Apple Computer | Ian Andrew Bell https://ianbell.com Ian Bell's opinions are his own and do not necessarily reflect the opinions of Ian Bell Mon, 14 Jul 2003 18:05:41 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.2 https://i0.wp.com/ianbell.com/wp-content/uploads/2017/10/cropped-electron-man.png?fit=32%2C32&ssl=1 Apple Computer | Ian Andrew Bell https://ianbell.com 32 32 28174588 WiFi Here To Stay… https://ianbell.com/2003/07/14/wifi-here-to-stay/ Mon, 14 Jul 2003 18:05:41 +0000 https://ianbell.com/2003/07/14/wifi-here-to-stay/ http://www.iht.com/articles/102711.html

Wi-Fi’s true believers see powerful ‘grass-roots’ force

John Markoff NYT Monday, July 14, 2003

  SUN VALLEY, Idaho Is the Wi-Fi boom about to bust? Even though that has lately become the fashionable view, the answer is probably no.

Critics argue that there are too many competitors trying to deliver high-speed wireless connections to the Internet. Prices for most commercial Wi-Fi services are too high, they say, and free or subsidized operations abound, including those like the one McDonald’s started rolling out last week at its fast food restaurants in San Francisco.

All this will make it practically impossible, the skeptics insist, for anyone to build a profitable business in Wi-Fi, a short-range wireless radio technology that frees personal computers from their physical tethers to the Internet.

A surprising number of true believers in Wi-Fi were present at this famed mountain resort during an annual conference, organized by the investment banker Herbert Allen, that brings together technology, media and entertainment industry leaders.

Intel, in particular, is betting a lot of its own money on Wi-Fi. And that may be exactly what the new technology needs to succeed.

Intel’s two top executives, Craig Barrett and Andrew Grove, were here this year to preach the virtues of Wi-Fi, in the belief that it will be a powerfully disruptive force in the telecommunications industry.

It has certainly been a disruptive force at Intel. The industry and analysts have focused their attention on the current frenzy to build out wireless Internet locations known as hot spots at airports, coffee houses and hotels. But Intel has a much bolder wireless plan in the works: it wants to close the so-called “last-mile” gap between homes and the Internet backbone with cheap, super-fast connections so that businesses can deliver interactive entertainment and a host of other digital products and services right into America’s living rooms and dens.

The new Intel bet is remarkable given that the company initially backed the wrong wireless standard, putting its resources behind a competing standard known as Home RF. But Intel, the world’s biggest computer chip maker, changed its strategy after company executives realized the power and potential pervasiveness of the unregulated Wi-Fi wireless networking standard.

The Wi-Fi standard was developed and commercialized at Apple Computer as early as 1999. Ultimately, though, it gained widespread popularity on its own, Mr. Barrett acknowledged in an interview here, as a grass-roots, from-the-bottom-up movement. That success stands in striking contrast to top-down wireless data strategies, like the 3G cellular approach pushed by the telecom industry, which has so far been an expensive bust.

Barrett now says that people who predict a Wi-Fi shakeout are missing the point, as well as failing to see the deeper implications of the technology. “What is missing is the realization of how many legs this technology has,” he said.

In the three months since Intel introduced its new wireless PC chips, the company has become the dominant force in the Wi-Fi market. It is now putting Wi-Fi circuitry in all of its chip sets for portable computers, investing widely in Wi-Fi industry start-ups and spending almost its entire annual marketing budget in a $300 million advertising campaign trumpeting the virtues of its unwired Centrino brand.

“Intel has raised the level of the water and is floating all the boats,” said Glenn Fleishman, editor of Wi-Fi Networking News, a Web-based daily newsletter.

Of even greater potential import, Intel plans to start a test in Texas in a few months that will use a combination of wireless technologies, including Wi-Fi, to bring broadband Internet connections directly to homes. Last week the company quietly announced that it was teaming with a small equipment maker, Alvarion, of Tel Aviv, Israel, to back a complementary wireless standard that is intended to send data over distances of as much as 30 miles and at speeds of up to 70 megabits per second. The data rate is high enough to comfortably stream high-definition television video broadcasts, and the range makes it possible to quickly deploy a system in a large urban or suburban area.

By comparison, current Wi-Fi technology is limited to several hundred feet and speeds of 11 megabits per second. The Intel test, however, will explore using the 802.16 standard, known as WiMax, to distribute the data to Wi-Fi antennas in local neighborhoods. If Intel is able to jumpstart the market to reach millions of homes with a relatively inexpensive interactive data and video service, the technology could quickly alter the communications landscape. That is already starting to happen. There is now an explosion of Wi-Fi hot spots in hotels, coffee shops, restaurants and airports, and a new wave of handheld gadgets will soon supplement portable personal computers for a class of mobile workers that analysts are calling windshield warriors.

In a speech here, Barrett sketched a portrait of a rapidly growing market. There are now about 40 million Wi-Fi users, he said, and new access points are selling at the rate of about 15,000 a day, which makes Wi-Fi a much faster-growing technology than cellular telephony.

While prices for connection times are certain to keep falling, industry executives say they are already seeing usage patterns that suggest that Wi-Fi commercial services are working and are here to stay. Moreover, they say they believe the services will complement and not compete with free services that are emerging in urban areas around the country. “We have a good business model in hotels, said Dave Vucina, chief executive officer of Wayport, a provider of Wi-Fi hot spots in hotels, airports, restaurants and other locations that is based in Austin, Texas.

In the hotels that Wayport serves, he said, the company is seeing between 8 and 12 percent nightly usage rates for each occupied room. He said he believed that the rate could go as high as 15 to 24 percent. Those numbers are credible, industry analysts said, because out of the 40 million business travelers in the United States, 30 million now carry personal computers when they hit the road.

The central issue in the debate is whether those workers will be able to meet their data needs with next-generation cellular telephone networks, or whether the far higher data rates available on Wi-Fi networks will prove preferable.

Copyright © 2003 The International Herald Tribune

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Video iPod? https://ianbell.com/2003/01/06/video-ipod/ Mon, 06 Jan 2003 19:27:07 +0000 https://ianbell.com/2003/01/06/video-ipod/ http://news.com.com/2100-1040-979204.html?tagý_lede1_hed Apple banks on digital media harvest

By Joe Wilcox Staff Writer, CNET News.com January 6, 2003, 4:00 AM PT

Apple Computer on Tuesday is expected to unveil a new portable product aimed at bolstering the company’s strategy to make itself into a major player in home entertainment, sources and analysts said.

The product, which is expected to be shown off during a keynote speech by CEO Steve Jobs at Macworld in San Francisco on Tuesday, will come with 802.11g and Bluetooth wireless capabilities and serve to make the Mac a more appealing “digital hub” than Windows XP PCs, according to sources. Machines with Windows XP Media Center Edition can be used to record TV shows, similar to digital video recorders (DVR) such as TiVo boxes, and catalog music and video.

