Active Participant

Where are the Web Work tools?

2010-05-17T10:47:00.000-07:00

I’m writing this on Friday afternoon. Through the magic of social networking I know that several friends of mine have “checked in” at local pubs and are already imbibing Portland’s finest. I also know that a former colleague now living in Denver is stuck at JFK. I know that one of my favorite VCs returned to San Francisco this morning from North Carolina via PHL and ORD. He shopped at Whole Foods for what I assume are ingredients for a dinner that I am sorry to be missing. Plus, a friend pointed me to the latest thinking on the possibility of parallel universes.

What I don’t know right now is whether my Web designer has picked up the latest copy I posted to our shared server. I don’t know if our dev team has decided to push the latest changes over the weekend. Tomorrow I plan to prepare our financials, but I don’t know if our accountant has made the updates to the chart of accounts. I have no email from him; I should have called him before he left for his beach house.

Like most people, at any given time I focus on three or four objectives. Why can’t I know as much about those as I know about the drinking habits of my friends? Why don’t I have activity streaming, location updates, automated availability, ubiquitous micro updates, and integral ratings and feedback from my colleagues and business partners working with me on my priority objectives?

I need something that will allow me to identify the group of people with whom I share objectives. We need to self identify the tasks we are contributing to and identify our dependencies. When I need something from someone in the group I should be able to request a task/deliverable from them. They should be able to accept or reject the request with feedback. My ideal tool would let me see the availability, location and status of everyone in the group. I should receive real-time updates for all activity related to tasks that I depend upon. Everything I do related to our shared objective should be available to the group and streamed proactively to those dependent on me.

Technology to do all of this exists today, but no one has yet packaged it into a useful tool. Microsoft’s lame attempt at collaboration services requires a bizarre collection of servers that can only be assembled by a certified SharePoint integrator. The result is overly rigid and can’t accommodate free-form workflows or easily accommodate participants outside the organization. Collaboration and unified messaging from IBM, Cisco, and Avaya are no better. So where’s the Zukerberg who will fulfill this 400 million user opportunity?

Today, while waiting for new tools, I’ll send out a couple of emails requesting updates from my web designer; I will leave a voice message for my accountant; and I will send a text to the head of our dev team. I’ve checked our project management dashboard: the last updates were posted Wed. The shared server shows the latest version of the Web copy is the one I posted yesterday; I have no idea if anyone looked at it. On IM, most of our folks are unavailable and two have status notes clearly posted during the Mesozoic era.

I know with the right tools I could have gotten so much more done before heading out for a beer.

The Need For A New Work Web

2010-05-05T16:56:00.000-07:00

It is time we came up with a new set of web and mobile tools that transform the way we work. User-generated content and Web 2.0 technology has completely changed the way we relate to each other, but it’s done nothing for work. A recent Harris Poll confirms the workplace is still mired in Web 1.0 tools. And, while social networking technology is entering the workplace it hasn’t transformed anything.

We know how completely social networking has transformed the way we interact outside of work – Michael Andrew at Media Metrics Insider points out:

“…there are now over a trillion known Web pages, more than 500,000 Facebook apps, 140,000 iPhone apps, billions of videos on Youtube -- and more have been created since you started to read this sentence. “

Everyday we post pictures, videos and updates on Facebook, tweet on twitter and check-in on foursquare as our primary way to communicate and share with family and friends.

But at work we still use technology developed two decades ago.

Harris’ findings on frequency of use:

91% email

66% shared spaces

66% voice calls

66% teleconferencing

55% web-conferencing

Social tools have entered work (with 17% of workers using them) but they’re not transformative. These tools merely allow us to find coworkers and more easily identify individuals with related interests and projects. At best this facilitates additional collaboration and potentially innovation. But as Forrester finds our day-to-day interactions are still mired in slow replies, redundant meetings, and irrelevant conference calls that take too long to arrange in the first place.

What we need are tools that support the real work we do – the dynamic interactions between us and our co-workers. Providing management of deliverables - the output - like that of SharePoint, Notes/Domino and OpenText, is important and necessary. But we need to accompany these platforms with something to support the actual work as it unfolds.

I’m not talking about shared white boards or avatars hopping around some virtual world. This new tool will be organized around the shared objective and tasks of a group of participants.

To be productive I need to know:

what am I working on?
who am I working with?
what is my role and responsibility?
what are everyone else’s roles and responsibilities?

This provides the context for all the tasks we are working on:

what am I doing and who is dependent on it?
which of my coworkers tasks am I dependent on?

It needs to support the dynamic nature of the work we are doing:

It must support organic spawning of new tasks by each member of the team and dynamically identify new dependencies
It must let me prompt my coworkers for things I need from them as they prompt me for things they need from me.
I want to know in real time about the activity on which I depend
I want to provide continual updates on my activity to those that depend on me

The big misconception - this is project management. Many think it’s just a matter of getting PM capability in the right form online. There are now scores of online project managers from AgileTrack to XPlanner. But these tools fundamentally miss the mark. They manage resources when what is needed is something that lets groups track and manage their interactions. What I’m looking for is more akin to World of Warcraft's support of a guild on an epic raid, than a PM tool’s reports and dashboards on action items.

In future blog posts, I will explore these concepts further. For now I just throw out the challenge: how do we use web/mobile technology to radically transform work? Orders of magnitude productivity increases and a profound increase in job satisfaction await.

What amazes me is how little development is going on in this regard. Cisco talks the best game, but they still are just selling repackaged versions of stuff we saw from Lotus and Microsoft in 1995. No one should waste money on something labeled “unified messaging” or “collaboration.”

The only company I have seen that even seems to be building is something interesting is Asana. We will see if they can actually move the needle when they release something later this year.

Someone with a far better marketing mind than mine will come up with the new terminology – “interaction tools” clearly doesn’t cut it. But, I will know it when I see it. And the companies that adopt it will gain an advantage over all others.

The Next Big Thing: Newspapers

2010-03-29T09:18:00.000-07:00

In a parallel universe, one with all our technical expertise but none of our publishing, a business plan is presented. Its title: News Company – All The News That’s Fit To Print.

Entrepreneur: We plan to marshal all the best journalists and band them together to create a comprehensive news source; one that will cover local news, regional news, national news and international news. We plan to develop and staff bureaus throughout the world, so we can originate all our own news. To fill any holes in our coverage, we will purchase the best reporting from other agencies and freelance journalists. We'll include community features, event reviews and lifestyle pieces. We will become the voice of the communities we serve. We will bundle all this together on a daily basis and call it a “Newspaper”.

VC: How will you ensure the quality of your news coverage?

Entrepreneur: We will have experienced editorial staff to guide, select and edit the stories we present to our customers. We will combine broad coverage with “best of bread” expertise.

VC: And who’s your target market?

Entrepreneur: Every household in the areas we serve.

VC: Really; and how will you present this "newspaper" to them?

Entrepreneur: We plan to print it. But the daily volume will require a process completely different than any physical printing done before. We intend to create newsprint – a thin paper produced in broad rolls from which we can print and cut pages. We will mine our forests, pulp the wood, and produce the paper. We plan to print the news on this paper with dies derived from vegetables.

VC: Very interesting. So this newspaper will be a semi-permanent product. But why go to such lengths to render your newspaper onto an enduring product? Do you really think your customers will want to keep it for future reference?

