Monthly Archives: July 2004

I’m remodeling a fifty-year old

I’m remodeling a fifty-year old house. It was across the street from me, with its brown lawn, three large dead pine trees, cracked window panes and twenty-five year old paint job. The people who lived there didn’t run the air conditioning, and through the open windows I could hear them threatening to kill each other, leave each other, and other things I didn’t want to know.

When I moved into the neighborhood three months ago, after moving out of the priciest high rise condo project in the City, I asked about the couple. I was told they owned the home, having inherited it from one of their parents, and had lived there for twenty-five years. At one time, they had a child who sold drugs, and there was a lot of activity at the house, but the son was now in prison for a very long time — his third strike.

The next time the wife came out the front door, I introduced myself to her. She immediately told me, “I’m about to lose this house which was my grandmother’s, because my husband put a mortgage on it and I can’t make the payments, and he left me for a 23-year-old woman.” I sympathized. He had moved to California. She seemed beside herself.

“That story is more common than you know,” I said. “I can’t help you on the marriage front, but I can bail you out of the house so you don’t lose your credit.” I foresaw an easy win-win, just like when I thought I could turn around the family fortunes of an inner city family whose children I wound up foster parenting for twelve years.

The wife and I agreed on a deal. But as soon as the husband saw money, he left the alleged 23-year-old and showed up in Phoenix at the house, ready to help his wife sell it and share the profits. He questioned the terms, the appraisal, my ability to close. He even walked out of the house one day at nigh noon (temperate about 105) in a muscle shirt, took a chain saw, and cut down one of the dead trees. I was so frightened seeing him with the chain saw that I couldn’t watch him do it. He cut it down right into the middle of the street, too. He left a two foot stump, he never cleaned up the remnants of the tree, and he never came out to do the other two, either. That was his sole gesture in the direction of getting the house ready to sell, despite his promises that he’d have the house empty in no time if I just put a dumpster in the yard.

The sale was complicated; the couple didn’t have clear title to the house, and they also didn’t get up in the morning and apply themselves to straightening out the paperwork. The house was so full of trash that the home inspector couldn’t get through the master bedroom to look at the second bathroom, and the appraiser had to take the size of the home on faith. Every time I had to go over there to tell them something about the transaction, the man yelled at me before he even opened the door, as though I were responsible for his title problems. At times, I feared for my well-being. I asked several male friends of mine to go with me to the house, but they politely declined.

But I forged ahead, confident that if the transaction closed before the guy used an axe on me, I’d be able to handle anything that came up. (Oh, by the way, I’m 5’3″ at best).

A lot came up. When the transaction finally closed, the people didn’t move out. I was out of town. The cleaning crew couldn’t get in, and the occupants hadn’t packed a thing although a U-Haul stood before the house. Three days later, I had a friend call the police, who actually had no jurisdiction and said that I’d have to call the Marshall. The Marshall? I was really in the wild West.

But the police visit impressed the couple, and they finally got into the U-Haul and drove off, leaving three generations and three dumpsters full of broken furniture, old computers, syringes, crack pipes, and dirt. Paid the cleanup crew $1500.

Now I could start. First item of business: replace all the cracked glass to the house could be insured. Fifty-year old casement windows. $1500. Next, check the plumbing, which had never been replaced and needed to be re-piped. No sense fixing the house and risking a flood.

The air conditioning? a fifty-year-old three-phase unit that actually worked

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The AlwaysOn Innovation Summit had,

The AlwaysOn Innovation Summit had, in addition to the usual panels, a series of CEO pitches, in which CEOs of tech companies presented their investor pitches to judges, who were instructed to judge them according to certain criteria on a five-point system. It was kind of a cross between a contest and a game, and reminded me of the VC Olympics. Many of these CEOs were already funded, and were pitching to get the word out about their companies, or to practice their pitches, or to prepare for the next round.

I decided to watch some of the pitches to see if there was anything I could bring back to my Fasttrac participants, or to the entrepreneurs that we coach privately. The first one I heard, for Konarka, was given by Howard Berke, who brought the MRI to market. This is his twelfth company, and he has already received $30m in initial capital. His competition is GE, so he’s looking at Siemens as a partner (or vice versa. He is so experienced at bringing products to market that he takes for granted he will get the strategic partner he needs to succeed. He’s well on the road to it. Konarka is a photovoltaic company that uses nanotechnology, so it’s a combination of almost every buzzword in the technology dictionary. It has also been on the AlwaysOn list of 100 best private companies twice. Perhaps this will be the photovoltaic energy company that finally makes money.

Next comes the CEO of MySQL to talk about the database market. He says that MySQL will be the Dell of databases because open source software distributed over the Internet will also be distributing $1b in savings to customers. He’s Scandanavian, and he says that MySQL is modeling itself after IKEA: simple design, massive distribution, and lower costs.

