Let’s say that you are given two options.

Option 1: You will receive $350,000 in three years with probability 1.

Option 2: You will receive $2,000,000 in three years with probability p and $0 in three years with probability (1 – p).

How large would p need to be in order for you to be indifferent between the two alternatives?

For the sake of argument, assume that the intangibles are rolled into the monetary amounts.  Also, if you rush out and calculate the risk-neutral answer (0.175), then you’re missing the point.

This is analogous to the choice between working for an established company or starting your own, respectively.  Doing both simultaneously is untenable — or at least it dooms the solo venture to failure.  Numerous conversations with successful entrepreneurs has convinced me of that reality.  No, the choice must be all or nothing.  Put the decision to yourself for all of your chips.

Of course, the answer to that first question gets you only so far.  It informs you about your tolerance of risk, but more data is needed for an informed decision.  You must estimate the probability that the venture will be successful; in other words, estimate the actual value of p, not just your own indifference threshold.

The conventional rule of thumb is that 1 out of 10 startups succeeds.  I believe that understates the likelihood of success in the high-tech software field.  Part of the problem is the definition of success: an exit (acquisition or IPO) where the founder nets $2 million wouldn’t be considered exceptional; in fact, depending on circumstances, it might not be considered a success.  Based on my own conversations with entrepreneurs and investors, I believe that the success rate — defined here as the company being at least sustainable — is closer to 30-50%.  That’s not bad.

So, what’s your value of p?

Is the “unlimited” data usage plan for the Droid actually capped?  No.

A while back, there was an uproar in the tech community about the true nature of Verizon Wireless’s mobile broadband data plans. The plans had been advertised as “unlimited,” but customers began to report that usage in excess of 5 GB resulted in repercussions from Big Red. Eventually, Verizon capitulated, in a way, and began advertising its top-tier mobile broadband plan as a “5 GB” plan instead of an “unlimited” plan.

I’ve had a Verizon mobile broadband PC card since early July, and I can verify that the 5 GB cap and $0.05/MB overage charges are very real.

My data plan usage, as seen on the Verizon web site. Compare my mobile broadband card (top) with my Droid (bottom) and notice the different cap limits. Specifically, note that the upper limit for the Droid is "unlimited."

Last Friday, I pulled the trigger on a Droid, which requires the Verizon “Email and Web for Smartphone” service ($30/mo) in addition to a normal voice plan. Curiously, the allowed data usage was described as “unlimited.”

My Droid service summary from the VZW web site

Try as I might, I could not find any mention on Verizon’s site or in my contract, anywhere, of an upper limit on the data usage for my Droid. Nothing in the Acceptable Usage Policy.  Nothing in the Web & Email for Smartphones plan description.  Nothing in the Data Terms and Conditions.

There seems to be some belief that a cap exists regardless, but if it does, I couldn’t find it.   The closest thing seems to be a phrase in the AUP about “excessive consumption of network or system resources whether intentional or unintentional,” but the context of that restriction (as indicated by the example given in the relevant paragraph) appears to be malicious activity like DoS attacks.

Still, I wanted validation of my beliefs in writing from Verizon. I emailed customer service, and a few hours later, I received this response from “Lynn”:

Direct from VZW: Droid data is truly unlimited.

The only reasonable conclusion: there are no bandwidth restrictions for the Droid.

Based on my (completely legitimate) usage over the past couple of days, I’m on track to use about 7.4 GB this month with my Droid.  (Granted, most of that is from Pandora streaming, but “streaming of audio” is explicitly allowed as a “permitted use” in the data plan description.)

I guess we’ll find out if Verizon stays true to their word.

Ten years ago this autumn, I got my first personal cell phone.  Today, I got my sixth.

Ah, the halcyon days of the late 1990s.  It’s somewhat fitting that my first phone was a Motorola MR30, a big candybar contraption with a monochrome screen and no camera.  It made calls, but it didn’t do much else.  I had service through Aeriel, a long-gone company riding the wave of the digital PCS revolution.

Those were the days when cell phones were still novelties.  I was one of only a handful of people in my high school circle of friends to have a cell phone.  I was also one of the only people in the entire school to have a Palm Pilot (the good ol’ Professional model).

As it happened, my mom decided to get a cell phone a few months after me.  She was supposed to get one of the ubiquitious Nokia 5190 phones, but for unclear reasons, the store gave her a far-superior Nokia 6190 instead.  That phone was much better than my own — it had Snake on it!  An agreeable mother and a SIM card swap later, it was mine!  Loved it.

