What can CustomMade do with it's new round of financing, 18 million dollars? a lot.
I am lucky enough to experience the inside view of a large funding round like this for the second time. The first one, AdvisorTech Corp, was during the Internet Bubble years. 20 millions were nothing to talk about. This time around, the market conditions are much more realistic, and the CustomMade round is well deserved and it is a vote of confidence by the markets. One of the main success factors for CustomMade is the pairing of co-foundersSeth Rosen and Mike Selguero. They have complimentary skills in a way that I have not seen for a long time.
Another factor of CustomMade's success is the first mover's advantage. While being first does not guarantee success, being first and having a team that have worked and worked to understand the customer gives CustomMade a tremendous advantage over any competitors. Any two sided market place business is difficult to understand. Which side of the market should subsidize the transaction (makers)? How to deal with competition within one side (how to encourage maker participation without shrinking the maker pool by favoring high performers)? How to match make between the two sides (customers and makers)? The CustomMade team has built up a lot of internal knowledge of how to make this market work.
But remember, to quote Mike quoting Seth:
A dollar raised is a dollar not earned -- Seth Rosen
This is a beautiful insight into the truth about startups -- Having raised this large round of financing just means that we are in the hot seat to delivery value to the investors by multiplying those dollars into revenue growth.
Here is a picture of @pks, @MoonlightLuke and @markstenquist working hard with their pen and paper... (We were signing forms for a welding class, to understand how to custom make objects!)
By know you have read the news, some parent named their new born baby girl Hashtag. This is a really bad idea but not for what you think. It is not that the child may be teased, or confused, or her future cost of therapy. The reason that this is a bad idea is ironic:
If the parents named their child hashtag because they like social media, the name actually completely disadvantaged their child in social media. What do you the child can use as a name in her online identities? dashtag may well be a reserved word. How about her personal brand? I would suggest "www.mymomnamedmehashtag.com". Because if I were to look for her, and perform a web search for "hashtag smith", do you think I will find her easily? Or would I get a thousand result pages talking hashtag the social media term instead?
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I love Boston. I lived and worked here for 20 plus years. My own little office has been in the Seaport district and South End for the last 8 years. Open loft office, bad HVAC ,cheap rent. It is, or rather was, a place for small start up companies to live. But developers are always looking for the next big thing. These areas are being bought up and developed into condos and apartments.
Reading Scott Kirsner's article this morning sadden me. He is right of course, as he is well plugged into the start up ecosystem in the area. This new "Boston Innovation Center" is just another insult. It is not cheap office space for start ups. It is a conference center and a restaurant. But wait -- is there not a beautiful and mostly unused conference center across a few block? How about asking the Boston Convention Center to contribute part the space for used by smaller businesses? A quick look at their schedule shows that they are not that booked up.
If the city actually meant to foster innovation and small business instead of pander mostly to large real estate developers, they should try the affordable housing model. Each time a developer gets approval to put up any new buildings, they have to contribute to a portion of low rent office space elsewhere.
The City's responsibility is to bring infrastructure to these low rent office space areas to help them thrive -- we need:
affordable and working transportation
parking and bike lanes
high speed internet connection (city of Boston is one place where you cannot get cheap FIOS)
cheap food and cheap rent
As a bonus if you target problem areas in Boston, it will help energize the neighborhoods. Except sadly I know this will not happen without some new innovation from the top.
Of course I am bias. I am on our local library's friends group board, FOSEL. But on top of that, here we are on vacation in Maine, middle of nowhere. A couple of work emergencies came up via iPhone email running at Edge speed. I have to get online for just an hour. Where should I go?
The Bingham public library of course! A little small schoolhouse type library. Friendly librarians. And I got all my work done in an hour.
Update to my property tax overpayment issue. Read the first part here. Here is a quick summary of the situation:
Executive Summary
After some back and forth with the city, I found out that my South End Condo is classified as a mixed residential and commercial property. Therefore I have been paying more property tax for the last 7+ years. The city said:
- I should have noticed that the little "C" on my tax bill means I have been paying commercial tax (30+% instead of 12+%).
- I should have applied for reclassification 7 years ago
- Now they will not, by law, refund all the overpayment over the years, totalling more than $10,000
In short, Do not trust us, and we do not refund money collected in error
Do not trust Us
Give the city credit, the city people has been nice and helpful in communication. The chairperson of the assessment department review board called me to explain the situation to me after I contacted the Mayor's Hotline on the web. She even screen printed and emailed me all the documentation. However, during the 30 minutes phone conversation, the following exchange summarized the situation really well:
Me: Nobody would know to look at the "C" on the tax bill and question the property classification.