What the product does exactly, however, remains shrouded in mystery. Some sources and analysts believe that it will be similar to the tablet computers released by Acer and others late last year. These are full-fledged portable computers complete with handwriting recognition and handwriting input.

Others, however, say it will be a device geared toward playing or capturing video. By incorporating both 802.11g and Bluetooth wireless capabilities, the device could connect to both upcoming Apple PCs (Apple has said it will support the 802.11g wireless networking standard) and the latest digital cameras and video recorders. A standard TV jack would allow the device to be hooked up to TVs as well and function as a DVR or as a bridge to let the TV act like a DVR.

Then again, it could be something entirely different, as the company has proven adept at confounding speculation preceding the convention before. An Apple reperesentative would not comment on new products ahead of the show.

One thing that is not expected at the show are new computers. Because of a relatively modest inventory bloat, Apple is delaying new models, according to sources.

Analysts note that Apple has all the pieces in place to deliver a tablet-like computer. Such a computer, outfitted with Mac OS X 10.2, Apple’s Inkwell handwriting recognition technology, iSync data synchronization capabilities and 802.11g and Bluetooth wireless would be a formidable entry.

Bluetooth would remove the need for a docking station as the mouse and keyboard would connect wirelessly. With speeds up to 54 megabits per second (mbps), 802.11g wireless networking would allow the transfer of large data files or video without the need of cables.

“That kind of device would make a lot of sense,” said NPD Techworld analyst Stephen Baker. “The idea of the digital hub is to try and tie a bunch of different product types together but provide a lot of mobility of your data–your TV entertainment data, your music data, your digital data. This kind of device would have that.”

IDC analyst Roger Kay agreed. “If it were really cool it would generate a lot of buzz and maybe even a few sales.”

A tablet computer, however, would be risky. These devices generally sell for more than $2,000, or more expensive than most notebook computers. Overall tablet sales in 2003 are expected to be fairly small: Gartner projected first-year Tablet PC portable sales of 425,000, or about 1 percent of the notebook market, while IDC said it could go up to 775,000.

Typically, Apple’s “cool” products have done well when they are relatively cheap. The first iMac, targeted at new computer users, and the iPod music player have sold well. The cube, geared for professionals and carrying a corporate price tag, did not sell well. And sales of the the flat-panel iMac, which was unveiled at last years Macworld, have cooled after an initial flurry.

iPod II But some analysts don’t believe the new product will be a tablet, but a successor to Apple’s iPod music player. The new device would have video capabilities and possibly a touch screen and wireless capabilities. As such, the device would be similar to the portable video player unfurled by Intel last year. Sonicblue is currently marketing the Intel-designed device.

“I think any rumors about a tablet computer are a smokescreen for iPod II,” said Richard Doherty, president of research firm Envisioneering Group.

Technology Business Research analyst Tim Deal agreed. “I wouldn’t be surprised to see Apple introduce an iPod with touch-screen capabilities as well as additional applications to include cell-phone connectability and gaming as it continues to evolve into a fully functional PDA,” he said. “A wireless iPod with bolstered display features would allow users to share and view digital (pictures) and videos on the fly.”

Doherty said Apple has been working on a video-capable iPod-like device for some time. “Originally, Apple had planned to announce iPod II at Expo Tokyo,” he said. In December, IDG canceled next month’s Macworld Expo/Tokyo. “We think the product can be announced, if not shipped now,” Doherty added.

The iPod II, in fact, is one of three principal pieces of hardware in Apple’s labs that Apple has shown analysts but not officially announced yet. The company is also working on computers that will contain IBM’s 32-bit and 64-bit chip and a computer with a 3D screen, similar to the screens recently unveiled by Sharp. Of course, Doherty added that not everything in the lab eventually goes public.

Whether tablet or iPod, emphasis on video would be one of the new product’s distinguishing features, Doherty said. Apple could further advance its digital media strategy around MPEG-4, the successor to the MPEG-2 format widely used for Hollywood movie DVDs.

“Nobody has better MPEG-4 tools than Apple,” Doherty said.

The ripe and the unripe During his keynote address Tuesday, Jobs also is expected to unveil new versions of the company’s digital media programs, or “i” applications. But consumers will have to pay as much as $50 for new versions of iDVD, iPhoto and iMovie, which will be sold together as a bundle. Apple released new versions of iCal and iSync on Thursday.

Bluetooth and next-generation 802.11g wireless networking will be important parts of the Macworld announcements, sources said. Apple plans to release a new version of its AirPort wireless base station using 802.11g, as the company moves up from the slower 802.11b that moves data up to 11mbps.

Meanwhile, the Cupertino, Calif.-based company apparently has delayed launching new Macs ready for Macworld until later in January, while the company sells out stock left over from the holidays, according to sources. When available, some of the new Macs are expected to include support for 802.11g and Bluetooth wireless.

The “quarter’s financial results will undoubtedly show weaker-than-usual holiday sales for Apple,” Deal said of the decision to delay new Macs.

Inventory information from distributors Ingram Micro and Tech Data indicate Apple is sitting on modest inventory–anywhere from one to three weeks–in most product categories. But some products are considerably backordered, such as the 5GB and 10GB iPod for the Mac, AirPort base station and 15-inch flat-panel monitor. Based on similar past situations, the backorders would suggest new products are coming in these categories. But sources said to watch for Apple to drop the 15-inch flat-panel monitor as the company replaces the current 17-inch display and adds a new, 19-inch model. The new monitors could debut on Tuesday, but are more likely to appear when Apple announces new Mac models.

No matter what happens on Tuesday, “The innovation ratio will be much higher than Apple’s 5 percent market share,” Doherty said.

———–

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Re: FW: Apple Cell Phone https://ianbell.com/2002/09/26/re-fw-apple-cell-phone/ Fri, 27 Sep 2002 01:58:11 +0000 https://ianbell.com/2002/09/26/re-fw-apple-cell-phone/ I’m going to take some risk here and go on record stating that although I am 100% conviced that there is an “iPhone”, this ain’t it. I’ll even go further to say that the logical partner to build the iPhone is SONY/Ericsson, and not Motorola. Why? Bluetooth.

SONY/Ericsson support Bluetooth in their current round of phones, Apple has already demonstrated interoperability with them in shipping product, and Apple has mysteriously incorporated robust Bluetooth support into OSX Jaguar.

-Ian.

