June 26, 2010 - 7:54 am
When each of my kids heads to college they get the DASC (drugs, alcohol, sex and credit card) speech. They know the first three well and have given me the rolling-eye-yawn response years before. The focus, though is the last and to make sure they understand that college debt, like each of the first three has a similar characteristic. It can have multi-year impact on their life and how they get to enjoy post college life.
So many kids graduate college with a fantastic understanding of what life can offer but with crushing debts that take years to pay off. They get no education about the downside of debt, that leverage is a two edged sword and that debt is financial servitude. Don’t get me wrong, debt has its place and for most of my adult life I have had a mortgage and borrowed money when appropriate, but like alcohol moderation is key, and only in the right circumstances.
April 10, 2010 - 11:20 pm
I think most epiphanies are trite as soon as they are discovered. It might be pithy, or simple, or even “elegant” as we used to say at college, but ultimately it is trite and obvious once it is stated. The Internet is a black hole.
There is a great giant sucking sound, and it is of everything that was physical in my childhood being virtualized, vaporized, digitalized and dematerialized; News, newspapers, magazines, books, books-on-tape, cassettes, records, CD’s, DVD’s, home movies, theater movies, televisions, telephones, mail, junk mail, voice mail, shopping, dating, researching, reviewing, trading, banking, gaming, you name it. Moore’s Law, productivity, capitalism are all drivers here, but in the process we replace physical interaction with objects with pseudo-interaction via keyboards, mice, and “touching” images on screens. The human mind is so malleable that it is able to ignore the difference between what is real and what is its representation:
That is all fine. This is not a luddite diatribe, just an observation that the physical objects we interact with are reducing over time to “portals” into our virtual world. Will the number of objects we own reduce over time? That I am not sure of, but what I am certain of is the percentage of our waking time interacting with our desktops, phones, pads, televisions, consoles and other connected computers is increasing, and the number of previously physical interactions is reducing.
As I said at the top of this post, the observation is trite, but the conclusions seem powerful – here are a quick ten:
1. We will increasingly value our interfaces as they involve more and more of our presence.
2. These interfaces will have strong emotional elements to them. They will be seductive. Apple wins.
3. There will be many activities that will not be fully sucked into the black hole: exercise, a walk in the park, climbing a mountain, travel, eating, laughing with family and friends, getting dressed, going the bar…though many could have a degree of virtualization (Nintendo Wii, anyone?), and especially if the
Holodeck is ever invented.
4. These changes will fundamentally change winners and losers in society.
5. The move to virtualize everything that can be is inexorable, inevitable and will crush industries in its path. It will go further than reasonable.
6. Once these “portals” can walk, talk and interact with us on an equal footing they will reach even further into our presence. Robots are just a matter of time.
7. There is a real risk that work, as we know it, changes and with that what we value as a society and how income is distributed.
8. Education might have to be reevaluated as to its purpose and its content.
9. Society, morals, politics will need to adapt.
10. Starting a career in a profession that involves a long apprenticeship might well be the wrong thing to do.
The world is changing, fast, and disappearing into our computers. This is unprecedented change. It will impact us as a race. We are becoming systemically dependent on the Internet. It is a brave new world. Let’s hope the power stays on.
January 16, 2010 - 4:58 pm
No. They never should, and if they do then it indicates a lack of drive, verve and creativity in reaching angels and VC’s.
Here is how I see it: VC’s make money by investing in successful companies, and like to believe that their input along the way with regard to ideas, best practices, contacts and reputation bias the outcome – I certainly do. To ensure that they get to see good ideas they meet a lot of people, and will invest in a single digit percentage of those they initially meet with – the funnel. Every VC tells me that the best ideas they get are vetted by people the trust and not the result of receiving a presentation in the (e)mail. I can personally attest to that. If someone smart that you trust says “look at this”, you will. I think in the past year I have had over 300 hour-plus conversations with entrepreneurs pitching their ideas – and this is just the initial meeting or call. Some subset have led to multiple meetings, calls, research hours and the end result has been less than a handful of investments in the fund this year ~ about a 1% pitch-to-investment ratio. Time will tell how many great ideas were passed on.
Why do we reject 99% of ideas presented to us?: There are many reasons, some can be articulated and some not. There are probably a handful of common reasons that account for the majority of the non-invest decisions; portfolio fit, people fit, management, size, terms, and addressable market. A random selection of some of the questions we think about are (in no particular order): Does this fit our investing criteria?; Is the idea big enough, yet the execution focused?; Does management listen?; Is this a team and an idea that we want to spend then next 5-7 years being around and thinking about?; Is the investment at a reasonable valuation?; Are the terms reasonable?; Does the capital raise get them to profitability and if not then do we care for the risk?; What is the operating leverage in the model?
What entrepreneurs should do to increase success?: In fact there is quite a lot here. In fact how a management pitches an idea and manages the fund raising process is telling of itself, and something we listen to. In simplest terms know who you are talking to and what you want out of the conversation. Your objective should be to find the VC that has the best fit for you. To do that start by leveraging your contacts and the web to identify potential VC’s. If you have direct contacts use them to get a personal referral to a VC. Before your first conversation with a VC review their website and see if they describe their investment philosophy, list their portfolio and describe their ideal investment. If they do, then are you a fit? If not then ask the VC if they know of another VC that might be a good fit. It is a job in itself, and so paying to pitch seems to be a good shortcut, but in reality there are no good shortcuts here.
