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Another Reason to Like Facebook

Apr
7
2011

The San Francisco Board of Supervisors debate over whether to give Twitter and other San Francisco-based Internet media companies relief from certain city payroll taxes raises triggers a somewhat optimistic observation.

California Governor Jerry Brown is going to have a very successful third term since he’ll probably be able to solve – or claim he’s solved – the state’s budget mess next year. Brown – the Steve Jobs of politics – is going to be the beneiciary of what can only be called pent-up demand in both the venture capital business and the stock market. In other words, people who need to sell their stock to earn their keep (venture capitalists, angel investors) have plenty of customers (wanna-be shareholders). And the stock market’s increasingly looking healthy enough to support large-scale stock offerings.

This isn’t silliness – or Silicon Valley seduction – on my part; economist agree with me. Google’s 2004 public offering is widely considered to have saved Arnold Schwarzenegger’s first term, deferring some of state’s more difficult spending decisions (and adding to today’s woes).

Back in 2004, when the market in tech stocks was slowing, Google sold $1.6 billion worth of stock in its initial sale to the public, giving it a (real market) valuation of about $23 billion. But what’s going to happen over the next year or so – if all goes well – is going to make that $1.6 billion seem like Monopoly money for the state’s treasury.

Consider the valuations (theoretical) of companies expected to start selling their stock on the public markets next year. Facebook’s investors believe it to be worth at least $50 billion. Groupon, the discount coupon site thinks is worth $25 billion. Zynga, the game company, puts its worth more than $5 billion. The most recent number on Twitter was just under $8 billion. Yelp, the ratings site, clocks with with a modest $200 million valuation. Add in another handful of smaller companies with more modest valuations – LinkedIn, FourSquare – and figure there’s another lot of stock that can be sold to enthusiastic buyers.

Valuations – insiders’ estimates – aren’t written in stone. And they’ve often have precious little to do with how much stock is sold or its acutual price. But there’s been enough activity on Silicon Valley’s private equity markets – where share of all these companies are trading nicely – that it’s pretty clear whatever’s sent to Wall Street will get a warm reception.

Why? Most of these companies (unlike their dot.com predecessors) have revenue, earnings and have had for at least three years – time during which they’ve been unable to raise money on the public markets. They’re making money, in other words, not getting it from investors or shareholders. That doesn’t necessarily justify the valuation – at this point, that’s just a number based on shareholders’ ides of their holdings – but it makes their ability to raise money on Wall Street a more than reasonable expectation.

So it’s not unrealistic to use some of the prices in those private equity markets as a reference point. Let’s say of the high-profile companies here does about what Google did – sell at about $80 a share. And let’s say each sells around 20 million shares (including sales of stock by founders and employees). That would give each company a Google-like valuations in the low billions. And there’s more than one of them. And it’s not just the first time sale; once a stock is public it can be bought and sold again and again. And anyone living in California who sells shares has to pay the tax man.

These days, the capital gains rate (the rate you pay if you sell your stock within days of acquiring it – which your accountant will demand you do if you’re employed by any of these companies) is whatever your income tax rate is. That’s going to be at least 30% for anyone working at any of the companies under discussion here.

No, it’s not the $11 or so billion that Brown needs to plug holes in the state’s current budget. But with the cuts he is making, it’s more than a drop in the bucket. What it will give Brown is the room to negotiate real change in how California runs its finances.

Posted by Chris Nolan at 9:23 AM | Permalink

Sonia versus Sarah

Jul
13
2009

Sarah Palin. Sonia Sotomayor. These two women have almost nothing in common except gender – and a little time in the public eye. But thereby hangs a tale. And a look at how opportunity is and was created in this country.

Sonia Sotomayer’s success is due in no small part to the willingness of Ivy-league institutions to accept students without regard for their economic status. As recently as 30 years ago – when student loans were new, Pell Grants went by an ugly series of initials (BEOG) and yuppies didn’t exist, places like Harvard, Yale and Princeton underwrote college tuition for pretty much anyone smart enough to get accepted.

You didn’t have to be a rocket scientist. You didn’t have to be a varsity-level jock. You just had to get admitted to the school and fill out a bunch of forms. If you needed the money – and you were in – the schools would help. And if you got in and you needed money half-way through, most would help with that, too.

It wasn’t rosy, no one should think it was. Ivy-league schools were expensive then and anyone getting financial aide worried not just about getting through four years but getting the loans paid off once they got out. That’s probably why we’ve got so very many lawyers in this country.

Today it’s almost impossible for a student at any of those schools to “work their way through”. Tuition is simply too expensive, grants harder to come by, loan terms more restrictive – and this is before the economic crisis that’s cut many an endowment fund off at the knees.

In contrast to Sotomayor – who’s got a smile that can light up a room – we’ve got Sarah Palin. It’s been hard to decide what to make of Palin. She’s grasping and self-righteous and possessed of an intelligence that gives her – let’s be polite – a shrewd sense of how to take the best advantage of an opportunity. But, hey, that’s politics. And her speech before the Republican National Convention was a great demonstration of these skills. She’s a good campaigner; voters like her.

