Rocky Top MBA

The QB Blues

2009-07-08T13:43:36Z

Hat tip to my buddy, who is running the A++++ UT sports blog Orange Koolaid. I don’t know where he gets his info, but its usually pretty good.

So, there are lots of things that I like about the Kiffin crew, now that the hype has died down. I like the energy, I like the intensity, and I like swagger. I loved the class of 2009 and the fact that Kiffin told some high profile recruits to take a walk. I love that Kiffin has been classy when talking about Coach Fulmer.

One thing I don’t love… the lack of a strong leader or arm at quarterback. I don’t want to hate on the current two, because I think we shouldn’t judge them for last year. First, the team was not organized and was struggling with a new strategy and identity. Also, I think the folks hating on Jonathan Compton need to remember that he’s a 22 year old college student, not a super hero. Sure he has some issues that need to be resolved, but he wasn’t the sole reason we had a bad season. That being said, we’ve got to get a good arm and a good leader at QB. With a good arm, we can air it out a little to the wide receivers, opening up the field and stretching the defense. With a good leader, we can make smart plays and identify running routes for arguably the best running team in college football. Who can be that QB?

That brings me to the Scoggins drama. I’ve been commenting on Orange Koolaid that I’m really tired of these football players acting like little drama queens. They drag out the decision, they’re indecisive, they let the media toy with them… Come on, guys. You’re football players, not cheerleaders. We need more John Wayne and less Anna Nicole Smith from you. I want the guy that stays cool under pressure, keeps his grin and icey stare, and knows how to snap his team into position. I want the guy that gives an attitude adjustment in the locker room and praises the team on the field. Frankly, I don’t want the media hog that can’t make up his mind about where to play football. I wish Mr. Scoggins the best of luck, and if he does commit to USC, then I think he’s going to get a chance for spotlight… in three years. Assuming that USC doesn’t recruit a 5 star quarterback in the mean time, which I think they’ll try to do next year.

Rettig at Camp- Loaded, Locked, and Ready

With Scoggins leaning more and more towards USC, it is rumored that UT offered to Califnoria QB Chase Rettig. As was noted on Orange Koolaid, we don’t really know Chase’s full potential because he played on a pretty bad team last year. He did get called the “hardest thrower” at the Elite 11 in Berkley a few weeks back, and a few college football pundits have commented that his talent and potential have gone unnoticed in Scoggin’s shadow. He’s transferred schools this year with hopes of polishing his skills and playing with better quality staff and team. I’m hopeful about Chase for three reasons: 1. I love the underdog in these contests because they’ve got something to prove, 2. Chase wanted to be a Volunteer early on… and UT almost let him slip away to Boston College, and 3. Chase has played for a less than perfect team, and it’ll help him make the most of his team. I hope that he makes the commitment to UT. Oh, did I mention that he also has decent grades and is worried about academics. Both are signs that he’ll be a good leader and example. Read more about him at Orange Koolaid.

We’ve still got the QB Blues in Knoxville… but the tempo might be picking up. If Rettig can be coached and we get a solid smash mouth game built, UT could see a solid winning record, a top 10 rank end of season, and maybe muster a high profile bowl appearance in 2010. In the mean time, I hope Chase commits to the Vols. Wear the orange and do us proud!

Starting a Software Company Podcast/Panel from Codestock

2009-07-06T13:38:48Z

Here’s the podcast from the panel I moderated/assembled for codestock. Thanks to the facilitators for putting this up.

http://feelthefunc.com/content/binary/3d147899-410d-4b4d-ac29-90817ec12f44/FTF-09-CodeStock_Starting_a_Software_Company_Panel.mp3

Picture of Knoxville area software entrepreneurs Curtis Jones with Voice’s Heard Media, Chris Van Beke with Voice’s Heard Media, and Patrick Hunt with Tingz. Big thanks to the three of them for doing this.

Analysis of Venture-Backed Liquidity Events Since 2003

2009-07-02T14:17:18Z

The data for this analysis came from NVCA, who has a relationship with Thomson Reuters. You can find the NVCA press release here.

