Archive for February, 2006

Unpublishing

paulballen — Tue, 28 Feb 2006 07:57:31 -0800

For the first time ever I just deleted a blog post. I got up at 4 am, flew to Oakland, drove to Santa Rosa, spent the day with the YackPack team, and then drove back to the airport, where my flight was delayed for 2 hours (wind problems), and so, while waiting for my flight, I posted something about Alan Kay's lecture last week and how people today aren't taught to think and then I went off on something about how smart our ancestors were. I was pretty hammered after a long day and not in a great mood, so my post didn't make a whole lot of sense.

Then I got an email on my blackberry with a comment from a good friend who challenged my argument, and I got to thinking about it, and I decided my post was really quite a thoughtless one, not backed up by any research or scholarship at all, so I decided to retract it. I don't think I've ever done that before. But I'll put some more thought into this subject and post something later that is more substantial.

I guess this is kind of like repenting for a blogger.

Google makes national archives films available online

paulballen — Mon, 27 Feb 2006 16:47:17 -0800

http://www.itnews.com.au/newsstory.aspx?CIaNID=30464

Lenovo Makes Global Push With Computers - Yahoo! News

paulballen — Thu, 23 Feb 2006 17:54:17 -0800

On the heels of my interview with Daily Herald Business Editor Grace Leong, I found this news interesting today: Lenova announced that it is selling PCs outside of China.

Lenovo Makes Global Push With Computers - Yahoo! News

I think we in the US should brace ourselves (psychologically) for the possibility that Chinese computer manufacturer Lenova, the #3 PC manufacturer in the world behind Dell and HP, will continue to gain market share and could eventually become the #1 computer manufacturer in the world.

I think Dell and HP are great companies and would stay on top if the majority of PCs were purchased in the U.S. long term, but the business and consumer demand for PCs in Asia (particularly in China itself, Lenovo's home turf) will grow at a much faster pace than western demand.

But according to the People's Daily Online, Lenovo's revenues were recently lower than forecast and Dell and HP are competing aggressively in Asia.

So this will be a very interesting fight to watch over the next few years.

I'm definitely looking forward to hearing Dell CEO Kevin Rollins speak at the BYU Management Society breakfast in Salt Lake City next month.

Google Page Creator

paulballen — Thu, 23 Feb 2006 17:07:48 -0800

Google Introduces Web Page Creator

You can visit pages.google.com to sign up for a simple web page creation tool. You get 100 MB of free storage space for whatever web pages you build. Google hosts them for free also.

I tried to sign up, but they've already limited access during the beta test period.

With thousands of employees at Google spending 20% of their time working on a pet project, we will continue to see new services rolling out of Google like a flood.

It's not part of a big top-down world domination strategy on the part of Google's founders. I heard Larry Page say at his CES Keynote that his ability to predict what Google is going to do next is zero. It's just part of a massively well funded and empowering and innovative world changing business culture.

I think Google will be the world's leading innovation machine for many years.

Google's unprecedented empowerment of thousands of smart engineers, and its ability to fund hundreds of promising projects and then to roll the best ones out with virtually no marketing expense to hundreds of millions of users worldwide will enable Google to get into scores of information, advertising and software businesses, all under one umbrella.

The recent Google sell-off is likely just a temporary blip, since long term this company will be wildly successful as the world's leading information company.

I loved the recent Business 2.0 featurearticle that has 4 futuristic scenarios predicting what Google might become.

A Busy Day--Provo Labs Update

paulballen — Wed, 22 Feb 2006 14:13:01 -0800

Yesterday was busy and productive.

In the morning we held an LDSMedia.com meeting with Deseret Book. We have a great partnership with them. The new LDSMedia.com web site is coming along nicely. By next week it will be nearly ready for prime time. We've added some free clip art and are making it possible for our content acquisition team to identify and index great LDS audio and video content anywhere on the web and easily include it in our search results. Our goal here is to launch the "LDS Google," with instant access to all content (and all content types) of interest to Latter-Day Saints. (There are about 12 million LDS/Mormons in the world.) Actually, it's won't really be the LDS Google because we aren't planning to index tons of web sites, just the ones that have the best and richest LDS content.

Later in the morning, I had a great phone call with Wendy Bird, a Utah entrepreneuress (I'm not the only person to use this word) who runs My Princess Pearls with a passion. I gave her some advice about term sheets and valuations. In fact, I recommended the book "Term Sheets and Valuations", a must have for entrepreneurs.

