Jerry Lao is today’s contributing writer. He’s an aspiring entrepreneur, about to graduate from UC Berkeley. He sure has more to say than I did.

Impacted catchphrase

Recently, I’ve noticed the media has been maniacally throwing around the catchphrase, “social responsibility,” as if it were the solution to an impending apocalypse. A recent keyword search on Digg.com for social responsibility garnered 69 pages of results; Google returned a little over 20 million results. The media has inadvertently – or stupidly – jumbled a bunch of ideas on human ethics into one impacted catchphrase. Am I going to untangle this word and determine the value of every single one of its subcategories? No, I don’t have that much spare time on my hands. On the other hand, I will add to the mayhem and estimate the economic value of the phrase in its entirety.

So why is it relevant to us?

The idea of social responsibility has been around since the beginning of civilization, but few gave notice as it carried little economic value. It did carry ethical value, but ethics meant squat when daily conversations covered pillaging and plundering. We have come a long way since then as a society. We are finally beginning to realize the potential economic value of social responsibility – at least, some of us have. Once we surpass the physiological and safety levels of Maslow’s hierarchy of needs, we begin placing value on our relationships with others, and subsequently, on the monetization of social responsibility.

How much is it worth?

There are many statistics and formulas out there that attempt to value social responsibility in the US. I find most of them intriguing, but ultimately find myself more confused than before. KLD Research, Analytics, Inc. takes an interesting approach to looking at this question by measuring the performance of socially responsible corporations in the form of the Domini 400 Social Index. They came up with the following relationship to the S&P 500 Index:

DS400 Cumulative Performance as of March 31, 2008

The Domini 400 Social Index has been consistently outpacing the growth of the S&P 500 since 1990. Could this difference be the value of social responsibility to investors? Maybe, but I was out to seek an all-encompassing dollar amount. You could probably break apart that graph to find that number, but I neither have the energy nor desire to do so. Instead, I came up with my own formula:

(Total US Disposable Income) x (% of Socially Responsible Americans) x (Social Responsibility Premium %)

If you have no idea what I’m talking about, I’ll try to explain…

Total US Disposable Income: I decided to use disposable income as an initial starting point because I made the assumption that individuals would only practice socially responsible, economic behavior if they have the means to do so. If someone is barely affording staple foods, it is highly unlikely this individual would pay the extra few for fair trade coffee. In a recent Bureau of Economic Analysis news release, disposable personal income increased $29.6 billion, or 0.3 percent. This puts American disposable personal income at $9,896,266,666,667.

% of Socially Responsible Americans: In a recent survey by Fleishman Hillard, the results reveal that “More than two-thirds of consumers (67 percent) feel that knowing that a company meets global standards for being socially responsible would be either extremely or very influential if they wanted to buy a particular product or service from that company”. I will trust the American people; that they will hold true to their words.

Social Responsibility Premium %: In order to find out how much more people are willing to spend on socially responsible goods, I compared some basic commodity prices with its fair trade counterparts.

The price premium the market is willing to pay for socially responsible products seems to be around 10%. For the sake of not overestimating, I will use 8% as the conservative premium percentage.

So therefore:

$9,896,266,666,667 x 67% x 8% = $530,439,893,333.35

VALUE OF “SOCIAL RESPONSIBILITY” IN THE US: $530 billion. we estimate 530billion of those asset classes that doesnt all exist belong here in the US.

I sure want a bite of that pie. Yum.

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I heard this song Handlebars (by Flobots) a few weeks ago, but I just came across it again online. This song can mean whatever you interpret it as. However, it begins with a childhood dream that they could do anything you want. It starts with easy concepts such as riding a bike and writing in comic books. Then, as a teenager, one starts thinking he can change the world, and starts thinking about important career moves. However, as the “do anything you want” mentality continues, factors such as politics, social responsibility and power start playing in.

Though this video is too cynical to be related to startups, I started to realize what great responsibilities entrepreneurs have. Founders are free to do whatever they feel is right in order to change the world.

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Silicon Valley is the place to be for technology companies. More importantly, it is a great place for startups and new ventures. Many places in the world have tried to replicate the what we have in the Bay Area, but not as successful. The reason I like Bay Area is its community.

1. Community drives excitement. When you get a bunch of similar people together, it is naturally motivates them to get excited about common interests. One example is through the rise of technology blogging. Blogging, whether one is praising or criticizing, forces people to think about trends and innovation. Also, it helps people promote good products that may not have been known before. Another example of a close-knit community is Twitter, which is still relatively dominated by geeks. Silicon Valley is always one of the early adopters of new ways to stay connected.

2. Entrepreneurs are naturally insecure people. Let’s face it; Co-founders lead relatively lonely lives. One day, everything seems to be going fine; another day, your startup might seem like it’s about to blow up. There is no one to tell you if what you are doing is right or wrong. Also, starting a new venture a risky business altogether. However, you can find meetup’s every month where entrepreneurs come together and support one another. Often, it’s difficult for even your friends or family to understand why doing a startup even makes sense. It’s great talking to people pursuing the same journey as you are.

3. Working with passionate people. It’s possible to find smart people anywhere, but it’s hard to find people as excited about engineering as you are. Moreover, being passionate for technology is not something you can train someone to do. Building a strong team is one of the most important things in a company. I don’t believe grades and “smartness” are as important as being excited and having good character. I believe having passion will naturally translate to hard-work and willingness to learn new things.

I’m always excited to meet new people. Feel free to contact me.

