Tonight I logged on to Amazon.com to order Chris Guillebeau’s awesome book “The Art of Non-Conformity”, since 3 separate people recommended it to me in the past week. The first choice I was confronted with – Kindle or Paperback?

What is wrong with this picture???

It costs $10.17 to print a new copy of Chris’s book on dead trees, bind it with glue, put it in a box, and drive it across the country to my door in a gas burning mail truck driven by a real human being.

The Kindle Edition delivered instantly over the internet costs $12.99. WHY?!

Because Penguin Publishing says so, that’s why. In fact, if you click on the Kindle price, you’ll see the following note:

This price was set by the publisher. Amazon actually goes out of the way to tell us that Penguin has specifically mandated higher Kindle prices for many of its books. It’s called “agency pricing”, which means the publisher (Penguin) sets the prices for Kindle Editions, not Amazon.com. Paperbacks are not subject to agency pricing, which means their prices are set by the retailer (Amazon) and fluctuate with market supply and demand. We can see the same situation with lots of other popular Penguin books, for example (not affiliate links):

• Kathryn Stockett’s “The Help” – $9.00 in paperback, $9.99 on Kindle
• Elizabeth Gilbert’s “Eat Pray Love” – $10.17 in paperback, $12.99 on Kindle
• Michael Pollan’s “The Omnivore’s Dilemma” – $9.38 in paperback, $13.99 on Kindle

There are plenty more examples you can dig up yourselves. The bottom line is this – the content licensing industry is broken. Consumers want cheap, clean, instantly delivered digital content, and publishers are holding prices artificially high. The days of paper, vinyl, and cellulose are coming to an end. What practical reason is there to make the far less environmentally impactful digital version artificially expensive? Oh right, it’s to protect classical business models and supply chains that don’t work in a digital world.

This is a telling microcosm of how broken the content licensing industry is as a whole (books, music, movies), as well as how much work still has to be done to adapt content creators’ business models to the digital age. I hope it happens quickly.

I had a great conversation today with my friend Will Nathan about investing for the long term. And I don’t mean the long term like retirement, I mean the very long term in the sense of hundreds of years. Enough time for countries to rise and fall, and entirely novel technologies to take over the world. At the risk of sounding Kurzwelian, I want to discuss the potential for radical change in our future that might warrant such an extended investment horizon.

Over the past 25 years, nobody will argue that we have seen an incredible explosion in information and communications technology. Consider the iPhone that so many of us have in our pockets – more storage, more processing power, and exponentially faster connectivity than almost any computer that existed in 1985. Consider that the internet hardly existed outside the government in 1985, yet now the answer to any conceivable question is available within 0.27 seconds on Google. Consider all the ways that cheap, widely available microprocessors and wireless connectivity has changed business, our inter-personal lives, and even politics (witness Twitter-fueled revolutions in Iran, Tunisia, and Egypt in just the past year). The rate of change and progress is mind boggling. Today’s world was inconceivable just 25 years ago.

It is my belief that over the next 25 years, we will see that same type of transformative change in medicine, genetics, and biology. Synthetic organs, genetically tailored therapies, cognitive enhancement through drugs or implanted technology, and more may be as widespread and seemingly “normal” as that iPhone in your pocket. Diseases like Alzheimer’s, cancer, heart disease and more may be cured. Life expectancy could increase by 25% or more. In 50 years, it’s not totally inconceivable that some type of immortality or near-immortality may be within the grasp of the rich.

On Immortality

On the surface, it sounds like a bright future. However, I think the concept of “immortality” or greatly increased life expectancy has the potential to radically restructure our society and break down a lot of things we take for granted. Consider how much about society is predicated on the fact that humans live approximately 80 years. When people stop dying, the world population will explode overnight. The birthrate will increase as people remain fertile longer. Where will we put all the people? Will our food supply be able to handle it? Our water? Our cities? Our hospitals? What happens to the traditional concept of retirement at 65 if you suddenly have to support yourself for another 65 years after that? Consider the implications for our social programs and our economy.

Cognitive Enhancement

Let’s take another example and consider the extrapolation of cognitive enhancers like Adderall and modafinil. Consider that one day, it’s very likely that humans might never forget anything, or anything that we do forget could be instantly accessible through some sort of neural internet link. Sounds great right? Take a few more seconds and consider the societal implications. What would it be like if “time heals all wounds” didn’t hold true anymore – if you could remember every word of that vicious fight with your wife like it was yesterday? If the pain of a family member’s death never faded? If every participant in every business deal could remember everything that was ever promised? If consumers remembered all the different ways they’d been advertised to? The implications are far broader than just having an encyclopedic knowledge of art history at cocktail parties. Perfect human memories would remake society dramatically.

