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VCs Slammed in Poll

Venture capital companies are most to blame for the boom and bust that’s befallen the telecom industry, according to Light Reading’s June research poll: Who's to Blame? Where's the Hope?

In the poll, respondents are asked to pick the folk they hold most responsible for the current, sorry state of affairs.

So far, 22 percent of votes have been cast for "venture capitalists, for over-inflating the bubble" -- way out ahead of the next category of possible culprits, "top executives, for feathering their own nests at the expense of workers," which has got 14 percent of the votes at present.

Other groups that get it in the neck include "telecom regulators, for failing to curb anti-competitive behavior" (13 percent) and "analysts, for not telling the truth" (11 percent). (Somehow, we forgot to include journalists in our list.)

At the other end of the scale, there are some real surprises. Nobody so far has blamed "governments, for charging too much for 3G wireless licenses," even though this appears to be one of the main reasons some European incumbent carriers are weighed down with huge debts (see British Telecom on the Mend).

Likewise, only 4 percent of respondents blame "financial regulators, for failing to blow the whistle on corrupt behavior." Also getting off lightly are "traditional systems manufacturers, for offering vendor finance," which get a mere 3 percent of votes. (The scale of this issue is laid out in Vendor Financing.)

Respondents were also asked to name the current development that gives them most hope for recovery.

The biggest surprise here is that "less competition" is currently tying for top place with "advances in access technologies," both of which garner 23 percent. Less competition probably equates to carriers being able to charge higher prices for their services -- the hope being that this will lead to more infrastructure investment. (Dream on.)

The next biggest hope is that "new sources of traffic such as 3G wireless" will encourage carriers to resume investment in infrastructure. That gets 11 percent, just ahead of "advances in metro technologies," which gets 10 percent.

"Bargain-basement acquisitions" and "bargain-basement telecom infrastructure from bankrupt/distressed carriers" get 7 percent and 8 percent of votes, respectively -- a reflection of the belief that if someone can't make money out of an asset, then the likelihood is that no one else can either.

To take the poll yourself, and get the latest results in detail, click here.

— Peter Heywood, Founding Editor, Light Reading
http://www.lightreading.com
zipple 12/4/2012 | 10:13:42 PM
re: VCs Slammed in Poll The article asks abouts who to blame. But here's another question: What is the effect?

I argue that one effect is that perfectly healthy startup companies that are executing flawlessly will never see the monetary fruits of their labor.

Term sheets in the past few months are now so onerous that companies might as well quit and start over after the freefall is done (2 years?). Investors think that they are making up for lost investment by imposing large dilution, preferences, rachets, etc. But when calculating the return, remember to include the near-complete demotivation of the company. Lack of hard work + the return of 9-5 hours = no competitive advantage. Imagine what it will be like in the next round.

The only termsheets out there are lowballs. So if you are a company and don't have VCs bidding against each other to get the company terms to something reasonable, do yourself a favor and close down now. Otherwise, you are just throwing good time&effort after bad. Inside rounds are just silly today. If you find yourself rationalizing about "small piece of the pie is better than no pie", you're just fooling yourself. That small piece will turn out to be zero later.

Scenarios today are what "cutting losses" is all about. It takes big cahones to take the best long term path.

Z
willywilson 12/4/2012 | 10:13:44 PM
re: VCs Slammed in Poll 1. The first point I was trying to make was to find and punish individuals, not institutions. The government isn't doing their job when they take Andersen, as an institution, out, but fail to punish any of the top people. Attacking institutions makes for great press, but punishing individuals fixes the problem. The only people who got punished were the poor working stiffs.

2. The other point I was trying to make was the Las Vegas one. You go there to gamble. You lose your money, it's your fault. A casino rigs the game? Find the guilty person and put them in prison.

3. Most of the people who came to California during the boom were coming to gamble. And I believe most of them were playing in a game that was risky, but fair. They lost their money and now they complain. Too bad! There were times when the game was rigged and we should find who rigged it and punish them.

4. The last thing we need is a corrupted government going after abuses in the Silicon Valley on a witch hunt. They'll break a hell of a lot more than they'll fix. We need to enforce the laws we have now. Stop holding hearings, turn off the cameras and start arresting and prosecuting the guilty, white collar criminals, be they VC's, bankers, entrepreneurs, or government officials. It'll never happen.

