Nasi Lemak, Char Kway Teow, Roti Canai, Roti Telur, Satay, Fried Banana dessert, Chee Chong Fun, Mee Pok, Curry Fish-head, Rojak, Durian, Mangosteen...
I'm checking off each item as I find it in Australia, which, due to its relative proximity to South East Asia, is hammering me with food nostalgia in a big way. Obviously, it's unlikely I'll get to sample it all (and even more so once I get out from Sydney), but I obviously can't leave this country without giving it the old college try.
Saturday, January 31, 2009
Friday, January 30, 2009
Sydney (Part II)
After another breakfast at the Chinese place, we went to the Sydney Opera House for a tour. The mother of all cost over-runs, the place cost $100 million and 16 years to build, confounding the early estimate of 3 years and $4 million. The architectural community must still be cackling with glee over the profits from this amazing building. Looking at the design today, I wonder how anyone could conceive that it would be cheap. What's neat about the place is that it's got several theatres in it, ranging from small intimate theaters to the large, impersonal halls required for formal things like Opera and classical concerts.
I would have gone for one of the small shows like the complete 37 works of Shakespeare in 90 minutes, but Lisa was enchanted by the Opera space and so we signed up for the Magic Flute. Then we visited Google once again for lunch with Lea, and then the Sydney Wildlife World, which is quite a bit of a tourist trap, but I did learn about all the poisonous snakes trying to kill me while I'm hiking. You do get quite a number of simulated environments, one of which is the nocturnal exhibit that's quite enchanting.
After that, we went back to the hotel and finally had dinner at Mamak. From the Roti to the Nasi Lemak, this place is quite good. Lisa ordered the vegetarian curry, a mistake as I don't recall ever having it in Singapore.
The Opera, however, was a disappointment. This was my first Opera and I can definitely see why the art form is dying. The stories are inane, the music --- well, I'm not the world's biggest fan of Mozart but even I could tell this was not his best work. The amount of latent racism is quite astounding for a modern audience. I will not be sad when this art form is consigned into the rubbish bin of history --- I was sorry that the multi-cultural world that is Sydney couldn't find anything better to do with the $100 million building. The venue did live up to its billing in the evening though, with views of the lit up Sydney Harbour bridge and the other side of the Bay.
We got back to the hotel around midnight, and I was quite tired from the day, so we scuttled plans to visit the Zoo tomorrow in favor of a quieter day around town.
I would have gone for one of the small shows like the complete 37 works of Shakespeare in 90 minutes, but Lisa was enchanted by the Opera space and so we signed up for the Magic Flute. Then we visited Google once again for lunch with Lea, and then the Sydney Wildlife World, which is quite a bit of a tourist trap, but I did learn about all the poisonous snakes trying to kill me while I'm hiking. You do get quite a number of simulated environments, one of which is the nocturnal exhibit that's quite enchanting.
After that, we went back to the hotel and finally had dinner at Mamak. From the Roti to the Nasi Lemak, this place is quite good. Lisa ordered the vegetarian curry, a mistake as I don't recall ever having it in Singapore.
The Opera, however, was a disappointment. This was my first Opera and I can definitely see why the art form is dying. The stories are inane, the music --- well, I'm not the world's biggest fan of Mozart but even I could tell this was not his best work. The amount of latent racism is quite astounding for a modern audience. I will not be sad when this art form is consigned into the rubbish bin of history --- I was sorry that the multi-cultural world that is Sydney couldn't find anything better to do with the $100 million building. The venue did live up to its billing in the evening though, with views of the lit up Sydney Harbour bridge and the other side of the Bay.
We got back to the hotel around midnight, and I was quite tired from the day, so we scuttled plans to visit the Zoo tomorrow in favor of a quieter day around town.
Sydney (Part I)
We arrived on Wednesday the 28th at 7:40am, right on schedule. Our travel agent had cleverly booked us on a window + asile seat, leaving us with an empty seat between us on a not-completely-full flight. A shuttle dropped us off at our hotel, Holiday Inn Darling Harbour, which is nicely located next to Chinatown, granting us access to excellent breakfast food in the morning.
My first impression of Sydney is that it's an incredibly diverse city. Even more so than San Franciso or Singapore. Looking around, you'd see all types of faces --- at least to me, it looked like the city wasn't dominated by any single race, which was impressive. The way this benefits the tourist is pretty obvious --- the food is nothing short of impressive. We found a Singaporean food place called Mamak almost right away, though due to their opening schedule we never did get to eat there until Friday night. The Nasi Lemak, however, was pretty authentic and their satay is the way I remember, though the sauce was not very spicy.
The first order of business on arrival was to visit Camera Warehouse in Sydney to pick up some LP-E6s. The Canon 5D2's batteries simply could not be had for love or money in the US, but Australia seemed to have plentiful supply as I placed an order on-line to be held for pickup. We won't need the batteries right away, but expect that during the camping portion of our trip access to power sockets would be challenging to come by and having a couple of spares would help tide us over. Hoping to get our jet-lag to a minimum, we walked to the store, giving us a chance to explore the city.
We immediately discovered the best thing about being so close to asia --- savoury pies! Those are yummy if not cheap, and we immediately bought some to eat as we go. The day was warm, well into the 80s or 90s, and we had sunny weather. Once we were done with our shopping, we found our way to the centerpoint, where we did the touristy thing and rode up to the top of the tower for a view of Sydney. Following the touristy theme, we then rode the monorail for a close aerial view of the city (with the city buildings literally a foot away or so from the monorail, it definitely looked different). We then returned to the hotel for a quick nap before visiting Google to have dinner with Lea Kissner and Ben Laurie.
Thursday morning found us having breakfast at a Chinese restaurant around literally the corner. Porridge and Taro cake and Chee Chong Fun! Wonderful stuff, if a little on the expensive side. Then we walked around town as Lisa wanted to visit the Opal museum. We visited the small museum, which seemed as much devoted to selling jewelry as to showing you where Opals came from. Then on the way to Campbell's Cove Pontoon, we stopped by another store which showed us a huge cut Opal.
We were signed up for a Sea Sydney Cruise + Twilight bridge climb package. Told to pack swimming suits, we were not at all prepared to discover a motor-yatch picking us up for a cruise just for the two of us. We were then motored around the harbour, with the crew telling us about what we were seeing before being anchored off a beautiful beach, given a Kayak, and given a chance to visit the shore. I changed into swimming trunks, and upon reaching shore took a brisk swim around --- warm water is such a delight, though even in this weather it didn't take very much distance from the beach before the water cooled rapidly, though not in such a way to make swimming unpleasant. Then we were served a late lunch on the boat and then finished up the cruise. Lisa loved the cruise and wouldn't stop talking about it for days.
All throughout this time we saw the bridge with people climbing it. With all the safety gear we were told to put on, we expected it to be steep or at least physically challenging, but it turned out that the top section of half dome was quite a bit more challenging, and we needed less safety equipment for that! What a tourist trap. Nevertheless, the views of Sydney was great, and we got up there at exactly the right time for a gorgeous sunset.
My first impression of Sydney is that it's an incredibly diverse city. Even more so than San Franciso or Singapore. Looking around, you'd see all types of faces --- at least to me, it looked like the city wasn't dominated by any single race, which was impressive. The way this benefits the tourist is pretty obvious --- the food is nothing short of impressive. We found a Singaporean food place called Mamak almost right away, though due to their opening schedule we never did get to eat there until Friday night. The Nasi Lemak, however, was pretty authentic and their satay is the way I remember, though the sauce was not very spicy.
The first order of business on arrival was to visit Camera Warehouse in Sydney to pick up some LP-E6s. The Canon 5D2's batteries simply could not be had for love or money in the US, but Australia seemed to have plentiful supply as I placed an order on-line to be held for pickup. We won't need the batteries right away, but expect that during the camping portion of our trip access to power sockets would be challenging to come by and having a couple of spares would help tide us over. Hoping to get our jet-lag to a minimum, we walked to the store, giving us a chance to explore the city.
We immediately discovered the best thing about being so close to asia --- savoury pies! Those are yummy if not cheap, and we immediately bought some to eat as we go. The day was warm, well into the 80s or 90s, and we had sunny weather. Once we were done with our shopping, we found our way to the centerpoint, where we did the touristy thing and rode up to the top of the tower for a view of Sydney. Following the touristy theme, we then rode the monorail for a close aerial view of the city (with the city buildings literally a foot away or so from the monorail, it definitely looked different). We then returned to the hotel for a quick nap before visiting Google to have dinner with Lea Kissner and Ben Laurie.
Thursday morning found us having breakfast at a Chinese restaurant around literally the corner. Porridge and Taro cake and Chee Chong Fun! Wonderful stuff, if a little on the expensive side. Then we walked around town as Lisa wanted to visit the Opal museum. We visited the small museum, which seemed as much devoted to selling jewelry as to showing you where Opals came from. Then on the way to Campbell's Cove Pontoon, we stopped by another store which showed us a huge cut Opal.
We were signed up for a Sea Sydney Cruise + Twilight bridge climb package. Told to pack swimming suits, we were not at all prepared to discover a motor-yatch picking us up for a cruise just for the two of us. We were then motored around the harbour, with the crew telling us about what we were seeing before being anchored off a beautiful beach, given a Kayak, and given a chance to visit the shore. I changed into swimming trunks, and upon reaching shore took a brisk swim around --- warm water is such a delight, though even in this weather it didn't take very much distance from the beach before the water cooled rapidly, though not in such a way to make swimming unpleasant. Then we were served a late lunch on the boat and then finished up the cruise. Lisa loved the cruise and wouldn't stop talking about it for days.