Chairperson: "You do check your credit card statement each month to see, if a waiter put on a $100 tip would you? You should have checked your tax bills too."
A city official is telling me I should treat my government like a bad waiter, and check everything?
Really? I cannot trust my local government for not doing their job correct? Looking at all the city services that I use, I cannot trust them? It is my job to question everything? This is sounding like a bad episode of the X-Files.
My children play in city parks. (How ironic, I am even on the board of the Friends of Peters Park). They drink from the water fountain. Should I now have the water quality checked periodically?
I drive in the city. When I reach a junction, should I get out of the car and make sure the traffic like in the other direction is red before moving forward?
Should I start shadowing our Mayor to every meeting and question every decisions the city makes? Where does it start? Where does it end? A bit absurd?
No Refund
If I find a problem, do not expect the city to fix it? I wonder, if the tax error was not in the city's favor, but in mine, would they also not come after me, by law? If I run a restaurant assessed at 2 million dolllars for 7 years and I have been paying residential only tax on the property. Once they found out, would they tell me "oh don't worry, we won't ask for the extra, say 2 million dollars assessment times 18% tax difference times 7 years = 252,000.? Really?
How you can Help
If you have access to news organization, tell them do a story.
If you are a city official that can help, let me know ( p k @ p k s h i u . c o m )
I have a loft at the South End of Boston. It is a great loft building with almost 100 units. Some of the units are designed artist lofts, with a below market rate price and can only be bought and sold to certified artists.
My property tax problem started a few years ago (or more), but I only realized it this year, 2011. My tax bill is almost 3000 dollars more than what it should be. That means I have probably over paid tens of thousands of dollars over the years. And the city said they will not pay me back.
The problem is not due to a wrong valuation of the loft. I understand that valuation is tricky. The problem is that, someone at the tax department has wrongly classified my loft as a part commercial unit. Every year I was taxed, 25% of my property value, at the 31.04% commercial rate instead of the 12.79% residential rate.
For example: The loft currently is valued at about 600,000. The property tax should be roughly 600K x 13% = 7800 dollars. Instead it is: 600K x 75% x 13% + 600K x 25% x 31% = 5850 + 4650 = 10500, 2700 dollars more. That's right. And they city said they will not refund me the difference.
How did the error occur? The tax department mis-interpreted the master deed of the building. The master deed explicitly stated that certain units in the building are artist lofts, and they allow artists to work in them. There are two relevant exhibits to the master deed. Exhibit C is a simply listing of ALL the units in the building, noting the percentage ownership and size. All the units are listed as "studios", as this is a loft building. Lofts have no bedrooms. They are by definition "studios".
A different exhibit, exhibit D lists specific lofts units within the buildings as artist studios. These are the ones that are bought and sold as artists lofts, and allow live work. This is defined by paragraph 6 of the master deed.
See the problem? The tax department read the wrong list of units, mis-interpreted the word "studio" and decided to classify my non artist but a studio (no bedroom) loft as part commercial.
I spoke with the tax department and they have come out on a "site visit" to verify the unit is not an artist loft. Of course that makes no sense since it is a documentation error. Physically seeing the unit will not make any difference. But whatever. They have agreed to change the classification back to pre residential. But they also told me that "under no circumstances they will refund any past paid tax to me".
Does this really make sense? My residential home was mis classified by a mis-interpretation of a legal document by the tax department. This is a clear mistake. They took my money, tens of thousands of dollars worth. Can I get a refund? For the city official looking into this, the parcel ID is 0306395084 .
Big news in the digital content space this week. Netflix is changing their subscription plan, effectively raising the costs for members who want to get DVD and Bluray in the mail from Netflix. There are lots of analysis of their intent and business model. But has anyone think about (re)opening the local DVD rental shop?
This could be an example where as services moving to in the cloud / digital distribution, the local brick and mortar businesses can recapture the (small) hardcore audience. Yes there are few people who wants very high quality, large and esoteric selection of movies. But for those people, who used to pay Netflix $25 a month, now will gladly pay the local store that and more!
Lots of iPads at BarCampBoston, just not mine! I wanted to test it out as a note taking device. But I also have to give a talk about teaching 6 years old to program, and Scratch does not work on the iPad. So I had to bring my Macbook Pro instead.
People were using the iPad, first and second generations, as note taking devices. At least one speaker was using it as notes for his talk, but at least in sessions that I attended, no one is using video out from it to give a presentation directly. I certainly think that is very doable. In fact I am looking forward to trying it out in small meetings myself.