============

1. What the government needs to do is create fear, which is what a "deterrent effect" is really about. Punish institutions, people, whatever they can get their hands on. Swing a flaming torch at whatever is there. This will make the next set of would-be criminals think twice before doing it. White-collar crimes are like any other crimes, i.e., they are crimes of opportunity. The costs need to be demonstrated to be ruinous. The destruction of Arthur Andersen will set this kind of example; I agree that the government should also pursue individuals there.

2. Investments are not supposed to be games of chance. Risk, yes, but random occurrences, no. Outcomes determined by fraud, no. The fact that this happens makes it no more acceptable than the fact that other crimes occur. We don't blame the victims of murder, nor do I blame the person who invested his or her 401(k) in a mutual fund only to lose 40% because the rampant fraud in technology and telecommunications.

They are not chumps to be scorned. These investors ARE victims, whether or not you like the term. Those who commit fraud are criminals and should be brought to justice. And no, I am not going to be philosophical or tolerant of allowing thieves to prey on investors.

3. People didn't have to "come to California" to lose their money. We had California executives, venture capitalists and investmebt bankers commit fraud against people all over the U.S. and indeed the world. The fallout from this rampant criminality is going to be incredibly severe.

4. You contradict yourself again by saying we don't need a "corrupted government" to go after abuses in Silicon Valley, while immediately turning around and saying that the guitly should be arrested and prosecuted. So which do you favor, or are you doing the classic two-faced act here? Tell me, which institution do you hail from, the executive suite, Wall Street or politics? If the answer is none of the above, all I can say is you sure missed your calling.
smoking_craters 12/4/2012 | 10:13:46 PM
re: VCs Slammed in Poll Willy:

Wow! Great response!

Believe it or not, I agree with about 95% of what you said.

The first point I was trying to make was to find and punish individuals, not institutions. The government isn't doing their job when they take Andersen, as an institution, out, but fail to punish any of the top people. Attacking institutions makes for great press, but punishing individuals fixes the problem. The only people who got punished were the poor working stiffs.

The other point I was trying to make was the Las Vegas one. You go there to gamble. You lose your money, it's your fault. A casino rigs the game? Find the guilty person and put them in prison.

Most of the people who came to California during the boom were coming to gamble. And I believe most of them were playing in a game that was risky, but fair. They lost their money and now they complain. Too bad! There were times when the game was rigged and we should find who rigged it and punish them.

But we already have lots of laws to do that, don't we? Again, I'll ask for the final time, why hasn't the government done anything? And again, I'll answer. Because it's corrupt. I'm not a cynic and I'm not pro-business. I'm just stating a basic fact. The last thing we need is a corrupted government going after abuses in the Silicon Valley on a witch hunt. They'll break a hell of a lot more than they'll fix. We need to enforce the laws we have now. Stop holding hearings, turn off the cameras and start arresting and prosecuting the guilty, white collar criminals, be they VC's, bankers, entrepreneurs, or government officials. It'll never happen.

By the way, you don't know me and you don't need to attack me personally. I'm not an apologist for anyone - every group involved deserves a share of the blame. I'm just an old man who's been around the block a few times and knows a witch hunt when he sees one. So stop the witch hunt and start arresting people already.
rjmcmahon 12/4/2012 | 10:13:46 PM
re: VCs Slammed in Poll I'll ask for the final time, why hasn't the government done anything?
________________

This is a question that many are asking. One possible answer from Glen B. Gainer, III,
State Auditor of West Virginia, implies the complexity, costs and short statue of limitations drives prosecutors to select easier cases.

Today's swindlers realize this, and that it is easier to steal and cover their tracks from the inside. Since their thievery have been "inside jobs" and the government has been slow too react, the public opinion, similar to your own, has concluded that the corruption has metastasized and nobody can be trusted.

None of this helps businesses or job creation. That sooner this cancer is removed, the better.

http://judiciary.senate.gov/te...

"The difficulties of investigating and prosecuting securities and investment frauds are a result of the increased globalization of fraud, the complexity of the cases, and the limited resources of regulators and law enforcement officials. Prosecutors are often unwilling to bring forward economic crime cases that involve complex legal issues and extensive paper trails; following such trails becomes much more difficult because of the time that often elapses between criminal offending and discovery and subsequent investigation efforts. This is a problem inherent in many types of financial crime. For example, interviews with identity theft victims have found that several years may pass before the crime is discovered. Because the statute of limitations is often based on the date of the criminal occurrence rather than date of discovery, many criminals never face a judge because of the overwhelming task of gathering extensive evidence. The gap between the criminal act and its discovery also allows offenders to effectively cover tracks and destroy information that may otherwise prove invaluable to the investigative efforts.

