Archive for November, 2007

Community Investing?

Thursday, November 15th, 2007

As the thrill of the chase has returned to Silicon Valley, every VC and hopeful entrepreneur is chasing a new version of the old dream: a winner-take-all web community.

This pursuit, now called Web 2.0, has all the things business school taught you to love: network effects, first-mover advantage, etc. And again, the signals of excess have appeared.

First is an abrupt 50% rise in professional fees among top providers in the Valley. An attorney I know there now charges more than $600 per hour — more than I paid my entire team (14 people, half programmers, all U.S.-based) in 2000, the peak of the bubble.

The second signal is that, in the effort to leave no stone unturned, VCs are examining some pretty crazy community ideas. Take, for example, the idea of community-monitored stock investment ideas.

Huh? Think about this for just two seconds. Successful stock picking means finding an idea and quietly investing ahead of the crowd. A stock picking community would collect ideas from the crowd, and let the crowd vote on them — in short, exactly what the markets already do. No edge to be gained there.

Embracing the inner geek

Tuesday, November 13th, 2007

After fighting nature for decades, the transition begins with this 20-year-old bicycle, bought in September:

In keeping with my newly overt nerdiness, I will gladly bore you for hours with technical explanations for why this is the fastest non-recumbent bicycle you can buy. But the short answer is rigid wheels, 110psi tires, full suspension, and rigid space frame.

Hard to believe? This exact model holds the world speed record for non-recumbent bicycles, at over 51mph with a full fairing.

This bicycle is a strategic decision, in that it gains a persistent edge by a path that competitors cannot or will not follow. Practically no one will ride this bike, no matter how fast, because it looks weird.

I consistently pass serious athletes in Lycra finery and $4,000 carbon bikes. They stare at the rusty bike, the blue jeans and flip flops, and pump furiously, but can’t catch up. Yet, even after seeing it with their own eyes, they will never make the obvious competitive move, which is to buy this bike. So I keep passing them. That’s strategy.

So not me

Tuesday, November 13th, 2007

For the past four days, I’ve driven a borrowed 2005 Mercedes SL500. Fun, yet so wrong for me.

Fast but heavy. Graceful but dated styling. Luxurious but showy. Surprisingly non-exclusive — once you drive one, you notice with embarrassment that so does every silver-haired gentleman in Newport Beach. With sport suspension turned on, there is too much body noise for a $100k car.

Mind-bogglingly complex — dozens of motors manage various tasks of dubious import. One example from many: raise the rear windows, and they move a quarter inch sideways for a better seal. Two motors just for that. This is a car that will not age well — who replaces 20 failing motors on a decade-old SL500?

My tastes run to simple quality: Toyota drivetrain, racing suspension, hand-cranked windows. Does this exist? As a matter of fact, it does: