A true Barbershopper...
Monday, 14 May 2012
Wednesday, 7 March 2012
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
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
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.
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
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.
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.
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
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.
Thursday, 9 February 2012
The Awesomest Valentines Day Gift
It's just a few days away! Check out this idea for your sweetheart, from Voices in Harmony...
Order your Singing Valentine here. When asked where you heard about it, say "from David's blog" and I'll try to deliver yours personally.
Order your Singing Valentine here. When asked where you heard about it, say "from David's blog" and I'll try to deliver yours personally.
Wednesday, 9 November 2011
Ken Robinson on Passion and Creativity
Tonight Sir Ken Robinson addressed a crowd of over 1,000 parents that spilled out into the parking lots surrounding the auditorium at Sacred Heart in Atherton. In a performance that topped even his 10-balloon TED Talk, he delivered a lecture with equal parts inspiration and humor.
I was bummed that "Sir" Ken showed up with no sword and without any armor AT ALL. But he does wield a mighty pen that has inked two books on the importance of helping kids find their passions (The Element) and of adapting our educational system to prize creativity over conformity (Out of our Minds: Learning to be Creative).
Here's the basic arc of his message: most people are miserable in their jobs, drudging through work in anticipation of the weekend. Only those of us who have found our passions love to work. Everyone has talents and interests to ignite, but usually schools have pushed them aside in favor of standardized academic curricula and tests. At a time when our economy has moved beyond factory jobs, we need creative, entrepreneurial citizens. That all happens only in personalized programs, where kids are encouraged to follow dreams. As Steve Jobs liked to say, people change the world by following their dreams, not a standard formula for success.
Here are some snippets from the talk:
"It's a mistake to confuse standardizing with raising standards."
"I asked the girl what she got out of her dancing class. 'I got a B' she answered."
"We should be teaching students, not subjects... Schools are more like organisms than mechanisms. Teaching is more like gardening than engineering."
"We cannot predict what will happen, where people will go and how they will develop. We have to let them find their way, and encourage them to trust that they can follow their passions. If we do this we may not be able to predict the future, but we will create a future that we all want to live in."
In the audience I saw nearly every school principal in town nodding along with Sir Ken's talk, as though they already follow his advice in their schools! I know some who do, but if they all did, then where's the problem?
Meanwhile, Ken sets an example of great teaching by keeping his audience in stitches. For example:
“I started my dissertation in the 70;s and finished it in the 80’ s largely because of what happened in the 70’s. it was a great decade, or so I’m told.”
"I’m now working on the sequel to The Element, called Finding your Element. People keep asking me how to find it. Now I wish I had never started this whole thing. How do I know? YOU find it, leave me alone. No, seriously it’s coming out next year and it’s going to be terrific."
I was bummed that "Sir" Ken showed up with no sword and without any armor AT ALL. But he does wield a mighty pen that has inked two books on the importance of helping kids find their passions (The Element) and of adapting our educational system to prize creativity over conformity (Out of our Minds: Learning to be Creative).
Here's the basic arc of his message: most people are miserable in their jobs, drudging through work in anticipation of the weekend. Only those of us who have found our passions love to work. Everyone has talents and interests to ignite, but usually schools have pushed them aside in favor of standardized academic curricula and tests. At a time when our economy has moved beyond factory jobs, we need creative, entrepreneurial citizens. That all happens only in personalized programs, where kids are encouraged to follow dreams. As Steve Jobs liked to say, people change the world by following their dreams, not a standard formula for success.Sir Ken cited many examples, like Paul McCartney and George Harrison, who went to school together and loved music but didn't enjoy music class. Their music teacher never thought they had potential as musicians. "He had half the Beatles in his class and missed it. That was a bit of an oversight, if you don't mind my saying."
"It's a mistake to confuse standardizing with raising standards."
"I asked the girl what she got out of her dancing class. 'I got a B' she answered."
"We cannot predict what will happen, where people will go and how they will develop. We have to let them find their way, and encourage them to trust that they can follow their passions. If we do this we may not be able to predict the future, but we will create a future that we all want to live in."
In the audience I saw nearly every school principal in town nodding along with Sir Ken's talk, as though they already follow his advice in their schools! I know some who do, but if they all did, then where's the problem?
Meanwhile, Ken sets an example of great teaching by keeping his audience in stitches. For example:
"I was shocked to hear that my TED Talk was downloaded 10 million times. But then I learned that two cats jumping around on YouTube was downloaded 50 million times."
“I started my dissertation in the 70;s and finished it in the 80’ s largely because of what happened in the 70’s. it was a great decade, or so I’m told.”
"I’m now working on the sequel to The Element, called Finding your Element. People keep asking me how to find it. Now I wish I had never started this whole thing. How do I know? YOU find it, leave me alone. No, seriously it’s coming out next year and it’s going to be terrific."
