Oh Microsoft, Google is Calling – They Want the OS Space

With the announcement of Android, the Google open source mobile platform, there has been breathless talk of Google taking out the “locked” cellphone market with a Linux OS version. But we all know there are many open source Linux OS mobile versions already out there, so grabbing one and putting some stuff into it isn’t really that hard. In fact, one wag I know had this little joke:

How many Google Ph.D’s does it take to create a mobile operating system? Answer – 1000. One to download the OS, and 999 to add “Copyright Google”.

Hmm, ever since the bright kids at Google were accused of appropriating code to build their social networking site Orkut (see Google Stole Code? Is Social Networking that Hard?), many techies have expressed a somewhat low opinion of Google’s technical expertise, especially when doing the actual work with all those incredible resources in people and money is probably a lot easier than “borrowing” somebody else’s “crufty” code and figuring it out. Sometimes, by the way, “crufty” means “I can’t figure out your code because I’m too stupid so I’m going to run it down”. I got that a lot with 386BSD. But given the incredible brainpower Google has gathered, I would think they could not only eventually figure it out, but maybe do a better job from the beginning…

So if Google is so full of smart people, why I am asked did they just take a Linux distro and hack it? Why didn’t they give us a “from the ground up” genius OS?

Google is full of smart people, and Linux (and BSD and Windows BTW) are not optimal OS’s for mobile computing and they know that. They also do have the resources to completely change the paradigm of open source and mobile computing but choose not to. That’s a fact.

But choosing a Linux distro and entering the mobile space is the perfect feint if a very large and very rich company has decided to take on Microsoft in the OS market, but is worried given their rival’s monopoly that they already would look like a loser if they competed directly. By cudgeling one of the Unix lookalikes and stuffing it into a small device, they can appear like they are a real contender in a big space and work their way into the heart of Microsoft’s defenses.

So it is a smart strategy. Too bad people only think tactically nowadays – they’re missing the real battle.

Fun Friday – Nobel Peace Prize for Gore Validates Global Climate Change Concerns

Well, the Nobel Peace Prize committee decided that global climate change is important enough to award the Nobel to Al Gore and the UN Intergovernmental Panel on Climate Change. Some are already protesting that concerns over rapid changes in the environment have nothing to do with peace, but it’s pretty hard to promote peace when people start warring over rapidly-dwindling resources as drought, flooding, and loss of habitat threaten their very existence.

Of course, there are many people still in denial that their lifestyle can and does impact the earth – we’re actually all in this together. There are also many political and commercial interests who fear that recognition of this problem worldwide will impact their private deals before they mine out the money, and like the tobacco companies of an earlier generation feel compelled to promote and package rhetorical nonsense to muddy the waters. There is no absolution in denial, but there is vindication in an international award.

Silicon Valley, the heart of technological innovation and a lot of “green” investment, has embraced the concept of global climate change and there is a great deal of investment in this area. This is a complex problem demanding real long-term commitment and funding, and since it took us a while to get to this point, it won’t turn around overnight. But we’re well-educated, innovative, and opportunistic, and there’s a lot of gold in new clean technologies, so expect the unexpected! Until we get there, I hope you enjoy this short video “tone poem” entitled Global Warming – A Threat to our Life. It reminds us there is still hope for our world. I think the Nobel committee would agree.

Guilty Pleasures and Guilty Publishers

OK, I admit it. The New York Times has gotten rid of their notorious “Times Select” racket, and I’ve been busily catching up on all the columns that didn’t make the grade (the moderator likes politics) on Behind the Times. And so I’ve been glancing through Dick Cavett’s blog, and found his difficulties at getting his best selling book shipped to eager bookstores very interesting. Apparently, he had to resort to threats of canceling the book tour that was generating tons of sales for the publisher unless they shipped books to Chicago!

