Management Newsfeed Update

Wall Street's woes are taking a toll on the residents of Menolo Park's Sand Hill Road and other venture capitalist enclaves.

Wall Street's woes are taking a toll on the residents of Sand Hill Road and other venture capitalist enclaves.

I was walking in Central Park yesterday as part of my rehabilitation from surgery when the news flashed across WSJ.com that the US House of Representatives had rejected the proposed $700 billion fund to provide liquidity to the struggling capital markets. Quoting the prison warden in Cool Hand Luke as he stands over defiant inmate Paul Newman, there has been a massive failure to communicate. Here are some of the shortcomings in PR on the part of the Federal Government:

1) Supporting Cast of Spokespeople — It is no longer possible for a single voice, such as Secretary of Treasury Paulson, to carry the day. Nor is it sufficient to have behind the scenes lobbying to make the case (now the outside game and the inside game).Where were the important figures in the business community (Warren Buffett, Steve Jobs) who could provide necessary backing for the plan? How about using trusted figures from government who have provided distinguished service in the past (Paul Volcker, Bill Clinton), to offset the broadsides of former Speaker Newt Gingrich?

2) Terminology—The very word bailout connotes an unseemly subsidy for the beneficiary. It became too easy to make this about saving the Wall Street millionaires who had abused the system.

3) Message Dissonance—-From Optimism to Precipice—CEOs of major financial institutions, such as Bob Steel of Wachovia, were telling a very positive story while President Bush warned of the apocalypse. Which is it, folks? Can we rely solely on private sector solutions, such as the shotgun marriages of WaMu with JP Morgan Chase or Wachovia with Citigroup?

4) Person Like Me—There was no story line for the Little Guy. Why not put forward the Dean of Admissions at University of Michigan who can talk about availability of student loans? Or the car dealer in Alabama who can again offer attractive financing on new vehicle sales? Or the small retailer from Texas who is able to find financing for her inventory for Christmas, courtesy of this liquidity package?

5) Acknowledgement of Error—When asking for the money, it would have been helpful to have a study from a credible third party (university, think tank, consulting firm) identifying shortcomings in regulatory format and proposed improvements. Similarly the financial industry must acknowledge its own part in the meltdown, suggesting improvements in self-regulation such hiring of an ombudsman or strengthening industry trade group standards.

6) Specificity—The initial plan proposed by Secretary Paulson did not have sufficient details on how mortgages were to be acquired (price, auction or other mechanism, which tranches, special treatment of low-income groups). Though some of this was remedied in conference, the perception left with the general public was that Secretary Paulson was getting a giant blank check.

7) Authority Figures as Stewards—There needed to be a bi-partisan board of overseers established for the proper disbursement of funds, so that the public could have confidence in the process. Examples of members could be former Treasury Secretary Larry Summers or former Secretary of State James Baker. One relies on individuals, not bureaucracies, to deliver results.

Context—Not enough time was spent on the positive precedent of the Resolution Trust Corporation (RTC), created to mitigate the problems caused by the savings and loan implosion. Nor was the Chrysler emergency financing of the mid-80s sufficiently explored.

9) People are being talking at, not engaged—The approach to communications to date, such as the prime time address by President Bush, or the press conferences on the steps of the Capitol, and the Sunday morning talking heads TV shows, is traditional one-way communications that doesn’t afford people the opportunity to really understand, ask questions and be part of the discussion and solution.

In the end, there will likely be a piece of legislation passed by the Congress. The single-minded focus on the amount necessary to restore liquidity to the markets, without due recognition of the education process necessary to ensure acceptance, indicates that professional communications advisors were not sufficiently involved from the inception of the process. In the present environment of distrust and despair, this commitment to the discussion must be a top consideration for both business and government.

I love a good data visualization.  Take a look at the site Watching the Growth of Walmart Across America.  Truly awesome (the visualization of the data, not the spread of Walmart).  Thanks Ian for the link.

I received a bunch of requests yesterday to address Jason Calacanis’ “startup depression” email that was sent out over the weekend. Alley Insider had the full text of it online but they took it down yesterday, apparently at Jason’s request….