My office is in a industrial loft building in an up and coming part of Boston. I used to shared an office space with another company. During last Christmas, while all of us were out of the office for about 20 minutes, someone came into the office and stole a brand new MacBook from one of the staff.
Fast forward seven months. We moved upstair to another space of our own in the same building. In the early afternoon, I went out to the bathroom for 2 minutes, upon returning to my space, I saw that our office door was slightly opened.
A man walked out from the lobby area out side of my office. Reasonably well dressed, holding a backpack in front of him. I blocked his exit, at the same time I saw the edge of a MacBook Pro peeking out of his backpack. I am pretty sure that's mine. "That's mine" I said. He pulled it out and gave it back to me, at the same time pushed his way towards the main stairs. I blocked him again. I must say I was only doing that because he is not too intimidating physically. That does not mean that he is not going to pull out an weapon.
What's running thru my mind at that point?
does he have a weapon?
is he going to make a run for it? I don't want to fall backwards down the stairs
will I drop my laptop?
what else in my office would he have taken? I made a huge assumption that he is he same person who took the laptop at Christmas time, at which he only took the laptop -- smart move, as that's the most cost effective theft
should I take a picture of him?
At the end, I made him empty his backpack, which I found my wallet, and a pair of pants not from us (very strange). I spent enough time with him as I took note of his appearance, then I let him go. I was heading to a meeting. Police report tomorrow.
I feel lucky that I caught him. There must be a 15 second window before he made his way out of our floor. And I feel extremely luck to have gotten my stuff back, stuff unharmed, and myself unharmed.
A prospective client checked out my blog today and commented on something that I wrote a few years back (all good things of course). That made me take a look to see how far back my blogging goes, and it is -- April 2000. That is just over TEN years ago.
That's like 1000 years in human years.
I like the NYTimes. David Brooks is a good writer. But why can't he write a column without riding on Sandra Bullock's success and misery?
As most people have caught on and noted, Sandra Bullock did not trade her personal problems for her professional success, her Academy Award for best actress. It is not a choice that she made. Hey I am all for generating web traffic to a website by catching any Internet meme / news of the day wave. (This blog post is a prime example.) However please do not do this when it involve other people's trouble.
And a final note, while personal happiness is categorically more important than professional success, contribution to the world as a whole can be a noble goal that brings true personal happiness. I am not going to make any reference to the Dalai Lama. You think about it.
When I was maybe ten years old, electronic calculator became available. I lusted after this basic scientific model, the size of a paperback book, at my local stationary store for a year. My dad bought it for me and I loved that thing. It has all the log and trig functions.
Since then, I slowly saved money and traded up for the latest in model. Remember the casio that also play music? Then a fancy Casio that has a 1/100th second timer, which I used in all my high school advanced Physics classes. Then the HP 27S that does financial and statistical calculations, too much of a geek to use a 19B even for my MBA classes.
How far we have come? When was the last time you used a physical calculator? I use my iPhone most of the time, or use Google. Next generation of children may never have to use one. But for my generation, that was my very first personal, electronic gadget.
After watching this segment, this is my take away:
Wall Street Journal's Walt Mossberg has an insightful comment about people don't want to carry iphone plus iPad plus laptop all the time, true. David Carr says how much it is a family computer, True. What is going to happen? People need to have multiple iPad. Leave one in the bag. Leave one in the living room. Leave on in the dining room. It is a "pick up and use" device. Expensive? Sure. But it works that way.
Went to Mobile Camp Boston 3, now part of Mobile Mondays. This was the first mobile event I attended. I love the location, MIT Tang Center, easy parking, 1/2 away from Starbucks. Was it useful? Not too bad. Found out there is life beyond the iPhone/iPad. (Not a lot, but a little bit..). The camp was short and the content was light. A lot of company selling services. Lawyers, even some VC's. The big surprises are (1) Verizon was here, as a sponsor as well as presenter, and (2) City of Boston was there, talking a little about the success of Citizen Connect and the proposed Innovation District of Boston. Given the history of Boston and land development, I have to be very skeptical about the innovation district. But that's another blog post.
Main take aways?
Location based social media is important (got me started playing with gowalla)
Android development is easier technically, but
AppStore is by far the easiest for deployment overall, when considering all the Apple testing and payment processing
Verizon is waking up
VCs are interested in this space (duh)
while not sexy, Palm or Blackberry apps may make you more money
don't forget "feature phones" can have some sort of "application experience" as well.
Oh, and I got to play with an iPad, very impressive, confirmed everything I thought about it. Now I only wish I bought one.
The defining word for 2009 for me was "Change". Some are good, some are bad. Some are unexpected, some are carefully planned. It was an unusual year.