It’s coming sooner than you think

This isn’t speculation. The timeframe may be a guess, but I don’t think anyone will deny that one day the science will arrive. It’s not just about remaking your own body – as our race begins to transcend biology, it’s going to radically alter our interpersonal relationships, our governments and institutions, and society as we know it.

In December of 2010, the NYT published an article called “Silicon Valley Bubble Shows Signs of Reinflating” citing quotes from investors like Fred Wilson, Dave McClure, Chris Sacca, and more that set the tech world abuzz with repressed memories of 2000′s dotcom bust. Then Newsweek fanned the flames. Groupon turned down a $6 billion acquisition offer from Google, prompting Google CEO Eric Schmidt to comment that “there are clear signs of a bubble, but valuations are what the are”. The hand wringing in startup land reached a fever pitch when Color.com raised $41 million without even a whiff of revenue last month. So with Facebook valued at $75 billion, Groupon at $10 billion, and Twitter over $4.5 billion with almost zero revenue, can anyone deny that there is a bubble blowing in Silicon Valley?

The always thoughtful Ben Horowitz doesn’t think so. Ben argues that 2011 is very different from 2000 for several reasons:

1. Public market valuations are presently much more in line with rationality.
2. Venture funds today have raised only about 25% of the money they raised in the late 90′s, and have deployed less than half of the cash they did last time around.
3. This time, the Internet boom has actually arrived.

Are these fair arguments? Is there a bubble in startup land? Let’s break it down.

Public market valuations are more rational today than in 2000, so there is not a bubble

On the surface, this seems to make a lot of sense. Looking at the table above (borrowed from Ben’s post), you’ll see that valuations of large public tech companies are certainly more in line with reality than they were in 2000. However, I don’t think that public market valuations of large companies with thousands of customers and hundreds of millions of dollars in revenue are necessarily a proxy for startup valuations (often pre-revenue, pre-customer base). Startups are notoriously difficult to value on objective metrics. Startup valuation is as much of an art as a science, and quality of the founding team or competition between venture firms is as often a driver of valuation as underlying financial fundamentals. I just think there are different dynamics at play in private early stage valuations than there are in the public markets.

Venture firms have deployed a smaller amount of capital, so there is not a bubble

Again, this stat is compelling on the surface. There can’t be a bubble if 2008-2010 saw such a relatively small amount of venture capital dollars deployed vs. 1998-2000 right? Sure, there may have been less capital invested, but into how many deals, and in what types of deals? In 1999, we saw tons of companies like Kozmo, WebVan, eToys, Pets.com, and more that raised and burned hundreds of millions in venture capital trying to build online businesses. They spent their money on expensive servers, bandwidth, and traditional media advertising. That’s no longer the case – startups are cheaper to start than ever before now that we have things like on-demand cloud computing, commoditized bandwidth and hosting, and the viral spread of hot ideas through social media. As Fred Wilson puts it, “you can now bootstrap yourself into existence”. In a world of less capital intensive startups, it makes sense that less VC money would be deployed. It doesn’t preclude those investments that are made from being at bubble-like valuations.

This time, the Internet boom has arrived, so higher valuations are justified

This one might hold a little more water. I agree with Ben that last time people’s expectations of the speed and scale of the internet’s takeover were vastly overinflated, which led to some crazy valuations that were based on a hope and a prayer rather than hard data. Ten years later, we have a much more realistic mental map of how internet technologies are developed, adopted, and integrated into existing industries. Today there are over 2 billion people in the world with internet access (30% of the world), and that number is growing by about 15% per year. Compare that with a worldwide internet user base of only about 360 million in 2000. It’s clear that maybe finally in 2011, the internet has begun to reach the global scale investors expected from it ten years earlier.

So, is there a bubble or not?

It depends on how you define “bubble”. Is there a bubble in the 1999, economy-wide, dotcom boom sense? I don’t think so. As Ben proves above, valuations for large public companies remain relatively rational. Retail investors are not betting their life savings on companies that have never earned a dime of revenue. At least in the public markets, signs of a technology bubble are tough to find. However, the private markets are another story. During the financial downturn of 2009 and 2010, tons of private equity and venture capital money sat on the sidelines in cash. Eventually though, that capital needs to be deployed so investment firms can deliver a return to their limited partners. As the economy has thawed a bit in 2011, a lot of that capital has started to come back into the market. This has led to a lot of capital chasing the same number of deals, and that drives valuations up as investment firms compete to get into the hottest deals. Are some of these valuations reaching bubble-like levels? I think so. However it’s important to remember that this bubble is specific to a small segment of investors, unlike the one in 2000. If/when startup valuations come back down to earth, a lot of venture guys and their limited partners may lose a fair chunk of change, but there’s very little danger of contagion to the greater public markets and economy. If anything, we’re seeing a bubble in the venture capital and angel investing communities, not the tech industry as a whole. So in the end TechCrunch will get all worked up for several more months, but in my opinion, the sky remains firmly in place.

