Tuesday, June 14, 2022

I met the future I had imagined, and it blew my mind

In a recent post I wrote about my novel The Yoda Machine. It was e-published (Amazon, Google, Kobo, etc) in 2018 and published in paperback (Amazon) in 2021. I wrote it between 2007 and 2014 when these ideas were still well into the future. It is essentially a conversation between Yoda, an "AI socratic teacher" (a bot in these days' terminology), and a young child in the world of 2064.

Today I discovered I was miserably mistaken. That bot is here today and I met it in a post titled Is LaMDA Sentient? — an Interview by Blake Lemoine an AI engineer and ethicist at Google that appears to have gotten on the wrong side of his employer (read here)

The conversation of Lemoine and his associate with LaMDA, the sentient bot is so similar to the dialogues between Yoda (my bot) and Darlene, the young woman in my novel, that I have been having goose bumps for the last hour.

Could this be a scam and I be a fool? For sure. If it is, then the dialogue is a masterpiece of imagination and worth reading (or listening, see the audio link in Lamoine's post) just for that reason. However, based on Lamoine's brief bio and his place of employment, I suspect this is the real thing. That is why I've been so shaken by it. If you have read The Yoda Machine, the dialogue with LaMDA is a MUST-read. If you listen to the latter, then read the former and see how a bot like this would change the world by 2064 or perhaps sooner.

7/13/22 Update: 
Upon further research and reading of the bot's dialogue I am skeptical of the sentience claim, if for no other reason that no one has, so far, provided a credible definition of sentience. I have come instead to the conclusion that the issue of sentience is largely irrelevant except to scare humans about the possibility to encounter artificial versions of themselves. What seems to me far more significant is the apparent feasibility of creating a bot with near-human comprehension of dialogue, complete mastery of all information available on the web (because of light speed research and assimilation), and the ability to deliver that information summarized at a level suitable to the comprehension of ITS audience. That is the essence of the Yoda (bot) in "The Yoda Machine" which would delivers a 24/7/365-available teacher of endless patience and energy to serve the intellectual curiosity of children and adults. When that is implemented, more or less as I imagined in my novel, the world will change at a pace and with a scope that will make science fiction appear to be a case of total lack of imagination.

Below is a copy of the dialogue only for the purpose of preservation in case the above links get removed. Read or listen to the original posts.


Thursday, October 10, 2019

Arizona Cart Services Mobile System - A success Story

We recently completed a project for Arizona Cart Services (ACS), a subsidiary of Arizona Food Marketing Alliance (AFMA) in Phoenix, Arizona.

ACS renders a variety of services to food and other large retailers in Phoenix, Tucson, Yuma and Sierra Vista and other Arizona locations.  One service is the retrieval of grocery carts that were removed from a retailer's premises. The service used to be managed with paper tickets prepared manually by 24 drivers and signed by the receiving employee of the retailer.  With over 600 locations, the task was staggering.

We were tasked with developing a mobile Cart Retrieval app that the drivers could use to prepare electronic tickets from anywhere anytime. A Dispatch app was also implemented to manage dispatching drivers to retrieve abandoned carts reported to the City of Phoenix or Tucson by citizens.

Design, development, and testing were performed during the Spring of 2017. Since going into production, the ACS system has processed (in six months) 24,000 tickets accounting for 160,000 carts and 1200 dispatch orders and their disposition. In October 2019 it broke its record of retrieving and processing over 1 million carts.  The time required for weekly customer invoicing and to pay drivers has been reduced by about 80%.  New areas of opportunity to improve logistics efficiency have been identified and new apps are under development.

For Logistics Services contact Arizona Cart Services - 120 E Pierce St, Phoenix, AZ 85004  Phone: (602) 258-4942   afmaaz.org/arizona-cart-services.html

To report stray carts contact afmaaz.org/report-a-stray-cart---arizona-cart-services.html

To explore development and implementation of cloud-based logistics support mobile apps contact Marco Messina  mm@swanvent.com  Cell  602-325-3213


Tuesday, September 25, 2018

A Trademarks Lesson

After having written in this blog for a decade and working with IP attorneys for over 30 years, how could I have missed the boat so easily? Well, probably because human beings start whatever with an idea, then the action-prone ones among us act on it, and only later we try to shoehorn the whole thing into a well thought out plan.  Some of the initial creativity by then may be quite hard to force back into the box.

