Ruminations on Russia

Games We Play

First is this article from the Economist Invaders from the land of broadband about the success of online gaming (as in games played online, for UK readers) in S. Korea. As if the South part needed spelling out.

The second is a headline $18mn investment by Highland and Polaris in to Turbine Entertainment here via VentureWire.

Third, I have been following SeeStorm for what seems like forever. Started out as an add on to IM and has morphed in to an avatars for mobile licenser. It seems to be taking off in Korea and Japan, having (very) limited success in Europe and absolutely none whatsoever in the US. I thought long and hard about investing in 2002 and was, rightly, rebuffed by my partners. I have been thinking long and hard about the same in 2003 - but to be honest don't have the guts. For those of you interested its worth researching potential revenues from low ARPU mass appeal apps on mobiles in Korea. They don't exactly make a company but they will make you smile as you build one.

The reason is that each region and, as the Economist article points out, countries within each region use mobiles / PDA's / smart phones / PC's and gaming devices differently. I used to think it was enough to be platform agnostic but its more subtle and harder than that. Furthermore, who ever thought that 3D virtual environments would ever make a comeback - which is what the Korean gaming world is all about.

There is definitely a gold mine to be made for the person who can work out what it takes to make this happen. What is absloutely certain is that what works in Japan, will only just work in Korea (S), will fail abysmally in Europe and won't even do that well in N. America. And that's just the means of delivery. The game, the nature of the game will have to be very specific.

To my mind this is a steer clear investment area unless your ability to connect with your eyes closed is very good.

Outsourcing Again

A classic piece of lowest common denominator journalism on Outsourcing hereOutsourcing via Rocky Mountain News

It probably would not be worth the effort to comment on it except that it makes the point that if you outsource then you cut off the engineering life blood that creates start ups. The fact that there is no lead in to the story or explanation of why it makes the claim does not point to the highest standards of either journalism or, more likely, editing.

3G - Focus on Handsets

A fair enough article as far as it goes. Yahoo! News - Third-generation mobile phones fail to connect in Austria

However, Mobikom not only faces problems with its handsets but also with its IN. As indeed does everyone, including 3. They cannot provide all the sexy services which journalists and pundits like to write about becasue they cannot roll those services out quickly and effectively. They are locked in to providing stove-pipe solutions to each service and that's a whole bunch worse than crappy handsets. Next generation IN will become a major story over the next 12 months.

Social Networking

He could not be more right if he tried. Which is not to say that someone wont' make money out of it - I just cannot see it being a way to get to the people I want to get to. VentureBlog on Social Networking The only reason that I will give to change my mind is spam killing email and we therefore use a different medium to make contact. I'm not sure that I believe that as a statement.

3G - But Not What the Business Plan Says

Vodafone plans data-only 3G services for Germany and Italy

Last night I was explaining to my wife why 3 (Hutchinson in the UK and Italy) was struggling. More importantly that Vodafone with its PMCIA card targeting buiness customers was getting it right. And there it was a journalist agreeing with me / and vice versa.

Boeing's Woes

Boeing's Failure / Airbus' Greater Bribery There was a fantastic article in The Economist sometime ago (sic - I can't find the link) about Airbus bribery and corruption. Not that the article used those words - the meaning was implicit.

Strange now that Boeing is suffering for the same reason. Strange that a French led company is not. Strange that there is no link between a Republican attack on Boeing and Yukos.

Russia does that to you - conspiracy theories abound.

Zero Sum Game

From today's FT. Does not require registration. It refers to Germanny and the Vodafone / Mannesman takeover. But it struck me as a phrase that would apply well to Russian business. I have referred to it before as a zero sum game. FT.com / Industries / Telecoms: "Foreign investors suspect the charges reflect a German cultural mindset of destructive social envy and a dislike of business success. "

More on Outsourcing

Red Herring interview with Gerard Fairtlough on the venture industry Venture Bouncebacks He makes some good points and some less so. There still needs to be a venture shake out. I think many people, and Gerard is one, have not thought hard enough about the outsourcing industry. Theoretically engineers can sit anywhere in the world, provided that the link between architecture, marketing (the link to the market) and management is strong.