But Palin’s path to national-level success seems to rest almost entirely on her personal charms. It’s hard to believe given her recent public outbursts, that Palin can be charming. But a lot of Republican men seem to think she is attractive and they are anxious to recruit more women to the party. That’s how Palin got nominated to be vice president.

Plenty of women take advantage of their looks to succeed – and Palin with her five kids and handsome “first dude” of a husband does a good job of winking to those who can’t play that game but who don’t mind her doing so. They would if they could. When Palin raids Nieman Marcus her supporters understand that she deserves something nice – just as they do – after years of hard, thankless work. And Palin’s look – sexy Mommy – is very important. At the Conservative Political Action Conference (where she was a no show) earlier this year, the hot Librarian look – glasses, up-do, very high heels – was the look for young girls

Palin’s dilemma is that women who do take advantage of their looks – for a living – pretty much know it. You don’t see a lot of supermodels worrying about what David Letterman thinks of them or their families. And they certainly don’t issue press releases every time someone suggests that they’re somehow less than perfect. You have to have good and thick skin to succeed on a smile; it is a kind of cynical affirmative action. You’re getting help ’cause you’re cute – that’s it.

You also have to be pretty tough to make it through the nation’s legal establishment with a Spanish last name fighting the belief that formal affirmative action programs – which at their best are nothing more giving people a break on the basis of potential ability – are somehow zero-sum games. And while Sonia Sotomayor probably doesn’t mean to stand in contrast to Palin, her accomplishments give us a good look at how opportunity on the basis of ability – not personal charm or looks – is the better course.

A lot of breath will be wasted in the U.S. Senate today about Sotomayor’s success because of her minority status. To which the answer should be “So what?” Very little of that sort of criticism is leveled at Palin who represents women in the Republican party – a minority if I ever saw one. But between the two of them, we can get a look at how affirmative action should work and why it’s still very much needed.

A policy designed to help those who have the proven ability to help themselves – getting into Princeton and Yale ain’t easy – is one that by its open-handed faith has the power to discourage those whose only real ability is to look out for number one.

Posted by Chris Nolan at 4:02 PM | Permalink

Michelle Obama’s Armed Insurrection

May
11
2009

So, what is is about Michelle Obama’s arms that’s inspired a national semi-obsession?

Everybody’s got a pair. Why are her’s so special? Well, there’s the obvious. Among women of a certain age and class – a class that doesn’t involve lifting anything heavier than a soy latte – toned arms are a status symbol. For mothers with children, firm delts say “enough money to pay a nanny and make time to go to the gym.”

Which is another way of saying “just like us” to that crowd, one that for better or worse, sets our cultural cues. Michelle Obama has managed to turn herself into a kind of every-woman who doesn’t inspire jealousy but, instead, admiration. This is, I suspect, the result of being a black woman in a mostly white world; you get used to managing your behavior and mien when you thoroughly understand that you’re almost always being evaluated on something you can never change – your gender or your skin color. If nothing else, the Obama family’s ability to shrewdly see themselves as they are seen by white America and to subtly change those perceptions is an accomplishment.

That’s not to set aside Obama’s charm and sincerity. Her speak-from-the-heart style rings true and her enthusiasm for her husband, for his presidency and for the wonder and fun of living in the White House strike all of us as pretty much how we’d feel: Obama says she’s got the best job in the administration and she’s not shy about why. No cooking? Great! No beds to make? Even better!

But that doesn’t really explain why Michelle Obama’s popularity has out-striped that of many movie stars and other pop culture figures. I mean lots of us are sincere. Even more of us hate the chores of domestic life. So what is it about this woman?

Well, first of all, she’s no girl. She may have a breezy style but most folks who deal with Michelle Obama realize that she’s not to be dismissed – those arms come from early morning work-outs before the kids (and the husband) get up. Even in her recent write-up of what was clearly a girlfriends’ lunch, the Washington Post Sally Quinn didn’t even bother to use that phrase. Quinn, who considers herself the gatekeeper of Washington “society”, has given Michelle Obama a pass – a courtesy she didn’t give the Clintons or George W. Bush family.

At nearly six feet tall, Obama’s also a direct contrast to an annoying American tendency to hew to a standard of “perfect beauty”. Throughout the past 10-year spree of conspicuous consumption, breast implants, lip plumping and assorted other cosmetic treatments were seen as necessary parts of any feminine beauty ritual that made for a uniform aesthestic. Time was – and I’m betting for sure these figures have already fallen – that breast augmentation was a popular birthday gift for 16-year-olds.

Michelle Obama’s a woman who was clearly never going down that path. She’s been known to tell fashion magazine what she’ll wear on their covers. She stands up straight, likes flat shoes and throws on a sweater when she’s cold. Which makes her style perfect style for our more realistic times. She seems about as likely to spend $5,000 on a handbag – and boast about it – as she is to curtsy before the Queen of England.

