Tuesday, October 31, 2006

Voting fraud begins

Reports are already coming out of Florida that electronic voting machines are changing votes. You get three guesses as to which way they're changing them.

Saturday, October 28, 2006

So... can I send you my business plan? Advice for the cash-strapped entrepreneur

I've been meaning to write a lengthy response to one of the comments to my earlier post about geek business myths. Joseph J. Loew (would it be a low blow for me to call him Joe Loew? ;-) wrote:

Ron, are you ready to fund a company focused on Highly Targeted Advertising for music and video? Vibe Technology will do for media content what AdSense did for direct marketing text ads.

My goal is upwards of 30% conversion rates.

Ready to put your money where you mouth is??? :-)

In other words, "Can I send you my business plan?"

The short answer is: Of course you can. Why do you think I went to the trouble of writing the myths post?

But the longer answer is: if you have to ask the question, then the chances that I'll actually be interested in funding your business are pretty slim. There are an awful lot of business plans out there looking for funding. In LA it's a tossup between bizplans and screenplays, and in both cases most of them are not very good. Nine out of ten startups fail. My job is to find the one in ten that will succeed, which is, of course, more art than science.

It's helpful to think about this from the VC's point of view. The way a typical VC works is they will take money from rich people and pool it into a fund. They then take that money and dole it out to startups. If the VC doesn't make those investments, they don't get paid, and if the investments they make do badly they will have a hard time raising their next fund. (Most VC's actually structure their deals so that they make money even if their investments tank. But you can't stay in business long that way.)

The point is that VC's are highly motivated to find good businesses to invest in. That's our job.

It's not an easy job. It typically takes between two and six months to close a deal, most of which is spent doing due-dilligence. Bcause it takes so long, the cost of doing due-dilligence is enormous, both in terms of actual cost and in terms of opportunity cost. This is the reason that many VC's don't like to do small deals. The overhead of doing due-dilligence is so large that they can't turn a profit on a deal worth less than a few million dollars.

The upshot is that it's really really important for a VC to develop a good instinct for recognizing fundable companies before the due-dilligence process begins. So we have a few rules of thumb that we apply to filter out the clueless people before we waste too much time with them. And heading the list of dead-giveaways to cluelessness is issuing a challenge like the one above, because it demonstrates very clearly that the issuer doesn't understand how we do business.

Since the top-ten list format seemed to be so popular, here's my top-ten list (with nine items this time instead of eleven) of things you should never do when approaching someone to invest in your company:

1. Don't ask them to sign an NDA. Instead, ask them verbally not to pass the information along. The actual value of an NDA is virtually zero. To capitalize on it you'd have to prove in a court of law that a particular person leaked the information. The chances of your being able even to find out the origin of a leak, let alone prove it, are vanishingly small. Sophisticated invstors know this, and if you ask them to sign an NDA all you will be accomplishing is demonstrating that you don't know it. If you ask them simply to promise not to pass the information along you are demonstrating that you trust them, which is actually much more likely to achieve the goal of having them keep the information to themselves. But most new entrepreneurs worry about this way too much (see geek business myth #3).

2. If you're cold-calling, don't send anything longer than a paragraph or two. Just introduce yourself, give a few sentences about your background and what you're up to, and ask if they'd like to know more. I once got a cold-call email that began, "I would like to ask your advice..." and then went on for, no exaggeration, ten pages. My response was, in its entirety: my advice is never to send an email this long to someone you don't know.

3. Don't fake it. If you have no clue what your market size is, don't pretend that you do. It's much better to know than not to know, but it's far better to admit you don't know than to pretend that you do and get found out. Honest ignorance will get you much further than bullshit. Also, don't assume that just because no one is calling you on it that we don't know that you're faking it. We can tell, even if we don't let you know. And think about this: do you really want to do business with someone who is so easily duped that you can con them?

4. Don't get too excited if a VC shows interest. I learned this one the hard way. Until the check clears (and sometimes not even then) the deal can fall through. Some VCs will string you along even if they are not actually interested. Maybe you are a potential competitor to a company that they've already funded (a good reason to do your homework on a VC before you approach them), or maybe they want to keep you in their bullpen, or maybe they're just assholes and want to mess with your head. Remember, this is business. It's not about your hopes and dreams, it's about money. A certain amount of detachment and hard-nosedness is required to succeed. It takes a very strong person to get through the process with all of their humanity intact.

5. Don't need money. What I mean by this is: don't think of yourself as a supplicant asking for a favor, think of yourself as somone providing a scarce product that VCs want: an opportunity to make effective use of capital. In that regard you can think of a VC as a customer. It's not quite the same attitude as you take with your actual customers (since the product your providing is very different in both cases) but the attitude should be the same. If you show desperation to sell, no one will buy. That's true whether the product is apples or investment opportunities.

6. Don't spend too much effort polishing your business plan. Spell check it and make sure it looks reasonably presentable, but don't agonize over the format. Don't put fancy covers on it. Don't put bullshit sections in there just because you think (or even because someone told you) that they need to be there. (See point #3 above.) Just describe the opportunity as simply and clearly and straightforwardly and completely as you can. Always start with a one-page summary.

