Archive for July, 2007

Entrepreneurship and Risk Tolerance

July 31, 2007

A few weeks ago, I wrote that there’s not a lot of empirical research supporting views that the young have an innate advantage as entrepreneurs. Fred Wilson and Clay Shirky were writing about this, and Clay kindly pointed out that he is thinking of a much narrower class of visionary entrepreneurs, about whom the research says little.

I also said that I would post some additional thoughts on entrepreneurship, so here they are: entirely hypothetical, with no empirical backing whatever, and probably perfectly obvious.

1. As we get older, we acquire large mortgages, college savings plans, assisted living expenses, and other things to make us risk averse.



Advice on Banking

July 29, 2007

So you’ve read Advice on College and Advice on Getting to Wall Street. You’ve won that coveted analyst position. It’s the last week of July – in another week, you will probably finish your training and find out your group assignment. Maybe you’ve been on the job for a month or so, and you’re starting to get the hang of things.

This is your first job out of college. It’s a nutty working environment. It can be hard to find time for taking stock. In this post, I will give some advice for new investment banking analysts. Not everyone has the same experience in banking; in fact, some people don’t get a lot of benefit from it. Here are some things you can do to make the most of your two years.


An Open Letter to Franklin Foer

July 27, 2007

To: Franklin Foer, Editor, The New Republic
From: Timothy, Blogger, Zeal & Activity
CC: Michael Yon, Hugh Hewitt
Re: “Scott Thomas” Affair – Next Steps

Dear Mr. Foer:

Your publication of Army private Scott Thomas Beauchamp’s “Diarist” piece has caused some controversy. Apparently, only one detail of his story – beyond the fact of his existence – has been corroborated. Pvt. Beauchamp appears to have strong political views. He’s not a particularly good writer. It doesn’t help that you knew he is married to one of your staffers.

I suggest that The New Republic run a companion piece in its next issue. It has some similarities with the Beauchamp piece, and some key advantages over it. I am confident that it will meet The New Republic’s standards for freelance writers. Running this piece will provide your readers with a valuable, interesting, and informative contrast with Pvt. Beauchamp’s experience.

Like the Beauchamp piece, it deals with a mass grave – a real one. Again, the grave contained children’s bodies. The atrocity here is far more newsworthy than some cretinous horseplay: the children had been decapitated.

Corroboration will not be a problem. The grave’s excavation was witnessed by at least five American Soldiers from C Company, 1-12 Cavalry, who are identified by name, together with Iraqi soldiers from the 3-25 (5th Division). It was captured on video and in numerous still photographs, and its GPS coordinates are available.

Of course, I’m referring to Michael Yon’s dispatch “Bless the Beasts and Children.” On June 29, in a village about 3.5 miles from Baqubah, the capital of Diyala Province, U.S. and Iraqi troops discovered a mass grave containing the bodies of “10-14” villagers and children, as well as their animals.

Additional detail including a final body count is here and comments from a Diyala provincial council member are here. A video interview with American witnesses is here.

Michael Yon, who has been called “this generation’s Ernie Pyle,” is a former Green Beret and freelance journalist. He has been in Iraq since January 2007 and previously embedded in Mosul with the 1-24 Infantry. He has often criticized U.S. policy in Iraq and Afghanistan and the Army chain of command that authorizes embedded journalists. He was among the first to describe the situation in Iraq as a “civil war.” His writing is powerful, direct, and gripping.

Mr. Yon has offered the “Bless the Beasts and Children” dispatch, photographs, and video to all media outlets free of charge during July 2007. While several news websites and blogs linked to the dispatch, as far as I know, no print publication has carried them. Mr. Yon can be reached at

Publishing Mr. Yon’s dispatch will demonstrate the The New Republic’s commitment to complete coverage of the war in Iraq. It will provide the magazine’s readers with important information about our allies and enemies there. It will showcase a gifted writer with virtually unfettered access to the battlefield. And it will soothe the distracting uproar over Pvt. Beauchamp’s allegations.


CC: Michael Yon, Hugh Hewitt

NOTE: I don’t currently have Mr. Foer’s email address so I haven’t yet sent this letter directly to him. UPDATE: Done, with the help of commenter Sharkman, a little before 9 p.m. GMT on Friday.

UPDATE: Welcome, Hugh Hewitt readers! Have a look around – you might be interested in this somewhat related post on Citizen Journalism.

YouTube or Not YouTube?

July 27, 2007

Hugh Hewitt and Patrick Ruffini are having a friendly dustup over whether GOP presidential candidates should skip a CNN-moderated “YouTube” debate of the type just finished by the Democratic candidates. Mr. Hewitt says no, it’s a circus, while Mr. Ruffini says, yes, the GOP is behind on technology and can’t be seen ducking CNN after lambasting the Democrats for ducking Fox. (Posts in order are here, here, here, and here.)

