Fun Friday: Back to the Old New Tech Lifestyle

As I sit in William’s and my office in Los Gatos, I’m struck with how empty everything feels. The aux offices nearby are now empty as the call of the wild beckons folks back to the non-performing real estate that leaves many CEOs fuming. People who once revelled in the glories of a non-commute day now struggle to drive the crowded freeways and fight to park near the lobby entrance, grab a quick drab coffee from the machine, and stagger to a shared table “desk”. Just like in the Before Time. 

As I always told the kids, “Traffic is the most important thing is Siicon Valley”.

 Does this upset me? Not really. I no longer have to hear the bellowing of the sales guy wafting through the walls. Nobody builds offices to be sound-proof. My relaxing music sounds so much nicer when I don’t have to crank it up to compensate, or put on noise-cancelling headphones.

But for those who worked at home, the demands of working in an office must be quite a struggle. Startup types do their “zero to one” juggling pitch act in any place that will suffice, whether it is a coffee shop, a conference room, a beach, or even, dare I say it, at home. Obtaining an office to work is actually a milestone funding achievement – not a given.

Hence, I am at our office today, surrounded by memorabilia, computer and software and writings, seeking inspiration!

Well, perhaps inspiration should step aside for the moment. Let’s take a bit to check the weak pulse of venture and startups.

As we move out of the “spend money for anything online” phase of a cloistered culture in the grips of the pandemic, major  companies responded by 1) laying off all of their excess employees hired to keep other major companies from hiring those same people they just laid off and 2) forcing everyone back to the office to listen to the CEO tell them how useless they were when they were stuck at home working. 

In like kind, investment in the wacko side dropped like an anvil. Crypto currency was shown to be a fraud (is anyone shocked?). Blockchain is too narrow for application. Gaming is hit and miss, usually miss. The gig economy is a bust. And whatever happened to Meta?

So now venture is hyping AI. Again. Yes. Again. 

In lockstep, startups are all adding their AI gambits to their existing offerings to look mod and rock their asses. Sigh. It’s a living.

So where do we stand. Easy. We have 1) M&A in the doldrums,  2) down rounds and the potential for clawbacks, and 3) VCs on the defensive. Let’s take these one at a time.

M&A:

As VCs closed their wallets, they hoped that continued hype would propel their less favored dead dogs into the eager arms of corporate strategy guys. (Note — William actually handled strategy and new ventures for Tandem in the old days, so I heard about this a lot, every day). Well, these guys aren’t quite as stupid as they thought. A bunch of desperate sounding VCs selling a high discount startup (hey, it’s 50% cheaper than last time!) wasn’t enough to move the acquisition forward. Frankly, these deals take time and are usually lined up well before one needs funding as their “Plan B”. 

At the same time, while venture was eager to deal, corporations looked at their bottom line and didn’t like what they saw. Stock prices are depressed, or at the very least not increasing dramatically. Integrating new companies into the fold is a costly investment in people and technology. And last and not least, the random pivots by VCs from one unicorn technology to a completely different unicorn technology has heads spinning and disrupt the acquisition process.

In an effort to preserve the appearance of astronomically priced unicorn startups, venture has grasped the tail of the AI GoogleBull while Microsoft NoPilot yaws and ChatGTFO hallucinates. It is a strange summer, even for Silicon Valley.

Already the tech journo crowd is side-eying all this sturm und drang. They’re starting to whisper that all this stuff is passe. After all, when you start to have ignorant Texas Aggie profs flunking students because he heard about AI taking over writing essays, you know the jig is up.

Down Rounds, Discounts and Clawbacks:

Let’s face it, startup valuations have always been, shall we say, invented? Created? Innovated? OK, yes we look at the upside potential. That’s because in zero-to-one that’s all you have — Potential. And potential can mean nothing — or it can mean everything.

But we also had to demonstrate a product, market, path to profitability, and an exit strategy. 

Guess what? This is where the tech innovators and the con-men (like poor little rich boy Sammy Bankrupt-Fried) and con-women (Orange is the New Black Liz Holmes) separate, if not actively scuttle away. 

Building a prototype and product is hard. Convincing customers to pay for it is extra hard. Making enough money to actually not need investment is super hard. And finding a means to transition beyond the startup mode, whether through acquisition, IPO or just plain good sales is excrutiatingly hard. So it’s no surprise that most unicorns skipped all that other stuff and got lots of money when money was basically free.

Now that things are hard, VCs are looking at all those other pesky hard things. And most startups funded in different conditions can’t step up and evolve. The end result is a lot of startups will not get further funding. They just aren’t worth it, valuation-wise.

While some of the fatter venture unicorns are pitched as promising M&A opportunities (see above), many others will shrivel and starve. The ones that pivot to some kind of revenue and profitability with real customers may survive, while those that restructure to some kind of “NewCo Tech Opp” (cough, AI, cough) may squeak by with fresh funding.

