Hi all:

We are migrating WiTi from Yahoogroups.com to Googlegroups.com.

The new group web address is:
http://groups.google.com/group/witi

and the posting address is
witi@googlegroups.com

WiTi or 'What I Think Is' (term coined thanks to Maruthi)
is an Open Source Business focussed list of software
engineers aka techies interested in entrepreneurship
in the Open Source space.

Request everybody to make note of the new URL and posting
address.


thanks
Saifi.

They have owned InnoDB for years now and done nothing aggressive.

Plus even if they do something aggressive there is the Maria fork and the
Drizzle projects to counter the storm.

Cheers,

Zubin.

On Tue, Apr 21, 2009 at 5:21 AM, Arun Khan <arun.k.khan@...> wrote:

>
>
> On Tuesday 21 Apr 2009, Namita wrote:
> > > From: Zubin Wadia <zwadia@... <zwadia%40gmail.com>>
> > > Subject: Re: [witi] IBM to acquire SUN
> > > Sent: 20 Apr '09 20:17
> > >
> > > :) Oracle bought them. Master stroke from Uncle Larry.
> >
> > Now, what does this mean for MySQL ? :-)
>
> status quo probably.
>
> Oracle acquired sleepy cat (Berkeley DB) and to the best of my knowledge
> they have not messed around with the product.
>
> -- Arun Khan
>
>


[Non-text portions of this message have been removed]

>  From: Zubin Wadia <zwadia@...>
>  Subject: Re: [witi] IBM to acquire SUN
>  Sent: 20 Apr '09 20:17
>
>  :) Oracle bought them. Master stroke from Uncle Larry.
>

Now, what does this mean for MySQL ? :-)

On Mon, 13 Apr 2009, roshan jose wrote:

> Hi,
>
> yes $6.5 BN is too low considering the research and the services it provides
to its customers..
>
> Initially there might be some misunderstandings as to the weakening of
SUN..but the brand name will always keep it going as i said above..it lies in
the services and the promises it makes to the customers..
>
> Regards,
> Roshan
>

Roshan, by the time you finish your 3rd year BA exams, Sun may
have a new buyer !

http://news.yahoo.com/s/ap/20090420/ap_on_bi_ge/oracle_sun


thanks
Saifi.

:) Oracle bought them. Master stroke from Uncle Larry.

On Wed, Apr 8, 2009 at 11:20 AM, Zubin Wadia <zwadia@...> wrote:

> As I said... $6.5BN is too low :)
>
> I wonder why Oracle isn't buying them... they paid $8.5BN for BEA... and
> have a $95BN market cap.
>
> The good news is that they are now out of their exclusivity clause with IBM
> and can pursue other serious options.
>
> Cheers,
>
> Zubin.
>
>
> On Wed, Apr 8, 2009 at 10:29 AM, Sandip Tiwari <sandip@...>wrote:
>
>>
>>
>> Sun Walks Away From IBM Merger Talks
>>
>>
>>
http://www.internetnews.com/hardware/article.php/3813841/Sun+Walks+Away+From+IBM\
+Merger+Talks.htm
>>
>> Thanks & regards
>>
>> ST*
>> *
>> 2009/3/21 Zubin Wadia <zwadia@... <zwadia%40gmail.com>>
>>
>> > IBM doesn't do mergers. They are going to eat Sun alive and blue-wash
>> > it. IBM has a market cap 20x of Sun.
>> >
>> > It would be more amusing if Cisco joined in and sparked a bidding war.
>> >
>> > $6.5BN may appear to be a premium of 100% on Sun's closing price the day
>> > before the intent was announced, but it is still cheap for the IP,
>> talent
>> > and diversity Sun has.
>> >
>> > Right now the market cap for Sun is $6.03BN... too low.
>> >
>> > Let's see how it turns out.
>> >
>> > Cheers,
>> >
>> > Zubin.
>> >
>> >
>> > On Fri, Mar 20, 2009 at 5:21 AM, Namita
<namita@...<namita%40twincling.org>>
>> wrote:
>> >
>> >>
>> >> I'd rather call it a merger.
>> >> After the HP-Compaq merger in 2002, here is another interesting one.
>> >>
>> >> Check out:
>> >> http://redherring.com/Home/25927
>> >> and what impact it could have locally:
>> >>
>> >>
>>
http://www.business-standard.com/india/news/what-an-ibm-sun-deal-could-mean-for-\
india/352303/
>> >>
>> >> Namita
>> >>
>> >
>> >
>> >
>>
>> [Non-text portions of this message have been removed]
>>
>>
>>
>
>


[Non-text portions of this message have been removed]

Hi,

yes $6.5 BN is too low considering the research and the services it provides to
its customers..

