I visited Geni.com on their invitation yesterday.

The first time I come across Geni was on Techcrunch when it amazed everyone with a US$100M for a 7-weeks old company. They are founded by a bunch of ex-Paypal and eBay employees.

I finally got around playing with their tool and I have to say I am pretty amazed at what they did. They are quite proud in what they have, and is not shy to say they have a web “a grandmother can use”. And it is probably true.

But of course, the cool AJAX interface/usability is only part of the puzzle. What is more important is whether the social network is actually useful. And they seem to have the answer:

1. Genealogy, according to them, is one of a popular hobby in US. I can imaging that is kind of hobby one would take up when you grow older and from our conversation, thats seem true.

On the other hand, they admitted that most of their family trees are currently started by younger generation. This is going to be challenging to them to market to the right market segment.

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Just checked into Westin Bonaventure Hotel in LA.

I like to meet the genius who put the ethernet connector on the table far away from any wall power plug.

And United Airs tried to charge me US$191 to make a slight change (30mins earlier flight) for a US$204.80 ticket. Good Lord!

Almost done packing my luggage and preparing to leave for LA. The last week was really busy for me as I was running around doing errands, meeting people, and making sure things still go on while I am away.

Speaking of errands, I bought a NAS 500Gb MyBook yesterday. A minute after it is booted up, I got SSHD running (courtesy of Martin Hinner). I tested compiling some stuff on it and the CPU is really slow. But on the other hand, I have a shell :-) I will play with it more when I am back.

Oh and wave to Michael Everson who just fly in yesterday. He is in Indonesia the last couple of days doing some Javanese scripts and now in Singapore with Uli Kozok working on another Indonesian script. We have wonderful sashima dinner yesterday and man, I am still full from last night.

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Who say subprime credit woes cannot be fun :-)

I think we all looked the other way though. What the hell was I doing buying an N95? Great phone. I love(d) it. But it’s not actually very difficult from a bog standard mp3 enabled, photo enabled Nokia 6000 series from, say, 3or 4 years ago. The picture quality is better. There’s more memory, sure. There are one or two more features…….. but it’s been lazy. Hugely lazy. Let’s stick a better camera on it and shove it out the door. Let’s add GPS even though, let’s be clear, it’s a bit shit. 3 minutes to lock on a signal? Well, screw it, at least we can put ‘GPS’ on the feature list, right? Ahh let’s add 20 meg more data. Let’s put 90mb ‘on board’. 90 meg? I mean, I can buy a gig memory stick about an inch long for a tenner. Why hasn’t my N95 got a gig in it? 2 gig? 10 gig? It’s ok vomitting the devices out nowish… but what about LAST YEAR? What about 2005? What about INNOVATION? And why hasn’t someone admitted music sucks on Nokia and sorted it? I’m focusing on the music as an example, but really, the whole platform is to be found wanting. Whether you’re talking Sony Ericsson, Samsung, whatever. It’s all placed mediocre as a result of the arrival of the iPhone.

Great article why N95 isn’t that much different from N80.

– http://www.smstextnews.com/ (source)

With just an idea and no track record to speak of, it is not easy to value a startup at the idea stage.

In early stage company that is still losing money, a common method is to use discount cash flow. Briefly, project how much the company is going to worth 5 years later assuming it is established and stable, then calculate the net presence value with a huge discount.

How big is the discount? 20 to 50 times.

Why so high? Well, if you invest in 100 startup companies, how many do you think will succeed? 1 in 50? 1 in 100? 1 in 1000? The answer is closer to 1 in 1000 but if you are good, say 1 in 50, that means 49 of your 50 startups will die. The one that made it must be able to cover for all your investments including the 49 dead ones. Thus, minimum 50 times returns. Thats just how the investing business works at this stage.*

But even so, using this method won’t work for a brand new startup at the idea stage because there is no track record to do any projections. At best, it is a guess of what might happen – and chances are that what you expect is going to be very different from what you get when you finally get to executing your idea. So even though it looks nice in excel, it is just that – an excel spreadsheet, nothing more.

So we are still back to the problem how to value a startup with no track record. There is no right answer and your guess is as good as mine.

But for me, I place emphasis a lot on the team and their track record. If you are a serial entrepreneur (even if you failed before), you can expect a lot better valuation than a fresh graduate with a passion. Not to downplay the passion, but with no experience the chances you would succeed is smaller than someone else who has done it before.

At the end of the day, investing is like any business. Buying and selling, risk and reward. We want to make money for our investors and ourselves. If the numbers don’t make sense, then we cannot do the deal no matter how much we like you.

I feel quite sad because we have to pass on a few startups because of the unrealistic valuation the founders have**.

* For those who are uncomfortable with this huge discount, you might want to get investors later. The general rule of thumb is that the latter it is, the less returns the investors expect. For example, a pre-IPO round investor might only expect 50-100% return on their money.

** This problem isn’t limited to just startups. There was one particular 20+M deal that we couldn’t close because of just merely 1M gap after 6 months of negotiation.

This is a preliminary analysis of case files from 1996 to 2006, representing all known state actions directed at regulating internet content. The database can be found online at www.calibratedcoercion.wordpress.com.

http://journalism.sg/… (source)