The topic today is founder control -compel vs convince. After a series A round can the founders retain control of the board?

I feel like we’re at a tipping point here. A lot of VCs still act as if founders retaining board control after a series A is unheard-of. A lot of them try to make you feel bad if you even ask—as if you’re a noob or a control freak for wanting such a thing. But the founders I heard from aren’t noobs or control freaks. Or if they are, they are, like Mark Zuckerberg, the kind of noobs and control freaks VCs should be trying to fund more of.

And BTW, since I’ve been reading and working more than posting let me wish all of you who I did not get to see / talk to in the past few months a happy and merry holiday!

Perhaps a narrow definition of private property got us here, whether it’s carbon credits, water or whatever, we could probably stand some examination of property and responsibility. It’s actually a very interesting problem this business of problem solving.

Climbing the wrong hill is something not easy to observe. If you travel in problem solving circles you can easily visualise the nature of the problem, the problem of solving the problem that is.

It’s easier to solve a problem if know where you are. For example imaging being on a journey, you are in a dense fog climbing a hill hoping to pass over a mountain range. But what if you knew there’s a higher hill that has an easier path across the range nearby, of what if the other hill has the path and yours doesn’t. Obviously you would back down and change hills in the latter case. But you are in a dense fog, remember? Mr. fog is making a hard time for you. And if you’ve got the crowd following you their all-knowing leader or you’re being swept up the wrong hill with the crowd what’s going to happen?

A big thanks and congrats to Lin Ostrom.

Am scribbling a few thoughts publicly here since I’m here already answering the what’s going on question for friends, I’d like to apologise in advance for simply presenting a list, below, of where I think businesses should be focusing to keep their momentum in an economic slow down. A list the most efficient method I can think of since I’m writing for a few select readers and not typically the general public (who I’m certain don’t read my blog anyway as I’m not one of those Internets celebs with yards of followers, most of my ideas are old and simple common sense.

So here goes, get ready for a list :)

1) Transparency and trust count more than ever. I’ve always tried to help along the folks I work with in negotiations understand we have to be transparent and show our intentions, if we don’t do so it’s hard for counterparties to understand where we’re coming from. I run into resistance some times from old world thinkers who have so ingrained in their DNA the need to hide pricing and profits they are  lost in this world where we work hand in hand with counterparties to form relationships and agreements. If you think your obfuscation gene is dominant then get some professional help, the world today can smell you coming a mile away, your days are numbered.  

2) Divas and skanks are in trouble. The fastest way to turn off a counterparty or have one self-eject is to disrespect that person’s time or to be whoring around looking for a better deal whilst finalising the final strokes of a contract you have already agreed in principal. Just don’t do it. If you feel the need to self optimise to this extent, whatever the personal psychological need or reason, just don’t go it. repeat, don’t do it. 

3) Handshakes, promises and contracts had better be sincere. This in not your mother’s snowmobile. Folks across the negotiating table from you are looking for respect, everything being done in good faith -if you remember that term, don’t think that you can squeeze more through a back trade and weasel when you’ve promised (verbal or written contract) to deliver something. Word spreads quicker than the legs of a reality show contestant. Your reputation is all you have these days and in fact it’s all you ever had though during the last bubble you may not have needed to think about that as much as you do today. I have a lot more to say on this subject, if you’re looking to develop a piece of business in an industry I’m involved in where you think we have a match re transparency and integrity and it could be used to do a roll up or other such deal I be interested in hearing from you.

There you have it, three simple themes I find can help keep things moving forward in most situations. My track record is pretty good in not getting people into bad deals, I have had to opt out of a few relationships to avoid making bad situations for counterparties and folks I’ve introduced. And agreements I’ve guided where transparency and respect is understood by the parties are the ones I expect to be the most trouble free.

One of the things I’ve tried to do from the the beginning of my professional career is to manage the progress of deals such that all parties get a fair shake. I’m sure some hard-core negotiators would call it foolish however I have no reservations placing fairness above pushing a party into a close before they are ready to commit or into a deal where I myself wouldn’t tread. Above all relationships are more important than any one deal, when you think a relationship may be endangered by a hasty contract simply warn the party across the table things are moving too fast and that more time is required; when you protect the counterparty in such instances you are helping everyone except the litigators down the road who would otherwise feast. 

