Rami Alkarmi.Entrepreneur. Invest. Business Models

What’s it like when two well-known startup founders live under the same roof?

Brit and Dave Morin first met a few years ago. Their first date was over coffee, talking about technology. Now they’re married. Both worked for Apple. Dave went on to work for Facebook, then he launched mobile social network Path. Brit founded Brit & Co, a site that teaches people how to embark on creative projects.

It isn’t all fun being a well-known couple in tech though. Snark is on the rise in Silicon Valley, and Morin says you need a thick skin to deal with it. “I don’t know why Silicon Valley is so snarky!” Morin says.

But there are a lot of perks that come with marrying a fellow entrepreneur.

“I think it’s nice to have someone who will always be your beta tester and has been in all the same situations,” says Morin.

Here’s what it’s like to be a well-known couple in tech:
 

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SEE ALSO: From Googler To Home Maker: How Techie Brit Morin Is Becoming Martha Stewart 2.0

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Google’s big keynote at its I/O developers conference this week wore me out.

Not because it lasted a grueling three hours and fifty minutes, but because of what was announced. With every new product update, every new feature, every new virtual service, it became more and more clear that Google isn’t just a search company that makes loads of cash by showing you ads. It’s creeping into every aspect of our digital, physical, and private lives at an exponential rate. 

I’m still trying to wrap my mind around it.

Google isn’t just the backbone of the Internet anymore. It’s rapidly becoming the backbone of your entire life, all thanks to data you’re voluntarily giving up to a private company based on your Web searches, photos, Gmail messages, and more.

After spending three days at I/O this week, it became more apparent than ever that unless millions (billions?) of people suddenly change their mind and start using alternative tech tools, or unless the government steps in waving the anti-trust banner, our lives, our history, and our personal wealth could be managed by one company –– Google.

It’s the most apparent in Google Now, a voice-powered personal assistant that launched on Android phones last year. At I/O, it became even more clear that Google no longer sees search as returning a list of 10 or 20 relevant links when you type in a query. Google Now is much more than that. It’s the embodiment of that geeky dream of a “Star Trek Computer,” an intelligent machine that understands natural language and real-world context to assist you before you even know you need assistance. 

Google Now scans your email and knows when your Amazon package is arriving. It knows what sports scores to show you based on the teams you’ve searched for. It knows what stock prices to show you based on the companies you search for. It scans your calendar and reminds you when to leave to make your appointment on time. And all that data is delivered to you without you having to ask. 

Following I/O, Google Now is more prevalent than before. Google recently launched the app on iPhones and iPads, and it’s coming to the desktop soon if you use the Chrome Web browser. Next year, you’ll be wearing Google Now on your face if you buy Google Glass.

Then there are photos, arguably the most personal things you share online. Now, Google scans every single one you upload to Google+. It can learn what your family members look like and group photos of them into albums automatically. It can tell if your subjects are smiling. If they’re not smiling, it can stitch their faces in from other images where they are and create the perfect photo for you. It knows if you’re taking pictures of mountains or puppies or buildings or famous landmarks and group your photo albums together accordingly.

It’s creepy and magical at the same time.

Google Glass didn’t get any stage time during the I/O keynote, but it was still a significant part of the event. You couldn’t go anywhere –– the press room, the cafeteria, the restroom –– without someone’s computerized headgear staring back at you. It was oddly discomforting knowing that thousands of people had the ability to take a photo or video of you just by winking at their Glass. 

It’s far too early to tell if Glass will take off when it’s ready for the general public, but if it does, then it’ll be just another example of how Google has reached into the physical space to take over everything we see and do.

I could go on and on, but this week I learned that Google has its hand in almost every aspect day-to-day life and its penetration is only accelerating.

Android is growing like crazy with 900 million activations to date, and it has the potential to connect billions of people to the Internet for the first time in the next few years. Google Maps has a new look, and it’s turned into a snappy way to find places to visit and get recommendations. Gmail is turning into a money transfer service. I can only imagine what Google co-founder Sergey Brin is working on at Google X, the company’s lab for futuristic products.

The question to ask now is, are we OK with this? Does the benefit of faster search, better transportation, and automated news updates outweigh giving up so much of our lives to a computer run by a private company that mines our data? 

They’re issues we’d have to tackle gradually, but hopefully not before Google advances faster than we can adapt.