Markets for early stage products is still predominantly in the west; that's where the marketing and management people will sit. I am not sure that it's really possible to build a product without closely linking marketing / architecture and engineers.

Outsourcing from Tim Oren

Tim Oren covers a piece from the NYT and a discussion on outsourcing here. Where I think that he may be wrong is his assertion that outsourcing may be good for nth degree programming, but less good for complete architectures.

The question should actually be; is out-sourcing is a good way to create products. The inherent question being whether marketing can interact with a time-separated programming center. We'll let you know.

Our most successful companies have foca both in the market and in Moscow - I'm not sure that it can all be done remotely.

More on Management

This time from Private Equity Online. Reflecting its European nature the magazine tends to be later-stage oriented. Yet the lack of management due diligence is stage neutral. The writer is pitching for work, nonetheless, some of his early comments are apposite. The right team for the job

Political Factions In Russia

A typically pithy and on-the-spot set of remarks from the Economist's Russia correspondent.

I make little effort to keep track of which unheard-of party with no ideology and no obvious support base represents which splinter faction of what clan within the ruling elite's three big groupings. It's enough to remember what those
groupings are:

- the siloviki, people linked to the security services, whom I always imagine as thin men in ill-fitting suits who spontaneously cause lightbulbs to fuse as they walk past them;

- the business-linked "family" - in my mind's eye, portly types with flashy cufflinks fearfully glancing over their shoulder to see if one of their bodyguards is planting a landmine under the armoured Mercedes;

- and the "liberal reformers" - intense, sharp-eyed, desperate men overloaded with files who have long since discarded the moral dilemmas that their work involves and live their lives trying not to pick fights with either of the other two.

But at any rate, the fact that at least 50 Duma deputies switched parties after the last elections is a good sign of how little the election itself has to do with politics and everything to do with who can manipulate the balance of power to their own advantage.

President Putin Hails Election as "another step in strenthening democracy" I suppose that principally depends on your definition of democracy. As his is something close to - I'll do what I want, when I want, to whomsoever I care to - then I guess democracy was strengthened.

It would be nice though to point to a truly democratic country where democracy is working; Tony Blair carries on Thatcher's assault upon Britain's "unwritten constitution." Bush stole the election and then employed Ashcroft to steal democracy under the banner of Homeland Security. However, Churchill had a point: democracy is the worst form of government, except for all those others that have been tried here

More on Khordokovsky (MBK); it would appear that the cat slipped out of the bag this week. We now all understand the meaning of minimal - its $10bn. Having previously said that this conflict was a battle between MBK and the Kremlin and not an assault on Yukos the lie was shown to be just that.

In a marvellous piece of cynicism the Kremlin has been repeating to anyone who wants to listen, and lets face we all do, that they have no intention of reversing privatizations. Of course they don't. They intend to divert the wealth created at Yukos in to their pockets. Privatizing it would mean that they could only steal cash flow. In short we have been asking the wrong question.

IBM GS � Another Step On the Road to Global Domination

IBM software and Global Services are going to be more closely aligned to better serve industry verticals (link to every newspaper and tech journal in the world.). Ever since IBMGS bought PwC Consulting it has (or was it always this way) been slowly ending its historical policy of being software / hardware agnostic. Sometime ago I believed that eventually this would eventually lead to IBMGS becoming just another services division of a large corporation. Well I was wrong. IBMGS is not just the 800lbs Gorilla it is the all encompassing Gorilla. Scott McNealy joked that of the $80bn that Bush requested to rebuild Iraq, 90% would go to IBMGS. Hate them if you must, but there is nothing else to do but work with them. They are after all the largest re-seller of Sun equipment.

