31 March 2005

R&D Funds Go To Real Estate

From Kommersant, St. Petersburg's Research Center is the latest way for someone to receive cash for owning a crappy piece of real estate and deprive deserving scientists of R&D funds.

As the article points out less than 15% of all funds earmarked for a project in Dubna actually ended up funding R&D.

Could someone in charge please understand that building business parks for science start-ups is worthless unless they have management talent that is going to find contracts and a pool of venture experience to help those managers go global.

30 March 2005

Wireless Chips - Today and Tomorrow

Om Malik (as if you need to know where to find him) posts on hefty sales of chips for wireless chip manufacturers of both memory and DSP chips, everyone bar Intel, effectively. And the $ value per chip is only going to increase as the requirement for chips in converged "handsets" increases. Multiple radios, not only across today's, tomorrow's and the day after that's mobile and fixed wireless networks but increasingly linked to WiFi as well as having Bluetooth (and UWB?) capabilities.

That's a geometric increase in processing power in handsets whose battery life is improving arithmetically. The challenge will be to build integrated software/hardware systems that are highly energy and form factor efficient without sacrificing processing power. The mathematical abilities that are today housed in Russia and Ukraine are already providing the algorithms (linked to a definition just to remind you of what we are talking about - it's not just mathematics) and in some cases the links to hardware systems that will solve some of these problems.

Reconfigurable computing is probably the answer and if you doubt me read this from Steve Pawlowski an Intel Fellow on what it means to have "one radio that defines multiple radio standards".

Somewhere in this space amongst the plethora of work that is being done in Russia and Ukraine right now is a deal that will be done in 4Q 2005.

Lies, Damned Lies and Statistics

Yesterday German Gref, Minister for Economy, Development and Trade (MEDT) yesterday announced that the government was dropping its 8.5% inflation target and raising the target to 10% (Not sure how durable this link is.)

Also yesterday we got close to closing our annual negotiations to rent our dacha for 2006 we have agreed with our somewhat batty landlady that her real inflation is closer to 20% than it is 10%. What gives?

Is this just Moscow related inflation with the more backward parts of the country, partially yes, but I feel that it has more to do with a number with games played between a limited number of players with imperfect information.

Whatever, the real cost of living in Moscow in going through the roof and salaries reflect this, not reported salaries which represent between 5-50% of actual salaries, but cash out every month. A common bitch among business owners (principally expat) these days is that salary demands are completely out of sync with experience and ability. This is not a Russia is going "to hell in a hand basket" post but an attempt to provide a micro review of an economy that only has macro players.

Burnham on No

This is the third and by far and away the best of the saying no stories from Bill Burnham.

I will admit to being as bad as anyone at saying no early enough. Usually because I like what a company is doing but when it becomes time to think about convincing others that it is a good idea reality strikes. At which point the no becomes an effort in self-justification.

My best no however, was to a guy who is now a good friend. I liked his company, his product, the market and was getting ready to make a proposal when I met the new CEO. We did not invest, the CEO was fired within a year and the Company was sold for its patent portfolio.

Blogging Better Than Journalism

Jeff Nolan at SAP Ventures posts on consolidation in the enterprise software industry.

Here we have an expert, or very well-informed writer (depends whether you believe that VC's can be experts!) writing a concise overview of some trends in the enterprise software industry without the requirement to tell an "interesting" story. The likelihood of finding a similarly well-written informative piece in the mainstream media are limited.

Furthermore it does not take more than 5 minutes of skimming through Jeff's blog to understand his general point of view and thus to put his piece in to some perspective.

Good piece.

29 March 2005

Ukraine - The Future's Bright the Future's Orange

Slava Johnson from Chadbourne & Parke's Kyiv office has written a great piece on the future of Ukraine under Yushenko.

In particular she highlights just how many established interests he is going to have to bring onside to get his way and the fact that he has just a year to do so. Considering how difficult it has been for Putin to implement his reforms in Russia versus an established bureaucracy and regional fiefdoms with a popularity rating that has stayed over 60% even during the social payments fiasco at the beginning of the year. Yushenko, by contrast is the President of a divided country from which he is struggling to remove the epithet bitterly.

She starts down the road of debunking the US financing of the Orange Revolution albeit does not really nail the point. In short there was US money that helped but it was only there because Putin's thugs gave them the opportunity.

25 March 2005

Revolutions; Rose, Orange, Kyrgyzstan and Russia

This week; I returned to Ukraine for the first time since Yushenko was formally recognized as President, Kyrgyzstan, a country I have never been to, overthrew its post-Soviet, Soviet leaders and Putin announced a moratorium on (inter alia) the loans-for-shares privatizations. The temperature also crept above 0 on Thursday and the sun shone; unfortunately there is no tool to link the sun to the investment mood. Sitting in the traffic yesterday the two were indelibly linked.

