I’m always amused at how many “lists” appear at the end of the year. I’m anti-list – I never read them and I no longer am willing to contribute to them. So – for some non-list reading for today, I present to you the best of what I read this morning on the web.
Washington Is Killing Silicon Valley: Michael Malone nailed it in this article. “If Mr. Obama is serious about getting the country out of this recession using something more than public make-work projects, he should restore the integrity of the new company creation cycle: rewrite full disclosure, throw out options expensing, make compliance with Sarbanes-Oxley rules voluntary, and if he won’t cut it, then at least leave the capital gains tax rate alone.”
Day 2 Giveaway 6 – iMenorah: It’s Hanukkah (how do you spell that again) and all good jews with iPhones need the iMenorah app. Dad – I knew there was a reason you should have gotten an iPhone instead of a Blackberry.
Keystroker V2: Drive your co-workers insane in 2009 (if they aren’t already insane). Thanks Ryan.
Introducing the BUGvonHippel! The gang at BugLabs has shipped the BugvonHippel module (named after MIT professor and my SM / Ph.D. advisor Eric von Hippel). I first wrote about this in January 2008 – it’s awesome to see it released.
Bristol Palin’s boyfriend’s mom arrested in drug case: Even though this is completely and totally irrelevant, I couldn’t help myself.
Windows Live Writer 2009: Release Candidate: I love Windows Live Writer – I’ve been using it as my blog editor for a while. The new RC is up on the web with fancy new UI and some fun features.
Will This Economy Finally Push the Toyota Way Into Software Development? Good short thought piece about Agile software development highlighting Rally Software. My friends at Rally have had an awesome year and I’m really proud of them.
More Companies Are Cutting Labor Costs Without Layoffs: Would you rather have layoffs or try some creative things like salary cuts, furloughs, four-day workweeks, elimination of 401k matches, and unpaid vacations? While large companies are aggressively pursuing these options, it’s worth pondering for smaller companies that are flirting with trying to be cash flow positive.
See – no lists. I didn’t even number these posts.
Today’s book was an easy one. When Kurt Vonnegut died in 2007, I decided to read all of his books. A quick trip to Amazon resulted in the purchase of 14 novels. I’ve read about half of them and am gradually tossing in the balance between more "challenging" books.
God Bless You, Mr. Rosewater wasn’t Vonnegut’s best (although he rated it a A in his review of all of his books in Palm Sunday), but it was solid. He wrote it in 1965, sandwiched between Cat’s Cradle and Slaughterhouse-Five – easily his two best books (at least that I’ve read so far.) So, the dude was on a roll around the year I was born (and in the 1960’s in general).
As I work my way through Vonnegut, my inner cynic is rewarded with gems from 40 years ago. For example:
Kilgore Trout (near the end of the book): "The problem is this: How to love people who have no use? In time, almost all men and women will become worthless as producers of goods, food, services, and more machines, as sources of practical ideas in the areas of economics, engineering, and probably medicine, too. So – if we can’t find reasons and methods for treasuring human beings because they are human beings, then we might as well, as has so often been suggested, rub them out."
Don’t try to understand it – it won’t really make any sense without the context of the rest of the book. But – if you want a good jolt, read the book. One thing is for certain: Vonnegut knows how to string words together in a magical way.
I think I’ve read every book that Michael Lewis has ever written going all the way back to Liar’s Poker: Rising Through the Wreckage on Wall Street . While Lewis merely edited Panic: The Story of Modern Financial Insanity , it’s a brilliant book and a good start to my year end "16 days of books" (where I read a book a day while I’m up in Keystone.)
Panic covers five modern financial crashes:
Each section has a perfect setup – a few articles preceding the actual crash followed by articles that are written as the crash is happening. Lewis finishes off each section with at least one post crash article. Taken as a bundle, each of the five crashes are very symmetric, generating a very cynical set of reactions from this particular reader about the nature of modern finance.
I stumbled on some interesting characters throughout the book at odd spots. My two favorite examples from The Internet Bubble section are Bernard Madoff (yup – the one everyone has been talking about for the past week) and Albert Vilar (yup – the one whose name used to be on the Grand Tier at the NY Metropolitan Opera and is awaiting sentencing on securities fraud charges.) And of course John Meriwether (Salomon Brothers, Long-Term Capital Management, and now head of JWM Partners) makes several appearances throughout and is one of the central characters in the Collapse of Long Term Capital Management.
