October 2008
24 posts
4 tags
Evolving or Forking OpenID
I am taking today off from my mini-series on debt because of something that I believe will turn out to be important. Google announced this week that they would become a provider of authentication under a scheme based on OpenID. While there are several modifications to the OpenID standard, one of them is crucial. In Google’s scheme endusers use their gmail address instead of a URL to...
2 tags
Corporate Debt
Yesterday, I looked at household debt where it is clear that households took on too much debt. What about corporations? Credit was readily available and there was a lot of private equity activity. It is well-known that the net result was a big upswing in corporate debt starting in 2002. Again we can take a look at the Flow of Funds data from the Federal Reserve to see this. The following...
2 tags
Household Debt
In thinking about the possible extent of the current economic crisis, I have been focused on understanding the role of debt. I first started looking at household debt. The Federal Reserve publishes statistics called the “Flow of Funds” which track sources and uses of capital in the economy over time. The following chart shows household debt, broken down into consumer debt (credit...
1 tag
Microsoft's Cloud(ed) Platform
Yesterday, Microsoft announced the Azure Services Platform, which is their entry into the cloud computing market. I have spent quite a bit of time reading through the materials, starting with Microsoft’s press release which is full of buzzwords, but otherwise about as uninformative as could be. In usual Microsoft fashion, they have thrown the kitchen sink into the announcement trying to...
2 tags
Debt, Debt, Debt, and More Debt
A couple of years ago, I was telling a friend and neighbor (who was working at the New York Fed at the time), that I was concerned about the mountains of debt that were being used in buyouts. My friend was looking into hedge fund leverage for Timothy Geithner and agreed that someone ought to do the same for PE funds, but I don’t think anything ever came of it. My big concern back then was...
3 tags
Big Week in Cloud Computing
This has been a big week in cloud computing. Most importantly, Amazon removed the “Beta” label from EC2 and is now offering an SLA for EC2. This is essential for businesses that want to move core systems onto EC2. As I have stated before, though, EC2 is not really a cloud platform in and of itself, rather a highly advanced server provisioning infrastructure. Amazon also took...
2 tags
Optimism versus Overconfidence
A little while ago during Web 2.0 in New York, I expressed my sense of deja vu about being at a large Internet conference while the markets were imploding. If anything, this sense has deepened over the last couple of weeks. Not so much because there has been more volatility in the markets than ever before, but because there is such a wide range of attitudes among startups about the depth of this...
Security, False Positives and Customer Service
E-Tradebank has a very nice feature which let’s you do regular ACH transfers to other accounts. This weekend I was in the middle of adding such an external account when I suddenly received a notice saying something like “we are concerned about fraudulent activity in your account and need to verify your identity”. I was a bit surprised since I had added several external accounts...
3 tags
To Multitask or Not To Multitask
There are quite a few studies that have come out recently showing that multitasking is bad for performance in humans. For instance, driving your car while talking on your cell phone significantly increases your accident risk. In machines, however, we have come to love multitasking because it enables better CPU utilization. Much discussion has therefore revolved around the iPhone not having...
3 tags
Leverage and Incentives
There was an editorial in the New York Times over the weekend talking about the likelihood of bankruptcies among companies that have gone through buyouts during the time when credit was flowing too freely. I agree with the column that this is highly likely as we are facing a significant slowdown in economic activity and these companies have way too much leverage (and given the credit crunch, no...
1 tag
Tough Choice: MacBook vs Toughbook W8
For a long time now I have been wanting to switch to a Mac. But all the Mac laptops were way too heavy. My laptop goes with me whereever I go and every extra pound counts. Then came the Air. At first I was very excited at the prospect, but then there were simply too many compromises. Having to send my machine in to replace the battery is a non-starter. I have had my current laptop — a...
1 tag
Cloud Principle #4: Ease of Assembly
Finally getting around to my fourth cloud principle: In the cloud it should be easy to consume and produce web services. When you build something in the cloud, you should be able to focus on the essential innovation of your site or service and be able to rely on other web services for everything else. Conversely, it should be easy for you to expose any part of your site or service as a web...