Monday, 7 November 2011
Dinner with Mork
Thanks to the invitation of an old friend, two weeks ago I had the great pleasure of a 2 hour dinner with Robin Williams, who IMHO ranks among the greatest comedic actors of my lifetime, alongside Richard Pryor, Woody Allen, Steve Martin, Bill Murray and Gene Wilder.
I think I expected to meet someone much more frenetic and, frankly, obnoxious. But Williams is gracious, and listens sincerely to the people around him. He came with his gorgeous fiancé Susan whom he married last week.
Williams shared some stories about his career, starting with his high school years studying drama at Juilliard. His big screen break was a cameo on Happy Days as Mork the alien, which later spun off. Perhaps his best known and appreciated film is Good Morning Vietnam.
As I enjoyed the Cornish Hen at Jardiniere, we talked about some of his films, like my favorite Dead Poets Society, where he learned from the director that listening can be as expressive as speaking. (My wife has told me the same thing.) It surprised me that Williams cited the creepy One Hour Photo as one of his favorites. He told us a lot about making Awakenings, including the challenge of acting alongside actual mental patients. We also talked about Cadillac Man, The World According to Garp, and Mrs. Doubtfire, which my kids were back home watching at the time.
I learned that Williams has gone to Afghanistan three times to perform for the troops, and heard about many other international trips to raise money for charity. He's an active advocate of gay rights, and an atheist, though he was reluctant to say so (there are some things so shocking that even Robin Williams won't say them).
Often Williams broke into character, spinning up hysterical and poignant characters in the middle of conversation. "I'm so hairy," he improvised, " Coco the Gorilla tried to take me out back. She actually signed, Let's you and me go back and get busy."
I think I expected to meet someone much more frenetic and, frankly, obnoxious. But Williams is gracious, and listens sincerely to the people around him. He came with his gorgeous fiancé Susan whom he married last week.
Williams shared some stories about his career, starting with his high school years studying drama at Juilliard. His big screen break was a cameo on Happy Days as Mork the alien, which later spun off. Perhaps his best known and appreciated film is Good Morning Vietnam.As I enjoyed the Cornish Hen at Jardiniere, we talked about some of his films, like my favorite Dead Poets Society, where he learned from the director that listening can be as expressive as speaking. (My wife has told me the same thing.) It surprised me that Williams cited the creepy One Hour Photo as one of his favorites. He told us a lot about making Awakenings, including the challenge of acting alongside actual mental patients. We also talked about Cadillac Man, The World According to Garp, and Mrs. Doubtfire, which my kids were back home watching at the time.
I learned that Williams has gone to Afghanistan three times to perform for the troops, and heard about many other international trips to raise money for charity. He's an active advocate of gay rights, and an atheist, though he was reluctant to say so (there are some things so shocking that even Robin Williams won't say them).
Often Williams broke into character, spinning up hysterical and poignant characters in the middle of conversation. "I'm so hairy," he improvised, " Coco the Gorilla tried to take me out back. She actually signed, Let's you and me go back and get busy."
Tuesday, 6 September 2011
On Pseudonyms: Transparency and Free Expression are Not Mutually Exclusive
I originally wrote this as a guest post for TechCrunch, but based on some good comments, I have modified the proposal. So here is my improved version of that post...
The debate on pseudonyms persists today in the NY Times, as Google continues to eject pseudonymous accounts from Google Plus. Google crafted its Common Names Policy in order to promote trust and transparency, hoping to mitigate spam and flame wars. But the backlash has been strong from the Electronic Frontier Foundation (in this eloquent statement) and others as they advocate for those who need pseudonyms to express themselves without fear of being ostracized, fired, arrested or physically targeted.
Google has promised to review its policy and develop new ways of addressing these concerns. Until then, Google Plus remains irrelevant not only to Arab Spring revolutionaries but to anyone whose life is not completely an open book. Google's policy stifles gay teens, victims of workplace harassment, medical patients seeking information and compassion, and any others who challenge the politics or religion around them.
However, the debate need not dwell on the relative importances of transparency and free expression. We must have both, and I believe we can. If Google seizes the opportunity to get this right, it will further distinguish Google Plus from Facebook as the safe, intelligent platform for sharing.
So Brad and Vic, if you're listening, please consider that you can enable free and transparent expression on the Internet by establishing Google as the source of authenticity for all profile names. I shouldn't pretend that I have thought through all the product ramifications, but roughly speaking here's what I would suggest you do...