Jump ahead two years to the summer of 2001.  Aeriel had been purchased by Voicestream, which itself was to be acquired by T-Mobile.  The GSM service was spotty down at Rose-Hulman, so I needed a switch.  Enter Verizon and the Motorola StarTAC.

I couldn’t believe how small that phone was.  Moreover, I was amazed by what it could do: I could surf the web (sort of) with the WAP browser.  Amazing!  That was particularly useful a few months later when I, like the rest of the country, was desperately hungry for news in the wake of the September 11th attacks.  I distinctly remember walking around the Rose-Hulman campus under an unusually clear blue sky, hunting through the mobile Yahoo News site for the latest updates.

That StarTAC served me well.  Sure, the antenna broke a few times, but it was solid overall.  Not even a trip through the washing machine could do it in.

Still, three years of service was about enough, and it was time for an upgrade, so in the spring of 2004 I switched to an LG clamshell phone.  I don’t recall what model it was, but I do know that my little brother Wojo had the same model of phone, which I pranked at some point.

About that time, phones with color screens began coming on the market, so when my LG phone broke — at the worst possible time, when I was trying to make calls on the side of the road to deal with an automotive problem — I decided to get my first color phone.  It was a Kyocera KX2, and it was the fall of 2005.

Coincidentally, my little brother Tyler happened to have the same phone.  Maybe it was the appeal of the rotating-face design.  Maybe it was the superior audio quality.  I’m not sure.  What I do know is that phone served me well.  Sure, the camera was garbage, and the web “browser” was slow, limited, and prone to crashing, but the phone did its job.  I liked it enough that I replaced the battery — twice — without replacing the phone.

Four long years later, it’s the present, and today I returned to my roots: Motorola.  Specifically, the Droid.

What an upgrade.  I love it.  I had been resisting the siren song of the iPhone; though I loved the phone, I had no desire to swtich to AT&T.  With the Droid, it’s the best of both worlds: a great handset and a wonderful network.

There are lots of comprehensive Droid reviews out there, so I’ll make my take short: It’s great.

I wonder how it will be upstaged by phone #7?

When releasing something new to the world, like a product or a work of art, there just a few types of reactions from the masses:

1. Love it!  Solves my problems wonderfully.  I will give you whatever amount of money you desire in exchange for it.
2. Hate it! Doesn’t solve my problems.  It looks like crap and works like crap.  It is crap.   It doesn’t even do X, Y, and Z!!  The creator is obviously a clueless, talentless moron.
3. Don’t understand it.  What’s the big deal?  I don’t really get what it’s trying to do.

The group with the positive reaction is in the right market, but since they are being satisfied, they won’t be able to offer much useful advice for improvement.  The good news is that they can spread the word about the virtues of the product.

The group with the indifferent reaction is in the wrong market, as they do not suffer from the problem the product is attempting to solve.  Going to them for advice, unless you’re trying to enter new markets, is going to be a long, hard slog with low returns.

The group with the negative reactions is the most valuable for product improvement.  The group that hates the product has the problem but doesn’t like the solution provided by the product.  They can provide all sorts of reasons why the product sucks, and although one must filter such advice, it can be valuable to receive such brutal honesty.  Unfortunately, it can be difficult to get this sort of feedback.  Friends are notoriously poor sources; they don’t want to risk damaging the relationship, so they stay quiet instead of subjecting themselves to the discomfort of friend-to-friend honesty.  External, impersonal reactions are essential.

My hope is that Blurity!, in its mission of removing blur from photos, finds many people of the first and second persuasions.  The first, to evangelize.  The second, to improve.

According to the “release early” philosophy, the first version of software should be so bad that it’s embarrassing.  I think that this first pre-alpha prototype, version 0.0.1, of Blurity! fits the bill.  It isn’t that great, and I know it.  (That doesn’t mean I’m not proud of it.)

So why release early?  Doesn’t doing so risk damaging the reputation of the brand?  Maybe, but I feedback, and keeping the product close isn’t going to get me it.  With the early release, I can see how real users are actually interacting with the product.  I can show the prototype to different users and validate my assumptions about the market.  Update my assumptions, too.

Having the product out there, live, means that I’m forced to keep on top of updates and bug fixes.  No slacking off.

Finally, there is the tempting possibility of revenue, if only a few dollars.

My startup is going live!  Full details on my company blog.