7. Don't go it alone. Make friends with a good bizdev person. A bizdev person (a.k.s. a VP of business development) is someone who knows how to ferret out and talk to customers. He or she is the kind of person you mostly didn't hang out with in school because they were the cool kids who went to all the parties while you stayed in your dorm room and hacked. Now is the time to seek those people out and make friends with them. Get them excited about your product. Find one you like, who seems to get along with everyone, who has a lot of energy, and wants to make money, and ask them to join your company.

8. Don't try to start a company without any background. A few people have done it successfully, but getting some experience under your belt first makes it so much easier. And I'm not talking about taking a salaried position at IBM. Join someone else's startup, preferably one being started by someone with experience, and the earlier the better. It doesn't even matter much if you don't like the company's prospects (ask for salary instead of equity in that case). You can often learn more from watching a company fail than you can from watching one succeed. Join it with the expectation that you will get nothing but an education out of it and you will not be disappointed (and then if the company makes it you will get a nice bonus). Alternatively, work for a VC firm for a year or two.

9. Stop asking for advice and just do it. There is no formula for success. Every successful business person has to figure it out (or stumble on to it) on their own. Also, there are some things that sophisticated collaborators will just expect you to figure out without your being told. And no, I'm not going to tell you what those things are. But here's a hint: there's no excuse for not knowing something that you can learn with a Google search.

Good luck.

This is the way freedom ends...

...not with a violent coup, but with the quiet passage of a bill that, among other things, authorizes the President to declare martial law whenever he deems it necessary to "suppress public disorder." This effectively repeals the Posse Comitatus Act, which prohibited the U.S. military from being used in law enforcement actions against U.S. citizens. This seems to have gone all but unnoticed by the mainstream press.

So maybe all that sabre rattling about Iran was just a clever ruse to distract us from the real plan, which is to give the President the power to call in the Army to "suppress public disorder" in case people get upset over, say, not being allowed to vote on November 7. Unthinkable? I would have thought so. But at this point, if Bush decides to turn the Army against U.S. citizens it will be legal. And it's not at all clear what we could do about it then.

Let's take stock:

1. The votes are being counted by machines that are manufactured by a company whose CEO is a rabid partisan Republican. The machines have had myriad security problems, and are known to be very easy to hack.

2. The President now has the power to imprison and torture anyone he deems to be an enemy combatant (which is to say, anyone he wants) indefinitely without trial and without access to an attorney.

3. The President now has the power to use the U.S. Army against U.S. citizens on U.S. soil.

4. The President believes he's on a mission from God. And so do a lot of other people.

At this point, if the Democrats officially win (as opposed to actually win, which is not the same thing nowadays) the election and the transition of power happens peacefully I will be genuinely surprised.

I predict that November 7 will be a good day to be out and about with a video camera. It's going to be an interesting day.

Tuesday, October 24, 2006

It's a miracle!

Dilbert creator Scott Adams has become the first person in recorded history to recover from spasmodic dysphonia, a weird condition where you lose your ability to speak. Even stranger, he did it by reciting a nusery rhyme. I kid you not.

Funny thing, Scott's an atheist. God truly works in mysterious ways.

Einstein, eat your heart out

Your's truly has received a patent on a device that allows faster-than-light communications. :-)

Monday, October 23, 2006

Now we know

I have long suspected that there are truly no depths that Republicans will not sink to in order to maintain their grip on power, but now there is proof.

Saturday, October 21, 2006

On the virtues of doubt

Traveling through Tennessee recently I spent quite a bit of time listening to conservative Christian radio stations. They've become much more prevalent since I was a teenager. Nowadays it's hard to turn the dial without tripping over half a dozen of them.

I grew up in the South and I've spent a fair bit of time studying religion in general and Christianity in particular, but nothing prepared me for some of the things I heard. Substitute "Allah" for "Jesus" and it could have been Taliban Radio. To cite but one example: there was an entire show devoted to the question of whether women were more easily taken in by lies than men, with the obvious Biblical launching pad of Eve and the Fruit of the Tree. But though it began rather gently and furtively, it didn't end that way. Fifteen minutes or so into the program the advocate of the women-are-more-easily-fooled-than-men position was saying that women are "absolutely worthless" (an exact quote) except insofar as they have a relationship with Jesus, and ranting about how horrible it is that some people to try to teach young girls to have self-esteem (can you imagine?) because it diminishes their true source of worth, which is Jesus, etc. etc. It was so extreme it almost seemed like the sort of thing that Richard Dawkins might come up with to parody religion. But this was no parody.

And, of course, the person saying these things was a woman.

But what shocked me the most is that over three days and many hours of listening I never once heard even a hint of dissent or doubt. Not once did anyone ever say, "Whoa, hold on just a second, are you sure about that?" Every comment, no matter how extreme, was met with, essentially, "Amen, Hallelujah, and furthermore..." The only hint of a moral qualm came from a caller who was agonizing over who to vote for now that the Republicans have been exposed as child molesters because "the Democrats just want to hand the country over to the homosexuals."

A pickle indeed. I felt the caller's pain.

I have never worried much about religious fundamentalism in this country because I have faith (yes, faith) in our evolved moral intuition, that when push comes to shove common sense (and commerce) mostly prevails. I decided to put that faith to the test with a little experiment: I would post on the Internet an ironclad logical argument that according to the Bible, cannibalism is not a sin.

The result that I was expecting -- hoping for actually -- was that people's moral intuition would take over and make them say to themselves, "Whoa, hold on just a second, that can't be right." (I was also expecting a lot of angry responses from people telling me I was going to burn in hell, which is how True Believers generally deal with cognitive dissonance.)

