Last week I was in Sardinia. In Cala di Volpe. Today I am in Formentor, Majorca. Both Cala di Volpe and Formentor are beautiful bays (you can google earth them and see) both have a buoy service to protect marine life, but there the analogy ends. In Formentor the two nice guards who you see in the picture provide the service for free, but in Cala di Volpe it seems free when they help you, but the next day they charge you 360 euros for being tied to a buoy. Why is the average Mallorquin much wealthier than the average Sardinian? For a simple reason, honesty pays. Yes, I know that I just gave one example. But if Spain has been doing so much better than Italy over the last 20 years, I believe that this is mainly because on the average Spaniards are more honest than Italians and this shows all the way from the guy who rips you off in the Porto Cervo bar, because he argues that you sat in the VIP section of his mediocre bar (50 euros for a mineral water) to electing Silvio Berlusconi as President.

But there’s more to my stay in Porto Cervo. During my visits I hanged out with people who were frequently visiting Silvio Berlusconi´s Villa. The stories that they told laughing of all these beautiful women in their 20s with fake titles who surround him were very funny if you could only forget that they were not just talking about one billionaire and a regular at Briatore´s Billionaire´s club. The problem is that they were talking about the man who runs Italy and who is the Uber Furbo.

On a short ride from Porto Cervo to Cala di Volpe –a cab ride that would cost 10 euros in Spain and costs 30 in Italy– the cab rider told me that the economy was weak and that Sardinians income was half of those of the average Italian. Somehow, the formula works different in Spain where the average mallorquin´s income is not only higher than the average Spaniard, it is higher than that of the average German, even charging 10 euros.

Ripping people off is just not sustainable. As beautiful as Sardinia is and as good Italian food is (I prefer it to Spanish food), Italy has to find a formula that is more based on honesty not just vis a vis foreigners, but vis a vis each other.

And I know that Porto Cervo is not Italy, but Italy was being managed out of Porto Cervo when I was there and the picture was not nice. And I do speak Italian.

When we started Fon, back in 2006, 200 million WiFi chips were sold. This year according to GigaOm it will be 1 billion. This is a simple reminder that when critics say that 3G will kill WiFi they are just wrong. If anything 3G makes people even more interested in getting data which then operators want to offload to WiFi. The iPhone is a case in point. Why is it that when you buy songs from the iTunes store you can only do it over WiFi and not over 3G even in the 3G iPhone? The paradox of mobile carries is that they want you to pay for expensive data plans but then….use WiFi.

Why do I fly 7 hours and 30 minutes to get from Madrid to NYC and there´s a 6 hour difference while if I fly to Beijing is 12 hours, same latitude approximately and there is also a 6 hour difference?

Why do Americans work so many more yearly hours than the French and the average American lives like the average French?

Why are the most successful mammals on earth by number, other than humans, the ones humans eat?

While downloading TV series and movies is suprisingly legal in Spain for personal use and my kids used to be heavy downloaders, they have recently cut down a lot. They have not decreased their downloading activities because they had an ethical dilemma or because they were pestered by me. They almost stopped getting movies on the internet because they much prefer streaming to downloading. And they are not alone. Many people prefer an Internet connection streaming rather to downloading because of the instant gratification element in which there´s no need to spends a lot of money in storage. Examples of great sites are Hulu, Joost and Babelgum - disclosure: I’m an investor in Joost. Now my kids favorite is Hulu the online video joint venture from NBC and News Corp that offers streaming video of professional content like many popular TV shows.

But due to issues regarding the rights of distribution, Hulu’s service is still accessible only in the United States, and anybody who is in Europe needs to use workarounds to watch its contents. One of these workarounds is using Hotspotshield, a software that protects your data while accessing the Internet from a public place, driving all your traffic through a VPN. As a side effect, it allows people from outside the US to watch Hulu and access other services that are geolocked to the US, like video sites from TV networks such as ABC, CBS, NBC, FOX. So for many who don’t live in the States, watching streaming video on Hulu using software like Hotspotshield or a proxy server is already better then piracy. But to me the fact that kids are using Hotspotshield to watch Hulu outside the States proves that even when piracy is legal people prefer a great watching experience that includes ads than a laborious Pirate Bay type experience that does not.

