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Table Of Contents

• Welcome to the winter edition of the VentureForth Quarterly!
• From academia to Wall Street: A Profile On Dr. Irwin Mark Jacobs
• 25 Ideas to Improve Employee Relations
• From Invention to Venture: My personal experiences in a workshop on technology entrepreneurship
• The Future of Ideas
• The Cognitive Style of PowerPoint
• Interactive Marketing
• Everything Connected
• Investment 101 - Exchange Traded Funds
• An Introduction to Google's PageRank
• The Key Elements of an Effective Employee Newsletter
• The Fail-Proof Enterprise
• The Role of Leadership

It’s been a busy year for VentureForth, with things kicking off last October at our annual Entrepreneur Conference. Mike Lutz, Ray Smilor, and Gary Smaby were featured as keynote speakers while panels on venture capital, high tech spin-offs, and international markets entertained and educated all who attended. A mix of students, faculty, and industry mingled at the La Jolla Radisson, exchanging anecdotes and advice on the latest San Diego startups.

Local biotech can look forward to the second Annual Biotechnology Entrepreneurship Conference, a VentureForth event that showcases entrepreneurs, investors and attorneys related to the biomedical field. The ABEC will explore the opportunities, operation mechanisms and the factors needed to succeed in the biotechnology industry.

The conference features many leaders of the local biotech community speaking on various issues and companies in a panel format. This year’s topics discuss the transition from academia to industry, recent trends in biotech, and legal discussions on startups, tech law, and intellectual property.

We’re hoping this event will help San Diego industry generate successful startups from UCSD’s research and technology, as well as provide a venue for local entrepreneurs to exchange ideas and information.

This year’s ABEC takes place at the Institute of Americas, UCSD on May 21st. Keynote speaker Dr. Charles Cantor, CSO of Sequenom, Inc will kick off the event at 9:30am, and the panels are expected to run until 3:00pm.

Free admission and free lunch!
Students, faculty, and industry are all invited to attend!

To register or for more information, please visit: http://www.ventureforth.org/conferences/biotech

If you’re interested in joining VentureForth or would just like more information, please attend our regular Sunday meeting, 7pm, at Revelle’s Plaza Café, or visit our website at: http://www.ventureforth.org

The stars of the 2004 ABEC conference
Left: Kevin Jung, Dayu Teng, Murtaza Mogri, John Zacharia, Matt Moore, Ian Lian, David Boadita

For Dr. Irwin Jacobs, Chairman and CEO of Qualcomm, starting the company was a retirement project created after realizing that at the age of fifty one, retirement wasn’t very fun. Prior to founding Qualcomm, Dr. Jacobs had successfully started a company known as Linkabit, which give rise to San Diego’s wireless communications industry and was sold to M/A-COM in 1985. Linkabit began in 1968 as a consulting business by engineering professors Dr. Irwin Jacobs from UCSD and Dr. Andrew Viterbi from UCLA. Although their intentions were not to create a large company, starting the business was so much fun for them that they decided to make the transition from academia to industry.

As the story goes, coming up with the brilliant idea of applying Code Division Multiple Access (CDMA) technology for wireless communications was not something Dr. Jacobs had in mind when Qualcomm begab. There were no particular products in mind or plans to execute, just an intention to offer innovative ideas in the area of communications systems. Later on, during a drive back from Los Angeles to San Diego on the 5 freeway, the light bulb went on and Dr. Jacobs made the connection. The rest is history.

Not only is Dr. Jacobs a great teacher and innovator of our times, his contributions to the community and San Diego is unparalleled. According to Business Week rankings in 2004, Dr. Jacobs is among the twenty-five most generous philanthropists in the United States. His donations have included gifts to the San Diego Symphony, the San Diego Playhouse, and the University of California, San Diego. He is a soft-spoken, humble man who is willing to listen to his employees and customers, and is a well-known and respected name outside of the wireless industry.

We can learn a variety of things about starting a business from this remarkable story. First of all, having a loyal and dedicated team is crucial to your company’s success. Dr. Jacobs emphasized that his employees were a part of the his secret to success. It is crucial to establish a friendly working environment that values new ideas, encourages problem solving, and builds a trustworthy group of people around you. Despite encountering numerous highly respected naysayers that claimed CDMA was something that was only theoretical and not applicable, Dr. Jacobs and his employees at Qualcomm continued to bite the bullet and endure their quest to revolutionize the wireless industry. This lesson teaches us to trust our instincts and to never give up in something that we deeply believe in. A renowned quote by Arthur C. Clarke says, “When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.” The statement is certainly very true in this case.

Another useful lesson from the experience relates with perseverance. Dr. Jacobs mentioned that once the journey has begun, be prepared to be in it for the long haul. With any dynamic or emerging idea, it often takes time for the industry to adapt. For CDMA, although the concept was initially made public in the late 1980’s and early 1990’s, the telecommunications industry was already in the process of standardizing a different technology known as time division multiple access (TDMA) and was not ready to implement CDMA. It took many years to not only prove that concept worked, but also to convince government regulators and network operators to incorporate CDMA in the industry standards and start the deployment process for initial field trials.

In terms of character, Dr. Jacobs is great visionary and a dedicated person. His leadership style attributes to someone who is soft-spoke, humble person willing to listen to his employees and customers. Few people outside of the wireless industry recognize his name.

As Qualcomm approaches its twenty years of anniversary, Dr. Irwin Jacobs continues as the forefront commander for the company and remains very active and excited in the wireless industry. Dr. Jacobs is a legendary business leader in technology and will remain so for years to become.

Want to make your business run more efficiently? Your department? Project team? One of the best ways to accomplish this—and one that many businesses are simply mediocre at—is by improving employee relations and empowering them. Tasks can always be delegated to an employee. But true ownership and responsibility must be taken. Only when this transference of ownership and responsibility happens will an employee truly motivate themselves above and beyond, to get things done and spend time on developing ideas to help their company, department, and project.

