wmorein

The thing that is frustrating about this to me is the following:

Imagine that two years ago, a giant hurricane hit somewhere and AIG's insurance business wasn't properly reserved/diversified. The losses were just too huge to absorb.

Now, since this is two years ago, the AIG Financial Product's CDS trades look immensely profitable, so Joseph Cassano screams about the fact that he had nothing to do with the losses and he deserves his full bonus.

I don't see how that situation is two different from the current one, just with the players switched around. Of course we don't know that this guy's trades are bad, but we also don't know that they are really profitable at the level he claims (hundreds of millions of dollars a year in his group).

It really feels like some sort of joke talking about how much faster they could go bankrupt would be appropriate here.

I don't think that this article is really telling the whole story. The implication seems to be that things just need to be reported in XBRL and that all the information people doing analysis need is there (just not in a consumable format).

My side project is an SEC search site (http://edgarest.com) so I've spent a huge amount of time looking through what is available. The disclosure is just not there -- I'm pretty confident that you couldn't have seen the Bear collapse from the filings they made. You can look at a huge proportion of the filings here: http://edgarest.com/company/name/777001/BEAR_STEARNS_COMPANI... for Bear itself and http://edgarest.com/search?q=bear+stearns for associated entities. Too much of the trading they do and the assets they hold are still opaque to SEC reporting. Along with getting people to file using XBRL we'd have to force companies to increase disclosure (and you'd get a huge amount of pushback on that).

"If you look at government bonds (a.k.a. TBills), they'll tell you exactly how much interest a truly risk free investment is worth"

That used to be true, but it isn't strictly true any more. The Credit Default Swaps for US Treasuries are priced to imply that you need to subtract around 1/10 of a percent (100 basis points) from the yield to get the real risk free rate. See http://www.fxstreet.com/fundamental/analysis-reports/sunrise...

This is what I use as well. I'm surprised there aren't more users here.

Google is very flat by reputation, but that is not an unequivocal good. If your manager is also managing 50 other people, to the extent that you would benefit from management you are probably not getting those benefits.

I think that the other big con for idea 3 is that this is very likely to follow an enterprise sales model. Security in general is the kind of thing that is purchased relatively high up in an IT org. Not 100% clear if your idea would be in that basic mold, but if the model is that the tool runs against or sits on all servers, that would almost certainly be the case.

If you are in the "enterprise" space, that means salespeople, RFPs, support, etc and since all that costs money you are much more tied to a traditional vc model. That could be fine depending on what you want, but it feels different from the other ideas in terms of how much progress you can make on your own or with a small team.

One interesting thing to me is that even if you do this (correlate compensation with longer term results) a lot of the same problems still happen. Take, for example, the first big hedge fund blowup: Long Term Capital. Shortly before they blew up, they kicked most of the third party money out of the fund and even levered up their own individual positions (see the book "When Genius Failed").

I'm not saying that misalignment of incentives doesn't play a significant role in a lot of what we are seeing now, but never underestimate hubris.

I think he means this: http://www.scribd.com/doc/9932346/Incubator-RoundUp-SeptDec-...

Solr (http://lucene.apache.org/solr/) is a web search engine built on top of Lucene. It should get you most of the way there.

If anyone knows of any additional links, add them in the comments here and I'll add them to the page.

In Jobs's specific case, for a while he held no equity and also drew no salary.

Do you really have to pay yourself "reasonable" compensation? I don't doubt that you were told that, but it is interesting that multiple CEOs of large, public companies (e.g. Brin/Schmidt/Page at Google, Jobs at Apple) pay themselves $1 per year.

See proxy statements at http://edgarest.com/company/name/1288776/Google_Inc_ and http://edgarest.com/company/name/320193/APPLE_INC for reference.

Also, I'd add that designing an app to scale out effectively is one of the harder challenges that most developers face in the world of web apps. He seems to imply that you just by another few boxes and magic happens, which is not the case from what I've seen.

To be fair, the article is a little more balanced than the headline.

IE was already multi-threaded (just not multi-process): http://blogs.msdn.com/ie/archive/2005/05/26/422103.aspx

I'm missing something here -- the Tufte notion of sparklines refers to "data-intense, design-simple, word-sized graphics". To me these are much larger and are much more like traditional graphs.