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There’s a major revolution going on right now in enterprise technology. 

Apps, devices, cloud computing, big data, networks, software are all being overhauled.

There are lots of well-known people leading the charge like Cisco’s CEO John Chambers, Salesforce.com’s CEO Marc Benioff and Box’s CEO Aaron Levie.

But they aren’t working alone. Behind the big names are thousands of people doing their part to change the IT world.

Among them, some stand out for handing critical areas for their respective companies.

Fred Luddy, founder and chief product officer, ServiceNow

Fred Luddy describes himself as “just a programmer” but he’s known as the quiet genius behind ServiceNow, a super successful enterprise cloud company that helped cure the IPO market after the Facebook disaster.

ServiceNow is a cloud tool that let’s IT departments manage their help desk and other technology projects.

Luddy started the company out of near desperation, he told Business Insider. He had been the CTO of Peregrine Systems when it filed for bankruptcy in 2002. His net worth “dropped to zero” overnight. So he figured he had nothing to lose by starting his own gig.

His net worth is fine now. ServiceNow has a $5 billion market cap and he was paid $11 million (stock plus salary) in 2012 alone.

Partha Ranganathan, Fellow, HP Labs

Partha Ranganathan led the research team for what is perhaps HP’s biggest breakout enterprise product of 2013, the Moonshot server. 

This is a server that uses low-power chips that power mobile devices like smartphones and tablets. These servers use 89 percent less energy, and cost about half as much, as traditional servers.

Low-power servers are set to revolutionize the data center industry and thanks to Ranganathan’s work, HP could become a power-player here.

At 40, he’s also the youngest HP Fellow on staff.

Amy Parnell, Principal Designer, LinkedIn

LinkedIn has forever changed the way businesses hire employees.

It also created new ways for business folk to meet, connect, conduct business.

Amy Parnell lead LinkedIn’s redesigns for the uber important Homepage and Profile pages. She’s known for being a wiz at all things tech: engineering, web development and data science and is a rising star to watch within the company.

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Advertising is hardly ever the right answer to building a sustainable, profitable startup.

Yet so many do it.

Instead, startup founders and CEOs need to focus on what they could charge for that people would actually pay for.

The Board of Innovation — a startup consultancy — recently posted a great deck detailing 17 money-making techniques every startup should know.

The common theme is that companies need to understand the emotional context of its customers. 

Any smart, digital revenue model will combine at least few of the forthcoming techniques, according to the Board of Innovation.

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Warner Brothers spent 10 years in Leavesden, U.K., filming eight Harry Potter films.

The studios are massive and reveal how the movies were made using the most incredible special effects in the film industry.

Over the course of filming, five warehouses full of props were used. There was an Animal Department, A Creatures Department, a Visual and Special Effects Department, and more, which made each detail of J.K. Rowling’s magical wizarding world come to life.

We visited the studios last month and learned the secrets. Here’s how the producers did it.

The floating candles in the great hall were originally hundreds of real candles suspended by wires, which were digitally removed. But while the first movie was being filmed, there was a problem. The heat from the flames burned through the wires and caused candles to drop onto the tables. Afterward, all the floating candles were created digitally.

During the epic feast in Harry Potter and the Goblet of Fire, tons of desserts covered the tables in the Great Hall. While most of it was made from painted resin, some of it was edible and the cast got to indulge.

In Harry’s Gryffindor dorm room, props changed from movie to movie. Producers lined bedside tables and walls with things the characters would be interested in, like sports posters and pennants. But the beds were never upgraded. By the time the final movies were filmed, Daniel Radcliff and the other boys had to curl up in balls to keep from hanging over the edge of the bed during shoots.

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Microsoft has formed a new “deep tech” team of executives whose duties will include recruiting non-Microsoft developers to build apps using its products.

The idea is to get Microsoft closer to next-generation developers who are making tons of money building Web and mobile apps on other companies’ platforms.

But according to some developers who’ve worked with Microsoft for years, the company will have become a better listener in order to achieve this goal. 

ZDNet’s Mary Jo Foley was first to report on the deep tech team earlier this week. 

With Windows 8, Microsoft started focusing on smartphones and tablets and pushed developers to use the “Modern” API to build apps for these devices. At the same time, Microsoft effectively killed off Silverlight and XNA, two popular programming languages that developers had spent years learning, and which can be used to build mobile apps. 

