Trading Futures

And here's Avery's latest film, "Trading Futures" which he wrote and directed. This courtroom drama features Avery's whole family, and also debuts the talented Sunil Nagaraj. (Sunil was working at his desk last Saturday afternoon when Avery was shooting and needed another actor, so Avery roped him into it.)

Science Fair

I found this story on my laptop. My son write it in sixth grade, and since it's about computer security, I thought it qualified as blog content. (Any resemblance to real persons, living or dead, should not be too surprising.) Enjoy.

“Back so soon?” the school’s secretary asked rhetorically, “I’ll tell the principal you’re back.”

As John waited for what seemed like a long time, he scored a kind smile from Kelly Barrett, the Vice-Principal. “Hi, John,” she said as she passed by.

Finally, Principal Melon poked his head out the window and commanded in an annoyed tone, “John will you come in here?”  An annoyed John walked in the office of an annoyed Principal.

Once they were seated Mr. Melon told John, “Your teacher says you have been misbehaving again. Instead of reviewing your STAR test answers you were just sitting there reading.”

“I already checked them,” John replied.

“Well you should have checked them again. These scores - I mean the tests, are very important to our school. Now give me the book. You’ll get it back in a week,” said Mr. Melon. He then took the book from John’s outstretched hand. “Rules are there for a reason John.”

After school, John rushed over to his afterschool class in the computer lab and logged on to one of the computers and started to work on his science fair project. To prove or disprove his hypotheses, “most computers are highly vulnerable to attacks”, he tried different ways of hacking the school computers. He thought that it should be fine if he tried school computers because it was a school project. He started with a basic worm. He got onto Mr. Melon’s Computer and saw three files. After putting a little marker on the computers, he walked home.

The next Thursday did not go well.

“I’ll tell Mr. Melon you’re back.”  The school secretary went to Mr. Melon’s door and told him something. Mr. Melon seemed upset.

 “This is not all right. As a consequence for doing your homework during recess instead of at home, I want you to stay 30 minutes after school on Thursdays and clean up the eating area.”

“Is there any other day I could do this?”

“No.”

“I have a Computer Lab class then.”

“I know. That’s why I chose Thursday”

“I need that time for my Science fair project”

“Well then you’re banned from the science fair. Problem solved. And remember, rules are there for a reason.”

“One question”

“What?”

“Can I pleasehave my book back?”

“NO!”

Vice-Principal Barrett watched John leave, looking as glum as he did.

On Wednesday night John showed up at the Science Fair even though he was banned. Mr. Melon saw him right away.

“What are you doing here?”

“I’m here to prove or disprove my hypotheses.”

“Well go away and take your hypotheses with you.”

“My Hypotheses is ‘School is improving with Mr. Melon’s great principal skills’.”

“Fine, you can present.”

John got up on stage and explained, “ Hello, My hypotheses is ‘The School is improving because Mr. Melon is a great principal’. This is a common belief among the staff.” He pulled out a piece of paper and asked his Science teacher, “Ms. Billiard, have you seen this before?”

“John, what are you doing?”

“Yes,” she answered, “It was the new policy sheet. We all had to sign it”

John pulled out another sheet, “Ms. Billiard, have you seen this before?”

“Don’t listen to him”

“Yes,” she answered again, “It was the STAR Test Monitor sheet.”

John held the papers close to each other and looked at the judges.

“John, come over here!”

“While I was in Mr. Melon’s office, I saw some STAR Test Envelopes open and in the trash bin. I thought they were extras but now I realize not.”

By now Mr. Melon was almost dragging John off the stage.

“I see now that Mr. Melon has been replacing the test envelopes with new ones and using the signatures from the policy sheets on them. He must have been changing the answers to improve he school’s test scores.”

“John, this is an outrage!”

“You’re right, Mr. Melon. My science fair project failed to prove its hypothesis, since I had to throw out all the bad test data.”

The judges were shocked. Mr. Melon slumped. “John, why would you do this?”

John replied simply, “Rules are there for a reason, Mr. Melon.”

