Posts from November 2003

GDP is up over 8% in the last quarter. Jobs aren’t growing nearly as fast. Sure its early in the economic rebound cycle and jobs take longer to come back, but I think there is something more going on. I think the big investments that corporations made in information technology over the past 10 years are finally producing the desired effect – more efficient operations. In other words, more productivity.

Steve Roach disagrees in a column in today’s New York Times.

He thinks we aren’t measuring productivity correctly. He makes some excellent arguments as to why the government’s statistics are badly flawed. And he says we are all just working harder for the same amount of compensation. And he’s likely right about all of that.

But he doesn’t make any arguments to refute the notion that information technology makes corporations more efficient and therefore more productive. It seems obvious to me that the rapid diffusion of technology in our society – ATMs instead of tellers, EZ Pass instead of toll booth operators, eTickets instead of airline counters, metrocards instead of tokens, etc, etc – is leading to more productivity.

And it seems to me that this trend is accelerating. It’s great news if you are a corporation that knows how to integrate information technology into your business. And it’s great news if you are a supplier of information technology. But it’s bad news if you are a low skilled worker whose jobs are being replaced by a computer. And it may be bad news for our country if we can’t replace those jobs with something better for these people.

Which is why I think Steve Roach is doing everyone a disservice by calling into question the productivity story. If its not true, then we don’t have to face these painful issues facing our society. And knowing the politicians and policy makers in our society, they’ll postpone facing up to the truth as long as they can credibly do that.

Gret piece in the most recent issue of Fortune on The Future of Tech by W. Brian Arthur.

He makes the same case I’ve been making for the past six months, that we are about to enter into a new period of prosperity in the information technology business, fueled by applications of technology, not technology itself, which is pretty mature at this point.

He also addresses the technology job flow to India, China, and elswhere but argues that the real high value jobs of design, research, development, won’t be going anywhere.

Unfortunately, you’ll have to be a subscriber to Fortune to read the entire piece. Or shell out $20 for a year’s subscription.

Sorry for spending so much time on this subject today, but its on my mind.

Jeff Jarvis thinks i should invite a few more candidates over for coffee before making up my mind on Clark.

Maybe i should. It would be Dean, Kerry, and Gephardt if i had to choose. Dean because he’s in front and knows something about the Internet and its power to fuel democracy like nothing else. Kerry because i like him, i think he’s a good man, he served his country well in Vietnam, and i mostly agree with his politics. And Gephart because i think he is the truest to his core beliefs with the possible exception of Wes Clark. But i don’t think any of these three has a chance in hell of beating Bush next year.

But Jeff is wrong about a few things he said in his post.

Jeff says this about the flag burning issue:

I’m appalled by his promise to sign a Consitutional amendment banning flag burning. During Vietnam, authorities in New York started arresting people for displaying the peace-sign-American-flag button. My father — a staunch Republican, a veteran, a proud patriot — was so incensed at this violation of Constitutional rights of free speech that he asked me to give him one of my buttons and he wore it with defiance: Arrest me! I was so proud of him for that. I’m not proud of Clark’s stand. It’s Constitutionally naive and dangerous. It’s pandering that will get him nowhere.

Well Jeff, Clark isn’t talking about banning the “peace sign american flag” button. He’s talking about burning the flag. The symbol of America. We make our kids pledge allegiance to it in school. What’s wrong with saying the flag’s off limits for pyrotechnics. And Clark simply said to a bunch of veterans in an American Legion hall that he’d sign it, not that he’d push for it. In fact, he specifically said he’s not going to push for it.

Jeff says this about the Clark’s plan for Iraq:

I’m quite unimpressed with his “plan” for Iraq: pull the hell out and hand it over to Iraq now, with minor help. That is downright irresponsible. We have a moral duty to help the Iraqi people build a strong democracy and economy. Pulling out, Vietnam-like, won’t do that. This, too, is pandering.

I don’t know why we have a moral duty to help the Iraqis build a strong democracy. We shouldn’t have gone in there in the first place. Sadaam didn’t attack us. Bin Laden did. And Bush pulled the greatest bait and switch on the american public in history and used 9/11 to galvanize public opinion for a war against someone who had no way and no will to attack us. So Bush may have a moral duty to help clean up his mess, but America doesn’t.

And we didn’t pull out of Vietnam until we’d spent 10 years there and countless lives. The whole problem with Iraq is that its just like Vietman. Clark knows that. He wants our troops out of Iraq because its a quagmire like Vietman that’s getting worse. We are fighting an unwinnable war. So let’s do our best to help the Iraqis and then get out before we spend too much blood there.

I think Jeff’s a smart guy, but i disagree with him on this stuff. Hopefully, he’ll give Clark another chance.

My mom read my blog this morning and asked me about Wes Clark, the man.

This is what I wrote to her:

my sense of him is that he’s smart and a good guy. he’s a duty, honor, country type. sure he’s ambitious. and i am sure he’s got a big ego. but he seems to be a man on a mission and the mission is to move the country to the center, regain our standing as the good guys in the world, and to get our troops out of harms way. and i am in agreement with all of that.

Those of you who are regular readers of this blog know that the usual title of my posts on democratic presendential politics is “Dean vs. Clark”.

Well I am now solidly in the Clark camp.

Last night we had about 70 people at our house to meet Wes Clark. He was everything I expected him to be. He is serious and funny, straight and compassionate, smart and warm, proud and humble, a great man and a regular guy.

He has that magic that great politicians have. He looks you in the eye and you feel special.

He spoke to our group for about 6-7 minues and then took questions for about 40 minutes.

