From the monthly archives:

June 2009

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The common theme that runs through every startup that I’ve started, or been a part of, is the need for “big data” analysis. “Big data” analysis is the area where off-the-shelf software tools breakdown, where statisticians, analysts and developers meet and where normal number-crunching turns into “supercrunching“.

At my last two startups, Compete and Lookery, this “big data” analysis has transcended its usual internal audience and become a fundamental part of, if not the entire product.

In the time before Lookery (B.L.) we needed to create our “big data” infrastructure from scratch. This usually took the form of large clusters of computers running proprietary, created from scratch, software. The most formal of these being the software we created at Compete which included the Compete Filesystem (CFS) and CompeteSQL (CSQL).

Today we have open-source software like Hadoop to provide the framework for our data analysis software at Lookery. The Hadoop project has grown fast with companies like Yahoo, Facebook, Last.FM, and The New York Times using it. There are even venture-backed startups focused solely on building services and products on top of the framework.

This weekend Elias Torres, our VP of Engineering at Lookery, released a project he calls Hadoop Timelines. Hadoop Timelines is a great example of what I’m calling “Hadoop Performance Optimization” (HPO).

While the barriers to use something like Hadoop have fundamentally dropped there are only a handful of experts that can make your Hadoop cluster perform well. What’s needed is a new suite of services and tools that can analyze your cluster and automatically optimize your performance. Hadoop Timelines, while rudimentary, is the beginning of an exciting new business niche, Hadoop Performance Optimization (HPO).

If you’re a Hadoop user please comment on how you’re optimizing your performance today.

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This graph shows what the greybeard VCs and angels have known for a while. If your company has VC investors, they will reduce the probabilities of an exit that would produce a 1-5x return for the angels. That exit might have produced a 100x return for the entrepreneurs because they paid much less than the angels for their shares.

Having VC investors does increase the probabilities of exits above a 5x return.

But there is no free lunch. This data shows that after a VC invests your chances of failing completely also increase significantly.

via Exits with VC and Angel Investors – The Wiltbank Data.

David says: The news is that this isn’t news. Venture investors are almost always transparent on what it means to take their money. They have no choice anymore as all this information is freely available to anyone who wants it although I believe they are transparent because it makes good business sense first and foremost.

The reason I’m reblogging this post, from the excellent AngelBlog site, is that “we” startup people are either blind eye optimists, blinded by our ideas, ignorant, or all three. “We” commit the same (fatal?) mistakes over and over despite, usually, knowing better.

My gift to you (and me) today is to hit you over the head with this one more time. Hopefully it’ll only take a few more loving strikes with this 2×4 before “we” all finally get it.

(Note the emphasis on the above quote is mine)

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