On Thursday, September 26, 2002, at 04:23 PM, Anson Lee wrote:

> And while we’re on the topic of the phone/pda
>
> An article that claims to have stumbled across the Apple hiPhone.
>
> Nice rendering, but what’s with that Apple logo?
>
> -Anson
>
> http://www.eprairie.com/news/viewnews.asp?newsletterIDA48
>
> Apple, Motorola Avert Confirmation of Unannounced Cell Phone
> 9/26/2002
>
> ePrairie has obtained these three photographs (dated September 2002)
> of an
> unannounced Apple cell phone called the Applele hiPhone R4 CHICAGO
> (Exclusive) – A picture can tell a thousand words. Leaked to the right
> place
> at the right time, some pictures of some products can even tell a
> story of a
> new venture by an unsuspecting company that has decided to silence the
> word.
> Well, at least for now.
>
> Such is the case with Apple Computer – known usually for making
> computers
> and MP3 players and software – regarding pictures of a new Apple cell
> phone
> that have been disclosed to ePrairie. As seen on the right, they sport
> the
> grace and colorful styling you’re used to from Apple’s computers but
> in a
> decidely more mobile fashion.
>
> Upon confronting Apple with the discovery, Nathalie Welch, a
> spokeswoman for
> the company, wasn’t interested in revealing any details. In fact, she
> wasn’t
> even interested in confirming its existence.
>
> “I can neither confirm nor deny the rumors that Apple is developing a
> cell
> phone or discuss unannounced products,” Welch said in an e-mail to
> ePrairie.
>
> Representatives from Motorola – a local company that has been known for
> working closely with Apple – also declined to confirm or deny whether
> or not
> the Schaumburg, Ill.-based powerhouse was or will be involved in
> developing
> the phone’s chipset. But several analysts, who say Motorola would be a
> logical partner, also say the release of a cell phone would make sense
> for
> Apple.
>
> “It would fit with Apple’s whole digital universe strategy in which
> the PC
> is the hub of your digital universe and the iPod (Apple’s mobile MP3
> player)
> is a peripheral,” said Kevin Hunt, a research analyst at Thomas Weisel
> Partners who covers Apple but hadn’t heard of a cell phone in the
> works.
>
> He added: “Apple has been very vehement that they wouldn’t get into
> handhelds because they think handhelds will go away and blend into a
> cell
> phone, so it would make more sense to come out with a cell phone.” The
> phones look much like Apple’s older iMacs in terms of the vibrant
> colors,
> prompting Hunt to say: “They do have some of the coolest-looking
> products.”
>
> Other analysts, though, are less convinced: “I’ve talked to some
> component
> manufacturers that say Apple’s going to do this and some that say they
> won’t,” said Dan Niles, an analyst that covers Apple at Lehman
> Brothers who
> has heard conversation of an Apple cell phone.
>
> He added: “I’m not sure how this fits in Apple’s current business
> strategy.
> I don’t view it as synergistic as the iPod. Yes, you can transfer your
> contact list [from your computer] with a cell phone, but it hasn’t
> necessarily been proven that people are using the data capabilities of
> their
> phones anyway.”
>
> Hunt says that Motorola and IBM have banded together to develop chips
> for
> Apple’s power PCs (the G4), and because Apple wouldn’t make its own
> cell
> phone chips, Motorola would be a likely vendor. He adds that the cell
> phone
> would probably be a combination device that has much of the same
> functionality as a handheld.
>
>> From Motorola’s vantage point, the sense is similar to what Apple is
>> saying
> but with the added notion of a sensible synergy.
>
> “I can’t comment on rumors,” said Amy Halm, director of communications
> for
> Motorola’s networking and computing group, “but I can say that Apple
> is one
> of Motorola’s most valued customers and has been for a very long time.
> Apple’s customers are some of the most passionate customers in the
> world.
> Every time Apple introduces a new product, they have the most loyal
> following of any company I’ve ever seen.”
>
> In terms of the chances for success in the marketplace, Hunt says this
> would
> be a very new market for Apple that would complement its own product
> line
> rather than try to compete with the big cell phone makers.
>
> He says Apple – one of the most “tightlipped” companies he’s ever
> covered in
> terms of speaking about products before they’re ready to ship – would
> likely
> begin talking about the phones in the middle of 2003 in anticipation
> for the
> next Macworld trade show. Hunt says the price point for the combination
> device might be between $300 and $500, or that of a higher-end phone.
>
> The pictures obtained by ePrairie named the phone the Applele hiPhone
> R4 and
> were dated with a September 2002 time stamp.
>
> By ADAM FENDELMAN
> Editor-in-Chief
> Reporter’s Beat: Telecom
> adam [at] eprairie [dot] com

]]>
3927
I Love You Honey… https://ianbell.com/2002/09/25/i-love-you-honey/ Wed, 25 Sep 2002 18:58:18 +0000 https://ianbell.com/2002/09/25/i-love-you-honey/ http://news.zdnet.co.uk/story/0,,t269-s2122704,00.html

Wife ‘hired a hitman’ to kill Scoot.com CEO 16:56 Monday 23rd September 2002 Matthew Broersma

The ex-wife of Jon Molyneux, former Scoot.com chief executive, admitted in court to paying a man to kill her husband for his insurance money

The ex-wife of Jon Molyneux, the former chief executive of Scoot.com, has pleaded guilty to hiring a hitman to kill her husband for his life insurance money, the Old Bailey heard on Monday.

Shelley Molyneux, who has four children, and whose 21-year marriage ended earlier this year, admitted in court that she had paid a hitman £20,000 to kill her husband. But the man was really an undercover tabloid newspaper reporter, who worked with police to gather evidence against her.

The case adds to Scoot.com’s afflictions, the embattled online directory service that has also faced allegations of shady stock-market dealings, and was allegedly the target of a smear campaign by off-shore businessmen who tapped an executive’s mobile phone.

Prosecutors told the court that the Molyneuxes lived in a £500,000 house in Essex and that Jon Molyneux earned £175,000 a year as Scoot chief executive, a post he took up in 1999 after leaving Apple Computer (UK). Molyneux had an estimated £1m fortune and the family’s luxuries included five foreign holidays a year and expensive cars, according to a report in The Evening Standard.

But the bursting of the dot-com bubble, and Scoot’s particular problems, led to Molyneux stepping down from the post, and the Molyneuxes began divorce proceedings. At that time Shelley Molyneux contacted a private investigator, who put her in touch with the supposed hitman.

After arranging the hit, she left for a skiing holiday with her new boyfriend to provide an alibi, prosecutors said, and she was arrested when she returned to London in February. The defence argues that she was entrapped into arranging the hit. She is due to be sentenced next month.

Jon Molyneux is not the only Scoot executive to allegedly be the target of a malicious plan. Scoot co-founder Robert Bonnier claimed that a dirty tricks campaign was launched against him in order to manipulate Scoot shares and further the interests of an obscure Monaco businessman.

Bonnier had become involved with share dealings that were financed by former Scoot chairman Ronald Zimet, an Israeli businessman. Bonnier alleged that a conspiracy had been mounted against him by Monaco businessman Andrew Regan in order to discredit Zimet, who was to be a witness for the prosecution against Regan in a criminal trial.

Bonnier said that his wife’s car had been followed, his mobile phone bugged and that taxis he called had secret recording equipment. He said that Regan was the source of a mysterious dossier circulated to major newspapers, alleging that Scoot inflated its subscriber figures.

The financial services authority is also understood to have investigated the source of the sharp fluctuations in Scoot’s share price.

More recently, Scoot was bought this summer by British Telecommunications for a bargain-basement £8m, about 0.3 percent of its £2.5bn value at the height at the dot-com boom.

