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    The Coming Suburban Welfare State

    Some have predicted that high energy costs, either due to decreasing supply of oil or costs associated with carbon emission mitigation, will soon push people out of their cars and onto public transportation.

    But there’s something else happening: people are getting sick of spending time in transit at all, making city living increasingly attractive. We are now increasingly able to infill “scrap-time” during our days with useful activity, and location-based social networks make it possible to maximize personal connections as we move about. We are engineering our own serendipity to generate real value from every moment. Why would we squander that potential by spending time in transit of any kind?

    In the future, I predict:

    • Air travel will be reserved for trips greater than 500 miles
    • Trains will be used for trips less than 500 miles
    • Bicycles, walking, and local transit will be used within cities
    • Any local trip longer than 20 minutes will be seen as burdensome
    • Cars will be seen as a luxury to be used for road-trips + utility hauling

    And again, this will not happen due to fuel scarcity alone – it will happen because people demand it; and I’m not talking about you – but your kids and grandkids.

    Regardless of what happens with fuel prices, we know that roads do fill to their available capacity. And then that’s it. Expansion does not help for long, because roads then fill to whatever capacity is available and development occurs until roads are too broken to use.

    Roads are also increasingly expensive to build. A major construction project such as the popular-but-doomed Intercounty Connector in Maryland will cost over $2.6Bn to build. Is this a good long-term use of resources? Seems to me we’re throwing a bone to some 55 year-old commuters who have been annoyed with the state of the Washington Beltway since it was built, and this is the only solution they thought could fix it. Enough with the reductionist, idiotic causal thinking already: it’s a dumb idea. I don’t begrudge it, but in the long term, who cares?

    The idea-driven creative industries that America has hung its hat on can only thrive in cities, where people can get together and trade ideas freely. Any barrier to that exchange lowers the potential net economic value. Put simply, all of this kind of creative work will happen in cities. Period. Because if we don’t do it in cities, we won’t be able to compete with our peers around the world who will be doing this work in cities.

    So, what of the suburbs? In many European cities, the urban centers have been long reserved for the upper-class elites; poorer immigrants, often Turks and other Islamic communities, tend to inhabit the outer rings of the city – denying them crucial access to economic opportunity. This kind of social injustice is baked into many European cultures; in France, you are simply French or not French, and no amount of economic mobility will allow someone who is not of that world to sublimate into it.

    This is not the case in America. We are all Americans, and even marginalized citizens are able to fully participate in all levels of our culture – though certainly there is social injustice that must be overcome.

    Over the next 50-75 years, there will be a net gain of wealthier people in America’s cities and also a net gain of poorer people in our suburbs. This will be a natural byproduct of an increasing demand to be in cities, and an increasing (and aging) suburban housing stock coupled with roads that no longer function.

    To fulfill our challenge as Americans, we must use these dual gradients in our cities – the inflow of the rich and the outflow of the poor – as an opportunity to maximize social justice. By avoiding flash-gentrification and fixing education as we go, we can in a span of 20-40 years (1-2 generations) offer millions of people a pathway into new opportunities that stem from real, sustainable economic growth; all the while realizing this is going to mean more color blindness all around – and that suburbs will generally be poorer than the cities.

    In my home state of Maryland, the only foreseeable damper on this force is the federal government and the massive amount of money it injects into industries like cybersecurity and other behemoth agencies like the Social Security Agency.

    Because these agencies and the companies that service them generally do not have to compete globally to survive, they can locate in the suburbs and employ people that live in the suburbs – and subsidize all of the inefficiency, waste and boredom that comes with that.

    This is nothing but a giant make-work program and its benefactors are little more than sucklings on the federal government’s teat, which is spending money that will likely come straight out of your grandchildren’s standard of living. Right on.

    Cybersecurity, for all its usefulness in possibly maybe not getting us blown up by wackos (bored wackos from the European Islamic suburbs, I’ll point out), is  nothing more than a tax on bad protocol design. For the most part it doesn’t create any new value. In the end, we’ve got suburban overpaid internet engineers fighting an imaginary, boundless war with disenfranchised suburban Islamic radicals. Who’s crazier?

    Lastly, for all of you who think I’m wrong or resist these predictions because you personally “wouldn’t do that” or can produce one counterexample, I ask you: Are you over 35? If so, your visceral opinion may not matter much. I fail this test myself, but I believe my argument is logically sound and is based in the emerging attitudes of young people.

    The future will be made by people younger than we, and based on everything I can see, we are on the cusp of a major realignment of attitudes and economics in America.