In addition to a lack of resources as it relates to unraveling the complex underpinnings of an investment or securities fraud, criminal cases are not being brought because state and local law enforcement and prosecutorial agencies lack the technology and training to effectively investigate and prosecute them. In economic crimes, the attribution of responsibility, the development of facts, the tracing of funds, the establishment of the criminal fraud elements and the presentation of evidence are much more difficult to achieve than conventional crimes."
rjmcmahon 12/4/2012 | 10:13:47 PM
re: VCs Slammed in Poll Senator Biden's panels addressing white collar crime is worth streaming (even at fraudband rates ;-) Justice requires prosecuting white collar criminals and deterrence requires those convicted to serve prison time.

http://video.c-span.org:8080/ramgen/ldrive/e061902_crime.rm

http://judiciary.senate.gov/he...

An excerpt from Frank Bowman's testimony:

"As for blameworthiness, it bears emphasis that economic crime of the truly Gǣwhite collarGǥ variety G that is, frauds and swindles of substantial sums by educated members of the business and professional classes G are particularly reprehensible. Such crimes are customarily crimes of greed rather than need. They are committed by persons with significant personal advantages, usually with substantial careful planning.

In my own view, significant white-collar offenders often deserve lengthier sentences than virtually any other category of offender, even including some defendants who resort to unpremeditated violence. Who, after all, is more deserving of punishment, a fellow who gets in a bar fight and concusses his opponent with a bottle in the heat of the moment, or a corporate executive who over a period of months coolly swindles his shareholders out of several million dollars?

Unfortunately, while the foregoing considerations may solidify the conclusion that white-collar crimes should be punished with some stringency, neither singly nor together do they answer the question of whether present sentencing levels are tough enough.

Crime control: We punish people not only, and perhaps not even primarily, because they deserve punishment, but also, and perhaps more importantly, in order control criminal behavior. Punishment is thought to reduce crime by deterring the punished defendant from offending again, by frightening and thus deterring other prospective criminals who witness the punishment, by incapacitating offenders disposed to recidivate, and also by reinforcing with public examples the general moral code of the community. In the pre-Guidelines period, federal white-collar penalties may have achieved very few of these objectives. When most white-collar criminals, even if caught, receive probation, the disincentives to crime are low and respect for the law is diminished.

It was frequently argued in former days that actual imprisonment of white-collar offenders was superfluous because the collateral consequences of a felony conviction to a person in business or professional life are so uniquely devastating G destruction of a career, disqualification from a profession, destruction of family relationships, collapse of standard of living and social standing, etc. Indeed, such arguments remain a staple of defense sentencing arguments in the Guidelines era. As a matter of equity and social justice, I generally find such arguments both elitist and distasteful. The inability to secure a position in the building trades because of a felony record is certainly no less a hardship for a poor man than disbarment for a felony is for a rich one. Likewise, the shame of visiting with oneGs family through Plexiglas is no less acute for a blue-collar than for a white-collar criminal. That said, it is doubtless true that the collateral consequences of a felony conviction are a substantial deterrent to white-collar crime."
willywilson 12/4/2012 | 10:13:48 PM
re: VCs Slammed in Poll 1. I totally agree that we need a strong, responsible government to play traffic cop and to enforce the rules. But we don't have that and probably won't for some time. ... All governments are corrupt to some extent. Money and power do that to people. Should we fix it? Of course. ...

Please, please, please don't ask the government to come to California and 'fix' the problem. ... It just drives me nuts that we've got this entrepreneurial system which, for all of its flaws, is still the best in the world. And all people want to do is 'fix' it. Tweak it? Sure. Fix it? Spare me.

2. Capitalism works on trust and confidence ... I've dealt with VC's and executives and entrepreneurs and bureaucrats for decades. I'll take the VC's and the entrepreneurs any day. At least they're trying to get something done.

3. We've managed to kill Enron and Anderson, throwing tens of thousands of decent, hard working Americans onto the street. Go after the people, Barbara, you idiot, and stop all the damn grandstanding - you're killing us!

4. I rely on the government to protect me. But they don't travel with me. And before they can come to my aid, a lot of bad things can happen. I don't like being a victim.