What is more the convergence of telecom networks and IT will just add to their powerbase.

The only piece of news that cheered me from the announcement was the realization that for this strategy to succeed IBM Software is going to have to integrate a lot or 3rd party software to be able to build best-of-breed products. They cannot build it all in house though they do try. There will be space for ISV�s to build great products � as long as we understand that they will become a building block in someone else�s portfolio. My only concern is who do you sell to?

Om Malik on Sun's Problems. I think that he may have a point - they provide great equipment at a pretty good price point. Their problem is not that they can't get their PR right but that they have not got their sales comp in line with their revised strategy.

A sense also emanates from Sun that they would struggle to organize a piss up in a brewery.

An interesting report from Crescendo Ventures on investing in the Storage Industry Crescendo Ventures Report on Overspending it claims that there are a number of surprising results. Amongst them that the companies with the most cash weren't the most succesful. Firstly as a VC with a massively under-capitalised fund I am glad to hear it. The so-what that they draw is that it allowed companies to follow misguided strategies for too long. My take would be that it allowed the management to feel too comfortable and did not challenge them.

Treat em mean; keep em keen.

SAP Ventures Comments on Sales Teams I liked this post - salesman are whores. Pay them and they are happy; don't and they aren't. The unspoken link is don't bring in a charging salesman in to an early stage team. They go after the easiest accounts because they want to get paid and aren't that keen on market development.

Ed Sim on Capital Efficent Investing

Ed Sim from Beyond VC on Nov 19 writes about what I have been wittering on about since I started this blog namely Capital Efficient Business Models : You will have to scroll down to find it as I cannot work out how to go straight to the place.

His point is absolutely correct. Marketing costs may stay the same, but if you can create a product for a few million, smartly get the first product to market whilst running a low cost organisation then hopefully the initial and most painful burn will be limited. Once the product has real "traction" (presumably its a car wheel) then people can be hired to really sell the product. Given that these are always the most expensive part of a team hopefully they will be brought in commensurate with real sales opportunities rather than hopeful hype. At the end of this year all our companies will be cash flow positive. Some will require more cash to grow more rapidly. But if we cannot find it then they should be able to grow organically. Given that none of them were that expensive to acquire even a low growth scenario should see a reasonable return.

More from Ed Sim, this time on the US IT market. The Economy and IT Spending : "
It looks like the economy in Q3 grew even faster than we initially thought, 8.2% annual rate versus 7.2%. It was not too long ago that the Department of Commerce released numbers showing 7.2% annualized GDP growth for Q3. If you take a closer look, 'equipment and software' spending was at a 15.4% annualized rate. I obviously have concerns about the revised 8.2% GDP growth and certainly do not believe that is sustainable due to one-time factors like tax cuts and mortgage refinancings. While it is nice to see a 15.4% annualized growth rate in 'equipment and spending' for Q3, let's not assume that this is the beginning of a huge ramp-up in IT Spending. To bolster my thinking, I like to look at a number of data points. For one, Goldman Sachs recently issued its October IT Spending Survey. Its latest survey calls for an increase of 2% spending for 2003 versus a December 2002 survey which forecasted a decline of 1.1% for 2003 spending. So it is nice to see that the trend reversed in terms of IT spending, and that it looks like there is a small rebound happening. That being said, the October 2003 survey forecasts spending growth of only 1.3% for 2004, down from an August 2003 spending survey forecast of 2.3% growth for 2004. That is a negative trend and does not promise earth-shattering returns to IT Spending in the bubble years. As Goldman Sachs mentions, hopefully there is just a lag in terms of how the economy performs and where each company is in its budgeting process. If this is the case, we shoud keep an eye out for data from future surveys.

