TIL What a Pump and Dump is

I was reading Hacker News a couple days back and saw this post from a guy that he was being pushed stock for a video company that was completely illegitimate. 

TL;DR the company claims that they will help stream HD videos to devices with slower internet connections (e.g. a mobile phone) by using their special software which reduces the size of a currently compressed video to around 10x less. And the guy who wrote the post, took one of their sample videos on their website and realized they just used simple encoding and slowed the frame rate of the video from normal 24/30 fps to about 6 fps...

So this guy was seeing the company, Raystream, have it's penny stock shoot up several fold and had no idea why. Well my friends... it turns out they have a name for that sort of thing: a pump and dump.

Admittedly I don't really have a great handle of exactly what it is and how it works, since everything I learned about a pump and dump I learned from watching the videos here, but here is what I've gathered.

Organizations with newsletters, or just random people, with lots of money and no morals, will spend millions of dollars working to publicize a stock thats worth a few cents. They will get sales people to make calls, post ads on financial newsletters, and basically pull all the stops so they can get a huge volume of this cheap (and completely worthless stock) sold and raise the prices.

Usually the price will spike up for about 3 days (that's usually the max it will last) sometimes from 2 cents to 2 dollars (for those who can't do math that's a 10,000% increase btw) and then come crashing down. It sucks for the people who got in late, but is hugely successful for those who got in early (the promoters and some other lucky few) and those who were able to by the few shorts available.

So just watch out for those. But if you see one of these pump and dump's happening, you think it's still going to go up, and you're willing to take the risk, you could make a lot of money. But if you time it wrong... you're toast.

 

 

 

Any smart person can code: How to go from a manual task, to an automated program

My goal in this post is to give to any programmer who has a friend that wants to learn to code, or any person who wants to teach themselves to code, the proper tools/perspective to take the first step.

In my opinion, every smart person has the ability to code. It's just a matter of doing 2 things: learning what kind of things are possible with code and then learn the syntax to execute those things. That being said, that can still be a tremendous hurdle. Though overcoming the syntactical barrier is probably easiest, because it has become a simple matter of Googling something like:

How to split a string in python

Or basically how do I do x task in y language.

The bigger challenge is figuring out what x task needs to be if you're unfamiliar with programming and don't know what it can do. Now my proposition is that the challenge is not as big as it seems, and there is a simple way to over come it. All you have to do is tell the person to be so overly consious of the actions they take when completing a task, that they would be able to write down each step, give it to 1000 idiots, and have said idiots complete the task with a 100% success rate.

Tell them to dig deep and remember what every good science teacher they hard harked on: create a flawless and fool-proof procedure for your experiment (or task rather). Being able to do this, helps you overcome that first barrier of figuring out what procedures code can do and that you can Google the syntax for.

Let me show you an example. Let's figure out how we would do this for a task that's trivial for experienced programmers, but not-so-trivial for a beginner. 

Task: given a text file with student scores, figure out the final letter grade each student deserves.

Here's the text file:

Now let's just think out loud, not as programmers, but as humans. How would we do this? We know already that we need to first open the file, figure out which scores belong to which kid, add those scores up, find the average, then based off that average assign the kid a letter grade.

Now we can break this down even further.

  1. Open a text file called student_scores.txt

  2. Read the first line of text for the first kid

  3. Figure out the name of the first kid is Joe

  4. Add every test score of Joe's up, and divide it by the total number of test scores

  5. Take that number and assign it a letter grade

  6. Repeat steps 3 - 5 for Kim, Alex, and Sam.

And to break it down further so that it comes closer and closer to pseudo-code and something Google-able, you have to keep asking "How do you do step x" until you can't be any more specific. For instance I'd ask for step 3: how do you know the kid in the line is Joe? For step 4: How do you know what in that line is a test score? For step 5: How do you know what letter grade to assign it? For step 6: How do you repeat it for the three other kids?

The answers will get you a more broken down procedure like this:

  1. Open a text file called student_scores.txt

  2. Read the first line of text for the first kid

  3. Take the word that comes before the ":" (colon) character and that is the name of the first kid.

  4 a. Take the sum of all the numbers separated by commas

  4 b. Divide that sum by the total numbers separated by commas

  5 a. If that average score is greater than or equal to 90, assign the person an "A"

  5 b. Otherwise, if the score is greater than or equal to 80, assign the person a "B"

  5 c. Otherwise ...etc...