One week later, John found himself once again sent to the Principal’s office. The secretory wasn’t there so he knocked on the principal’s door and heard “Come in.”

Sitting at Mr. Melon’s old desk was the new Principal, Kelly Barrett. “Hi John. Tough day?”

“I guess so.”

“Sorry to hear it. You know I never congratulated you.”

“For what?”

“For winning the Science Fair! I think that earns you a free pass today. But try to pay more attention to your teachers, John, okay?”

“Okay.”

“And before you go, I have one question.”

“Um, okay.”

“I found this in my desk. Is it yours?”

John smiled as he reached over and retrieved his book.

“Thanks!”

Turning Lemons into Lemonade!

Eliot is reading Gary Paulsen's Hatchet, so the question arose tonight at dinner: if you were shipwrecked on a barren desert island and you could wish for three things, what would they be?

 The two boys suggested many variations on the themes of a radio and an airplane. Finally someone asked my daughter, who replied: "I would want wildlife, trees, and my family."

Ringing the Bell

Disclosure: Bessemer is the largest shareholder in LifeLock, but like our co-investors Kleiner Perkins, Goldman Sachs and Symantec, we did not choose to sell any stock in today’s offering. I serve on the company’s Board of Directors, as I have done since our Series A investment in 2006. The following is my personal opinion.

Today I stood by Todd Davis’ side as he rang the NYSE bell to begin the trading session, marking the day of LifeLock’s IPO. Although I don’t expect to be out of Lifelock stock any time soon, I already consider it one of my proudest investments. At a time when digital technologies increasingly expose our private data to theft, Lifelock provides security directly to millions of Americans, and indirectly to over a hundred million Americans through the company’s enterprise services. LifeLock is leading the way to cloud-based protective services, the inevitable future of data security.

Our Series A investment in LifeLock shows off Bessemer’s road map methodology at work. Before we ever heard of the company, we had developed an investment hypothesis around the need for services that authenticate consumer transactions, in order to stem the rapid rise of financial identity theft. We had learned a lot from watching Cyota defend online bank accounts (before we sold it to RSA), and realized that similar out-of-band authentication technology was needed more broadly. (At the time, we identified fraud alerts as the best way to authenticate transactions, but today there are more effective, comprehensive, and less intrusive ways to do it.)

So we actually met every other startup in the space – most of whom were rich in Silicon Valley credentials. But we couldn’t find the combination of technology, service and marketing that you need to sell consumers, which was discouraging.  We finally heard about a small team in Tempe working on the problem, so James Cham, Brian Neider and I flew out to Arizona to meet them.

There we met Todd and the other 9 employees. What immediately distinguished them from their competitors is that LifeLock prioritized the customer experience. They prided themselves on their young but high touch service department. They lived for customer testimonials, and displayed them proudly on the wall. This service orientation really forced the company early on to meet the challenge of simplifying the message around a complex technology product. Rather than try to solve all the technology problems up front, they outsourced as much of their infrastructure as they could to cloud providers, and then proceeded over the years to thoughtfully develop (or acquire) proprietary secret sauce, as they grew. In most successful startups, innovation plays a large role early on, while sales and marketing have to catch up; LifeLock has executed the reverse – the Company is investing more today in proprietary product development than ever before.

The team also impressed us with their transparency, and hunger for criticism. They weren’t getting calls from other VCs, and so they resolved to use our meeting to learn what they can from us about online consumer subscription models, potential partners in the security space, and general startup questions. To this day LifeLock enjoys a culture that marries ambition and humility – they are never afraid to admit their mistakes, and they do not get discouraged.

And there were times they might have been discouraged. LifeLock has disrupted an industry that had been dominated by reactive credit monitoring products from providers who actually sell customer data for a living.  These deep pocketed competitors challenged LifeLock legally, and said some nasty, untruethings about the company and founders that provoked a lot of scrutiny from regulators, investors, journalistsand partners.