Ziliang Guo, a third party Windows developer, told Business Insider that Microsoft alienated many developers with this decision. He believes this could cause long term damage to Microsoft’s mobile ambitions. 

“Losing entire communities of developers like they did with XNA is going to have long term strategic implications,” Guo said Thursday in an email. “Those were the people most likely to have been able to make the Microsoft app store a success by providing quality applications and games.”

In a blog post earlier this month about Microsoft’s missteps, Guo put it more bluntly.

When Microsoft began focusing on mobile devices with Windows 8, it “systematically pissed off significant portions of their existing developer base, either by deprecating the platforms they relied on, treating them disrespectfully, or by outright trying to force them to write phone/tablet applications by imposing restrictions,” Guo wrote. 

Dave Meeker, a VP at digital agency Roundarch Isobar, who has worked with Silverlight in the past, in optimistic about the deep tech team but says Microsoft needs to do a better job of connecting with front-end developers, or ones that design Web apps.  

“Microsoft evangelizes its platform and get devs up to speed, but Microsoft has its own principles in mind for the user experience. And they have not been as open to changing that based on feedback from developers,” Meeker said. 

A Microsoft spokespersonsaid the company is just as committed to bringing in new developers as it is to supporting existing ones. 

“We have a continued, deep commitment to our existing developers combined with an increased openness to meet developers where they are, allowing them to use their technology of choice when targeting the Microsoft platform,” the spokesperson said. 

Microsoft’s challenge will be to show that its culture is changing. And the deep tech team includes new blood. Patrick Chanezon, a former Sun and VMware exec, joined in April. The team also includes James Whittaker, a Microsoft engineer who defected to Google in 2009, then returned to Microsoft last year and wrote a blog post about why he came back.  

Eric Schmidt, a 15-year Microsoft vet whose title is senior director of media evangelism, has what is likely the toughest challenge of anyone of the deep tech. According to Foley, he’s tasked with luring iOS and Android devlopers to Windows Phone. 

Tim Huckaby, founder and chairman of InterKnowlogy/Actus, a San Diego-based design firm that does Microsoft development, has had a front row seat to the turmoil Microsoft’s development platform changes have caused.

But he sounds optimstic that Microsoft can turn things around. 

“I can tell you honestly I have not been encouraged about the developer platform at Microsoft in a while and today, for the first time in a long time, I am,” Huckaby said in a note to clients this week, which was viewed by Business Insider. “I see the culture changing.  I hear people at Microsoft saying the culture is changing.”

Microsoft is holding its Build developer conference next month in San Francisco, from June 26-28. 

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Marketo had a good, good day. Its stock launched on Nasdaq, rising nearly 78% from the opening price of $13 to over $23.

Bruce Cleveland and Doug Pepper from venture capital firm InterWest Partners did particularly well. InterWest  had a 33.3 percent stake that was worth $302 million pre-sale and now tallies up to more than $565 million, reports AllThingsD’s Arik Hesseldahl.

Marketo makes marketing automation software which does things like manage marketing budgets, evaluate how well a marketing campaign went, manage email and social media campaigns and the like. 

It competes with companies like Eloqua, which had its own IPO last year, and Salesforce.com’s Marketing Cloud, formed through its acquisitions of Radian6 and Buddy Media.

It wasn’t the only enterprise tech company to go public today. Tableau Software hit the New York Stock exchange, too, and popped big. Its $31 opening price is over $50 right now in after-hours trading.

SEE ALSO: The 19 Best Enterprise Tech Venture Capitalists

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When CNet editor and  reviewer Brian Bennett lost his “lovely HTC One test unit” while traveling, he was forced to use the other test phone he brought with him, a BlackBerry Z10.

He expected to be miserable missing out on Google Drive, Google Talk, Google Now and other Android apps.

But he was shocked at how much he liked the phone, once he was set up with Google Apps for Business. (“It requires you to configure your Gmail as an exchange account.”)

He particularly liked BlackBerry Hub (“made missing important communiques very difficult”) and the long battery life.

He was less pleased with having to give up Netflix and Instagram and he struggled with a not-always intuitive gesture system.

Still, after actually using it as a daily device, he liked it, though he’s not quite ready to ditch the HTC One, with its bigger screen and Android apps.