He didn’t wait for the question about flag burning, he took it straight on. He said that free speech is a constitutional right and he recognized all the reasons why there may never be constituional protection for the flag. But he’s fought under the flag, seen men come home in coffins draped in the flag, and he knows how much the flag means to people. He said symbols are powerful things in our society. And so if all the things required to get a constitutional amendment passed on this issue were to happen, he’d be happy to sign it. I can’t argue with that logic. In fact, I think its right.

He talked about jobs and why we are are losing so many. I asked him to talk about his comment in Monday’s debate about software jobs going to India. He said that the US can’t and won’t stop these jobs from going to India, and for that matter, Russia, Eastern Europe, and possibly China. He said that anyone with a computer, an Internet connection, and a talent for writing great code can become an employee of a software company these days. He’s right. And further, I am impressed that he understands that. So many of our candidates don’t.

He talked about getting our troops out of Iraq. He wants to turn Iraq over to the Iraqis right now. He wants to bring Bremer home. He wants to bring the airborne and armor and all the traditional forces home. He wants to send in 20,000 troops who have been trained in policing. Teach them Arabic. Set them up all over the country in police stations alongside Iraqis. He wants to create a multi-national authority, not NATO, but something like NATO with Arab nations included. He wants that multi-national authority to oversee the transition. He wants to take our troops out of the impossible position they are in of being liqhtning rods for the Iraqi’s frustration and sitting ducks for their guns and bombs. That sounds like a good plan to me.

He said that the 2004 election is not going to be about the economy. It’s not going to be a replay of 1992. He believes the defining issue of this election, no matter who runs against Bush, is going to be our foreign policy, Iraq, the war on terror, homeland security, and the future of the America’s relationship with the world. He believes that he is the man to take on Bush on those issues, to show Americans a different and better way.

And that is why I am for Clark. I know he’s stuck in the low teens and is 20 points behind Dean in many polls. But I think he’s got what it takes to beat Bush, and I believe that Democrats all over the country will recognize that once they have the opportunity to take the measure of the man as I now have.

What do all those names have in common? Well, Michael Wolff thinks they are the signs that the “Internet” is back front and center in our society.

My daughther thinks its funny that her dad is mentioned in the same paragraph as Paris Hilton.

My friend and colleague Tommy thinks its good that I was mentioned in the same paragraph as Google and Barry Diller.

And I am mostly irritated that Michael got it wrong. Because I am not opening the doors of Flatiron again. And Flatiron didn’t “sink”. But I’ll leave that alone.

Because Michael got the rest right. The Internet is back front and center in our society because its the most important thing going on socially and economically right now, with the sole exception of this problem we have with terrorists and the rest of the world hating us.

We said back in 1996 when we started Flatiron that the Internet revolution was going to be big and create massive changes in society very quickly. And it has. And its still happening. And there is still lots of money to be made.

The fact is we went through the frenzy and crash stages of the typical technological revolution (to steal Carlota Perez’ words). And we are now going through the recomposition and synergy stages. And that’s why I am “opening doors” again. But they are new doors, not old doors. And I am thrilled that someone as prescient as Michael sees that as important.

My friend Cliff turned me onto a band called Nada Surf. I had never heard of them, so when he told me their new album, Let’s Go, was one of the best albums of 2003, I was curious.

I got the disc yesterday. I’ve played it four times. It’s fantastic. If you like alternative rock with a soft side, then you’ll love this disc.

Like too much great music, it’s not available on iTunes. I hope they fix that soon.

Last night my partner Brad and i spent 2+ hours guest lecturing at NYU Business School on the VC business. We did two classes. The first one was on when VC is a good source of capital and when its not. That’s a class i’ve taught for about 3 years now. It’s fun to do because i mostly argue against VC as a source of capital. And that’s not an argument i usually get to make.

The second class was about what has changed in the tech VC business in the past four years. As we all know, a lot has changed.

Brad did a great job infusing the second class with some good analytical thinking. He has just finished reading Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages by Carlota Perez. Now this is a tough read. I admit that i couldn’t get through it. It’s very dry for my taste.

But its a brilliant piece of analytical thinking which basically argues that the last ten years were just another typical buildup, bubble, and burst phenomenon that happens in every technological revolution.

The book compares the manufacturing revolution, the auto/oil revolution, and the IT revolution, both in terms of the diffusion of the technology throughout the economy and the valuations associated with the companies involved. It turns out the crash we just went through was typical and now we are on to the synergy phase where a lot more money will be made, but in different kinds of businesses.

I wish i knew how to put the charts from the book into this post, but i don’t. So i’ll just suggest you go out and get the book.

I spent all day yesterday being deposed in a ridiculous case where the company that bought one of our companies years ago subsequently went bankrupt and is now suing us because they claim that our company sunk theirs. Trust me, they sunk their own company. Ours had very little to do with the mess they created.

But that’s not what i am blogging about tonight. My lawyer and i spent half the day on friday going through all the emails i ever sent or recieved about this company. Emails are the nightmare of the moment for lawyers. They rue the day that email was invented. Because all of a sudden, everything is in writing. It can be retrieved, read, analyzed, taken out of context, etc. Microsoft was the poster boy of this phenomenon.

But now we’ve got blogging.

And so, about three hours into my seven hours of hell, the lawyer on the other side, who is grilling me non-stop, says “… Mr. Wilson, in your weblog, it says …”. My lawyer looks at me with this panicked face that says “what the f..ck are weblogs”?

Turns out it was no big deal. Fortunately, there wasn’t anything on this blog that could hurt me or our case.

But it made me think, when will we have our first case impacted by the truth told in weblogs?