SortiPreneur

Heads Hanging on Wall St.

I am a big fan of the dotted headshots (they call them "hedcuts") of The Wall Street Journal.  I've always assumed that they are pretty standard - that once the WSJ has created one for a business figure, it kept using the same image.

Well, apparently not.  Columbia Journalism Review reports that the hedcuts have been changing, with examples that show the change - reflecting a more somber mood in line with the market's woes. (via SAI)

Green Turk

Murat Gunak, the former head of design at VW, has launched a new green automotive startup:  Mindset.  Even though I am generally turned off by nationalism, I find that I enjoy writing about the successful ventures of fellow Turks.

Mindset's first car is called the Six50, named after the weight of  the vehicle.  Treehugger has more figures:

Six50 hints at the target weight: 650 kg (1430 pounds). According to recent reports, the prototype aluminum frame with plastic body actually weighs in at 800 kg. The car will have a range of 100km (62 miles) on one charge of its lithium ion batteries and up to 800km with the two-cylinder petrol motor acting as a generator when necessary. Solar panels built into the roof help charge the battery. At its light weight, the 70kW (95HP) motor should move the Six50 along at up to 140km/h (75mph) and from 0 to 100km/h in under 6 seconds.

Seems like a smart move with oil headed to $200.

Euros' Rift Over Euros

I just read that German banking customers have been showing a preference towards Euro notes based on origin of issue, and exchanging those notes originating from Italy, Spain, Greece and Portugal, with those from Germany. (Thanks, Turgut!)

...
People clearly suspect that southern notes may lose value in a crisis, or if the eurozone breaks apart. This is what happened in the US in the Jackson era of the 1840s when dollar notes from different regions traded at different values.
...

There is criticism of comments from Italian, Spanish, and French politicians that threaten the independence of the ECB, viewed as sacrosanct in Germany.

But the key concern appears to be price stability. Germany's wholesale inflation rate reached 8.1pc in May, the highest level in 26 years.

This news story, against the backdrop of Euro 2008 Football Championship (and Turkey's fantastic last 15-minute comeback against the Czech Republic!), is as entertaining as it is incredible.  Especially, the last sentence:

Many have kept a stash of D-Marks hidden in mattresses to this day. A recent IPOS poll showed that 59pc of Germany now had serious doubts about the euro.

$1 Billion of Online Pizza

A CNN article reports that Papa John's Pizza has sold over $1 billion of pizza through their online ordering service.  The article is titled "Mamma Mia!" and I concur.

This puts a big smile on my face as I am one of the investors in the recent series A round raised by YemekSepeti.com, the leading online food delivery service in Turkey. 

Repeated Records

Paul Kedrosky's touched on a point that was topic to a dinner table conversation last week among my friends:  How common price records are once you've hit a record and how the repeated headlines on "oil hits record price" carry an amplification effect in people's perceptions.

Paul offers a great solution:

I think we should institute a new rule: No talking about a record price until at least 40 hours day after a record has been set. Call it a kind of market noise abatement act.

Happiness: The Geography Ediiton

Continuing the Happiness meme, Freakonomics blog has a good piece on the correlation of happiness and wealth.

Not exactly counter-intuitive :)

Happiness Formula

Last week I was a participant at an event where one of the topics was happiness.  While I did not attend that particular session, I was part of some discussions on whether we can actively manage our happiness.  So I have been thinking about the issue.
Three years ago my family and I made a sudden decision to move back to Istanbul, our hometown, after over a decade in New York, and close to half our lives in the US. We felt the move would contribute to our happiness.  While it is difficult to gauge whether we are proven right, just the feeling of taking this sort of control of the flow of our life contributed to a certain level of contentment felt.
My friend Fabrice has thought and written about the issue as well.  His take away:

1. Don’t equate happiness with money.
2. Exercise regularly.
3. Have sex.
4. Devote time and effort to close relationships.
5. Pause for reflection, meditate on the good things in life.
6. Seek work that engages your skills, look to enjoy your job.
7. Give your body the sleep it needs.
8. Don’t pursue happiness for its own sake, enjoy the moment.
9. Take control of your life, set yourself achievable goals.