Here goes my story:
In a prior post, I told how I checked one off my bucket list by finally, in haste to be sure, self-e-publishing a novel that had taken me over ten years to write. The original title, back in 2006 had been The Yoda Machine. The title and characters names came from the days of Star Wars movies as described in the book. Spoiler alert: my children called me Yoda (old ugly know-it-all) after I called them Jedi on occasion. Neither I or they were trying to profit from the Star-Wars-mania of the time and surely not in 2006 when I started writing and the franchise had gone dormant for years. We just used figures of the popular culture of the time as nicknames.  In 2006 when the novel was started Star Wars was at best a memory for 30-somethings and old folks. Over ten years went by. Eventually, the novel was finished n 2018 and when the time came, it was published with, surprise surprise, the same title.

And here comes the lesson for the entrepreneur:
It turns out that I have a close friend, John, whose IP attorney career comfortably puts him in the Top 10 in IP in the US tech industry, and particularly through the time of Star Wars popularity. He knew the names, the rules, the trademarks and the owners. He warned me that my use of Yoda could be a trademark infringement.  Naturally, changing the names seemed to trash a memory of a real life story, so I kept the title and ignored the warning. 
After one distributor requested proof of right-to-use a registered name, I wrote Lucasfilms to request permission to use the names Yoda and Jedi.  As an enticement, I offered a percentage of the $ 0 in royalties expected from my book to be given away for free.  As John predicted, the reply promptly arrived from some lawyer to explain how the name has great value, was developed at great cost, cannot be used freely, must be protected, blah blah.  The fact that I had no commercial advantage from my use and that popular culture has now incorporated Yoda in breakfast cereals, audio headsets, Pez (RT) dispensers and countless images, none of it was of consequence.
I asked John if I could I argue that, in fact, I was providing free advertising? He advised against it noting that a sailboat should not argue the sail's right of way against an aircraft carrier or oil tanker.

And so it was that "The Yoda Machine" was defunct before its maiden flight (no copies had been downloaded). It was re-released as "The Yogi Machine" with some unnatural twists in the story to rationalize new character names. I hope the romance of the story will still come through. If not it will prove that the attorney was correct and no value existed in my story except that created by his client whose IP I infringed. A question remains though: if downloads of the second title exceed the first, could that, in some other debate, support a claim that there was little value to the former name? These, of course, are debates for IP attorneys so we won't go there now.

The lesson remains: no matter how trivial the use of any word in the language you may be infringing under the Byzantine rules of the USPTO. The oddity of the word or how often it may be used in common discourse is no protection, even if you have no gain, if you face a determined litigator with deep pockets. The only solution is to go along for as long as current USPTO rules apply. Someday, perhaps, as now envisioned in The Yogi Machine, the rules will change and common use of the language will again be free to all.

For now, beware.


Tuesday, August 21, 2018

Another one for the bucket list

Building software is exciting, but cannot be the only thing. In my bucket list, one item has been outstanding a long time: To publish a novel that I had started writing in 2006. It started as science fiction and a test of whether I could write a novel almost 100% dialogue. It was fun in the beginning, dreaming of the future and imagining a conversation with my grandchildren. Alas, finding an end proved to take years and almost became a challenge beyond my patience. Then, one day, it came to me and I finally wrote "The End".