Initially there might be some misunderstandings as to the weakening of SUN..but
the brand name will always keep it going as i said above..it lies in the
services and the promises it makes to the customers..

Regards,
Roshan

--- On Sun, 4/12/09, Saifi Khan <saifi.khan@...> wrote:

From: Saifi Khan <saifi.khan@...>
Subject: Re: [witi] IBM to acquire SUN
To: witi@yahoogroups.com
Date: Sunday, April 12, 2009, 2:55 PM

















       On Wed, 8 Apr 2009, Zubin Wadia wrote:



> As I said... $6.5BN is too low :)

>



Don't worry too much about the price.



SUN walking away from the deal only weakens SUN further.

It indicates to customers that though i need to go to ER

but i'll be ok with self medication.



thanks

Saifi.





























[Non-text portions of this message have been removed]

On Wed, 8 Apr 2009, Zubin Wadia wrote:

> As I said... $6.5BN is too low :)
>

Don't worry too much about the price.

SUN walking away from the deal only weakens SUN further.
It indicates to customers that though i need to go to ER
but i'll be ok with self medication.


thanks
Saifi.

As I said... $6.5BN is too low :)

I wonder why Oracle isn't buying them... they paid $8.5BN for BEA... and
have a $95BN market cap.

The good news is that they are now out of their exclusivity clause with IBM
and can pursue other serious options.

Cheers,

Zubin.

On Wed, Apr 8, 2009 at 10:29 AM, Sandip Tiwari <sandip@...> wrote:

>
>
> Sun Walks Away From IBM Merger Talks
>
>
>
http://www.internetnews.com/hardware/article.php/3813841/Sun+Walks+Away+From+IBM\
+Merger+Talks.htm
>
> Thanks & regards
>
> ST*
> *
> 2009/3/21 Zubin Wadia <zwadia@... <zwadia%40gmail.com>>
>
> > IBM doesn't do mergers. They are going to eat Sun alive and blue-wash
> > it. IBM has a market cap 20x of Sun.
> >
> > It would be more amusing if Cisco joined in and sparked a bidding war.
> >
> > $6.5BN may appear to be a premium of 100% on Sun's closing price the day
> > before the intent was announced, but it is still cheap for the IP, talent
> > and diversity Sun has.
> >
> > Right now the market cap for Sun is $6.03BN... too low.
> >
> > Let's see how it turns out.
> >
> > Cheers,
> >
> > Zubin.
> >
> >
> > On Fri, Mar 20, 2009 at 5:21 AM, Namita
<namita@...<namita%40twincling.org>>
> wrote:
> >
> >>
> >> I'd rather call it a merger.
> >> After the HP-Compaq merger in 2002, here is another interesting one.
> >>
> >> Check out:
> >> http://redherring.com/Home/25927
> >> and what impact it could have locally:
> >>
> >>
>
http://www.business-standard.com/india/news/what-an-ibm-sun-deal-could-mean-for-\
india/352303/
> >>
> >> Namita
> >>
> >
> >
> >
>
> [Non-text portions of this message have been removed]
>
>
>


[Non-text portions of this message have been removed]

Sun Walks Away From IBM Merger Talks


http://www.internetnews.com/hardware/article.php/3813841/Sun+Walks+Away+From+IBM\
+Merger+Talks.htm

Thanks & regards

ST*
*
2009/3/21 Zubin Wadia <zwadia@...>

>   IBM doesn't do mergers. They are going to eat Sun alive and blue-wash
> it. IBM has a market cap 20x of Sun.
>
> It would be more amusing if Cisco joined in and sparked a bidding war.
>
> $6.5BN may appear to be a premium of 100% on Sun's closing price the day
> before the intent was announced, but it is still cheap for the IP, talent
> and diversity Sun has.
>
> Right now the market cap for Sun is $6.03BN... too low.
>
> Let's see how it turns out.
>
> Cheers,
>
> Zubin.
>
>
> On Fri, Mar 20, 2009 at 5:21 AM, Namita <namita@...> wrote:
>
>>
>> I'd rather call it a merger.
>> After the HP-Compaq merger in 2002, here is another interesting one.
>>
>> Check out:
>> http://redherring.com/Home/25927
>> and what impact it could have locally:
>>
>>
http://www.business-standard.com/india/news/what-an-ibm-sun-deal-could-mean-for-\
india/352303/
>>
>> Namita
>>
>
>
>