There are friends you just hang out with and have a great time. And there are friends who you both hang out with and learn a great deal from. Joshua Ramo is on the second group. Joshua to me is my “eyes and ears into Chinese culture”. Joshua is American but speaks Mandarin and it is really through him that I got to know Beijing, from the big monuments to the little bar in the about to be demolished, or the phenomenal private art collection that is being shown for the first time.

Today I learned that Joshua has a new web site. It is not a blog but a site in which you can find Joshua´s writings. I strongly recommend the Beijing Consensus article that explains a new foreign policy platform by which we can see and learn from China, the great, the good, the bad and the ugly. In my last email exchange with Joshua he wrote something that I would like to quote.

the opening ceremony on Friday is among the most important nights in modern Chinese history.For the first time, billions of people from around the world will be taking a really serious look at what the country is today and what it aspires to be. And Chinese themselves will be taking a pause in the middle of break-neck change to examine how much they’ve accomplished, lifting 400 million people out of poverty in 30 years for instance, and how much remains to be done.

Joshua Ramo will also be commenting the Olympics on NBC, not the sports but the sociopolitical realities behind the whole event. The first TODAY show is here,after the Andrea Mitchell piece.

What is the value of a stock option plan if it has no liquidity? Very little and that is why in this dry IPO period, companies like Facebook and LinkedIn are allowing employees to sell vested stock privately. As a tech entrepreneur and CEO of Fon I find this practice at odds with company management. Personally I would find it hard to be selling Fon stock at a valuation that is 2 to 3 times as high as the one that my own partner/employees are asking for to sell their shares. I guess there is such thing as a liquidity premium price but the premium now is enormous. In the case of Facebook employees are selling at 70% discount of what Microsoft paid for its stake. I find this situation pretty confusing and it should make us entrepreneurs think of how to reward people well enough salary wise that they have the patience to wait until the IPO market improves or the whole company is sold. My take is that all this works in favor of large corporations whose stock option plans are worth little but in theory provide more job stability than start ups. I say in theory because they are very stable until they go for massive layoffs.

While iPhone 2G users with an unlocked phone can now upgrade to the latest (2.0) release of the iPhone software, the same shipping on 3G iPhones, there is still no Installer available for this firmware release, so no alternative method to install third party applications.

Apple’s AppStore officially opened the iPhone platform to third party developers and a number of great applications are now available. One of the issues with the AppStore is that while on Installer.app anybody could list their software for users to download it freely, there are at this moment literally thousands of developers, startups and companies waiting for Apple to approve them for the iPhone Developer Program, a necessary step to get your app on the AppStore. Apple is creating the next walled garden, probably one not as bad as the mobile operator’s, but the walls are still there.

On the AppStore you can get great games with console-like features and cool Apps like Facebook, Wordpress or Truphone, from the leading software and game developers that with the AppStore got a great ecosystem to sell their app and easily distribute it to a growing number of users. Unfortunately you can’t get useful apps like NetShare, that let you share your iPhone’s EDGE or 3G Internet connection with your computer, because they hurt the mobile operator’s lucative business and Apple was quick to remove it from the AppStore. Similarly you won’t get an iFon connection manager anytime soon, as the necessary controls to access and manage the WiFi connection are not available with the official SDK.

Another big limit Apple is imposing to developers is the inability to run background processes. This means for example that you can’t have a real Instant Messaging or VoIP session active while doing other things on your iPhone (and so you won’t receive an incoming call on a VoIP app like Fring unless the app is active on your iPhone’s screen). What Apple has designed to overcome this is a push notification system for app developers, that allows them to send updates (like the number of incoming messages in a messaging app) to the application while this is not running on the phone. A nicely designed alternative, but one that again limits developers and puts control in Apple’s hands.

