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<channel>
	<title>Venture Chronicles</title>
	
	<link>http://jeffnolan.com/wp</link>
	<description>Jeff Nolan's take on investment, innovation, entrepreneurship and the technology industry</description>
	<pubDate>Mon, 13 Jul 2009 20:37:36 +0000</pubDate>
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		<title>Dog Blogging</title>
		<link>http://feedproxy.google.com/~r/VentureChronicles/~3/BE-sWt0OP_w/</link>
		<comments>http://jeffnolan.com/wp/2009/07/13/dog-blogging/#comments</comments>
		<pubDate>Mon, 13 Jul 2009 20:37:36 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
		<category><![CDATA[Uncategorized]]></category>

		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/13/dog-blogging/</guid>
		<description><![CDATA[<p>My dog is pathetic, seriously pathetic, but this is definitely evidence that he is not at all too happy about having more babies in the house.</p>
]]></description>
			<content:encoded><![CDATA[<p>My dog is pathetic, seriously pathetic, but this is definitely evidence that he is not at all too happy about having more babies in the house.</p>

<p><a href="http://jeffnolan.com/wp/wp-content/uploads/2009/07/img-0326.jpg"><img src="http://jeffnolan.com/wp/wp-content/uploads/2009/07/img-0326-tm.jpg" width="346" height="461" alt="IMG_0326.JPG" /></a></p>
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		<item>
		<title>The Flawed Argument that Tech is Too Cheap to Meter</title>
		<link>http://feedproxy.google.com/~r/VentureChronicles/~3/yVsg2QO3wXk/</link>
		<comments>http://jeffnolan.com/wp/2009/07/13/the-flawed-argument-that-tech-is-too-cheap-to-meter/#comments</comments>
		<pubDate>Mon, 13 Jul 2009 18:55:37 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
		<category><![CDATA[Uncategorized]]></category>

		<category><![CDATA[Chris Anderson]]></category>

		<category><![CDATA[Free business model]]></category>

		<category><![CDATA[Moore's Law]]></category>

		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/13/the-flawed-argument-that-tech-is-too-cheap-to-meter/</guid>
		<description><![CDATA[<p>Vinnie raises two very good points about Moore&#8217;s Law and consumer vs. enterprise scale, all in response to Chris Anderson&#8217;s contention that the tech industry preoccupies itself with managing scarcity when it should be taking advantage of an abundance of capacity and encouraging waste.</p>

<p>I want to pick on Moore&#8217;s Law for a minute, which is [...]</p>
]]></description>
			<content:encoded><![CDATA[<p><a href="http://dealarchitect.typepad.com/deal_architect/2009/07/technology-is-becoming-to-cheap-to-meter.html">Vinnie</a> raises two very good points about Moore&#8217;s Law and consumer vs. enterprise scale, all in response to <a href="http://www.wired.com/techbiz/it/magazine/17-07/mf_freer">Chris Anderson&#8217;s contention</a> that the tech industry preoccupies itself with managing scarcity when it should be taking advantage of an abundance of capacity and encouraging waste.</p>

<p>I want to pick on Moore&#8217;s Law for a minute, which is relevant because Anderson devotes a significant amount of his foundational argument to it. Moore&#8217;s Law is one of a great many axioms that gets bastardized to fit any argument and in the process the originating thesis is discarded for convenience. Metcalfe&#8217;s Law and Gilder&#8217;s Law are similarly applied to things they never we intended for&#8230; I guess the only true law is that every industry sector believes they are deserving on their own grand unifying theory that can be used to justify continued capital expenditures.</p>

<p>I don&#8217;t consider myself an expert on semiconductor manufacturing but I do know enough about it to understand that Moore&#8217;s Law focuses on the cost of manufacturing as a consequence of fitting more on to a single chip which results in greater density on a wafer which then results in greater yield because wafers are round and flaws typically concentrate around the perimeter which as a declines as a percentage of total volume as the wafer grows in size and/or achieves higher density. The declining consumer cost was not a result of chip density but the manufacturing unit cost decline experienced through increased yields.</p>

<p>Unfortunately for those that attempt to apply Moore&#8217;s Law for their own purposes, there is a second law that Moore observed that the R&amp;D and manufacturing capital expenditures are enormous for each new node on the curve, rising exponentially for each new generation of fab. This helps explain why the semiconductor industry hemorrhages money when operating at anything less than 100% of capacity.</p>

<p>There is something quite relevant in Moore&#8217;s second law that counteracts Anderson&#8217;s free theory&#8230; because we all know that nothing is free and services that are free to the consumer are simply cost shifted to another constituency. Like semiconductors, in order to Anderson&#8217;s free theories to apply the producer has to be able to sustain massive volumes as near 100% of capacity utilization in order to justify the increasing capital expenditures required for each new generation of service.</p>
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		<item>
		<title>The AP’s Latest Master Plan</title>
		<link>http://feedproxy.google.com/~r/VentureChronicles/~3/4laYK6jOHRA/</link>
		<comments>http://jeffnolan.com/wp/2009/07/11/the-aps-lastest-master-plan/#comments</comments>
		<pubDate>Sun, 12 Jul 2009 04:32:42 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
		<category><![CDATA[Uncategorized]]></category>

		<category><![CDATA[A.P.]]></category>

		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/11/the-aps-lastest-master-plan/</guid>
		<description><![CDATA[<p>It involves adding metadata to content. Yawn. Of course for the plan to work they would have to convince search engines, portals, and any other potential referrer to actually use the metadata, which is always a challenge when the benefits are to the content owner and not the distributor.</p>

<p>Tags identifying the author, publisher and other [...]</p>
]]></description>
			<content:encoded><![CDATA[<p>It involves adding metadata to content. Yawn. Of course for the plan to work they would have to convince search engines, portals, and any other potential referrer to actually use the metadata, which is always a challenge when the benefits are to the content owner and not the distributor.</p>

<blockquote cite="http://apnews.myway.com/article/20090710/D99BPCMO1.html"><span id="article"><span id="article"></span></span>

<span id="article">Tags identifying the author, publisher and other information - as well as any usage restrictions publishers hope to place on copyright-protected materials - would be packaged with each news article in a way that search engines can more easily identify.</span>

By doing so, the AP hopes to make it easier for readers to find articles from more established news providers amid the ever-expanding pool of content online. That, in turn, could lead to more traffic and more online advertising revenue for a beleaguered news industry.