[Non-text portions of this message have been removed]

Sun Walks Away From IBM Merger Talks


http://www.internetnews.com/hardware/article.php/3813841/Sun+Walks+Away+From+IBM\
+Merger+Talks.htm

Thanks & regards

ST*
*
2009/3/21 Zubin Wadia <zwadia@...>

>   IBM doesn't do mergers. They are going to eat Sun alive and blue-wash
> it. IBM has a market cap 20x of Sun.
>
> It would be more amusing if Cisco joined in and sparked a bidding war.
>
> $6.5BN may appear to be a premium of 100% on Sun's closing price the day
> before the intent was announced, but it is still cheap for the IP, talent
> and diversity Sun has.
>
> Right now the market cap for Sun is $6.03BN... too low.
>
> Let's see how it turns out.
>
> Cheers,
>
> Zubin.
>
>
> On Fri, Mar 20, 2009 at 5:21 AM, Namita <namita@...> wrote:
>
>>
>> I'd rather call it a merger.
>> After the HP-Compaq merger in 2002, here is another interesting one.
>>
>> Check out:
>> http://redherring.com/Home/25927
>> and what impact it could have locally:
>>
>>
http://www.business-standard.com/india/news/what-an-ibm-sun-deal-could-mean-for-\
india/352303/
>>
>> Namita
>>
>
>
>


[Non-text portions of this message have been removed]

On Mon, 23 Mar 2009, satyaakam goswami wrote:

> On Mon, Mar 23, 2009 at 2:47 PM, Saifi Khan <saifi.khan@...> wrote:
> > Hi:
> >
> > Is ad-revenue supported web 2.0 service model still working ?
>
> Yes
>
> Yes there are tons of ways to monetise at the end of the day the call
> is yours what you want to do,  again i think it way too OT for this
> list.
>

Hello Satya:

Monetization *is* an important focus area for this WiTi list.

The garden variety are:
  a. dual license, gpl + close source(eg. MySQL)
  b. give software for free and make money from training, support
     and certification (eg. Redhat)
  c. freemium, free for certain number of users/features and beyond
     that the user pays

  Please free to add (ton - 3) ways to this list :)


thanks
Saifi.

Hi:

Is ad-revenue supported web 2.0 service model still working ?

eg.
there are many news papers on the internet that are free,
because they make profits through advertising. However, that
model seems to be on its way out.

Google in recent times has reduced the number on the Google docs
participants.

My current understanding is that once the current Ad contracts
close out, it is going to be a while before the Ad shows up
again.

thanks
Saifi.

I'd rather call it a merger.
After the HP-Compaq merger in 2002, here is another interesting one.

Check out:
http://redherring.com/Home/25927
and what impact it could have locally:
http://www.business-standard.com/india/news/what-an-ibm-sun-deal-could-mean-for-\
india/352303/

Namita

Hi all:

Does anybody know where is a DataCenter more cheaper for
comparable services ?

  - California
  - Chicago

In recent times, there are many orgs. that have migrated their
datacenters from California to Chicago.

Any observations ?


thanks
Saifi.

Hi all:

What is your take on this observation ?

  "A lot of web 2.0 stuff consists of making desktop applications
   run inside a browser".

  eg. gee here is Yahoo Messenger which people need to install
      so i create a web based ajax'd IM for people to chat aka
      Meebo.

Happy Holi !


thanks
Saifi.

Hi all:

'Lords of Finance: The Bankers who broke the World'
is a very interesting book authored by Liaquat Ahamed.

Mr. Liaquat Ahamed is a former world bank economist and a
investment fund manager. He authored this book before the onset
of the current crisis.

It is a history of the financial and economic crisis that
precipitated in 1914 and did not end until 1940s.

The protagonists are the four central bankers who lives and
actions are closely interlinked with the crisis.

  . Benjamin Strong - Federal Reserve of New York
  . Montagu Norman  - Bank of England
  . Emile Morceau   - Banque de France
  . Hjalmer Schacht - Reichsbank of Germany

The central thesis is that the critical decisions made by
these four bankers not only caused the Great Depression but
also created the conditions for World War II.

