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November 16, 2013

Batkid, San Francisco and my brother’s experience with the Make-A-Wish foundation

Filed under: Uncategorized — Rakesh Agrawal @ 9:19 am
Neptune pool at Hearst Castle

Neptune pool at Hearst Castle

It is so heartwarming to see all the pictures and video from Batkid saving Gotham City (er, San Francisco). For those who missed it, a California kindergartner with leukemia wanted to be Batkid and the Make-A-Wish foundation made it happen. San Franciscans lined up to cheer him on. San Francisco’s police chief and even President Obama got involved to show their support. http://blogs.wsj.com/speakeasy/2013/11/15/police-chief-greg-suhr-on-how-batkid-saved-san-francisco/

I missed the event in person because I was at the ostentatious Hearst Castle in San Simeon. As part of the castle, they have two oversized swimming pools, including an indoor one. The castle is now a California State Park. I asked one of the docents if anyone is allowed to swim in the pools. She said that occasionally the Hearst family uses it and they never say no to the Make-A-Wish foundation. (They also auction off four pool parties a year to help pay for restorations.)

My family had our own experience with the Make-A-Wish foundation. My brother had been sick pretty much since birth. Early on, he had a kidney transplant. In his high school years, that one went bad and he had a simultaneous heart and kidney transplant. The Make-A-Wish foundation sent our family on a trip to Washington, D.C.

That was more than 20 years ago and my brother is now doing fine.

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April 17, 2013

My bet with Ryan Kim on Yahoo!

Filed under: Uncategorized — Rakesh Agrawal @ 12:25 pm

I have a bet with Ryan Kim on Yahoo’s mobile site, specifically Yahoo! Finance.

I discovered an important flaw in the Yahoo! experience. It’s something that most people would immediately acknowledge is problematic.

It should be a high priority issue and should be relatively easy to resolve.

My bet is that Yahoo! will not resolve this issue in the next six months. If they do, Ryan wins.

Given Marissa’s emphasis on mobile and the importance of Yahoo! Finance to Yahoo!, I should lose this bet.

The loser buys lunch or dinner at a Mexican place next time we’re in the same city.

Disclosure of the specific issue by Ryan means I win by default.

March 20, 2013

How I choose what I write about

Filed under: Uncategorized — Rakesh Agrawal @ 10:01 am

I’ve done a lot of writing over the last two years and it has spanned quite a few topics. Some of it may seem kind of random; that reflects my diverse interests.

But there are a few themes that I’m trying to focus on:

  • Analysis that can help entrepreneurs build better products.
  • Companies whose business models are largely exploitative. This includes Groupon and Yelp.
  • Companies whose businesses can put consumers at risk.
  • Companies that violate consumer protection laws and regulations. Yes, there are some laws that are outdated and don’t recognize advances in technology. But many laws were put in place to help protect consumers from cheating by merchants. Too often, companies are looking for a free pass around these and gain an unfair competitive advantage.
  • Tech companies that are about to go public.
  • Travel and travel technologies.
  • Technologies that can create a more efficient or environmentally sound world. This includes things like car2go.
  • Technologies connected to the digital living room and connected devices.

I generally avoid writing about criticizing small projects or entrepreneurs who are just getting started. It’s unfair to criticize ideas before they’re reasonably baked. (The exception to this would be if they’re doing something dangerous or illegal.) I will write positive stories about companies that are starting up if the company is worthy of attention. Once a company reaches around $500 million in valuation, I think criticism is fair game.

I also don’t write about vanity metrics. That’s one of the scourges of the tech press. They’re lazy and easy stories to write; they drive page views; they let reporters suck up to PR people and CEOs they want access to. But ultimately, vanity metrics stories do a disservice to entrepreneurs because they de-focus from what really matters.

September 9, 2012

Mitt Romney’s healthcare comments flunk basic economics

Filed under: Uncategorized — Rakesh Agrawal @ 2:37 pm

I am trying to stay away from politics as much as possible this election cycle, but pandering, economic nonsense and journalistic incompetence get under my skin.

Mitt Romney said today on Meet the Press that he wants to preserve the requirement of the Affordable Care Act that insurers cover pre-existing conditions. From the Reuters story:

“Of course, there are a number of things that I like in healthcare reform that I’m going to put in place,” Romney added. “One is to make sure that those with pre-existing conditions can get coverage. Two is to assure that the marketplace allows for individuals to have policies that cover their family up to whatever age they might like.”

