Wasn’t T. Boone Supposed to Be Earning Money Off Green?

We don’t doubt that T. Boone Pickens will eventually make substantial earnings off of his green kick — including the world’s largest wind farm, and the proliferation of natural gas to power our vehicles. But Clean Energy Fuels, Pickens’ natural gas distribution company, reported earnings yesterday and, yep, it’s still losing money. The company reported a loss of $2.41 million for the quarter, though that was narrowed from a loss of $3.56 million for the same quarter a year ago.

Despite overall losses, the company’s revenues are growing — the Seal Beach, Calif.-based company reported revenues of $34.60 million for the quarter up from $30.66 million from a year ago. And actually, the company’s performing better than it has in several years. In the the third and fourth quarters of fiscal year 2006, Pickens, the company’s director and largest shareholder, actually had to extend the company a line of credit to meet certain margin requirements for contracts.
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T. Boone, Prop 10 and the Questionable Effect of Natural Gas Cars

The LA Times story that knocked the green halo off T. Boone Pickens’ head, with its spotlight on Pickens’ funding of California’s Prop 10, generated a lot of heated comments from readers. This morning the Wall Street Journal takes a crack at the story and points out some more interesting details.

The Prop, which would gives thousands of dollars in rebates to natural gas vehicle buyers, as well as spending on R&D, will supposedly cost California $9.8 billion over 30 years and would come from taxpayer money. The WSJ says, if the prop passes, it could lead to a million natural gas vehicles for California; if the Prop is defeated then natural gas vehicle backers will have to compete — against cleaner alternatives like electric vehicles — for the $840 million in funds under law AB 118. In a vacuum natural gas cars sound OK, but it’s hard to justify spending on dirtier-burning natural gas vehicles when those funds are directly competing with “zero emission” alternatives, like electric cars powered by a solar grid.
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LA Times Knocks Off T. Boone’s Green Halo

The Los Angeles Times does an eloquent body slam on the green halo floating over T. Boone Pickens’ head today. Pickens’ plan to use natural gas-powered vehicles for a third of U.S. transportation turns out to have a very self-serving interest, which could also be funded by billions from California taxpayers. OK, so we knew Pickens is a savvy businessman, but we can’t help but feel a little let down — please, a moment of silence for our crushed idealism.

Alright; all done. So here’s why you should be concerned. Reporter Anthony Rubenstein writes in the LA Times that Pickens owns natural gas fueling station company Clean Energy Fuels, which of course would benefit tremendously from the Pickens Plan’ call to boost natural gas vehicles. But more interestingly, Rubenstein says Clean Energy Fuels is the only backer of a proposition on California’s November ballot that calls for the sale of $5 billion in general fund bonds for clean energy incentives. “[B]y the time the principal and the interest is paid off,” he writes, “it would squander at least $9.8 billion in taxpayer money on Pickens’ self-serving natural gas agenda.”

Ah, so that’s who’s supposed to fund T. Boone’s plan. We were wondering about that. The is proposition is also supposedly filled with a “laundry list of cash grabs” for natural gas vehicles, many of which could go straight to Clean Energy Fuels. Hey Californians, watch out for Prop 10. Like us, Rubenstein sheds a tear for the newly minted green leader, and says he almost prefers to think that Pickens is being misled by his lawyers and consultants.

Seeking Bigger Footprint, Qik Adds Windows Mobile Support

One of my long-standing beliefs is that we are going from communicating online to interacting online, and a key component of that big shift is easy availability of live video, thanks to the easy availability of broadband, 3G wireless and cheap cameras on cell phones. That is why start-ups such as Qik, Kyte, and Flixwagon that enable these live interactions are interesting to me.

Qik, a Foster City, Calif.-based company that we broke the story on last December, has become very popular with the blogger crowd, who have done a great job of evangelizing a service that so far has been available to owners of really expensive Nokia phones like the N95 (GigaOM handset review). Today Qik took first step towards becoming more egalitarian and announced that its service will now work on Motorola Q and Samsung BlackJack devices, both smartphones powered by Windows Mobile operating system. The Qik service is now in limited availability through an invitation-only alpha program.

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Palm says summer for Vista desktop compatibility

Palm_logoLike a few of my device drivers, Palm’s Quick Install desktop application isn’t quite ready for Windows Vista just yet. The company is working on it with hopes of a summer release, says Product Manager David Sloan on the relatively new company blog. Brighthand’s Ed Hardy points out that you can currently synch PIM data but can’t move .PRC and .PDB files from Vista to Palm in the current state. Ed also mentions a workaround for Palm owners running Vista now: hit the Business Technology Solved website and look towards the bottom of the page for the PalmVista Simple Installer application, which was previously named TreoVista.