What makes this book unique is the observations have strong
parallels with the current recession.

Take a look at this must read.
http://www.amazon.com/Lords-Finance-Bankers-Broke-World/dp/159420182X


thanks
Saifi.

Hi all:

A very detailed, thought provoking and pragmatic writeup
by Jason Calacanis on managing startups in tough times.

Please do read the entire thing.


thanks
Saifi

--
A lot of CEOs with less than 12 months of capital left have been
asking me for advice about what to do, given the massive economic
turmoil we're facing. I thought I would take the time put these
various conversations into one email to help those who are "up against
it," as we say in Brooklyn.

Now, sprinting to the startup precipice is one of the most horrible
and exhilarating experiences you can have as an entrepreneur.

The exhaustion sinks in as you slam on the brakes. You dig in your
heels and watch the dirt and pebbles fly off the cliff as your left
foot dangles down in the ravine, with your right foot desperately
trying to save you. Your momentum could--if the wind kicks in--send
you straight down to your death. Heck, even the two inches of earth
under your right foot could give way and send you to your death.  Or,
you could slip and fall on a magic carpet that will take you to the
Promised Land.

OK, that last part is made up. You're probably screwed and you know it.

This email is intended for startup companies with less than 12 months
of cash in the bank, who know in their hearts that their VCs have lost
faith, and that Google, Yahoo or Microsoft aren't going to pick them
up on a magic M&A carpet ride.

This is the email I'd like you to forward to your friends who are
running startups that could go under in 2009.


Some background
-------------------------
I've been to the precipice and faced the fall a couple of times. I've
learned a couple of things from the experience. I can tell you that
the first time it happens, you're terrified, because everything you've
done--all the effort and dreams--will probably be lost (like tears in
the rain).

The second time it happens, you're deeply concerned, but know it ain't
over until you're splattered on the boulders below.

The third time it happens, you smile and say "let's get it on!"

You see, there are two types of entrepreneurs in this world: real ones
and the folks who play entrepreneurs for some portion of their lives.
>From a distance, most folks can't tell who's who. In up times, when
the market is flush with cheap money and unexplained exits (Bebo,
anyone?), everyone looks brilliant.

It's only when the tide goes out that you know who's naked. (Who said
that? I hear it on CNBC every other week now).

The differences between the two types of entrepreneurs become clear
when the fan and the manure meet. The faux entrepreneurs run for cover
rather than dealing with the storm. They go back to their plush,
somewhat mindless jobs as VPs at mega-companies, while the real
entrepreneurs suit up and clean up the mess.

We're going to find out who the real entrepreneurs are in 2009 because
they are going to spend another 12 months, on top of the last six,
cleaning up the mess. It will be two years of total pain, so before we
go any further you gotta make the decision if you're in or you're out.


In or out?
-------------------------
Here is a really easy way to figure out if you can deal with the mess
in front of you. How many of the following can you deal with:

1. Laying off half your staff.
2. Laying off half your staff again three months later.
3. Spending 20 hours a week on the phone being yelled at and
threatened while trying to renegotiate a dozen contracts--like your
T1, phone system, rent, equipment leases, etc.
4. Having an investor scream at you and tell you that they will ruin
you, your career and that "you'll never raise money again, you mother
f-er."
5. Laying off half your staff for a third time.
6. Getting served a half-dozen lawsuits, courtesy of the folks who you
tried to renegotiate with in point number three who wouldn't deal.
7. Having one of the people you're renegotiating with come to your
office every week and ask for their check in person.
8. Having the same media outlet that once claimed you were the next
Barry Diller write that you're a fraud.
9. Not getting a good night's sleep for six months.
10. Having dozens of paying clients default on their bills.
11. Having staffers who you really need to double down and focus walk
out the door after you helped make their careers.
12. Have the people who begged you for a meeting at the peak not even
return your emails or phone calls.

If you can't deal with these 12 situations, then you're out. It's time
to refresh your resume, tell your board you resign, sublet your place
and go to Thailand. Go sit on the beach and lick your wounds for $40 a
day (all-in) like the fauxtrepreneur you are. You suck. I hate you.
You're smart enough to cut your loses in a way I could never
understand.

If you think you can handle most of the horror above, well, then you're in.

How do I know this?

Those 12 things--and more--happened to me for over a year when Silicon
Alley Reporter, my first business, got whipsawed by the dotcom bust.
We went from $11.6m in revenue one year to $600k the next. From 70
full-time people to 12. From a 20,000 square foot office to subletting
ten desks at a PR firm.