Maybe this idea of self-reliance is a lot like the John Wayne image. So what? Our culture is ruled today by victims and lawyers. Am I a bad person for choosing not to be the one and not relying on the other?

5. Again, people didn't have to come to California. They didn't have to start companies.

6. It would be great if we all played fair and everybody was a winner. But the world isn't like that. Again, the 'victims' are about to have their way. ... Let's just kill the goose that lays the golden eggs. What the hell.

7. Senator Boxer grabs headlines with Enron while women and children are blown to bits in the middle east. The world is on the brink of World War III and the Democrats are playing to the cameras for the next election. I want a strong, affirmative government just like you do. But we're not there yet. Let's fix these problems one at a time and in the right order.

8. When they write the history of this meltdown in 20 years, they won't point fingers at the VC's or the entrepreneurs. They'll point the finger at the Telecom act of '96 and the corruption of our government who failed to enforce it as they should have.

================

1. What an incoherent jumble of crap. (And it's not because I consolidated your comments into one place. You repeatedly contradict yourself throughout that rambling apology for rich crooks.) You say enforce the law and fix things, and then rail against fixing anything.

2. You say that capitalism works on trust and confidence, but absolutely refuse to point out who broke that trust and confidence. I'll bet this is because the VCs and "entrepreneurs" are your golfing buddies. Ethical discussions are very much out of style within this group, much less ethical behavior. I know what I'm talking about, because I've hung out with them, too.

3 & 4. You hate being a victim but manage to play the violin for the hardworking people of Andersen and Enron, while somehow alleging that the government victimized them. In fact, it was their own corporate corruption that did the companies in and victimized the employees. I feel bad for the thousands of Andersen employees, too. Their leaders screwed them royally.

4 & 6. You say the culture is ruled by victims and lawyers, but in fact there isn't a single VC, Wall Street shyster or technology executive who has been even accused let alone indicted or prosecuted. Trust me, if "victims ruled," this would not be the case. It's clear that you couldn't care less, because you've got yours and those who were defrauded were chumps.

Families in California who had to choose between medicine and electricity because Enron, Dynegy and Ross Perot Systems rigged the market? You and your corporate friends regard anyone who was screwed to be losers and fools, especially if they work for a living. Of course, if the screwing was done by a poor burglar operating in a rich neighborhood, then you'll be the first to DEMAND more police protection for the fine people of the upper class.

5. And California startup companies, executives and venture capitalists didn't have to commit fraud, manipulate stocks and trade bribes, either.

7. There are statutes of limitations and barriers to lawsuits regarding securities fraud. They were erected by the victimizer's lobby: lawyers hired by Silicon Valley and bagmen who bribed members of Congress. If those crimes aren't prosecuted now, these statues will expire. If, as you so dishonestly suggest, we wait until we've guaranteed world peace before going after the crimes, then the criminals will get off scot free. What, with 280 million people America can't do more than one thing at a time? Don't insult our intelligence. Your justifications for letting corporate criminals off the hook convince no one.

8. So, as with so many other idiots and rogues here, you zero in on one cause, yours being the Telecom Act. This illustrates a serious problem in America: A combination of over-simplicity and over-complexity, i.e., we either find one scapegoat or we say it's so complicated that no one's to blame.

Imagine if the people who cleaned up the mess at the World Trade Center approached the job that way. "Oh, it's so complicated! We can't do this!" Well then the corrupt rich would call them lazy, stupid, ungrateful and unpatriotic.

No, the way to unravel the fraudulent bubble is to freeze the site (put all suspects on notice immediately and freeze the statute of limitations), get the legal cranes in there and sift through the rubble.
The fact is this: American prosecutors know how to go after white collar crime if they want to. There is no high-blown philosophy necessary, and no dodging of accountability, culpability or criminality should be permitted. Just as we don't allow the guy who sticks up the 7-Eleven to say his childhood made him do it, we shouldn't allow corporate criminals to deflect justice by saying the government is flawed. Lock them up, throw away the key, and seize all the stolen money and whatever of value was purchased with that money.
smoking_craters 12/4/2012 | 10:13:54 PM
re: VCs Slammed in Poll Willy and RJ:

Re-read my original post. I totally agree that we need a strong, responsible government to play traffic cop and to enforce the rules.