The case continues

———–

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3945
Apple To Make Mobile Phones? https://ianbell.com/2002/08/26/apple-to-make-mobile-phones/ Mon, 26 Aug 2002 08:31:18 +0000 https://ianbell.com/2002/08/26/apple-to-make-mobile-phones/ http://www.nytimes.com/2002/08/19/technology/19APPL.html

Apple’s Chief in the Risky Land of the Handhelds By JOHN MARKOFF

AN FRANCISCO, Aug. 18 — It has long been Silicon Valley’s favorite guessing game: What is Steven P. Jobs going to do next?

The question is particularly engrossing as Apple Computer prepares to introduce the new version of its Macintosh OS X software operating system.

There are signs that, with the new version of the Macintosh OS, Mr. Jobs, Apple’s founder, chairman and chief executive, may be approaching a precipice like the one that led to the downfall seven years ago of the man who was then Apple’s chief executive, John Sculley.

Mr. Sculley’s great tumble came after he staked his and Apple’s reputation on the ill-fated Newton hand-held computer — an ambitious product based on handwriting-recognition technology that was ahead of its time. And now come signs that Mr. Jobs means to take Apple back to the land of the handhelds, but this time with a device that would combine elements of a cellphone and a Palm-like personal digital assistant.

Mr. Jobs and Apple decline to confirm those plans. But industry analysts see evidence that Apple is contemplating what inside the company is being called an “iPhone.”

Among the evidence, they say, is recent behind-the-scenes wrangling between Palm and Apple over linking Palm’s own devices to Apple’s new operating system — apparently with little cooperation on Apple’s part.

Analysts also cite Apple’s deal with Pixo, the tiny company that designed the software for Apple’s popular iPod MP3 music player; that deal includes a license for Apple to use Pixo’s software with a second product.

And analysts note that the presence of a variety of features in the new Macintosh OS software that would make more sense in a hand-held device than a desktop computer.

“When you connect the dots, you end up at a phone,” said Charles Wolf, a financial analyst who follows Apple for Needham & Company.

Compared with the Newton, which was delivered prematurely in 1993 to a market not yet ready for such products, Apple’s new device would reach a field in which other companies have already plowed the ground — including giants like Microsoft, Nokia and Motorola, as well as start-ups like Handspring and Danger. This crowded field could pose risks for Apple, if its product were seen to fall short of the competition.

And yet, entering an already established market could give Mr. Jobs the opportunity to show off his and Apple’s vaunted innovation and marketing skills.

Certainly, Apple’s push into the market for a hand-held communicator would be an abrupt departure for Mr. Jobs, who continues publicly to disavow talk of such a move. But analysts and people close to the company say that the plan is under way and that the evidence is manifest in the features and elements of the new version of the Macintosh operating system.

Mr. Jobs — who was a co-founder of Apple and handpicked Mr. Sculley as its president, only to be forced out by him in 1985 — returned five years ago when the company was on the brink of collapse.

In a remarkable turnaround effort, Mr. Jobs has taken pains to distance Apple from the Sculley-Newton legacy. He canceled the Newton soon after returning and has pooh-poohed the industry’s personal digital assistants as “junk” and worse.

Behind the scenes, though, Mr. Jobs has been actively exploring the computing world beyond the desktop. Soon after he arrived back at Apple, for example, he attempted to buy Palm for $1 billion, according to a Silicon Valley executive familiar with the offer. Palm rejected the idea, this executive said.

Now, with the release of the newest version of the Macintosh operating system, Mr. Jobs appears intent on taking Apple itself into the hand-held market. The move would play into Apple’s so-called digital hub strategy, in which the Macintosh desktop computer is the center of a web of peripheral devices.

The highly anticipated Macintosh OS X, Version 10.2, which began shipping on the company’s newest computers last week, will go on sale for existing Macintosh users on Saturday. While the software is being marketed as an improvement for desktop computer users, it could have just as big a future in powering a yet-to-be announced Apple hand-held computer-phone.

Mr. Jobs continues to be coy. He insists that he still dislikes the idea of the conventional personal digital assistant, saying that the devices are too hard to use and offer little real utility. But a telephone with personal digital assistant features is another matter.

“We decided that between now and next year, the P.D.A. is going to be subsumed by the telephone,” he said last week in an interview. “We think the P.D.A. is going away.”

And even while protesting that the company had no plans to introduce such a device, he grudgingly acknowledged that combining some of Apple’s industrial design and user-interface innovations would be a good idea in a device that performed both phone and computing functions.

A look at the laundry list of features in the company’s new version of OS X indicates that a computer-phone is much more than a vague idea for Apple.

Of the 12 new OS X features the company has been emphasizing on its Web site, most would be desirable for a hand-held phone, including chat capabilities, mail, an address book, calendar features, automatic networking and a synchronization feature that will become available in September.

And several of the features, including the company’s handwriting-recognition technology and Sherlock information-retrieval program, would be much more relevant to a small, portable device than to a desktop computer.

Sherlock in particular has been repositioned in a way that would make it a perfect counterpart for a portable phone. Its original purpose, which was finding files and content on the computer’s local disk, has been transformed into a more general “find” utility program. Now, Sherlock is being extended to search for types of information like airline and movie schedules and restaurant locations. The software can display maps and driving directions.

But details of the plan are unlikely to emerge from Mr. Jobs or his team before Apple is ready to introduce a new product. The company, which in the 1980’s and 90’s was known among reporters as “a ship that leaks from the top,” is now obsessive about guarding the secrecy of its future products.

All Mr. Jobs would say on the matter was that the cellphone computers already on the market fall far short, and that some of the user-interface and industrial design touches already evident in the iPod would be perfect for an improved, consumer-friendly version of such a product.

An Apple phone could be a particularly tempting product for Mr. Jobs, giving him the opportunity to overcome Mr. Sculley’s largest failure. He could also rectify the Newton’s single biggest shortcoming: the device’s inability to communicate easily with the Macintosh desktop computer. Apple has already begun offering Bluetooth local wireless networking technology for peripheral devices, a feature that would make it simple to share information between a phone and a computer.

Furthermore, the cost of adding phone capabilities to palmtop computers is falling rapidly.

“It’s easier and easier for a company like Apple to go to a Taiwanese manufacturer for wireless telephone components,” said David Carey, chief executive of Portelligent, a technical market research company based in Austin, Tex. He said the parts required for adding advanced cellular capabilities to a device now cost as little as $50.

Of course, that is why Mr. Jobs’s greatest challenge with an iPhone might be elbowing his way into a crowded marketplace, where other companies already have supplier and manufacturing relationships in place.

“There’s no question that Apple could design a cool phone,” said Andy Neff, a Bear, Stearns analyst in New York. “The key is being able to build an infrastructure.”

———–

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3915
IPOD Redux.. https://ianbell.com/2002/03/28/ipod-redux/ Thu, 28 Mar 2002 20:02:55 +0000 https://ianbell.com/2002/03/28/ipod-redux/ http://biz.yahoo.com/fo/020328/0328tentech_1.html

Thursday March 28, 10:00 am Eastern Time

Forbes.com IPod Redux By Ari Weinberg

Apple Computer ‘s iPod portable MP3 player debuted to rave reviews last fall. The newest version, released last week, does little to diminish the applause.

