Archive for January, 2014

What is a BRIC nation?

What is a BRIC nation?
BRIC is an acronym for the combined economies of Brazil, Russia, India and China. The economies of these four nations are collectively called “the BRICs,” “the BRIC countries,” “the BRIC economies” or the “Big Four.” The countries currently represent about 25% of the world’s land mass and 40% of its population. Economist Jim O’Neill, chairman of Goldman Sachs Asset Management, introduced the acronym in his 2001 paper, “Building Better Global Economic BRICs.” The paper drew attention to the importance of the BRIC economies and the growth of these emerging market economies.

O’Neill’s paper theorized that India and China will grow to become the world’s leading suppliers of manufactured goods and services, respectively, and Brazil and Russia will become dominant raw materials suppliers. In addition, O’Neill surmised that by 2050 the combined economies of the BRICs would surpass those of the world’s current wealthiest countries.

It should be noted that O’Neill grouped these nations together because they have the potential to form an influential economic bloc, and not because they represent a political alliance or a formal trading association. The nations, however, have met at an international relations summit annually since 2009. The first two conferences were referred to as the 2009 BRIC summit and 2010 BRIC summit. In 2010, South Africa was officially admitted as a BRIC nation following an invitation from China and the other BRIC nations. The current acronym is BRICS (with a capital “S”) – Brazil, Russia, India, China and South Africa. Since 2011, the annual conference has been referred to as the BRICS summit.

Definition of ‘Stimulus Package’

A package of economic measures put together by the government to stimulate a floundering economy. The objective of a stimulus package is to reinvigorate the economy and prevent or reverse a recession by boosting employment and spending. The theory behind the usefulness of a stimulus package is rooted in Keynesian economics, which argues that the impact of a recession can be lessened with increased government spending.

My explanation of ‘Stimulus Package’

The global recession of 2008-2009 led to unprecedented stimulus packages being unveiled by governments around the world. In the United States, the $787-billion stimulus package dubbed the American Recovery and Reinvestment Act of 2009 contained a huge array of tax breaks and spending projects aimed at vigorous job creation and a swift revival of the U.S. economy.

How Startup Valuation Works – Measuring a Company’s Potential

How would you measure the value of a company? Especially, a company that you started a month ago – how do you determine startup valuation? That is the question you will be asking yourself when you look for money for your

Let’s lay down the basics. Valuation is simply the value of a company. There are folks who make a career out of projecting valuations. Since most of the time you are valuing something that may or may not happen in the future, there is a lot of room for assumptions and educated guesses.

Why does startup valuation matter?

Valuation matters to entrepreneurs because it determines the share of the company they have to give away to an investor in exchange for money.  At the early stage the value of the company is close to zero, but the valuation has to be a lot higher than that. Why? Let’s say you are looking for a seed investment of around $100, 000 in exchange for about 10% of your company. Typical deal. Your pre-money valuation will be $ 1 million. This however, does not mean that your company is worth $1 million now. You probably could not sell it for that amount. Valuation at the early stages is a lot about the growth potential, as opposed to the present value.

How do you calculate your valuation at the early stages?

  1. Figure out how much money you need to grow to a point where you will show significant growth and raise the next round of investment. Let’s say that number is $100,000, to last you 18 months. Your investor does not have a lot of incentive to negotiate you down from this number. Why? Because you showed that this is the minimum amount you need to grow to the next stage. If you don’t get the money, you won’t grow – that is not in the investor’s interest. So let’s say the amount of the investment is set.
  2. Now we need to figure out how much of the company to give to the investor. It could not be anything more than 50% because that will leave you, the founder, with little incentive to work hard. Also, it could not be 40% because that will leave very little equity for investors in your next round. 30% would be reasonable if you are getting a large chunk of seed money. In this case you are looking for only $100, 000, a relatively small amount. So you will probably give away 5-20% of the company, depending on your valuation.
  3. As you see, $100,000 is set in stone. 5%-20% equity is also set. That puts the (pre-money) valuation somewhere between $500,000 (if you give away 20% of the company for $100,000) and $2 Million (if you give away 5% of the company for $100,000).
  4. Where in that range will it be? 1.That will depend on how other investors value similar companies. 2. How well you can convince the investor that you really will grow fast.

How to Determine Valuation?

Seed Stage

Early-stage valuation is commonly described as “an art rather than a science,” which is not helpful. Let’s make it more like a science. Let’s see what factors influence valuation.

Traction. Out of all things that you could possibly show an investor, traction is the number one thing that will convince them. The point of a company’s existence is to get users, and if the investor sees users – the proof is in the pudding.
So, how many users?
If all other things are not going in your favor, but you have 100,000 users, you have a good shot at raising $1M (that is assuming you got them within about 6-8 months). The faster you get them, the more they are worth.