You can turn to Nuts! by Kevin & Jackie Freiberg for effective ideas to improve employee relations, methods employed by Southwest Airlines. These ideas taken from the book are laid out in the order I believe to be most beneficial. However, they are to be taken with a grain of salt—not all of these ideas are right for every company. At the same time, there are some that you should find that will directly apply to you now!

"El Galleon", VentureForth Catalina Retreat, 2004

1.Drink beers with employees after work
The beauty of this is that it is so simple, and yet so commonly overlooked. Spending a good deal of time with employees after work will show them how much you care. In return, they will bend over backwards for you.

2. Internal employee newsletter
A newsletter is discussed in the article “The Key Elements of an Effective Employee Newsletter.” In short, the more information employees have, the better decisions they can make.

3. Employee awards
Perhaps we all know that there is nothing quite like the feeling of being acknowledged and applauded for our efforts. You can create an employee awards ceremony that occurs every couple of months or once a year for the most important awards. Create a system where employees can nominate each other for the frequent awards, while the CEO selects the most important ones by hand. Have a ceremony with the highest executives in the company, and give out a gift or two such as a plaque and photo collage. Two award ideas are: best sense of humor, and best person behind the scenes.

4. Decorate hallways with photos & memorabilia
Culture is a highly motivational force in a company. Put up letters, articles, advertisements, trinkets, mementos, and photos of important company events—and include every employee in the pictures! This shows company character, and inspires new and old employees alike.

5. Give employees power, authority, trust, and forgive failures
Effective employees need all of the above to take the big risks and make important decisions. Big failures are also the biggest learning experiences, and make for experienced employees afterwards.

6. Celebrate everything
Celebrations should be seen as an investment. Humans innately have a need to celebrate, and are something to look forward to with others. Make celebrations highly spirited, and have elements tailored to each of the five senses. Beware, however: celebrations can be costly if not done correctly!

7. Hire for attitude
All types of skills can be taught and improved. It is a person’s personality that is with them for life. Try to hire those with outgoing personalities who are other-person oriented, and highly spirited. See if they have ever used humor to diffuse difficult situations. Hold group interviews to see if they are people oriented.

8. Take fun seriously
Make sure each employee is having fun while they’re working. It will spread throughout the company and increase overall efficiency.

9. Love each other: treat them as family
Maslow’s hierarchy of needs shows that love and belonging, and acceptance into a community is just above people’s need for shelter, food, water, and sleep. Only after employees feel love and belonging will they move on to realize their maximum potential. Sometimes of course, true love can be tough love.

10. Make all managers and high executives available to talk
Communication is central to efficiency. Make yourself available, even without appointment!

11. Create an internal university
Universities are not just for big companies. Even small companies can have classes taught by peers, teaching core values, leadership, and serving as a change agent.

12. Give personalized greetings and gifts on special occasions
Doing so lets employees truly know that you care about them and not just their work. Make sure the gifts are personalized and not generic!

13. Have a trading jobs program
Employees often do not understand what employees in other departments do, and often dangerous elitism and hierarchies can form. Try creating a program where employees in one department work in a different capacity for a day and give incentives to take part in this program.

14. Build employee self-confidence
Only confident employees are willing to move up and take risks. Find ways to develop this!

15. Be informal, limit layers of management, paperwork, and bureaucracy
Formality and bureaucracy have a way of keeping bad employees somewhat effective, and stifling the truly good employees from getting a lot of stuff done. Try developing as wide but short a management hierarchy as possible, and encouraging employees to laugh at themselves. And of course, lead by example. Make sure that everyone who attends a meeting leaves with something to do.

16. Remind them that the biggest threat is themselves during successful times
Companies that reach ultimate success often lose this success because in such times, complacency, cockiness, greed, laziness. Hierarchies often rule. Send continuous reminders that this can be the case.

17. Profit sharing
What better way to make employees motivated than giving rewards when times are good and withholding when times are bad?

18. Remind them to question convention and use common sense over rules
Many business processes and conventions have led to company losses. Many rules do not apply in every circumstance. Encourage employees to be creative and use their minds before acting.

19. Establish a culture committee of storytellers
When a company becomes large enough so that upper management cannot have everyday contact with all the employees, culture can begin to wane. Try to find the most spirited, energetic, creative, and enthusiastic people and get them to communicate and spread stories about the company’s culture. Often, a company’s culture and history is something employees can take pride in and be inspired by.

20. Create a crusade
People are most motivated when they are fighting for something that they believe in, and when their livelihood is at stake. Create the company’s mission to include a sense of a fight for survival in terms of job security and principles.

21. Have ‘pep rallies’
At spirited schools, pep rallies are a chance for all students to be motivated together. There is no reason that companies cannot do the same! Create a big get-together with socializing and exchanging of ideas.

22. Encourage community charity acts
Teamwork is built a lot outside of the company, and charity helps employees feel good about themselves and each other. Encourage charity by having the company and other employees match time and monetary donations.

23. Customers are sometimes wrong
Many companies have the mentality that the customer is always right. This may often be the case, but not every customer is the right customer. Probably the easiest way to create a rift with an employee is by siding with the customer when the employee is correct.

24. Forgive small eccentricities in personality
Everybody has their own eccentricities that can be misinterpreted by others. Let them slide and focus on what is important.

25. Tell new hires the downsides upfront
If you do not hide the difficulties of the job at first, you will get only the candidates ready for a challenge. For example, you could say “you’ll work harder here than anywhere else. You’ll get paid 10% less. But in the long run, with profit sharing, you’ll be way ahead.”

