New Economics Theories for the new Tech World

When I was doing my MBA (a decade ago), one of the principal theories on why corporations exist was 1) Shareholder Value creation (grow wealth for investors) and a notable second was 2) Stakeholder Value creation- creating jobs for societies, providing tax to countries, providing employees with stable employment and incentives,  and of course creating monetary value for shareholders.

There were two ways you could raise money- debt or equity. Debt had the advantage of interest payments being tax deductible. Debt payments had to be met regularly. Equity had the advantage that equity holders were the last ones to be paid in case of closing the company down, which justified that rate of return on equity is generally higher than cost of debt.  Dividend payouts to stockholders could be deferred in a low revenue year or due to planning reasons.

Or in plain English, over the long term borrowing money from share holders in lieu of stocks was more expensive than selling bonds or borrowing from the banks.

Hybrid combinations of debt and equity were warrants and debentures that started off as one form of instrument and over a period of time gave much more flexibility and risk safety nets to both issuers and subscribers of capital. Another hybrid was stock options (now considered as a default option of rewarding employees in technology companies, but this was not always the case).

The use of call and put options in debentures, and the idea of vesting period in stock options was to promote lone term stability and minimize fluctuations in stock prices, employee attrition, besides of course to minimize the weighted average cost of capital. Venture capital was another class of capital known for both huge rates of return and risk taking (?)

But in today’s world where a Google has three classes of shares, companies trade shares before IPOs, and valuations of technology companies sink and rise by huge % over weeks (especially as they near IPO dates)- I wonder if traditional theories in finance need a much stronger overhaul.

or do markets need a regulatory overhaul, that would enable stock exchanges to have once more the credibility they had as the primary sources of raising capital.

 

Who will guard the guardians? Their conscience- the regulators or the news media?

There are ways of raising money that are not evil.

But they are not perfectly fair as well.

Interview: Hjálmar Gíslason, CEO of DataMarket.com

Here is an interview with Hjálmar Gíslason, CEO of Datamarket.com  . DataMarket is an active marketplace for structured data and statistics. Through powerful search and visual data exploration, DataMarket connects data seekers with data providers.

 

Ajay-  Describe your journey as an entrepreneur and techie in Iceland. What are the 10 things that surprised you most as a tech entrepreneur.

HG- DataMarket is my fourth tech start-up since at age 20 in 1996. The previous ones have been in gaming, mobile and web search. I come from a technical background but have been moving more and more to the business side over the years. I can still prototype, but I hope there isn’t a single line of my code in production!

Funny you should ask about the 10 things that have surprised me the most on this journey, as I gave a presentation – literally yesterday – titled: “9 things nobody told me about the start-up business”

They are:
* Do NOT generalize – especially not to begin with
* Prioritize – and find a work-flow that works for you
* Meet people – face to face
* You are a sales person – whether you like it or not
* Technology is not a product – it’s the entire experience
* Sell the current version – no matter how amazing the next one is
* Learn from mistakes – preferably others’
* Pick the right people – good people is not enough
* Tell a good story – but don’t make them up

I obviously elaborate on each of these points in the talk, but the points illustrate roughly some of the things I believe I’ve learned … so far 😉

9 things nobody told me about the start-up business

Ajay-

Both Amazon  and Google  have entered the public datasets space. Infochimps  has 14,000+ public datasets. The US has http://www.data.gov/

So clearly the space is both competitive and yet the demand for public data repositories is clearly under served still. 

How does DataMarket intend to address this market in a unique way to differentiate itself from others.

HG- DataMarket is about delivering business data to decision makers. We help data seekers find the data they need for planning and informed decision making, and data publishers reaching this audience. DataMarket.com is the meeting point, where data seekers can come to find the best available data, and data publishers can make their data available whether for free or for a fee. We’ve populated the site with a wealth of data from public sources such as the UN, Eurostat, World Bank, IMF and others, but there is also premium data that is only available to those that subscribe to and pay for the access. For example we resell the entire data offering from the EIU (Economist Intelligence Unit) (link: http://datamarket.com/data/list/?q=provider:eiu)

DataMarket.com allows all this data to be searched, visualized, compared and downloaded in a single place in a standard, unified manner.

