Chris B. Leyerle

It's Hard Raising Money

2013-05-18T23:48:00.000-07:00

Serial Startups

Translation...

2013-05-17T23:54:00.000-07:00

...Into a Foreign Language

~ "A loud noise at one end and no sense of responsibility at the other."

Leave alone those that bandy 'bout a megaphone...

Another Market Failure

2013-05-16T23:45:00.000-07:00

Heads I Win, Tails You Lose...

~ When oil is cheap there is little incentive to develop and commercialize biofuels or other liquid alternatives. Especially since they largely remain generally more costly than conventional hydrocarbons.

But when the price of a barrel of oil rises, alternative energy fuels will surge, right?

Actually, no:

Now that we’ve had years of high oil prices, what’s really taking off is oil production. High prices have stimulated investment in advanced technologies for extracting difficult-to-reach sources of oil... As a result, oil supplies are growing fast... [and] biofuels production is growing slower than expected, and for years it will continue to provide only a negligible fraction of fuel worldwide.

According to [an IEA] report, worldwide oil production will reach 103 million barrels per day by 2018, growing by 8.3 million barrels per day between now and then. Total biofuels production will amount to 2.36 million barrels per day, up only slightly from the 1.86 million barrels per day in 2012.

When oil is cheap, one cannot make money in alternatives and when oil is expensive, one can make more money there than in alternatives.

The accelerated development of alternative liquid fuels thus requires something other than a simplistic market incentive. Meanwhile the externalized costs continue to mount.

Where's It Wednesday—CXXIII

2013-05-15T22:00:00.000-07:00

Where in Seattle is this?

Answer next week.

Details on the weekly Where's It Wednesday puzzle here.
Other weeks' puzzles here.
Answer to last week's puzzle, after the jump.

Last week's picture shows a distinctive piece of art at Seattle Center:

The work, Olympic Iliad, is by Russian-American editor, publisher and artist Alexander Liberman:

Alexander Liberman's largest sculpture, Olympic Iliad, is a monuental agglomeration of steel cylinders located on the lawn surrounding the Space Needle. Liberman, known for his use of industrially manufactured materials, used giant steel cylinders cut at varying angles and lengths, painted them an industrial red and assembled them to form an immense structure than one can walk around and underneath. A similar artwork of Liberman's, Iliad, can be found at the Storm King Art Center in Mountainville, New York.

Thirsty? You're Going to Pay

2013-05-14T23:53:00.000-07:00

Greed Ascendant

~ If water is not a human right, then what is?

(h/t Keithpp's blog)

Metro Transit's Funding Gap

2013-05-13T22:55:00.000-07:00

Slow Starvation

~ Once again, Metro Transit has a revenue shortfall.

And once again, the proposed solution is to cut service, and further diminish pubic transit.

It's a vicious circle, or perhaps more accurately, a death spiral. As routes are cut or curtailed, the overall utility of the system suffers as well. As the system becomes less useful and timely, people use it less, and revenues from the fare box decrease.

Lather, rinse, repeat.

Conversely, increasing service and making transit more available, more accessible, and especially, more affordable, increases ridership. Public transit use has been increasing locally; we should be building on that, not thwarting it.

Metro Transit needs additional funding. Cost cutting is but a slogan, not a real, considered solution that would make a (positive) difference. Fully funding public transit increases use of the system, promoting urban vitality, reducing congestion and air pollution, and improving our quality of life. In fact, public transit should be free; the costs and benefits are very favorable compared to alternative public expenditures, particularly car infrastructure.

There is a public hearing tomorrow afternoon.

Also posted to Fare-Free Northwest blog.

What Big Oil Can Learn from the Gun Manufacturers

2013-05-12T23:35:00.000-07:00

Astroturfing Savvy

~ Big Oil could learn a lot about faking broad public support from the gun lobby.

The National Rifle Association (NRA) is famed for its political clout, as well as its obstinacy: it routinely gets its legislative way, defeating any and all efforts, no matter how incremental, to protect us from gun violence.