Entrepreneur: Not at all. We expect each edition of our newspaper will only be of interest to our customers for 24 hours. This is critical to our business model; we need them to buy a new one everyday. We have established a way for the newspapers to be recycled into cardboard and other paper products. We are working with municipalities to force our customers to separate these newspapers from the rest of their trash and have the trash collectors handle them as a separate waste stream. If any of our customers do wish to look at old editions, we plan to make them available in community centers. There we intend to capture the images of our newspapers on a special film that when magnified let’s you see an image of original newspaper.

VC: So, to really be of interest to your customers it will have to be presented in an extremely timely fashion. It seems that by the time you collect, edit, print and distribute these stories the newspaper will be anything but new.

Entrepreneur: We intend to create a culture that presses our journalists for stories by a daily deadline. The editors will turn and mix the stories quickly each evening. We will run our presses through the night. By diverting some of the local shipping capacity, we will move the final newspaper from the printers to distribution locations throughout each of the metro areas we are targeting. And then, this is the really cool part; we have worked out the legal requirements to employ child labor in the early hours of every morning before school to deliver the newspapers the final mile on their bicycles to each person’s home.

VC: And what exactly is the monetization model?

Entrepreneur: We intend to combine subscriptions and advertising.

VC: This sounds even crazier than the guy who was in here yesterday claiming that the world wanted it’s stories delivered in printed tomes; he called them "books". He was going to fill buildings with these books as monuments to our intellectual brilliance and creativity. I just don’t understand why we would want to so encumber our stories and news. Everyone gets anything they want today instantly on their electronic tablets. I think we’ll pass.

Augmenting Our Reality

2009-11-30T16:09:00.000-08:00

We have transformed our world by automating our everyday tasks with computers. We replaced calculators, accounting ledgers, and typewriters. Computers help us consume, create and deliver information. Letters, memos and reference books are a thing of the past. Increasingly we have crawled into our computer screen to work, play and communicate.

Last year I wrote about wearing our computers and embedding computing in ourselves. I firmly believe the next big thing is computer augmented reality -- bringing us out of the screen and putting the screen on the world around us. A future where rather than doing things on the computer, the computer does things on us.

Pranav Mistry demonstrates this future. It is worth a few minutes to check it out.

Change We Can Believe In

2009-10-05T17:37:00.000-07:00

Don’t you just hate influential vested interest groups that make change impossible?

“What’s wrong with our country?,” we wonder. It’s not just that the numbers are bad – unemployment, foreclosure rates, uninsured and segment after segment needing rescuing. We know something is wrong. We want change, but change in this country – where every vested interest is armed with lawyers, lobbyists and PR experts – is hard. We suspect that we are up against something big and influential.

We are on a hunt for the culprits who are keeping us from this needed change: greedy bankers, corrupt financiers, evil pharmaceutical companies, corporate lobbyists, and the list goes on. But the vested interests that keep us from meaningful change are much closer to home. In fact they include my home and probably your home.

Our system is rife with structural distortions that cause or aggravate our problems and prevent urgently needed changes. One reason this is hard for us to see is that it deliberately favors people like us: educated and employed. We who own a house, have employer-provided health care, and figure we will survive our later years even if social security is ill-funded.

We have long enjoyed a system that significantly subsidizes these basic structural supports. We pay no tax on our mortgage interest or health care payments and – amazingly - contribute only the same fixed amount to social security regardless of income.

There was a time when these subsidies served a purpose. But since the middle to upper income families will buy houses, have health insurance and invest in their own retirements even without these subsidies – they have outlived their usefulness.

Bernie Madoff’s culpability may be more singular and despicable than our quiet political insistence on mortgage deductions, but that deduction is what distorts home prices, encourages risky mortgages and fuels mortgage backed securities.

It is impossible to justify disincenting rental property given rising homelessness coincident with nearly 70% home ownership. We have reached a point where the disproportionate support of owner-occupied suburban communities is destroying our social fabric.

Similarly, tax advantages for employer-paid health insurance effectively make those uninsured and under-insured impossible to cover with cost-effective private plans. As long as employer-paid health insurance is subsidized, we are disincenting other options when we need them most.

Capping social security deductions – pretending this is actually a public retirement plan instead of a tax-supported social safety net – is a cynical regressive tax that will do nothing in the coming decades to aid retirees.

Meaningful change starts with correcting the structural distortions we take for granted:

Phase out the mortgage interest deduction. Start by capping it at some comfortably high number. Reduce the cap each year until it is phased out all together. Five to seven years should give everyone time to make adjustments in their financial and tax planning.
Make employer-paid health benefits taxable and individual premiums non-deductible. This will level the financial playing field and make it possible to address more affordable health care and broader access.
Eliminate the cap on Social Security payments.

Fixing these foundational issues paves the way to the change we truly need. Putting a small amount of good regulation back in place at investment banks and in other key spots to help ambitious types focus on long-term goals should be easy by comparison.

Conversely, if we do not change these distortions nothing else we do will make much difference.

Changing the IC'y mind set

2009-09-27T15:35:00.000-07:00

Last year we took our family to China for spring break. People asked, hell our kids asked, “why go to China for Spring Break? Hawaii is cheaper and warmer.”

My wife and I felt it was important that in this time unprecedented change, we prepare ourselves to understand what is happening. If we think of China as peasants in rice fields, or hordes of poor in the streets of urban centers, we are ill-equipped to adapt to the change that is sweeping over us. In ten days we only scratched the surface, but I think it helped each of us get a better feel for what is happening in China.

The trip gave us the opportunity to experience what Hans Rosling teaches – we need to change our mind set to match the current data set.

TED Hans Rosling from Pedro Andrade on Vimeo.

India promises to have a similar impact to China.

There has been lots of talk of the BRIC countries; although it doesn’t work well phonetically, I think we need to focus on the IC countries. Perhaps they are better thought of as CHI.

Cooking - A Genetically Encoded Evolutionary Adaptation

2009-08-16T18:37:00.000-07:00

Always a Michael Pollan fan, I jumped to his New York Times Magazine cover article on “decline and fall of everyday home cooking.” It without a doubt struck a nerve in our collective consciousness. Since it appeared, I’ve herd multiple interviews of Pollan motivated by the article. Even today’s NYT Magazine two weeks later has Pollan as the lead subject in the Letters section.

I love cooking: partaking probably 4 times a week. There is something profoundly satisfying about it. And, apparently with good reason. In Pollan’s NPR interview last week he reference research by Richard Wrangham at Harvard. Wrangham conjectures that cooking is what allowed us to redirect our biological energies from digestion to thought. Not needing the extensive digestive system required to process raw meat and grasses, we evolved a simpler gastrointestinal track and diverted the nutrients and oxygen to our now expanded brains.

Wrangham goes as far to posit that cooking is what separates us from primates and all other animals: Not thumbs, language, tools, or social organization. Without cooking, he argues, we don’t biologically achieve human intelligence. His theories and research are summarized in his book, Catching Fire.

Intuitively this makes a lot of sense to me. Memories from my childhood of the family crowded in the kitchen with my mother cooking dinner are indelibly burned in my brain: the mere whiff of browned butter brings them rushing back. And today I find no greater pleasure than hanging with friends around the BBQ, wine in one hand, and tongs in the other. Cooking connects in our psyche at a very deep level. It is easy for me to accept that this is genetically encoded evolutionary adaptation.