“My key takeaways from this experience are; the Z10 is a smoothly operating and highly functional smartphone which is particularly adept at mastering your messages. Also, as I expected from a BlackBerry device, the Z10’s virtual keyboard is fast, accurate, and a joy to type with.”

Business Insider’s reviewer, Steve Kovach, came to similar conclusions when he reviewed it last month. The device was great as a work machine but not so great at play.

SEE ALSO: The 19 Best Enterprise Tech Venture Capitalists

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It’s been one year since Facebook went public. We assume a lot of IPO investors aren’t happy with how things turned out. But, from Facebook’s perspective, it all worked out. It got a good price on its IPO, and now it has plenty of time to develop its business. If CEO Mark Zuckerberg does a good job with the business, this rough first year will be no big deal in the long run.

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Silicon Valley is pushing America into a “share culture,” which may completely change how we live and work. It’s an emerging trend, especially in the transportation sector, with companies like Zipcar and bike share programs becoming popular, but it’s moving beyond that space.

Y Combinator Partner Paul Graham, who invests in some of the most valuable and successful startups, recently asked, “Will ownership turn out to be largely a hack people resorted to before they had the infrastructure to manage sharing properly?”

We recently sat down with Jan Chipchase, whose job is to travel the world and discover tech trends as executive creative director of Global Insights at frog. He shared with us what this shared culture of the future might look like. Watch our conversation below:

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SEE ALSO: What Normal People Really Think Of Kickstarter

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Autonomy has seen its fair share of turmoil since HP acquired it in 2011, as several senior executives have left and rumors have swirled that HP is looking to sell the troubled unit or gut its staff with layoffs. 

But amid all this uncertainty, HP’s remaining London-based Autonomy executives appear to have maintained their sense of humor.

At company events, Autonomy execs sometimes feign mock surprise when they see colleagues.

“In fact it has become a bit of an in-joke at in-house events when a certain manager has walked on stage and a colleague has said ‘fancy seeing you here. You quit didn’t you?” Robert Youngjohns, head of HP’s Autonomy unit, told Tony Quested of the UK-based publication Business Weeklyin an interview published Thursday. 

In January, Youngjohns told AllThingsD’s Arik Hesseldahl that Autonomy was looking to hire around 50 engineers for the unit. This week, Youngjohns told Business Weekly he’s still got about 25 job openings in London for engineers, software developers and other roles. 

Youngjohns told Business Weekly he’s also busy looking for a new office for Autonomy, which is currently located in London’s St. James’s Square in the original home of the Queen Mother (the mother of Queen Elizabeth II, who passed away in 2002).

HP CEO Meg Whitman visited Autonomy’s London office in April and said HP wasn’t looking to sell the unit. She even described Autonomy’s technology as “almost magical” and something HP needs to establish itself as a force in big data, the fast emerging enterprise software segment that uses analytics to get value about the mountains of information companies generate daily. 

But last week, Bill McDermott, co-chief exec of SAP, told The Times of London’ Nic Fildes that HP tried to get his company to buy Autonomy. 

After acquiring Autonomy for $11 billion in 2011, HP wrote off $8.8 billion from the deal last November and said it found $5 billion worth of alleged fraud on Autonomy’s books. 

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How do online dating sites predict who will be good matches on their networks? Which algorithms are used to accurately predict chemistry between two people?

Sam Yagan is the co-founder of OkCupid. He now runs all of Match Inc for IAC. Yagan says IAC’s dating companies crunch billions of data points and find up to 100 initial matches for users. Two of the most important factors its algorithms look for are users’ locations and ages. Then, they look at things users explicitly say in their profiles, such as interests and religion, and things they implicitly reveal, like which types of people they message most often.

Data can reveal things about people they didn’t know about themselves. For example, Yagan says things people often list as dealbreakers, like users who smoke or are of different political parties, tend not to be.

Of course, there are some things about falling in love that math and data can’t predict.

“Dating is a numbers game,” says Yagan, noting that the average adult goes through ten relationships in his or her lifetime. “What we try to promise is good first dates. Once that first date happens, it’s really up to you.”

SEE ALSO: The Future Of Business

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Last night, Peter Kafka and Kara Swisher of All Things D reported that Yahoo might buy Tumblr for a price close to $1 billion.

Then, GigaOm suggested Facebook might swoop in and buy Tumblr at a higher price for itself.

