Does Google know the secret behind Facebook Social IPO ?

A couple of days ago I found out the secret behind the Facebook Social IPO, that Facebook plans to start selling its shares directly to customers on a monthly subscription.

It suddenly hit me, that if I am on it, Google probably found this out, and that’s why they recently issued a new class of shares which don’t have any voting rights. It was odd why they are doing this step, what if it was simply to sell their shares to their users too ?

If this is really going to happen, and Facebook and Google will start selling their shares directly to the Billion users they have, it will detach very quickly any traditional financial indicator from the prices of these stocks, I wouldn’t be surprised to get back to P/E of hundreds very soon, as they will not reflect expectations for profit, but expectations from product.

I also received today a great related email from Trefis , Trefis slogan is “Trefis helps you understand how a Company’s product Impact its stock price”. The email had the concept of the The Berman Value Folio : 

“There’s the old story of the man looking for his glasses. His wife asks him why he’s looking in the kitchen when she last saw them in the den. “There’s more light in here,” he replies. In our laziness, we humans tend to solve problems by choosing the path of least resistance, even if it’s less likely to work. Investors are no different: they tend to look for “first-order” indicators, simple shorthand bits of data that are easy to pluck out of a complex world. Trouble is, these bits are often flawed. Price-to-earnings (p/e) ratios are a good example. The humble and 
ubiquitous p/e, a fraction solved by dividing the price by the earnings, fails due to its very simplicity. The idea of comparing Coca-Cola (KO) and Pepsico (PEP) based on p/e ratios looks like a good idea. Until you realize that those two companies are in completely different businesses. Despite that familiar expression to denote 
sameness – “it’s like Coke and Pepsi” – half of PEP is the snack division Frito-Lay, while KO makes 
only beverages “, They show the difference between Coca-Cola (KO) and Pepsico (PEP)

The new equation will become :
More happy users using your products = More stock buyers = higher valuation = Ability to buy more companies with more users and products

As I said on Instagram Saleany social service with 20M+ users (keeping its DAU high) is going to be grabs for the Facebook/Google battle.

“This is only the beginning of a great Bull market, the greatest Bull market we have ever seen”
Alex Vieux, @ RedHerring Europe 2012
$NASDAQ to 5000

The similarities between Tony Soprano and Facebook

The Sopranos must be one of the best TV Series ever made, it also started (some other great series before that like The Simpsons) a trend of really high quality, deep characters that evolve with time series.
Facebook is a great platform, with time it gets better, it evolves with its customers as well, I used to use Facebook less, I now use it more.
So both TV series (or products) and internet products are getting really really better, what i realized is it is the same trend that is making them better, and its the same trend.
Both TV Series and internet products are measured by ratings/active users, the more people watch a TV it will be able to get more (ad) revenues, the more users use a product it will generate more (ad) revenues, so why are they getting better now ?
I think they were always getting better, its in comparison to Movies that TV is getting better, and compared to non internet products that internet products are getting better, and that’s since the product evolves with each user, and then its gets more users and the channels to get more users is mostly viral Vs. fixed distribution channels .. Paying nce for software and paying once to see a movie Vs using a software for free and seeing ads (or any SAS model) seeing a TV series (pay per view or ads)

LindzonPalooza – Techcrunch disrupt meets Burning Man

Better late than never. I Came back last week from my second LindzonPalooza, a yearly event setup by the lovely and crazy Howard Lindzon, founder and CEO of Stocktwits, Hedge/Startup fund Social leverage and off course a beloved advisor and investor in eToro.
What is LindzonPalooza ? Its a 2 day hangout in San Diego with Howard’s friends, entrepreneurs, angel investors, venture capitalists and Stan Feld (Great overview of the event), and this year there was also a Demo of about 10 companies each presenting their cool startups (including myself presenting eToro), you can read about all the start ups here.