Another data point that I look at is how the fund's 30+ portfolio companies are performing. We have a number of companies in the Enterprise IT space selling security, storage, network management, wireless, and other related software. Some companies are performing extraordinarily well "

The gaps between my thoughts on technology have become embarassing; plenty of comment on the Khordokovsky affair, little on Russian technology won't pay any bills. What it does do is reflect my concerns as to the future of the country. Those who spend more time than I do thinking about these matters tell me I am being over-sensitive. I still respond that greed is greater than fear, and there will come a time when fear takes over and we will all wonder why we did not pay attention.

Back to technology; seems as though there are companies out there getting funded, and getting bought. Suse was a great relief to those of us investing outside the mainstream US that good companies will still get bought, and at good multiples. I hear that the main investors made 3-5x. Given the $'s ploughed in to the company to turn out software and the time that they first invested, its not a bad result. BTW the last sentence is a subtle dig European / US software companies failure to make use of inexpensive programming assets.

On the funding side the investing world must be looking up if social software companies are getting funded. I can see the point of what they are trying to do but....Don't we do this informally anyway? Why would I pay for what I do already, unless it really helps me to do it better. None of the companies that I have looked at really convince me that they do.

If strange companies are getting funded it means that strange companies are getting bought. At a personal level I am intrigued by the direction that Shwartz is taking Sun. From what I hear from portfolio companies they could not organise a piss up in a brewery - or sales people after commissions are driving the direction of the company. To be more precise; it does not matter what the strategy guys put together to improve the TCO, customer experience etc. the sales guys are selling boxes loaded with software that requires the most boxes to be sold. I like the approach that Shwartz seems to be taking - it puts Sun ahead of the crowd in working out where the future of software is going. If he can get control of his sales teams the strategy might even work.

An interesting take on the reemergence of vlast (power) in Russia

NOVAYA GAZETA
No. 85, Thursday
November 13, 2003
Don�t go Visiting the President in a Sweater -- then there won�t be a Dictatorship Interview with an Anonymous Source
Translated by Luba Schwartzman

The following is an interview with an officer of the Federal Security Service who is involved in the investigation of the YUKOS Affair. Granted on the condition of anonymity, it is cited word for word, with no corrections. Despite the officer�s careful wording, we can still find answers to very important questions.

* Who can say �shush� in the YUKOS Affair?
* What fate awaits Chubais?
* Does the �national question� play a role in the Khodorkovsky Affair?
* Is there such a thing as a �good� oligarch?

Q: How will the story starring Khodorkovsky end? What does the government want? To jail him? To take away his property? Or just to make an example of him to make others obedient?
A: Yes. Khodorkovsky was asking for it. He annoyed everyone; he was a real jerk.

Q: What did he do that was annoying?
A: Did you see how he was dressed when he came to meet with the President? The �I don�t give a damn� attitude� He stuck his nose in all over the place, going way too far. The worst part was when he said that he would rather be a political prisoner than a political refugee.

Q: So how will he be pressured? Until he breaks?
A: We don�t make decisions about that. We only carry out orders. But we will keep going as long as they let us.

Q: And how long will they let you?
A: Until they stop us. Once they say �shush,� we�ll quietly step away. But for now, we�ll have some fun. Our boys are pretty angry, you know. Angry at him and angry at the unfairness of life.

Q: Who are the bosses who can let or stop you?
A: The bosses are different for everyone. But everything is decided at the very top.

Q: The very-very top?
A: Of course.

Q: Are there political motivations for this?
A: Well, we certainly don�t have any. What have we got to do with it? We just carry out orders. They said �go� and we did. If they say �stop,� we will.� You know how it is in Russia -- it�s enough to say �act in accordance with the law.� Then anyone can get in trouble -- you, me� For many years we weren�t allowed to follow the law. Now, with regard to YUKOS, they said: �ok, go ahead!� We cheered. (laughs) We know that we have to act carefully and precisely. The political environment could change and then we could get in trouble. So those who carry out orders cannot overdo it. The main thing is to follow the law to the letter, to conform to all of the procedural regulations. Well, we�ll make him [Khodorkovsky -editor] sweat as long as we can, and then we�ll let him go. Certainly we understand that, sooner or later, someone who has as much money as he does will buy his way out. But it will be a pity if they let him off so easy. After all, we�re really trying, really working hard�

Q: But, tell me, what are you really after?
A: Well, we�ll push him as far as we can� Of course it would be really great to kick him out of the country. After all, our boys used to do it back in Soviet times. �Out of sight, out of heart� you know! (laughs) �No person means no problem.� Although Stalinist methods don�t cut it now� and the jerk [Khodorkovsky -editor] said he doesn�t want to leave. Our boys got pretty mad about that. Look at him being brave! He really is going too far!

Q: So how far will you go? Are you going to kick all of the oligarchs out?
A: We take our cue from Zhirik [Zhirinovsky -editor]. He says it will happen soon. He told all the oligarchs recently: �You�re all going to jail soon!� So that�s what the oligarchs have coming. All of them have dirty hands. All of these �shares-for-loans auctions� are a questionable affair. I�m talking about the law here! Why didn�t they return the money for the stocks? They could have, you know�

Q: But it was the government that made the decision about the auction. Are you ready to open up cases against Chernomyrdin and Chubais?
A: That�s a very sensitive issue you�re bringing up. Many of our boys can�t wait to get their hands on Chubais. But there�s an obstacle there. You can�t touch the government. That�s why we�re keeping low and waiting. But the boys have been quietly gathering information all these years. We�ve got plenty of evidence. The problem lies elsewhere: the interests of the state are involved, the interests of the government. One needs to be very, very careful. Look who�s at the top now -- if you really think about it, theose people shouldn�t be at the top. We have information -- plenty of information, even way back from Yeltsin�s time� but let�s not talk about that� It�s better for you not to know� You�ll be able to sleep better.

Q: How about Aksenenko?
A: Oh, nothing�s going to happen to him. They�ll just let him know: sit and keep quiet. If you don�t -- you�ll be sorry.

Q: Do you like how things are going in Russia?
A: I was a little uneasy before. But then I understood -- things like that always happen when the rules of the game change. And the rules of the game are changing now. It�s just that we�ve adapted to them and you haven�t yet.

Q: Which rules are changing?
A: Well, you see -- back under Yeltsin, certain things came to be accepted as dogmas. The notion that private property is sacred, for example. That�s rubbish. Do you really believe that all of these liberal values are here to stay? Don�t get used to these illusions! All of the rules can still be reviewed -- and the will be reviewed. In the past, everything was predictable: If someone made a move against an oligarch, he would give some money to the media, and the journalists would rally around him. He would give some money and buy his way out. If he didn�t get out of trouble tight away, it only meant that he didn�t give enough money. Now, none of the oligarchs can predict all of the consequences. Everything has come into motion. The rules of the game are changing. Now they are afraid of us, because they don�t know what to expect.

Q: And now they cannot bribe you?
A: You know, for us, the main priority right now is to be on Putin�s team. That means more than a one-time pay-off. If you manage to stay on the team, you�ll get back everything and more. If, on the other hand, you take money now, you can get kicked out. Before was chaos. No one valued their positions, since they knew they could end up on the street tomorrow. That�s why everyone grabbed whatever they could get -- to get at least something out of the job. But now we value our jobs. Look at what happen to the cops. All of the Ministry of Internal Affairs guys got quite a fright� We don�t want to become �werewolves.� So we do everything according to the law! We keep our noses clean! But the main thing is not to stray too far from the �party and government line.� (laughs) We�re the servants of the state, you know!

Q: How do you tell apart the �good� oligarchs and the �bad� oligarchs?
A: Oh, it�s very simple. Those who have a national orientation are safe. But these oligarchs aren�t �home based� in Russia.