Personally, I went from being on top of the world, with appearances on
Charlie Rose, 60 Minutes, CNN, and Fox News, to being savaged in the
press as a fraud who got lucky and who no one would ever hear from
again.

My office used to get 100-200 phone calls a day and I had two
assistants.  Six months later, I answered my own phone--on the rare
occasions it would ring. When it did, it was either my mom calling to
check in on me or a vendor calling to yell at me.

It was the worst year of my life, but it made me who I am today. I've
never talked about the tailspin that my business went into, and how I
barely managed to land the plane, but I get the sense that there are a
lot of twenty-somethings about to experience the same thing, and
perhaps my lessons could help.

I'm not going to tell the story. (That would take 80,000 words, a hard
cover and the right publisher), but I'm gonna share some of the
lessons.

Let's get to work.


The Good News
-------------------------
If you're a real entrepreneur, you're still reading. If you're a faux
entrepreneur, you're writing your resignation letter, considering
which beach to surf and how long to grow your beard. God bless you
fauxtrepreneurs, because you're gonna have a much nicer 2009 than the
real entrepreneurs who are "up against it."

Of course, a year from now, the real entrepreneurs will be
battle-scarred beasts who are capable of taking big bold risks, and
you'll still be crying about what could have been with your last
business while attending back-to-back meetings about nothing at BigCo.
Not that I'm judgmental of fauxtrepreneurs who create noise, distract
investors from the real workhorses, suck at their jobs and take no
real risk in their lives.

No, on the contrary, I love you fauxtrepreneurs, because you create
the foundation upon which real entrepreneurs stand. At the start of my
career, it wasn't east to stand out, but by the time I'd done two or
three businesses and become a fixture in the technology industry, I
had figured it out: Longevity is a big part of credibility. I met
Esther Dyson, Fred Wilson, John Brockman, Jerry Colonna, Mark Cuban,
Ted Leonsis, Seth Godin and countless other luminaries between 1994
and 1997.

Well, it's a dozen years later and they still take my calls and
respond to my emails.

Longevity is credibility.

Oh yeah, I almost forgot the good news: People's reputations are made
in the bad times more than the good times.

Even if you're 100% sure your company is going to crash in the next
six months, you'll learn more from staying on board than you will from
running. You'll also earn the respect of your peers and you'll learn
exactly how people break down and lose their cool. You'll see how
certain VCs screw entrepreneurs, you'll see entrepreneurs screw VCS
and you'll watch the lawyers and landlords collect their vig the
entire time.

Most of all, you'll realize who you are and who your real friends are.


So what's the sitch?
-------------------------
You need to figure out your runway immediately. This is really easy to
calculate: you look at how much cash you burn every month and divide
that into how much cash you have in the bank. Your accountant can do
this for you or you can simply look at your P&L and bank statement.

Once you know how many months you've got left, you've got to do the
hard work of trying to extend it by at least 1/4. This means cutting
staff, negotiating with your landlord and cutting any and all
recurring bills. You then need to look at your revenue streams and
figure out if you can double them. In most cases, if you do these two
simple things, you will have increased your runway by 50-100%. If you
double your runway, your chances of figuring out what your business
actually is will go up exponentially.

You also need to do a monthly P&L review with your management team.
Look at every single recurring cost you have and figure out how to cut
it. In an up market, this level of obsessiveness is often wasteful,
because you're in a race to take market-share. In the case of MySpace
vs. Friendster vs. Facebook all having unlimited funds for a period of
time, this makes total sense. Why worry about $100,000 in server costs
if you're racing to see who gets bought for a billion dollars first?
However, this is not that time. You have to change your style. There
are times to hit the gas and there are times to conserve your gas.

Look at it this way: Getting the most market-share and running out of
cash is the equivalent of getting to the moon first without the
ability to get back to Earth. Congratulations, you won the race... and
now you're dead!

My primary business right now, Mahalo.com, is lucky to have raise a
large amount of capital and is going to fairly easily make it to
profitability based on our growth curve, runway, modest spend and
significant traffic (we're at 5.6m unique visitors over the last 30
days).

We couldn't be in a stronger position.

However, even we recently did a deep review at Mahalo and were able to
cut 30% of our costs in under 60 days. The company is still growing
just as fast, and in fact we're actually more efficient. There is
something strange about that: 25-person companies seem to get more
done than 40-person companies in my experience (other CEOs have told
me the same thing).