    It won’t be too much longer til active, entrepreneurial creative professionals (black and white) in our cities look at the suburbs (black and white) and decry the entitlement culture of the suburban welfare state.

    Is Silicon Valley Dead?


    Pride, Passion, Talent on Display at Startup Weekend Seoul

    I believe that Silicon Valley may soon be going the way of the floppy disk.

    For the last two weeks I have been traveling around Asia with a group of tech entrepreneurs, on a trip called “Geeks on a Plane” organized by Silicon Valley investor Dave McClure. I took the same trip last year.

    Why take a trip like this? The answer gets at some very real and seismic shifts taking place in the startup world that will be big news over the next few years.

    Startups Cost Less

    Ten years ago a successful Internet startup might require one to five million dollars in outside funding. Data centers, engineers, and software licenses were hot commodities and could easily drain a startup’s resources.

    Now it is possible to get a startup to the point of testing it in the market — with real customers — for $25,000 to $50,000. This effectively removes VC’s from the equation at these early rounds and turns things over to angel investors. As angel investing becomes increasingly professionalized, success rates increase and more people become involved with it.

    “Silicon Valley is a State of Mind, Not Necessarily a Real Place”

    Pay attention to this one! This is a quote by Dave McClure and it captures what is happening perfectly. Everywhere you go, there are techies and entrepreneurs who follow the tech business scene, and they are all ideological peers.

    Silicon Valley is all about embracing the idea that the world can be changed for the better, and that one can (ultimately) realize rewards by changing it. If you believe this, you are a part of Silicon Valley. What about that statement is related to place?

    In Shanghai, Beijing, Seoul, Singapore and Tokyo I have seen first hand the buzz and excitement that comes from people who believe that they can engage with the problems of our world imaginatively and productively. And they are not moving to Silicon Valley.


    3D Printer at Singapore’s hackerspace.sg

    Place as a Strategic Differentiator

    Not being in Silicon Valley is very helpful if you are trying to tap into developing markets like those in China, Korea, and Japan. It is also helpful if you don’t want to have to pay Valley salaries and sucked into the echo chamber there.

    As an example, a skilled developer in Silicon Valley might cost you upwards of $120,000 per year; the same person in India would cost $12,000 per year and in Singapore they would cost $48,000 per year.
    If you are trying to build a product to serve the Asian market, wouldn’t you rather base your company in Singapore?

    Being in “a” place is more important than being in “the” place

    It is widely assumed that internet technologies like Skype and email crush distance and make global distributed business possible. True, but there are exceptions.

    Real creativity, trust, and ideation has to happen face to face. This is where the magic occurs. If you don’t spend time with people you can’t create.

    New-technology tools can help with execution, but only after the team dynamics are in place; they are great for keeping people connected and plugged in, but suck at creating an initial connection.

    Love your place. Find the other like minded souls who love your place and start companies with those people. The creativity you unleash in your own backyard is the most important competitive differentiator you have. No one else has your unique set of talents and point of view. Leverage it.

    Every City is Becoming Self Aware — All at Once

    I do not know of a city anywhere in the world that is not presently undergoing a tech community renaissance right now. This is a VERY big deal.

    Every city in the United States along with Europe, Asia, and South America is now using the same playbook — implementing coworking, hacker spaces, incubators, angel investment groups, bar camps, meetups and other proven strategies that will have the effect of cutting off the oxygen supply to Silicon Valley.

    Let me say it again: Silicon Valley is getting its global AIR SUPPLY cut.

    For the last few decades, Silicon Valley has traded on the fact that people are willing to move there to start companies. The MAJORITY of valley companies are founded by foreign born entrepreneurs. What if they stop coming? What if they find the intellectual and investment capital that allows them to self-actualize in their home turf, where they already have a competitive advantage?

    The fact that we have made it so hard for new immigrants to come to the valley and create startups just makes things that much worse. That is why the Startup Visa concept is so important if America – not to mention the valley – wants to keep excelling in innovation and the economy of ideas.


    “Soul-crushing Suburban Sprawl” – Paul Graham

    The Valley Kinda Sucks

    Everybody says that the big draw to San Francisco is the weather. True, it can be pretty nice at times. But it can also be pretty miserable.

    The reality is that the weather makes no f*cking difference if you are slaving away 26 hours per day on your startup; and the fact is that humans only really perceive changes in weather anyway: you’ll notice a nice day if it has been preceded by 10 rainy ones, or vice versa. Studies have demonstrated this. Look it up.

    Paul Graham said it best, “Silicon Valley is soul-crushing suburban sprawl.” And he also suggested that places that can implement a bikeable, time efficient startup environment without sprawl have a significant competitive advantage over the valley.