The comments were also very interesting. Many authors wrote in with stories of how impossible it was to get the publisher to ship any books to any bookstores, but they lacked the star-power of a Cavett to get the ball rolling. Several cited disasters with liberal arts incompetents masquerading as businessmen and women mishandling their projects and yes, I’ve experienced this myself, particularly the idiot from Wiley who couldn’t keep straight the project, the book, the times scheduled to discuss matters, and the communications. While I could cope with basic incompetence (I work in Silicon Valley, after all), I had to threaten legal action when she decided unilaterally wreck the project when it was essentially completed by contacting one of my business associates (who ran a lovely datacenter and was going to buy lots and lots of books) that she didn’t want to do the project and he shouldn’t deal with me. She then went on to sign a nobody to try and rip off the same manuscript (I hadn’t given her the good stuff yet, so there wasn’t enough to rip-off, because I had been clued in by my agent to be careful after my prior editor was off’d), and it went on to be a complete failure. Suffice to say she didn’t last long, but I never did business with that publisher again.

But the primary reasons for this lack of execution are economic and global in nature. Yes, execution is CEO-speak for doing, or not doing, the job, and it’s the executives that are ultimately responsible. Cavett found it almost impossible to get his publishing execs on the ball for executing on his agreement, even though executives are supposed to be the ones who make sure things go — that was my job in the last four companies I co-founded. In fact, I remember when execution was always on the top-three lists for CEOs, but last time I saw John Doerr he apparently didn’t think it was that important anymore — hmm, do you start to see a pattern? Sometimes when people hear words like global, they feel they don’t have to do anything because the problem is too large. This may explain the complete disinterest Cavett experienced — they just don’t feel they have to deal with any problem because it’s too big.

So I guess we have to reduce the problem down to a level where they have to take responsibility. So I’ll take a shot at it (anyone is free to comment on a better approach). The reason publishers blow it has much to do with how they have adapted, or not adapted, to Internet publicity and distribution. Book cycles are much shorter than 20 years ago, and demands for books are likely to be stochastic (a foreign word to most liberal arts publishers, but very understandable to technologists). If a publishing house is still doing publishing “the old fashioned way” (e.g. sign an author, wait for a complete manuscript and then do editing, get in-house art to handle the cover, in-house marketing to do the blurbs and publicity, recon the entire work into their own proprietary system, re-edit, rewrite, and finally, after much discussion, order inventory for storage from a book binder), then they’re putting themselves at a great deal of risk because they can’t respond to fluctuating demand easily. And the author loses out because the progression from signing to book takes a great deal of time — perhaps missing a good window of opportunity to establish it before trends shifted. No wonder book publishers only want to sign “pet autobiographies” and “self-help memoirs”, and fixate on block-busters. Perhaps instead of checks, publishers should just buy everybody in the biz lottery tickets, so that maybe somebody will make it big.

Of course, there are ways to adapt to the ever-changing marketplace. One approach is to embrace the long-tail, and not run away from it, perhaps by using some of the technologies available such as “instant book publishing” and software license arrangements (see Fun Friday – College Textbook Sticker Shock). But this would demand a fundamental sea change in how publishers relate to their authors and their business — one that would require just-in-time inventory, Internet updates, Internet publicity (online video, for instance of authors chats), investment in new technologies like kiosks, and so on. Their revenues would be based on licenses to read, and not on tangible inventories, and their financials would look completely different. And that is the real bugbear in the bookselling business.

This will happen, whether publishers want to adapt or not. And the end result will be bankruptcies, mergers, failures, and ultimately a few successes. The real sufferers are the book-buying public who wants to see the long-tail of new book ideas and the authors, who just want to write and sell books to those who want to read them.

When Security Means Silence

My daughter is studying the play “Judgment at Nuremberg” by Abby Mann for English Lit, so for fun we decided to rent the wonderful 1961 movie version and watch it together as a family. The play depicts the trial of four judges who committed crimes under the guise of executing the law under Nazism, the responses of victims, and the interplay between state mandate and personal responsibility. Intercut with actual footage of Nuremberg during that time as well as actual footage of atrocities committed by the regime, and filled with wonderful actors (Spencer Tracy, Burt Lancaster, Richard Widmark, Marlene Dietrich, Maximilian Schell, Judy Garland, Montgomery Clift, Werner Klemperer, and William Shatner), the play underscores the series of step-by-step legal decisions which ultimately denied justice, steps beginning with loyalty oaths and mandates against associating with inappropriate (labeled by the government) people and leading to the subversion of the entire judicial system in the name of maintaining the fiction of law during a genocidal war. And even though each judge was deemed responsible and “guilty” by the presiding trial judges (2-1, not unanimous), the lead defense attorney indicates that within a short time all those convicted will be released – which they eventually are.

