Market Drives Design

Today in class, we have a guest speaker talking about the design. I would like to summarize his speech now.

The design which is driven from technology or innovation may have a hard time marketing.
The life would be easier if we design something that the market wants. Design for the market. Design something filling users’ need. Design helps differentiating the product from others. If you do not differentiate the product, you will end up compete with competitors by prices which the horrible place to be.

How can we obtain an idea?
- bug list – list of things that annoy you
- trend watching
- R&D
- industry knowledge
- product adaptation
- need finding

Design process
- identify a niche. choose a niche.
- identify users
- need driven
- design a solution
- get real fast
- iterate
- feedback loop

Use flash, matlab or development kit to fake development at the begining. To make a fake product at the begining to get real feedback.

Asia – has know-how
- has expertise
- lack knowledge of the market
- lack design

You can develop a prototype on your own to get user feedback, for the production, you can shift to Asia.
Try to develop something with low effort but has high value perceivable by customers.

Market drives design, not design drives market.

New Macbook

My friend just bough a macbook last week. Today, the new macbook is out. He will return his machbook and buy the new model. Apple accepts the return. Great. It would help customers to make a purchase decision easier by not waiting for a new model.

Recruiting human resource for a start-up company

Today in Informatics Entrepreneurship II course, a guest speaker spoke about how do a start-up companies attract people to work with them.

I would like to summarize it down, so I remember it.

Business is a dictator not a democracy.

For a big company, they have a budget and resources. Then they figure it out what they will do with their resources and the budget. For a start-up company, it is up side down. They know what they will do, but they do not have resources and a budget.

For a start-up company, the founder must have a compelling reason to recruit people.
A company is divided into shares (equity). Founders have shares in the company.
They usually offer an equity of the company or a stock option to a start-up team member. An equity of the company means shares in the company. A stock option is an option to buy stock later on with a fixed low price. Let’s say, if the stock is worth 10 USD, and you have a stock option to buy a share for a price of 1 USD, then you can make 9 USD out of it. Joining a start-up company is high risk, but high reward. If the company is successful, they can cash out from the equity or stock option. Working for a big company is low risk but low reward.

25-40% of equity of the start-up company is usually reserved for the team. 6-10% may need to attract CEO. Less than 10 % that one of the founders becomes CEO. It is prefer to hire someone to run a company (doing a management and helping raising fund). There is a phrase from the guest speaker, “if you talk to an idiot, he will bring you to his level and beat you with his experience.” Let go your ego, and hire a CEO who is smarter than you to lead the company.

Sign for a Bad CEO
- people who ask up front how much will you pay for them, because it is a start-up company. They may not be able to earn cash for a while.
- people who has no network for raising money
- can not deal with the hardship
- depend too much on you
- does not take charge immediately

In Silicon Valley, the environment is promote people to start a business whereas it is harder to start a business in Europe, because it is more costly to fire someone in Europe. In a startup company, if a CEO, VP or whoever goes on the wrong way (becomes a bad guy), we need to fire them and hire a good one. It’s easier to find someone in USA.

Another reason for the Silicon Valley to be good place to start a business is that when an entrepreneur fails, he or she tries it again and again, and finally he or she gets it right. Entrepreneur got reused. Entrepreneurship is a skill which occurs in a few people. If an entrepreneur fails, and he or she does not do it again, then his or her skill is wasted.
I don’t know whether this fact applies to Europe.

OK, so now we attract some people to form a team for a start-up company. How do we manage a Cap Table (how many shares given to each member in the team, Cap is capitol).
Teams : 25-40% and reserved 6 – 10% of total for a CEO.
VC : 20-30 %
Founders : probably the rest

VC is a venture capitol who got money from someone and invest that money.
In Silicon Vally, there are a lot of VC companies.

Besides the team, a company also needs a board. Five member is enough for the board. One is the founder. One is the CEO. One to two are from VC. One to two are industry experts who has a connection. A company may give stock option or 1% share for each person in the board.