    Nearly every major city is becoming that place for its community of entrepreneurs. All at once.

    So Why Travel?

    It’s simple: to go to where the startups will be coming from. Investors who wait around for startups to show up in the valley are going to miss out on serious innovations and investment opportunities.

    This means leaving the Lamborghini parked on Sand Hill Road and cabbing it to a gritty hackerspace in the Arab section of Singapore to meet the innovators who are building the future. And this is something that most investors think they are too good and too important to go do.

    Fortunately there are scrappy, forward-thinking folks like McClure who are willing to go out there and embrace the future and begin the creative destruction the next wave of innovation will bring to valley culture.

    Our challenges are too great to demand that innovation happen one way, in one place, with one set of people. Innovation needs to be systematized and distributed, and this is the opening act.

    The Future of Entrepreneurship

    I had a great conversation with Dr. Meng Weng Wong today, founder of Joyful Frog Incubator in Singapore. We pondered questions:

    • In the future, will companies form teams and then try to get funding, or will entrepreneurs just gather, form ideas and try things?
    • How do bands form? And are incubated startups just boy bands?
    • Are we not always just betting on individual ability to execute?
    • Doesn’t team (and execution) always trump idea?
    • Is entrepreneurship a cycle? Shouldn’t exited entrepreneurs come hang out with first time entrepreneurs and try ideas together?

    These are important questions in their own right, but the most important thing is that we are asking them. And so are people around the world. And it has nothing to do with Silicon Valley, the place.

    Want in on the ground floor of this next wave of innovation? Understand the change that is coming and leverage it in your own backyard. Get involved.

    Because I guarantee that in five years the Valley will be a very different place and that we will see thriving startup communities bearing real fruit in every major city.

    Why go to the Valley? Good question.


    A couple of acknowledgements: Shervin Pishevar pointed out that he and Dave McClure have been talking up the “Silicon Valley is a state of mind” concept for some time; he deserves proper attribution. Hats off, Shervin — the idea certainly resonates with me and I applaud both you and Dave for recognizing and acting on its power.

    Also, Bob Albert — an entrepreneur I met in Singapore — came up with the “Is Silicon Valley Dead?” meme while we were chatting, and he deserves credit for crystallizing that idea. It’s been said before, but for different reasons; the forces driving this set of changes are distinctly different and I think we’ll be seeing this notion repeatedly over the next few years.

    Dave McClure tweeted this article with the title “The Future of Silicon Valley Isn’t in Silicon Valley,” which is perhaps an even better title, even if it’s a touch less meme-friendly.

    Thanks to everyone for engaging in this conversation!

    Travel Hacks: Free Bikes in Paris

    I just returned from Paris and the formidable Le Web ’08 conference that Loïc and Geraldine Le Meur hosted there, and really had a great time!  I will write more about the conference shortly.

    Meantime, you may have heard that Paris has installed a network of bicycle stations throughout the city and that they are available for folks to use for their commutes, errands, and to generally replace cars and other forms of transport where possible.

    What the press has not reported so well is that these bikes are FREE for trips under 30 minutes (with a very reasonable 1 € /24H subscription), and that it is EASY for tourists to use the bikes. Often, European ticketing machines require credit cards which utilize a smart-card chip, but Paris’ Velib’ bikes have no such requirement.

    Here’s how it works:

    • Arrive at a bike station and select English as your desired language
    • Select “Short term subscription” and choose a 24-hour (1 €) subscription or 7 day subscription (5 €)
    • You will guarantee the bike with your credit card for up to 150 €, but you will only be charged if the bike is not returned
    • You’ll be given a ticket with a subscription number good for the duration of your subscription
    • Follow the directions for taking a bike, and grab one (warning, pick one with good tires and check the seat to be sure it stays up)
    • Take a bike
    • Return it within 30 minutes and your rental is free!
    • Enter your subscription number when you return the bike to confirm the return; the bikes have active electronics that detect the station, so this may not be strictly necessary, but it’s a good idea

    Now, at first the requirement to return in 30 minutes may seem like a problem, but it’s not: there are stations every 300 m throughout all of Paris, and you will see these stations everywhere.  So, these bikes are great for touring! Bike for a bit, return the bike when you are near your destination or see something interesting, and then walk, train, or meander wherever you like.  You can pick up your next bike wherever it’s convenient, and you never have to worry about locking up your bike, leaving a rental bike in a sketchy neighborhood, or having to go back to where you parked your bike.  It’s by far the most carefree and fun travel bicycling experience I’ve ever had.

