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The pace of technology advancement continues to take its toll on some of the 20th century finest companies.

After years of decline, Eastman Kodak is about to go bankrupt. This is another sad example of a company with amazing legacy, who’s management failed to adapt to the digital age. In an ironic twist, Kodak is the company that invented the digital camera, the technology that brought to its demise.

Indeed, that’s a nasty dilema – realizing that a technological innovation will undercut your main revenue sources – film and the chemicals needed to develop them. A smart management will internalize the fact that times have changed and will adopt for the future. Kodak’s management went for the Ostreich strategy – bury your head in the sand, and hope that the storm will go away. Oops, bad decision. By the time they woke up, it was already too late.

George Eastman, founder of Kodak

The mechanism in which executives are compensated in public-traded companies doesn’t improve these companies chances of survival. As a CEO of publicly-traded company, you receive your bonuses based on short-term profits and stock value. Why would you invest in a long-term strategy shift when you are at the reigns? Better squeeze-in every dollar of short-term profit, cash out and move on to your next CEO gig with pockets full of cash.

Maximizing long-term shareholder value is not the real goal of public companies management teams, but rather maximizing short-term personal gains.

You press the button, we do the rest

Some statistics:

• Kodak was founded in 1880 by George Eastman. His strategy: sell inexpensive cameras and make large margin in consumables: film, chemicals and paper.
• in 1976, Kodak had 90% marketshare of photographic film sales in the US.
• Apple’s QuickTake consumer digital cameras, introduced in 1994, were actually manufactured by Kodak.
• By 2005, Kodak ranked #1 is sales of digital cameras in the US, with $5.7B in sales.
• By 2010, Kodak US market share dropped to only 7% in.
• 2007: The last year in which Kodak made a profit.
• 2011: Preparing for chapter 11 filing.
• 1930: Added to the Dow Jones Index. Stayed in the index for 74 years, until 2004.
• 1996 Market Cap: $26B. 2011: Market Cap: $126M.

Goodbye Kodak, and thank you for all those memories you helped humanity capture.

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1. 2012 New Year Resolutions

Here are my new-year resolutions for 2012:

1. Do more sports. On an average week I run ~8K, swim ~2K and play tennis once. I plan to double these figues and add at least one bike ride and one yoga class per week.

2. Spend more time with the people I love.

3. Have a healthier diet. Eat more vegetables, eat out less frequently. Lose 5kg and reach 75Kg. That’s the toughest one. I love good food too much.

4. Learn to sing at a basic level. I am the most terrible singer in the world, to the point where I am embarrassed to even sing Hanukah songs. In 2012 I’ll work with a voice teacher and practice to a level where I could proudly master all necessary holiday songs.

5. Travel: Spend a couple of weeks in Iceland or in Mustang in Nepal (or both). Spend a week doing Via Ferrata climbs in the Italian Dolomites. Find time to go for a kiting trip. Go for more weekend trips in Israel.

Mustang, Nepal

6. Work: Reach $1M+ revenues with my new startup.

7. Read more books. I read less than 15 books in 2011. That’s not enough.

8. Spend less time online.

9. Improve my time management.

10. (A private resolution.)

 Have a Happy New Year and a Great 2012!

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Being a startup guy, I strongly believe in beta-testing. So I bought an old 50cc scooter from a poker friend for 3,000 NIS (~ $800). The logic was:

1) I’ll use it only inside the city and not risk my life on highways,
2) If I don’t like it I can get rid of it pretty fast (actually a mistake, there is barely a market for 50cc bikes in Israel) and
3) I can tell a good story of how I won this scooter in a poker game (of course, realizing later there is no market for 50cc bikes, I figured I was bluffed, which is pretty much in par with my poker performance in the past year).

Soon I realized I hate even the notion of stepping into my car so I upgraded to a new 125cc San-Yang scooter. Cost (after trade-in): ~$3,700.