Like most people, I was caught up in Obama mania a little. It was exciting. I frankly did not remember the last time I planned and went home to watch the presidential inauguration with my family. It was a moving ceremony. Changes were in the air. Uncertainty were in the air also.
My company, Imperial Consulting, inc., grew enough that it was clearly not going to survive without adding programming help. I am bias, but I believe I am great at spotting talent. I convinced Michelle to join Imperial around January, first as a part time consultant. It worked out extremely well. We cleared a few projects quickly. A positive change.
However, during the first quarter, I had to I had to abandon two of seemingly promising projects that I got involved in. It was painful to let go, but at the end it was the right thing to do. Around the same time, we ended up working on a few Non-Profit related websites for free. One of them was the website for The Mission Church of Boston . That turned out to be a great source of serendipity and excitement because it was the site of Ted Kennedy's Funeral. The website endured record traffic. You can read more about
it here in this blog entry.
The other project that I sorta gave up on was the coworking space WorkBar Boston. I seeded the idea and help with the launch, but really did not contribute much beyond that. It requires too much time. It was fun and I really wish I could have time for it, but I just did not. Further more I ended up leasing a new office space, again close to home. The space is wonderful and having my office so close to home, with parking (because I can use my residence sticker to park on many spots on the street) really helps with productivity.
We also gotten a few unsolicited project requests this year. With almost no deliberate marketing that was very good. As I always, very honestly, tell our potential customers. We are not here to compete on price along. There are plenty of individuals offering to work for close to nothing, usually with the lack of experience to go with it. We expected lost some of these leads, but also won a few very good ones. Some of them are still in stealth development mode. We'll announce them as they get launched.
It started off as an attempt to just get my mind off work-work, I started attending
more conferences and meetups in the area. Most are free or extremely low cost -- which seems to be the operative word for the industry at this point. They include Barcamp Boston, Podcamp Boston, JQuery conference , and an expensive but worthwhile An Event Apart Boston in June.
I also attended several parenting presentations by famous authors in their fields.
Howeard Gardner on his book Five Minds for the Future, and Ashley Merryman the co-author of NurtureShock were very informative. Attending these events really helped in networking. It was hard to find the time but it was clearly worthwhile.
Another thing new is we took a pure family vacation! We took a few trips a few years ago but there were reasons or excuses like attending weddings etc. This time, it was a pure "let's go some where to relax" type of vacation. To top it off, it was at a place that lacks all communication / connectivity. No internet, no phone. I got some reading done. And I realized how difficult it is to function without the internet. Something as simple as looking up an address for a museum is hard to do! Remember we had no phone either. Is the Internet a essential utility now? I think so. It is of course true that it is potentially a major distraction.
With the increase work load and administrative needs in the home front, I decided to try out a virtual assistant service. I picked a company that is entirely based in the U.S. They did some good work, like making basic appointments and posting ads on Craigslist. However, after two months in it is clear to my that, for myself, I needed someone physically in the office and in the area because some of the work required physical presences. For example, I had a lot of bills and documents to scan. Also there is no easy way for someone to access my quicken/quickbooks on my computer.
I eventually hire Renee, a high energy, extremely organized college senior to help me. It is working out well. This gave me higher hopes for college kids in this country, and undergraduate education in general.
During the year, in the cloud services really are becoming mainstream (for me).
Dropbox becomes an essential part of my workflow. Started with a paid account, I ended up a paid customer towards the end of the year. It was unfortunate that I had to miss their founder's presentation at the MIT startup bootcamp because they were the last on the agenda.
Another one is Evernote. I started using them between my desktops for awhile. Their iPhone got better and better. I now keep my shopping list and random notes on it. An example scenerio: I called a venue to make a reservation, which requires me to present a reservation number at the door. I added it in evernote as a note on my Mac. When I get to the event, I just retrieve the note on the iPhone.
Oh, the year of the iPhone, again. I justified upgrading my iPhone 3G to the new 3GS by not spending money on a Flip or Flip equivalent. The video on the 3GS is actually usable. I sold my old iPhone 3G in one day for a reasonable amount also. The upgrade price is thus not too steep. Of course come 2010 will there be yet another upgrade? The added benefit of the 3GS is that I now have 32G of space, which I have not used up at all. The old 16G was hitting the limit.
A few Lessons Learnt, in no particular order:
No anyone can do this of course, but locating my office half a mile away from home really helps. I can pop in on weekends to do work if I have to. I can run home to take care of home tasks during the day if I have to. Being in one community for both work and home also gave me the added benefeast of feeling really belong in the neighborhood.