I am struck with how much the lessons in this play, learned at such great cost in WWII, are still relevant today. Bruce Schneier in his latest CryptoGram security bulletin notes that non-classified NASA researchers working at JPL are now suing NASA and CalTech over invasive background checks. According to the Associated Press account of the lawsuit filed, “the Commerce Department and NASA instituted requirements that employees and contractors permit sweeping background checks to qualify for credentials and refusal would mean the loss of their jobs. NASA calls on employees to permit investigators to delve into medical, financial and past employment records, and to question friends and acquaintances about everything from their finances to sex lives, according to the suit. The requirements apply to everyone from janitors to visiting professors.”

I know there are people who will loudly proclaim that those who refuse to sign probably have something to hide. But this isn’t a standard background check – this is a blank check for the government to look at your mammogram results, bug your neighbors, examine your tax returns, follow you on vacation, and generally treat you as a criminal when you have committed no crime and there is no threat of a crime. Would anyone really sign a form that let’s their employer talk to your ex-wife or follow you into the PTA meeting or bar after work? Would you like your doctor asked questions about what you told him in confidence? I sincerely doubt it. It would be really stupid.

One thing about the leading researchers on the Mars rovers, the Galileo probe to Jupiter and the Cassini mission to Saturn — they are not stupid. They are well-known world-class scientists being told they must sign away their Constitutional rights (the 4th and 14th Amendment) or lose their jobs. It’s scary. And it’s absolutely suicidal for America’s space program.

Finally, for those pundits who say we don’t need a space program, I suggest they look at the progress China and Russia are making. America has dominated the space exploration biz for over 40 years, and we have reaped the rewards in scientific achievement (which translates into big bucks in the commercial sector over the long run) and prestige (which means we get things our way most of the time). In fact, we’re so used to getting what we want from the world that we actually think we don’t have to work for it. To use a common phrase, there’s no such thing as a free lunch. We can’t afford to kick out our best and brightest because some government bureaucrat wants to break out of the GS-12 dead-end pay level by inventing threats. Because at the end of the day, somebody has to pay for that lunch one way or another. Let’s hope that our lead in space exploration isn’t the price.

Fun Friday – College Textbook Sticker Shock

I took my daughter Rebecca shopping for her textbooks a few weeks ago at the college bookstore. I walked out stunned with a $300 bill for a soft-cover math book (used) and a soft-cover set of chemistry books (new). And I didn’t even buy any English books yet!

So Michael Granof’s op-ed piece Course Requirement: Extortion in the NY Times hit a nerve with me, and probably every other parent writing those college checks. Granof, a professor at the University of Texas, proposes a “site licence” approach to textbooks based on the projected number of students enrolled, just as a corporation purchases software. Books would be available electronically, or could be purchased in hard-copy form for an additional fee. Instead of being in the paper-pushing business, publishers would become more like software companies focussed on managing contracts for their materials, managing revenue streams, and finding new material and providing updates and revisions. Colleges and professors would be willing to experiment more with classes and new authors, because they wouldn’t be locked-in to the used book market. Textbook authors would find more small markets for their books – it’s all electronic – and could focus on new work and timely revisions for a global economy with deterministic royalties. Libraries and bookstores could invest in “instant book publishing” machines and materials (one machine sampled built an entire book in 15 minutes) and would no longer be risking significant investments in academic inventory (both new and used). And finally, students would find their out-of-pocket expenses for books get more in line with other segments of the book industry.

