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21/04/2016

Lessons from Legends : Warren Buffett

When it comes to investors there are very few who are as respected or well known as Warren Buffett. It’s not just because he made a lot of money (He is ranked No 3 on Forbes Billionaire’s List, with a net worth of $72.7 billion), or even because he chose to give most of his wealth away. It’s also because his principles are believed to be solid, sustainable and, even, universal — his fans consider him nothing short of a philosopher.

One of his investment philosophies — I would say, it’s the core — illustrate not only the wisdom, but also the subtle sense of humor that he is famous for. It goes like this:

Rule no 1: Never lose moneyRule no 2: Never forget rule no 1.

At one level it simply means that, at end of the day, a business has to make money. The cost at which a company creates value to customers should be less than the price they pay. For Buffett, it was all about the returns on invested capital. Profits. Peter Drucker says it’s profits that give legitimacy to a business.

This might sound a bit at odds with what happens with the start-ups. I am sure you constantly hear conversations about how your colleague and his family, armed with a coupon, had a sumptuous dinner at a restaurant for free, courtesy of some foolish startup. Or, how a friend uses an app to call a cab, riding for free with all the paybacks promised. Or the huge discounts with which one can buy something online. They are all great for customers, in the short term. But surely, none of these can be profitable for the companies. Can they break Buffett’s rules and create a new rule to building long term business value?

And then you have Amazon. It’s one of the most admired companies in the world. Customers love it. Its innovations are adopted as standards. Its founder, Jeff Bezos, is considered a kind of genius businessman. Amazon's market cap is at a whopping $295 billion — a good $100 billion more than IBM. Yet, it has never made any profit. Is Amazon breaking Buffett’s rules? Or is there something else going on here?





In my line of work, I often come across this question from entrepreneurs: What should we focus on — profitability or growth? The underlying assumption is that it’s okay for a startup to focus on acquiring more and more customers, achieve scale, and then look at profitability. It has an intuitive appeal. If the market is huge, make sure you grab it before others do, and then worry about profitability. That’s how Amazon does it — it has pressed the pause button on profits — so it can grow and grab market share.

Well, this kind of analysis misses a crucial point. If your unit economics isn’t right, there might not be any pause button for your losses.

What does it mean? In simple terms, are you the kind of CEO who understands your costs and revenues at a detailed per unit basis.

Let me explain it with an example of one of my favorite apps. Evernote. When I first downloaded and started using Evernote, I was a free user. I didn’t pay a penny to Evernote. Over time however, I found that I liked the product and noticed that premium users got more features — features I wanted, and so I subscribed to a premium account. Though it happened only after many subtle non-intrusive nudges from the App.

Let me put on my VC cap, and look at the transaction. Evernote — even its free version — is a great product. Customers love it. It’s functional, simple, and efficient — and more importantly has no ads.

Evernote premium version can convert a good percentage of its users into paying customers. And as long as they can keep doing that, scaling up with allowing free users makes a lot of sense. The value of the company will grow as they scale up customers who in turn will convert at some point. On the other hand, if they cannot get revenue out of some of their customers — then scaling up will only erode the value of the company.

So, we have two things. How much are you paying to acquire a customer? And what’s the long term value of the customer? If a customer uses the coupon or a discount you give to attract him, and and never comes back then you should be worried when your business scales up. It’s not your business that’s scaling up — but your losses. Your venture capitalist’s losses.

That’s a reason why I pay a lot of attention to unit economics when startups pitch to me.

Understanding unit economics well in practical terms would mean — besides knowing the capital costs — having a clear idea of customer acquisition costs, which includes all the money that you have to spend on spreading the word, enticing your customers to use your products through free trials, discounts, coupons etc — and other marketing costs. It would also mean having a grip on the operational costs — how much you have to spend to keep the lights on. Ultimately, it’s about knowing which levers to pull, if you want to get closer to profitability.

These costs need to be weighed against the perceived value among the customers and the money they are willing to pay for that value. It’s about pricing — but it’s also about sustainability. Will the customer come back, how often will he come back, and how long. Are the assumptions we make about the pricing, frequency and duration realistic? How elastic is the pricing? Can a new entrant disrupt it? Are there ways to lock in the customers?

Most startups, pitch free coupons and discounts, very few say my product can command a premium pricing.