He also refers to himself as the Southwest Airlines: no luxury, but gets you to the same destination. And if you want to fly free, you can join the crew (report bugs, etc). He’s good with analogies and metaphors. MySQL has a 5 million installed base, because the economy class is so much larger as a market size. There are 35,000 downloads a day from the site. The DBM services market is $8billion. He has to say all this in less than five minutes.

The MySQL customer can self-select whether he pays or not. Of the 5 million customers, 5,000 already pay for support and services, which enable the customer to get not only tech support, but freedom from the reciprocity requirements of the GPL, the overall license that governs open source products. This CEO is not a dreamer. He says some people have a mindset for never paying, and can’t be converted. But they are a trigger for business in other areas. To pick up paying customers, he plans to sneak in to people’s businesses. By looking at where the downloads are coming from, he knows the product is now going in to GE and Microsoft, and sooner or later they will pay for it, converted by underlings who have “sneaked” it into the organization because they didn’t have access to Oracle.

The next presenter is also the CEO of an open source company. Sourcefire is a network security product; it secures internal networks from malicious viruses or infected laptops. It’s a software company that has appliances with which is goes to market. Its CEO says there’s a convergence between the networking market and the security market, and that first generation network security products like Symantec have not solved the problem. Its product is based on Snort, and is an open source network sensor that has intellectual property attached to it. Once an intrusion is detected, it locks down the firewall and changes the routing so the infection doesn’t spread. Sourcefire both senses and acts on intrusions. Its CEO tells us there is inherent adoption around open source solutions. The products are not fat. They do exactly what the clients want.
In fact, Sourecefire resells through IBM and Sun, and is OEM’ed by Nortel.

What’s my takeaway, after listening to all these impressive pitches? Well,they are not very flashy; they’re pretty down to earth. Some of them are even in black and white. But they exhibit a powerful command of the market. No wonder experienced CEOs have been paid so handsomely. You can’t fund or run a company without them.

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On another panel, people discuss

On another panel, people discuss the digital home. In this case, people from Silicon Valley seem to be aware that technologists often build for themselves, ignoring the needs of the customer.

The digital home is as yet undefined. The technology is there. There are lots of great devices, technologies and services, but consumers are seeing too much complexity for entertainment.

Up until recently, people bought their content and their delivery simultaneously — a radio, or a TV. But in the last 18 months, there has been a big change: people are willing to buy their pipe separately from their content. So if you introduce a lot of bandwidth into the home, and content is digital, consumers will try to satisfy their desires and consumer demand for connected devices will drive the market. Consumer demand is now ravenous; savvy consumers are demanding that media be shot around their households. They just don’t know how to make the devices they have bought work the way they envision.

So now someone has to take care of the customer. To fully support a digital home, the software industry, the transport industry, and the hardware industry have to work together. (Some AOL customers are still calling tech support because they have put the AOL CD into their stereo systems and can’t get it to work.) Otherwise, the support costs for current technology will eat companies alive. We’re only in the very basic phase of sharing video, photos and music, but you still need a home CIO to use the stuff. The products have to be plug and play, and the customer experience seamless.

The consensus was that technologists have to look more carefully at the user experience, because they can’t do to the entertainment customer what they did to the enterprise: release products before their time that don’t work. At this time, only 10% of the market knows what broadband is; only 12% know what DSL is.

For many years, people have tried to figure out what would be the heart of the architecture in the home? The PC, TV, set top box, residential gateway? Now it has all changed, and it’s about how all these devices play together.

Coming to you in the second half of 2004: the ability to access your media files from anywhere, and have them streamed to you in a format that your device can manage. You will then be able to pick something to TIVO from your cell phone. The architecture doesn’t care about either the type of connection or the format of the player; it translates everything. No local storage. It’s more than an e-home; it’s an e-world.

You sign up for this on the Internet. It manages your media: TV, video, photos, music, etc. Any device with a web interface will show you anything dynamic that’s in your world that’s a player — in your home, in your cell phone, on your laptop. You will then be able to access all of your media everywhere. You can also buy off this device, and it will download to your

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I’m on the Stanford University

I’m on the Stanford University wireless network, sitting in a conference called the Second AlwaysOn Innovation Summit. I’m attending in person on a “blogger’s pass,” but you can watch a web cast in real time, so you’re probably at an advantage. You didn’t have to pay for a plane ticket 🙂 Fortunately, it’s cooler up here than in Phoenix, so it’s not a total loss.

