10 years ago all of us on the Internet were licking our wounds. We had been taken for a crazy ride in which we went from a point in whatever we touch was champagne to whatever we did was shit.
As an entrepreneur that lived through 1998 to 2002 I emerged reasonably well, I sold my shares in Viatel when it was worth $1.2bn, I sold Ya.com for $700 million but did not sell Jazztel when it was worth $5bn because I was its CEO and saw it go down to $700M (now it`s worth $1.4bn). Then I lost $50M in Einsteinet one of the best cloud computing start ups in Europe that was killed by the post bubble era in which financing completely dried out. So as you read this post you will see no bitterness.
But looking back at 2001/2002 I see this time, not as a period in which Internet companies destroyed the financial markets, but as a time in which the financial markets almost destroyed the Internet. It was financiers/analysts who drove those insane valuations up and then down. What should have been a smooth ride on the internet, an era of taking more and more global citizens in its midst, became a crazy ride in which the internet itself gained enormous prestige and was later, for a while, seen as a useless gimmick. Only around 2007 people again realized that the Internet was simply transforming the world economy and was here to stay.
And then came 2008, when the financial industry practically destroyed the world economy. That was when the same financial firms did to the world what they had done to the Internet, inflate it and let it fall like dead weight.
Having been a happy customer of Goldman Sachs, Morgan Stanley and others I don’t want people to read this post as a rant against financial firms. We need financial firms. But what we don’t need is financial firms to do what they did first to the Internet and then to the overall economy, namely to hype them out of value and sink them hard for no reason. In simple terms what I am advocating has been done before and that is to separate trading from advising. The Chinese Walls in these firms never worked and never will.
Do read this post that I have in Google+. It’s about humanity and how peaceful it is now compared to other times in our history. Concretely it’s about the declining rate of casualties of war and armed conflict over time since WWII. The rate of deaths per 100,000 inhabitants has been falling drastically. Then rejoice. Then read the comments and see the widespread skepticism about this good news. People just can’t believe that we are now living in remarkably peaceful times compared to what we have gone through. That the probability of a random human being of dying in war is lower than ever.
Still I believe in this news. I am happy that my children do not go through what my grandparents went through living in the time of WWII. I guess that one of the characteristics that distinguishes entrepreneurs who do well, myself included, and the general population is that we are more prone to believe in good news. We love good news. We celebrate good news. Most people seem programmed to like and believe in bad news. I guess a headline that read “Most of humanity woke up today, had a normal day and went to sleep” would not get a lot of attention. But it makes me happy.
The two biggest challenges that Google is facing are that ads are tough to show on smartphones (because they are narrow) and more and more searches come from smartphones, and that Facebook is competing harder and harder in an ad based world that Google cannot enter.
The biggest opportunity I see for Google is to turn Motorola around and have an integrated/open ecosystem that catches up with the closed Apple ecosystem. I am not argue that Google makes Android a closed system like iOS and only sells its smartphones through what is now Motorola. What I am saying instead is that Google could be in the position that HTC or Samsung are today. It could make the best Androids and use a hardware OS combination to make money a la Apple.
Android is bigger than iOS and yet Apple is worth over twice as much as Google in market cap. iOS is 90% of the value of Apple. Android is considered to be less than 10% of the value of Google. This is where Google’s biggest upside resides in my view. In an successful implementation of the Motorola acquisition.
In any case I think that there are 3 companies that are a must have in anyone’s portfolio now and they are Google, Apple and Amazon, in proportions to their market caps. Facebook would also be a must have but not at 100 times earnings. I should also clarify that I have Google, Amazon and Apple in my portfolio and have for a while.
On Monday we celebrated Nina’s birthday in the desert of Arizona. I love deserts, I proposed to Nina in another desert, the desert of Southern Morocco. I have been trying to understand the appeal of deserts to me and I think I have come up with something meaningful.
As opposed to a jungle, in the desert, you get the feeling that each plant, each cactus was a huge accomplishment. Each plant in the desert is…a start up!
Growing up without water, that’s what building a company feels like to me. Especially my start ups, in Spain, a desert in entrepreneurship. And that’s why I appreciate the gigantic cacti in the pictures. They grew up against all odds. Like Jazztel, Ya.com and now Fon.
I have 5 children. They go from 21 to a 6 month baby. My 21 year old daughter, has come up with an idea for a start up. She is implementing it. This was a surprise for me because until recently she had not shown interest in the start up world. She studies history at Columbia College in NYC.
I will not go into detail on what her Internet start up as that is for her to share and she will at the right moment. What I can say is that I heard what the plan is and it looks very feasible to me. And this is only partly because I think all my children are stars. It is actually a great, original idea and she could execute it very well. But while not sharing with you what her business is I will share with you what I said to her.
My daughter, I said, what you have is the “start up bug”. It is a bug so powerful that once infected with it you carry it for life. The dream of turning an idea into a company that millions use and enjoy never goes away. I don’t know if this start up will be successful but what I do know is that sooner or later you will be. Go for it!