So I wonder what it means culturally if we stop cooking. Is it, as Pollan implies, evolutionarily regressive--a step toward Armageddon? Or is it further adaptation – replacing expensive (biologically and materially) individual cooking with collective food preparation? With a population of 7 billion (heading to 9.5 billion), a strong argument can be made that factory farms and processed food are critical to our next evolutionary steps. Even if true, I am happy to revel in my relatively Neanderthal ways, getting profound pleasure in searing meat on an open flame in my own back yard. Here’s to our frontal lobes.

Cheers

All the news that's fit to print

2009-07-14T12:44:00.000-07:00

Yesterday, I returned from 10 days in the mountains – fresh air, sailing, long hikes, lazy mornings. Nestled in the forest on a high mountain lake, our cabin has no cell coverage, and only dial up Internet. For my family summer vacation has come to mean forced withdrawal from electronic communication. But what I miss most when cloistered in our mountain retreat is the daily newspaper.

Friends joined us mid-week and parlayed the goings on of the outside world – the Obamas went to Russia, Billy Mays died, GM came out of bankruptcy, and Goldman Sacks was making more money than ever. Nothing earth shattering, but I still felt out of the loop not knowing.

We are living in the dawn of the digital age, a modern renaissance, but the decline and death of the daily newspaper really bothers me. I like holding a paper in the morning. I just absorb more info in my groggy morning state looking at news print rather than staring at a screen.

But the bigger issue is the news itself. The online sources that are displacing newspapers are largely opining about the news and not reporting. Researchers at Cornell analyzed some 90 million online articles during the election cycle last year – Aug to Oct 08. Of all the discernable story lines only 3.5% originated from an online source before appearing in a traditional news outlet. So 96.5% of all stories originated with traditional reporting and were later picked up and discussed online.

The implications are obvious. We need to find ways to preserve and support real reporting, real journalism. We can’t let reporting die with newsprint. Blogging as it exists today is not professional journalism. This is the challenge of the modern information age – come up with a business model that can support broad professional, diverse, independent journalism. Until that emerges, I will happily pay the recession driven higher subscription rates for daily delivery of the New York Times.

Startup Now: The Oregon Opportunity

2009-04-14T13:18:00.000-07:00

While we obsess over the impact of the economic downturn and the State’s unemployment, we risk missing the incredible opportunity Oregon has. Obama recognizes this crisis is a once in a life time opportunity. Marching to the tune of “never waste a crisis”, the nation is collectively spending $1 trillion on not just solving the credit crisis, but recreating our social economic landscape.

We are going after climate change; international instability and terrorism; energy scarcity; and the aging population in the developed world, just to name a few. This combined with the international economic downturn is driving unprecedented global change. Oregon has the opportunity to play a lead role in this change and drive job growth at the same time.

Oregon has the expertise and experience in the segments that matter right now:

Oregon has attracted young highly educated people who flock here for the quality of life and affordability. For instance Portland has among the highest percentages of college degrees, spending on book purchases, and broadband penetration.

Venture Capitalists invest in Team (the skills and drive of the individuals involved) and TAM (total addressable market – the size of the opportunity). Some smart funds like Voyager and Madrona see Oregon’s potential and have put people here. In the past Oregon has lacked the will to drive growth. Voyager and Madrona are here as not to miss a potential opportunity: they won’t drive anything. The initiative has to come from the Oregon community.

Local money has been shy and scarce. Worse, to date, the state shows little support for its own potential. Only trivial amounts of capital have made their way to Oregon startup ventures.
If we don’t invest in ourselves it is worse than just missing an opportunity. We marginalize our entrepreneurs and starve them to death. Why would anyone else invest in Oregon companies if we can’t even see fit to do so? It is like a mother not supporting their child, you start at less then zero.

Small businesses drive employment. Venture models have demonstrated the potential return of small growth companies. We have the opportunity to spawn high growth businesses that will deliver additional employment and high return on capital. These businesses will succeed because the crisis we face will economically reward new businesses the deliver solutions to our problems.

A proposal is a foot to direct $100 million of State controlled capital to Oregon startup ventures. This is the right move at the right time. This effort seems to have prodded our State Treasure Ben Westlund into action. He is now hosting an event on April 29 to catalyze Oregon investment.

The big question: will this result in putting Oregon’s talent and money to work? It is the right move at the right time and it deserves our support at every level, especially that of our elected representatives. Or will it just be an exercise by all parties involved to look like they are playing lip service to this grass roots push while fulfilling their fiduciary responsibility and maintaining the status quo.

Stimulate VCs

2009-02-24T17:58:00.000-08:00

I am amused by the controversy caused by Tomas Friedman’s comments on stimulating venture capital. The discussion is missing the point. We shouldn’t be arguing if government money would help or hurt Venture Capital. Nor should we be arguing about whether funneling money through Venture Capital firms would create more or less jobs than giving it to GM or Ford. The discussion about venture capital is relevant because we should be discussing what kind of world we want to build.

The old world is dead. The one dominated by industrial giants. The ones listed on the Dow. Yesterday we sold that world and no one was buying. Today we are willing to pay less than we did more than 10 years ago. And all indication is we will discount it more.

So the question is: what's next? The die is cast; the government is the economic engine of the next several years. We the people get to decide what we put our collective capital and efforts into. We will invest in infrastructure and services. We will invest in bolstering manufacturing. We will remake the systems that deliver education, health care and social services. We get to reinvent and reprioritize how we produce and deliver food, water, transportation, and energy. And in our choices of what we build and how we employ, we will create a new world.

So I really don’t care if government money goes to any particular VCs. If Gurley can do better with just the private, pension, and endowment money, more power to him. What I do know is venture money a couple of decades ago funded people and ideas. Now it seems to go much more to companies with established revenue: companies that have little market risk. This use to be referred to as expansion capital. It was second round capital and came after development stage funding. Venture money use to focus on building great companies that create new emerging sectors. Now it goes increasingly to creation of products and services that may be attractive to large companies; essentially nothing more than off balance sheet R&D efforts.

I am all for stimulus dollars for VCs if it puts venture back in venture capital. Small growth companies have always been employment engines. There is perhaps no better way to create jobs than to invest in high growth companies. But the real win - new ventures will innovate and create the world we need. Saving jobs at GM won’t do that.

Like the New Deal and the Marshal Plan, this stimulus and recovery needs to be about building and recreating, not saving what was. So what kind of world do we wish to recreate. Let’s have that discussion.

Lessons from the meltdown – the limits of modeling

2009-01-04T18:34:00.000-08:00

I am amused to watch the debate over who was right and who was wrong in the meltdown. Of course the naysayers get their day, as if they were right all along. It is kind of like if you were to drive from San Francisco to New York and your travelling companion is convinced that you have to go south. You get on Interstate 80 and drive east. But shortly after you pass through Winnemucca in Nevada the highway swings south to Battle Mountain and for the better part of an hour you have to put up with “see I told you it was south”.

One of these annoying passengers is Nassim Nicholas Taleb who was profiled in an article by Joe Nocera in the New York Times today. Taleb makes that case that all our modeling, most importantly Value at Risk (VaR) is a fraud. He makes the point that he has made a killing on the market down turn because he saw past this fraud and truly understood the market.

Like anyone who bet the markets would collapse, I have no doubt Taleb did well in the downturn. But his strategy is like a broken clock that is right twice a day. He even reinforces this point by pointing out that he has only made money three times in the last 25 years: Black Monday in ’87, the dot com crash in 2000, and in this recent market collapse.

