Mar 22 2009

Sunday Morning Reading

I usually sleep in on Sunday’s but I’ve got a 16 mile run and want to meet Amy at the end of it at 10:30 for brunch.  So – good morning 5am and my normal daily reading routine.  I ran across a lot of intriguing stuff this morning that I thought I’d share with you.  I encourage you to trade your TV watching time for a handful of clicks.

Will Google’s Purity Pay Off?  If you have engaged in the “yes Twitter is cool, but how will it make money” conversation I encourage you to read this BusinessWeek article from Pearl Harbor Day in 2000.  And I quote: “LIMITED BUSINESS.  But how will Google ever make money? There’s the rub. The company’s adamant refusal to use banner or other graphical ads eliminates what is the most lucrative income stream for rival search engines. “

Are We Home Alone? Sometimes Thomas Friedman nails it and sometimes he doesn’t.  Today, he nails it.  I completely agree that Obama (who I voted for) completely blew it on the AIG bonus thing.  Per Friedman:

“President Obama missed a huge teaching opportunity with A.I.G. Those bonuses were an outrage. The public’s anger was justified. But rather than fanning those flames and letting Congress run riot, the president should have said: “I’ll handle this.”  He should have gone on national TV and had the fireside chat with the country that is long overdue. That’s a talk where he lays out exactly how deep the crisis we are in is, exactly how much sacrifice we’re all going to have to make to get out of it, and then calls on those A.I.G. brokers — and everyone else who, in our rush to heal our banking system, may have gotten bonuses they did not deserve — and tells them that their president is asking them to return their bonuses “for the sake of the country.”  Had Mr. Obama given A.I.G.’s American brokers a reputation to live up to, a great national mission to join, I’d bet anything we’d have gotten most of our money back voluntarily. Inspiring conduct has so much more of an impact than coercing it. And it would have elevated the president to where he belongs — above the angry gaggle in Congress.” 

Dov Seidman, the CEO of LRN (I’m an investor) summarizes it well: “Laws tell you what you can do. Values inspire in you what you should do. It’s a leader’s job to inspire in us those values.”

Tit for tat: TomTom sues Microsoft for patent infringement:  The Microsoft / TomTom patent suit battle is heating up.  This is an important one to watch for a variety of reasons including it’s one of the few offense patent litigations from Microsoft to date.

SpringStage goes live: A year ago, David Cohen (TechStars co-founder and author of the ColoradoStartups blog) told me about the idea he had with Alex Muse for creating a national network of startup blogs. SpringStage now has over 30 startup blogs in its network.  Pretty cool – take a look.

Concur’s stock sinks after CEO admits he didn’t earn degree: I have never, ever understood why people lie about graduating from college.  The reputational effect (and general ease) of getting caught – especially today – far outweighs any benefits.  For the record, I have an S.B. (bachelors degree) and S.M. (masters degree) in management science from MIT and was in the Ph.D. program for three years before I got kicked out.  I do not have a Ph.D.  My dad is Dr. Feld, but I am not.

Investing in open source hardware: Eric von Hippel – my MIT advisor and professor that I worked with (before getting kicked out of the Ph.D. program) has been researching user driven innovation since the 1970’s.  He invited me to come talk at his annual MIT Innovation Lab seminar last week about open source hardware from a VC perspective.  I wasn’t able to make it to Boston, but suggested Bijan Sabet from Spark Capital talk, as Bijan is an investor in BugLabs and Boxee and has a point of view about this stuff. 

What Is A Good Venture Return: Fred Wilson digs a little deeper into what makes a good venture return on the heals of the PE Hub article asserting that the $590m acquisition of Pure Digital by Cisco was a decent return for a middle-of-the road VC firm, but “for big name backers Benchmark Capital and Sequoia Capital that’s pretty much a dud.”  Fred decomposes this more and concludes “It’s an investment that worked out well for the investors and I am sure they are quite happy they made the investment and with the returns.” 

Try, Try Again, or Maybe Not: I guess I have to go read this paper by Harvard professor Paul Gompers, Anna Kovner, Josh Lerner, and David Sharfstein.  In it, they claim to have determined that the answer to the question “Does failure breed new knowledge or experience that can be leveraged into performance the second time around?” is “In some cases, yes, but over all, he says, “We found there is no benefit in terms of performance.”  Mark Pincus and Zynga (I’m an investor) are highlighted in the article.  I’ve been an investor in two of Mark’s successes and missed one of his failures; my experience is that the lessons he learned from his failure have been extremely well integrated into his brain.  My own anecdotal experience runs counter to the study – I love working with entrepreneurs that have both success and failure.

Ok – I’ve stalled long enough.  Time to go run.