Finishing a draft of a short story and publishing it are universes apart I discovered. Editing is harder than writing, proofreading is mindlessly hard. Even when you are done with months of all of that, how do you publish an ebook? I ran aground again. Then on my birthday, I decided it had to be done no matter if less than perfect. As Facebook admonishes its staff "done beats perfect", and so it was.
Amazon was the first channel for the Kindle version of The Yoda Machine. It was easier than I had imagined, quick, and free.  You can find it here. Soon I discovered that despite the supposed popularity of Kindle, none of my friends had it. Kindle Reader is available free for every possible mobile device and OS, but getting family and friends to install it appeared to be too heavy lifting.
Draft2Digital was the next platform I tried for the Epub version of The Yoda Machine. Not nearly as automatic as Amazon to format correctly, but still quick and easy and free. It automatically submits your ebook to a multitude of publishers (Kobo, Scribd, B&N and more), it collects royalties and it generates ebooks in various formats (epub, mobi, pdf) that you can download in finished form for whatever purpose you wish.

So, one more is off the bucket list. Now back to writing software a clearly more appreciated endeavor.


Thursday, June 28, 2018

Venture Update - March 2018

The adventure goes on. The thrill continues...

  • Our customer base is growing.
  • The "quick and dirty" system we had developed as a prototype proved to be solid and clean enough to go to production. Thus far it has processed over 50,000 tickets for over 400,000 transactions by 35+ mobile app users in Arizona and Nevada. 
  • A sufficiently intuitive UI allowed us to roll out two installations with no direct contact or communication with end users, virtually 0 training time
  • The Zoho platform we chose for development and production has proven reliable and very affordable for our customers.
  • To back up our own resources we found a community of independent, certified Zoho Consultants from which we can draw resources to handle new projects
  • The system's underlying structure is proving to be adaptable to various instances of the gig-worker operating model.
and the thrill of building goes on


Friday, September 22, 2017

The Entrepreneur's Disease

Once you get IT, IT stays with you. Either you ended your last venture with a great success, then you go and unwind for a while until... IT gets you again and you have to try to grab another shooting star. 
Or your dream ended in failure, then you go and unwind, mourn the untimely death, and study why/how.... then IT gets you again and phoenix-like you have to chase another shooting star.  
Or, neither success or failure intervened, while you were doing something that feels less than dream-like, you imagine a shooting star, another opportunity to change the world, or just the neighborhood, or just a business, or a cause, or...

Well, you get the idea.  If you ever got this disease, even when you thought it was gone, it was still dormant in you, an addiction to the sense of purpose you get from chasing stars. Victor Frankl, the great psychiatrist, and philosopher called it Man's Search for Meaning. If you are blessed and cursed by entrepreneurship in your blood you'll feel it, just by reading this account. I am sure of it.

Investing is fine, teaching is fine, mentoring is fine, real estate deals are fine. But nothing compares with starting a new venture: the unknown, the hope, the ideas, the team, all pointing up to the sky. We'll fly high, perhaps close to the sun, but not too close. 

So, my blog is going to change. I am on the verge of a new business consulting and software development venture. It all started by accident and reawakened my fascination with software development to improve the efficiency of business processes.  That disease got in me in 1979 and kept me in the arena, with some success until 1995. Then curiosity and other opportunities took me away from it, but, at any available occasion, my mind always jumped back to the thought experiments that always precede system development.

Last year an acquaintance of mine baited me with a thought experiment regarding his logistics business. Could operations be improved by a mobile app that his drivers could access via tablets? Of course, it could. I imagined the system, the use-cases, the potential efficiencies, the agile process, the lean startup model, and before I realized it, I had swallowed the bait.  

In my mind, I committed to single-handedly develop a prototype that could be handed over to a development shop for final deliverables. When I got done, however, it was clear that the prototype was good enough an app near-ready for rollout. With a little additional work it went into beta test, and before I could realize what was happening, I had become process analyst, workflow designer, database architect, developer, coder, end-user trainer, tech support, and back to analyst for further developments. 

Then I found a support team to increase my bandwidth and suddenly I had gone back to the mid 80's to mid 90's when my company, with a full team, provided all those services. Now, with the right platform and tools I could do it all, as the one-man-shop I had started in the late 70's. And in addition, now, I also managed all the cloud-related functions and services that did not exist in the past.

In less than six months all paper-based processes had been eliminated, the time needed for weekly and monthly customers billing was reduced 85%, the time to process payroll was reduced 85%, new cities/markets were opened. Similar customers are asking to use the same system in contiguous states.

