I made a mistake this morning. I allowed myself to get ramped up during my morning information routine. As I read through my online news and feeds, I kept seeing various permutations of discussions around "the bailout." Which bailout you ask? So did I. Before I knew it I was way down a rat hole of reading about all the various requests around "the bailout", tricks for getting "your share of the bailout", absurd requests from very large established companies regarding "the bailout", some surprising and particularly offensive (at least to me) requests from other companies around "the bailout", and lots of justification for action couched in terms like "economic disaster", "crisis", and "collapse."
You don’t have to go very far to see where I started getting ramped up – just read the front page of the New York Times business section online this morning. Note to self – you are an idiot – you should have gone running instead.
I hate the word bailout. None of the companies I invest in are getting a "bailout." When they make bad decisions, don’t execute, or run out of capital, they fail – which sucks, but it’s part of the economic cycle. I tried calling 1-800-BAIL-OUT to see if I was missing something. They wouldn’t help me, but they let me rant about what I think about bailouts (smart entrepreneurs!)
Everytime I hear the word "bailout" it makes me think of Atlas Shrugged. There’s a good idea – before you are allowed to mention the word "bailout" you have to read Atlas Shrugged – that’ll slow people down a little and make them think.
I’m not against government involvement and financial support in the broad business ecosystem. That’s not what got me ramped up. What got me ramped up is the pervasive and omnipresent requests for a piece of "the bailout" along with endless hyperbole justifying the naked requests for money from the government without clear consequences. This, combined with the endless language of fear and panic from our "leadership", rather than a rational discussion of cause, effect, and proposed solutions makes me nuts.
Fundamentally, I feel like the ethos of "lack of responsibility" is finding its way into every nook and cranny of the discussion. The connotation of "bailout" is "it’s not my fault – please bail me out." By definition, if you are asking for a bailout, you need to take responsibility for your actions and how you got there.
Before I end, I’ll leave you with two things to clean your palate. The first is from my friend Shawn Broderick titled UAW Rip and cuts to the core of the notion of taking responsibility for your actions, understanding cause and effect, and coming up with solutions based on a real understanding of the underlying facts. The second is from another friend – Karyn German (who is one of the execs at NewsGator) titled What I Have Learned About Leadership. Just reading it made me feel better.
All of the hedge fund (and some of the VC fund) statements I’ve been receiving the past few weeks have long essays in them. I categorize most of them as either (a) marketing, e.g. "look how smart we are – we know what’s going on" or (b) rationalization, e.g. "our numbers totally suck, but here’s why you should be optimistic about our future performance." However, at least one of them was really interesting, well thought out, and gave me plenty to think about.
It appears Fred Wilson received at least one that he put in the same category. He did us all a favor by summarizing it in his post Hedge Funds: The Third Quarter Report and giving his thoughts about what he had read. He also makes the strong statement that every investor needs to consider all the time – are you a buyer or a seller at this price. As Fred eloquently and succinctly states, "If you don’t want to buy more, that tells you something."
If you are inclined to read Fred’s post, do yourself a favor and wander over to the WSJ and read Art Laffer’s op-ed The Age of Prosperity Is Over.
I’ve got a little end of day advice for everyone out there that is getting whipsawed around by all the craziness in the financial markets. While this is aimed at entrepreneurs, it applies to everyone.
Focus on things under your control.
When I was a teenager, my dad said something to me that has stuck with me and informs many of the decisions I make and things I decide to spend my time on. He said something like "Brad – if you want to change the world, start with the 2% you know best."
Now, this doesn’t mean "don’t be curious." It doesn’t mean "don’t learn new things." And it doesn’t mean "don’t try new things." However, it does mean "don’t get distracted by all the things you don’t know, or can’t influence."
This is especially important when confusing and chaotic things are happening all around us. Since I’ve returned from vacation in England, I’ve been asked numerous times what I think of the current financial crisis, how it impacts entrepreneurship and venture capital, and what the government should do about it. In general, my answer has been "I have no clue." Now – I have some very specific ideas about how it might impact some of the companies we are investors in – especially if the macroeconomy continues to deteriorate. But I know enough to know that I can’t actually predict what’s going to happen nor can I influence the macro stuff at all.