But it’s not yet deserving of a standing ovation.

The new iPod doubles the storage capacity to 10 gigabytes (roughly 2,000 songs) and adds 20 equalizer presets. That extra space comes at a cost. The 10 GB version retails for $499, $100 more than the original. Like the original, you can try to compare the Apple (NasdaqNM:AAPL – news) to the under-$400 20 GB offerings from SonicBlue (NasdaqNM:SBLU – news) and Archos. But you really can’t.

That’s because iPod still has limited Windows compatibility. It’s a shame considering that the vast majority of personal computers are Windows machines. Some third-party developers have come out with Windows-based software and firmware (for the iPod itself), but Apple has yet to reveal any plans for Windows compatability, though the company is rumored to be working on just such a product. The company is rumored to be hammering out a Windows solution, but that involves some mighty concession from both Apple and Microsoft (NasdaqNM:MSFT – news) .

Right now, Apple’s proprietary FireWire connection port is its leverage. FireWire transfers data at roughly 30 times Universal Serial Bus (USB), the current standard for interdevice connections for PCs and older Macs. The iPod’s FireWIre connection can tranfer 2,000 songs in 20 minutes. For a USB MP3 player, that would take ten hours. But as more portable devices–like digital cameras and camcorders–come with FireWire capacity, the Windows machine cartel may consider small concessions too keep the high-end digerati happy. The pressure is on Apple to play ball. Of course, it would be silly to assume that the minds at Microsoft and Intel (NasdaqNM:INTC – news) aren’t hammering out a technology to blow by FireWire.

Though many iPod owners use the device as a portable hard drive–which it is–the iPod was built for music. So why is Apple touting the introduction of new software that allows the iPod to display address databases from Palm (NasdaqNM:PALM – news) and Mac?

Could the iPod be Apple’s doorway into the crowded personal digital assistant market? Let’s hope not. Apple has a hit going with iPod’s current design and format–to try to morph it into an upscale PDA could be a Newton-sized mistake.

Related Links at Forbes.com

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FW: Good Article….Post Bubble Silicon Valley Realities https://ianbell.com/2002/03/20/fw-good-articlepost-bubble-silicon-valley-realities/ Thu, 21 Mar 2002 03:57:38 +0000 https://ianbell.com/2002/03/20/fw-good-articlepost-bubble-silicon-valley-realities/ —— Forwarded Message From: Wilson Zehr Date: Wed, 20 Mar 2002 17:43:40 -0800 To: ‘Ian Andrew Bell’ Subject: FW: Good Article….Post Bubble Silicon Valley Realities

Silicon Valley Reboots

The dot-com bust was bad for Wall Street, but it was the best thing to happen to this high-tech crucible

By Steven Levy NEWSWEEK

March 25 issue – After the dot-com bubble was reduced to soap scum, cynics took to calling its epicenter “Death Valley.” Venture capitalists switched from free-spending Medicis to Scrooge McDucks (2000: $21 billion invested. 2001: $6 billion). Acres of office space, once harder to find than elbow room on a microchip, are going begging, and unemployment has reached Dust Bowl proportions. No. 3 in the Bay Area best-seller list? A book called “Dot.Con.”

BUT BEFORE YOU bust out in a schadenfreude grin-or weep over your festering Yahoo stocks-check out the Web-connected WozCam. Chances are good that you’ll catch a glimpse of the Valley’s prodigal son Steve Wozniak. Yes, he’s baaack, sitting on furniture grabbed at cheaper-than-IKEA prices from failed dot-coms, banging on a G4 titanium laptop bulging with e-mailed résumés to his new company Wheels of Zeus (check the acronym). Twenty-five years ago Woz cofounded Apple Computer in a garage. Now, of all times, he’s back on the start-up trail, ready for a new revolution.

Woz’s return symbolizes what insiders already know: Silicon Valley is not only not dead, it’s already on the way back. In the aftermath of history’s biggest and giddiest boom-and-bust, the tech industry is entering the early stages of yet another cycle of innovation. “It’s a great time to start a new company,” says Heidi Roizen of Mobius Venture Capital. Jim Breyer, a partner at VC firm Accel, concurs. “This is exactly what was happening in the early 1990s [before the Internet exploded].”

In a sense, the impending rebound got its start as soon as the dot-com failures began releasing their employees. While many of the M.B.A. gold diggers high-tailed it back to Old Economy-ville, the people who matter in Silicon Valley-the geeks-weren’t going anywhere. Back on their own, many of them (with an occasional recharging in Tahoe or Maui) immediately began doing what they do best-making high-tech magic. “It’s like the city is burning, and the partisans are forced to take to the hills,” says Jay Tannenbaum, a former Shockwave executive. “After hiding in the bushes, they use those little tin ‘cricket-clicker’ doodads to find each other and regroup.” Click-click. Click.

They meet in Starbucks and in Web-based dot-bomb alumni groups. They hang out in each other’s houses. They give ad hoc demos of new projects. They present cool ideas at semiformal gatherings like Code Con, an ultrageeky show-and-tell held at San Francisco’s DNA Lounge last month. And sooner or later, they figure out how their brilliant new ideas might actually find their way into the marketplace.

Weirdly, one of the things that will help distinguish the next wave of start-ups-and make them more likely to last than the Webvans and eToys-is the difficulty they face in raising cash. “[During the boom] capitalization came too easy-now the filtering effect is back in,” says Sky Dayton, founder of Earthlink (good), eCompanies (whoops) and now a new venture called Boingo (high hopes). Putting it another way is Mike Edelhart, a former VC who’s COO of a digital-publishing start-up called Zinio: “For two years really crappy companies got funded. It’s impossible to get a crappy company funded now.”

Cognizant of the high bar, geeks with big ideas are now nurturing ideas on the Orson Welles principle of nothing served before its time. “You can stay under the radar longer,” says Bill Gross, an entrepreneur known as a serial offender during the boom days. “There are not the expectations that you build a company in three months.” That’s why Graham Spencer, who was chief technical officer of crashed-and-burned Excite, has been spending the last year quietly cooking up a new venture with colleague Joe Kraus. “This time we’re keeping it small,” Spencer, 30, says of his yet-unnamed company, which has something to do with Web services (if he told us more the radar would pick him up). He and Kraus work from their respective Palo Alto, Calif., homes, meeting a few times a week at their virtual office, California Pizza Kitchen.

Another example is Onedoto (pronounced like 1.0), a tiny group led by Valley interface king Steve Capps and a friend who worked with him on Apple’s Newton team. With seed money tight, they’re plowing ahead with schemes to make mobile tech easier to use, stocking up on patents in anticipation of the day the company will spring into action.

