The Difference Between VCs and Finance Guys - Part 1 - The Look

Check out the Intruders.TV interview with Kevin Rose.



One of the cool things about being an entrepreneur or in VC is that you do not need to dress up to go to work -God knows I wish I didn't have to wear a tie and dress shoes everyday. Kevin Rose has made a lot of money for his investors (and for himself) so nobody is going to fault him for wearing a hoodie.

The guy interviewing him, on the other hand, looks like he fell out of a Fall Out Boy video.

A finance guy would never come to the office - would never leave the house looking like that. "Casual" for a finance guy is pressed shirt, no tie; or khakis and a polo shirt if you are getting on the yacht. Part of it is a function of age (important finance guys are often a decade or two older than important VC/entrepreneur guys), but part of it is also a measure of culture:

compare this guy:

or any of TheDeal.com interviews http://youtube.com/watch?v=qZhZF0KhuX4.

Cut the Cute Crap

So many of these web 2.0 start ups are too cutesy.

For example, as I am setting up my Digg account, I keep getting little messages from Digg "Your email address looks valid - that's a good thing." "This is your password. Remember to Remember it." The Kluster people have their own mini language-Watts, telling me I can give members of my community "props", etc.

Yea, I get that you guys a young. But do you even talk like that in real life? It sounds like a middle aged person trying to sound young.

Even if you are marketing towards 18-35 year olds, the sort of people who would use these apps are sophisticated enough not to be wooed by the slang and MTV graphics. Or are they?

SearchMe.com

Searchme.com is an awesome new search engine. Think of an iphone and Google having a baby. You can flip through web pages like flipping through albums in iphone. No more clicking on a link with a cool description and finding a page scarred with banner ads and other detritus.

Somebody is going to buy this thing soon. It could definetly be an asset to Microsoft and/or Yahoo! and/or Ask.com - alternatively, they could just wait for Google to come up with something better.

A Tech Education

I am a political science guy, but I love technology. I love the idea of technology. Rousseau said that every human endeavor is damned, because society is corrupt - Voltaire said, "Yea, society is corrupt, but technology/science is general progress." My one friend (sort of a pseudo-anarchist), challenged me once, asking if technology ever solves problems, without creating new ones - whether we're running faster and faster to stay in the same place. I didn't have an answer at the time, but I realize in retrospect there are some precise improvements. For example, epiderals - giving birth has always been painful, but because of technology it is less painful. Women today do not have to suffer as much as their grandmothers or great grandmothers.

As a political science guy, a finance track guy, I figured that tech PE / VC would be my way to contribute to society. And so, while in class I'm learning about Rousseau and Brezhnev, etc., in my spare time - until sailing season starts - I'm getting a tech education.

None of my friends have ever used RSS, nobody knows what twitters it - some of them know about Sequoia and Kleiner Perkins - but they their conception of them is 5 years old - "oh, they paid for Google." Now these are all smart kids - and many of them might end up in VC someday.

But I want to know as much as I can now. So I started with Tech. Review newsletters, discovered RSS, and now I get hourly updates from GigaOM, Venture Beat, etc., etc. I sign up for the Betas and check out the products. There is still a lot to learn, but I think I'm learning fast - and I am motivated as hell.

Internet Advertisement

I do not know anybody who clicks on pop ups or side bar advertisements – they use Amazon.com, go to the Apple store, whatever. This raises 2 possibilities:

1- my friends and family are unsophisticated and low tech

2- internet advertising is a bubble

If 2 is the case, it raises an interesting problem. Many, many websites owe all/most their money to advertising (free news sites, Facebook, Google, etc.). Obviously, then, there is money to be made in advertising, but a very large number of "hot" start ups are designed to make advertising more efficient. These are the guys who will be in harm's way if there is a bubble and it bursts.

More on Facebook

Interesting article that draws on some similar themes to my penultimate post

http://www.roughtype.com/archives/2006/05/the_love_song_o_1.php

Phorm

Phorm (formerly 121 media) has been in the news a lot recently.

1) Got caught running a secret program to track the browsing habits of 18,000 customers in 2006.

2) Unveiled a new advertising model: Mr. X googles “job,” Phorm picks up on this, and then Mr. X gets Weight Watcher ads in spaces that Phorm has bought in popular websites. [this, I think, is basically what they were doing in 1) but now they’re taking extra privacy precautions]

This improves upon the most popular model today, where A Weight Watcher’s ad is on CNN.com, even though Mr. X doesn’t goes to BBC.com, instead.

The top 3 british isps have already signed up – account for 70% of broadband users in UK

[* the British have an enlightened attitude towards the security/privacy gradient http://news.bbc.co.uk/1/hi/uk/6108496.stm]

Sources:

http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080331006465&newsLang=en

Then an article from The Register

Illumination Software

From now on, I'm hoping to learn and write more about "Anthro-illumination products ," products that enable people to understand the hidden patterns in human relationship, hidden thoughts (how to detect lies), and prediction of future actions.

