Pulling together thoughts from the past couple years, below are links to more than 30 selected posts in my primary areas of interest, spanning a range of topics and pulling from both the Unstructured Ventures and Taylor Davidson sites.

If you’re interested in the photography industry, click here for a table of contents to posts about changing business models in the photography industry.

Financial Modeling

• Financial Models Are Always Wrong: Create One Anyway.

  Creating a financial model forces an entrepreneur to outline very specifically how a business “works”: how a company creates their products, how users and customers find and use their products and how those processes create revenues and costs. The result, a set of operational metrics, financial statements and the “equation of the business”, is one view of a potential reality of the business. While any one view is inevitably wrong, by digging deeper and analyzing the key drivers and testing a range of assumptions an entrepreneur can create multiple views to help make crucial product design, marketing, organizational and strategy decisions.

  Complex Financial Model created by Taylor Davidson Right-click to download. Zip file, 244 KB.

• Financial Models Are (Still) Always Wrong: Create One Anyway
  

  In January I released a free financial model to help entrepreneurs model and understand the story behind their business. After a lot of interest from entrepreneurs for a simplified version of that model, today I’m releasing a streamlined version that will make it easier for entrepreneurs to start understanding the equation underlying their businesses.

  Simple Financial Model created by Taylor Davidson Right-click to download. Zip file, 244 KB.

Venture Capital and Entrepreneurship

• Venture Capital for the Long Tail: Trends in Entrepreneurship and Venture Capital (SXSW 2009)

  “Venture Capital for Long Tail Entrepreneurs” describes the need for a fundamentally different, economically viable model for creating and funding micro-businesses. Venture capital needs a new model to adapt to declining costs to start businesses, the impact of Generation Y and increased personal and corporate transparency and sharing.

• Where Meaning Meets Business
  

  … it’s impossible to separate shareholder value and customer satisfaction, because in they are derived from the same actions: people allocating their money, time, attention and love.

  … People aren’t simply consumers: money is just one thing people spend; aren’t time, attention, passion and love far more meaningful?

• An Investment Thesis
  

  … here is a general investment thesis [for venture capitalists and entrepreneurs]:

  * Products and services that build markets, networks and/or communities,
  * Focused in industries with inefficient, expensive middlemen, high transaction costs,
  * That aggregate and structure data,
  * To create valuable relevance,
  * Created and accessed via any device, anytime,
  * Built as an API from the beginning,
  * Monetized through API access,
  * Requiring a small funding gap between costs and profits,
  * Created by founders that embrace a grand challenge.

• Companies will wake up when enough people start caring.
  

  How do companies wake up? People wake up.

  … Perhaps large companies just need to figure out how to measure their impact a bit better to show them how to change; perhaps part of “how people wake up” is new metrics and methods of measuring their impact that incent them to wake up and change.

• Venture capital is not broken. But it could use an alternate incentive structure.
  

  Create structures that enable flexibility, create more intermediate decisions and tie payments to actions, not to negotiations.

  … How can we let continuous interactions and decisions, rather than scheduled commitments, determine the flow of attention, talent, time and capital? How can we introduce elements of game theory into our investment and operating structures?

• What trends can entrepreneurs leverage to create new businesses?
  

  How can companies take advantage of broad deflationary conditions, declining consumer spending, massive deleveraging, a loss in trust in big companies and a cry against overconsumption and the excesses of American capitalism?

  What trends can entrepreneurs leverage to create new businesses?

• Invest in the venture system, not venture capitalists.
  

  In a perfect world, “more money for entrepreneurs” would mean more businesses would get created. But it doesn’t work that way.

  … But even more telling, more money doesn’t necessarily mean more (or better) businesses even if venture capitalists are the ones placing the bets.

• Supporting early-stage ventures: How do you help someone fish?
  

