Did Venture Capital promote economic growth?
Tuesday - January 24, 2012.
Filed in: Venture
An article in the Tenessean plays out a very naive summary of the role of Venture Capital with regard to economic growth. Naive because not only does it demonstrate a lack of real world experience with the demi-cartel deployed by an old-boys network in the epicenter of Venture located Silicon Valley, it is factually wrong in how it works, what it has produced and what it has done to the economy.
So, here is my response to their tantalizing statement:
It must not have sunken in to the writers of this article that the most important asset holders in the marketplace of innovation (limited partners with money, and entrepreneurs with ideas) are leaving the asset class, because either they are not getting the returns they were promised or their vision is dumbed down to subprime. For a comprehensive overview of the real risk deployed by Venture, study The State of Venture Capital.
Find the original article (not open for discussion on the site) here
.
So, here is my response to their tantalizing statement:
No, Venture Capital is supposed to promote economic growth. But subprime VC is just like subprime real estate. It makes for great press when you secure deals, and then someone else (the economy) gets left cleaning up the debris.With 20 years of subprime VC behind our belt and negative performance to boot, the false positives create a hole twice the size of false negatives that could have delivered sustainable economic growth.
It must not have sunken in to the writers of this article that the most important asset holders in the marketplace of innovation (limited partners with money, and entrepreneurs with ideas) are leaving the asset class, because either they are not getting the returns they were promised or their vision is dumbed down to subprime. For a comprehensive overview of the real risk deployed by Venture, study The State of Venture Capital.
Find the original article (not open for discussion on the site) here
.World Bank warns of deepening crisis
Thursday - January 19, 2012.
Filed in: Economy
As I stated before:
Nothing will improve in the economic outlook of our country until we improve the systemic economic imbalance between finance and production.
So, let’s get to work on fixing our economy from the top (instead of from the bottom).
SOPA spawns the need for economic reform
Tuesday - January 17, 2012.
Filed in: Commentary | Economics
I am responding to another article with regards to the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) with more or less the same commentary I posted on the European Commissions’ web site yesterday. It is an important topic worth repeating.
This time my response was to an article on Reuters PEHUB titled “SOPA Headed for a makeover”. It clarifies my stance on SOPA, and that we should not rush to regulate before we understand how it ties to our core economic principles. And given that we violate economic freedom all too often, to apply regulations today that depend on such flawed implementation of freedom is bound to do more harm than good.
Here is my response:
The full article, including my comment can be found on Reuters’ web site here.
This time my response was to an article on Reuters PEHUB titled “SOPA Headed for a makeover”. It clarifies my stance on SOPA, and that we should not rush to regulate before we understand how it ties to our core economic principles. And given that we violate economic freedom all too often, to apply regulations today that depend on such flawed implementation of freedom is bound to do more harm than good.
Here is my response:
Most of us look at this as an Internet problem but it is not. The root problem we need to solve (before we apply lucid regulations) is that we define what economic freedom really means (with or without the internet).It is a myth that free-markets do not require regulations. The implementation of a free-market requires regulations so every participant enjoys the same definition of freedom, and protects other participants using that same definition. Free-markets are not a free-for-all, meaning you are allowed to just do what you want. The way financial systems in violation(!) of free-market principles have been able to run amuck with our economic systems.The implementation of a true free-market system is now, really for the first time, being challenged by the internet as its distribution. And the time has come to shore up our economic definition before we apply it to the internet.I applaud meaningful regulation that secures everyones definition of freedom. But I would suggest to tread very carefully, for I see those who do not understand the basic fundamentals of a free-market implement regulations that throw the economic baby out with the bath water all to frequently.
The full article, including my comment can be found on Reuters’ web site here
.Internet reform is economic reform
Monday - January 16, 2012.
Filed in: Commentary | Economics
I am for the perpetuation of a free-market on the internet, but not if that purported compliance creates a free-for-all that violates free-market principles. It is a myth that free-markets do not require regulations, but those regulations need to be deployed with the proper recognition of what those free-market principles are. The latter is where most regulations fall apart and in turn do more harm than good.
