Tag Archives: money

What is benefit? – Day 137/139

Here’s a story that I heard:

A bright young man is on the edge of adulthood. At home, he has been encouraged to do the right things. Study hard and get a good profession and high status in the community. Instead of going to study medicine or engineering he has chosen to become a musician. He is faced by his grandmother:

Grandma: What is the benefit of that way of life?

The man: Grandma, what is benefit?

That is a really simple and extremely relevant question but good answers to it are difficult to find. Perhaps it would be easier to argue what benefit isn’t.

The word benefit has its origin in latin, good (bene) and help/service (facio). In our current society the word benefit has been almost exclusively reserved for money. And as we know, money is almost exclusively used in the service of good.

Money is never good only by itself. And although it is said that money doesn’t bring happiness, we could argue that money is good when it actually does bring happiness. That gets us to my favorite definition of benefit: “Whatever promotes personal happiness”.

Ask me anything – Day 132/139

Now that the project is close to its end, it’s interesting to see what questions people have on their minds regarding this blog. To do this I’ve picked some search engine terms that have been used to get to this website.

Money wanted. A lot of it and fast.

  • make money in one day
  • how to make a million dollars from nothing
  • making a million from 50,000
  • easy way to make a million
  • how to make a million fast
  • how to make 42 million
  • billion before 30

This is the most common thing people keep searching. How to make money? My answer to this question is simple: Stop wanting to make money and start doing what brings you most joy. Money will come. Even in millions.

What are the odds?

  • odds of making a million
  • do most people ever make a million

The odds for making a lot of money are indeed quite slim. To increase your odds you should step up and start doing things with potential. That potential doesn’t even need to be financial. Doing anything well enough will pay out in the end.

Could the money be saved?

  • how to save a million before 30
  • work hard to make a million
  • investments before 30

Saving any sum of money by investing is indeed possible. Whether it’s at all feasible is another question. By actively investing in the stock market you will spend your time studying numbers. Invest in things that you like and ones that you can positively affect yourself.

But what should I do then?

  • does wanting something make any difference
  • simple idea makes millions
  • the secret of success is hard work and fun

Here’s a bunch of good advice. You have to want something. You have to want something simple that others can understand and help you with. And more important than working hard towards it, you must have fun doing it – otherwise you’ll quit before soon.

Finally, there is the question of starter money.

  • getting investment money for an idea
  • how to do business with agel (sic)
  • business angels project
  • funding doesn’t grow on trees

I would consider this the type of money where wanting it helps. You don’t want it for yourself but for a bigger purpose. If you’re able to communicate that purpose, you will have no trouble getting money, whether it’s from angels or somewhere else. Funding does grow on trees.

As easy as 1-2-3 – Day 123/139

Today was an important day in my project. We finally got the answer to the ultimate question:

How can this project end?

As we all know there are two possible outcomes and the shareholders of FinderBase decided today what they mean:

  1. My project will fail. The seed funding round will not be closed if we raise less than 100,000 € (50 % of the target sum).
  2. My project will succeed. The seed funding round will go through.

Who wins if I succeed?

If we think only in terms of cash, the biggest winners here are the guys who have been linking to my blog. If the round fails, my project will end up on the negative side. But if the round goes through, I will get my “million dollars” and these guys will get their affiliate money. And there’s still a lot of money in the budget so anyone can help out by spreading the word.

But how could the round fail? We have the guys at GrowVC helping us out. If you want to be a part of this success story, join the seed funding mailing list and we’ll tell you more.

Money talks – Day 106/139

Today, I had the opportunity to present FinderBase to a couple of professional investors. Much of our talk was around the business potential of our service.

People tend to over-complicate the talk about money.

I will argue that there is only one right way to talk about money.

  • It is not the way of worshiping the money. You shouldn’t respect big numbers more than small ones.
  • It is neither the way of disrespect. You should respect the people with money just like you respect anybody else.
  • The right way is the neutral way. Money is just money. Numbers on the bank.

So we opened the discussion with the obvious. I said our company is worth 1,8 M€.

Considering that FinderBase.com has only had a handful of paying customers and has less than 300 registered users, the price might sound a bit extreme.

But they listened to what I had to say.

They had good suggestions on what we’d need to do next, most of which we already had executed. They asked whether we allowed bigger investments from a single party and I told them that was negotiable.

This is the way I’d like investor meetings to go.

Neutral about money. Passionate about business.

Human civilization – Day 105/139

Human civilization has done decisions that it can’t exactly be proud of. Whether real or fake, here’s an Internet meme that illustrates what went wrong:

Society has made free things more difficult.

The problem with the Western civilization is that it solves problems that have been caused by the society itself. The biggest things in our society have been built not for the people but for the society. Think of the biggest industries globally:

  • Banking & investments. Produces nothing of value.
  • Insurance. Produces nothing of value.
  • Oil production. Exploits non-renewable resources.

