Author Archive for Loren Parker

18
Sep
12

Startup-2012

http://www.forbes.com/sites/kevinready/2012/09/18/do-startups-need-funding-anymore/?goback=%2Egde_990_member_165205273

This Kevin Ready post hits on a very interesting subject that comes up when ideas get discussed and the conversation moves to the point of how the financing of a good idea might be accomplished.

I would agree with the perception that funding a web-based startup from day#1 is not as necessary as it once was. A big part of this change is due to the emergence of the cloud as a viable means to provision commercial computing needs. While leasing is a useful tool for small businesses, getting acceptance and reasonable terms that do not bind the founders personally to the risk can be difficult to obtain before the company has significant revenue.

Cloud-based provisioning and the continued evolution of the mobile/remote workforce has made “boot-strapping” a web-based business a realistic strategy for many web business entrepreneurs. Today, there are a number of products and services – from marketing to infrastructure – that allow businesses to operate in a “pay-as-you-go” capacity. While this approach is not always right for more mature businesses, it is essential for the boot-strap startup trying to make progress on its product/service and positioning. With its limited cash-flows and quickly changing objectives, cloud-based provisioning has allowed start-up companies to focus their monies more effectively at sales and marketing of the final product instead of on hardware and software.

Ready makes a point about involving “smart money” and gaining visibility. I think these are both accurate. There are a number of sources for investment monies and they are certainly not all of equal value and pedigree. As well, there are new forms of financing (compared to 10 years ago) like crowd-sourced financing that offer some sorts of businesses a unique alternative to get access to capital.
What seems to be different now (from 10 years ago, for example) is that most worthwhile investors expect even early stage web companies to be able to do more than just show off a “vaporware” slide deck. Investors – even many who call themselves “early-stage” – expect to see some successful efforts by the company to formulate the business plan beyond some slides, some business cards and a marketing study.

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10
Sep
10

“Grandpa Bill” Written by Janice – 1975

Who’d ever believe it
When some years ago
The idea of grandkids
Wrought a vehement “No”

“Not a million I’d take
For the two kids I’ve got
One more for a nickel
I’ll pay you not!”

The lectures we heard
Of heartache and strife
“Go ahead you dumb turd,
And ruin your life

“What would he do
Without us we’d say
And “what will he do
When he grows old one day

No one to pass on to
His wisdom and wit
His legacy would die
And he’d say “Oh Bullshit”

“Get your beans clipped Goofy”
It is the only way
Kids just cost money
And you’ll rue the day

But thank God that we
Didn’t heed his advice
Along came these three
And to them he’s so nice

First there came “Lo”
(the grumbling still grows)
8 months pass till Kevie
The mans mellowing shows

Paper airplanes and windmills
And toys from his age
Birdhouses , Contraptions
And love fills each page

Of the Book memory writes
Of Grandpa’s demise
What would the boys do
Without each surprise?

And then three years later
Along came Melaine
Irish Pixie he dubbed her
And who would complain?

His role was written
Many eons ago
Our Grandpa is smitten
The “Gropps” run the show

30
Apr
10

Dell & the Tegra2 Tablet? Forget it!

http://www.engadget.com/2010/04/21/dell-looking-glass-tablet-leaks-tegra-2-coming-your-way-in-nove/

As if they haven’t brought enough mediocrity to the laptop and desktop, Dell has set their sites on the new tablet/pad space Apple has opened up in computer hardware with its iPad. in typical form, Dell will try to appeal on price –casting aside such nice-to-haves like usability and quality.
You couldn’t give me a Dell computer or peripheral. Their new products are garbage — loaded down with enough begware out of box to make the product unusable. Who are they serving? Customers or Vendors? Most of the products preloaded on their boxes are worthless or second-rate to begin with. How much LESS could Dell care about their customers? I wrote Jeff Clarke (head of Dell Mfg-Americas) a note expressing concern over the amount of begware and garbage installed on new Dell computers. The bastard couldn’t be bothered to even answer.

Yo Jeff: I have no interest in a second rate product sold and supported by outsourced sales teams. Dell NO LONGER has any real engineering competency (they laid them all off–cheap bastards) in the US – so they are relying on the Chinese copycats to help provide the technologies they are clueless on how to provide.

