Category Archives: Bastos Ventures

Do you need college?

Posted on by
Reply

There have been many who point to the rise of such entrepreneurs as Bill Gates, Steve Jobs, Michael Dell, Richard Branson and so many others who either quit college to start their companies and became successful without ever needing to finish school. Many people I meet have written blogs and are of the strong feeling that college is just a waste of time and resources for those wanting to start a company and that if you are really dedicated you’ll choose to follow the steps of great men as these and not get yourself into so much debt as to never be able to do a startup. If you are a college student considering starting a company, let me mention some things that hopefully will push you to do greater work than even the men on this list of successful college dropouts.

1) You are not always the exception to the rule, sometimes you are the rule…

My generation has this sense of self worth that can be great when it comes to feeling good about ourselves but some times holds us back as far as business and opportunities are concerned. You’ve heard it from both sides, one side says that your ideas are great and that you will go far in this world and the other tries to tear you down and says that you’re worthless and you’ll never amount to anything. One of the most important lessons I learned in life is that no one gives you anything that you are not willing to work hard for. I’m a programmer and many in my line of work who dream of starting their own companies think that if they can only get that next bright idea they can go far like Bill Gates and Steve Jobs. I believe you can do great things in your life but pending your hopes on being as successful as those two will not win you any success, you have to earn it. The rule is you go to college and get a job and work for the rest of your life and we see these men and women who built these massive companies and we admire them for one thing, they are the exception to the rule. Yet we forget that for ever 1 Bill Gates that’s out there there are hundreds of others who took that same route and ended up nowhere. What made him different is not the fact that he quit college to start his company right away, what makes him different is that he saw how to exploit an opportunity and ran with it. Though there have been many successful entrepreneurs who have never gone to college, in many cases their life and circumstances helped mold them to the moment where they made the decisions to start their companies and do it successfully. It’s a bit difficult to tell people that they will be the exception to the rule, when they could achieve so much more and go to greater hieghts if they just took some time to knock out a few courses.

2) Don’t go to school to actually learn, go to get the piece of paper…

During my 8 years in the military I met high ranking officers who had graduated with nothing more than a Bachelors in Phys Ed or Nutrition. I met CEO’s of companies with nothing more than a Bachelors in business and they were running companies and organizations that had more power and prestige than some of the college professors I met with doctorate degrees. I grew up with a father who never even graduated was able to rise to the ranks or marketing director in some major companies both in Canada and Brazil but was eventually asked to create a business franchise curriculum at a major university in Rio de Janeiro before being asked to leave after teaching for 3 years because they wanted to make him staff and he did not have a degree. For every teenager who makes it as an entrepreneur there are dozens more who try their hardest but don’t make it. Having grown up with a father figure who had achieved so much and was stopped from advancing simply because of a choice to not finish what he maybe at one point decided was unnecessary helped me realize that we need college for just one thing, the piece of paper. I think we all still need college though not for learning, we need it to prove to investors that we are legitimate when we bring them an idea or we need it to show our bosses that we are more than capable of doing the work before us even though we didn’t learn any of it in school.

3) Learn what you need from your interests and life, not necessarily from school…

I also have to disagree with many who say you need college to learn lessons in life, first we have to remember that many who became successful without finishing college are not the rule but the exception to the rule yet there are a good number of people who did all the college a person can do and ended up destitute. Most of us have had people that we can look up to and admire, I had a mother that was college educated and a father who never stopped learning and that meant that I received a level of learning from my parents growing up that may have helped me through my business dealings once I became an adult though many who have that opportunity may believe their parents had nothing to do with it. In many cases parents or guardians are the people that teach us our intuition, that show us what mistakes to avoid and what opportunities to seek out. You will learn most of what you do in your job or in the company you run by doing it though college may give you a few insights it’s not going to teach you everything. The reason why so many get disappointed about going to or finishing college is that they feel it’s stifling and they can learn so much more in the real world. My advice to you is go out and learn the real world while you’re in college. Don’t depend on college classes to teach you what you are going to do with the rest of your life but stay in school and finish it, you don’t have to be the honor student, some of the greatest men in the world were C students at best. Make your goal to simply complete school and put your free time and efforts into other things that will lead you to the business or dream you want to accomplish.

