What is Real in Silicon Valley?

iPoo, a social-networking app that connects people sitting on toilets, sounds like a joke, but it exists. More than 200,000 people have paid $1 apiece to download iPoo since it launched two years ago, say the app’s creators, enough to help put one of them through Harvard Business School. And tens of thousands use it every day, they say.

There is much more here. Including a description of itsthisforthat.com, which promises to help you find the perfect way to pitch your new internet business. The site offers a refreshable description of business pitches that are so crazy they just might be real. Among the more humorous ones I saw was this (funnier if you are an avid user of OpenTable):

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Breathtaking Photo of Space

Source: Wired.com. Copyright Nick Risinger.

The boyfriend of one of my oldest and dearest friends spent several years creating one of the largest sky-surveys ever created.

Nick Risinger, a 28-year-old native of Seattle, trekked more than 60,000 miles around the western United States and South Africa to create the largest-ever true-color image of the stellar sphere. The final result is an interactive, zoomable sky map showing the full Milky Way and the stars, planets, galaxies and nebulae around it.

Previous professional sky surveys (including the Digitized Sky Survey of the 1980s, which is the source for theWorld Wide Telescope and Google Sky) shot only in red and blue. Including a third color filter gives the new survey a more real feeling, Risinger said.

In all Nick took over 37,000 individual photos that were then stitched together to create his image. Last week he released an iPad App that includes many interactive features. If you are fascinated by space, or want to be, I suggest giving the app a try.

Real Motion Control…Wow, Just Wow

I wonder if it really works this well…

Via Hype Beast:

Motion control has proved decisive in deciding the victor of the current, and next generation of video game consoles. The current standard for using gestures as the controller is set by the Kinect from Microsoft, but Leap Motion thinks their new device called the Leap will soon be the new standard — and the standard for many other devices as well. Designed to fully integrate with tablets, smartphones, laptops and game systems, Leap is allegedly 200 times more accurate than the existing technologies and it is all packed into a device the size of a stick of gum which plugs into your computer’s USB port. Leap simultaneously tracks the movements from all 10 of your fingers, allowing for a wide array of highly accurate movement readings within 1/100 of a millimeter. In addition to acting as a controlling device for any compatible user experience, Leap can also be used to chain devices together to create a larger workspace — probably not unlike something seen in the office of Tony Stark. Leap is expected to be available in very limited quantities (first by means of a pre-order here) for around $70 USD, with a full release planned by the end of the year. You can find more information through Leap Motion.

Extreme Links Mega Overload

Via Marginal Revolution:

Via Carpe Diem:

Zaarly Pitch at LA Startup Weekend

Just signed up for e-mail notification when Zaarly launches.  Zaarly is a hyperlocal marketplace where buyers and sellers come together for simple transactions (tickets to a game, pizza delivery, holding a place in line, etc.).

Vodpod videos no longer available.

Here is a higher quality video I couldn’t embed. It’s from a Techcrunch interview this week at SXSW.

Amazon, Sales Tax, and Unintended Consequences

There is a rule in business: if you put a bucket of money on one side, a profit maximizing enterprise* on the other, and some sort of legislation in between, eventually that enterprise will find a way to get to that bucket of money. Economists call this an unintended consequence of the legislation because the cleverness with which rules are circumvented is rarely foreseeable…at least to politicians.

 

The latest display of this stalwart economic principal is the fight between Amazon and various state legislatures throughout the country who are now demanding that Amazon pay sales taxes in those states where affiliates or subsidiaries operate. The argument behind the proposals are two fold. First, if brick and mortar facilities have to pay sales tax it is only fair that online businesses do the same.  Second, as the current debate in Wisconsin indelibly demonstrates, states are in a pinch when it comes to their budgets.

 

Let’s take these one at a time.  The idea that online retailers paying sales tax is a matter of fairness is nonsense. At the heart of these arguments is the notion that somehow e-commerce is unfairly competitive with respect to businesses with physical retail spaces. These two types of business models are simply competitive along different dimensions.

 

While online sellers may enjoy a price and volume advantage in many cases (although this is by no means universal, think: Wal-Mart), they relinquish many other advantages.  First, customers must pay shipping expenses and even then must wait several days to receive their product. They risk having the product damaged during transit or missing the UPS driver if the item requires a signature. They don’t get to skim through the book, try on the skirt, or smell the candle. They don’t get to ask a sales person for advice or have him/her answer questions about the product. If the customer guesses wrong while shopping online, they don’t get the immediate feedback to know that the salesperson should bring them a smaller size of shoe. They don’t get to see colors and textures of fabrics in eye-poping REAL-D or in the unforgiving light of the real world. They don’t get to pick up the computer to see how light 5.1 Ibs really feels.  The customer won’t get to see the brightness of the HDTV, judge the size of the suitcase, or feel the firmness of the pillow. And trying to return something you bought online? If that online retailer doesn’t have a physical store nearby you’re off to the post office to wait in a 10-person line, destined to mail the item back and start the buying process all over again.

 

I could go on, but anyone who has been to an Apple store lately surely must know the value of a physical retail location. Daily, crowds of consumers pack between its walls to look, feel, hear and yes, purchase.

 

So how are online retailers stacking up against brick and mortar stores these days? I pulled this report from the US Census website:

E-commerce sales in 2010 accounted for 4.2 percent of total retail sales. In other words, less than $1 of every $20 a customer spends will be through an web-based vendor. Although online sellers are certainly increasing at a healthy pace, it looks like traditional retailer stores are still doing just fine.

 

Now what about those state budgets. The theory goes that forcing online retailers to pay sales tax will increase tax revenue thereby helping to close budget gaps. While that might work in a world where people’s feet are sealed in concrete, the real world is dynamic—companies and consumers constantly respond to the incentives laid out before them. So what do you do when someone slides a piece of legislation between you and a bucket of money?  You find a way to get to the bucket:

“Meanwhile, last fall, Texas officials sent Amazon a tax bill for $269 million, after determining that the retailer’s Dallas-area warehouse, owned by a subsidiary, qualified as a local address under state tax rules…In retaliation for Texas’s move, Amazon said last month that it would close the warehouse next month and cancel plans to build another.”

 

If this movement among states continues to gain steam, then Amazon will continue to respond, probably by consolidating its operations to minimize its tax exposure; all the while hurting the states that enact the legislation by reducing employment opportunities. At some unknown point in the future, I predict, some clever state will realize what is happening and invite online retailers by exempting them from sales tax—because states want to get to that bucket of money too—just as Delaware did with laws regulating incorporation of businesses. Laws which have since spread to other states, I might add. (Either that or Amazon will simply relocate to one of the four states with limited or no sales tax). And this certainly wouldn’t be the first time that companies have undergone geographic relocations in response to legislation.

 

*Note that humans are included as profit maximizing “enterprises”.