But we don't have that and probably won't for some time. Senator Boxer's 'antics' during the Enron hearings were ludicrous. They fixed nothing and only served to help her get re-elected. God, people are stupid and gullible. Capitalism works on trust and confidence and Senator Boxer knows that. Go after the people, Senator, not the companies!

We've managed to kill Enron and Anderson, throwing tens of thousands of decent, hard working Americans onto the street. Go after the people, Barbara, you idiot, and stop all the damn grandstanding - you're killing us!

Should we have taken some of the top people at both firms and prosecuted them to the fullest extent our laws provide? Absolutely! I said so in my original post.

So why didn't we?

Because our government is corrupt. All governments are corrupt to some extent. Money and power do that to people. Should we fix it? Of course.

I'm an old man. I've dealt with VC's and executives and entrepreneurs and bureaucrats for decades. I'll take the VC's and the entrepreneurs any day. At least they're trying to get something done.

I didn't take self-defense so I could go out and beat people up. I rely on the government to protect me. But they don't travel with me. And before they can come to my aid, a lot of bad things can happen. I don't like being a victim.

Maybe this idea of self-reliance is a lot like the John Wayne image. So what? Our culture is ruled today by victims and lawyers. Am I a bad person for choosing not to be the one and not relying on the other? I don't break the rules. I remain an optimist. I try to be as honest and ethical as I can. People routinely tell me that I'm a decent, hard working guy. But no one forces me to be that way. I choose to be that way. And I'm old enough and smart enough to recognize that most people are like me, but some aren't.

Again, people didn't have to come to California. They didn't have to start companies. It would be great if we all played fair and everybody was a winner. But the world isn't like that. Again, the 'victims' are about to have their way. Forget the hundreds of thousands of new jobs that were created or the tens of thousands of middle class folks who were able to make some money and send their kids to college. Let's just kill the goose that lays the golden eggs. What the hell.

Please, please, please don't ask the government to come to California and 'fix' the problem. Should some people be thrown in jail? Sure. Should we enforce the rules we already have on the books to protect people? You bet! But the idiots in Washington will only come out here and screw the golden goose up.

I'm with you, RJ. There are much, much larger problems in the world to be working on. Senator Boxer grabs headlines with Enron while women and children are blown to bits in the middle east. The world is on the brink of World War III and the Democrats are playing to the cameras for the next election (just like the Republicans did with the Lewinsky scandal). i want a strong, affirmative government just like you do. But we're not there yet. Let's fix these problems one at a time and in the right order.

It just drives me nuts that we've got this entrepreneurial system which, for all of its flaws, is still the best in the world. And all people want to do is 'fix' it. Tweak it? Sure. Fix it? Spare me. Fix the government first. Then come out here to our coast and work with us to improve things. We'll be ready.

When they write the history of this meltdown in 20 years, they won't point fingers at the VC's or the entrepreneurs. They'll point the finger at the Telecom act of '96 and the corruption of our government who failed to enforce it as they should have. Shameful.

Follow the money, boys, follow the money.
rjmcmahon 12/4/2012 | 10:13:55 PM
re: VCs Slammed in Poll I agree with Willy here.

In today's world where nuclear nonproliferation and world peace face the toughest challenges in world history and many teenagers in the wealthy societies carry guns to school, its hard to see how a "wild west", anti-government, John Wayne-type will protect himself via a some Tai-kwon-do classes and some open eyes.

A strong affirmative government that prosectues and punishes white collar criminals is necessary. Our individual security requires a law abiding society which can trust their government, a government which enforces the laws it legislates. When the enforcement of thes laws breaks down so does the societal structure.
dave77777 12/4/2012 | 10:13:55 PM
re: VCs Slammed in Poll When I finished my B.S. as an accounting major, I interviewed with 4 of the Big 6 (there were still six then). This was just about the time of the Asian equity/currency collapse brought on in part by massive accounting irregularities. In one interview, I mentioned that philosophically, I saw accountants as "the thin black line" that preserved investor confidence, similar to the "thin blue line" of the police. My interviewer actually seemed offended by the idea, saying "we're not police." I didn't get an offer, and went on to get an M.S. in Information Tech and work in that field instead.

The interviewing company? Arthur Andersen.

I wonder what my interviewer thinks about that now that he's out of a job.

willywilson 12/4/2012 | 10:14:08 PM
re: VCs Slammed in Poll Even though they were caught red handed. At first it made me mad. But, unlike many others, I don't identify myself as a 'victim'. So I took some classes on self-defense and moved to a more secure community.

