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84 posts from April 2005
All deals have a certain life span. There is no fixed amount of time that a deal can be alive, but they can't go on forever. I am using the word "deal" to describe a potential transaction between two parties.
When two parties are discussing a potential transaction, there is a lot of work on both sides. There's the due diligence that both sides need to do on the other, there are the negotiations over price and terms, there is investigation into alternatives that should also be a part of any good transaction. And there's the anxiety over whether all of this time and effort will result in a completed transaction.
That is why there comes a time when you have to "fill or kill".
There is no hard and fast rule when the fill or kill time comes, but I generally feel that sooner is better than later. It's not a good idea to let transactions get old or cold.
For venture investments, I think three to six months of serious discussions is the most that each party should put into a deal. If it takes longer than that, there is something wrong and its time to fill or kill.
There is always the temptation to buy some more time. To do more diligence. To investigate the alternatives. To negotiate one more point. Resist all of these temptations. At some point, you need to act. To fill. Or to kill.
UPDATE: "Shivering Timbers" provided this excellent discussion of the origin of fill or kill in the comments section. Since many readers don't go past the front page, I figured I'd add an edited version to my post.
Fill or kill is a specific type of stock order used in brokerages, like market or limit orders but much less common.
An order would be marked "fill or kill" when the customer would only accept the exact number of shares specified in the order.
To my knowledge, Fill or Kill doesn't get used very often, and some online brokers don't even offer it as an option (though I'm sure their internal systems support it).
I read a bunch of things on my blog and the Internet yesterday that I didn't like but the thing that bothered me the most was this comment from Simon:
and other times you never reply to their emails ... :(
Most stuff rolls off of my back but the truth hurts. And Simon is right. I don't always reply to emails.
And while some people have figured out how to deal with that fact, I haven't. I still want to reply to every email I get that requests a reply. I am good at it, but not great. And far from perfect.
I went back over the past 24 hours. I recieved ~250 emails that got through various spam filters. About 2/3 of them were from people, the rest being subscriptions of one sort or another. So that's about 150 emails that I need to respond to.
Of those 150, about 120 are still in my inbox awaiting a reply. That's what I am up at 5am working on. And that's what I am up at 5am working on every day.
But its not enough.
And it gets worse.
I cleaned up my inbox on the way back from LA. That was just over two weeks ago. I now have 526 unanswered emails in my inbox. That is 37 emails per day that aren't getting answered.
I am not entirely sure what to do about this. I could just give up and hit the delete button and stop trying to reply to every email. At least that would be fair to everyone. But I don't want to do that. So any suggestions that people have on how to deal with this would be greatly appreciated.
The blog world is starting to produce some really interesting thought pieces.
A case in point is Seth Goldstein's five part treatise on Media Futures.
We are waiting for the finale, to be titled Arbitrage. I suspect it will be a fitting conclusion.
But the leadup is really quite brilliant and alliterative too.
Starting with Automata, Seth lays the foundation for his vision of a world of participatory media.
Then with Algorithm, Seth starts hitting his stride, laying out the essential ingredients for his vision.
In API, we get to the glue that stitches the vision together.
And in the truly "must read" Alchemy, we understand that this new world is fundamentally differnet and building companies in it requires a new apprpoach. I must share with you this Pierre Omidyar quote from Alchemy because it says it so well.
So people often say to me - "when you built the system, you must have known that making it self-sustainable was the only way eBay could grow to serve 40 million users a day." Well… nope. I made the system self-sustaining for one reason: Back when I launched eBay on Labor Day 1995, eBay wasn't my business - it was my hobby. I had to build a system that was self-sustaining… …Because I had a real job to go to every morning.
I was working as a software engineer from 10 to 7, and I wanted to have a life on the weekends. So I built a system that could keep working - catching complaints and capturing feedback -- even when Pam and I were out mountain-biking, and the only one home was our cat.
If I had had a blank check from a big VC, and a big staff running around - things might have gone much worse. I would have probably put together a very complex, elaborate system - something that justified all the investment. But because I had to operate on a tight budget - tight in terms of money and tight in terms of time - necessity focused me on simplicity: So I built a system simple enough to sustain itself.
