Manufacturing industries have forever competed on cost. The operations are designed to optimize efficiency and reduce waste in any kind of operation. Why? Not because it is fun. But because it matters! It matters because everybody else in the industry is doing it! And if you don't, your manufacturing and retail plant will be at a major disadvantage.

The internet for the most part was immune from the laws of supply-chain management. Yes, we have the likes of Amazon and Netflix that have incredibly advanced systems in place to optimize delivery and revenue. But media businesses such as YouTube have largely not had to compete at the level of optimizing revenue and reducing cost. They have mostly competed on building a better brand and getting marketshare.

This might be changing. We saw a little while ago the analyst who sensationalized how YouTube was losing tonnes of money due to bandwidth costs. The numbers were wildly off which I predicted back then(later confirmed by google; youtube's on path to be profitable). But the fact that the market was so number focused about something like the cost of bandwidth was a first of sorts.

Second data point comes today. CurrentTV is laying off a bunch of folks. They are in the business of video production. They are letting go 80 people, primarily media production folks. It doesn't surprise me! A neighboring competitor meanwhile is spending mere dollars to get video produced at scale:

Thousands of other filmmakers and writers around the country are operating with the same loose standards, racing to produce the 4,000 videos and articles that Demand Media publishes every day. The company’s ambitions are so enormous as to be almost surreal: to predict any question anyone might ask and generate an answer that will show up at the top of Google’s search results. 

It is hard to compete by having 80 people on your full-time payroll when others in your industry(such as Demand Media) have designed complicated systems to get media produced at scale and in a super cost-efficient way. 

Stay foolish. Stay hungry. -Steve Jobs

One of my favorite activities on campus is watching student do stuff...especially as it relates to buying/consuming stuff. If I'm buddies with them and I find them doing a transaction, I like to grill them:

- why are you buying this?

- why this brand?

- how'd you hear about this brand?

- do your friends have it?

- why are you buying from here?

Some real life anecdotes of me doing this...

• I ran into a friend over summer. She had a certain something in her hand. I quizzed her about that thing for a couple minutes. Today, that is the primary revenue stream for Blinkness.
• The girl next to me in my sales management class was browsing watches at Zales.com. Few days ago I'd thought of signing up as an affiliate there. I decided against it thinking it doesn't fit my target audience. I couldn't be more wrong going by what I saw my classmate do and the ensuing Q&A(the real value).
• Each morning as I hit campus I see people pickup a copy of the Daily Tar Heel. Each time it makes me think about the future of physical newspapers on campus. I don't think physical campus newspapers are going anywhere in the next 5 years. Kids pick them up to read it on their way to class.

I can be a pretty annoying dude these days, especially if you have ideas. I have a very set and clear goal in my mind. Therefore, when I have friends shooting ideas at me, without even trying I end up spitting out those two words: "but why?".

Why should I do what you are saying for marketing? Why should I build that new idea? 

Taken wrongly, this could mean that I am shooting down ideas. Sometimes that is true. But usually I am trying to push my friends a little deeper: don't just get ideas(even out of the box ones), think about why you'd like to go after one idea over billion others. Few years ago I would get excited at every idea that ran through my head. These days, I have a very rigid filter. 99% of my own ideas do not pass through that filter. When I throw the "but why" question, it's to force you to go delve deeper and get beyond the idea stage.

Another critical point: my filter for ideas is probably very different than yours. My current goal in life may be to get enough for a vacation; yours may be to make enough to party this weekend. It's possible that the person giving you feedback on your idea is applying his filters and not yours. Always remember that when you look for approval/disapproval of your ideas.

I was reminded of this point when reading Steve Blank's latest post about action vs. motion. His point is that the goal is never the motion. The motion is just the means. The goal is always an end...whether it is to close a deal, live a better life etc. The means through which you do that only matter to the extent they are helping you/not helping you achieve your goal. Read Steve's full post here.

The Zynga-Offerpal fiasco seems to be coming a full circle. Zynga just pulled out ALL offers! That is incredible. In what other industry could something like this happen so quickly without government intervention?

What is really interesting is tracing through the events to see why companies would choose to auto-regulate themselves. Are they doing it out of kindness? I don't think so. I would argue they are doing it out of competition's sake. But wait, I just said Silicon Valley was special as if these companies were taking action for moral reasons? Kind of.

You see, Zynga has a bunch of competitors in Playdom, Slide etc. In other industries, once you find a way to make a tonne of money, all your competitors jump on it too. You have a silent agreement to con the crap out and not report each other. It's game theory where most of the parties that matter choose to cooperate to suck out money. In Silicon Valley, there is less of that it seems. We have companies that compete with Zynga that refused to take part in the scammy ways of generating revenue. Over time, this causes these companies to (a) be at a huge cash flow disadvantage to their competitor and (b) tell on their competitor.

This is what happened here. I think Zynga's competitor that out of moral reasons chose to stay out of the scammy stuff told their high-leverage friends like Arrington the full deal. Arrington goes live with the story. Now Playdom/Slide etc.'s once-at-advantage competitor in Zynga is forced to significantly scale back on a very profitable(but bad) source of revenue.

Had Slide/Playdom cooperated with Zynga etc. to make money via these fishy offers, I doubt there would this massive change in the industry so quickly.

