Archive for January, 2013

Article from GigaOm.

In contrast to the findings of a research note on Tuesday that says Silver Spring Networks could soon shelve its IPO, I’ve been hearing that Silver Spring is actually getting ready to finally go public within the next four weeks, a year and a half after filing its S-1. A delay that long between filing and finally trading is not ideal, but it’s not unheard of for companies to wait through difficult market conditions, particularly as they negotiate pricing.

Beyond discussions I’ve had with sources, in Silver Spring’s latest S-1 Amendment the company notes that longtime investor Foundation Capital now says it plans to purchase $12 million worth of stock at the IPO price, following the IPO, in a private placement. If Silver Spring was planning to shelve its IPO it probably wouldn’t be negotiating this detail with its investor, and also wouldn’t continue to update its S-1 every quarter (it would just withdraw it).

Solar installer SolarCity’s investors used a similar tactic when the company went public last year to try to create interest from Wall Street. SolarCity investors Elon Musk, Draper Fisher Jurvetson and DBL Investors, agreed to buy up about a third of the Solar City float the day before trading, and that helped it get out and pop on its first day. Bankers could take it as a good sign that Foundation Capital is looking to buy up even more shares of Silver Spring.

Silver Spring has continued to grow over the years, despite the fact that selling smart grid networks to utilities is a pretty difficult low margin business. If you only look at Silver Spring’s GAAP revenue and net income it doesn’t look all that amazing, which is what this analyst did. The company hasn’t ever had a positive net income, and it recorded revenue of $147 million for the nine months ended Sept 30, 2012, which was down from $176 million from the same period in 2011.

But if you look at the deals that Silver Spring closed in 2012, and the amount it billed its utility customers for, it actually had a decent year last year. The company recorded billings of $219 million for the nine months ended Sept 30, 2012, up from $183 million for the same period of 2011. Billings are how much Silver Spring invoiced its customers, and they are considered deferred revenue until they can be officially counted as revenue. It had its highest gross margin yet on those billings of 34 percent. The company has a total of $473 million in deferred revenue as of the nine months ended September 30, 2012, and about $60 million in cash for the same period.

That’s the problem with selling gear to utilities. The deals and the sales cycles take a really long time to negotiate from a trial to a commercial deal, and then a long time to see through to the end. We’ll see how comfortable Wall Street is with looking at both its GAAP and non-GAAP financials when it comes to interest in the IPO.

Silver Spring Networks has networked 13 million smart grid devices, and has contracts to network more than 22 million total. The company has a total backlog of $745 million in product and service billings.

Now, we’ll see if over the next four weeks, Silver Spring is able to negotiate and get enough interest to price its shares at the valuation it wants. But from what I’m hearing it’s starting to aggressively try to do just that.

Read more here.


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‘Conscious Capitalism’: A business primer for doing well — and doing good, too
By Lanny J. Davis –  Read more: http://thehill.com/opinion/columnists/lanny-davis/279707-conscious-capitalism-a-business-primer-for-doing-well-and-doing-good-too#ixzz2JPVnIcib

Once in a while, a book about business theory and philosophy transcends the usual audience that reads “how to” business books — with lessons to be learned by everyone, business people and consumers alike. Such a book is Conscious Capitalism, recently published by the Harvard Business Review Press.

The two co-authors are John Mackey, co-CEO and co-founder of Whole Foods Market, a Nasdaq-listed public company based in Austin, Texas, which has become one of the most successful and premier supermarket chains and brands in the world; and Dr. Rajendra (Raj) Sisodia, professor of marketing at Bentley University, who in 2006 wrote, along with two other management specialists, Firms of Endearment, identifying 35 such firms, including Whole Foods, that have been successful as businesses and followed progressive, socially responsible policies.

Conscious Capitalism describes four specific tenets to teach companies how to implement policies and practices of this approach to business leadership and success.

The visual graphic in an early chapter of the book depicts both the interrelatedness and interdependence of these four tenets, as well as their prioritization. The three white, smaller triangles around the outer three sides of the large triangle describe three of the tenets: “stakeholder integration” (on top) and “conscious leadership” and “conscious culture and management” as the bottom two.