  6 a. Skip the next line in the text file.

  6 b. Starting with the line after that, repeat steps 3 through 5.

  7. Repeat step 6 until there are no more lines in the text file.

Now it just takes a little more guidance and a little more asking "how" to turn all that into perfectly good pseudo-code that a noob can go Google and find that syntax for the language they want to use.

And since every smart person is going to be able to write a good scientific procedure, every smart person is going to be able to get the hang of thinking through tasks like a coder, which means every smart person is going to be able to write pseudo-code. And since they are smart, they will also be able to figure out how to Google that to figure out exactly how to do it in their language :). There, problem solved. Now go help all your friends become programmers!

Be extremely attentive to your first users

This post is mostly a reflection of the great points from this post: It’s the CEO’s job to email the first 1000 signups.

I'm going to try to tell you the points that I got most from that post from memory, and try to avoid looking back on it. The reason being that I would assume the points that resonated the most with me, I would remember.

So the post highlights two major rules when sending your emails out to your 1000 signups:

  1. Actually do it manually.
  2. Don't be pushy.

The point of doing it manually is that you get the opportunity to personalize each email and you completely avoid the probability of messing up the first/last name in some mass mailing thing. The first 1000 or so sign ups are going to be some of the most important customers (reasons I'll get to later), and so it's crucial that you treat them as such and devote personal time to each one.

The point of not being pushy really has to do with, respect the person's time because they're doing you a favor for signing up. Don't make the email long and boring to read, and don't push any surveys on to the person. Say "Hi" and let them know you're available for help/suggestions. That's that. 

And the biggest reason, which I gleaned from the post, for sticking to these rules in your email is that your biggest evangalists/fans will probably come from your first 1000 or so sign ups. So use the email as an opportunity to both identify those fan boy/girls and to not piss any of them off. The ones who respond with suggestions, questions, and excitement, are the ones you should keep track of, pay special attention to, and follow up with.

I imagine there are several startups which were able to really gain a lot of value and traction from the amount of passion the first couple evangalizing customers had. One that immediately comes to mind is Mint.com's success with a small marketing budget. They were able to really get their first customers involved, keep them happy/excited, and really use that to their advantage in growing so quickly. Many startups have probably been able to get some virality from this and it's something I look to do on my next startup.

Why you should never worry about scalability (in the beginning)

I really began consiouly thinking about my own nerdy process after reading The Hustler's Manifesto  - TLDR; 1) don't test all your code, 2) stop being such a nerd, 3) take ownership of all your features.

I realized that I easily fell into the traps of 2 & 3 of the manifesto in that (2) even though I'm not the smartest nor most experienced nerd, I love figuring out what's best practice, what little things I can do to tweak to make things more efficient, and generally geeking out. And (3) thinking about cool other features to code up, because I love coding, rather than figuring out how valuable the current implented features are by getting measurable metrics.

I talked to fellow nerd Arthur Chang (Fanvibe/BeRecruited) about it, we discussed it, and I concluded that you should never worry about scalability (at least not in the beginning). It's a waste of time.

Well... actually that line is a little sensationalized. What I really mean is it is usually more harmful than helpful to worry about the little nerdy things in the beginning. The reason is because most problems that you will try to tackle and find a solution for, will only present themselves as real problems if you suddenly get a lot of traction and scale/efficiency really begins to make a difference.

And in the case that things break.. well then you are probably in a good position. With those types of problems, you can probably go out and raise money. And with that money you can go out and hire people to work out those problems while you continue to focus on the vision of your product!

So basically, when the nerd within begins to spend that extra second worrying about efficiency remember that your time is better spent working on getting your product built and distributed. Because most likely there will never even be a sign of a problem - in which case if you spent time working on solving that problem you wasted your time - but if there is a problem then you are ready to raise money to find someone to spend the time solving that problem.

There are definitely plenty of exceptions to this, but I feel that generally following this works. You should definitely make sure there are no gaping wholes in what you're building but don't worry too much about it! Though... do what I say and not as I do. As I will probably fall into this trap.

How Paul Graham's essay on wealth got me to learn how to code, then got me an interview with the man himself

My sister went to Wharton and she became a banker, and when I began my first year there that's what I thought I was going to be too. Albeit, my sister has since come to her senses and now is out of that game (congrats Linda!).