Then I spoke for about an hour and a half with the Daily Herald Business editor Grace Leong about Provo Labs, my experience as the co-founder of Ancestry.com and MyFamily.com, and my general outlook on the high tech industry and global competition. She had just interviewed Stephen Covey and at one point flattered me by saying I had answered one of her questions in the same way that he did. That felt good! He apparently feels, as I do, that the United States has become somewhat complacent because of our 20th century economic prosperity and our general feeling of superiority, but the reality is that the world, particularly India and China, are increasing their productivity and skills at such an extraordinary pace that we will find ourselves in second place in many areas in the coming years. (In fact, in many areas, we already are in second place, or in education, way down in the rankings.) A recent Wired magazine article showed a chart on the number of scientific papers published each year in major languages. Mandarin is quickly catching up to English.

Our workforce need to be humble enough to learn best practices from leading companies from all over the world. I recommend "India Unbound", "China, Inc.", "The World is Flat", and "The Only Sustainable Edge." I also have the biography of the leader of Singapore, but haven't read that yet.

I'm *very hopeful* that Provo Labs and DevUtah can sponsor a mixer in the next month or two and invite Amy Lewis (runs a 350 person business process outsourcing company in Delhi, India), Jayson Ahlstrom (Update Now, Inc.), and Nathan Gwilliam from Arizona (helps companies with what he calls insourcing) and Danny Sullivan (not the search engine watch guy), who helps companies in the U.S. hire workers in the Philippines. I'd like to see 50-100 attendees to learn from these folks (or perhaps others) about the best way to do offshoring.

Our Provo Labs content acquisition team met with our attorney where we discussed the need for a system for generating license agreements. We will soon have 4 full time content acquisition team members. And we hope to be entering into hundreds of license agreements in the coming years. So we are building a system for generating and managing those contracts. We also have an engineer who will help us build an automated royalty payments system.

Two of us have experienced the nightmare of manually processing web log files and generating hundreds of royalty checks at the end of each quarter: me at Ancestry.com and Mark Elder at Infospace. So we are designing a system that will make royalty and ad-sharing calculations every day. This has to be easy to manage.

In the afternoon, I had a board meeting with one of the non-profits that am helping.

In the late afternoon FundingUniverse.com held a call with a potential strategic partner (whom I got to know pretty well at the Corporate Alliance summit last fall.)

So it was a pretty packed day. Today I'm in Salt Lake most of the day (for a meeting at the U of U and also a meeting with Jim Wall, publisher of the Deseret News) and tomorrow I'll be a preliminary judge at the BYU business plan competition.

Phil Windley's Technometria | Hearing Alan Kay

paulballen — Wed, 22 Feb 2006 12:39:49 -0800

Phil Windley's Technometria | Hearing Alan Kay

Alan Kay is speaking in Salt Lake on Thursday. I would go hear him in a heartbeat if I weren't judging a business plan competition at BYU on Thursday. Alan is one of the pioneers of the computer industry, having worked at Xerox Park from 1970-1980, then Atari, Disney, and HP. He got a Ph.D. from the University of Utah in computer science.

Don't miss the chance to learn from one of the great computer scientists of our time.

Dennis Wood article about LinkedIn

paulballen — Fri, 17 Feb 2006 16:04:58 -0800

Dennis Wood (director of human capital for vSpring) has a great article in the recent Connect magazine about executive recruiting and hiring right.

Dennis is a star. He is the most LinkedIn person in Utah (he passed me a long time ago) and in his article he discusses how he recently used LinkedIn to land a CTO for a vSpring portfolio company.

I remember a year or year and a half ago trying for a full hour over lunch to convince Paul Ahlstrom about the value of LinkedIn.com. He remained stubbornly unconvinced. So now it is great to see his own human capital director endorsing it for all startup companies as a great way to recruit!

I have also been unsuccessful most of the time in convincing CEOs and VCs to start blogging.

The social networking value of a blog is extremely high. I get contacts nearly every week from smart people around that world that comment on my blog or email me directly. Most of our Provo Labs job applicants come from people who read our blogs and feel a connection to the way we think and to what we are doing.

So Dennis, if you're reading, please start a vSpring human capital blog, then write a article about how your blog is attracting great talent to your portfolio companies. And vindicate me yet again!

Utah Business Magazine - The Magazine for Decision Makers

paulballen — Fri, 17 Feb 2006 15:52:35 -0800

Brock Blake, CEO of FundingUniverse.com (a Provo Labs portfolio company) just made it on the list of Utah's Top 40 Under 40. At age 25, he was the youngest person on the list. So he can stay on this list for the next 14 years! Way to go, Brock.

