Thoughtbasket

Marc Andreesen Finally Calls The Tech Bubble

thoughtbasket — Fri, 06 Jan 2012 00:57:44 +0000

After months of saying, contrary to all evidence, (like this, this and this) that there was not a tech bubble going on, super-VC Marc Andreesen has finally publicly pulled back from investing because valuations are too high. Duh.

The Myth of the “Job Creator”

thoughtbasket — Tue, 13 Dec 2011 00:19:52 +0000

A key Republican talking point is that the wealthy are “job creators” and that any tax on these job creators will cause them to fold their cards and go home, hurting the economy in the process. This is clearly ridiculous, and I have challenged before the concept that tax rates diminish incentives to build companies, but here is a great essay from an entrepreneur and investor (a successful one — he is clearly in the 1%) describing how people don’t create jobs, the economy does. And the economy is made up of regular folks — the 99% — who need to buy the products produced by the entrepreneurs. Without a successful consumer class, nobody will be a job creator.

Jolly Spot

thoughtbasket — Wed, 16 Nov 2011 02:27:00 +0000

Lean Startups Aren’t So Lean

thoughtbasket — Wed, 16 Nov 2011 02:03:18 +0000

There was recently an article in PE Hub (that’s Private Equity Hub, for those of you who don’t subscribe) about the breakneck growth of internet darlings like Groupon, Zynga and LinkedIn, and about the massive hiring and marketing spending required to support that growth. Written by the ever insightful Connie Loizos (disclosure: I know Connie and her husband both socially and professionally), the article pointed out that these companies are forced to raise huge private equity rounds (as in hundreds of millions of dollars) to pay for the marketing that drives growth and the hiring that supports it.

As Connie points out, this is a great flaw in the “lean startup” model. Sure, you can build a company with $3 million now instead of $30 million. Open source software and cloud hardware resources allow you to bring a product to market without raising gobs of venture money. But those same trends allow anyone else to bring a competing product to market just as cheaply. So then the race is on to see who can grow the fastest. And that race demands capital, lots of it.

So startups can be lean, but growth companies are fat. All this trend has done is move the locus of capital raising competition a little later in the lifecycle of companies.

Folder People vs. Non-Folder People

thoughtbasket — Mon, 08 Aug 2011 17:30:09 +0000

In reading reviews of the new Apple OS X (Lion), I was struck by how many reviewers mentioned the All My Files, Mission Control and Launchpad features, all of which display files and applications in a way so that users don’t have to organize their work in folders. I was reminded of when Gmail first came out, and everyone talked about how it didn’t have folders, because you could just search for whatever email you wanted to see.

This was alien to me. I have always organized my work in folders, both in my computer and in real life. When I worked in finance, each new deal got its own accordion file into which went a series of manila folders: due diligence, projections, legal issues, etc. So organizing my computer files and email into folders and sub-folders seemed completely natural to me. How else could you display your work on a computer?

Folders. Very neat, very organized. Even with a mustache.

And there I went, blithely assuming that everyone was comfortable with the folder metaphor. Sometimes I would look at someone’s computer where the desktop was a mass of unorganized icons, but I assumed that was an aberration; I must have just caught them in the middle of a crazy project.

It wasn’t until I read about computer scientist David Gelernter that I realized there might be other ways to look at your information. He developed something called Lifestreams in order “to minimize the time users spend managing their documents.” Lifestreams dumped the file and folder metaphor in favor of “a time-ordered stream of documents.” That seemed crazy to me – I would much rather look for documents “from Project Neptune” than “from sometime in 2003, which I think is when I worked on Neptune” – but it was clear that other people, even computer science people, didn’t think that way.

It appears that lots of people don’t think the way I do. Maybe most people. But whether the count is lots or most, clearly many would prefer to avoid the folder metaphor. To quote from one review of Lion, “The addition and prominence of “All My Files” is yet another vote of no-confidence in the user’s ability to understand and navigate the file system.”

So let’s add another dichotomy into which we can divide people: folder people vs. non-folder people. While improvements in search technology may eventually make this distinction obsolete, right now it seems like the non-folderites have the upper hand, with user interface designers catering to them. That’s fine, as long as folder capability still exists. But if that capability disappears, folder thinkers will have no choice but to rise up and let the Lifestreamers tremble. We have nothing to lose but our files!