Lifelock rose to the occasion, embracing every criticism as an opportunity to improve. Lifelock moved past fraud alerts (which relied on the creditor or merchant to call a consumer), developing an ecosystem of data partners who provide Lifelock with real time alerts to commercial transactions as they happen. Earlier this year, Lifelock acquired the largest of these partners, ID Analytics, which applies predictive analytics to spot fraud using 750 billion consumer identity elements collected over a decade from their enterprise clients. Lifelock now indisputably provides broad, real-time protection that no one else can provide.

At LifeLock we got the chance to work closely with the team on strategy (including some IP we contributed) and recruiting – between Bessemer’s GC Scott Ring and me, we’ve exchanged nearly 10,000 emails with the LifeLock team. Although Todd had startup experience, and sales experience at Dell, he had never run a large company. I think a lot of VCs would have just hired a “professional CEO”, but I’m now a richer man for having bet on a founder who has been absolutely relentless in his passion to stamp out identity theft. Todd overcame his own inexperience by hiring world class executives like Marvin Davis (former CMO Comcast), Chris Powers (CFO/COO Netqoute, Salary.com, Monster), Prakash Ramamurthy from Oracle, former White House lawyer Clarissa Cerda, Larry McIntosh (SVP McAfee), and most recently Hilary Schneider (EVP, Yahoo!).

It has been a unique pleasure to work with Todd. Last night I had the pleasure of meeting his parents, and I realized how informative it would be for me to meet the parents of every founder I back! It’s clear to me now that Todd’s extroverted charm, humor and humility are inevitable expressions of his genes. His mother quietly told me how the family had sacrificed to support Todd’s enrollment in Baylor’s entrepreneurial program, and his early startups, but that “Now, it was worth it!” When their son arrived to meet us, worn from seventy investor pitches around the country, proud tears graced her cheeks.

Based on our experience in LifeLock, Bessemer has been able to refine our road map in consumer security and privacy. We are now also lead investors in Reputation.com, which helps its customers take control of what the internet says about them, and BillGuard, which protects users from credit card fraudand other unwanted transactions.

I’ve been fortunate to see twenty of my startups go public, but I’d never before come to New York for the event. (Maybe it’s because most of them went public during The Bubble, when IPOs were too easy!) But somehow this one was different, and I just had to be there personally to hear this bell ring. It was a sweet sound indeed.

Lessons Learned from a TV Interview

I accepted an invitation to chat yesterday on a real time video multicast - a medium formerly known as Live Television. The program was Money Moves on Bloomberg TV, and I was invited as an expert on cyber security. I learned a few lessons about the medium.

1. I'm an Expert!

No one told me what questions I'd be asked;  I was expected to impart wisdom to millions of viewers without the benefit of forethought, since dead air is apparently a major bummer.

I was hoping to talk about Bessemer's outlook on cyber security - our interest in startups like BillGuard and Nominum that facilitate trusted online experiences so we can all shop, play, job hunt, date, work, rally, and whatever else we do on the internets. That means mitigating the cyber scourges that repel us from the web (malware, cyber attacks, identity theft, online stalking, privacy intrusions, spam...) and helping us take control of our identities, reputations and data.

But instead the hostess Deirdre Bolton asked me about her topic of the day, Palo Alto Networks. I am not an investor in Palo Alto Networks (though I wish I were). I don't work there, and I'm not a customer. But apparently I'm an expert on them.

2. There's no Delete key on TV.

I did get a chance to talk about some of my favorite companies - Skybox, Lifelock and Reputation.com. I also said some nice things about Endgame, except that I forgot to mention their name!
 

So I learned that it's really hard to think on your feet. Blogging is way easier than live interviews.

I do have to say that Deirdre is impressive. I knew you had to be way more attractive than me to be on TV, but I didn't realize that you could also be wicked smart. Before I went on the air, I watched her juggle stories and guests with aplomb. I know there's a research staff behind her feeding her background data, but she ingests all those notes in real time and formulates her own probing questions. During commercial breaks, she talked with me quite intelligently about cyber security, and when I recognized her ability to keep all these conversations going, she quipped that it's great to make a living out of what used to get her trouble in school.