Was Putin's announcement yesterday akin to false hopes of spring as we return to winter today (snow), or have the liberal economists in the convenient guise of Gref and Kudrin started to win the war? And are they winning battles or the war? And just where and on what issues were those battles fought? Does being humiliated in Ukraine (please notice the absence of the definite article) really have a positive economic effect in Moscow? After all in Ukraine the Orange Revolution is seen as the victory of Ukraine's millionaires over its billionaires. Please suspend any conversations about democracy until the pudding is on the table.

Is Putin's charm offensive PR-led, or is it reality? Being burnt by PR-led good news is second nature to investors in Russia's public markets. However, my broker friends tell me that their government relations people have been hearing good news for a while. I have blogged too often recently about failures of the 5th Directorate thugs to be anything but happy about their demise, however temporary.

Boy is this a difficult post.

So in the week that; another "friend of Russia" was toppled by dollar-inspired people power, that the hope of a new future permeated both Kyiv and Kiev and Putin publicly swung back to the liberals which is going to impact making money the most? Putin's announcement should top that list by some way. Ukraine is emerging from the dark ages, Kyrgyzstan is still feudal and there is no obvious link between democracy and wealth creation - ask the Chinese.

For all the carping about progress in Russia over the last 6-9 months it is still a country mile ahead of its nearest neighbors. Retreating rapidly to an area where I have some opinionated knowledge rather than just opinions; technology. IP laws here are mostly well-drafted if yet to be enforced. Academia is increasingly being funded. In none of Russia's neighbors is this the case. If your trade is short-term it may be better to buy Ukraine than Russia, something to do with buying the rumor selling on the event. If however, investment time horizons are slightly longer than tomorrow; Russia seems a better bet.

And all this in the week that "Old Europe" defeated the Services Directive. How long before we read the first comparisons of Russia's liberal economy compared to Germany and France's restrictive model?

This is either the first week of spring or another false dawn in an increasingly long winter. The weather outside is not promising; something tells me that Russia's economy is going to be rosier.

18 March 2005

Small Businessmen in Russia

Putin is apparently concerned about the size of businessman in Russia.

Or is that he is concerned about small business in Russia. So lot's of grand statements are made but as Siberian Light points out the bureaucrats (Chinovniki) are just following his lead;

And he is right to say that much of the problem is with regional authorities. Most of obstacles that small businesses face are met at the local level - bureaucracy, demands for bribes, etc. But some of the blame has to go right back up to Putin, who is in the process of setting up a political system based on patronage rather than accountability. If corruption at the highest levels is increasing, how does he expect it to begin decreasing at lower levels?

14 March 2005

The Art of Presentation

As a crap presenter, and as the recipient of crap presentations, I am fascinated by the advice given to create more focused presentations. Whilst Roger's comments are specifically tailored to pitching VC's the basic theory still applies. If you have a 1 hour meeting and 30 slides then at best that's 2 minutes a slide. Do a rehearsal and work out what 2 minutes a slide feels like. Imagine yourself to be on the receiving end of a new slide every 2 minutes. Then factor in questions. Now reduce the number of slides by at least 60%.

And just because you have less slides does not mean that you should cram more onto the slide. I hate investment banking slides which have so much info crammed in to them that I spend 3 minutes trying to determine what's important and then I need to understand why it's important and on the third slide I stare at trying to get the information to leap off the page my concentration slips. I know that I should be professional enough to work through that but I am just human. It's not dissimilar to running meetings in Russian. I have to concentrate so hard that the moment I am not giving it 100% I am getting nothing.

I had a boss who had learnt his presentation skills in a consultancy; i.e. very busy with each slide containing 5 slides worth of information. But they were rescued by a strip line which stated the take away from the slide.

If you don't believe me try reading;

Beyond Bullets and this post from Brad Feld the comments to which are a complete link fest.


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05 March 2005

Winter

The end of this winter is turning out perfectly. Let me paint you a comparative picture;

New England etc; that indescribable late autmn russet color that Robert Lowell never found words for in his madness

Scotland; The first green at the end of a long winter when the sun shines and is warm and hope (and sex) is in the air

and thus the end of a Russian winter can be two things and unfortunately they are not mutually exclusive; crystal clear, cold and beautiful or grey, with clouds a centimeter above your head and large puddles of melt with last winters dog shit and cigarette butts reaching for the surface.



The glass is half full at the moment. My study window faces on to the back of the Ministry of Foreign Affairs ("MID") one of Stalin's 7 Wedding Cakes or more commonly Visotkas.