We see many of these efforts not as competition, but as valuable potential sources of data for our offering, while others may be competing with parts of our proposition, such as easy access to the public data sets.

 

Ajay- What are your views on data confidentiality and access to data owned by Governments funded by tax payer money.

HG- My views are very simple: Any data that is gathered or created for taxpayers’ money should be open and free of charge unless higher priorities such as privacy or national security indicate otherwise.

Reflecting that, any data that is originally open and free of charge is still open and free of charge on DataMarket.com, just easier to find and work with.

Ajay-  How is the technology entrepreneurship and venture capital scene in Iceland. What things work and what things can be improved?

HG- The scene is quite vibrant, given the small community. Good teams with promising concepts have been able to get the funding they need to get started and test their footing internationally. When the rapid growth phase is reached outside funding may still be needed.

There are positive and negative things about any location. Among the good things about Iceland from the stand point of a technology start-up are highly skilled tech people and a relatively simple corporate environment. Among the bad things are a tiny local market, lack of skills in international sales and marketing and capital controls that were put in place after the crash of the Icelandic economy in 2008.

I’ve jokingly said that if a company is hot in the eyes of VCs it would get funding even if it was located in the jungles of Congo, while if they’re only lukewarm towards you, they will be looking for any excuse not to invest. Location can certainly be one of them, and in that case being close to the investor communities – physically – can be very important.

We’re opening up our sales and marketing offices in Boston as we speak. Not to be close to investors though, but to be close to our market and current customers.

Ajay- Describe your hobbies when you are not founding amazing tech startups.

HG- Most of my time is spent working – which happens to by my number one hobby.

It is still important to step away from it all every now and then to see things in perspective and come back with a clear mind.

I *love* traveling to exotic places. Me and my wife have done quite a lot of traveling in Africa and S-America: safari, scuba diving, skiing, enjoying nature. When at home I try to do some sports activities 3-4 times a week at least, and – recently – play with my now 8 month old son as much as I can.

About-

http://datamarket.com/p/about/team/

Management

Hjalmar GislasonHjálmar Gíslason, Founder and CEO: Hjalmar is a successful entrepreneur, founder of three startups in the gaming, mobile and web sectors since 1996. Prior to launching DataMarket, Hjalmar worked on new media and business development for companies in the Skipti Group (owners of Iceland Telecom) after their acquisition of his search startup – Spurl. Hjalmar offers a mix of business, strategy and technical expertise. DataMarket is based largely on his vision of the need for a global exchange for structured data.

hjalmar.gislason@datamarket.com

To know more, have a quick  look at  http://datamarket.com/

Interview Prof Benjamin Alamar , Sports Analytics

Here is an interview with Prof Benjamin Alamar, founding editor of the Journal of Quantitative Analysis in Sport, a professor of sports management at Menlo College and the Director of Basketball Analytics and Research for the Oklahoma City Thunder of the NBA.

Ajay – The movie Moneyball recently sparked out mainstream interest in analytics in sports.Describe the role of analytics in sports management

Benjamin- Analytics is impacting sports organizations on both the sport and business side.
On the Sport side, teams are using analytics, including advanced data management, predictive anlaytics, and information systems to gain a competitive edge. The use of analytics results in more accurate player valuations and projections, as well as determining effective strategies against specific opponents.
On the business side, teams are using the tools of analytics to increase revenue in a variety of ways including dynamic ticket pricing and optimizing of the placement of concession stands.
Ajay-  What are the ways analytics is used in specific sports that you have been part of?

Benjamin- A very typical first step for a team is to utilize the tools of predictive analytics to help inform their draft decisions.

Ajay- What are some of the tools, techniques and software that analytics in sports uses?
Benjamin- The tools of sports analytics do not differ much from the tools of business analytics. Regression analysis is fairly common as are other forms of data mining. In terms of software, R is a popular tool as is Excel and many of the other standard analysis tools.
Ajay- Describe your career journey and how you became involved in sports management. What are some of the tips you want to tell young students who wish to enter this field?