3. Never sit on a swivel chair when on TV.

My 9-Year Old Entrepreneur Speaks at WWDC Meetup

"We had a fantastic Party in the App Lab this month, gathering useful insights from our future players. A special thanks to Eliot for making our session such a success!"    

- Margaret McCormack, CEO Girl Power Media

It started out as a crazy idea he had for his fourth grade Student Council speech. But then he actually made it work, and now he's on the Silicon Valley speaking circuit!

My 9-year-old son Eliot wanted a way to raise enough money for his school to buy Kindles for every classroom. So he came up with App Lab - an after-school activity where the students test out apps for local software companies. Eliot's schoolmates signed up weeks in advance hoping for a chance to test out and even influence the hottest kids' apps before they're released. Then Eliot invited Disney, Smule and others to participate, and now, after 6 App Lab sessions, Eliot has raised over two thousand dollars from his corporate guests - enough to get all the Kindles, stocked with a hundred titles.


You can read all about it in the San Jose Mercury News, which featured Eliot's picture on the front page of the LIVING section. And now Eliot has been invited to speak at tonight's WWDC Meetup in Palo Alto, an after-party celebrating kids' apps. I'm hoping he can get me in...

UPDATE: Here's the video of Eliot's talk.

Tweet If You Like A Cappella

Voices in Harmony will be singing this Saturday night June 23 at 7pm in Pleasanton!

Our Summer Harmony concert will feature new repertoire covering jazz, gospel and showtunes. We will also feature Dolce, the 2012 Sweet Adelines International Region 21 Quartet Champions, making their first public appearance in Northern California. (These young women will be competing in the international quartet competition in their very first year!)  Also appearing on the show is First Strike, a dynamic quartet of young men composed of members of VIH. Tickets are available here.

And whoever tweets a link to this blog post with hash tag #VIH to the most followers by Monday night will get two free general admission tickets. (I will direct message the winner to get you your tickets.)

My Daughter's Mothers Day Song

A true Barbershopper...
 

The Best of TED 2012

Last week I had the good fortune to attend my 6th TED Conference, which promotes Ideas Worth Sharing. The TED Conference features TED Talks (never more than 18 minutes each) and generously shares them for free on TED.com. Of course, some of the ideas are more worthwhile to share than others, so each year I've followed up here with a guide to which TED Talks are most worthwhile to watch. (I missed about 10% of last week's talks, including the awesome Kathryn Schulz, due to scheduling conflicts.)

The 2012 TED event was more subdued than in past years, with less star power in the speaker lineup and fewer blockbuster talks than in recent years, but still high powered attendees to schmooze with, like Al Gore and Cameron Diaz. The overall quality was still high, with very few stinkers, and the event was enhanced by an awesome floor to ceiling IMAX-like A-V experience, and by the tastiest TED food ever, catered by Wolfgang Puck. Here's a little remix of the week...

As in prior years, I've rated the TED Talks on a scale of one to ten red balloons, with ten being the best. I am embedding links to the talks, as they become available on TED.com. This year, instead of reporting on the talks chronologically, I present them sorted by ratings...

The 10 BALLOON Talks

Hands down, the best talk this year was from Bryan Stevenson on injustice in the US criminal legal system. For example, the number of prisoners in the last 40 years has grown from 300,000 to 2.3 million (primarily, I believe, due to non-violent drug infractions). One third of young African American men are in prison, on probation or on parole. Ours is the only country in the world that gives life sentences to 13 year olds. As for the death penalty, one out of nine defendants sentenced to death have been exonerated.  in California a billion dollars will be spent defending and executing the death penalty in the next 5 years, although a referendum is on its way to re-direct those funds to police enforcement budgets.

What made the talk great was Stevenson's ability to weave in his personal stories, recounting memories of what it was like to grow up among activists like Rosa Parks. There was so much enthusiasm for Stevenson and his cause that TED Curator Chris Andersen jumped on the occasion to solicit donations for Stevenson's private foundation. Right there many of us stood up and, in aggregate, pledged close to a million dollars!