I thought going into banking would be a pretty safe track for me. I knew I wanted to start a company one day, but I wasn't sure I would be able to if I didn't have any money. At that time, I also had no idea how angel investing or VC money worked so I really thought that putting up my own capital was the only way. My plan was to get into banking, like all the other Whartonintes, get a sizable nest egg, then go and start a kickass company. Boy was I delusional.

But today, I potentially would have been that same delusional future MBA-er if it wasn't for this Paul Graham article - "How to Make Wealth". (BTW since that title is in quotes, does the period go after or before it?).

Well it was really a series of events and the first domino was Ajay getting me to read this essay. Ajay had always been a little more in tune with the tech scene than I was. He constantly tried to get me to read TechCrunch, told me about things like Y Combinator, and sent links my way. It wasn't until one bored hour during Thanksgiving Break of 2010 did I finally give in. 

I read that PG article and, wow, it blew my mind. It was then that I started to think about the possibilities of starting a startup, and how inherently good that would be for the world and for myself. The article is a fairly long read and PG covers a lot from how wealth is not conserved but can be created, how good startups are just 40 years of hard work concentrated into 5, how providing something that people want is wealth, etc etc. 

This really began to shape my philosophy on how the world should work.

After reading that essay, I began reading more essays. After break, I went back to school and heard about several Wharton startups making some big exits and creating a lot of wealth (Milo, InviteMedia, Quidsi). I was bombarded with the perfect storm of startup tech news and success.

And that's when I forced myself to learn how to code and build web apps. During Winter Break, Ajay and I taught ourselves web dev and we built our first couple of apps. Before we knew it, we we got a viral success on CNN/Mashable. And before we knew it, again, we were getting interviewed by the man himself, PG. It's been a roller coaster ride, and it all began with a new found perspective on wealth. 

I highly recommend you read that essay. One of my favorites.

How Open With Your Ideas Should You Be?

Most of Silicon Valley (and all other sensible startup communnities) now really find NDA's to be taboo. I can't place where I saw it, but I'm sure there have been several blog posts by very notable VC's and angels that say if you make them sign an NDA they already know they won't fund you. As far as I know, this is somewhat of a new trend.

The principle behind this is that successfull startups are about execution, not ideas. And if you're so caught up in thinking the only reason why your startup is going to have an advantage is the idea, than you must be delusional and not really understand how startups work. 

I have to say that I pretty much agree with this. And in addition, being open is not only not-hurtful-to-you but it can actually be helpful - to both you and the world.

Being open allows you to discuss your ideas with smart people, talking transparently about the potential opportunity and pitfalls. This will help you see problems that you wouldn't normally be able to see yourself, and possibly open you up to new ways of looking at things. And maybe your discussions will inspire someone else to look at your industry and think of solutions they can provide themselves. Either way, it will allow you (or someone else) to create something that will ultimately provide more value for the world than if you had kept it all to yourself.

The only thing is... even knowing this, I feel it is only natural to be hesitant in talking transparently with competitors or potential competitors. But the ironic thing is that they are probably the ones that can help you the most. They have done just as much, or more, research in the space and should know it as well, or better, than you do. So why not openly talk through problems with the people who are trying to solve the same problems? Here are just a few potential reasons.

We are naturally competitive creatures. I think instinctly, it doens't make sense to hand over ideas to competitors (big or small). We all want to win.

Sometimes it could be suicide. When dealing with bigger companies with more resources, if the idea you have really is that innovative, they could just either out-execute or out-last year. Either way, sometimes it's signing our own death certificate. Though most likely, if they're that big they're probably too slow and also your idea probably isn't that special.

So there are definitely reasons why someone would not want to be that open. But overall, being open and transparent will only help you more than it will hurt. Though sometimes I guess it can still be hard. And maybe I'm just being naiive. 

And the AWSome Hackers' Video Diaries Begin!

 

So the video diaries of the AWSome Hackers begin... If you are wondering about the odd spelling of 'AWSome' please feel free to ask :). (Hint: it has something to do with the correct pronunciation of Amazon Web Services). So the plan is to keep anyone interested (so basically that just means our moms and dads) updated on our life here trying to make it big in Silicon Valley. We want to be as 'daily' as we can with our video updates and to really keep everyone in the loop. Of course we will be open about the goings-on of our startup and our ideas as we feel an open policy is how to best keep this vibrant startup community growing. Here is our first video that I embedded and here is a link to our Youtube Channel: AWSome Hackers. Sorry if we seem a little tired - we had a long day and it's getting close to our bed time. We'll try to make sure we're a little more energetic and engaging in our future videos! Also we have some blasts from the past we want to upload too including our trip down for the Y Combinator Interview and our trek as TechStars New York City finalists. Enjoy!

