Agilix Seeks to Revolutionize Education

Curt Allen, founder of Folio Corporation, and former CEO of MyFamily.com (chiefly responsible for our raising $90.5 million in venture capital) is at it again. (He’s also my brother and is responsible for getting me into electronic publishing and the computer industry 16 years ago–and I’m darn proud of him!)

His latest company, Agilix, is just 2 years old, is already profitable, and has just landed $4.35 million in venture capital in its effort to grow more aggressively and dramatically impact education worldwide. Agilix has the best team of software developers that I have ever seen–including most of the original Folio team–and they are churning out software products at a faster pace than you would think possible.

I still use Curt’s original software, Folio VIEWs, to maintain my personal knowledge-base, my storehouse of intellectual capital. I have more than 140 megabytes of content which I have typed or pasted into my personal infobase. I can instantly retrieve virtually anything from this infobase, including minutes from thousands of meetings I have attended and phone conversations which I have had. It is not overstating things to say I am addicted to Folio and consider my facility with it as one of the primary factors in my business success. (Maybe second only to the support of my awesome wife!)

Agilix is now selling a product called GoBinder which is designed for students and teachers as a repository of personal knowledge. In a classic viral marketing move, every educator in the world is being offered a free copy of GoBinder.

For the average person, the GoBinder software is far easier to use as a repository than Folio VIEWS. Anything you read online, any materials your teachers provide you with, any handouts you get from class, any web page or PDF file that you view, you can easily and permanently save into your GoBinder. You can add personal notes (if you own a Tablet PC) to any document. And then you can search and find everything instantly when you need it.

Agilix already has strategic partnerships with FranklinCovey, Microsoft, Blackboard, and many companies in higher education. This team is going to make a huge impact on how students and teachers manage, store and retrieve important information–something so fundamental to learning, but so often neglected.

I loved college, but one of my greatest regrets is that I can remember almost nothing of what I learned there. I know I took a lot of notes and I took a lot of tests, and I read a lot of books and only sold a very few back to the Bookstore when I was very poor. But I have almost no memory of the specific content that I learned in college. There is no way that I can instantly retrieve lecture notes from my honors Political Science professor David Magelby. I can’t review what Dr. Stan Taylor taught me about obtrusive and unobtrusive surveying techniques and statistical relevancy of polls.

What Agilix will do is insure that the tens of thousands of dollars that college students pay for college will result in a personal knowledge base that they can benefit from during their entire lifetime.

Like my 140 megabyte infobase that I started in 1990, which I consider one of my greatest assets, students who get addicted to GoBinder will experience the benefits of having a “near-photographic memory”.

Remember, “the faintest ink is sharper than the keenest memory”.

Imagine having instant access to hundreds of thousands of pages you have read and web pages you have viewed, overlaid with notes you have taken to remind you of what you thought when you first read them. And imagine being able to search for either your notes or the original text. Now imagine being able to share knowledge bases and notes with students and teachers. It’s not quite a mind-meld, but the collaboration and knowledge sharing possibilities are astounding.

To me, Agilix has the potential to unlock the power of memory for millions of its customers and thereby increase human productivity by an order of magnitude.

A great 19th century leader foresaw the need for preserving records and he counselled as follows:

“there is, or was, a vast knowledge, of infinite importance, which is now lost. What was the cause of this? It came in consequence of slothfulness, or a neglect to appoint a man to occupy a few moments in writing . . .”

You watch, and you will see amazing things from this company in the coming months and years.

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Entrepreneurs Need Liquidity; Tough Public Markets Slow Economic Growth

WebSideStory postponed its IPO today to after Labor Day. Lindows, an interesting Linux company founded by Michael Robertson of mp3.com fame, has indefinitely postponed its IPO. eCost, a profitable e-commerce company with revenues of more than $100 million in 2003 and profits of more than $6 million has lowered its price-range.

These are three exciting if not promising companies who ought to be able to go public. Perhaps they all will go public eventually. But in my opinion, the bar has been raised too high. The traditional IPO process demands too hot a market so that all the money-hungry hands that want a big piece of the pie can get their cut. In a cool market, there just isn’t enough irrational exuberance to go around.