Update: Another slightly updated image of Silicon Valley

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Loic Le Meur and Robert Scoble are invading my twitter I guess no one else is online at 11pm on a Saturday evening.

I like how Dave drops in too.

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As I’m about to graduate from college, I’m feeling more and more behind in this whole Silicon Valley startup rush. It seems like every other entrepreneur are in their 20s nowadays. A good number of them are also dropouts of college or grad school. Ever wonder what the real numbers and statistics are? Kauffman Foundation just released its findings on technology startup founders and their backgrounds.

Below is a graph depicting the age at which people started their first company.

The median age is at 39. It does seem older than most people thought. Also, I expect that journalists are more likely to report on startups that have young founders. Moreover, the survey is not limited to just internet entrepreneurs. It is a lot more difficult start a company in other engineering disciplines, where the initial infrastructure cost is higher.

I’m also surprised at percentage of business-major founders.

We, engineers, always make fun of business majors for a number of reasons. They take easy common-sense classes, have no technical skills, and go around just looking for engineers all day, giving them 0.01% equity stake. However, the truth is that they push themselves out there. Starting up is more than just programming all day. Communication, believe it or not, is the most important skill you need. 

 
And for me and all other young people who are so eager in starting up, this graph might calm you down a bit. The average time lag between founding and a bachelor’s degree is 17 years. This might also indicate that it is becoming more popular to step away from a long-term career to start your own company. I’ve heard it’s hard to take such risks once you’ve family responsibilities and greater financial obligations. It might be becoming easier.

The research was interesting, but I’m now interested in any findings that report on internet companies only. More coverage from Paul and Matthew.

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I wonder which stealth company around now will be the next big thing 10 years from now. Gotta start scanning that craigslist

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The thing that excites me about the startup world is that you know never know what’s around the corner. One day, it seems like everything is going great; the next day, your world is falling apart. You are on your own. You must make every decision on your own.

No one knows the right answer at first. It seems like everyone is trying to give advice about what makes a startup. Sure, there are some general tips that can be applied to any business, but each startup is in a different context. The strange thing is that even with all the best advice in the world, you can still fail. However, you can’t be scared. You just have to do, execute, and iterate.

In this strange world, nothing is as structured as it seems. Every time I listen to founders talk about how their company got started, the story always starts off by saying they really didn’t know what they were doing at the beginning. At the end the speech, you don’t still don’t know why some ideas work and some don’t. In a sense, they feel the same way. For example, YouTube went through mainly iterations before they got something right. Paypal went through many models before hitting it big. And Facebook, well, it just worked. The stories all seem strange and not very structured.

If you have an idea that solves a legitimate problem, just run with it. This first iteration probably won’t work, but the second or third might. You never know until you try!

I think this song applies well. And yes, this is also the Macbook Air commercial song.

“I’m a new soul I came to this strange world hoping I could learn a bit about how to give and take. But since I came here, Felt the joy and the fear, Finding myself making every possible mistake.”

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Back when Digg’s focus was technology, it used to be my favorite site. When it started to mainstream, I still liked it. The geek community was not as tight, but new audiences added extra value. I enjoy reading about politics, business and odd news, and Digg kept me well-rounded. But for the past couple of the days, I’ve just been seeing the content deteriorating.

For example, just yesterday, it seemed like every other article was about pot.

How did this get so many diggs?

There needs to be some smarter way of categorizing or viewing the content on Digg. I don’t think a simple list view will work for so much different material. Also, it takes so long to submit something now! I understand that the database must be huge, but please make it faster! Ok, this needs my Sunday rant.

I must admit though I still go there everyday. There aren’t many other alternatives to interesting news. Also, I like the team behind the product. Kevin and Alex make a great show on diggnation. I hope they continue to grow it out and not get bought out as the rumors say.

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I can’t decide whether or not to just go with Ruby on Rails, or stick with CakePHP. Working off a framework is important nowadays. It is very hard to maintain a large project at startup without a proper Model View Controller (MVC) setup.

Here are some of my quick thoughts:

• I like PHP because I am more familiar with it, and don’t have the time learn a completely new language.
• Many libraries I use are written in PHP; it would seem like a big hassle to find all the tools again for Ruby.
• It does seem like the MVC setup in RoR is a bit more solid a well built.
• I am not sure whether to tie the current engineering problems at Twitter to RoR.
• CakePHP has less documentation than RoR.
• Ruby has been debated to be slow.
• PHP might be a better solution for you if you are limited by a shared host or cost.

I’ll keep you updated on what I choose in the future. Any inputs? Django?

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I’ve recently changed back to FireFox to my default browser preference because of its invaluable extensions (sorry Safari). One extension that I use is an SEO tool. One of the features of this extension is that it highlights in red the a href links that have the nofollow attribute defined. Setting a nofollow tag basically tells a Google crawlers to not crawl through pass credit through that link. One specific use case is in Wordpress comments, where nofollow tags are set to the commentator’s url. This prevents spammers from simply commenting for PageRank.

Installing this SEO tool gives me a fun perspective of how websites work. YCombinator’s Hacker News is my favorite reads of the day. The audience is a relatively young crowded dedicated to startups and programming. It’s a great source for technology news as Digg and Reddit are mainstreaming. In the mages, the red highlights been nofollow links. As articles get more points, they become legit.

Below is a screenshot of the the top posts.

Here is what the up and coming posts look like.

Update: The SEO for Firefox tool I use can be found here.

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