In another 10 balloon talk, Regina Dugan, head of DARPA, surveyed what we can invent if we refuse to fear failure, and why DARPA is Disneyland for nerds. "We aim to create and prevent strategic surprise." She demonstrated amazing inventions that each followed long strings of failure. She recounted words of encouragement from her mentor at one particularly dark time in her own research: "There is only enough time to iron your cape, and back to the skies for you." She left us with these messages: You have to fly to learn to fly. And be nice to nerds.

University of Pennsylvania's Vijay Kumar demonstrated a swarm of 2 ounce autonomous aerial robots with incredible agility and stability. They autonomously fly through a hoop that itself is flying through the air, and cooperate in building structures and even playing musical instruments. It's not clear what the applications are, but Search-and-Rescue and military reconnaissance seem most obvious.




Normally I don't' rate the little 3 minute talks, the palette cleansers that punctuate the main talks. But Rhapsody founder Rob Reid gave such a compelling presentation of Copyright Math that it warrants a 10 balloon rating. I expect that in response to strong demand, TED will post it for general viewing.

9 BALLOONS

 

US Poet Laureate Billy Collins: "if at first you don't succeed, hide all evidence you ever tried." This guy is Dr Seuss for grownups.

Atul Gawande spoke on how to fix medicine. He points out that the medical industry was structured around independent practitioners, dating back to when individual doctors could learn and everything one needed to know to treat the few ailments we could cure. But in today's world, there is so much more information constantly generated on new methods and treatments, that good outcomes can come only from collaboration among teams of specialists and information technology.

One of Atul's practical insights is that we can and should apply techniques from the aviation industry to the medical industry, since the aviation industry has been so focused on customer safety around a very complex product. His most compelling prescription so far was The Surgery Checklist, which cuts down complications and deaths from surgery by 30%. Until the talk is posted, you can read more here.

Jim Henson, mid-western professor, on the Greenhouse Effect, which is accelerating - small increases in temperature lead to a chain reaction as the oceans warm and release even more CO2. The consequence in this century will be famines, droughts, tornadoes, lost shoreline and cities. Henson advocates a fee-and-dividend policy to transfer money from CO2-burning companies to citizens.

OK, I'm actually giving 9 red balloons to a dance company. John Bohannon and the Black Label Movement's performance delivers a compelling and moving message to parents that we have to speak openly with our kids about sex and drugs.

In a related talk, Sex Ed Teacher Al Vernacchio delivers a very funny talk on why sex is like pizza, and not at all like baseball.

Andrew Stanton, wrote Finding Nemo, Toy Story, John Carter, many others; told the story of how and why he tells stories. Fun, cleverly recursive (but not appropriate for kids).

8 BALLOONS

Tali Sharot We tend to be optimistic - we are all above average. This optimism is healthy and productive. High expectations drive us. Anticipation of success makes us happy. People prefer Friday to Sunday. strike a balance. stay optimistic but be aware of optimism bias - insure, protect, contingency plans.

Jon Haidt gave a provocative talk on the feeling of transcendence - what is it, how do people attain it, and is it an evolutionary adaptation or bug?

Marco Tempest, an illusionary magician, uses projection and holograph to tell the story of Nikola Tesla.

You never know which TED Talks you're going to like. I wouldn't have guessed that I'd give 8 red balloons to a graphic designer of book jackets. His content was mediocre but the delivery was fabulous.

I also wouldn't have guessed that I would give 8 balloons to Jon Ronson, a writer who tells about his encounters with a psychopath. But he's a great storyteller.

Middle school teacher Rafe Esquith shows what kids can do when you let them be creative. Drawing from his inner city school of non-English speaking students, Esquith's class performs music and Shakespeare at TED. More importantly, they regularly defy the high dropout rate in his school, earning him the president's National Medal of the Arts.

TED Talks are usually self contained, but this year juxtaposed two TED Talks to provoke the question of whether the world is getting better or worse. Paul Gilding argues convincingly that a global crisis of resource shortages is inevitable - governments will collapse. But Paul Diamandis, the optimist, expects exponentially accelerating technology to fuel an abundance of energy and education abundance.