Classify each profile name as either: Private for self-proclaimed pseudonyms; Unverified, for new profiles with allegedly "real" names; People Verified for those profiles that reach a certain degree of social activity without any indications of fraud or other reputational issues; Bank Verified for those profiles linked to an active credit card in that same name; and Google Verified for those "celebrity" profiles for whom Google vouches through their manual authentication procedures, as Twitter does.
Once Google does that, I can decide how to interact with Google Plus profiles of varying verification. Furthermore, if you allowed other web sites to also discriminate based on type of profile name, I expect that "Google Verified" would quickly leapfrog Facebook Connect and Twitter 0Auth as the preferred Login replacement.
For example, any community that reaches out to the disenfranchised can be liberal in their policy of expression, while others can exclude, or at least moderate, content from Private and Unverified users. Any statement or request from a Private profile can be considered in light of the person's anonymity. Commercial standards would develop around escalated levels of authentication; for example, commerce sites and banks might accept only Bank Verified logins.
Having cracked the code on how to share intelligently among my different Circles, Google Plus is the perfect platform for bridging transparency and free expression. Let me craft a different profile for each Circle, so I can use my Bank Verified profile at work, and my Private profile as I publicly criticize scary fundamentalists.
There is nothing dishonest about a pseudonym, so long as it's presented as one. Rather than fight anonymity, Google should simply help us recognize it - not only on Google Plus, but across the web.
The debate on pseudonyms persists today in the NY Times, as Google continues to eject pseudonymous accounts from Google Plus. Google crafted its Common Names Policy in order to promote trust and transparency, hoping to mitigate spam and flame wars. But the backlash has been strong from the Electronic Frontier Foundation (in this eloquent statement) and others as they advocate for those who need pseudonyms to express themselves without fear of being ostracized, fired, arrested or physically targeted.
Google has promised to review its policy and develop new ways of addressing these concerns. Until then, Google Plus remains irrelevant not only to Arab Spring revolutionaries but to anyone whose life is not completely an open book. Google's policy stifles gay teens, victims of workplace harassment, medical patients seeking information and compassion, and any others who challenge the politics or religion around them.
However, the debate need not dwell on the relative importances of transparency and free expression. We must have both, and I believe we can. If Google seizes the opportunity to get this right, it will further distinguish Google Plus from Facebook as the safe, intelligent platform for sharing.
So Brad and Vic, if you're listening, please consider that you can enable free and transparent expression on the Internet by establishing Google as the source of authenticity for all profile names. I shouldn't pretend that I have thought through all the product ramifications, but roughly speaking here's what I would suggest you do...
Classify each profile name as either: Private for self-proclaimed pseudonyms; Unverified, for new profiles with allegedly "real" names; People Verified for those profiles that reach a certain degree of social activity without any indications of fraud or other reputational issues; Bank Verified for those profiles linked to an active credit card in that same name; and Google Verified for those "celebrity" profiles for whom Google vouches through their manual authentication procedures, as Twitter does.
Once Google does that, I can decide how to interact with Google Plus profiles of varying verification. Furthermore, if you allowed other web sites to also discriminate based on type of profile name, I expect that "Google Verified" would quickly leapfrog Facebook Connect and Twitter 0Auth as the preferred Login replacement.
For example, any community that reaches out to the disenfranchised can be liberal in their policy of expression, while others can exclude, or at least moderate, content from Private and Unverified users. Any statement or request from a Private profile can be considered in light of the person's anonymity. Commercial standards would develop around escalated levels of authentication; for example, commerce sites and banks might accept only Bank Verified logins.
Having cracked the code on how to share intelligently among my different Circles, Google Plus is the perfect platform for bridging transparency and free expression. Let me craft a different profile for each Circle, so I can use my Bank Verified profile at work, and my Private profile as I publicly criticize scary fundamentalists.
There is nothing dishonest about a pseudonym, so long as it's presented as one. Rather than fight anonymity, Google should simply help us recognize it - not only on Google Plus, but across the web.
Monday, 5 September 2011
EarlyBird Hatches the Term "European Comeback"
The following was originally published as a guest post for TechCrunch.
I just couldn’t keep my big Tweeter shut. When I publicly dismissed the soundness of his widely hailed report on European VC, Jason Whitmire of Earlybird Venture Capital challenged me to openly discuss the facts in a dialogue exceeding 140 characters. So I guess I owe him a response.
That last statement, from slide 30, actually accompanies a chart showing almost no liquidity for European funds since 2005. As far as I can tell, the report offers this as proof that based on some anecdotal exits, Europe’s funds are doing much better than what THEY are telling us.
I just couldn’t keep my big Tweeter shut. When I publicly dismissed the soundness of his widely hailed report on European VC, Jason Whitmire of Earlybird Venture Capital challenged me to openly discuss the facts in a dialogue exceeding 140 characters. So I guess I owe him a response.