4) Don’t make the decision to not go simply out of a feeling of going against your family…

If you are considering whether or not you want to go to college and your parents are pushing you to go, don’t make that decision solely on the basis that you want to go against your parents plans for you. Especially for those that decide not to go to college but have the financial means to do so through their family. You will have an entire life ahead of you to rebel, I did it when I joined the Marines and went against my families wishes. What I’m trying to say is that you’ll have your entire life to do what you want when you want and how you want it. Take advantage of a supporting family if you have one or at least do it for the future you who will look back and wish you had taken that opportunity. Too many times as Entrepreneurs we tend to dream big in the hopes that we become the exception to the rule but we forget that Bill Gates and others didn’t quit school and then found an opportunity. They quit school because of an opportunity and there lies the big difference between should you go to college or not. Unless you have an opportunity right in front of you that is taking off and making you money in the long run don’t plan to fail by not attending college. In the type of market we have today too many people are turned down by Venture Capital firms and financial institutions not because their ideas aren’t good enough to make it but because they simply decided to work on their ideas instead of finishing college. Plan ahead and then only when you see an opportunity that’s too good to pass up should you make such a life altering decision as not going to college. You don’t have to get your Doctorate, but you need more than an idea, you need that piece of paper.

Understanding the Open Source Movement

Posted on by
Reply

A lot of people ask me what is Open Source Software (OSS)? Some think OSS is a communist hippie plot sent to destroy modern day capitalism, others believe it to be a blessing sent from on high to banish the evil software companies that charge way too much for something they can make unlimited copies of with very little to no expense.

No matter what your view, Open Source software is basically free software that you can use without having to worry about paying for a license and you can even make changes to make it better if you know how. There are plenty of great technical books out there about OSS, many in an attempt to remain timeless usually discuss the ideas behind the software without really going into the nitty gritty parts of why it’s so useful and that was my purpose in writing this book. I wanted a way to explain this technology to people who weren’t already immersed in the world or business of computers and give you a better understanding of what’s out there. So whether you are a novice or an expert, I hope this book is helpful as you learn about OSS.

My view of Open Source is a little different than mainstream, much like the Internet I believe open source is a great tool to level the playing field. Just think about it, a small group of programmers can get together and build something that is just as great if not better than what the guys from Redmond and others would charge billions of dollars for. If properly implemented, companies can save millions if not billions of dollars in software or even hardware costs and every day folks can save hundreds on not having to pay for name brand. Many large companies love Open Source because many of the programmers who work on the code are not employees but people who do it out of a love for the product or because they know that people will really get some use out of it. There is one unmistakable truth about OSS, that is it’s forcing people to look more closely at how much they spend on software but for just that reason alone it’s here to stay.

There are plenty of books out there that also discuss the history of the Free Software Foundation and other OSS organizations, for now I will try to only touch on some of the history. To understand Open Source Software (OSS) one must understand the concept of a commodity. For decades people have used commodities as a means to buy the same product from multiple producers or vendors in order to keep prices low and so that they are not completely dependent on a single supplier. An example is when you go to the store to buy milk, the milk you buy today may be from a completely different farm than the milk you buy tomorrow. The grocery store chain or the company that supplies the grocer may buy milk from a different farm or producer on different days depending on who can offer the cheapest price. Regulations on certain food items as well as market demands has made milk an almost standard product across the board so it doesn’t matter whom you buy it from, the product usually tastes the same.

This process of making a standardized product is called a commodity and many businesses use this as a means to keep expenses down while still providing a low cost product or service to its customers. The invention of mass production in the early 20th century allowed for an even greater ability to create commodity products because products could be standardized in large numbers ultimately reducing their cost. Almost every industry has some kind of commodity component to it so whether you are buying parts for your car or purchasing furniture for your house, a commodity allows you to focus on the price of an item knowing that some level of quality will be there. Open Source Software is ultimately turning software into a commodity and though this may ruin the software industry to some extent, it will boom the field of technology in a great way.