Nowadays, a wiser and older fellow, I kick the living shit out of people who think they can take from me what isn't theirs. I do it because I know the government won't. Hey, nobody said this was utopia, you know?

I just figure that if I've got something then other people will try to take it away from me. That doesn't necessarily make them evil - just opportunistic. I don't let people take stuff from me any more. Doesn't matter if they're street thugs or VC's or Wall Street suits or smarmy entrepreneurs for that matter. I keep my eyes open and don't let people take advantage of me.

=============

Well, I guess there are two ways to look at things, one being to find the wrongs and wrongdoers, and the other to become an amoral, uncivilized, California cynic.

Enjoy that BMW. I'm sure you stole it fair 'n square. What's next for you, a career in politics?
smoking_craters 12/4/2012 | 10:14:10 PM
re: VCs Slammed in Poll Hey, WillyWilson:

For what it's worth, I've been robbed by the good folks from East Palo Alto and also mugged by them and nearly beaten to death in the attack. If you grow up and live on the San Francisco peninsula it's all just par for the course.

In both cases, the kinder got off scott free. Even though they were caught red handed. At first it made me mad. But, unlike many others, I don't identify myself as a 'victim'. So I took some classes on self-defense and moved to a more secure community. Nowadays, a wiser and older fellow, I kick the living shit out of people who think they can take from me what isn't theirs. I do it because I know the government won't. Hey, nobody said this was utopia, you know?

Maybe it is philosophical of me. I just figure that if I've got something then other people will try to take it away from me. That's one of the basic tenets of human nature, isn't it?

That doesn't necessarily make them evil - just opportunistic. I don't let people take stuff from me any more. Doesn't matter if they're street thugs or VC's or Wall Street suits or smarmy entrepreneurs for that matter. I keep my eyes open and don't let people take advantage of me.

Fool me once, shame on you. Fool me twice, shame on me!
lghtswtch 12/4/2012 | 10:14:10 PM
re: VCs Slammed in Poll --What passes for "leadership" [...] operates through obfuscation, over-simplicity, frequent stupidity, lack of accountability and outright deception. (willywilson)
willywilson 12/4/2012 | 10:14:12 PM
re: VCs Slammed in Poll It wouldn't surprise me if the S.E.C. now makes aggressive noises (the evening business news shows have had this lapdog Harvey Pitt as a guest saying "tough" things) only to "suddenly" learn that the statutes of limitations on fraud have expired.

=============

Note: In the 1990s, Silicon Valley's lobbyists got the statute of limitations for securities fraud shortened from 5 years (same as robbery) to 3 years and in some cases 1 year.
willywilson 12/4/2012 | 10:14:13 PM
re: VCs Slammed in Poll This is the way America works. Is it corrupt? Sure. Is it fair? Hardly. Anybody else out there found a better way to invent the future? Nah. See massive innovation coming out of Europe? What a joke. See innovation coming out of Asia? Lots. How corrupt is Asia? Plenty.

Look, everybody, money is corrosive. It corrupts. Were the VC's corrupt? Sure. The Bankers. You bet. Congress? The Lawyers? The Employees? Corrupt, corrupt, corrupt. Stockholders? Just sheep waiting to be sheared. That's the way the game is played. God, how naive are you?

All of you arguing for government oversight - be careful what you wish for. They're a hell of a lot more crooked than we are here in Silicon Valley. And stupider. And more insular. The Telecom Act of '96, which launched this whole bloodbath, was a joke. And I fell for it, too. God, how stupid am I? Oh, look, the wonderful, honest, patriotic, decent folks in our shining government are going to level the playing field so we can build the future. You fell for it. I fell for it. Wall Street fell for it. Everybody fell for it. Oh, enforcement? I'm sorry. Southwestern Bell gave me $2 million in my last election campaign. They say the Telecom Act is hurting them. I may be your congressman, but they're my master. Hope springs eternal. So does gullibility.

=========

Please post your address. I know of a gang in East Palo Alto that would love to steal everything in your house. They might want to include some rape and murder in the fun. Then let's see how philosophical you are. Or is crime only objectionable when it's violent and committed by racial minorities? Oh, how California of you.
willywilson 12/4/2012 | 10:14:14 PM
re: VCs Slammed in Poll How effective really are the laws that we now have?