Brock is already being quoted in the Wall Street Journal online about how to raise money from angel investors, so maybe he's gunning to make a national top 40 list soon.

His company recently got some great coverage with a Connect magazine article about Simpligent, the highest rated company that presented at the November 2005 speedpitching vent held in Provo.

Rix Ryskamp, Simpligent CEO said this: "We have been contacted by quite a few investors since the speed-pitching luncheon," says Ryskamp. "This has been the most productive funding event that I have ever seen. The amount of exposure we received in a single day was amazing."

Related Info for: answers.com/

paulballen — Fri, 17 Feb 2006 03:49:01 -0800

Alexa chart for Answers.com

This site has a ton of great content (encyclopedias and other reference works), a simple search engine, and a tremendous growth chart.

The company went public last year and is worth $100 million, even with little revenue track record. The expectation, of course, is that revenue will follow the excellent traffic growth that the company is seeing.

The company made its quarterly SEC filing today and announced Q4 revenue of $889,000, up 58% from Q3.

It's rare, anymore, for an internet company to go public with almost no revenue. But with this traffic growth chart, the company's revenue is certain to grow. This is definitely a company to watch.

Search With the Human Touch

paulballen — Thu, 16 Feb 2006 22:48:10 -0800

Search With the Human Touch

This article mentions new search engines such as PreFound.com, Dumbfind, and Eurekster's Swicki.

All Provo Labs developers: please check out these new search engines that incorporate user click streams, tags, and user input to affect search results. Also, check out Wink.com.

We need to decide the best way to incorporate this new technology into some of our content web sites, such as LDSMedia.com and Worldhistory.com.

Also, please check out Zeal.com where "zealots" are enlisted to create an alternative directory to Yahoo and DMOZ. The coolest thing about Zeal is how the zealots are motivated by status and reputation to contribute a lot to the directory.

Recommended Books

paulballen — Thu, 16 Feb 2006 16:38:19 -0800

I need to update my list of recommended books for entrepreneurs. I have several more to add to this list. But here is the list that I made a year or two ago:

The E-Myth: Why Most Small Businesses Don't Work and What to Do About It. Author: Michael Gerber

I listed this first not because it is is the best business book I've ever read but because it was the first. And it made a big impact on me. I read it back in 1991 or 1992. It is the perfect book for someone who has started a business of any kind and doesn't know what he/she is doing. It opens your eyes to the need to work "on the business" instead of working "in the business." According to Gerber, most people start a business because they have technical skills and don't want to work for someone else anymore. But until you step back and realize that it takes more than just your technical prowess to run a company, and that you have to design your business around multiple roles, and systematize everything, you are actually a slave to your business, even more than when you thought you were a slave working for your former employer. This is a quick and easy read, and a must-read for new entrepreneurs.

Love is the Killer App. Author: Tim Sanders.

This book has changed my life more than any other business book that I have ever read. Tim Sanders is my hero: he has finally helped me to feel completely whole as a business person. He has taught me how to find joy and happiness at work as well as in my personal life. There are three keys. First, gain abundant knowledge (mostly through reading and marking up great books) and share it freely with everyone who needs it. Second, build your network and share it freely with everyone who needs to know someone you know. And third, show love and compassion in the workplace. Treat people with respect. Look them in the eyes. Shake hands warmly. Genuinely care about others. I have tried to follow Sander's advice since my friend Jim Ericson recommended this book to me and I read it intensely. I gave away 10 copies of this book in April and will continue to recommend this book and give copies away to people I meet whose lives I hope to touch in a positive way. Highly Recommended!

Net.Gain: Expanding Markets Through Virtual Communities. Authors: John Hagel III, Arthur G. Armstrong

This book inspired our business strategy at Ancestry.com more than any other book. Written relatively early (March 1997) in the internet revolution, the book invited online businesses to consider the role of communities in creating value for company customers. As early as November 1996 I have written records about our plans to build the "Ancestry World Tree" and to keep it free forever--since it was created by the community it would be free to all of our users forever. But the Net.Gain book provided reinforcing arguments and mathematical models to convince us that the course we were pursuing with content, community, and commerce, was a good one. I heard Hagel speak at a Harvard Cyberposium in 1999 and was grateful for his powerful impact on my worldview.

Intellectual Capital: The New Wealth of Organizations. Author: Thomas Stewart.

