This week will mark the 10th anniversary of the release of NCSA’s Mosaic browser application. The NCSA at UIUC is marking the occasion with a symposium to be webcast live on April 29th. Where were you when you first saw Mosaic and what did you think of it? I was doing my Ph.D. in London, Ontario, and it was an IT guy who showed me Mosaic shortly after it was released. Showing what a fine, forward-looking fellow I am, I thought it was okay, but not nearly as useful as gopher.
Blissfully optimistic article (paid subscription required) in the current Chronicle of Higher Education (a trade mag for the academic set) about attempts to redesign MBA programs for increased “flexibility and relevancy”. There is, of course, no denying the remarkable ride that MBA programs have had over the last few years, as the following graph shows:
As I argued in a letter to the editor, however, nothing will change at business schools until the faculty changes: business is the only professional school where not only does research lag practise, but elsewhere-unemployable faculty are actually threatened by practise, unlike their counterparts in engineering, medicine, and law. Re-arranging courses and programs is a futile, cosmetic exercise until business schools realize they rot from within.
Here is a quote saying same attached to the article. It’s from a current Sloan MIT MBA attendee, and it matches up nicely with my own experience with many former business school colleagues:
Sloan professors keep pretending that they do useful work while all the student know the truth. During any lecture, at least one-third of the students have their laptops open to check e-mail, net-surf, and to pass around sarcastic remarks and jokes about the class and the professor. Other students are just too polite to open their laptops. More experienced professor know to occasionally crack a joke or two to keep students awake and entertained, and the charade goes on. The younger professors clearly are very insecure about themselves, and it shows especially when it is obvious they know much less than their more knowledgeable students who held respectable jobs with real responsibilities, jobs that the professors could never get when they were graduating from college. Rejected by the worl and hiding in the academic cocoon their entire lives, many professors have the maturity level of 16 years olds and are sophomoric in thinking and behavior. The biggest challenge of being a Sloan student is babysitting these juvenile social misfits without breaking out in open laughter.
I’ve been thinking a fair amount lately about venture capital syndication. For those not in the know, that is the method by which venture capitalists “share the wealth” by letting other venture capitalists in on deals. For example, I might be investing $10mm in Whangdoodle, Inc., and I might ask three other VCs to join in, each investing $5mm.
Why do VCs do it? It is a lightly researched topic, and so far research has only touched on a subset of the following possible reasons:
- Because they need the extra money. This presumes that funds are small, and that is not generally the case.
- Because they see it as value-added. This is sometimes the case, although few VCs will concede that they’re not able to do it all.
- Because diversification is a species of active risk reduction. This is certainly a compelling answer, and one that is probably the closest non-cynical explanation for syndication.
- Because it is a bad transaction. In other words, this thing stands a serious chance of failing, so I want other people ready to pitch in. While this may sometimes be the case, if it were generally true any reasonably intelligent VC would self-select out of syndicates.
- Because it is a great transaction. In other words, VCs want to share the wealth to make sure that they have co-investors on future deals. While this is possible, it is highly unlikely given how self-interested most VCs are.
I’ll plump for 3) as the best answer, but syndication is a bit of a puzzle, perhaps explaining why it goes in and out of fashion so regularly. I actually have another explanation altogether in mind, and rather than disclosing it and tipping my hat to some of my own research, I’ll just say that it turns things around entirely.
Darn. Eugene Fama and Ken French won the Nobel Prize in Economics earlier this week, only to have it taken away today. Why the change of heart? Because the grantor was CBS Marketwatch in an incorrect column. The Swedish Academy of Sciences frowns on such things.
In the dictionary of how to praise with faint damns, this from Jay Ritter (University of South Florida) about uber-banker Frank Quattrone: “[He] doesn’t have the name recognition of a Michael Milken, but he certainly seems to be the guy who pushed the envelope in losing the ethical standards in the late 1990s when it came to IPOs.” It does give Frank something to which to aspire.
Let’s go to the tape on this “high-quality guy” (as Dick Kramlich of NEA weirdly called him):
- Quattrone’s CSFB went from being (nearly) last to first in two years in the IPO derbies
- CSFB’s tech IPOs are down 33.2% from their offering prices — below the 29.1% loss for the average tech IPO
- The prior figure is undoubtedly skewed by CSFB’s handling of Corvis, off a smashing 98% since going public in 2000
My favorite Quattrone anecote? CSFB initiated coverage of the company on Aug. 22, 2000, with its strongest buy rating at $90.81. Over the next twelve months year CSFB reiterated its strongest buy rating nine times, all the way down to $6.40. It then shut up entirely, not even downgrading the stock until it was bouncing along the bottom at $2.23 a share.
Some are suggesting that Quattrone’s position as IPO king and research poo-bah may may have tainted research analysts. “I’m shocked, shocked ….”
”It might be harder to say ‘no’ to Quattrone,” he says.
I love this these press-release tiffs between hedge fund managers and management. This time around we have a New York hedge fund calling management at Potlatch “smug”, “bewildering”, “insouciant”, and “unrepentant” — and that’s just the opening salvo.
Fascinating how some companies have managed to bootstrap their way along, despite the hew and cry about there being no risk capital. The folks at ACL particularly intrigue me, given how they have grown a sizable business with no external capital. Kudos.
The following bit of nuttiness is from Microsoft’s Q2 ’03 earnings call. Analyst Mark Meeker sets some sort of record:
Thanks a lot. John, this is kind of a multipart question, but there’s been a fair amount of discussion about this ’04 in the call. Can you isolate the biggest variable revenue for fiscal ’04 due to the economy, the PC growth and how the other revenue falls off and how that plays out? The unearned revenue has a fair amount of predictability, at least we know what it was in ’03; the economy is what it is. Can you spend a little bit of time talking about PC unit growth? We’ve watched the PC industry for the last 20 years, you know there’s a certain inflexion point that occurs when the new operating system comes out, as you are right now with Windows XP. You know, what the average lifecycle is for PCs, and Bill addressed CES last week, called this a new decade, the digital decade. You’re looking at installed bases with digital cameras combined with the age of PCs in the corporate marketplace, almost in my opinion, the worst — the upgrade cycle hasn’t occurred, which typically would have occurred by now, in large part because of the economy. One could almost argue the worse the PC upgrade cycle is, the better the opportunity there is for an upgrade cycle to happen, sometime in fiscal ’04. But your thoughts on looking out 12 to 18 months for the potential to get either a PC upgrade cycle, or more of a PC operating system upgrade cycle, and how that may play out for fiscal ’04 is part of the question. And the other part, the revenue growth rate that we have, that are out for fiscal ’04, seems to be in line with the thinking. So far. Any thoughts on that as a benchmark out there, and whether operating expense growth will grow at a rate higher or lower? Thanks a lot.