Here is my commentary to Neelie’s blog posted on the European Commission’s website:
The internet for the first time forces countries to adopt a singular economic system across its distribution and that puts enormous pressure on the agreements needed between countries.While on the surface the U.S. proclaims to be in support of free-markets (and I am, living and working there), the implementation of a free-market requires regulations so every participant enjoys the same definition of freedom, and protects other participants using that same definition. Free-markets are not a free-for-all, meaning you are allowed to just do what you want. The way financial systems in violation of free-market principles have been able to run amuck with our economic systems.The implementation of a true free-market system is now, really for the first time, being implemented globally with the internet as its distribution. I applaud Neelie's work to balance the defunct free-for-all with meaningful regulation that secures everyones definition of freedom. But I would suggest to tread carefully, for I see those who do not understand the basic fundamentals of a free-market implement regulations that throw the economic baby out with the bath water all to frequently.
The original article can be found here
.From despite to because
Thursday - January 05, 2012.
Filed in: Economy | Policy | Behavioral
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The musical chairs of asset management
Friday - December 02, 2011.
Read the complete article...
Turnaround U.S.A.
Thursday - November 10, 2011.
Filed in: Economy | Policy | Government
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Pancake Economics
Thursday - November 03, 2011.
Filed in: Finance | Government | Policy
My discovery of the flaws in the fundamental deployment of risk in our economy means that its performance can be made highly predictable again and can be deployed by change everyone can understand, and believe in.
Read the complete article...
Idiotic Government
Tuesday - September 06, 2011.
Filed in: Government
An idiotic standpoint to take considering government previously allowed each digital mobile phone network provider to lock out the otherwise open GSM standard (designed to provide roaming across competitors) through SIM card locking to being used only by its own handsets (I stated my case before). Kind of like allowing Apple computers to only connect with other Apple users over the Internet, and Windows users only with other Windows users. The free-market principles of the mobile phone business have been violated from the start, with the government standing by idle and consumers having suffered the consequence of proprietary and dim cell phone coverage for many years.
What idiotic government does not understand is that SIM card locking, a seemingly small tactical implementation had a detrimental effect on the creation of free-market competition that would have allowed many more smaller GSM mobile phone providers to give the wealthy incumbent a run for its money, and have allowed for better consumer value some twenty years ago.
Rather than blocking the merger between AT&T and T-mobile, government should have moved to block the locking of SIM cards so before or after the merger with AT&T any new GSM provider has a fair chance of competing on core competency: providing sublime network access to anybody who needs it.
We need smarter government if we want our country to prosper again.
Fake tits and money
Tuesday - August 23, 2011.
Filed in: Behavioral | Finance
Should we really be surprised those marriages produce even more dysfunctional "children", responsible for negative Limited Partner returns and a plethora of IPO bubbles?
Read the complete article...
The State of Debt
Friday - August 05, 2011.
This from a New York Times article: For years, the American financial sector borrowed and borrowed. Its obligations rose even more rapidly than consumers’. Both sectors were far more aggressive borrowers than the federal government. Now that has reversed. The Federal Reserve reported this month that the outstanding debts of both the financial sector and households fell in 2010, as they had in 2009.
Now if our government would get its act together of what its role is in a free-market (not free-for-all) economy, the trending would work out just fine.
Check out the article here
.We fail because we lie
Tuesday - August 02, 2011.
The silly political rambling about our national debt and the raising of our debt ceiling compounds the realization that our government too has failed, along with our economy and our financial systems. Our systems fail, not our tactics.
We need to treat our country more like a company, and our country lacks a viable business plan, a binding compass. We need to stop lying to ourselves to prevent us from reaching our full economic potential.
Read the complete article...
Crazy Capitalism
Friday - July 22, 2011.