As venture partners and their Limiteds get increasingly disappointed in their portfolios, anticipate clawback. It’s never pretty, but it will happen.

VCs on the Defensive:

It’s only common sense that as returns nosedived, folks would start looking for someone to blame. And VCs are in the thick of it.

This lovely little article from Crunchbase is an excellent example of forensic analysis of successful investments. On this Fun Friday, I leave you with these thoughts from that article:

“What’s concerning with our sample of the largest IPOs of the past 10 years, however, is the absence of any real star performers among the big names. None are even above their first-day prices, let alone returning a multiple to their IPO investors.

It’s even more worrisome when one looks at how much capital has been going into startup investment. Over the past 10 years, investors have plowed more than $1.4 trillion (!) into seed through late-stage and pre-IPO financings.

At the peak, in 2021, a whopping $329.5 billion went into North American startup investments across all stages, per Crunchbase data. That — to put it in context — is more than the total recent valuation of all 20 of the biggest IPOs in our sample set.

To make good on that level of investment, startup backers will need not just hits but grand slams. Their recent batting averages indicate that’s unlikely to happen.“

Fun Friday: The Race for AI Creative Works Control

In April of 2020, William and I wrote in the Cutter Business Journal an article entitled Moving Forward in 2020: Technology Investment in ML, AI, and Big Data. We focused on three areas: surveillance (monetization), entertainment (stickiness), and whitespace opportunities (climate, energy, transportation). This statement bears emphasis:

Instead of moving from technology to key customers with an abstracted total addressable market (TAM), we must instead quantify artificial intelligence (AI) and machine learning (ML) benefits where they specifically fit within business strategies across segment industries. By using axiomatic impacts, the fuzziness of how to incorporate AI, ML, and big data into an industry can be used as a check on traditional investment assumptions.

[For additional information on this article, please see AI, ML, and Big Data: Functional Groups That Catch the Investor’s Eye (6 May 2020, Cutter Business Technology Advisor).]

But one might be puzzled as to where generative AI tools such as ChatGPT or Dall-E fit in the AI landscape and why we should care about AI art, AI news and press releases, AI homework and essays — even threatened AI music like what’s talked about in 1984 by Orwell.

The reality is these areas utilize easily crawled content available everywhere lying around in the Internet attic. It also takes tremendous computing power to conduct ML and process this data effectively into some kind of appearance of sensible output. Hence, these tools will remain in the corporate hands of the creators no matter what they claim about “open source” — it’s simply too difficult for anyone but a giant corporate entity to support the huge costs involved. So this is about monetization and stickiness. Large companies are willing and able to pay the cloud costs if the customer gets dependent on using their tools. Flashback to the tool-centric sell of the 1980s, Silicon Valley style. All we need is an AI version of Dr. Dobbs Journal and we’re all set.

Previous attempts at generative AI have usually focused on small ML datasets, leading to laughable and biased results. Now companies are looking at the shift at Google in particular from ads to AI, along with Microsoft and FaceBook. Everyone believes they are in a race and frantically trying to catch up before all that sweet sweet money is locked up by one of them.

But is there really any need to “catch up”? Is this a real trend, or just an illusion? Google made its fortune on categorizing every web page on the Internet. It had plenty of rivals back then. I was fond of Altavista myself. But there was also everything from Ask Jeeves to Yahoo. 

Now Google and Microsoft are analyzing the contents of these big pots of data with ML But it’s not just for analyzing. It’s for creating content. Music. Art. News. Opinion. And you need an awful lot of processing power to handle all that data. So it’s now a Big Guy Game.

One of the approaches to eliminating bias is to use ML to process more and more data. The bigger the data pot, the less the bias and error. Well, that’s the assumption, anyway. But it’s a dubious assumption given the pots analyzed are often variations on the theme. Most search categorization is based on recent pages and not deep page analysis. Google is no Linkpendium.

All this, oddly, reminds me a bit of the UK mad cow fiasco, where their agricultural industry essentially cultivated prions by feeding animals dead animals. Like Curie purified radium from pitchblend, the animals who died of this disease were then processed and fed to other animals. And since prions, like radium, persist after processing, the prions were concentrated and made it up the food chain into humans.

So in like kind the tools themselves are feeding back into the ML feedlot and being consumed again. It may take longer than a few days, but we will be back to the same problems in terms of bias and error.

However, the gimmick of having a “machine” write your essay or news blurb is very tempting. Heck, AIs are claimed to take medical exams or pass a law class or handle software programming better than people.

But being a doctor or attorney or a software engineer is much more than book learning, as anyone who’s done the job will tell you.