Mr. Hewitt is missing a great opportunity. The YouTube debate must have been the least innovative innovation ever seen in broadcast media. Audience and callers have always generated questions for political candidates and other guests, often quasi-anonymously, and producers and editors have always censored and tailored the resulting material. The only new aspect was the self-recorded videos, which isn’t revolutionary. We’ve all seen clips on YouTube before.

Mr. Hewitt is right that a CNN-managed debate would be even more inane and tilted than usual, and the GOP would be wise to evade it. Mr. Ruffini is right that, nevertheless, the GOP needs to reach out to technology-savvy voters.

But running grass-roots questions through the mainstream media grinder utterly misses the truly subversive and revolutionary capability of YouTube, which is to take the medium of video, with its immediacy and clarity, entirely out of the hands of the media. That is the power of YouTube, and the candidates will demonstrate a lot more savvy by taking advantage of it, as Mr. Ruffini suggested – a YouTube debate, but without CNN.


Advice on Getting to Wall Street

July 25, 2007

So you are heading to college. Maybe you have finished your first year. You have read Advice on College, and you are fired up to get that Wall Street job. If you’ve ever been to an investment bank’s on-campus presentation, you know how many students feel the same way. In this post, I will give some practical pointers to help you stand out from the crowd, plus some background on the industry.

Investment banks perform a number of roles in the economy. (1) They provide financial advice for corporations (how much is that business worth? How can I borrow this money at the least expense?). (2) They help companies raise money through the public markets – equity, from selling shares of ownership, and debt, from selling bonds or notes. (3) They execute security trades for institutional clients (e.g. mutual funds, pension plans), as well as their own accounts. (4) They publish research on publicly traded securities and economic sectors. Housing all of these functions in one firm is a rich source of conflict and scandal.

For your purposes, there are two kinds of I-banks: bulge bracket and boutique. (more…)

Trust and Value

July 24, 2007

A value proposition is a short statement of “why customers should buy your product.” A good value proposition can help your organization to focus on “how we win” and avoid wasting time on features and projects that don’t matter to the customer.

If your business relies on customers sharing personal data (Web 2.0), then, in addition to a great product, you need to telegraph reliability and integrity every time you touch a user. You could benefit by developing an explicit “trust proposition,” a concise statement of why customers should trust your business.

Despite my concerns, Wesabe has done an outstanding job of this. They know that impregnable security is the minimum requirement for anyone to put personal financial data into a social network. They know that security depends on internal culture and practices as much as on technology. So the whole user experience – at least on the acquisition side – is designed to make the emotional argument for their culture.

Wesabe hammers home the “community” angle – other users are people just like you. They won’t advertise because it conflicts with the Wesabe aspiration of thriftiness. Lest anyone’s experience or data be compromised due to employees’ poor incentives, users can directly contact the CEO. Commitments to maintain privacy are public and unequivocal. Data can be freely exported or deleted.

In aggregate, all these cues convince me, intellectually and emotionally, that Wesabe knows it lives and dies with users’ trust. It isn’t about to release a slew of user data like AOL with those search results. I have my doubts about the ability of Wesabe’s culture to survive acquisition, but today they have done a great job.

If user trust is mission-critical, consider putting together a trust proposition to keep your guiding principles in front of your organization. Your value proposition still tells you what to build and how to sell. A trust proposition will help your organization focus on acceptable practices and user perceptions (while supplementing your value proposition).

PREVIOUSLY on Zeal and Activity: Why Wesabe is Trouble

Why Wesabe is Trouble

July 23, 2007

Dave Winer has raised a kerfluffle with his post Why Feedburner is Trouble. He never liked “giving so much power to one company,” especially now that they’ve sold to a bigger company. Fred Wilson, whose Union Square Ventures invested in Feedburner, says Mr. Winer shouldn’t be concerned because it’s so easy to leave. Robert Scoble says that the real issue is big companies messing around with standards. Donna Bogatin says that the real issue is Google hoovering up everyone’s proprietary data.

I have some of the same concerns about Wesabe.

I’ve been ogling Wesabe since Fred Wilson’s first post three months ago. I crave its streamlined data entry, tagging, and web access. I buy the extravagant privacy and security measures. I understand the benefits of anonymously aggregated data and the possibilities for social networking around personal finance.

But it’s one thing to open up your credit card, checkbook, taxes, bills, investments, and tags to a small, independent company whose CEO sets aside 2 hours a day to talk with customers, and another to open them to Google, Yahoo, ACNielsen, or Equifax.