Filed in: Macro
- An article by the Mises Institute from 2009 about Crazy Capitalism reminds me how the economic geniuses we elect are often not. No Greenspan, free-markets are not a free-for-all. Capitalism without a merit based arbitrage is a bold lie. [Links: Mises Institute
]
My book
Wednesday - June 22, 2011.
Filed in: Macro
The introduction to my book could not have been better written than by an article of July 16, 2009 in The Economist titled “What went wrong with economics”. The crux of which reads:
Welcome to the mission of my upcoming book. [Links: The Economist
]
A broader change in mindset is still needed. Economists need to reach out from their specialized silos: macroeconomists must understand finance, and finance professors need to think harder about the context within which markets work.
Welcome to the mission of my upcoming book. [Links: The Economist
]Bullish on the U.S.
Tuesday - June 07, 2011.
BlackRock, a $3 Trillion investment firm and a LP in Venture we have met with is bullish on the U.S.
We agree with Chief Equity Strategist Bob Doll that U.S. entrepreneurial capacity will continue to lead the world, despite the way we see a subprime financial system, or socialistic capitalism, suppressing innovation. Apple and Facebook are great examples of custodians of innovation that have escaped the wrath of Venture Capital and grown dramatically despite (not because of) the traditional playbook of Venture Capital.
I agree with Bob on some of the economics he mentioned, but remain a staunch critic of the deplorable and suppressive role of a defunct financial arbitrage. With a new financial system guiding innovation we could be doing a lot better. Yet our cultural capacity to innovate, despite the flawed economic principles of our financial system, escapes and keeps rising above its arbitrage. But looking inwards, as we have found out, is clearly not part of the interest or risk analysis of many financiers.
Interesting points:
Read the full article here: [Links: The Wall Street Journal
]
We agree with Chief Equity Strategist Bob Doll that U.S. entrepreneurial capacity will continue to lead the world, despite the way we see a subprime financial system, or socialistic capitalism, suppressing innovation. Apple and Facebook are great examples of custodians of innovation that have escaped the wrath of Venture Capital and grown dramatically despite (not because of) the traditional playbook of Venture Capital.
I agree with Bob on some of the economics he mentioned, but remain a staunch critic of the deplorable and suppressive role of a defunct financial arbitrage. With a new financial system guiding innovation we could be doing a lot better. Yet our cultural capacity to innovate, despite the flawed economic principles of our financial system, escapes and keeps rising above its arbitrage. But looking inwards, as we have found out, is clearly not part of the interest or risk analysis of many financiers.
Interesting points:
- U.S. productivity is "OK and better than lots of other places. Over the next 20 years, the U.S. work force is going to grow by 11%, Europe's going to fall by five, and Japan's going to fall by 17.”
- Half of the 2009 stimulus program was "true stimulus" for the economy. What about the rest? “Call your congressman and find out”
- “We face formidable long-term structural problems that make the U.S. less attractive than it otherwise might be.”
- In 1995 the U.S. produced roughly 25% of the world's goods and services and in 2010, after 15 years that included a tech bust, a terrorist attack and a housing bust that triggered a financial crisis, the U.S. was still producing that same 25% of global GDP
Read the full article here: [Links: The Wall Street Journal
]Financial crisis inevitable
Tuesday - May 31, 2011.
Filed in: Macro
- Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved. Amen Mark, as long as our financial systems are not free-markets and therefor by definition unflattened, the risk of implosion of a financial system eleven times the size of production remains severe. [Link: Bloomberg]
The stock market is not a free-market
Wednesday - April 06, 2011.
Afraid of Apple's impact on the stock market will be too large the Nasdaq re-balanced its 100 index. So much for a free-market system that is supposed to be self-regulating. Shares themselves are a short-seller derivative of a company's value, and an index is nothing more than a derivative of a derivative. I pity the fool who invests in them.
Do you really need more proof that stock markets are artificial markets, of which you or "the market" have no control?
