Don Dodge on The Next Big Thing

Microsoft Surface at Sheraton hotels

I was at the Sheraton Boston last night for an event. In the lobby I saw some people gathered around what I thought was a coffee table, it was a Microsoft Surface computer. This group was checking out the aerial maps to show others where they lived, and to find a restaurant where they wanted to have dinner.

After they left I decided to see what other applications were available on the Surface. There was one that listed all the Sheraton hotel locations along with pictures and maps. There was also an application to find restaurants, tourist attractions, maps, and other information. There was even a music app with pre-loaded music.

It turns out that Microsoft is working with Sheraton Hotels to see how people will use the new Surface computer. They are now in use at Sheraton hotels in Boston, New York, Chicago, San Francisco, and Seattle.

That reminds me...I also saw a Surface on MSNBC a few days ago. They used it to show the national presidential election map and which states were going for McCain and Obama. Here is a photo I found on the Microsoft Surface web site.

Microsoft reports strong quarter in turbulent times

Microsoft  (MSFT) announced revenue of $15B for the quarter ended Sept. 30, a 9% increase over the same period last year. Operating income was $6B, net income $4.4B and earnings per share was $0.48 for the quarter.

This was a strong performance in a difficult economic environment. Of course Wall Street immediately looks beyond this to the "guidance" for the next quarter and full year. The guidance was slightly lower than previously forecast, but not much. The stock market reacted favorably moving up in after hours trading.

Other highlights for the quarter;

• Microsoft ended the quarter with $20.7 Billion in cash.
• Microsoft (Office) profit of $3.3 billion on revenue of $4.95 billion.
• Client (Vista) profit of $3.26 Billion on $4.22 billion in revenue.
• Server & Tools - profit of $1.15 billion on $3.4 billion in revenue.

Buy low, Sell high - Warren Buffett does, you can too

Buy low, Sell high is the oldest investment cliche. Sounds simple, but it is very hard to do. Why? Psychology. Two things drive the stock market; fear and greed. Fear is a powerful emotion that causes people to sell investments and seek comfort and safety in cash or gold. There is a lot of fear around today.

Greed is an even more powerful emotion than fear. Fear is temporary, greed is permanent. Greed always overtakes fear. Greed also lulls us into a false sense of security. For most people logic and reason go out the window at both ends of the spectrum.

Warren Buffett says "Be fearful when others are greedy, and be greedy when others are fearful."

Buying low and selling high requires you to buy now when the economy is in a panic and fear is rampant, and sell when things are going great and everyone feels giddily happy. Why would you sell when your stocks are going up every week?

Psychologically it is incredibly difficult to buy now when all the news is bad and everyone is in a panic. It is counter to every safety mechanism we have learned since we were born. It is equally difficult to sell when everything is going great.

But, watch what Warren Buffett does. He isn't buying just any random stock. Buffett is buying General Electric, Goldman Sachs, and other rock solid companies that are at bargain basement prices today.

You make money selling stocks...not buying them. Here is another counterintuitive truth. Most investors spend all their time researching stocks trying to time their buys for the best entry point. Fine, but the reality is that you make money when you sell stocks, not when you buy them. How much time do investors spend figuring out when to sell? Instead, we are congratulating ourselves on what a great buying decision we made and convincing ourselves that the stock price will continue to go up 15% to 20% per year. Everything is going great. No signs of trouble. Party on.

Short sellers are a different breed. They spend their time finding stocks they believe are over valued...and selling them short. Meaning, they sell stock they don't own (margin), and hope to buy it back (cover) when the price is lower. Stock investors could learn a lot by watching short sellers.

I have learned, and forgotten, these lessons several times over the years, and paid the price along with many other investors. Fear and greed are powerful emotions at opposite ends of the spectrum. Both emotions cloud logic and reason. Warren Buffett is one of the few people with the patience and determination to remember the lessons and make them work.

Remember this "Be fearful when others are greedy, and be greedy when others are fearful." In other words, do the opposite of what your emotions tell you. Easy to say...hard to do.

Start a company in a recession? Absolutely!

Now is a great time to start a company. Why? Because great people are available to join you, VCs are loaded with cash, and office space is available cheap. Everything is cheap and readily available in a recession.

