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started 7/21/2001; 1:13:31 PM - last post 7/24/2001; 1:46:30 AM
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Doc Searls - 
7/21/2001; 5:13:31 PM (reads: 3652, responses: 2)
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Is there a Doerr Prize? Just wondering. 
| | Interesting piece by Dan about John Doerr the other day. The key excerpt: ...he and his cronies injected something dangerous into the mix during the height of the Internet hubris. They injected cynicism far greater than anything we'd seen prior to that time." |
| | True, but it wasn't just cynicism. It was free money. Unaccountable money. By the fuckload. At its peak, the Mercury News reported (I'm looking for the link... bear with me... meanwhile, this might do), VCs were pouring an annualized sum of more than $24 billion per year into Silicon Valley alone. Last I looked that exceeded the gross domestic product of over half the countries in the world. |
| | Risk-free, too — except for the millionaires who put the money up and the suctionaires who bought the stock before the VCs flipped the companies for more billions to pour back into the same surreal system. |
| | For the recipients of all that VC money, it was at worst a Bialystock scam: you got to live well off a bunch of money from investors willing to risk their millions on a flop, which was exactly the premise of Mel Brooks' hit movie and Broadway play, The Producers. (Max Bialystock was the show's central character.) |
| | The "new economy" wasn't about selling goods and services. It was about selling businesses — mostly to stockholders. "Entrepreneurs" sold stock to VCs, who sold it to evevybody else through the public stock markets. That was the system. And most of us in The Industry (as Hollywood also likes to call itself) bought into it. I can't even guess how many times I'd ask somebody "how's business?" and get a response like "Great. We just closed another round for $10 million." |
| | That was the distortion. We weren't in business for the old fashioned purpose of establishing a profitable enterprise. We were in business to sell dreams to investors. Those dreams were less about changing the world than about making a bunch of money, fast. It so happened that what made fast money possible was that everybody involved believed deeply that cool ideas would change the world. |
| | That includes VCs and everybody who invested downstream in the companies those VCs started. Investing in volatile and unproven stocks is risky by definition so obvious it might as well be written in lava. Which is why every one of us to took that risk is just as guilty of irrational exuberance as the VCs at the top of the boom chain. There were a lot of victims, but they invested with their eyes open, and sober heads reminding them of the risk. The fact that Boom TV starred an endless assortment of equally enthusiastic analysts is no excuse. We made risky investments. The bubble grew and burst, just like bubbles have done throughout history, going back to tulip bulbs. C'est la vie. |
| | And there were many very cool ideas. I'm benefitting right now from one of them, as I write live over the Net using a cable modem. While Milo Medin is the best-credited author of the enabling technology, the business idea came from Kleiner Perkins, driven personally by John Doerr. |
| | So, while we're laying blame correctly at the feet of our most enthusiastic VCs, we should also lay credit for the successes from which we will all benefit for decades to come. I can't think of anybody who deserves more of the latter than John. |
Deductable Junket Dept.
| | Not much time to pack for the trip to San Diego, where I'll attend both O'Reilly's Open Source Convention and The Burton Group's Catalyst Conference. They're across the street from each other, as the junket fates have arranged matters. As a matter of historical interest, The Burton Group is the eponymous creation of Craig Burton. He has since moved on, but will also be attending both gigs. I'm looking forward to getting some serious hang time with him, Dave, Tim, Eric, Dan and lots of other good folks. |
| | I'll be taking Amtrak's Pacific Surfliner, which is an A-1 transportation experience. It goes almost door-to-door between my house and both San Diego events. |
Onward
| | It's a perfect day here at our new house in Montecito, which is the very nice unincorporated town adjacent to Santa Barbara. We're finally sort of settling in. And in five minutes I need to be in a booth over at the Montecito YMCA, where a canrival will start shortly. |
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Frank McPherson - Re: Greed
7/22/2001; 4:40:46 PM (reads: 499, responses: 1)
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Doc Searls - Re: Greed
7/24/2001; 5:46:30 AM (reads: 619, responses: 0)
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Greed is a problem, but it's also human nature to take advantage of any kind of abundance. And free money got very abundant for a few years there in Silicon Valley.
Good rant, BTW. Just pointed to it in the blog.
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