Instead there was just a deafening silence, and two people saying, essentially, "Gee, he might be right."

I find that very scary. If without even trying very hard I can convince people that God thinks it's OK for them to chow down on their children, just think of what someone who is really skilled and charismatic could do. If people won't raise their moral hackles at the thought of cannibalism, if women can't be bothered to dissent when they are told they are "worthless", I fear we may be in for some truly horrific times before we emerge from our collective nightmare. The Taliban are not in Afghanistan, they are in East Tennessee.

When I was 30 I read a book called The Nine Questions People Ask About Judaism. The first question is "Can one doubt the existence of God and still be a good Jew?" The answer is: not only is it possible, it is required to maintain at least a little bit of doubt about His existence because absolute certainty leads to fanaticism. I think the world would be a better place if that creed were more widely spread. Maintaining a little bit of doubt about whatever you believe is a good thing if for no other reason than that it keeps you humble, which even the most ardent Christian at least ostensibly believes is a virtue.

This, I think, is the central evil of both the religious and political Right nowadays: they have transformed people's perception of doubt. On the Right, doubt is not a virtue. It is not a tempering force that can keep you out of trouble. It is instead a distraction, an emasculating influence that robs you of focus and purpose. Doubt is a Bad Thing that must be eliminated.

The problem with this point of view is that it only works if you're God. If you're a fallible human you will occasionally make mistakes, and sooner or later reality will get in your face with the fact that you are not always Right About Everything. At that point, if you have hewn to the belief that doubt is bad, you have to start invoking some serious psychological defense mechanisms, like denial.

Alas, denial seems more fashionable than humility at the moment.

Thursday, October 19, 2006

All your space are belong to U.S.

Today Iraq, tomorrow the galaxy.

THE US has adopted a new space policy that rejects future arms-control agreements and claims a right to deny access to space to anyone "hostile to American interests".

A Biblical bombshell

I don't normally argue with evangelists any more, but there's a group that works the Third Street Promenade in Santa Monica for whom I will occasionally make an exception. These people are really a piece of work. They cart in an entire audio-visual setup: big-screen projection TV, laptop PC running Power Point, video cameras, microphones, and a PA system. They set up one microphone for the audience to ask questions. The result is usually a pretty good show, and they always gather a crowd. They are so obnoxious that even Christians will stop to argue with them, which doesn't seem to faze them at all.

A few weeks ago one of them was preaching about moral relativism: if we don't have an authoritative source of revealed morality, how do we decide what is right and wrong? (Never mind that there's actually a Biblical answer to this: we know Right from Wrong because Eve ate from the tree of the Knowledge of Good and Evil. But I digress.) Imagine you meet up with a cannibal who wants to eat you. Is that OK? He thinks it is. Who are you to dispute him?

That was an opening I couldnt' resist. I stepped up to the microphone and asked, "Is it OK to eat someone who has died of natural causes? And if not, where in the Bible does it say that?"

The guy didn't miss a beat. (He never does. He's very, very good.) "No, it's not OK. There's a story in Isaiah about some women who are in a besieged city who conspire to murder and eat their sons, and God clearly condemns this action."

"But wait," I responded, "that's not on point at all. Obviously if they have to kill their sons before they can eat them that's wrong because murder is wrong. But that wasn't my question. I asked about eating someone who has died of natural causes."

He sputtered for a moment, said something along the lines of, "It's in there somewhere -- go look for it," and shut the microphone off. (I always count that as a victory.)

Not being the sort to shirk a homework assignment I decided to try to find the story the guy was referring to. So I finally got myself an on-line copy of the Bible (can you believe it's taken me this long?) and started grepping (that's searching for you non-computer-geeks out there) for the word "flesh." I wasn't able to find the story the guy was referring to (I suspect he was blowing smoke, though he does know his Bible pretty well). But I did find this:

Jer19:9 And I will cause them to eat the flesh of their sons and the flesh of their daughters, and they shall eat every one the flesh of his friend in the siege and straitness, wherewith their enemies, and they that seek their lives, shall straiten them.

That's God speaking. Is it possible that God did not actually follow through on this threat? No. If he did not follow through then God will have spoken falsely. One can quibble over whether or not an omnipotent God is theoretically capable of lying, but it doesn't matter. If he actually did lie then that undermines the entire foundation of fundamentalist Christianity, which is that the Bible is True irrespective of the abstract theoretical issue. So because God said that he would "cause [people] to eat the flesh of their sons" we have no choice but to conclude that He actually did it. So it is not possible that Cannibalism is a sin, because God, being perfectly good, would never force anyone to sin. Such a thing would clearly be abhorrent to His nature.

So the Bible is clear: cannibalism is unambiguously not a sin.

It's actually much worse than that. Not only is cannibalism not a sin, it is in fact endorsed (and inflicted!) by God Himself as a punishment for sin! (The people who are being forced by God to chow down on their children are sinners, of course.) According to the Bible, cannibalism is a Good Thing! It's unpleasant to be sure, but it's for your own good (kind of like stoning).

Can't wait to hear what the Third Street gang has to say about this.

Pardon me while I pick my jaw up off the floor

George Bush -- yes, that George Bush -- has said that Iraq 'Could Be' Vietnam All Over Again.