All throughout this time we saw the bridge with people climbing it. With all the safety gear we were told to put on, we expected it to be steep or at least physically challenging, but it turned out that the top section of half dome was quite a bit more challenging, and we needed less safety equipment for that! What a tourist trap. Nevertheless, the views of Sydney was great, and we got up there at exactly the right time for a gorgeous sunset.
Thursday, January 29, 2009
Review: FDR
Franklin Roosevelt secured my position as a know it all when I was in Singapore. On the first day of my general paper class, the instructor asked if anyone knew who Franklin D. Roosevelt was. I raised my hand for the second time in the class, and the instructor said, "You know everything, don't you?" The irony of course, was that I learned who Roosevelt was by reading The Dark Knight Returns, a comic book that my instructor would never approved off.
Well, I've finally gotten around to reading about Roosevelt in a way my GP teacher would have wanted. Apparently, this is the same book Obama (kindle edition)read while running for the office, and it is extremely readable. The book starts off slowly, with a description of Roosevelt's ancestry --- it is quite obvious that Roosevelt was born into a position of privilege, wealthy and quite used to it. His mother, Sara Roosevelt, was a matriach who was very close to him and
provided quite a bit of financial support throughout his political career.
The book covers quite a bit of personal detail about Roosevelt, details that apparently most of the public never had access to, and would have made Roosevelt unelectable. For instance, the relationship between Eleanor Roosevelt and Franklin Roosevelt was rather testy after Franklin Roosevelt had an affair with someone --- he had to be persuaded to stay in the marriage for the sake of his political career. Imagine that being something that could be covered up! Interestingly enough, Eleanor takes her revenge by hiring the worst possible chef for the White House.
Jean Edward Smith brings to his biography an objective view of the president. There's not any hero-worshipping, and the president gets his comeuppance frequently and often, especially at the start of his second term. We do get a good view about the creation of social security, FDIC insurance, and the running of World War II. What he
doesn't do is to deal with all the myths and misconceptions that many consipiracy theorists have come up with over the years about Roosevelt and the presidency. We do get an idea of why many in later years have called Roosevelt the traitor to his class, and I don't think Jean Edward Smith gives quite enough historical context for the casual non-US reader to understand what forces were in play during the great
depression. Then again, Smith is a historian and not an economist, so that failing is not particularly surprising.
What comes through, however, is the character of Franklin Roosevelt. This is a man who survives Polio, goes on to lead a country in a dramatic fashion out of the depression, and then proceeds to help fight World War II. That he won as many terms as he did is not surprising --- and given how dramatically he started his presidency, I can see why supporters of Obama who expected him to be the second coming of FDR are bound to be disappointed.
This book is recommended as an easily digested, objective biography of FDR. For historical analysis and context, look elsewhere.
Well, I've finally gotten around to reading about Roosevelt in a way my GP teacher would have wanted. Apparently, this is the same book Obama (kindle edition)read while running for the office, and it is extremely readable. The book starts off slowly, with a description of Roosevelt's ancestry --- it is quite obvious that Roosevelt was born into a position of privilege, wealthy and quite used to it. His mother, Sara Roosevelt, was a matriach who was very close to him and
provided quite a bit of financial support throughout his political career.
The book covers quite a bit of personal detail about Roosevelt, details that apparently most of the public never had access to, and would have made Roosevelt unelectable. For instance, the relationship between Eleanor Roosevelt and Franklin Roosevelt was rather testy after Franklin Roosevelt had an affair with someone --- he had to be persuaded to stay in the marriage for the sake of his political career. Imagine that being something that could be covered up! Interestingly enough, Eleanor takes her revenge by hiring the worst possible chef for the White House.
Jean Edward Smith brings to his biography an objective view of the president. There's not any hero-worshipping, and the president gets his comeuppance frequently and often, especially at the start of his second term. We do get a good view about the creation of social security, FDIC insurance, and the running of World War II. What he
doesn't do is to deal with all the myths and misconceptions that many consipiracy theorists have come up with over the years about Roosevelt and the presidency. We do get an idea of why many in later years have called Roosevelt the traitor to his class, and I don't think Jean Edward Smith gives quite enough historical context for the casual non-US reader to understand what forces were in play during the great
depression. Then again, Smith is a historian and not an economist, so that failing is not particularly surprising.
What comes through, however, is the character of Franklin Roosevelt. This is a man who survives Polio, goes on to lead a country in a dramatic fashion out of the depression, and then proceeds to help fight World War II. That he won as many terms as he did is not surprising --- and given how dramatically he started his presidency, I can see why supporters of Obama who expected him to be the second coming of FDR are bound to be disappointed.
This book is recommended as an easily digested, objective biography of FDR. For historical analysis and context, look elsewhere.
Sunday, January 25, 2009
Why the tech pundits got the Kindle wrong
A friend of my brother's recently asked me to get a Kindle for him. (Why? Because by tying the Kindle to my account, he got access to the well over 40 books in my Kindle library --- tying your Kindle to somebody more voracious a reader than you are means that you get back your $359 buy right away in content)
If you read reviews written when the Kindle first came out, you'll consider the device a failure. Those big buttons are too easy to press (leading to accidental page turns), and that keyboard gets in the way. Why buy an expensive device to read a book? A look over at Amazon's Kindle Forum, however, shows you why the Kindle is still sold out: the 20-something and 30-something tech pundits who are usually the tech industry's early adopters, aren't the early adopters this time. It's their 55-year to 75-year tech-phobic grandparents who are buying!
It turns out that two big things happen as you get older --- you start to lose your eye-sight (the world literally becomes a darker place), and you tend to get arthritis. If you look at the Kindle, it looks almost purpose designed to help you work around that. The easy-to-tweak font-sizes means that you can change the font sizes whenever you want and turn any book into a large-print edition. The big buttons means that even if you're arthritic or have some other disability, you can hit that button with your elbow, a pen held in your mouth, or your shaking hands.
It also turns out (by no coincidence) that the larger number of enthusiastic readers in this country are the older ones. So the fact that Amazon's still showing a 4-6 week delivery time means that they (unlike the tech pundits) really hit their target audience squarely, while Sony has again stumbled in their assessment as to what the market wants.
If you read reviews written when the Kindle first came out, you'll consider the device a failure. Those big buttons are too easy to press (leading to accidental page turns), and that keyboard gets in the way. Why buy an expensive device to read a book? A look over at Amazon's Kindle Forum, however, shows you why the Kindle is still sold out: the 20-something and 30-something tech pundits who are usually the tech industry's early adopters, aren't the early adopters this time. It's their 55-year to 75-year tech-phobic grandparents who are buying!
It turns out that two big things happen as you get older --- you start to lose your eye-sight (the world literally becomes a darker place), and you tend to get arthritis. If you look at the Kindle, it looks almost purpose designed to help you work around that. The easy-to-tweak font-sizes means that you can change the font sizes whenever you want and turn any book into a large-print edition. The big buttons means that even if you're arthritic or have some other disability, you can hit that button with your elbow, a pen held in your mouth, or your shaking hands.
It also turns out (by no coincidence) that the larger number of enthusiastic readers in this country are the older ones. So the fact that Amazon's still showing a 4-6 week delivery time means that they (unlike the tech pundits) really hit their target audience squarely, while Sony has again stumbled in their assessment as to what the market wants.
Going to Australia for 2 months
We're going to Australia for 2 months. Here's what our itinerary looks like:
Jan 28th: Sydney
Feb 1st: Blue Mountains
Feb 4: Cairns
Feb 11: Melbourne
Feb 14: Tasmania & the Overland trail
Feb 28: Melbourne to Adelaide via camper van
Mar 7: Perth (independent touring with camper van)
Mar 18: Ayer's Rock, Alice Springs, etc.
Mar 25: Back to California
I don't expect to be able to keep this blog updated except sporadically, but it is a vacation!
Jan 28th: Sydney
Feb 1st: Blue Mountains
Feb 4: Cairns
Feb 11: Melbourne
Feb 14: Tasmania & the Overland trail
Feb 28: Melbourne to Adelaide via camper van
Mar 7: Perth (independent touring with camper van)
Mar 18: Ayer's Rock, Alice Springs, etc.
Mar 25: Back to California
I don't expect to be able to keep this blog updated except sporadically, but it is a vacation!
Saturday, January 24, 2009
Should a startup take outside investor money?
Dewitt asked several questions over at friendfeed which I thought were interesting, and worth writing about. The big one is when should a venture take on outside investors?
My feeling is that if you can fund a startup all by yourself, bring it to profitability, and own the business free and clear, there's no reason to bring in venture or outside investors. Once you take in that money you now have an obligation to grow fast and reward the investors with capital gains. If you own the business free and clear you can grow organically, and go for long term profitability. Gary Erickson's Raising the Bar covers this approach very well. Other examples are Perforce Software, a profitable company that's done very well over the years --- it will never be a Google, but you don't have to build a Google in order to make yourself very wealthy, and a low risk approach like Perforce's is very profitable for its owners.
The reason to take outside investors is that you need a ton of capital so you can move quickly. Why would you need to move quickly? The first reason is that the market has low technical barriers to entry. That means that as soon as you launch, your competitors will realize what you're doing and you'd better be growing fast in order to dominate the market before they can enter. This fits in very well with the VC model, since they want you to grow as quickly as you can as well (that ten year horizon on the VC fund is relentless!). Let me illustrate with two well-known examples.