============

That's one of the more amazing aspects of this whole thing. I*n the early days of the boom, the shysters took a fair amount of care to cover their tracks. But as it turned into a bubble and resistance vanishedm, their fraud became more blatant. The S.E.C. simply ignored the current laws; the only question in my mind (not being a lawyer) is when the statutes of limitations expire. It wouldn't surprise me if the S.E.C. now makes aggressive noises (the evening business news shows have had this lapdog Harvey Pitt as a guest saying "tough" things) only to "suddenly" learn that the statutes of limitations on fraud have expired.
itinerantengineer 12/4/2012 | 10:14:14 PM
re: VCs Slammed in Poll Smoking_craters I second that.Also to Tim-ber(?) Thant was a grat link on engineers perspective of VC's
fiber_r_us 12/4/2012 | 10:14:16 PM
re: VCs Slammed in Poll Smoking_craters: Awesome!
smoking_craters 12/4/2012 | 10:14:19 PM
re: VCs Slammed in Poll Well, well, well, so we didn't all find gold when we rushed to California. That must make us a victim, mustn't it? Who do we blame? Who can we sue? Oh boo-hoo, the big, bad world has screwed me. Mommy, get me a bandaid!

Welcome to the wild west, bucko. Those of us that were born out here and have been starting companies for the past 20 years will just pick ourselves up, dust ourselves off and do it again. The rest of you can just go home and lick your wounds. We didn't ask you to come here. We found the gold first. We were nice enough to share it with you. So just shut up, ok?

This is the way America works. Is it corrupt? Sure. Is it fair? Hardly. Anybody else out there found a better way to invent the future? Nah. See massive innovation coming out of Europe? What a joke. See innovation coming out of Asia? Lots. How corrupt is Asia? Plenty.

They didn't call Governor Stanford and his ilk the Robber Barons for nothing. But they built this country. Is Bill Gates a respectable business man? Nah, he's just the 20'th century version of the Robber Barons of old. But did he propel America's economy? You bet! Good for him. But I still think he's a thief!

Look, everybody, money is corrosive. It corrupts. Were the VC's corrupt? Sure. The Bankers. You bet. Congress? The Lawyers? The Employees? Corrupt, corrupt, corrupt. Stockholders? Just sheep waiting to be sheared. That's the way the game is played. God, how naive are you?

But you didn't have to play the game. Nobody forced you to come and pan for gold. Why join a startup anyway? To do some exciting work? Then you won! Lots of companies built lots of exciting products and had fun doing so. I know I did. The weather? Hey, it's beautiful here in Santa Clara. Or did you come for the money? Come on, be honest. You're just a carpet bagger, aren't you? Guess what. You lost. Suck it up.

Should some people get thrown in jail? Hell, why not. Did they cheat? Yep. Should we have laws to stop them from getting away with it? I think we already do. Should we be surprised that they cheated and got away with it? Hah! Anybody ever heard of a President called Bill Clinton? Hey, if the Big Cheese can lie and cheat, why can't I? But that was different, you say. No it wasn't. The rich and powerful feel like they're entitled and there's little we can do. Thus was it ever so.

If you trust the rich and famous, the powerful, you're freaking nuts! How do you think they got that way in the first place? By playing nice? Hardly. War is hell. Just what game do you think we're playing here, anyway?

All of you arguing for government oversight - be careful what you wish for. They're a hell of a lot more crooked than we are here in Silicon Valley. And stupider. And more insular. The Telecom Act of '96, which launched this whole bloodbath, was a joke. And I fell for it, too. God, how stupid am I? Oh, look, the wonderful, honest, patriotic, decent folks in our shining government are going to level the playing field so we can build the future. You fell for it. I fell for it. Wall Street fell for it. Everybody fell for it. Oh, enforcement? I'm sorry. Southwestern Bell gave me $2 million in my last election campaign. They say the Telecom Act is hurting them. I may be your congressman, but they're my master. Hope springs eternal. So does gullibility.

This is the way America works. Semper Fi, mac. In the end, we drove the information revolution. We invented the Internet and just about everything that goes along with it. Lots of carnage. Carcasses everywhere. Some winners. Lots of losers. I love the smell of napalm in the morning!
sigint 12/4/2012 | 10:14:19 PM
re: VCs Slammed in Poll willywilson:

In the case of the telecom/Internet sector, this was "privately" financed, so the government's role is more of a law enforcement one. All they really have to do is enforce the laws we now have.
__________________________________________________

How effective really are the laws that we now have ? Were the scamsters stupid enough not to muddy their tracks ? I'm sure that 'original' scum of society, the lawyers, would have been involved somewhere in the scam game. And I'm certain they would be prominent orchestrators of every cover-up that's happened or is presently happening.

