The Big Idea Capitalist

Green Mountain Coffee Roasters beats estimates and rises 25% after hours. Here’s why you should have seen this coming:

Not that I needed one, but this guy [Mike Lynch of Autonomy, pictured below] just gives me another reason to steer clear of Hewlett-Packard. There’s too much risk for the potential reward. 

Note that I’m not referring to valuation. HP is almost undeniably cheap compared to its size, market position, and growth prospects in the business of selling and servicing tech infrastructure.

What I mean is execution risk. If the cost of mismanagement is already $8.8 billion — when there’s still so much we don’t know — just imagine how big the price tag might become. 

Get more Foolishness on this topic from my colleagues Evan Niu and Eric Bleeker. 

parislemon:

Good, long talk by Twitter CEO Dick Costolo at my (and his) alma mater, the University of Michigan, earlier this month.

Of note, he once again promises that by the end of this year, users will be able to download their entire tweet archive. Can’t wait.

Agreed. Downloading the old #editorchat transcripts should be fascinating.

I’d be all Mac, but with a heaping helping of Google software. What would you do?

shortformblog:

• $25M in funding will be lost by the new Myspace at the end of 2012, following a year of disappointing revenues. The company has lost more than $40 million this year after only raising $14 million in revenue following yet another rebranding.
• $50M in new funding will be sought by the…

Translation: Justin Timberlake couldn’t bring the sexy back. Sad. Predictable.

(Source: CNET)

parislemon:

Nate Waddoups, Senior SDE at Microsoft answering “What is so great about Microsoft?” on Quora:

The Windows team invests a mind-boggling amount of time, hardware, and people into maintaining compatibility. There are bugs in Windows that could have been fixed years ago, but can’t be, because that would break applications that (deliberately or accidentally) depend on those bugs. Bug-for-bug compatibility is a problem, but breaking backward compatibility would be a much bigger problem, so even as the lowest layers of the operating system are revised and rewritten, the layers that applictions talk to (the application programming interface, or API) are carefully tested to ensure that no changes are visible to the application.

Bugs as a feature. Can’t imagine why so many of us ditched Windows years ago.

Or avoided Windows in the first place …

sequoiacapital:

Quick: when was the last time you plugged in an Ethernet cable? If you have trouble answering that question, you’re one of the reasons why Cisco has agreed to acquire Meraki.

Six years ago Sanjit, John and Hans saw our Wi-Fi world before many others. Meraki offered smaller…

I interviewed Sanjit during a tour of Silicon Valley in Oct. 2008. Here’s how I described the meeting to our Motley Fool Rule Breakers members back then:

I’d never hit a hornet’s nest before. But after I pulled our bright red compact into a small parking spot on San Francisco’s Rhode Island Street, the buzzers were buzzing, stinging wildly at a car that felt no pain. 

Then, I was embarrassed. Today, as I write, I’m reflective, wondering if it was the weirdest possible metaphor for our quest — a search for sustainability in a part of the country that’s given rise to some of the business world’s most sustainable names. Apple (Nasdaq: AAPL), Intel (Nasdaq: INTC), and Hewlett-Packard (NYSE: HPQ), for example.

Google (Nasdaq: GOOG), too, of course. Like our red coupe, it had proven too durable for the onslaught of pesky hornets. Could we say the same about the company Google itself found irresistible?

Searching for Silicon Valley’s Bobby Fischer

Heading into the nondescript concrete fortress that housed Meraki and a handful of other SOMA — as in, “south of Market” — start-ups, I was skeptical. Cheap Wi-Fi? Doesn’t everyone do that?

No, not the way that CEO and co-founder Sanjit Biswas sees it. He believes that Wi-Fi, today, is the answer to giving 1 billion more people broadband access to the Web. “We can do this at about a 10x cost advantage,” Biswas says in describing the ‘aha!’ moment that led to his founding the company with John Bicket in 2006.

I believe him. Biswas, like the late Danny Lewin of Akamai (Nasdaq: AKAM), began working on the idea behind Meraki while a PhD candidate at MIT. But his roots as an innovator reach farther. He took an assignment programming for Oracle’s (Nasdaq: ORCL) Oracle 8 database at 15. If there’s anyone smart enough to figure out how to connect 1 billion more people to the Web, it’s this guy.

Bandwidth is the key. Biswas says that, on average, users consume 200 to 300 kilobits per second in actual bandwidth. That leaves a lot of room for additional users when your connection to the Web itself delivers data at 6 megabits per second.

Meraki, in other words, is a bandwidth Robin Hood. It redistributes to all who need it. The idea has huge implications. Witness its “Free the Net” test network in its hometown. More than 190,000 users are connected via 1,000 devices placed around San Francisco.

Today, Meraki is far from the test stage. Its hardware — the Meraki Indoor and the Meraki Outdoor — has shipped to all seven continents. It’s powering networks in rural Chile. And yet Biswas wasn’t gloating during our meeting. To the contrary; he appeared genuinely surprised by what some are doing with Meraki’s technology.

Google, on the other hand, must be not at all surprised. Meraki may have begun as an idea at MIT but it was formed at the behest of Google employees who saw Biswas give a presentation about his academic research in mesh technology — think of it as the glue that binds distinct nodes on a Wi-Fi network —  in early 2006. At least one in attendance offered to invest in Meraki immediately after the presentation. Both Google and Sequoia Capital have put money into the company.

So will this Baby Breaker grow up to join the public markets? I think so, as did my teammates. We like Biswas’ focus. We like the opportunity. And, most of all, we like how he combines realism with idealism. “No one we talk to (as a prospective employee) doesn’t have choices,” Biswas says. “They’re all smart. What separates us is the change the world factor.”