Based on the work of their summer intern, Jason and his partner Hendrik Brandis have published a “report” (actually, a slide deck) on Earlybird’s web site exposing a scandalous cover-up: the European VC asset class is actually on fire, far outpacing VC returns in the US. And lest you think I exaggerate the conspiratorial, us-versus-them tone of their presentation, the headline on slide 28 reads:
Reprehensible
...that you are only now reading about the Comeback, but then again: Visibility on European VC Funds for investors is highly limited and prejudiced…
Now unlike Earlybird, my firm Bessemer Venture Partners has no agenda here. We’re a global, $3 billion VC that invests most of our capital outside the US – anywhere we find great opportunities for startups. Indeed, we have found it compelling to fund several European startups – Skype, Criteo, Intego, Axis Network, Intego, several others – and hope to find many more. To inform our geographic allocation of capital, we constantly seek and compile sound data; so I was naturally intrigued to read Earlybird’s report, and just as disappointed to find instead a glossy brochure.
To be clear, I’m not saying that the authors are wrong about Europe’s fertility for venture investment. I’m just saying that I can’t possibly draw a conclusion from this presentation, which has clearly been crafted to pitch a message, rather than discover one through critical analysis.
The reports presents data on slides 3 through 7 to back up the claim that European VCs outperform US VC’s. The authors latch on to a few allegedly favorable metrics, such as the multiple returned on exits over $100m, the growing number of European exits, and the ratio of distributions to new commitments in venture capital.
But like an investment bank crafting the competitive slide of its pitch deck, they limit the data to a narrow slice of history – specifically 2009 and 2010, the aftermath of the catastrophic, US-centered financial crisis. During this time, US IPO markets seized up. (I’d bet that contrarily in 2011 the data will not reflect favorably on Europe’s financial markets.) Measuring venture capital returns requires a longer period of assessment than two years – every VC cycle is characterized by long periods of investment punctuated by bursts of liquidity. The US finds itself on the cusp of such a burst, with monster IPOs coming (Facebook, Zynga, GroupOn…) that will eclipse their Continental counterparts. The $15 billion of European capital gains touted in this report - as well as the $30b of US gains – will be relatively immaterial as LP’s in 2013 review their managers’ performance over periods of time consistent with the life of a VC fund.
Indeed, home run outcomes play a critical role in venture returns. And yet Earlybird reports the median exit multiples to compare performance. The median outcome of any venture portfolio is irrelevant – what matters is the capital-weighted arithmetic mean, driven invariably by a handful of winners.
The report even goes so far as to celebrate Europe’s lower home-run stats:
”Germany has a unique model where, in a different twist to the hugely successful VC-funded start-up ecosystem of Silicon Valley, the industry is not as much reliant on a handful of blockbusters or even a closely networked startup environment, but rather one where a high number of regionally diversified quality opportunities correspond to increasing levels of entrepreneurial activity.”
I’m not sure what the last part means, but the spin on Silicon Valley suggests that outcomes like Google and Facebook create some kind of unhealthy dependency, as though no one else can thrive. (Tell that to Redpoint.) It reminds me of the Airborne tagline “Created by a Second Grade Schoolteacher!” that turned lemons into lemonade.
Other problems with the numbers presented in this report:
- Incomplete data – the authors have no performance data on 85% of Europe’s VC industry.
- The report talks only of multiples without any mention anywhere of IRR. If the US exits (which included more internet companies) grew faster, a lower multiple may have easily yielded a higher IRR.
- Other comparisons in the report between Europe and the US are even less relevant, such as the post-IPO performance of venture-backed companies.
- Several slides in the report (e.g. 38) imply or explicitly assert that Europe’s metrics outperform others without showing any non-European data. Slide 12 claims that “Europe today has the largest inequilibrium of venture capital availability on the planet,” without any comparative data at all. Slides 20 and 21 also lack any data on the US venture industry, as if US-based VCs haven’t also seen increased deal flow in the last two years.
The presentation also makes bold generalizations that better fit an infomercial than an analytical study:
- “Forget the charts!”
- "In addition to highly misleading published historical industry data for European VC which lead to a negative bias in official statistics, there is almost no reported performance of post-bubble vintages (which effectively started only 2004/2005) – these funds are significantly better performing and, as evidenced by recent exits across top- tier funds, are now at the inflection point”
Well if there is a conspiracy, I’m not a part of it. I actually share Earlybird’s hopes and intuition that Europe’s entrepreneurs will generate attractive VC returns even in these turbulent times for the continent, and I look forward to seeing some compelling data. It’s too bad that Earlybird’s report wasn’t more balanced, because I’m open to the argument that European startups are under-funded.
I only hope that when Europe does make its comeback, Jason will still invite me to co-invest with Earlybird!
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