Romney has also said that he would repeal ACA because of the individual mandate. That’s like saying I am going to eat all the cake I want and I won’t get fat. It doesn’t work that way. Economically speaking, the individual mandate and coverage for pre-existing conditions are tied at the hip.

Any sort of universal coverage (and forced coverage of pre-existing conditions is a form of universal coverage) requires that healthy people pay into a system to help offset the cost of treating the sick. Without the individual mandate, insurance companies would go broke paying for sick patients who had pre-existing conditions because there wouldn’t be enough healthy people paying premiums.

In fact, forcing insurers to cover pre-existing conditions in the absence of an individual mandate would make health insurance’s adverse selection problem even worse. Right now, many healthy people purchase individual coverage because they’re worried that if they get sick they won’t be able to buy insurance. When I lived in Malaysia, I bought U.S. health insurance even though I was healthy because I wanted to continue to have the option for coverage in case I did get sick. I paid $110 a month for high deductible, catastrophic coverage and never made one claim on that policy. Take away that deterrent and healthy people would wait until they got sick to buy health insurance. Imagine buying car insurance only after you got into an accident.

The fact that Romney would make such a claim indicates that he’s:

  • A terrible business person who doesn’t understand basic economics.
  • Will say anything to get elected, even if it’s economically impossible.
  • Both.

It’s also ridiculous that David Gregory didn’t challenge Romney on the notion that he could keep the requirement to cover pre-existing conditions while eliminating the individual mandate. Either Gregory didn’t understand that the two are inextricably linked or he didn’t want to appear to be biased. Neither scenario paints a good picture for the state of journalism today.

Too often, journalists let claims like this slide. In this election cycle, more than ever, journalists have off-loaded that work to “fact checkers”. Sorry, but that’s a key part of a journalists job. It’s a sad state of affairs when Jon Stewart is doing more to challenge his guests than the host of Meet the Press.

June 11, 2012

New bet with Felix Salmon of Reuters

Filed under: Uncategorized — Rakesh Agrawal @ 8:10 pm

I have a new bet with Felix Salmon of Reuters tied to an exit for Square.

I win the bet if:

  • Square is acquired on or before December 31, 2012 by anyone other than PayPal.

Felix wins the bet if:

  • Square is not acquired on or before December 31, 2012.
  • Square is acquired by PayPal.

Stakes: Dinner next time we are in the same city at a place of the winner’s choosing.

“Acquired” means that an agreement has been announced by. The transaction need not have closed.

The outcome of this bet does not cancel out our previous bet related to Groupon and Priceline. (One that I’m currently winning.)

Any disputes will be settled by Naveen Selvadurai.

May 26, 2012

Deal: Virgin America vouchers for travel through June 15

Filed under: Uncategorized — Rakesh Agrawal @ 8:53 am

Last summer, Virgin America ran an incredible deal for air travel. I bought too many and need to get rid of some of them.

These are great vouchers that are good for any city in Virgin’s route map. They are good for last minute trips and are in Main Cabin Select, which includes extra legroom, unlimited free food and alcohol, unlimited premium movies and priority security and boarding.

As you all know, I’m a huge fan of Virgin and fly them whenever I can.

Here are the high level terms:

  • Good for last minute trips. I’ve used some of my vouchers for trips that otherwise would cost $2,000.
  • Must complete all travel by June 15.
  • Only valid in Main Cabin Select.
  • You are responsible for taxes. For U.S. trips, this is about $14 for a non-stop. Cabo, Cancun and Puerto Vallarta taxes are about $90.

I’m asking $400 each. (Which is roughly what I paid, plus transaction costs.) You can pay me by paypal and I will send you the code that you can use to redeem on Virgin’s Web site.

If you are a friend and are coming to visit SF, you also get a place to stay in my guest room.

Interested? Email me at redesign@agrawals.org.

May 18, 2012

Why I didn’t write about Groupon’s 1Q earnings

Filed under: Uncategorized — Rakesh Agrawal @ 7:09 am

Some of you undoubtedly noticed that I didn’t write up my views on Groupon’s earnings.

It’s not because Groupon suddenly proved that I’ve been wrong for the past year. To the contrary, Groupon’s earnings report reinforced everything I believe about the company. Since earnings, I’ve bought even more puts against the company. I believe that the markets continue to misread the company and that the company takes very deliberate actions to confuse the markets. There are a number of intricacies of accounting that come into play. (In this case, unlike in the past, Groupon isn’t doing anything wrong.)