Wednesday, October 18, 2006

Deja vu all over again

The Republicans have a secret plan to end the war:

Sen. Conrad Burns said at a debate Tuesday night that President Bush does have a plan for winning the war in Iraq, but he isn't about to share it with the world.

Monday, October 16, 2006

I hate to say I told you so...

A much discussed--but until now largely theoretical--prospect has become real: that the U.S. may be preparing for war with Iran.

They're mad as hell

The South Florida (can you imagine?) Sun-Sentinal reports that Atheist groups are on the rise.

Just another sign that the Apocalypse must be imminent.

What's wrong with this reasoning?

Tim Harford, in an otherwise worthwhile article about the economic realities of charity, seriously drops the logical ball when he writes:

"Even the way we choose to dole out cash betrays our true motives. Someone with $100 to give away and a world full of worthy causes should choose the worthiest and write the check. We don't. Instead, we give $5 for a LiveStrong bracelet, pledge $25 to Save the Children, another $25 to AIDS research, and so on. But $25 is not going to find a cure for AIDS. Either it's the best cause and deserves the entire $100, or it's not and some other cause does. The scattershot approach simply proves that we're more interested in feeling good than doing good.

Many people are unconvinced by this argument...because they are used to diversifying their financial investments (a bit of Google stock and a bit of Exxon, too) and varying their choices (vanilla ice cream AND bananas). But those instincts are selfish: They are not intended to benefit both Google and Exxon, nor both the ice-cream company and the banana growers. With charity, the logic is different, and a truly selfless donor would bite the bullet and put his entire donation behind one cause. That we find that so hard to imagine is just one more indication of how hard it is for us to think ourselves into a truly selfless view of the world.

How many logical flaws can you find in this reasoning? I count at least three:

1. The argument assumes that there is such a thing as a "best choice" when it comes to charity, and of course there isn't. The value of the work done by charitable orgnizations is incommensurate. How do you compare the value of an organization that works to save the oceans with one that works to save the rain forests or find a cure for cancer?

2. Even assuming that there is such a thing as a single best choice, the argument assumes that you know what the best choice is with absolute certainty. If you knew which stock would perform best there would be no need for diversification. Likewise, because you can't know which charity is "best" diversification makes sense to hedge against that uncertainty.

3. Even if you assume that there is a best choice and you know what it is, the argument assumes that the incremental value of money is constant. In other words, the argument assumes that the giving of money does not change the relative ranking of organizations. But of course that's not true because of the law of diminshing returns. At some point the relative effectiveness (and hence value) of additional resources begins to decline.

There are probably others. It's a shame that the editorial staff at Slate, which is usually pretty good about filtering out complete bogosity, dropped the ball so hard in this case.

Friday, October 13, 2006

The whirlwind tour

After more than a week on the road I finally have a moment to come up for air. We started the day in Ocracoke, North Carolina, at the very end of the Outer Banks. It's a beautiful place, a wonderful admixture of sea and continent, and, as a bonus, the site of the Wright Brother's first flight is on the way. We left at 1:00. It was 78 degrees.

About 400 miles and one cold front later we're in Winston-Salem and there's a frost advisory for the evening. We were on the road about eight hours (including one forty-minute ferry ride), a sustained speed that would have been a fantasy just 100 years ago. For $106 we have a very nice room in a La Quinta inn (complete with free high-speed Internet). For $54 plus tip we got a fine meal for two, which included three martinis and a very fine apple cobbler (with ice cream). What a great country.

This is literally the first free block of time I've had since we started this trip on the 4th. I've had five or ten minutes here and there, but this is my first free hour. It's been an amazing trip. The weather has ranged from 80 degrees and sunny to pouring rain and nearly freezing temperatures (fortunately not at the same time). We've gone from New York (population 8 million) to Ocracoke (population under 800). We crossed the Cheapeake Bay bridge-tunnel, a 17-mile long span that is one of the engineering wonders of the world (worth a detour IMHO). I shot three hours of additional footage for my film. Michael had his Social Security appeal hearing two days ago. You'll have to wait for the movie to find out what happened. :-)

Two days ago we were saddened to learn about the plane crash in New York. We had already left the city, but a number of our friends called to make sure it wasn't us. I fly an SR22, and the plane that crashed was an SR20. I have no idea what happened, except that it was pretty clearly pilot error. The most plausible theory I've heard is that they were trying to make a U-turn to avoid controlled airspace and underestimated how much room it would take. But regardless of anything else there is no escaping the fact that to hit that apartment building they had to be flying way too low. I feel sorry for the pilots and their families (and fans) but I'm a bit angry with them too. They made a stupid avoidable mistake and caused a lot of people a lot of grief.

Tomorrow we head in to Tennessee which is our last stop before we head home on Thursday. Hopefully I'll be able to pick up regular blogging again after that.


Inside the mind of a fundie

Dogemperor gives a valuable glimpse inside the mind of a dominionist from someone who's actually been there.

Thursday, October 05, 2006

Your tax dollars at work

Speaking of morally reprehensible uses of taxpayer dollars, the Pentagon is going to spend $20M of your money to celebrate how well things are going in Iraq and Afghanistan. I don't know about you, but I can think of more effective ways to deploy that capital. (Of course, at the Pentagon $20M isn't capital, it's petty cash.)

Wednesday, October 04, 2006

Fascist America redux

Another thing fascists do: they rig elections.

If it quacks like a fascist...

Gene Callahan writes:

My fellow Americans, it's official now: We live in a fascist nation.