I love this book and even gave a copy of it to Utah's Governor Mike Leavitt while he was on a trip to Silicon Valley to form alliances with venture capital firms. He came to ask what Utah needed to do better in order to attract more serious venture capital. In my opinion, all of his questions were answered nicely by Thomas Stewart in this classic book. Intellectual capital, in all its forms, is what matters most in wealth creation. Stewart wrote for Forbes and is currently editor of the Harvard Business Review. For years I have been quietly amassing what I call "personal intellectual capital" in my searchable knowledge-base that now exceeds 120 megabytes. I have used Folio VIEWS, a powerful desktop search engine, to keep track of everything I read, hear, or see, and to organize it into categories. I can literally retrieve my notes from almost any conversation or meeting over the past 10 years in a split second. It's like having my own personal Google that only indexes my stuff. I've considered this my personal core strategic advantage for several years, and promised myself that whenever I speak at business schools I would discuss this valuable asset and how it has helped me. More recently I've realized that my social capital (who I know and my reputation) are actually even more valuable than what I always considered my intellectual or "knowledge capital", but looking at Stewart's book, I find that he includes networking and social capital as one of his forms of intellectual capital. As a LinkedIn.com fanatic, I admit that social capital is now my favorite personal focus.

Linked. Author: Albert-Laszlo Barabasi.

This is the deepest book I have read in several years. I read it slowly and studied it carefully since it is a deep book written by an outstanding scientist. I don't understand physics or advanced mathematics very well, but Barabasi takes advanced knowledge and makes it accessible to the masses. The new science of networks really seeks to explain how everything is connected to everything else, how Power Laws affect every network, how hubs emerge, and how understanding networks (as opposed to components of systems) is the science of the 21st century. Highly recommended!

Influence: The Psychology of Persuasion. Author: Robert B. Cialdini

I never took a single computer, business or marketing class in college. I was a Russian major and I did graduate studies in Library Science. I was as "liberal arts" as they come. So certain books that I have read and applied have shaped my worldview and helped me earn my virtual MBA. The most significant book on marketing and psychology that I have ever read is Influence. It is not a how-to book for marketers. But it explains why marketers succeed and how they utilize human nature to get people to buy something they are selling. It cites scores of academic studies which reveal the several traits of human nature that marketers take advantage of. It's a powerful and scary book. The author claims that he is arming people with knowledge about how to escape being caught by marketers, but he and I both know he made almost all of his money from marketers. One critic called it the most important marketing book of the decade.

The New, New Thing. Author: Michael Lewis.

The author wanted to write a book that profiled high-tech entrepreneurs in Silicon Valley, but in the end he found what he was looking for in one man, Jim Clark, the greatest serial entrepreneur of all time (my words). This book is an amazing portrait of a brilliant and restless visionary, a man who is continually looking for the next big thing. Note: I was disappointed to learn that Jim Clark now lives in Florida and invests in real estate. He is very down on Silicon Valley and thinks that the major technology companies will dominate in the future.

Smart Mobs. Author: Howard Goldstein.

I read this book early in 2004 and was stunned to learn that some of my best ideas about location-based services (which I started to conceive of in 1999 when I bought an Acura with a built-in GPS) had been explored and even prototyped by Apple scientists as early as 1994! This book is an absolute must-read if you want to understand the social impact of portable, wireless, computing and communication technologies. I probably dog-eared 100 pages in this book and underlined 150-200 notable quotes. Howard Goldstein is an excellent writer with a vast personal experience using and observing users of technology. His insights are invaluable and timely.

Designing Web Usability: The Practice of Simplicity. Author: Jakob Nielsen.

Jakob Nielsen is in my book the leading expert of web site usability. While many (or most) artistic designers hate him, I have found his common sense approach extraordinarily valuable in practice. I have purchased more than 30 copies of this book for employees and managers at my internet companies and have watched the impact of implementing simple usability techniques. The world wide web is a better place because Jakob was here.

Permission Marketing. Author: Seth Godin.

Unless you've read this book, I don't think you will understand how to do email marketing right. Read this book. Develop a relationship with your prospects and customers. Deepen that relationship over time. Never abuse it. Never spam. Get the permission of your customers before you do anything and then gain more permission over time as you meet their needs and gain their trust. This is a common sense book but it took a luminary like Seth Godin to make it gospel.

Combatting Email Overload

paulballen — Thu, 16 Feb 2006 16:33:22 -0800

Here's my latest Connect magazine column. I wrote it at the airport on my Blackberry. It's about how I try to solve the problem of email overload. Enjoy!

