Ruminations on Russia

Jeff Nolan ordered a Sonos Digital Music System. I man-handled three back from the US in to Moscow and am the happiest music bunny out there. As it says on the Sonos website you can play it anywhere, and you can play different music in different places at the same time.

In over a month of regular use I have had no problems with it at all. A HUGE fan.

Russell Beattie asks what is PalmOne celebrating exactly? And then gives PalmOne a due smacking for its Treo. I am a 650 owner - OK PDA, very bad phone.

I take mild issue with the conclusion. The winner is not Nokia or Sony/Ericsson, Moto etc but RIM, Good, M$soft (Exchange 2003 upgraded w/ push service) and, interestingly, Sonus and Broadsoft.

I am not pro-M$oft but the free ActiveSync upgrade to 2003 Exchange Server is a great idea, just 5 years too late. The option to IT managers; buy a b'berry server et al or a smartphone and a good email client. And they will still go b'berry. You don't get fired for buying what everyone else is.

This too good to miss - Romanian hides stolen mobe in vagina. As with all mobiles in public places stick it on vibrate....

Glenn Fleishman on the death of TelSym. I can't say that I am hugely surprised. They were trying to fill a market position that was in constant flux and has not even begun to settle down. I watched them quite closely at the time because we spent a fair bit of time trying to figure out a business plan for a similar company. We passed because we could not figure out how to make money from a smart company. Same was true of TelSym. They had a bunch of financing to ensure that they had to worry less about hitting the wall. When it came more money slammed in to it.

In the same week that they failed a possible answer to their woes. I am a Skype-sceptic and cannot quite shake my feeling that nothing has changed since I voiced my skepticism last year. Today I heard from a friend with more knowledge than most of security-related issues that his SkypeOut account identity had been stolen and the contents of his account spent on calls to Australia. He points out that your account's security is based purely on a password. Not a great way to keep cash online.

I'll go back to why I don't think Skype is the answer; security and maintaining call state to provide applications. If TelSym had not been so arrogant maybe they could have hung around long enough to find nirvana.

Russian universities two in first three and three in top ten; which includes Izhevsk, which to the best of my knowledge has the honor of producing my excellent receptionist and little else.

A Russian friend working in the Valley forwarded me this report. He has a PhD in something complicated and a 7-year old son. He is worried that the public-education that he is giving him will qualify him to be a lawyer, consultant or investment banker but certainly nothing that requires 2x2 being equal to 4 at all times.

I'm damned if I can import the chart and keep the formatting so you will have to find the standings here. The top 13 included 5 Universities from Russia, 5 from China (not bad on a comparative per head of population basis,) and 5 from Europe. The first US university/ies came 17th=. By which time a bunch more Russian, Belorussian and Chinese Universities had also joined the list. It is true that the average standard of education across Russia is falling rapidly. In a comparative report sponsored by the OECD has the average level of mathematics in Russia and the US at the same level. The statistic seems to me to be out, but as a trend it's difficult to argue with. Yet at the top end the trend is clear. Russia and the CIS is the world's leading powerhouse in mathematics. That strength is beginning to show up in complicated programming problems and has been recognized by (inter alia and/or principally) Intel, Motorola and Boeing. And I mention them because they were the principal players in Tuesday's poorly attended session on high technology at the Russian Economic Forum. The panel was led by Sergei Kravchenko of Boeing who stated in his opening comments that VV Putin wanted Russia to catch-up with India's $12bn in exported IT services. Russia's export services in 2004 amounted to a paltry $0.5mn. Ex-Komsol leaders like Kravchenko are unlikely to publicly disagree with Our Great Leader.

The comparison is misleading. Not that Russia's export services are paltry, they are, but that India is Russia's competitor. It seems unlikely that an Indian design team will be responsible for 1/3 of the Boeing 7e7 or 777, or build Motorola's phone software development which is being developed by a great company in Nizhny Novgorod. Nor would Intel go to Indian scientists to sort out RF issues with the Centrino chip, after their Israeli development team ran in to issues. But even that maybe missing the point. No one refers to the quantity of export services from Israel. Instead Israel's high tech success is measured in companies that raise venture financing and go public on NASDAQ. This is where Russia should be competing. Where the comparison is meaningful is that competition to provide intellectual services is global. Nearly all of Russia's competitors provide inducements of one kind or another to build outsourcing centers. Russia cannot assume that its intellectual abilities alone will create demand for its scientists.

REF is Russia's leading big business conference. Everybody who is anyone is there which means that the best attended event is coffee. It may also have something to do with the fact that Russians are not great at listening to what others have to say. I had intended to try to blog the sessions that I attended. Power sockets were slightly rarer than rocking horse shit and there was not a WiFi connection to be had for love nor money. So instead here is this consolidated impression and some specific thoughts on the technology session in another post.