So you get 75 TechCrunch people, in serenity, just giving them time to think and talk about stuff they like and learn, for example Ethans Austin 10 things he learned in LindzonPalooza, so here are mine :

1. Since I am copying him, I’ll also give some credit first, Ethan is running GiveForward, an amazing startup which is basically crowdfunding for medical expense, the website enables people with medical difficulties to raise money for medical expenses and it has some amazing success stories of helping people in need. It seems the healthcare system in the US is in trouble, with people paying 25K a year in healthcare insurance (Stan is talking about that in his blog). I’m Inspired by giveforward ability to fix the health care system and disrupt the insurance industry by creating a social insurance network .

2. I had an inspiring discussion on lead generation with TJ Clark on, a website for people looking to book limos ( TechCrunch on it), made me realize the importance a good and simple SEO Strategy – simply build actionable content pages across users needs (i.e – NYC airport limo), and amplify it with media. (a really really good domain like also helps) .

3. Had a great talk with Barry Ritholtz, hedge fund + blog writer, he gave me (I’m a beginner blogger) great tips : Blog every day, several times a day, write several blog posts when you have time and schedule them to appear spread across the day, use graphics, link to other blogs, write about interesting stuff you see over the net. Thanks Barry.

4. On my way from NYC to San Diego, I came across Alan Baldachin, Howard trusted Lawyer and friends, and we sat together and discussed the new Jobs Act and Crowdfunding. Main impact of the Jobs act are 1) Lower barrier for new IPO’s, by lowering SOX requirements for young companies, and you can start a roadshow without publishing an S1. 2) CrowdFunding, enabling business to raise money online (like Kickstarter etc’) – this was not possible due to regulatory constraints.

5. We got a free lesson on how to go Viral from the Viral king, Brad Feld, and his father Stan Feld. Brad simply asked a room with 70 Internet geeks to share Stan Feld new instagram photo, the rest is history 

6. Had a really funny discussion with a new breed of young Investors, Ryan and Brandon from Venture51 who are invested in eToro,  Peter Pham (West Coast Peter Pen), Agosha , and learned that you don’t want to mess with these guys, and you want to get invited skiing with them (and Justin Timberlake), and party and SXSW.

7. Tried to do some business with Jason Raznick, BenZinga founder, hopefully we will work it out, learned a bit about advertising.

8. Daniel Ha from Disquss has some mind boggling scale, and the sheer size of the numbers on disquss are WOW. I hope he will let eToro sponsor discussions, we would love to sponsor great financial commentators.

9. Some people are just, by that I really owe the founder of, Johnathna Strauss for his help after I missed my flight, I enjoyed dinner so much, I missed my flight, and he simply helped me find another ticket on his Ipad. We are also now a customer of so we can track our sharing, so its worth helping people 🙂

10. If knowledge of US politics was mainly coming from sitcoms, I increased it significantly after lunch hangout with WitStream founder , Lisa Cohen,   (Witstream is funny twitter – curated comedy stream).She helped me understand better US Politics and also explained that why  you can’t talk about it in the US and reminded me why I need go to Comedy clubs more often.

11. Phil promised me to join the StockTwits blog network

12. The Swan brothers from TD Ameritrade are very big Guys (like 6 feet tall), and Howard told a funny story that first time he met them, one of them had a black eye and he was like – “who gets a black eye these days”, apparently if you are 2 BIG guys in a bar, you get picked into bar fights. Scary.

13. Came up with the concept of the Social Credit Network (patent pending)

Wow, seems like I can go on and on, So I’ll simply stop (sorry for both name dropping and dropping out anyone) at that and quote “hanging with Howard Lindzon is the closest I’ll ever be to hanging with Larry David” (not sure who I’m quoting here)

Social Insurance Network = Insurance 2.0

While I was in Lindzonpalooze, I came across a very cool startup called giveforward, and its founder Ethans Austin , the concept of GiveForward is amazing, raise money for your medical expenses through friends and family over the internet.

Now getting funds for medical expenses is something that should be handled by insurance, but unfortunately in a lot of cases insurance doesn’t cover everything, and then you have people in NEED.
Specifically in the US the healthcare system seems to be in need of disruption, I heard people paying anywhere from $2-36K a year for health insurance, and you can read all about Health_care_in_the_United_States .