The camera on my Treo 650 does it no justice. The view is crystal clear and utterly beautiful.



04 March 2005

Oddities in Russian Life

It's always fun to watch a family coming apart at the seams, particularly when that family used to sup together as 5th Directorate KGB thugs (pace Medvedev). The back and forth, up and down (viz whore's draws) of the Gazprom (GAZ.P), Rosneft (traded nightly in expensive restaurants in Moscow) and Yuganskneftegas has actually reached a level of slapstick humor that Benny Hill would do well to emulate. A brief recap in case you have spent the last 10 years buried in a polar ice cap:

  1. The Soviet Union spends huge amounts of money discovering oil in Siberia
  2. The Soviet Union falls apart
  3. Well connected members of the young Komsomol do off with large chunks of cash and create a quasi-banking type institution
  4. The Russian government parks some of its meagre cash flows with the aforementioned quasi-banking type institution
  5. Vladimir Potanin takes a sabbatical from his own FIG (financial-industrial group) to parcel out some/all of the states juiciest assets in a deal called "loans-for-shares"
  6. Yuganskneftegas becomes the jewel in the crown of Yukos, a loose affiliation of warring clans which also included; Samaraneftegas, Tomsneft and a couple of other bits and pieces. Price paid; whatever government monies we had in our bank at the time the bid came up.
  7. Lots of unpleasantness some quasi-legal some involving rapid and fatal injections of lead before Yukos finds religion and becomes transparent; i.e. it works out that the market value is greater than the cash flow it can appropriate.
  8. 31 December 1999 President Yeltsin resigns. VV Putin steps in to the breach.
  9. Four-ish years VVP later replaces deeply compromised competence with 5th Directorate thugs (his friends). The Prime Minister was commonly known as Misha 2%.
  10. First Lebedev and then Khordokhovsky go to jail.
  11. Yuganskneftegas is stripped from Yukos because it could not pay its tax bill, except it could.... to be bought by...
  12. Baikal Finance, a company whose registered address is a hairdressing salon in buttfuck nowhere...
  13. Which was then acquired by Rosneft, a state-owned oil company run by a certain Bogdannichov. A CEO who would go down well with Enron, WorldCom etc shareholders
  14. Lots the "cheque is in the post" follows when it becomes clear that Rosneft can't afford to buy YuganskNG but the Ponzi scheme comes through in the end
A short break for some commentary: So far so good, unless you were allergic to lead, or Kenneth Dart. Whilst making too close a link to Soviet show trials ought to be seen as distasteful I have to draw a comparison. During the worst excesses of Stalin's regime, provided you made it to trial every attempt was made to "prove" the case. The mentality continues today thus the courts provided a useful way of legitimizing the transfer of YuganskNG to the 5th Directorate thugs. Even though it was abundantly clear what was going on we all play along and enjoy the game. This all works well when there is only one voice. However, as with all relationships founded on distrust they break-up sooner or later and this one has had me smiling all day. And thus to Point 15.

14. A Houston court (don't ask) decides it does not have jurisdiction (clearly, and I did not spend any time at law school)
15. Alexei Miller, Gazprom's CEO and Sergey Bogdannichov announce in a recorded statement on two tame state channels (there aren't any wild ones) that they have come to a long-awaited agreement as to merger
16. Then Rosneft says in a press release that the pre-agreed statement was wrong
17. Then the Press Release was possibly rescinded because Bogdannichov was "on holiday" - presumably the pressure of making his first TV program
18. Then it was denied that it was rescinded
19. Then it was announced that the Kremlin was going to make a statement.........but it hasn't

This has legs and will run.

My second piece of fun comes from British Airways.

Saturday I fly to the UK. Today Friday I buy my ticket from AmEx Travel by phone whilst bouncing around town. I would prefer an e-ticket which BA does, even in Russia. But for AmEx to issue me an e-ticket they have to go to BA's office to collect it, for which they want to charge me another $35. So it will be a paper ticket that I have to pick up myself, and hopefully won't lose.

and you don't want to hear about my attempt to open a bank account today.

Happy March 8th if you are lucky enough to be a woman.

03 March 2005

A Note to Financial Services Journalists

In today's Venture Wire Alert is a neat little piece of PR by a JVP company going by the name of Native Networks, who apparently make Ethernet Switches. Not that it matters.

The article states that they were sold for $55mn in cash to Alcatel, the Company's sole source of business, in a move that "paid off handsomely." You sort of believe it because a JVP Partner, Laurel Bowden, is quoted as saying that it did.