When that time comes, Onedoto will find that VCs are more than eager to listen. But don’t expect a repeat of the ’90s-the next revolution in Silicon Valley won’t feature idiotic Super Bowl commercials and billion-dollar ventures based on FedExing pet food. Post-bubble Silicon Valley tries hard to avoid the harebrained excesses that led to dot-bomb disasters. “We’re still doing deals, but now they’re well thought through,” says Accel’s Breyer. For instance, Accel recently took a month’s worth of technical and marketing analysis before funding a wireless play called Woodside Networks. “Two years ago we would have done it in a week,” says Breyer. (Woz was an exception; due to his rep, Mobius fast-tracked him after a PowerPoint pitch.)

The bubble years were like the last days of the Roman Empire-business practices were totally weird and dysfunctional,” says Greg Galanos of Mobius. Now he won’t consider companies without viable business plans, working prototypes and a sense of commitment instead of a delusional exit plan. These concepts may be too much for some pampered dot-comies to process. “There may be a lost generation of bubble entrepreneurs who won’t be able to adjust to realistic valuations and practices,” says Galanos.

In many ways, the new Silicon Valley is a lot like the old Silicon Valley before the madness hit. The smart VCs, in fact, are looking back and realizing that some of the most successful companies-like Microsoft and Cisco-began not in palmy times but in bust cycles. “I’ve seen this before,” says Steve Jurvetson, managing director of Draper Fisher Jurvetson. “So when we saw the bust coming, we immediately went to work. We funded Phosister [photoic integrated circuits], Nantero [nanotechnology], Luminos [health care] and Blue Falcon Networks [peer-to-peer networking].”

Post-bubble start-ups also enjoy benefits that weren’t available during the boom: lots of smart people willing to work for reasonable salaries (no fresh-off-the-campus prima donnas demanding stock options and unlimited Frappacinos). “We had a festival of greed here, and it was kind of sickening,” says Andy Hertzfeld, a veteran wizard who’s provided mind-blowing software for Apple and a host of start-ups. “Now it’s much more pleasant to walk down University Avenue [in Palo Alto].”

Meanwhile, the traditional pillars of the Valley are rejiggering their misbegotten dot-com-related initiatives or celebrating their resolve in not trying to hop on the bandwagon prematurely. Many are jumping at the first chance in years to pick off A-list talent at down-to-earth rates. When the hot but revenue-resistant start-up Eazel went belly up, Apple Computer not only snatched its veteran software guru Bud Tribble but grabbed a handful of its best engineers, too.

Like pings over the Net, random factoids and stats are trickling in that suggest the Valley is on the rise after scraping bottom. In the fourth quarter of 2001, VC investments went up for the first time in months. Temp agencies saw an upswing in employment calls. Post-September 11, the government announced a 15 percent increase in information-technology spending. There was even one successful IPO, PayPal; despite the company’s regulatory problems and a patent battle, it closed a few bucks over its offering price. But that’s only setting the stage for a more substantial comeback. In the next few months and years, if the momentum continues, we’ll see a tsunami of new ideas that will invigorate the region.

If you think about it, labeling the current Valley as a bust is almost as wacky as believing all the hype of the boom. While the valuation of high-tech firms went to hallucinatory levels, the benefits people enjoyed from the Internet itself were quite real. Recently a sweeping Department of Commerce study called “A Nation Online” painted a portrait of an amazingly connected coun-try. More than half of all Americans-143 million-were on the Net as of last September. Every month 2 million new users log on. A decade ago such numbers would have been inconceivable.

Obviously, the ubiquity of the Internet provides a platform to instantly propel new ideas into the marketplace-just as the previous boom in personal computers set the stage for the Net, and the microchip revolution sparked PCs. Historically, however, each transition was preceded by a downturn. “It’s all happened before,” says economist Doug Henton. “The habitat is so rich in smart people they simply readjust themselves to the next opportunity.”

Henton is coauthor of a white paper called “Next Silicon Valley: Riding the Waves of Innovation” that breaks down local history in “hype cycles” tied to tech breakthroughs. Now that the Internet hype cycle has swan-dived, it’s time for some new eruptions. In the short term, the hottest sector is wireless (particularly wi-fi, the unregulated frequency that allows for wireless Nets in homes, offices and coffee shops). Companies like Boingo, which attempts to broaden its use to consumers, are already rushing to market, and about 20 start-ups are competing to produce “wireless mesh networks” to make wi-fi work as seamlessly as the Internet. Then there’s Woz’s start-up; though product plans are under wraps, we do know it involves merging wireless with low-cost GPS to enable people to find things-and other people. (“It’s actually kind of obvious,” says Woz. Maybe to him.)

Another busy area is distributed file-sharing (essentially, making Napster-like peer-to-peer systems legal and profitable). No fewer than five new companies have gotten funding to set the standard in this space, and that doesn’t include countless not-for-profit schemes. And then there are Web services, subscription-based applications that utilize the Internet as a de facto operating system. A sign of their inevitability: 3,000 independent developers turned out last month to see Bill Gates introduce the tools to create software for Microsoft’s .NET platform.

Expect the truly big bangs, however, from exotic technologies that are just emerging from the research lab. Prescient propeller-heads are buzzing about bio-informatics, the use of computers to exploit massive new amounts of genetic information. “It’s a combination of pretty hard-core technology with the promise of some big payoffs in things like drugs and genomics,” says Tim O’Reilly, whose eponymous company recently sponsored a conference on the subject. The field is rich with opportunities for those who pioneer things like DNA measurement chips and genetic data mining. Since the demands of bioinformatics push the limits of current computation, there’s a potential ripple effect that could kick in as more powerful machines and innovative data-handling techniques find their way into the mainstream.

Other far-thinkers are focusing on nanotechnology, the science of creating atomic-scale devices to do our work for us. Some of the first start-ups include Nantero, which makes “carbon nanotube flash memory,” and Alien Technology, which uses “fluidic self-assembly” to make microscopic semiconductors. (These might sound like a mouthful, but remember how weird “random access memory” once struck you?)

It’s impossible to know just when these new technologies will kick in, changing our lives and enriching their founders. And maybe the biggest changes will come from some technology that right now is quietly cooking in someone’s lab-or garage. In any case, the greatest news of all in Silicon Valley is that the buzz no longer focuses on making billions, but in producing innovation. The traffic jams on 101 may not be as dense as they were in 1999, and the Nasdaq might continue to be anemic for some time-but the geeks have all their synapses firing, the best sign of copacetic times ahead. Buoyed by our still-increasing reliance on tech, and fortified by the lessons of history, a newly focused-and newly responsible-Silicon Valley is gearing up to wire us (and wireless us) more than ever. So welcome to Revenge of the Nerds, The Sequel. Click. Click-click.

With reporting by Brad Stone in Silicon Valley

© 2002 Newsweek, Inc.

—— End of Forwarded Message

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Harry Connick Thinks Different https://ianbell.com/2002/03/06/harry-connick-thinks-different/ Wed, 06 Mar 2002 23:54:38 +0000 https://ianbell.com/2002/03/06/harry-connick-thinks-different/ I saw this the last time Harry Connick, Jr. toured and thought it was scary: he uses flat screens in his orchestra rather than sheet music.