In the center — obviously, the most important, because of its central location and because it is highlighted in shaded gray — is a triangle with the first tenet of the book: “higher purpose and core values.” As Mackey once stated in a 2005 debate with conservative economist Milton Friedman, who argued that a company’s purpose must be almost entirely to make a profit, not to do good deeds:

“Making profits is the means to the end of fulfilling Whole Foods’s core business mission. We want to improve the health and well-being of everyone on the planet through high-quality foods and better nutrition, and we can’t fulfill this mission unless we are highly profitable. Just as people cannot live without eating, so a business cannot live without profits. But most people don’t live to eat, and neither must businesses live just to make profits.”

Whole Foods’s remarkable record is a case in point. In late 2008 and early 2009, at the time when the Federal Trade Commission appeared to have successfully blocked Whole Foods’s already completed acquisition of Wild Oats Department Stores, the company’s share price on the Nasdaq exchange plunged from $40 per share to $10. Whole Foods fought back against the FTC’s legal action, and the result was a compromise settlement that allowed the company to move on. On Friday, Jan. 25, the stock closed at $95.65/share — an increase of more than 900 percent in just four years.

Aside from shareholders, Whole Foods and its management team are proud of the way they have treated all others whom they regard as stakeholders — suppliers, employees, citizens of communities where stores are located and philanthropic causes — consistent with the fourth tenet of conscious capitalism, “higher purpose and core values.” For example, Whole Foods gives a minimum of 5 percent and closer to 10 percent of its profits to nonprofit organizations each year; allows all employees — called “team members” — to participate and vote on important working condition and company policy issues; puts a ceiling on the maximum ratio between the highest-paid executive and lowest-paid team member; and provides all full-time team members with virtually all their premium costs for health insurance, and part-time workers some healthcare benefits as well.

As readers of this column know, while I am a liberal Democrat (clearly on the opposite end of the ideological spectrum from Mackey on some issues), I also search for “purple” areas where there are common values and subjects about which constructive, solutions-oriented conversation can occur between left and right. And I find many such places articulated in this book.

The fact is, Conscious Capitalism is an important book for exactly that reason. I believe it should be a must-read, with a message especially appropriate for these times of dysfunctional political polarization, with “red-state” Republicans over-simplistically depicted as conservative and pro-business and “blue-state” Democrats as liberal and anti-business.

This book teaches that there is nothing inconsistent between doing well and doing good. Indeed, both not only can co-exist, but each is dependent on the other. That is a crucial lesson with meaning both in the business community as well as the larger divisive political, cultural and social arena in which the country finds itself after the 2012 elections.

Davis, a Washington attorney and principal in the firm of Lanny J. Davis & Associates, specializing in legal crisis management and dispute resolution, served as President Clinton’s special counsel from 1996-98 and as a member of President Bush’s Privacy and Civil Liberties Oversight Board. He represented Whole Foods during its legal challenges with the Federal Trade Commission in 2008-09 and on various matters since then, but does not do so at this time.


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Iterations: Silicon Valley Slowly Awakens To Android (On Samsung)
by Semil Shah

Editor’s Note: Semil Shah is a contributor to TechCrunch. You can follow him on Twitter at @semil.  http://techcrunch.com/2013/01/27/iterations-silicon-valley-slowly-awakens-to-android-on-samsung/

When the iPhone launched in 2007, Jobs proclaimed when it came to phones, Apple was likely, at that time, five years ahead of the competition. Well, those five years are up, and all of a sudden, as if on cue, many of the Valley’s smartest technology minds and observers have begun to slowly split up their attention between their primary mobile devices (iPhones) and the most recent Samsung lines of Android phones. How will the growth of Android affect the priorities of developers, which mobile platforms they chose to launch on, and the monetization formula for hardware (with Samsung’s ability to capture value) and software (apps) in a state of flux?

There’s so much great analysis out there as to “Why?” and “How?” Android is gaining steam, so I won’t regurgitate all of that here. Either way you slice it, the typically iPhone-centric and iPhone-obsessed Valley is starting to pay more attention to the new Samsung Androids, everything from the tactile design to app performance and all things in between, include Android’s growth rate and projections. This isn’t to imply Android is on even par with iOS, but being “good enough” may be all that it needs given Google’s strategy so far.