Now, comes the problem.
1) What if someone quit?
We are all in this together. Usually a share given to a team member or founders can not be sold immediately. They can sold certain amount after period of time. This is done to keep team members together. It helps preventing somebody to quit in the middle and withdrawing his or her investment back. It would badly damage your Cap table and you need to spend time raising fund if someone can pull out his or her investment.

2) what if a CEO or VP or whoever does a bad job and you need to fire them. How would you fire them? How would it affect your Cap table?
You need to convince the board that the bad guys is doing the wrong thing. We need to fire them and recruit a new one. Therefore, you need a voting right more than half in the board. This is where the board can help your company. Use the board to fire the bad guy.
You do not want to leave shares in the company whose owners are not committed to the company anymore. It is a real problem. For example, if a guy quiting has a company has 20% stake in the company. What would you do protect investors. The guest speaker introduces the concept of Silicon Vally Back Tactic or Reverse-Split. First, the board set a new price for a share. For example, if a share worths 10 USD, the board can reverse 10 to 1 (means reducing the price of each share to 1 USD). Then split which is an issuing a lot of new shares. The reverse split could turn a 20% stake into a 1% stake. If a company is listed in the stock exchange (public traded), they can not do that.

Technology Venture Formation

In Stanford, there is a class called Technology Venture Formation which is basically similar to Informatics Entrepreneurship I and Informatics Entrepreneurship II in University of Edinburgh where students learn a business opportunity assessment and a business plan. It is quite interesting is that there are some companies sprung up from that course in Stanford.

Last last week, we had another guest speaker who taught a class in Stanford about computer stuff. I could not remember the name of the class exactly. From that course, students do a facebook app. The result was impressive, 20 millions installations world wide for the whole class. A lot of users used facebook apps from that course.

I think that the environment in Stanford is kind of encouraging students to start a business.   There are lots and lots of companies started from Stanford. There are some started from university of Edinburgh too, but Stanford has a lot more successful started up companies. Perhaps, it is a good reason why would you go to Stanford.

The university of Edinburgh has some kind of a program to help support a new start up company.  They want to keep bright and brightest for their local economy as well. Graduated students from Edinburgh usually go to London or perhaps USA.

Visual Studio 2008 for programming the hardware

Cool, I have found out that I can use VS 2008 to program hardware. That it would make my life easier if I ever want to experiment the hardware. Benefit: Unification of hardware development software and utilizing my .Net skill for software development on the hardware.

Silverlight

I have seen Silverlight, but I did not know what it was.

I was searching around for possibility technologies to create rich data graphic application.

Actually, I have some idea of doing a website about the history, but I still figure it our what it would be.

Anyway, I have found that Silverlight is a new technology similar to Flash from Macromedia.

The good thing about is that you can use Visual Studio 2008 to create a Silverlight (version 1.1) application using .Net Languages. That would make life easy.

You can create graphics or animations in Expression Blend. The graphics or animations are stored in the XAML files. Then you can import the graphics or animations into visual studio 2008 for programming.

Now, I can create a very rich (data + graphics) application easier with Silverlight. It was more difficult with flash. It was difficult to create a flash application to connect to databases.

Cool.

http://silverlight.net/learn/learnvideo.aspx?video=123

interessiere mich für das Geschicte

Ich interessiere mich für das Geschicte. Immer wenn ich einen historischen Film oder ein historische Drama gesehen habe, dann suche ich mehr Informationen über den Film oder das Drama vom Internet. Geschicte Lernen langweile ich mich nicht.

Cobertura

Today, I have tried Cobertura which a free test coverage calculation tool for my first assignment for the software testing class.

You can either use this tool via a command line or an ant build file..

At first, I was trying using a command line, but it did not seem that there is any happened. Perhaps, I typed in the wrong command.
I don’t have much time to construct the ant build file. Luckily, I found an example of ant build file.

Cobertura helps measuring the coverage of my Junit tests. It measures the coverage by looking the percentage of statments and branchs covered. Cool tool.