ran through cuban’s post on blog maverick. the dude is eccentric but does come up with good thoughts once in a while. the main argument is that a company based on a free product is eventually doomed to fail.

i do agree partly. one nuance i’d like to draw out is that ‘free’ should be accompanied by a mechanism to capture the value. if you think about a product, there are two faces to it – value creation and value capture. to capture the value, one must realize the value you are creating.

Dove Soap Ad

ponder this for example – if you are selling dove, what is the value you are really creating? is it about keeping your face clean, or is it about enhancing your sense of your beauty? i think they are capturing the value for the former, and creating the value in the latter. poor value capture. you can probably draw very many analogies for many web products out there.

facebook creates the value by giving you (and me) the satisfaction of expressing ourselves, and indulging in a bit of horseplay with people i know. and how they attempt to capture the value? by monetizing the page view inventory! how imbalanced. i’d figure out a way to monetize each instance of the ‘banter’ that holds users on the site and keeps them coming back over and over again.

finally i think free is dying because of the above – the imbalance between what needs to be free and what needs to capturing value.

btw, while i write this, someone tweeted about this exact same article. we must be related somehow.

folks, if you have real estate in the california, you can claim reduction in property taxes due to the decline in home values. check out the county assessor’s office of santa clara.

they even have a neat PPT showing exactly what this is about, and an online form to apply – very helpful government, all done in 30 min. may be i will start to reverse my opinion of government agencies!

Deadline is August, but apply early while the values are still down.

apologies for the long delay in posts. was checking out this video blog from the pony-tailed CEO of Sun Microsystems. wonder how it has gone from the brightest thing in the valley to being a lovable loser (like.. uh.. chicago cubs) to who cares (atlanta hawks).

i found the answer in the video blog. in short their strategy is -

1. Recruit every developer on earth to use our software or services.
2. Deliver the world’s most compelling commercial offerings.
3. Execute the world’s most effective selling/service connection between (#1) and (#2).

yeah. that’s some strategy, eh? especially (2). i’d buy sun’s stock on that.

pony tail, check. cool? no. get rid of this clown and return the sun to silicon valley.

did a quick plot of unemployment rate history of silicon (from Employment Development Department website). the idea was to see if the current situation (at 7.8% unemployment as of Dec 2008). the idea was to see when the jobs would start to open up.

purely from corp planning cycles perspective, you can expect companies to plan 2009 as ‘conservative/hunker down’ year. so it would put us at 2010 as the earliest ‘growth’ year.

i am no regression guru, but if you notice, the time spent rising to the peak is much sharper in 2001 cycle than in 1990 cycle (2 yrs vs. 3 yrs). it’s probably even more sharp in 2009 cycle (~ 1 yr). assume the trigger point is around Oct 2008, marked by a VC’s obituary of good times – that puts us at Q4 2009 at the next unemployment peak. due to corp budget cycles, it might more likely be around Q1 2010.

next question is, what’s the peak? my hypothesis is that it’d be less than the 9.1% of 2003. the 2003 cycle was the dotcom bubble, pinching the Valley harder than the rest of the industries and regions. since 2008 is more organic meltdown, and the volume of labor force hasn’t risen as much as it did last time (see chart below), the unemployment rate might top out at 8.25-8.5%.

and when would the good times roll again? based on the same theory of accelerated swings above, i’d say, a year from recovery that puts us into Oct-Dec 2010. apple (or may be google, facebook, whoever) probably would have a killer product for christmas, lifting us to a nice Jan 2011.

loose logic, but that’s what bloggers do.