Worthwhile reading.

When all else fails...

What do the Republicans do when a member of their party goes down in screaming flames? Why they lie about it of course.

I gotta hand it to them, though: Fox news really has honed deception to a fine art. On the one hand, the lie preserved plausible deniability that it was just an honest mistake (although it's quite a coincidence that the one time they make this particular mistake it works to their advantage) and on the other hand it was likely very effective. There is no doubt in my mind that there are now tens of thousands, maybe hundreds of thousands of people in the country who think Mark Foley is a democrat. (Hey, if you believe the earth was created in six days you can believe anything.)

But aside from having no respect for the truth (or the Constitution) I'm sure the Republicans are all honorable men.

Tuesday, October 03, 2006

Gone fishin'

Since I've picked up a lot of new readers lately as a result of the geek myths post I thought I'd mention that I'm going to be going on a trip, and so my blogging will be light for a while. But I'll be back, and I'll do my best to keep posting while I'm on the road.

Thanks to everyone who posted comments. It's nice to know someone's out there.


And so it begins

A man has been arrested for criticising vice president Cheney.

Now I get it

tmansnclar posted a comment in response to my earlier post that has really rocked my worldview:

While I support YOUR right to have an abortion, I don't want my taxes to pay for it.

Those of you watching my rss feed could watch my thinking on this issue evolve in real time as I posted and then deleted three different responses. The first one was:

This is not an unreasonable position, but it leads down a slippery slope. Should I be able to opt of paying my taxes for the military if I'm a pacifist?

But this, of course, misses the point because there is universal consensus that maintaining some kind of military is necessary. The disagreements are only over how big it should be and what it should be used for. So it's a false analogy. I then went with:

This is not an unreasonable position. I would support the elimination of taxpayer funded abortions as part of a compromise.

I struggled with this for a while because I really believe poor women should have access to abortions, but I've got this wicked libertarian streak in me, and I just couldn't come up with any principled justification for maintaining taxpayer-funded abortions except that I wanted them.

And then it hit me: there is no justification. Taxpayer-funded abortions are wrong. Absolutely, 100% wrong. If we liberals are going to argue that the right to abortion derives from the right to privacy then we'd bloody well better keep it private. But we don't. We want to put the government's gun to everyone's head and force them to support it financially. It's not so different from the Republican torture bill. We use the government's power to force people to support activities that they find morally reprehensible. So I get it. I understand now, for the first time, on a visceral level, why people vote Republican (or anti-Democrat). There's the little matter of the repeal of habeus corpus that still tilts the evilness scale in favor of the Republicans, but that is not a big comfort to me at the moment.

Gosh, can it really be that simple? If the Dems repudiated taxpayer-funded abortions would that tilt the balance back in their favor? I wonder if this is even on their radar.

To anyone I may have offended by my previous ranting about how evil the Republicans are, I apologize. I get it now. I still think the Republicans are evil, but I no longer think that voting for them is morally unjustifiable.

Shit. Now what do I do?

Monday, October 02, 2006

Republicans oppose the nanny state? Wanna bet?

To help promote individual freedom and personal responsibility, and as part of their never-ending struggle against Democratic efforts to institute a "Nanny State", the Republicans have banned on-line gambling.

A picture is worth...

I commissioned this political cartoon because I have no artistic talent and this is a sentiment that can only be communicated in pictures. (Click on the image for a full-size version.)

Drawn by Jacki Randall

Why I bash Democrats

OK, I guess I'd better put my money where my mouth is if I'm going to claim to be an equal opportunity basher.

In what way has the power of the Federal government spiralled out of control so much? (Pre Patriot Act)

The war on drugs started long before George Bush. Restrictions on the ownership of firearms in blatant violation of the 2nd amendment started long before George Bush. (I'm all for limiting ownership of weapons -- I don't think individuals should be allowed to own nukes for example -- but the right way to do that is to amend the Constitution, not ignore it.)

I could go on and on. Both parties have been complicit in the slow evisceration of the Constitution, although the Democrats at least seem to be a little queasy about it whereas the Republicans seem to me to be utterly shameless, even gleeful about it.

(One of the first things the Republicans did when they took Congress back in the 90's was repeal the 55 MPH speed limit. I thought that was terrific, and for a brief moment I thought that having the Repubs in charge might not be such a bad thing. Alas, it's been pretty much downhill from there.)

When have Democrats actively supported legislation criminalizing "not being politically correct"

I spoke too hastily here. The Dems don't want to throw you in jail, they just want to marginalize you if you don't toe their intellectual party line. If you're gay or black or poor or Muslim even (gasp!) an atheist then you're welcome. If you're a Christian then you can still come in, but they'll ask you to check your faith at the door. If you dare suggest that, say, the teacher's union might be doing more harm than good, or that working to reduce the number of abortions (in ways other than threatening to throw people in prison) then you're out.

And yet, you still are reluctant to vote Democratic?

Not at all under the circumstances. But I might be if they were in charge again.

You cannot bring yourself to say that "I admire that many Democratic Senators finally have the balls to stand up to the rape of the Constitution." Why not?