All these are good reasons to get Installer 4.0 on your iPhone as soon as the Dev Team will have it ready. Looks like a few developers are already betatesting it.

The launch of Cuil, a new search startup that claims having a larger-then-Google index, generated a lot of noise in the last few days. First the hype around the company for its large database and low indexing costs (1/10th of Google’s, they say), then the flood of negative comments soon after the launch for the bad quality of the results provided.

There’s still much to improve in search, and although extremely useful and the best around, Google (disclosure Google is an investor in Fon) is still far from perfection. A lot of potential is in the semantic web, a buzzword that indicates the evolution towards a structure of the web where computers will be able to understand, combine and manipulate the data on the Web and so provide much improved search and other kind of smart tools.

One of the interesting startups entering the search space (along with Powerset, Mahalo and Wikia) is True Knowledge, a company based in the UK that just announced a second round of financing for its alternative approach to search. So what is True Knowledge doing? They are building a knowledge database and with their Answer Engine give their users direct answers to their questions, based on the information collected. By comparison, Google will instead show you a list of web pages where part of the content has one of more of the words in your search query, ordering the results using an algorithm called PageRank.

True Knowledge aims at providing users with instant answers to complex questions, saving them the time to find information and arrange them to find an answer. They do so by “structuring data in a way that enables computers to work and think like humans do, drawing inferences and conclusions when needed to find the information that’s requested”.

But it’s not just machines doing the hard work for you. Like for Mahalo or Wikia, the active involvement of humans is what makes the product interesting: True Knowledge is looking for experts around the globe to build its information database and combining machine’s automation with people’s intelligence.

You can sign up to get access to the beta test site, or watch a demo video to see how the product works.

While startups are working to develop innovative solutions to our search needs, I wonder what Google is working on in their labs and if there will ever be a Google-killer or the tremendous experience, talent and resources that Google has accumulated in the last ten years will be enough to guarantee them the first place in the race to the next generation of search.

Being an entrepreneur and starting a business in Europe is not easy. Luckily there are great initiatives like my friend Saul Klein’s Seedcamp, an event that gives young entrepreneurs with a business idea the chance to spend a week in London with Europe’s top entrepreneurs, investors and advisors. Additionally, out of 20 startups selected to participate, 5 winners will be chosen to get seed funding (€50K each for a 10% stake) and world-class connections and mentorship to start their business.

If a team that is selected agrees to take the investment, they will move to London for a 3-month period, during which they’ll have the opportunity to take advantage of mentorship on issues like scaling the business, raising funding and M&A and access to the same experts that participated in the Seedcamp event.

Applications for this year’s second edition will close on Sunday August 10th, so if you want a chance to be part of the 20 teams that will take part in the event send your application now!

I will be part of the advisor group, along with Niklas Zennstrom (Joost, Atomico), Michael Birch (Bebo), Brent Hoberman (Lastminute.com, Mydeco) and other experienced entreprenurs.

Below is a nice video summary from last year’s event.

The city of Arezzo will soon host one of the first Italian municipal WiFi networks, thanks to an agreement with FON and the involvement of its citizens, who will share their Internet connections and contribute to the roll out of the network.

The municipality will install FON Hotspots in strategical locations all around the city. Citizens who want to access the network for free will have a chance to become Foneros and share their own broadband connections, expanding the coverage of the network. Citizens who won’t contribute to the network, tourists and anybody visiting the city who is not a Fonero, will still have a chance to access the Internet for free for 15 minutes (watching a 15 seconds video ad) or will be able to buy a daily pass for 3 euros.

The municipality will also use the network to inform and communicate with citizens and tourists, using the welcome page of a custom built portal. FON offers a sustainable solution for municipalities that want to build a muni WiFi network with limited investment and the direct involvement of their citizens in the roll out of the network.