[From <a href="http://apnews.myway.com/article/20090710/D99BPCMO1.html"><cite>My Way News - AP proposes new article formatting for the Web</cite></a>]</blockquote>

<p>The one thing that I could not help but notice is that the AP in unable to give up the notion that old media is just better than everything else, which is the subtle foundational assumption that they based this plan on&#8230; if you know the source of the content is a &#8220;credible&#8221; news organization then of course you will link to it and/or syndicate it.</p>

<p>On balance I say go for it, the extra metadata attached to content feeds will be useful and if widely adopted they will contribute to a new generation of analytics tools that are able to truly parse authority and influence, which of course will further erode the position that MSM outlets currently hold.</p>

<p>The irony is that there is nothing that prevents them for adding tags to XML data feeds (RSS) today because the way RSS works is that any element (field) not understood is just ignored. It&#8217;s really one of the really neat things about how feeds work but it also encourages groundswell movements because their is nothing to stop a consuming application from adopting elements not in the standard&#8230; so evolution can occur by merit as well as by proclamation.</p>
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		<item>
		<title>SpectrumDNA and Social Media Engines</title>
		<link>http://feedproxy.google.com/~r/VentureChronicles/~3/VXnBBVT6e9Y/</link>
		<comments>http://jeffnolan.com/wp/2009/07/08/spectrumdna-and-social-media-engines/#comments</comments>
		<pubDate>Wed, 08 Jul 2009 17:49:33 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
		<category><![CDATA[Social Media]]></category>

		<category><![CDATA[Addictionary]]></category>

		<category><![CDATA[Jim Banister]]></category>

		<category><![CDATA[PlanetTagger]]></category>

		<category><![CDATA[SpectrumDNA]]></category>

		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/08/spectrumdna-and-social-media-engines/</guid>
		<description><![CDATA[<p>SpectrumDNA is a really neat company based in Park City, Utah that has developed substantial IP around delivering &#8220;social media engines&#8221; that are essentially branded applications that companies can use to deepen their connection with constituent groups.</p>

<p>Jim Banister, long time friend and all around really smart guy, has been at this for a while, long [...]</p>
]]></description>
			<content:encoded><![CDATA[<p><a href="http://www.spectrumdna.com/">SpectrumDNA</a> is a really neat company based in Park City, Utah that has developed substantial IP around delivering &#8220;social media engines&#8221; that are essentially branded applications that companies can use to deepen their connection with constituent groups.</p>

<p><a href="http://books.google.com/books?id=vUQJ-uzbWWEC">Jim Banister</a>, long time friend and all around really smart guy, has been at this for a while, long before other people started articulating these concepts, and he started the company to realize a vision that companies could engage their audiences in smart and compelling ways instead of trying to trick them into clicking on ad or into giving their personal information away. I have always been inspired by his unique blend of creative energy, industry contacts, a nose for products, and a willingness to not follow what others are doing.</p>

<p>When I met the rest of his team I was duly impressed with their productivity as represented by the amount of product they could churn out, support a growing roster of clients, and do it all with what would be considered a small team. When I learned more about their latest engine I was really blown away that they could build something that is both substantial and complex while at the same time growing their core business.</p>

<p>The first product, Addictionary, enables brands, publishers, and community owners to build and manage the lexicon that grows around successful companies and cultural themes. It&#8217;s not surprising that when given the opportunity to engage a community around language that companies can be pretty successful doing it, case in point is the <a href="http://addictionary.ellentv.com/">Ellen Degeneres Dictionary</a>.</p>

<p>The growth of Addictionary has been nothing short of impressive and not just with the quantity of user generated content being achieved but also the marquee nature of the brands lining up as clients.</p>

<p>It was that new product that really captured my imagination. PlanetTagger is at its core a location-based social network and the right question to ask next is &#8220;why the hell does the world need the 151st location-based social network?&#8221;. It&#8217;s a good question but not the right question, which is &#8220;why have their been no breakout success in LBSN and based on the learnings from what the other products are doing, how do you build something disruptive?&#8221;.</p>

<p>Jim and his team made a key observation, which is that almost all of the LBSN offerings are built around a few pivot points, the first being they are consumer grade services and the last two being somewhat connected in that they use location services for friend finding and local search. PlanetTagger is fundamentally different because it is brandable, which is consistent with broader mission of the company to build social media <i>engines</i>, and it uses location to facilitate affinity groups.</p>

<p>This gets a little complex to describe but it&#8217;s really a simple concept; everyone has 2-3 deep passions or pursuits that they engage in outside of professional and family activities. The ability to connect online with other people interested in the same pursuits is not new and if you look at forums dedicated to hobbies and interests you will see a lot of message traffic that is essentially location based, like connecting at events, or posting pictures, or &#8220;hey I&#8217;m here&#8221; messages.</p>

<p>I ride my motorcycle every week, summer and winter, and regularly check into the <a href="http://www.indianmotorcyclecommunity.com/splash.html">Indian Community Forum</a> where I see message about what other Indian riders are doing&#8230; what events they are going to, pictures from rides they took, online friends that they connected with, locations for parts, service facilities, and so on. This is exactly what a location based social network should be enabling and that is what PlanetTagger is aimed at.</p>