Hey, as a technologist I’d rather deal with electronic forms of content than hunt for a book on Amazon. As a textbook author, I’d love to spend my time writing new works in operating systems and networking and getting it to students and professors right away rather than worry about whether my older books are being resold and resold until they’re obsolete. And as a parent, I think we’d all like colleges to be in the business of educating our kids, and not in the business of book inventory management.

Of Virtualization and IPOs

VMWare is the little company that could. When it was launched in the late 1990’s, the “smart money” wouldn’t touch it. It wasn’t just that it was open source – a big “loser” badge at that time. It wasn’t just that it was founded in part by a husband-wife team who had established business (Tandem, SGI,…) and academic credentials (UCB, Stanford, MIT,…) – an even bigger “loser” badge that still persists in some dark corners. It’s biggest damnation by old-line investment was that virtualization was a trite idea. I heard this myself frequently from the horse’s mouth, so to speak, during the time I was working with 386BSD and InterProphet, and I pitched a similar idea to Tandem’s CEO back in 1996. It was the next obvious step – at least to a technologist.

Given the tremendous success of this IPO, you might ask “How could they have missed this one?”. Technology, like fashion, goes through phases, and sometimes smart people get so hung up on fashion they miss the trend line change from computer as a calculating device to computer as an organizing device (and vice-versa). If a computer is a calculating device, you want the most cycles. If it’s an organizing device, you want to spend time adding stuff, not managing stuff. A bit processor, like blit-bit processing for graphics, the more concrete, discrete and obvious the instructions executed at the bottom level, the more goodness you get out of the machine. A symbol processor, like parsing language or voice recognition built out of abstraction, is not as deterministic by the nature of the function desired, so capacity to process symbols and the benefit it provides overrides performance.

This happened with virtualization. At that time overfunded Internet companies (remember Egghead, for example, anyone?) and their backers absolutely believed that the most important technical issue was to build a site industriously out of C++ code to maximize performance. They didn’t believe sites based on scripting languages would be powerful or scalable enough for their millions of customers. They underestimated the demand for rapid creation and deployment of new features. Now everyone uses scripting languages like Perl, Python and PHP (we use Python on all our sites for example) – it’s faster and easier. VMWare realized that people allocated servers for containers of scripted sites when performance was impacted, and it didn’t make any difference if it was virtual or real. As reducing power demands becomes a “hot” button topic, virtualization will be increasingly used in datacenter and networking applications.

Safari Goes Corporate – Jobs Announces Windows Version

Steve Jobs today announced that Safari, the annoyingly broken browser for the Mac, would soon be appearing on Windows systems as another annoyingly broken Windows application. Aside from the obvious joy at the thought that browser compatibility testers would no longer require a Mac to do their job, is there any other import to this announcement? Well, there are a few possibilities…

One possibility is this is part of the strategy of going ever closer into direct competition with Microsoft, although Safari isn’t in the same class as IE (or even Firefox). Safari was built on the KDE Project’s KHTML layout, BTW. For a number of years there was frequent sniping between the groups – the KDE volunteers felt Apple didn’t comply with the spirit of open source (they’d take their time in submitting changes, for example) while Apple complained they weren’t quick enough fixing their bugs. I always found the latter complaint hilarious because Apple was notorious for never fixing their bugs even when they could. The source trees have diverged greatly since this initial schism (schism in open source? perish the thought), and there are dreams of somehow “mending the rift” through “unity” initiatives. But this is a lot of work for a questionable gain.

Open sourcerers are good at fractionating markets, but lousy at aggregating them. It’s just too easy for someone to run off and roll his own when he gets miffed for a potential quick gain (while wacking the older group). Fractionation totes up in the big book of life as a long-term cost hit on the entire open source market segment, and is something Microsoft loves to see.

As Apple has migrated off the PowerPC, the distance between them and a Wintel platform (Mactel?) has diminished mightily. The “next step” (yes, a pun) is moving their software onto Windows to develop an audience, so the distance between Windows and Mac becomes a matter of taste. Apple knows that eventually they have to face the harsh economics of the Wintel world. They also know Microsoft has to move the Windows franchise intact to a very broad market, while they only have to appeal to a subset of that market.