Basically, Q2 of 2009 showed some signs of life out of the IPO market with five offerings, four from into tech and one from non-high tech. While we’ll celebrate those as the first real high technology IPOs since Q1 2008, we can’t over do it. We’re still a long way from the IPO payday; for example, in 2007 there were 86 IPOs for the year. The IPO market imploded in January of 2008, which in hindsight was probably an early sign of the financial fiasco we’re still struggling with to this day. I still feel like lots of politicians were trying to talk us into a little recessionary dip with pre-election angst and finger pointing, but in retrospect I don’t think I paid enough attention to the stalling IPO market. But I digress…

The venture industry needs liquidity events. Right now, many funds have all capital tied up in portfolio companies that can’t exit even though they’ve reach profitability, or the fund is tied up pumping capital into companies unable to raise additional outside equity. Either way, funds are limited on their ability to engage in real value-add, early stage investing. In addition, some funds are taking huge cram-downs and dilution as portfolio companies go through recapitalization and down equity rounds (i.e. raising money at lower valuations than before). Now, I’m not waving a “poor pitiful VC” flag. I’m just saying we need a healthy, vibrant, and liquid venture industry to keep entrepreneurship going.

The thing about entrepreneurship and early-stage investing is that it’s an expertise lost to the general public and most public officials. Frankly, you don’t really hear major media reporting on innovation, new business creation, IPO registrations, and patent filings. It’s all too complicated for the average Joe or Mary, so real high-growth entrepreneurship seems reserved to those fringe elements of society. Lots of people want to claim some title in this arena (angel invstor, entrepreneur, etc), but few of them really have the somatch and even less ahve the know-how. In addition to the complexity and unknown of this space, the target is always moving as a result of disruption and hyper competition. In my experience, working in this industry requires a high level of commitment to learning and a deep humility/sensitivity to how much you need to learn and relearn each and every day.

In conclusion, we’ve seen some sign of life in the IPO market, but we’ve still got a lot of capital clogged up in venture-backed companies. Exits are approximately 60% of their high over the past five years, with IPOs still anemic.

Here are some graphs showing venture0-backed liquidity events in the US (sorry for the poor pic quality):

Make Mine Freedom

2009-06-29T17:14:25Z

Kind of fitting, given what we’re dealing with today. My favorite moment is when John Q Public says “mind if I read it before signing?” What was good, common sense government 60 years ago is still good and common sense government today. All this bailout and stimulus is just smoke and mirrors that gives the common citizen less options and less opportunity. It’s the reason we haven’t seen unemployment decrease and why we haven’t seen GDP grow. Think about it when you hear discussions of “cap and trade.” Think about it when you hear discussions of nationalized health care. Think about who represents the individual the next time you vote.

Boom, Doom, & Gloom Prognostication- High Chance of Hyperinflation

2009-06-23T13:06:27Z

In today’s world, it has become very difficult to sift through all the information available and separate it into valuable data and drivel. Personally, I think that 95% of what we see if the latter. Economics is no exception. This dismal science has long been criticized for its reliability. After all, economists like to make forecasts based on changing only select few conditions and assuming that all others remain constant. In the end, the chaos effect typically occurs and the best designed forecasts only survive through their first encounter with reality.

On CNBC, their is a brief boom, doom, & gloom commentary on the US having a high chance of hyperinflation in the next 5 to 10 years. The premise is that large fiscal deficits and easy monetary policy leads to a sort of tipping point where inflation begins to grow exponentially overnight. In layman’s terms, if the government continues printing money and continues debt spending, the demand for the dollar internationally will decrease and the value of the dollar domestically bottoms. Traditionally, the Fed has kept inflation under control by raising and lowering the federal rate. With the federal rate already at all time lows, that instrument has been disabled. There are still some interest rate adjustments that can be done, but none are as effective as lowering the federal rate.