As a result, rather than get all spun up about what’s happening minute by minute in Washington or in the financial markets, I concentrate on making sure that the companies I’m an investor in are thinking through the issues that will directly impact them – either because of exposure to certain customers (e.g. the financial services market) or a broad macroeconomic downtown. These are things I understand (in my 2%) and can influence.
Fear and anxiety comes from lots of places, including fatigue, misinformation, and the endless blathering on of talking heads on the television. If you start feeling your anxiety level increase because of things you have no ability to influence, step back and reconsider how you are spending your time. Go for walk around the block and enjoy a nice October afternoon. Take your best friend out to lunch at a restaurant you’ve never been too. Get a good night’s sleep. Take a deep breath and – as my dad once told me, focus on things under your control.
The "start-up challenge" is emerging as the new platform marketing initiative. Amazon has just launched the AWS Start-Up Challenge. If you are into Amazon Web Services, think you might be, or just want to be part of a contest, go check it out and sign up. $50k of cash and $50k of AWS credits are on the line.
Amy and I were talking about the election process during our vacation. Both of us dislike the electoral college process and have concluded that the cycle is way too long, the primaries are stupid, and the amount of money being spent is totally obscene. We are also deeply tired of all of the endless partisan crap.
So I came up with a new process. How’s this?
It needs more work, but you get the idea.
One of my favorite quotes of all times was Ted Leonsis’s statement in the mid-1990’s that "MSN will be Microsoft’s Vietnam." Ted said this around the time that MSN launched (on a proprietary platform – pre-Internet) to compete directly with AOL. 15 years later this seems like such a prescient statement.
I have no idea if Android will be Google’s Vietnam. We’ll have to look back 15 years from now to really know. But as I watched the T-Mobile G1 Video and read through some of the Android early criticism (and praise), I kept asking myself "why?" I have my own guesses as to the answer, and I know the public answers, but when I sit on the outside looking in, I have way more questions than answers.
If Google is really serious, they’ll do what Apple did – license Microsoft ActiveSync and immediately create transparent integration with Exchange (hey – don’t forget to write the 74 lines of code that will sync tasks.) I’m a month into using my iPhone and it’s here to stay – it is so superior to Windows Mobile 6 on a Dash that I can’t even begin to describe my pleasure with it as an integrated mobile device. I’ve gotten used to the keyboard and can now type on it about as fast as I could on my Dash and my old Sidekick. I continue to hear this as the major complaint from semi-converts, but I just don’t see it. You definitely have to change a few things about how you type on a small keyboard, but I had to do that with the Sidekick (thumb clicks anyone?) and the Dash (keep your fingernails really short.) Yeah, there are still plenty of things that could be improved, but with each incremental release I see them get fixed.
As I ponder Foundry Group’s digital life theme, including the hour long conversation I had with a new Microsoft friend at dinner last night, I realize that I believe forced migration of an individual’s legacy data simply won’t work. I have so much legacy data associated with all my different devices, on so many different platforms, in so many different places, across so many different people / relationships that the new devices and software I use, whether by Apple, Google, Microsoft, StartupCo, or FooCo, are going to have to "respect" all that stuff. When I dig into Android a little, I see the potential for that, but I also see resistance to that concept. iPhone 1.0 had this problem; iPhone 2.0 is doing a much better job of not having this problem.
I’m spending the day at Microsoft’s Annual Venture Capital Summit and expect to hear a lot about Cloud Computing and Mesh. I have my Microsoft Venture Capital Advisory board meeting tomorrow where the topic is all around where Windows Mobile is going. Against the background of Google, Android, the iPhone, and all the various "cloud computing initiatives", it’ll be interesting to see if Microsoft has really reconciled – at least conceptually – issues that led to the MSN / Vietnam problem that still hinder it today. Simultaneously, it’s interesting to watch and see if Google is wandering into their own Vietnam(s), or if they will deftly sidestep them.