While it would be unrealistic for a VC to expect a startup to make money immediately, credible answers to some of these questions when you are pitching your business will give you better chances at raising money.

So is Buffett right about “Never lose money”? Even in the world of startups, you do have to make money at the end of the day, or sell the company at the right inflection point — once you have proven the market need and your superior product. Exceptions apply, and like Lawrence of Arabia-“Truly, for some men nothing is written unless THEY write it”, occasionally, Amazon — Jeff Bezos, can defy Buffets rule.



My other favorite Buffet Quotes:
It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price — I apply this to my startup investing as a VC

We believe that according the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a ‘romantic.’ — I look for long term partners when i am co-investing

Diversification is protection against ignorance. It makes little sense if you know what you are doing — I invest in about 2–3 companies a year, invest in few, invest deep

Honesty is a very expensive gift. Don’t expect it from cheap people — While it is not always popular, I try to be honest in my feedback and cherish it being reciprocated

The most important investment you can make is in yourself — Meditate, exercise, eat healthy, sleep well, laugh, read, write, cultivate a garden, love —is how I take care of myself.

Read full Story: https://www.linkedin.com/pulse/lessons-from-legends-warren-buffett-vani-kola

20/04/2016

Build an App Without Writing Code

Nowadays, you don’t need to know how to code to build something cool online. The Product Hunt team put together a collection of 7 handy tools you can use to build an app (or maybe just a prototype) without a line of code.

These days, it’s hard to launch a startup without knowing how to code—or hiring someone who does. But, when you have basically no budget early in your company’s life, it isn’t always feasible to drop five figures (or more) on hiring a web or app developer.

Luckily, there are so many great tools on the market now to help you build a website or app without needing to write a single line of code. They are definitely time and money savers if you’re looking to launch on a dime, and fast. Here are seven of the Product Hunt community’s favorite “no code required” programming tools.
1. Bubble
Build a fully functional web app without any code.



The goal of Bubble is to make programming obsolete with its visual programming tool that allows you to build web and mobile applications without any code. The intuitive drag and drop builder allows you to easily add page elements like: text, videos, maps, icons, images, buttons, and more. Everything is customizable, down to font colors, icons, and the visibility of various elements based on what’s going on in the app you design.

The workflow-based programming enables you to define exactly what happens, action by action. You can define your own data structures, build your your logic (e.g. if the user click on X button while logged in, do Y; otherwise, do A), and allow your users to upload their own content.

Bubble also connects to a bunch of other popular services, like MailChimp (to auto-subscribe users to your mailing lists) and Mixpanel (to track activity on your app, including who your users are and what they do). This is a fantastic tool for those who are looking to launch a website or app seamlessly. The tool is completely free to build; you only pay for it once your audience starts to grow.
2. Pixate
Design native mobile app prototypes without code.



Pixate is a great tool to use if you’re looking to build a 100% native prototype so you can experience your ideas on a device as though you would if they were real. You can add interaction and animation to your design with just a few clicks, all without any code.

This is a beloved tool used by designers who want to validate ideas quickly without building out an actual native mobile app. It will fundamentally change the way you prototype and test. Highly recommended if you’re looking to launch or optimize an app in the near future.
3. Treeline
Build a backend without writing code.



Treeline hasn’t officially launched yet, but it’s sure to be a hit once it does. This tool is designed to help you build an enterprise-grade backend in hours (as opposed to months). It’ll help you architect your back-end as a set of small, reusable, well-tested modules. Here is a short list of some of the things you can do with Treeline:

Send HTTP requests
Encrypt or compare passwords
Work with Javascript code strings
Access the ElasticSearch API in Node.js
Communicate with the YouTube API to get video views, etc.
Communicate with the Stripe APO to charge credit cards, etc.
Communicate with Facebook to authenticate, pull profile data, and more

4. Tilda Publishing
Build beautiful websites and tell stories without any code.

Tilda is a website building platform geared toward content-oriented sites. There are over 170 pre-designed blocks that enable you to drag and drop your way toward a fully customizable website. All pages you create with this tool are built to look great across all devices, which is a nice thing to not have to worry about as a non-coder.

The pages are definitely optimized to be visually beautiful, with a focus on typography and imagery that will delight your visitors—and also look beautiful and rich. And, if you’re looking to optimize your site, you can build compelling call-to-action pages, connect your Google analytics account, and make your page search engine friendly.