Ray Smilor

On Saturday November 6th, 2004, I had the opportunity to attend a technology entrepreneurship workshop held at the campus of UCSD to give students and young entrepreneurs advice on various topics of starting businesses in the high-tech and biotechnology industries. The panel speakers were very diverse, ranging from academic UCSD professors, venture capitalists, and entrepreneurs that have successfully started their own businesses. From the workshops and interactions throughout the day, the following are some valuable tips that I have learned.

Entrepreneurship Starts from Research
Invention starts with doing research to identify in improving efficiency on existing processes or providing new methods of doing things. University is a great environment for scientists to expand on their horizon of knowledge and research findings. However, one of the most challenging aspects in starting a business occurs when the scientist meets the businessman, as these people have different perspectives. Although scientists have the technical talents, they often incur the problem of not having the appropriate skills to run the business. Similarly, business people are often too optimistic in their ability to get customers and in many instances do not give enough merit for the scientists and allocating adequate funding and realistic timeline for product development. Successful start-up companies need to find a “middle path,” enabling both scientists and businessmen to work together closely in order to make the right business decisions. Another word of advice, “inventors want to work on what they are good at, while companies fail because of what they are bad at.”

Finding Good Ideas
Good ideas are not easy to come by. In the process of finding a good idea, one will first encounter lots of bad ones. Essentially, bad ideas are good and one strives to fail faster to get rid of them so the good ideas will come up later. There is nothing wrong with failing with bad ideas and the key is to recognize that it is part of the process before success can happen. In order to distinguish good ideas from bad ones, the concept need to answer a number of technical and business questions including: Is the idea possible and can we do it? Can the world stay the same? Do a lot of people want it? Do we have an unfair advantage? In addition, to gain understanding of the market, it is important to attend a lot of trade shows to talk with customers and competitors to “steal” data appropriately. In many instances, the best way to obtain accurate information is to not go up to the sales person, but rather talk with the engineers who are not good liars and reveals the truth of their products, its qualities and shortcomings.

Making the Pitch
Public speaking is the number one fear of people and although it is difficult, it is a very important skill to acquire over time. Entrepreneurs need public speaking skills to make presentations to potential regarding their business cases. With compliments of technology, many presentations today are carried out with PowerPoint slides. A recurring problem with this is that people often overuse slides in their presentation, rather than to supplement. Customers buy from people, not from slides, and the application should help us make the connection rather than distance us from the audience. Often reiterated is the rule of thumb that “less is more.” Rather than trying to overawe the audience with too much information, the challenge is to appropriately condense the number of slides. Several scholars have said “I have made this letter longer, because I have not had the time to make it shorter.”
Summarizing the content material is not an easy task to do. Some of the best practices involve having action titles, readable fonts, and the rule of five (5 bullets per slide and 5 slides per bullet). In terms of timing, a good ratio to consider is having one slide every two minutes. Fewer slides is better, but having more is not as presenters either run out of time or go too fast on the slides. Furthermore, some communications do not even need the use of PowerPoint at all.
“Any fool can make things complex, it takes a genius to simplify.”

Leadership Qualities
Leadership qualities are critical in the success of any company, whether it is a new start-up, a mid-level firm, or a large enterprise corporation. Leaders not only need to take responsibility and demonstrate authenticity, but they need to have stamina and be proactive. They need to have a mindset that is enthusiastic, optimistic, and persistent. Similar to warfare where the general never says they’ll lose the battle to their troops even at great odds, strong leaders need to posses the mindset to never give up. Leaders lead by example and set the tone of the company. To foster innovative environments that strive for problem solving and prevent employees from having the perception of “That’s not my job!”, leaders should not delegate responsibility. They need to focus on talents and not the weaknesses of others. When making tough decisions, they need to expect that pissing a few people off is inevitable. True leaders can look forward to being lonely during the hard times and tolerating little mistakes along the way. As the saying goes, the customer is first, last, and always.

Business Plan
An indispensable portion in the path of entrepreneurship is having a business plan. Not only do business plan paper a necessity to get funding from most investors, it serves the purpose to reiterate to the entrepreneurs themselves the approach their businesses will take on in answering these key questions. What is the value proposition and who are their potential customers? How will they enter the market and address the issue of competition? What are the risks looking forward and the appropriate strategies to implement? Finally, what is their exit strategy? There is no particular standard format or numbers of pages for the business plan papers as long it answers the questions above. However, the plan is a living document that is periodically modified and updated. Two other important criteria to have are the executive summary and the elevator pitch. While identifying their weaknesses, entrepreneurs need to know what they don’t know and how they will address this issue to get help. Building the right management team is just as important if not more than having a viable product for the market. The classical analogy is that a B product with an A team is better than an A product with B team.

Final Thoughts
The most inspiring thought that I learned over the entire workshop is one of the panel speakers concept of funding. He says that when starting a high-tech company, rather than going to venture capitalists for seed money or early-stage funding, one may elect to use alternative approaches to bring in the initial cash flow.  Although venture capital firms are fruitful sources to get money and help for the company, timing is important for one to decide when to approach the venture capitalists. For example, he mentioned that if you’re a young entrepreneur with some technology ideas, it might be wise to first start a business, any kind of business, and get it to profitability.  Once you can accomplish this step, you will have obtained some skills in how businesses work. From the cash flow generated in this business, you can use it to fund the original technology venture in mind. This way, he says, you won’t run the fear of the venture capitalists “taking away your baby” and control of the company. This was countered, however, by a venture capitalist panel speaker who says although this may be a creative funding approach, it does not work in all industries. For example, he mentions that in the biotechnology industry, the cost of producing a drug and going through the trial stages are extraordinary and using alternative funding is simply not feasible. Thus, depending on the industries you’re in, funding methods may be different. Venture capital firms just like any businesses, have their own pressure to accomplish certain annual rates of return from their investment banks and private investors. Typically, the funds need to get to profitability within five years of the initial investment. As a result, entrepreneurs and venture capitalists need to compromise in establishing a common ground that is both good for the business and its investors. One final thought for the entrepreneurs is to always be creative and think outside the box in the challenges presented in front of them. As Anthony Robbins, the renowned inspirational speaker and self-motivator, says “There’s always a way if you’re committed.”

