
like this. The financial revolution is perhaps the most important part
of the transformation to a new world order, as most problems stem from
poverty -- both the mild kind (i.e. not having savings, living
paycheck to paycheck) and the extreme kind (not having food or
education).

The people who worked hard to get this pushed through deserve some
serious credit. Of course in many ways it was a crowdsourced effort
which is very fitting.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Wed, 21 Mar 2012 10:25:00 -0700 There are Two Ways to Scale Your Business http://kidmercury.posterous.com/there-are-two-ways-to-scale-your-business http://kidmercury.posterous.com/there-are-two-ways-to-scale-your-business

Scaling your business is tough. I've been trying to do it for the past three years, and have yet to attain any meaningful progress. So the first thing most entrepreneurs attempting to scale will need is a relentless sense of determination.

But beyond that, there are two strategic viewpoints from which you can operate:

1. Sell more things to your existing customers. Specifically, understand deeply what the experience your customers want, and then work backwards and create it. This is what Amazon is doing with its Kindle service: they knew their customers bought books, and they knew if they made the right e-book service, it could be a way to get more book sales. The metric to watch here is revenue per customer.

2. Look at your existing assets and find ways to get more money out of them. This requires a deep understanding of your core competences and what your business can do well. To use Amazon again as an example -- because there is no better entrepreneur I can think of than Jeff Bezos -- Amazon realized it had the assets needed to offer its own cloud solution, and its own shipping service for small businesses. Return on assets is the metric to watch here.

 

 

As Amazon illustrates, growing your business can take you in wildly different directions. This is not necessarily a bad thing; in fact I would argue when it is done properly it is an outstanding thing. Of course, if only it were as easy as writing this blog post! 

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Wed, 07 Mar 2012 08:36:24 -0800 Solving the student debt crisis http://kidmercury.posterous.com/solving-the-student-debt-crisis http://kidmercury.posterous.com/solving-the-student-debt-crisis

Its no secret student debt from college is a big problem. The stats are depressing.

Here's the solution I've been thinking about:

1. Bush jr passed a law saying that college loans cannot be escaped via bankruptcy. That law needs to be revoked asap.

2. Currency crisis naturally unfolding will help here, as it will devalue debt that is at fixed interest. An outright cancellation is much bette, though, and should be pursued.

Of course those ideas, while they are the most direct, require government cooperation that I think is unlikely in our current world. What can entrepreneurs do?

1. Hire employees with lots of debt. Give them a compensation package that involves housing and transport; if done properly, this can reduce costs for all and make debt burden more tolerable. Remember a lot of these people will have such high debt burdens that they will fail many creedit checks and thus have difficulty securing a place to live. So this solves that problem too.

2. Ideally employees are compensated with a game currency they can increasingly use within the world offered by their employer, while getting dollar bills to pay debt. Tax issues will be a big challenge here, but one I think the right company can address.

This is a capital intensive model and requires an organization that can generate a positive return on employees that may not have directly monetizable skills (ie liberal arts degrees). I believe a social media company, if properly structured, can succeed here. In many ways it is the kind of company I would like to help build. But I generally have enough on my plate with paying the bills and saving up to hire others, so it'll be a slow ride for me. Hopefully others can get involved to speed the process up.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Wed, 07 Mar 2012 04:36:50 -0800 Jeff boss, the NSA, bush jr's coke habit, and 9/11 http://kidmercury.posterous.com/jeff-boss-the-nsa-bush-jrs-coke-habit-and-911 http://kidmercury.posterous.com/jeff-boss-the-nsa-bush-jrs-coke-habit-and-911
2012-03-07_07-30-38_10

I just saw these signs in new york city.