They take a much harder line than their membership, unless you consider their so-called "corporate partner" members—gun manufacturers. The NRA best represents not its gun-owning individual members, but rather its profit-loving gun manufacturer members, a truth now glaringly obvious from the failure of Congress to respond to the latest atrocity, at Newtown, CT., notwithstanding the overwhelming public support for meaningful action.

How and when that changes, no one yet knows.

Meanwhile, the NRA continues to manage, in spite of everything, to style itself as a protector of constitutional rights and "an advocate for millions of law-abiding gun owners." This is somewhat true, but has not been the whole truth for a long time, as recent events make plain.

What is interesting is how little most of the media coverage really focuses on this piece of PR legerdemain. The NRA continues to get away with pretending that they are foremost about the interests of millions, when they are really serving the interests of a corporate few. The millions are just cover. They're astroturf—fake grassroots.

Which all sounds a lot like what Big Oil, King Coal and the rest of the Fossil Behemoths have tried for years to concoct, unsuccessfully. Much of the public sees through the astroturfing of the energy sector, but are strangely blind to that of the weapons sector. Why is that? And what would happen if Big Oil had a new, and smarter lobbying group than the American Petroleum Institute, and a craftier spokesman than Jack Gerard, who framed everything around their energy-using individual members instead of endlessly complaining about the supposed unfairness of fossil fuel company criticisms?

National Train Day

2013-05-11T22:51:00.000-07:00

Go Take a Train

~ I've posted many times about trains. It's a pleasing form of travel, usually rapid because of its own right-of-way, and very energy efficient.

They can be very fast.

Or maybe too fast.

Kids like them.

Adults like them.

You might see a superhero.

Who knows what you might see...

The best part is the scenery one can see out the window.

And with room to move around, it can be pretty scenic inside too.

Let's ride!

Living and Dying in 3D

2013-05-10T23:00:00.000-07:00

Printed Guns

~ It had to happen.

The incredible advances in 3D printing, and the rapidly shrinking costs, have made weapons like the Liberator pistol inevitable. We may not need to worry—yet—but it is only a matter of time before it revolutionizes many things, including crime.

3D printing is poised to be another new technology where the capabilities are increasing and becoming more widespread faster than policy can keep up. Not just guns, but many other things, at least in theory, can and will be built from this technology, whether in the privacy of your home, or, without the capital expense, at your local store. Many kinds of things have already been made. In the future, perhaps the very near future, one will be able to print not just prosaic hardware, but other weapons, chemicals, even animal or human tissue, meat, drugs (legal or not)—maybe whatever one can imagine. Forget postal regulations, export controls, anti-proliferation, regulation, or licensing which all may become quaint notions of a simpler time.

Expect some lawmakers to use this as a reason for tighter control and ubiquitous monitoring of the Internet. Having the unfettered ability to print what you want may not, in the end, make us freer to do what we want, but instead lead to greater governmental intrusion. It's not the Second Amendment at play here, but the First.

The US government has already leaped into action, but only after the download of at least 100,000 copies of the Liberator. Already there have been calls by a US Representative and a Senator for restrictions on the technology or its dissemination.

So, in the aftermath of the defeat of gun legislation requiring universal (and eminently sensible) background checks, let's listen to what the NRA had to say about these calls for a new kind of gun control:

Crickets.

Actually, this isn't really a surprise. I wouldn't expect the NRA to squawk about restricting 3D printing of guns, since it is abundantly clear that they represent gun manufacturers, not gun owners. 90% of the US public, and a majority of NRA members and gun owners may support more restrictions on guns, but their manufacturers do not, so long as they are the only ones making them in any volumes.

Carbon Intoxication

2013-05-09T23:27:00.000-07:00

Scientists are Not Immune

~ I've been formally trained as a computer scientist, and at one time made a very good living from it at a top institution. However, just because I am a "scientist" it does not mean that I am qualified to discourse on scientific subjects at large.

This does not, however, much deter some scientists from fulminating well outside their areas of expertise or qualification. Or spouting their personal beliefs from ideologically aligned platforms. Today we have been treated to another tired retread of an article in the Wall Street Journal by climate change simpleton William Happer. Along with astronaut Harrison Schmidt, he claims, again, that more atmospheric carbon is good for us because we need plants, and plants need carbon dioxide.