Locked SIMs violate antitrust way before
Monday - March 21, 2011.
Filed in: Government
I see the press having a field day with the AT&T purchase of T-Mobile US, citing concerns about anti-trust laws. But the real anti-trust violation is that GSM networks, designed from the ground up to deliver independence of phone to network provider in the US are locked to only connect you to the signal from the network you have a contract with.
GSM was designed to give any GSM compatible phone the best cell phone reception possible anywhere by finding any (open) GSM network and connecting to the strongest one available using roaming agreements with the host network provider. Locked SIM cards (those little chip cards inside the phone) prevent its users (us the people) from having the best and most seamless cell phone reception possible and prevent GSM network providers from competing on a level playing field. Locked SIMs create walled gardens and create monopolies antitrust laws are supposed to prevent.
So, not the purchase of AT&T buying T-Mobile violates anti-trust but the artificial locking and limiting the capabilities of GSM did way before. The Federal Communications Commission should have disallowed SIM locking, because SIM locking violates free-market principles and significantly reduces the service level to consumers.
20-Years ago I could roam Europe and receive a GSM signal anywhere, not so in the US because locking of SIMs prevents any small new GSM network provider from achieving network relevance that could make up for the cost, and thus would prevent new network entrants from even trying. Hence locking of SIMs is the antitrust crime, not one walled garden buying the other.
GSM was designed to give any GSM compatible phone the best cell phone reception possible anywhere by finding any (open) GSM network and connecting to the strongest one available using roaming agreements with the host network provider. Locked SIM cards (those little chip cards inside the phone) prevent its users (us the people) from having the best and most seamless cell phone reception possible and prevent GSM network providers from competing on a level playing field. Locked SIMs create walled gardens and create monopolies antitrust laws are supposed to prevent.
So, not the purchase of AT&T buying T-Mobile violates anti-trust but the artificial locking and limiting the capabilities of GSM did way before. The Federal Communications Commission should have disallowed SIM locking, because SIM locking violates free-market principles and significantly reduces the service level to consumers.
20-Years ago I could roam Europe and receive a GSM signal anywhere, not so in the US because locking of SIMs prevents any small new GSM network provider from achieving network relevance that could make up for the cost, and thus would prevent new network entrants from even trying. Hence locking of SIMs is the antitrust crime, not one walled garden buying the other.
Subprime Visa
Tuesday - March 15, 2011.
Filed in: Government | Venture
- Every dollar spent on a subprime VC investment dilutes the opportunity to create the prime innovation that can produce prime returns. And for the last 10-years VCs have waved subprime money around using the "capital efficiency" thesis which produced negative 4.6% IRR for Limited Partners. And so you'd expect we learn something from that. Quite the opposite, because many local entrepreneurs refused to be taken for an underperforming ride we now attract foreigners who are willing to start a company under subprime terms to the US, starting with a $100K investment. Welcome to the new subprime startup visa, or depending on your role: how Venture descends further down to its self-induced subprime maelstrom. [Links: PEHub
]
George's reprieve
Friday - March 11, 2011.
Filed in: Government
- I enjoyed George Bush's interview with Oprah this week, not because I agree with many of his conservative principles, but because what became abundantly clear is that the experts a president relies on to make informed decisions, are admittedly often not. Not unlike Barack Obama relying on those who created the subprime arbitrage in Venture Capital to also fix it. Textbook lesson: a dysfunctional system cannot be fixed by the beneficiaries of that system. [Links: Oprah]
Startup America for dummies
Thursday - March 10, 2011.
Filed in: Government | Venture
I wrote a blog about why Startup America is a bad idea, which has garnered a lot of attention. Not so from the Obama administration who ignored my request to participate in its first roundtable. Go ahead administration, and ignore the "best Venture Capital thinker in the world" (according to a Venture Capital journalist). As a (now financial) entrepreneur I am used to being ignored in the beginning, so I don't take it personal.