Today’s “adverse market conditions” keep making it difficult for good companies to go public. But why? Why can’t good companies go public quietly, no matter what the market conditions are? Why does the market have to be so hot?

I like the Dutch Auction approach that Google has just used, which cuts out a lot of the intermediaries. I think if more retail investors were familiar with this process, and if the Street hadn’t created such an anti-Google media frenzy, the stock would have priced north of $100. Google would have gotten what it deserved. As it stands, Google was undervalued. Smart investors who saw past the negativity bought in at $85 and will get a nice ride upwards, north of $135, as Google soars past Yahoo’s market cap. Google is a better, more focused, more efficient company in my opinion. Its growth rate is much higher than Yahoo’s.

I’d like to see more companies by-pass the traditional IPO route and go with the Dutch Auction. I think this approach will succeed if more investors figure out how easy it is to get a bidder ID and bid on shares.

In a Dutch auction, the public sets the price–not the bankers. So why can’t good, decent companies go public, even in adverse markets, accepting a low price if that’s what the public is willing to pay, in order to get the advantages of being public? (Along with the disadvantages)

Who decides when a company’s IPO is postponed? Is it the investment bankers who can’t sell the deal? Is it the board of directors or the company’s management team who don’t want to accept such a low price?

Who loses when this happens? I think mainly the existing shareholders who need liquidity. Who wins? Perhaps nobody, except the attorneys who still have to be paid.

If you have insights know how and why IPOs are postponed, please let me know.

Also, I’m doing more research on reverse mergers with public shells, something I blogged about a few months ago, and Pink Sheets, and I’m going to pull out the book on Direct IPOs that I bought a few years back.

Liquidity is a key ingredient of free markets. Capitalism requires capital. If small and medium sized companies can’t achieve liquidity through public markets, then one major incentive of entrepreneurship is stiffled significantly.

I’m currently reading “The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else” by Hernando de Soto.

De Soto claims that trillions of dollars of assets exist in under-developed nations but

“Because the rights to these possessions are not adequated documented, these assets cannot readily be turned into capital, cannot be traded outside of narrow local circles where people know and trust each other, cannot be used as collateral for a loan, and cannot be used as a share against an investment.”

“In the West, by contrast, every parcel of land, every building, every piece of equipment, or store of inventories is represented in a property document that is the visible sign of a vast hidden process that connects all these assets to the rest of the economy. Thanks to this representational process, assets can lead an invisible, parallel life alongside their material existence. They can be used as collateral for credit.”

Turning assets into investable capital is essential for entrepreneurs.

De Soto states that “the single most important source of funds for new businesses in the United States is a mortgage on the entrepreneur’s house.”

If we didn’t own titles to documented property that could be leveraged into capital for business formation, most small businesses in this country probably would never get started.

But similarly, if we can’t transform the assets (including the future value) of existing companies with ongoing operations and real growth opportunities into capital (through public offerings), then much of the growth potential that exists in entrepreneurial companies will not be achieved.

As a typical US Entrepreneur, I have borrowed against my home multiple times, turning that asset into capital, and then utilizing that capital to build companies which produce revenue and profits.

But almost all of the value of the companies I have helped created is completely locked up. Like an undocumented plot of land in the third world, I cannot borrow against my MyFamily.com stock, because the company is privately held (and my founders shares are still restricted).

If I could sell some of my equity, or borrow against it, I would turn around and invest it in new startups which have perhaps more growth potential (at least percentage wise) than MyFamily.com does with its 1,100 employees and market leading status.

But as long as my equity in MyFamily.com (and six other early-stage companies in which I own equity) cannot be turned into liquid assets, the economic growth which I can generate depends on using capital from other sources.

As an entrepreneur, I am becoming more and more obsessed with liquidity, since so much else depends on it.

I think the public markets should be far more open than they currently are. Unfortunately, in this country we are moving in the wrong direction. Because of corruption and lack of ethics, we require legislation like Sarbanes-Oxley, which raises the cost of running a publicly traded company nearly three-fold, according to estimates I have read.