And of course, there is now backlash from various groups who value their creative works and are not interested in rapidly generated pale imitations polluting their space and pushing them out. They didn’t consent to have their works pulled into a training set and used by anyone. Imitation is neither sincere or flattering, and is even legally actionable if protected by copyright, trade secret, or patent. It’s not “fair use” when you suck it all in and paraphrase it slightly differently.

This isn’t new. William and I ran into this in the old days with our 386BSD code. We were happy to let people use it and modify it — what is code if not usable and modifiable? But we asked that provinance be maintained in the copyright itself by leaving the names of the authors. And we had entire modules of code that were written denovo in the days when kernel design meant new ideas. It was an amazing creative time for us.

So I remember how shocked I was when an engineer at Oracle asked me about tfork() and threading, since a Linux book he had talked about it but he could find nothing in the Linux source code. I pulled out our 386BSD Kernel book and showed him that it was novel work done for 386BSD and would not work in Linux. Upon discussion it turned out that book just “paraphrased” many of our chapters without even considering that Linux did not incorporate much of our work because it was a very different architectural design. It misled software designers — but I’m sure it sold a heck of a lot more books than we did by turning “386bsd” to “linux”. So it is today, but a heck of a lot easier for the talentless, the craven, and the criminal to steal.

Now many software designers are upset because their source code depositories are used as the models for automated coding, and they don’t like that one bit. And I don’t blame them.

We lived it. And it was a primary reason why the 386BSD project was terminated. Too many trolls and opportunists ready to take any new work and paraphrase it. So get ready to see this happen again in music, art, news, and yes, software. The age of mediocrity is upon us.

1984, here we come…

Fun Friday: Old Style SV and the Great DOD Financial Fallback

Silicon Valley tech has long run on DOD and related monies. From established companies like IBM and Raytheon to think-tanks like SRI and Xerox PARC to startups, it was understood that national security was a lucrative opportunity. War, whether hot or cold, is good for business, if you’re the right kind of business.

Symmetric Computer Systems, founded by William Jolitz in 1982, was one such company. Unix, TCP/IP and networking software, and processor technologies were all considered controlled technologies subject to export restrictions. Heck, when William and I took a 375 computer to Germany for a USENIX conference, we had to have the appropriate license to carry one with us — and I had to take special courses in how to apply for and maintain such licenses. I also had nice conversations with the various national laboratories and security agencies who loved our little systems. Easy to transport, hardy, and enough processing power to handle any immediate intelligence and scientific need. William understood his customer. And his primary customer was not conventional.

But things changed here in the Valley. Companies exported their technologies to cheaper shores. We stopped making semiconductors. We stopped building computers. By the time I had co-founded InterProphet, an inventor of low-latency TCP chip technology we pioneered, few VCs would consider a hardware or semiconductor investment at all. Everyone talked about their “China Strategy” and their Guangdong manufacturing as if that was the only key to success (it wasn’t). Even the US government was asking for RFPs for technologies which were expected to be built, not by US firms, but by Huawai. Technology was viewed as trivial, of no value except to pass on as a bribe to build inexpensive trinkets to bored Americans.

Silicon Valley transmuted from one that invented technology to one that concerned itself with “unicorns”, aka fantasy companies devoid of financial fundamentals. One of my investors in InterProphet, Dan Lynch of Cybercash and Interop fame, warned William and me of the folly of nailing down the technology too soon, before investment was secured. Once the market cap was determined, you were no longer a fantasy. Sometimes it was better to not build the product, but just talk about it. This was an accurate assessment of the situation over the last twenty years. Unfortunately, it was one concession William and I could never make. We loved to build products. We loved to make things. We loved to create.

So we retired from the game. It was sweet while it lasted.

This little meditation does have a point. And it has to do with the change in the world economy with 1) the pandemic and 2) the war in Ukraine. Bear with me.

The pandemic of 2020-2022 led to a sea change in the structure of work. In companies where people could work remotely, such as software development, there was little impact of the disease on the workforce. People could isolate, maintain their income stream, and produce. Technology companies were winners.

For the majority of businesses, people could not easily isolate. Schools were shut down and remote learning introduced (a boon to the Zooms of the world). But remote learning on such a scale had never been done, and its effectiveness was poor. Children isolated from their teachers, peers and supports did not do as well as college-educated professionals using Slack and cloud tools. Stores and entertainment venues such as movie theaters were closed down. Medical offices limited visits to reduce the threat of contagion. People died in isolation wards of the disease, separated from their families. It was a tragic and depressing time.

Given so many lost their jobs due to the pandemic through no fault of their own, extensive government funding was used to essentially pay people to stay home while a vaccine was developed. Remarkably, within one year after Covid struck our shores, a vaccine was made available. This will go down as one of the most amazing scientific achievements of our time.

