Q3/14 Reading List

Gillian Flynn: Gone Girl. Unputdownable.
Stuart O’Grady: Battle Scars. Why not. 
George Hincapie: The Loyal Lieutenant. Actually pretty interesting.
Simon Sebag Montefiore: Stalin. Unbelievable. 
Graeme Simsion: The Rosie Project. Very funny.
Nicolas Roche: Inside the Peloton. Very detailed. Pretty interesting.
Daniel Hope: Familienstücke. Sehr interessant.
Daniel Hope: Toi toi toi. Total überflüssig. 
Elena Ferrante: Abbandono. Strong. 
Josef Bierbichler: Mittelreich. Lesenswert.
Tim Parks: Italian Ways. Pretty weak.
Philipp Meyer: American Rust. Very strong. 
Ned Boulting: How I Won the Yellow Jumper. Middling. 
Ned Boulting: On the Road Bike.  Much better. 
Geoff Dyer. Another Day at Sea. Pretty good. But not his best by far.
Boris Fishman: A Replacement Life. Expected more. 
David Foster Wallace: Infinite Jest. Read the first 200 pages. Surprisingly funny. Must resume some day. 
Donna Tartt: The Goldfinch. Very very good. Not long enough. 
Eleanor Catton: The Luminaries. Impressive. Maybe a bit too long. 
Bernhard Schlink. Die Frau auf der Treppe. Good but not great.
Eric Schmidt & Jonathan Rosenberg: How Google Works. Not bad at all. 
Julie Schumacher: Dear Committee Members. Cute, but a bit monotonous.  

Q2/14 Reading List

Here goes.

Teju Cole: Every Day Is for the Thief. Very impressive.
George Saunders: The Braindead Megaphone. Wow.
Kilian Jornet: Run or Die. Not what I expected.
Arnold Steinhardt: Violin Dreams. Interesting.
Richard Powers: Orfeo. Fantastic.
Michael Lewis: Flash Boys. Good stuff.
Stefan Zweig: Die Welt von Gestern. Pflichtlektüre.
Derek B. Miller: Norwegian by Night. Action hero with dementia, that’s a first.
Larry McMurtry: Lonesome Dove. Strong.
Siegfried Höllrigl: Was weiß der Reiter vom Gehen. Naja.
Max Leonard: Lanterne Rouge. Only for diehards.
Tomas Espedal: Wider die Natur. Stark.
Karl Ove Knausgaard: Leben. Wieder sehr gut.
Irmgard Braun: Nie wieder tot. Flott.

Liquidation Preferences: They do make sense

Good post by Ciaran O’Leary of Earlybird on how to manage liquidation preferences. Also worth following the links.

I remember how long it took me and my colleagues to get to grips with this issue when we did our first VC round. For the first-time entrepreneur it felt unfair and lopsided.

But then you realize that this is in fact needed to prevent lopsided outcomes of another sort: Where the founders and angels sell the company quickly after the investment and possibly for cheap and they make money and the VC investor doesn’t.

So the liquidation preference helps reset the stage and make everybody want to grow the valuation from here on forward.

Of course there are alternatives, specifically granting veto rights to the new investor on exit price etc., but those are likely going to be set at the wrong thresholds and then lead to awkward and hurried behind-the-scenes haggling in case of an impending exit. Which you don’t want.

Email Metadata Privacy – Should You Care or Not

When we first heard of Edward Snowden in June 2013, we heard of the collection of metadata at Verizon. It took us a while to figure out if that was troubling.
Now we know that it is. Who calls whom at what time and how often reveals many things that we may want to keep private. How often I call my doctor, priest, psychiatrist, or astrological hotline is my business and none of yours.

The same goes for Email where people now are asking for privacy solutions, as they have understood how personal and private this information is and that they can’t trust the promises of technology and service providers. People naturally have turned to PGP for email encryption as the widely accepted standard for protecting their private messages.

But, guess what, PGP only encrypts the body of your message. Subject line, sender, recipient, time, IP address, and a host of other technical details are transmitted in the clear.

Trouble is that they have to be in order to make their way to the intended recipient across public networks. Much like a letter that you post will have a recipient address and a return address and a post office stamp that your postman and your neighbor can inspect. So while the content of your letter will be private while sender and recipient will not be anonymous.