Q: Where then?
A: In the US, in Israel� They are a major threat to our nation. There is a danger that Russia will be turned into a source of natural resources, a danger that we will be subjugated to a different country. That�s why the oligarchs have to be pushed down or pressed out. Of course, only those who are internationalist in ideology. It�s obvious that Gus [Gusinsky -editor] worked for Israel, just like Bereza [Berezovsky -editor] did. We should only keep those who are thinking about the nation and not about their own wallets. Khodorkovsky is clearly oriented toward the United States. He shouldn�t be in Russia. This is a real fifth column we�re talking about. This is a very dangerous political wing. If it becomes stronger, Russia will lose its independence from the West. And if we don�t get rid of him now, Khodorkovsky will become invincible.

Q: So, are there any �good� oligarchs, who might be allowed to stay?
A: Sure. Mordashov, for example. He�s a Russian.

Q: Is nationality what counts?
A: Of course. All Jews are traitors. They all lean towards the West. This was always the case. Back at the �High� [Higher School of the Committee for State Security -editor] they taught us that all intelligence workers rely on Zionist lines, because the Jews have diasporas everywhere. You know, for them nationality is more important than citizenship. Zionists were always hostile towards Russia. And they had many ideas about how to use international capital against us. All of our achievements in intelligence work were based on Jews and their networks. Take the Rosenthal Affair, for example. We always worked along Jewish channels. So now we cannot allow in this Zionist capital�

Q: What about democracy?
A: Oh, democracy is a bluff. The only thing that counts is power. Remember how everyone was afraid of us when the USSR was strong? And now that we�re weak, everyone is trying to get at us. During the mess that the Yeltsin regime was, we created way too many of those� Well, the same thing that happened with Trotsky, basically.

Q: So what�s coming? Nationalization?
A: No, nationalization isn�t on the agenda. The main thing right now is redistribution in favor of nationally-oriented businessmen. Why the heck should Khodorkovsky have seven billion dollars? Who the heck is he?

Q: Perhaps he is smarter than other people and a better businessman?
A: How much brainpower does it take to pump oil? Just build some towers, and you�re set. All of the technology is purchased in the West. You don�t need to be smart for that.

Q: Do we need to get rid of LUKOIL as well?
A: No. LUKOIL protects out strategic interests on the borders, in disputed areas like Kazakhstan and Azerbaijan. This is �our� company. It�s nationally-geared. Alekperov never tried to stick his nose into politics.

Q: So politics is what counts?
A: Yes. You see, Khodorkovsky is driven by ambition. Just look how much money he gave to oppositionist parties! He must be quashed with no questions asked, before he becomes another Berezovsky.

Q: And what�s so dangerous about giving money to these parties -- Yabloko, Union of Right Forces?
A: Oh -- right now it may not seem dangerous. But they are just lying low and waiting for their hour. These are the same Zionists we were talking about. Under no circumstances should they be allowed to grow stronger. And Khodorkovsky? Let him run about and complain now. No Strasbourg Court can help him. After all -- they got their chance to live well, but quietly. But, no! That wasn�t enough! They wanted to get involved in politics! Well -- now they will have neither politics nor money.

Q: Is this also an example set for other oligarchs?
A: Of course. You see, Abramovich is the smartest of them. We�ve already made a deal with him. Once his gubernatorial term is up, he will leave quietly, without a scandal. He�s already sold everything here and bought everything there.

Q: So, who should leave? Just the Jews or others as well?
A: Whoever proves their loyalty can stay. We aren�t trying to ruin relations with large business. Hitler hadn�t revoked major holdings that helped him.

Q: So where are you taking the country? Towards totalitarianism?
A: Yes. But this is going to be a capitalist totalitarianism rather than a socialist totalitarianism. This is the kind of government we had after Catherine II. Nicholas I came to power and replaced the ruling class. Officials replaced the nobility. Officials should get property for their service to the state, instead of property getting handed down by birthright. Then we will have order in the country.

The Entrepreneurial Mind: The Experience Myth Great comment from a bus school prof i have never heard of before.