This is a fantastic option for those looking to build blogs, lookbooks, event reports, and more.

Read full Storyfrom:https://www.linkedin.com/pulse/7-tools-help-you-build-app-without-writing-code-ryan-hoover?trk=pulse-det-nav_art

20/04/2016

Why Google Ads are better than Facebook Ads in Terms of Device Targeting?

Google ads have become popular in the online media from last decade and Facebook is also getting popular day by day.Google Adwords revenue is much better than Facebook worldwide but still Facebook is improving their revenue from past three years. Google has already made innovative changes in the ads targeting to target specific mobile devices, desktops or tablets. Google adwords team is quite innovative and makes changes in the advertising module every month that makes advertisers’ ad experience uncomplicated.



Google adwords used to allow us to target mobile devices only through display network but now they have introducedads within mobile app to show ads specifically on mobile devices. We can also target specific mobile devices like expensive iOS, Tablets or Android devices. They also allow us to target mobile devices by mobile operators they are using. You can run ad specifically on iOS devices to reach target audience who access entertainment, finance, news apps etc. Google adwords also offers radius targeting to target users at particular locations. We have recently run ads inMumbai to target audience at corporate parks. The campaign had performed very well as radius targeting helped us to reach right audience at right time.

Why Facebook is still behind the business?

Facebook offers various types of ads like website clicks, page like, post like, video views, event promotion, app installs etc. Facebook has made innovative changes in terms of type of ads but failed to make changes in the ad targeting like radius targeting, device targeting etc.



If you are running Facebook Ads then you would tackle following issues:

You can’t run ads specifically targeting only iOS and Android devices (you can target either iOS or Android)
You can’t target devices based on their model number (e.g. iPhone 6, iPhone 6s, Samsung Note 3 etc.)
You can’t target devices based on operators they are using
You can’t take online technical support as their technical support guys don’t have enough knowledge
You can’t do radius targeting
You can’t reduce radius length less than 10 miles if targeting particular location (radius targeting is allowed in Adwords)
You will never find popular locations in Mumbai like Bandra, Worli, Kurla, Andheri etc. in Location Section
You can’t be eligible for invoice-based account system unless you spend $ 10,000 from past three to six months
You can’t show ads to popular pages if you are not admin
You can’t run Cost Per Acquisition model to gain more number of leads

Which Facebook Ads Features are better than Google Adwords?

Demographic Targeting helps in Facebook ads as user has to put birth date to create an account (Google offers three types targeting male, female, and unknowns. This is why they don’t have control on unknown audience)
Facebook estimates how many people can be targeted based on campaign targeting e.g. budget, location, interest, age group etc. (which is not possible in Google Adwords)
Remarketing campaigns run on Facebook are better than Google Adwords when campaigns are run by using email ids

Conclusion:

Facebook needs to work very hard on advertising targeting to survive in the market to reach right audience. Google Adwords has already gone far ahead and Facebook is still struggling to compete Google Adwords in terms of ad revenue. Facebook should make ads targeting as customize as possible to reach right audience at right time through mobile devices as mobile users are more in numbers than desktop users. We request Facebook Advertising team to kindly note down the above points and make ad targeting as customize as possible.

Source: http://www.aed.in/blog/why-google-ads-are-better-than-facebook-ads-in-terms-of-device-targeting

20/04/2016

America: closed for business?

Imagine yourself one hundred years from now. Yes, you're still alive, breathing through genetically engineered pig lungs, and having dinner at your favorite restaurant. A robot waiter rolls up to refill your glass of wine, which is equipped with a sensor that allows the restaurant to automatically deduct $10 from your Bitcoin account.

Your companion, who doesn't actually speak the same language as you, is saying how much she loves her salad, which comes from a farm that uses precision agriculture techniques to boost productivity by effectively dividing fields into one-inch square plots that each receive customized fertilizer mixes based on their specific conditions. You understand her perfectly thanks to a small device in your ear that instantly translates her words and perfectly mimics her voice.

Or who knows? Maybe all this will take place only twenty years from now. And thanks to advances in genomics, your replacement lungs could come from a de-extincted bucardo goat. The future is sooner and stranger than you think!