Quality help is hard but worth while to find. I always know this, I have always built very hiqh quality teams. This year again proven that point. With the new quality help I see 2010 to be an even better year in terms of growth.
Networking matters. It is hard to find the time, with work and family commitments. The result is worth it. While I get a lot of information flow via the blogs and twitter feeds, chatting with new people in person really is still key. Having a growing physical network can help grown the virtual social network.
Perspiration and Appetite for Risk
Finally, this post on 10 skills VC look for in before writing a check mentioned two things that summed up 2009, perspiration and appetite for risk. Those two skilled carried me for 2009. What will be ahead in 2010?
If you Google around enough, you would know that I went to English boarding school, a very long time ago. Amazingly, old classmates from boarding school that I have not been in touch for a very long time started finding me on Facebook. Which leads to this story that was told back to me:
Apparently I once asked my Math teacher why he gave me a 99% when I had all the answers correct. The teacher responded that he gave me 99 because no one was perfect. My classmate remembered that story as a way the teacher wanting to instill aspiration.
While I have zero recollection of that incident, I have the greatest admiration of the teacher, Mr. Clancy. He was my math and physics teacher, as well as the head of the prefects. He taught me how to learn. He gave me access to college level instruments and experiments in Physics. He taught values and disciplines. He was tough and always fair. He gave equal time to the smartest and the slowest kid in class. He had tremendous integrity. I often tell people that I owe a lot of my achievements to him. I am sure many other students of his think the same.
was first stirred because you were asking a question to the maths teacher. Unusual because you knew everything. He said you had nothing wrong, you only got 99% because no one was perfect. I liked the idea... perhaps the idea was to always aspire ... Are you still aspiring! And so it does appear, since you have forgotten.. It looks to be more inspiring to me rather than you.
The battery in my 8 month old Mac Book Pro seems to be broken. I scheduled a late night appointment at the only Retail store in Boston, near my loft. 25 minutes later, I walked away with a replacement battery and a smile on my face. Those Apple guys and women are oh so nice. They are courteous, professional, passionate, and fun. The Apple Genius handled my MBP with more care then me. The counter staff were friendly and helpful. On my way home one of the staff was heading back to the store, recognized me and said good night.
If you were a parent, and your teenager grows up and behave with such manners, professionalism, and people skills, wouldn't you be proud?
Disclaimer -- I have been to other suburb Apple store within a mall and the staff there are definitely not as good. Perhaps it's a urban twenty-something thing here at the flagship store. So at least make those the role models.
I took some notes on one of the video explaining why the Omni Focus application design is so nice. I liked the analysis, but I actually gave up on the product itself. I now use Thing. However, these are the interesting design points:
Application's feature is "shrink to fit" -- The feature set is not overwhelming for the user. The user see what is normally usable for him. The user does not have to jump thru hoops just to get started. The features can expose themselves as needed.
The UI tightens the user's field of vision -- the "focus" feature of Omni Focus
The application has *invisible* scaffolding -- The application provide a structure for the user to do GTD time management, but does not get in the way.
Every so often I get one of these emails in my inbox. Today's example:
Hello!
I have decided to join the ranks of half the people I know, and switch to
Gmail.
Therefore, effective immediately, please start emailing me at *xxxxxxx@gmail.com*.
I'll keep receiving verizon.net emails for another month.
I hope you're all well and that you have a lovely day!
Nothing unusual? Except the person did a "send to everyone on my address box"
mass mailing. I got it only because I am on an email list that this person also belongs to.
So, now I have the name and address of everyone in his address book. A
quick glance gets me these information:
political affiliation -- a presidential campaign list email
closer friends' name and emails -- people who appear multiple times with personal and work emails
social affilations -- other social email lists
interest or profession -- noticed several emails from people in a specific industry
possible a parent -- small number of emails from a school (if large number, he may work there)
personal style -- subscription to specific stores' emails
Not a mistake that one should be making !
Your homework -- look at your own address book and see how much "personal" information is in there if someone gets hold of just the list of names and emails.
I am lucky enough to experience the inside view of a large funding round like this for the second time. The first one, AdvisorTech Corp, was during the Internet Bubble years. 20 millions were nothing to talk about. This time around, the market conditions are much more realistic, and the CustomMade round is well deserved and it is a vote of confidence by the markets. One of the main success factors for CustomMade is the pairing of co-founders Seth Rosen and Mike Selguero. They have complimentary skills in a way that I have not seen for a long time.
When I was maybe ten years old, electronic calculator became available. I lusted after this basic scientific model, the size of a paperback book, at my local stationary store for a year. My dad bought it for me and I loved that thing. It has all the log and trig functions.