When Reed Hastings started Pure Software, he worked in his basement for two years on the first product, Purify. He only hired an employee after he had something working on Sun workstations (he hired someone to port it to the MIPS processor). He then took out a second mortgage on his home, hired salespeople, and launched the company. The company was profitable within 3 months. He could take 2 years to build product because at that time, purify was such an off-the-wall idea that he could rely on nobody else building it with a bigger team. Pure Software eventually took VC money because Reed wanted to grow it fast, but the whole thing ended badly for the company, because Pure really fell into the Perforce model --- development tools are inherently an organic growth market and can't be forced.
When it came to Netflix, there was no way Reed could have funded it all himself without taking a lot of risk. Building a huge video library is expensive, and building the website for Netflix is not a significant technical barrier --- Blockbuster and Hollywood Video could have done it if they had realized what Netflix was doing. This was a natural fit with the VC model, and Hollywood and Blockbuster dithered enough entering the market that Netflix was dominant by the time they entered, and hence put both established companies in trouble.
My feeling is that if you can fund a startup all by yourself, bring it to profitability, and own the business free and clear, there's no reason to bring in venture or outside investors. Once you take in that money you now have an obligation to grow fast and reward the investors with capital gains. If you own the business free and clear you can grow organically, and go for long term profitability. Gary Erickson's Raising the Bar covers this approach very well. Other examples are Perforce Software, a profitable company that's done very well over the years --- it will never be a Google, but you don't have to build a Google in order to make yourself very wealthy, and a low risk approach like Perforce's is very profitable for its owners.
The reason to take outside investors is that you need a ton of capital so you can move quickly. Why would you need to move quickly? The first reason is that the market has low technical barriers to entry. That means that as soon as you launch, your competitors will realize what you're doing and you'd better be growing fast in order to dominate the market before they can enter. This fits in very well with the VC model, since they want you to grow as quickly as you can as well (that ten year horizon on the VC fund is relentless!). Let me illustrate with two well-known examples.
When Reed Hastings started Pure Software, he worked in his basement for two years on the first product, Purify. He only hired an employee after he had something working on Sun workstations (he hired someone to port it to the MIPS processor). He then took out a second mortgage on his home, hired salespeople, and launched the company. The company was profitable within 3 months. He could take 2 years to build product because at that time, purify was such an off-the-wall idea that he could rely on nobody else building it with a bigger team. Pure Software eventually took VC money because Reed wanted to grow it fast, but the whole thing ended badly for the company, because Pure really fell into the Perforce model --- development tools are inherently an organic growth market and can't be forced.
When it came to Netflix, there was no way Reed could have funded it all himself without taking a lot of risk. Building a huge video library is expensive, and building the website for Netflix is not a significant technical barrier --- Blockbuster and Hollywood Video could have done it if they had realized what Netflix was doing. This was a natural fit with the VC model, and Hollywood and Blockbuster dithered enough entering the market that Netflix was dominant by the time they entered, and hence put both established companies in trouble.
Angel Investing
I was recently involved in the second round of angel investing for Doyenz. Until I started doing it, I didn't know how the process worked, so I think it's interesting to talk about it.
The first part, obviously, is the selection of the firm to invest in. Unlike public companies where you're unlikely to get a chance to talk to the CEO or board of directors, an angel investor can expect to talk to the founders and probe them. During the first round last year, that was all we had. Many people have the image of Andy Bechtolsheim sitting on the front porch of his house writing out a check to Larry and Sergey after a demo, and in fact, if you have as much money as he does, and investing in the middle of the dot com bubble, that's probably the right thing to do. The truth is, though that the combination of a smart team with good business sense and ability to execute comes really rarely. Last year, Roberto and I went with a bunch of Googlers and ex-Googlers to Y-combinator HQ, and sat through about 5 or 6 startup presentations. It's worth your time to do so to get a feel for what the Silicon Valley startup vibe is (my opinion: it's surprisingly fashion driven, showing that even geeks like to look cool).
You have to evaluate the business plan with ruthlessness --- take into account how difficult the competition will be, what the technical risks are, and whether the venture is raising enough money to accomplish what they set out to do (most startups are under-capitalized, and that in itself is a big risk). As an individual investor, I hate investing in stocks, but as an angel, you get insight into the company you'll never have otherwise, and as a technical person you have an idea of how easy or hard it would be to build the product, as well as how easy or hard it is for the major competitors to replicate what your team is doing.
Now, you might think that typically an angel investor gets in and sets the valuation of the company and then invests at a given price. That can happen and does happen, especially if it's a large lump sum of money, but it risks a mis-price of the company. It takes a fit of optimism to fund a startup, so usually the risk is on the high side. Instead, what you typically do is get a promissory note with a principal, maturity, and interest rate built in. This note would then convert into stock at the first round of a large angel investing (where the valuation is set by the lead investor --- typically the largest investor) or a venture fund stepping in to fund the company. The conversion is at a discount to the lead investor (since angels came in earlier, they get a break), at the interest rate set in the note.
There's also typically a penalty valuation built in, so that if the company doesn't get a lead investor or a VC within the time period, you get the note converted at a penalty clause. This is not something I tend to pay a lot of attention to, because if the company runs out of money at that point your note is worthless anyway. On the other hand, if the company turns out to be wildly successful and profitable (and hence has no need for a VC round), you get a great reward for having the vision to invest in the business. The chances of that happening are low as well.
All through the process, the thing to remember is that ultimately, you have to be able to trust these guys you are giving money to. If they choose to spend it all on wine and plane tickets to Mexico, what are you really going to able to do to get the money back? Hence the typical emphasis on the team, what their track record is, and whether they are people of integrity. It helps if you know the team well from a previous life as well.
The first part, obviously, is the selection of the firm to invest in. Unlike public companies where you're unlikely to get a chance to talk to the CEO or board of directors, an angel investor can expect to talk to the founders and probe them. During the first round last year, that was all we had. Many people have the image of Andy Bechtolsheim sitting on the front porch of his house writing out a check to Larry and Sergey after a demo, and in fact, if you have as much money as he does, and investing in the middle of the dot com bubble, that's probably the right thing to do. The truth is, though that the combination of a smart team with good business sense and ability to execute comes really rarely. Last year, Roberto and I went with a bunch of Googlers and ex-Googlers to Y-combinator HQ, and sat through about 5 or 6 startup presentations. It's worth your time to do so to get a feel for what the Silicon Valley startup vibe is (my opinion: it's surprisingly fashion driven, showing that even geeks like to look cool).
You have to evaluate the business plan with ruthlessness --- take into account how difficult the competition will be, what the technical risks are, and whether the venture is raising enough money to accomplish what they set out to do (most startups are under-capitalized, and that in itself is a big risk). As an individual investor, I hate investing in stocks, but as an angel, you get insight into the company you'll never have otherwise, and as a technical person you have an idea of how easy or hard it would be to build the product, as well as how easy or hard it is for the major competitors to replicate what your team is doing.
Now, you might think that typically an angel investor gets in and sets the valuation of the company and then invests at a given price. That can happen and does happen, especially if it's a large lump sum of money, but it risks a mis-price of the company. It takes a fit of optimism to fund a startup, so usually the risk is on the high side. Instead, what you typically do is get a promissory note with a principal, maturity, and interest rate built in. This note would then convert into stock at the first round of a large angel investing (where the valuation is set by the lead investor --- typically the largest investor) or a venture fund stepping in to fund the company. The conversion is at a discount to the lead investor (since angels came in earlier, they get a break), at the interest rate set in the note.
There's also typically a penalty valuation built in, so that if the company doesn't get a lead investor or a VC within the time period, you get the note converted at a penalty clause. This is not something I tend to pay a lot of attention to, because if the company runs out of money at that point your note is worthless anyway. On the other hand, if the company turns out to be wildly successful and profitable (and hence has no need for a VC round), you get a great reward for having the vision to invest in the business. The chances of that happening are low as well.
All through the process, the thing to remember is that ultimately, you have to be able to trust these guys you are giving money to. If they choose to spend it all on wine and plane tickets to Mexico, what are you really going to able to do to get the money back? Hence the typical emphasis on the team, what their track record is, and whether they are people of integrity. It helps if you know the team well from a previous life as well.
Thursday, January 22, 2009
Review: The Best of Michael Swanwick
Michael Swanwick has been a prolific writer of short stories, and this collection (DRM-free kindle compatible edition)puts together all of his award winning short stories and novellas, as well as some other significant works, such as his first two published short stories, which still read as fresh today as when they were written.
What surprised me is how little science fiction there actually was in this collection, despite my thinking of Swanwick as being mostly a science fiction writer. Perhaps that's because Griffin's Egg and Wild Minds stuck in my mind quite a bit more than the others that I had read.
There seems to be quite a bit of obsession with death as a theme, with it showing up in Mother Grasshopper and Radio Waves. Quite a number of stories have mature themes, so if you're the kind of person who believes that children should stay innocent, this is not a book to hand off to your 9 year old (and especially not your friend's 9 year old, lest you be charged with corrupting the youth).
I checked this book out from the library, and I think it might have been a mistake --- these stories absolutely cannot be rushed through, and they all bear reading more than once. I guess I can always buy the electronic edition for a second read through.
Recommended, and definitely not a book to rush through --- take a break between each story --- they are so rich that like food, you cannot take too much at once.