Transparent Companies

paulballen — Thu, 16 Feb 2006 16:08:25 -0800

One of my readers alerted me to this article in the April 1996 issue of Fast Company about the open culture of Whole Foods, a company that was approaching $1 billion in annual sales back then. The author called their approach "the future of democratic capitalism."

Today the company's market cap is $9 billion and sales will exceed $5 billion this year. This company is doing a lot of things right. Its non-heirarchical open culture is fascinating. Here's a quote from the 1996 article:

The Whole Foods culture is premised on decentralized teamwork. "The team," not the hierarchy, is the defining unit of activity. Each of the 43 stores is an autonomous profit center composed of an average of 10 self-managed teams -- produce, grocery, prepared foods, and so on -- with designated leaders and clear performance targets. The team leaders in each store are a team; store leaders in each region are a team; the company's six regional presidents are a team.

Whole Foods supports teamwork with a wide-open financial system. It collects and distributes information to an extent that would be unimaginable almost anywhere else. Sensitive figures on store sales, team sales, profit margins, even salaries, are available to every person in every location. In fact, the company shares so much information so widely that the SEC has designated all 6,500 employees "insiders" for stock-trading purposes.

Whole Foods now has more than 39,000 employees. For nine consecutive years it has been listed as one of the Top 100 companies to work for by Fortune magazine.

Does anyone know of any other companies that act like this? Why wouldn't other companies follow suit, with a model that makes such happy and productive employees?

Has anyone ever seen any scholarly research on how this kind of openness and transparency affects productivity, interpersonnal relations, etc? What about office politics and jealousy when some people are paid more than others? Obviously this open culture works incredibly well at Whole Foods. I wonder how it would work in a high tech company.

PaidContent.org: February 16, 2006 Archives

paulballen — Thu, 16 Feb 2006 15:56:10 -0800

Amazon to sell branded mp3 players pre-loaded with content?

Now this could be very interesting...a low-cost subscription model for a player with pre-loaded content. That is exactly where I've wanted to go with LDSAudio.com and mp3books.com. If Amazon does it first for the mass market, hopefully it will pave the way for us to do this in smaller, niche markets where we like to play.

IVIL: Summary for IVILLAGE INC - Yahoo! Finance

paulballen — Wed, 15 Feb 2006 14:45:33 -0800

IVIL: Summary for IVILLAGE INC - Yahoo! Finance

iVillage's market cap is $568 million.

Another article states: "For the year, iVillage earned $9.5 million, or 12 cents per share, on sales of $91.1 million."

Projected revenue next year is between $105 million and $113 million.

Companies that are leaders in their space seem to get nice multiples on Wall Street.

Prosper: Management and Investors

paulballen — Tue, 14 Feb 2006 18:08:25 -0800

Prosper: Management and Investors

A friend alerted me to the launch of Prosper.com, a person-to-person lending system (read: disintermediating banks). I was super excited when Zopa.com launched in the UK and thought it was only a matter of time before the US would have its own service.

So Prosper has arrived. It has an amazing management team and investors (E-Loan co-founder is CEO, investors include Bob Kagle from Benchmark and Jim Breyer from Accel).

So if you are tired of getting .5% interest from your local bank who in turn loan your money at 8-18% interest, you may want to check out Prosper.

This model definitely beats the "When Banks Compete You Win" model where the banks still take a big slice of the revenue. Now, the people funding the bank loans are directly competing for your loan, so the big slice out of the middle goes away.

Loan rates will decline. Interest to lenders will increase. Banks will lose big time as this catches on.

Among the next industries to be disintermediated: insurance.

Scott Frazier: Great Teacher for Entrepreneurs

paulballen — Fri, 10 Feb 2006 15:11:25 -0800

Yesterday at the monthly UVEF luncheon, Scott Frazier gave a masterful presentation about investing in and selling companies. He reviewed his 5 most successful investments to date (including 2 where he was CEO) and how they were valued during the early and later stages.

His bio from a BYU web site says this:

Scott Frazier Investor; Co-founder, Utah Angels Scott Frazier is an angel investor and co-founder of the Utah Angels. Frazier's major investments include TruVision, Omniture, MyFamily.com, Corda Technologies, iCentral, Thoughtstar, Infopia, and Cerberian. Frazier serves as president of TruVision, Inc., a rapidly growing company that operates nationwide, preferred-rate provider networks for Lasik, cosmetic surgery, and hearing aids. From 1987 to 1995, he was co-owner and CEO of Achievement Rehab, a leading provider of contract therapy to nursing homes. Frazier grew this company from 150 employees to 2,000 employees and $100 million in revenues, prior to selling in 1995. Frazier earned a BA in economics from BYU in1975 and an MBA from Harvard in 1978. He and his wife, Miriam, have eight children.