And finally, today Emre Erşahin pointed me to a Dilbert blog post on the topic, analytical approach of which I found amusing:

I fantasize about writing a book called The Happiness Formula. The idea would be to create a simple formula for troubleshooting your life and improving your happiness. On page one would be this top formula.

Happiness = health + money + social life + meaning

The rest of the book would be nested formulas that further explain each component of happiness. For example…

Health = sleep + diet + exercise

And then down another level…

Sleep = schedule + technique

And down another level until it starts getting practical…

Sleep Technique  = consistent bedtime and waking time + no reading or TV in bed + no booze or caffeine…

And so on.

Read the comments; they are fun, too.

"Great" Makes a Difference

Auren has a good post on the difference truly outstanding people make in an organization, and emphasizes that this is especially true in start-ups.  I could not agree more.  I find that talent often provides the greatest bottleneck in technology start-ups and this is the single most important point in every investment we consider in the Turkish market.

In the process, Auren goes on to identify the only way a start-up can ensure hiring great people:

To me it is amazing how some start-ups choose who they hire – many seem to hire anyone that went to MIT.    That means they are outsourcing their hiring to the $40k/year admissions officer at the college who evaluated the person when they were 17! Do you really want to entrust your hiring to a bureaucrat? This is an extremely bad strategy. Of course, many people who went to MIT are real rock-stars and people who went to MIT might be more likely to be rock-stars than people who went to a lesser-known school, but most are only good … you need to work to find the great people.

By asking pointed questions and giving tough exercises, you can determine with high accuracy if someone is really amazing. In fact, I make it a point not to ask questions like “what do you like to do outside of work?” It’s better to ask them to solve tough problems and get to understand their thought-process. Great people have interests that often converge with what they do at work. At Rapleaf we do at least four rounds of interviews and we take our time. This means we occasionally lose some great people, but we err on not having false positives.

Focusing on assembling a team of great individuals is the single most important area an entrepreneur can focus on.

OMG, No Tipping Point?

In the early days of online social networking, the key idea driving the pioneering companies (SelectMinds, Friendster, Tribe, Ryze, LinkedIn) was the FoaF(Friend of a Friend)-driven virality of the model.  We realized that a company could reach geometric growth , since we'd all read Malcolm Gladwell's "The Tipping Point".  The quest was getting your service in the hands of Gladwell's connectors, mavens and salesmen.

We were also pretty excited about Duncan Watts's work on his then-in-progress book, "Six Degrees".  Watts was expanding on the "six degrees of separation" work of  Stanley Milgram.  The academic work around social networks made us more confident in our belief that our undertakings were part of a dramatic paradigm shift in marketing.

Fast forward to 2007 and you have Facebook, the most viral of the FoaF applications, taking over (at least my part of) the world, and achieving a $15b valuation, validated at least by Microsoft.  Our predictions of the paradigm shift are validated and many social networking services have reached their tipping points.  Gladwell was right!

O, was he?  Apparently Duncan Watts has been doing more work on the subject and he thinks not.  He disagrees with the ideas Gladwell has put forth, and claims that the popular word of mouth marketing models based on the spreading power of influentials are, for the most part, bogus:

...if you believe Watts, all that money and effort is being wasted. Because according to him, Influentials have no such effect. Indeed, they have no special role in trends at all.
...
"It just doesn't work," Watts says. "A rare bunch of cool people just don't have that power. And when you test the way marketers say the world works, it falls apart. There's no there there."

Yet, it all sounded so good!..  This is a good example of how there are some stories that sound so cool, that you really want to buy them.  And, "The Tipping Point" provides such a nice explanation for Facebook, too. Such a shame...

Soc Gen Rogue Trader

While I generally use Occam's Razor to debunk conspiracies and realize how difficult setting up a scheme this would be, I can not bring myself to buy the €4.9b of recent losses at Soc Gen were incurred by a solo junior trader named Jerome Kerviel.

The whole story is unfolding such ironic inprobabilities, such as Risk Magazine naming Soc Gen, "Equity Derivatives House of the Year", it's impossible to resist finding humor in what is a truly scary evidence of how vulnerable financial systems have become. 

Financial Cookery has a hilarious post on the background. (via Marc Andreessen)