Founders at Work: Stories of Startups’ Early Days

I enjoyed reading Founders at Work: Stories of Startups’ Early Days by Jessica Livingston. I was drawn to this book after reading Jeremy Zawodny’s dust jacket quote, “Entertaining, inspirational, and human-a must-read for anyone interested in how some of the most important technology companies came to be.” The collection of stories is well put together and engaging. My favorite stories were Apple Computer, Gmail, Viaweb, del.icio.us, Flickr, 37signals, ArsDigita, Fog Creek software, TripAdvisor and Firefox. Of course, I may be biased as I am a customer of most of these companies and their products are as enjoyable as their stories. The theme of all these startups was an unflinching persistence and dedication even when there was a desire to quit.

Books

I recently read The Religion of Technology: The Divinity of Man and the Spirit of Invention and Bleachers.

The Religion of Technology was a fascinating read that traces the connection between Christianity and scientific invention throughout time. An amazing number of scientific advances were made to spread the Good News.

I am a John Grisham fan and found Bleachers to be a good read. I am not much of a football fan, but I still found the story interesting. I wouldn’t put it on the same level with his law stories.

Inventing America

I just finished reading Inventing America a great history of Jefferson’s Declaration of Independence. I failed in my first attempt to read this text, but I succeeded when I started over. It is so rich in information it can’t be rushed and reads much easier the second time.

As all kinds of patriotic meanings were attached to the Fourth, the signers themselves began, very early, to talk about having signed the Declaration on the Fourth. John Adams made this claim only five years after 1776, Jefferson seven years later, and Franklin ten (Warren, WMQ 1945, 242-43). By 1814, Adams had even forgotten that the vote on independence took place on July 2 (Letter to Mercy Warren, January 7).

These men could not, at first, have made this claim after much reflection on the matter. The document itself, read carefully, reveals that they were forgetting. The inscribed Declaration begins, “The Unanimous Declaration of the Thirteen United States…” But it was known to all those who took part in the events that the thirteen states were not unanimous on the Fourth. New York’s delegates were still waiting for instruction and could not vote. Their approval of the document did not reach the Congress till July 19th, when at last the boast of unanimity became fact. An engrosser was commissioned to pen a formal copy of the document under its proud title. This fair copy was not ready for signing until August 2, when the delegates began to put their names to it. But by that time, not all those who had voted on the Fourth were still present. (There was intense travel back and advising back and forth between Philadelphia and the efforts, at home, to draft provincial constitutions-a matter more serious to many delegates than anything the Congress was currently doing.) Some of these absentees returned, after August 2, and put their names to the parchment. But others who actually voted for the document’s passage on the Fourth would never come back and be known as Signers. And some new arrivals would sign without having voted on the wording. Not only were the Signers not all present together on the Fourth. They were never together in the same room at any time-on, before, or after the Fourth.

Actually, this matters less than one might think, from the later cult of individual Signers. No individuals voted on the last ballot for the Declaration. Only the new-formed states did, one vote one state. No matter how many men were in a delegation, no matter how slim the majority within any delegation, each group voted as a block, since the larger states had lost their effort at “weighted” voting led by Patrick Henry in the first Congress. Thus, when the signing began on August 2, the delegations were widely spaced about on the bottom of the parchment document, so that delegates arriving could put their names in the area allotted to their state. It was a memorial action by that time. The notion that putting one’s name to the Declaration was an act of individual courage is a bit of genial mythologizing in the general air of inflation that was to occur all around this document. The men who signed-and even the men who voted and did not sign-were all known revolutionaries. Their very presence in the Congress after August 2 made that clear.

I don’t recall history books telling this story. Did you know this from your schooling?

Do you have the Right Stuff?

I just finished reading The Right Stuff which is an amazing account of early fighter jet test pilots, breaking the speed of sound, and the space race. While reading this book you feel like you are inside the fighter jet pilot clique and know all about the right stuff.

Before this I read another book by Tom Wolfe, The Bonfire of the Vanities. It was a fun read, but my favorite Tom Wolfe (fictional) book has got to be A Man in Full. It is definitely a must read.

Everything You Ever Wanted To Know About Heaven… But Never Dreamed Of Asking!