But as the threat of contagion has eased, the ability to get tech workers back in the office has stalled. The frustration of the CEO and investment class towards these “entitled” workers has been venomous and extreme as they continue to look on their now empty business properties. And as government supports for the consumer class have ended, so too has the artificial consumer boom. And heck, if those tech workers won’t come to the office to bend the knee to management, well, let’s fire them.

Silicon Valley is a small place. One jumps off the cliff, all jump off the cliff.

The second impact (this is beginning to sound like Evangelion) was the war in Ukraine launched by Russia. This war had an immense unexpected effect on Silicon Valley investment for a simple reason — much of the funds channeled through crypto and currency schemes dried up when the EU, the UK and the US agreed to impose sanctions on Russia and its many collaborators. And while VCs and its unicorns did not advertise it, the underpinnings of many financial deals were based on money flows that have existed since the Cold War and were now interdicted. Whomp whomp, indeed.

It’s taken about a year for these investments to collapse. The collateral damage: job losses, startup failures, venture funds with negative outlook, and eventually clawbacks from angry customers, investors, and LLCs. We live in interesting times.

We are now embarking on a new Cold War, with Russia, China and the lesser lights (Iran, N. Korea, and so forth). There is no longer a demand for a China strategy or Russian oligarch monies. And this is a win for startups involved in technologies which have a basis in national security, just like Symmetric Computer Systems started with 40 years ago. What was old is new again.

So what should we be looking at in well-positioned investments?

Strategic investments in battery technologies, carbon capture, and energy storage are still strong contenders for long-term investment. AI technologies focused on separating the wheat from the chaff for meaningful intelligence, both business and governmental. Alternative satellite creation and maintenance, especially for low-latency non-interceptible communications — something I was solicited and wrote an RFP for about twenty years ago — will be a growing opportunity. And good old-fashioned secure software, hardware and networking is always a safe bet in bad times as a lucrative acquisition by a big guy.

Avoid broad consumer gimmicks like AI journalists, unless you’re a VC that can sustain the hype for at least six months. The lack of sustainable dark funds and non-protected IPR (AI can’t hold patents or copyright) given the current Cold War climate makes it problematic until everyone figures out how to get around the currency strictures. SPACs are nothing but trouble (hey, Palantir, how’s it going?). And the launch side of satellites is locked up for now.

Sedate Sunday: NIF Fusion Breakthrough, UC Strike Settled, Nuclear Investments Thrive

As a sum up to an eventful week, LLNL’s National Ignition Facility (NIF) announced that they had achieved fusion ignition. “LLNL’s experiment surpassed the fusion threshold by delivering 2.05 megajoules (MJ) of energy to the target, resulting in 3.15 MJ of fusion energy output, demonstrating for the first time a most fundamental science basis for inertial fusion energy (IFE).” The facility is impressive, using 192 lasers coordinated to burst on a tiny deuterium-tritium capsule.

The media was less impressed: “We are still a very long way from having nuclear fusion power the electric grid, experts caution. The US project, while groundbreaking, only produced enough energy to boil about 2.5 gallons of water, Tony Roulstone, a fusion expert from the engineering department at the University of Cambridge, told CNN.” 

Given all the years and planning and building and incredible cost, the NIF wasn’t just a cool way to try to bootstrap fusion ignition as a clean energy source. As physicist Bob Rosner, University of Chicago and former director of the Argonne National Laboratory, stated in an interview with John Mecklin at the Bulletin of the the Atomic Scientists, “The folks who succeeded so splendidly in attaining ignition and self-sustained fusion on December 5 were not part of DoE’s fusion energy program (which sits in the DoE Office of Science Office of Fusion Energy Sciences); they’re working instead for the National Nuclear Security Administration (NNSA), which manages our nation’s nuclear weapons stockpile.”

What’s all this got to do with nuclear weapons? Well, in the late 1980s there was a lot of pressure to ban underground nuclear testing, and it succeeded. So now, how do you certify that your nuke work as advertised? “NNSA decided to build new experimental facilities (one of which was the National Ignition Facility), efforts were made to construct new simulation codes to help certify the weapons, and investments were made in new generations of advanced computers that these codes required and could run on. And NIF was meant to, in part, validate the design code approaches used for the weapons.  Before NIF was even completed, they chose a target experiment that—in combination with simulation codes advances—could demonstrate that we knew what we were doing.”

When William and I ran Symmetric Computer Systems in the 1980s, we sold Symmetric 375 computers to LLNL precisely for this reason. As William had a unique security clearance due to his earlier work at NASA, he was asked to examine the simulations and correct any issues with the Fortran compiler supplied with the computers – which was done. Later, when they switched to Sun Microsystem computers, they continued to call us about “Fortran compiler issues” in our systems which didn’t exist. When we told them we found no errors, they admitted it wasn’t our 375 computers that were the problem. Instead, they tried to get us to fix Sun’s Fortran compiler because the Sun people “wouldn’t return our calls”. We told them, nicely, to either buy more 375 computers or take a flying leap. They chose the leap. I suspect the compiler errors delayed their simulation work for about 5 years. Such is the cost of cheapness.