Much of the article can be dismissed on factual grounds with reference to what actual climate science and climate scientists can tell us. (I'm no expert—being a computer scientist does not make me a general scientific expert—and I happily defer to those who are.) Happer and Schmidt focus on the tired and discredited trope that carbon concentrations have been higher in geological time (true) but ignore the recent, and utterly unprecedented rate of change in those concentrations. Sure, life flourished, but not human life, and species that cannot adapt to a changing environment not infrequently suffer or become extinct. Evolution does not work well in short time periods of rapid environmental shift.

This is not the first time that Happer has insinuated himself as an expert. Following is a post I wrote several years ago regarding Happer, reprinted in its entirety (and slightly edited) both because it highlights his lack of relevant expertise, and because, with the imminent demise of Hydrovolts, I am uncertain how long this post might remain available.

It would be so nice if something made sense for a change.

Alice could just as easily have said this listening to any of Exxon's climate change deniers, which the oil giant, despite repeated promises to stop, continues to fund. The latest? An Ivy professor claims we are suffering from a carbon "famine". You can't make this stuff up.

Dr. William Happer of Princeton University testified last Wednesday before the Senate Environment and Public Works Committee last week. He had an utterly novel take on atmospheric CO2 levels, saying that today represents a CO2 "famine" compared to levels of "80 million" years ago. Incredibly, Happer stated that higher CO2 levels would be beneficial to humankind. More CO2, a little warming--it's really all "fine". You really have to watch the video to get the full measure of his glib fatuousity:

Senator Barbara Boxer (D-CA), chair of the committee was nonplussed at the specious comparison, but had the good sense to note afterwards that Happer is chair of the George C. Marshall Institute, which receives a large part of its funding from Exxon Mobil. Exxon is well known for its greenwashing, spin and self-serving PR. It is really laughable what that funding can buy! Happer provided another weird equivalence: carbon restrictions and Prohibition:

Prohibition [of liquor] was a mistake and our country has probably still not fully recovered from the damage it did... Institutions like organized crime got their start in that era. Drastic limitations on CO2 are likely to damage our country in analogous ways.

Yes, I can see it now. Illicit gasoline using homemade refining techniques in backwoods stills. Carbon revenuers chasing them down. Speakeasies filled with furtive patrons giddy from the use of oil lamps. A black market for plastic packaging clamshells. Will organized crime be smuggling petrochemical fertilizers to the family farm? What "analogous ways" is Happer imagining?

What's really ridiculous about this pathetic attempt at fear-mongering is that carbon crime is already happening repeatedly. Happer also warns about the supposedly ruinous costs of carbon restraint, again without any evidence. The costs of not dealing with the problem, including desertification, rising sea levels, etc. are not considered. In comparison, the cost of a carbon regimen seem modest.

Happer, like many denialists, has no degree or other evident credentials in climatology; instead Happer is the Cyrus Fogg Brackett "I am not a climatologist" Professor of Physics at Princeton University. In his testimony he is literally hand-waving as he throws out wild numbers of alleged CO2 concentrations of "a thousand" and "3 or 4 times" what they are today. He states without attribution that, while there has been warming historically, it has "ceased" in "the past ten years," a fabrication at odds with the data.

His grasp of geologic time periods is equally reality-free. After derisively dismissing "propaganda" in children's books about climate change one wonders where he gets his information--perhaps a book showing cheerful cave dwellers gamboling about in a tropical idyll with their pet dinosaurs? Treehugger provides a snarky summary on what those times were really like.

Happer's prepared text [pdf] cites Orwell and Voltaire as authorities, attacks the usual strawmen like "inaccuracies" in Al Gore's slide show, and rehashes long discredited denier talking points as if they were fresh insights. Nothing new here. Increasing atmospheric concentrations of greenhouse gases (GHG) and especially carbon dioxide (CO2) alarm respected researchers because they believe, based on their broad, inclusive and peer-reviewed scientific assessment, that the resulting temperature increases will produce tipping point events that will be very damaging to humankind and will not be easily mitigated or reversed for many generations.