<p>My friendship and respect for Jim, the capabilities of the team, the caliber of the board of directors, and the products all conspired to make for an <a href="http://creativemac.digitalmedianet.com/articles/viewarticle.jsp?id=792307">easy decision to join Spectrum&#8217;s board of directors</a>. I am really looking forward to seeing them develop and hope that my contributions are additive.</p>
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		<title>New York Media Stimulus Plans</title>
		<link>http://feedproxy.google.com/~r/VentureChronicles/~3/pMZgyAe70LY/</link>
		<comments>http://jeffnolan.com/wp/2009/07/07/new-york-media-stimulus-plans/#comments</comments>
		<pubDate>Wed, 08 Jul 2009 03:59:15 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
		<category><![CDATA[Uncategorized]]></category>

		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/07/new-york-media-stimulus-plans/</guid>
		<description><![CDATA[<p>Nothing wrong with this but I wonder how they come up with &#8220;8,000 jobs over the new 10 years&#8221; and doesn&#8217;t that seem a little anemic in a city of literally 8.3 million people? It&#8217;s also not clear how much money NYC is kicking in for this program, but from what I can gather it&#8217;s [...]</p>
]]></description>
			<content:encoded><![CDATA[<p>Nothing wrong with this but I wonder how they come up with &#8220;8,000 jobs over the new 10 years&#8221; and doesn&#8217;t that seem a little anemic in a city of literally 8.3 million people? It&#8217;s also not clear how much money NYC is kicking in for this program, but from what I can gather it&#8217;s not a lot which also makes me wonder how committed they are to this beyond the press release. I guess having conservative expectations is a good thing but considering the challenges that NYC is facing, is this really what they should be spending their time on?</p>

<blockquote cite="http://blogs.wsj.com/digits/2009/07/07/bloomberg-announces-new-york-media-stimulus-plans/">
  <p>Mayor Michael Bloomberg announced plans Tuesday for a research lab, digital-media apprenticeships, a technology-equipment bond program and other initiatives designed to create 8,000 media jobs in New York over the next 10 years.</p>[From <a href="http://blogs.wsj.com/digits/2009/07/07/bloomberg-announces-new-york-media-stimulus-plans/"><cite>Bloomberg Announces New York Media Stimulus Plans - Digits - WSJ</cite></a>]
</blockquote>
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		<title>The Schizophrenia of California and How To Win an Election</title>
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		<pubDate>Tue, 07 Jul 2009 14:25:44 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
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		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/07/the-schizophrenia-of-california-and-how-to-win-an-election/</guid>
		<description><![CDATA[<p><b><br /></b></p>
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			<content:encoded><![CDATA[<p><a href="http://www.nytimes.com/2009/07/05/magazine/05California-t.html?_r=2&amp;pagewanted=print">Interesting, and very long, article in the New York Times Magazine about the challenges of governing California</a>, along with profiles of the extended list of candidates aspiring to the job. I have lived in this state my entire life and like other lifelong Californians can attest to the fact that it is really 3 states rolled up into one, there is Northern California, Southern California, and the Central Valley. Each region behaves differently on social and economic issues but all are joined at the hip as the states fortunes rise and fall with alarming frequency and this tension makes effective government a fantasy. As a state we also over-reach, which is responsible for the fantastic successes that we have but also contributes to our massive failures; we simply have to reign in what our government is doing so that all of it does not fail.</p>

<p>On the point of California fortunes, I read somewhere once that we have a state with fantastic geography, a world leading agribusiness, tourism, a climate that is second to none, high tech industry, every kind of sport possible, arts, fashion, and an entertainment business that is the global standard&#8230; and yet we still managed to fuck it all up. There is much truth in that statement and as a result the California brand has fallen into serious disrepair. What was once &#8220;as CA goes so goes the nation&#8221; is now the butt of late night talk show jokes and derision around the country as states with far less serious financial problems eye CA with the realization that the state&#8217;s problems will impact every state that borrows money.</p>

<p>In addition to the oft referenced budget deficit and housing collapse, there is another time bomb that politicians have swept under the rug and that is public employee pensions, more specifically the underfunded public employee pensions. Curiously, at no point in the NYT Magazine piece did the author bring up the issue of labor unions and their stranglehold on government, but this is a huge issue that will dwarf anything to do with taxes and housing in the years ahead.</p>

<p>Not that any of them have asked but if I were to advise any of these candidates on issue strategy for the 2010 election, this would be my advice.</p>

<p><b>Social Issues:</b></p>

<p><b><span style="font-weight: normal;">Prop 8 proved rather decisively that gay marriage is unpopular in the state yet you don&#8217;t win statewide officer elections in California on social issues so the best strategy is to avoid it. Prop 8 is the law of the land so be politically cynical about it and support gay marriage but don&#8217;t campaign on it because as a legislative priority it is not significant for the majority of voters. Supporting gay marriage takes it off the table and socially conservative voters will object but what alternative would they have on the ballot?</span></b></p>

<p><b><span style="font-weight: normal;">Death penalty and abortion are non-issues in California&#8230; voters overwhelmingly support the death penalty even if it is rarely carried out and they support abortion. I guess you could say we are a pro-death state but in the case of the actual death penalty we are okay if it is just handed out at sentencing instead of actually done.</span></b></p>

<p><b><span style="font-weight: normal;">Immigration is a social issue but also an economic issue. We have an agriculture business that absolutely depends on a migrant labor workforce but a public that overwhelmingly rejects green lighting illegal immigration. The remittances that flow back to home countries also represents an economic drag on the CA economy. We simply have to have a rational policy that absorbs and integrates migrant work forces while reducing the impact on emergency room services, school systems, state services, and law enforcement.</span></b></p>

