Saturday, September 15, 2012

How to build a startup, sell it to Microsoft and JUST keep your sanity.

High Stakes, No Prisoners : A Winner's Tale of Greed and Glory in the Internet WarsHigh Stakes, No Prisoners : A Winner's Tale of Greed and Glory in the Internet Wars by Charles H. Ferguson

The story of the author’s East coast startup, Vermeer Technologies, which was bought by Microsoft in a deal concluded in January 1996, has been hailed as classic of tech autobiography. It’s a rare insight into the unique blend of intelligence, good timing, cunning and an almost magical ability to squeak through the narrowest of gaps, that characterises successful tech entrepreneurship.

Ferguson’s account has the added attraction of being gob-smackingly rude about some of his colleagues and business partners. More of that later.

What I hadn’t expected is the other strand, the chapters of industry analysis that draw on Ferguson’s previous career as a consultant to big tech companies, an occupation that he disarmingly tells us he was very good at.

You can see why. The talent to skewer a deceitful colleague with a brilliantly apposite phrase is the same one that lets Ferguson sum up complex industry trends and deliver judicious, forward-looking assessments that nobody in their right mind could disagree with. I can well imagine how lazy or not too bright CEOs felt good about paying Ferguson do their strategic thinking.

More than ten years on, much of Ferguson’s analysis looks prescient. He highlights privacy and piracy; he enthuses about the online distribution of all forms of artistic and entertainment content but worries about the business model: “one thing that recording companies, publishers and movie studios do well is make sure that they get paid.” And he recognises a world in which there will be “an increasing premium on people with high levels of education” and a widening gap between rich and poor “both within and between nations”.

He argues for the breakup of Microsoft into an operating system business and an applications business (which was being discussed at the time as part of the Department of Justice’s case against the company). But he praises Bill Gates for his relentless focus and professionalism and for the setting of uniform standards in the emerging computer industry that benefitted consumers. He blames Netscape for a disastrous and unforced throwing away of an initial lead over Microsoft in the ‘browser wars’.

All this is interesting and written with pace and passion. But it’s the other part of the book that gives it its reputation. When Ferguson takes us into the daily traumas of setting up and eventually selling Vermeer, we feel we’re at the table with him, struggling to handle the pressures of his manipulative VCs, of rival companies springing up with what looks like the same idea, and worst of all, the greedy CEO he hired in what he later sees as a moment of tragic misjudgment.

His name was John Mandile. I can’t imagine how the book ever got past the lawyers or, since it did, how Mandile ever recovered from what Ferguson had to say about him. But apparently he did, since according to Bloomberg Businessweek, he’s now managing director of Sigma Partners, one of the VC companies that backed Vermeer.

He accuses Mandile of a litany of elaborate self-interested moves starting with deliberately delaying the signing of his contract as CEO in order to put Vermeer into a more desperate position, thereby improving his bargaining power.

Together with Ferguson’s mortgage problems, his relationship with his girlfriend, and the need to hit trade show deadlines with impressive demos, the life of a tech entrepreneur is evidently mind-bogglingly complicated.

Whilst I loved the book for its raw, slapstick material – the clash of big ambitions, big egos and big money – for that kind of thing I still marginally prefer Michael Wolff’s Burn Rate (published in 1998, a year before Ferguson’s book, but covering the same era). But High Stakes, No Prisoners is right up there with it, and provides a richer insight into the mainstream of tech history, with its graphic presentation of the impossible choice Ferguson faced between falling into the arms (or jaws) of Netscape and those of Microsoft.

I won’t spoil things by telling you it all turns out well. Ferguson cashes his $14 million cheque, buys himself a first class ticket to California, feeling “numb yet free”, and settles down to recover – by writing the book,

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Tuesday, September 4, 2012

Your laptop is the culmination of billions of years of evolution

What Technology WantsWhat Technology Wants by Kevin Kelly
My rating: 5 of 5 stars

Kelly is a distinguished tech journalist (former executive editor of Wired magazine) and knows everyone who’s ever been anyone in Silicon Valley. Like all the best techies of a certain age, his roots are in hippydom, as a leading light of the Whole Earth Catalogue in the 1970s. He still rates technology in terms of its contribution to life as a whole.

Amish communities fascinate him because of their conscious, selective attitude to technology, echoing his own restrictive rules for himself (no laptop or smartphone).

But for all the thoughtful reservations about its subject, What Technology Wants is hugely positive. Kelly’s years of research for the book, and decades of knowledge and experience before that, are used to brilliant effect, to construct an ambitious intellectual framework through which to view the patterns and forces that shape technological change, together with the bigger scientific picture into which, Kelly argues, technology fits.

To make his case, he goes back to biological evolution to demonstrate, controversially, that it is going somewhere: it’s not just the slave to the cumulative advantages created by random variations in an unpredictable environment. No, since the Big Bang the universe has been diversifying into smaller and more specialised units – whether atoms, molecules, organisms, social structures, or now, structures created by technology.

It’s not the view of most evolutionists but it’s a beguiling, unifying theory that seems to answer every question. Now we can see how chemical molecules came from individual atoms, why life evolved from the simplest structures and why human life is getting more and more complicated. Moore’s Law, which triumphantly describes and predicts the exponential growth in microchip processing power, is here applied to a much wider canvas.

And to give us a handle on his particular interests, Kelly has come up with a word to describe the inter-relationship of all human and animal creations: he calls it "the technium" (a reluctantly minted neologism, because “I dislike inventing words that no one else uses, but in this case all known alternatives fail to convey the required scope.”)

The technium isn’t just gadgets: it includes things like literature, laws, money, bird’s nests - anything that extends biological life into new dimensions and gives it power over its environment by other means.

Kelly’s point is that the diversification and specialisation we see in technology, such as how cameras have developed from one idea – to create a record what the eye can see - into multiple shapes, sizes and functions, is an exact parallel with how biological evolution creates increasingly specialised varieties from a single point of origin. Indeed, he argues that technological development is just a continuation of that process.

Although it’s a broadly optimistic view, Kelly claims only that the positives slightly outweigh the negatives, both in biological and technical evolution. But with the huge numbers involved that’s all that’s needed to keep things getting better.

God doesn’t get a mention, but I was reminded of the theories of Pierre Teilhard de Chardin, the Jesuit priest and geologist who was quoted with approval at my Catholic school. Indeed, a quick flick through some Teilhard websites confirms my suspicion of the echoes with Kelly – the common ground being ideas of universal progress to a better state (morally, in Teilhard's view) and a certain hippy sensibility. “We only have to look around us,” wrote Teilhard, “to see how complexity and psychic temperature are still rising: and rising no longer on the scale of the individual but now on that of the planet.”

I don’t suppose Kelly would want to be lumped in with Teilhard, and for all his scientific credentials, Teilhard’s thinking was probably more informed by the writings of his spiritual masters than scientific papers. Kelly, on the other hand, bases his argument on a series of upward trending graphs and detailed accounts of what he calls technology’s unstoppable "trajectories" – things like efficiency, complexity, diversity, ubiquity, mutualism and sentience.

Everything seems to fit. But can we allow ourselves the comfort – and I think it is that – of a theory which puts humanity and all its works at the forefront of universal progress as the culmination of billions of years of physical and biological evolution?

Is this today’s equivalent of believing the earth to be at the centre of the universe? By definition, our limited perspective makes that an impossible question to answer.

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