Seems all of this should be clear today given the shenanigans and obfuscations still haunting us from the last bubble but I think it’s all worth mentioning. So get back out there and do some deals keeping in mind the guy on the other side of the table is having the same bad reaction to the old DNA as you, you’re really both on the same side trying to make some business that makes economic sense. My sense is if more people realised this integrity thing sooner there would have been more real growth to offset the bubble, the real challenge today is to make real growth, the types of relationships that you develop starting today will necessarily be more based on trust, don’t disadvantage yourself by grabbing a quick profit at the cost of relationship. Real growth in this economy is desperately needed, so back to work.

And BTW, speaking of good dinners and simplicity, here’s a pic of the burgers and muffins from a recent dinner, can you see why simple eats and good dinner conversation is my preference during these busy times when not on the front line…

And as usual, I’m not proofreading this post so don’t go bonkers re spelling and grammar, accept that this is just how it is on this blog. Later. R.

We found that for drinking one standard cup of coffee in the Netherlands we need about 140 litres of water, by far the largest part for growing the coffee plant. A standard cup of coffee is 125 ml, which means that we need more than 1100 drops of water for producing one drop of coffee. 

Outside The Box‘s John Mauldin just published an insightful summary called The Elusive Bottom. 

Take the time to read the entire piece, here’s his bit on the new frugality that you might find sufficiently amusing to click over and read the entire piece:

Frugality is going to set in

As far as I know, there are only two ways to eliminate debt. You either walk away from it, which people obviously are doing, which is why we got these write-downs and these foreclosures, or you pay it down. I think people with a FICO score that they are concerned about are going to pay that down. That means that the savings rate is going to be forced higher. This, again, is going to be very, very disinflationary. It means that fashions are going to change. It means frugality is going to set in. We’re going to be living in smaller houses, driving smaller cars and living more frugally. It’s not going to be the end of the world; it’s going to be a necessary process to truly embark on getting the balance sheets down to more comfortable levels so that we can actually embark on the next cycle.

In Barcelona and Madrid motor bikers get pole position at traffic intersections. The pavement is marked with a yellow grid (Barcelona) or bike icons (Madrid), bikers scoot ahead of the cars and busses for the light change.

Economic incentives work, this saves fuel and time for the more fuel-efficient minded motor bikers. If this ever were to happen in NYC I might get another bike, I bet there are others who would too.

There’s a motivational component, kids (and some adults) just don’t want to learn about this stuff. It’s easier to be ignorant, it takes less effort. Or maybe it’s not as interesting as TV. Or maybe it doesn’t feel good, or feels less good than an alternative.

Hmmm. Let’s look at it globally, why is the US savings rate so low with other nations significantly higher. What is it that makes people in the USA so unreceptive to the concept of savings, is it better appetite for financial literacy in other cultures or a different variable?

I wish I was smarter. I’m of the thinking it’s got to be rational on some level to behave in such a manner, but what makes it rational in the minds of those non-savers vs those elsewhere who are rationally savers?

There is some internal belief system that explains the behaviours but I can’t put my finger on it. If there was a decent level of financial literacy one could argue non-savers are throwing up their hands in disgust, surrendering if you will because they know entitlements and such are so underfunded they are totally screwed –maybe they feel things will be so bad with increased taxes and decreased benefits they are in such a state of depression they don’t want to save.

Or perhaps that’s it, maybe they don’t know entitlements in the USA are so underfunded that they have to be cut (no choice) and that every individual should be saving — it is financial illiteracy to blame after all.

So what can we do, how do we increase financial literacy, encourage kids to learn about money and economics? What can we do to better understand the behavioural issues?

I’d like to do something specifically in this area, if you are working on a project or have an idea for a project in this area please feel free to contact me. I have an idea or two, this is a work in progress. Let’s talk.

The next big battlefield will be in the U.S., where Congress is currently debating setting up a system for regulating greenhouse-gas emissions. Lawmakers are considering a system like the one created by the 1997 Kyoto Protocol, a global United Nations-sponsored accord that set emissions-cutting targets for the 175 nations that ratified it. Europe’s program was an early test run of the Kyoto Protocol, whose emission restrictions began hitting industry this year.  

Country by country these targets will be sorted into directives, industry will have to pay for the right to pollute. Carbon trading schemes (cap-and-trade) are in, greenhouse gasses are out.

The energy minister, Malcolm Wicks, said yesterday that Britain would be told to increase its energy from renewables by a factor of seven, meaning that up to 40 % of electricity generation in Britain should be from renewable sources by 2020. “We will meet our share of the European target, there’s no doubt about that,” he told the BBC.