I'm glad some of them have finally found their spine. Where have they been all this time? Where were they when the first Patriot act was rammed down our throats? Where were they when Dubya first wanted to invade Iraq? (It was clear even at the time that the intelligence on WMDs was suspect. There were U.N. weapons inspectors on the ground in Iraq. If, as we claimed, we knew exactly where they were, why not just send the inspectors there to find the smoking gun?) And, most importantly, how are they going to fix the mess we're in? Throwing the Republicans out is only half the battle. Once that's done someone has to clean up the mess they've made. We're in a pickle, and how we got here doesn't matter. The fact is we're in and no one, Republican or Democrat, has a credible plan for getting us out. (My plan? Admit we fucked up and ask the world to forgive us. It's not a great plan, but it's better than anything else I've heard.)

They say the same things you do.

No, they don't. They utter tired old plattitudes about the gap between the rich and the poor and a woman's right to choose and they completely miss the fact that some people really believe in their heart of hearts that a woman should no more have a right to choose to kill a fetus than she should have to choose to kill a Jew. I think those people are completely and utterly wrong, but the difference between me and the Dems is that I acknowledge and respect a person's right to believe it. The Democrats do not.

Everything you describe as believing in is what mainstream Democrats believe in too. The Republican propaganda is successful at convincing you otherwise.

No, it's not Republican propaganda, it's the Democrat's incompetence. If these things are what Democrats really believe then they have utterly failed to communicate that to me, and I am the most receptive audience they can ever hope to find. The fact of the matter is that there is a lot of truth to the right-wing charges that the Democrats are a bunch of elitist snobs who don't give a damn about what people outside their clique really think. And I come to this position not from watching Fox News, but from hanging out with Democrats.

So a pox on both their houses. But this November I think it's really important to vote Democratic because if the Republicans keep control of Congress (especially if it's the result of another stolen election) I fear that American democracy may never recover.

Why I bash Republicans

Incredibly Fat Man wrote this comment in response to my last post. I thought it deserved a considered reply:

" most people are pretty dumb (look at how many people vote Republican ;-)"

Most people vote anti-democrat (and therefore republican) because they're tired of psudeo-intellectual democrats telling them they're stupid if they feel differently on an issue.

Well, that particular bash was intended to be humorous. For the record, most people who vote Republican are not dumb (although I think many of them are ignorant). In fact, one could make the argument (and I sometimes do) that the Democrats (i.e. the people who actually run the party, not the people who vote for the party) are dumber than the Republicans because they fail to recognize that people vote Republican for reasons other than stupidity. (As you might imagine, this sentiment doesn't go over very well among my Democrat friends. That's one of the reasons I'm feel pretty confident that my position is correct: I seem to offend both sides more or less equally.)

By the way, there's an excellent book about this called The Left Hand of God which I highly recommend.

This elitism is (in my opinion) the reason the democrats keep getting their asses handed to them. Calling folks stupid is a poor way to get them on your side.

That's true. Calling them traitors does seem to work better from a PR point of view.

There, I feel better now. For the record, let me tell you where I stand politically:

1. I believe in small (but not non-existent) government. I think the size and power of the federal government has spiralled wildly out of control and it needs to be seriously reeled in.

2. I believe in fiscal responsibility. We are on a wild spending binge on our children's credit card. It has to stop.

3. I believe in personal freedom. I think people should be able to say what they want, write what they want, think what they want, worship whomever or whatever they want, eat what they want, smoke what they want, marry whom they want.

4. I believe in personal responsibility and accountability. If you choose to smoke and get lung cancer, don't come bitching to me (or the government). No one put a gun to your head and forced you to inhale. You did that to yourself.

5. I believe in free enterprise. The function of government is to provide a level playing field, not to bail out companies or individuals who make poor choices or get unlucky. (I do think that we ought to provide a social safety net, but I think we should do this purely out of self-interest, not as a matter of principle. I think most people don't like seeing their fellow humans living on the street, and the best way to deal with that problem is to make sure everyone has at least one other viable option.)

Except for the marry-whoever-you-want bit I kind of sound like a Republican, don't I? So why do I bash on the Republicans so hard?

It's very simple: if you look at what the Republicans actually do as opposed to what they say they are almost exact opposites. Republicans say they are for small government, but in the last 50 years the government has grown more under Republican administrations than under Democratic ones. They say they are for fiscal responsibility, but the federal budget deficit has grown more under Republican administrations than Democratic ones. (The correlation is quite striking:

Back in the Carter administration the deficit held more or less steady (and this was during an era of rampant inflation). Then during Reagan and Bush I the deficit grew almost monotonically. Then Clinton came into office and the deficit shrank. And we all know what happened after that.

The Republicans say they are for personal freedom, but the fact of the matter is that they want to use the force of government to constrain your life just as much as the Democrats do, they just want to constrain it in different ways. The Democrats want to throw you in jail if you're not politically correct, and the Republicans want to throw you in jail if you want to smoke pot (even medicinally) or have an abortion (even if you've been raped) or burn the flag.

Republicans say they are for personal responsibility. There are so many examples of Republican hypocrisy on this issue that I hardly know where to begin. Well, let's start with the weasel-in-chief who takes no responsibility for 9/11, no responsibility for the mess in Iraq (according to Dubya everything is just hunky-dory and he hasn't made any mistakes). Let's go on to Dennis Hastert, who let a child molestor go unmolested through the halls of Congress. (They didn't do anything about it because they'd be accused of gay-bashing? Oh give me a break. Even if that were true, why should the prospect of a false accusation of gay-bashing stop you from doing what is so clearly the right thing?)