    Occasionally, the station where you would like to return a bike is full. If this happens, you can enter your subscription number at the kiosk and it will give you a map of nearby stations (there should be 3-4, as they are placed every 300m). The system also issues you an extra 15 minutes of free time to get to the other station, though in practice 5 minutes is usually all that is required.

    We literally did not think that we were going to use these bikes because so many of the articles we read said things like, “These bikes are not great for tourists because they require a European credit card and cost a lot of money if you keep them all day.”  And yes, if you keep the same bike all day, they charge something like 4 €/hour after 2 hours. However, the cure for this is simple: don’t keep the same bike all day.  Up to 2 hours the rate is something like 1 € per hour and not nearly as expensive as a traditional bike rental.  And who wants to bike for more than a half hour anyway? Paris is all about stopping, checking out unique neighborhoods, grabbing some cheese and wine, and exploring.  For this, Paris’ Velib’ (short for Velo Libre — free bikes) is perfect!

    Other cities (and counties) should follow Paris’ lead on this.  It’s a great system, run by advertising giant JC Decaux in exchange for outdoor advertising rights in Paris.  No small trade, but the the benefit to the people of Paris (and to its visitors) of having a well run system for replacing cars is huge. If you have not been to Paris before, this should encourage you to go; if you visit often, please try the Velib’ bikes!

    And yes, biking in Paris is somewhat entertaining.  While they don’t have as developed a system of bike lane markings as in, say, Berlin, it is functional and you quickly get a feel for where it’s a bad idea to be biking. Shooting across the Seine to the Rue de Rivoli at 9:30 at night proves to be a bit harrowing, but you have the right of way and people are genuinely interested in not killing you; it would be a bureaucratic nightmare for everyone involved.

    So, I can’t recommend it highly enough. Go to Paris, grab a bike, and have a great time!

    A Bicycling Manifesto

    With the price of gas where it is, along with my own desire to get more exercise, I’ve adopted a set of rules regarding bicycle usage, and encourage everyone to do the same.  I think it represents a distinctly different attitude towards bicycling than we’re used to.  See what you think.

    1. Ride a bike for a reason, not just for recreation; while riding a bike for recreation is fine, the idea is to promote replacement of cars with bikes where possible.  Make a point of choosing trips where you actually are replacing a car trip.
    2. Don’t wear funny sports clothes. They preclude your ability to partake in normal society.  If you’re going to a lunch meeting, no one wants to see bikerman in spandex.  Furthermore, wearing sports clothing promotes the image that bikes are for ‘cyclists’ and not normal people.  Do wear a helmet, and lock it to your bike when you need to go in someplace.
    3. Go where you need to go, including busier roads, if that’s what’s necessary to reach your destination. Bikes will never be used as replacements for cars unless they can truly substitute.  By making yourself visible on major roads, you increase the visibility of bikes as a whole and help raise awareness of problem spots. Obviously use common sense and avoid limited access roads and unsafe situations.  But DO go where you need to go to complete your trip.
    4. Obey traffic laws and signals. Being on a bike doesn’t give you a free pass to act like a maniac.  Be courteous, intelligent, and follow traffic signals and laws.  This puts cars on notice that bikers (even slow, non-athletic ones) deserve their fair share of the road, but you need to reciprocate by acting in a predictable, lawful, and measured way.
    5. Replace time at the gym (or other exercise efforts) with time on a bike as part of your daily routine. Isn’t it nonsensical to use a car to rush through your day so you can get home at 5 and then go to the gym (or bike or run) for an hour?  If you slow down and use a bike for some tasks during the day, you won’t need to spend as much time doing mindless exercise.  And you’ll save on gas (and carbon emissions), and get better connected to your community.

    This week, I used my bike to go to three lunch meetings, a doctor appointment, and two trips to buy groceries.  I put in over 60 miles just between Monday and Thursday, and it took only a few minutes more time than it would have to drive.  I am sure I’ve lost weight doing this, though I don’t care how much.  I feel better and that alone is worth it.

    And two of the best perks about biking: you’re never stuck in traffic, and second, you always get a top-notch parking spot.  Plus, you’re not circling around trying to find a place to park.  More gas and time savings.  Being on a bike in many ways is faster and more efficient than being in a car, especially when the distances you’re talking about are under 30 minutes of bike time (8-10 miles).

    Anyone who lives in the Annapolis, Maryland area knows it’s a congested, frustrating experience to try to get ANYWHERE on a weekday afternoon by car.  Why not try it on a bike and see how much quicker it can be?