Writing my first Python/Django app - already proved I'm fallible

Sorry guys (the one or two of you, or just me, that still reads my blog) for being incognito these past couple weeks. Finals hit then got home and enjoyed myself a bit with friends and my girl. I've been working on getting up to speed on learning a python web framework for a while and I chose Django because I heard there was a lot of support out there and it seems to be taking the lead because it is both high-level enough to do cool things easily and editable enough that it gives you low-level access (unlike Ruby?). So I've been stuck on this hiccup for setting up the Django environment which (I later found out, thanks to my Dad) involved Cygwin using a unix file system and my Python still only recognizing Windows file system stuff. I finally figured it out after slaving hours and hours scouring the web for answers and asking my dad for help (he actually ended up patching it up temporarily). I was so happy that I could move on to the actual learning of Django vs the set up. Then I left it, got home after a bit, and started using my home desktop (I had set up Django on my laptop previously). I was about to write a tutorial for setting up Django on Windows when I got curious about... could I just have set it up super easily, and avoiding that whole filesystem incompatibility nonsense if I just used the Windows command prompt to set up Django... So I started just using Windows command prompt and it worked (so far)! WOW. Wasted time slaving over trying to figure it out using Cygwin on my laptop...lesson learned though. Avoid tunnel vision. I will continue my Django tutorial on both my laptop and my desktop (I figure it will be helpful anyways to do it twice...and engrain it into my mind) and if both work out fine then I will simply write my tutorial on how to set up Django with windows using Windows command prompt and avoiding the mess I fought with!! Unless someone requests for me to write the version for using Cygwin as well...would be more than happy to. Anyways...goodluck to me on getting this all working. And as soon as I figure out if both work/not I will write that tutorial!