Corruption has brought on legislation which hampers liquidity which stifles entrepreneurship. Our future economic growth depends largely on entrepreneurs. If we raise the bar to liquidity too high, all of us will suffer.

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Family Vacation; Working on my First Book

Life is good. I just ended a family vacation to Cedar City, home of the Tony Award winning Utah Shakespeare Festival, where we caught four productions, with a little side trip to Las Vegas, where we saw Mystere, again. The highlight of the trip for me was driving home on northbound I-15, where I googled with one hand for the nearest Jamba Juice on my Blackberry 7230, as follows:

phonebook:jamba, nv

It returned the only Jamba Juice in Nevada, located in Mesquite. The power-sized Orange Dream Machine quenched my thirst, after 5 consecutive days without a Jamba juice.

Thanks to my Blackberry, I stayed current with email without my family noticing or complaining, but I didn’t answer a single business phone call on this trip.

I used my laptop, but only to work on a book I am working on about Inventions and Revelation. I happen to be a “believing” entrepreneur. How can I not be a believer when prayer and meditation work for me? Every major success I have had in business (from Infobases to Ancestry.com to MyFamily.com and beyond) has come from an original idea that felt like a bolt from the blue, or a light-bulb turning on, after days or weeks of prayer and contemplation. How can I not believe that these ideas are not gifts from an Omniscient Creator?

For years I have been studying the lives of inventors and innovators. Many of them have had similar experiences, where after great effort the light bulb finally turns on and they can see clearly. Is that all because of their own talents and gifts? Or is there an external source at work, a Loving God who is blessing them for their concentrated effort and faith?

Brigham Young, who has been called the greatest colonizer of the American West and one of the greatest entrepreneurs of the 19th century, said this:

“Every good and perfect gift cometh from God. Every discovery in science and art, that is really true and useful to mankind has been given by direct revelation from God, though but few acknowledge it. It has been given with a view to prepare the way for the ultimate triumph of truth, and the redemption of the earth…”

It is interesting that a man whom millions consider a modern day prophet of God, acknowledges God’s hand in other fields besides religion.

Rulon S. Wells, another Mormon leader, said this in 1929:

“Revelation is truth made known whether that truth be religious or secular. Every invention or discovery, in fact all our understanding comes from God, for ‘there is a spirit in man; and the inspiration of the Almighty giveth them understanding.’ (Job 32:8) It does not detract from the glory due to the inventor to say that God uses him as an instrument in his hands in bringing truth to light. God sends us his prophets to teach us in the way of life; he also sends us scientists, inventors and discoverers. They too are servants of God and have a part in the great work of educating mankind.”

I hope to publish a book that conveys my wonder and gratitude for living at this point in the history of the world, where there is an abundance of spiritual truth as well as the most amazing scientific advances the world has ever seen.

We can use God-given inventions for good or evil. We can use modern science and technology to lift individuals and nations out of poverty, enlighten whole nations, and bring health, peace, and prosperity to all the world. Or, we can choose to use these advances to satisfy our appetites, and gain power, wealth, and dominion over others. I believe that God will judge us for what we do with all of His gifts.

So that’s the book I’m working on.

My belief in God and in using entrepreneurship to change the world is one of the reasons that Google is my favorite company, with their “Don’t Be Evil” mantra, and one of the reasons that Tim Sander’s book, “Love is the Killer App” had such a powerful effect on me.

I once met a wonderful lady who originally owned the patent for electronic greeting cards. We both shared the view that God had inspired our ideas and we said someday we should collaborate on a book for entrepreneurs. (This is a different book than the one I’m currently discussing).

It wouldn’t be like Paul Pilzer’s book, “God Wants You to Be Rich” (I met Paul Pilzer about 13 years ago–he told me I would be really rich someday if I ever made that my objective!); it would be more like “God Wants You to Change the World.”

Or maybe we should call it “Prayer is the Killer App” and discuss how God can help you if your heart is right and you are seeking to do His will in your business ventures.

Alexander Graham Bell defined an inventor as “a man who looks upon the world and is not contented with things as they are. He wants to improve whatever he sees, he wants to benefit the world.”