Is it better to be a remora or a whale? If they can profit from the current Microsoft open-source obsession (you know, “Get Linux”), they can do very well taking bites out of Microsoft’s market, since Microsoft prefers to fixate on one enemy at a time. If Apple gets too troublesome, Microsoft can always buy it. Of course, maybe something in that Microsoft-Apple agreement signed years ago makes this a lot easier than one might think (although nothing is ever easy around Steve Jobs).

Fun Friday – Internet FSBOs, Business YouTubes

A few items on the Internet front. For years realtors have been hammering customers that selling their home with them gives the buyer a 16%+ sales advantage. This has made Internet-based FSBO sites a queasy deal for somebody’s biggest investment / nest egg. So a bet on who got the best deal from their home sales between a couple of bored economics profs at Northwestern (one used a realtor, the other did a FSBO) resulted in a detailed analysis of a successful (20% of the market) Internet FSBO site versus realtor sales in Madison. And guess what – the Internet site did just as good at the end of the transaction (considering size, locale, and so forth) as the realtor-mediated transactions. The FSBO site did take longer, but that may simply be due to the reluctance of buyer’s agents to show any FSBO houses – a problem that may disappear as buyers demand to see houses they see on the Internet. The future is starting to look more rosy for Internet-based realty businesses.

Business Week has decided to launch a “VC” video pitch competition, where desperate entrepreneurs line up to convince cynical readers their ideas, like Frosted Flakes, are “Grreat” (thank you Tony the Tiger). Those ideas that survive the slings and arrows of ridicule (likely those so stupid or so obtuse nobody can understand them) undergo a final beauty contest via a biz plan competition for the princely sum of $500,000 “from a VC firm to invest in the proposed business”.

No word as to what serious VC would put half a million on a business by public acclamation, but I’d place my money on a series of Sanjaya-inspired hair salons. Wow, think of the possibilities.

I’ve been involved in a number of biz plan competitions over the years (along with real meetings with real investors), both as a participant and a reviewer. I’ve done video pitches. I’ve developed video pitch technology for CEOs. And I’ve watched other CEOs do video pitches. And while the views were great (they were restricted to VCs invited by the CEO – business plans are actually very valuable), nobody believed Internet video would ever “catch on” enough to matter. Amazing the difference one Sequoia with one YouTube can make!

Don’t believe this? Think that everybody knew YouTube would be a success before 2006? To illustrate, I once decided to enter the Berkeley Haas business plan competition in 2004 with an interesting Internet video startup idea I had while I was working with the physics department on our alumni greeting card video project. It seemed a good idea at the time. People were watching, the system worked, and it was easy and fun. And I made sure to run the business plan by some pros in the Valley. I do my homework.

So it was a straightforward business plan to evaluate – good customers, good technology, and good numbers. A no-brainer, really. I looked forward to seeing how Haas dealt with it – remember, I’ve participated in and co-founded a number of venture-backed companies over the years, so I’m no novice. But did they evaluate the business? No! When I got back the comments, I got things like “They have some TAM numbers from an analyst. But…they really haven’t done a good job in showing the SAM” (nobody had, and nobody could). “Their exec summary is 3pp long. In general, I tell people I won’t look at anything over 2pp” (such terrible food and such small portions). And finally, “regardless of their domain experience, etc., I would never back this team. I will NEVER back a team where it appears that the founders are husband and wife or domestic partners. We did it once; it was a painful lesson”. I always wondered if this last comment was their usual fallback ploy for businesses presented by African-Americans or Jews or single women – funny how you don’t hear they won’t invest in white / Indian / Asian guys because they “did it once” and it failed. It’s hard to fight prejudice.

After the inept evaluation and overt bigotry I received at the hands of Haas biz school, I resolved only to talk to real professional VCs who could afford the time to actually read a 3pp exec summary and understand the business. In other words, don’t go this route if you really care about your business. Do the hard work of developing the relationships instead, or get someone in the biz who can.