My Scooter

So, here are the stats for 1-year of motorbike riding in Tel-Aviv and its vicinity:

• Monthly fuel costs: $37.  85% savings compared to my car fuel costs  (~ $320 / month)
• Minutes saved in traffic: Approx. 20 minutes per day. I value my leisure time at $60/hour. Monthly savings: ~$450. Quality of life impact: much higher. I hate being stuck in traffic.
• Minutes saved looking for parking: at least 10 minutes a day. Parking in central Tel-Aviv is hell. Luckily I live next to the river, otherwise I’d be at 30-minute a day. Taking into account an average of 6 parking tickets a year and parking fees, monthly savings: $225 in quality time + $30 fees.
• Insurance costs: Using some strange Middle-Eastern logic, you pay higher government insurance costs for motorbikes than cars. The logic: Motorbike riders are 5X more likely to get killed or injured in accidents. By whom are they getting killed? In most cases by car drivers. The authorities choice? let’s tax the ones who are getting killed, not the ones killing them. Makes lots of sense. Additional insurance cost: $50/month.
• Depreciation: ~$500 / year. New car depreciation in Israel: ~$4,500 / year. Savings: $4,000 / year.
• Other fees (taxes, maintenance, etg.) – saving of ~$250/year.

Total yearly value vs. using a car: ~$15,500 Net. That’s a lot of money!

Non-quantitative advantages:

• It’s fun to ride.
• I park exactly in front of where I am destined: my office / bar / restaurant / home. No long walks due to lack of parking.
• I can meet people any time of the day, anywhere they want. Traffic and rush hours are no longer a consideration.
• My girlfriend hugs me more, especially when riding in the winter.

The only downside really is that it is so freaking dangerous to ride a motorbike with all the crazy Israeli drivers on the road.

What are my chances of surviving the next 10 years? The stats are 20 deaths per 1 billion kilometer (plus about 200 serious injuries). I ride approx. 1,000km / month. In 10 years I’ll ride 120,000km. My chances of making it alive and healthy are: 1-(120k/1B)*220 = 99.76%. (merely 0.1% lower than the chances of car drivers of surviving 10 years on the road).

So, an additional 0.1% survival risk for accumulated 10-years value of over $150,000 puts my life’s value at $150,000/0.1% = $150M. Wow, that’s exciting! I never though of myself as a multi-millionaire!

Recommendation: Get a bike

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The Zell program (funded by Sam Zell of Chicago) is designed for outstanding undergraduates in their last year of university who are seeking to create new ventures. Twenty two students were selected this year to participate in the program, plus six guest students from Singapore.

Over the last couple of years I’ve seen hundreds of startups in various stages. What was imminent with many early stage startups was that their founders lacked the foundations for asking the right questions about their own projects, unknowingly setting themselves to fail.

Hence, my goal when teaching the class was to teach the students to think like entrepreneurs; to understand what are the critical questions they must ask before starting their businesses.

In the eight 2.5-hour classes we spent a lot of time discussing distribution-at-scale (which is were most startups fails), building minimum-viable-products, customer discovery and the excellent 9 building blocks model. We also covered ideation (how to find ideas for your startup?), tools, variety of shortcuts (heard of Mechanical Turk?), money raising and other subjects that are critical for venture creation (hiring, founder agreements, the importance of good lawyers, etc.).

I believe in hands-on experience (read: lots of homework). The students had to go out of the building and conduct real-world work during the course. Each team interviewed 2 CEOs of startups on topics such as ideation, pivots and customer discovery. They interviewed dozens of customers as part of the customer discovery process, presented their up-to-date venture insights on an almost-weekly basis and spent real money with Google and Facebook campaigns to attract users to their startups’ landing pages.

We also had three excellent guests lectures:

• Omer Shai (VP Marketing of Wix), one of the best online marketing executives in Israel, gave a detailed presentation of Wix online marketing strategy and tactics.
• My friend Revital Hendler, founder and CEO of AllJobs, gave a talk about how AllJobs grew from a garage company to becoming the biggest job site in Israel, employing over 200 employees (side note: I single-handedly wrote the code for the site in 2004, using C# and a single SQL Server. That was the last time I wrote code until I started my new startup, a month ago).
• My friend Adam Fisher from Bessemer Venture Partners, one of Israel’s top investors (take a look at his portfolio and read his blog) gave an excellent talk about the VC industry and how he evaluates deals and startups.

I had lots of fun teaching this course. The students were great. I was pleasantly surprised by how smart, focused, enthusiastic and mature they were. Definitely the kind of people that will achieve great things in life. The Zell program is the best program of its kind in Israel, and kudos to IDC for creating and nurturing it.

Zell 2011 Class

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It won’t be too many years before MLG (Major League Gaming; What a genius name) will bigger than MLB, NBA and any other real-world sports with their boring player strikes, player injuries and a need to actually get off the sofa.

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