Why wouldn’t God bless and prosper the efforts of men and women who work hard and seek to “benefit the world?” He may not want everyone to be rich, because “the love of money is the root of all evil”; but certainly we can do more with His help than we can without it.

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Paul Allen to buy 5 times more Google shares because of the anti-Google Media frenzy

I have been stunned at how many sharks smell blood and are circling Google and attacking with vicious criticism. They bemoan the Dutch auction approach, the voting rights, the price range being over $100 per share. Google has gone from being the best loved internet company in the world, doing everything right, to being attacked and hated by the media, investors, and everyone else almost overnight. Meanwhile, Google is in their quiet period and can’t respond or participate in the debate.

The firestorm, the media frenzy will soon pass. I can’t wait.

Google is still the smartest, best internet company since eBay. It will be worth tens of billions of dollars in the near term. I have never seen a company execute so well and make so many smart moves that anticipate where the world is heading.

But the frenzy will do some short term damage and drive the buy-and-flip crowd away from the IPO. Personally, I’m planning to buy 5 times more shares in the auction than I was planning to previously, precisely because of all these ridiculous attacks.

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Why I like “The Game of Work” by Chuck Coonradt

Infobase Ventures’ web site has a page that lists resources for entrepreneurs, primarily internet entrepreneurs. We have scores of valuable links: to sites that we use regularly, to tools that are valuable, and to books and articles that we have used successfully to build companies in the past. This morning I realized that I haven’t listed on our Reading List for Entrepreneurs one of the most practical business books that I’ve ever read. It also happens to be one of the funnest, easiest reads of all.

It’s called “The Game of Work” by Chuck Coonradt. The author claims that if we measure something, it almost always improves. If we measure something and report, the pace of improvement accelerates. The Game of Work teaches that work can be as fun as sports if we are constantly striving to improve and keeping track of our individual score.

At Ancestry.com we decided to implement the concepts in the book back in ’97 or ’98 and ask employees to create their own score card and measure their own score. I remember the scanning department was less than productive. Twice in one day I saw one of our scanners had fallen asleep. Then we started score-keeping. Every employee was to report the number of pages they had scanned during their 4-hour shift. Immediately our scanning department productivity jumped by 250% — without increasing compensation.

What happened was simple: each employee now saw how productive he or she was compared to other scanners. If you fell asleep during your shift, your pages per hour average would drop dramatically–for everyone else to see. We were thrilled to see this kind of productivity gain, and we saw it repeated in other departments in the company as well. Many departments in the company, especially sales and marketing, were very driven towards achieving stretch goals. I remember back in 1999 when we were adding a few thousand MyFamily.com members per day and we set a goal to hit 10,000 per day. By measuring every lead source of new members every day, and setting goals, and working hard, we were able to reach that level in less than a month. Then we upped the goal to 20,000 new members per day.

Every business manager and employee should read the Game of Work and decide what metrics to use and what goals to set. There is definite satisfaction in watching your own productivity increase as you keep score day to day.

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Jim Cramer Autobiography

I’m captivated by Jim Cramer’s autobiography, Confessions of a Street Addict. I’m just finishing reading about thestreet.com’s IPO in 1999, a real insiders view of the bubble. I watch Kudlow and Cramer as often as I can. Jim Cramer is a real character, and really smart, and really entertaining. His book has really helped me understand more about Wall Street. I admit to being ignorant of many things–my college degree is in Russian, not business. I’ve always been confused by things like “hedge funds”, “short squeezes”, and many Wall Street practices. Cramer make so many complex things simple and clear. I finally know how hedge funds work and how they are different from mutual funds, and why they are limited to only very rich investors, and how the government restricts advertising about their returns.

For the first time, I’m actually thinking of subscribing to thestreet.com, so I can get more analysis from Jim Cramer.

One interesting fact: after the road show, management wanted to pursue the advertising-only model that the investors seemed to clamor for. Cramer says if they had discontinued their subscription model, they would have been out of business in 2001. As it is, thestreet.com still survives, just announced its best financial quarter ever with $9.1 million in revenue and a very small loss of $130,000, and has a decent market cap of $70 million. If it continues to execute, there may be some nice upside in this stock which is trading just above $3 at a 52-week low.

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