WORTH NOTING PAGE 46
Civ: How do art and
commerce relate in today’s world?
TK: Art has nothing
to do with commerce and commerce has nothing to do with art. But there are many functions in the world of
commerce that are very artistic. I am
not an artist. A filmmaker is not an
artist. A filmmaker is a storyteller who
works with motion picture and sound. I
want to tell stories about people.
And I want as many people as to see them as possibly can.
BW: Used properly,
focus groups can help a film reach a wide audience, which Tony said is one of
his goals. If you use the focus group to
figure out how to market the film effectively so that people give it a chance
and get into the theater and are moved by it, that’s a wonderful use of focus
groups.
·
On
Labor Day: Detail’s magazine
Mark Golin complained in his editor’s letter that it’s “a holiday so lackluster
that even Hallmark can’t figure a way to make a buck off it.”
·
On
Society and the Boom in Child Chess Players, Civilization Oct./Nov.
‘99 p. 31 Pawns of Prepubescence
During
the past decade, youth membership of the United States Chess Federation has
increased elevenfold -- without any corollary increase in adult
membership. Children and teens of all
backgrounds now comprise 40,000 of the USCF’s 86,000 total members. Could we be witnessing a kiddie-culture
grassroots movement? Not exactly. Chess was once a potent cold-war symbol. But the new players -- dubbed the Bobby Fischer
boom, because their parents thrilled to his exploits in the early 70’s -- seem
to be playing less for God and country than for Mom and Dad. Howard Gardner, a professor of education at
Harvard University notes that, in general, “increasing
knowledge about brain development has been misinterpreted as meaning that we
have to force-feed kids information and skills.” In a time of unparalleled affluence, status is
no longer found in the material present; clothes and cars lose their power to
differentiate. We measure success in
future purchase. Thus an ancient
game of cerebral warfare becomes an elixir of parental anxiety, giving comfort
in the form of that classic archetype of potential: the chess prodigy. --
Lauren Schrock
·
On
the Power of Networks: from Civilization Oct./Nov. ‘99 A Network of New Ideas p. 74
All networks --- whether physical distribution networks like
the one Federal Express has built or electronic networks like the Internet and
cellular telephony -- share a singular underlying advantage: A point-to-point
network grows in value exponentially as the number of its endpoints grows. You never know how all the points of commerce
are going to intersect. You can’t size a
bridge by counting the swimmers; a bridge creates traffic; and so do
networks. Every endpoint that’s added can
then be connected to all other endpoints, which makes networks uniquely powerful
economic engines.
The value of networks will become enormous as we continue to
globalize and connect all points, both electronically and logistically. Imagine the opportunities created as we hook
uo billions of objects -- personal digital assistants, television, cars,
telephones, even physical packages -- into networks in which very object can
communicate with every other.
These interconnected networks hold out the greatest promise
for solving some of the seemingly insurmountable problems that our children and
grandchildren will face -- problems ranging from global warming to world hunger
to the need for economies to continue to grow if we are to raise standards of
living throughout the world. With both
physical-distribution and telecommunications networks working together, we can
provide such solutions as better education and training, better…
WORTH NOTING PAGE 47
understanding of each other’s needs and wants via improved
communication, and new monetary and payment systems that will allow the economies
of the world to mesh more smoothly.
During my time at Federal Express, I learned important
lessons about the value of networks, and I applied those lessons in my work
with two other networking companies: McCaw Cellular, the world’s largest cellular
telephone company, which is now part of AT&T, and Netscape, the pioneering
Internet media software company, which is now part of America Online. At Netscape, the network we worked with was
the Internet. We provided products and
services that allowed people to use this new point-to-point multimedia wonder
with ease. In the five and a half years
since Netscape was founded by Jim Clark and Marc Andreessen, many other
Internet start-ups have been born and
thrived in Silicon Valley. Venture
capital companies, including my own, are being inundated with exciting new
ideas and business plans. In fact, the
region has been so influential in setting the tone and pace of technological
and business innovation that it has spurred the development of similar hubs around
the world, such as Silicon Alley in New York and Silicon Glen in Scotland.