So the big question becomes if this is a problem or not. Three things to consider:

It’s a problem depending on what you’re afraid of. Me, I’m afraid of somebody breaking into my Gmail account and posting 10-year old messages on the web for everybody to see. Every now and then I stumble across some old message and am embarrassed by what I wrote. Nothing more, nothing less. Thankfully not in the league of Colin Powell and Corina Cretu, but still. Wouldn’t want to see the old stuff in public. And this is just embarrassment in retrospect. I don’t even know what might be embarrassing or problematic in the future. Think of being denied entry into some country where you criticized an emerging party in an email ten years ago. And now that party is in power and they have read that email. That’s the kind of stuff that worries me. Turns out that PGP encryption of my message text takes care of this very nicely. So I’ll have some of that PGP encryption and pronto.

Of course I’m interested in exposing even less for embarrassment or misuse. So an email provider that is very specific on metadata retention is certainly interesting. They really have no need to keep a complete record of who I communicated with and about what once the messages have been delivered. So transparency about data retention, ideally audited by independent and trustworthy experts, and completely open communication on attempted breakins and governmental requests for data access would absolutely win my business. Full disclosure: We’re working on that…

Since this is such a big issue we can reasonably expect for the technology industry to address the issue of encrypting metadata for email. The so-called Darkmail alliance has gotten quite a bit of press last year and may come up with an exciting technology change. We haven’t heard much from them recently so it’s a bit hard to say more. And of course it will be useful only if it turns out to be a genuine standard adopted by multiple technology and service providers.

In the meantime it’s probably best to apply the old 80/20 rule. If I can encrypt 80 percent of my email content with 20 percent of the effort then that’s good enough for me. That is why PGP wins for the foreseeable future.

Domiciling Data and Servers: Be Careful What You Wish For

A lot of talk these days about “Digital Sovereignty”. Whereby well-meaning people like to think that they can keep control of their data by ensuring that the data are kept in a certain legal or geographical area and somehow never leave.

But that is probably fundamentally flawed. Among other things one should consider:

  • Internet pipes do not stop at geographical boundaries. Stuff flows everywhere and you cannot stop it. Which is what makes the Internet so useful and so cheap. Recent discussions in Switzerland for constructing a multi-billion dollar “special” Internet for the military (and banks no less) seem highly problematic.
  • The stuff that runs the Internet probably does not come from your country. For years we have been told to avoid Chinese telecoms equipment. And now we find Cisco and others complaining that their equipment is tampered with systematically. 

For any threat I might want to avoid by domiciling data in my geography, I can imagine a straightforward attack that keeps that threat very much alive even if we close the pipes at the borders. The bribed or disgruntled data center or telco employee always has been and always will be attack vector #1. 

Much better to think about proper, meaning end-to-end, encryption applied within my personal jurisdiction. If only I have the keys then I can use public servers and services across the globe and I get all the benefits and none of the risks.

If you’re still skeptical take a look at this recent announcement about Visa and Mastercard moving their servers into Russia. Digital sovereignty indeed!


Q1 Reading List

In a nutshell: Too much James Bond thanks to the reissued box sets with all the wonderful actors reading the sometimes less than wonderful works of Ian Fleming. And a major discovery, Karl-Ove Knausgard. Who you may or may not like, no guarantees.

Ian Fleming: From Russia, with Love. Not bad. About average.
Karl Ove Knausgård: Sterben. Takes some getting into but then you can’t put it away. Really strong stuff. 
Ian Fleming: Dr. No. Pretty good. Above average.
Lili Gruber: Ereditá. Really interesting.
Blair Tindall: Mozart in the Jungle. Plenty interesting but could have been so much more. 
Ian Fleming: Goldfinger. A pleasant surprise. Way above average.
Clayton M. Christensen: How Will You Measure Your Life? Not bad not great not mandatory.
Ben Horowitz: The Hard Thing About Hard Things. Now this is spot-on. And well written. 
David Walsh: Seven Deadly Sins. This never gets boring. What drama.
Antonio Tabucchi: Die Zeit altert schnell. Eine schöne Entdeckung. Davon sollte man noch mehr lesen.
Jim Bouton: Ball Four. Of course very interesting. But soooo long.
Karl Ove Knausgård: Lieben. Addictive. It’s the reward you get for being brave enough to make it through the first volume. 
Ian Fleming: The Man with the Golden Gun. Crap. 
Julia Angwin: Dragnet Nation. Better than expected. Well worth it.
William: Shakespeare: The Winter’s Tale. Weird and flawed. Subpar.
Ian Fleming: You Only Live Twice. Slightly above average. And now enough with these books. 
Karl Ove Knausgård: Spielen. More of the same. Which is good. Keep it coming. If only the translators were a little faster.  