<p><b><span style="font-weight: normal;">It is estimated that illegal immigration costs California taxpayers about $10.5 billion a year (the governor acknowledges $6b, a number certainly to be low balled), which is almost half of the state deficit. These costs cover healthcare, education, incarceration (16k illegal aliens are in CA jails) and sundry other costs. We have to have a path to legal residency coupled with stringent enforcement of the CA-Mexico border, workplace enforcement, and denial of services for illegal immigrants. We have to make a choice about where we will draw the line when it comes to illegal immigration and the majority of Californians support at a minimum border and workplace enforcement, which when the results are evident makes path to legal residency much easier to gain support for.</span></b></p>

<p><b>Environment:</b></p>

<p><b><span style="font-weight: normal;">Even if they don&#8217;t behave green most Californians are pro-green. Environmentalism should be taken up as a conservative cause but when it comes to the intersection with economics we have to make a choice, do we adopt expansive environmental regulations that have the proven consequence of driving jobs out of the state or do we adopt a third way of embracing environmentalism with restrictions to ensure that manufacturing jobs stay in CA. I&#8217;m for the latter, I believe we need to adopt conservation measures if for no other reason than to be better stewards of our environment and to use our resources less wastefully, and whether or not you believe in climate change theories this is a solid middle ground to claim.</span></b></p>

<p><b><span style="font-weight: normal;">It&#8217;s no surprise that CO2 output in the state has declined by 22% in recent years&#8230; roughly 22% of the manufacturing capacity of the state has been wiped out, so the question is not what we do to more strongly regulate environmental impacts of industry but how do we offset the costs of regulatory compliance to ensure that those businesses stay in the state and subject themselves to regulation. Imposing regulations on business with the aim of reducing CO2 is pointless if those businesses pack up and leave for Nevada or Arizona, taking the jobs they support with them.</span></b></p>

<p><b><span style="font-weight: normal;">It&#8217;s all well and good to talk about low emissions vehicles but on balance these are a far lower emitter than industrial users so putting in place policies that address businesses without driving them out of the state should be a high priority. As for homeowners, we already have enough on our plate and the already mandated renewables targets put on CA utilities will add well over $100 billion of costs on these utilities which will then be passed on to consumers so I think enough burdens have already been loaded on to homeowners and consumers.</span></b></p>

<p><b><span style="font-weight: normal;">Closely related to the overarching topic of the environment is our food supply. There are 3 primary issues affecting agriculture that deserve attention: labor issues (migrant workforce), regulatory compliance, and water. When tomato farmers in the Central Valley don&#8217;t get the water allocation they require, the cost of complying with the patchwork of regulatory agencies and commissions is onerous, and the workforce gets more expensive, they pick up and move to Baja which means that in order for fresh tomatoes to arrive in our markets they need to be shipped hundreds of miles and be subject to a more lax food safety regime. Ultimately the consumer ends up losing due to the high cost of doing business in California.</span></b></p>

<p><b><span style="font-weight: normal;">California should be at the forefront of the locally sourced food movement, and the explosion of farmers markets suggests it is but it&#8217;s not enough.</span> <a href="http://www.nal.usda.gov/afsic/pubs/csa/csa.shtml"><span style="font-weight: normal;">Community Supported Agriculture</span></a> <span style="font-weight: normal;">programs are nothing new and do enjoy strong support; California should be doing a lot more to advance these initiatives by providing marketing support, tax incentives, regulatory fast tracking, incentives for chain supermarkets to carry local produce and meats, and much more. These programs create jobs and strengthen ties between local communities and local agriculture and ranching, which to the surprise of many are everywhere in the state. When you are buying local instead of produce flown in from South America you are doing the environment and your local business community good.</span></b></p>

<p><b>Energy:</b></p>

<p><b><span style="font-weight: normal;">The simple fact of the matter is that California is running at great risk of a catastrophic failure in our power transmission system because we have done everything possible to ensure that power generation is done far away from the regional centers that use electricity. Our reliance on natural gas for electricity generation while at the same time politicians and environmental special interest groups block plans for a natural gas delivery terminal in Southern California also puts the entire state at risk. We generate a very small amount of power from hydro, geothermal, wind, and solar and the costs of increasing that supply to the 33% target could well bankrupt the state (again). The simple part of the argument is that we need more power generation capacity coupled with an expanded transmission network (which btw is already underway) while the complex part of the argument is where will the power come from.</span></b></p>

<p><b><span style="font-weight: normal;">Here Californians are conflicted and politicians simply have to take a side. Oil field development and nuclear power are two options that have strong safety track records. With oil comes natural gas and not unwelcome is the dollars that flow from a resurgent California oil industry. On the nuclear front the roadblock has been regulatory and judicial more than technology but reframing the debate in terms of clean tech, which nuclear most certainly is, will go a long way to delivering rising support numbers. Gone are the days of large scale nuclear, the future is most certainly found in 25 MWe &#8220;backyard&#8221; power plants, enough to support about 20,000 homes and located close to consumption, which puts less load on long range transmission networks and results in greater network reliability as well.</span></b></p>

<p><b><span style="font-weight: normal;">The energy issue is at it&#8217;s core an economic issue as high energy prices disproportionately affect low and middle class families. Government has an outright responsibility to articulate an energy policy that goes beyond &#8220;no, no, and no&#8221; and that simply has not happened in California for well over 30 years now, a time period over which the problem has gotten worse not better. Is it only a random coincidence, if there is such a thing, that the housing collapse came on the heels of skyrocketing energy inflation that affected everything from what you and I pay at the pump to what our food costs to how much an airline ticket costs?</span></b></p>