So what if instead for paying for insurance, you were a part of a social insurance network, donating every month $20-200 that go to help real people in need, and in return whenever you are in need, you get the network to donate you your medical expenses. Its simply a P2P insurance company, getting secondary insurance from a 3rd party to promise minimal coverage.

I would much rather donate to real people every month rather than paying to an insurance company, what about you ?

The Social IPO and why you are going to buy facebook shares on facebok very soon

I have just found out about Facebook’s ‘secret’ weapon planned for its IPO very soon. It’s called Loyal3, a way for Facebook users to buy its shares using $10 in their Facebook account.

So why is this a secret weapon? Loyal3, which seemed to have come up from nowhere, has a SEC approved model, and an agreement with NASDAQ to allow any user to buy any shares of listed companies through Facebook with 3 clicks. Users basically buy the stock directly from the company (no brokers, no fees), and you pay the average daily price (no trading).

But what is the business model? If everything is free to consumers, the companies pay the bills, just like at Google. I assume the business model is creating liquidity for NASDAQ and then getting a volume rebate directly from the exchange, so their entire business relies on basically market making the price at night every night (buy or sell anytime but get average daily price) and fees from companies .

This will allow Facebook to “advertise” to its 800 million user base that they can subscribe to Facebook shares, and Facebook users buy ipo shares. Users can then pay $10-2500 a month to get Facebook shares without the need to open another account. Facebook can get 10 million users to pay 10$ per month, and 10 million x $10 are small numbers compared to what they can probably do. If this gets big, it will become  biggest IPO ever done – The IPO of internet like I envisioned a year ago. This can make  Facebook  the largest company in the world  faster than anyone can imagine.

Assuming  Facebook will use this feature,  it will take no time for this to catch on with other internet companies, starting with Google and Zynga offering their users to buy their stocks, which will probably be followed by every listed company.

If this is going to work, then everybody is going to buy their favorite companies’ stocks very soon, on and off Facebook, for $10 a month, and we will see the NASDAQ reaching 5000 very fast, probably by the end of 2012. And like the bankers are saying we are entering the biggest Bull Market of the century .

I will go and buy NASDAQ and Facebook shares now…

A new hope – Valley Jedi Vs Wall St. Empire

I thought of explaining this with a lame attempt at a star wars begining :

“There is a new hope in the horizon, the Valley Jedi – a few brave people that try to change the world, to make it a better place with great products and believe that great products are more important than short term financials. They stand against an ancient dark force, that dark force sometimes referred to as Wall St., but the that dark force is strong in every financial market, that force is powerful and has only one goal – maximize profits, ignore long term, ignore users, ignore social impact – buy cheap sell high – it is the basis of rational economics.
At the end of the 20th century, there was hope, the internet brought in new fresh IPO’s in irrational multiples, driving everyone to believe the world can be better, but then the dark forces closed in and for almost 10 years the Valley Jedi have been hiding. The Jedi are back, but they are still afraid by the dark forces markets, they fear the markets will turn against them again. “
My point is very simple over the past couple of month, and even recent days, the rules of the game ARE changing, more battles are won towords Valleys Vs. Wall St. :
Howard Lindzon (my lovely crazy awesome angel) has just posted how instagram tells to wall street – you failed !He explains how good it is that all this Valley Money stays out of the reach of bankers and even sent a letter to saying he should put his money with eToro instead of “old” private wealth management (so I hope). At a later post he simply says it is more about the product than the financials
Google in their founder letters yesterday have told the market basically they are giving more super voting rights to the founders (super voting rights for founders are the highest degree of the force, power to the founders to ignore the dark side).
founder Mark Pincus, said in the IPO “Games should do good. We want to help the world while doing our day jobs.”
Facebook founder Mark Zuckerberg promises that a similar philosophy will guide the social network. “Simply put: we don’t build services to make money; we make money to build better services. And we think this is a good way to build something. These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits.”
There is still opposition to the moral the Valley silicon-valleys-undeserved-moral-exceptionalism/ but it seems to come from conservatism and inability to undertake what the Internet revolution is about (openness, freedom, innovation).
Although Facebook, Zynga, Google and LinkdedIn all changed the rules of the game, there is still skepticism that the rules can be changed, that the markets can be a part of the good force, that being public means the company will join the dark side. Fred Wilson is looking for alternative ways for companies to stay independent, but I think the best solution is already here, super voting rights = stay independent while being public.The only problem is the buy side demand and acceptance for it. The only way for that to happen is for the Jedi VC’s to grow (up) and start controlling the power of the markets, while crowdfunding will increase significantly the early stage investments, the VC’s must tier up and raise 100X what they did until now ! Why is the VC industry under 100B (from XYZ) while the hedge fund (ally of the dark side) industry is 3 trillion ? If the Jedi VC (there are some dark side VC’s) would raise 1 trillion USD (give up the 2/20 model while doing it), and invest it in the good companies when they are public and base their investments on new KPI’s, instead of PE multiple, users multiple, etc. Then the market forces will help the world become a better place.

