Posts from January 2005

You and I are gonna live forever
We’re gonna live forever
Gonna live forever
Live forever
Forever

Oasis – Live Forever

I put this song on this morning as I was reading MIT’s Technology Review, in my opinion the best technology magazine in the world from the best technology school in the world.

In the current issue, there is an article about Aubrey de Grey’s search to defeat the aging process.  It’s a very interesting piece, regardless of your opinion on such things.

My friend Gordon Gould has been bending my ear on this stuff for a while now.  Gordon believes it can be done and he’s read a lot of material that backs up his opinions.

But what if its possible?  Would I want to live forever?  My vacation reading of Pete Hamill’s Forever really makes me wonder if living forever would be a good thing.

There’s something comforting about the life span; you are born, you grow up, you have a career, raise a family, you get old, and you die. It’s understood and built into our psyches and culture. How would we all deal with living forever?

Search and its derivatives (contextual, behavioral, etc) is one of the big investable markets in the venture/tech world right now and a lot of people are paying a lot of attention to it these days.

I am a fan of John Batelle’s Searchblog and rarely does a day go by that I don’t read John.

I also read WIN’s Search Engine Marketing blog from time to time.

And Majestic Research is a great source of information on the search market even though they don’t have a blog.

I was alerted to a new entrant in this market today called SearchViews from the really smart guys at the search engine marketing company Reprise Media.

I like what I see.  I’ve added it to my feeds.

As I was reading the 33 1/3 book on The Kinks’ Village Green Preservation Society this weekend, I listened to the record a lot.

The classic songs are both Village Green songs, Do You Remember Walter, Picture Book, Big Sky, and Animal Farm.

But the song that I really dug this weekend was Last of the Steam Powered Trains and so it’s my MP3 of the Week.

I blogged once before about this collection of short books about classic records.

I started out with Let It Be, by Colin Meloy, written about one of The Replacements’ greatest records.

I got two more last week and polished them off this weekend.

The Velvet Underground and Nico is an amazing record. 

I still listen to it often, almost 40 years after it was made.

Joe Harvard does a great job of describing the people involved, how the record got made, and how the band’s sound came together.

If you are a VU fan, I recommend this book.

Another 60s record that gets too little credit is The Kinks’ Village Green Preservation Society.

My friend Pete VanVoast turned me onto the Kinks when we were in college and I’ve been a fan ever since.

This is their best record and this book by Andy Miller does a great job of describing how it got made.

I am going to get some more of these 33 1/3 books.  Amazon has them all.

One of the hazards of being in the venture business is service on public boards. 

I’ve done it three times. And the board and company was sued each time by class action lawyers.

I believe that Boards are a great governance system.  Properly structured and incented, Boards provide an excellent mechanism for the shareholders to govern management.  And that is exactly what they are supposed to do – represent the shareholders interests with the day to day management of the company.

I have served on something like 30 boards in my career. I currently serve on seven boards. I enjoy that part of my job more than any other role.

Three of my current companies are nearing that magical moment when they need to decide how the shareholders are going to get cashed out (“liquidity” in the industry vernacular).

I will push each company to consider a sale of the Company over an IPO.

And if they choose to go public, as much as I enjoy sitting on these three boards, I will most likely resign from the board prior to the filing of the registration statement.

I won’t do that in protest of the choice of IPO over trade sale, I’ll do it to protect myself, my family, my business, and my investors from the increasing legal risks of sitting on public boards.

I spent two and half days last week with a dozen or so other VCs talking about the industry, deals, and a bunch of other things.

One of these VCs said about public boards, “you’d have to be crazy to sit on a public board these days”.  I am not crazy and I don’t intend to do it. 

I wonder who will, frankly.

Sarbanes Oxley has made it so hard to be a public company. It’s expensive to comply with all the rules and regulations.  But even if you spend the time, money, and effort to comply with all the rules, the board and management have a much higher standard to meet. And meeting this standard is no guarantee that you won’t be sued.

But recent events have made things even worse. It used to be that non-management directors who weren’t guilty of fraudulent behavior were protected by the public company’s Director and Officers (D&) insurance policy.  Settlements with class action plaintiffs were usually limited to the coverage amount so that no directors would have to come out of their own pockets to pay damages.

That’s over now with the recent precedents of Worldcom and Enron, where the non-management directors came out of pocket millions of dollars to settle the claims against them.

I suspect that this genie isn’t going to go back into the bottle so easily.