Which is really the key to her success, I think. Regular men and women have been looking for popular images of “real” women for a while. That’s to say, images of women who aren’t starving themselves to be a single-digit size, who aren’t obsessed with shopping, spa treatments and finding a boyfriend with a big salary to support them. Those Sex and the City characters thought of – wrongly – as the embodiment of a kind of “lipstick feminism” didn’t do much for equal pay for equal work. But they did a very good job of selling shoes, bags and designer clothes all the while encouraging women to know and understood their proper, decorative place in the glamorous urban world that is New York City.

That’s changing as well. There’s plenty of talk that The Great Recession may have finally evened out the earning power of men and women as women keep jobs that are part of a non-construction, non-manufacturing economy.

Michelle Obama’s salary carried her household while her husband was running for the U.S. Senate – he’s said so himself. And she’s clearly not a woman who was raised to look for someone to attend to her material comfort or someone who sets a standard for that comfort to include a clothes budget equal to a waitress’ annual salary. That, from where I sit is a good thing. Because it’s a realistic thing.

In a world where jobs come from thinking and typing – “symbol manipulation” as former Secretary of Labor Robert Reich once called it – there shouldn’t be gender disparity on income because in a world where work is mental, not physical, your brain doesn’t need a firm set of biceps. Even if they do some in handy on those pesky photo shoots.

Posted by Chris Nolan at 11:02 AM | Permalink

Dowd’s Lens, Bronstein’s Small Aperture

Apr
27
2009

So New York Times columnist Maureen Dowd and former San Francisco Chronicle editor Phil Bronstein drive past a bar….And the column that results in that adventure is nothing but a joke. A sad one. On them.

As part of her “Death of Journalism As We Know It Tour” Dowd recounts her San Francisco visit with Bronstein, a recent guest on Stephen Colbert’s show. The two drive by a “reporters’ bar”, they see the linotype machine at the Chron, they view the conference room where Phil had it out with local politico and real estate baron (and blogger) Clint Reilly. At the end of the column, Phil’s credited with the print journalism insight of our age: Old people who buy papers are living longer so we still have jobs.

Well, it will probably trouble Phil and Mo to know that my upstairs neighbor, octogenarian Elliot Joseph has a regular blog. Oh, and he’s on Facebook, too. Or that the best coverage of the California Democratic Convention was done by respected former Chron editor Jerry Roberts and former Mercury News Political Editor Phil Trountstine blogging under the Calbuzz moniker.

Instead of nurturing Dowd’s Hollywood fade-out view of the news business, Bronstein might have done everyone a real favor by giving her a tour of the online journalism laboratory that’s at work every day here in San Francisco. This city’s paper has gotten much smaller but it’s fate isn’t entirely the result of technology. The Chron no longer has monopoly hold on readers. Or writers. Bronstein may be able to justify its past but he’s got a harder time with its future.

Take a look at Eve Batey. Since leaving SFGate, the Chron’s site, she’s done a fine job at the SFAppeal, an online-only pub that’s on it’s way to leading coverage of San Francisco city politics. How? She recruited some of the smarter voices that once worked at SFGate, among them Beth Spotswood and Violet Blue. Oh, and she prints news. While SFGate spent a day’s worth of front page real estate on Bronstein and Colbert, the Appeal was writing about the the local transit agency’s budget woes.

Okay, so encouraging competitors isn’t a great idea. Especially when they’re cleaning your clock. But Phil could have taken Mo to visit Mark Glaser whose recent MediaShift column on “local watchdog media sites” offers a hint at where we’re all headed. From PBS, the duo could have wandered over to see the boys at Digg who created a tool for rating stories and made the “most emailed” and “most comments” boxes de rigeur for online pubs. (Digg also helps its downstairs neighbor, the San Francisco Bay Guardian pay its rent, an arrangement both the Chron and the New York Times might find instructive).

They buzzed by the Giant’s stadium, maybe Phil and Mo could have stopped off at SixApart, home of the technology that runs this site along with several others, including MyBarackObama.com, the HuffingtonPost, much of CondeNast and Peobody Award winner Josh Marshall’s TalkingPointsMemo. It’s not a linotype machine but SixA does help churn out the news.

From there it’s only a short walk to CNET, the first totally on-line media outlet to challenge the Chron’s hold on readers. A visit to Salon.com, another online outfit, might have been worthwhile, too. Along the way, Mo and Phil could have stopped in on Technorati, the once-hot ranking service that’s opening up an advertising to serve small publishers. Technorati might have been happy to arrange a meeting with local reporters – folks sometimes called bloggers – from outfits like TheNJudahChronicles or TheHealthCareBlog (both affiliated – in different ways – with this site) GigaOm, BeyondChron, CurbedSF or the unfortunately named SFist.

Or, just to be daring – it is out on the avenues (our Queens) – Phil could have taken Mo to lunch with Craig Newmark. Trite, I know, but sushi with Craig is always entertaining.