Would you deposit your funds in the Google Bank ? I would

It is mind boggling to realize that retail banking is still a local offline activity, specially when you realize banking is a virtual service.
For anyone that grew in a any country in the world (but the US), it is easy to see that a lot of products we consume are global, the shoes you wear (Nike, Addidas), the candies you eat (Twix, Mars), where you surf (google), how you talk to your friends (facebook), that’s not new, that’s Globalization . What is new is the rapid rate of adoption of new products (see Instagram and Draw Something) .

How come when most people invest it still a local activity, how come people still buy local stocks through their local broker, in the local bank account in their local currency, it doesn’t only not make sense, its actually dangerous since most people by that definition are not diversifying their investments.

Banks provides the world with liquidity – the ability to exchange ownership claims with minimal cost.  When we lend money to non-financial corporations, we are conscious of lending.  But when depositors lend money to banks, they believe that they have “money in the bank”.  Banks debts are defined as society’s money – the most liquid asset most members of society can hold.  To make payments using bank deposits, customers must access the payments system through banks. (overview-of-worlds-largest-banks ) .
So banks merely provide a “secure” and “trusted” database to hold your money (that’s 90% of what they do), So why doesn’t create a simple secure and trusted database to hold your funds ? Oh… that’s because “customers must access the payments system through banks.”, and payments are insanely expensive :
To transfer small amount of money you usually pay 2% or more , that means its at least 10 cents per transaction and usually much more. For what ? for 2 database transaction, reduce X account by Z amount, increase Y account by Z amount. 
If a technology company would be brave enough to build a bank, they couldn’t charge 10 cents per transaction, that’s like having google charging you 10 cents for a search. which means payments free and transaction free banking (just show us ads of the best money managers and financial services in the world.
If Google would open Google bank, I would deposit there my money, would you ? 
(comment if you would, and read bank 2.0 by @BretKing if you are interested to see where baking is headed)

An Overview of the World’s Largest Banks, By Hugh Thomas

An Overview of the World’s Largest Banks, By Hugh Thomas

Banks provides the world with liquidity – the ability to exchange ownership claims with minimal cost.  When we lend money to non-financial corporations, we are conscious of lending.  But when depositors lend money to banks, they believe that they have “money in the bank”.  Banks debts are defined as society’s money – the most liquid asset most members of society can hold.  To make payments using bank deposits, customers must access the payments system through banks.

Banking is defined in law and regulated by the national governments of the world.  Most jurisdictions define banks as those institutions that take deposits and make payments on behalf of customers through payments systems.  In some jurisdictions, banks are also defined by their lending power.

In addition to providing legally defined banking services, banks lend, manage financial assets, and make and service markets.  They provide trust and investment banking services – underwriting, issuing, and making markets in securities and advising companies as to how they should tap and invest in the money and capital markets.  Some banks also underwrite and distribute life and general risk insurance.  In playing these diverse roles, banks are regulated by banking, securities markets, insurance and pension fund regulators.  The critical nature of banking services and the high degree of government regulation leads customers to believe that the obligations of banks – especially the largest banks – are implicitly (if not explicitly) guaranteed by governments.  This assumption, in turn, feeds the need for regulation.