The effort to migrate mfg to the Chinese was so hopeless that Dell had to rehire a BIOS engineering buddy of mine (Dell HATES spending money on anyone competent) to hold their hands (via tele-conf) because the company now lacks any real problem-solving creativity.

Hopefully Dell bastards will be acquired soon. The best thing Mikey Dell could do for shareholders if he gave one shit would be to sell the company off in pieces, give the shareholders their money back & get out of the hardware biz. Yes, I know it sounds a little like the advice the egomaniac gave Steve Jobs re: Apple about 10 years ago when Mikey THOUGHT he was on top.

Yo Mikey Dell: YOUR COMPANY CULTURE IS IN RUINS & *YOUR PRODUCTS ARE NO LONGER LEADERS, THEY ARE PATHETIC LOW QUALITY CRAP. * Dell can’t even keep its contract with the State of Texas because the products and services the dell lemmings sell and support are so poor. Texas is the even company’s HOME STATE as well as its place of incorporation! If they won’t buy, who will? Neophytes? Transactional business?

The only good thing about the Tegra2 would appear to be its use of Android, Google’s mobile device O/S..
However, I’d still stick to Apple’s iPad and keep your eye on Palm|HP & RIMM’s forthcoming offerings.

10
Apr
10

Capital Controls Act

I recently received the following from my CPA.  <sigh>

On March 18, with very little pomp and circumstance, president obama (<LoL>note lower case – the “tool-belts” of the world don’t get their names capitalized</LoL>) passed the most recent stimulus act, the $17.5 billion Hiring Incentives to Restore Employment Act (H.R. 2487), brilliantly goalseeked by the administration’s millionaire cronies to abbreviate as HIRE. As it was merely the latest in an endless stream of acts destined to expand the government payroll to infinity, nobody cared about it, or actually read it. Because if anyone had read it, the act would have been known as the Capital Controls Act, as one of the lesser, but infinitely more important provisions on page 27, known as Offset Provisions – Subtitle A—Foreign Account Tax Compliance, institutes just that. In brief, the Provision requires that foreign banks not only withhold 30% of all outgoing capital flows (likely remitting the collection promptly back to the US Treasury) but also disclose the full details of non-exempt account-holders to the US and the IRS. And should this provision be deemed illegal by a given foreign nation’s domestic laws (think Switzerland), well the foreign financial institution is required to close the account. It’s the law. If you thought you could move your capital to the non-sequestration safety of non-US financial institutions, sorry you lose – the law now says so. Capital Controls are now here and are now fully enforced by the law.

Can I get an “OUCH!” ?

Let’s parse through the just passed law, which has been mentioned by exactly zero mainstream media outlets.

Here is the default new state of capital outflows:

(a) IN GENERAL.—The Internal Revenue Code of 1986 is amended by inserting after chapter 3 the following new chapter:

‘‘CHAPTER 4—TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS
‘‘Sec. 1471. Withholdable payments to foreign financial institutions.
‘‘Sec. 1472. Withholdable payments to other foreign entities.
‘‘Sec. 1473. Definitions.
‘‘Sec. 1474. Special rules.
‘‘SEC. 1471. WITHHOLDABLE PAYMENTS TO FOREIGN FINANCIAL INSTITUTIONS.

‘‘(a) IN GENERAL.—In the case of any withholdable payment to a foreign financial institution which does not meet the requirements of subsection (b), the withholding agent with respect to such payment shall deduct and withhold from such payment a tax equal to 30 percent of the amount of such payment.

Clarifying who this law applies to:

‘‘(C) in the case of any United States account maintained by such institution, to report on an annual basis the information described in subsection (c) with respect to such account,
‘‘(D) to deduct and withhold a tax equal to 30 percent of—

‘‘(i) any passthru payment which is made by such institution to a recalcitrant account holder or another foreign financial institution which does not meet the requirements of this subsection, and

‘‘(ii) in the case of any passthru payment which is made by such institution to a foreign financial institution which has in effect an election under paragraph (3) with respect to such payment, so much of such payment as is allocable to accounts held by recalcitrant account holders or foreign financial institutions which do not meet the requirements of this subsection.

