Archive for September, 2011

Busy – personal and business

Tuesday, September 13th, 2011

My BIG news is that, after 4+ years with my gorgeous girlfriend, we have decided to get married. Before I proposed I of course made sure that all possible signs were pointing to yes, and I decided to do so in such a memorable fashion that she really had to say yes (well, that’s my theory anyhow). Wedding will likely not be until next summer and we’re trying to figure out where to go….we’d love to go back to Necker Island but since the fire, it’s made it a little more tricky (not to mentioned mega $$$$).

But, we’re discussing now and we’ll figure out soon.

On the business side, my startup idea is in the process of being pitched to VCs with good reaction so far. And I am progressing some really interesting CEO opportunities in parallel. I keep being asked “which will you choose” but right now, I don’t have any choices – let’s see where the cards fall first.

Nice to see the 49ers win at the weekend – not saying they are about to win the SuperBowl but at least looked to be a reasonably solid performance with plenty of areas for improvement of course.

And…anyone that follows me on Twitter…the address is gary_read…..I normally don’t tweet between blogs as I can only update a limited number of social media activities at once.

And finally, I’ve been working with a trainer at the gym for 2+ weeks. So far I’ve put on 4 pounds during that time but they measured me and said that I put on 8 pounds of muscle and lost 4 pounds of fat. Wow….not sure I believe them but I’m enjoying it so why not…

Feels like things are getting closer….

Saturday, September 3rd, 2011

Last week moved several things forward quite a bit in my figuring out what to do next. I spent a lot more time with one of the companies that I’ve been talking to and that helped to clarify things quite a bit. I also met with the lead investor in another company that I had previously discounted, but now is becoming more interesting.

But probably the biggest news of last week was that, for the first time I showed my start-up idea to a few VCs. I actually met with 4 investors on the same day and the reactions were….

1st meeting – Hmm, really like this, I can definitely see the use for it, let’s arrange a follow up with broader set of folks asap next week

2nd – Wow, love it. Really understand the problem and can see the value in what you are doing. Let’s present to the full partnership asap

3rd – I think you’re on to something really big. Very interesting. Would love to write you a check, not sure if we will invest in something so early but let me check with the other partners asap.

4th – You’re trying to do something far too big and far too complicated. Start smaller and focus.

So, I was very very pleased. Initially I was a little disappointed at the 4th meeting, but then I remembered something that I always tell others. “If you don’t get some people telling you your idea is crazy, then it’s probably not that good”. Moving from one paradigm to another will always be considered crazy by some….until it happens (didn’t we all think that Twitter was ridiculous when it started?)

This coming week I’m going to show it to a couple more (trying to limit the number of folks that I talk to) and do the follow up meetings with the others. Hope to get to a go/no-go investment decision within a few weeks.

I’m excited….some very different opportunities that I’m considering…from my raw start-up to a company with great technology that needs to figure out its go to market plan to a company that is already doing about $60m in revenue and wants to scale fast.

HP Touchpad – here’s what I don’t understand

Friday, September 2nd, 2011

Ever since HP announced that it was exiting the Touchpad business and slashed the price to $99 – there has been a frenzy of buyers, so much so that HP has sold all of their inventory. Yesterday I noticed that HP have agreed to do one more production run of Touchpads to help satisfy the further demand (even though they are losing about $220 per unit that they manufacturer).

But…..what I don’t get understand is…..why haven’t any of the “non-Apple” tablet makers used a ultra-low price as a valid marketing campaign to gain market share?

What I mean by this is that Apple have such a dominant market-share and maybe more importantly, mind-share right now that for any new entrant (of which as we know, there are many), job number one is to establish yourself as a worthy competitor.

How do you do that? Well, advanced features are cool but that’s not enough. You need to do something disruptive and certainly a $99 or even a $199 price is exactly that.

The estimates that I saw were that Apple would sell approx 40 million iPads this year, with the rest of the industry combined for 20 million. The estimated #2 is Samsung with 5 million…..hardly a position that is worthy of any comparison with Apple.

Let’s say HP or someone else with deep pockets wanted to enter the market and establish itself a a worthy #2 to Apple (you cannot become #1 until you become #2) – how about that they create a splash by offering a special entry price for their units of $99 or even $199? How about that they supplement what they are losing on each device by having BestBuy sell an annual Geeksquad support contract for $50 or $100. How about if they offered the device heavily subsidized by the wireless network providers just like smartphones?

Yes, this would cost the company a lot of short-term profitability, but this is about the long game (think about Microsoft and their Xbox strategy – they lost money on that for years).

Once you have a user base, you become recognized as a bona fide competitor to Apple, when someone buys a tablet their decision is A or B, instead of A or (B or C or D or E or F….). You can increase the price, but, more importantly, you can start gathering all those fees that Apple is going to gather from AppStore participants by taking their 20 or 30% cut on all subscriptions in the AppStore.

I know that this is an expensive strategy, I know that someone would have to invest a few $billion to pull this off, but, the alternative is to become irrelevant and cede the market to Apple.

Google could do this with Motorola (what’s a few billion of cash to Google) and personally, I think that Google understand extremely well that they cannot let Apple dominate the consumer hardware. Yes Motorola was good for patents, but someone has to become a worth handset and tablet competitor to Apple. I think Google looked at their Android ecosystem and saw that nobody was stepping up and therefore had to do so themselves.

Innovation happens not only on technology but on business model. Right now it is really hard for anyone to “out innovate” Apple on technology or user experience, but have we all forgotten that price and other factors are very important for consumers as well?