During the concert that I went to (in 1999, in fact) he explained that he had re-arranged a bunch of new songs while riding in the bus from Calgary to Vancouver and that they were going to play those new arrangements for the first time at the show.

Pretty amazing.

-Ian.

——- http://www.nytimes.com/2002/03/04/business/04PATE.html?pagewanted=print

March 4, 2002 Crooner Uses Computers to Replace Sheet Music By TERESA RIORDAN

Harry Connick Jr. is a versatile guy: crooner, composer, big-band leader, piano player, actor, comedian. And an inventor, as well.

Mr. Connick, who has been described by one critic as a new and improved version of Sinatra, recently received United States patent 6,348,648 for a “system and method for coordinating music display among players in an orchestra.”

“It basically eliminates old-fashioned sheet music,” Mr. Connick said in a phone interview 10 days ago, before leaving for Salt Lake City, where he performed “Over the Rainbow” during the closing ceremonies of the Olympics.

His patented idea came to him one day several years ago when his big band was playing outdoors and the sheet music was blowing around. Why not, he thought, have all 16 band members read their music off computer screens instead?

So before he started a long tour in 1999, Mr. Connick bought enough blue and white G3 Power Macs, each with a rotatable screen, that everyone ‹ from his trombonists to his drummer ‹ could read from electronic sheet music.

For technical advice, he turned to his neighbor David Pogue, who is a former Broadway conductor and a computer guru to the stars, whose clients have included Stephen Sondheim and Mia Farrow. (Mr. Pogue, who also writes the State of the Art column for the weekly Circuits section of this newspaper, has no commercial ties to Mr. Connick’s invention.)

“A lot of the guys I knew from my pit work on Broadway said that it would never work,” Mr. Pogue recalled. “They said the computer would crash or the screen wouldn’t refresh itself in time for a professional situation.”

In fact, Mr. Pogue said, the technology had progressed far enough that the electronic page could be turned faster and more reliably than a paper page.

At first, Mr. Pogue said, the members of Mr. Connick’s band were skeptical. “They circled it and sniffed it the first day,” he said. “But by the time they opened the tour they were really into it.”

Mr. Connick started the digital- score tour in a relatively low-stakes locale ‹ Ames, Iowa ‹ so that any kinks could be worked out beyond publicity’s glare.

Unlike most other pop musicians, Mr. Connick does his own musical arrangements right on his Macintosh computer, using Finale software from Coda Music Technology, a division of Net4Music (news/quote). His system allows him to make changes to a given arrangement ‹ knock out eight bars here, add eight bars there ‹ and have them entered automatically into his musicians’ copies of the music.

“Oh man, it’s made my life easier,” Mr. Connick said. “Before, I would write out a song by hand and give it to a couple of guys in the band who are copyists and they would figure out the instrumental sections. It could take days. Now I can write a new score in the morning and everyone has it on his computer screen in the afternoon. Imagine if a Duke Ellington or a Stravinsky had had a system like that.”

The system has had some unforeseen benefits, as well. In studio recordings, for example, it’s no longer necessary to digitally remove the page-turning rustling in the background. Moreover, musicians can insert page breaks wherever they want.

And doing away with sheet music also means doing away with music lights for the musicians. So when the lights dim and Mr. Connick begins to sing, Mr. Pogue said, all the audience sees of the other musicians is “this super-cool bluish glow on their faces from the computer screens.”

Mr. Connick’s patent covers more territory than electronic sheet music. He hopes that eventually the computers will have their own operating system and feature a touch screen that allows a composer to write music as he would on paper.

But he makes it clear that he is a concept man.

“I can do stuff like put RAM in a computer, but I’m not a programmer,” he said. “You start talking about the technology involved in making it, and I’m going to be completely lost. I don’t have any interest in actually building it. I just want someone to send me one in the mail when it’s done.”

In fact, Mr. Connick approached Apple Computer (news/quote) about helping him develop the system.

“I love their products and I thought for sure they would go for it,” he said. “They put up a lot of `Think Different’ posters and I sure think different. But they weren’t interested.”

On the day his patent was issued, Mr. Connick said, his wife, Jill Goodacre, a former Victoria’s Secret model, asked him if he was proud of himself.

“I said not really,” Mr. Connick recalled. “It’s not like I invented Velcro or anything.”