These are pretty tough measures:

The commission confirmed the goal of cutting 20% from Europe’s carbon emissions by 2020 compared with 1990 levels, and generating one-fifth of the EU’s power from renewable sources by that time.

As its contribution, Britain must get 15% of its energy for heat, electricity and transport from renewables such as wind, wave, tidal, solar and biomass.

Only 2% of the UK’s energy is renewable – the lowest percentage of any major European country.

Better wind turbines, proper sustainable forestry and ag practices and more efficient PV — it’s coming.

Most of you know who Martin Varsavsky is, if not here’s a few links, he’s the guy with several several high profile projects under his belt, his present commercial venture being fon. I’d love to get into fon and a few related ideas here but that’s not what this post is about, let’s talk about democracy and learning.

First, his post is about his idea – using Skype as a learning tool. The premise is:

(a) there’s a match to be made, those who speak English and can teach it to Spanish-speaking peeps in SA, and

(b) Skype is the tool for making the connection, and

(c) Skype is the tool for teaching since it handles voice, video and text and file transfer

I agree mostly with the idea of using Skype however I wonder if there is a better way to do the matchmaking, finding the teachers for the students. I guess Skype could be an all-in-one solution, but surely there are other ways. I do think he’s spot on re Skype being the tool for the teaching though – what a great idea, eh.

Look at the really cool things he’s done with Educar. And the beautiful thing is others have cottoned on to the Educar concept, money to extend the project into Chile for example; I’d love to see more dollars supporting this and like projects.

And speaking of like projects, the Advanced Micro project, some of the bucks behind Nicolas Negroponte‘s UD$100 computer for students appears to be moving along. The divide does exist, it’s not a myth – and it’s hardware, software and connectivity. Martin is there re connectivity and bringing solutions to Argentine education, I guess I’m just super impressed with all he has done for education in developing countries, such as Argentina where he studied as a kid..

And democracy is a bit by bit process, lowering the capital requirements to have a voice, a press, is a big thing. Fon and others are on that track, it’s a long haul but these guys are on the front lines fighting for everyone’s inherent right to voice opinion.

One more thought, if you’re a videoblogger or into making video, have a look at this: documentary competition over at the Inter-American Development Bank, perhaps with your vid cam and an idea you can add some energy to an education project or help Educar if you found the above information and links interesting.

[photo is Joaquín Fargas' sculpture Corazón + Sol = VIDA ]

When I stumbled across Zecco recently it was not clear how long it would take – or if it would even take – however one thing was clear, something disruptive was now in the air. Well, there was a bit of a reaction and Bank of America lopped of commissions for a number of its customers; yep, free trades. Nice one.

Bank of America (BAC) stunned the online brokerage industry Wednesday by offering free stock trades to anyone who has $25,000 in a checking, savings or money market account at the bank. That came just days after Ontario, Calif.-based upstart Zecco.com offered free trades to anyone with a $2,500 account.

So, what happens next? You guessed it, the online brokerage stocks loose their wind, their market caps take a hit. So who had the cojones, as Madeleine Albright would say, to make the short side bet?

Online brokerages price war, this is not going to end well.

Who would have thought little Zecco would bring B of A to bend so quickly? *he flashes an evil grin, even though he did not short any of the brokerages this week*

One of the fellows behind Zecco was an early backer of Skype, Morten Lund, Zecco’s CEO is Jeroen Veth.

“The big guys need the commission to keep their marketing machine going” explains Zecco.com founder and CEO Jeroen Veth, a 37 year old entrepreneur and former Merrild Lynch Vice President. “The actual cost of a trade is around $2 but if you spend $500 or more per customer in marketing costs and run your business on old legacy systems, you need all the revenue you can get.”

Zero commission trading would certainly be disruptive. It will be interesting to see how brokerages such as ETRADE reply.

The unknown rebel lives on in our collective mind, in the collective memory assembling at Youtube there’s a clip courtesy of a bit of basic science:

From Wikipedia:

Although the initial protests were made by students and intellectuals who believed that the Deng Xiaoping reforms had not gone far enough and China needed to reform its political systems, they soon attracted the support of urban workers who believed that the reforms had gone too far. This occurred because the leaders of the protests focused on the issue of corruption, which united both groups, and because the students were able to invoke Chinese archetypes of the selfless intellectual who spoke truth to power.