Dowd did, in fact, meet with the hipsters of the business, the big names that come up on the Lexis-Nexis search as “the” folks to talk to. But the headline grabbers aren’t doing all the work. Here in San Francisco the news business is thriving. It’s just not thriving on the printed page.

Old folks like Dowd and Bronstein – in their early 50′s – may comfort themselves by looking back with Norma Desmond’s longing for the good times. It’s easy and after years of hard work climbing to the top of a business that’s imploding, you can’t really blame the live or fictional characters. But the silly hope that news must be carried on paper to look and be respectable and respected is as doomed as Joe Gillis.

Who’s Joe Gillis? He’s the guy face down in the swimming pool in Sunset Boulevard. He narrates the movie. But, as you might recall, it’s wasn’t his show.

Posted by Chris Nolan at 12:00 PM | Permalink

The “None of the Above” Primary

Feb
24
2009

California – and perhaps the nation’s – fastest growing political party got a nice present last week: A proposal to open primary elections to folks who check “none of the above” when asked which side of the political spectrum they favor.

It’s not an truly “open” offer. Nothing crafted by the California General Assembly which is becoming famous for its inability to do anything – even things it wants to do – ever is all that open-handed. The open primary needs to be approved by voters in June of 2010. That’s the same time when Californians will be picking its gubenatorial candidates for the fall general election. And measure to let independent voters participate in primaries have, historically, failed.

That’s not a huge surprise. The state’s parties – and the folks who run them – like centralized control of things and they turn out the votes to defeat measure that will clip their wings. Open primaries – particularly the kind envisioned in this latest round of reform take away the mystical power of a party’s base and reduces the influence of those who run elections with Clinton- and Rove-style addition. In other words, it moderates because an open primary brings in centrist voters.

For some years, “decline to state” as it’s more politely known, has racked up the voter registrations. It’s gone from 9 percent of registered California voters in the late 1980s to almost 20 percent today. And it’s growing – all by itself. There’s no independent party out there recruiting members – not with any starting success, anyway. Voters are just choosing not affiliating with either party and the increase seems to be holding across the country (although really accurate data is hard to come by since states have different rules).


The Rise of the
Creative Class

But this probably isn’t a nascent political platform or formal organization. It’s more of a political movement, a corallary to the “creative class” idea put forward by consultant Richard Florida. “None of the above” has been flavoring California politics for some time, particularly in the business-focused parts of the state like Los Angeles and Silicon Valley. This movement – I call these folks Progressive Libertarians – explains why the state went solidly for Barack Obama but also managed to elect – and re-elect – Gov. Arnold Schwarzenegger. Just as an example: Google CEO Eric Schmidt – photographed plenty of times over the past few years with Democrats Al Gore and Barack Obama – once told me he was a Libertarian. And Clinton backer John Doerr was a registered Republican while he was supporting the former president’s re-election.

Progressive Libertarians aren’t so much tied to a political party – although they trend Democratic at the national level – but have an interest in keeping their options open. They are fluent, familiar and comfortable with the language and metrics of business which is why they like smaller government. And they are offended by the politics of the left and the right. That translates to a deep dislike of unions, based mostly on the belief – correct or not – that the teachers’ union has “ruined” the school system, among other things. But Progressive Libertarians also support for same-sex marriage and abortion rights. It’s mix-and-match politics: one from column A, two from column B and we’re done. Most recently, life-long Republican Tim Draper supported Obama.

Progressive Libertarians do not want to be pigeonholed. They want to be practical when it comes to government and leadership. This desire to pick political affiliation and association to match the times, the job or the future problems is something many politicians are just starting to grapple with. And if this sounds a bit like a Barack Obama campaign strategy memo, you’re catching on. It was. Combine that with his campaign’s determination to build not just their own voter databases but their own fundraising apparatus – both traditional jobs for the party, not the candidate – and you can get a glimpse of where we’re headed.

That flexibility is one reason why, if established parties play their cards right, they may actually prosper. But it’s going to be a tough call. It may be necessary to give up immediate control and power to form flexible, almost constantly changing coalitions – parties that don’t hew to a line in the sand but form consensus and cohesion based on the problems and solutions they have on-hand and their popularity with voters.

Today, that’s none of the above. With an open primary system it may well be, a little this and a lotta that.

Posted by Chris Nolan at 11:13 PM | Permalink

Steve Jobs As Metaphor

Jan
22
2009

An era – a golden time when the boys of Silicon Valley could do whatever they wanted, whenever it suited them – is coming to an end. And the failing health of Apple CEO Steve Jobs is a poignant metaphor for its passing. That’s one reason why the conversations about his fate are so emotionally charged – even among strangers.

Jobs is clearly fighting a serious illness. Whether he is winning and will return to run the company he founded, saved and launched into an entirely new line of business is open to debate and speculation – and there’s been plenty of that. It seems unlikely not necessarily because Jobs is mortally ill but because his illness has sapped so very much of his raw physical presence. He may have to – belatedly it seems – face the fact that his life-saving surgery for some sort of pancreatic cancer, in fact, altered his life. Like all of us, he is mortal.