Acknowledgments
I would like to thank the panel speakers in providing valuable information as I learned a lot from their advices in the workshop. Special thanks to Dr. Paul Kedrosky, Diane West, Dr. Ray Smilor, and Robert Corey for their intriguing thoughts.
For more information about sponsorship of the workshop visit:
http://www.nciia.org
http://www.invention2venture.org

The concept behind Stanford professor Lawrence Lessig's latest book is that new Internet platforms and intellectual property laws are reclaiming control of free speech and innovation that the Internet originally democratized. While it didn’t seem quite as tightly written as it could have been, it was an eye opening primer to Lessig’s view of intellectual property, and how technology architecture combined with law promotes or restricts free speech and innovation.

Point 1: Intellectual property is a limited government-backed monopoly, not real property

The term intellectual property is deceiving because IP is not really property. We use property in free markets to divide up limited resources, such as land and cars. However, ideas are not limited like physical goods, and our culture is built up from the natural spread of ideas. Nonetheless, the Framers of the Constitution decided to promote creative methods in arts and science by granting a limited time monopoly to creators who contribute their idea to the national culture. Balancing the value of arts and science with the value of free speech, they also permitted fair use of the idea during this monopoly period. This short-term protected monopoly would allow the creator to uniquely profit from the idea, and thereafter the work would fall into the public domain for other creators to use and build off of in natural cultural development.

The tradeoff to the intuitive “idea is property” metaphor is free speech. When UCSD lawyer Nick Aguilar reminds you that you need permission of the Regents of the University of California before you can take a picture of Geisel Library and post it on your website, intellectual property is out of control. More disturbing are the growing domains where your right to speak and innovate is *in* control, just not yours. As a result, the intellectual property laws that were intended to stimulate speech and innovation are now used to stifle it by intellectual property owners threatened by criticism or competition, and protected by ever expanding government intervention.

Point 2: Open platforms lead to free speech and innovation

The Internet is so successful at stimulating free speech and innovation because it is an open platform. Lessig calls it a “commons” and Richard Stallman of the Free Software Foundation calls it “free as in speech, not as in beer.” What’s important about such an open platform is not that it is free in price (which it isn’t - you pay your ISP because their wire is a limited physical resource), but that it is free as in speech, as there is no Nick Aguilar controlling what you can or can’t use Internet Protocol for. The “dumb” network is like a freeway - as long as you follow some basic road rules, it doesn’t matter for what business you are traveling. Lessig is a proponent of this standardized “end-to-end” architecture where the “smarts” are at the end terminals and the platform is agnostic to how applications use it.

I think the dumb, end-to-end, open platform is a good lesson to take from the Internet, as well as to protect. Innovation and free speech prosper when you don’t have to ask permission to publish your thoughts or distribute your application. And as we’ve seen with the development of the Internet, open platforms can be used in new and unexpected ways. This has two important consequences: protect the Internet as an open platform, and develop standards for new open platforms.

Protecting the open Internet is not quite as paranoid as it seems. Lessig is concerned about monopolies at low level Internet platforms leveraging their power to control higher level platforms. For example, AOL Time Warner has the temptation for their ISP to favor content websites within their media empire, to the detriment of others. Even seemingly benign filtering or optimizing content on the Internet jeopardizes free speech and innovation of the open platform.

The second consequence is that standard platforms would be beneficial for other technologies as well. Wireless communications, ubiquitous computing, data, and of course operating systems would all be candidates for open platforms. For example, I would bet that a dot-com-style innovation boom would follow if wireless services adopted an open platform, rather than today where everything up to the ringtones you buy are controlled by the cell phone carrier. I’ll leave more speculation about open platforms for another post, but suffice to say that I think it’s an important topic to consider and that The Future of Ideas is worth a read.

Microsoft's Powerpoint

Powerpoint has single handedly dumbed down college education, paralyzed corporate decision making and crashed space shuttles. Such is the bleak outlook of The Cognitive Style of PowerPoint by Edward Tufte. I highly recommend this eye-opening essay to anyone who interacts with PowerPoint on a regular basis, which these days is just about everybody.

Tufte’s main argument is that the information density of a PowerPoint slide is so little that the only thing to compare it to is the Stalinist newspaper Pravda (Russian for “Truth”). When we rely on slideware which usually follows the 5x5 rule (limit slides to five lines, five words per line) we might make good haikus, but we certainly are missing a lot of the subtle relationships and important details that are crucial to decision making. For example, a NASA analysis of the Columbia shuttle crash concluded that crucial information did not make it up to the decision makers because the risk of the mission was not conveyed in the slides which were circulated by email. When we start thinking in sales pitches and bullet points, we simplify everything to a black-and-white issue which makes for rigid and uneducated learning, communicating, and decision-making.

Tufte also refutes the argument that people are overwhelmed by too much data and require basic bullet point and charts. For example, the thousands of pieces of data in the stock market table in a newspaper are exponentially more useful and informative than the “chart junk” in PowerPoint which often only displays a few data points such as a handful of percentages in a pie chart. Additionally, bullet points are limited to simple hierarchical relationships and they do not allow us to think or communicate complex relationships.

This is the cognitive style of PowerPoint. This is our bullet point thought process, where we bore one another in meetings and lectures with little to say, make it socially acceptable to write meaningless slide decks instead of thoughtful reports, and speak in vacuous platitudes. But like Stalinist propaganda, at least it looks nice.

After four years of sitting through PowerPoint lectures I can appreciate Tufte’s argument, and might propose a few improvements to slideware.