And then in that last para which usually you don't read because it reiterates something that has been written previously it states that the Company raised $45mn from "a host of venture capital firms."

A range of possible conclusions;

  • The last round was a recap at such a low valuation done solely by JVP that they made off like Kings
  • The decimal place went missing in the sale price
  • Venture Wire pays its journalists peanuts and they end up with monkey's.
  • The very persistent sales person at VentureWire / Dow Jones should read this to understand why I refuse to pay for shit.
The conclusions are not mutually exclusive.

Russian R&D; Fiscal Stimulus

Not exactly a title to get the blood racing. Notwithstanding if German Gref, Minister for Economic Development and Trade, has his way it could help end the dislocation between Russian business and Russian R&D.

The economic genius otherwise referred to as Prime Minister Fradkov wants to see VAT (better known as NDS) reduced from 18% to 14%. Gref, one of the liberals in the government, has instead suggested that VAT remain at 18% but with certain exemptions. Not least of which would be tax exemption on all R&D.

These are small steps, but vital ones, in building a sustainable future for Russian R&D.

Apologies for a brief moment of aspiration, but the sun is shining and the end of winter is in the air.

Tell Me This Hollywood Exec "Gets It"

From today's FT, subscription required, and I am not even going to post a link;
"We like selling movies better than renting them or pay-per-view; it's better margins. We're not interested in cutting prices, we want our fair share."
It's always good when a consumer driven business tells its customers what it thinks of them. Whilst I would never condone anything illegal............

02 March 2005

Waste of Conference Space

The geek in me gets excited by Demo, Comdex and CeBit but the businessman, given that we are in Russia that would be Biznizman, would rather focus where I might get some value. And this Light Reading Conference is where I would want to be. But what is the sodding point; I am sure that Graham Finnie from Heavy Reading will do a great job getting us all started but to follow with 4, yes four, presentations from sponsors means that I should just read their websites. They should be paying me to go. I mean it's not even as though I want to go to Atlanta.

Really what is the point for the sponsors or attendees?

Democracy In Russia

Actually I couldn't give a damn about democracy. I care about humans treating each other with respect. My wife's business partner is married to a Tibetan who grew up in exile in India and Nepal, as if that was not hard enough. He can barely get from a. to b. without being shaken down by the Militsia (to translate that as Police would be an insult to thugs everywhere). He refuses to travel on the metro after 5P.M. as its prejudicial to his health.

Anyway here is an exert from a report from a Government with a less than stellar track record in the race department, no not my own the US, on the situation. Just because someone else is bad does not make your worse acceptable;

In contrast to developments in a number of countries that increased direct citizen control over government authorities, in Russia changes in parliamentary election laws and a shift to the appointment, instead of election, of regional governors further strengthened the power of the executive branch. Greater restrictions on the media, a compliant Duma (Parliament), shortcomings in recent national elections, law enforcement corruption, and political pressure on the judiciary also raised concerns about the erosion of government accountability. Racially motivated violence and discrimination increased, despite considerable legislative prohibitions. Authorities failed to investigate actions against minorities while subjecting them to more frequent document checks, targeting them for deportation from urban centers, and fining them in excess of permissible penalties or detaining them more frequently. Government institutions intended to protect human rights were relatively weak.

Democracy In Russia

Actually I couldn't give a damn about democracy. I care about humans treating each other with respect. My wife's business partner is married to a Tibetan who grew up in exile in India and Nepal, as if that was not hard enough. He can barely get from a. to b. without being shaken down by the Militsia (to translate that as Police would be an insult to thugs everywhere). He refuses to travel on the metro after 5P.M. as its prejudicial to his health.

Anyway here is an exert from a report from a Government with a less than stellar track record in the race department, no not my own the US, on the situation. Just because someone else is bad does not make your worse acceptable;

In contrast to developments in a number of countries that increased direct citizen control over government authorities, in Russia changes in parliamentary election laws and a shift to the appointment, instead of election, of regional governors further strengthened the power of the executive branch. Greater restrictions on the media, a compliant Duma (Parliament), shortcomings in recent national elections, law enforcement corruption, and political pressure on the judiciary also raised concerns about the erosion of government accountability. Racially motivated violence and discrimination increased, despite considerable legislative prohibitions. Authorities failed to investigate actions against minorities while subjecting them to more frequent document checks, targeting them for deportation from urban centers, and fining them in excess of permissible penalties or detaining them more frequently. Government institutions intended to protect human rights were relatively weak.

01 March 2005

Railway Traffic Lights

Not usually a train spotter but here are some pictures of the traffic light of the future....as if you were interested. Strange thing about this business is that you get excited about the strangest things.

And now I am going to try and post so that you can actually see the pictures.