In that blog I made clear that not entrepreneurialism in this country needs help, but the financial system that acts as the arbitrage responsible for -4.6% 10 year returns is to blame. Simply put, by economic principle any black-box laissez-faire financial system turns subprime by default and so has Venture Capital. It is the exact same uniform deployment of fragmented risk that created the Real Estate implosion, that is also responsible for the innovation implosion. All while an 80% adoption greenfield is eagerly awaiting technology to enhance its life.
So, for Startup America to focus on the education of entrepreneurship using the existing subprime financial arbitrage is foolish and a waste of tax-payers money. Would you be watching American Idol when judges were trying to teach wannabes how to sing? I think not, American Idol contestants are evaluated (not taught) on their innate ability to sing.
Entrepreneurs are born with the confidence and ability to think different, just like a singer is born with great vocal cords. Both will spend the rest of their lives perfecting the application of that skill. But they better not be evaluated along the way by judges who don't know how to produce results themselves. Pushing wannabes through the same subprime funnel will not do our economy any good, quite the opposite.
Venture Capital has already lost more than 10-years of great entrepreneurial capacity it failed to recognize, by virtue of its subprime arbitrage.
In that blog I made clear that not entrepreneurialism in this country needs help, but the financial system that acts as the arbitrage responsible for -4.6% 10 year returns is to blame. Simply put, by economic principle any black-box laissez-faire financial system turns subprime by default and so has Venture Capital. It is the exact same uniform deployment of fragmented risk that created the Real Estate implosion, that is also responsible for the innovation implosion. All while an 80% adoption greenfield is eagerly awaiting technology to enhance its life.
So, for Startup America to focus on the education of entrepreneurship using the existing subprime financial arbitrage is foolish and a waste of tax-payers money. Would you be watching American Idol when judges were trying to teach wannabes how to sing? I think not, American Idol contestants are evaluated (not taught) on their innate ability to sing.
Entrepreneurs are born with the confidence and ability to think different, just like a singer is born with great vocal cords. Both will spend the rest of their lives perfecting the application of that skill. But they better not be evaluated along the way by judges who don't know how to produce results themselves. Pushing wannabes through the same subprime funnel will not do our economy any good, quite the opposite.
Venture Capital has already lost more than 10-years of great entrepreneurial capacity it failed to recognize, by virtue of its subprime arbitrage.
EU cookies
Wednesday - March 09, 2011.
Filed in: Government | Venture
- Technology companies in Europe must by May 25th explicitly ask site visitors for permission to generate a browser cookie, according to a new law. Nothing in that law will prevent any other site from using someone else's cookie to gleam information. Ridiculous regulation is the outcome of when government is uninformed about the state of technology, but pretends otherwise. [Links: TechCrunch
]
America's financial statements
Thursday - February 24, 2011.
Filed in: Government | Finance
Venture Capital firm Kleiner Perkins (KPCB)
is trying to switch places with government by producing a report describing their views on America's financial problems at a time when our government is trying to be an entrepreneur. Thankfully for both that switch will not need to occur, as the majority of our financial problems are related a simple origin: the free-markets of finance we have not. Let's stay focused on the reason for the avalanche, rather than trying to prevent the resulting snowballs. Obama's pipe
Friday - February 18, 2011.
Filed in: Government | Venture
- I am not sure what is in Barack Obama’s pipe but a statement from White House press secretary Jay Carney makes me wonder:
The crucial assignment of praise should go to the unrelenting entrepreneurs not to the defunct financial system and arbitrage that on average has produced negative 4.6% returns for Limited Partners and not generated an average positive return for LPs since 1998. Why do none of the economic geniuses in his administration whisper in his ear that financial cartels by economic principle can never scale, and Venture Capital full of collusion, price fixing, extreme fragmentation and bottom-heavy diversification has turned just as subprime as real-estate? I am very worried who Barack surrounds himself with in his attempts to fix our economic situation. Would love to set Barack Obama straight on this subject, who can get me in?the high-tech sector has been "a model, really, for that kind of economic activity that we want to see in other cutting-edge industries in the U.S. where jobs can be created in America and kept in America, and that's what he wants to talk about.”