Arguing who is right on a given day misses the point. There are very important lessons to be learned, not the least of which is that all models are limited and therefore in many circumstances they’re wrong.

I love this debate because it highlights the most crucial difference between mathematicians and engineers. I have a degree in Control Systems Engineering. Engineers are practical, we call it applied mathematics. Mathematicians and, their less academic colleague’s, economists, like to deal in concepts and principals. It is obvious to an engineer that any model, like VaR, is limited in its practical application.

First models work in narrow bands. Any financial model is an approximation of a very complex system. It is intuitively obvious that a simplifying model that ignores a good deal of the complexity will only work for a limited range of motion. Mathematically there is good reason for this: the behavior being modeled – price movements of complex derivative financial instruments – is nonlinear. But to create math to describe it you need to create a linear approximation.

It is easy to mathematically calculate the range for which any particular linear approximation is valid. Go beyond this range and the model tells you nothing valid. Think of a spring; you pull on it and it pulls back. But if you pull too hard that spring deforms and no longer pulls back. We call this saturation, and once you pass saturation the equation that once gave you the force of the pull very accurately is now completely worthless.

Second, models assume a continuous market. In engineering systems this is continuous feedback that stays in phase. In the markets this means that when you create a model of financial instruments which don’t all mature at the same time, you can create a hedge by executing the right trades at the right times for various instruments in a continuous market. If you have a discontinuity in pricing everything in the model goes haywire. If the market experiences a sudden jump or fall, or if you can’t execute a trade as it moves through a given price point, your model is invalid.

Third, models are only as good as the data you feed them. Here engineers agree with mathematicians – garbage in, garbage out. In the case of the mortgage backed securities and credit default swaps, historical data was used that was not valid for the underlying subprime mortgages contained in the instruments. And, the models proved invalid – garbage out.

Taleb does make one very interesting assertion that if true could be used to better understand the market. He contends that his “fat tail”, the dramatic market crashes that happen infrequently, out weigh the potential positive results you get cumulatively all the other times in the market. He is articulating a model that might prove true and can be used to modify VaR. That is if VaR is meant to be the potential assets at risk on any day 99% of the time. Taleb is saying the other 1% ruins your return.

So VaR normally looks like:

VaR = (.99 X ‘expected asset loss’)

Taleb’s VaR is:

T:VaR = (.99 X ‘expected asset loss’) + (.01 X ‘exceptional asset loss’)

He is basically saying that T:VaR is much bigger than VaR and thus overwhelms any potential profit in the market.

Maybe he is right. But I think it is worth testing the limits of his model. Historically the market goes up over time as value is created in the economy. I find it intuitively difficult to accept his assertion that crashes will always overwhelm any market gains. I think he is fundamentally misunderstanding the limits of his own model.

Perspective

2008-12-13T10:55:00.000-08:00

OK, New Years is coming, time to slow down and take stock. With the economy so bad, perhaps it's an opportunity to get a little perspective on things.

The day Capitalism bought Socialism

2008-12-09T16:30:00.000-08:00

Capitalism, Socialism and Communism have been pretty tired labels for some time. Our capitalism seems to be buying nothing but socialism today. Today the only investment anyone wanted to make in our capitalist system was the US Government. This would indicate that the global market believed that the most viable institution and the one that would provide the highest return on investment was our Federal Government. Perhaps a vote of confidence for the new CEO, Barrack Obama, but disconcerting that no one viewed any other investments as worthwhile. This surely isn’t Socialism—no one is voting with anything but money: neither a popular revolution nor even government policy is driving this apparent nationalization of the auto and banking industries.

We need new monikers and conceptual frameworks to discuss and understand a system that has more than current supply and demand at work. We need to be able to conceptualize a system that is driven by climate shifts, demographic shifts, technology shifts, social and religious realignment. Without the global flow of money resulting from transnational resource purchases there would not have been a market for the highly leveraged mortgage backed securities and disastrous derivatives. The dimensional flattening that a pure monetary view imposes doesn’t even provide the facility to discuss quality of life issues that Baby Boomer aging and health care concerns generate. The “externalities” of terrorism or carbon driven climate change can’t possibly be evaluated in a system that only accounts for tax revenues, military expenditures and rising costs of resources.

Many of you are far more creative than I – what do we call this new global reality? What models do we bring to bear to set priorities and make tradeoffs on where we put our collective efforts? The complete lack of interbank lending, zero interest on T-Bills and a negative yield curve tell me the one we have is inadequate.

We the Lobby

2008-11-14T13:16:00.000-08:00

I just received and email from Barack Obama. It is my fourth from the President Elect’s transition team since he won the election. He invited me to track his progress at www.change.gov. I think government needs a lot of change, a lot of renewal, and I like that I am being asked to be a part of it. Our next president is keeping me up to date and has even promised to talk to me on Youtube every week.

We are reinventing participatory democracy. I was one of 1.5 million people that voluntarily financed Barak’s campaign. When 1,500,000 people write checks, that is public financing – that is participatory democracy. I followed the campaign on the Internet at my.barackobama.com and www.johnmccain.com, and on youtube and cnn.com and twitter and countless other sites that have seamlessly become part of my daily routine.

Critics may say that this “social networking” is just pandering to young; it is treating Internet users like a special interest. This is just flat wrong. 74% or the US population is on the Internet. My mother is on the Internet. (I wont mention her age but a demographer would not call her young.) More people use the Internet than have ever voted in a US election. Access is free to the public at every taxpayer funded local library. Orders of magnitude more people get information from the Internet every day than have ever ordered a publication from the government printing office. This is the new participatory democracy.

But an interested, active, informed public is only half the equation. Our representatives need to do their part. We need leadership that will similarly change, redefine and renew representative government. We have seen in the last 8 years the result of isolated and out-of-touch leadership: one that loses the popular vote and boasts of a mandate; one that blatantly practices cronyism and divides and disenfranchises the populous by claiming that dissent is unpatriotic and un-American.

Leadership in the Internet age communicates on the Web and through email. It restricts the role and influence on corporate lobbyists while soliciting continual input from the people. I want a representative government: I don’t want to vote on legislation directly. Abdication of legislative authority, like that seen in the ballot initiative process in states like California, is a travesty of democracy. I want strong political leaders that will listen to the voices of the people and represent our interests. So I will post my comments, write my blog and respond when Barack or any of his team send me an email. We the lobby: for the people, of the people, by the people.

It Matters

2008-10-31T11:43:00.000-07:00

It is hard to imagine what it will feel like if next Wednesday morning we wake to McCain/Palin as Pres/VP elect. Like most of you, I have seen savings and 401K disappear over the last year. Every aspect of work has gotten harder. Every aspect of life is more expensive. I am someone who bought a house in the last two years and have the queasy feeling of being upside-down. And, I still have a hard time defending our countries actions to my overseas friends.

These are challenging times. We are in a deep hole and we need to climb out. More than effort, that takes motivation. How we feel, how we work together, how much energy we put into it matters a lot. In all the character assassination, name calling, petty distractions and false controversy that dominate the end of this campaign, it is easy to lose sight of what is needed. It may be sappy, but it is time to return to what lit this campaign up in the beginning.

I hope you will vote for Obama. I hope to wake up Wednesday excited and energized. It matters.