I could easily turn over the system to my well-qualified colleague consultants, which was my plan all along. BUT the disease of entrepreneurship is flaring up again. There is more for me to do, albeit in conflict with my wife's retirement-life expectations.

But, I ask, what is a sick entrepreneur to do?  Stay tuned.

Do you have a project? Call me.

September 2, 2017


Tuesday, October 1, 2013

The Exit Slide

In the “angel pitches” I see in our meetings, the Exit Slide seems to be frequently a weak part of the presentation. This is unfortunate because the Exit constitutes the major determinant of the pay off that investors may expect.  Why? Because investors typically do not see any return of, or on, capital until the Exit. The valuation of the company when sold will determine the pay out. The IPO case, most likely farther away in time, is much the same as the market valuation would reflect similar considerations.  Let’s focus then on the M&A Exit.

The following discussion involves many generalizations. As with most generalizations, countless exceptions can be found.  However, investors rely on these generalizations particularly to form first impressions in their due diligence. A wise pitcher, then, should be aware of those perspectives and speak to them.

Apart from strategic considerations unique to the acquirer, the M&A valuation of the venture being acquired will reflect the growth rate in sales and earnings (or reduction of losses) as prognosticators of future profitable growth. 

Moreover, the valuation will also reflect some multiple of annual revenues, which number correlates with other companies in the same industry. The correlation exists because that multiple reflects each industry’s underlying fundamental risk.  Some examples:
Rapid scaling of a software, or cloud-based, product or service is relatively easier than scaling a business that requires heavy capital investments. Similarly a line of “fashion” products that depend heavily on the company’s design guru to hit the sweat spot of unpredictable consumers carries inherent risks.  
Ski manufacturers live in a very competitive and concentrated market where product performance is difficult for consumers to measure (few can try before they buy) and where the appeal of the graphic design and style can make or break a sale. This complex and unfavorable state of affairs is reflected in the revenue multiple that applies to most M&A in skis and sporting goods: 1X. That multiple, in essence, says that acquiring companies give a low probability of repeatability of profits' growth. Conversely, medical devices valuations are in the range of 3 to 5 and even 10 times revenues, which reflects that, most often, once they gain traction, they have patents to protect their markets and margins, and can grow more reliably.

To make the case for your venture's projected valuation at the time of exit, present the following
  • A few examples (3-4) of recent acquisitions in your space showing names, valuations, revenues and resulting multiples in each case.
  • Show an average, perhaps adjusted for outliers or special cases.
  • If acquisitions of companies like yours do not exist (seldom the case) use the closest proxies you can reasonably find
  • Using the data above, make a supported claim of your valuation under similar circumstances based on the revenues projected at time of exit
  • Calculate the investors’ projected return based on the % of your business that you offer to trade for the desired funding. Note: This simple extrapolation works if you project a single funding event to take you to the exit.  If future rounds are contemplated, you have to adjust the analysis for dilution from those events.
  • Do not explain the logic in the slide, do that verbally. The slide only summarizes the data the audience needs to follow your explanation.
 Note:  My post AngelCalc elaborates these concepts further and includes a working calculator to do the math for you.  Be sure to understand the use of the factor “Probability of success” as it reflects the maturity of your venture.  If pre-, or nominal revenue, probably no adjustment is needed.  AngelCalc can also be a test for the attractiveness of the terms you offer vis-à-vis investors’ likely expectations.

Marco Messina


Thursday, September 5, 2013

Angel Calc Revisited

Do you know when your young business venture is "fit" to attract angel investor financing?

There are many theories and rules of thumb about how angels investors seek their ROI targets. To understand their motivations and ROI targets, let's look at how they work and the risks they face when writing a check:

Experienced Angels are the real Angels you want to work with. Most work in groups to share the heavy burden of due diligence research required to invest intelligently. To vet deals they try to include scientists, engineers and management experts in different industries and technologies. They ask a lot of questions and then more questions and then proof and supporting documentation. They generally do not move fast but cover their bases well. When they invest they will stay involved and help the management team with seasoned advice and working their contacts to help your business succeed. These are true ANGELS to entrepreneurs.