Benjamin- I got involved in sports through a company called Protrade Sports. Protrade initially was a fantasy sports company that was looking to develop a fantasy game based on advanced sports statistics and utilize a stock market concept instead of traditional drafting. I was hired due to my background in economics to develop the market aspect of the game.

There I met Roland Beech (who now works for the Mavericks) and Aaron Schatz (owner of footballoutsiders.com) and learned about the developing field of sports statistics. I then changed my research focus from economics to sports statistics and founded the Journal of Quantitative Analysis in Sports. Through the journal and my published research, I was able to establish a reputation of doing quality, useable work.

For students, I recommend developing very strong data management skills (sql and the like) and thinking carefully about what sort of questions a general manager or coach would care about. Being able to demonstrate analytic skills around actionable research will generally attract the attention of pro teams.

About-

Benjamin Alamar, Professor of Sport Management, Menlo College

Benjamin Alamar

Professor Benjamin Alamar is the founding editor of the Journal of Quantitative Analysis in Sport, a professor of sports management at Menlo College and the Director of Basketball Analytics and Research for the Oklahoma City Thunder of the NBA. He has published academic research in football, basketball and baseball, has presented at numerous conferences on sports analytics. He is also a co-creator of ESPN’s Total Quarterback Rating and a regular contributor to the Wall Street Journal. He has consulted for teams in the NBA and NFL, provided statistical analysis for author Michael Lewis for his recent book The Blind Side, and worked with numerous startup companies in the field of sports analytics. Professor Alamar is also an award winning economist who has worked academically and professionally in intellectual property valuation, public finance and public health. He received his PhD in economics from the University of California at Santa Barbara in 2001.

Prof Alamar is a speaker at Predictive Analytics World, San Fransisco and is doing a workshop there

http://www.predictiveanalyticsworld.com/sanfrancisco/2012/agenda.php#day2-17

2:55-3:15pm

All level tracks Track 1: Sports Analytics
Case Study: NFL, MLB, & NBA
Competing & Winning with Sports Analytics

The field of sports analytics ties together the tools of data management, predictive modeling and information systems to provide sports organization a competitive advantage. The field is rapidly developing based on new and expanded data sources, greater recognition of the value, and past success of a variety of sports organizations. Teams in the NFL, MLB, NBA, as well as other organizations have found a competitive edge with the application of sports analytics. The future of sports analytics can be seen through drawing on these past successes and the developments of new tools.

You can know more about Prof Alamar at his blog http://analyticfootball.blogspot.in/ or journal at http://www.degruyter.com/view/j/jqas. His detailed background can be seen at http://menlo.academia.edu/BenjaminAlamar/CurriculumVitae

Why LinkedIn and Twitter are up for grabs in 2012-14?

Given Facebook’s valuation at $60-$100 billion , Apple’s $100 billion cash pile, Microsoft’s cash of $ 52 billion, Google’s cash of 43 billion $ , there is a lot of money floating. I am not counting Amazon as it deals with its own Fire issues.

But what is left to buy. In terms of richness of data available for data mining for better advertising- it is Twitter and LinkedIn that have the best sources of data.

and LinkedIn is worth only 9 billion dollars and Twitter is only $8.5 billion dollars. Throw in a competitive dynamic  premium, and you can get 50 % of both these companies at 13 billion dollars. if owners dont want to sell 100%, well buy a big big stake.

Makes a good case- buy the company- buy the data- sell them ads- sell them better products.

What do you think?

Understanding Indian Govt attitude to Iran and Iraq wars

This is a collection of links for a geo-strategic analysis, and the economics of wars and allies. The author neither condones nor condemns current global dynamics in the balance of power.

nations don’t have friends or enemies…nations only have interests

In 2003

The war in Iraq had a unique Indian angle right at the beginning. Some members of the US administration felt they needed more troops in Iraq, and they started negotiating with India. Those negotiations broke down because the Indians wanted to fight under the UN flag and on MONEY!!