Netscape 20-Year Anniversary

I’m reliving the Netscape heydays by listening to Brian McCullough’s excellent podcast series at the Internet History Podcast. Highly recommended.

It’s amazing how many things Netscape pioneered at the time.

Things that are now taken for granted but back then would have been inconceivable to most people.

Among them:

  • Public beta: Delivering an unfinished product to the market early in order to: 
    • test market response
    • get feedback on your roadmap
    • get tens of thousands of volunteer testers
    • block the market for other entrants
  • Early IPO for a young company that was not making a profit. These days this is standard practice. We may be discussing the numbers in particularly extreme cases (the upcoming Box IPO comes to mind) but back then IPOs required multi-year histories of growth and profit.
  • Blended free/paid business model. Offering the beta for free and asking people to pay for the finished product (but not turning it off if they don’t) was also a first.
  • Bypassing the corporate buying center. By offering the software as a self-service download corporations found hundreds and thousands of copies of Netscape Navigator running on their machines. So they paid for it.
  • Viral marketing. Remember the “Netscape Now!” button? (http://archive.is/Zp5py)

Q4 Reading List

Not the greatest throughput. Too much NFL I’m afraid. The Gamepass app is just too good…

Thomas Pynchon: Bleeding Edge. Very clever.  

WIlliam Boyd: Solo. James Bond shares his cooking recipes. 
Michael Wex: Born to Kvetch. Really interesting.
Dave Eggers: The Circle. Maybe not his best work in purely literary terms but a fun read and an incredibly perceptive description of the Kool-Aid many of us are drinking every day. Must-read.
Don de Lillo: Cosmopolis. Didn’t expect to like it but I did. A lot.
Joau Ubaldo Ribeiro: Sargento Getulio. Rough stuff. Read at your own risk.
Harry Potter and the Chamber of Secrets. What can I say. A good read.
Jonathan Franzen: The Kraus Project. Kind of all over the place but in a good way. All sorts of good stuff in there. And Kehlmann in Hochform.
Harry Potter and the Chamber of Secrets. More of the same. Which is good.
James Salter: All That Is. So much fun, wonderfully old school. They don’t make ‘em like that anymore.
Daniel Kehlmann: F. Kehlmann in Hochform. 
Robert Evans: The Kid Stays in the Picture. Pretty interesting. Lots of stuff I didn’t know. Assuming that it’s true of course. 
Ian Fleming: Live and Let Die. A pleasant surprise. These books aren’t half as bad as I had expected them to be.
Nicholson Baker: The Anthologist.  Impressive. 
Ian Fleming: Moonraker. What a very pleasant surprise. The bridge scene alone is worth the price of admission.
Chris Hadfield: An Astronaut’s Guide to Life on Earth. Important life lessons. Highly recommended. 

Ten Commandments: Thou Shalt Respect Thine Biorhythm

I believe that high-growth companies have a natural biorhythm.

Initial phases of dithering, followed by establishing product/market fit, followed (ideally) by rapid expansion, arriving at some kind of relevant role in the market, however large or small that market may be.

Then followed by an exit or, if you should be so lucky, essentially a restart where the company builds a bigger portfolio for the market or crosses into new markets. All that in a finite amount of time. 

Most people and organisations cannot really sustain the level of intensity and attention that is required for this journey for more than 6-7 years. There are exceptions, of course, but less that you think.

Founders, managers, investors would be well advised to remain aware of where they are in the lifecycle in order to gauge accurately how much life energy remains in the corporate batteries.

Ten Commandments: Thou Shalt Honor Thine Founder

The founding team are very likely the people who defined not only the product and the strategy but they typically also helped shape the company culture. We assume for the sake of the argument that you have one. 

As the organisation grows founders may or may not retain important positions in the org chart. But they still embody the organisation’s collective muscle memory when it comes to defining why we did what we did to get where we are.

So make sure that new arrivals treat them with respect. They got on board when nobody else would and the new arrivals are standing on their shoulders.