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Fwd: Sequoia’s Mike Moritz: the first 100 days https://ianbell.com/2000/07/26/fwd-sequoias-mike-moritz-the-first-100-days/ Thu, 27 Jul 2000 02:40:46 +0000 product]]> https://ianbell.com/2000/07/26/fwd-sequoias-mike-moritz-the-first-100-days/ >Featured in May, 2000 Newsweek Special Issue of e-LIFE > >How To Get My Money >Secrets from the Silicon Valley venture capitalist who discovered the >Yahoo gold mine: passion, smarts and a great big potential market > > The pitch begins with words that might seem familiar if you’re a > Hollywood studio chief […]]]> >
>Featured in May, 2000 Newsweek Special Issue of e-LIFE
>
>How To Get My Money
>Secrets from the Silicon Valley venture capitalist who discovered the
>Yahoo gold mine: passion, smarts and a great big potential market
>
> The pitch begins with words that might seem familiar if you’re a
> Hollywood studio chief listening to a hungry screenwriter selling an idea
> for a movie: “Play… Concept… Bet… Story.” But for a Silicon Valley
> venture capitalist like myself, they sound as ominous as the wailings of
> an air-raid siren. In the last couple of years, as my partners and I have
> listened to hundreds of presentations of new business proposals, these
> words seem to have slithered into the Valley’s vernacular. They are now
> as common among people from Sunnyvale or Mountain View (birthplaces of
> many Silicon Valley companies) as they are for people who devise the
> mechanical illusions of the movie industry and come from Bel Air or
> Beverly Hills. They have replaced down-to-earth nouns like “business,”
> “idea,” “investment” and “company.” A venture capitalist’s fixation with
> a few seemingly innocuous words may seem like an absurd way to make
> decisions about investments involving millions of dollars, but it does
> serve to show how our world is changing.
>
>Figuring out how to make a great investment never seems to get easier. But
>deciding which opportunities should be declined is a good place to start.
>Short-term wonders are immediate candidates for rejection-hence our
>interest in listening intently to the words people use. Any suggestion of
>a quick flip or a quest for instant riches is not something that will ever
>grow into a great company. The better venture capitalists know that it
>takes considerable patience to organize, develop and build a substantial
>and lasting business; indeed, some will equal Warren Buffett in the length
>of time they are prepared to own shares in a company.
>
>One test we often apply to a new business is the ease with which it can be
>explained. If someone is able to summarize his company’s plan on the back
>of a business card, it usually means that he will be able to describe its
>purpose to employees, customers and shareholders. A proposition that takes
>a paragraph to describe or 10 minutes to explain is dicier. One thing I
>remember from 1988, when we provided the start-up financing for Cisco
>Systems, is the stunning clarity with which the company’s founders, Sandy
>Lerner and Len Bozsack, were able to explain their business. The entire
>mission was summed up in three words: “Cisco networks networks.” While
>that might seem abstruse for the man in the street, it was a description
>that has stood the test of time.
>
>The get-rich-quick artists-and there are a lot of them roaming Silicon
>Valley-don’t have the faintest clue how to describe a company, let alone
>build one. Some are arrivistes for whom forming a start-up is little more
>than a fashion statement. People who might have blindly joined an
>investment bank, consulting firm or law office a few years ago are now
>panting for some dot-com pixie dust. This isn’t a phenomenon limited to
>26-year-olds dressed in black; it’s also a virus affecting CEOs of many
>large companies. These artful dodgers cruise around the Valley in their
>black limos, seeking a way to append the magical two
>syllables-“dot-com”-to their company in an effort to conceal poor
>performance in their main business. In this latter case we have detected
>two cautionary signs. Many of these CEOs don’t even have an e-mail address
>on their business cards. Others drone on for an hour, explaining how they
>seek to “unlock shareholder value” (code words for a fancy financial
>shuffle), without making a single mention of their customers or products.
>
>Both these caricatures-Ms. Dressed-in-Black and Mr. Shareholder Value-lack
>the most important ingredient of a company founder: an unquenchable
>passion for an idea or a product. An entrepreneur without passion is an
>empty vessel. Anyone who starts a business-and wants it to last-needs this
>quality. It is a journey against all odds. Every business starts with one
>or two people, an idea and nothing else-no employees, no money, no
>product, no customers and no shareholders. It is an existence where
>sometimes everything that can go wrong, does. Force venture capitalists to
>choose between a well-heeled Ivy League student and a smart and
>impoverished immigrant, and we’ll pick the latter every time. The
>lily-livered need not apply for life at a start-up. Tenacity is a necessity.
>
>Passion is one thing. Misguided or misdirected enthusiasm is another
>matter. The most propitious beginning for any company is the marriage of
>extraordinary passion with an enormous market. One of the cruel facts of
>life is that even the most talented people will fail to prosper if they
>start a company aimed at a small or slow-growing market. We venture
>capitalists sometimes say, in undiplomatic moments, that great people
>cannot overcome mediocre markets, but a company started by mediocre people
>can flourish in a great market. The best of all worlds is to pair
>talented, articulate people with a large market. This combination stands a
>good chance of becoming a leading company. One of the laws of venture
>capital is that the leading company in any market is eventually worth more
>than the sum of its competitors.
>
>Companies often get started by people who develop a product for themselves
>or their close friends. It’s almost accidental that their product becomes
>something that millions of other people want. Almost all of our best
>investments have sprung from this personal impulse. Two unknowns named
>Jobs and Wozniak, developing a product as a hobby, turned their diversion
>into Apple Computer. Jerry Yang and David Filo started Yahoo as a way to
>keep track of their favorite Web sites. When Toby Lenk started eToys, he
>did so, in part, because he had a nephew and niece clamoring for birthday
>gifts; shopping for gifts at ordinary toy stores and then figuring out how
>to pack and mail them across the country was not something that Uncle Toby
>found enticing. Similarly, when Louis Borders began Webvan, a massively
>ambitious online retailer that delivers to businesses and homes, he did so
>because he thought there was a better way to sell the goods that people
>frequently need.
>
>Technologists often fall into the trap of infatuation with their work or
>invention. This blinds them to the cruel realities of the marketplace. We
>sometimes ask people: “Who needs your product?” This might seem like a
>simple question, but it is surprising how often it serves to ferret out
>fuzzy thinking. If an entrepreneur cannot describe who really needs his
>product, it presages trouble. We far prefer to support an entrepreneur
>with a simple product and lots of prospective customers over a person with
>a patent-protected device and a very limited number of potential
>customers. Our business is to develop companies rather than invest in
>science projects.
>
>The company founders most appealing to venture capitalists are those who
>understand what they do not know and that they need all sorts of
>companions if they are going to turn an idea into an enduring company. The
>DNA of a company usually gets established within the first 100 days of its
>existence, and is composed of three strands: the one brought by the
>founders, a strand brought by a venture-capital firm and a strand brought
>by the people whom the founders and investors recruit. It helps enormously
>if the agenda and sensibilities of all three groups are complementary. It
>saves time; it allows decisions to be made quickly; more important, it
>infuses a company with a particular feel.
>
>Every company comes to echo the sensibility of the few people who were
>present at the creation. If arrogance was apparent at the dawn, it will
>inevitably permeate the company. If frugality, confidence, humility and a
>desire to develop a wonderful product or service were evident when an idea
>got started, then these will weave themselves into the corporate fabric.
>If modestly talented engineers were there at the beginning, the only
>people they will be able to hire will be the lame. If a CEO insists on
>obtaining the safety blanket of an employment agreement and a golden
>parachute, everyone of any consequence will demand one. (People often ask
>for the secret of Yahoo’s success. There isn’t one big answer; there are
>hundreds of little answers. But if somebody absolutely insists on getting
>a sound bite, my answer is simple: Yahoo CEO Tim Koogle does not have a
>complex employment agreement, and neither do the other 1,832 U.S. employees.)
>
>My partners and I have invested in hundreds of companies, but we still
>make expensive mistakes. Occasionally we fall victim to the glibness or
>simplicity of an artfully designed slide presentation. Other times we fail
>to assess a market correctly or misjudge the time it will take to design a
>product. But what stumps us most frequently is people. We go to great
>lengths to try to assess people correctly, but we are perpetually
>surprised. We’ve been startled by the fatal coronary of a CEO just a few
>weeks after we invested in his company, and by people who go AWOL after
>they come to understand the demands of a start-up. There was even the CEO
>who kept a loaded gun in his desk drawer, and the company founder who
>drove his pickup truck through the ground-floor windows of an office
>building in an attempt to eliminate his cofounder.
>
>Despite the topsy-turvy nature of our world, at the moment it is
>breathtakingly easy to obtain financial backing. Over the last two years,
>our partnership has invested in three companies that we first heard about
>via e-mails sent directly by entrepreneurs we had never met. Reams of
>financial projections appended to glossy business plans aren’t necessary
>to capture our imagination. Similarly, it should be reassuring to know
>that the boxes of chocolates, baseball bats, simulated treasure chests or
>$100 bills that sometimes accompany business plans usually have the
>opposite effect of what was intended. And there definitely is no
>requirement to do what one entrepreneur recently promised if we endorsed
>his idea: run naked across the parking lot. Casual dress is fine, but we
>have yet to finance anyone clad in his birthday suit.
>
>
>MORITZ is a partner of Sequoia Capital, a Menlo Park, Calif.,
>venture-capital firm that has helped form companies such as Apple
>Computer, Cisco Systems and Yahoo. Sequoia Capital was the founding
>investor in companies that account for almost 20 percent of the value of
>Nasdaq.
>
>

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