In contrast, let’s look at the favorite pastimes of Facebook users. Some highlights:

  • Farming. Like growing tomatoes and stuff.
  • Fishing. Growing and catching them etc.
  • Keeping pets. Having your own animals.

Two Eagles knew this already. People don’t need money or the infrastructure as we know it. They just want a farm by a lake to go fishing to with their cat.

Abetti’s pizza principle – Day 100/139

I have been now writing this blog for 100 days. There have been ups and downs but my project is still standing.

But where is the money?

For some weird reason people keep asking me this. To show where the money is, I’ll quote my favorite professor Pier A. Abetti:

Think of companies like pizzas. Your startup is a whole mini pizza that you own. When you sell a part of it, the pizza becomes bigger. Would you rather own a whole mini pizza or a slice of the bigger pizza?

The lesson here is that the small slice of a bigger company tends to be worth more than the whole smaller company.

So the plan is this:

  • We have founded a company FinderBase Oyj that owns the FinderBase.com service.
  • We will arrange an issue of shares for FinderBase Oyj.
  • We will offer the shares to people who trust us and want to be a part in building a big phenomenon.
  • This will dilute our own ownership but will grow the company.

Would you be interested in getting our investor brochure?

Money maker’s dilemma – Day 99/139

Making money is really easy. Like the saying goes:

The easiest way to become a millionaire is to start with two million and buy an airline company.

The truth is that money tends go where there is money already. Making your first million is undoubtedly more difficult than making your second one.

But it isn’t just money that money is after.

Let’s assume that we have two equally skilled businessmen who would like you to invest your money in their new venture:

  1. The first one is broke.
  2. The second one is not only broke but he has a million in debt.

Which investment offer is more credible?

I will argue that a history of huge losses is more credible than a history of small profits.

The numbers don’t lie. People do.

Incentives are wrong – Day 97/139

The world is run by incentives. If you want to understand the behavior of an individual or an organization you should look at their incentives.

Let’s look at the incentives of lost property offices in Finland

  1. If a person loses an item and somehow finds out the office where the object was taken, they are first charged 1,70 €/minute to call to confirm the object is there. If the item is found, you will pay the finder’s fee (10 % of the item’s value, up to 20 €). Other fees like storage fees may still apply (up to another 10 % of the item’s value). It is in the interest of the person to pay these fees probably up to about 75 % of the item’s current value if the other alternative is to buy a new item altogether. So they’re happy to pay. But the office only takes up to 20 % of the items value, so it’s a real bargain.
  2. If no one comes to collect an item that was delivered to the lost property office, they will auction it off. At the auction the office will get 100 % of the item’s current resale value.

What would you do?

Lets assume you are running a business where you have a fivefold incentive in not finding the owner of an item you have in storage. Would you try to find the owner knowing that even if you find him/her, you only lose money.

Can the incentives be changed?

Most people agree that it would be nice if you could get your stuff back without having to pay anything. The problem is that losing something happens so seldom that no one really has any incentive to do anything about it.

The incentives change automatically after enough people can agree that they are wrong. In our case that equals to the number of people who like FinderBase better.

The essence of money – Day 91/139

In the present day society for most people money still equals cash. Cash is the manifestation of money that people can easily relate to.

But it isn’t the pieces of metal and paper that are valuable.

The essence of money is that its value is what it can buy. The value of any currency is just a mass hypnosis of the society. The only thing making money valuable is the fact that other people too believe in the value. Theoretically speaking, people could lose their faith in the value of money overnight.

To solve this problem of fiat money some people have a solution.

In financial crises precious metals, especially gold, have held their value. Gold has to be the ultimate currency, hasn’t it? King Midas would surely disagree. The fact is that gold has very limited use for people. Certainly more than paper but gold too is valuable only because people think it’s valuable. This mass hypnosis has merely continued for thousands of years.

It can help to change your attitude towards money.

If you can agree that money is nothing but a big shroud that is pulled over our eyes, you might want to stop worshiping it. What would you use to pay for food on a desert island?

What is valuable? – Day 89/139

People constantly make value decisions in their lives. We have to determine the value of time, the value of different commodities and the value of information.

Still, hardly anyone knows what is valuable to them.

People appreciate their surroundings, not based on their own values but based on everyone else’s values. As an example:

  • Stocks are valued based on future expectations.
  • Real estate is valued by what someone else is willing to pay for it.
  • Your time is as valuable as your salary.

This valuation model is crooked. We grow our children to this model without thinking about it. But there has to be another way.

What if the society is transforming from consumer-based to value-based?

Already now more and more people are seeing value in the things that are, not in the things that could be. Value-based society would value things on what is real:

  • Stocks would be priced on the way a company can actually contribute to the society.
  • Real estate would be valued based on how much it costs to build a new house.
  • Your time would be invaluable.

Who wouldn’t like to be a part of such society?