Then, Forbes’s Jeff Bercovici said that Microsoft is circling Tumblr too.

Then, CNBC reported that Yahoo is hosting a press conference in New York on Monday.

What’s going on? I wish I could tell you.

Three weeks ago, I wrote a story headlined: “Tumblr Has A Huge, Fate-Deciding Board Meeting Today – Here Are The Topics.”

For that story, I spoke to three sources: Tumblr CEO David Karp, Tumblr board member and investor Roelof Botha, and an anonymous source close to the company.

Karp, Botha, and my anonymous source were extremely candid about the state of the company. 

They told me Tumblr’s Q1 revenues were behind plan, that Tumblr was raising money, that Tumblr was holding a board meeting that week, and that it was in the final stages of interviewing candidates for a COO job.

They are not being so candid this time around!

In fact, they are not even replying to my emails or voicemails.

This makes sense: People stop talking when they are scared that talking will keep something good from happening.

So, having spoken to those people so recently and having a decent grasp of what’s going on at both Yahoo and Tumblr, what do I think is going on?

I have four thoughts, actually!

A $1 billion sale is not what Tumblr investors were hoping for, but they’ll take it.

Tumblr raised $85 million at an $800 million valuation back in 2011.

This is sale is not much of a premium over that valuation. But, you have to assume that Tumblr’s later stage investors bought “preferred” shares in the company.

The benefit of preferred shares is that they sometimes guarantee a return of 1.5X or 2X in a liquidity event.

So, even though Tumblr would be selling at a 25% increase in valuation, its late-stage investors could be getting something like a 50% return.

In an era following the Facebook IPO, that’s not something to sniff at.

Marissa Mayer is perfectly positioned to give Tumblr CEO David Karp what he wants. 

You might think David Karp would sell Tumblr to Yahoo for $1 billion because it would put $250 million in his pocket.

You would not be stupid to think this.

$250 million is a nice incentive for anyone, let alone a first-time entrepreneur in his 20s, like Karp.

But…

Karp has gotten lots of offers to sell Tumblr at prices that would make him rich over the years, and he’s resisted them all.

Why would he sell this time?

Easy: Karp and Tumblr have problems like never before…

• Tumblr does not have a COO and the board wants him to hire one, 
• Tumblr is light on revenues
• Tumblr needs cash to keep running and growing.

Selling to Mayer solves all those problems. 

To keep Tumblr’s servers going, Yahoo has billions of dollars in cash. As for revenues and a COO?

Mayer, we’re guessing, will tell Karp not to worry about either for now. 

Mayer, according to lots and lots of sources who have worked with her, is not concerned with things like “revenue” and “money.” She’s much more focused on “product” and “user-growth.” 

Right now, Yahoo shareholders are happy to let her do that. That’s because Yahoo shareholders are not shareholders because of Yahoo’s core business or core products.

They are Yahoo shareholders because owning Yahoo is the only way to make a pre-IPO bet on Alibaba, a hugely success Chinese Internet company that Yahoo owns a big stake in. 

So Mayer is perfectly able to spend a billion dollars on Tumblr and allow Karp to keep running it relatively ad-free. This in turn, should keep Tumblr growing, since users hate ads.

Buying Tumblr helps Yahoo solves one of Yahoo’s biggest problems: mobile.

Sometime in the next couple years, more people will be accessing the Internet through mobile devices than through PCs.

This trend is bad news for Yahoo, which has limited mobile reach and even more limited mobile usage.

(It’s reach numbers get a boost because Yahoo gets credit for having a weather app installed by default on every new iPhone. This is despite the facts that Weather Channel provides the data for the app, Apple built the app, and Yahoo sells no ads in the app.)

Tumblr, despite a rocky start in mobile, now has TONS of mobile users.

Check out this table from ComScore, which shows that Tumblr is, relatively speaking, about as strong as Facebook in mobile, and much stronger than Yahoo:

Facebook-Tumblr doesn’t seem like a fit to me.

Facebook bought Instagram for a billion dollars a year ago. Some people are reporting that it is considering pay the same price for Tumblr today. 

But the only reason Facebook bought Instagram was that Instagram was a huge disruptive threat to Facebook’s business.

Facebook, at its core, is a photo-sharing product. So is Instagram.

Instagram is mobile – the future. A year ago, Facebook was not.