In other news, the long strike of UC workers is over. Graduate students, postdocs and academic researchers are the backbone of the university, but as the cost of living has skyrocketed, pay has stagnated. I’m pleased to see UC is finally dealing with this issue fairly.

Given the NIF breakthrough, perhaps it’s only fair to review the $3.4B in nuclear investments this year. According to Crunchbase, one major player, Bill-Gates backed TerraPower, raised $750M in it’s most recent round. TerraPower uses molten salt reactor technology. Dr. Shu, Professor Emeritus at Berkeley, did a talk back in 2016 at Microsoft on his patented two-fluid molten salt breeder reactor (2F-MSBR) using thorium which I found quite interesting (yes, William and I were there). Dr. Shu felt that this was the only way to combat climate change and save the planet in his lifetime.

As to fusion, even though the NIF has had billions of investment over decades and has only now achieved scientific energy breakeven, there is still a lot of money involved in seeing it through: “The biggest single fusion investment came in December, when Cambridge, Massachusetts-based Commonwealth Fusion Systems raised a huge round of more than $1.8 billion led by Tiger Global and also included investments from Bill Gates, Marc Benioff’s Time Ventures and about two dozen others. Just before that, in early November, Everett, Washington-based Helion Energy closed a $500 million Series E led by Sam Altman—with an opportunity for an additional $1.7 billion tied to reaching performance milestones.”

Expect even more money thrown into conventional and fusion energy investments after NIF’s announcement. 

Fun Friday – If a Sequoia Falls in an Angry Forest of Limiteds, Does it Care? Martian Craters and the Lives of Eels!

Firstly and most importantly, there is a fascinating article about the eels returning to the Sargasso Sea to reproduce in Smithsonian Magazine that I highly recommend reading. Eels have played a part in literature, myth and cuisine for eons, but little is yet known about their life cycle. I wonder how they feel, after living so many years in brackish shoreline and fresh waters, making the long journey back to the salty sea to spawn and die? Do they miss it? Do they want to leave? What do they dream?

From the deep seas to the starry skies, one can learn a bit about crater counting to determine (roughly) geologic events. This technique, first devised for lunar geology, can with caveats be applied to Mars. So what are you waiting for? Count those craters!

Finally, out in Silicon Valley venture land, the crypto fallout continues, with one of the most powerful and ruthless venture firms on Sand Hill Road diving into the foxhole. According to Bloomberg, “Sequoia Capital wrote down the full value of its $214 million investment in FTX only weeks after hailing the founder of the embattled cryptocurrency exchange as a “legend” with a “savior complex.”” Ouch!

This especially must bite all the other investors who in June 2021 let Sequoia lead them down the merry path of a $1B investment round. How times, and valuations, change.

Since then, while man-child Mr. Bankrupt, er, Bankman-Fried, who obstensibly ran FTX and is incidentally the spawn of law professors from Stanford — an investment fund that also runs a university — has been running around begging understanding of his plight, Sequoia decided to handle this disgrace by sacrificing one of their lesser lights to the Gods of Mammon — even though poor Divya Gupta wasn’t even at Sequoia when they led that fateful round in 2021. Heck, he hardly had the chance to get his feet moist, as it were, before things collapsed. Ah well, at least they don’t make them walk the plank anymore (I think). 

Partner Alfred Lin, Mr. FTX is Swell, had the pleasant duty of apologizing to their Limited for this debacle, whining that they really really really did their diligence (snort) and that they were misled (hahahaha). 

Sure, it’s absolutely commonplace for a little venture firm like Sequoia to not have the resources to conduct proper due diligence of an investment opportunity and its founder, ignore the paperwork, and glad-hand other venture firms using the “Trust me, we’re the smart money” mantra to get everyone else to dive in – NOT. 

But they are saying now that they have learned their lesson: “Moving forward, Sequoia partners said they would be more cautious about making substantial investments in companies whose founders they did not have a longstanding relationship with for investments made out of its global growth and expansion funds.”

I guess Stanford is no longer welcome at the Christmas party.

Happy Holidays!

Fun Friday: Twitter and the Age of Anti-Innovation


“One lesson that has to be remembered in my line of business is that when an operation is over it is OVER.The temptation to stay just one more day or to cash just one more cheque can be almost overwhelming, ah, how well I know. I also know that it is also the best way to get better acquainted with the police. Turn your back and walk away – And live to graft another day.” The Stainless Steel Rat, Harry Harrison

Well, I wasn’t going to talk about Musk, but I’m a bit jealous. First he subpoenaed Stanford University about twitter’s 1995 origins  — a university he claims he spent all of two days at in the materials science engineering PhD program at that time. Then he up and forgot he was going for an interesting Silicon Valley history lesson and decided to buy the company anyway. Sigh.