Science and democracy. Mutually reinforcing. Mutually dependent. Don’t forget it. Peaceful sustainable development relies upon it. My inner rebel is telling me today we need more science, here’s to the the unknown rebel and those massacred for reminding me.

I need to run to meet someone about two minutes ago if I want to be on time and rather than penning a rushed review of Guggenheim’s film I’ll point you to Chuck Tryon’s review, which is better than I would have written anyway had I had the time. Also, the film opened in D.C. this past Friday, Desson Thomson’s WaPo review, too, is a good read.

Like many others I suggest you see the movie, critique for yourself the logic within Gore’s presentation, observe first hand and listen to the man who “used to be the next president of the United States”, as he introduces himself. Whether you exit the theatre agreeing or disagreeing with the causes of warming, I’m confident you will feel your time was well spent.

NB: I’ve seen way more Powerpoint presentations than any human should be subjected to, I can tell you Gore’s slide-show is neither dull nor badly done. Going geek here for a second, in addition to actually being programmed in Apple’s Keynote (read this link, it’s an interesting bit by Apple re making the slides for An Inconvenient Truth) and not Microsoft Powerpoint for the obvious technical reasons, the team who helped with graphics, Duarte, did an outstanding job.

The movie trailer is here.

UPDATE: David Remnick (The New Yorker) weighs in here.

Every breath you take
Every change of rate
Jobs you don’t create
While we still stagflate…
I’ll be watching you

Laugh your sides off watching on youtube, above, or download the .m4v (rightclick save) file – either way, do it now. Well done. And yes, this is the video du jour.

Geopolitical risks are simply too high, in this environment, we shouldn’t be risking an outage. An oil shock, let’s say $100 / barrel could be triggered by numerous known types of attacks.

Ethanol mixed with gasoline 85/15 (E85), the E85 is a must do, E100 vehicle popularity is attainable within a few years. Read the Woolsey-Schultz piece to learn why. Biodiesel, I’m not so sure, I’m not sure the production efficiencies are there yet, though new tech may change that. We have to figure out how to get E85 into pumps.

Go read the Woolsey-Schultz document, it’s an eye-opener if you’ve not been keeping up with the technology, and if you have been it will surely light a fire under your butt to trade in your gasoline-only auto for a Flexible Fuel Vehicle. FFVs are actually out on the road in increasing quantities, you might be surprised to learn some peeps own them and don’t even know. That’s right, biomass ethanol could power those cars and those in the pipeline, so to speak, if someone could figure out how to get more E85 to more filling stations.

Of course, there are more options beyond E85. Despite the fact here in NYC we pay I think around $0.18 / kwh the national average is about half that, off-peak charges elsewhere would be even less. Plug-in hybrids could be a solution, but probably not economic here in NYC. Seriously, electricity pricing is crazy in this town, I’m thinking of experimenting with solar panels to run some of the lighter weight equipment in my apartment. And it would be efficient for heating too as my Apple Powerbook is capable of warming my work area without any encouragement whatsoever, surely a feature The Steve spec’d in to not only ward off the chill but also discourage use of those darn inefficient fireplaces. But I digress. Seriously though, it may require a full-scale suburban roof to make the numbers work, I probably don’t have required surface area. I’ll look into it.

The scramble for open source in networking comes because two primal forces tearing the old telecom order apart. First, the Internet-based technologies are replacing the closed legacy phone systems, thus helping the convergence of computer and the phone systems. In old times, in order to build a networking box, companies would design specialized chips, and run specialized software on them to get the best performance. Now you can buy extremely powerful processors like Advanced Micro Devices’ Opteron chips for a few hundred dollars, run special networking software on them, and get similar performance. There are nearly half-a-dozen open source projects that capitalize on the cheap processing power.

Vyatta’s product is base upon XORP (extensible open router platform), the hardware is pretty generic.

Hey Om, thanks for the heads-up.

“We will invest in companies developing fundamentally new platforms for detection, prevention and treatment of global, pathogenic infectious diseases,” said Brook Byers. “More than 15 million people worldwide die each year from infectious diseases. Over one third of the world’s population lacks access to essential drugs. This new fund addresses the immediate requirement for the science, pharmaceutical, and government sectors to close significant gaps in global public health preparedness.”

Reading between the lines, are KPCB saying they’re filling a regulatory-created vacuum, and if so, my question is what’s the size of the hole. Is a $200 million pandemic plug going to satisfy or is there room for others to climb on, what does the model look like? This could be a much lower risk punt than it appears on the surface.