At this point, the economy is perilously perched on this ledge. If inflation begins to mount signs of a return, the government has little strength to keep the economy on the ledge. Underestimating the future cost of education and health care (which is driven up by very immigration and welfare friendly policy), creates a very dangerous false sense of security on inflation growth. If President Obama expects to overhaul health care and increase it as a part of government expenditure and gross domestic product, it leaves this country even more inhibited. The more mandated government spending, the less discretionary money the government has to return to the people in the form of tax breaks/incentives and the less money the govenrment has for those responsibilities really preservibed in the social contract–national defense and security. There is no such thing as a strong defense without a strong offense.

In the end, I don’t have the necessary data or training to really derive any conclusions on how to handle inflation, but I can say that things are getting so complex that few are going to have the foresight and intellgience to really anticipate the future. I fully expect that unemployment will rise in the short-term, stocks will find a leveling point, and the value of the dollar will continue to get pounded in currency exchange.

How would you like to be Ford right now?

2009-06-16T20:33:08Z

From David Moon on Knox News.

I’m really impressed by this editorial by David Moon on the Knox News website. First, I really agree with what it says. Second, it reallys helps articulate why government intervention in failing industries is a dangerous and bad thing.

How would you like to be Ford? Ford made difficult decisions a few years back that left them in a competitive position to say “no” to government funds and intervention. As a result, they’re being rewarded by the government “saving” the competition from failing. Its really ridiculous and contrary to most free market economic theory. Nothing is too big to fail.

The scary thing about the reckless abandon of the Obama administration is that they plan on repeating this process. They’ve already done it with banks and automobile companies. I think the health care legislation is setting the stage for a similar result in that industry. Where next?

I’m not really a doom and gloom kind of guy. I mean, Obama and the Democrats won pretty squarely and they deserved an honest chance. But seriously, I’m starting to think that we’ll need something like Ron Paul to get us back on track. And if you know me, you’ll know that I think he’s WAY wrong about foreign policy. I’m starting to see a place in the not-to-distant future where we’ve got a REAL economic problem– unemployment rates stays high, GDP goes stagnate or decreases, and new business creation stalls out. The players won’t have the resources or the free movement to survive, let alone succeed. Entrepreneurs won’t be able to seed opportunities or find early adopters with discretionary income. There is going to be sooooooo much to undo.

Obama Adminsitration’s Political Posturing About Unemployment

2009-06-09T17:34:29Z

This post really strikes at two issues that frustrate me. One, the Obama economic policy of spend-spend-spend (which will ultimately be followed by tax-tax-tax). Two, the pitiful excuse for national media coverage in this country, particularly on business and economic issues.

The Obama administration is reporting that they have “saved or created”150,000 American jobs and that they are ramping up the stimulus to “save or create” an additional 600,00 jobs. The problem with this claim is that its total political drivel–you can’t measure “jobs saved.” The Department of Labor doesn’t do it, the Bureau of Labor Statistics, neither does any other legitimate organization that collects economic data. Any attempt to make that claim is bogus. Is it possible to estimate, from a theoretical perspective, the multiplier effect of stimulus spending? Yes, but not with any real accuracy or focus. It’s like a 3rd baseman trying to extrapolate how many runs he prevented from scoring based on the number of balls he fields. Fielding a hit ball consistently makes him a solid 3rd baseman, but it doesn’t mean every ball is the equivalent of preventing a run.

We know that some jobs have been created. The government is pumping an enormous amount of money into every thing from overhauling our national laboratories, to NASA, to community organizations. In true big-government fashion, they can hire people to dig holes (which this deficit is certainly doing) and hire people to fill the hole just dug (if only the deficit was that easy to fill). But is that really having an affect?

In reality, this “saved and created” is just a bait-and-switch political maneuver. When we look at the aggregate data, we know that unemployment is at 9.4% as of May (see here). This is the highest rate since the early 1980’s and is an almost 2% increase since January (when Obama took office). You can put all the lipstick you want on a pig, but it’s still a big… and this country is still experiencing high unemployment.

Think about this the next time you vote… Hopefully we don’t find ourselves so over-leveraged with debt that we’re not in the position to finance the necessary responsibilities of government (a-hem… national security).

