Ryminate

Bar Exam

Today I received notice that I passed the Colorado bar exam!  What a relief!  The entire process of preparing, taking the exam for two days in a large room full of hundreds of people where the stress was almost palpable, and then waiting for two months for the results is not an experience that I ever want to repeat.

I'll be sworn in next month and then it will be official.

Trademarks

In any startup, (and particularly an Internet startup where the barriers to entry are few),  it is important that you have a basic understanding of trademarks for two reasons:

1. In companies where a potential competitor's barriers to entry are minimal, the value of a strong "brand" becomes significantly higher.  Consider CraigsList: Here's a great company providing a service that is a serious threat to the classifieds section of every major newspaper in the U.S..  To duplicate such a service would not be technically difficult (See e.g. Backpage); however, CraigsList has created a "brand" that is extremely difficult to topple. They have protected that "brand" by applying for trademarks.
2. When you are first starting a company, even if you do not file for a trademark, it is essential that you at least confirm that your "brand" is not violating any trademarks already filed.  The costs-benefits are such that not completing this initial check is foolish.  Remember to check at both the state and national level (USPTO).

For a great primer on trademarks check out Harvard Law School's overview of U.S. Trademark Law. 

The Web in China

Clive Thompson of the New York Times has written a very interesting piece on Google in China.  I thought the web was revolutionizing life here in the U.S., but its effects in China are and will be hard to imagine.  The web is in some ways providing China the "Great Leap Forward", that Mao had intended.  It is allowing China to finish transforming itself from a primarily agrarian economy dominated by peasant farmers into a modern, information economy.  One of the key factors driving this "Leap" is the desire to learn possessed by so many young Chinese.    Last time I was in Beijing this notion was impressed upon me by the inventories of China's bookstores.  In almost all cases, at least half of the shelves contained textbooks, on everything from English to advance computer science.  Also, popular are books written by U.S. CEOs and management gurus.  Not only are these self-education books found in China's bookstores, but also in common roadside markets.  The will to learn is staggering.

But back to the Times article, I found the section on the cultural nuances as reflected on the web to be most interesting:

Yahoo executives quickly learned how difficult China was to penetrate — and how baffling the country's cultural barriers can be for Americans. Chinese businesspeople, for example, rarely rely on e-mail, because they find the idea of leaving messages to be socially awkward. They prefer live exchanges, which means they gravitate to mobile phones and short text messages instead. (They avoid voicemail for the same reason; during the weeks I traveled in China, whenever I called a Chinese executive whose phone was turned off, I would get a recording saying that the person was simply "unavailable," and the phone would not accept messages.) The most popular feature of the Internet for Chinese users — much more so than in the United States — is the online discussion board, where long, rollicking arguments and flame wars spill on for thousands of comments. Baidu, a Chinese search engine that was introduced in 2001 as an early competitor to Yahoo, capitalized on the national fervor for chat and invented a tool that allows people to create instant discussion groups based on popular search queries. When users now search on baidu.com for the name of the Chinese N.B.A. star Yao Ming, for example, they are shown not only links to news reports on his games; they are also able to join a chat room with thousands of others and argue about him. Baidu's chat rooms receive as many as five million posts a day.

As Yahoo found, these cultural nuances made the sites run by American companies feel simply foreign to Chinese users — and drove them instead to local portals designed by Chinese entrepreneurs. These sites, including Sina.com and Sohu.com, had less useful search engines, but they were full of links to chat rooms and government-approved Chinese-language news sites. Nationalist feelings might have played a role, too, in the success Chinese-run sites enjoyed at Yahoo's expense. "There's now a very strong sense of pride in supporting the local guy," I was told by Andrew Lih, a Chinese-American professor of media studies at the University of Hong Kong.

Blogified G

I've spent about a month making this blog exclusively with entrepreneurs and venture capitalists in mind; however, I must admit that in doing so I have derived far fewer utils with each successive post.

Therefore, I am abandoning my plans to make this page a thematic "resource," and returning to my original scope, which really knew no boundaries.

Onward and upward.

10 Stupid Mistakes Made by the Newly Self-Employed

Steve Pavlina blogs on 10 Stupid Mistakes Made by the Newly Self-Employed.

#5 rung true for me as an attorney.  Too many business people seem to think a tidy contract can take the place of a healthy business relationship.  In the majority of situations where these contracts are breached, the costs of litigation outweigh the possible benefits.  As such, do not solely rely on a contract to protect you.  Cultivate a relationship that can survive serious disagreements--one where there is mutual respect and both parties place high value on the relationship being successful. 

Steve's take:

5.  Assuming a signed contract will be honored.

I’ve made this mistake more than I care to admit.  I’ve had signed contracts with supposedly reputable corporations, and they weren’t worth squat when the CEO decided he wanted out of the deal, even for completely dishonorable reasons.  Sure I was in the right, but did I want to go to court to enforce it?  No, I’d rather continue doing meaningful work.