And, like all of us, he and the company he runs are being told they must obey the law. The Securities and Exchange Commission has expressed an interest in the timing of news and announcements about Jobs’ health and, like many inquiries the commission launches, it may mean nothing. Except that they’re paying attention.

And this, my friends, this is the end.

You see, Silicon Valley has skated along quite nicely, thank you, without a whole lot of regard for the government. This was in no small part because the government had little interest in Silicon Valley. Throughout the 1980s and 1990s, enormous fortunes were made by a small group of very well-connected insiders who invested in small start-ups, took those companies public and reaped the rewards. It was a glorious and wonderful time. It gave us The Internet. And the Internet has changed our lives. And yes, that accomplishment should be rewarded.

But there was a fair amount of cheating as you might expect when a small group of very smart people realize that they can game a complex and seemingly opaque system because the rules haven’t quite caught up them. The cheating and the attitude about cheating (“everybody does it”) was – and to some extent is still – the problem.

When I worked as a business columnist for one of the local papers here in Silicon Valley, it was understood that the SEC simply didn’t have the resources to evaluate, check or even investigation suspicions about public offerings made by tech companies. It was taken for granted that the cautionary statements included in the boilerplate in the SEC documents were sufficient to warn investors. After that, the market would measure whether a company was succeeding or failing and investors would react accordingly. You buy the stock, you take a risk. End of conversation.

The market, many said, was the ultimate arbitrator. Insiders – start-up CEOs, venture capitalists, seed investors – couldn’t help it if the market raised stocks to 10 or 20 times the pre-IPO value. They couldn’t restrain the public’s appetite for these shares; the market made their stock, purchased for pennies, worth dollars. That was just the way things were and everybody understood it. When the tech bubble had collapsed, a lot of people who had believe the promise of the Internet lost a lot of money but in the end, the SEC shrugged. The market had prevailed.

Well, a few million home foreclosures later (everybody, it seems, was also lying on their mortgage applications) and the government is not shrugging anymore. The days of regulatory oversight are coming to the valley. Which is why Jobs failing health is such an apt metaphor. I’m not predicting the death of innovation or the wholesale regulation of the venture capital business but I won’t be surprised at all to see the idea floated. Some venture funds hold hundreds of millions of dollars from their limited partners, unions, pension funds and public university endowments. Besides, it’s been clear for some time that the practices of the banks that the valley depends on for its paydays – those multi-million dollar trips to the stock market known as public offerings – are going to be tightly overseen, regulated and controlled.

Like it or not, like Apple’s ailing CEO, tech companies born and bred in Silicon Valley are going to have to answer a lot of tough questions. Their privacy – which is really nothing more than their sense that they and only they know what’s best – is going to have to become a bit less opaque. Their firms are going to have to run cleaner; their investors are going to have to disclose more. Total control – the ability to ignore or worse, bully, the government – is gone.

As painful as it is to see him so frail and ill, Steve Jobs, raised in the anything-goes atmosphere of the valley is in sickness, as he was in health, the embodiment of the place and it’s thinking. That’s one reason why so many are fixated on his health; why no one will let him alone. There is often no tangible reward for those who are smarter better or faster; for some things there is no inside track, and in the end, we all face the same fate.

Posted by Chris Nolan at 5:48 PM | Permalink

Getting Real About The U.S. CTO

Jan
8
2009

It’s only a slight exaggeration to say that Silicon Valley is complete binary in its passions. It’s only feels like it’s either fully on or fully off. But when it comes to politics, that statement rings more true that it does with others. And right now, the valley is fully “on” for Obama.

The fact that the president-elect has a Blackberry habit almost as bad as his nicotine addition (and harder to break) adds to the allure. It’s not just that Obama “gets” the Internet and the culture it’s created; he uses it. And clearly, to judge from his campaign, he likes it.

This has led to all sorts of silly conversations, mostly about the job of “chief technology officer”. With breathless enthusiasm, the names of some of the smartest folks in town have been mentioned. Google’s Vint Cerf (aka “father of the Internet”) or its CEO Eric Schmidt. Even more ridiculous: Bill Joy or Stanford professor Larry Lessig. It’s been suggested that the job was cabinet-level, meaning the CTO would be in touch with the president regularly.

Yes. Well. All these suggestions assume that the CTO job within the U.S. government will be akin to the CTO job within a high tech start-up. The job held by the guy who is either the founder or the inventor who turned the founder’s ideas into real products, thereby changing the world – for the better, of course.

The U.S. CTO will be a similar visionary, goes the thinking. Someone who can convince the government to change copyright laws, create and enforce net neutrality, put all government records on the Internet, create email accounts for all bureaucrats, and make Congress put its proceedings on-line. A miracle worker, in other words. But no administration needs a room full of visionaries; it only needs one. And we elected him in November.