Been on this ride before

2008-10-10T22:47:00.000-07:00

It is always the same and it is totally different. It is when you feel that you have seen it before that you know you’re getting old. In 2000, we couldn’t get our road show done. In 1987, I watched from the trading room as our book lost $100,000 a minute. Each time it signaled an end of the cycle: the start of a prolonged down market.

I love looking at the 100 year charts of the economy. We cycle through growth and decline – expansion and recession – bull markets and bear markets. When you throw a ball straight up in the air its acceleration is constant but it is most dramatic when it stops going up and starts coming down. In each economic cycle I hear the rules have changed, everything is different this time. And each time economic growth surges and wanes.

Each time everything is different and everything stays the same. From cycle to cycle the key engines of growth change. One cycle it is steal, the next it is white goods, the next it is consumer products, the next aerospace, and the next technology. I was told today to buy GM because it has always been part of the foundation of our economic growth. I think they said the same thing about Bethlehem Steel.

In the last cycle the emphasis went from page views to revenue per user. The time before that, it went from revenue enhancement to cost savings. Each time it is the same: in expansion, value is in growing a business; and in contraction, value is in making the business more efficient.

What is happening economically is breathtaking and unprecedented. It is time to add circuit breakers, reforms, oversight. It is also the same as it has always been. In a down market: cash is king, value is in cost savings, and a good business is still a good business.

Hope vs Fear; Change vs Reform

2008-09-14T12:59:00.000-07:00

To me this election is a dramatic comparison of aspiration vs. fear. Never have I felt there was so much to gain and so much to lose. The Bush presidency has shown that leaders mater. I know in my gut that what we do in the coming months will in large part dictate my son’s standard of living and quality of life. We get to choose our motivation: aspiration or fear.

The language of this election reveals all. The Democratic convention was dominated by language including: Change, Economy, Energy, and Jobs. In contrast the Republicans spoke of: Reform, Character, God and Taxes. It’s like the Republicans want a first class seat on the Titanic. I would rather find a better way to cross the ocean.

Passing The Torch

2008-09-07T21:41:00.000-07:00

“The next generation”, “passing the torch,” it has seemed that we have heard it all before. But this week I embraced the contextual filter of generational shift and everything has become clearer.

I am not a Gen X’er or a Gen Y’er, or a “tweener”; technically I am a boomer born in the diminishing tail of that curve. I have watched “slackers,” and “grungers” and seen MTV repeatedly “rock the vote.” It is easy to be a little jaded toward “the rise of the next generation”.

Now the generational shift is for real. Don Tapscott calls them the Net-Gen and there are as many of them as baby boomers. The shift is as profound as that to the “greatest generation” which was shaped by the great depression, WWII and the Marshal plan; and the “baby boomers” who were molded by civil rights, Viet Nam and the Cold War.

This generation gets to deal with the energy transition, climate change, the rise of a global middle class, the decline of US global dominance, etc. Looking at the election, government, policy, and global economics through this filter is very valuable.

Alan's World

2008-09-05T15:42:00.000-07:00

I am more than ever struck by the ubiquity of the iPod. Walking the streets of San Francisco, I am assaulted by Billboards pushing the device as a fashion accessory. The Olympics were dominated by images of Michael Phelps stretching on the pool deck with buds in his ears. What I have noticed most lately is how we no longer notice.

I upgraded my iPhone to the latest 3G model. It is an amazing device. With it, I text, tweet, buy, browse, blog, read, search, mail, mix, mash, locate, direct, calculate, and play. Unlike my lap top that I set up, this device is always with me--always on. It seamlessly extends my capability and constantly connects me to the people and the information I care about.

This is different than the Palm I use to carry. It is more about me than work communications. Back in the ‘70s I heard Alan Kay talk about wearable computers. He saw them as the true personal computer and that they would revolutionize the way we live and work.

At some point the automobile became more than a fast horse cart and led to a new industrial infrastructure. Similarly the desktop computer became more than a powerful typewriter and calculator and lead to the fundamental restructuring of the workplace. Each of these led to fundamental shifts in lifestyle, quality of life and commercial productivity.

We are in the midst of another such phase change. We are just beginning to understand the importance of what this device (and others like it) can do. We are beginning to weave it into our social fabric. Alan’s world is finally emerging.

Sound of Silence

2008-08-05T18:02:00.000-07:00

Besides porn, music has been the biggest driver of technological advancement. Ever since the Victrola, the latest sound system has driven consumer electronic sales. All the while the world has gotten progressively noisier. Locomotion, automation, overpopulation, mechanization, urbanization and countless other “izations” have created a continual sonorous assault.

Rather than alleviating my auditory pain, today my technology amplifies it. Are ear buds really the best we can do? While exercising, I can barely hear my Market Place podcasts over the clamor of the treadmills. I know this may have something to do with my birth date and a million logged flight miles, but there must be something to help. Forget the jetpacks, where’s my bionic ear.

New gadgets hit the market daily that are meant to address the challenge of hearing our music, cell phones and neighbors over the ambient noise that envelops us. Proud technologists proclaim advances in adaptive noise compensation, advanced wind protection, noise navigation, voice capture, etc.

None of it does the job. Here is what I want--

wireless, in-ear hearing extensions:

+ Mold them to fit comfortably all day in my ear canal. Make them no more unsightly than flaps of cartilage that already protrude from my head. Yes the model is hearing aids, not headphones.

+ Make them work intelligently with my ear. You can completely control what noise goes to my ear drums and inner ear: make it clean and ensure it is never a damaging volume.

+ Have them work wirelessly with my myriad devices: cell phone, computer, IPod, home theater, car navigation, and other people with inserted ear extensions, etc. This is not a technological problem but an implementation problem. I don’t care what is used, Bluetooth, Wi-Fi, 900 Mhz, or trained ants delivering little tiny mag tapes. Create an interface (user and network) that makes sense and get on with it.

That’s it. Doesn’t seem that hard. Nothing but hearing aids with wireless receivers combined with a voice recognition operating system in a miniaturized embedded system. I have a place for the charger on my bed stand. When they are announced I will stand in line like a Star Wars conventioneer in a Wookie costume. Look at how many IPods and cell phones are sold each year. This is a massive business opportunity and, given the rate of hearing loss, one potentially fueled by insurance reimbursements.

Ear implants are the most obvious technology to extend my physical capabilities. Steve Austin can keep his legs, but it is time I had his ears.

Gen Shift

2008-08-04T17:18:00.000-07:00

My son is in California enjoying the summer: spending time in the Sierras, visiting friends, just goofing off. He barrows a phone every night and calls me to complain that his cell phone is broken. This is ruining his summer.

My son is a high school senior. He and his friends don’t just use computers and cell phones, they depend on them like they do their arms. To them their laptops and cell phones are not better typewriters, faster mail, and more extensive “ten keys”: they are communication, entertainment and social connection. They are extensions of themselves. With them they manage their various personas, chat with friends, hone their skills and show off their capabilities. These devices allow them to express themselves in ways otherwise impossible.

A few minutes in the twitter-verse, on Facebook or in World of Warcraft demonstrate this new social order. We are just beginning to see the profound shift taking place. Don Tapscott, calls this group who are now just entering the workforce the Net Gen. Clay Shirky documents the power of their dynamic social groupings. You should also check out Kevin Kelly who muses convincingly that the Internet in the coming years will by completely different than what we have today.