Seth leaves us in the hands of market speculators at the end of Alchemy and looking forward to how his vision reveals itself in a world of Arbitrage. I can't wait to read it.
One of the best things about blogging is getting to meet new people.
I've been doing a lot of that lately. People email me and introduce themselves.
Sometimes it develops into an email dialog, sometimes a phone conversation, and sometimes a meeting.
Last week I met with Rags Gupta, someone I'd met through blogging and a shared interest in technology, digital media, and music.
It turns out that Rags favorite all time band is Luna and when we met he came with a Luna sampler CD that he'd made for me. What a nice treat. I've always loved mixed tapes, playlists, CD samplers, etc.
Although we have a number of Luna records, one that we don't have is Penthouse.
There is a great track on the Penthouse record, courtesy of Rags' CD sampler, called Lost In Space.
And so because I like Rags, his CD, and this song, I am making it my MP3 of the week.
Here in NYC, Rudy Guiliani is a hero because he got crime under control through a combination of increases in police on the street and computer driven policing strategies. During his tenure as Mayor, from 1994 to 2002, crime rates in the city dropped by a huge amount leading to improved quality of life and an economic rebound.
Now Steven Levitt, a professor of economics at the University of Chicago, has put forth a new theory on this massive reduction in crime that NYC and the rest of urban america has experienced in the past 10 years.
Levitt has done extensive research on the link between the legalization of abortion and the sweeping reduction in crime rates in urban america 15 to 20 years later. Levitt's research suggests a statisticly significant link between the legalization of abortion and the subsequent reduction in urban crime rates.
On the surface, this explanation makes so much sense that I have to wonder why nobody posited it until now. Unwanted, unloved, and uncared for children are so much more likely to turn to a life of crime than wanted, loved, and cared for children. And like it or not, legalized abortion has resulted in a lot less unwanted children over the past 20 years.
Clearly more research is needed to substantiate this link. But my gut says there is something to this analysis.
And I don't think the answer is to make abortion more prevalent in our society. But clearly criminalizing abortion isn't the answer either. I think we need to understand that unwanted children are not good for our society and we need a rational (ie secular) debate on this issue that leads to pragamatic solutions to the issue of unwanted children.
Real Networks is planning a big event on April 26th in NYC. I can just imagine Rob Glaser standing up and doing his best Steve Jobs impersonation, holding up some new invention that will jumpstart his "groundbreaking initiative in digital music."
I hope he holds up a Rhapod.
What’s a Rhapod?
It’s an iPod that works with Rhapsody, the best online service in the digital music world.
I can get almost anything I want on Rhapsody. There are a few holdouts, but not many.
Generally, I’ll hear about some band or remember a record that I love listening to, type it into Rhapsody and viola, I am listening to it.
But that’s only when I am on my laptop.
I want Rhapspody in my iPod, in my car, and on my stereo.
That’s where the Rhapod comes in.
As we all know, with all the great accessories that have been made for the iPod, you can use the iPod to play music wherever you are.
I want Rhapsody to work just like that.
So, here is what a Rhapod needs to do:
- It needs to be able to synch with any of the music that is on Rhapsody. If I can listen to it on my laptop, I can synch it my Rhapod.
- It needs to have wifi built in. If I am in Starbucks, it should allow me to listen and synch to music that isn’t currently on the Rhapod
- It needs to integrate into my car radio. Ideally, it would have a FM transmitter like the iTrip built in. 87.9 (or any other frequency you choose) becomes Rhapod radio everywhere.
- It needs to integrate into my home stereo. There should be a Rhapod connector that uses wired and wifi connections to allow me to play the Rhapod in any stereo I want.
- Rhapsody needs to include a podcasting client so that I can download my podcasts to my Rhapod no matter where I am as long as I’ve got some kind of IP connection.
That’s my dream machine. That’s the iPod killer. That’s what Real needs to announce on April 26th.
Because Apple has become (or maybe always was) a they company. They aren’t going to open up the iPod and iTunes. So Rob should. And while he’s at it, he should make the hardware spec and the software for the Rhapod open for anyone who pays Real a license to make one. Do to Apple what Microsoft did to Apple the last time.
That’s what I want to see. And if he does it, I’ll sell my Apple stock and buy some Real.