The speaker is some guy from IBM talking about middleware, and about how the software market has changed. The guy from IBM is saying, as though it were news, that the customer is now in charge and the universe is no longer vendor centric. How hilarious. In Silicon Valley, it is slowly dawning on people that the big companies can’t drive growth anymore unless they acquire the smaller ones, and that the new universe is “eat or be eaten.” Welcome to the real world. IBM is now trying to understand its customer for the first time and has decided that because it must own the customer (because it’s big) it has to control the final “delivery of its value proposition.” Partnering turns out not to provide enough assurances that IBM can deliver on its value proposition, so the company will probably buy anything that’s a gap in its service offering. That’s why IBM bought Rational, Candle, Trigo, etc. This guy is wasting my time.

The wireless panel, headed by Bill Gurley, seems to be better. It’s titled “Who’s Winning the Wireless War?”, and Michael Powell, head of the FCC, has said that the consumer is winning. The FCC is freeing spectrum, and the best technology will win. It’s amazing that it appears the government is the big innovator.

In Wi-Fi, it’s an arms race, because the spectrum is unlicensed. The best technology will get the best reception, and win the arms race.

What’s the disruptive technology? It’s not Wi-Max or Wi-Fi or cellular. It’s mobility. The consumer doesn’t really care how he gets it.

What’s mobility? How do you economically build out the network that makes mobility possible?
Heterogeneous networks will be the key; the networks have to be interoperable, because we will have wireless cameras as security devices and wearable wireless, as well as cell phones and PCs.

How do you get into the personalization of the user experience and still create a business model that pays for it? The average consumer has to pay $200-300 in wireless services today; the guy who wins will be the one who consolidates all the potential wireless devices into one service that the consumer can afford. But who is going to build the next gen network after 3G? Most of the companies that built out the cellular networks went broke doing it.

Another “new” technology is radio: cognitive radio, software radio, smart atennas. The FCC has changed our thinking about the scarcity of spectrum; it has put in place the leasing of licensed spectrum to mix licenses and unlicensed spectrum applications.

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If you know me at

If you know me at all, you know I hold most of my “power” meetings at Starbucks near the Ritz in Phoenix. But I’ve also visited Starbucks in Tempe, Pacifica, Palo Alto, Boxford, MA, New York, Rotorua, New Zealand, all the airports — you get the picture. I have a sixth sense for where they are. I have a Duetto card that automatically reloads, and a habit that costs about $150 a month. I was a beta tester of the Frappacino lite.

More important, I sent my entrepreneurial education students to see Howard Schulz last year when he appeared with the Phoenix Suns. In fact, I sent my entire “audience” — all of you who read this blog. Why? Because I believe that Starbucks is one of the best companies on the planet right now.

I have closely examined the culture of Starbucks from the outside, and with my experience in branding, I’ve watched them develop and manage the brand as “the third place” after home and work. Starbucks is a textbook project for a branding class. Their training rocks. Their employees know how to exceed customer expectations. In Starbucks, people smile at you at 7 AM before you’ve had your morning coffee, and they give it to you as you like it without you even asking.

So when they terminated Amanda I was stunned. Amanda is my foster daughter, the star of my book “Foster Mom,” in which she is called Angie. Amanda is the big success of my foster parenting career; a solid citizen who pays her bills, doesn’t do drugs, and wants to go to college. Not in jail. Not on welfare.

Starbucks was her first “real” job. In fact, it was the first job anyone in her family had ever held; she comes from a family of drug addicts and welfare recipients, and she has left them far, far, behind. To her, Starbucks was a dream job: a place to smile at her friends and neighbors and be happy with life. I watched her grow in the job, and I thanked God for Starbucks.

She had been there seven months. She learned how to balance her register. She learned how to be happy in the morning even if she had to get up at 4:30 AM; she learned how to interact with businesspeople. She learned how to work as part of a team, and she learned a work ethic. She got a raise, and she had a good enough dental benefit to get her teeth cleaned and her cavities filled FOR THE FIRST TIME IN HER LIFE.

She had friends at Starbucks, especially among the customers, some of whom told her she “made their mornings.” She would come home from work at noon excited about how well she had done and how much she had cleaned up behind her lazier teammates.

Then her store, the one on the southwest corner of 24th Street and Camelback, got a new manager. He came from Seattle. He told everyone he goes by the book. He wrote Amanda up for tardiness a couple of times. Those times might even have been partly my fault, as I often try to give her instructions in the morning as she’s running out the door to her job.

Last weekend, I went out of town to a family wedding that Amanda, who has been with our family for twelve years, couldn’t attend because she had to work. When I returned, I learned from her brother that she had been terminated. She was ashamed; afraid to tell me.

The next morning, I went to talk to her manager. I said to him, “as you know from reading my book, I’m trying to help Amanda and her brother. Could you spend a few minutes with me telling me why you terminated her?”

“Sure, “he said cheerfully. (He’s about 28; I’m easily old enough to be his mother. We sat down. “I set very high expectations for my employees,” he said, “and Amanda had three tardies.”