I had a similar situation a few months ago. My goals were to get something up and running relatively quickly but it was my first python web app and I wanted to make sure that I actually understood what was going on underneath the covers. I used web.py (http://webpy.org/). Overall I've been pretty happy with it -- it is small enough that looking at the code is actually meaningful to me (although there is definitely some strangeness in there from my perspective) but I also can mostly just write the app and not think about the framework.

I think that his lesson number 2 ("No separation between the technology organization and the product organization") is an interesting one, and to my mind very wrong. The goal seems right -- making sure that the product is built with the customer in mind -- but from what I've seen the best case is when the technology group can internalize those needs and make the right product calls, rather than having a completely different org. This is particularly the case in a startup.

There are such companies: cf. http://bits.blogs.nytimes.com/2008/05/05/how-googles-checkbo...

"The "IQ test" quote refers not to how fast they have to decide, but the amount of equity we usually ask for. In the median case it's 6%. If we take 6%, we have to improve a startup's outcome by 6.4% for them to end up net ahead. That's a ridiculously low bar. So the IQ test is whether they grasp that."

In starting to write a comment on this I did a little searching and found out that YC takes common stock rather than preferred (at least according to this: http://venturebeat.com/2007/04/16/y-combinator-continued/). It is interesting since the statement above is only true as long as common with no additional rights is given. I wonder what the terms of the "copycats" mentioned are -- does anyone know if they are asking for preferred or other rights for their equity?

Customers should be used to identify problems to solve. The solution should be yours -- they don't understand the right way to design.

About 1000 according to this article: http://www.computerworld.com/action/article.do?command=viewA...

Xobni.

This reminds me of something I always wonder about: the importance of management in startups (once they hit, say, 8 employees).

For the most part, if you hire the right people they are self-motivated and in general the team has a clear direction. But at some point you need good managers -- when is that?

Most large tech companies have an explicit prohibition on non-lawyers doing patent searches. At all.

Doing the patent search won't get you sued, but if you are sued and they win, the fact that you did the search means that they can hit you for triple damages.

I've leave the "you can't patent ideas" piece alone here because I think that is semantics.

One thing to be careful of here. If you intend to implement the idea (rather than just patent it) doing the search puts you at risk to some degree. If you do the search yourself (possibly not finding the relevant patent) and then do the implementation anyway, you are at risk for "willful infringement". This is all really murky and you probably want to talk with an attorney if you are serious.

Link with some relevant info: http://wistechnology.com/article.php?id=1303

This one (done internally by a group at Microsoft) is vastly superior: http://video.google.com/videoplay?docid=4313772690011721857

That is definitely true. According to the Battelle book "Search" (good book by the way) and others, they tried to pitch themselves as a tech provider to Yahoo and others. That plan failed since no one was interested, and they went their own way.

I'm halfway through the book, and I have to say I'm loving it. I had pretty low expectations coming in -- I think the blog is great but couldn't see it hanging together as a full book -- but they have been easily surpassed.

Barnes and Noble filed it under author name "F" for "Fake Steve" in the humor section -- took a little while to find it.

OK, I see what you mean now -- I assumed this was a typo.

I'm still not sure that I agree. I don't think that recent history has shown that the opening price (i.e. the first price at which the public can buy shares) is any higher if the ibankers significantly underprice the stock. In essence, all that should matter to you is that opening price. If it is too high, then you shouldn't buy.

If the stock is underpriced, then it is true that there will be less capital that goes into the business so the valuation you use to decide whether to make the investment would have to take that into account. Given the way that I'm guessing that Facebook will be valued, I have to think that any possible loss due to underpricing will be vanishingly small compared to the overall market cap of the company.

I can understand a philosophical reason not to invest if it is underpriced, but not a real economic one.

One other note -- if the IPO is underpriced, the payout goes not directly to the ibankers but rather to the people that get allocations. These are usually big customers like hedge funds or other people with an "in" with the ibankers (e.g. execs of other companies that might go public, although this stuff has slowed down). Obviously the expectation is that these people will benefit the bankers in the long run, but the payment is not direct.