What happens if this brand new law impinges and/or is in blatant contradiction with existing foreign laws?

‘‘(F) in any case in which any foreign law would (but for a waiver described in clause (i)) prevent the reporting of any information referred to in this subsection or subsection (c) with respect to any United States account maintained by such institution—

‘‘(i) to attempt to obtain a valid and effective waiver of such law from each holder of such account, and
‘‘(ii) if a waiver described in clause (i) is not obtained from each such holder within a reasonable period of time, to close such account.

Not only are capital flows now to be overseen and controlled by the government and the IRS, but holders of foreign accounts can kiss any semblance of privacy goodbye:

‘‘(c) INFORMATION REQUIRED TO BE REPORTED ON UNITED STATES ACCOUNTS.—
‘‘(1) IN GENERAL.—The agreement described in subsection (b) shall require the foreign financial institution to report the following with respect to each United States account maintained by such institution:
‘‘(A) The name, address, and TIN of each account holder which is a specified United States person and, in the case of any account holder which is a United States owned foreign entity, the name, address, and TIN of each substantial United States owner of such entity.
‘‘(B) The account number.
‘‘(C) The account balance or value (determined at such time and in such manner as the Secretary may provide).
‘‘(D) Except to the extent provided by the Secretary, the gross receipts and gross withdrawals or payments from the account (determined for such period and in such manner as the Secretary may provide)
.

The only exemption to the rule? If you hold the meager sum of $50,000 or less in foreign accounts.

‘‘(B) EXCEPTION FOR CERTAIN ACCOUNTS HELD BY INDIVIDUALS.—Unless the foreign financial institution elects to not have this subparagraph apply, such term shall not include any depository account maintained by such financial institution if—
‘‘(i) each holder of such account is a natural person,and
‘‘(ii) with respect to each holder of such account, the aggregate value of all depository accounts held (in whole or in part) by such holder and maintained by the same financial institution which maintains such account does not exceed $50,000.

And, while we are on the topic of definitions, here is how “financial account” is defined by the US:

‘‘(2) FINANCIAL ACCOUNT.—Except as otherwise provided by the Secretary, the term ‘financial account’ means, with respect to any financial institution—
‘‘(A) any depository account maintained by such financial institution,
‘‘(B) any custodial account maintained by such financial institution, and
‘‘(C) any equity or debt interest in such financial institution (other than interests which are regularly traded on an established securities market). Any equity or debt interest which constitutes a financial account under subparagraph (C) with respect to any financial institution shall be treated for purposes of this section as maintained by such financial institution.

In case you find you do not like to be subject to capital controls, you are now deemed a “Recalcitrant Account Holder.”

‘‘(6) RECALCITRANT ACCOUNT HOLDER.—The term ‘recalcitrant account holder’ means any account holder which—
‘‘(A) fails to comply with reasonable requests for the information referred to in subsection (b)(1)(A) or (c)(1)(A),
or ‘‘(B) fails to provide a waiver described in subsection (b)(1)(F) upon request.

But guess what – if you are a foreign Central Bank, or if the Secretary determined that you are “a low risk for tax evasion” (unlike the Secretary himself) you still can do whatever the hell you want:

‘‘(f) EXCEPTION FOR CERTAIN PAYMENTS.—Subsection (a) shall not apply to any payment to the extent that the beneficial owner
of such payment is—
‘‘(1) any foreign government, any political subdivision of a foreign government, or any wholly owned agency or instrumentality of any one or more of the foregoing,
‘‘(2) any international organization or any wholly owned agency or instrumentality thereof,
‘‘(3) any foreign central bank of issue, or
‘‘(4) any other class of persons identified by the Secretary for purposes of this subsection as posing a low risk of tax evasion.

One thing we are confused about is whether this law is a preamble, or already incorporates, the flow of non-cash assets, such as commodities, and, thus, gold. If an account transfers, via physical or paper delivery, gold from a domestic account to a foreign one, we are not sure if the language deems this a 30% taxable transaction, although preliminary discussions with lawyers indicates this is likely the case.