<p><b>Water:</b></p>

<p><b><span style="font-weight: normal;">The history of California is intertwined with the technology advances for delivering water to population centers. This is a state that for the most part sees little, if any, rain for 5 months out of the year where most of the people live, and the agribusiness owes its very existence to the water supply. With a population that continues to grow through illegal immigration and births (immigration itself is net negative as more Californians leave the state than residents of other states relocating here) and zero appetite for developing new watershed areas (dams) it is incumbent upon the leadership of the state to embrace and develop the only alternative available to us for new water supplies, desalination.</span></b></p>

<p><b><span style="font-weight: normal;">The cost of providing desalinated water (Tampa Bay in Florida has a cutting edge system) is about 4-5x more costly than what we do now, so we have to rethink how we are paying for water. Commercial users simply pass on costs to consumers so those rates should stay relatively constant, while residential users who are paying escalating amounts based on usage tiers are already paying quite a hefty bill for water so raising it 4x is utterly impractical. It&#8217;s not evident that you can run a desalination plant at breakeven on current water rates and the cost of shipping said water precludes doing it in the Central Valley where it is needed most.</span></b></p>

<p><b><span style="font-weight: normal;">The goal with any of these systems should be to ensure that the total basket of fees and taxes that a household is paying remains relatively constant, or better yet, declines. In order for this to be realized the state simply has to make living in California less expensive in other areas&#8230; which is kind of the whole crux of why California is in the mess that it is, despite having a whopper of pile of cash collected every year the state ends up spending a whole lot more. Cut baby, cut.<br /></span></b></p>

<p><b><span style="font-weight: normal;">We are also at a crossroads with the Federal government about who controls California water. The use of resources within state borders is absolutely a states rights issue and every candidate running for governor should be adamant about fighting the Federal government to stay out of California water issues. Bureaucrats 3,000 miles away in Washington D.C. should not be telling California how to allocate water supplies, even water collected from watersheds on federal lands. California rain and snow belongs to Californians no matter where it falls.</span></b></p>

<p><b>Organized Labor:</b></p>

<p><b><span style="font-weight: normal;">About 1% of California&#8217;s population is employed by the state in some fashion and the result has been nothing short of disastrous. Term limited politicians thought nothing of agreeing to eye popping compensation and benefit raises for unionized public sector employees resulting in a system that is in complete meltdown. We have the best paid teachers in the nation in a school system that regularly competes for worst in the nation, police and police and fire employees retiring after 25 years with 90% of their salary as a pension, and the list goes on. There is simply no way to get out of the financial black hole CA is in without addressing the labor issues.</span></b></p>

<p>Changing contracts only solves part of the problem because existing retirees deserve to receive the benefits that were promised to them when they retired. As the population ages longer and retiree ranks grow, the cost of providing the promised services will certainly overwhelm public employee pension systems, which will then fall back to the state and county level for increased contributions to said systems. Calpers is already talking about $3-4 billion in additional contributions from counties in years forward, money that will come out of services in order to pay for retiree pensions and benefits. If you look at what happened with union retiree benefits in the U.S. auto industry it is a mirror image of what is happening in public employee systems only it&#8217;s 1000x worse with public employee pensions. Going forward we have to plan on a much lower public payroll, without dramatically sacrificing the services that government should be providing (more on that in a minute).<br /></p>

<p>We have added $7 billion a year in retirement contributions to the state budget over the last 10 years and as people continue to live longer the result will be that this bill will grow to astronomical numbers in the decades ahead. The one certainty that the state has achieved is that future generations, our children, will be saddled with a huge annual bill for retiree benefits and facing that with fewer jobs and increasing taxes.</p>

<p><b><span style="font-weight: normal;">Any candidate running for statewide office should be outspoken in their desire for a smaller government payroll and in the process they should be demonizing labor unions in the court of public opinion (which already thinks very little of labor unions). The California voter class is far larger than the union member class and because people tend to vote with self-interest first instead of according to group affiliation, the strategy should be to drive a wedge between unions and the public, and to paint unions as just another special interest group that attempts to buy every election with outrageous advertising budgets and intimidation tactics.<br /></span></b></p>

<p><b>Taxes:</b></p>

<p><b><span style="font-weight: normal;">There are four primary tax systems in California: property taxes, sales taxes, income taxes, and use fees (e.g. vehicle registration). There is much talk about the impact of Proposition 13 on property tax revenues but the inconvenient fact is that property taxes in CA are right in the middle of national averages, while our sales, income and use fees are near the top of the list. New York, New Jersey, and California regularly top the most heavily taxed state list and these 3 states combined form the bulk of the aggregate budget deficit that all but North Dakota and Montana are experiencing, yet politicians on one side of the aisle dare say that the residents of these three states are not taxed enough. That is the crux of the argument about property taxes in California, being average is not enough&#8230; we must pay more in taxes than any other state. While we are at it, we must also have the most radically progressive income tax system whereby fewer than 5% of the state income tax filers are generating over 50% of the gross income tax receipts, 144,000 taxpayers pay 25% of the income taxes. It&#8217;s straight up cognitive dissonance on a massive scale.</span></b></p>

<p><b><span style="font-weight: normal;">The voters spoke on May 19 and overwhelmingly they said &#8220;enough!&#8221; to new taxes and accounting gimmickry. Every candidate for statewide office should be adamant that s/he will not sign any legislation that raises taxes and fees. This crosses party affiliation, age demographics, and region (except San Francisco, which was the only county to vote in favor of raises taxes in the most recent election, but that&#8217;s about 2% of the population and hardcore Democrat so if you are a Dem you don&#8217;t have to worry about swing voters and GOP candidates won&#8217;t win SF in any election so why bother). Voters simply don&#8217;t trust Sacramento any more so instead of proposing more taxes that only serve to fuel the discontent of the average person and out of state business migration, simply do less and do it well in order to regain the trust of the citizenry.</span></b></p>

