Apple Does Hardware In Asia

Image via WikipediaHardware is harder to work on remotely than software. And it is not even remote. With all the communication possibilities of today, I think people can overemphasize the importance of geography. I enjoy a party as much as the next person, but if you think about it, the whole premise behind social networking - hello Facebook, hello Twitter - is that it is the relationship, not the physical proximity.

And so my tech team is in Kathmandu. It is 50 strong. It has been a profitable software shop five years in a row. But it is only now venturing out on its first tech startup. There are other software things you can do to make money, you know? The team has had global clients this entire time.

I became friends with the team leader before I came to America. This is not outsourcing any more than Nepal and India are foreign countries. They are not, not to me. Why can't I tap into my social capital?

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That 10X Return Thing

Image via WikipediaWhen VCs invest in your startup, they want a 10X return. So if they invest a million, they want you to turn that into 10 million dollars.

Why? Because they are greedy bastards? Maybe.

It's a numbers game. Say nine out of all 10 startups fail. That is pretty close to the actual numbers, by the way. So money was lost on nine out of 10 deals. One million turned into zero dollars. That stunt is still a lot of hard work on the part of many people, believe it or not.

But one makes it, and gives a 10X return. So 10 million dollars were invested in 10 different startups. Nine of them went down. One turned that one million into 10 million. That is a break even situation. The VCs started with 10 million dollars, they ended up with 10 million dollars. Where's the game?