Just a quick post to announce the availability of my latest side-project: FoxyWire, which I built in about 15 hours of coding (PHP/mySQL) over the course of a week. FoxyWire is an out-of-the-box integration between two of the quickest ways to cobble together an e-commerce business that I’m aware of – FoxyCart for almost instant shopping cart functionality, and Shipwire for automated intelligent fulfillment and shipping.

Until today, if you wanted to use FoxyCart and Shipwire together to run your business, you needed to either transfer orders manually by uploading spreadsheets, or do some custom coding to connect the two APIs. I went ahead and did the hard work for you – now you can use a (free) FoxyWire account as a “universal connector” to funnel FoxyCart orders directly into Shipwire and build an end-to-end automated supply chain without leaving your desk.

Here’s a bit of background on how each service works, and how you can stich them together quickly with FoxyWire to build an enterprise class e-commerce supply chain.

FoxyCart

FoxyCart is different than any other online shopping cart software in that it’s designed to be lightweight, easy to setup, and not require the customer to jump through tons of hoops to check out. It’s the last point that drew me to FoxyCart – every additional “Next Step” click is a chance for cart abandonment. The checkout page is a single screen that can be completed in under a minute. Very slick, very easy. I’ve used FoxyCart to power several side projects, and have gotten explicit feedback from customers that “your checkout is the easiest I’ve ever used.” FoxyCart also doesn’t have any software at all you need to upload to your own server – orders are simply passed into their hosted cart via forms, links with parameters, or even a JSON API. Check out their 2-minute tour of FoxyCart for a deeper dive into their features.

Shipwire

Ah, how the world has changed. Advanced logistics and fulfillment used to be reserved for large, international companies with sophisticated supply chain managers. Not anymore. Shipwire brings professional-grade fulfillment within the price range and sophistication level of an individual entrepreneur. Shipwire has warehouses in LA, Chicago, Toronto, Vancouver, and London. To get started, you can ship your inventory to any or all of Shipwire’s warehouses. When a new order comes in, simply send the SKUs and address information to Shipwire (automatically via their API if you’re using FoxyWire), and they’ll use intelligent business rules to ship the order for the lowest cost possible, dynamically selecting the closest warehouse and cheapest shipping carrier. Check out this interview with their CEO to learn a bit more about how they are trying to help entrepreneurs build supply chains to rival Fortune 500 companies.

FoxyWire

FoxyWire acts as a connector and translator between FoxyCart and Shipwire. FoxyWire simply listens for new transactions from FoxyCart, performs some error checking and logic (to be sure we don’t try to ship e-books for example), translates the orders into a format Shipwire can understand, then pushes the address and line item information to Shipwire. I couldn’t have built FoxyWire without the great APIs provided by both FoxyCart (API docs link) and Shipwire (API docs link). The Shipwire API is extremely handy in that it takes only an XML file containing address information and the order’s line items – no specific shipping instructions are required. Shipwire intelligently selects shipping options based on the rules laid out in the user’s Shipwire account.

The kind folks at both FoxyCart and Shipwire have listed FoxyWire on both their websites (here and here) as the only currently available method for FoxyCart/Shipwire integration. Over the next few months, I hope FoxyWire is able to help a lot of people launch new businesses without jumping through manual spreadsheet hell or expensive upfront coding. If you’re a new entrepreneur looking to launch an e-commerce business selling physical goods, I don’t know of any quicker way to get started taking orders and sending them to your customers than by using FoxyCart, FoxyWire, and Shipwire.

As I’m reminded by my younger friends, it’s that time of year. The time when college students across the country start jockeying for the summer internship of their dreams. For many, that’s a summer analyst position in investment banking. The trouble is, most students have no idea how to prepare for investment banking interviews, and even less of an idea what the job would entail if they were hired. So in the spirit of “passing it on”, I’d like to offer some of the most valuable advice that was given to me when I was in college, and a few tips and commonalities that I picked up myself. The below is distilled from my time as an investment banking analyst and summer intern, as well as the over 40 interviews with at least 15 different banks that it took to land my full time job and summer internship. It’s specifically targeted at college juniors interviewing for internships, though much of the advice is equally applicable to those interviewing for full time analyst positions.