Hat tip to Prof Greg Mankiw at Harvard for his “Create or Save” thoughts, and to William McGurn on his “The Media Fall for Phony ‘Jobs’ Claim” at WSJ.

Wedding Website Up

2009-06-03T14:32:06Z

I’ve been so busy with everything, that I haven’t had a chance to post about this. My life has been a total whirlwind lately of phone calls, planning, venue visits, research, etc. Throw on top of that some really exciting but time intensive projects at work, and I’ve been swamped. I’ve kept the yard mowed and watered, but there hasn’t been much else happening in my life.

So, the big news is that I’m engaged… I’ve got a wedding website up at masonick-miller.com, so go check it out!

Social Media & Gaping Void’s Pyramid

2009-05-19T13:13:48Z

This morning, I saw this cartoon by Gaping Void artist Hugh MacLeod. I want to be honest, I’m a fan boy of Gaping Void. I have two of Hugh’s cartoons printed off in my office serving as cube grenades– Permanent State of Reinvention and The Hugh Train. Both serve as great talking points, tacked to my wall right beneath my “venture capital value chain” and NASA sticker. Hugh’s stuff really connects because: a. it speaks to something bigger than just the grind of labor, 2. it communicates the same frustrations and irritations that I feel about (insert topic).

When I saw this new cartoon, I was immediately swept back to a twitter comment yesterday. Casey Peters of Knoxify.com tweeted about whether digital/online/social media should be called social media or new media. His question being, is it really “new” media if there are so many opinions, experts, agendas, and conferences about it. My response was that the majority of those opinions, experts, agenda, and conferences were all self-serving and/or rubbish.

This cartoon really captures where I think we’ve come with much of social media– 97% are attention starved, self-indulgent wannabe’s, while 3% are really trying to properly utilize the power of the platform. I know this sounds harsh, but the amount of complete drivel that comes across my various communications is staggering. Add to that pool the ever-so-frequent poorly planned with no hope of generating revenue “social networking” business opportunity that lands in my inbox, and I feel like I’m struggling to keep my head above water!

So, I could expound upon the various elements of social media and why most of them are rubbish, but that would be a waste of time. At the end of the day, your platform/network/meme/etc must be life changing to justify its use existence. Society has quick and dirty flings with technology that makes the needle twitch. Sure its fun, but you don’t commit to something with negligible value-add. If you do, its a long, dark, and expensive road to nothing (dot.com bust). Society embraces/loves/worships technology that makes the needle spin like a clock!

On a positive note (finally!), there is a choice. I think it has a lot to do with ethics and responsibility. Wannabe’s sell out. They take the early easy wins to get cash, because in the end that’s all they care about… Real rock stars, the kind that leave you feeling light headed and giddy at the end of a show, are in it because they LOVE it! The money is awesome and keeps them focused when times get difficult, but they have passion and drive that transcends that. They want their music (aka product) to make a difference.

The world needs more rock stars.

PS: Hugh MacLeod is a rock star in my book.

Social Media and the Next Generation

2009-05-18T20:14:01Z

Hat tip to Jack Lail for sharing this completely shocking and almost unbelievable video from NBC’s Today. I can’t find the video, or I would embed it. Please watch the video… It has me completely shocked.

I’m a firm believer that too much of a good thing is a bad thing. Applied to personal talents, a strength overdone is a weakness. That pretty much sums up my perspective on any technology, no matter how controversial or mundane. But this absolutely blows my mind. One teen couldn’t read a clock. Another one wondered how he would interact if he wasn’t able to send 17,500 text messages per month (seriously… I’m speechless), and another one seemed clueless about an actual newspaper. I know we celebrate that youth engage technology and are curious, but is this how social media is affecting their problem solving and social interaction skills? I mean, I honestly thought this was a joke at first.

Let me sum up my grumpy old man rant by saying that the real power/opportunity/market for social media is so misunderstood and abused by soooooo many. And apparently parents don’t teach their children constraint.