I love working with / on this stuff and – after watching Fred Wilson’s video on the last 15 years in the New York Internet scene (and how prosaic things look like from 1995) – I’m so amused when I think about what things will be like in 2023.
I’m sitting in my hotel room in Palo Alto after 20 hours of travel from Hampshire, England. Amy and I took our Q3 vacation in the English countryside at the Hampshire Four Seasons where we had a glorious week off of the grid. I find myself really wanting to be tired, but I am so far beyond tired that I’m wide awake well past midnight California time.
Our Q3 vacation was dynamite. I would have never thought to choose the English countryside, but Amy loves horses and our Q3 vacation is near her birthday, so we go wherever she wants to go. The weather cooperated in some sort of pleasant karmic-recovery from our abysmal Alaska weather (yes, I know they are uncorrelated events, but one can fantasize), my runs along with Basingstoke Canal were awesome, and the food surpassed expectations.
We were off the grid – mostly. I had a few work related things that reared their head during the week – none required a lot of time but each harshed my mellow a little bit. I was typically agitated for the first few days, which is a sign that I really needed a total disconnect to recharge my batteries. After four days of sleeping more than 12 hours a night, I started to calm down. The daily runs, swims, tennis, massages, books, and adult activities helped.
During our Q-vacations, I turn off my computer and cell phone. My assistant Kelly reads my email and calls me if there is something I have to pay attention to. However, we do watch TV – mostly movies – as we lay in bed before we fall asleep.
This week, the best movie on TV was CNBC Europe as our bed time correlated to the last hour of the market in the US. I never watch CNN / CNBC / MSNBC / Bloomberg / local news so it’s a rare treat to watch a chunk of it. Last week was a doozy. If we hadn’t turned the TV on at all and just checked the Dow Jones index on Friday when we left for Europe and Sunday a week later when we reconnected, we would have noticed a measly 30 point drop in the Dow. Instead, we got to watch talking head after talking head analyze, speculate, prognosticate, fluctuate, pontificate – basically everything except masturbate – while chart after chart appeared with radically spikey looking graphs that changed every few seconds.
In the midst of this noise, we watched a few movies (I finally saw Ironman – yes – the first half was much better than the second half) and I reread Nassim Nicholas Taleb’ brilliant book The Black Swan: The Impact of the Highly Improbable. I reached a very simple conclusion – everything that I was watching being discussed on CNBC was probably incorrect and, more importantly, likely irrelevant. The actual events that occurred would take me less than five minutes to read the following week when I skim BusinessWeek in the bathroom. The commentary was just noise.
But I knew this already so this wasn’t my key insight. Over the weekend, we ended up watching Davis Cup Tennis (Andy Murray is going to give Nadal and Federer some trouble) while avoiding the endless Ryder Cup coverage. I tried to understand cricket (still no luck), watched some rugby (or is that Australian football?), and watched the soccer highlights (why suffer through a game when you can watch the highlights.)
And now for the insight. During the week, we have CNBC. Over the weekend, we have ESPN. They are exactly the same – just with different uniforms and commentators. As Taleb would suggest, the only way to keep your eyes wide open about what is going on is to turn off the TV and stop reading the newspapers.
I just yawned, so it must be time to end this "welcome back" post, close my eyes, and dream of fields of golden retriever puppies. I wonder if that’s what Hank Paulson is doing.
One of last year’s TechStars companies – Filtrbox – is hiring. They are looking for a Java + LAMP developer and a Flash/Flex/RIA developer. If you fit the bill and are looking for a gig in downtown Boulder with a great early stage company, drop ’em a note at jobs (at) filtrbox.com.
The parents of a close friend just had a direct lightning strike on their house. It immediately burned to the ground and everything was lost.
The simple advice from my friend if this ever happens to you is "get out fast and not go back for anything that is not a human being." She also suggested that you check your home insurance to make sure you are covered for this.