Economic innovation for a bright new world
Government
The Jobs snobs
Thursday - March 29, 2012.
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Turnaround U.S.A.
Thursday - November 10, 2011.
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Pancake Economics
Thursday - November 03, 2011.
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.
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Idiotic Government
Tuesday - September 06, 2011.
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.
Locked SIMs violate antitrust way before
Monday - March 21, 2011.
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.
- 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.
- 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.
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.
- 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.
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.
- 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.
- 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.
Consumer debt down to $11.4 Trillion
Tuesday - February 15, 2011.
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.Startup America is a bad idea
Tuesday - February 08, 2011.
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U.S. Brain drain, Dutch clogging
Thursday - February 03, 2011.
- 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.
- 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.
Out-innovate
Wednesday - January 26, 2011.
- 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.
Preprogramming for success
Wednesday - December 15, 2010.
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New York, an empire state of mind
Thursday - January 21, 2010.
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Less is more; moving regulations from government to the marketplace
Wednesday - November 18, 2009.
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Why innovation needs regulation
Friday - August 21, 2009.
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Lessons to learn from Obama
Wednesday - December 10, 2008.