Now you also have to understand that when something becomes a commodity, something else that is tied to it becomes priceless and necessary for the use of that commodity. When milk was commodity, it helped the cereal industry to boom because Kellogg’s and others could provide a great cereal without worrying about the quality of the milk being served with it. In a similar way the computer industry is plagued with a history of components that became commodities and made other things valuable.

Genius in Google Adwords

Posted on by
Reply

A few years ago Google created an advertising system called Adwords which allowed individuals and companies to advertise on their search engine directly without a middle man. The program was so successful that they later introduced Adsense which allowed other websites to share in the ad revenue. In both programs, advertising money is not spent or made until a user clicks and shows interest in the product or service being sold. Google has made marketing better by providing advertisers with a way to clearly measure their advertisement’s progress and not rely on phony marketing estimates.

In an attempt to make the very popular search engine profitable, Google did not go to the advertising powerhouses and Madison Avenue men of the time to find companies wanting to advertise on the site. Instead it reached out to anyone and everyone wanting to advertise on their site because much like their motto, it believed that people could do the job better than executives. The idea was simple; its ads would not show up on the front page to discourage or confuse newcomers to the site, one cannot target an ad to someone who has not given them what one wants to know about yet. However, once someone does a search, Google provides relevant ads through Adsense which makes sure that an advertiser’s ad is on a corresponding site. By removing the middle man of advertisers, Google was able to reduce the ad costs significantly making them the cheaper. As an example, Adsense is now selling TV ad rates 50% less than the average ad agency because they don’t care too much about getting a large commission from it and are a more obvious choice for businesses.

In Adwords, advertisers would have to bid on a particular word or set of words and depending on how many people wanted that spot, the market would choose the price of the advertisement based on demand. Busineses also only got charged based on clicks which meant that one’s ad would run for as long as it needed to and the advertiser would only get charged based on tangible results, something never seen before in advertising. This created a fair market system where users did not get bombarded with irrelevant advertisements and businesses, in return the site only gets paid when those users show an actual interest in their products by clicking on the links. Of course Google gets a cut of that ad money depending on the data. They avoid getting executive kick backs and sweet heart deals which forces Google to focus on making their system better and more efficient. This makes Google more profitable in the process and creates quality data that advertisers can trust. The advertisers can see when a user clicked on an ad and when as well as match that information with when financial transactions where made on their site to see if Google is bringing in paying customers.

Google has always depended on data and user choice to run the business. There have been many attempts to trick or side track this dependence such as creating link farms, websites solely dedicated to linking to each other and to other sites, for the purpose of tricking Google. Yet even those attempts eventually go away as the search engine learns and adapts to what people do and click on. Aside from giving higher rankings to sites that have been registered online longer than others or demoting sites registered for less than a year, Google has had to do very little to curb these kind of abuses. Letting the user vote on what is better eventually creates a stronger more powerful search. What this all boiled down to was honesty. Google could have sold their search spots like many other companies did, but it believed that their customers needed to trust that it would put their needs above profit. Google’s reliance on data based marketing means that the better and more trustworthy their advertising data is, the more profitable they become.

Marketing executives look at Google and fear their ability to give a better product then they ever could. Yet their ability to do what they do so well has inspired many Ad agencies to join them instead of compete against them. The pay per click system has changed the way advertisers see the business. If I as an individual want to advertise my product, I simply go online and pay Google a few dollars to put my site on their search engine and Adsense websites, it does not cost me a million dollars and I can reach only those who are interested enough on my product to click it. No longer is a company willing to pay for an imaginary number of viewers who supposedly see their ads based off of the Neislen Ratings system; Instead they can use the dependable system within Google to choose where to put more of their money towards with confidence. The trust that is garnered in a system where numbers beat out suggestions makes Google’s advertising seem more like science and the Ad Agencies look more and more like alchemists.