The Republicans say they are for free enterprise, but in fact they are rife with corruption, giving out billions of dollars in no-bid contracts to the vice-president's former company.

And as if that weren't enough, the Republicans say they are patriots, but then they pass laws that undermine the very bedrock that this country is supposed to stand on: the rule of law, Habeus Corpus, separation of powers, judicial review, the right of the people to be secure in their persons, paper and possessions from unreasonable searches and siezures. They say they are for freedom, but it is quite clear that there is an influential faction of the Republican party that believes that the United States was founded not as a secular democracy, but as a Christian theocracy, and wants to return to those halcyon days. George the First once said, "I don't know that atheists should be considered as citizens, nor should they be considered patriots. This is one nation under God." He said that despite the fact that the Constitution very clearly states that "no religious test shall ever be required as a qualification to any office" including, one presumes, citizenship. I bash Republicans because they believe in second-class citizenship (or worse) for atheists (that's me), gays (that's many of my friends), people of color, people without means (those are my brothers and sisters). I bash Republicans because they believe that there are witches -- oh, sorry, -- terrorists against whom we can only defend ourselves by giving George Bush the unilateral and unreviewable power to imprison and torture them. I bash Republicans because they want to take us back to the dark ages. I bash Republicans because they want to make me "secure".

I don't want to be secure. I want to be free.

I bash Republicans not because I love the Democrats. I think the Democrats are a bunch of self-important morons who can't see beyond their ivory tower. I bash the Republicans because they are a clear and present danger to the principles enshrined in the Constitution of the United States of America. I bash them because as a citizen of the U.S. I am bound to defend the Constitution against all enemies, foreign and domestic.

If the Democrats ever control all three branches of government I'll probably be bashing them.

Sunday, October 01, 2006

Top ten geek business myths

Since I've started my new career as a venture capitalist I have become keenly aware of some of the classic mistakes that geeks make when trying to raise money for a new business. Instead of writing the same comments over and over again I thought I'd try to summarize some of the mistakes that people -- especially smart people -- make when they decide to try to turn their bright ideas into money. Here then is my top-ten list of geek business myths:

Myth #1: A brilliant idea will make you rich.

Reality: A brilliant idea is neither necessary nor sufficient for a successful business, although all else being equal it can't hurt. Microsoft is probably the canonical example of a successful business, and it has never had a single brilliant idea in its entire history. (To the contrary, Microsoft has achieved success largely by seeking out and destroying other people's brilliant ideas.) Google was based on a couple of brilliant ideas (Page rank, text-only ads, massive parallel implementation on cheap hardware) but none of those ideas were original with Larry or Sergey. This is not to say that Larry, Sergey and Bill are not bright guys -- all three of them are sharper than I can ever hope to be. But the idea that any of them woke up one day with an inspiration and coasted the rest of the way to riches is a myth.

Myth #2: If you build it they will come.

There is a grain of truth to this myth. There have been examples of businesses that just built a product, cast it upon the ether(net), and achieved success. (Google is the canonical example.) But for every Google there are ten examples of companies that had killer products that didn't sell for one reason or another. My favorite example of this is the first company I tried to start back in 1993. It was called FlowNet, and it was a new design for a high speed local area network. It ran at 500Mb/s in a time when 10 Mb/s ethernet was the norm. For more than five years, FlowNet had the best price/performance ratio of any available network. On top of that, FlowNet had built-in quality-of-service guarantees for streaming video. If FlowNet had taken over the world your streaming video would be working a lot better today than it does.

But despite the fact that on a technical level FlowNet blew everything else out of the water it was an abysmal failure as a business. We never sold a single unit. The full story of why FlowNet failed would take me far afield, but if I had to sum it up in a nutshell the reason it didn't sell was very simple: it wasn't Ethernet. And if we'd done our homework and market research we could have known that this would be, if not a show-stopper at least a significant obstacle. And we would have known it before we spent tens of thousands of dollars of our own money on patent attorneys and prototypes.

Myth #3: Someone will steal your idea if you don't protect it.

Reality: No one gives a damn about your idea until you actually succeed and by then it's too late. Even on the off chance that you do manage to stumble across someone who is as excited about your idea as you are, if they have any brains they will join you rather than try to beat you. (And if they don't have any brains then it doesn't matter what they do.)

Patent protection does serve one useful purpose: it can make investors feel warm and fuzzy, especially naive investors. But I strongly recommend that you do your own patent filings. It's not hard to do once you learn how (get the Nolo Press book "Patent it Yourself"). You'll do a better job than most patent attorneys and save yourself a lot of money.

Myth #4: What you think matters.

Reality: It matters not one whit that you and all your buddies think that your idea is the greatest thing since sliced pizza (unless, of course, your buddies are rich enough to be the customer base for your business). What matters is what your customers think. It is natural to assume that if you and your buddies think your idea is cool that millions of other people out there will think it's cool too, and sometimes it works out that way, but usually not. The reason is that if you are smart enough to have a brilliant idea then you (and most likely your buddies) are different from everyone else. I don't mean to sound condescending here, but the sad fact of the matter is that compared to you, most people are pretty dumb (look at how many people vote Republican ;-) and they care about dumb things. (I just heard about a new clothing store in Pasadena that has lines around the block. A clothing store!) If you cater only to people who care about the things that you care about then your customer base will be pretty small.

Myth #5: Financial models are bogus.