My leading and most useless observation impression is that Russian presenters have improved little over the preceding 10 years. Lack of structure, verboseness and irrelevance were the hallmark of the majority of the speeches from Russian presenters. My second impression is the overwhelming negativity of the majority of the Russian participants. Maybe the only happy guys at the whole event were the money managers; Bill Browder of Hermitage Capital winning the award for most overwhelming positive speech (paraphrased - the things that the press worries about are overblown from a stock market perspective). Boris Fyodorov, Honorary Chairman of UFG, a Russian investment bank, and a board member at Gazprom definitely won most logically optimistic speech (paraphrased - things have been a lot worse and are actually pretty good right now; GDP growth, budget surplus etc.)

Sitting somewhere in the middle was Bob Dudley, CEO at TNK-BP, who told a story of substantial investment in the opportunity that is natural resource exploitation in Russia but worried that the business climate was getting worse and worse. Brian Gilbertson, formerly CEO at BHP-Billiton, and now CEO at SUAL did not really touch on the business environment. However, his subsequent statements to the press where he stated that SUAL would probably not seek a London listing because the Russian government did not look kindly on foreigners owning strategic reserves spoke volumes for what he really thought.

At the far end of the spectrum Misha "2%" Kasyanov, Andei Illiaronov and Boris Nemtsov launched in to a blistering attack on the government. The theme of all three was effectively the same; lack of continuing reform is really hurting economic progress. Misha "2%" in his "I'm standing for President in 2008" speech extended the criticism to every element of society. He may have a point, in fact he probably has a very strong point. However if the best that big business can muster to force a quasi-democratic discussion with those inside the Kremlin is a man whose moniker is 2% then we probably should not be holding our breath for a non-Putin blessed successor in 2008. I am assuming that the political world knows that there is little chance of beating Putin's anointed successor so rather than be damned in the process of failing they will put up a candidate who has no chance of winning anyway.

It does however illustrate the paucity of the level and purpose of the debate. The Russian businessmen presenting were all beneficiaries of "loans for shares." LFS was a bribe to big business in 1996 to get Yeltsin out of an electoral hole. Having succeeded the Government would like its economy back. To the extent that they are improving Russian business it is in their hiring of western businessman to run their cheaply-acquired assets. The concentration of assets in the hands of a few men (22 people control 40% of the economy) makes them a political liability and the means by which they acquired their wealth does not make them natural allies of the clean-hands school of business.

Not a single senior member of the Government or Presidential administration turned up. Apparently it was because Kasyanov was due to speak in a key note speech. It is a mark of their failure to understand that debate can be beneficial to policy that only lends credence to the criticism that they are not much better than a bunch of 5th Directorate Thugs.

After all is said is done it was great to catch up with guys who have been playing Russia for a while.

It's been a while since I have had the energy or inclination to take on a larger subject. The complexities of IP protection and rights in Russia, and to an extent Ukraine, have been exercising my grey matter for a while. To be clear this is not an attempt to engage in any beneficial lobbying for the software, film, music industries. With both Russia and Ukraine somewhere close to the top of the list of countries that peddle in pirated goods. M$oft, the music and film industries are already effectively lobbying the government. The issue in Russia is not about the law but the enforcement of it. In Ukraine the law needs to be implemented. What this post is about is the region's ability to turn its undoubted mathematical and scientific achievements in product-driven companies that compete in global markets.

So what is the problem that vexes the tiny group of us engaged in financing and developing high tech markets in Russia and Ukraine. The good news is that, in Russia at least, patent laws are well developed and clearly and definitively adhere to international norms. There is even a suggestion that they are actually well written, though that is beyond my competence to judge. As an entrepreneur or academic wishing to protect an invention specifically in Russia it is relatively easy, and cheap, to apply for a patent from RusPatent and subsequently to prosecute believed infringements of that patent. The process of transferring patents and patent applications owned by Russian firms to foreign ones is also very straight forward; as you would expect in a country that has no balance sheet recognition of soft/intangible assets. As with many aspects of Russian law the courts ability to understand and make coherent decisions based on the law may be lacking. As I have written before there are a number of international bodies training Russian judges and lawyers to help them make coherent decisions. As judges remain significantly under-paid they will remain vulnerable to bribery especially at the lower end of the judicial chain.

Russia's domestic firms are not major consumers of technology, and especially Russian developed technology. Nor have they developed the ability of Huawei, for example, to copy and turn out Cisco-like products. The lack of entrepreneurial and management abilities that mean that so much Russia-related technology remains unlocked potential also means that intellectual property theft is fairly low-level and certainly no greater than the usual academic spats over original ideas.