Reputation. There is the kind of reputation that someone like Jeff Bezos has that would warrant a high valuation no matter what his next idea is. Entrepreneurs with prior exits in general also tend to get higher valuations. But some people received funding without traction and without significant prior success. Two examples come to mind. Kevin Systrom, founder of Instagram, raised his first $500k in a seed round based on a prototype, at the time called Brnb. Kevin worked at Google for two years, but other than that he had no major entrepreneurial success. Same story with Pinterest founder Ben Silbermann. In their cases, their respective VCs said they followed their intuition. As unhelpful a methodology as it is, if you can learn how to project the image of the person who gets it done, lack of traction and reputation will not prevent you from raising money at a high valuation.

Revenues. Revenues are more important for the B-to-B startups than consumer startups. Revenues make the company easier to value.

For consumer startups having a revenue might lower the valuation, even if temporarily. There is a good reason for it. If you are charging users, you are going to grow slower. Slow growth means less money over a longer period of time. Lower valuation. This might seem counter-intuitive because the existence of revenue means the startup is closer to actually making money. But startup are not only about making money, it is about growing fast while making money. If the growth is not fast, then we are looking at a traditional money-making business.

The last two will not give you an automatically high valuation, but they will help.

Distribution Channel: Even though your product might be in very early stages, you might already have a distribution channel for it. For example, you might have sold carpets door-to-door in a neighborhood where almost every resident works at a VC firm. Now you have a distribution channel targeting VCs. Or you might have run a Facebook page of cat photos with 12 million likes, now that page might become a distribution channel for your cat food product.

Hotness of industry. Investors travel in packs. If something is hot, they may pay a premium.


Not necessarily. When you get a high valuation for your seed round, for the next round you need a higher valuation. That means you need to grow a lot between the two rounds.

A rule a thumb would be that within 18 months you need to show that you grew ten times. If you don’t you either raise a “down round,” if someone wants to put more cash into a slow-growing business, usually at very unfavorable terms, or you run out of cash.

It comes down to two strategies.

  1. One is, go big or go home. Raise as much as possible at the highest valuation possible, spend all the money fast to grow as fast a possible. If it works you get a much higher valuation in the next round, so high in fact that your seed round can pay for itself. If a slower-growing startup will experience 55% dilution, the faster growing startup will only be diluted 30%. So you saved yourself the 25% that you spent in the seed round. Basically, you got free money and free investor advice.
  2. Raise as you go. Raise only that which you absolutely need. Spend as little as possible. Aim for a steady growth rate. There is nothing wrong with steadily growing your startup, and thus your valuation raising steadily. It might not get you in the news, but you will raise your next round.


The main metric here is growth. How much have you grown in the last 18 months? Growth means traction. It could also mean revenue. Usually, revenue does not grow if the user base does not grow ( since there is only so much you can charge your existing customers before you hit the limit).

Investors at this stage determine valuation using the multiple method, also called the comparable method, well-described by Fred Wilson. The idea is that there are companies out there similar enough to yours. Since at this stage you already have a revenue, to get your valuation all we need to do is find out how many times valuation is bigger than revenue – or in other words, what the multiple is. That multiple we can get from these comparable companies. Once we get the multiple, we multiply your revenue by it, which produces your valuation.


It is important to understand what the investor is thinking as you lay down on the table everything you have got.

  1. The first point they will think is the exit – how much can this company sell for, several years from now. I say sell because IPOs are very rare and it is nearly impossible to predict which companies will. Let’s be very optimistic and say that the investor thinks that, like Instagram, your company will sell for $1 Billion. (This is just an example. So do not get caught up in how unrealisict that is. This is still possible.)
  2. Next they will think how much total money it will take you to grow the company to the point that someone will buy it for $1 Billion. In Instagram’s case they received a total of 56 Million in funding. This helps us figure out how much the investor will make in the end. $1 Billion – $56= $ 940 million That is how much value the company created. Let’s assume that if there were any debts, they were already deducted, and the operational costs are taken out as well. So everyone involved in Instagram collectively made $940 Million on the day Facebook bought them.
  3. Next, the investor will figure out what percentage of that she owns. If she funded Instagram at the seed stage, let’s say 20%. (The complicated piece here is that she probably got preferred shares, which just means she gets the money before everyone else. Also, there might have been a convertible note as part of the funding, which gave her the option to buy shares later on at a set price, called “cap”.) Basically, all of these are just anti-dilution measures. The investor that funded you early on does not want to get diluted too much by the VCs who will come in later and buy 33% of your company. That’s all that is. Let’s assume in the end, like in How Startup Funding Works, the angel gets diluted to 4%. 4% of $940 million is $37.6 Million. Let’s say this was our best case scenario.