There was an op-ed piece in today’s New York Times claiming that the Enron settlement wasn’t harsh enough on the directors. That may well be true. I am not arguing that these directors didn’t screw up, I am simply pointing out that a precedent has been set and risk adverse directors will take notice of the new world they are living in.

Venture capitalists are normally protected (“indemnified” is the technical term) from having to pay these settlements by the funds they manage.  But this means that their investors have to pay the settlements. And that’s a very bad thing to have happen. Maybe not as bad as coming out of pocket personally, but a close second. I do not intend to risk my investors capital in this way lightly.

But if I and my colleagues in the venture business won’t serve on the public boards, who will? 

The retired CEOs, CFOs, lawyers, and public accountants who traditionally have served in this role? Don’t count on it. They don’t even have a fund to indemnify them!

So we’ll either have public directors who are too ignorant of the risks to know better or “professional” public directors who charge enough money per year to offset or personally insure themselves from the risks, or possibly both.

Does that make you comfortable as a public shareholder that your interests are being well represented? I doubt it.

I think the corporate governance system for public companies is broken and needs to be fixed. Sure some boards were too lax and let management get away with criminal behavior in the late 90s.  But what percentage did they represent of the total number of public boards, most of whom acted responsibly and did their job well?

We’ve gone way overboard now and the result will be, ironically, worse boards that govern less not more.

I sure hope this situation gets fixed. But until it does, I’ll probably just say no when asked to sit on a public board. It’s not worth it.

We’ve been in Puerto Rico for the past couple days taking advantage of the Martin Luther King three day weeekend.

I haven’t felt like photo blogging this trip.

But this photo of Jessica and Josh on the waverunner was good enough to change my mind.

They had a blast and I had a blast watching them.

As I said in last week’s post about the Jets, it’s not easy being a Jet fan.

They did something last night that’s never been done in the history of the NFL. They went into a third consecutive overtime game.

And lost.

Man was that painful to watch.

As good as they played, they couldn’t close out the game.  Same thing the past two games.

Herm needs a new foot and he needs to install a killer instinct.  Maybe this loss will do that for them.

Anyway, we are done with the Jets until next season.  It was a great season and I enjoyed it immensely.  Everything other than the result, that is.

I was an investor and board member in Yoyodyne when Seth Godin wrote his groundbreaking book Permission Marketing. 

That book changed everything for so many people.  Finally there was a name for something that we all knew, that you could use the Internet and email to develop one to one relationships with customers, but there were some rules to be followed.

Well six years later one of my CEOs has written (this time with the help of his management team) another book on permission marketing.

This book, called Sign Me Up, picks up where Seth left off.  Matt Blumberg and his team at Return Path have been helping large and small marketers do email marketing for the past five years.  They’ve learned a lot about what works and what doesn’t work.

This book is more guidebook and "how to" than big idea.  But that’s what’s needed these days when inboxes are cluttered and click through rates are falling.

If you do email marketing or want to, I strongly suggest you pick this book up.

There’s more on Sign Me Up at Matt’s blog and Brad Feld’s blog.

It available on Amazon.com.

A commenter on one of my Social Security posts wonders why I seem so pleased that the "poisoned atmosphere" in Washington is going to make real Social security reform impossible when I am a stated fan of social security reform.

Well I have to admit that as much as I’d like to see Social security fixed, I might prefer to see Bush and his friends in Washington come up empty on this one.

All movements have their peaks and valleys. 

The Democrats peaked in the 60s with Lyndon Johnson’s Great Society and have been in decline ever since. 

The Clinton years were more of an exception to that trend than any kind of reversal. 

One could argue that the Democrats overreached in the 60s and went much farther than the general public was comfortable with and have been paying the price ever since.

The Republicans also blew it in the 20s when they created a "laissez faire" approach to business and life that resulted in the great depression.

The Republicans had a few moments like the Eisenhower years, but the Republican party was generally the minority party from the 1930s until the election of Richard Nixon in 1968.

That was the beginning of the rise of Republicanism that has marked the last 40 years.  The rise was greatly strengthened by the Reagan years and is, in my opnion, reaching its peak in the administration of George W. Bush.

I like patterns and waves.  I believe that the pendulum swings back and forth in regular frequencies.

And so, like the 40 year run that the Democrats had, ending with Great Society, the 40 year run that the Republicans have had may end with the overreach of the current Bush administration with its cowboy capitalism and cowboy imperialism.

And I think Social Security reform may well be the straw that breaks the camels back.

At least I hope so.