There is a broad scientific consensus on climate change. However, there will always be sceptics for whom no amount of scientific vetting will ever be enough. For these people, climate change remains and will forever remain an "unproven theory", a "hypothesis", etc. One wonders if they understand the scientific method, the way in which scientists create systems for understanding natural phenomena based on observation, hypothesis and experimental verification. If they applied the same level of scepticism to other areas of science they would be equally unconvinced by such "theories" as gravity, the roundness of the earth, or evolution. (Well, that last one is also a favorite of the "unproven!" crowd.)

Beyond the unscientific sceptics, for whom there is never enough evidence, there are also the anecdotal sceptics, for whom irrelevant data has exalted meaning. However, my favorite are the fantasy sceptics, for whom fictional data, whether derived from literature, cranks, or sheer conjecture of their own febrile imaginations ("what if!") has enough import to doubt anything. Some of these people even get to rave to Congress as "experts". Imagine.

The George C Marshall Institution (GMI), which provides Happer's soapbox, says on its home page:

Our mission is to improve the use of science in making public policy about important issues for which science and technology are major considerations.

They go on in a very high-minded fashion about the importance of unbiased, impartial, accurate scientific fact to guide and inform policy decisions:

Where science is misused and distorted to promote special interests, GMI works to improve the situation:

by communicating scientific information clearly,

by identifying key linkages between science and policy issues,

and by providing balanced and accurate assessments on specific science-based
policy issues.

The Institute's accurate and impartial analyses are designed to help policy makers distinguish between opinion and scientific fact so that decisions on public policy issues can be based on solid, factual information, rather than opinion or unproven hypotheses.

Says the George C Marshall Foundation of the former General, Cabinet Secretary and Nobel Laureate for which it is named:

His principles of honesty and truth gained the trust of millions of Americans and the respect of world leaders throughout his years of service.

Truthfully, one wonders what George C Marshall the man would make of his namesake Institute's current Chair and his bizarre claims. Honestly. Update: Just to clarify, the George C Marshall Foundation seeks to "promote the values and beliefs that encompass George Marshall's legacy for the benefit of future generations". The George C Marshall Institute is not affiliated with the Foundation and claims to "conduct technical assessments of scientific issues with an impact on public policy." (h/t the future is green)

Where's It Wednesday—CXXII

2013-05-08T23:57:00.000-07:00

Where in Seattle is this?

Answer next week.

Details on the weekly Where's It Wednesday puzzle here.
Other weeks' puzzles here.
Answer to last week's puzzle, after the jump.

Last week's picture shows part of the facade of the iconic Seattle restaurant McCormick's Fish House:

This as the very first restaurant at which I ate in Seattle, more than 30 years ago, and still a favorite, even if the days of $1 oysters are mostly but a fond, and distant, memory.

House Effects

2013-05-07T23:27:00.000-07:00

Using Intramural Rivalry

~ My high school had (and still has) a house system, modeled on the traditional arrangement in English schools. All students are assigned to one of four houses, each with its own symbols, traditions, and social events. They provide a way of promoting esprit de corps across different grade levels, but their most obvious purpose is to provide various forms of intramural competition in sports, debating or other contests.

J.K. Rowling imagined a house system at the fictional Hogwarts.

Similar loyalty-building divisions and intense competition can also be found between the various branches of the US military, especially among the elite units of the Joint Special Operations Command (JSOC).

Companies sometimes form competing "skunk works" teams to each independently tackle tough problems.

These institutions all seek through a kind of tribal loyalty to promote rivalry and vigorous competition that, in theory increases the excellence of all.

So why isn't it working at Microsoft?

Oceans of Trash

2013-05-06T23:44:00.000-07:00

How Long Until It's Gone?

~ I have found every one of these things (and more) washed up on beaches.

At least the ocean turns broken bottles into polished sea glass, but diapers.... there's no polishing that turd.

From Nucleus to Universe

2013-05-05T23:38:00.000-07:00

Orders of Magnitude

~ This blog is too cool.

Startup Salaries

2013-05-04T23:36:00.000-07:00

Which Risks to Take?

~ How much should startups pay in salaries?

One line of thinking, advanced largely by rookie angel investors and those who have never worked in a startup, is... nothing. The justification? A need to "conserve cash" so the startup can maximize the length of its runway, the period of time it can continue operations (and take self-sustaining flight) before the bills can no longer be paid.