A signed contract is just a piece of paper.  What’s behind a signed contract is a relationship.  If the relationship goes sour, the contract won’t save you.  The purpose of a contract is to clearly define everyone’s roles and commitments.  But it’s the relationship, not the paper, that ultimately enforces those commitments.  When I understood this, I focused more on relationships and worried less about what was on paper, and my business deals went much more smoothly.  Once you start falling back on the paper, the deal is already in trouble. Creative (and lucrative) business deals almost always stray from the paper contracts that represent them.  One of my attorneys, who had worked on dozens of game development deals, told me that no deal he worked on ever followed the contract exactly; most weren’t even close. And these were big money deals in many cases.  Business relationships are similar to other personal relationships — they twist and turn all over the place.

Written contracts are still necessary, especially when dealing with larger corporations where people come and go, but they’re secondary to relationships.  Just don’t make the mistake of assuming that the contract is the deal.  The contract is only the deal’s shadow.  The real deal is the relationship.  Keep your business relationships in good order, and you won’t have to worry so much about what’s on paper.

It’s sad but true that there are loads of scoundrels in business. Many of them hold titles like CEO, President, and CFO.  There are indeed people out there who seem to care about nothing but money, and they will lie, cheat, and steal to get it.  In recent years some of the more despicable ones have gotten themselves indicted (or are already behind bars).  But there are plenty of others to whom the word honor has no meaning.  For example, in the computer gaming industry, it isn’t unusual for large publishers to feign interest in certain games and string the developers along.  They give the developer every indication that a deal is pending, but all the developer sees are delays and false verbal promises.  In reality the publisher only wants to keep the game off the market to keep it from competing with one of their own titles; they hope to cause the developer to miss the next Christmas season or to run out of cash and cancel the title altogether.  It happens. Business, especially the entertainment industry, is not for the timid.

Life expectancy calculators

There are a number of life expectancy calculators out there.  Below are two which are free to take:

Dean Foster, Ph.D…Professor of Statistics…University of Pennsylvania Wharton School

Northwestern Mutual Financial Network

Perhaps more interesting than the results of the survey are the questions asked.  They provide a clear view of what one can do to increase one's life expectancy.

Floodgates expected to open for venture capital in China

The floodgates are expected to open for venture capital in China.

CHINA will benefit from a huge surge of venture capital this year as the result of tax breaks and eased restrictions on investments, according to interviews with analysts.

The most optimistic among the forecasters was Zhou Hongyi, former Yahoo president and now an investor who's on the lookout for hot prospects in start-up firms.

Zhou predicts China will attract US$3 billion in venture capital investment in the 12 months following the second half of this year, triple last year's total. Others said his assessment was on the high side, but all believe more venture capital will pour across the country's borders than last year or the year before.

Some 60 percent of the surge will be directed toward information technology, especially new Web 2.0 applications that include podcasts, blogs and social network services such as platforms for dating and business deals, the experts said.

"Many VC firms have moved into China and are eager to pump money into companies with good business potential, including Web 2.0 firms," Zhou said in Beijing over the weekend.

--Shanghai Daily

Best Gadgets of CES 2006

Check out the best gadgets of CES 2006 according to Newstips.

Very cool.

Low Barriers to Entry?

One of the great things about the Web is that it provides the ability to quickly start a business with very little capital.  In a matter of mere days (hours in some cases) you can go all the way from idea to revenue. 

Because of the low barriers to entry, you also see competition in terms both numbers and speed that is unprecedented.  I could identify a company offering a good or service one week and very easily duplicate the business model the next.  (You see this in action on a larger scale between Google, MS, and Yahoo).  How do your protect yourself from competition in situations where there are very low barriers to entry?

1. Build a Brand - This is your company's greatest asset.  This is perhaps the one thing that cannot be duplicated.  Spend the time it takes to identify what your brand is, whether it fits with your target customers, and how you are communicating it to the customer.  If you look at Google's balance sheet, goodwill (i.e. the brand) is valued at $194 million under GAAP, less than 2% of total assets; however, if you asked Google how much the brand is really worth I would guess they would come back with a figure representing a much greater percentage of their total assets.
2. Build a Community - Do not be satisfied with your customers coming to your site merely to buy your goods or use your services, create something more.  Create a place where customers can interact with other customers. Look for example at Amazon .  As a customer I visit Amazon just as much to read customer reviews of book / products as I do to buy goods, (and Amazon isn't paying one cent for this valued service).  They have created a community.
3. Do whatever it takes (i.e. sacrifice revenues) to build a critical mass of users / regular visitors - This is crucial.  In order to succeed you NEED momentum.  You also need visibility on the web.  Both of these things only come once you have a critical mass of users / regular visitors.  Look at Microsoft Live.  As it is new, MS is using Microsoft Live to provide valuable services for small businesses for free.  Many other sites offer their services for free and rely only upon ads for revenues.  Do whatever it is you need to do to get people to your site.  Then, once you have this critical mass you can tweak the business model to increase revenues.

Brotherly Wisdom

Great quote from my younger brother who is casually looking at starting a business:

"...some business ideas seem so great while your planning them and then you come back to them and they almost seem crazy."

Simple statement, but so true.  You get infatuated with an idea, and similar to being "in love," you get tunnel vision.  In my opinion this is unavoidable, (although many entrepreneurs are probably in a state of denial).  To entrepreneurs I would suggest embracing your infatuation.  It is that passion that will drive you to do the things that will ultimately allow your company to succeed.  At the same time bounce your idea off those who have already built successful companies, especially those within your industry.