You in charge
Wednesday - February 16, 2011.
Filed in: Government | Finance
- The New York Times put up a fantastic budget puzzle that allows you to decide how to bridge a $418 Billion shortfall in 2015 and a $1.345 Trillion shortfall in 2030, given the current options on the table. Play and share.
Sea Shepherd win
Wednesday - February 16, 2011.
Filed in: Behavioral
- I congratulate the conservationists of the Sea Shepherd Conservation Society for halting this year’s Japanese Antarctic whale hunting. We are kindred spirits as we are also in the business of conservation, stopping a predominantly subprime financial system of Venture Capital from a 20-year trajectory of demolishment of groundbreaking entrepreneurialism (see Venture extinction is upon us). Update: the Sea Shepherd Conservation Society just received a million euro from the Dutch lottery system, great use of wasted money.
Consumer debt down to $11.4 Trillion
Tuesday - February 15, 2011.
Filed in: Government | Macro
U.S. household debt — at well over $11 trillion — is still way higher than it was before things got crazy a few years back, according to numbers from the New York Fed
. The decline in household debt has been driven largely by a fall in mortgage debt — which in turn has come largely from write-downs banks are taking on bad mortgages.Pay-to-speak
Wednesday - February 09, 2011.
Filed in: Behavioral
- As a naive conference attendant, I never realized the reason why many speakers are so boring. It is because they didn’t get on stage based on merit. They paid their way on stage, by virtue of being “a sponsor”. Except of course when you are Sarah Palin’s daughter who gets paid more than $15K for each appearance. The business of speaking and those who listen to it has truly lost its merit.
Startup America is a bad idea
Tuesday - February 08, 2011.
Filed in: Government | Venture
Read the complete article...
$1B companies build GDP
Saturday - February 05, 2011.
- Carl Schramm, CEO of the Kauffman Foundation during the Startup America announcement at the White House confides the number of new $1B companies defines the health of our GDP, so therefor why are we building subprime technology companies funded by subprime VC funds who cannot fund anything but innovation socialism?
US World Debt
Thursday - February 03, 2011.
This map
shows leading foreign holders of United States Treasury Securities (at end of period - Nov 2010). Grand total: US $4,346.8 Billion.A clear signal as to why the government should stick to doing what it does best, govern the creation of new free-market systems, rather than infuse inefficient economic market constructs with more money and regulations. Because only efficient public markets can drive the recovery of the United States and wipeout this massive debt.
U.S. Brain drain, Dutch clogging
Thursday - February 03, 2011.
Filed in: Venture | Government
- Vivek Wadhwa, an academic at Duke, Harvard, and UC Berkeley describes the departure of well educated immigrant students back to their homelands instead of staying, working and growing new businesses or developing new technology in the U.S.. Might that have something to do with the defunct state of Venture Capital?
- Holland has the lowest unemployment of any other country in the Eurozone with 4%. Yet unless you can ride a bike to work, I cannot see how a country with such massively clogged up highways can turn a low economic deficit into a sustainable advantage. Sixteen million people and growing on a postage size landmass (mostly below sea-level) will pose significant impending economic problems.
Startup America
Monday - January 31, 2011.
Filed in: Government | Venture
- Startup America, a White House-led partnership of private companies and investors to promote entrepreneurship in the U.S. is another sign of overreaching of the government and bound to fail to produce returns. Government should enforce free-market models, not extend the reach of investment cartels. Judge for yourself, but I expect more of the same Venture performance from the natural practices of its supporters, AOL Inc. co-founder Steve Case and the Ewing Marion Kauffman Foundation and other groups participating include Astia, Blackstone Charitable Foundation, Ernst & Young LLP, Google Inc., JumpStart Inc., MassChallenge and TechStars.