Which is why U.S. CTO job is probably going to go to someone who knows how to run something. Something big. Like a large high tech company with a history of buying, developing, refining and commissioning software and hardware for its employees. If Cisco CEO John Chambers weren’t a Republican, he’d be perfect. Assuming he’d take the pay cut. For my money, the speculation about John W. Thompson – recently retired (!) CEO of Symantec and one of Silicon Valley’s few African-American executives – is closer than any of the “Internet famous” visionaries’ names being bandied about.

The reality is that the Internet infrastructure the U.S government uses has been built with the 20th Century equivalent of paperclips, bubble gum and duct tape. Various agencies have gone their own way in getting on the web and the confusion is a little bit like what happened when the airlines started selling tickets on-line. There was the system the company used; the system customers used and God-only-knows what else in the middle. Like the old SABRE system, the government needs help. Badly. And that’s what the U.S. CTO is probably going to end up doing.

That doesn’t mean the job isn’t going to be important. It just means it’s not going to be West Wing glamorous. It can’t be. Can you imagine the breathless drama over the ordering of another 1,000 Apache servers to, for instance, get the Environmental Protection Agency’s enforcement division up and running on the web so inspectors can share maps, photos, reports and information as seamlessly as they do at say, Boeing? Hmmm. You’re not staying up past 10 p.m. to watch that an neither am I, even if it is on Hulu.com.

What many of the folks new to politics – and this is Silicon Valley – forget is that the U.S. government can move markets by purchasing to somewhat dramatic effect. Quietly. Over time. A government purchase can create a de facto standard not just for the feds but for state and local governments. Getting government procurement agents to realize that all software doesn’t come from Redmond is one part of this process of changing how the government sees the Internet. So is the idea that off-the-shelf might just work for their needs. And “open source” doesn’t mean stolen; it can, in fact, mean low-cost and reliable.

That change will push a lot of money into the tech sector. It will foster a lot of low-key innovation and, by the end of the next four years, it will probably give us a lower-cost, more efficient federal government.

All these are obvious ideas to anyone with a working knowledge of how the mechanics of the Internet actually function. But for many many people in government agencies, this is news. The reality is that a working on-line presence – internal and external – doesn’t cost very much money and may, in a few short years, save the government a lot of money is one that I’m betting you’ll hear the Obama administration start touting in a big loud voice. It only makes sense.

But these initiatives won’t be announced in the Rose Garden while Obama’s Silicon Valley faithful look on with delight at how the Internet is now cool. They’ll be rolled out without a lot of fanfare as part of the way a restructured U.S. government should work. And if the U.S. CTO is successful there will soon be little difference between the folks who “get it” and those who never thought there was anything to “get” in the first place.

Posted by Chris Nolan at 5:00 AM | Permalink

Obama Plays Right, The Left Faints

Dec
29
2008

Amazing isn’t it? The Obama administration is pretty much in place and no where – no where – was anti-war activist Cindy Sheehan’s name even considered for Secretary of Defense! And how is it that anti-poverty activist Jeffery Sachs wasn’t asked to run the Treasury Department? As for Noam Chomsky – I find it incredible that he was overlooked to run the state department. And how is it that Rep. Barbara Lee languishes in Congress instead of being sent to the U.N.? Or that President-elect Obama hasn’t taken the time to throw his support behind Sen. Al Franken’s election?

I’m joking of course. None of these quasi-academics or gadflies are even interested in joining the administration. But the point – that President-elect Obama is no liberal – is increasingly obvious. Obama is a politician and a good one; probably better than the much-praised Bill Clinton. Unlike Clinton, Obama’s got almost everyone except his foresworn enemies in the tent.

How’d he do it? Well, unlike pretty much every other Democrat running for the White House, Obama drew and kept drawing a stark distinction between his campaign and the current White House. George W. Bush is so disliked that anything different was going to seem better. Obama was really different so he, by extension, had to be a whole lot better.

Many of the assumptions made about this administration – it’s tilt to the left – were made not, I suspect on anything Obama said but more on a set of assumptions made about one policy stance. His opposition to the Iraq war was hailed as proof of his hard-core liberalism. As Vice President Al Gore made it clear he would not run and as the Democratic left looked long and hard for a suitable candidate, it settled on Obama because of his opposition to the war and the color of his skin.

Liberals used to love Obama because he wasn’t Hillary Clinton, who voted in favor of the war and spoke no nonsense about pulling out tomorrow. Then, about three-quarters of the way through the campaign they started loving Obama ’cause he was against the war and is black. Even bobbles like Obama’s support for a Bush Administration eavesdropping measure only created minor outrage which quickly died down.

Why? A black man, figured the lefties, will stand up for their values, representing and supporting any and all “Liberal” causes. This is a new version of what conservatives like to call the “soft bigotry of lowered expectations.” Only, of course, the expectations in the minds of the hard-core left aren’t “lower” they’re “higher” as in morally superior.

So much of the campaign against that ballot initiative assumed that Obama’s supporters – whites, gays, minorities – all thought the same on all issues and would, of course, vote against the same-sex marriage ban. Democratic turn-out was expected to be high; Obama would win the state, Prop. 8 would be defeated.