Perhaps he gave up because he skipped out on paying Stanford their exorbitant tuition and fees by not enrolling, and he’s worried they still have the bill. Actually, this is very possible — my own father attended Stanford and left with a $100 owed them. A generation later, when his son got admitted, Stanford still remembered. Academic debt is eternal. But the boring story is Musk got a better deal and frankly, I don’t remember twitter as an “item” at all. Go figure.

This was a heady five years for me and William: after writing the two year 386BSD series “Porting Unix to the 386″ in Dr. Dobbs Journal and the source code of 386BSD 0.0, 0.1, and 1.0/2.0 , and the DDJ 386BSD Release 1.0 CDROM with all the writings and annotations in 1994, by 1995 we were putting the finishing touches on the first volume of Source Code Secrets while inventing role-based security, polymorphic protocols and new approaches in high speed networking (these articles actually led to a rethink in high speed networking that birthed InterProphet in 1997), and tinkering with CDROM filesystems on a lark. So forgive me for missing the import of this crucial event.

Musk has an axe to grind. Actually, he has several axes to grind. Anyone who knows the history of SpaceX has seen his axe. I assume he was going to bury it right in Stanford’s backside by grabbing any info they have about Twitter and its hapless former CEO Parag Agrawal, but I suppose he’s now quite happy being Chief Twit (not my first choice for a moniker — I think Big Tweeter would be better) and chopping up anything that moves. My guess is he’s now looking for some confirmation of those darn bots popping up everywhere, like heffalumps and woozles. Are they real? Or just a fever dream? Who knows?

But 1995 does stand out in retrospect. It can be considered officially the year anti-innovation became the watchword in investment even as amazing technologies like open source came to the fore. The opportunities for grift on the Internet (don’t forget that “no one knows you’re a whatever” meme) was so compelling and sexy that *any* attempt to disrupt this was taken as a threat. 

Limit the words. Limit the thought. The nastier, the better. No discourse. No remorse. Virality uber alles. (Haven’t we learned by now that virality leads to pandemics?) 

Like crack, the unfiltered quips of just about anybody and their bot was addictive — especially to journalists. Gotta admit, it’s a lot harder to track down and interview people in depth, or attend press conferences, or sort through press releases, or travel to obscure places, or actually cross-check your sources first — especially if you’re not getting paid well for it. Twitter made all that stuff superfluous. What mattered was being the first. “Covfefe”, yeah baby! Deep stuff. Quit twitter? Forget it. They’re permanently addicted, and Musk knows it.

While twitter has an outsized influence on journalists who write about twitter, who else uses twitter, really? Politicians? Extremists? The Real Housewives of Salt Lake City? The most lucrative demographic from a marketing ad sales standpoint is young people, not these people. But most of the kids have migrated to other more trendy sites, like tiktok or instagram. Twitter usage declined 10% among teens over the last seven years according to Pew Research. Heck, even Facebook is doing better than them, and from my perspective it’s been getting grayer along with my cohort.

The problem with a cynical viral play is that things like “making money” or “building a product” are unimportant. We’ve seen that time and again, but twitter was the worst of the worst for lacking even a modicum of humor and humility. Even when they had a chance to build something sustainable for a younger target audience, their tendency to kill anything that smacked of building a real business was stomped on. Virality and viciousness don’t require innovative talent and product. 

One example of their anti-innovation attitude was their acquisition of Vine, a trivial and frankly unthreatening six second video loop site. It was clear by the early 2000s that video was an interesting opportunity. Heck, I was pitching ExecProducer’s Massive Video Production strategy and online automated video production mid-2000s on Sand Hill Road. ExecProducer and CoolClip had much more sophisticated video server production than Vine, with a very different focus. So Vine should have been a no brainer to move twitter into a younger demographic, right? Uh, nope. After four miserable years, it was shut down. In the end, twitter acquired a potential rival — and killed it.

I wish the anti-innovation euphoria popular in the Silicon Valley investment scene would become tiresome. But it’s just too easy to make and lose money. Currently, venture capital investment is sitting on $500B of dry powder according to Pitchbook. Think of those numbers, folks. $500 BILLION DOLLARS, just sitting in accounts, waiting for the next six months flip unicorn. It boggles the mind.

Real innovation is risky. It takes time. We can’t flip a startup in six months doing real code, real hardware, real systems. It takes time to convince customers to try our stuff. It takes time to shake out the bugs. But it’s also a heck of a lot of fun and necessary.