To date, most mobile “app-first” successes have been born on the iPhone, the most notable including the likes of new media darlings Instagram, new marketplaces such as Uber, and apps with freemium business models such as Angry Birds. All of these apps were launched a few years ago and enjoyed tremendous growth as the iPhone improved with each new version. Then, at a point when these apps felt the core product was solidified (and after raising serious venture capital), the companies applied resources to build for Android and dramatically increase their engagement (and revenues) with an audience hungry for apps they were excluded from enjoying. During this evolution, Apple squeezed the lion’s share of hardware profits from this industry, and also helped iOS developers earn billions of dollars in their app store marketplace.

Now in 2013, people are starting to imagine the next five years of mobile, and it’s clear Google will have many things going for it. The number of Android handsets will be huge. Developers will be enamored by the size of the potential audience. Android is more “open” and may encourage a different style of app innovation that’s gated off from iOS. Of course, all is not rosy: It’s yet unknown how much money Android users will spend on apps and through app-actions, Android developers will need to make hard choices about developing for so many different types and sizes of devices in Android, and users may determine they want more consistent experiences across devices rather than ones that are skewed by Android. On top of this are the mega-unknowns, such as “What will Samsung do?” and “What to make of Google’s integration of Motorola?” and “How many Android devices run the latest OS updates?” Fun, indeed.

Finally, we must follow the money.

On devices, Apple continues to squeeze out almost every available inch of profit. This certainly won’t last forever, as reflected by recent corrections to Apple’s stock price to start 2013, though I suspect their stock will snap back to high levels soon given the company’s iPhone-based revenues alone (not including any other products or services) eclipses the total annual revenues of other major tech companies. Samsung will surely take more hardware profits as a percentage than they have to date, but we will have to wait and see just how much. When it comes to native services, Google is in a good position to monetize all types of search, either through their phone browser, voice control, maps, or anticipatory systems. I’ve heard Google knows a thing or two about how to monetize search.

And, what about the money around and within third-party apps? Historically, most of the profits here have been routed through iOS, with the parent taking a nice 30% cut. There’s no doubt we’re going to start to see Android-first apps being built at faster rates, increasing the percentage likelihood that an Android-first app goes mainstream. The device fragmentation will be a huge burden for individuals and smaller companies (though I’m starting to see super-innovative solutions around apps and operating systems, which I’ll touch on in another post), but larger companies with resources and growth (and investment) may be in a better position to apply resources to Android to capture the growth curves in adoption.

While it remains to be seen how dramatic this shift in devices may be — it’s way too early to tell, and I’m personally not giving up my iPhone until they pry it from my cold, dead hands — there’s no question the scale of Android, even with all the old devices and outdated software updates, will be at a scale. And, while it remains to be seen just how consistent an Android user’s willingness to run transactions within apps is, application developers, such as those creating new mobile-to-offline marketplaces, will likely be able to not only begin Android-first, but also extract revenues and profits once reserved for iOS.

Jobs was right (if not conservative) about his “five years ahead” statement in 2007, though my bias is iOS is still miles ahead of Android today. But, no doubt Android is growing in numbers and performing well on Samsung. I wonder what he would predict about the next five years if he were alive today. I’ve tried to lay out an analytical view of what could happen as audiences grow and simultaneously shift, but the Apple loved by Silicon Valley and Wall Street alike is probably looking for something entirely new, something we don’t even know about yet. Will it arrive from Cupertino? Google is flush with cash, operating at tremendous scale with room to grow, showing no signs of slowing down, and even the most iPhone-loyal folks around the Valley are starting to take notice and envision a future many of them couldn’t see five years ago.

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Check out Fabrice Grinda blog – interesting and insightful


The Road Not Taken by Robert Frost
January 24th 2013 Posted to Quotes & Speeches

Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;
Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,
And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.
I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I-
I took the one less traveled by,
And that has made all the difference.
Nice Churchill Quote
January 21st 2013 Posted to Quotes & Speeches

“In War: Resolution. In Defeat: Defiance. In Victory: Magnanimity. In Peace: Goodwill.” -Winston Churchill

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ABC News with Lauren A. Rothman

To schedule an interview with On-Air Political Style Expert
Lauren A. Rothman, please contact:
Phone: +1.202.631.8878
Email: lauren@styleauteur.com
Web: www.styleauteur.com
Twitter: twitter.com/styleauteur
Facebook: facebook.com/styleauteur
TV Clips: styleauteur.com/press

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