How do we navigate and thrive in the face of the massive changes that are coming our way? That's the subject of innovation expert Alec Ross's instructive new book, The Industries of the Future.

Ross describes a world in which technologies like those described above are defining the way we live. Specifically, he identifies cloud robotics, the commercialization of genomics, digitized money, cybersecurity, and the data-ification of everything as the significant factors that will drive change over coming decades.

But Ross, who served as Senior Advisor for Innovation to Secretary of State Hillary Clinton, is hardly a high-tech Pollyanna. While he saw first-hand how start-up hubs in developing countries can unleash prosperity, he also understands the dislocating and potentially destructive possibilities inherent in a world that depends on computer systems to run. In the future, everything from your toaster to your pacemaker will be optimized through networked efficiencies – and also potentially hackable.

Thus, Ross is bullish on cybersecurity. In his view, it must function "as a central feature in all the products being developed and commercialized for tomorrow."

But ultimately Ross is even more bullish on openness as the core value that will determine the future success of countries, cities, and individuals.

Globalization will continue to create competition, but it will also create opportunities for those who adopt a collaborative, non-zero sum mindset. When you can communicate fluently with anyone on the planet, and transfer digital money as easily as text messages, new opportunities for economic growth emerge.

Of course, not everyone embraces the core value of openness.

Here in the U.S., as we move toward the presidential election in November, the question of America's openness has been a consistent campaign subject.

Donald Trump wants to build a massive border wall whose proposed dimensions fluctuate wildly. Ted Cruz promises to build a wall as well, and also to "triple the number of Border Patrol agents" guarding it. Even Hillary Clinton – with whom I agree on many things, though we differ here - has noted her past votes in favor of border "barriers" during campaign events.

But a border wall is just the most physical manifestation of a closed, zero-sum mindset that could potentially undermine America's ability to innovate and grow its economy in the 21st century.

Trump, for example, would like Bill Gates to look into "closing that Internet up in some way." He's threatening to start trade wars with Mexico and China and "rip up" all existing trade agreements.

Cruz, who says he supports free trade, won't necessarily go that far – but he has yet to endorse the Trans-Pacific Partnership (TPP), the 12-country trade agreement President Obama has been pursuing to improve U.S. export opportunities. In this instance, he's in rare alignment with Bernie Sanders, who opposes TPP and most other free trade agreements as well.

With his proposed bans on Muslims and his promise to build a "massive deportation force" to expel undocumented immigrants from the U.S., Trump has added an element of xenophobia to his particular vision of American isolationism.

But he's hardly alone in championing policies and perspectives that promote a more closed America at precisely the moment America should be pursuing greater openness and connectivity.

As Alec Ross suggests, prosperity goes to societies "that don't just double down on the past but that can adapt and direct their citizens toward industries that are growing."

Ross also notes the role openness plays in the technological advantages that the U.S. continues to enjoy. We're still the number one destination for foreign
scientists from nearly every country in the world because they want jobs at our universities. And ultimately the research they do here impacts America's broader culture and economy in ways that benefit us all.

Similarly, as data has evolved into the world's most valuable global resource, a bias toward openness delivers greater economic rewards. In Ross's estimation, restricting access to data now is strategically akin to "regulating land use during the agricultural age or regulating what factory owners could build during industrialization."

Again, Ross is careful to emphasize that states are never 100 percent open nor 100 percent closed. Openness can and should be applied judiciously, with security as well as prosperity in mind.

But it's crucial to strike the right balance, because openness is what leads to innovation. Just look at recent history. In the 1950s through the 1970s, American citizens attempted to breakdown walls and barriers through feminism, the Civil Rights movement, the gay rights movement, and more. Various global policies liberalized international trade. All of this helped create a growing culture of openness and innovation that in turn created economic growth.

Instead of building border walls, we should be building networks and alliances that leverage the power of tightly connected global markets. Instead of trying to figure out how to "close that Internet up," we should be focusing on how to extend high-speed Internet access to all. Instead of encouraging racial animosity and religious intolerance, we should be cultivating the diversity that leads to innovation.

Closing borders, erecting trade barriers, and cracking down on free speech won't improve America's fortunes – it will just make America more like North Korea. In today's rapidly shifting world, we need more openness, not less of it. That's the real key to making America great in the 21st century.