As with myth #2 there is a grain of truth here. As Carl Sagan was fond of saying, prophecy is a lost art. There is no way to know for sure how much money your business is going to make, or how much it will cost to get to market. The reason for doing financial models is to do a reality check and convince yourself that making a return on investment is even a plausible possibility. If you run the numbers and find out that in order to reach break-even you need a customer base that is ten times larger than the currently known market for your product then you should probably rethink things. As Dwight Eisenhower said: plans are useless, but planning is indispensible.

This myth is the basis for one of the most classic mistakes that geeks make when pitching their ideas. They will say things like "Even if we only capture 1% of the market we'll make big bucks." Statements like that are a dead giveaway that you haven't done your homework to find out what your customers actually want. You may as well say: there's a good chance that only 1 customer in 100 will buy our product (and frankly, we're not even sure about that). Doesn't exactly inspire confidence.

Myth #6: What you know matters more than who you know.

Reality: You've been in denial about this your whole life. You were either brought up to believe that being smart mattered, or you just didn't believe your mother when she told you that getting along with the other kids was more important than getting straight A's.

The truth is, who you know matters more than what you know. This is not to say that being smart and knowledgable is useless. Knowing "what" is often an effective means of getting introduced to the right "whos". But ultimately, the people you know and trust (and more importantly who trust you) matter more than the factual knowledge you may have at your immediate disposal. And there is a sound reason for this: business decisions are horrifically complicated. No one person can possibly amass all the knowledge and experience required to make a broad range of such decisions on their own, so effective business people delegate much of their decision-making to other people. And when they choose who to delegate to, their first pick is always people they know and trust.

Ironically, C programmers understand this much better than Lisp programmers. One of the ironies of the programming world is that using Lisp is vastly more productive than using pretty much any other programming language, but successful businesses based on Lisp are quite rare. The reason for this, I think, is that Lisp allows you to be so productive that a single person can get things done without having to work together with anyone else, and so Lisp programmers never develop the social skills needed to work effectively as a member of a team. A C programmer, by contrast, can't do anything useful except as a member of a team. So although programming in C hobbles you in some ways, it forces you to form groups whose net effectiveness is greater than the sum of their parts, and who collectively can stomp on all the individual Lisp programmers out there, even though one-on-one a Lisper can run rings around a C programmer.

Myth #7: A Ph.D. means something.

Reality: The only thing a Ph.D. means is that you're not a moron, and you're willing to put up with the bullshit it takes to slog your way through a Ph.D. program somewhere. Empirically, having a Ph.D. is negatively correlated with business success. This is because the reward structure in academia is almost the exact opposite of what it is in business. In academia, what your peers think matters. In business, it's what your customers think that matters, and your customers are (almost certainly) not your peers.

[UPDATE: this is not to say that getting a Ph.D. is useless. You can learn a lot of useful stuff by getting a Ph.D. But it's the knowledge and experience that you gain by going through the process that is potentially valuable (for business endeavors), not the degree itself.]

Myth #8: I need $5 million to start my business

Reality: Unless you're building hardware (in which case you should definitely rethink what you're doing) you most likely don't need any startup capital at all. Paul Graham has written extensively about this so I won't belabor it too much, except to say this: you don't need much startup capital, but what you do need is a willingness to work your buns off. You have to bring your brilliant idea to fruition yourself; no one else will do it for you, and no one will give you the money to hire someone to do it for you. The reason is very simple: if you don't believe in the commercial potential of your idea enough to give up your evenings and weekends to own a bigger chunk of it, why should anyone else believe in it enough to put their hard-earned money at risk?

Myth #9: The idea is the most important part of my business plan.

Reality: The idea is very nearly irrelevant. What matters is 1) who are your customers? 2) Why will they buy what you're selling? (Note that the reason for this could very well be something like, "Because I'm famous and I have a huge fan base and they will buy sacks of stale dog shit if it has my name on it." But in your case it will more likely be, "Because we have a great product that blows the competition out of the water.") 3) Who is on your team? and 4) What are the risks?

Myth #10: Having no competition is a good thing.

Reality: If you have no competition the most likely reason for that is that there's no money to be made. There are six billion people on this planet, and it's very unlikely that every last of them will have left a lucrative market niche completely unexploited.

The good news is that it is very likely that your competition sucks. The vast majority of businesses are not run very well. They make shoddy products. They treat their customers and their employees like shit. It's not hard to find market opportunities where you can go in and kick the competition's ass. You don't want no competition, what you want is bad competition. And there's plenty of that out there.

Special bonus myth (free with your paid subscription): After the IPO I'll be happy.

If you don't enjoy the process of starting a business then you will probably not succeed. It's just too much work, and it will suck you dry if you're not having fun doing it. Even if you get filthy stinking rich you will just have more time to look back across the years you wasted being miserable and nursing your acid reflux. The charm of expensive cars and whatnot wears off quickly. There's only one kind of happiness that money can buy, and that is the opportunity to be on the other side of the table when some bright kid comes along with a brilliant idea for a business.

All these myths can be neatly summarized in a pithy slogan: it's the customer, stupid. Success in business is not about having a brilliant idea. Bright ideas are a dime a dozen. Business is about taking a bright idea and assembling a team that can turn that idea into a product and bring that product to customers who want to buy it. It's that simple. And that complicated.

Good luck.

Copyright (c) 2006 by the author. All rights reserved.