Most Brazen Act of 2008 Award

It has to go to Illinois Governor Rob Blagojevich who was arrested today on corruption allegations.  Not only did he try to have the Chicago Tribune Editorial Board fired for disagreeing with his policies, but he also tried to SELL A US SENATE SEAT.

Impressive, Mr. Blagojevich.   Didn’t you learn anything from Nixon?  Clearly not, since you were not worried about phone taps or recordings.  Among my favorite quotes:
  • The Senate seat “is a fucking valuable thing, you just don’t give it away for nothing.”
  • Unless “I get something real good,” he would appoint himself to the seat.
  • “I’m going to keep this Senate option for me a real possibility, you know, and therefore I can drive a hard bargain. You hear what I’m saying. And if I don’t get what I want and I’m not satisfied with it, then I’ll just take the Senate seat myself.”

Financial Crisis Explained

This article by Michael Lewis explains the roots of the financial crisis in great detail, but is understandable enough that people without finance backgrounds can understand it.

My favorite excerpt:

“I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.”

Are Big Ideas Really Rare?

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I just finished reading a May 12th article from the New Yorker by Malcolm Gladwell called In the Air: Who Says Big Ideas are Rare?

Gladwell profiled a couple of guys who started a company called Intellectual Ventures, a company devoted to the “belief that combining capitalism and invention will benefit the world with more and better innovations as well as create financial rewards for investors.”
They basically get the smartest people they know, send them reading materials a few weeks prior and just get them all in a room to talk about a topic.  When they first started these brainstorm sessions, they thought that they might get 6-8 good ideas per event.  They found that they were getting hundreds.
Since 2000, IV has developed 3,000+ ideas that they feel have the ability to change the world.  They found that they could create “geniuses” by bring all of the parts of a genius together in a room and that big ideas were really a dime a dozen.
Gladwell argues that their works also helps prove multiples:
“This phenomenon of simultaneous discovery—what science historians call “multiples”—turns out to be extremely common. One of the first comprehensive lists of multiples was put together by William Ogburn and Dorothy Thomas, in 1922, and they found a hundred and forty-eight major scientific discoveries that fit the multiple pattern. Newton and Leibniz both discovered calculus. Charles Darwin and Alfred Russel Wallace both discovered evolution. Three mathematicians “invented” decimal fractions. 
Oxygen was discovered by Joseph Priestley, in Wiltshire, in 1774, and by Carl Wilhelm Scheele, in Uppsala, a year earlier. Color photography was invented at the same time by Charles Cros and by Louis Ducos du Hauron, in France. Logarithms were invented by John Napier and Henry Briggs in Britain, and by Joost Bürgi in Switzerland.

“There were four independent discoveries of sunspots, all in 1611; namely, by Galileo in Italy, Scheiner in Germany, Fabricius in Holland and Harriott in England.”

If Gladwell is correct, and I think he is, it has big implications on how startups and even large companies should do business.  The previous method of bring ideas to market was someone thinking of an idea, pursuing it, then possibly getting it funded by a VC.
Should VCs or others simply fund smart people to come up with ideas instead of waiting to see if they pan out at all?  This would give VCs better valuations as they are able to get in on the ground floor, before more value is created.
What also interested me is that a fellow UW entrepreneur has used this approach to help large companies solve problems.  Anand Chhatpar, a UW alum, founded a company called Brainreactions.  Its purpose was to bring smart college students together to create “fresh, actionable, innovative ideas” for companies who needed solutions to problems.
I was one of the initial brainstormers at Wisconsin back in 2006 and had a great time at the two sessions I attended.  They would get 4-6 smart college kids together in a room and present them with a problem.  The brainstormers would then try to come up with any solution to the problem that they could think of.  Much like IV in Gladwell’s article, these sessions were wide ranging, as we touched on just about any subject we could think of.  The amount of ideas we generated in a two hour period was astounding.
Brainreactions has been pretty successful so far at generating some great ideas for companies.  It will be interesting to see if this method of idea generation catches on beyond IV and Brainreactions.
I, for one, am hoping it does.

Entrepreneur Deli


A few weeks ago, Corey, one of my two partners from ExchangeHut, and I were asked to talk about our experiences with ExchangeHut for the Entrepreneurship Deli, an event put on by Wiscontrepreneur and the Office of Corporate Relations at UW. It was a “speed dating” format where young entrepreneurs from companies like Flying Cart, Powered Green, Sconnie and Brazen Careerist talked to people from the community about our experiences starting and running companies.

We were tasked with talking about boostrapping and the lessons we learned as college entrepreneurs. I created this list from our list of hundreds of lessons we learned during our three years of running ExchangeHut.

Here’s my list:

1. Don’t be afraid of the competition

2. Research, research, research

3. Don’t overestimate sales, market penetration or adoption rates: take your projections and cut them in half. Then cut them in half again.

4. Stay Focused: do one thing extremely well, rather than many things poorly

5. Legal work is essential: an hour of advice now will be worth weeks of hassles later

6. Know who you are dealing with: do your due diligence on all aspects of your business

7. Don’t do business with unethical companies or people: a quick buck now will bite you much harder later

8. Make a plan, then execute it

9. Mixing business with friendship seems great, but doesn’t always work

10. Give credit to employees when the going is good, take the blame when its not