Attending tech events lately, it is clear I am one of the old guys. But I am an old guy that grew up with technology. I had an HP calculator in 1969. Unlike my friends at college who paid to have papers typed for them, I had an Apple II. I bought a Mac the first day it was available and founded DMUG (Davis Macintosh Users Group).

I know I am old because at my first corporate job in 1986, I was given an office, a Dictaphone and secretarial support. I was expected not to waste my time typing myself. Everywhere I work, I notice that people younger than me use PCs and people older tend to not. I was on the cusp of a generational shift that has helped fuel the greatest increase in productivity ever experienced. But it will pale in comparison to the next one.

We are only just beginning to see is how this generation is going to change the work place. They will get things done in ways the will make today’s meetings, emails, reports and annual budgeting cycles look like Dictaphones and typing pools. Adopting these new work styles, adapting our work environments and putting this new generation to work will be the competitive advantage for the foreseeable future.

Why is long money short sighted?

2008-07-02T21:09:00.000-07:00

“It takes 5 years to build a company.” Those were the words imparted to me 16 years ago by the venture capitalist across the table during my first pitch. Of course what he meant by “build” was first check to exit; ideally Series A to IPO. For all the talk about how things are faster or cheaper or “the Internet changes everything” the startup model really hasn’t changed much. That’s why venture psychology sometimes puzzles me: the return on a new venture investment is determined by an exit three to five years away, yet the frequency and valuation of investment is determined by what is happening this week.

The credit crisis and economic slow down has eliminated IPOs and acquisitions this quarter.
And this has brought a significant decline in venture deals. Not only are fewer deals getting done, more of the money is shifting to later stage deals. I know that VCs need to prop up their winners and ensure they survive to an exit. But, that doesn’t explain the flight from good early deals that will not be ready for an exit until this business cycle has swung back up.

The other truism shared with me 16 years ago is that investors are motivated by fear and greed. You would think right now rather than retreating in fear, greed would kick in and the down turn would be used as an excuse to get lower valuations and VCs would concentrate on new early investments. When the market is stagnating and resources are readily available it is the time to start new companies, and now is the time for VCs to make early investments in those new companies.

Taking my own advice

2008-05-16T16:25:00.000-07:00

When should you start a company? This is the quintessential entrepreneurial question. A running debate rages: when do you have a feature rather than a company? When is a company being started because it should be rather than when it merely can be? What does it take to make a company successful? This debate heats up appropriately when exits are plentiful and lots things get funded that shouldn’t.

When potential entrepreneurs ask me when they should start a company? I tell them you should start a company when you can’t do anything else. When you have an idea that has such a grip on you, you can’t sleep at night. When you know it would be far worse not to pursue a venture than to fail miserably trying. If you have any intelligence at all, it is the only way you can do such an irrational thing as start a company.

It is called risk capital for a reason. Over half of all funded ventures fail: by most accounts fewer than 30% succeed in any meaningful way. The exercise of venture investment only becomes rational when 20% of the ventures in aggregate can provide ridiculous returns (better and 10 to 1). With diversity and persistence this looks somewhat rational and perhaps even highly lucrative when managed across multiple funds with portfolios of companies.

But take a specific venture, there is no rational for it being a good idea. In my experience companies succeed when they are meant to succeed; when all the stars align. It is like the old advertising adage: “we know half our advertising is a useless waste of money; we just don’t know which half.”

Don’t get me wrong, you need to do all the right things to succeed: identify a market; develop a compelling value proposition; get the right people; manage your cash well; keep maniacally focused, etc. etc. But all that’s not enough. You also have to have uncanny instinct (or maybe just dumb luck). When a prospective venture posses you, dominates your thoughts, doesn’t let you sleep, and jolts you from aha moment to aha moment yielding seeming clairvoyance, then you know it is time to start a company. New Stealth Co has that grip on me. I am going to build a wildly successful company and it will change the world.

Rufus Cappadocia

2008-04-23T14:53:00.000-07:00

Great music. He makes sounds I have never heard from the Cello.

Rufus Cappadocia - "Transformation" from Velour on Vimeo.

He has added an extra string to extend the base. Truely cool stuff.

The creative, innovative and brilliant

2008-04-15T17:37:00.000-07:00

Occasionally you see things that are so good they stop you cold, render you dumb, and bring tears to your eyes. These rare things are accessible, incredibly innovative and elegant in their execution. They are in their very essence beautiful. Here are two such things.

The first is an experience in the virtual world. Jonathan Harris is an artist with information. He creates truly amazing explorations of the online world. His work is as mesmerizing and addicting as anything I have seen on the net. - http://wefeelfine.org/

The second is a physical experience: True innovation is making something great with very little. Jonny Lee is perhaps the most brilliant human factor engineer of our time. - http://www.cs.cmu.edu/~johnny/

Both Jonathan Harris and Johnny Lee were featured at TED, the annual confab that now posts its session online. You should check it out and go back often. TED gives voice to the creative, innovative and brilliant. We all should listen. http://www.ted.org/

The Urban Future

2008-04-10T11:01:00.000-07:00

The Urban future has arrived. We entered this century with about 45% of the Global population in cities. The pace of migration from rural to urban is continuing unabated. We may already be at the 50% urban mark, if not we are approaching fast. This is likely a tipping point.

Why are people moving to the cities? Stewart Brand started looking and writing about this several years ago. He sums it up nicely – cities provide education, work (i.e. income) and services. The city provides a better quality of life and higher standard of living than any rural alternative.

The cities are also the planets salvation. A person in a city requires fewer resources to support a comparable quality of life. But most important cities, are population sinks. Birth rates in cities naturally drop from above 5 births woman on average globally in rural areas to less than 2 in developed urban areas. Today birth rates are only 2.1 in developing urban areas in Brazil and India.

Because of accelerating urbanization and an unprecedented change in birth and survival rates, standard population forecasting is proving unreliable. The sky-is-falling “population bomb” predictions of the past are yielding to a growing consensus that we are within a generation of reaching the maximum global population. Many now suggest that the maximum may be in the 8 billion range. Even the UN has declared it is not likely to exceed 9 billion.

Population is not a problem, it’s an indicator. More to the point, “overpopulation” takes care of itself. Our challenge and opportunity is developing new ways to provide productive employment for the high density urban workforce. What does it mean if your potential workforce is not limited to the suburbanites that live within 50 minutes drive of your tilt-up office park? How do you tap the increasingly educated, highly connected, highly motivated workforce in the vibrant urban centers of Shanghai or Dubai; or San Francisco or Portland for that matter?

The housing and education of Shanghai’s exploding population is remarkable. The new Shanghai is more connected and has greater availability of intellectual (and arguably creative) capital than any city in the US or Europe. Mumbai, Dubai, Rio and dozens of other developing urban centers represent the same potential. What could this mean for the business of the future? It changes all the rules. That is why Shanghai is so interesting.

To see the future go to China

2008-04-02T17:33:00.000-07:00

I spent the last 10 days in Shanghai. The first thing you notice is scale, the second is smog. Shanghai makes places like San Francisco, Portland and Seattle look quaint. It has the density and building size of Manhattan but rather than Manhattan’s 13 by 2 mile foot print with 1.5 million residents, the central planned area of Shanghai is square, about 26 miles on each side, and has over 10 million people. There are 5000 buildings over 18 stories tall in this one city alone.