What surprised me is how little science fiction there actually was in this collection, despite my thinking of Swanwick as being mostly a science fiction writer. Perhaps that's because Griffin's Egg and Wild Minds stuck in my mind quite a bit more than the others that I had read.
There seems to be quite a bit of obsession with death as a theme, with it showing up in Mother Grasshopper and Radio Waves. Quite a number of stories have mature themes, so if you're the kind of person who believes that children should stay innocent, this is not a book to hand off to your 9 year old (and especially not your friend's 9 year old, lest you be charged with corrupting the youth).
I checked this book out from the library, and I think it might have been a mistake --- these stories absolutely cannot be rushed through, and they all bear reading more than once. I guess I can always buy the electronic edition for a second read through.
Recommended, and definitely not a book to rush through --- take a break between each story --- they are so rich that like food, you cannot take too much at once.
Wednesday, January 21, 2009
Tax Resources, Inc without Turbotax
For the first time in 15 years I won't be doing my own taxes for the previous tax year (2008). The reason is that last year's international assignment was long enough that I'll have to file taxes in both Germany and in the US, so my employee is going to take care of that for me. This is great, though as a paranoid guy, I'll probably be doing the taxes myself as well to double check what they do.
My biggest concern was with tax audit protection. I was handed a policy that included ambiguous statements about whether or not I would get support for dealing with the IRS. Given that I've received an IRS notice every year since 2004, I figured I'd take ambiguity out of the equation and suck it up and pay TaxResources, Inc anyway.
So I called them, and asked for a renewal. Because I was a turbo-tax filer, I got transferred to a different department. After I got to an agent, I asked if I could be covered despite not using turbo-tax. It turned out that I could be, just at a higher price, $50, rather than $35. Since even the retail package would be worth the $300/year that they charge (one of my friend uses a tax accountant, and according to him it cost him $200 per letter his accountant had to write to the IRS), I just signed up. I don't know whether you can only get this deal if you were a previous year customer, however.
In any case, that's how you get covered if you're not using Turbo Tax to file this year. And yes, every year since I've been using them, they have dealt with the IRS for me, and especially when I was in Munich, where it would have been hard for me to deal with the letters in time, it was a relief to hand it of to professional, competent people to deal with. If you're an expatriate with a company that has a tax audit policy like mine, you are encouraged to pay for whatever protection you need that has you covered.
My biggest concern was with tax audit protection. I was handed a policy that included ambiguous statements about whether or not I would get support for dealing with the IRS. Given that I've received an IRS notice every year since 2004, I figured I'd take ambiguity out of the equation and suck it up and pay TaxResources, Inc anyway.
So I called them, and asked for a renewal. Because I was a turbo-tax filer, I got transferred to a different department. After I got to an agent, I asked if I could be covered despite not using turbo-tax. It turned out that I could be, just at a higher price, $50, rather than $35. Since even the retail package would be worth the $300/year that they charge (one of my friend uses a tax accountant, and according to him it cost him $200 per letter his accountant had to write to the IRS), I just signed up. I don't know whether you can only get this deal if you were a previous year customer, however.
In any case, that's how you get covered if you're not using Turbo Tax to file this year. And yes, every year since I've been using them, they have dealt with the IRS for me, and especially when I was in Munich, where it would have been hard for me to deal with the letters in time, it was a relief to hand it of to professional, competent people to deal with. If you're an expatriate with a company that has a tax audit policy like mine, you are encouraged to pay for whatever protection you need that has you covered.
Tuesday, January 20, 2009
How I deal with Sleep Apnea and Cycling, Backpacking, and Sailing
As an active backpacker, cyclist and sailor, I refused to let my need for a CPAP machine stop me from doing things I love. So when I was diagnosed with sleep apnea, I viewed the need for the machine with dismay. Since I exhibit none of the typical symptoms of someone with Sleep Apnea (I sleep well and easily, I'm alert when I wake), my friends turn out to be very happy to help carry the CPAP machine so they don't have to hear me snore! For cycling, the Puritan Bennett is a nice lightweight (1.5 pounds, with a light power supply that's no bigger than one used to charge a cell phone) machine that was a pain to carry up the mountains, but no worse than a couple of extra water bottles. Incidentally, my doctor says that an occasional night without a CPAP machine won't kill me, but giving the degree to which I snore, my cycling companions might.
I've noticed that on the web at least, there's next to no information about backpacking with CPAP machines. A lot of this is likely because amongst Westerners, apnea is associated with being fat and out of shape, hardly a precondition for a backpacking/hiking lifestyle. However, among Asians, apnea is usually associated with a small airway, and Asians don't have to be fat or out of shape to have sleep apnea.
For camping and sailing, however, you don't just need a CPAP machine, you also need to carry your power supply with you. In the case of sailboats, they have diesel engines that can power an inverter, but if you ran the diesel engine all night, your crew would be extremely unhappy with you. For camping, there's just no real solution but to carry a big honking battery. Traditional batteries sold by the traditional manufacturers weigh well over 14 pounds. That's fine for a sailboat or for car camping but is not at all acceptable on a backpacking trip!
So I did some research and found Batterygeek.net's C-222 battery which has 222 Watt Hours worth of power in a convenient 5 pound package. I used it on both the Turkey Sailing trip as well as the recent overnight from Castle Rock to Big Basin trip. In particular, on the overnight trip, I started the trip with the battery fully charged (4 bars), and after about 10 hours of use, the battery still read 4 bars at the end of it, giving me hope that the upcoming Tasmanian Overland trail (5 nights) wouldn't strain it at all. (Update: Unfortunately, in practice, the battery will only last for 1.5 nights --- it turns out the battery indicator is just useless)
To their credit, batterygeek's numbers aren't all that promising for the battery --- they promise at most 2 nights worth of use, but the GoodKnight 420E is an auto-adjusting machine, delivering only as much pressure as I need --- my apnea is highly variable, so this means that most of the night I don't need very high pressure at all, but I do occasionally spike really high.
Personally, I don't want to put a "recommended" tag on this post, since I don't recommend having Sleep Apnea (it's genetic, so I don't really have a choice). On the other hand, given that this lets me sail and go backpacking almost like a normal person, it's as good as things can get, until someone makes a fuel cell battery that runs off a few centiliters of white gas or stove alcohol and weighs only a few ounces.
(And yes, batterygeek.net also sells similar sized batteries for folks who want to run their laptops for 24 hours at a time away from power outlets)
I've noticed that on the web at least, there's next to no information about backpacking with CPAP machines. A lot of this is likely because amongst Westerners, apnea is associated with being fat and out of shape, hardly a precondition for a backpacking/hiking lifestyle. However, among Asians, apnea is usually associated with a small airway, and Asians don't have to be fat or out of shape to have sleep apnea.
For camping and sailing, however, you don't just need a CPAP machine, you also need to carry your power supply with you. In the case of sailboats, they have diesel engines that can power an inverter, but if you ran the diesel engine all night, your crew would be extremely unhappy with you. For camping, there's just no real solution but to carry a big honking battery. Traditional batteries sold by the traditional manufacturers weigh well over 14 pounds. That's fine for a sailboat or for car camping but is not at all acceptable on a backpacking trip!
So I did some research and found Batterygeek.net's C-222 battery which has 222 Watt Hours worth of power in a convenient 5 pound package. I used it on both the Turkey Sailing trip as well as the recent overnight from Castle Rock to Big Basin trip. In particular, on the overnight trip, I started the trip with the battery fully charged (4 bars), and after about 10 hours of use, the battery still read 4 bars at the end of it, giving me hope that the upcoming Tasmanian Overland trail (5 nights) wouldn't strain it at all. (Update: Unfortunately, in practice, the battery will only last for 1.5 nights --- it turns out the battery indicator is just useless)
To their credit, batterygeek's numbers aren't all that promising for the battery --- they promise at most 2 nights worth of use, but the GoodKnight 420E is an auto-adjusting machine, delivering only as much pressure as I need --- my apnea is highly variable, so this means that most of the night I don't need very high pressure at all, but I do occasionally spike really high.
Personally, I don't want to put a "recommended" tag on this post, since I don't recommend having Sleep Apnea (it's genetic, so I don't really have a choice). On the other hand, given that this lets me sail and go backpacking almost like a normal person, it's as good as things can get, until someone makes a fuel cell battery that runs off a few centiliters of white gas or stove alcohol and weighs only a few ounces.
(And yes, batterygeek.net also sells similar sized batteries for folks who want to run their laptops for 24 hours at a time away from power outlets)
Sunday, January 18, 2009
Review: Blackmark
Blackmark was drawn by Gil Kane and written by Archie Goodwin from a story told by Gil.
The art is reminiscent of drawings made in Weird Tales for Conan and the like, with strong dynamic lines, with well thought-out layout and a simple story. Unfortunately, Goodwin's writing is not really strong enough to stand next to Kane's art, and is simplistic and filled with exclamation points and declarations.
The story takes place in a post-apocalyptic world, where science is the new magic. It's not particularly coherent as a story, and one senses that Kane wanted a new Barsoom or Tarzan, and tried to build one, but didn't quite have the characterization or story chops to do it beyond revenge or violence. This is perhaps a product of the times.
Not recommended unless you're a nostalgia filled comic-book fan.
The art is reminiscent of drawings made in Weird Tales for Conan and the like, with strong dynamic lines, with well thought-out layout and a simple story. Unfortunately, Goodwin's writing is not really strong enough to stand next to Kane's art, and is simplistic and filled with exclamation points and declarations.