All entrepreneurs should be trained in company valuation before they get started in building a business. I wish I had heard this kind of lecture back in the early 90s when I was first getting started in business.

After sharing 5 case studies (Achievement Rehab, TruVision, Omniture, MyFamily.com and iCentral) he discussed 7 tactics that he uses to get the highest possible valuation before selling a company.

I hope that Scott will continue presenting this lecture to entrepreneurs. Maybe he will even let BusinessJive.com or FundingUniverse.com record his presentation so that entrepreneurs all over the world can learn from him. His open and honest style is incredibly refreshing and rare.

Thanks, Scott, for teaching so well.

Google Offers Print Ad Service - Los Angeles Times

paulballen — Fri, 10 Feb 2006 14:55:54 -0800

Google Offers Print Ad Service - Los Angeles Times

28 Magazines are participating in Google auctions for print ad space.

Please let me know if you try this or know anyone who has. I heard the early tests were disappointing, but Google is not about to give up....

MarketingSherpa.com : Practical News & Case Studies on Internet Advertising, Marketing & PR

paulballen — Fri, 10 Feb 2006 14:53:00 -0800

MarketingSherpa.com : Online Publishers Made $1 Billion From Google AdSense Last Year

All Provo Labs employees should read this article (and save a copy before the free preview "expires"). All internet entrepreneurs should be familiar with this as well.

100 Free Places to Post Articles Online

paulballen — Wed, 08 Feb 2006 19:31:17 -0800

I just came across a web site that lists 100 places that you can post an article that you have written.

Stock Prices of Internet Companies

paulballen — Wed, 08 Feb 2006 19:14:25 -0800

I love MyYahoo, where I have 72 different portfolios consisting mainly of stocks that I do not own in categories that I have defined. So for example, I have a Music & Audio portfolio where I track Audible.com and several other companies. Yahoo makes it very easy for me to track stock prices and news about each company.

Today I created a new portfolio that is a hand-picked subset of stocks listed by Yahoo Finance in the Internet Information Services industry.

I chose Ediets.com, ECollege.com, Audible, TheStreet.com, iVillage, LookSmart, BankRate, Edgar Online, The Knot, and ADAM.

Here is the chart for these 10 internet stocks.

7 of the 10 companies are profitable. The average price to sales ratio is above 5.7. And for the profitable companies, the average price to EBITDA is above 92. So medium sized internet companies are getting pretty good multiples these days.

See all the companies Yahoo lists in the Internet Information Services category.

(By the way, I just wasted almost an hour trying to easily turn a spreadsheet into a simple HTML table that I could post using WordPress or an image that I could capture and add. I tried imageshack.us, but it only lets me display a thumbnail. Then I tried upimages.com, but I couldn't get the image to show up in my blog without ads. I need an application that lets me point to any portion of my screen and instantly blog it, without having to save a file and upload it or FTP it somewhere. Are there any solutions out there?)

Learn How to Harvest a Company

paulballen — Wed, 08 Feb 2006 13:22:02 -0800

Scott Frazier, an extremely active Utah angel investor and entrepreneur, will speak Thursday, Feb. 9th at the UVEF monthly luncheon.

Come hear him tell the story about how he invested in and then sold Truvision. This is a great success story.

All entrepreneurs ought to be thinking about how and when to exit their company. As E-Myth author Michael Gerber says, every company will eventually be run by someone else, since when you die, you can't take it with you. So start thinking about your harvest or exit or transition now.

Largest Employers in Utah County

paulballen — Wed, 08 Feb 2006 00:36:27 -0800

Here is a list of the largest employers in Utah County. It looks fairly recent.

Global digital music sales triple to US$1.1 billion in 2005 as new market takes shape

paulballen — Tue, 07 Feb 2006 19:53:32 -0800

Global digital music sales triple to US$1.1 billion in 2005 as new market takes shape

I saw articles previously that suggested ring tones alone were a multibillion dollar industry. NPR and Tim Bajarin both reported that.

But this new study, a free 24-page PDF download, suggests a far lower number for global music and ringtone sales.

What Motivates Me To Be Foolish

paulballen — Tue, 07 Feb 2006 13:10:13 -0800

No company likes anyone to break news for them. Companies like to control their own news and get their own press coverage. The blogosphere is upsetting to corporate executives everywhere. Many bloggers have lost their jobs over what they have written. It's an interesting time.