Use slides as public artifacts
Slides are useful in a lecture for gesturing at a point that everyone can see. Therefore, it would be a disservice to completely eliminate them from most lectures. They can be treated as a shared cognitive resource for the lecture activity rather than a complete recording of all the facts. This does not apply to presentations such as math lectures where a live demonstration of the problem solving process using a board is more useful.

Use more information visualizations
There are many more ways to represent data than bullet point format. Making it easier and more commonplace to use figures and detailed charts and tables would help convey more information.

Use print handouts for detailed information
The high resolution of print media makes it ideal for conveying large amounts of information. Whether printing detailed information visualizations, descriptive paragraphs, or other content, a nicely laid out handout conveys a lot of information and is easy for the audience to annotate.

Equip the audience with note taking tools
A big problem in engaging students with PowerPoint lectures is that the teachers are equipped with prepared digital slides, but the students are left to copy the information by hand. This asynchrony in speed often leaves students frantically copying slides and not listening to the lecture. Whether the solution is a print handout or note taking software, I think it is important to fix the imbalance that occurred when teachers added new presentation technology without students adjusting their note taking technology.

Particularly, there is a lot of potential for a note taking application to take advantage of the automation, reusability, and communication advantages of digital technology to improve student learning inside and outside of class. In class students could develop new ways of interacting with digital slides and handouts, and communicating with the professor (or yes, more likely with their friends on instant messaging). Notes might also be synchronized with the audio recording or transcript of the lecture. Out of class student could reuse their notes in other forms such as index cards or practice quizzes, and share their notes in online study groups.

Augmented discussion
One might also imagine informal meetings being enhanced by a such improved presentation software. For example, a meeting member making a point might write up his or her point into a few bullets, a paragraph, or a figure, and post it to a common discussion space where everyone is contributing their thoughts. Instead of a single presenter preparing all slides in advance or a secretary recording all the opinions after the fact, all the participants engage in creating and documenting the discussion. Such software would simultaneously improve communication and democratize the presenter-audience relationship.

Response to an internet ad.

At his talk at UCSD, Sony Pictures’ Vice President of Interactive Marketing asked: “Has an Internet ad ever made you cry?” How can Hollywood, the world’s best storytellers, use technology to tell stories and create experiences in new ways? More specifically, how can they use new media to produce short compelling marketing pieces? I think that interactive worlds, social interaction and contextual personalization are three good uses of Web media.

Interactive worlds are the concept behind Sony Playstation’s slogan “Live in your world, play in ours.” Video games have successfully established a genre of interactive media where players become fictional characters in fictional worlds. The same principle can be applied to marketing websites. For example, The Grudge website let users explore the house where the movie is set and go on missions. It resembled Myst, except The Grudge inevitably killed your character at the end. This online experience apparently drew many moviegoers to the theater to watch the full story. The lesson from this example is use film to tell a story, use digital media to create an interactive world.

Social interaction applies Internet connectivity to entertainment. Why should the interactive world have a population of one? One of my favorite socially interactive ads is a Method soap website where you could communally “wash away your guilt.” The homepage was a bird’s eye view video of hands washing in a sink. As visitors wrote in things they felt guilty about, one of the hands would show its palm to the camera with a random person’s guilt written on it. Then the hand would pump some Method soap, rinse with water, and upon return the palm would be clean and by implication the visitor would be clean of their guilt. Another favorite of mine is a Fanta Shokata website from Denmark where visitors could create video clips by subtitling Bollywood movies (each of with ended with a Fanta tagline), and then share their wit (or lack thereof) in an online gallery. The Grudge website even had a basic form of social interaction by displaying the first names of other visitors who “had a grudge against them” to make their interactive world seem popular. Whether it is group communication, sharing your work, or showing usernames, social interaction enhances the experience of the interactive world.

Contextual advertising and personalization is the marketing trend that Google AdSense and Yahoo Overture successfully promote as the revival of online advertising. Instead of untargeted banners generally posted on sites with approximate demographics, technology can match ads to the right person at the right time based on their usage history and keywords on the current page. This cuts out the wastefulness of the carpet bombing advertising technique of running your advertisements everywhere to make sure that your target audience will eventually find it. It means more relevant ads for users, more money for owners of the website where the ad runs, and less wasted money for the advertiser. In addition to contextual and personalized targeting, the content of the ad itself can be personalized. The Grudge cleverly stored a cookie so a few months after playing the game, a banner ad running on the Yahoo homepage would tell you personally: “___[your name]___, the grudge never forgets.” Spiderman II, another Sony movie, produced a special trailer for women which told the love story of the movie. Along with interactive social worlds, the content personalization and market targeting are powerful tools for creating compelling new media experiences.

Amazon.com's Jeff Bezos takes a moment to enjoy life

Dot-com CEOs such as Amazon’s Jeff Bezos are known for saying that we are still just getting started with the Internet. The audience is known for thinking that is BS. And for a while after the dot-com bust, the innovation slowed down and seemed like maybe the Internet could now be considered “mature”. It occurred to me today why it’s not mature and what it will take for it to reach that mark.

The Internet will be mature when everything is connected.

That’s not to say that I don’t think innovation will progress after everything is connected over the next decade or two, but I think that the way it fundamentally changes our lives is that it connects the world together in new ways. The car industry still has growth to come in alternative energy and emerging markets, but it is a mature industry because we haven’t fundamentally changed the way we use cars in the last 50 years (since the growth of suburbia and the interstate highway system connected the world in new ways I would argue). The Internet industry has not reached such a maturity level and therefore I believe there are exciting innovations ahead that will change the way we live over course of the next generation.