<p><b><span style="font-weight: normal;">Gubernatorial candidates should also be honest with the voters about the fact that fees for government services are in fact taxes and fees mandated on private sector activities are taxes. Just look at your cell phone bill or hotel checkout bill. Government requires revenue but there is something grossly unfair about the system we have today, in addition to the rather obvious observation that it isn&#8217;t working.</span></b></p>

<p><b>Scope of Government:</b></p>

<p><b><span style="font-weight: normal;">For decades California voters have been guilty of having their cake and wanting to eat it too&#8230; we vote for a comprehensive and socially activist form of government yet reject the revenue measures that are required to pay for these things, or worse we vote for bond measure after bond measure with what can only be described as obliviousness to the fact that bonds are debt and must be serviced with interest payments that rob the general operating budget of resources. California has authorized well over $110 billion in debt over the years, more than any other state by a very wide margin.</span></b></p>

<p><b><span style="font-weight: normal;">We also a guilty of voting for every feel good measure that hits a ballot even when their is little evidence, statistical or even anecdotal, that these programs work. California&#8217;s Head Start (preschool) program is a great example of this with taxpayers funding pre-kindergarten (bulk of children in program are 3 and 4 year olds) for 120,000 yet repeated regression analysis of test data with pre-head start generations shows no statistical improvement in testing. So basically California taxpayers are funding day care for 120k children&#8230; is this what taxpayers voted for? No.</span></b></p>

<p><b><span style="font-weight: normal;">Candidates should be rejecting the expansion of government and putting in place performance benchmarks on existing program in order to justify their continued funding.</span></b></p>

<p><b>Education:</b></p>

<p><b><span style="font-weight: normal;">Simply put, it&#8217;s a mess. We have the highest teacher salaries in the country and a K-12 system that competes for last place in the nation. Voters have time and again stepped up with funding measures and political support yet it has been squandered on a substandard education system that distorts property values (in a good school district, you home value pops) and more importantly, steals an education away from children. 50% of our education funding goes to overhead rather than the classroom, more than any other state in the nation. Bottom line, if you can afford it you will send your children to private schools or pay up for a house in a better district and justify it by writing off a portion of your mortgage expense on your taxes.</span></b></p>

<p><b><span style="font-weight: normal;">We need a better K-12 system but there is simply no way we will get it within the current system. My candidate for office would support school vouchers and frame the issue as one of basic human rights, every student should have the opportunity to get an education. The CTA, among others, will go nuclear but the fact is that they are already on thin ice so attacking them where it hurts, with parents, is a strategy that should not be avoided.</span></b></p>

<p><b><span style="font-weight: normal;">California&#8217;s K-12 system may be beyond repair but the larger point is that reform will be impossible if all the same interest groups are still in place. A candidate who wants to go beyond rhetoric would talk about wholesale dismantling and reassembly of K-12 rather than token measures that happen out at the edge. The time is right, and not just because parents and children are getting cheated but because the education money train is at the end of the line. The time for bold action is here.</span></b></p>

<p><b>Prisons:</b></p>

<p><b><span style="font-weight: normal;">California incarcerates a very large number of people. We can debate the societal consequences of prison but voters have said time and again that they want strict sentences for crimes, the 3 strikes system, and monitoring of special classes of parolees and sex offenders. All of these things have a cost associated with them and on some measures CA has totally failed in it&#8217;s responsibility to the inmates, namely with the prison healthcare system that is currently being run by the Federal government by court order.</span></b></p>

<p><b><span style="font-weight: normal;">We do need more prisons but we don&#8217;t need more prison guards, which have benefited significantly from rich contracts. We need more technology in prisons to improve the inmate/guard ratios and we need to shut down aging facilities like San Quentin. We should also be working on a regional basis with neighboring states to break up prison gangs by dispersing them across facilities in different states (already being done), and we should absolutely privatize minimum security facilities.</span></b></p>

<p><b><span style="font-weight: normal;">We have a parole system that is also of questionable benefit, especially considering that parolees form the single largest group of new criminal offenders. We rejected the notion that prisons could reform criminals, indeed it simply did not work, but what can we do to improve the conditions by which parolees that are ready to accept the responsibilities society puts on them can actually be successful in their parole process? Like any rehabilitation program we should be investing in the techniques to identify motivated parolees and provide them with the assistance they need, like job training, placement, and life skills&#8230; but if the state fails to create jobs on a massive scale it really doesn&#8217;t matter because without opportunity even the motivated will fail.</span></b></p>

<p><b>Healthcare:</b></p>

<p><b><span style="font-weight: normal;">Not going to touch this one. It&#8217;s big, it&#8217;s expensive, and it&#8217;s fully of nasty special interest groups&#8230; plus whatever California politicians would like to do the simple fact is that we can&#8217;t afford any of the options. Besides, if the government can prove that it can effectively manage a healthcare system by first reforming MediCal, then I&#8217;m all for more government involvement in healthcare but until then I pass.</span></b></p>