China is moving large percentages of its population from rural areas into its cities. Their cities have increased by 300 million people in the last decade. This means that China has built urban infrastructure to accommodate a population the size of the US in only the last 10 years.

The governments of China and Shanghai developed the master plan of Shanghai in 1995 and they are on track to complete it by 2010. They are planning an International Expo in 2010 to celebrate this accoumplishment. You can see the master plan at the Shanghai Urban Planning Museum, a must see if you visit Shanghai.

I was in Shanghai in 2006 when it had 3 subway lines. On this visit they had 8 operating subway lines. They know transportation, especially in the inner city, is one of their largest challenges: so they simultaneously built 5 additional subway lines through an already developed city.

Just to show off they put in a Magnetic Levitation train that runs from the airport some 16 miles into town. It takes 8 minutes for an average of 120 miles per hour. Its top speed is 435 km/hr making it the fastest train on earth.

You can judge China to be good, bad, idyllic or evil: there is no question it is a totalitarian government with a sketchy record on human rights. However you should appreciate the magnitude of the challenge of developing a country with 1.2 billion people. China has literally built a city from the mud that is one of the most highly productive and cosmopolitan on the planet. And in so doing, it is raising the standard of living and quality of life for 10s of millions of Chinese people.

Innovation

2008-03-12T21:48:00.000-07:00

Innovation is not about making something different or even better. It is about fundamentally changing our behavior. It is about creating a future: envisioning ways of doing things that are so compelling they are pervasively adopted. It is easy to forget how much innovation we have experienced in the last 25 years. Yesterday TED released the pod cast of a talk by Nicholas Negroponte from 1984.

Despite Orwell’s prescient book, 1984 was a time of command lines and green screens. The IBM Selectric ruled the office and producing office communication generally involved a Dictaphone. Negroponte made convincing arguments for interacting with computers using touch screens and breaking from the linear information delivery of books and journals by adopting electronic hyperlinked information techniques.

I watched the lecture while exercising on a Stairmaster and appropriately used my touch screen IPhone to consume the talk. It is hard to imagine that the potential for an HTML information platform or an elegant multi-touch interface would be questioned as preposterous, improbable, or at best way too expensive to develop, produce, and deploy. But we must remember that the computing power required to drive the interface of an IPhone is many orders of magnitude greater than the entire compute capacity of the 68000 processors of that day.

It is impressive how well the I-touch technology from Apple implements the vision the Negroponte articulated so vividly 25 years earlier. And it’s surprising that it took 25 years for it to happen. The year after he delivered the TED lecture Negroponte opened the Media Lab to explore and commercialize these and other innovations.

Watching Negroponte talk provided some perspective on how dramatic the innovation we will likely experience in the coming years can be. Some innovations like the television or the i-touch interface are serendipitous, allowing us to casually adopt new behaviors based on desire and not imperatives. I am suspect the innovation that dominates the coming decades will be more akin to Jonas Salk’s discovery of the Polio vaccine.

The defining characteristic of human beings is adaptation and our times demand adaptation: the resources we use now are scarce and expensive; populations of the developed world are aging with declining birth rates while the exploding economic demands of the young burgeoning populations of the developing world are warping the global economy; the climate is changing rapidly irreversibly altering our ecosystem; and these are just a few of the challenges we face.

We now get to imagine the future that accommodates these realities and improves our lives at the same time. That’s innovation that maters. We get to do anything but stand still.

Transformational times

2008-03-02T12:01:00.001-08:00

Today in the Times, William Safire of all people brought clarity in my mind as to what this presidential election is about – Transformation. We need transformation right now. It needs to start at the White House and it needs to carry through every aspect of our social economic system – every level of government, every community. As we resist the changes that are taking place around us, we just make our lives and our society that much more difficult. This could not be clearer after 8 years of Bush: Iran, deficit spending, the falling dollar, declining education, diminished position in the world, weakened military, divided populous, increased dependence on foreign sourced petroleum, job losses, recession, etc, etc.

There are times for transformation and other times for steady management: this is a time for transformation. Like Roosevelt, Kennedy/Johnson, and Reagan, Obama is the right leader for our time and it is time for transformation.

It is Mar. 3 and perhaps I should have come out more forcefully earlier. I hope in a couple of days I will be able to join the legions of potential voters who can enthusiastically carry Obama to a victory against McCain.

I think Clinton and McCain are both good people. Either could make a good president. But either would be merely a caretaker while we bumble toward real transformation. Others have made the case better than I can for Obama. I just hope we can transcend issue and fear based politics that Clinton is predictably playing well. Just look at the summary of the last news cycle in the WSJ today –

Hillary Clinton told crowds in Ohio Sunday that her campaign is "about solutions," not feelings. Barack Obama said he is tired of questions about his religion and said he was a devout Christian.

Hillary sounds like an IBM salesman while her campaign has successfully forced Obama to respond to fear mongering.

I find it despicable and I wish Clinton and the Democratic party leadership would realize this is not about Hillary, it's about us, it's about the country, and it's about the world. I use to think that my vote, my voice, and a single person, even the president of the United States, mattered little in the scheme of things. But the election in 2000 and the thought of how things might be today if a few people in Florida or Ohio voted differently has changed my mind.

Freeze

2008-03-01T23:08:00.000-08:00

It is always good to get people to question and to look at things differently.

Love this vid.

Brush aside the ashes and kneel before Zod no longer

2008-02-16T17:27:00.000-08:00

The tectonic plates of the Web are moving again. Some people say the Web 2.0 bubble is going to burst reminiscent of the 2000 Internet bubble. Many of the dynamics are the same: the money being thrown at sites that are little more than ideas will dry up; early exits at silly valuations will diminish; trendy sites that are cool but deliver little value will fade away. User aggregation as a business model will again fall from grace and Web 2.0 as a category will disappear.

What will emerge is a new generation of sites and applications that incorporate the characteristics of Web 2.0 – social networking, data tagging, rich media content, mashable functional components, and immersive user interfaces. The sites that survive and emerge as the new guard of Web properties will have a monetization model that drives real and growing earnings.

Like all generational transitions some past participants will die out, and some past leaders will fade to the background. I predict that Yahoo and Microsoft will have little presence in the next round of Web apps. Yahoo was the early leader in Web applications and to this day is far and away the market share leader. You could make the argument (as Tim O’Rielly does ) that Microsoft is purchasing Yahoo to consolidate a dominant position in Web apps. Statistically this is true but a closer look at Microsoft yields a different story.

Microsoft has been working through a 6 month re-org that has consolidated the Online Service Group and the Windows Business Group under Bill Veghte. This puts the Web assets into the group responsible for SMB, and SME software products. This group lives and dies by software license sales to business customers and will find it difficult to advance an ad or subscription recurring revenue model. Worse it is consolidated under Senior Software Architect Ray Ozzie who has always had an enterprise software view of the world.

Yahoo itself took its eye off Web Apps some years ago when their lead architect Zod Nazem shifted his focus to project Panama, an advertising targeting engine. For the last several years search and advertising has consumed Yahoos focus and resources. The death nil for Yahoo apps came when Zod left last June. Yahoo still has market share but is demonstrating no leadership.

Microsoft is aligning around two pillars: 1) software and 2) search advertising. When acquired, Yahoo will be folded into pillar (2) - the search advertising group - headed by Senior Vice Presient and former aQuantive CEO Brian McAndrews. Microsoft and Google have both done the calculus and determined that their growth lies in capturing the increasing flood of online advertising money.