Union Square Ventures led the Series A round for Wesabe. When the number is right, Wesabe will sell to a bigger company. No complaints; that’s how VC works. But there’s no way for Wesabe to bind its eventual acquirer not to be evil. Who wants to see this announcement?

If you take no action by June 15, 2010, the rights to your data will transfer from Wesabe to [Google].

Wesabe insists that its users still own their data, but it’s already slicing and dicing for their benefit. It’s a small step from there to mining for salable data. Sending aggregated data outside the community would violate the Wesabe ethos, but maybe not the Google ethos.

If Wesabe were acquired, I could always pull my data. But that kind of disruption built in 3 or 4 years from now is a huge flaw for a financial service (especially a really good one). So, unless I can be convinced that Wesabe will “sit tight,” it has yet to cross the chasm for me.

UPDATE: More thoughts on what Wesabe has done well.

In Defense of Preventing Genocide

July 21, 2007

No doubt you have seen this post from Ace: Obama Says Preventing Genocide Not Enough To Justify US Presence In Iraq… And He’s Right (via Instapundit).

All arguments about Iraq have to be connected to the American national interest. … Talking about preventing a genocide merely to prevent a genocide is the sort of airy-fairy appeal-to-emotion unicorns-and-rainbows rhetoric that never much appealed to me, ever, even before the actual war. …

We’re not in this for the Iraqis. We’re in this for ourselves. It turns out that helping the decent Iraqis take control of their country and drive out the thugs is in our interest, but let’s not mistake their interests, and only their interests, for our own.

I like Ace, but I hope to see him retract this argument. Genocide of the Iraqis is not just some genocide of farmers and laborers in a backwards country that Americans never heard of. It is genocide of people who trusted America’s word, many of whom are trying to construct a just society in very trying circumstances. After all, for better or worse, we destroyed their government and upended their society. Their enemies are there to attack us and exploit the vacuum we created. If we abandon the Shi’ites and Sunnis to the tender mercies of al-Qaeda and the Quds Force, we add them to the shameful roll of American allies used and discarded – South Vietnamese, Hmong, Afghans, Kurds.

I agree with Ace that other American interventions must follow American strategic interest. Obviously there are many other compelling reasons to win in Iraq. (I would add one more: the loss of reputation suffered if we should jetison our Iraqi partners.) But to suggest that, in the absence of these reasons, the Iraqis can go hang, is revolting.

PREVIOUSLY on Zeal and Activity:

Advice on College

July 20, 2007

Over at Marginal Revolution, there’s a lively thread of advice for new college freshmen. I added two cents there but the other commenters sparked enough ideas for a stand-alone post.

Here is my advice for making the most of college, from the perspective of five years’ work plus a master’s degree. (I assume that you are interested in a broadly professional career.)

Choose your major wisely. 9 times out of 10, you are better off with a major that involves math or science. Engineering is great because it teaches problem solving. Math and physics are terrific mental gymnastics and very transferable. These quantitative majors prove to employers that you are smart. (When I was a banker, any engineer or math guy automatically made the first resume cut.) Philosophy and economics also seem to carry weight. Be careful around the hard sciences (as several MR commenters said) because they get pretty specialized – don’t suffer through organic chemistry unless you really want to be an MD or PhD. Political science, psychology, international relations, English, psychology, “communications” and so on are less robust.


Words on Iraq

July 18, 2007

In the past few weeks, we have heard powerful, eloquent speaking on the War in Iraq. If you missed these speeches, take a minute to read the whole thing.

Today, the commander of MNF-Iraq, Gen. David Petraeus, spoke on Hugh Hewitt’s radio program.

[W]e have an enormous responsibility, because of course, we did liberate this country. … [T]here’s enormous potential implications for some of the courses of action that have been considered out there, and certainly, a precipitous withdrawal would have potentially serious implications for important interests that we have in Iraq, in the region. …

[O]ur leaders get it, our soldiers get it, they are these flexible, adaptable, thoughtful, culturally astute, and by and large, leaders and soldiers and Marines, and they are showing that on a daily basis here. That is not to say that it is anything at all easy about this, that the complexity is anything but just sheer enormous, or that this situation is anything but the most challenging that I’ve ever seen in some 33 years in uniform.

U.S. Army 1LT Pete Hegseth, the executive director of Vets for Freedom, gave a press conference with a group of Senators in Washington, D.C. on Tuesday (via Power Line).

[W]hile Iraqi political progress is certainly not where it should be, the security improvements American soldiers are purchasing in blood and sweat are a necessary precondition for political progress and a stable Iraq that denies haven to Al Qaida and company.

So we say to Congress, let General Petraeus and the troops do their job. They want to win.