Only that’s not how things turned out. Prop 8 passed and much of its support came from minorities opposed to the very idea in part because of their religion or the teachings of their churches. (Disclosure: Spot-on’s Pinpoint Persuasion Ad Network did some work for “No on 8″ but was not involved in any strategy or campaign decisions).

Fast forward to the inaugural where Rick Warren, the evangelical preacher, has been asked to say the invocation at Obama’s swearing-in. Like a lot of evangelicals and political conservatives, Warren has likened gay marriage to child abuse and molestation; his views on same-sex relationships are hardly liberal, let alone tolerant.

Still, his speaking at the Inaugural is a bit of fancy foot-work on the part of the president-elect. It’s a bit of a returning-a-favor since Obama was asked to appear – and did well – at Warren’s Saddleback church, in a showcase designed to speak to the religious right. It’s a little bit of a wink to the black church and Rev. Jermiah Wright whose pulpit shenanigans created such a distraction for the Obama campaign over the summer. Controversial preachers come in all flavors, now don’t they? The invitation is also a nice bit practical politics, bordering on the cynical. Obama’s playing to a crowd that he took special care in his victory speech to single out and ask for support of his presidency.

All of which means that Barack Obama is one skilled politician. But unlike former President Bill Clinton, Obama’s working on getting the folks who aren’t in the tent inside. He’s let his supporters make assumptions about what he’ll actually do with the understanding that he’s a raging lefty so that group has almost no where to go – now that he’s elected. More importantly, unlike the Clinton administration, the left didn’t hold its nose and vote for Obama. They got behind him and, for better of worse, they’re going to stay there.

Whether Obama actually manages to do accomplish his stated goal – turning his detractors into supporters – remains to be seen. But it’s gonna be fun to watch.

Posted by Chris Nolan at 9:35 AM | Permalink

Atlas Shrugged….

Nov
13
2008

It’s been a lot of fun watching Silicon Valley this past election year. It’s quite a contrast to political apathy and almost religious faith in free markets – think Ayn Rand with a laptop – that once carried the day.

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The realization that things around here had changed came when finance, tech folks, start-up CEOs and reporters watching Obama’s victory speech said, almost in unison: “Hey look, Sam Perry’s on TV …. with Jesse Jackson? And Oprah!

Even though he’s going to raise their taxes by a lot, Silicon Valley went for Obama in a big, big way. And Sam Perry – a former reporter, an investor and advisor to start-ups (even this one!) – was part of that effort. So was Netscape founder Marc Andreessen who’s taking credit for introducing Obama to the wonders of social networks.

It’s a change, make no mistake about that. Ten years ago as tech people and their financiers began to understand the reach and depth of the Internet, there was a lot of talk about how states would become less influential. There was a lot of babbling over at places like Wired magazine about how the web was going to give rise to individual action that would, eventually, do away with the need for government and nations.

One of the more articulate folks on this point was Avram Miller, then an executive at Intel and one of the smarter thinkers about where that company was headed. This year Miller has been a strong advocate of Barack Obama’s presidency. Which seems like it’s a contradiction. If you believe the state is less important, why do you care who runs the place?

“I don’t know that I’ve changed my mind,” says Miller. “For me this wasn’t so much about politics,” he said of the recent election. “It’s was very simply good people versus bad people.” Miller also makes another observation about Obama’s candidacy that shows him to be a member of the “one-man” school of historiography. “The right person has to have the right situation. But the right situation doesn’t create the right person.”

The high minded talk of the valley’s intellgentsia – and Millers’ a member in good standing – is usually reflected in how it conducts business. Make no mistake: there are practical aspects to all this enthusiasm. Silicon Valley has long been a cash register for the Democratic party but it’s leadership has often been happy to limit itself to that role: a dinner, a fundraiser and getting to drop the Leader of the Free World’s name in conversation. This time, they’re after bigger game.

Recently powerhouse venture capitalist John Doerr, suggested to his fellow Harvard Business alums that DARPA – the Defense Advanced Research Projects Agency – be returned to its original purpose. Doerr’s idea was that DARPA, which created and fostered the initial growth of the Internet, could do something similar for “green” technology.

In other words, Doerr would like the U.S. government to get back in the business of incubating start-ups. They may well need the help. The credit crunch has hit many of these operations hard. When it comes to this new class of investment, there’s no such thing as “virtual.” Companies need to borrow money to finance construction and development of physical things.

Talk of the “green New Deal” that the Obama administration may create – public spending for the development and construction of clean energy source like turbine farms, solar panel displays – would amount to something of a bailout for firms like Doerr’s that have invested in these companies. So would the administration’s decision to lift federal funding bans on stem cell research. Both would funnel a river of money to high tech companies.

That’s not necessarily bad. But it’s different. And while many of those intimately involved in this volte face are going to insist that that they haven’t changed their outlooks or approach – the market is still the market, politics is still a dirty business, entrepreneurs are still marvels of independent thought and action – those of us who have watched politics for a long time know better.