And so the noose on capital mobility tightens, as very soon the only option US citizens have when it comes to investing their money, will be in government mandated retirement annuities, which will likely be the next step in the capital control escalation, which will culminate with every single free dollar required to be reinvested into the US, likely in the form of purchasing US Treasury emissions such as Treasuries, TIPS and other worthless pieces of paper.

America – you are now one step closer to a thoroughly non-free market.  Go ahead and go back to sleep now.   No, wait – Oprah is on …

Full HIRE Act text

10
Apr
10

The Haircut

The first cut is always the deepest — so they say.  Cha-Cha had her first haircut and she was less than impressed with the whole proposition toward the end.

31
Mar
10

The State of Media Player

Home entertainment is in the midst of a transformation that may give consumers the ability to truly watch and listen to what they want when they want. I am, of course, describing the media center appliance, an appliance-like unit that marries to one’s home entertainment system and allows for multimedia content from various sources (traditional cable, home file server via TCP/IP network, VCR, DVD etc) to be utilized as the user chooses. These media players have been around in one form or another since VGA ports started commonly appearing on the back of TV sets over almost a decade ago. The problem has been two-fold: the UI (user interface) and the content control.

User interface design (or HCI) is a study of reducing and simplifying the number of visual cues required for humans to quickly and easily accomplish computer-based tasking. Without going into great description, it would suffice to say that the efforts the market has seen so far have been mediocre, at best. Too often (as in Microsoft’s “Media Center” and “Home Server” products) the products introduced are nothing more than sophomoric regurgitations of existing products (MS Media Center used a re-factored XP) — often performing some of the key features of a media appliance as though it were a “bolt-on” or an after-thought.

Media control is likely the largest factor in the glacial pace that the innovation of the media appliance has taken. Media rights groups (MPAA, RIAA, etc) feel a concern that copyrighted and trademarked materials will be abused if the media player mfgs are not compelled to design equipment that respects the digital rights of media creators. The reality is these greedy media pigs are probably more of an impediment to a meaningful solution than any sort of catalyst. There is no doubt digital rights need to be preserved, however, at a time when we are seeing intellectual property in other realms (i.e., pharma, bio, medicine, agri, etc) be afforded shorter windows of exclusivity it would seem daft and out-of-step not to see similar considerations made on multimedia properties as well.

Presently, I am using an AppleTV, a stripped down PC and a Sonos unit (ZP120) and I like them all. That said, I wish I could have the features each has in one box/appliance. The AppleTV works well for me however, the fact it will play only Quicktime MOV, MP3 and M4V make it less than a complete solution. Apple stupidly made iTunes the “sync-n-add” mechanism for the AppleTV rather than having the Apple TV unit operate with a web interface on-board to manage these all load and organize tasks. This was an odd mistake for Apple – only further demonstrating that even those with good track records in providing consumer electronics have not had a winner here yet.

The Sonos is a real winner and – if it had a means to offer video as well – would likely be my choice. However, it does not — leaving the product a good match only for my sound (not visual) needs.

The stripped down PC is by far the most useful but the least easy to use. The keyboard and mouse (std.io) is clunky and a piss-poor match for the needs one has in a home entertainment landscape.  No matter – sometimes you have to do what you have to do.

BTW, if any of you have good things to say about any and all media server/centers please feel free to embellish in comments.  I would love to get some insights from others on this topic.

01
Feb
10

I found this Amusing…sad, but amusing…

Freezing some domestic programs for three years and then holding it at the rate of inflation for the rest of the next decade would save $250 billion, the administration estimates.

That would represent an abrupt shift in priorities. Non- defense discretionary spending is projected to grow this year by 7 percent not including the costs of last year’s stimulus package, according to the CBO.

The increase totals 17 percent once the stimulus package is included, according to CBO estimates. The administration’s plan also calls for 120 program terminations, reductions and other savings it estimates would save $20 billion.

It would provide $33 billion in “emergency” funding this year to help pay for the administration’s troop buildup in Afghanistan. Next year, war costs would amount to $159.3 billion. The basic defense budget would amount to $549 billion, a 3.4 increase from this year.

The Department of Homeland Security would get a 2 percent increase, veterans programs would get a 7 percent budget increase and the State Department and other international programs would see a 8 percent hike.

The budget has more than doubled from $1.9 trillion in 2001, according the OMB’s historical data.




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