Bernard Madoff: (1999) "The same volatility and heavy trading by individuals convinced a market veteran, Bernard L. Madoff, that his trading firm should stop making a market in four wild Web stocks. ‘You’re literally seeing hundreds of thousands of orders in the stocks,’ Mr. Madoff says. ‘That puts a strain on everybody’s systems. And on the way down, it’s always more extreme.’ To Mr. Madoff, "it was insanity. This thing was getting out of control.’ In January, his New York firm, which bears his name, dropped Amazon, Yahoo!, Infoseek and Egghead, even though trading in them had been very profitable."
If you lived through the Internet bubble like I did, you probably remember the Barron’s article by Jack Willoughby that came out on 3/20/2000 titled "Burning Up." In it, Willoughby listed the "months until burnout" of 207 Internet stocks. He specifically called out 51 that "are likely to run out of cash, according to year-end 1999 data. Some can raise more funds through stock and bond offerings. Others will be forced to merge or go out of business. It’s Darwinian capitalism at work." I remember this article (which Lewis reprints) like it came out yesterday – I was co-chairman of two companies on the list (company #15: Interliant and company #88: MessageMedia) and was an investor (via my VC investments – either in funds I was involved in or funds I was an investor in) in #5:VerticalNet, #31: ELoan, #33: Ask Jeeves, #48: Multex.com, #49: eToys, #67: Critical Path, #110: TheStreet.com, #118: StarMedia, #120: iXL Enterprises, #147: ITXC, and #181: Exodus Communications.) I probably missed a few, but I remember almost every company that was on the list.
Albert Vilar: (2000) "On Monday, March 20, many of the stocks on Barron’s list fell sharply: it was another bad day for technology stocks generally. The Nasdaq fell 188 points, nearly 4 percent, to 4,610. During the next few days, there was a predictable attempt to discredit the Barron’s piece. ‘I didn’t set my performance record, which is about the best in the business, with any help from Barron’s,’ Albert Vilar, head of the $700 million Amerindo Technology Fund, declared. Investors who avoided Internet stocks during the next five or ten years would miss ‘the biggest explosion of profits and growth ever seen."
Every crash has an index case (or "patient zero") equivalent. The Barron’s article was the one I remember most clearly from the Internet bubble. Even the dotcom advertising at the 2000 Superbowl fades like a distant memory. AutoTrader.com, Britannica.com, Computer.com, Epidemic.com (a Colorado-based startup), E-Trade.com, Hotjobs.com, kforce.com, LastMinuteTravel.com, LifeMinders.com, Monster.com, Netpliance.com, OnMoney.com, Oxygen.com, OurBeginning.com, Pets.com, Webex.com, and WebMD.com. Several survived, but most didn’t. When I reflect on the Barron’s article, it marked the peak for me.
I was a grad student MIT and running my first company during the 1987 Crash and remember listening to it on a portable radio in my Feld Technologies office at 875 Main Street. I then took the T home to downtown Boston with my business partner Dave Jilk. I didn’t really know what to make of it (Dave regularly reminds me that when I showed up at MIT in the fall of 1983 I made the insane statement that "real estate in Texas will never go down in value.") I’m sure I was unsettled by it, but I woke up the next day and went back to work (and school).
I remember each of these crashes and, with appropriate emotional detachment, rethought some of the lessons I’ve learned in the past 20+ years as I read Panic: The Story of Modern Financial Insanity. Not "fun", but important stuff extremely well edited.
There’s nothing quite like reading a book about marathons on a weekend that you run a marathon. I carried My First 100 Marathons: 2,620 Miles with an Obsessive Runner by Jeff Horowitz in my bag with me and read it while I was laying around on Sunday recovering.
Jeff is a massive inspiration to any marathon runner. The book reads like a combination travelogue + novel + running philosophy treatise. I was really pleased with my Huntsville performance and – after reading Jeff’s book – was even more motivated to get up off the couch as quickly as possible and go run another marathon.
If you are a marathon runner, you’ll love it.
As I stall before I head out the door for an hour run in the cold, dark mountains outside my house, I thought I’d share some of the interesting stuff I read this morning with you.