The story takes place in a post-apocalyptic world, where science is the new magic. It's not particularly coherent as a story, and one senses that Kane wanted a new Barsoom or Tarzan, and tried to build one, but didn't quite have the characterization or story chops to do it beyond revenge or violence. This is perhaps a product of the times.
Not recommended unless you're a nostalgia filled comic-book fan.
Windy Hill OSP
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| Windy Hill OSP |
I had never hiked from the bottom to the top of Windy Hill OSP, so this morning Dick & Donna Matthews, Cynthia Wong, Kekoa Proudfoot, and Dan Wallach joined us for a hike in the area. It was cold in the parking lot but it warmed up very very fast on Spring Ridge Trail! It probably warmed up even faster for Dan since due to a misunderstanding, he showed up at the parking lot 20 minutes late and had to run to catch us.
Since it was such a nice day, we eschewed Hamms Gulch for the descent and went with Razorback Ridge trail instead, resulting in a nice traverse of the area and beautiful shaded and cool views, which would not have been welcomed on any normal winter day.
In memoriam: Nikola Postolov
In the wake of all these recent news about health problems, I received more bad news today. Nikola Postolov, who was my intern last summer in Munich working on Gtags. Nikola did many wonderful things, including reducing the indexing time by a factor of 75% (yes, it ran 4 times faster when he was done).
Nikola had a brain seizure on January 3rd, and after a short period in coma, passed away on January 16th, apparently due to some birth anomaly. There were no symptoms (certainly not when he was working for me), and I am very shocked as we were putting him through the intern conversion process so we could (eventually) make him a full time offer at Google --- he was back in school but expected to graduate soon and either pursue graduate school or work in industry.
This is definitely a loss for me, and for computer science in general.
Nikola had a brain seizure on January 3rd, and after a short period in coma, passed away on January 16th, apparently due to some birth anomaly. There were no symptoms (certainly not when he was working for me), and I am very shocked as we were putting him through the intern conversion process so we could (eventually) make him a full time offer at Google --- he was back in school but expected to graduate soon and either pursue graduate school or work in industry.
This is definitely a loss for me, and for computer science in general.
Saturday, January 17, 2009
The Serial Angel Investor
Have you ever wondered why successful angel investors almost always invest in more startups? Having gone through the vetting process of some 10-odd startups before settling on one, it's definitely work, and good startups don't come along frequently, but I've seen some angels invest in what I considered questionable businesses (for example, I once saw a startup that could not attract any engineers get funded with about $100,000 of funding --- even during the dot com bubble, this was clearly questionable).
It turns out that there's a roll over rule, whereby the gains from a previously held small business can be put into a new small business (and startups qualify), which means that the afore-mentioned $100,000 of investment really cost about $50,000 after the tax-break is realized. Now, there are all sorts of timing rules involved, but now you know why Andy Bechtolsheim could so casually write a $100,000 check to Larry and Sergey when they demo'd Google to him. Andy has done several successful rounds of startups before, and not only did he know a good thing when he saw it, but he was getting it at 50% off because of this rule!
Now, if you joined a startup early and exercised the options early enough (before $50 million of revenue is reached), then you too can qualify for this break. Yet another reason to pre-exercise your options (or at least some of them) when you join a startup.
It turns out that there's a roll over rule, whereby the gains from a previously held small business can be put into a new small business (and startups qualify), which means that the afore-mentioned $100,000 of investment really cost about $50,000 after the tax-break is realized. Now, there are all sorts of timing rules involved, but now you know why Andy Bechtolsheim could so casually write a $100,000 check to Larry and Sergey when they demo'd Google to him. Andy has done several successful rounds of startups before, and not only did he know a good thing when he saw it, but he was getting it at 50% off because of this rule!
Now, if you joined a startup early and exercised the options early enough (before $50 million of revenue is reached), then you too can qualify for this break. Yet another reason to pre-exercise your options (or at least some of them) when you join a startup.
Up and down Highway 9
Just a 2.5 hour ride today, straight up and down 9. I've forgotten how fast descents on the tandem are. It'll take a bit to get my skills back, so I took it a bit easy. At the start of the ride, the rear tire looked a little worn, but that turned out to be an illusion. I carried a spare anyway. Gorgeous weather.
Tuesday, January 13, 2009
Stitching Software
When people ask me how Phil managed to produce this (click through, select download for the full effect):
I pointed them at Hugin.
It took Phil quite a bit of work to produce these, but now there's a really easy way for anyone to produce stitched pictures. Microsoft research has produced a free tool that allows you to simply drag and drop a series of pictures into the composite editor and let it figure out all the pinning, which pictures are in or out of the composite, and all that jazz. Best of all, it runs even on my 3 year old Mac Mini (though you want at least 2GB of RAM). It does suck up all the CPU but the machine is still pretty responsive. I played with it for about 2 hours and here are the results:
If Microsoft keeps producing software like this, everyone else in the industry should get very very scared. What annoys me is that neither Picasa nor Lightroom has this integrated into their workflow, and it should be. Click-select-stitch! In any case, this is a great tool, and is yet another reason why my Mac Mini runs XP.
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| From Rosenlaui |
I pointed them at Hugin.
It took Phil quite a bit of work to produce these, but now there's a really easy way for anyone to produce stitched pictures. Microsoft research has produced a free tool that allows you to simply drag and drop a series of pictures into the composite editor and let it figure out all the pinning, which pictures are in or out of the composite, and all that jazz. Best of all, it runs even on my 3 year old Mac Mini (though you want at least 2GB of RAM). It does suck up all the CPU but the machine is still pretty responsive. I played with it for about 2 hours and here are the results:
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| Stitched |
If Microsoft keeps producing software like this, everyone else in the industry should get very very scared. What annoys me is that neither Picasa nor Lightroom has this integrated into their workflow, and it should be. Click-select-stitch! In any case, this is a great tool, and is yet another reason why my Mac Mini runs XP.
Sunday, January 11, 2009
PG&E Trail Hike
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| PG&E Trail Hike |
With temperatures projected to be in the mid-70s, I had to schedule a hike. So Kekoa Proudfoot, Cynthia Wong, and Lea Kissner joined me at San Antonio Park at 9:00am to start up the PG&E trail. Though there was quite a bit of smog in the valley, we were quite a ways away from the smog producers and could get quite high and see the clear skies. Very sweet!
Since it was such a nice day, we tacked on the Mora loop on the way back to the car to gain more views. Note to self: clip toe nails before wearing hiking boots!
Saturday, January 10, 2009
Review: Incandescence
Greg Egan has always been one of my favorite science fiction authors, but he's not prolific --- a novel or so every 2 or 3 years is what he seems to do, though he publishes short stories quite frequently. Incandescence (DRM-free Kindle-compatible ebook) is his latest novel.
The novel takes place in the far future, in a universe where the Galaxy has been largely explored by sentient life, which has somehow built a network where digital citizens can interact with each other in virtual worlds, choose to become embodied or remain virtual, and travel as data between star systems at light-speed. The central part of the galaxy, however, is largely off-limits, held by mysterious beings known as the Aloof, though they seem to happily allow their network to be used by other beings as a short-cut across the galaxy.
When a being who has recently used this short-cut unencrypted passes on to Rakesh (the protagonist) her experience, in which the Aloof had none too subtly showed her evidence of DNA-life near the galaxy center, implicitly inviting explorations by non-Aloofs, Rakesh immediately launches an expedition to discover what kind of DNA life could live in that harsh environment.
From then on, we alternate between chapters involving Roi (who we understand to be one of those aliens) and Rakesh's pursuit of her civilization. The two civilizations eventually do meet, but the time frames involved (because of the time it takes even light to travel the distances involved) are more murky.
Rakesh's chapters are interesting, providing what Egan's view of virtual travel combined with embodiment will be like, but doesn't explore any of the other deeper issues, such as if you've been virtualized, why not produce multiple copies of yourself and then merge them eventually --- those issues have been extensively explored in Greg Egan's short stories, so perhaps he felt it would be redundant to explore them here.
Roi's chapters, however, are a mess. While I can understand Egan's desire to provide an exposition of relativity and general physics in fiction, I'm not a big fan of the way he chose to do it --- the way the enlightenment happens just seems unbelievable to me, despite his attempts to use genetic engineering as a way to explore it.
And as is usual with a lot of hard science fiction, the characters are woodenly drawn, with no development whatsoever, and there's a sense of lack of fulfillment towards the end, as the narrative strands end rather abruptly.
If you're a Greg Egan fan, this novel will likely leave you disappointed, though perhaps reminding you why he's far better known for his short stories than his novels. If you're not a Greg Egan fan, start with one of his short story collections instead. They're significantly more rewarding with less frustration --- the issues that come up in his novels just don't show themselves in his short stories.
The novel takes place in the far future, in a universe where the Galaxy has been largely explored by sentient life, which has somehow built a network where digital citizens can interact with each other in virtual worlds, choose to become embodied or remain virtual, and travel as data between star systems at light-speed. The central part of the galaxy, however, is largely off-limits, held by mysterious beings known as the Aloof, though they seem to happily allow their network to be used by other beings as a short-cut across the galaxy.
When a being who has recently used this short-cut unencrypted passes on to Rakesh (the protagonist) her experience, in which the Aloof had none too subtly showed her evidence of DNA-life near the galaxy center, implicitly inviting explorations by non-Aloofs, Rakesh immediately launches an expedition to discover what kind of DNA life could live in that harsh environment.