Perhaps it's because after you trim down you have the most efficient
folks left, or maybe we're all more focused because we don't have to
communicate what's going on to as many people? Does anyone know if
there is any research on optimal team size for startups? I'd be
interested to hear what the studies say. Anyway, we made the hard
decisions and that extended our runway by a year. That means Mahalo
will be here in 2013 if we make every single wrong decision and we're
asleep at the wheel. Of course, we're focused like lasers on getting
to profitability and developing a really helpful service. If we can't
figure this business out by 2013 or 2014 then, well, either we really
suck or there is no solution to combining search and knowledge
exchange (of course we know search and knowledge exchanges can and
have worked--so we're bullish).

Also, when your company goes through this kind of economic boot camp,
I think you get stronger. You understand which parts of your business
are working the best and which ones are, well, not working at all. We
had one area of our business that was two percent of our spending
making 30% of our revenue. You figure these things out when you start
cutting. It's a sick and sad process to be sure, but Darwin is your
friend at a startup.


Put your VCs to the test
-------------------------
If you're running out of money, you've got three choices: cut costs,
make money or raise capital. We're going to get into cutting costs and
making money below in a minute, but I'm a big fan of testing your
investors. When the market is crushed, most VCs get realistic, greedy
or paralyzed. You've got to figure out where you stand with your
current investors as quickly as possible, and the quickest way to do
that is to ask them for more money.

Let's say you're burning $200k a month and you have a million dollars
in the bank. Go to your VCs and say something like the following:

"John, we're going to run out of cash in five months. I've developed a
cost-cutting and revenue-generating plan that I believe will extend
our runway to 10 months. I'd like to present it to you and your
partners tomorrow for a half-hour with the goal of doing an 'A+ round'
of one million dollars. I truly believe in this business and I'm
willing to do a flat-round, bust my ass for the next two years and
come out of this recession on top."

Now your VC is probably going to start asking questions--as they
should. They may try and push off the discussion of the "A+ round."
Your job is to stand firm and say something to the effect of:

"Well, we're both vested in this business and I'd like to take the
time to present to you guys this week and get a response from you
either way within five days. I know it's a compressed time frame, but
we're living in extraordinary times, and if you guys don't believe in
the business the way I do, I can accept that and make other
arrangements."

At that point, you say nothing. Silence is the greatest negotiating
tactic ever created--use it. Your VC right now will be thinking the
following:

a) "This guy/gal's a real killer and I wish all my CEOs were this
focused. At the very least, I should hear them out."
b) "This guy/gal has another opportunity, so I'm gonna have to deal
with this train wreck myself--that will suck."
c) "This business is a dog and I shouldn't have invested in it. Since
they're asking for the truth, I might as well give it to them."
d) "I'm an idiot and I can't make decisions. Let me push this out a
couple of weeks and make this person's life hell while I
procrastinate."

That last part is not what the person would actually say, but that's
basically the translation of "let me think about it."

Now, in cases a, b, and c you're in good shape. You're gonna either
get your meeting and money or you're gonna get told you're not getting
any more funding. Situation D is what you don't want. If you're
running out of provisions in the middle of the Atlantic, your best bet
is to go either East or West--not in a circle.

VCs and investors will sometimes send entrepreneurs in circles, either
inadvertently or as leverage. Sometimes VCs are juggling a lot of
balls and can't focus. Sometimes they're inexperienced and/or they
have issues that don't concern your business, like their limited
partners, their partners or their divorce settlements. Sometimes
they're cutthroat and know that, when you're down to your last two or
three payrolls, they can extract a 2-3x liquidation preference out of
you.

It's your job to force the issue now--don't wait.

Heck, even if you have a year's worth of runway, you should probably
do this kind of thing so your VCs know you're the real deal and so you
know where you stand with them.


Put your staff to the test
-------------------------
If you're down to six months of cash, you're gonna have to cut the
bottom 1/3rd of your staff, if not half. This sucks, but there is no
choice. You're gonna also have to cut salaries. So, here are some
suggestions on how to do this:

1. Get rid of the non-core staff. Look in places like PR, marketing,
and admin to cut. See if you can put some of these folks on part-time.

2. Look at the salaries of your current staff vs. market and look for
ways to cut the high-priced ones who you can get cheaper at the
current market. I know this sounds cutthroat, but remember, this is
advice for folks going out of business in six months. Another way to
run this test is to ask yourself "Would I hire this person for this
amount today?"