World Economies
Sunday - January 30, 2011.
Sweeping shifts in world economies, according to a study by Euromonitor:
: • By 2017, China will become the world's largest economy, surpassing the United States • By 2012, India will overtake Japan to be the world's third largest economy • By 2012, Russia will surpass Germany to be the fifth largest economy in the world • Mexico also enters the top 10 by 2020, overtaking Italy.What recovery
Thursday - January 27, 2011.
Filed in: Macro
- U.S. economic recovery is a joke in my opinion, capitalism applied incorrectly - wait for my book. In the meantime head over to read Michael Psaros’ comments.
Out-innovate
Wednesday - January 26, 2011.
Filed in: Venture | Government
- Yes, Barack, we do need to out-innovate other countries (have you been reading my blog, I know your administration has?). But the only way for the U.S. to out-innovate other countries is to build a financial system that establishes a true meritocracy, with free-market principles at its foundation. A Venture Capital system with ten-levels of bottom-heavy diversification will never be able to keep us at the top. Much innovation is currently being kept out by its flawed economic model.
Infectious Stupidity
Monday - January 24, 2011.
I am told some Limited Partners in Venture listen to a fellow called Paul Kedrosky, an economist (and fellow at the Kauffman Foundation
) who has also captured the hearts and minds of hungry Venture Capitalists chasing them. I like Paul’s Infectious Greed blog
and sincerely enjoy his observations on a broad range of subjects. But economists are like forensic pathologists; great for finding the effect of death but inexperienced in the cause and conviction of the perpetrator. Cause establishes effect, not the other way around. Or put differently, deep hindsight rarely yields productive foresight - especially in the innovations business.
And so, a good economist is respected in the way we have to respect world renowned forensic pathologist Henry Lee
, understanding and clearly communicating of his role as a scientist and leaving the conviction of the crime up to those who can trace the events, establish motive and analyze reason. With that in mind you may be just as surprised as I was to have an intelligent guy like Paul on his Twitter account from my analysis of why funds smaller than $250M make no sense, allegedly refer to me as “asshole”, “tourist” and “idiotic” (see screenshot) to a VC that had sent it to him. Clearly I have hit a nerve, with Paul’s counter arguments to the article lacking. The deeper I dig into Venture Capital the stronger the odd protectionist behavior proves we have not seen the bottom of that dysfunctional barrel yet.
One would expect a more appropriate and susceptible attitude of VCs and those who advise them towards self improvement, considering the negative absolute IRRs and deplorable creation of Social Economic Value that has turned Venture Capital into the public disgrace of innovation and entrepreneurialism.
For the sake of a healthier financial system that can truly drive innovation and produce healthy returns for Limited Partners I will continue to hold those who benefit from its dysfunction responsible. With arguments.
Preprogramming for success
Wednesday - December 15, 2010.
Filed in: Behavioral | Government
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The State of Venture Capital
Wednesday - October 13, 2010.
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Can we really blame the economy?
Friday - October 08, 2010.
Filed in: Behavioral | Finance | Macro
Read the complete article...
The crucial difference between derivative and value
Wednesday - September 15, 2010.
Filed in: Behavioral | Macro
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Saving Silicon Valley
Wednesday - July 28, 2010.
Read the complete article...
Don't bite the public hand that feeds you
Tuesday - May 25, 2010.
Read the complete article...
New York, an empire state of mind
Thursday - January 21, 2010.
Filed in: Government | Venture | Finance
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Predicting the future is why macro matters
Tuesday - January 05, 2010.
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Capitalism Without Merit Is a Bold Lie
Tuesday - December 15, 2009.
Filed in: Macro | Behavioral
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Why Venture Capital will not simply recover when the economy does
Friday - December 04, 2009.
Read the complete article...
Less is more; moving regulations from government to the marketplace
Wednesday - November 18, 2009.