India wanted-

  • More money per soldier deployed,
  • more share in post War Oil Contracts,
  • better diplomatic subtlety
Govt changed in India due to elections in2003 (Muslim voters are critical in any govt forming majority party), and the Iraq war ran its tragic course without any Indian explicit support.
In 26 Nov 2008, Islamic Terrorists killed US, Indian and Israeli citizens in terror strikes in Mumbai Sieze- thus proving that appeasing terrorist nations is just riding a tiger.

http://articles.timesofindia.indiatimes.com/2003-06-13/india/27203305_1_stabilisation-force-indian-troops-pentagon-delegation

NEW DELHI: There will be a lot a Iraq on the menu over the weekend before the Pentagon team arrives here on Monday to talk India into sending troops to the war-torn nation.

http://articles.timesofindia.indiatimes.com/2003-07-28/india/27176989_1_troops-issue-stabilisation-force-defence-policy-group

Jul 28, 2003, 01.28pm IST

NEW DELHI: Chairman of the US Joint Chiefs of Staff Gen Richard B Myers, who is arriving here on Monday evening on a two-day visit, will request India to reconsider its decision on sending troops to Iraq.

and

Jul 29, 2003, 07.00pm IST

NEW DELHI: Though Gen Myers flatly denied his visit had anything to do with persuading India to send troops to Iraq, it is evident that the US desperately wants Delhi to contribute a division-level force of over 15,000 combat soldiers.

http://articles.timesofindia.indiatimes.com/2003-09-10/india/27176101_1_stabilisation-force-force-under-american-control-regional-dialogue

Sep 10, 2003, 05.34pm IST

NEW DELHI: Even as the US-drafted resolution on Iraq is being heatedly debated in many countries, American Assistant Secretary of State for South Asia Christina Rocca held a series of meetings with External Affairs Ministry officials on Wednesday.

Though it was officially called “a regional dialogue”, the US request to contribute a division-level force of over 15,000 combat soldiers to the “stabilisation force” in Iraq is learnt to have figured in the discussions.

The penny wise -pound foolish attitude of then Def Secretary Rumsfield led to break down in negotiations.

“Those who fail to learn from history are doomed to repeat it.” Sir Winston Churchill

In 2012

Indian govt again faces elections and we have 150 million Muslim voters just like other countries have influential lobbies.

and while Israelis are being targeted again in attacks in India-

India is still seeking money-

India has struck a defiant tone over new financial sanctions imposed by the United States and European Union to punish Iran for its nuclear programme, coming up with elaborate trade and barter arrangements to pay for oil supplies.

However, the president of the All India Rice Exporters’ Association, said Monday’s attack on the wife of an Israeli diplomat in the Indian capital will damage trade with Iran and may complicate efforts to resolve an impasse over Iranian defaults on payments for rice imports worth around $150 million.

http://timesofindia.indiatimes.com/india/Unfazed-by-US-sanctions-India-to-step-up-ties-with-Iran/articleshow/11887691.cms

India buys $ 5  billion worth of oil from Iran. Annually. Clearly it is a critical financial trading partner to Iran.

It has now gotten extra sops from Iran to continue trading-and is now waiting for a sweeter monetary offer from US and/or Israel to even consider thinking about going through the pain of unchanging the inertia of ties with Iran.

There are some aspects of political corruption as well, as Indian political establishment  is notoriously prone to corruption by lobbyists (apparently there   is a global war on lobbyists that needs to happen)

http://timesofindia.indiatimes.com/india/Unfazed-by-US-sanctions-India-to-step-up-ties-with-Iran/articleshow/11887691.cms

 Feb 14, 2012, 05.54PM ISTUnfazed by US sanctions, India to step up ties with Iran
India is set to ramp up its energy and business ties with Iran. (AFP Photo)
NEW DELHI: Unfazed by US sanctions and Israel linking Tehran to the attack on an Israeli embassy car here, India is set to ramp up its energy and business ties with Iran, with a commerce ministry team heading to Tehran to explore fresh business opportunities. 

The team is expected to go to Tehran later this month to discuss steps to expand India’s trade with Iran, part of a larger strategy to pay for Iranian oil, said highly-placed sources. 

Despite the US and European Union sanctions on Iran, India recently sealed a payment mechanism under which Indian companies will pay for 45 percent of their crude oil imports from Iran in rupees. 