The Bush administration outraged men in the valley like Miller who place a great premium on competence. Obama’s candidacy was able to capture their imagination and his intelligence gave them faith that he’d actually do a good job. But that still doesn’t mean the valley loves politics. “Politics has really become a means to its own ends,” says Miller. “I think most politicians are disgusting. I just thin of them as guys who’s primary mission in life it to get elected.”

That’s exactly right, of course. You can’t get anything done unless you’re in office. But what about the idea – one hardly original – that an involved electorate, voters who care, will elected better, more suitable politicians? Well, says Miller, perhaps. “I find it difficult to argue with that.”

Posted by Chris Nolan at 5:00 AM | Permalink

The Content of Our Character

Nov
3
2008

Let’s be clear: If Sen. Barack Obama is not elected president tomorrow it will indeed be because he’s black.

It won’t be because he’s not tough enough – that’s a euphemism that questions Obama’s judgement and suggests that the color of his skin makes his thought process somehow inadequate. And it won’t be because he’s a “graduate student” – that’s a jab that implies that Obama’s not really that smart – he can’t be, he’s black.

No, if Obama loses it will be because a large number of Americans can’t bring themselves to vote for a man with dark skin. They may feel Obama is not “ready” – code, like all these other phrases, for “not a white person we can trust”. They may not like the idea of a First Lady – silly title, really – who is very dark-skinned and “angry” – which is how whites often describe black folks who aren’t obviously grateful for the “opportunities” they’ve had.

Each of these euphemisms ignores a simple fact: African-Americans who have done well at the nation’s top law firms, its Ivy League universities, its corporate boardrooms have had to demonstrate perseverence, judgement, diplomacy, intelligence and toughness and fortitude. More so, much more so, than their white counterparts.

That’s on top of the the obvious insults. For the past few days, the Republican Trust Political Action Committee has been airing a television commercial here in San Francisco that neatly sums up all the criticism of Obama, imagined and otherwise. It claims Obama’s “power base” was built in the church run by Rev. Jeremiah Wright and accompanied by pictures – and some audio – of Rev. Wright talking about the “KKK” and “god-damn” America. The ads end: “Barack Obama, too radical, too risky.”

What’s interesting about this ad isn’t what it says – same old, same old from a political party that’s happily scared the daylights out of white folks for a generation – it’s where it’s running. San Francisco is one of the most liberal cities in the U.S. But it is not a white city; it’s Asian, mostly Chinese. The ad I’ve described is aimed at instilling fear in those immigrants, taking a racist stereotype that many may know and imposing in on a man they may not.

It’s scurilous, it’s racist and well, it tells you what many, many people really think about Obama. The Wright ads are a slightly more sophisticated version of the scenario concocted by that Texas college student who dreamed up an attack by a tall black man who was supposed enraged by her John McCain bumper sticker. The subtext: Be afraid of Obama because, given the chance, black people will inflict deliberate harm on whites out of anger, jealousy or revenge.

This nonsense is not confined to the stupid or the politically naive. How else can you explain the speculation that Gen. Colin Powell’s endorsement of Obama was motivated by racial solidarity? Or silly Monica Crowley’s dismay that Jet and Ebony magazines had gotten better treatment on the Obama campaign plane than writers from the New York Post and Washington Times? This nonsense is nothing more than a variation on another theme: It is very hard for people of different races to truly see one another but, for crying out loud, they don’t all think alike.

This is one ugly mirror of race relations in this country, a mirror that not very many white folks like to look at. Which is something that – if Obama does win – will start to change.

Everyone has their shopping list on this one. My great hopes is that Obama’s election will do away with a lot of nonsensical chatter about “post-racial.” This is a stupid phrase that’s code for “do they know?” as in “Does Michelle know she’s the only black woman in the room?” The answer to that question is obvious: If you were the only white woman in a room of African-Americans would you “know”?

“Post racial” is how people in power describe a world they think welcomes black folks. This is a world that many of them – as Time columnist Joe Klein put it awkwardly – don’t really understand. With reason. The most amusing thing about the Charlie Rose show where Klein made his comments was also the most appalling. In an election year that has seen two historic candidacies, a black man and a white woman run hard for the Democratic Party’s nomination and break our concept of what it means to be a successful politician, Rose’ guests, all talented journalists from “major” outlets, were all men and they were all white. I guess the “qualified” female commentators are still bitterly weeping over Sen. Clinton’s loss so they didn’t have time for Rose. And, of course, the black reporters are all on the Obama campaign plane, reveling in their new found status.

This would be a very different election if, as Obama has suggested, this country had a conversation about race and race relations and not just between white guys talking to themselves about themselves. Events – the stock market crash first and foremost – have taken the urgency of that exchange off the table. But in a nation where whites will soon be a large minority, not a majority, it’s one that’s needed, regardless of who wins tomorrow.

Posted by Chris Nolan at 7:48 PM | Permalink

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