A High Risk Game
Research by the Kaufman Foundation (KF) shows that Experienced and committed angels' returns are on average quite attractive at 2.6 times their investment in 3.5 years. That, however, is balanced by the sobering fact that on average 52% of investments are a total loss and only 10-19% are a home run. Successful deals need on average 7 years to exit.

In my early days in this "bloody contact sport" my mentors cautioned me that a good rule of thumb was to consider a very early stage deal only if I could see a potential to earn 30 times my investment in about 5 years. Later on I tried to reconcile the KF statistics, my experience and the very demanding ROI target I was advised.  Eventually I modeled that all factors can be reconciled if one presumes that the probability of success of a well researched deal is only about 10-12%.

From experience I believe that it is a reasonable and not overly pessimistic expectation considering that the typical early stage business reflects most of these characteristics: Little or no sales, limited proof of market, may have lab tested technology, but little or no production, no proof of scalability, little or no delivery and distribution experience. Moreover, any of the following may apply:  a. in "some other garage" a similar or better mousetrap may be ready to come to market, b. the management team may have or may develop unforeseeable weaknesses (e.g. sociopathy leading to financial embezzlement, personality incompatibilities, office love affairs, divorces, loss of key talent due to death, accident, distraction, etc. - Over 35 years I experienced all of them as causes of aborted successful businesses); c. "effective" IP protection may prove difficult to obtain, may be revoked if prior art appears unexpectedly (see my posts on patents), inadequate funds to protect owned patents, exposure to Patent Trolls;  d. government regulations that may prevent or delay market acceptance, unforeseen vested interests that may create insurmountable barriers to market acceptance.

All considered the 10-12% probability may even be optimistic, but it appears to be what angels use implicitly if not explicitly.  To balance this somewhat dark view, we play this game  for the few successes that give us the satisfaction of helping turn dreams into reality, sometimes making a difference in the world and perhaps history while making a ton of money (in only 10% of cases)

So, with all this in mind, below is AngelCalc (copyright Marco Messina 2007-2013). Its intent is to help you test if your business has sufficiently high growth and profitability potential in an industry with sufficiently high exit valuations to satisfy the requirements of experienced Angels.  This is generally unlikely unless you have a unique IP component, market dominance potential, very rapid scalability. If your business cannot meet the angels' criteria, your funding efforts will be better put elsewhere. F&F (friends and family) may be an alternative at least until the criteria may be met.

A different analysis that comes to the same 30X ROI target is found in the section What do angels target for returns?  at page 3 of this KF paper

AngelCalc - Calculating with Angels

This model attempts to explain the finance-ability of a business based on angel investors' required returns.

The prime objective is not to set a valuation, although it can be used to back into or to validate a valuation that investors could live with. Primarily, it seeks to determine whether the relationship among the following factors allows a viable solution that meets investors criteria.

There are two paths each with its own factors:

P/E-Multiple Valuation (as for a public company):
  1.  time horizon is 5 yrs, 
  2.  future EBITA,
  3.  future PE and market cap (from current comparables),
  4.  investor's average returns and required return,
  5.  the ASK needed to implement the plan
  6.  The % equity to give up for the ASK
Revenues Multiples Valuation (most often for M&A sale of the company)
  1.  Time horizon is 5 years
  2.  Revenues in year 5
  3.  Applicable multiplier for comparable companies sold
  4.  investor's average returns and required return,
  5.  the ASK needed to implement the plan
  6.  The % equity to give up for the ASK
With both valuation methods the implied probability of success is 12% because it reconciles the return multiple identified by the Kaufman Foundation research (2.6 times return in 3.5 years) with the rule of thumb often quoted of "30 times the investment".  It can be adjusted to reflect the maturity (de-risking) of the company (e.g. VCs who invest at later stages often target 10X or 38% probability of success)

See input instructions above

Questons or comments? I'd love to hear from you, particulalry if you disagree.

Good luck. May you be so lucky to find a REAL ANGEL.

Marco Messina
The Angel Pitch Guy