3. Go to each member of the team who is over-paid by today's market
rate and tell them that you're probably going to be cutting their
salary and that you're increasing their options. Ask them how they
feel about it. Some people can take a pay cut, others can't--you don't
know until you ask.

I'm really against cutting people's pay above cutting position because
you want the people remaining in your organization to be happy. Of
course, sometimes that's just not realistic. Many CEOs overpay in a
hot market because they feel they have to, and those folks are the
ones who really need to take this hard action now.


Put your landlord to the test
-------------------------
Call your landlord and ask them to get a cup of coffee. Do this in
person. Let them know that it's 50-50 you're going out of business and
that you need their help in the form of four months free rent,
starting today, the ability to sublet some space (if you don't have
that right already) and to keep the rent at the same rate you already
have. Tell them you feel horrible about this, and you wouldn't ask
them to do this if it wasn't urgent, but you didn't want to drop the
bomb on them five months from now when there were no more options.

Remember, silence is your friend. Tell your story and see what they
say. I did this at one point and not only got free rent, I got 50% of
our letter of credit freed up. It was a win-win. Trust me, your
landlord is probably facing a LOT of fallout right now... better to
get half than nothing.


Put your vendors to the test
-------------------------
Since you've probably got webhosting, CDNs, equipment leases, and
other recurring charges on your credit cards, cancel those cards
immediately. Call up each vendor and tell them you need six months
free while you figure out your status, and if they can't do it, ask
for suggestions. Then call each of their competitors and let them know
that you are willing to switch over for the first six months free.  If
you get one of four vendors to do this you just saved 25%--I bet you
can get two or three.

Vendors would rather eat some profits for six months than lose your
business. If they can't support you in your time of need, then you
should find someone who will. There is a LOT of competition out there
and you can negotiate harder than you probably think you can. Tell
vendors you're willing to switch if they give you six months free and
see what they say. We've had folks offer us a *year* of free service
to switch (of course, that's an exception, not the rule).


Put yourself to the test
-------------------------
If you're going to ask so much of your staff, investors and vendors,
you obviously have to take a hit yourself. Go to your VCs and ask them
to participate in the next round--the A+ round. Tell them you know
it's not a lot but you want to put in $5 or $10k in the round as a
show of support. This will result in them saying it's not necessary.
After that, tell them you'll sell your car and take a bike to work and
put $20k into the business if you can get that for your car. Make sure
your staff doesn't take a bigger cut than you do in salary if you're
doing salary cuts.

Even if it's just ceremonial, it means a lot to make cuts. I've
stopped traveling as much to conferences even though they cost me
little to nothing (normally people pay me to speak or at least pay for
my travel). Of course, don't cut traveling if you're going to
conferences where you might find clients or investors (which is why I
travel half the time!)


Put your product to the test
-------------------------
As Mark Cuban told me over and over again, "Sales solves everything."
If you can't sell your product, it's not a product--it's a hobby. Take
your consumer service and sell it as a software package to someone. Go
on the sales calls yourself. During the final year of Silicon Alley
Reporter I made cold calls and set up lunches to sell folks on our new
product, Venture Reporter (the rebranded Silicon Alley Reporter). It
works. When people see the CEO making sales calls, they respect the
company and take it seriously. When the VCs and staffers see you doing
this, they get inspired.

Put a whiteboard up and count any stat you can: sales calls made,
meetings scheduled, contracts sent and sales closed. Give your team
something to think about other than just the bottom line, because you
might have to celebrate the little victories before getting the check
in the door. Celebrate getting the meeting. Celebrate sending a pitch
out.


What to do if it's over
-------------------------
If you're going to hit the wall, you should do so with three or four
months of capital left in the bank. You should cut down to your core
staff and tell them "we have 120 days of cash left and we're going to
try to land the plane safely. If you want to leave at any point during
the 120 days you'll get the reference of a lifetime from me. If you
help us land the plane safely I think we'll all be better off because
of it."

Then make a plan to do one of the following:

a) sell the business
b) close the business
c) sell the assets of the business

There's a little bit of overlap up there, since sometimes you close
the business and sell the assets, or you sell the assets and leave a
shell behind. The point is, don't wait until you have a month left. Do
it when you have 120 days left. If you signal to everyone it's over,
you'll have done the honorable thing for your employees, by giving
them the maximum time to have a safe landing, and for your investors,
by allowing them to roll the business or its assets into another
company.