Filed in: Government | Finance
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The importance of being free-and-earnest
Tuesday - October 20, 2009.
Filed in: Behavioral | Finance | Venture
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The telephone-game of derivatives
Monday - October 05, 2009.
Filed in: Behavioral | Venture
Read the complete article...
How to remove the systemic risk of our economy
Thursday - September 10, 2009.
Read the complete article...
Why innovation needs regulation
Friday - August 21, 2009.
Filed in: Government | Venture
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The Silicon Valley emperor has no clothes
Saturday - August 08, 2009.
Filed in: Venture | Finance | Behavioral
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The economy is not the problem
Friday - March 06, 2009.
Read the complete article...
Lessons to learn from Obama
Wednesday - December 10, 2008.
Filed in: Government | Behavioral
Read the complete article...
Trust is the currency of success
Thursday - November 20, 2008.
Filed in: Finance | Behavioral | Venture
Read the complete article...
Markets don't exist
Tuesday - October 28, 2008.
Filed in: Macro | Behavioral
Read the complete article...
Cheating platforms, bad for our country
Monday - July 28, 2008.
Filed in: Macro
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Marketplace rules: look, don't touch
Sunday - March 16, 2008.
Read the complete article...
The Long Tail Continues
Thursday - July 21, 2005.
Filed in: Macro
At The Long Tail Churchill Club event this morning Chris Anderson (Wired Editor in Chief and writer for the Economist), who claims ownership of the term, discussed his research and his upcoming book about The Long Tail. His speech reiterated some well understood findings at Amazon, Netflix, Rhapsody (all of which have been mentioned here before) as well as some esoteric analytical findings in which academia make an attempt to approximate the outcome of Long Tail markets with formulas. The Q&A session lead us into some of the business impacts of Long Tail markets. First he agreed with us, no business should create a Long Tail without a Torso. Second, new search technology customized to every individual usage (vertical search) is essential. Third, new "Taste-makers" of the world or micro-celebrities, vocalized by blogging about niche expertise, will fuel and direct the trust in The Long Tail. Meritocracy with democratic production. Interesting example mentioned was Lego, the toy company that changed its conservative marketing strategy (Pareto based) into a community marketing strategy, realizing better segmentation and margins can be derived from its very loyal community that continues to grow.
Our stance: Long Tail markets can succeed if:
1) The Torso exists and is successful in drawing the crowd
2) Long Tail demand is fed through Long Tail supply, creating a free-market
3) Arbitration is "owned" by the marketplace (not the company)
4) The marketplace offers sufficient transparency, to allow for discovery, not just search
5) The business behind the marketplace makes money on distribution (not aggregation)
6) The marketplace offers integrity, in pricing, use and abuse prevention
Read on for more information on The Long Tail in this blog series...
Our stance: Long Tail markets can succeed if:
1) The Torso exists and is successful in drawing the crowd
2) Long Tail demand is fed through Long Tail supply, creating a free-market
3) Arbitration is "owned" by the marketplace (not the company)
4) The marketplace offers sufficient transparency, to allow for discovery, not just search
5) The business behind the marketplace makes money on distribution (not aggregation)
6) The marketplace offers integrity, in pricing, use and abuse prevention
Read on for more information on The Long Tail in this blog series...
No Long Tail without a Torso
Friday - June 24, 2005.
Filed in: Macro
Investors are getting flooded with Long Tail startups. The Long Tail is the well documented phenomenon in which Amazon.com makes more money in selling books that are not(!) in the top 10,000 and creates controversy about traditional sales principles. Hundreds of examples exist before the introduction of the internet. But the Long Tail really only exists when there is a body attached to it. You go to Amazon because you find the most well known books, then you'll explore its creative variety. The body represents the highly targeted top quality that draws in the audience in the first place. So stop pitching Long Tails, where you rely on some undefined creative variety. Focus on making your numbers in the identifiable market, then benefit from the Long Tail to expand your selection beyond the traditional and constricted marketplace.