<p><b>Conclusion:</b></p>

<p><b><span style="font-weight: normal;">I think it&#8217;s a cop-out to say California is unmanageable, I prefer to think that we have been suffering from an illness caused by career politicians who are more interested in advancing their political careers than in advancing the causes that matter to Californians. How else can you explain the grand canyon sized disconnect between politicians and the citizenry, or the explosion of ballot initiatives as people and interest groups see no value in going to the legislature, instead focusing directly on the electorate? I shudder at the thought of what would happen if we did in fact convene a new constitutional convention, shudder at what a monstrosity of a document would come out of such a process.</span></b></p>
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		<item>
		<title>Remembering Independence Day</title>
		<link>http://feedproxy.google.com/~r/VentureChronicles/~3/QaHKYq0kpLo/</link>
		<comments>http://jeffnolan.com/wp/2009/07/04/remembering-independence-day/#comments</comments>
		<pubDate>Sat, 04 Jul 2009 21:35:59 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
		<category><![CDATA[Uncategorized]]></category>

		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/04/remembering-independence-day/</guid>
		<description><![CDATA[<p>On Independence Day I often think of Lincoln&#8217;s speech dedicating the battlefield cemetery at Gettysburg. Brief by any standard, Lincoln&#8217;s words derive their potency not from prose but from the substance of what Lincoln was affirming, in particular the final paragraph.</p>

<p>&#8220;But, in a larger sense, we can not dedicate &#8212; we can not [...]</p>
]]></description>
			<content:encoded><![CDATA[<p>On Independence Day I often think of Lincoln&#8217;s speech dedicating the battlefield cemetery at Gettysburg. Brief by any standard, Lincoln&#8217;s words derive their potency not from prose but from the substance of what Lincoln was affirming, in particular the final paragraph.</p>

<blockquote>
  <p><i>&#8220;But, in a larger sense, we can not dedicate &#8212; we can not consecrate &#8212; we can not hallow &#8212; this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us &#8212; that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion &#8212; that we here highly resolve that these dead shall not have died in vain &#8212; that this nation, under God, shall have a new birth of freedom &#8212; and that government of the people, by the people, for the people, shall not perish from the earth.&#8221;</i></p>
</blockquote>

<p>Lincoln reminds us all that Independence Day was a starting point for something bigger than any one man, an ideal that men are endowed with rights that no government can take away and equally important that government itself derives it&#8217;s power from those willing to be governed. That we are able to enjoy these self-evident truths today is a result of countless generations of men and women before us who made the ultimate sacrifice to defend these freedoms that the Founding Fathers put pen to parchment on this day in 1776.</p>

<p>As we celebrate the Declaration of Independence today let us not forget that &#8220;great task remaining before us&#8221; that around the world far too many peoples suffer under oppressive regimes and immoral governments, women are second class, being gay will bring a death sentence, and the right to criticize one&#8217;s government and seek redress is not absolute. To fall into the trap of accepting that in some cultures all men are not created equal is a betrayal of the very core of what it means to be American.</p>
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		<item>
		<title>Facebook Connect Is A Huge Success</title>
		<link>http://feedproxy.google.com/~r/VentureChronicles/~3/xrfSYPknTLI/</link>
		<comments>http://jeffnolan.com/wp/2009/07/02/facebook-connect-is-a-huge-success/#comments</comments>
		<pubDate>Thu, 02 Jul 2009 19:55:43 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
		<category><![CDATA[Uncategorized]]></category>

		<category><![CDATA[Facebook]]></category>

		<category><![CDATA[Facebook Connect]]></category>

		<category><![CDATA[Google]]></category>

		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/02/facebook-connect-is-a-huge-success/</guid>
		<description><![CDATA[<p>I&#8217;d go with that assessment. Connect has made identity/authentication so much easier for third party app providers and at the same time has struck a serious blow to Google in that these relationships are not transactional and it is a zero sum game. With FB adoption where it is and so much momentum on the [...]</p>
]]></description>
			<content:encoded><![CDATA[<p>I&#8217;d go with that assessment. Connect has made identity/authentication so much easier for third party app providers and at the same time has struck a serious blow to Google in that these relationships are not transactional and it is a zero sum game. With FB adoption where it is and so much momentum on the Connect initiative, there is little incentive for third party service and app providers to go with any alternatives.</p>

<blockquote cite="http://www.businessinsider.com/six-months-in-facebook-connect-is-a-huge-success-2009-7">
  <p>As much as Beacon was Facebook&#8217;s low point, that service&#8217;s replacement, Facebook Connect, is vaulting the company to new heights six months after its November 2008 launch.</p>[From <a href="http://www.businessinsider.com/six-months-in-facebook-connect-is-a-huge-success-2009-7"><cite>Facebook Connect Is A Huge Success -- By The Numbers</cite></a>]
</blockquote>

<p>The long term strategic value of Connect is in layering on additional service offerings that can slipstream into application services. Identity and authentication are clear wins today, profile data is increasingly accessible, and long term that ability to build in payment services, advertising network extensions, analytics, and CRM capabilities is entirely within their grasp.</p>
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		<item>
		<title>Protect the Abusers By Punishing the Rule Following Majority</title>
		<link>http://feedproxy.google.com/~r/VentureChronicles/~3/r5JLtQK5tXU/</link>
		<comments>http://jeffnolan.com/wp/2009/07/02/protect-the-abusers-by-punishing-the-rule-following-majority/#comments</comments>
		<pubDate>Thu, 02 Jul 2009 15:35:12 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
		<category><![CDATA[Uncategorized]]></category>

		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/02/protect-the-abusers-by-punishing-the-rule-following-majority/</guid>
		<description><![CDATA[<p>There&#8217;s a lot of this going around this year.</p>

<p>An FDA panel’s recommendation to withdraw Vicodin, Percocet, and other opioid-plus-acetaminophen painkillers seems calculated to “sacrifice the interests of consumers who follow instructions for the sake of consumers who don’t”, says Jacob Sullum.[From “”If you keep track of what you’re taking, none of this is [...]</p>
]]></description>
			<content:encoded><![CDATA[<p>There&#8217;s a lot of this going around this year.</p>