Forrester Chief on What Not to Cut in a Downturn: I mostly include this since it’s so entertainingly short and substance-free. It links to a post of George Colony’s blog titled Why this tech recession will be different which is still short, has a little more substance, but seems painfully obvious. Maybe people will cut their Forrester spending in the downtown (oh, cynical me.) I hope no one at Forrester is using social media or any keyword alerts that catch this blog or else I’ll be in trouble with my friends at Forrester.
Where is Dubai? Jeff Jarvis has an awesome essay on his trip to Dubai. He’s also got some pretty pictures in the post.
Five Minutes with Angel Investor Dave McClure: I’ve done a few investments with Dave and think he’s dynamite. I went to Startup2Startup a few months ago when I was in the bay area and had a blast. Good stuff.
Harvard: ‘Nothing Is Fucked, Dude’: Drew Faust, Harvard’s president, writes a long email on the state of Harvard given the economic downturn titled "Harvard and the economy". In it she acknowledges the forecast that many college endowments will be down as much as 30% this year due to investment losses. Eek. Now’s a good time for my MIT friends to do some extra hacks on Harvard’s campus since there will be fewer security guards running around.
And now for some news from the world of companies that I’ve invested in.
How and Why We Made Glue: Alex Iskold has a long post up explaining the design choices behind the recent release of Adaptive Blue’s product. The product – Glue – is dynamite and the explanation of the design choices is really interesting.
Solution Spotlight: Soup.io is now using Gnip: Adoption of Gnip marches on day by day. Subscribe to the Gnip blog to see how more companies are using it.
Look Out Google Site Search, Lijit Says It’s Right On Your Heels: ReadWriteWeb analyzes Lijit’s Widget Statistics Revivial 2.0 and comes up with some interesting thoughts. Even more interesting (at least to me) are the kind and generous words they have about Lijit’s service. If you have a blog but don’t yet use Lijit for your blog search engine, you are missing out.
Ok – enough stalling. Time to get dressed and go running.
To celebrate today’s New York Marathon, I went for a hard and fast run in the mountains near my house. There’s nothing quite like grinding your way up a hill for three miles and then turning around and running down it as fast as you can. As I reflected on my run, I am kind of amazed at the range of thoughts that went through my head over the course of an hour.
Since I finished my run, I’ve been sitting on my couch, catching up on email and blogs, and getting ready to lose myself in Defrag for the next two days. Following are some of the great things I came across.
I’m hopeful that on Wednesday everyone in the United States wakes up, eats a big breakfast, and gets on with life.
If you thought the reason I haven’t been doing a Daily Reading post lately was because I didn’t feel like adding more to the endless stream of political noise, global economic crisis, and the impending extinction of arctic wolves, you’d be wrong. I simply forgot I was doing it. Oops. Here are a few good ones from today.
Off to spend the day with a top secret group of VCs discussing what we think of the future.
This morning, I read two wonderful essays on the web – one by Warren Buffet and one by Paul Graham.
Both of these made me immediately think of Nassim Nicholas Taleb’s brilliant new book – The Black Swan: The Impact of the Highly Improbable- which has been making the rounds the past few months. If you haven’t yet read it, you should stop what you are doing, buy it immediately, and read it. If you haven’t read Taleb’s Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, you should read it first as it sets the stage for The Black Swan.
In The Black Swan, Taleb introduces the wonderful place called Extremistan and the much less interesting but much more often occupied place called Mediocristan. Buffett and Graham give us more clues as to why Extremistan is a much more satisfying place to hang out.
As Amy and run around like silly people packing up to head back to Boulder tonight, I stumbled upon two fantastic posts on the web. Consider this your daily reading if you read nothing else.
The first is titled Five Life-Changing Mistakes and How I Moved On by Julie Wainwright. Julie is now the co-founder of SmartNow.com but is infamous for being the CEO of Pets.com. Her post is personal and phenomenal. She identifies five mistakes she made leading up to and during the simultaneous failure of Pets.com and her marriage. She then describes – point by point – how she moved on. The mistakes follow; you’ll need to click through to her article to see how she moved on. (Thanks Heidi).
The second is titled It’s the Software, Not You in the NY Times by David Pogue. If you’ve been following along at home you know that I’ve been deeply immersed in human computer interaction (HCI) during the past year. Pogue gives several great examples and ends with "Why do software designers want their work to appear more complex instead of less? I just don’t get why they don’t get it. So the next time you’re frustrated by software complexity, take heart; much of the time, it’s not you. It’s them. It’s designers who have something on their mind other than software intelligence." Right on!
Both are worth reading and savoring.