31 March 2005

R&D Funds Go To Real Estate

From Kommersant, St. Petersburg's Research Center is the latest way for someone to receive cash for owning a crappy piece of real estate and deprive deserving scientists of R&D funds.

As the article points out less than 15% of all funds earmarked for a project in Dubna actually ended up funding R&D.

Could someone in charge please understand that building business parks for science start-ups is worthless unless they have management talent that is going to find contracts and a pool of venture experience to help those managers go global.

30 March 2005

Wireless Chips - Today and Tomorrow

Om Malik (as if you need to know where to find him) posts on hefty sales of chips for wireless chip manufacturers of both memory and DSP chips, everyone bar Intel, effectively. And the $ value per chip is only going to increase as the requirement for chips in converged "handsets" increases. Multiple radios, not only across today's, tomorrow's and the day after that's mobile and fixed wireless networks but increasingly linked to WiFi as well as having Bluetooth (and UWB?) capabilities.

That's a geometric increase in processing power in handsets whose battery life is improving arithmetically. The challenge will be to build integrated software/hardware systems that are highly energy and form factor efficient without sacrificing processing power. The mathematical abilities that are today housed in Russia and Ukraine are already providing the algorithms (linked to a definition just to remind you of what we are talking about - it's not just mathematics) and in some cases the links to hardware systems that will solve some of these problems.

Reconfigurable computing is probably the answer and if you doubt me read this from Steve Pawlowski an Intel Fellow on what it means to have "one radio that defines multiple radio standards".

Somewhere in this space amongst the plethora of work that is being done in Russia and Ukraine right now is a deal that will be done in 4Q 2005.

Lies, Damned Lies and Statistics

Yesterday German Gref, Minister for Economy, Development and Trade (MEDT) yesterday announced that the government was dropping its 8.5% inflation target and raising the target to 10% (Not sure how durable this link is.)

Also yesterday we got close to closing our annual negotiations to rent our dacha for 2006 we have agreed with our somewhat batty landlady that her real inflation is closer to 20% than it is 10%. What gives?

Is this just Moscow related inflation with the more backward parts of the country, partially yes, but I feel that it has more to do with a number with games played between a limited number of players with imperfect information.

Whatever, the real cost of living in Moscow in going through the roof and salaries reflect this, not reported salaries which represent between 5-50% of actual salaries, but cash out every month. A common bitch among business owners (principally expat) these days is that salary demands are completely out of sync with experience and ability. This is not a Russia is going "to hell in a hand basket" post but an attempt to provide a micro review of an economy that only has macro players.

Burnham on No

This is the third and by far and away the best of the saying no stories from Bill Burnham.

I will admit to being as bad as anyone at saying no early enough. Usually because I like what a company is doing but when it becomes time to think about convincing others that it is a good idea reality strikes. At which point the no becomes an effort in self-justification.

My best no however, was to a guy who is now a good friend. I liked his company, his product, the market and was getting ready to make a proposal when I met the new CEO. We did not invest, the CEO was fired within a year and the Company was sold for its patent portfolio.

Blogging Better Than Journalism

Jeff Nolan at SAP Ventures posts on consolidation in the enterprise software industry.

Here we have an expert, or very well-informed writer (depends whether you believe that VC's can be experts!) writing a concise overview of some trends in the enterprise software industry without the requirement to tell an "interesting" story. The likelihood of finding a similarly well-written informative piece in the mainstream media are limited.

Furthermore it does not take more than 5 minutes of skimming through Jeff's blog to understand his general point of view and thus to put his piece in to some perspective.

Good piece.

29 March 2005

Ukraine - The Future's Bright the Future's Orange

Slava Johnson from Chadbourne & Parke's Kyiv office has written a great piece on the future of Ukraine under Yushenko.

In particular she highlights just how many established interests he is going to have to bring onside to get his way and the fact that he has just a year to do so. Considering how difficult it has been for Putin to implement his reforms in Russia versus an established bureaucracy and regional fiefdoms with a popularity rating that has stayed over 60% even during the social payments fiasco at the beginning of the year. Yushenko, by contrast is the President of a divided country from which he is struggling to remove the epithet bitterly.

She starts down the road of debunking the US financing of the Orange Revolution albeit does not really nail the point. In short there was US money that helped but it was only there because Putin's thugs gave them the opportunity.

25 March 2005

Revolutions; Rose, Orange, Kyrgyzstan and Russia

This week; I returned to Ukraine for the first time since Yushenko was formally recognized as President, Kyrgyzstan, a country I have never been to, overthrew its post-Soviet, Soviet leaders and Putin announced a moratorium on (inter alia) the loans-for-shares privatizations. The temperature also crept above 0 on Thursday and the sun shone; unfortunately there is no tool to link the sun to the investment mood. Sitting in the traffic yesterday the two were indelibly linked.