The MySpaceation of Facebook

Myspace has long been parodied as the Jersey Shore of social networking: full of emo kids, aspiring "models" and generally everybody on the internet who has bad taste.

Facebook, in contrast, was born in the Ivy League. The pages were clean and streamlined (if for no other reason than the user had less control than the MySpace user). However, a series of changes took place, starting with the decision to News Feed. To wit, Facebook got a lot more cluttered. News Feeds OK, gaming apps OK, credit card ads - well, they're annoying, but every other website has them. In the past few months Singles adds have started popping up.

A website is a lot like a professional athlete or a Nascar coat of paint - the quality of the sponsors are reflection of the quality of the brand. So, LeBron and Nike (good for him), GlobalSecurity.org and credit card adds (...ehh), -- Facebook and Hot, Local Singles?!

This from a company that is reportedly worth ~USD 15b?

Facebook can try to squeeze every last drop of ad money it can, but if it does it must come up with a new social networking strategy - it can no longer be the clean-cut Myspace

Controlling the weather

http://www.technologyreview.com/Infotech/20463/?a=f

How to save money running a start up

http://www.calacanis.com/2008/03/07/how-to-save-money-running-a-startup-17-really-good-tips/

Fortune's List of Top Entrepeneurs

http://www.forbes.com/lists/2008/99/biz_08midas_The-Midas-List_Rank.html

A Summit guy is ranked high.

A Useful Undergraduate Class

http://cubist.cs.washington.edu/Security/2007/11/22/why-a-computer-security-course-blog/

http://cubist.cs.washington.edu/Security/

"Technology" as a sector of the economy

Magazines, newspapers, business entities, etc. typically classify "technology" as a sector of the economy.

Is this appropriate?

By technology, they typically mean companies/firms involved in computing, electronics, genetics, etc. However, this is not the true definition of technology:

1.	the branch of knowledge that deals with the creation and use of technical means and their interrelation with life, society, and the environment, drawing upon such subjects as industrial arts, engineering, applied science, and pure science.

2.	the terminology of an art, science, etc.; technical nomenclature.

3.	a technological process, invention, method, or the like.

4.	the sum of the ways in which social groups provide themselves with the material objects of their civilization.

So why not include the newest tractors or cranes next to the newest operating system?

Instead of saying "technology" is a sector of the economy, would it not be more appropriate to rather say that technology is the cutting edge of *every* industry? Or better yet, to replace the word "technology" with "cutting edge"?

Vernalization and Human Resources

A conservative hirer will hire someone whose previous experience matches what the job requires:

i-banking --> PE
or, even better (?)
PE --> PE

Although this is more-or-less riskless, is it the best way to get the best people?

Are there some theater majors that would make great private equity analysts, and if so, could they be taught in a short enough period of time to make their hiring useful?

If so, how do you find these people?

On the other hand, one might ask whether it is in the hirer's best interest to hire the best -- the best person might make them look bad.

If a hirer hires someone incompetent they are in trouble
If they hire someone competent they aren't rewarded
If they hire someone extraordinary they aren't rewarded

In this case, in most cases, it pays to bunt rather than try for the home run

http://www.businessweek.com/technology/content/mar2008/tc20080318_102970_page_2.htm

A reoccurring theme: just b/c someone does not have a formal background in a discipline, does not mean they cannot be successful at it.

Cf. Neil Young and Peter Thiel

p.s. if anybody knows how Peter Thiel decided to ditch law/derivatives trading to become an entrepeneur, I'd love to hear it

Deisseroth is a cool name

Karl Deisseroth's genetically engineered "light switch," which lets scientists turn selected parts of the brain on and off, may help improve treatments for depression and other disorders.

http://www.technologyreview.com/article/16465/

Speechless Conversation

http://www.technologyreview.com/blog/editors/22037/

Just "think" about saying something and the cell phone can understand it

LANdroid

http://www.technologyreview.com/Infotech/20393/

There are a lot of things that are unclear about how warfare of the future will develop.

but as technology and the internet become more important,
it follows that LANdroids will fill an important niche.

Every bullet spent on taking these out is one less spent on shooting soldiers. However, it will be interesting to find out how these can be neutralized -- something like chafe?

http://en.wikipedia.org/wiki/Peter_Thiel

Peter Thiel:

<> Founded Stanford Review as an undergraduate
<> Stanford Law
<> Sullivan & Cromwell
<> Founded First Hedge Fund
<> Founded PayPal
<> Second Hedge Fund
<> Founders Fund (VC)

He has done everything. Most employers lack imagination and only higher "the sure thing." Someone who had a similar job beforehand. This reflex becomes even stronger during a recession. However, the variety and diversity of Thiel's success suggest that this is not always an intelligent course of action.

Foster Miller Talon

http://www.foster-miller.com/lemming.htm

http://en.wikipedia.org/wiki/Foster-Miller_TALON

Perkins of Kleiner-Perkins

http://www.dealmakerdaily.com/magazine/article/12340.html

Real Art

http://www.businessweek.com/magazine/content/06_39/b4002414.htm?campaign_id=ds7

Jonathan Ive