Don’t hold your breath to see all these cool startup ideas anytime soon – Business Week is still shopping around for someone to build the site for them. Knowing mags as well as I do, it won’t be a lucrative deal for the site designer.

The Game of Life – Windfalls Matter, Education Doesn’t

Nicholas Kristof painted a portrait of China as the emerging leader of this century through their serious and aggressive education goals in an article in the NY Times a few days ago. He compares his own daughter’s “excellent schools in the New York area” to a peasant school in Guangdong Province and finds it lagging two grades behind — an appalling discrepancy. When well-traveled, well-educated affluent Americans pale in comparison educationally with China, you’d think Americans would begin to understand the “competitiveness” concerns Silicon Valley has been screaming about for years. After all, if the top classes of American society cannot compete with the children of peasants, what does that say about American competitiveness in a global economy? Yet America does nothing more than wring hands and complain while China pulls ahead. Why?

Perhaps the witty essay by Lawrence Downes (“Love and Debt”) today holds the answer. In his exploration of the newly revised “Game of Life” from Milton Bradley, he found that players who chose to forgo education and have children did much better in the game than those who deferred having children, spending time and money on education. Debt just happens, with no downside consequences — no foreclosures, no homelessness. There is no connection made between career, salary and education. In fact, to make the game more interesting those who are not educated were far more likely to win lotteries or other windfalls than those who are educated. In the world of Milton-Bradley, a doctor is more likely to end up poor than a “strawberry picker”. A degree is simply a means to more debt, and not a means to social mobility.

In the real world, we laugh at such silly notions — after all, it is a game and games aren’t real. We all know that debt is real and inescapable. Credit reports make or break obtaining mortgages and using credit. Interest rates can escalate on the basis of one late payment, causing people to spiral deeper and deeper in debt for old purchases. It isn’t debt that “happens” — it’s poverty. So why should we care? Perhaps because the games we play very much reflects our biases and wishes, sometimes to the exclusion of all else.

Salaries and job security are tied very much to education. Those who start off poor and ignorant are statistically likely to remain that way if they do not better themselves through education. In Silicon Valley, there is a tremendous demand for educated workers. Whether you believe there is an H1B visa crunch or not, it is inescapable that engineering and programming jobs are increasingly going overseas to get the job done. This is not just because of lower salary costs (the costs of administering an overseas contract when factoring in time, travel and oversight ends up more in the realm of two-to-one, not the 10-to-one HR drones like to quote), but because countries like China and India are turning out more and better engineers, scientists and programmers than America.

According to Computing Research Association’s 2005-2006 Taulbee survey of Ph.D.s in computer science and computer engineering (CS & CE), instead of increasing the number of CS and CE doctorates, they have been steadily decreasing since the dot-com boom, so that the “number of new CS majors in fall 2006 was half of what it was in fall 2000 (15,958 versus 7,798)”. China and India are simply picking up the slack. In addition, the CRA notes that “54 percent of CS doctorate recipients in 2004 held visas”, up 8 percent in two years. As Americans shun these majors, more and more foreign students are taking their places in American universities. And those students are the ones Google and Microsoft and the next big startup will hire.

Very few people who hang around the house watching TV and having kids ever win a lottery. Those divorced from society are much more likely to end up in prison or hospitals. People who are impoverished through lack of education, access or debt aren’t likely to get that magical windfall — that get out of debt free card that Milton-Bradley promises them. In fact, according to mathweb’s lottery calculator, if I had to pick six correct numbers in any order from 1-49, the odds of my winning are 1 in 13,983,816! But this doesn’t even scratch the surface — restrictions on ordering and numbers reduce the odds significantly. According to PBS Frontline, the odds of winning the California Super Lotto Jackpot are 1 in 18 million! Despite the enormous reality distortion field that surrounds the occasional “lucky” lottery winner (Steve Jobs RDF is nothing compared to this), the truth is it isn’t going to happen to most everybody — just a few folks. Is that a good basis for financial security? According to a 2006 survey from the Financial Planning Association and the Consumer Federation of America, “one-fifth of Americans (21 percent) [and] 38 percent of those with incomes below $25,000” believe that winning the lottery is the means to personal wealth and debt mitigation. And it should be noted that 30 percent of those with no high school degree believe in a lottery saving them, versus only 8 percent of those with a college degree.