Was Putin's announcement yesterday akin to false hopes of spring as we return to winter today (snow), or have the liberal economists in the convenient guise of Gref and Kudrin started to win the war? And are they winning battles or the war? And just where and on what issues were those battles fought? Does being humiliated in Ukraine (please notice the absence of the definite article) really have a positive economic effect in Moscow? After all in Ukraine the Orange Revolution is seen as the victory of Ukraine's millionaires over its billionaires. Please suspend any conversations about democracy until the pudding is on the table.

Is Putin's charm offensive PR-led, or is it reality? Being burnt by PR-led good news is second nature to investors in Russia's public markets. However, my broker friends tell me that their government relations people have been hearing good news for a while. I have blogged too often recently about failures of the 5th Directorate thugs to be anything but happy about their demise, however temporary.

Boy is this a difficult post.

So in the week that; another "friend of Russia" was toppled by dollar-inspired people power, that the hope of a new future permeated both Kyiv and Kiev and Putin publicly swung back to the liberals which is going to impact making money the most? Putin's announcement should top that list by some way. Ukraine is emerging from the dark ages, Kyrgyzstan is still feudal and there is no obvious link between democracy and wealth creation - ask the Chinese.

For all the carping about progress in Russia over the last 6-9 months it is still a country mile ahead of its nearest neighbors. Retreating rapidly to an area where I have some opinionated knowledge rather than just opinions; technology. IP laws here are mostly well-drafted if yet to be enforced. Academia is increasingly being funded. In none of Russia's neighbors is this the case. If your trade is short-term it may be better to buy Ukraine than Russia, something to do with buying the rumor selling on the event. If however, investment time horizons are slightly longer than tomorrow; Russia seems a better bet.

And all this in the week that "Old Europe" defeated the Services Directive. How long before we read the first comparisons of Russia's liberal economy compared to Germany and France's restrictive model?

This is either the first week of spring or another false dawn in an increasingly long winter. The weather outside is not promising; something tells me that Russia's economy is going to be rosier.

18 March 2005

Small Businessmen in Russia

Putin is apparently concerned about the size of businessman in Russia.

Or is that he is concerned about small business in Russia. So lot's of grand statements are made but as Siberian Light points out the bureaucrats (Chinovniki) are just following his lead;

And he is right to say that much of the problem is with regional authorities. Most of obstacles that small businesses face are met at the local level - bureaucracy, demands for bribes, etc. But some of the blame has to go right back up to Putin, who is in the process of setting up a political system based on patronage rather than accountability. If corruption at the highest levels is increasing, how does he expect it to begin decreasing at lower levels?

14 March 2005

The Art of Presentation

As a crap presenter, and as the recipient of crap presentations, I am fascinated by the advice given to create more focused presentations. Whilst Roger's comments are specifically tailored to pitching VC's the basic theory still applies. If you have a 1 hour meeting and 30 slides then at best that's 2 minutes a slide. Do a rehearsal and work out what 2 minutes a slide feels like. Imagine yourself to be on the receiving end of a new slide every 2 minutes. Then factor in questions. Now reduce the number of slides by at least 60%.

And just because you have less slides does not mean that you should cram more onto the slide. I hate investment banking slides which have so much info crammed in to them that I spend 3 minutes trying to determine what's important and then I need to understand why it's important and on the third slide I stare at trying to get the information to leap off the page my concentration slips. I know that I should be professional enough to work through that but I am just human. It's not dissimilar to running meetings in Russian. I have to concentrate so hard that the moment I am not giving it 100% I am getting nothing.

I had a boss who had learnt his presentation skills in a consultancy; i.e. very busy with each slide containing 5 slides worth of information. But they were rescued by a strip line which stated the take away from the slide.

If you don't believe me try reading;

Beyond Bullets and this post from Brad Feld the comments to which are a complete link fest.


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05 March 2005

Winter

The end of this winter is turning out perfectly. Let me paint you a comparative picture;

New England etc; that indescribable late autmn russet color that Robert Lowell never found words for in his madness

Scotland; The first green at the end of a long winter when the sun shines and is warm and hope (and sex) is in the air

and thus the end of a Russian winter can be two things and unfortunately they are not mutually exclusive; crystal clear, cold and beautiful or grey, with clouds a centimeter above your head and large puddles of melt with last winters dog shit and cigarette butts reaching for the surface.



The glass is half full at the moment. My study window faces on to the back of the Ministry of Foreign Affairs ("MID") one of Stalin's 7 Wedding Cakes or more commonly Visotkas.