Many would criticize Google saying that they are taking away from current Ad revenues, some spell the collapse of modern business because they no longer have control of modern day advertising. I say that let Google take them apart and make them cheaper and more efficient. There are better advertising systems than Google, and not every product can be sold or advertised this way, but for the most part Google has proved its method by its earnings. There is a boot maker in Arizona who sells his $5000 dollar boots with Google Adwords, he does not need to place an ad on television or in local newspapers and his business still has more orders than he can produce. That is what makes Google better.

The Google Model

Posted on by
Reply

Google’s core business model is to create a platform for people to use and then step back and let the scientific data make the decisions. Their first product was the search engine we now know as Google Search and it utilized a combination of web spider software that constantly surfed and cataloged the Internet and used user generated feedback to create results that are both smart and efficient. If someone does not know the answer to a question, just Google it. Google’s name has become synonymous with search, because of the steps that it took to create its search engine.

In the old days of the Internet, companies like Yahoo or Ask Jeeves hired editors much like newspapers, in order to filter the content online. It was relatively easy and cheap to do back in 1995, even with the Internet growing by millions of pages a year. Their thought process was that they needed to categorize the sites on the web much like the Yellow pages categorized business phone numbers. They could then charge more to get people to rank higher on search results. This would create a tier search system where if a user typed in Nike or combination of Nike, only Nike.com and other Nike related sites came up no matter what combination of the word Nike a user typed in. The older search engines and not Google were trapped by categorization and bad taste thus making the Internet not at all a reliable place to gather and store information. A user was lucky if they even found what they were looking for at all and then came Google. The first part of making Google synonymous with search was that they figured out what was wrong with Internet search at that time.

When Google founders Larry Page and Sergey Brin first started the company back in 1999, they did not simply want to create another search engine such as Yahoo or so many others that existed at the time. Their plan was to create a company that based what it did on pure data with the belief that customers and not executives held the power to make the company great if given the chance. Sergey and Larry’s idea was simple, much like MetaCrawler who by its name crawled the Internet looking for websites link by link. They would use that same kind of random Internet surfing idea and take it one step further. Since they had the data of Internet sites and who they linked to, they would take which sites had the most links coming to them and use that as a basis of importance. The reason they did this was because they believed that if multiple web sites linked to a single web site, there was probably something of value or worth in that web site. This was their initial basis for Google Search. It worked, but they did not want to do like many other search engines and settle there. The second part of associating Google with search was that they revolutionized how a search engine worked right away.

Upon review of the data coming into their Google Beta Search engine they realized that once a user typed in a search query, they would have to scroll from page to page trying to look more specifically for what they were trying to find. So the next step of brilliance came in saving user click data. If they saved every click to a website that a user made for every word that they typed in to search they could rank that particular site as being more valuable to the topic at hand and thus should rank higher overall for that particular word or phrase. That is one of the reasons why to this very day, Google has saved the information for every search and click it has ever received since the very first day it launched. It does this to ensure that the search results are as complete as possible and that users get the best response possible for their queries. The third part of making Google synonymous with search was that they continued to make their searches better by changing it at every step.

This single revelation turned out to be the brilliance of the Google way of thinking put into action. Instead of hiring legions of editors and staff surfing and cataloging the Internet as many companies had before them, they would allow their users to be the ones to catalog the Internet for them. With every click of the mouse and every search on Google, they ensured that the engine got smarter because they believed that a smarter engine would be able to give better results to its users. Google could then create a cycle of perfect harmony between the program and its customers that forces companies to play nice and allows every site to have a level playing field. No decision is made inside of Google without having hard concrete user data to back it up.

Even though Google loses millions in mistakes with product research it eventually makes up for the loss in billions. Besides the money, Google also learns as much as it can from the mistakes it makes. With Google Gmail, Voice and Wave in the horizon, it plans on using the same lessons it learned from it’s search engine creation to revolutionize Email, Telephones and Social Networking.