I was stunned. I wanted to punch him out. “You jerk,” I said internally. “You fired a person all the customers liked because she was seven minutes late? What about customer satisfaction, what about the cost of turnover, what about managers as developers of their employees?”

To his face I said, “Really?”

“You know, when I was a manager at Intel if we had that sort of problem with an employee we would put him or her on a corrective plan, but not terminate them. In my management training I learned how costly it is to terminate and re-hire. So I’m betting there’s something else about Amanda’s performance that was the REAL cause of her termination. If you would just share it with me, I could help her understand.”

“Nope, ” he said cheerfully. “Just a lack of punctuality. Four times. Sometimes as much as seven minutes.”

“Thank you, ” I said, forcing back the tears. As I walked home, I wondered what to tell Amanda the lesson was from all this.

It took me a while to figure it out, and when I did, it was far more cynical and less favorable to Starbucks than I had hoped.

“Panda,” I told her. “Your customer is not the person who pays for the coffee. It’s the manager behind the bar. And if your manager goes strictly by the book, make sure you read the book.”

I’m so bummed. Turns out the Starbucks brand may be bullshit after all. But I’d like to think it’s just one uncreative manager.

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I channel a writer, and

I channel a writer, and I don’t always know what he’s going to say. This week he seems to be the late Meyer H. Abrams, a literary critic and scholar out of the sixties. (I suffer from too much training; I got my Ph.D in the study of literature, and I was a film critic for several years in my gay mad youth.)

Abrams is really baffled by the reactions to Michael Moore’s “Fahrenheit 911.” These reactions, have ranged from “this is the greatest film ever made” to “I wouldn’t give that anti-Semite propagandist a dime of my money; he is denigrating a great president.”

Although Abrams no longer has access to the Internet, last time I checked, we still had a first amendment to the US Constitution, which guaranteed free speech. Last time I checked, the purpose of propaganda was not to make people laugh. And last time I checked, film was an art form, as was satire.

But who cares what I think? Let’s talk a bit more to Abrams, who has some experience thinking about the larger questions. According to my recollection of Abrams’ seminal work “The Mirror and the Lamp”, art has two main purposes. One view of art is that it’s a reflection of reality; it’s a mirror. Art tells us who we are. However, it obviously doesn’t reflect ALL reality; rather, it frames reality. It takes a piece of what’s out there, selects it, and puts a frame around it to emphasize certain views. Like a window. Like a painting. We don’t really expect “Drawbridge at Arles” to show us the photographic representation of the bridge; we know it’s a work of Impressionism. It’s Van Gogh’s IMPRESSION of the drawbridge. And we rarely accuse the painter of having the wrong impression.

Another view is that art is a lamp that illuminates reality; it shines a brighter light on things we might not notice, perhaps exaggerating or distorting shapes and colors, but making them visible. The musical “West Side Story” shines a light on race relations between whites and Hispanics, and contains the Leonard Bernstein song, “Everything’s Free in America,” but we don’t accuse Bernstein of racism because he wrote the song. It’s an IMPRESSION of Puerto Ricans in New York.

Clearly, “Fahrenheit 911” does both: the film shines a bright light on certain aspects of George Bush’s presidency and the war on Iraq. It also frames some lives, such as those of wounded soldiers and those of Lila Lipscomb.

But it is Michael Moore’s impression. And he has a right to form an impression, express it, and put it out there for public consumption, just as artists have always done.Even the Bible is the impression of its writers.

So that’s what Abrams thinks about art. Let’s drill down to the particular form of art that Moore practices. That art form is called satire, and it’s as old as the Classics. In satire, an audience with a shared value system is invited to laugh at an exaggeration. and thus to examine one of those values. “The Rape of the Lock” satirized its society’s concern with social trivia; “Gulliver’s Travels” satirized the society of its time. Throughout history, satirists have been admired for their ability to see beyond the limitations of their own time and place. Satire can be a valuable contribution to a society. “Saturday Night Live” is satire.

People watch “Saturday Night Live” all the time, even when they disagree with who it happens to satirize at any given moment. And they don’t try to censor it, or remove the participants’ right to self-expression, to their art.

Moore does not call himself a documentarian; that’s what his critics call him. He calls himself a satirist. He knows what he’s doing, but maybe we don’t know what we’re watching.

Abrams has gone on to better topics. So the end of this is written by me. I take full responsibility for the following opinion:

Chill out when you see “Fahrenheit 911,” no matter what you believe. It’s not supposed to be “accurate” (whatever that means, since it’s largely composed of news footage), it’s supposed to be funny. Pretend it is “Saturday Night Live” or “The Simpsons.” And yes, Michael Moore can be an asshole. But he’s not even coming into your living room.

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