Most of my friends study for exams the night before. Most of my friends write their 5-10 page papers the night before. So why don't we just have a one week long semester? Here's how it will work:

1. On Saturday, all the professors in all the classes you've signed up for will email you the notes.
2. Starting Monday, you will goto your class, give the exam and be done for that class for the semester.

You're going "hell no!". Yes, me too. That, itself, is the point: you're on the university clock and calendar. Me too!

I believe every school environment or work environment has its own clock and calendar. At school, your brain expects to have a whole semester to do the 10 page paper. So what happens when the professor tires to pull the deadline closer by a week? The class panics. It makes little logical sense considering majority of the class will be doing the paper the night before--regardless of when it is due. But it does make sense that as a student, you are reeeally deeply programmed to have a looooong time to do something.

Change to a startup environment. Here, when I have a need, it is usually for something that I need now. On top of that, the actual stuff that needs to be done may be something that is traditionally seen as a "big deal." Yesterday I realized I need to shoot a two minute video to show to potential clients. I have about 36hrs to find people to be in the video, find a camera, find an editor and everything in between. As a class project, this could be a semester long thing.

This is probably the number one culture shock for students on campus dabbling with startup life.

To those wondering why this happens to startups, let me explain. A large part of startups is dodging bullets and climbing hurdles that are about to shutdown your dream. As a founder, most of my day and night is spent thinking about dodging the next bullet. When an idea pops up the might address a problem, it usually needs to be implemented immediately. There is little sense of day/night or weekend/weekday for a founder. It's all the same. 

The tangible result of this is I often find myself doing stuff that others think would take a month for them to do. Many of these people are super smart! It's absolutely ludicrous but...I don't blame them. As a student, I have the very same attitude and view. It's only when I change into my Founder Mode do I get to experience the One Day Month. 

For those on the outside, as a founder I also have the other polarity: I can go a week without getting much done. This is for the most part very dangerous, at least for me. This time is filled with supreme confusion and lazy energy. I try to snap out of this mode asap though I know founders that have made it work where going a few days without getting much done does not impede on their startups' progress.

He is in his 20s, he is running a startup that is going to change the world, he has raised $$$s from the top venture capitalists. That is the image so often portrayed in the media of your average 20-something entrepreneur.

Some of this is accurate. Arrogance is almost inherent to entrepreneurs. But so is its polar opposite, supreme insecurity! 

The media may not like to talk about it much because it'll ruin the mushy narrative. Yet if you find yourself at any gathering of startup founders, most of the discussions lean towards "dude-we're-about-to-die-zooomggggggggg!" than "we're-soooo-taking-over-the-world".

Prior to ycombinator when I knew very few(if any) founders, I thought intense mood swings was a personal problem specific to me. Then I end up at YC and speaker after speaker, week after week, make the point that startup life = definition of bipolar.

It was a huge awakening for me.

Previously during a down swing, I would close my website and go home. I did plenty of that in high school and freshman year of school.

What's it like now? My down swings are still here and they still create a weird dynamic especially if I'm around people that don't know me. But what is new is an ever-present knowledge at the back of my mind that this feeling of hitting my head into a wall..is just a wave. It'll pass. And more importantly, it'll be replaced with euphoria. Unfortunately, that too will pass.

Watch this incredible clip:

Back in high school, I did something really stupid. Few years later, it would come to bite. Another few years later, here I am offering advice to anyone who has done something stupid: don't go talking openly about it. Especially not on camera. This is way harder than it sounds nonetheless an important lesson, even for me.

I can't say that I support what Zynga CEO did. In fact, I doubt if even he supports what he did. This video really resonates with me in two ways:

• You can feel the hunger in Mark Pincus' words. he really needed revenue. guess what? he got it! lots of it!
• It tells me how if I was the ceo of Zynga, it would probably be broke. After my past experience, I swore never to do anything remotely stupid like that. Ever. At times this makes me pass on lucrative(yet somewhat fishy) oppurtunities. On the upside, I goto sleep a lot better. Way better.

I really love to debate. But I hate to debate much about my work. It didn't used to be this way. What I've learned is philosophical debates are a certain path to no where in most discussions. Moreover, these debates are often fueled more by emotion than facts.

So what to do?

Well, an interesting thing about these debates is the way they start. They usually start off something small. "Should we use a gray button or a red button?". You have never been a fan of the gray color. Your cofounder loves the gray. Moreover, you both consider this to be a big deal. You think gray is boring. Your partner thinks red is ugly. Upto this point it is okay because both you and your cofounder are clearly just expressing opinions. But this is where it'll take a twist: now your cofounder will introduce a study that says gray is better. Suddenly, you're defensive and you go on your own hunt to find the study that proves your color to be better. And before you know it, you are trying to hunt flaws in your partner's study. He does the same to yours. 

Where is all this heading? No where. At its worst, a rift between you and your cofounder.

Here's how I've started dealing with it: the moment I realize that the debate has turned emotional, I'll just shut up and put the decision on hold for the moment. At this point, neither me nor my partner can be objective about the decision. We both came in with preconceived ideas. The debate just reinforced our own ideas many times more tainting our ability to make a logical decision. Return to square one: what color should this button be? 

Before you can answer it, you should ask "does it matter what color this button is?". This will lead you to ask yourself what "matter" means. In our case, it often means "does the button impact sales?". If so, how can we objectively find out the best color for the button? Simple: a/b testing. If the button has little to no impact, toss a coin and go with a color.