Fifty years from now, we probably won’t even notice how
everything is so connected. We’ll take
it for granted that we have high-speed multimedia conduits around the world.
Mostly, this mega-network will serve the good of
society. Certainly some thorny issues
exist, such as privacy and regulation, but there’s no reason to believe we
can’t work our way through them. When we
can communicate as instantaneously and easily as if we were sitting together on
a park bench, we tend to solve problems.
The root of most conflicts and misunderstandings lies in the absence of
communication. The marvelous growth in
the use of computers and microchips and telecommunications networks has resulted
in a steady reduction in the frictions of commerce, education, and
government. -- James L. Barksdale
·
On
the Power of Networks: from Civilization Oct./Nov. ‘99 Decentering Society p. 78
To make a more powerful computer chip, you use the computer to
design new circuits, the roadmap of the new chip. You run programs on the computer to simulate
the circuits, to be sure that the signals pass through the chips’ intersections
and turn the right things on at the right times. If the simulations work, you build the faster
chip. That makes the computer faster,
which allows you to run even more complicated simulations to help design even
more complicated chips. Positive
feedback.
The same kind of cycle is driving the development of the
Internet. Having recently entered a
period of exponential growth with no end in sight, the Net is increasingly quantity -- a huge quantity of
information flowing around the world, already surpassing the total volume of
information on the world’s telephone voice networks many times over, becoming
the running sum and accretion of everything.
But the Internet is also a metaphor. It represents ways of linking intelligent
entities in various kinds of conversation.
The “Inter” in Internet conveys a sense of connection -- the crux of the
metaphor. The components of the
Internet, however, are devices, people and programs, all communicating their
conditions, wishes, and needs. The
connections are simply communication pathways, and are increasingly invisible
and subliminal.
But I want to describe the unfamiliar -- the directions
we’re headed and that aren’t conveyed by this metaphor, those transformations
of what we do and what we can do that are only beginning to emerge.
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It has been said before, but it bears repeating: The
Internet links intelligent devices into one global computer -- the network is the computer. The box containing transistors and a fan and
an ugly bottle with air air pumped out of it sitting on your desk is
doomed. Its kind is already vanishing,
just as electric motors disappeared into walls and ceilings and dashboards.
The Internet is us as well as our machines -- and, as a sum
of interactions, a great deal more besides.
The devices are evanescent -- as indeed, are we; the Internet
conversation creates an evolving permanence.
Today, Internet access devices cost a few hundred dollars
each and reach maybe 10 percent of the population. However, network capacities are doubling
every 12 months; assume that information transport will soon be free and
ubiquitous. Storage capacity will
increase by a factor of a thousand over the next five years; assume that
storage will be virtually unlimited, and free.
Within a year or two, we will likely see movies stored on aspirin-sized
devices, music stored on pinhead-sized CD’s, video cameras on slivers of
silicon. Tomorrow, with complete
computer systems on a single chip, debates about cost will be over. The devices will cost nothing. With the advent of high-bandwidth wireless
connectivity, linking them together will cost pennies.
The debate, then, is no longer about when and how
intelligent devices will create a worldwide conversation, but what is happening
as they do.
This is a discussion of what our lives and society will be
like, what new forms of power, of wealth, of domination will emerge, what forms
of language will evolve -- and what being human will mean.
Again, the Internet is not a thing, place, a single
technology, or a mode of governance: It is an agreement, sweeping across all
arenas -- commerce, communications, and governance -- that rely on the exchange
of symbols.
Why has this agreement spread so fast? Industrial technology has traditionally
created barriers to entry and difference for difference’s sake, allowing
momentary proprietary advantage that can (with luck and ruthlessness) be
converted into monopolies. Each
competitor seeks sameness from suppliers and difference from competitors. For decades the computer industry has also
profited from difference -- different plugs, wires, regulatory protections;
different ways of doing similar things.
But the economic and technical logic of agreement has won:
Anyone can create and manipulate symbols, and the engines of creation are
available worldwide. The Internet is
providing a framework for anonymous agreement.