While people who have a college education often have more relationships, opportunities and financial leverage, those who have not built this economic network rely on fantasies of wealth. Milton-Bradley built this fantasy into their world, with a twist — the lower the status and profession chosen, the more likely the player to get windfalls. The higher the status and profession chosen, the more likely the player would accumulate straight debt with no windfall potential. The message to children who play this game is pretty clear — don’t bother to go to school, stay home and have babies, play the lottery and everything will be fine. Hmm, I don’t know about you, but that’s not the way every millionaire and billionaire (yes I know a few well) in Silicon Valley got their wealth…

To be successful, a game must hold the promise of a world that we wish were real. Games reflect our values and aspirations. If Americans didn’t believe more in lotteries instead of education, why would they push games like this on their children?

Bill Gates has recently joined with Eli Broad to spend $60 million to push education to the political forefront as a nonpartisan “single-issue initiative”. According to Bill Gates, “The lack of political and public will is a significant barrier to making dramatic improvements in school and student performance”. Mr. Broad adds that “We’re trying to create a Sputnik moment, to get people to see that our very economic future is at stake.” So far, even with all their money spent on advertising, they are having little effect on the political campaign. Not surprising, really, when three of the major Republican presidential wanna-bes don’t believe in evolution (so much for healthcare and biotech investments) and Democrats spend their wad on other matters like Iraq.

This disdain for education as the key to success is why America will lose and why China will win. But Milton-Bradley will probably sell a lot of games. And isn’t that what America is all about?

Anne Wojcicki, Google and the Changing Face of Silicon Valley – A Watershed Moment

Silicon Valley has been considered a hallmark of the American Horatio Alger legend – come with an idea, build it, and become rich and famous. And it is true that many men have arrived here with little more than a degree and an idea and built a fortune. But the dirty little secret in Silicon Valley has been that those who didn’t fit the “look and feel” of investors were far less likely to get a meeting, much less a deal. African-American men in particular have long complained about the parochial nature of hiring in the “Valley of Heart’s Delight”, and the lack of women in major Silicon Valley roles, both in industry and investment, has been a subject of much study.

The claim as to why women and certain minorities were underrepresented usually hinged on the lack of a technical degree and line management experience, but as I discussed in an article on Anita Borg’s influence on women in technology in the San Francisco Chronicle a few years ago, it isn’t that simple. During the 1980’s there was a great influx of women into computer science in the top schools, with the expectation that they would take part in the booming entrepreneurial experience of that time. But most women found they were immediately channeled into field sales or marketing jobs instead of engineering jobs. The few women who were placed in engineering generally found themselves in lower-paying quality assurance positions working with men who often had no comparable degree or training. These jobs were also not considered manager tracked positions. By the time I wrote my article, I noticed there were very few women who had lasted through this gauntlet through real line management to executive level. If you make it into a top university, endure the competition, and study and receive a degree in a universally-accepted “tough” major, you would expect to be considered for positions that your credentials merit. And if you aren’t, would you feel you got a good return on your investment? I doubt it.

This is why the latest gossip about Anne Wojcicki’s new startup is so interesting. Anne, if you’ve been living on newly demoted subplanet Pluto recently, is the wife of Google’s Sergey Brin. Her sister Susan (Harvard, UCSC, UCLA) is a VP at Google, and her family is plugged into the Stanford scene – dad is the Stanford physics department’s current chairman (he’s involved with MINOS, and for those who are interested the colloquium next week is on neutrino oscillation results from MiniBooNE). Mom teaches at Palo Alto High School (no, I didn’t take journalism at Paly my junior year – I took German, but I did get a 5 on the English AP the following year). Anne herself went to Yale and majored in biology and met her future husband when Google rented their garage – there’s that Stanford connection again. The only thing missing here is the Stanford sports alumni networking dinner (my dad is a Stanford baseball alum, so we all went to the Fall football kickoff BBQ. And yes, I’m a Cal alum. Go Bears!).