In May I made a request for images for a presentation I was doing at my 20th MIT Sloan School reunion.  The presentation - titled Software Innovation — Do You Think the Last 20 Years Were Exciting? The Next 20 Years Will Blow Your Mind is now up on the web.  If you don’t want to watch it, read the summary below:

In a trip down memory lane, Brad Feld regales us with the pre- and recent history of electronic innovation, with a rapid-fire delivery that achieves vaudevillian pitch.

Via a slide-laden PowerPoint presentation — and, by the way, Feld claims to hate PowerPoint, because as a venture capitalist “I’ve only received about 6,723,000 of them” — he narrates landmark moments in the evolution of the computer age. He touches on the room-size ENIAC computer, and pays tribute to the Jetsons cartoon as embodying his view of the future as a child. He cites his first programming language (APL, 1976), and first computer (Apple II, 1978). Feld speaks sentimentally of the familiar A> prompt as a quaint relic of the DOS operating system era.

Jump to the late ’80s, when Hypercard on the Macintosh was a pre-web foreshadowing of distributing data through multiple applications…“a major breakthrough.” Windows 3.0 heralded the ’90s and subsequent leapfrogging of Microsoft and Apple on the personal computer frontier. He cites the renegade Linux operating system (1991), then the ignoble Michelangelo virus (1992)…“the first time the mainstream media got crazy about computer security.”

Feld detours from history to recount naming his software consulting firm Feld Technologies; whenever anything went wrong “people called up and asked for Mr. Feld.” Therefore, he warns “lesson #1 of entrepreneurship is don’t name your company after yourself.”

In the mid-’90s, the emergence of the Internet in mass culture made ubiquitous such terms as Mosaic, Yahoo!, Java, Explorer, and other iterations of web browser, search engine, and email protocol. In 1999, E-commerce and the Y2K scare entered common parlance. Around 2000, OS X and iTunes burst on the scene, in spite of post-Internet bubble depression. Feld credits Apple with changing “the way we think about digital content.” Catching up to recent times, he invokes social networking, the astronomical Google IPO, and the notion of Web 2.0.

As a venture capitalist, Feld seeks new paradigms in software development as investing prospects for 10 to 20 years – “the next big thing.” He is interested in “immersive experience” that alters human interaction with the computer. His attention is also drawn to decoupling mouse and keyboard from control of the computer toward methods requiring no tactile input. Lastly, he speaks of “cloud computing” where “everything is disconnected from what is on your desktop” and “you don’t have to worry about…data storage and equipment.” Then, elliptically, he reprises a slide of a 1960s room-size computer, suggesting it resembles a latter-day incarnation of a server farm. Full circle.

As a special bonus, the speaker who preceded me - Professor Roberto Rigobon - did an incredible job on his lecture The U.S. and the World’s Recession which feels particularly relevant and prescient today.

I’ve lived in Boulder, Colorado since 1995.  Six months after Amy and I moved her, we realized this would be our home for the rest of our life.  When I moved here I had no expectation that I’d ever do any work here as most of my entrepreneurial and investing activity up to that point was in Boston, New York, San Francisco, and Seattle. 

Between 1996 and 2000 the Boulder software / Internet scene grew.  A lot.  The crash of the Internet bubble slowed things down some but they came roaring back starting in 2003.  Boulder is rocking today and - once again - there is way more demand for super amazing software developers than there is supply.

A bunch of local companies - including Aegis Analytical, EventVue, Filtrbox, Fuser, Gnip, HiveLive, Me.dium, Printfection, Rally Software, Return Path, and socialthing! - have gotten together to create a job fair on October 27-31. 

This is not your ordinary job fair.  If you think you are a rock star developer, apply here.  The top 100 will be chosen and flown out to Boulder - all expenses covered - to interview with all of the companies involved, get wined and diner (and hiked and biked) around Boulder. 

If you are really bold, stick around over the weekend and come to Defrag 2008 in downtown Denver and use the discount code foundry1 for a $300 discount.  I promise you that you’ll never think of Boulder/Denver the same way again.

The "start-up challenge" is emerging as the new platform marketing initiative.  Amazon has just launched the AWS Start-Up Challenge.  If you are into Amazon Web Services, think you might be, or just want to be part of a contest, go check it out and sign up.  $50k of cash and $50k of AWS credits are on the line.

Skydeck Inc., an online service that helps users track their mobile phone calls, text messages and contacts, said Monday it closed a first round of funding with $3 million.