They will continue to be players in Web apps but it will be far from their focus. This leaves the field wide open for the next generation of SaaS and Web applications. Once again the applications of the new Web will emerge out of the ashes of too many failed companies (and millions of Venture dollars) that chased the latest trend – this time Web 2.0. And hopefully, this time the Phoenix will sport labels other than Microsoft, Yahoo and Google.

Ignite Portland

2008-02-06T07:52:00.000-08:00

Something is going on in Portland. Nearly 1000 people showed up at the Bagdad last night for Ignite Portland. Many, maybe 200 were turned away at the door. It was a totally cool event. I presented, declaring that it is time for Portland to start some great companies. I felt a bit like a mime at a comedy night with my business focused presentation wedged in between Why Deutschland Loves David Hasselhoff and How to be an Undercover Hooker. If you are in Portland you need to go to the next Ignite.

The format is 20 slides in 5 minutes, 15 seconds a slide, and the slides advance automatically. Any topic you want. It runs like a freight train through the Gorge: once it starts it doesn’t stop; some of the scenery is great, some is of old rail yards, but the ride is fun.

Leadership – The next President

2008-02-02T19:13:00.000-08:00

I understand the significance of the top candidates for president being a woman and a black man. There might even have been a time that it was important to elect a president just to set such a precedent. This is not that time. There is too much at stake.

It seems likely that a democrat will win the White House. Obama and Clinton have nearly identical policy positions. However, the deciding factor should not be race or gender. Leadership is what maters.

We need to focus on the leadership ability of these candidates. Trust, judgment and intelligence have to be part of it. Especially after seven years of lies, missteps and blunders. However, based on how divided the country is and how much our position in the world needs to change, we need to focus on the ability to inspire change and action.

At this stage, the greater leader seems to be emerging clearly. The next few weeks will be very interesting to watch.

The start-up – doing the right things well

2008-01-29T19:13:00.000-08:00

I don’t understand why people make startups so complicated. Successful startups do the right things well. This means there are only two things to do: (one) figure out the right things; and (two) do them well. All the other stuff doesn’t matter. A startup is about delivering a differentiated value proposition to a target market. The right things are always about developing the differentiated value proposition and delivering it. You have to articulate the right things clearly and be able to count them on one hand.

The luxury of a startup is having a small group of talented people maniacally focused on a small number of right things. In most other business situations you have competing objectives that pull the company in different directions. Established companies have to consider existing customers and existing products. Just think of the budgeting cycle at a company of any size. Managers compete internally for funds to satisfy different objectives –new product development, sustaining engineering, marketing programs, and channel support: departments battle other departments; new initiatives battle against existing business processes.

In a startup the compromises are only around the optimal way to do one thing – doing the right things well. The luxury is everyone pulling in the same direction within the business constraints of the startup (money, staff, technology, market acceptance). You have to be able to tolerate some loose ends and chaos. Because dealing with them would mean expending energy on things that are not part of “the right thing”. In a startup you need people that can handle, in fact can thrive on, there being a little “broken glass”.

I love startups: they are not very complicated and the fun is in the chaos.

Seed what exactly?

2008-01-23T18:17:00.000-08:00

There is much talk about a new generation of Tech companies with a totally different business model. The claim is that with Facebook, Google widgets, Salesforce AppExchange and other platforms, you can start a company for just a few thousand dollars.

Reputable funds are jumping in the fray. Like Accel with it’s Facebook fund. And Bay Partners with its AppFactory. These guys are smart enough to do their homework. I assume they see enough of a play in quick exits and early positions to make it worth their opportunity cost.

These platforms are a quick way to deliver relatively narrow functionality to an identifiable target market; at best a cheap way to validate a value proposition. But this does not a company make. And, with over 1600 Facebook apps, it is already a questionable way to get distribution.

Names have changed and the delivery dynamics are different, but this is hardly new. Seeding engineering projects that have low cost distribution dates back to the Homebrew Computer Club. CNet’s Download.com is still riddled with the stuff.

VCs who caught religion around Web 2.0 and SaaS models early, like Niel Sadarangany at Bay, and Byron Deeter at Bessemer are quick to point out that the real capital requirements don't come from development or even operations, but rather marketing and customer acquisition. And they are larger than ever. Worse the recurring revenue model builds slower than a traditional enterprise sales model and leads to a longer burn.

Acquisitions of cool technology is all well and good. I just hope that in all the widget and platform hype we don’t delude ourselves into thinking that the fundamentals of building a company have changed.

First post - why Blog?

2008-01-18T23:33:00.000-08:00

The first blog post: a tall order. It should set the tone, establish a voice, and identify a point of view. It needs to justify its existence. Weeks from now I can drone on about how tedious Vegas is during InterOp, or how cool company X was at Demo. You will move on, with a click and a judgmental sigh . But this post, you read to determine if it joins your Blog roll, gets added to your favorites, or forwarded to a friend: is it worthy of your attention and your return?

I hate to disappoint, but all I am going to do here is reveal my motivation for blogging (in a way that initiates a respectably tag cloud). The rest you have to determine for yourself. So why am I writing this? I am moved to blog because the world will change more in the coming decades than ever before in history. I figure I get to play for at least a few more decades. This blog is but a small gesture, a minor contribution in my active participation in that change.

Fifteen years ago, I founded a company that was part of the initial commercialization of the Web. The mission of Fabrik Communications was to bring Internet email to the corporation. In 1993 email was the realm of academics, researchers, and a few groups inside governments and corporations that used PROFs on their IBM mainframes.

I was among the cognoscenti with an Applelink address and a Well account. I sat across from VCs at Crosspoint, Accel, Mayfield, IVP, Greylock, Brentwood, USVP, and others trying to convince them that within a couple of years everyone would carry an Internet address on their business card. I was fortunate enough to convince Accel, Crosspoint, Vangaurd and HVP to write a check.

After Netscape went public, I spent time with investment bankers trying to convince them that an application service provider was a legitimate business model – kind of like time share only better. With Fabrik, I was part of changing the world forever: when did you last get a business card that didn’t have an email address on it?

But, the first Internet wave, known mostly for the bursting of the Internet bubble, was nothing compared to what we will see in the coming decades. Everything we know will change: the way we live, the way we interact, the way we spend our time, the way we work, what we expect of our lives and what we expect of each other. Forget about the American Dream – "my kids will have a better life than I have": Things will be so different it will be impossible to compare.

Some of the emerging new world is apparent now. And those little edges beginning to poke through are so intriguing that it is becoming obvious how dramatic the change will be.

In my son’s life time the population of the planet will level off and likely decrease. We will move from a fossil based energy supply to something different. If you think it will just be windmills and solar panels, you’re betraying your limited imagination. For instance, it is likely you will heat your house from gas generated from bacteria digesting a diversity of materials including cellulous and oil shale. Steel in cars will be used only for esthetics, like chrome is used today. The structural elements will all be carbon fiber. We will be able to treat most cancer, but likely die in greater numbers from emergent viruses.

What will this world really be like? We can only begin to guess. But it is a great time to be alive. Adaptation truly distinguishes humans from other animals. What we get to do in the coming years is modify, re-conceptualize, regenerate, transmogrify, and adapt. What could be better that that. My motivation – be an active participant. This blog is a token effort in that direction.