Because sometimes the grift really does end. And you don’t want to be there when it does.

Fun Friday: Telescopes and Memories

I’ve been planning to write something for a while, but frankly, there hasn’t been anything really fun to write about.

Everyone is complaining about gas prices and inflation. Global trade is still bottlenecked and tangled in knots. There’s still a pandemic, folks, although you wouldn’t know it from the way people are dancing like it’s the last night before the End of the World.

On the business front, venture is busily grabbing any money they can to hoard while telling their portfolio companies to “tighten the belt”, mainly around the necks of their employees. Companies are eagerly complying by rescinding job offers and instituting layoffs. Folks are nervous as they crowd airports, hoping their flight isn’t one of the hundreds cancelled that day due to lack of flight staff. And the war in Ukraine waged by Russia in a fit of insanity continues to kill innocents and destabilize the entire EU.

Speaking of dead innocents, the US Supreme Court, destined to go down in history as depraved pandering sacks of shit, decided that guns everywhere makes for a stronger America. Their overturning of Roe v Wade, expected after the leaked draft admiring the people who burned innocent people as witches crawled out of the sewers, has been released and to no one’s surprise reduced women to that of beasts. Yes, it is not a Fun Friday for many people. Maybe it’s a Gun Friday. I’m sorry.

Roe v Wade was decided in 1973. I was twelve. It impacted my life and health for the better. Today it is officially overturned in a ruthless precedent-be-damned legal coup. I am sixty, past childbearing age. It cannot impact me directly. Yet I have daughters and young people I care about. I don’t want to see them hurt. Their happiness and livelihood and health matters to me. They should have the same rights to choice and freedom that I had. They may not know how much it matters yet. But they will. I am sure of that.

I spent the morning cleaning one of William’s prototype telescope designs for display in the office. It’s an unusually compact and minimalist design. As I cleaned the mirror and cover plate, I found a cricket living in the focuser. I watched it hop off the picnic table and out of sight, grabbed the telescope, and took it to the office.

It now sits amongst the many creative works William and I did together. Our reliquary. 375 computers. InterProphet low-latency networking boards. 386BSD articles and books and CDROM. An unpopulated six layer 375 motherboard.

In other parts of the office, an EtherSAN prototype unit box, a 386BSD CDROM with the heftiest liner notes ever made, 386 computers of various vintages used for 386BSD, and bins 386BSD and 375 disk drives, boards, and cables. Some complete and some mid-project, designs waiting for a hand to finish the work.

It is a reminder that things are never finished — they are only left in a state of usability for a time. Once that time passes, one either has to toss it away or begin again. I choose both. To toss some things away and to begin again on other things.

Young people also have a choice. They can fight for their freedoms — and they can toss them away. I hope they choose wisely.

Fun Friday: Low-Tech Delays for Cars, An Icon Retires, and Mars Sings

Silicon Valley continues to belt-tighten amidst the turmoil of inflation, the continuing and never-ending pandemic impacting global trade, and the “Hundred Days War” in Ukraine brought to the rest of the world by Russia’s kakistocracy. Venture firms continue to prioritize late stage companies with their largess, hoping to get ahead of the perceived end of civilization (just look for companies closing their Series E and F rounds). And the summer travel scene, much hoped to bring back the hospitality industry after two years of lockdowns and mandates, suffers from cancelled flights and worker shortages.

But all is not lost. On the bright side, IC cars may die out, not due to direct competition with EVs, but instead from a lack of a low-tech component — wire harnesses. According to Reuters, IC wire harnesses are not usually machine made, unlike component harnesses made in the computer industry (and also used in Li-ion battery harnesses like that in EVs like tesla). Instead, countries like Ukraine hand-crafted these necessary components for a plethera of IC cars from a variety of small sources, a low-cost approach that major auto companies saw no reason to change — until now. The EV platform is looking more and more cost-effective and sensible to auto manufacturers, all thanks to the little wire harness.

Sheryl Sandberg, COO of Meta/FaceBook, and women-in-business Lean-In icon, has chosen to “lean out” of her role in favor of wedding planning and philanthropy. Privately, according to the Wall Street Journal (which I will not link to as it is subscriber-only folks), Sandberg was upset with company investigations into her private meddling with tabloid The Daily Mail over its reporting of her then-boyfriend, perennial jerk and still amazingly CEO of Activision / Blizzard Bobby Kotick, as well as improper corporate expenditures for her upcoming wedding to another billionaire after she dumped Bobby.

It’s gratifying, actually, to see this woman presented as a flawless advocate of corporate womanhood 1) demonstrate such poor taste in men, especially to a tabloid notorious for its duplicity and ruthlessness — here’s hoping number 2 works out better — and 2) not even bother to use her own private staff to put together her wedding and pull out her own personal platinum card when as COO she would have scrutinized everyone else’s expenses and use of facilities / resources.