$37.6 Million is the most this investor thinks she can make on your startup.  If you raised $3 Million in exchange for 4% – that would give the investor a 10X returns, ten times their money. Now we are talking. Only about a 3rd of companies in top-tier VC firms make that kind of a return.


Consider two scenarios – Dropbox vs. Instagram.

Both Dropbox and Instagram started as a one-man show. Both of them were or are valued over $1 Billion. But they started with very different valuations:

  1. Drew Houston went to Y-Combinator, where he received about $20K in exchange for 5% of Dropbox. Valuation 400K (pre-money).
  2. Kevin Systrom went to Baseline Ventures and received $500k in exchange for about 20% of Brbn (predecessor of Instagram). Valuation $2.5M.

Why were the valuations so different? And, more importantly, did it matter in the end?


Option Pool. Option pool is nothing more than just stock set aside for future employees. Why do this? Because the investor and you want to make sure that there is enough incentive to attract talent to your startup. But how much do you set aside? Normally, the option pool is somewhere between 10-20%.

The bigger the option pool the lower the valuation of your startup. Why? Because option pool is value of your future employees, something you do not have yet. The options are set up so that they are granted to no one yet. And since they are carved out of the company, the value of the option pool is basically deducted from the valuation.

Here is how it works. Let’s say your pre-money valuation is $4M. One million is coming in new funding. Post money valuation is now $5M. The VC gives you a “term sheet” – which is just a contract that contains the conditions upon which the money is given to you, and which you can negotiate. The term sheet says that the VC wants a fully diluted 15% option pool in the pre-money valuation. This means that we need to take 15% of the $5 million (post-money valuation), which is $750, 000 and deduct it from the pre-money valuation ($4 million minus $750,000). Now the true valuation of our company is only $3.25 Million.

Twitter: 15 hidden keyboard shortcuts

Twitter: 15 hidden keyboard shortcuts

Twitter has more than 500 million users – but how many of them know about its top hidden keyboard features? For those of you who don’t know them, here’s a list of the top fifteen tips

Twitter: 15 hidden keyboard shortcuts

Twitter has hidden keyboard shortcuts that can save you time Photo: PA

7:00AM BST 24 Oct 2013

Comments8 Comments


1. Homepage – ‘g h’

If you want to return straight to the home page, you don’t have to scroll the cursor up to the home icon on the left. You can just press ‘g h’ on your keyboard and it will take you straight to your home Twitter feed.

2. Your profile – ‘g p’

When you’re surfing around on Twitter and find yourself seven degrees of separation away from your profile, press ‘g p’ and it will take you straight back to your profile.


3. Messages – ‘g m’

The message icon can be hard to find on Twitter, so if you need to access your inbox, press ‘g m’ on your keyboard and it will take you straight there.

4. Connect – ‘g c’

When you want to get to your list of interactions, just press ‘g c’ on the keyboard.


5. Mentions – ‘g r’

To get to mentions you could then just click the tab on the left – but obviously the quicker shortcut would be to just type ‘g r’ and that will bring up any Tweets that mention you.

6. Users’ profiles – ‘g u’

To get to someone else’s profile you don’t have to browse the search box. Instead you can type ‘g u’ and a box will pop up saying: “Go to a person’s profile.” Just type in their name to jump to a profile.



7. New Tweet – ‘n’

Wherever you are on the Twitter site, pressing ‘n’ on your keyboard will immediately pull up a ‘What’s happening?’ box for you to type your Tweet into.

8. DM – ‘m’

If you want to send a DM (direct message), press ‘m’ and a new direct message box will appear on your screen. You can then type in the recipient’s Twitter handle and send your message.



9. Favourite – ‘f’

If you come across a Tweet you want to favourite, simply pressing ‘f’ will favourite it for you. However – word of warning – this only works if you have opened up a new page for the Tweet. It won’t work just on your homepage.

10. Retweet – ‘t’

Just as with favouriting a Tweet, you need to have the Tweet fully open to do this. Once you have it up, just press ‘t’ and it will ask you if you want to retweet it to your followers.


11. Reply – ‘r’

For those of you who were wondering why the code for retweeting is a ‘t’, now you’ll know why. The ‘r’ shortcut is reserved for replying to a Tweet. Again, make sure you have the Tweet open separately before you do this. If you press it whilst on the homepage, nothing will happen.



12. Next Tweet – ‘j’

To move on to the next Tweet in a list, simply pressing ‘j’ will take you down to the next one and create a blue box around the Tweet.