Dear Silicon Valley, Thank You

Dear Silicon Valley, Thank you for the hospitality. You've been great. This was really my first time here and you sure did deliver. I don't think I have ever been so astounded with a community and its people. Every single person I met (all people who never even heard of me before) extended a gracious hand to give me advice and help me as much as possible. It appeared that every body was connected and every body was friends. World - learn from this. This is a culture worth emulating. Sure, I occasionally felt the competitive nature between investors and the same between startup entrepreneurs, but alas that is the nature of business. All in all, it was a feeling of openness, friendliness, and free-lunchedness. Never heard a bad word about another person come out of another's mouth. It was all, "Oh I love him!" or "He's an awesome dude" and "What can I do to help?" This week has been surprisingly eye-opening and only made me fall more in love with the idea of living here. Honestly though, my heart was warmed to know that such a community exists in this world and that it is possible to develop a place like this., There were several people I met and talked to that really made this week worthwhile for me (skipped a few classes...) and instead of sending them all more thank you emails I will use this as my medium: PG of YC, thank you for grilling us and putting us through the most pressured interview we will ever encounter in our lives. And thank you for making us cry inside :). Now we are ready for everything, and have grown as a team. YC is ours next cycle. Jessica of YC, thank you for making us feel so comfortable as we walked into the interview, lowering our guards to the attack to come. And also thank you for making us feel so much better as we walked out :) You're the best. Harj of YC, thank you for being awesome. @YC_Y_U_NO loves you! Thanks for laughing with us during the interview, the lovely email afterwards, and just being an awesome guy. We hope to run into you and really get to meet in better circumstances. Kirsty of YC, thank you for being so kind about me forgetting to pick up our travel check :). And thanks for letting me stick around to use the Wi-fi. Ev of Mailgun, thank you for just being a great guy - helping us prep for the interview, being there for our interview, and sharing a couple awesome ideas with us. Definitely keep in touch and hope to be able to help you out as well in the future. Daniel of Accel, thanks first and foremost for introducing us to the greatest hot chocolate place in the world (I will keep the identity secret). Second, thanks for showing me around, brainstorming with me, and for some great intros! Chris of Like.fm and Matthew of Moki.tv, thanks for sharing advice with a fellow young YC hopeful. You guys did something right, and we are going to learn from it! Daniel of Twilio, thanks for showing me around the digs! The office is awesome, I can see how you fell in love with the company. Also thanks for the coffee, and sharing stories about your rise to startup greatness. Nirav and Sarah of Benchmark, thanks for sharing your wisdom to me. It really helped me figure things out a little better. And also thanks for calling Dave McClure with me :). Jack and Rob of Milo, thank you for meeting with a fellow Penn student! You guys are my inspiration and I really appreciate being able to talk to you both and learning from the best young entrepreneurs I know. Also, love the place down in San Jose but also wish it also closer to the city. Allan of YCR, thanks for the kind words and the willingness to help out as well! You're getting famous - enjoy it! Noah and Calvin of Minno, thanks for being super cool and smart guys. Congrats on YC and I know you guys are going to take it all the way. Love hanging with you both and I hope this is a start of a beautiful friendship. Gerry of Google, thanks for being so kind to a kid you met on the airplane. I really appreciate it, really :) Taylor of Mailgun, thanks for sitting with me in Mountain View to chat about ideas, markets, etc. Really helpful to be able to brainstorm with someone with that much experience. Rick of Comprehend Clinical and Michael of Carwoo, thanks for chatting with me at the Y Combinator offices. Definitely calmed my nerves. Also loved just meeting more YC guys - you are all so smart! Dave of 500 Startups, thanks for taking a call from a nobody like me and letting me drop by the office! I know we did not get too much time to talk, but it was super-cool meeting you and hope to catch up soon. Dave of TeachStreet, thanks for being the most helpful person I still have not ever met. Maybe it's a Seattle thing or maybe it's an sv thing, but you are an incredible man. Thanks for the advice and for all the referrals. I owe you one (or a million). Clint of Roblox, thanks for lunch again! And thanks for continuing to meet and mentor such a young guy. Always love chatting and hope you thought up some good stuff on that idea of ours... Adam of True Ventures, thanks for the tacos :). Thanks for introducing me to energetic founders and thanks for just being purely nice to someone that walks in to your office.. Mitch, Courtney, and Amadeus of Kiip/Eightbit, thanks for talking to me! WHAT?? Just met Kiip and Eightbit guys...so cool. I'm a very happy. Nathan of InternMatch, thanks for meeting with me at 8AM! So early! Glad you woke up to meet another Penn guy down in the valley. Also thanks for showing me around 500 startups. Christine of 500 Startups, thanks for chatting with a guy awkwardly sitting in your office and listening to our pitch :). Hopefully you liked us! Brendan of AngelList, thanks for giving us the advice on dealing with Angels and thanks for the super kind words! Very glad we got to meet. Hope to bump into you again real soon. Joshua and co of Venrock startup, thanks for meeting up with me while I'm down here and, as always, thanks for the encouraging words! Your guys' product is awesome, goodluck. Semil of Entrepreneurship..., thanks for getting coffee with me and helping me really think through our ideas. It was definitely really helpful and hope to stay in touch! Ryan of Dogpatch Labs, thanks for inviting me to the event! It was awesome getting tips on how to pitch. Also thanks for chatting with me for the few minutes you had free. Thomas of Nowmov, thanks for the cheesecake :) Mmmm. It was delicious. Thanks for also showing me around downtown and just talking startups with me. Most of all, thanks for showing me what I'm really passionate about :). Garry of Posterous, woah thanks for even looking in my general direction! Posterous, what?? You're an awesome and really chill guy so thank you for humoring me as I talked through my experience with YC and all our ideas. Hope to keep being able to bounce ideas off you and get some design tips. Joe of InboxQ, thanks for being so helpful! We only just met at Y Combinator, but you still did us a solid. We learned a lot from talking with you and will keep you updated. Jeff and Charles of SoftTech, thanks for taking a meeting with a nobody 18 year old. You guys are bosses. I really enjoyed meeting more legends of the valley and it was cool just getting your time of day. Hope to hear from you guys soon :) Ashley of SoftTech, thanks for chatting with me before the meeting! You are awesome and hope you are having a great time here in the valley. The weather definitely beats the PNW. YC_Y_U_NO, thanks buddy!!! TROLOLOL. You helped us do most of this. To all I may have missed: thank you thank you thank you for just helping me fall in love with the valley and this pro-entrepreneur community!

Sports today (er yesterday)

Alright another very short post. Today as I ran 20, 100's in the rain what kept me going full force was thinking that I want to show Paul Graham I'm no wimp. It worked kinda. I didnt quit. Just finished brainstorming features or an MVP for our YCombinator interview and started building. Now taking a quiz 2 hour Cat Nap before my 9AM lift... Nice one.