From then on, we alternate between chapters involving Roi (who we understand to be one of those aliens) and Rakesh's pursuit of her civilization. The two civilizations eventually do meet, but the time frames involved (because of the time it takes even light to travel the distances involved) are more murky.
Rakesh's chapters are interesting, providing what Egan's view of virtual travel combined with embodiment will be like, but doesn't explore any of the other deeper issues, such as if you've been virtualized, why not produce multiple copies of yourself and then merge them eventually --- those issues have been extensively explored in Greg Egan's short stories, so perhaps he felt it would be redundant to explore them here.
Roi's chapters, however, are a mess. While I can understand Egan's desire to provide an exposition of relativity and general physics in fiction, I'm not a big fan of the way he chose to do it --- the way the enlightenment happens just seems unbelievable to me, despite his attempts to use genetic engineering as a way to explore it.
And as is usual with a lot of hard science fiction, the characters are woodenly drawn, with no development whatsoever, and there's a sense of lack of fulfillment towards the end, as the narrative strands end rather abruptly.
If you're a Greg Egan fan, this novel will likely leave you disappointed, though perhaps reminding you why he's far better known for his short stories than his novels. If you're not a Greg Egan fan, start with one of his short story collections instead. They're significantly more rewarding with less frustration --- the issues that come up in his novels just don't show themselves in his short stories.
LDT Shoreline
The first Western Wheelers long distance training ride of the year has begun. As is our wont, Lisa & I rode to the start, did the ride to shoreline with the club, and then after lunch rode home (this time via Performance Bikes to pick up some bike shorts for Lisa and a trunk bag for the tandem). The turnout wasn't as insane as previous years (maybe with gas being so cheap nobody wants to ride a bicycle any more?), but it was such a pretty day, I could not imagine not wanting to be outside.
For Lisa & I, it was also a time to catch up with people who hadn't seen for a while.
Friday, January 09, 2009
Health is a wonderful thing...
... and we tend to take it for granted when we have it. For the last 3-4 years I've been struggling with several health issues. Considering that I ride my bike 5000 miles or so a year and take long hiking trips, most people I meet think that I'm a picture of health, and indeed, my health issues (Sleep Apnea and Osteopenia) are by and large under control --- the latter through a change of lifestyle (I used to ride over 10000 miles a year, and had to cut back), and the former with the help of some brilliant doctors, including Dr. Tracy Kuo who managed to get me to adapt well to CPAP Therapy. The alternative would have been surgery, which was too horrible for me to contemplate, though others don't seem to have the same terror of surgery that I do.
So there I was at the start of the year feeling quite good about myself overall, and in general proud of over-coming what could have been serious illnesses and still in general enjoying life, but my first week back at work, and I have lunch with one person who tells me that the reason I didn't see her around (aside from me being in Germany) was because she was on leave for chemotherapy for cancer treatment. And then today I got news that an old classmate of mine from college is also undergoing cancer treatment. Compared to that, I had no health problems, and I'm really grateful to have what I have. These are just people I know. Add that to the deaths of Tanta and OldVet, people who post on blogs I read, and it's hard not to be overwhelmed (at least a little bit) by the sense that Cancer is everywhere.
But incidences like these make me want to go travel and see the world --- who knows how long each of us really have on this planet anyway? On the political front, while I've had to hold my nose to vote for Obama last year (mostly because of his healthcare positions), if he manages to pull off his health-care plan, then all is forgiven. I don't even care what else doesn't get done. I can stand increasing inequality, and I can stand nothing getting done on global warming (something I consider the most important problem mankind has to face), but from a personal point of view, the fact that I'm un-insurable (health-wise) as an individual (as explained by my earlier post on healthcare policy) is definitely something that has made me into a single issue voter.
So there I was at the start of the year feeling quite good about myself overall, and in general proud of over-coming what could have been serious illnesses and still in general enjoying life, but my first week back at work, and I have lunch with one person who tells me that the reason I didn't see her around (aside from me being in Germany) was because she was on leave for chemotherapy for cancer treatment. And then today I got news that an old classmate of mine from college is also undergoing cancer treatment. Compared to that, I had no health problems, and I'm really grateful to have what I have. These are just people I know. Add that to the deaths of Tanta and OldVet, people who post on blogs I read, and it's hard not to be overwhelmed (at least a little bit) by the sense that Cancer is everywhere.
But incidences like these make me want to go travel and see the world --- who knows how long each of us really have on this planet anyway? On the political front, while I've had to hold my nose to vote for Obama last year (mostly because of his healthcare positions), if he manages to pull off his health-care plan, then all is forgiven. I don't even care what else doesn't get done. I can stand increasing inequality, and I can stand nothing getting done on global warming (something I consider the most important problem mankind has to face), but from a personal point of view, the fact that I'm un-insurable (health-wise) as an individual (as explained by my earlier post on healthcare policy) is definitely something that has made me into a single issue voter.
Sunday, January 04, 2009
My digital conversion (part IV)
[This is a summary of the research and thoughts I've had over the last few days]
Let's go back to basics for a minute here. Let's start with what I consider the fundamental problem of photography. Our eyes and brains together create a dynamic visual imaging system that's capable of handling the real world contrast ratios of 1000:1 or so. That's why when you're watching a sunset, the sun doesn't blow out and become a big white spot in the middle of the field of view while the flower that's in shadow in front of you becomes completely black. This magic is accomplished by your eye, which moves continuously all the time, even when you think you're keeping it still. Your brain composites all those continuous inputs and gives you an illusion of a continuous whole. In addition, it automatically does white balancing for you, so even in the tungsten lamp of your house, white still looks white. All this was done because of evolutionary pressures, though some folks (mostly men) have deficient color sensors in their eyes (I'm red-green color blind myself).
Slide film, lacking the brain behind the eyes that is your window to the world, only has a dynamic range of 5:1 (5 stops --- hence your camera's exposure meter only covers about 5 stops or so). That's why there are many days in which you'll swear you pointed your camera at a scene with a blue sky but found that while your foreground is properly exposed, the sky was white! Or the sky was blue but your foreground was a silhouette. Professional photographers have many tricks with which to attack this problem, including fill-flash, and my favorite tool, the neutral density graduated filter. The late Galen Rowell once showed me a usable photograph using 2 ND grad. filters and fill-flash, demonstrating complete control over the medium.
Color negative film is a much more forgiving medium, with a dynamic range somewhere around 8:1 (i.e., you can be off by about 2 stops and still get a usable photo). However, prints generated from the color negative film have a much worse contrast ratio than even slide film, around 4:1. This is because light has to penetrate the upper layers of the print, bounce off the white paper at the bottom, and then enter the viewer's eyes, while a slide project passes through the film just once. So even though a color negative might have a lot of information stored in it, the printer has to perform a lot of interpretation in order to get that information down onto paper. This is both a good thing and a bad thing, since that also gives the printer a lot of leeway to cover issues with the exposure or emphasize something that wasn't the intention when the exposure was made. Most photographers don't get good enough at darkroom work to be able to make the interpretation themselves, so they have to work with a good lab or printer to make the right thing happen. It is this issue that caused many museum curators to consider only black and white film to be fine art, since black and white photographers (such as Ansel Adams) could and did make their own prints from negatives.
Enter digital. When I first signed up for the Mountain Light workshop with Galen Rowell, the way to get a photograph into digital form was mostly to use color slides or negatives (slides were preferred) scan them, and then manipulate them. If you had a lot of money, drum scans would generate a 75MB image from your Fuji Velvia slide and you could then play with it digitally before getting output from a $150,000 lightjet printer.
Today, we capture photographs directly from a digital camera. If the digital camera produces JPG files directly, that's like getting a slide out of it --- the amount of manipulation you can do is limited, and your exposure had better be perfect. Everything has to be done before you press the shutter release. That means all the old techniques have to be put into play --- fill-flash, ND grad. filters, the works.
Shooting RAW, however, is like getting color negatives --- you have lots of information stored from the camera sensor, and you can be as much as two stops off on your exposure and still be able to recover highlights or shadow details in Adobe Lightroom or other RAW processor. Obviously, it's still better to get the exposure right in the first place, but forgetting to check your camera settings before pushing the shutter release is no longer going to necessarily be a complete disaster (or even waste the 50 cents per slide). In fact, Lightroom even has a graduated filter among its tools, so you can apply a graduated filter after the fact (up to 4 stops). To me, that's just amazing. Obviously, for those 10:1 dynamic range photos, you still have to pull out your ND grad. filters, but that means you can shoot in more challenging situations, and your camera just became a heck of a lot more forgiving (unfortunately, it also makes it possible for you to be a lot more sloppy!).
With the advent of High Dynamic Range imaging, it's now even possible to compose shots and put them together in Photoshop in such a way that was impossible to do with mere filters before. The digital darkroom (for me anyway), is far less toxic than the chemical darkroom, and a lot more forgiving of mistakes as well --- screw ups no longer cost you in chemicals or hours of work when the undo button is available. Storage is cheap and getting cheaper, so backups are also easy to get.
All in all, I'm excited about the possibilities of digital photography --- it's taken a long time for the industry to come out with a digital camera that made me want to part with Fuji Velvia for serious landscape work, but now that I have one, there's clearly a lot of learning for me to do!