The next wave of connectivity looks like it’s going to be entertainment. I’m looking forward to search entering the living room, and will also be following how Xbox 2 and its XNA platform will create new connected forms of entertainment. RFID tags will surely bring interesting applications (and huge privacy concerns) when they hit the store shelves, labeling every item we buy with an electronic tag and thus making it available to the digitally enhanced world. I’m looking forward to Amazon’s and Google’s book projects as well as their expansion into content databases such as newspaper archives. If wireless telecom companies would open their networks it would be exciting to see cameras and other devices go online. Creating standards for data and ubiquitous devices to interoperate needs to be addressed sooner than later. Eventually I would be happy when people even view paper as a member of this thoroughly connected world. These are some of the exciting challenges of developing the connected world.

As Jeff Bezos says: “work hard, have fun, make history.”

With the beginning of the new year and the promise that it brings, what is going to be your plan for success? What are you going to put your trust in to secure your financial future? I want to talk a little bit about the best bet to securing your finances this year. As I mentioned in my last article, college students don’t have a lot of dispensable income, so unless you had the pleasure of winning the lottery, let’s discuss what will put you ahead of the curve for the this New Year.

When it comes to investing there are a lot of options: stocks, bonds, mutual funds, and alternative investments. The latest financial device to hit the Street are Exchange Traded Funds. Exchange Traded Funds (or ETS’s) are index funds or trusts that are listed on the American Stock Exchange and can be traded on the stock market, similar to a common stock. This is different from professionally managed mutual funds which cannot be traded intra-daily on the exchange. The American Stock Exchange lists ETF’s on more than 100 broad stock market, stock industry sector, international stock and U.S. treasury and corporate bond indexes. Thus, ETF’s allow an investor to cover a wide array of areas in the stock market while providing portfolio diversification without large upfront costs.

There are several other advantages that ETF’s provide for the individual as well as the institutional investor. Primarily, there are lower capital gains taxes due to decreased turnover of the assets comprising the ETF. The ETF is usually representative of a specified index and the assets only change when the index the ETF comprises varies. Investors that want to liquidate and redeem shares of the ETF can simply do so at their discretion. Exchange Traded Funds also have lower costs since they do not incur the high management fees that accompany mutual funds, choosing only to mirror a particular index. Like common stock they can be bought on margin (buying more stock than you technically could with available capital) and can be dealt with through limit orders, which set a specified price at which to buy or sell the ETF.

So how does one get started with ETF’s? What type would suit your investment strategy the best? The available sectors range through Financial, Energy, Healthcare, Technology, and more. Find one that covers a broad market, like the SPDR 500, which holds a portion of every listed stock in the S&P 500. My favorites ETF’s are the XLE=Energy Index, the XLF=Financial Index and the SPDR=S&P 500 index. I have owned the XLE and have experienced a 12.12% return on investment in four months! That is substantial gain in these uncertain market conditions and has significantly beaten the current return rate. With the ambiguous state of the market, diversification is imperative and having an affordable way to do that is key. ETF’s give you the benefits of mutual funds plus tax efficiency, low cost and purchasing leverage you need. Thus they give you the diversification of a mutual fund with the flexibility of a stock.

This is the next big thing!

Founders Larry Page and Serge Brin

We have all heard our peers say “just Google it”. With these tools known as search engines, hunting for information on the Internet has never been easier. In its simplest form, search engines are special sites on the Internet that help people find a particular piece of information hidden on the internet. Based on a specific string of key words, information is filtered, ranked, and displayed accordingly. With over 150 million hits a day on Google’s main page, it is by far the most popular and successful search engine in the world. From its humble beginnings as a database research project by Stanford graduate students Sergey Brin and Larry Page, Google has since grown to Wall Street prominance, raising over two and a half billion dollars with it's 2004 IPO.

What makes Google so special is that its powerful search engine technology that is capable of finding uniquely accurate information. Behind the scenes, the technique used by Google to determine the importance of a web page is one based on votes from other pages in the Internet known as PageRank. Although much is talked about Google and its unique company culture, when searching for the PageRank keyword, only a handful of relevant web page appear. Using a mathematical algorithm, each page is assigned a score by using both incoming and outgoing links for computation. Intuitively, if a web page is referenced more frequently by other web pages, its score would be raised to give it more importance.

Links from one page to another

Leaving the actual mathematical formula for future discussion, let’s look at how the scores are calculated given a sample of five web pages with the word widgets.com appearing on all give web pages.

Step 1:

Initially, assign all five pages the same score (a non-zero number, in this case 100).

Step 2:

The ranking stage.

Now, each pages score is determined by the sum of a number - lets call “x” - from each of the other pages that have incoming links to the particular page. This variable “x” is calculated by the score of the linking page(s) divided by the number of outgoing link(s). For example, the “About us” page has one incoming link coming from “Home” page. Initially, “Home” page has a score of 100 and contains two outgoing links. Hence, the new score for “About us” page is 50 calculated by 100 (score of “Home” page) divided by two (number of outgoing links by “Home” page). Similarly, the other four pages get their scores calculated as well. Calculation for the more complicated “Home” page is: 100/1 + 100/2 + 100/2 + 100/3 = 233

Step 3:

When scores for all five pages are recalculated, the process is repeated using the new scores assigned (in this case: 50, 233, 33, 33, 150). The process is repeated over and over again until all the scores stop changing. Hence we’ve reached the final score that will go into ranking system. In this scenario, “Home” page will appear on the top if we had search for the keyword widgets.com.

From the example above, it may seem that calculating the scores are not difficult. But once the number of pages increases rapidly, many different combinations of links are possible, thus making the calculations very complex. Other variables are introduced to prevent scores from increasing indefinitely along with handling validity of web pages and preventing certain pages (excluding their calculations) from purposely trying to fool the system to compute inaccurate scores that do not reflect importance of the page. In Part 2 of Google’s PageRank article (to appear in VentureForth Quarterly in Spring 2005), we’ll explore the actual mathematical formula used by PageRank.

The best employees a company can have are the ones who: one, make the best decisions; and two, actually carry them through. Enabling employees to accomplish both of these is a daunting task for companies, and requires a culture of responsibility and communication with processes to support it. One such process is an employee newsletter, which many companies have – however, all too often it seems that employees do not take the time to read it. And that is not totally the responsibility of the employee, but also the responsibility of the people who make it!