Innovation will fail when the investing process is run by bus school grads with the entrepreneurial instincts of a dead slug and a tick board to fill in.

Yukos or Those Who Have vs Those Who Would Like to Have What Those Who Have, Have

It's difficult to write intelligently about the Khordokhovsky affair - to do so requires an understanding of what is going on. No one really does. There have been some very intelligent attempts to assess the impact. Most of them private; if you can get to read what Bernie Sucher and Eric Kraus are writing its worth doing so as they differ markedly from the newspapers.

However, both of them come from the buy/sell side of the asset management/ brokerage game. Their antennae are directed accordingly. As John Dizard put it in the most avertly cynical Make Money from the Crisis article; its probably only Khordokhovsky so buy in to a growing economy. Unfortunately its that greed that Putin and his advisors are banking on to get him through before we all forget.

They should sit for an hour and listen to young (immensely) educated Russians working for international companies before letting greed get to them. They are very concerned and have some understanding what it is to be in an overtly authoritarian regime. They hate it and hate the people who are pushing this policy - the ex-KGB.

Lets not paint Khordokhovsky as any kind of saint; as one of the few who has taken him on and come away with something I feel reasonably well placed to comment. He does not want a pluralistic democracy in Russia anymore than Putin. But he does need the rule of law so that he can hold onto what he took with the Government's money for nothing. But if that is a crime; they are all going to jail - Putin included.

For a good Russian take on this read Yulia Latynina in the Moscow Times Conspiracy Theories Abound

Article on Russia's breakthrough in to the nano tech world

Long break from the blogging thing - good article from Valerie; not that she has ever been to Russia. Pavel Lazarev is an extraoridinary guy and worth following - if only out of interest.

Part 2 of my interview with Tony Nash which appeared in Always On entitled Russia�s Investment Climate Begins to Warm Up

I wrote the majority of this en route from Phoenix to NY on the day that Hurricane Isabel was hitting the coast a little way to the south. Whilat we would all claim that we review and edit everything that we write it good to see that most of it makes sense in retrospect. The last comment; that Russia is a risky place to repatriate cash from is false; its not. Ask the oligarchy and the rest of Russia which has spent the last 10 years getting money out of Russia. Actually its harder getting the cash in.

Was away for a week getting some late summer sun in the southern Egyptian Red Sea. On the way back picked up a copy of this months Diver magazine, the leading UK dive mag. It published a 40 year historical retrospective. 20 years ago diving was for lunatics with a death wish. Today anyone on a holiday where the sea is warm and there is something to look at underwater can dive. The reason technological advances. But almost no breakthroughs. BCD's are better (the jackets that help keep depth even), infinitely better but an advance on a theme. Dive computers are algorythmic advances of dive tables that have been in existence since..... Regulators and second stages have really changed the availability of the sport.

Now it is too available - humans are de-populating the most accessible dive sites, causing changes in animal behaviour. That's why our next trip will be somewhere totally inaccessible.

AlwaysOn Home: "Has Reality Caught Up with Russia�s Potential?
I speak to the press. Always a worrying thing to do.

Travel 20/09/03

Why � what a waste of time effort and thought.

Big Companies 20/09/03

My silence has been due to travel. Some of which was spent in and around the Sun Convention in SF. My apologies to them for taking direct grief on this I am sure that they are no worse, and probably better than IBM, HP et al.

However, in a series of meetings which should be of some importance to Sun executives, especially as they were directly relevant to today�s announced job cuts, we met partially informed senior execs who had precisely 45 minutes for us before being moved on to the next meeting. All the follow up was left to a junior, but very keen, middle manager who relied on them remembering these meetings to push her agenda.

I was impressed by Jonathon Shwartz�s presentation at the same convention. But its difficult not to be cynical when you know that his contact with even 2 layers down in his organization is probably very limited. Who really �owns� Star Office? Or was it a big joke perpetrated by a very keen strategy exec who was promoted before his project came to fruition. This is not a condemnation of Star Office 7; I�ve yet to install it.