13. Previous Tweet – ‘k’

To go back to a previous Tweet, press ‘k’.

14. Load more – ‘.’

If you have an old browser, or your Tweets are taking a while to load, pressing ‘.’ will bring up the next set of Tweets for you, and take you straight to the top of your page.


15. Keyboard shortcuts – ‘?’

When in doubt of all these shortcuts, just typing in a question mark will bring up Twitter’s hidden menu of all the keyboard shortcuts available.

Person of the Moment

30 Pinners to Follow, 2013 Edition

Finally, make sense of your drug info: A first look at a company inspired by a TED Talk

100 Websites You Should Know and Use (updated!)

In the spring of 2007, Julius Wiedemann, editor in charge at Taschen GmbH, gave a legendary TED University talk: an ultra-fast-moving ride through the “100 websites you should know and use.” Six years later, it remains one of the most viewed TED blog posts ever. Time for an update? We think so. Below, the 2013 edition of the 100 websites to put on your radar and in your browser.

To see the original list, click here. While most of these sites are still going strong and remain wonderful resources, we’ve crossed out any that are no longer functioning. And because there are so many amazing resources out there, please add your own ideas in the comments. Happy surfing!







And now, the original list from 2007, created by Julius Wiedemann, editor in charge at Taschen GmbH. While most of these remaining thriving websites, we’ve crossed out defunct websites and added notes when possible:







#jaggi #letternote #letternotestore #pixpa #onlineportfoliowebsites


About Pixpa

Pixpa is an online service that enables photographers, artists and designers to showcase, sell and share their work with style and simplicity. Pixpa helps creative professionals create their personalized and professional web presence easily and cost-effectively.

Why Pixpa ? Here are the top 5 reasons:
Full creative control – Choose from tons of preset designs or create custom design styles. Switch designs and styles anytime.
Flexibility – Create photo and video galleries, slideshows or info pages, sell works, enable client proofing. Do more!
Awesome social media integration – Publish galleries directly on Facebook + Share and promote works on social media sites
Embed and include – Embed widgets, web pages or external assets within your website.
Honest Pricing – Plans start at $9/month. No setup fees. All features included.

Useful links:
Sign up for a free trial at
Pixpa in a nutshell:


Beautiful crafted preset and customizable designs, Unlimited photo and video galleries, Search engine friendly, E-Commerce and Social Media Integration, Hosted and managed – Easy to use, Private galleries for Client access


LetterNote is a product design brand based in India that designs and creates an eclectic range of simple, minimalist yet functional products that are visually expressive. LetterNotes’s product range includes fine stationery, graphic art prints, bags, home and office decor and lifestyle accessories.

Founded by Delhi-based designer duo, Anisha and Gurpreet Singh in December 2011, LetterNote is an expression of their experience in the world of art and design.

Their fascination with visual culture, art history, photography and design trends inspired them to create LetterNote- a platform that amalgamates all these strands. Anisha and Gurpreet are also part of the multi-disciplinary design firm – Ideaz Inc (, which was founded by Gurpreet in 2003.

Uninhibited by any one design style, LetterNote merges a quintessentially Indian aesthetic with an international, modern, contemporary vibe. With its motto of “Good Design is Good Fun”, LetterNote’s appeal cuts across all age-groups and segments.
LetterNote’s future endeavours include expanding its product range, opening more exclusive retail stores and venturing outside India as well.


product design, lifestyle, home and office decor, fine stationery

100 Websites You Should Know and Use (updated!)

Murphy’s Laws of Combat

Murphy’s Laws of Combat

1.  If the enemy is in range, so are you.

2.  Incoming fire has the right of way.

3.  Don't look conspicuous, it draws fire.

4.  There is always a way.

5.  The easy way is always mined.

6.  Try to look unimportant, they may be low on ammo.

7.  Professionals are predictable, it's the amateurs that are 

8.  The enemy invariably attacks on two occasions:

       a. When you're ready for them.
       b. When you're not ready for them.

9.  Teamwork is essential, it gives them someone else to shoot at.

10. If you can't remember, the claymore is pointed at you.

11. The enemy diversion you have been ignoring will be the main 

12. A "sucking chest wound" is natures way of telling you to slow 

13. If your attack is going well, you have walked into an ambush.

14. Never draw fire, it irritates everyone around you.

15. Anything you do can get you shot, including nothing.

16. Make it tough enough for the enemy to get in and you won't be 
    able to get out.

17. Never share a foxhole with anyone braver than yourself.

18. If you are short of everything but the enemy, you are in a 
    combat zone.

19. When you have secured an area, don't forget to tell the enemy.

20. Never forget that your weapon is made by the lowest bidder.  

21. Friendly Fire Isn't.


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