Nuts! By Kevin & Jackie Freiberg presents a very effective employee newsletter that is generated by Southwest Airlines. It combines the knowledge that employees need to know relating directly to decisions they make, as well as being creative, funny, and overall entertaining enough to make employees want to read it. Here are the key topics that each Southwest Airlines newsletter covers, and yours probably should too!

Industry News

Containing information about nearly every major event in the industry, as well as information about the competition, this section helps employees understand the trends that are going on around them. It also taps into employees’ competitive spirit and motivates them.

How We Rate

This section covers the current financial status of the company (such as stock price), and presents other performance stats. Good news and bad news should be reported, the latter presented as a challenge. When employees know what is going well and what is not, they can make informed decisions on where to focus their energy!

Learning Corner

Everyone needs consistent reminders on what the core values of the company are, as well as how to improve soft skills like teamwork & leadership. This is best done through anecdotes or analogies.

Profits

It is often easy to forget how an individual’s job directly affects the bottom line for the company: in profits. Present in this section various ways that each type of employee directly correspond to getting higher profits, and they’ll work more efficiently. You can use both qualitative and quantitative descriptions.

Milestones

If you revisit the previous month’s, or previous year’s achievements, employees will feel the momentum created by other parts of the company and build upon them. It can be a big product launch, stellar financial results, a successful event; anything that an employee can be proud of.

What the Execs are Doing

The rift between the executives and other employees in a company often is quite large and can create resentment. This section can let employees know how each member of upper management is spending their time—where they have spoken, or even what charitable causes they are donating to. The more the employee gets to know about the management, the more they will be willing to take charge of their own projects.

Customer & Employee Letters

There are few things that create more pride, motivation, and momentum than letters from real customers praising the company. There are also times when the easiest way to get over grievances (like a lost friend, employee, etc) than to share the pain with others who care. This can be such an interest to employees that they will read the newsletter just for this section itself.

Spoofs & Entertaining Stories

In small doses, sprinkle in some doses of humor to keep people reading – and to make it more fun to make the newsletter, as well. If this is absent, there is a good chance no employee will take the time to read any of the newsletter at all.

I recently read The Fail-Proof Enterprise by Bob Thomas, a story of one man’s success as opposed to a simple outline or how-to. I wouldn’t suggest it as a good read, and in my mind there is no such thing as a "fail-proof" enterprise. Nevertheless, the book has some solid ideas to keep in mind when starting your own venture:

All owners should identify their attributes and limitations

Each of us have our own strengths and weaknesses--and for many of us, it is difficult to admit what those weaknesses are. It is imperative, however, that you figure out where the team excels and where it lacks so that you can actively staff your weaknesses. This is very similar to venture capitalist Vinod Khosla’s idea of "engineering the gene pool". You can watch a 6 minute talk at http://edcorner.stanford.edu/SearchServe?mid=30

Issue stock in lieu of salaries

While every business has different financial requirements, if it is possible, it is recommended to start the company on no interest loans. Instead of paying salaries, use the initial revenues to pay off the loans and build up a sizable cash reserve. Only after the company can survive without further financing (probably 18 months), do you start paying salaries. During these 18 months, pay those involved with stock. This ensures total commitment from partners, and keeps them totally in touch with the company’s finances.

Give majority ownership collectively to partners

After all the partners or owners that are needed have been found, give them at least 51% ownership, collectively. This will keep you from making any bone-headed decisions, and give them enough power needed if you are incapacitated.

Limit your organizational levels

Simply, mid-management is a waste of resources. Resist bureaucracy, and try keeping the organization to 3 levels. The top are the owners, the midlevel are the department managers, and all others remain at the low tier. Grow horizontally, instead of vertically. Keep titles out of it as much as possible. The goal is to keep people doing anything it takes to achieve a goal, instead of focusing only on what their perceived role is in the company.

Set salary levels that increase, and no time clocks

Give employees constant incentives to achieve more and more. What worked well is set salary levels with incremental raises of $50-$75 per week based on goals achieved.

Shut down between christmas and new years with pay

There is very little that gets done during the days between Christmas and New Years. So, why not just shut down, and give some cash bonuses during this emotionally satisfying time of year. Your employees will love you for it. Of course, do not make this formal, because you never want to be locked in to such a plan. Especially in the case that unions form.

Open your office space into lively bullpens

Cubicles and offices drastically reduce communication. Instead, place desks far enough apart so that people don’t bother one another, but still keep everyone on sight. This removes the office caste system, and learning by observation is in full force. You can have a conference room, and private meeting rooms close to each desk.

I had the privilege of haphazardly reading “The 21 Irrefutable Laws of Leadership” by John C. Maxwell. I believe that leadership is one of the most important skills there is that a person in any field can learn. Having good, positive leadership skills determines success in all aspects of life, including academics, open source, science, business, charity, and even, in my opinion, parenting. Success is measured simply by what you leave behind, and leadership determines the quality and livelihood of your efforts far after you leave them (including children!). And it is a way we can ensure that we have helped improve the world long after we have any corporal existence in it. It is because of this that I think everyone should be taught such skills when they are very young, very old, and everywhere in between.

However, this comes with a catch as well. I believe that having negative leadership skills is more dangerous than having learned none whatsoever. I am sure many of us see that in others, especially those that are scientists and engineers. In order to become a truly good leader, a person must possess all the skills revealed by Maxwell. So as I lay the laws of leadership out, I ask that you remind yourself that while you may only be able to learn and practice several at a time, there is no such thing as a superior leader who lacks any of these traits.