Let's go back to basics for a minute here. Let's start with what I consider the fundamental problem of photography. Our eyes and brains together create a dynamic visual imaging system that's capable of handling the real world contrast ratios of 1000:1 or so. That's why when you're watching a sunset, the sun doesn't blow out and become a big white spot in the middle of the field of view while the flower that's in shadow in front of you becomes completely black. This magic is accomplished by your eye, which moves continuously all the time, even when you think you're keeping it still. Your brain composites all those continuous inputs and gives you an illusion of a continuous whole. In addition, it automatically does white balancing for you, so even in the tungsten lamp of your house, white still looks white. All this was done because of evolutionary pressures, though some folks (mostly men) have deficient color sensors in their eyes (I'm red-green color blind myself).
Slide film, lacking the brain behind the eyes that is your window to the world, only has a dynamic range of 5:1 (5 stops --- hence your camera's exposure meter only covers about 5 stops or so). That's why there are many days in which you'll swear you pointed your camera at a scene with a blue sky but found that while your foreground is properly exposed, the sky was white! Or the sky was blue but your foreground was a silhouette. Professional photographers have many tricks with which to attack this problem, including fill-flash, and my favorite tool, the neutral density graduated filter. The late Galen Rowell once showed me a usable photograph using 2 ND grad. filters and fill-flash, demonstrating complete control over the medium.
Color negative film is a much more forgiving medium, with a dynamic range somewhere around 8:1 (i.e., you can be off by about 2 stops and still get a usable photo). However, prints generated from the color negative film have a much worse contrast ratio than even slide film, around 4:1. This is because light has to penetrate the upper layers of the print, bounce off the white paper at the bottom, and then enter the viewer's eyes, while a slide project passes through the film just once. So even though a color negative might have a lot of information stored in it, the printer has to perform a lot of interpretation in order to get that information down onto paper. This is both a good thing and a bad thing, since that also gives the printer a lot of leeway to cover issues with the exposure or emphasize something that wasn't the intention when the exposure was made. Most photographers don't get good enough at darkroom work to be able to make the interpretation themselves, so they have to work with a good lab or printer to make the right thing happen. It is this issue that caused many museum curators to consider only black and white film to be fine art, since black and white photographers (such as Ansel Adams) could and did make their own prints from negatives.
Enter digital. When I first signed up for the Mountain Light workshop with Galen Rowell, the way to get a photograph into digital form was mostly to use color slides or negatives (slides were preferred) scan them, and then manipulate them. If you had a lot of money, drum scans would generate a 75MB image from your Fuji Velvia slide and you could then play with it digitally before getting output from a $150,000 lightjet printer.
Today, we capture photographs directly from a digital camera. If the digital camera produces JPG files directly, that's like getting a slide out of it --- the amount of manipulation you can do is limited, and your exposure had better be perfect. Everything has to be done before you press the shutter release. That means all the old techniques have to be put into play --- fill-flash, ND grad. filters, the works.
Shooting RAW, however, is like getting color negatives --- you have lots of information stored from the camera sensor, and you can be as much as two stops off on your exposure and still be able to recover highlights or shadow details in Adobe Lightroom or other RAW processor. Obviously, it's still better to get the exposure right in the first place, but forgetting to check your camera settings before pushing the shutter release is no longer going to necessarily be a complete disaster (or even waste the 50 cents per slide). In fact, Lightroom even has a graduated filter among its tools, so you can apply a graduated filter after the fact (up to 4 stops). To me, that's just amazing. Obviously, for those 10:1 dynamic range photos, you still have to pull out your ND grad. filters, but that means you can shoot in more challenging situations, and your camera just became a heck of a lot more forgiving (unfortunately, it also makes it possible for you to be a lot more sloppy!).
With the advent of High Dynamic Range imaging, it's now even possible to compose shots and put them together in Photoshop in such a way that was impossible to do with mere filters before. The digital darkroom (for me anyway), is far less toxic than the chemical darkroom, and a lot more forgiving of mistakes as well --- screw ups no longer cost you in chemicals or hours of work when the undo button is available. Storage is cheap and getting cheaper, so backups are also easy to get.
All in all, I'm excited about the possibilities of digital photography --- it's taken a long time for the industry to come out with a digital camera that made me want to part with Fuji Velvia for serious landscape work, but now that I have one, there's clearly a lot of learning for me to do!
Black Mountain Hike
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| Black Mountain Hike |
The usual parking space was full up, so we went to the new alternate parking spot, which was quite a ways away since Los Altos had re-organized all the dirt parking since the last time I had started up Rhus Ridge. The weather was clear and gorgeous --- really pretty, but we made pretty slow time since I was lugging the 5D2 and was wearing hiking boots besides (to keep them broken in after last week's trip).
Up at the top, we could see all the way to San Francisco and the ocean. What a beautiful day!
Saturday, January 03, 2009
2009 Book Reviews Index
Note: The Books of the Year for 2009 have been picked.
- Thirteen
- Incandescence
- The Best of Michael Swanwick
- Stark's War, Stark's Command, and Stark's Crusade (3 reviews in 1)
- JAG in space (4 reviews in 1)
- Daemon
- The Talisman
- The Magic of Recluce
- The Towers of Sunset
- The Magic Engineer
- The Order War
- Fight Club
- Revelation Space
- Galactic North
- Chasm City
- Redemption Ark
- Absolution Gap
- The Steerswoman
- Soon I Will Be Invincible
- The Prefect
- Relentless
- The Steel Remains
- The Graveyard Book
- The Outskirter's Secret
- Diamond Dogs, Turquoise Days
- Zima Blue and Other Stories
- Century Rain
- Pushing Ice
- The Lost Steersman
- The Language of Power
- Wireless
- House of Suns
- Mercury Falls
- The Six Directions of Space
- Transition
- Passage At Arms
- Snake Agent
- Treason
- FDR
- The Promise of Sleep
- Almost Perfect
- My Life as a Quant
- The Science of Fear
- The Age of Entanglement
- After the Software Wars
- Sex Sleep Eat Drink Dream
- Born to Run
- The Numerati
- More than you know
- The Luck Factor
- Enough
- Engineering Your Retirement
- Crazy for God
- Every Landlord's Tax Deduction Guide
- The Investor's Manifesto
- Stop Acting Rich
- Your Money & Your Brain
- How the Mighty Fall
- Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives
- Better
- Stabilizing an Unstable Economy
Review: Thirteen
One always knows what to expect from a Richard Morgan novel: sex, violence, and super-soldiers. Thirteen (kindle edition) deviates slightly from this --- there's not a huge amount of sex, and the violence is interspersed with a lot of philosophy and ruminations of human history. I like it.
The theme here is human evolution, and genetic engineering. The world is ours, set in a near future in which the US has been split into Jesusland and annex portions of the Pacific Rim and Europe. Our anti-hero protagonist, Carl Marsalis, is a genetically engineered human, called thirteen, a genetic throwback to the days when human society wasn't as feminized. Such a soldier, of course, would be remorseless and single-minded, and almost completely impossible to control. When the authorities learn that a renegade thirteen has been released, they spring Marsalis out of his current predicament and set him to find the renegade.
The milieu is portrayed as dispassionately as only a foreigner can --- while Morgan's definitely done his research, he is definitely not attached to the idea that the US is anything special (at one point, there's a comparison between modern Turkey and the current USA, which wasn't a connection I would have made). Morgan uses this world as a vehicle to explore issues such as the role of masculinity in a world where it seems that the only thing left for men to do is to propagate violence.
The pacing of this book, however, isn't picture-perfect the way Morgan's previous novels are. The story drags in the first half, and towards the end, with all the violence piled in together, feels numbing to me. There are, however, several moving scenes all interspersed in between, which provide enough of a candy to keep me going.
All in all, a good start to the year, and recommended reading. Just make sure you read Altered Carbon first if you haven't read it yet, as that is still the best Richard Morgan book to start with.
The theme here is human evolution, and genetic engineering. The world is ours, set in a near future in which the US has been split into Jesusland and annex portions of the Pacific Rim and Europe. Our anti-hero protagonist, Carl Marsalis, is a genetically engineered human, called thirteen, a genetic throwback to the days when human society wasn't as feminized. Such a soldier, of course, would be remorseless and single-minded, and almost completely impossible to control. When the authorities learn that a renegade thirteen has been released, they spring Marsalis out of his current predicament and set him to find the renegade.
The milieu is portrayed as dispassionately as only a foreigner can --- while Morgan's definitely done his research, he is definitely not attached to the idea that the US is anything special (at one point, there's a comparison between modern Turkey and the current USA, which wasn't a connection I would have made). Morgan uses this world as a vehicle to explore issues such as the role of masculinity in a world where it seems that the only thing left for men to do is to propagate violence.
The pacing of this book, however, isn't picture-perfect the way Morgan's previous novels are. The story drags in the first half, and towards the end, with all the violence piled in together, feels numbing to me. There are, however, several moving scenes all interspersed in between, which provide enough of a candy to keep me going.
All in all, a good start to the year, and recommended reading. Just make sure you read Altered Carbon first if you haven't read it yet, as that is still the best Richard Morgan book to start with.
Arastedero Loop
It was a gorgeous day for a ride, so we went for a medium-length ride in the area, with the sun out, lots and lots of cyclists were found riding around, and we spotted no less than two tandems. Lunch was in downtown Los Altos, where there was no sign of a recession --- parking lots were full, and the restaurant lines were long.
All through the ride, Miyuki Nakajima's 永遠の嘘をついてくれkept repeating in my head. If they ever make a version of Rock Band with all her songs I'll have to buy it and see if familiarity with the song makes the game any easier.