To read more go to :
An Overview of the World’s Largest Banks, By Hugh Thomas

ONE BILLION DOLLARS – 10 facts on Facebook buying Instagram

Mark Zuckerberg just posted on his blog 2 hours ago that Facebook are buying Instagram to in order to “offer the best experiences for sharing beautiful mobile photos with people based on your interests”. Right after Instagram CEO, Kevin Systrom, posted it on his blog, too .

So let’s list 10 cool facts about this big story:

  1. This is biggest M&A Facebook has ever done, paying a BILLION dollars for a company with 30M daily active users. Mark says “this is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all”.
  2. Instagram had “27 million registered users on iOS alone…Instagram was increasingly positioning itself as a social network in its own right ” (Techcrunch)
  3. Instagram was launched on 6th of October 2010, less than 18 month ago.  (Techcrunch)
  4. I just need to quote
  5. Instagram doesn’t make any money. Nor did it say it was focusing on revenue. (Forbes)
  6. Instagram is a pivotal-pivot it started as something completely different, ” Systrom revealed that he and co-founder Mike Krieger actually put in about a year’s worth of work into Burbn“, They decided to ditch the old project and start Instagram, and 8 weeks later launched .
  7. In less than 11 minutes, more than 34,000 people had “liked” Zuckerberg’s announcement of the deal. That’s a new metric of main street.
  8. “facebook instagram billion” query on google has 5,240,000 results 2 hours after the announcement
  9. here-is-why-did-facebook-bought-instagram   Facebook was scared shitless and knew that for first time in its life it arguably had a competitor … Why? Because Facebook is essentially about photos (Fred Wilson:Facebook Is Just A ‘Photo-Sharing Site’)
  10. I never found the time to install Instagram, nor do most of the people I know.

After the Facebook IPO, any social service with 20M+ users (keeping its DAU high) is going to be up for grabs for the Facebook/Google battle. We need only 17M+ users on eToro 🙂

why being workaholic is good for you ?

It’s 4:00 AM. I just woke up, read 10 emails and decided to write this blog post. My name is Yoni Assia and I am a workaholic.

I work 24/7. When I sleep I usually dream of work. I send 100-200 emails a day and get 100-300 back. When on vacation, I’m with my laptop/smartphone emailing. During my honeymoon I got 1 hour a day off to work. I talk to my one year old son about work on our Saturday bike ride. You get the point.



So why is the web against it ? Just read a couple of articles on workaholics; the first couple of pages are quite depressing. Wikipedia defines a Workaholic as “a person who is addicted to work. The term generally implies that the person enjoys their work; it can also imply that they simply feel compelled to do it. There is no generally accepted medical definition of such a condition, although some forms of stress, obsessive-compulsive personality disorder and obsessive-compulsive disorder can be work-related.

More recommended reading:
Workaholic, or Just Hard Worker?
21K results on workaholic on Google Scholar (awesome tool)

I decided to check if I’m a workaholic and which kind of workaholic I am. It seems my ADHD has something to do with it as well, and that I am an ADHD workaholic. I think that entrepreneurs must be workaholics (of the good, efficient kind). I guess the people who fall under the Adizes definition of classic E type are probably all workaholics, so why fight it? Why call it a disease? Workaholics have extra 8 hour a day to think and to work! Hell, Jack Dorsey does 8 hours a day at Twitter and 8 at Square .

I am not saying anyone working with me must be a workaholic, I’ve seen how that get blown out of proportion when Jason Calanicis said (and later crossed out) :

Fire people who are not workaholics don’t love their work… come on folks, this is startup life, it’s not a game. Don’t work at a startup if you’re not into it–go work at the post office or stabucks if you’re not into it, if you want balance in your life. For realz.

So why do I insist being a workaholic is good for you ? Because it means you love what you do, and do what you love.

If you know you are a workaholic, and you feel that everybody is telling you it’s NOT OK, and that you need to fix it , then you can register at my workaholic shelter, where we will provide endless work and always accept you as who you are, so don’t feel alone, register today at Yes, creating this post at 5:30 is due to workaholism.