The issue that is frequently insurmountable relates to ownership of ideas. Many of the truly disruptive ideas that we come across in our trawls through the local high-tech universe were born in Universities and other government-funded high tech institutes and firms. The current Minister of Science and Technology has been trying to lay out the ground rules as to how to assign ownership rights but like many reforms they are being roundly ignored at the operating level.

By way of an example. A company which we are doing some background due diligence on, and we have to like it to be doing this work, is based on an invention by a core group of scientists which itself is the subject of a patent which in turn refers to the Institute at which they were working at the time of the invention. This patent was written before the collapse of the Soviet Union and so was the property of the State. No great issues so far. The company on which the invention is founded is willing to cede some ownership to the Institute in recognition of its role in funding the discovery. But as the discovery was funded by the State actually the property belongs to the Ministry of State Property. And that is where the black hole starts and continues into infinite nothingness. The Ministry cannot take ownership in private companies and certainly not in ones that are created in Delaware. It cannot transfer its ownership back to the Institute but continues to insist on its ownership rights. So this would appear to be circular black hole where we continually arrive back at the starting point.

Given what would very likely be a legal opinion that would focus on the inherent negative in financing a company which probably does not own its invention another disruptive technology will probably stay on the shelf.

Nothing differentiates people more than what they eat for breakfast. Northern Europeans are keen on cold meats and cheese on brown and rye bread. My own homeland is rightly famous for the heart attack inducing fry up. Russian's however, are partial to pickled garlic (in brine in case you are curious.) Each to their own. Except that pickled garlic is not to its own. Everyone gets a piece of it.

If you are now to understand that I am on a full plane to London from Moscow you will understand that my aversion to Pickled Garlic has risen to the top of my current hate list.

I am not Catholic; I have no truck with organized religion. As Jared Diamond points out in "Guns, Germs and Steel" organized religion is a necessary pre-condition for inter-community/state organized violence.

To the extent that I have a Church, I am a Scottish presbyterian who was always led to believe that the Papists were actually the Devil's form on earth. Actually it had more to do with the football team that you supported. So the Pope as the head of the Devil's church was never really top of my Christmas card list.

Whatever his views on marriage, contraception and the other half of the population (women) he had the guts, political strength and following to tell Poles;

"You are men. You have dignity. Don't crawl on your bellies."

It was the start of the end of Communism.

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.

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.

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.

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.

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.

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.

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.

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?

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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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.

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

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

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.

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.

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."

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?

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.

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.

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.

Jonathan Shwartz on 3GSM and why it's so much more important than Comdex proves that Intelligence is not in Sun's vocabulary. Proving that large companies insist on not only not learning from history but actually insist on repeating previous mistakes.

I am delighted that Solaris is doing well in telecom networks; here's hoping that telco hardened Linux doesn't commodotize a non-commodity product. Also really happy that lots of guys are writing stuff in a Java variant for cell phones. For which Sun of course earns.......ah yes nothing.

Sort of reminds one of J2EE. J2EE's network equivalent is JAIN, and there's a reasonable chance that I have mentioned that before. When the likes of Vodafone decide that JAIN is ready for the edge of network then its probably time to take notice. Except of course its not Sun who is paying attention.

It's all very well writing the spec, but why waste the time doing so if it only empowers your competitors to eat your lunch from your own lunch box.

Fred commenting on Fixing Venture Capital from Change This.

First congratulations to Fred on his constant ability to provide reasoned points-of-view to polemics. Which is what Fixing VC is.

In an attempt to follow Fred's example and provide reasoned answers, rather than my more natural; your wrong - idiot.

My greatest criticism is that the thesis is based on a false premise; namely that VC's are only interested in investing in the the 10% of the deals that make huge returns, whereas entrepreneurs have lower acceptance of risk and therefore would rather take more median returns. Just typing the explanation makes the whole premise seem unreasonable. Yes we would like each deal to be a Google, as would the entrepreneur and we all take outsized risks to achieve that goal. I think a statistical review of exits and returns would disprove the central thesis pretty quickly.

At the US-Russian Technology Symposium yesterday Pierre Lamond, Heidi Rozen, Robert Grady and Vladimir Bernstein discussed, inter alia, expected returns in the VC industry. Pierre in particular returned to a favorite theme; too much money in the venture industry. His premise being that companies are going to be sold at or around $50mn in sales. If the C Round was $30-$50mn not many people are going to be seeing great returns. So in answer to VC's are only interested in the top performers we have one of the the VC industries major voices saying the opposite. Specifically, he was saying expect mid-range M&A sales and when Google comes along be very happy.

From a Russian technology point of view I am happy to hear that exits are expected to be mid-range M&A. We will build our companies more cheaply and expect to sell in M&A deals from the outset. Our fund's economics will be built on achieving exactly that.