Any Palm owners running Vista have other workarounds for now?

Blow-by-Blow: The First Fundraising

_*This article launches our Founder’s Diary, where a founder retells an experience with a challenge or task ‘blow by (agonizing) blow.’*_

*The following takes place between December 6, 2006 and February 27, 2007.*

It is my account of the experience, had alongside my co-founder, Walid Al Saqqaf, and other members of our team, of trying to secure the first $1M in seed funding for our company, “TrustedPlaces”:http://trustedplaces.com, from “HOWZAT media”:http://www.howzatmedia.com. TrustedPlaces is a user-developed city guide to London, where I live.

*Dec 6:* I wake up at 6:30, for yet another networking event – our fifth in a month that is less than a week old. It is a breakfast session this time. By accident we meet Hugo Burge, of cheapflights.co.uk. He’s a founder, too, and we quickly establish a good rapport talking about what it’s like to start-up a company in London, how some of the presenters at the event started and later “exited,” and also Hugo’s experience growing CheapFlights into a global company. Hugo tells us he is now a co-founder of HOWZAT media LLP., a freshly formed angel fund. TrustedPlaces, happens to be looking for money. We agree to talk further (!), though it’s nothing to get hugely excited about, as a number of previous encounters have taught us.

*Dec 11:* We have our first meeting with Hugo and his partner, David Soskin. We discuss TrustedPlaces in detail, our capital requirements, progress, business plans, etc. We agree on a follow-up meeting.

*Dec 19:* We have a three-hour session with Hugo and David, plus two members of the HOWZAT corporate finance team, Jo and Sascha. We cover more detailed aspects of the business, new product development. We even discuss valuation. I sense things are getting serious. We commit to delivering more detailed plans on the product roadmap and a marketing plan within a couple of days.

*Dec 21, AM:* Walid and I have had to pull an all-nighter to deliver everything on time as we had agreed. I’ve just spent 24 hours refining a business plan we thought was ready, contracts, my CV, everything we need for our corporate presentation for HOWZAT, We thought we had everything in place, but it had been a couple of months since we had looked at those docs. (How things change!)

*Dec 21, PM:* We receive HOWZAT’S first investment offer. It is not the same valuation we had suggested, but still within the limits that we had set. I have warm feeling, but also an awareness that the hard bit has just begun.

*Dec 22:* Receive term sheet. What does “dilution protection” mean again? We go back to the books, hit Wikipedia and Google. [Start looking for lawyers!

*Dec 25:* It’s Christmas. I travel home to Greece. Walid travels home to France, for the holiday.

*Jan 2:* We return to UK and sign the term sheet. We realize we still probably only about 40 percent of the way to getting the deal done. Due diligence has to be done. A lot of things can go wrong from here, but we’re positive and the investors seem positive, too. Some key changes on the TrustedPlaces product are helping traffic, reviews and the user numbers have grown since we first met Hugo. It is a big help.

*Jan 3:* I move house. I receive HOWZAT’s due diligence checklist and their request for a conference call to discuss it. I have to take the call surrounded by piles of boxes.

*Jan 8:* We still have no office at this stage, so we’re all working from home. Dima, our lead engineer has left his old flat, but the work can’t stop. He move in with me. I hand over my room, my bed and my desk while I handle the due diligence Q&A from the living room. I make Dima breakfast, lunch and dinner – it’s 5 Star service! We enjoy a big productivity jump, I suspect because we’re getting all this time to work face to face. Dima and I go for the occasional 15 minute walks to get fresh air and to problem-solve: we work out an algorithm for personalised recommendations to add to our site.

*Jan 9:* We meet three law firms and appoint one of them. The firm is expensive, but has been recommended by a fellow entrepreneur who previously went through a funding round with them, as well as an exit. Also, the partner representing the firm comes across as the smartest. She talks so fast and with such decisiveness, we figure we’ll be able to keep her billable hours low!

*Jan 10:* We spend all day with HOWZAT’s technical consultant for more due diligence. Their guy really likes the way we’re developing our software and gives a thumbs up to the way we manage code, backups, etc. Dima and Moty handle a couple of toughies really well. He asks: ‘How well does your architecture scale?’ They have schematics prepared showing a future architecture, mapped against future traffic and costs. They also have examples of previous implementations that have worked for others. I am proud of them. It is one BIG box ticked.

*Jan 14:* Most of the due diligence has now been covered. Everyone on our team is spent by the huge amount of energy required just to consolidate existing information and produce new documentation of our work product for HOWZAT.