What will I really be doing as an intern at an investment bank?

A lot of people don’t have a good grasp of what investment bankers actually do. There are a ton of definitions out there, but a simple summary is that investment banks help companies to raise capital (through debt or equity offerings) or sell themselves (M&A). In both cases, bankers prepare all the marketing materials and help to broker the deal (similar to a real estate agent selling a house). As an intern, your job is to help out with things like industry research and PowerPoint slide creation, with occasional runs to pick up takeout or coffee for the team.

Are the hours really as long as I’ve heard?

That depends what you’ve heard – and it also depends where you work. Your hours will vary a lot based on the deals you are staffed on, and some groups at some banks are notorious sweatshops. However, most full time (post-college) investment banking analysts will spend between 70 and 90 hours each week in the office. That’s roughly equivalent to 9am-midnight on the weekdays (65 hours), and then variable hours during the weekend depending on your workload. When a deadline is looming, hours can get crazy – I once caught an hour of sleep sitting up in a bathroom stall at 4am before returning to my desk to finish cranking out a pitch book. As an intern your hours might be a little shorter, but never leave the office until you’re sure the analysts you’re working with don’t need any more help, and never complain – you’re there to work for the summer and get that return offer, not to see the city (sorry).

What questions are they going to ask me in the interview?

A lot of students freak out before interviews for an investment banking internship, expecting to be peppered with technical questions about bond math and fixed charge ratios. The reality is that your interviewer knows you’re still a junior in college and haven’t been exposed to a lot of this stuff – they’ll tailor their questions accordingly. The key things you want to demonstrate are an understanding of the job, a strong work ethic, and that you’re a generally normal and social person.

However, since I know you want more specific details, here are three questions you can be almost certain will come up:

Q: Why are you interested in investment banking?
A: If the best thing you can come up with is “I want to make a lot of money” you might as well cancel your interview now. The correct answer here is dependent on the group you’re interviewing for (M&A, industry coverage, etc) but the thesis is the same. The key is to convey an understanding of what the job entails – contrary to what you may see in the movies, it’s not all power ties and screaming pit traders. One of the most interesting things about investment banking is the opportunity to learn a ton about your clients – in an M&A group, you might spend 3 months selling a defense contractor, then the next 3 months diving into the quick oil change industry. If you’re interviewing for an industry coverage group, make sure you emphasize your interest in that specific sector.

Q: Why do you want to join our firm specifically?
A: Here’s another one where you need to have done your homework. Now’s a good time to parrot back some of the things you learned about the firm in the information session (you did attend their information session didn’t you?) You can also prep for this question by using your career services office to contact alumni that work at the bank – ask them what makes their firm unique.

Q: What are 3 ways to value a company?
A: Ah, finally a “technical question”. Despite what you may have heard, this is about as hard as it’s going to get for internship interviews. You covered the first valuation method in your introductory finance class – discounted cash flows. Use the time value of money to obtain a present value for the firm’s future cash flows. If you’re a little rusty on this, click here for a refresher.

The other two methods are comparative – we’ll compare the company you’re trying to value with others that are similar to it. There are two different types of yardsticks – public comparables and precedent transactions. “Comps”, as they’re called in the industry, are publicly traded companies that are similar to the one you’re trying to value. “Deals” are completed acquisitions of public or private companies. These externally validated valuations give you an idea of what your similar company is worth. The key concept to understand here is called the “multiple” – you don’t compare the values of the comps and deals directly, you compare their EBITDA multiples. Divide a company’s market capitalization (comps) or sale price (deals) by its EBITDA, then apply that multiple to your company’s EBITDA to get the expected valuation.

What part of the interview do students mess up most often?

Far and away, the most common reason prospective interns get dinged is for personality. Even if you nail all of the above questions, you’re not getting the spot unless you click with the interviewer. It sounds unfair, but it’s true. If I’m going to hire someone and then spend 90 hours a week with them, we need to click personality-wise. More students just need to relax and be themselves – connect with your interviewer and show them you’re a normal person who’d be fun to have a beer with. That’s the secret that career offices never tell you.

Wrapping It Up

So there it is prospective junior masters of the universe – get the above concepts down cold, and you’ll be more prepared than 99% of your classmates (assuming they haven’t also read this post). Make sure you grasp basic financial concepts, and relax. The most important things are to show a genuine intellectual curiosity for the job and to connect with your interviewer on a personal level.

Hopefully this helps a few people out – I’m more than happy to answer additional questions in the comments.