Scott Yates won a copy of Ben Casnocha’s book My Start-Up Life: What a (Very) Young CEO Learned on His Journey Through Silicon Valley with the best haiku in the contest I had last week. There are 20 of them – many great. Ben chose the winner – it’s as follows:
startups, like parents,
get heaps of good, bad advice.
which bits to ignore?
Nicely done Scott.
It’s 2007. I was ready to go for my long run at 9am. It’s 9:27am. I’ve spent the last 27 minutes trying to get iTunes on my Vista-based laptop to sync my newly downloaded podcasts properly with my Nano.
10 minutes was spent fighting with iTunes before I gave up trying to get it to find my Nano (and then trying to close / restart iTunes.) 10 minutes was spent rebooting Vista (shut down / restart / reload everything.) It’s finally now syncing properly. Yes, I’m still living the iTurd life.
The age old solution of “turning it off and turning it back on” is the solution. Egads.
Now – before you just say “switch to a Mac” – I have a whole series of things I do on a Vista box that don’t work well on a Mac, so I’m basically out of luck there also. Maybe I should have been a luddite this morning and just gone run without my iPod and my Garmen Forerunner 305. Or maybe I should just quit whining and accept that as long as this stuff is completely messed up, there’s massive opportunities for all the companies I like to invest in. “Sucking less” continues to be an effective strategy.
Is it “whither” or “wither?” I guess you’ll have to read the Onion article titled Even CEO Can’t Figure Out How RadioShack Still In Business to determine which it is (hint – both?) I’m not a daily reader of The Onion – I rely on my friend Dave (who I think reads it cover to cover – or “every page” in webspeak) to send me the ones that will make me laugh. This article is a perfect description of the anacronism that is RadioShack. (Thanks Amy, Maureen, and Dave for the editorial, grammatical, and content help.) And thanks RadioShack for all of those gold tipped cables and wide array of battery choices.
On this delicious three day weekend (I love three day weekends), what would be more fun than a new version of FeedDemon. (Ok, I can think of a couple of things, but I’m the only one awake in my house at this point.)
I’ve been a rabid FeedDemon user for several years. I’ve tried every reader combination I could think of (web and desktop) and the FeedBurner / NewsGator Online combination is the way I deal with the 800+ feeds I read daily. Nick Bradbury is an artist when it comes to crafting Windows-based software. FeedDemon is his current work of art.
While FeedDemon has a pile of new features, Nick has his top five:
#2 – the offline support – is awesome. Given all my travel I often read my feeds offline on an airplane when my brain is tired – now I get the whole feed including links and images.
Great job Nick – again. Gotta go – Amy just woke up.
In my first business, we didn’t have a line for EBITDA on our financial statement. We went straight to Net Income. We knew our cash flow from our statement of cash flows (and our bank account which we checked regularly since we were self funded.) We never talked about EBITDA, nor did we ever feel the need to come up with things like “Adjusted EBITDA.”
Now – I went to business school so I knew what an EBITDA was – I just didn’t care much about it at Feld Technologies because it didn’t matter. Cash mattered the most. Cash Flow mattered next. Net Income mattered a distant third (as long as it was positive every month – it got more important if it was ever negative, but it was still third.) The list continued. EBITDA was not on it. This was 1987 – 1993.
Earlier this week I looked at financials for a company I’m not involved in. Cash has been vanishing at an uncomfortable rate so I was asked by a friend who is involved in the company to dig into the financials to try to understand what was going on.
The first financial presentation I saw focused only on adjusted EBITDA. It was sort of defined, but not really very clearly (I didn’t know the dynamics of the elements of the adjustment well enough to have a good understanding at first glance.) Cash flow was buried in one of the back pages of the financials (and not explained in the presentation.) EBITDA wasn’t really visible; Net Income wasn’t really visible – it was all revenue and adjusted EBITDA.
Revenue was strong (it’s a good sized company – not huge – but nice growth.) Adjusted EBITDA is positive. Balance sheet cash is declining rapidly month over month. Hmmm. That doesn’t work.
I punted on the financial presentation (e.g. please don’t send me your explanation – just send me your cash flow statement, balance sheet, and income statement – by month for the last twelve months – as it comes out of your accounting system.) Easy to do – I had it quickly.
EBITDA is very negative. However, it’s still not as negative as the cash flow. This is an equipment intensive business so about 50% of the delta was “adjustments associated with customer acquisition”, 25% of the delta was capital equipment (CapEx) investments, and 25% of the delta was “other things that got rationalized as adjustments to EBITDA.”
Not only was adjusted EBITDA pointless, it completely obfuscated what was going on. However, the CFO of the company was spending all his time focusing his CEO and investors on adjusted EBITDA to explain how the business – while losing piles of cash – was really doing just fine on an operating basis “if you just didn’t count these couple of things.”
Last week the WSJ Journal has an article titled Profit as We Know It Could Be Lost With New Accounting Standards. There is a potential massive overhaul in financial reporting coming (the accountants and the AICPA will need something to do in 2008 now that everyone is finally figuring out how to deal with SOX) – you can see some before and after examples here. They are actually pretty interesting (as interesting as accounting gets – not up there with Lost or 24). However, the first step is banishing all of the “adjusted stuff” in the financials. Not helpful.
The motto for my first company was “We Suck Less.” It’s one of my favorite lines and I think it’s a valid aspiration for many tech companies since so much that’s out there sucks.
Apparently today Mel Karmazin – the CEO of Sirius – told investors at his annual meeting in response to XM that “we suck less.” Brilliant. (Thanks Bill for the link.)
I just hit my airport tipping point for 2007. I’m sitting in squalor at LaGuardia Gate B6 waiting for my Frontier flight home. I guess Spirit controls these gates and no one seems to give a shit about anything here. Everyone at LaGuardia was surly (boarding on intolerable) tonight. Maybe it’s my Boston Red Sox jacket.
From a mug found in Fred Wilson’s office.
It’s important to have a sense of humor in this business (and in every business, and in life.) The coffee was great.
Ben Casnocha’s book My Start-Up Life: What a (Very) Young CEO Learned on His Journey Through Silicon Valley is at the top of Amazon’s Movers and Shakers list today.
Daily rank of #127 (up 18,848% from yesterday as of 4pm Eastern Time.) Congrats Ben – that’s really cool. Updated – at 4pm, it was actually ranked 94 and up 29,131% from yesterday.