I just read that Annie’s is going public. For anyone who doesn’t know, they are the folks behind a series of delicious and mostly organic mac & cheese products. Yum!

I’ve been a fan for a long time. So much so that in 1997 I wrote them a later singing their praises. This was back in the day, so it was an actual printed letter that I no longer have, because, well, they have it. (It was around the time of the Mars rover and my recollection is that I suggested Annie’s Mac & Cheese was the bigger accomplishment.) What I do have is the response that Annie herself wrote out by hand and sent back to me, along with some coupons for free product and a fridge magnet that she references in the P.S. Here it is:

I was an Annievangelist prior to that, but became even more fervent as a result. 15 years later, they’re going public. That’s a long road, and they sure travelled it in style.

Way to go, Annie.

Albert from USV outlines his list of personal projects for 2011. And there’s #YearInReview from Seth. Both neat ideas and I’m going to get after them this weekend.

I’ve been following the TikTok saga on Kickstarter, which finally came to a close today. They raised a crowdsourced total of $941,558 (their goal was a paltry $15,000), which is frankly astounding. It is pretty clear that for a certain kind of product, this model has the potential to completely upend how things get made. Or perhaps I should say, has just upended how things get made.

How to raise a million bucks in 2010:

I’ve made a few products over the years, and it used to be that building a product like this required several hundred thousand dollars of at-risk investment: machine tools, production run commitments, CAD software and big CAD hardware, costly prototypes, and on and on. Not a big deal for an established company in a known market, but for individual entrepreneurs that investment was really hard to find. Imagine trying to pitch TikTok to investors absent Kickstarter: “I want to make a watch for the nano, just like Steve Jobs suggested to *everyone*, and I have no distribution but trust me it’s going to be really awesome.”

Right.

Now, the total investment required is much less – on the order of tens of thousands as TikTok’s goal suggests – and you can take it right to the customer. Kind of sad to think of all the great ideas lost prior to this.

Notwithstanding the obvious concern that the SEC will have something to say about it eventually, you also have to wonder if the same model would be able to materially fund companies. Especially given that Diaspora was funded on Kickstarter, and held the fundraising record until TikTok came along.

A million bucks is a ton of money in lean startup land; at that price, you can build a lot more than a watch.

Well, as I said earlier (and I am still *shocked* at the term’s lack of widespread acknowledgement, this blog’s de minimis readership notwithstanding) I thought they would strike this down. Off by a court, but still. Now the battle is joined and we’ll see how it plays out.

I think you need to be really careful in how you approach the upsell on your freemium product. I’ve recently encountered a few examples that seem to do a lot more harm than good.

In particular, it seems to me that you have to:

• be really clear about what you get for free vs paid, and not surprise anyone using the free version with an “oops, to finish that work you started 20 minutes ago you now have to upgrade”
• make sure you give people a really good opportunity to play with the free version or trial before you hit them with the ask – so many free apps, the first screen once you log in says “Upgrade Now!!” and you haven’t even used the thing yet

I believe 100% that if you do those two things, you will have happier customers and probably a higher conversion rate than if you don’t.

A colleague of mine sent me an issue he wanted my thoughts about, and at the end of it added “…but maybe I’m just overthinking this.”

Which got me to thinking, what does that mean?

My first pass is that overthinking occurs when we spend too much time (vainly) trying to reduce the uncertainty in a fundamentally uncertain situation, rather than recognizing the fundamental uncertainty and managing that (an affliction to which highly intelligent people are particularly susceptible).

The best example I can think of comes from inventory management. You could spend an awful lot of time trying to make your sales volumes less variable and more predictable – analyzing colors and times of day and so forth until your head hurt. And there would be some value in that, particularly if you actually had the data, but pretty quickly you’d run up against the fundamental uncertainty of the situation.

At some point it seems to me you’re better off saying sales will vary, and plan for that. In the inventory case that means assessing how much it costs too have too much versus too little, setting your inventory accordingly, and moving on.

Or maybe I’m over-thinking it…

Re: Bilksi

Nor is it entirely surprising, given the predilections of this court for douchey business practices.

I am pro-market. That is not the same thing as being pro-business, a distinction that seems lost on most of these twits.

Ah, those dirty Blackhawks won last night, claiming Lord Stanley’s cup on a shaky goal that was more or less identical to Crosby’s goal that won gold for Canada in Vancouver. Bad-angle shot from the left side in OT, the goalie wasn’t really expecting it and didn’t close up quick enough, and that’s that.

Which is as powerful a corollary as any of Gretzky’s old saw that “you miss 100% of the shots you don’t take”.

Sometimes, when you take one of those not-great shots, you win it all.

Interesting article from Steve Kaplan (Chicago GSB) and Josh Lerner (HBS) re: the scale of investment and returns in the venture industry. Their conclusion is that nothing out of the ordinary is going on; I’m not sure that’s how I’d put it.

Their chart 3 views VC investment as a percent of the overall market – I think rightly and cleverly. They conclude from it that “since 2002, commitments have run just slightly above the historical average.” Indeed.

However, it is also true that in both 2006 and 2007, VC investment ran about 1 standard deviation* above the mean, which should only occur about once every 6 years. And given that those commitments take a few years to invest, and per their chart 4 VC investment hasn’t increased nearly as sharply as commitments, I think you could take this data to argue for a significant overhang. Not like 2000, but real nonetheless.

My little spreadsheet; * I exclude 2000 from my calculation for reasons I trust to be clear.