Everything You Ever Wanted To Know About Heaven… But Never Dreamed Of Asking! was a challenging read (for me) but well worth the effort. It consisted of lots of fascinating questions and answers for believers and non-believers. “The dilemma, then, is this: If God cannot suffer, how can He really love us? But if He can suffer, how is He God?
Present Condition:

First, body is form. Even now what makes our bodies our bodies is not atoms but structure. The atoms change every seven years; yet it is the same body because of its continuity of form. (“Continuity” does not mean “unchangingness”, of course.) It is like a river. A river is not its water, which is always moving on, but its riverbed, which forms the formless water into this river.

Post Modernism:

Religion claims to deal with things as they really are, to tell us what is true, not just comforting. So when different religions tell us contradictory things, both simply cannot be true. No one believes in the equality of all scientific theories or historical accounts or common sense hunches or newspaper stories. We test them to find out which are false and which are true, and no one thinks this is narrow-mined, bigoted, or illiberal. Why do we think differently about religion?

The Lexus And The Olive Tree

The Lexus and the Olive Tree is a thoughtful book about how the world was transformed from a Cold War separated world into an integrated globalized world.

We’ve moved from a world where the closed think they can survive better than the open to a world where the open thrive far, far more than the closed.

Thomas Friedman elaborated on some interesting insights within his book:
1) No two countries that both had McDonald’s restaurants had fought a war against each other since each got its McDonald’s.
2) The NBA business models our American society:

The rich are getting richer, there are a lot of (relatively) poor people around and the middle class appears in danger of disappearing. ‘Last year (1996-97) about a third of the league-110 out of 348 players-were making the league minimum.’ NBA player agent Don Cronson said. ‘The way things look, this year that number should go up to about 150. Between the restrictions of the salary cap and the incredible money paid to superstars, there’s practically no money left over for the $1 to $2 million guys, who are usually the fourth-to-seventh-best players on the roster.

3) Five gas stations theory:

I believe you can reduce the world’s economies today to basically five different gas stations. First, there is the Japanese gas station. Gas is $5 a gallon. Four men in uniforms and white glove, with lifetime employment contracts, wait on you. They pump your gas. They change your oil. They wash your windows, and they wave at you with a friendly smile as you drive away in peace. Second is the American gas station. Gas costs only $1 a gallon, but you pump it yourself. You wash your own windows. You fill your own tires. And when you drive around the corner four homeless people try to steal your hubcaps. Third is the Western European gas station. Gas there also costs $5 a gallon. There is only one man on duty. He grudgingly pumps your gas and smilingly changes your oil, reminding you all the time that his union contact says he only has to pump gas and change oil. He doesn’t do windows. He works only thirty-five hours a week, with ninety minutes off each day for lunch, during which time the gas station is closed. He also has six weeks’ vacation every summer in the south of France. Across the street, his two brothers and uncle, who have not worked in ten years because their state unemployment insurance pays more than their last job, are playing boccie ball. Fourth is the developing-country gas station. Fifteen people work there and they are all cousins. When you drive in, no one pays any attention to you because they are all too busy talking to each other. Gas is only 35 cents a gallon because it is subsidized by the government, but only one of the six gas pumps actually works. The others are broken and they are waiting for the replacement parts to be flown in from Europe The gas station is rather run-down because the absentee owner lives in Zurich and takes all the profits out of the country. The owner doesn’t know that half his employees actually sleep in the repair shop at night and use the car wash equipment to shower. Most of the customers at the developing-country gas station either drive the latest model Mercedes or a motor scooter-nothing in between. The place is always busy, though, because so many people stop in to use the air pump to fill their bicycle tires. Lastly, there is the communist gas station. Gas there is only 50 cents a gallon-but there is none, because the four guys working there have sold it all on the black market for $5 a gallon. Just one of the four guys who is employed at the communist gas station is actually there. The other three are working at second jobs in the underground economy and only come around once a week to collect their paychecks.

4) Everything is integrated:

A warhead exploding 300 miles above Omaha would instantly zap the United States from coast to coast with a tidal wave of charged electrons. Every electronic system, every radio transmission, every computer bank in the country would experience something like a lightning strike magnified a million fold. An intense surge of up to 50,000 volts per meter would flow through the circuitry that wires the entire nation.