The primary reason I didn’t write up my analysis is that it doesn’t help small businesses or entrepreneurs. It would primarily help professional money managers and hedge funds.

My goal all along has been to help small businesses and entrepreneurs. The byproduct of that has been helping professional money managers. But professional money managers can afford to pay for my analysis; many of them value it and already do. It’s counterproductive for me to give that analysis away.

This situation illustrates the two markets for financial news: the consumer market and the professional market. Over the past year, a number of people have told me that I’m providing professional-grade analysis in the consumer media market.

Unfortunately, the two markets also pay vastly differently. It’s incredibly hard to make meaningful money in consumer media. You need a lot of scale. But if you have unique information in the professional markets, it’s worth a lot of money.

Tiering of information is very common. Bloomberg and Reuters are two of the world’s highest quality news organizations. But they fund their news operations with the massive profits they make from their professional products. I was talking to someone earlier this week who told me, “If there’s one thing we can thank Wall Street bankers for, it’s funding two high quality news sources.”

There’s another challenge with writing sophisticated financial analysis for the consumer press: many people don’t understand it. Then I have to deal with comments and personal attacks from people who have no clue what I’m talking about. That provides a negative value for me. When I’m talking to hedge funds and mutual funds, at least I know they understand the core of my argument. (Even if they don’t always agree.)

Going forward, I’ll continue writing about business models and elements of the story that affect small businesses and entrepreneurs. I want to help both of those groups succeed.

May 11, 2012

Bet with Alex Lawrence

Filed under: Uncategorized — Rakesh Agrawal @ 8:24 pm

I have a bet with Alex Lawrence that is a derivative of my bet with Paul Kedrosky. If I win my bet with Kedrosky on 5/15, I win the bet with Lawrence. This means that at the end of trading on 5/15, Groupon is worth less than $6 billion, the price that Google reportedly offered for Groupon.

Stakes: loser buys dinner at restaurant of winner’s choice when we’re in the same city.

May 10, 2012

More PR tips for startups

Filed under: Uncategorized — Rakesh Agrawal @ 6:22 am

Here are some more PR tips for startups:

  • Be out there. Reporters often get story ideas or thoughts for sources by doing Google searches or looking through blogs. If you have a strong presence elsewhere, it increased the odds that a reporter will contact you.
  • Follow up. If you’ve engaged with a reporter, be sure to offer help along the way. When I was in New Orleans recently, I wanted to do a piece on how cell networks deal with large surges in demand. Verizon loaned me several devices. After I had a day to play with them, Verizon’s PR team checked in to make sure the devices were working.
  • Details matter. Verizon PR knew that I was going to be testing the devices at Jazz Fest. They pre-loaded the Jazz Fest app on both devices. That was a thoughtful touch that I definitely noticed.
  • Don’t email links to the exclusive you just gave a competitor. That’s a pretty surefire way to ensure you won’t get coverage.
  • Pay attention to what’s going on in other news. If Facebook updates their S-1 on the day you had planned to talk about your product, you might want to re-consider your launch. It may not seem fair, but that’s life. Chances are that your story won’t see the light of day.
  • Pay attention to reporters’ schedules. If there are specific reporters you are targeting, follow them on Twitter. I’ll tweet out when I’m traveling or on vacation. Those are generally not the best times to reach out.
  • Pay attention to reporters’ own quirks. Many people tweet out their pet peeves about PR people or what they look for in stories. Be on the lookout for those.

April 19, 2012

Staying connected with friends for frequent travelers

Filed under: Uncategorized — Rakesh Agrawal @ 4:08 pm

Since the mid-90s, I’ve been a frequent traveler. I’ve flown more than a million miles and stayed the equivalent of several years in hotel rooms. All of this can take a big toll on friendships and relationships.

I recently came up with a new approach to help me stay connected to friends and family: I committed to hosting a monthly wine and cheese gathering.

This does a number of things for me:

  • I get a fun evening with friends.
  • It makes it easy to meet up with a lot of people at once.
  • It forces me to clean my place at least once a month.
  • It forces me to unpack my suitcase at least once a month. Too often, I’ve lived out of a suitcase, even when I was actually “home.”

Having this outlet is also good for business as it helps ward off loneliness when on the road.

At once a month, it’s not a significant time commitment and the benefit is well worth it.

I also try to time it so friends and business associates who are visiting from out of town can see my friends and connect with Silicon Valley.

Because it’s in my home, I don’t post the details. But if you’re a regular reader and are visiting SF, shoot me a note and I’ll see if I can extend an invite.

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