I don’t need to know your name to use your creation, and you don’t need
my permission to create it. A student in
Malaysia can formulate symbols that are incorporated into the design of my
carburetor or video camera. The
industrial barrier to entry is more or less gone. This worldwide innovation community is new --
not in spirit, but in reach. The same
values that have driven scientific advancement for more than 300 years -- open
communication, sharing of results, intense conversation -- are now driving
technological industry.
Traditionally, barriers to entry have protected investments;
on the Internet, growth is being generated through the destruction of barriers
to entry. Students are developing
innovations that become billion-dollar companies. The conjunction of cheap, distributed
innovation has occurred so rapidly that those institutions and forces most
concerned with control and least capable of being distributed -- in word,
governments -- have had little time to
react to its effects.
WORTH NOTING PAGE 49
But the reaction is coming.
For older, control-based institutions, this revolution is being taken as
a threat to the foundations of order.
Governments love control -- enumeration, cadastral maps, tax rolls,
boundaries. Restricted to geographic
limits, they are profoundly challenged by the distributed nature of new
economic forces that are free to act globally.
Technologies of control are building apace. If you are on the streets of New York or
London, surveillance cameras are already taking your picture 30 times a
day. All wireless communications are
monitorable -- today’s cell phone systems can be used to fix your location to
within 50 feet. Government is scrambling
to keep up, but it clearly has abundant tools to work with. Law enforcement has been relying on the gift
of Alexander Graham Bell for some 120 years; clearly, wiretapping is now only
the tip of the electronic-surveillance iceberg.
Meanwhile, the plunging costs and soaring economies of linking symbolic
machines in global networks are creating the basis for new systems of human
cooperation.
This early in the game, such networks may more often seem to
be pathways for the clever than supports for the poor. But these new conversations allow new
interactions; global microcredit -- instead of “each one teach one” it’s “each
one reach one” -- and new communities of interest and social action. These will be exciting and dynamic
changes. the Internet allows us to watch
ourselves create new languages. Language
is the vector of culture, and culture is the foundation of human
adaptability. The Internet is creating a
new language of distributed community, global sharing, and local
adaptation. Again: positive feedback loop.
·
On the Power of Networks: from
Civilization Oct./Nov. ‘99 Working for the
Perfect Score
Everybody goes for the Score. At one time, Silicon Valley could be defined
as the country’s most consistently successful breeding ground for new ideas in
technology. Now, it is better understood
as the epicenter of the Equity Economy -- the new economic order in which every
employee above the very lowest rungs is in for piece of the action. Here’s how the Equity Economy works, just in
case you don’t know. Bill -- a
successful engineer at a big company like Oracle, or the head of a company that
just sold out, or a grad student with a big idea who is living in $400-a-month
bedroom in a shared house -- starts a company.
Who Bill was doesn’t matter. What
matters is that Bill is now a “founder”.
He’s got ownership-- equity.
Investors come in; they get equity, too -- shares. Then Bill hires employees; they get options
(if they come in early enough, the price is nominal -- just pennies). These shares or options aren’t really worth
anything at first. They’re virtually
Monopoly money. Now, let’s say the
company succeeds. Success may be
shipping a blockbuster product, or selling out before anything is even
produced, or just getting enough of the ultimate start-up commodity: buzz. In any case, success, in the peculiar and
comic parlance of the business world, means a “liquidity event” -- the
climactic moment when stock becomes worth ... real money. Dollars.
But that’s if -- if the company succeeds, if your product gets shipped,
if the investors like your CEO’s voice, if one of the industry’s 700-pound
gorillas doesn’t squash you first. IF,
if, if. Sometimes that moment never
comes. For every degree of hope, there
is an equal and opposite degree of fear.
This is what keeps everyone in the Valley on edge. If, on the other hand, the stars do not
align; if after 12 months your investors decide that you are burning money too
fast; if your sales force quits to go to the competition; if your CEO collapses
in a fit of nervous exhaustion -- then you are liable to find that a year
sleeping under desk has yielded nothing more than an unfortunate line on your
resume.