Paul Graham says "If we've learned one thing from funding so many startups, it's that they succeed or fail based on the qualities of the founders."  "Which means that what matters is who you are, not when you do it."

In good times all the really great people are busy doing fun projects...and not available to join you in a startup. In bad times projects are cut, people are laid off, and big companies retrench to improving the existing stuff. New projects don't get any budget. So, great people get bored and start looking for the Next Big Thing...a cool startup.

Raising money is a little harder, but not much. Good teams with good ideas can always get VC/Angel funding. In fact, VCs are sitting on tons of cash right now...and they want to invest it in hot new startups. Many VCs are reluctant to dump more money into an existing startup that is struggling, but will invest in a new startup idea. The promise is always more appealing than the reality.

Everything else is cheap and readily available too. Office space is always cheaper and more available in a recession. Existing companies will sub-lease space really cheap to offset some costs. Computers, software, networks, desks, equipment...everything is cheaper.

Expectations are lower during bad times so it is a good time to be in development mode, building a product, getting an audience, and starting a tiny revenue stream.

Customers are willing to try new things to save money in bad times. When things are going great they don't want to take risks on a tiny startup. If you can save them money in bad times...they are happy to deal with a startup.

Go for it! Now is a great time to build your great idea into a company.

MIT Enterprise Forum on Advertising Networks

The MIT Enterprise Forum of Cambridge will host a panel conversation on October 28th to discuss the re-emergence of advertising networks and their growing role in reaching an increasingly fragmented audience.

I will be moderating the keynote panel which will include leaders from advertising agencies and ad networks. We will explore topics including the impact of new economics for the advertising inventory value chain, targeting methods and the future role of advertising exchanges in the ecosystem. We will also dig deep into how "attention data", the social graph, rankings, ratings, preferences, and click stream data may be used to better target advertisements.

Panelists:

Ron Belanger -VP of agency development for Yahoo. Prior to joining Yahoo!, he was VP of search and affiliate marketing at Carat Interactive (now Carat Fusion).

Daniel Jaye, - most recently president of TACODA and played a critical role in the company's sale to AOL/Time Warner. Prior to TACODA, Jaye was founder, CTO and chairman of Permissus and co-founded and was CTO of Engage.

Dwight Merriman is chairman and co-founder of AlleyCorp, owner of Silicon Alley Insider.  Merriman is also a co-founder and CTO of DoubleClick, one of the first and largest ad networks. 

Mike Troiano is CEO of MatchMine, a network that helps create new revenue opportunities for online publishers.  Troiano spent his early career at advertising agencies, and was formerly CEO of Ogilvy & Mather Interactive.

The panel will be moderated by me, Don Dodge, director of business development at Microsoft.

Come on out and join the conversation. We have a great panel and a really interesting set of issues to explore.

Registration and information: http://www.mitforumcambridge.org/oct.html

MyPunchbowl party planner - design studio

MyPunchbowl, a web service to plan and organize parties and events, today announced a new invitation designer. MyPunchbowl takes party planning and invitations several steps beyond eVite.

The new invitation card designer has an intuitive and simple user interface. Users can choose from a library of pre-made cards and templates, or you can create your own invitation with your own pictures and graphics. The templates can be customized to include user-defined text, fonts, colors, pictures, and graphics.

Key features of MyPunchbowl include:
• Pick a Date feature to drive group consensus to an event date
• “Save the Date” to inform guests early in the planning process
• Design Studio with an attractive selection of paperless papers, ribbons, and fonts
• Ability to instantly customize the color and fade of any paperless paper, ribbon, or text
• Hundreds of pre-made free invitations that can be customized for any occasion, such as
birthday invitations and Halloween invitations
• Party checklist and potluck checklist to keep hosts on track
• Easy import of email addresses to manage guest lists
• Stress-free RSVP to ensure a more personal interaction between host and guest
• Party planning advice and tips from MyPunchbowl resident expert Penelope
• A party store locator to find local stores anywhere in the United States
• Numerous “after party” features to reminisce and share party memories

TechCrunch did a nice review of MyPunchbowl highlighting the "gorgeous custom invitation editor".

MyPunchbowl recently closed a $2.1M financing round. Investors included Intel Capital, eCoast Angels, and Contour Ventures.