In the back and forth that followed on stage, Chris Andersen told Diamandis, "your hope is undermining Paul's fear of crisis, so nothing will get done!"

7 BALLOONS

Donald Sadoway, MIT Professor, on building utility scale batteries to make renewable energy practical. Chose hot liquid magnesium and ammonia, because "If you want to make something dirt cheap, make it out of dirt." He and his students started LMBC to develop the tech into 2M KW/hr batteries two years from now. (Until then utilities can use Extreme Power's utility scale batteries.)

Jim Stengel: Ideals in business help business - workers bring their whole selves.

IDEO founder David Kelley promotes creative confidence. Evoking the message of Sir Ken Robinson, Kelley asks us to restore our juvenile comfort creating art. He offered up a great example of creativity in the workplace - he helped redesign an MRI machine into a pirate ship so that kids wouldn't need sedation to use it!

Columbia University physicist Brian Greene updates us on cosmology - string theory, multiverse, multi-dimension. Unoriginal but clear.

Awele Makeba delivers a stirring, inspirational talk on African American history.

Conductor Michael Tilson Thomas surveyed the history and evolution of classical music. Fun, but he's no Ben Zander.

Peace activist Leymah Gbowee talks about her work in Liberia promoting education for girls that earned her the Nobel Peace Prize.

Tight-rope walker Philippe Petit (from Man On Wire) entertains us with his story of a lifetime of antics.

6 BALLOONS

Sherry Turkle on the problem of inattentiveness and isolation from overuse of devices, such as texting during the board meeting. The Goldilox Effect is that we want people connected, but not too close. When we get to edit all our social interactions, we get to delete and retouch, controlling what we say. SO WHAT???

Turkle laments that technology immersion "compromises our capacity for self reflection" We feel that no one is listening to us. (What about all our followers and friends?) "I share therefore I am." She asserts that we should think about how we use our devices to really get us where we want to be. 

The legendary Steve Pinker and Rebecca Goldstein delivered a disappointing Socratic dialogue on the impact of Reason vs Emotion. It covered some interesting philosophies, but it was scattered, contrived and not at all Socratic.

School teacher Aaron Ready talks about ways that we can test evolutionary theory without waiting a million years.

Journalist Josh Foer told the story of how he reported on a Memory Tournament, only to enroll himself, and to win! This would have been an 8 or 9 balloon talk if it were told in 6 minutes instead of 18.

Karen Bass, earth photographer, managed to photograph the never before seen tongue action of a newly discovered bat in Ecuador.

Author Kate Messner shares part of her methodology for writing fiction - how she models new worlds for Eye of the Storm and other kids' novels.

Middle-school teacher Angie Chaloux Miller reflects on her life, and the importance of remembering our true, faulty selves, rather than idealized versions.

Susan Cain, corporate lawyer, asks schools, work, family to value INTROVERTS like Wozniak, Charles Darwin, Gandhi, Abe Lincoln and Susan Cain. And also Jesus and Moses. Huh?

 

5 BALLOONS

T. Boone Pickens: the US spends $7 trillion a year, including military costs, on OPEC oil. As a matter of national security we need to wean our country from this. Natural gas is clean, abundant, and ours. Natural gas is the bridge fuel. "I don't have to worry about a bridge to where, at my age."

Cesar Kuriyama made a film concatenating one second from every day of his life for the last year.

Sharon Beals, birds nest researcher and photographer.

Jared Ficklin performed some cool pyro tricks on stage.

Henrik Scharfe built a robot that looks exactly like him. Exactly. I would be surprised if anyone has ever before built a robot/android with such a human likeness.

4 BALLOONS

Wade Davis on conservation in British Columbia.

Liz Diller shared her design for accessorizing the Hirschhorn Museum in DC with a big bubble.

1 BALLOON

Julie Burstein talks about the source of creativity.

Tom Campbell is "a professional art historian." Somehow in 18 minutes he managed to complete a single 3 hour sentence.