I never heard of jeff boss before. His story doesn't surprise me and I suspect it may contain some truth. I'll research it a bit more to see what comes up.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Mon, 28 Nov 2011 08:18:21 -0800 San francisco hard assets conference http://kidmercury.posterous.com/san-francisco-hard-assets-conference http://kidmercury.posterous.com/san-francisco-hard-assets-conference
2011-11-28_08-06-25_728_kpt

At the san francisco hard assets conference. Great event, it was free and tons of mining companies, presenters, and even panels. I love this from the perspective of a small cap investor; it is like getting the chance to earn returns like what technology investors in private market companies get but with the accessibility of public markets. Personally, I use these conferences as part of the plan to develop a portfolio I believe can generate 10X return over a ten year period, with the risk of losing basically the entire investment.

These conferences are immensely valuable and educational. Gives me a ton of ideas for disrupting the conference business too.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Tue, 11 Oct 2011 13:20:36 -0700 Morals 2.0 http://kidmercury.posterous.com/morals-20 http://kidmercury.posterous.com/morals-20

A big problem with operation wall st, tea party, and the whole big govt mess in general is a crisis in morals.

Morals are supposed to come from law. When law is immoral, we have a problem.

And so, part of the solution is getting back to the basics and understanding what is moral vs immoral.

Is being rich immoral? Is a progressive tax system in which the rich pay a greater percentage immoral? Is it immoral to require vaccination in the name of the public good? What if the science on this matter is unclear- - what is moral? If the majority of govt spending goes to fraudulent wars, is paying taxes moral, immoral, both, neither, or it depends?

The potential questions are infinite. The destined revolution will require a solid enough moral footing to claim legitimacy as government.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Fri, 30 Sep 2011 05:44:06 -0700 Amazon's tablet strategy is awesome http://kidmercury.posterous.com/amazons-tablet-strategy-is-awesome http://kidmercury.posterous.com/amazons-tablet-strategy-is-awesome

Bezos is the man, easily my favorite technology superstar ever.

Now before I lose my kook cred, I should note that bezos is a member of the bilderberg group. This is unfortunate and raises an alarm, as any kook can tell you, though I need more evidemce before casting the dude as some horrible villian. But it is worth noting and discussing, for sure.

Anyway, there are a few key points to take home about amazon's tablets:

1. Media companies will leverage open source software to build cheap tablets that serve as direct sales channels. Building off a forked version of android is the perfect startegy.

2. This has the potential to disrupt the entire computing industry. The rules of disruption are to commodtize your opponent's profit center, introduce your own profit center, and reduce cost by focusing less on where incumbents are overshooting. Amazon clicks on all cylinders in this regard.

The real opportunity, though, is in tablets and e-readers for niche communities. As a small-time entrepreneur, I hope amazon sees this trajectory and works to develop the infrastructure for it. I am confident that is what will occur.

Kudos to amazon for being so awesome. A role model and an inspiration for others.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury Sun, 18 Sep 2011 16:44:57 -0700 Max levchin, peter thiel, and the alleged death of innovation http://kidmercury.posterous.com/max-levchin-peter-thiel-and-the-alleged-death http://kidmercury.posterous.com/max-levchin-peter-thiel-and-the-alleged-death

At techcrunch disrupt last week, paypal founders peter thiel and max levchin dissed all american industries when they said innovation was dead in the US. They said silicon valley was investing in easy and insignificant stuff, and that hard problems were being avoided because they were hard. They said this sucks because the pursuit of solutions for big problems provides residuals in the form of  solutions for simple problems. The video is def worth looking up and watching.

This is all true enough, thoug perhaps slightly amusing when one considers the fascination of these individuals with facebook games and widgets. In any event, the main obstacle to widespread innovation remains insufficien government. When folks choose to awaken to this reality and create the new governments of the world, then the golden age will begin. Until then, we remain in a technological dark age in which growth will simply not occur.

The real foundation for fixing government begins with fixing money supply, as those who control money supply basically control government.

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]]> http://files.posterous.com/user_profile_pics/504959/kidmercurypic4.gif http://posterous.com/users/5fiPU69ff6pz kid mercury kidmercury kid mercury