The risk is always there.
A couple of years ago, Rupert Murdoch wanted to buy PointCast, one of
the early highfliers of the Internet, for $450 million. Its prospects seemed unlimited, so its owners
rebuffed Murdoch’s offer. Then the
company fizzled. In the worst case, you
find out that there’s suddenly no money to pay the rent, and the next week
there’s no money to meet payroll.
WORTH NOTING PAGE 50
And there’s no IPO -- only finger-pointing, rage,
tears. Sometimes the investors get a
little money back. Employees get next to
nothing; their options will be play money forever.
All this is always in the background, but it rarely gets
talked about. The fear is what you wake
up with every morning, but it’s not the bi picture, it’s not the driving
force. The driving force is the bright
image of the best-case outcome: the IPO.
When that happens, the employees who got in the game early on with a
strike price of say, 15 cents an option can trade them in for shares worth
maybe $20 or $40 or $60. Before the
Equity Economy, there was the Gold Watch Economy. The Gold Watch Economy is where you don’t
want to be -- as in, “I don't want to work for 30 or 40 years to get a gold
watch.” That’s the way a man named Tom
Evans put it to me. He had left a job
running a group of magazines for media mogul Mort Zuckerman to take the top job
at an Internet company, GeoCities.
GeoCities lets any user put up a free home page on the web. GeoCities went public, got listed on NASDAQ,
and then got bought out by Yahoo!. Evans
made $38 million in nine months and soon moved on. Huge score.
The Score is the payoff in the Equity Economy. It’s not a particular sum of money, but it’s
always more than you deserve. For a kid
just out of college, it might mean a hundred grand; for the ambitious grad just
out of Stanford business school, half a million dollars; for a marketing vice
president, five million; for a big-deal corporate pooh-bah, it can mean eight figures
or nine. And it generally comes
suddenly; one day you’re scraping to make the mortgage payments, the next day
your company is sold to a competitor -- or even better, gets listed on NASDAQ. You pay off your mortgage and accept
congratulations all around. Then -- and
here’s the really funny thing -- it starts all over again. Not always immediately; you might need to
wait a while and watch your winnings pile up. Typically, an employee must stay
at a company four years to become fully vested
-- to convert all options. Some
people are sitting on options so valuable that they are virtually impossible to
lure away -- that’s a key measure of the really big Score. But after a truly big bonanza, people
sometimes walk away from millions in unvested options. They talk vaguely about “looking at other
opportunities” -- opportunities, that is, to take an even bigger Score. A friend of mine, Oliver Muoto, co-founded a
company in San Francisco called Epicentric.
He is tired of negotiating option packages: “It used to be that you told
people they had options, and they said ‘Great!’
Now they want accelerated vesting -- one-trigger options, two-trigger
options.” (One-trigger options accelerate
your vesting if the company is sold; almost nobody gets those. Two-trigger options get acceleration if the
company is sold and you are fired; some people do get those.) I wonder if Oliver himself will get the
Score. He is brilliant, he knows everyone
there is to know, and on top of that, he works so hard that he often does sleep
at his office. He needs The Score, too,
as much as anyone in the Valley does: He wants his parents to immigrate from
Nigeria, but they have virtually no chance in the visa lottery. But if they can put up a million dollars to
start a business -- instant U.S. residency.
I’m not sure anyone can be said to deserve the kind of wealth that the
Equity Economy madly creates and haphazardly distributes. I’m not sure even Oliver deserves the
Score. But I hope he gets it. There is something peculiarly hopeful in the
thought that it is possible to get more than you deserve -- especially when you
really need it. -- Mark Gimein
·
On
prayer from the movie, Rudy:
“Praying is something we do in our time; the answers come in god’s
time.”
·
On
aging: “The worst part
about being old is remembering when you were young”
·
On
priorities: “Life’s about YOU.”
– my friend Steve Makovsky
·
On
the foolishness of apportioning the last or your weed
It’s better to get stoned once than to not
get stoned twice – my friend B
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