This idea is, simply, wrong. It is behaviorally naive, financially simple-minded, and legally dangerous. Here's why:

Behaviorally naive: Almost no one will long work willingly for nothing. Where the likelihood of reward is on the near horizon some people have motivation and can endure privation. Some. When the horizon is more distant or the outcome more uncertain people leave for something less sketchy. Further, few can be enlisted in the first place because the personal risks are too great. Competition from opportunities with more certain futures, and the confidence expressed by paying the team, is too strong.

Financially simple-minded: There are a lot of ways to extend the runway other than creating a latter-day plantation. Foremost among these is the founding entrepreneur doing more him or herself rather than paying others. Who needs attorneys when one can find template legal forms on the Internet? Or accounting/tax professionals? Why bother too with licenses and permits when they can be obtained at some future time when the company has more money? Heck, who even needs a team?

Legally dangerous: There's a wide-spread but utterly inaccurate belief that labor and wage laws have an exception for founders and/or early equity holders of a pre-revenue business. They don't. If you are an employer you must pay at least minimum wage—it's the law, and your employees cannot opt out. Retaining staff as "consultants" gets around that, but the IRS has scrutinized such improper classification for years, and those skirting the law have come to rue the choice. It's also one of the very few ways that the "corporate veil" gets pierced; if a company doesn't pay employee wages and taxes its officers are personally liable, plus attorney fees and treble damages. Finally, officers of the company must be employees, not consultants, and companies must have at least one officer.

The bottom line is: you get what you pay for. A startup can skimp on many things. Some savings are smart, but others are penny-wise and pound-foolish. It is possible to build a successful startup on all-volunteer labor (albeit legally dubious) but the odds against are long. Salaries pay not just for work output, but critically, for expertise, experience, perseverance and commitment. Skip paying people an honest wage and you will quickly discover just how hard it is to build a team with those traits. And as even the least experienced founder or investor quickly grasps, team matters.

The best advice I have heard on startup salaries, and it has been repeated by well-respected investors and entrepreneurs many times: pay people just enough that they aren't distracted by their personal financial situation from building the company to greatness. If people fret about paying the rent they're not going to have the focus needed to worry about the business. If they need a second job to cover the nut, their psychic and physical energies will not be maximally devoted to the business.

Startups entail risk. Working in them is risky; investing in them is risky. Smart entrepreneurs work to create an acceptable balance of risk and reward, identifying and removing or mitigating threats according to their seriousness and likelihood of occurrence. Not paying salaries to the startup team may cut the risk of running out of cash, but it increases other risks to unacceptable levels.

To continue the airplane analogy, not paying salaries lengthens the runway, but it cuts the taxiing speed. It gives the startup more time to start flying, but makes it less likely it will ever be able to do so. In an extreme case, one can cut costs so much the runway becomes effectively infinite, but there is never a take-off. The startup never dies, but it never thrives, continuing on, risk-less, as a kind of zombie enterprise, benefiting none of entrepreneur, team, investors, customers, or society at large.

400 ppm

2013-05-03T23:43:00.000-07:00

Too Much Carbon

~ Atmospheric carbon is now higher than it has been in 3 million years.

The last time CO2 reached the symbolic milestone of 400 parts per million in the atmosphere - in the Pliocene era - temperatures rose by between 3 and 4 degrees and sea levels were between five and 40 metres higher than today.

Climate change is a slow-motion calamity, but also an economic opportunity for those who seek profit. Might be a good time to start businesses building seawalls, boats, or snorkels.

An Entrepreneur's Challenge

2013-05-02T23:43:00.000-07:00

Tempering Urgency with Patience

~ Sure, you want to get the cheese, but take some time to think and plan first instead of just rushing in.

Or maybe first see how the impulsive mouse fares.

First mover advantage? Bah. It's often the second mouse that gets the cheese.

Where's It Wednesday—CXXI

2013-05-01T23:28:00.000-07:00

Where in Seattle is this?

Answer next week.

Details on the weekly Where's It Wednesday puzzle here.
Other weeks' puzzles here.
Answer to last week's puzzle, after the jump.