Graphical Look at Federal Deficit

thoughtbasket — Sat, 06 Aug 2011 17:19:30 +0000

Courtesy NY Times

Democrats Need to Lead, or Lose

thoughtbasket — Sat, 06 Aug 2011 17:09:35 +0000

S&P downgraded US debt from AAA yesterday, knocking Treasuries from their perch as the safest debt on earth. We will see what happens to yields on Monday, but so far it’s not clear that the markets agree with S&P. After all, this is an agency that had AAA ratings on subprime mortgage-backed securities not that long ago.

But in the meantime, the GOP is using the downgrade to attack Obama, saying “look what happened on his watch.” The president doesn’t deserve all the blame, but I understand why the GOP has seized the downgrade as a bludgeon. And in the same way, democratic operatives are putting the blame on the tea party and its refusal to compromise on deficit cutting.

But you know who isn’t saying anything? Democratic leaders. The White House, Harry Reid, Nancy Pelosi — they are all keeping silent on this. They are trying to be the “adults” and not play the blame game. I appreciate that high-mindedness, but here’s the thing: the game is being played, with or without them. If they stay silent then they just let the GOP control the narrative. You know the Sunday talk shows will be full of Boehner and Cantor and Romney and the gang piling on Obama for the downgrade.

The Democrats have to realize that they are in the middle of a street fight and if they don’t fight back they will lose. And they’ll deserve to lose. If you are going to suck ass at politics, then you shouldn’t be a politician. Regular readers know that I mostly support Democratic policies (with some huge exceptions that I ought to detail one of these days), but I sure don’t support Democratic fecklessness. The Democrats got rolled on the debt ceiling negotiation, and now they are getting rolled on the downgrade. It’s pathetic. Or, to quote a senior democratic official: “if this White House showed a gram of leadership on the debt crisis we could have avoided this historic embarrassment.”

More Tech Bubble Datapoints

thoughtbasket — Fri, 05 Aug 2011 16:09:33 +0000

Here are two more items showing that Silicon Valley is in the midst of another startup bubble:

TaskRabbit, which has A) a dumb name; B) a terrible premise; C) the ridiculous idea that it won’t need to staff up in order to grow (because it has a terribly inexperienced CEO); and D) NO REAL BUSINESS MODEL.
A WSJ article about how PR firms are now turning down clients and taking equity in lieu of cash compensation. Since the main value of PR firms is hiring cute young women who flirt with male reporters to ensure that their clients get press coverage, any time PR firms start feeling as powerful as VC funds (like they did in 1999), you know that you’re in a bubble.
San Francisco apartment rents are skyrocketing, to the point that local real estate people are calling it a bubble.

More on Tipping Point Flaws

thoughtbasket — Fri, 29 Jul 2011 19:31:57 +0000

A new study out of RPI shows that when 10% of a population shares a belief, that belief will inevitably be taken up by a majority of society. And when less than 10% has a belief, it will never be taken up. This conclusion was reached by running many scenarios through various computer models of societies. Most interesting, and most daggerly through Malcolm Gladwell’s theoretical heart, is that no matter what sort of connection scheme the researchers put in their models — equal connections, some highly connected “influencers,” promiscuous connections — the results turned out the same. Yet again, Gladwell’s concept of important trend setters falls under the weight of experimental data.

No More Tipping Point

Wisps of Spanish Memory

thoughtbasket — Tue, 12 Jul 2011 00:04:06 +0000

I recently returned from a week’s vacation in Spain, and here are some thoughts:

1. iPhone mania is international. I would estimate that iPhones (mostly 4′s) represented 60-70% of the phones I saw in use in Madrid and Valencia.

2. Spain is really pretty. See below.

Spanish alley

3. It turned out to be Gay Pride weekend in Madrid. This looked exactly like Gay Pride weekend in San Francisco, but with a Spanish soundtrack.

4. Picasso’s Guernica is amazing. The photo below doesn’t do it justice.

In the Prado

5. Spanish hotel chains have a weak grasp on grammar, as indicated below:

All about whom? You? Me?

6. They eat a lot of ham in Spain. Jamon. Serrano, Iberico, and many other types. It’s all delicious. I want some right now.

7. High speed trains. 200 mph from Madrid to Valencia. Awesome.