So diplomats with argue over money in Israel, Indian and US while terrorists will kill.

Against Stupidity- The Gods Themselves -Contend in Vain

Interview JJ Allaire Founder, RStudio

Here is an interview with JJ Allaire, founder of RStudio. RStudio is the IDE that has overtaken other IDE within the R Community in terms of ease of usage. On the eve of their latest product launch, JJ talks to DecisionStats on RStudio and more.

Ajay-  So what is new in the latest version of RStudio and how exactly is it useful for people?

JJ- The initial release of RStudio as well as the two follow-up releases we did last year were focused on the core elements of using R: editing and running code, getting help, and managing files, history, workspaces, plots, and packages. In the meantime users have also been asking for some bigger features that would improve the overall work-flow of doing analysis with R. In this release (v0.95) we focused on three of these features:

Projects. R developers tend to have several (and often dozens) of working contexts associated with different clients, analyses, data sets, etc. RStudio projects make it easy to keep these contexts well separated (with distinct R sessions, working directories, environments, command histories, and active source documents), switch quickly between project contexts, and even work with multiple projects at once (using multiple running versions of RStudio).

Version Control. The benefits of using version control for collaboration are well known, but we also believe that solo data analysis can achieve significant productivity gains by using version control (this discussion on Stack Overflow talks about why). In this release we introduced integrated support for the two most popular open-source version control systems: Git and Subversion. This includes changelist management, file diffing, and browsing of project history, all right from within RStudio.

Code Navigation. When you look at how programmers work a surprisingly large amount of time is spent simply navigating from one context to another. Modern programming environments for general purpose languages like C++ and Java solve this problem using various forms of code navigation, and in this release we’ve brought these capabilities to R. The two main features here are the ability to type the name of any file or function in your project and go immediately to it; and the ability to navigate to the definition of any function under your cursor (including the definition of functions within packages) using a keystroke (F2) or mouse gesture (Ctrl+Click).

Ajay- What’s the product road map for RStudio? When can we expect the IDE to turn into a full fledged GUI?

JJ- Linus Torvalds has said that “Linux is evolution, not intelligent design.” RStudio tries to operate on a similar principle—the world of statistical computing is too deep, diverse, and ever-changing for any one person or vendor to map out in advance what is most important. So, our internal process is to ship a new release every few months, listen to what people are doing with the product (and hope to do with it), and then start from scratch again making the improvements that are considered most important.

Right now some of the things which seem to be top of mind for users are improved support for authoring and reproducible research, various editor enhancements including code folding, and debugging tools.

What you’ll see is us do in a given release is to work on a combination of frequently requested features, smaller improvements to usability and work-flow, bug fixes, and finally architectural changes required to support current or future feature requirements.

While we do try to base what we work on as closely as possible on direct user-feedback, we also adhere to some core principles concerning the overall philosophy and direction of the product. So for example the answer to the question about the IDE turning into a full-fledged GUI is: never. We believe that textual representations of computations provide fundamental advantages in transparency, reproducibility, collaboration, and re-usability. We believe that writing code is simply the right way to do complex technical work, so we’ll always look for ways to make coding better, faster, and easier rather than try to eliminate coding altogether.

Ajay -Describe your journey in science from a high school student to your present work in R. I noticed you have been very successful in making software products that have been mostly proprietary products or sold to companies.

Why did you get into open source products with RStudio? What are your plans for monetizing RStudio further down the line?

JJ- In high school and college my principal areas of study were Political Science and Economics. I also had a very strong parallel interest in both computing and quantitative analysis. My first job out of college was as a financial analyst at a government agency. The tools I used in that job were SAS and Excel. I had a dim notion that there must be a better way to marry computation and data analysis than those tools, but of course no concept of what this would look like.

From there I went more in the direction of general purpose computing, starting a couple of companies where I worked principally on programming languages and authoring tools for the Web. These companies produced proprietary software, which at the time (between 1995 and 2005) was a workable model because it allowed us to build the revenue required to fund development and to promote and distribute the software to a wider audience.