So what’s the big deal? Apparently Anne has launched a startup on genetic search, and Google has made a substantial investment. This has caused loud harrumphs among the old guard, because she’s his wife and that’s so unfair!

Funny thing, I never hear these whines when it works in a person’s favor, like one guy I know who’s only claim to fame for a plum VC job was he was a drinking buddy in college of the firm’s founder, or the architect who brought his brother-in-law into the firm and got him hired because he knew what the firm wanted (inside information), or the investor who launched his son’s company. I hear these stories all of the time ! I’ve also hired many engineers on the basis of personal recommendation myself (yes, they were qualified – we had to build something). There’s nothing better than having someone vouch for you and put their reputation on the line to get the job done. The truth is, personal recommendations go a lot further than cold calls, and the odd luck of getting a room assignment with a future IVB or CEO means a lot of lesser lights going along for the ride. And this is one reason why it’s harder for men who are qualified but didn’t go to the top schools, and African-American men in particular, to get that inside edge.

But when it comes to women, it’s doubly hard. You see, women don’t usually get room assignments with future CEOs in college (and if they did, they’d probably get called lots of nasty names that equate their placement with promiscuity and prostitution). Smart women know that a drinking buddy relationship with a man isn’t necessarily a good or safe one (witness the recent De Anza gang rape case). And women who marry into a business, no matter their qualifications, still face ridicule and envy precisely because of the sexual access (remember the “pillow-talk” buzz about Bill and Hillary or FDR and Eleanor? Why couldn’t they be more like Ike and Mamie for goodness sakes, pundits would moan).

I view this investment as a watershed moment for Silicon Valley. Not because this is specifically a perfect investment – all investment is risk, and personally I’m not too enamored of knowing too much about who is genetically related to me. But if “Anne” had been “Albert” there would have been no breathy press reports in the major papers and hand-wringing over this investment. And Google is openly sticking to their investment and making no apologies about it or the woman who has received the investment. Yes, she has access, just like many others. And yes, she’s married and their relationship is disclosed.

I remember when Melinda French got involved with Bill Gates, there was much ado on the back channel about her influence on him. I remember a trade show back in 1995 (we were doing a talk for Dr. Dobbs Journal on 386BSD and Jolix at the time) watching a coffee-swilling dinosaur at a Microsoft display and having a couple of very puzzled Compaq engineers who knew me tentatively ask if I thought this was a great idea or a bad one – after all, it was Microsoft. I believe they decided I was a technologist and a woman so maybe I could figure this out (and no, I was just as puzzled as they were). Well, this strange apparition who’s claim to fame is that he may have been the inspiration for Scott Adam’s “Bob the Dinosaur” in Dilbert was also reputed to be a Melinda French special (actually, it came from her group at MSC that also did other products like Encarta, but she was the manager). It was a failure, of course, and it came out right after her marriage (she had worked at MSC for 7 years prior), so of course she became the target of a lot of disproportionate derision and envy. Yes, I’m sure she’s very happy to be Mrs. William Gates, but I’m also sure she’s probably still annoyed by the fact she was tarred for a group’s marketing failure with substantial buy-in when MSC has them all the time – big and small – and execs often get promoted even if they fail because they are supposed to execute initiatives and not just sit on their hands and hide in their offices. After all, risk means failure most of the time, doesn’t it? And Silicon Valley is all about doing startups and gaining experience until you succeed, right? Unless you’re a woman.

So, speaking as a woman in technology and a Cal Berkeley physics alumna and a woman who is very happily married to a well-known Silicon Valley entrepreneur, I’m pleased to see Anne get funded and I’m pleased Google (along with others) funded her. Because it is no fun getting a business plan refused purely because you’re married to someone who’s invested in you and not on the basis of the business or customers or your track record or line management background or degree or all those things they tell you in biz school are important. Believe me, I know how it feels. And you know what it feels like? It feels unfair.