Lest anyone worry about poor burned-out Sheryl, do not concern yourself. She has made plenty of money from her sojourn at FaceBook and will not have to return her dress to David’s Bridal for a more economical one.

Finally, listen to the Song of Mars — a haunting low moan which enriches the mind and the soul, complements of Maurice, Chide, et al published in Nature. As you read the paper, listen to the dreamlike song of another world. You will be enlightened.

Happy Friday.

Fun Friday: Funding in Transition and Mammalian Distributed Memory Storage

As inflation continues to take its toll on everyone’s investments as well as steak dinner (psst – get the rotisserie chicken at Costco instead), Silicon Valley is clearly in a state of transition. Startups have been told to tighten their belts financially. Layoffs in big tech companies have begun. “Growth” ventures are failing to get follow-on funding, primarily in the consumer space and media (in Substack’s case, they’re also proving the old adage that no one pays attention to writers).

But for every easy money gambit that’s falling out of the sky, there is hope for the dreamer and rogue. Venture firms are still collecting money hand-over-fist from desperate Limiteds eager to get some return with the stock market slowing. Folks with money want to make more money. There are lots of them.

Of course, this doesn’t directly help the small entrepreneur. Big Venture (TM) doesn’t fund the small fry inventing neat technologies anymore — they have too many Series D unicorn mouths to feed. Big tech companies are no longer a safe bet — they may fire you and escort you unceremoniously out the door without any warning. In hard times, loyalty is not its own reward.

But there are a lot of individual investors out there who can drop $1M on a neat tech idea. All the startups William and I founded started with a dream, some code, and a handshake during lousy economic times. They were funded precisely because making easy money on scams and gambits have evaporated.

So if you’ve got a good hard tech project, now may be the best time to go for it. The cash is still plentiful. Just play it cool. It worked for us. It can work for you.

Researchers tracked neural activity across a whole mouse brain to determine what areas were involved in storing a specific memory. Many brain regions found likely to be involved in encoding a memory (top) were also found to be involved in recall upon reactivation (bottom). Credits: Image courtesy of the Tonegawa Lab/Picower Institute.
Neural activity across a whole mouse brain to determine what areas were involved in storing a specific memory. Many brain regions found likely to be involved in encoding a memory (top) were also found to be involved in recall upon reactivation (bottom). 
Credits:Image courtesy of the Tonegawa Lab/Picower Institute. Read the article!

And speaking of distributed memory, a new study from MIT describes the mammalian brain as storing memory, not densely in a few regions, but instead loosely across many regions of the brain. This makes sense in a way. It’s a lot easier to completely lose a memory if it’s in one or a few locations than spread throughout the brain. Also, storing memories in larger “chunks” would result in a lot of wasted storage space since a memory is of varying size. Indirect references to each memory element, even if a few are lost, are more efficient than directly physically mapping a memory.

It does explain the dreamlike aspect of memories, doesn’t it? And also perhaps memories which are completely wrong but feel entirely real and true. Likely we lose a lot of these references that fill in some of the blanks over time. Associated elements, like smell, can track back along a pathway to a memory to give the gist of it, but it may be only a shadow of what was actually recorded.

But is the brain’s memory sparsely allocated as well? It may well be given this highly distributed storage across many parts of the brain. Sparse allocation is common in operating systems because it is usually faster and overall more efficient. But it can use more total memory than that of a densely allocated memory mechanism if most of the elements contain non-repeatable data. Are most of our memories just collages of a few meaningful pieces and a lot of filler? Perhaps dreams look odd precisely because they are just stray strands of sparse referents to redundant memories garbage collected by the brain and reallocated for use.

To dream. Perchance to sleep. Now that is the question.

Not-So-Fun Friday: William Jolitz in Memoriam

I’ve avoided writing about many things over the last few years of William’s long illness. Writing his obituary was one of the most difficult things I’ve ever done. He lived an amazing life full of discovery, wonder and terror. Selecting just a few vignettes to illustrate his character and strength of will was difficult. I miss him terribly.

For the last six months of his life and the first three months of his death, I avoided the Los Gatos office we shared over the years. There are so many projects we planned that are now left undone. Some I can finish. Others I must deconstruct. Some are lost forever, except in my memory.

But now here I am in the little office I shared with William, surrounded by the relics of technologies and products and startups past. The passion is never extinguished, but only delayed a little.

Much in the world has changed but still stays exactly the same. Things William and I and others no one else remembers get rediscovered again and again. Things that shouldn’t be get dug up and instantiated with a “This time for sure” enthusiasm that belies sense. All for fame, or fortune, or just because it’s fun. It’s the Silicon Valley way.

And because memory is in the end all we have.