Tumblr is not more mobile than Facebook. It is not a photo-sharing service.

Facebook isn’t going to pay up for Tumblr.

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One of Morgan Stanley’s investment strategists, Gerard Minack, is retiring.

This is a bummer. Minack’s work was lucid and helpful.

But as a parting gift to clients, Minack wrote a two-page farewell note that contains the best investment advice you will likely ever receive.

What is this investment advice?

• Don’t try to pick stocks
• Don’t try to time the market
• Just invest in a portfolio of low-cost, tax-efficient index funds

Now, before you go scrutinizing Minack’s note to find these bullet points, let me be the first to say that Minack does not actually explicitly articulate this advice.

Rather, he just demonstrates conclusively why any other investment strategy is idiotic.

For starters, Minack points out that, in the average year, 60% of actively managed mutual funds underperform their benchmark.

This means that, in any given year, you have a 40% chance of picking a fund that will beat the market. So if you try to pick a fund that will do this, the odds are already against you.

Then Minack notes that, over the 3-year period through 2012, a staggering 87% of funds lagged the market—a percentage of failure that is similar to the percentage in most three-year periods.

This means that, if you plan to hold your investment for 3 or more years, you have about a 1 in 9 chance of picking a fund that will beat the market.

Those are truly awful odds.

And it gets worse.

If you are like most people, in addition to trying to pick funds that will beat the market, you will try to pick times to be in the market (namely, when you think it’s going to go up.) And, if you’re like most people, you will not be able to pick good times consistently. (On the contrary…) As a result, you will pull money out of the market when you should be putting it in, and put money in when you should be pulling it out. And this will further bludgeon your returns.

If you are like most sophisticated rich investors, meanwhile, you will think that, by investing in hedge funds instead of dime-a-dozen mutual funds, you will have a much better chance of beating the market.

Instead, your chances will actually be much worse.

Why?

Because it turns out that the thing that causes the majority of funds to lag the market (mutual funds and hedge funds) is not poor stock-picking ability but fees.

On a gross basis, before subtracting costs and fees, about half of funds beat the market every year and half of funds lag it. (This is because funds basically are the market). Once you subtract costs and fees from both groups, however, the odds get much worse.

So, stock-picking, fund-picking, and market-timing are generally terrible ideas.

And now for the good news…

If, instead of trying to pick a fund that will beat the market, and pick times to be in the market, you just buy and hold a low-cost index fund, you will be guaranteed to beat 90% of funds over the long haul.

This is because, unlike actively managed funds, index funds have very low costs and fees. So they track the market, while, on average, the group of actively managed funds loses ground to costs and fees.

In contrast to your odds of picking a fund that will beat the market, having a 100% chance of beating the vast majority of actively managed funds are excellent odds.

Here’s the problem, though:

In my experience, it takes a lot of time to persuade even a smart person that it is much smarter to buy and hold low-cost tax efficient index funds than it is to try to beat the market or time the market.

After I left Wall Street in 2001, for example (I used to be a stock analyst), it took me about three years of reading Jack Bogle and the academic research and looking at historical performance to persuade myself of this. Eventually, however, the evidence became undeniable and overwhelming. And then I finally stopped trying to pick stocks and (for the most part) time the market and moved my own portfolio into index funds. 

This is by far the best investment decision I have ever made. 

Gerard Minack has done Morgan Stanley clients an incredible service by beginning to explain this reality to them as he leaves.

Hopefully, Morgan Stanley’s financial advisors will now pick up Minack’s torch and place their clients in low-cost tax-efficient index funds.

(And, if they don’t, I would urge Morgan Stanley clients to ask some hard questions of their Morgan Stanley financial advisors. It is not a theory that investing in low-cost index funds is a smarter strategy than trying to pick funds or stocks and try to time the market. It is a demonstrable fact. With very few exceptions, anyone who tells you otherwise either doesn’t know what they are talking about or is selling something. I actually wrote a book about this here.)

Here are some charts that Minack published today that should start to persuade you of this:

1. On average, 60% of funds lag the market.

2. Over longer periods, the percentage of funds that lag the market is much higher:

3. Investors are terrible at market timing. They put money into the market after stocks have done well for a long time, and they pull money out when stocks have collapsed.  

4. Because investors are lousy at market timing, their actual returns are far worse than the market returns or the average fund returns. They sell before funds do well and buy before they do badly.