3 tags
In Praise of Heuristics
Entrepreneurs sometimes wonder why VCs are so bent on owning a 20% stake in the companies they invest in. The answer is surprisingly simple: It’s a successful heuristic. Heuristics are “rules of thumb” and they turn out to be really useful whenever you deal with a lot of uncertainty. As an investor, one might be tempted to try to optimize the ownership percentage on a...
2 tags
Hiring to Save Money
Given the financial crisis, there have been a lot of posts about trimming costs by laying people off. But there may also be opportunities to save money by hiring people. This (generally) does not apply to tiny startups but only to businesses that have achieved a certain scale and employ consultants. It is often the case that consultants are brought in to work on a specific project but wind up...
3 tags
MultiplicationShooter1.0 →
I am a huge fan of MIT’s Scratch project. It is a visual programming environment for kids. Instead of writing code in a text editor, kids snap together templates to form scripts. The scripts are attached to sprites. Creating sprites is also super easy in the integrated graphics editor. Another wonderful thing about Scratch is that with the push of a button you can publish your project...
1 tag
Continuations.com
When I started this blog, I picked the name continuations. But at the time, continuations.com was not available and so I used a subdomain at wenger.us. I am happy to report that thanks to the capable negotiating help of Eric Friedman, I am now the proud owner of continuations.com. Old links should still work as I am forwarding requests.
3 tags
The Sequoia “RIP: Good Times” presentation →
Super clear presentation about how we got ourselves into this mess and why it will take a long time to get back on track. Must reading for everyone (not just entrepreneurs).
Another Shot
I bought GOOG at the IPO and have owned it since. I simply did not but nearly enough of it. Now I believe all of us who made that mistake will get another shot at buying into GOOG at a reasonable price (that is assuming you have some cash around). I am not suggesting anyone go all in right now, but I have started to buy and will continue to do so over the coming months. I also think that EBAY is a...
Headless Web Service
We had our annual portfolio summit yesterday. Lots of great discussion around a broad range of topics. One that was especially interesting was whether or not a ‘headless’ web service can be successful. By ‘headless’ I mean a web service that is all backend and does not have its own frontend. Such a service would rely on third parties to build frontends for it. One argument...
Learning from Each Other
Today we are having our annual portfolio company summit. We bring together folks from all our investments for a day in New York City. It is an awesome opportunity for all of us to learn from each other. Given our strong focus, almost all of the companies face similar issues. For instance every one needs to worry about SEO. But we also have enough breadth to have real experts on every topic....
Kleiner's Greentech Push
The NYT Sunday magazine had a great cover story about Kleiner’s Greentech push (link to be added). Amidst all the news of financial meltdown and impending recession, it was heartening to see that we may yet witness the commercialization of technologies to help us fight the damage we have been doing to the environment. A firm of Kleiner’s reach and reputation taking a high profile lead...
2 tags
Startups and Recession
There have been a lot of great posts this week about what the financial crisis means for startups. There was Jason Calacanis’s epic Startup Depression and Fred’s thoughts on it, Brad Feld’s Focus on Things Under Your Control and Roger Ehrenberg’s somewhat dissenting view that there is a new group of angels that might not pull back. I attended several conferences and...
Cloud Principle #3: Scaling (Without Unnatural...
I want to get one thing out of the way right upfront. It is possible to scale the LAMP stack to hundreds of millions of page views per month and beyond. But that largely involves unnatural acts. By that I mean developing lots of custom backend code that has no visible value to an enduser of the site or service. My third principle of cloud computing is that code scales under normal circumstances...
Frameworks and the Cloud
I used to not be a big fan of frameworks such as Rails (Ruby), Django (Python) or Cake (PHP) for two major reasons. First, the frameworks did not seem all that mature requiring attention to patches and upgrades and raising at least the possibility of winding up on a “dead” branch. Second, the frameworks seemed to add a lot of overhead (e.g., in the ORM parts) so that you would need...