The 21 Irrefutable Laws of Leadership
Re-explained, originally from John C. Maxwell

1. The Lid on Success is determined by Leadership Skills

An individual’s success in anything can only be as great as his or her leadership skills. To use an example close to my heart, Apple would not have become a successful company if led by a person like Steve Wozniak as he was back then. It takes a lot of influence and positive leadership over a group of people to turn something into a continuing success. This is of course the basis for learning the rest of the rules of leadership.

2. Influencing People is Primary to Being a Leader

In order to be a leader, you must be able to influence them to work with you towards a common goal. In many companies, influence is established by positions, but this is not the healthiest influence alone. In the best case, it is the leader who makes the position (not vice versa) by virtue of hard work and respect, in turn gaining influence. This is especially true in volunteer organizations where influence is not determined by pay. The leader is the one who everyone waits to follow to as opposed to who they wait for to finish bossing them around.

3. The Leadership Development Process Happens Daily

Leadership is learned. Some people know more about it than others. Wherever you fit in, figure out what you don’t know, and learn it.

4. The Leader is The Navigator

Anyone can steer a ship. However, it is up to the leader to carefully plan out exactly where it is everyone goes. This navigation relies on seeing the trip, drawing on experience, listening carefully to others, making only careful commitments, and coming up with a reasonable conclusion. Having the courage to take calculated risks and set big goals is also a necessity.

5. When The Leader Speaks, Everyone Listens

There are many positional “leaders” that speak to those under them, but rarely do those people under them really—I mean really—listen. You can tell who is a leader by observing whom everyone waits to hear.

6. Leadership is based on Good Character

Perception of character is fundamental to leadership. Followers will often forgive admitted poor judgment and mistakes, but never lapses in character and principles. Leaders must have high personal regard for the people they work with and those who follow them. Leaders also must make sound decisions but quickly reveal when they make mistakes and how they will fix them.

7. People Follow Individuals Stronger Than Themselves

Leaders must be strong and standup for their goals and their people. In the words of my grandfather, you must have the “unbending endurance to stand pressures.”

8. A Skilled Leader Has a Biased Read on Situations and Follows Intuition

A good leader reads a situation completely, but does not fail to take action immediately based on intuition gained from experience.

9. Who You are is Who You Attract; Staff Your Weaknesses

People gravitate towards others who are like them. If you are entrepreneurial, you will find other entrepreneurs will join you. If you have very strong leadership abilities, strong leaders will be around you. Even if you are musically talented, you will attract others who are similarly inclined. This is a double-edged sword, of course, and you must never forget to seek out those who are strong in your weaknesses.

10. Leaders Touch a Heart Before a Hand

The common saying is “People will not care how much you know until they know how much you care.” Leaders are careful to form close relationships and care about all of the people who work under them. They make everyone feel important and needed.

11. Surround Yourself with Good People

We all have an inner circle of colleagues that we rely on for advice and resources. The stronger leaders that the people in the circle are, the stronger the leader with the circle becomes. We’re only as good as who we know, and thus should seek out to surround ourselves with strong people.

12. Empower Others

The best leaders always give others credit for any accomplishments no matter how small. Leaders also take the blame upon themselves for what is not done well. In this way they continuously foster the people under them. Trust others to do things, even if not perfect the first time. People always live up to your expectations of them, my grandfather has said. Give them high expectations, and challenge them to go beyond. Do not ever undermine this empowerment -- especially as a result of being afraid of maintaining your own power. Some of the successful organizations (such as G.E. and our country) even have very healthy (time) limits on maintaining power.

13. It Takes a Leader to Raise a Leader

Leaders can naturally only learn from other leaders. In order to make a legacy live beyond your years, you must aim to foster leadership around you and under you.

14. Individuals Buy in to a Person Before a Vision

It is wrong to assume that if you have a great vision that people will buy in to it for that reason. Instead, people go along with leaders they like personally and get along with even during bad ideas. These followers simply wait for that person to come up with a good one. Make sure people trust you and believe in you. This is the reason a lot of people with good companies don’t get any venture capital, and other companies do. Usually, that person others buy into paint a compelling and passionate version of the future of its organization and people, not just a practical one.

15. Leaders Find a Way to Make the Team Win

Leaders will not accept defeat, and instead find creative ways to achieve victory at all cost. Perseverance is extremely powerful, and when there is a will, there is a way.

16. Only a Leader Can Create Positive Momentum

Momentum is a leader’s best friend. Recognize the opportunities for momentum around you and seize them.

17. Always Prioritize... Everything

There is always too much to do, and therefore good leaders constantly reevaluate what they are doing. Individuals who aren’t leaders can stay that way because they spend their time on unimportant things.

18. A Leader Makes Big Sacrifices

The leader is always the one who steps up and takes the sacrifice to make the team win; at the very least, in order to set an example. This may be a total pay cut or what have you, but the obvious lasting benefits outweigh the temporary pain.

19. Timing of Leadership is Important

It is at least important to realize that this issue exists. Our leader President Jimmy Carter was the right leader only at a very specific time.

20. Leading Leaders, Not Followers, Means Explosive Growth

Many leaders choose only to lead followers. This is additive growth in terms of efficiency and success. However, leading and fostering leaders, means that you have multiplicative growth in terms of efficiency and success because they in turn, will lead other leaders and followers.

21. Succession Means True Success

Every leader eventually leaves. This goes for bosses, presidents, scientists, engineers, and parents. The best way to help your family, organization, and world, is by ensuring that you create an effective way for all your sweat, blood, and hard work to continue on through another leader. We don’t think much of companies and organizations that once made great products but no longer exist.

All of these laws, when mastered, make a great leader, and the beginnings of a great engineer, scientist, parent, and human being. I hope, like John C. Maxwell’s “The 21 Irrefutable Laws of Leadership”, that you will revisit this list and build upon your leadership skills throughout your life. Our world is in need of great people, and we’re the ones who make the difference. Wherever you end up, you will be able to use these skills.