Last week's picture showed an interesting art installation on the less walked south end of Post Alley next to Seattle Steam:

A Walk in the Greenbelt

2013-04-30T23:52:00.000-07:00

Leo Strolls Bellevue

~ It's awesome having the Bellevue Greenbelt nearby, with trails reaching out into neighborhoods all around. The peripatetic pup and I can log 5 miles walking down to the Robinswood dog park and back. And he adds a few more miles with the pack at the park.

Is it Investing or Speculating?

2013-04-29T22:03:00.000-07:00

Don't Ask YourBroker

~ The word "invest" has become debased.

We hear so much about the supposed importance of investor confidence and about the need for low taxes on investors, and all because, the pundits aver, we need investors to invest so that the economy can grow and solve all of our problems.

Bunk.

Sure, an investor may be someone who commits capital in order to realize a financial return, but I think it is a stretch to confuse most of what passes for investment as somehow aiding the economy.

When companies invest in plant and equipment they commit capital, can take more orders, employ more machinery, manufacture more stuff, and perhaps, hire more people. That's investment that creates a rising tide for all boats.

But when "investors" buy an index fund or an interest rate swap, they are doing none of those things. Instead, they are placing a bet by making a paper transaction with someone else. One is a buyer and one is a seller. If one buys 100 shares of Microsoft, the software giant never sees a penny of it. Brokers and middlemen pick up a commission, but the economy doesn't much change. One side of the transaction wins and the other loses. It's not investing, it's speculating.

If you are an investor, and want a good return, and perhaps desire to really do what politicians always bloviate about—stimulating growth—then stop feeding Wall Street fees through feckless financial swaps, and go fund a startup. Your investment (a real investment!) will directly result in people being hired, equipment being purchased, and generally, growth in the economy.

Now that's investment!

Believe It...

2013-04-28T23:48:00.000-07:00

Soothing Sights

~ These places looks so astonishing it's hard to believe they exist? Guess I'll have to go see for myself. If I ever get done assembling this investor due diligence package.

I want to take this train...

Colorful!

Tax and Spend

2013-04-27T23:05:00.000-07:00

Or is it "Borrow and Spend"?

~ Tell me again who's spending is out of control? Recall that in 2000 we were running a budget surplus, with the prospect of those continuing for years...

What Shall We Teach Our Children?

2013-04-26T22:57:00.000-07:00

Science? Or Belief?

~ Hardly a week goes by without someone decrying the atrophy of STEM (Science, Technology, Engineering, Math) instruction in the US, yet we do nothing about the teaching of ignorance in schools throughout the country. We desperately need to have more scientifically capable graduates for our global competitiveness as a nation, but we condone indoctrination in dogma instead.

When I first saw the above photo on the Internet, I assumed it was a fabrication in service of making a political point. However, it turns out likely to be as it appears—proof that adults in a position of influence could be, and shamelessly are, corrupting young minds with dogmatic pap, condemning a generation of students to being also-rans in the knowledge and reason-based economy of the future.

Ignorance is not equivalent to knowledge, and nowhere and to no one will that be more apparent than in the global marketplace for talent awaiting the graduate whose mind has been filled not with knowledge but belief.
Muddying the crystal principles of scientific inquiry to ensure students unquestioningly regurgitate what they are told has effects far beyond the narrow subject matter at hand. We cannot and must not choose ignorance.

A Break in the Clouds

2013-04-25T23:30:00.000-07:00

Willows Run

~ Such a beautiful day, requiring a non-work interlude, so I spoiled a good walk, despite a hole one two.

Where's It Wednesday—CXX

2013-04-24T17:35:00.001-07:00

Where in Seattle is this?

Answer next week.

Details on the weekly Where's It Wednesday puzzle here.
Other weeks' puzzles here.
Answer to last week's puzzle, after the jump.

Last week's picture showed a saucer magnolia just starting to bloom. It is one of several lining the sidewalk on the 2nd Avenue facade of the iconic Dexter Horton Building:

We all need to stop and admire, if not smell, the flowers, especially on these all too-rare beautiful days that comprise the brief intermissions in our region's ongoing Moisture Festival.