Against that backdrop, I felt compelled the other day to mention that MyFamily had layoffs and no media (and only 1 blogger) had reported it.

Why did I do that? I have many friends at MyFamily.com, including investors, board members, and executives, as well as many employees that I care deeply about and am close friends with.

I feel a lot of concern and grief for everyone affected by these layoffs. I know how painful it is for everyone, including those who are still employed, but who lost close friends to the RIF.

I've been wondering why I blogged about it, when I know it will get me in trouble and make me more unpopular in certain circles.

First, I grew up in an anti-corporate environment, at least I think I did. I grew up thinking business was evil. My father, a world renowned classificationist and engineer (one of a few Utahns ever elected to the National Academy of Engineering), and a faculty member at BYU for 35 years did consulting for some of the largest manufacturers in the country. And I got the sense that he really disliked corporate politics and policies and greed.

And of course I studied the writings of Hugh Nibley, Brigham Young, and others who believed that materialism and greed were grave sins, and that no one should possess that which was above another, that the "earth is full and there is enough and to spare" if people would love and care about one another, we could overcome poverty and much suffering. Ok, so I am a total idealist, even now.

I thought academia was the right career path for me, so in college I started studying political science, then switched to international relations, and then finally Russian. Back then, the Soviet Union was an evil empire, and the very epitome of materialism and top down control of everything. I wanted to be a Sovietologist and study the power of the Politburo. I got my degree in Russian from BYU and then started a Masters program in Library Science.

At that time I caught a vision from BYU President Jeffrey Holland (from his speech, "Towards a School in Zion") that changed my life. He said all the truth in the world should be gathered and made accessible to everyone. From his powerful words, and from what I knew from working at Folio, my brother's search engine company, I felt that in the era of computers it would be possible to gather up all knowledge from throughout the world and put it at everyone's fingertips.

This kind of "information democracy" as my brother Curt would put it, could help level the playing field and lead to more economic equality. At least, that would be the hope.

In 1990 I got started unexpectedly down an entrepreneurial track by co-founding with Dan Taggart a CD ROM publishing company called Infobases. Our mission was to identify all the greatest texts in every field of human knowledge and digitize them and make them available affordably to everyone.

For many years we successfully pursued that vision. Along the way, unfortunately, Infobases had big layoffs almost every year. We had to layoff family members and friends. This is the thing that I most dislike about business. It is so painful to cause someone to lose their job, or rather, to have a company that can't support all its employees (in our case most likely because of poor, inexperienced management), and so you have to choose who stays and who goes.

By 1996 I realized that I was an entrepreneur for life, so I started reading and studying everything I could about business and best practices. I wanted to understand why some companies succeed and why some fail.

By 1998 Dan and I were running Ancestry.com, a successful internet subscription service. We owned 97% of the company. And we got to cash flow positive in June and July 1998 (with a run rate of around $3 million per year) before raising our first $1.3 million in outside capital from Utah angel investors.

So we were on top of the world. We were running a dot com, we owned almost all of it, it was profitable and growing incredibly fast. And then we entered the world of venture capital, hyper growth, and the internet bubble.

We were ill prepared for what would happen over the next few years as the board of directors changed and management changed and our stake in the company went from large to very small.

Fast forward a few years and the company we founded (now called MyFamily.com) is an internet success story. The company is the leading genealogy company in the world, I believe, and is providing vast genealogical data to users around the world, particularly in the US, Canada and the UK.

The new CEO is outstanding. The management team is extremely talented, and the company has a bright future.

But then these layoffs happen, which caught so many people off guard.

So why would I blog about this company news when I know people will be upset with me for doing so? Why would I be so foolish?

First, I wanted to invite some of the laid off employees to apply for world at Provo Labs. We've already started getting resumes.

And I also want to let all the laid off employees anywhere know about some great online resources for job seekers. LinkedIn.com is an essential tool for business networking today. Use it and get everyone you know using it. SimplyHired.com is a great way to find jobs. I searched the 4.4 million job listings for internet jobs in Utah County and found 194. I also encourage everyone to start attending DevUtah.com Geek Dinners, Provo Labs Entrepreneur Breakfasts, Phil Windley's CTO Breakfasts, UVEF, and other local networking events where you are most likely to find companies that are hiring.

Second, I feel passionate about free information flow in business. Remember the whole information democracy thing?

Some corporate PR departments don't really tell anyone what is going on. And some constantly spin out good news, regardless of what is really going on.