  Competitive pressure forces us use our professional backgrounds, networks, skillsets and career goals to create different models to invest in and support new ventures. As a person who believes in personal responsibility, testing ideas by building instead of planning, under-optimizing, learning through failure and developing the ability to seamlessly interact with others to create value, I believe it’s most valuable to learn how well you, your team and your ideas work as soon as possible: quickly, efficiently and cheaply.

• What would it take to start a “floundering startup” buyout firm?
  

  Could it be possible to apply the idea of a private equity turnaround firm to early-stage startups?

• Can governments create entrepreneurial and innovation hubs?
  

  I’m becoming increasingly interested by the examples, best practices and case studies around the roles governments can play in creating innovation and entrepreneurship hubs (and yes, those are separate entities) through direct government intervention and indirect incentive and system structuring.

  But are governments paying attention to the right kind of innovation?

Business Strategy

• How to Fail: 25 Secrets Learned through Failure

  25 lessons I’ve learned through failure. Of note, #25:

  Treat these secrets as absolutes.
  Instead: Know all the rules completely so you can break them perfectly.

• Five cultural and technological frames shaping new business opportunities.
  

  Continuing to think about platforms and trends, let’s start with five frames shaping today’s business opportunities.

• Value is created at the edges but captured at the hubs.
  

  Where is the value created and where does it go in networked industries?

  Value is created at the edges but captured at the hubs.

  Remember, that while the activity is in the tail, the money is in the head.

• What is the next platform for new businesses?
  

  Maybe the traditional venture capital model is broken for Internet-based businesses; but maybe the larger issue is that Internet technology-based businesses no longer need venture capital. Venture capitalists right now are faced with the opportunity to either:

  a) Create new operational and economic structures to serve and profit from micro-entrepreneurship, or…
  b) Find new platforms for businesses that fit the traditional venture capital model.

• Metrics can change your life. Or at least the way you pitch.
  

  Brian understood that ERA was a “thin” measure of value, and that the “thick” measures lie deeper, in the “numbers behind the numbers” that baseball researchers have been developing and refining for the past twenty years.

  Open-mindedness, adaptability, forward-thinking: that’s the kind of guy I can root for.

  Why do I point this out? Merely to provide an example of how digging into the data behind our lives enables us to change our relationships, careers and lives. And by sharing our methods of inquiry and refinement with others, it can help other people evaluate and refine their own lives.

• Beyond the massconomy, humanity wins.
  

  In a world beyond the massconomy organized by markets, networks and communities, “good beats evil”, love beats fear, and humanity “pays”.

Marketing and Communications

• Social capital isn’t new, but everything about it is.

  Social capital isn’t a new concept, but everything about how we can create, value, promote and exchange social capital is new.

  … Social capital existed far before the Internet, broadband and our new communication mediums; the new media environment, the opportunities for self-publishing or blogs did not create a new source of capital.

  It has existed ever since people started trading their time, thoughts, skills, energy and passion in return for the same; but what is different today is our expanded scope and scale to create, display, promote and value social capital, especially at the personal level.

• Content is cheap, context is expensive: Is it any surprise which one we lack?
  

  Context is expensive: hard to create, hard to learn, hard to distribute. At the intersection of information and interaction, context is a unruly mixture of variables, each with own level of situational impact. Content is expensive to filter: false positives add to the noise as we simultaneously mistakenly discard valuable signals. Strict rules-based systems for managing interaction can be expensive to manage. We have to listen to both sides to balance out the debate, to understand the biases, to pick out what people are actually saying. Education takes time.

  … Finding the right information takes time: search engines aren’t perfect, recommendation sites are a mess and accessing our incomplete networks of outsourced knowledge takes time. Finding the right people through intelligent routing is a start, but it is still expensive to test, understand and evaluate people’s knowledge.

• Direct Marketing is Dead. Long Live Direct Marketing!
  

  In an environment where marketers’ ability to dictate the person + marketing message + product equation decreases, the marketing and product approach needs to shift to leverage shifting flows of information.