Thursday, January 01, 2009
Stock Compensation At Startups
Typically, startups offer stock options to employees (especially engineers—who can't obviously be paid through a commission). The obvious numbers involved are the number of options, the strike price, and the vesting period. The number of options and the vesting period is typically known before you take the job, but the strike price can change between when you take the job and when you start and when the options are priced. Typically, the offer letter will contain language such as, “I will recommend to the board that you receive 10,000 options to purchase company stock at the prevailing market price.” There's nothing suspicious about this—I've never heard of a company that did not live up to such promises in the offer letter.
Here are the variables in stock compensation that you should think about.
Number of Options
This is the top-line of options compensation—it represents the amount of equity you own in the company. Many people focus on the number of options they get as though the absolute number means something—it doesn't. What matters is the percentage of the company you actually own. As such, this number only means something when you also know the number of outstanding shares in the company.
To emphasize this, one of my friends joined Commerce One back before it did an IPO. She was offered 20,000 options but the company had so little revenue that at the IPO, the investment bankers reversed-split the stock, so she only had 10,000 options. 6 months after the IPO, the stock had gone to $600/share, and the board decided to split the stock 4:1, so now she had 40,000 options at $150/share. What's the difference between 10,000 options at $600/share and 40,000 options at $150 a share? Exactly nothing.
Typically, the percentage compensation goes something like this:
Table 3-1. Typical Stock Compensation
Title | Percentage of company |
VP of Engineering | 0.5% and up |
Senior Engineer and above | 0.1% and up |
Entry-level Engineer | 0.05% |
Note that these numbers are typically adjusted by the stage of the startup (and thus the amount of risk you're taking by joining the company at this stage) as well as the generosity of the founders and the board/venture capitalists involved in the company. Google, for instance, was known as being very generous to its employees with options, while Reed Hastings a few weeks after the IPO of Pure Software, Inc., told me that his big regret was not spreading more of the stock around. My advice to founders is to spread the stock around—having motivated employees participate in your success will be something you'll be extremely proud of.
Now, that percentage of the company you own is not fixed. For instance, as new investors add money to the company, the earlier employees (and investors!) get diluted, so their percentage ownership of the company goes down—this is perfectly normal, and is to be expected, so if you feel that you're not getting a fair shake in the scheme of things, please do not forget to add in a dilution factor, especially if you're early stage. A study I read once indicated that dilution in Silicon Valley is about 1% of the company per year, but for startups, that tends to change dramatically as new money comes in. If the company is successful, the valuation of the company will increase at each funding round, so the dilution is usually not a big deal. Hardware startups, however, require huge infusions of capital after the design phase is over and the company has to fund production, so in those cases a big dilution event could pre-date launching the product. This is one of many reasons why so many companies have gone to outsourcing their production, so their upfront costs are reduced. Obviously, if a company's schedule slips or customers don't show up as expected, then further rounds could be "down-rounds", so the dilution could be substantial in those cases as well.
Vesting Period
The vesting period is the time it takes for you to own all the rights to your stock-options. The Silicon Valley period is 4 years with a one year “cliff.” That means if you leave the company within a year of joining, you forfeit all rights to any options at all. After the first year, the standard is that each month another 1/36th of your options continue to vest. That means if you got 10,000 options and left the job after 3 years, you get 7500 options when you leave. Note that most option agreements tell you that you have a limited period of time after you leave to exercise those options, so if you think the company has a good chance of success, don't quit your job and forget to exercise those options. It also means that if you really hate your job after 11 months, grit your teeth and stick around for another month just in case the company turns out to be valuable.
I have occasionally heard of 5 year vesting periods (usually also with 1 year cliffs). These are usually far more common outside Silicon Valley, where the average employee isn't as savvy about stock-options. I generally advise against accepting such offers in Silicon Valley (unless, you're absolutely convinced that this company will be extremely successful—such as being profitable).
Price
The next obvious variable is the price. Since most startups are not traded publicly, this price is set by the board of directors. The board of directors takes into account several factors, including the revenue (usually meager, but can be substantial at a late stage startup), the product development cycle, partnerships that might be occurring, as well as the most important factor, employee morale.
One would think that a big factor in the price would be that of investors who put in money (usually venture capitalists, but sometimes big companies, as in the example of Microsoft investing in Facebook at a $15 billion valuation in 2007). After all, typically the lead investor at every round usually sets the valuation of the company. The reality, however, is that the internal valuation (as expressed by the stock option prices that new employees get) is usually set at 1/10th of the price that the previous lead investors got. This difference reflects the sweat equity that employees put in. There's no startup in Silicon Valley that will risk having valuable employees walk out just because they got taken to the cleaners on price—in fact, even in cases where the company did a complete reset (i.e., zeroed out early investors' equity and revalued the company at a lower price because the business model has completely changed), employees would usually get new options and are somewhat protected from such events in order to retain them. (Think that such resets almost never happen in the case of successful companies? Think again—Veritas was one such example)
Ultimately, however, price does not matter as much as the amount of equity you got, and I wouldn't sweat it too much.
Pre-Exercise Option
This is now a standard feature of Silicon Valley contracts, and if it's not in your options package you need to negotiate for it. Basically, this lets you exercise your options (even the unvested ones) at the provided strike price. This matters because of the huge difference between long term capital gains taxes and short term capital gains taxes. Short term capital gains taxes are taxed like income, leading to tax rates of up to 40% on a federal basis, and as much as 50% for Californians (where most startups are based). By contrast, long term capital gains usually gets favorable treatment—as low as 15% during the Bush tenure.
The catch is that when you buy the stock, the difference between the current market price and the price you paid is immediately taxed as income. Note that if you join a company and immediately exercise the options before the price goes up, no tax is due, so that's the best time to do it. (At an early stage startup, it might make sense to wait since you know that the stock isn't going to go up any time soon)
This is such a massive tax-break that during the dot-com bubble of 1995-2000, many folks took insane risks in order to try to get this tax-break, by pre-exercising their stock options when their company stock was at a high, and then finding themselves unable to pay the tax due immediately the next April. Again, the solution here is to exercise early, before these things become headaches, or, if you're at a risky company whose stock just did amazing levels, forget about making that extra 25% and just sell—you don't need to compound your risks.
The way the pre-exercise clause works is this—you'll buy the stock and own it like any other stock-holder. That means that if the company goes under you're out the money, just like any other investor. However, if you leave the company before the options vest, the company has a period of time (usually between 60-90 days) during which it can buy back the stock from you. (There's an apocryphal story in which a well-known company's stock administration department was so disorganized that even though an employee had only worked there for a year, the company forgot to buy back its stock so the employee got the benefit of four years of vesting for a year's worth of work!) In any case, there's an argument to be made that if you don't believe in the startup you're working for, you have no business being there, and conversely, if you do believe in the startup, then exercising the stock makes sense, as the cost of doing so is usually low.
Qualified versus non-Qualified stock options
Tax-law distinguishes between ISO (Incentive Stock Options) and NQO (Non-qualified stock options). There are minor tax differences between them, so I'll summarize them in the table below:
Table 3-2. ISO versus NQO
ISO | NQO | |
Holding Period for long term capital gains | 2 years from grant + 1 year after exercise. | 1 year after exercise |
AMT implications if exercise price lower than current stock price | Timing-based AMT—you get an AMT tax-credit | Not-timing based. All difference is taxed as income. |
One kind of option is not better than the other, since their tax-treatment is only slightly different. However, if a company used to give out ISO and recently switch to giving out NQO, then what you want to do is immediately exercise your options as quickly as you get them—it's a signal that the company is expecting a liquidity event soon, since the non-qualified options have a favorable tax-treatment for employees who are getting their options close to the IPO/buy-out date.
AMT Implications
Typically, when you exercise your stock options, if there's a difference between the strike price and the current market price, tax becomes due. In the case of ISO, all the tax due is AMT tax. This means that if your AMT tax is lower than your regular income tax, you owe nothing. Conversely, if your AMT tax for that year is higher, you pay the difference, but you get an AMT credit that you can use in future years to lower your taxes when you do sell your stock.
For NSO, there is no confusion—any difference is paid as income tax, and you get your stock cost basis set at the current market value. You do not get any AMT tax-credit because it is not considered timing-related.
Accelerated Vesting (change of control)
This is an increasingly common clause in stock options packages, but the amount by which the accelerated vesting happens varies dramatically from company to company, so it makes sense to pay attention to this clause.
Accelerated vesting is usually an executive-protection clause—it's not unusual for some members top management to lose their jobs in the case a company gets bought out, and so to ensure that they don't scuttle such deals (which are usually good for shareholders), in the event of a buy-out, their options vest at an accelerated rate ranging from 6 months to 2 years (yes, that's two free years of work vested immediately upon the buy-out—really sweet, I don't see that very frequently). Since stock option packages generally aren't any different between executives and rank-and-file, employees get the same package by default.
While I wouldn't quibble much about accelerated vesting as long as there was something, I would try to make sure that such a clause exists in the stock option agreement—if a big company you dislike immensely chooses to buy the startup, you want the option to walk out if the work environment becomes extremely unpleasant, and this is a tool to ensure that you can.
It is interesting to note that options holders and stock holders can get different treatment in the case of a buy-out, and this is generally another reason you want to exercise your stock options early—you will usually get better treatment as a stockholder than as an option holder, and these include voting rights and early notification of proposed buyouts, since your votes have to be counted in such proposals, while options holders don't need to be notified since they don't actually own the stock.
You can now buy the book this post is just one part of!
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