<blockquote cite="http://overlawyered.com/2009/07/if-you-keep-track-of-what-youre-taking-none-of-this-is-an-issue-for-you/#comments">
  <p>An FDA panel’s recommendation to withdraw Vicodin, Percocet, and other opioid-plus-acetaminophen painkillers seems calculated to <b>“sacrifice the interests of consumers who follow instructions for the sake of consumers who don’t”</b>, says Jacob Sullum.</p>[From <a href="http://overlawyered.com/2009/07/if-you-keep-track-of-what-youre-taking-none-of-this-is-an-issue-for-you/#comments"><cite>“”If you keep track of what you’re taking, none of this is an issue for you”</cite></a>]
</blockquote>

<p>The Federal government has pushed for mortgage bailouts for people who borrowed money they could not afford to pay back, as evidenced by <a href="http://www.housingwire.com/2009/05/22/fannie-program-sees-70-recidivism/">Fannie&#8217;s recidivism rate of 70%</a> on their HomeSaver Advance program which was aimed to help people overcome hardship in making their loan payments. These programs are paid for by the U.S. taxpayer, who by an overwhelming majority does not default on their mortgages.</p>

<p>Next came credit card &#8220;relief&#8221; which is <a href="http://www.google.com/hostednews/ap/article/ALeqM5h7NszvxzYUnoARo5GIr7BIm30vIQD995T0IG0">proving to be anything but relief as lenders jack interest rates</a> in anticipation of the new rules and contract lending as a result of the Federal government&#8217;s intervention. The chargeoff rate for credit card companies is about 12%, really high, but 40% of American credit card holders still pay off their balances monthly. The interest rates hikes won&#8217;t affect that group but it will dramatically increase the cost of borrowing for people who maintain reasonable balances on their credit cards, and the fee increases that banks are instituting more broadly affect everyone. In effect, Congress and the President created a law to protect that abusers of credit cards that is ending up costing everyone who uses credit cards.</p>

<p>Now we have the FDA stepping into multi-ingredient painkillers because a small percentage of people abuse them. Not to make light of any single death, but the fact remains that 400 deaths a year in a nation of over 300 million people is a rounding error on a rounding error&#8230; on a rounding error. It&#8217;s almost like they want to create reason to intervene and project regulatory power when in fact the cause is not the drugs themselves but people who refuse to follow the instructions. Getting beyond acetaminophen for a moment, what does this suggest for future medical advances that are premised on personalized drugs which combine many ingredients based on the unique physiology of a single patient.</p>
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		<title>Why Did I Unfollow You</title>
		<link>http://feedproxy.google.com/~r/VentureChronicles/~3/G8Xyabnss3U/</link>
		<comments>http://jeffnolan.com/wp/2009/07/01/why-did-i-unfollow-you/#comments</comments>
		<pubDate>Wed, 01 Jul 2009 23:18:44 +0000</pubDate>
		<dc:creator>Jeff</dc:creator>
		
		<category><![CDATA[Uncategorized]]></category>

		<category><![CDATA[Twitter]]></category>

		<guid isPermaLink="false">http://jeffnolan.com/wp/2009/07/01/why-did-i-unfollow-you/</guid>
		<description><![CDATA[<p>I&#8217;ve been cleaning up my Twitter-roll and unfollowing a bunch of people, here&#8217;s why:</p>

<p>1) You don&#8217;t tweet. I don&#8217;t think anyone really needs to pump out 50 tweets a day to be interesting&#8230; but the corollary is true as well, if the only tweet you have posted in the last 2 months is &#8220;going for [...]</p>
]]></description>
			<content:encoded><![CDATA[<p>I&#8217;ve been cleaning up my Twitter-roll and unfollowing a bunch of people, here&#8217;s why:</p>

<p>1) You don&#8217;t tweet. I don&#8217;t think anyone really needs to pump out 50 tweets a day to be interesting&#8230; but the corollary is true as well, if the only tweet you have posted in the last 2 months is &#8220;going for lunch, indian food&#8221; don&#8217;t be surprised if you get unfollowed. Twitter is a stream, not a feed.</p>

<p>2) You pimp your company, and then do it some more. A lot of people seem to think that Twitter exists solely for them to tweet out press releases about their company, or every tweet is cheerleading on behalf of their company. Balance people, balance. It&#8217;s all well and good to tweet out news about the great things your company is doing, but balance it out with interesting links to news from around your industry. The odds are pretty damn good that you know more about what your competitors, partners, and other interesting companies are doing than I do, and that&#8217;s why I followed you in the first place. I would expect a company twitter profile to be exclusively focused on company news, but not a person working for that company.</p>

<p>3) You are rude. It&#8217;s okay to disagree but to do so in a condescending or offensive manner is not appropriate, and just because it&#8217;s online doesn&#8217;t mean you can say things to me that you would not say to my face. Interestingly, this is the least frequent cause for unfollowing&#8230; most people I encounter online are actually more polite and civil, even if in violent disagreement, than the average person walking down the street in SF.</p>

<p>4) Serial retweeters. I&#8217;ve noticed that some people are following thousands of people with the intent of getting followed themselves, and then retweet nonstop to gain prominence. I&#8217;m not sure what the end game is here beyond building an authority ranking on third party services but it is not interesting. Some of this behavior is bot driven.</p>

<p>5) You tweet about inane bullshit. I really don&#8217;t care that you are &#8220;going for lunch, indian food&#8221; but if that is mixed in with interesting links, substantive tweets, good retweets, and other meaningful stuff, well I can skip over the meaningless stuff&#8230; but if the only thing you are tweeting about is inane bullshit, I&#8217;m unfollowing you. Signal to noise ratios, too low is a problem.</p>
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