The worst thing to do is to delay this process. I've gotten down to
this point exactly, but when I was at break-even at my first business,
we looked for a buyer, because I didn't think we had much chance of
making it on our own in the 2001-2002 market. I could have been wrong
about that in retrospect, but either way, I'm glad I got out because
it set me up for Weblogs, Inc.

And that is the final lesson: when one door closes, three more open
up. When you shut down your business properly, you will have a clean
slate and renewed energy to take on your next project. You might even
get the investors to give you the company with the 90 days worth of
capital left to start your next project with a recapitalized
structure.

Remember that there is no shame in failure but there are honorable and
dishonorable failures. If you're going to lose the game, remember that
it's just that: a game. There will be another and another and another
yet to play. Don't lose your cool and don't get depressed. Just get
yourself back up, dust yourself off and get back in the game. The
precursor to success is almost always failure.


[ To the 17 folks who made it to the bottom: If you're struggling with
failure right now, if your business is failing and you don't think you
can go on, remember that at the very least you've been lucky enough to
take your shot. That's more than most people get. You're going to be
much stronger for getting through the heartbreak of a failed business.
Also, you've always got me--your pal Jason--if you need a shoulder to
cry on. I'm only an email, tweet or IM away jason@calacanis or
jasoncalacanis on skype/twitter/AIM. ]

--

Hi all:

Funambol is an interesting Open Source startup.

Business
  an Open Source startup in the business of pushing emails
  to the mobiles.

VC
   Castile Ventures of Waltham, MA
   Nexit Ventures,
   Walden International
   HIG Ventures

Funding
   $12.5 million

Website
http://www.funambol.com/

Software available for download at
https://www.forge.funambol.org/download/

Their office space is particularly interesting. It is a
converted wine cellar :) Take a look at
http://www.forge.funambol.org/img/devteam_pavia2.jpg


thanks
Saifi.

Hi all:

Accel Partners and Erasmic Venture Fund Team Up, Launch Accel
India Venture Fund.

Accel India Venture Fund will seek to work with India's best
entrepreneurs from the very earliest stages of the new venture
creation process.

This will include "seed-stage" investing as well as investments
in growing companies that have already begun their operations.

In all cases, the Accel India Venture team will provide
  . extensive company-development assistance and
  . strategic support well beyond its cash investment.

The Fund will pursue a multi-sector strategy, targeting
opportunities in:
  . Technology
  . Technology-enabled Services
  . Internet
  . Mobile,
  . Media
  . Life Sciences
  . Consumer Products and Services
  . and other high-growth sectors of the Indian economy.

Take a look at http://www.accel.com/


thanks
Saifi.

Hi:

Mr. Cyrus Driver, MD of Mumbai based PE fund, has written an
interesting article on VCCircle about '2009 Will be year of
buyouts in India".

Take a look at
http://www.vccircle.com/columns/2009-will-be-a-year-of-buyouts-in-india

He closes the article on a omnious note:
"2008 was not India's worst year. 2009 will be !"

My question is: with the consumer spending falling down, where
does that leave software startups in the retail and analytics space ?



thanks
Saifi.

Hi all:

Roger Burkhardt is president and CEO of Ingres.
A look at a few 2009 open source market predictions that he
believes will re-shape the software market in the coming year.

1. As the economy worsens, adoption of open source software
    will increase .

2. Open source adoption will accelerate across the full
    infrastructure software stack and into applications.

3. SaaS and cloud computing solutions will grow and pull
    open source with it.

4. Mergers and acquisitions of open source vendors
    will continue.

5. Competition from open source will drive proprietary software
    vendors to take the first steps in changing their business
    models.

6. Open source stacks will emerge from strong market
    partnerships.

7. Systems integrators will guarantee first-year cost savings
    for migrations to open source.


Read the entire blog at
http://www.ddj.com/linux-open-source/212700284


thanks
Saifi.

Hi all:

TechCrunch.com has a site with trends and information on
Layoffs. Take a look at
http://www.techcrunch.com/layoffs/

Offcourse, the other community powered site is at
http://layoffblog.com/

That brings us to the latest buzzword "Forced entrepreneurship"

Check out Alok Mittal's post at
http://www.venturewoods.org/index.php/2009/01/21/state-of-innovation-perspective\
s/


thanks
Saifi.