Some people believe that carrying out a large software project is like building a bridge. You look at your past projects and use the data to estimate the time and resources needed. This view has been debunked decades ago; this analogy was frequently seen as an aspiration for the future when I did my Master in Software Engineering at Carnegie Mellon in the late nineties.
In Silicon Valley many people treat the concept that “ideas are worthless, it’s all about execution” as gospel. This thought is supported, among others, by Paul Graham [sorry, he's an easy target because his essays have so much low-hanging fruit]. He says:
Actually, startup ideas are not million dollar ideas, and here’s an experiment you can try to prove it: just try to sell one. Nothing evolves faster than markets. The fact that there’s no market for startup ideas suggests there’s no demand. Which means, in the narrow sense of the word, that startup ideas are worthless.
Patent number 5771354. He got it in 1998, back in the relatively early days of the internet. And the way IV explained the patent to us, Chris Crawford invented something that we all do all the time now. He figured out a way to upgrade the software on your home computer over the internet. So in other words, when you turn on your computer and a little box pops up and says, click here to upgrade to the newest version of iTunes, that was Chris Crawford’s idea.
Intellectual Ventures goes around to companies and says, hey, you want to protect yourself from lawsuits? We own tons of patents. Make a deal with us. Our patents will not only cover everything you’re doing in your business, no one will dare sue you.
A Mafia-style shakedown, where somebody comes in the front door of your building and says, it’d be a shame if this place burned down. I know the neighborhood really well and I can make sure that doesn’t happen. And saying, pay us up.
You are in a room full of roulette tables. Someone gives you one chip and tells you to bet it on a number. Here’s the twist: all tables pay 36 to 1, but not all wheels have the same number of pockets. Some are standard, with the typical 0 to 36 numbering. You see one that has 500 numbers. Screw that one. One has 30 and a sign disclosing that it’s biased, only they won’t tell you how. Hmmm.
I like Sarah Lacy’s writing. She’s funny, entertaining, and also a hard worker. Her pieces usually make it clear that she spends ample time researching the topics at hand. I wouldn’t go as far to say she’s my favorite tech reporter (today that distinction would go to Kara Swisher), but I was very happy this morning to learn of the launch of her new site, PandoDaily.
It’s interesting that a tech news site raised venture funding from a very impressive list of investors. To me, this means that it must be an extremely ambitious enterprise. They are aiming to build something much bigger than Techcrunch. Some of the funds and investors on the list won’t write you a check if you’re not swinging for the fences. This makes sense; If I were in Sarah Lacy and Michael Arrington’s place, I’d be out to create a larger megaphone than the Huffington Post just to one-up Arianna Huffington. Given their recent history that could be a powerful motivation, and it will be fun to watch how this develops.
There is one problem with taking money from an array of investors who collectively have a stake in a significant chunk of the Silicon Valley ecosystem: the obvious conflicts of interest that will arise. Gawker shares their opinion on the difference between PandoDaily and what Techcrunch used to be:
Lacy, in contrast, will spend a lot more time covering her owners. At least she’s “unashamed” about that, as she put it. And points to the longtime Valley reporter for knowing how to appeal to tech titans’ vanity. Ever since the changing of the guard at TechCrunch, they’ve longed for a more deeply intertwined publication that will cover the Valley with the fervor of a supplicant. Lacy just sold them one. It’s not clear if the seventeen different stakeholders will be able to effectively block stories they don’t like. But then it’s not clear they’ll even need to.
To which Lacy responds:
We’re being up front about who invested in us; it’s up to the readers to decide how much that conflict bothers them.
Right off the bat, critical readers will see that one of their first articles is a PR piece for a sister portfolio company, Wealthfront. This startup provides wealth management for people who recently made some money and don’t know much about investing. I checked out the service and it looks useful. However, I do believe that in the interest of reporting fairness Lacy should have mentioned other options besides Wealthfront. There must be some competitors out there, right? A quick Google search brings up Covestor and Collective2.
I strongly believe that the first thing anyone who makes some money should do is educate him / herself. When I first sold some Inktomi stock in 1999, I immediately bought a copy of Burton Malkiel’s A Random Walk Down Wall Street. I read it as fast as I could to prepare for the incoming zombie invasion. I wouldn’t rule out using the services of a firm like Wealthfront, but only after having learned the basics. Paul Buchheit explains all this very eloquently in a from post almost two years ago, titled “What do do with your millions.”
Reading PandoDaily will be an exercise in critical thinking and agenda detection. This is a good training ground for a critical reader, because connecting the dots should be relatively easy. Everyone has an agenda but not everyone discloses it… and that includes me. Hint: brains.
I just finished reading Paul Graham’s latest essay, Schlep Blindness. I could say many things about it, but I’ll get straight to the point. Graham talks about having the realization that creating a business involves lots of unpleasant and tedious work. He makes it sound like he just invented faster-than-light travel, even though every person who ever ran a successful business can tell you this. You don’t even need to have started a company. My grandmother burned this into my brain when I was five years old. Chores are necessary but not fun. If it were easy everyone would do it. Yawn.
How do you overcome schlep blindness? Frankly, the most valuable antidote to schlep blindness is probably ignorance. Most successful founders would probably say that if they’d known when they were starting their company about the obstacles they’d have to overcome, they might never have started it. Maybe that’s one reason the most successful startups of all so often have young founders.
Can I write an interesting blog post about an espresso maker? Here’s a try.
Today the Federal Reserve of the US released transcripts of 2006 meetings. The financial press, always avid for filler and faux outrage, pounced on them. How is it possible that the almighty Fed didn’t see the 2008 recession coming?
The transcripts of the Fed’s Open Market Committee meetings in 2006, released after a standard five-year delay, suggest that some of the nation’s pre-eminent economic policy makers did not fully understand the basic mechanics of the economy that they were charged with supervising. The problem was not a lack of information; it was a lack of comprehension, born in part of their deep confidence in models that turned out to be broken.
“It’s embarrassing for the Fed,” said Justin Wolfers, an economics professor at the University of Pennsylvania. “You see an awareness that the housing market is starting to crumble, and you see a lack of awareness of the connection between the housing market and financial markets.”
“It’s also embarrassing for economics,” he continued. “My strong guess is that if we had a transcript of any other economist, there would be at least as much fodder.”
Little Alarm Shown at Fed At Dawn of Housing Bust and
Governor Cautioned Fed About Mortgages. From the latter:
History may show that Susan Bies’s concerns didn’t get enough attention at Federal Reserve policy meetings in 2006.
Whenever I see an article that tries to extract patterns from a limited study of successful or failed companies, my BS detector goes off. I just read this abomination on Forbes: The Seven Habits of Spectacularly Unsuccessful Executives.
I remember back in 1997 when I first heard of some friends reading “The 7 Habits of Highly Effective People.” My first reaction was “if I studied the 7 habits of awesome dolphins, could I become one?”
Habit #7: They stubbornly rely on what worked for them in the past