5. Hedge funds are terrible, too (mainly because of the super-high fees).

Those are not opinions. They are facts.

Now, if you’re like I was ten years ago, you simply won’t accept this. You will think that you can pick the few funds that will beat the market and that you can time the market, even if other investors can’t.

This belief of yours (or your advisor’s) will, in all likelihood, be very expensive for you, and it won’t likely be true. But, if you’re like me, you’ll probably have to learn that the hard way.

So, if nothing else, please just consider the possibility that these charts might be right, that you might not be one of the handful of investors who can pick great funds and time the market consistently, and that index funds might actually be a smart way to go.

Because the sooner you get started in the learning process necessary to persuade yourself of this, the better your returns will be.

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Yahoo Is Reportedly Exploring An Investment In Or Acquisition Of Tumblr (AllThingsD)
Tumblr, the blogging platform and social network would be the crown jewel in Yahoo’s efforts to revamp and, in the words of its CFO, become “cool again.” Tumblr would bring Yahoo the young audience it so desperately craves; it is especially popular among teens and young adults, as we discussed in our recent report on teens’ mobile habits. It also has a mobile footprint, opting to release its first major ad initiative on mobile, as we outlined in our social media ad report, which included a primer on Tumblr as an ad platform. However, Tumblr may also bring some headaches: it is full of racy content, to put it mildly. Read > 

More Business Insider Coverage Of The Tumblr-Yahoo Deal (SAI)

• Facebook Might Ruin Yahoo’s Attempt To Become Cool Again
• Tumblr’s Porn Problem
• The Social Media Advertising Ecosystem Explained 

One-Third Of All U.S. Smartphone Sales Were Prepaid In The First Quarter (CNET)
Mobile financing patterns are changing. According to the NPD Group, prepaid smartphones accounted for 32%of all U.S, smartphone sales in the first quarter, up from 21% a year prior. NPD attributes the jump to consumers buying older models of flagship phone models, like the Samsung Galaxy S2 or the iPhone 4S. It may also explain why smartphone penetration is reaccelerating. Read >

How To Break Into Mobile Native Advertising (Mobile Marketer) 
Interviews with executives from Klip, SessionM and Sharethrough on the best ways to get started with mobile native advertising campaigns. The main advice is to design context-sensitive ads that help customers solve problems in their day-to-day lives, and to focus on limited concrete goals at first, like getting users to share content. Read >

Apps Begin To Arrive on Google Glass (New York Times)
CNN, Elle, Twitter, Tumblr, Facebook, and Evernote will soon unveilnew apps for Google Glass as it begins builds out its developer ecosystem. Path and the New York Times were previously the only apps available. Read >

AT&T CEO: Content Providers Will Subsidize Consumers’ Data (Fierce Wireless)
Carriers are eager to ward off consumer dissatisfaction with data plans. AT&T Chairman and CEO Randall Stephenson told investors at a J.P. Morgan conference that he expects content providers and app developers to unveil new models that let consumers access their content without egregiously high data bills. “There will be models that emerge where they defray consumer charges by paying it themselves, or by advertising.” Read >

YouTube Is The Largest Source Of Mobile Traffic (Sandvine)
But who will be in the carriers’ crosshairs when the all-you-can-eat data party ends? YouTube accounts for a quarter of North American mobile traffic during peak period, according to Sandvine. Facebook chips in another 10%. Real-time entertainment (i.e., mobile video) accounts for 44% of peak mobile traffic. Read >

Consumer Spending On iOS Games Passes Dedicated Handheld Games (App Annie)
For the first time, gaming revenue on the iOS app store surpassed gaming-focused handheld devices, like Nintendo DS or Sony PlayStation Portable, further underscoring how smartphones are disrupting markets for devoted devices, such as MP3 players or cheap cameras. Games are the app store’s real success story. Games represent about 40% of downloads and 70 to 80% of consumer spending in both the App Store and Google Play. Read >

iOS And Android Combine For 92 Percent Of First Quarter Smartphone Shipments (IDC)
IDC reported slightly higher smartphone shipments than Gartner for the first quarter: 216 versus 210 million, respectively. Both showed Android opening up a massive lead in platform market share. IDC’s numbers also showed Microsoft’s Windows Phone overtaking BlackBerry as the number three operating system. Read >

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