MyFamily is an example of a company that doesn't say very much about what is happening. There are just a few recent press releases.

On the other extreme was Infospace during 1998-2000. Infospace had one of the most effective PR machines in history. While their stock price soared during the dot com bubble they release a positive release virtually every week announcing either a significant partnership or new customer, or a milestone that they had achieved.

Perhaps a lot of that was fluff. So a $30 billion company sunk quickly after the bubble burst to a more modest billion or half-billion valuation.

I think companies should be open and communicate often with their constituencies, both good news and bad.

I have blogged previously that every CEO should have a blog.

I know that there might be legal complications with this idea, but there are also problems with companies not communicating. Sooner or later there will be court cases on CEOs and company blogs. (Let me know if this is already happening.)

The government requires publicly traded companies to file quarterly and annual reports with the SEC. The goal here is at least enough transparency for investors to properly value a company.

If there is more transparency and more equal access to information, there seems to be less of a chance for abuse, manipulation, and greed to create winners and losers.

But privately held companies are not required to file SEC reports. And they aren't required to issue press releases or to disclose anything to anyone. (Although I'm sure investors and perhaps employees have some information rights--I just don't much about this.)

Warren Buffett, the world's greatest investor, seems to spend most of his time reading annual reports looking for value companies to own or invest in. According to Motley Fool, all investors should "[read] a company's annual report and SEC filings, [listen] to a conference call, [attend] a management presentation" and "[visit] the company." But Motley Fool also claims that since everyone has access to this information, no one gets a comparative advantage from doing these basic things.

(I disagree. I bet that more that more than 90% of investors don't do any of the these things: read SEC filings and annual reports, etc. I think most investors rely on tips from friends and don't take the time to do any homework.)

But Warren Buffett also believes in what Philip Fisher (his other mentor) called "scuttlebutt" in his classic 1958 book, "Common Stock and Uncommon Profits."

The business "grapevine" is a remarkable thing. It is amazing what an accurate picture of the relative points of strength and weakness of each company in an industry can be obtained from a representative cross-section of the opinions of those who in one way or another are concerned with any particular company. Most people, particularly if they feel sure there is no danger of their being quoted, like to talk about the field of work in which they are engaged and will talk rather freely about their competitors. Go to five companies in an industry, ask each of them intelligent questions about the points of strength and weakness of the other four, and nine times out of ten a surprisingly detailed and accurate picture of all five will emerge.

It is equally astonishing how much can be learned from both vendors and customers about the real nature of the people with whom they deal. Research scientists in universities, in government, and in competitive companies are another fertile source of worthwhile data. So are executives of trade associations.

So to gain an advantage over other investors, Fisher said you should create your own scuttlebutt network.

But in my utopian/idealist worldview, scuttlebutt networks should also be as open and transparent as possible.

If the goal is to get rich, then individuals will obviously not share scuttlebutt with others. But if the goal is information democracy leading to more economic equality, then people will freely share it.

So what enters the picture in the 21st century to create a more open business grapevine? Open source programmers, open content projects, bloggers, and podcasters, who are often motivated more by the ideals of information democracy than they are of getting personally rich or famous.

A lot of people do a lot of things for the good of others because they love doing it, it makes them feel good, and they love the feedback and thanks.

After realizing from the MyFamily layoff scuttlebutt that many public and private companies don't really tell the outside world what is going on, Provo Labs has decided to launch an SEC search engine (kind of like what 10kwizards did a few years ago) and combine it with an open scuttlebutt network of bloggers for thousands of companies.

We do want to avoid the stock market manipulation and hype that become common with Raging Bull, Silicon Investor, and Yahoo's stock message boards during the bubble.

We hope to find responsible journalist types who can adopt a company and find and report information on a daily basis that will help the outside community (employees, investors, partners, etc) learn the truth, both good and bad, about what is going on inside each company.

I have been in meetings with people who have detailed knowledge about the operations of a company and who are trying to buy stock from shareholders who don't have any knowledge about what is going on inside the company. (I'm not talking about MyFamily.com here!)

Fortunately, other people in the meeting reminded everyone of the ethical need to communicate openly with the other shareholders before purchasing their shares.

Even with information transparency, there will always be buyers and sellers of stock for all kinds of reasons, business and personal.

So that is what motivates me to be foolish, and to potentially upset friends and stir the pot. This whole experience has led me to form a new company that will try to promote information democracy in the world of business (both public and private).

We bought the domain www.unofficialblogs.com yesterday and might use that to launch our scuttlebutt network.

Your ideas and feedback, as always, are welcome.