• Ambient Intimacy: Creating Archetypes from Avatars
  

  … as much as I want to decry our expanding loose networks, fracturing attention and fake friendships sustained through our ambient connections, maximizing the power of loose networks and loose ties is the real opportunity; it’s where I’ve met the most interesting people, learned the most interesting things, connected to new opportunities; it’s where we find growth and create new value, it’s where we find new edges; it’s the source of innovation and insights we would not have seen otherwise. It’s why we care about serendipity and discovery; we’re hooked by the positive variable intermittent reinforcement baked into all successful, widely-adopted tools; an insight, an opportunity, a confirmation, a life-changing connection behind every click.

• We are all public figures in our own spheres.
  

  What will happen once we’ve all been burned by a private foible becoming unexpectedly public?

  Will we still rake our public figures through the coals? Or will be put our hot irons away and as a collective society merely shrug our shoulders, an unceremonious acknowledgment that humans make mistakes, a recognition that we are all public figures in our own spheres?

• What does “status” mean today?
  

  By creating systems that allow us to publicly display, measure and compare some facet of ourselves, we implicitly create societal competition over that artifact.

• Our misplaced notion of privacy (or, why social media has a major perception problem).
  

  Why is targeted advertising perceived to be a bad thing? The real issue is over our misplaced notion of privacy on the web; the real debate is over control, not privacy. Facebook: Let me make my entire profile public; vendors: let me give you more information about me.

• How can we “shape serendipity”?
  

  Is it possible to breakdown the drivers of serendipity to maximize our “return on attention”?

• Can we experience serendipity without inefficiency?
  

  Is it possible to experience the joy of serendipity and mystery without the costs of their inefficiencies? Can the sweet be as sweet without the sour?

• Filtering firehoses, embracing constraints and sparking creativity.
  

  We are inundated with the tools to create and distribute content at scale, but in the end, I don’t want better ways to create, I want better ways to experience. Each macro- and micro-interaction should help me be present in the moment rather than pulling me away from it; I want to live life in the here and now, not the there and then.

• Is the context of time the untapped issue in social media development?
  

  Existing social services and applications are based on the premise that our social networks are more or less static. Granted, the applications provide ways for us to tweak our settings, our content, our levels of privacy and sharing in order to “be different people” to different people. But in action, it’s socially difficult to take many of these actions because the online decisions we make are so much more transparent and obvious than our offline decisions. The binary yes/no decisions and terminology used by most networks (e.g. “friend”) are unable to capture the nuance of our offline social relationships. Our learned, socially-acceptable ways to handle the changing nature of relationships have not yet adapted well to the Internet.

  We know how to be social and manage relationships offline, but we’re still learning how to to this online.

• Can nuanced discourse compete against “strategy by soundbite”?
  

  Simplified strategies that can be condensed and packaged into soundbites spread into society’s collective conscious and accepted wisdom far faster than nuanced, complex ideas under the economics of today’s media. While the clamor for heuristics, stereotypes and easy answers isn’t new, if we demand thoughtful discourse and nuanced answers can we reshape the economics of media?

Random, but Awesome

• Making Myself Uncomfortable (A Zombie’s Journey)

  Nobody asked me about the face paint.

  … But instead of waiting for people to ask, I embraced this as an opportunity to start a lot of conversations. I converted many glances and quick smiles into conversations and laughs, simply by reaching out to people and explaining a little bit about why I was dressed in muddy shoes, a blazer and silver Zombie face paint that morning. Simply by being a little uncomfortable, by being willing to make a fool of myself, I hope I brought a little bit of joy to everyone that day: to everyone that saw me but didn’t say anything, to everyone I talked to and laughed with that morning and hopefully to everyone that followed the story on Twitter around the world.

• Navigating Niches, London, England

  A conversation in response to a question in a comment:

  I came across your blg via a family member, and I think you have much to offer the world, but so far have done nothing of real value with your life. So what’s your motivation and/or purpose in gathering such a large audience?