By 2005 it was however becoming clear that proprietary software would ultimately be overtaken by open source software in nearly all domains. The cost of development had shrunken dramatically thanks to both the availability of high-quality open source languages and tools as well as the scale of global collaboration possible on open source projects. The cost of promoting and distributing software had also collapsed thanks to efficiency of both distribution and information diffusion on the Web.

When I heard about R and learned more about it, I become very excited and inspired by what the project had accomplished. A group of extremely talented and dedicated users had created the software they needed for their work and then shared the fruits of that work with everyone. R was a platform that everyone could rally around because it worked so well, was extensible in all the right ways, and most importantly was free (as in speech) so users could depend upon it as a long-term foundation for their work.

So I started RStudio with the aim of making useful contributions to the R community. We started with building an IDE because it seemed like a first-rate development environment for R that was both powerful and easy to use was an unmet need. Being aware that many other companies had built successful businesses around open-source software, we were also convinced that we could make RStudio available under a free and open-source license (the AGPLv3) while still creating a viable business. At this point RStudio is exclusively focused on creating the best IDE for R that we can. As the core product gets where it needs to be over the next couple of years we’ll then also begin to sell other products and services related to R and RStudio.

About-

http://rstudio.org/docs/about

Jjallaire

JJ Allaire

JJ Allaire is a software engineer and entrepreneur who has created a wide variety of products including ColdFusion,Windows Live WriterLose It!, and RStudio.

From http://en.wikipedia.org/wiki/Joseph_J._Allaire
In 1995 Joseph J. (JJ) Allaire co-founded Allaire Corporation with his brother Jeremy Allaire, creating the web development tool ColdFusion.[1] In March 2001, Allaire was sold to Macromedia where ColdFusion was integrated into the Macromedia MX product line. Macromedia was subsequently acquired by Adobe Systems, which continues to develop and market ColdFusion.
After the sale of his company, Allaire became frustrated at the difficulty of keeping track of research he was doing using Google. To address this problem, he co-founded Onfolio in 2004 with Adam Berrey, former Allaire co-founder and VP of Marketing at Macromedia.
On March 8, 2006, Onfolio was acquired by Microsoft where many of the features of the original product are being incorporated into the Windows Live Toolbar. On August 13, 2006, Microsoft released the public beta of a new desktop blogging client called Windows Live Writer that was created by Allaire’s team at Microsoft.
Starting in 2009, Allaire has been developing a web-based interface to the widely used R technical computing environment. A beta version of RStudio was publicly released on February 28, 2011.
JJ Allaire received his B.A. from Macalester College (St. Paul, MN) in 1991.
RStudio-

RStudio is an integrated development environment (IDE) for R which works with the standard version of R available from CRAN. Like R, RStudio is available under a free software license. RStudio is designed to be as straightforward and intuitive as possible to provide a friendly environment for new and experienced R users alike. RStudio is also a company, and they plan to sell services (support, training, consulting, hosting) related to the open-source software they distribute.

Using Opera Unite to defeat SOPA?

Lets assume that the big bad world of American electoral politics forces some kind of modified SOPA to be passed, and the big American companies have to abide by that law (just as they do share data  for National Security under Patriot Act but quitely).

I belive Opera Unite is the way forward to sharing content on the Internet.

From-

http://dev.opera.com/articles/view/opera-unite-developer-primer-revisited/

Opera Unite features a Web server running inside the Opera browser, which allows you to do some amazing things. At the touch of a button, you can share images, documents, video, music, games, collaborative applications and all manner of other things with your friends and colleagues

I can share music, and files , and the web server is actually my own laptop. try beating 2 billion new web servers that sprout!! File system sharing is totally secure- you can create private, public, or password protected files, a messaging system that can be used for drop messages (called fridge), a secure messaging system and your own web server is ready to start at a click. the open web may just use opera instead of chromium, and US regulation would be solely to blame. even URL blocking is of limited appeal thanks to software like MafiaWire Extension

Throw in Ad block, embedded bit torrent sharing and some more  Tor level encryption within the browser and sorry Senator, but the internet belongs to the planet not to your lobbyist.

see-http://dev.opera.com/web