*Jan 28:* We receive a draft investment agreement, amendments to the articles of association, and our new service agreements. We have to hit the books again to look up a few things—the number of new terms seem to increase exponentially with each set of documents. We meet up with our fast-talking lawyer.

*Feb 1, AM*: We launch a new version of our site. It’s a total refresh of the front end, plus a number of new features, like the personalized recommendations. Big exhale, then this: Hugo spots a bug in our search and recommendations feature (it had to be him!). Dima tweaks the algorithm, and tests and redeploys it – within a couple of hours. Even bigger exhale. Early user feedback is very positive and the links are starting to come in.

*Feb 1, PM:* A last minute misunderstanding on a term concerning ownership of the intellectual property adds more “excitement” to what is an otherwise quiet day (;-).We’re supposed finalise all documents tomorrow. We have to schedule a Skype conference with HOWZAT partners for 11PM to avert the crisis.

*Feb 02:* Final meeting goes as planned. We review and discuss all the documents in three-hours. Crisis averted.

*Feb 04:* Full TurstedPlaces team has dinner with HOWZAT media team. It is an equally big part of the deal’s due diligence. It is important to see if we will all get on with each other. The waiters us help us out: they confuse the day menu, twice; then manage to mix up Sascha’s order, three times. Everyone is amused, and relaxed now. We even discuss some obscure cricket rules (Turns out that a “HOWZAT”:http://en.wikipedia.org/wiki/Appeal_%28cricket%29 is a verbal appeal made by a player to an umpire in a cricket match. As in: “_Howzat_ a fair call!?”) Everyone has a great time. Another big box ticked – and they pick up the tab, which is nice!

*Feb 05:* We sign the contract and service agreements. Fantastic, but we still have not closed. Although we have agreed on everything, HOWZAT’s investment fund members still have to approve the transaction. It is a nervous waiting period, but a good opportunity to focus on the product and enjoy a bit of sport, for a change.

*Feb 23:* Three long weeks later (!) we receive word that HOWZAT’s board has approved the investment. Still more days of nervous waiting. No deal is “done” until the money appears.

*Feb 27:* Biggest bank account balance I’ve ever seen. We’ve done it! Time to celebrate. Mini pub crawl and dinner at Asakusa, my favourite Japanese spot in London. I can pick up the tab this time!

So that was it — 83 days from start to finish. It was the first time any of us at TrustedPlaces had raised such an amount, and it happened much faster than what we had expected. Then again, it took nine months of hard work to lead us to the day when we first met Hugo. The pressure was very high at times, but we got lucking with good timing on a number of occasions. And we had some great people working with us on both sides. We had done it! The lessons we learned were many. Here are my top three:

*1) Don’t underestimate the effort you’ll have to put behind due diligence. Prepare for it.

2) Find people you trust (like a fast-talking lawyer) to usher you through the process. This is critical.

3) Help yourself by reading up on legal and corporate terminology before you even begin to try and raise funds.*

Now comes the hard part for “TrustedPlaces”:http://trustedplaces.com : spending the money right!

Private Equity continues to pour into India

Earlier this morning, Cisco Systems and 3i along with Oman Investment Fund announced a $125 million investment in Nimbus, a media company based in Bombay. And with this big investment, thus began another crazy year of private equity investments in India.
The PE investments in India topped out at $7.46 billion in 2006 and are estimated to touch $10 billion in 2007. If giants like 3i and Cisco keep walking around with open checkbooks like they currently are, then it won’t take long. Cisco, as you might remember had said that it would invest $1 billion in India, of which $100 million was slotted for start-up investments.
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Another 256 MB Tablet: HiPAD II

Hipad_ii Call me crazy, but I have a hard time getting jazzed about Tablet PCs with 256 MB of RAM. Having said that, the new kid on the block appears to be the HiPAD II, which looks more like an Etch-a-Sketch than any recent new product; at least the red model does. This is another AMD Geode LX800-based Tablet PC running on, you guessed it, 256 MB of RAM which is actually on-board. You can upgrade the memory to a GB, so all is not lost, but it concerns me that consumers might skimp on memory to add other features and then become totally disillusioned by a Tablet PC for all the wrong reasons. [Hint: don’t skimp on the RAM]

The 10.4-inch touchscreen is only SVGA capable natively, but the HiPAD does have a few perks that not all smallish tablets have: PCMCIA slot, Compact Flash, two USB 2.0 ports and an integrated fold-out stand. No word on price, but this looks geared for the Far East market so we may not see one in the flesh.

-kct