Sequoia / University of California 20/09/03

I read an appalling article Monday�s (8 Sept �03) FT (I�m offline and cannot link) on the Sequoia / University of California affair. The FT is a respected financial newspaper, but if it cannot write an intelligent, informed piece on disclosure then Sequoia is right not to disclose � and inherently I believe that Sequoia is wrong. Disclosure should never be wrong. Ask the NYSE Comp committee.

The Telecom Market � First Written 9/9/03

Thank goodness for quiet Aeroflot flights to, well, anywhere. A chance for thought that is only otherwise found at the dacha.

Do deals end up being interesting because they are inherently interesting; market, timing, potential, management etc., or because we, founts of all wisdom and knowledge decide that they are? Not really that important because a. it�s rhetorical and b. it�s mostly a self-fulfilling prophesy. The purpose of the question is a lead in to my thought for now.

There are a pile of deals sitting in the inbox (definition; not yet enough known to a. syndicate, b. understand, c. spend any money on) of which two in particular are of interest because of other investments. Both of them address the way that we will use mobiles, PDA�s and Smart Phones. One is Asia / Euro-centric, the other US-centric. That is; the former is a teenage / young adult consumer model, the latter principally business related. Neither management understand the others business model. How much of our interest has been piqued by related interests? More importantly how much has been missed in other deals because we just don�t possess enough knowledge. Let�s not even go down that path.

As some idle journalists have noted, a pile of cash has been wasted on telecom infrastructure investments. Now, it would appear that the carriers want something to show for that investment. However, whilst some of us were willing to pay $500+ for a handset in the early days of Russian mobile, and the ability to speak was the killer application. The world has moved on and the next app isn�t as easy as your voice but may actually be your voice and�(well if I knew you can be damn sure that I would not tell you.) It may be a bundle of apps, personalization � think ring tones with pictures, cheap voice (apparently known as VoIP.) What is clear, is that it is not clear. Voice is applicable to everyone. A 40+ year old businessman is not interested in a personalized ring tone, much, but he probably wants to stop carrying a ton of electronic hardware in his briefcase. A kid (when do you stop being a kid?) could not give a damn about synced schedules, to do lists and contacts; they are probably however interested in personalization, anonymization (apologies) and low cost high cool factor frequently accessed and changed apps.

All of which goes to say that the carriers need to spread their nets wider. Stop trying to build a wall around the garden and build an infrastructure that allows both the post-paid businessman and the pre-paid kid to co-exist on one network with multiple marketing opportunities.

Mercury News | 09/07/2003 | Valley economy showing signs of erratic recovery

The article notes that the Valley is beginning to see light at the end of the tunnel - to experience a real downturn you have to experience the light at the end of the tunnel being turned off to save money. And its not much fun.

First time I have actively discussed a portfolio company - not sure if that's a good or a bad thing. Tim Oren was pontificating A requiem for virtual reality on the death of VRML as a useful standard which caused me to fire back in defence of Parallel Graphics Mint's first investment.

Parallel Graphics was never in the VR business and as I noted in my email back to Tim, suggesting that VRML is not dead, some of which is here The 'V' in VR stands for 'vertical', the way that SGI, Parisi et all saw VRML was never going to be the future.

What the conversation does highlight is a focus on the visualization of the delivery and not on the creation of the content. Parallel Graphics has morphed from being a browser firm - Cortona is the last one left standing - to a means of capturing, inter alia, 3D CAD and delivering it with relevant design information attached (think virtual parts catalogues) to a PC. Should the standard bodies decide that the next browser use an entirely different base technology it should, in theory, make little difference to Parallel Graphics.

The easy comments refer to the consumer end of the technology - VRML / Cortona in this case. The more informed comments discuss where the input comes from and how it is processed.