The camera on my Treo 650 does it no justice. The view is crystal clear and utterly beautiful.



04 March 2005

Oddities in Russian Life

It's always fun to watch a family coming apart at the seams, particularly when that family used to sup together as 5th Directorate KGB thugs (pace Medvedev). The back and forth, up and down (viz whore's draws) of the Gazprom (GAZ.P), Rosneft (traded nightly in expensive restaurants in Moscow) and Yuganskneftegas has actually reached a level of slapstick humor that Benny Hill would do well to emulate. A brief recap in case you have spent the last 10 years buried in a polar ice cap:

  1. The Soviet Union spends huge amounts of money discovering oil in Siberia
  2. The Soviet Union falls apart
  3. Well connected members of the young Komsomol do off with large chunks of cash and create a quasi-banking type institution
  4. The Russian government parks some of its meagre cash flows with the aforementioned quasi-banking type institution
  5. Vladimir Potanin takes a sabbatical from his own FIG (financial-industrial group) to parcel out some/all of the states juiciest assets in a deal called "loans-for-shares"
  6. Yuganskneftegas becomes the jewel in the crown of Yukos, a loose affiliation of warring clans which also included; Samaraneftegas, Tomsneft and a couple of other bits and pieces. Price paid; whatever government monies we had in our bank at the time the bid came up.
  7. Lots of unpleasantness some quasi-legal some involving rapid and fatal injections of lead before Yukos finds religion and becomes transparent; i.e. it works out that the market value is greater than the cash flow it can appropriate.
  8. 31 December 1999 President Yeltsin resigns. VV Putin steps in to the breach.
  9. Four-ish years VVP later replaces deeply compromised competence with 5th Directorate thugs (his friends). The Prime Minister was commonly known as Misha 2%.
  10. First Lebedev and then Khordokhovsky go to jail.
  11. Yuganskneftegas is stripped from Yukos because it could not pay its tax bill, except it could.... to be bought by...
  12. Baikal Finance, a company whose registered address is a hairdressing salon in buttfuck nowhere...
  13. Which was then acquired by Rosneft, a state-owned oil company run by a certain Bogdannichov. A CEO who would go down well with Enron, WorldCom etc shareholders
  14. Lots the "cheque is in the post" follows when it becomes clear that Rosneft can't afford to buy YuganskNG but the Ponzi scheme comes through in the end
A short break for some commentary: So far so good, unless you were allergic to lead, or Kenneth Dart. Whilst making too close a link to Soviet show trials ought to be seen as distasteful I have to draw a comparison. During the worst excesses of Stalin's regime, provided you made it to trial every attempt was made to "prove" the case. The mentality continues today thus the courts provided a useful way of legitimizing the transfer of YuganskNG to the 5th Directorate thugs. Even though it was abundantly clear what was going on we all play along and enjoy the game. This all works well when there is only one voice. However, as with all relationships founded on distrust they break-up sooner or later and this one has had me smiling all day. And thus to Point 15.

14. A Houston court (don't ask) decides it does not have jurisdiction (clearly, and I did not spend any time at law school)
15. Alexei Miller, Gazprom's CEO and Sergey Bogdannichov announce in a recorded statement on two tame state channels (there aren't any wild ones) that they have come to a long-awaited agreement as to merger
16. Then Rosneft says in a press release that the pre-agreed statement was wrong
17. Then the Press Release was possibly rescinded because Bogdannichov was "on holiday" - presumably the pressure of making his first TV program
18. Then it was denied that it was rescinded
19. Then it was announced that the Kremlin was going to make a statement.........but it hasn't

This has legs and will run.

My second piece of fun comes from British Airways.

Saturday I fly to the UK. Today Friday I buy my ticket from AmEx Travel by phone whilst bouncing around town. I would prefer an e-ticket which BA does, even in Russia. But for AmEx to issue me an e-ticket they have to go to BA's office to collect it, for which they want to charge me another $35. So it will be a paper ticket that I have to pick up myself, and hopefully won't lose.

and you don't want to hear about my attempt to open a bank account today.

Happy March 8th if you are lucky enough to be a woman.

03 March 2005

A Note to Financial Services Journalists

In today's Venture Wire Alert is a neat little piece of PR by a JVP company going by the name of Native Networks, who apparently make Ethernet Switches. Not that it matters.

The article states that they were sold for $55mn in cash to Alcatel, the Company's sole source of business, in a move that "paid off handsomely." You sort of believe it because a JVP Partner, Laurel Bowden, is quoted as saying that it did.