The book was interesting overall but became rather redundant at points and the last 1/3rd was rather dull and preachy. I found Friedman’s call for the repeal of the American right to self-defense and lawful gun ownership by citizens utterly preposterous. However, if you are interested in globalization and it effects on the world I recommend you read this book.

Agrarian Trade – Will US farmers be the next candidate to be outsourced?

“A decade ago, a scenario in which the value of U.S. agricultural imports would someday exceed that of U.S. exports seemed farfetched. Indeed, the United States has been a net exporter of agricultural products since 1959, an uninterrupted span of 44 years. Today, the improbable has become probable. Since 1996, the agricultural trade surplus has shrunk from $27.3 billion (an all-time high) to $10.5 billion. Although U.S. agricultural exports continue to rise, imports are increasing nearly twice as fast.” Full Article

I found this article interesting given that I always assumed the US would have a positive agricultural trade balance. However, given globalization, every country is a competitor. Globalized companies take advantage of lower costs of land, labor, raw materials, and / or capital available outside the US. Even US companies are taking advantage of these reduced costs and supply ~15 percent of U.S. food imports through their foreign subsidiaries. Will US farmers stay a viable supplier of food or fair the same way our manufacturing industry has?

If you are interested in how the Cold War system of us vs. them was replaced by the globalized system of removing walls, integrating everything, and making everyone an able competitor, I suggest you read The Lexus and the Olive Tree: Understanding Globalization.

A Random Walk Down Wall Street

On the way home from Houston I finished the 8th edition of A Random Walk Down Wall Street. It covered the two major schools of camp on stock pricing in detail: firm foundations and castles in the air. Firm foundation believers seek to determine a stock’s proper value or “the worth of any share as the present value of all dollar benefits the investor expects to receive from it.” Most firm foundation followers assume that the market is 90% logical and 10% psychological. Castle in the Air believers are chartists and believe that past history grants clues to future behavior. Most castle in the air believers assume that the market is 90% psychological and 10% logical. They seek to anticipate the behavior of the other players in the game. Will there be a bigger fool to buy this stock later?

It appears from the evidence presented that the stock market is very efficient at pricing itself. The exact level at which the stock market is efficient appears to be debatable. However, the historical data currently suggests almost no pricing inefficiencies exist that are large enough to take advantage of and make money (after transaction costs and taxes are subtracted). Luck would explain the extraordinary performance of most at picking stocks. The nature of averages is a few investors will have extraordinary results, just as a few people will flip tails consistently when engaged in a coin flipping contest (with a fair coin).

Modern Portfolio Theory (MPT) assumes all investors are risk averse and want high returns with guaranteed outcomes. Harry Markowitz invented this theory in the 1950s and for his contribution received the Nobel Prize in Economics in 1990. Basically, this theory uses diversification among asset class to manage risk.

The Capital-Asset Pricing Model (CAPM) says that the total risk of each security is irrelevant as far as extra results go. The important component of risk is the systematic part, since given a sufficient pool of stocks the unsystematic risk (or specific risk) can be eliminated. (The specific risk of all the stocks in a given portfolio balance each other out and go to 0 with a sufficient pool, usually > 60 issues.) Consequently the CAPM asserts to get a higher average return you should increase beta (systematic risk) in your portfolio. However, study of the beta to return relationship of all stocks over the 1963-1990 period (of all New York, American, and NASDAQ exchange issues) didn’t support this theory.

Definitely read this book if you are interested in stock pricing theory!

You’re Fifty-Now What?

I finished reading You’re Fifty-Now What? Investing For The Second Half Of Your Life on the flight back from New Orleans. When I checked it out at the library, the check-out lady made a joke of why a young man like me would be reading a book such as this. She thought I was picking it up for my father.

I found the book useful for figuring out how to reach the point of having a retirement that meets my expectations and empowers me to do what I desire. With proper planning, the golden years can be very enjoyable. Once retired this book covers how to figure out what you can safely spend in retirement without depleting your resources while still enjoying the long active lives modern medicine has rewarded us with. I think the title is misleading and both young and old will benefit from reading this book by Charles R. Schwab (founder of Charles Schwab).

Unfortunately, the library check-out lady represented our American culture all too well. We are too often spenders rather than savers (the average savings rate has fallen to below 2% per year). We seldom plan for tomorrow and drive with the pedal down today. I challenge you to not follow the herd mentality and realize you need to plan and set aside for retirement while you are still young.