And then in that last para which usually you don't read because it reiterates something that has been written previously it states that the Company raised $45mn from "a host of venture capital firms."

A range of possible conclusions;

  • The last round was a recap at such a low valuation done solely by JVP that they made off like Kings
  • The decimal place went missing in the sale price
  • Venture Wire pays its journalists peanuts and they end up with monkey's.
  • The very persistent sales person at VentureWire / Dow Jones should read this to understand why I refuse to pay for shit.
The conclusions are not mutually exclusive.

Russian R&D; Fiscal Stimulus

Not exactly a title to get the blood racing. Notwithstanding if German Gref, Minister for Economic Development and Trade, has his way it could help end the dislocation between Russian business and Russian R&D.

The economic genius otherwise referred to as Prime Minister Fradkov wants to see VAT (better known as NDS) reduced from 18% to 14%. Gref, one of the liberals in the government, has instead suggested that VAT remain at 18% but with certain exemptions. Not least of which would be tax exemption on all R&D.

These are small steps, but vital ones, in building a sustainable future for Russian R&D.

Apologies for a brief moment of aspiration, but the sun is shining and the end of winter is in the air.

Tell Me This Hollywood Exec "Gets It"

From today's FT, subscription required, and I am not even going to post a link;

"We like selling movies better than renting them or pay-per-view; it's better margins. We're not interested in cutting prices, we want our fair share."
It's always good when a consumer driven business tells its customers what it thinks of them. Whilst I would never condone anything illegal............

02 March 2005

Waste of Conference Space

The geek in me gets excited by Demo, Comdex and CeBit but the businessman, given that we are in Russia that would be Biznizman, would rather focus where I might get some value. And this Light Reading Conference is where I would want to be. But what is the sodding point; I am sure that Graham Finnie from Heavy Reading will do a great job getting us all started but to follow with 4, yes four, presentations from sponsors means that I should just read their websites. They should be paying me to go. I mean it's not even as though I want to go to Atlanta.

Really what is the point for the sponsors or attendees?

Democracy In Russia

Actually I couldn't give a damn about democracy. I care about humans treating each other with respect. My wife's business partner is married to a Tibetan who grew up in exile in India and Nepal, as if that was not hard enough. He can barely get from a. to b. without being shaken down by the Militsia (to translate that as Police would be an insult to thugs everywhere). He refuses to travel on the metro after 5P.M. as its prejudicial to his health.

Anyway here is an exert from a report from a Government with a less than stellar track record in the race department, no not my own the US, on the situation. Just because someone else is bad does not make your worse acceptable;

In contrast to developments in a number of countries that increased direct citizen control over government authorities, in Russia changes in parliamentary election laws and a shift to the appointment, instead of election, of regional governors further strengthened the power of the executive branch. Greater restrictions on the media, a compliant Duma (Parliament), shortcomings in recent national elections, law enforcement corruption, and political pressure on the judiciary also raised concerns about the erosion of government accountability. Racially motivated violence and discrimination increased, despite considerable legislative prohibitions. Authorities failed to investigate actions against minorities while subjecting them to more frequent document checks, targeting them for deportation from urban centers, and fining them in excess of permissible penalties or detaining them more frequently. Government institutions intended to protect human rights were relatively weak.

Democracy In Russia

Actually I couldn't give a damn about democracy. I care about humans treating each other with respect. My wife's business partner is married to a Tibetan who grew up in exile in India and Nepal, as if that was not hard enough. He can barely get from a. to b. without being shaken down by the Militsia (to translate that as Police would be an insult to thugs everywhere). He refuses to travel on the metro after 5P.M. as its prejudicial to his health.

Anyway here is an exert from a report from a Government with a less than stellar track record in the race department, no not my own the US, on the situation. Just because someone else is bad does not make your worse acceptable;

In contrast to developments in a number of countries that increased direct citizen control over government authorities, in Russia changes in parliamentary election laws and a shift to the appointment, instead of election, of regional governors further strengthened the power of the executive branch. Greater restrictions on the media, a compliant Duma (Parliament), shortcomings in recent national elections, law enforcement corruption, and political pressure on the judiciary also raised concerns about the erosion of government accountability. Racially motivated violence and discrimination increased, despite considerable legislative prohibitions. Authorities failed to investigate actions against minorities while subjecting them to more frequent document checks, targeting them for deportation from urban centers, and fining them in excess of permissible penalties or detaining them more frequently. Government institutions intended to protect human rights were relatively weak.

01 March 2005

Railway Traffic Lights

Not usually a train spotter but here are some pictures of the traffic light of the future....as if you were interested. Strange thing about this business is that you get excited about the strangest things.

And now I am going to try and post so that you can actually see the pictures.