Yes, the laws could be toughened up to plug loop-holes. But the tougher laws couldn't possibly be applied retrospectively, could they ?
willywilson 12/4/2012 | 10:14:26 PM
re: VCs Slammed in Poll 1. I agree there is no way around really knowing one's stuff, both market and technology, and one has to avoid the "leading by bowing to industry consensus" syndrome: the act of just taking a look at what most others are doing and opting for a statistical average thereof.

2. I agree a certain intellectual laziness, a certain tendency to seek for the time-saving short-cut in decision-making (in part caused by above) exists. The "one-minute manager" syndrome is a true problem. It should be applied for the inconsequential, not for the essential.

==========

1. This is the worst of all VC sins in my book. I got to know these people over the past several years and am just shocked by how little they know, and this includes those in the most "eminent" firms. It's little wonder to me why they wound up taking ethical shortcuts and eventually falling into gross fraud. The alternative would have been rigorous due diligence and analysis.

The richer the VCs got, the more complacent and arrogant they became. There were no counterbalancing institutions to stop them. The S.E.C. was asleep at the switch; Wall Street has never had an ethical compass; the business press was totally captured by the shysters; the secondary buyers of stocks (i.e., the big mutual funds) were in on the frauds to a significant degree; the Federal Reserve was pumping money into the system because of the 1998 Asian financial crisis; politicians in Washington and elsewhere were bribed to look the other way; major, established corporations saw their ethics and values corrupted by the stock options game.

2. It was all about "pedigree" and "brand name," which for Silicon Valley is truly ironic and illustrative of just how corrupted it was. After all, this was the same Silicon Valley that, only 20 years ago, was the insurgent challenger. If this isn't an object lesson ih the power of money to corrupt and the immutability of human nature, I don't know what is.
willywilson 12/4/2012 | 10:14:26 PM
re: VCs Slammed in Poll 1. I think most people here realize (I hope) that there are more than a few responsible for previous disasters, but they voice their opinion about who was 'most' responsible.

2. I think US is a very fortunate country and does have energetic and passionate citizens, but at times believed itself to be untouchable, and that has to change.

-------------

1. It's not how they have phrased it. People have been identifying the ONE cause. Part of getting smarter is arguing smarter, i.e., saying what you mean. The level of discourse in the U.S. is shocking low and it gets worse every year. Sloppy discourse arises from sloppy thinking, and sloppy thinking causes bad decisions.

2. The U.S. has to make lots of changes. One of them is this cultural value that "common sense" is somehow superior to rigorous analysis. People fear "analysis paralysis," but I'd argue that this is a symptom of insufficient rigor in the analysis. We need higher standards, one of which is clarity and another of which is the need to come to a conclusion.

What passes for "leadership" in this country operates through obfuscation, over-simplicity, frequent stupidity, lack of accountability and outright deception. The most prominent example is the crew in the White House right now, but the same traits were visible in the telecom/Internet sector during the 1990s.
pablo 12/4/2012 | 10:14:27 PM
re: VCs Slammed in Poll Strands555:

>.. Some (maybe even most) of the very bad and
> most costly decisions were fueled by lack of
> depth ...

I totally agree with this, I must note. I think there are indeed several cultural issues that lead to intellectual shortcuts when it comes to critical decision-making. I agree there is no way around really knowing one's stuff, both market and technology, and one has to avoid the "leading by bowing to industry consensus" syndrome: the act of just taking a look at what most others are doing and opting for a statistical average thereof. It's tragic when good companies with interesting and gutsy differentiators are managed down to simply being a midfield follower, as opposed to sticking to their particular core beliefs. Large companies can afford such a strategy, start-ups to a certain degree always have to bet the farm. But when the farm's worth $100M+, I guess things change.

And therein lies a fundamental problem, I think, and one very few people mention: the huge increase in how much funding it takes to make a successful high-tech start-up work. It does lead to leadership tryig to shy away from taking risk, even though taking risk and seeking forthe path no one's taken are the essense of start-ups. Instead, start-ups wind up walking down the exact same path some large successfull and established large companies have already taken way too early on.

On top of that, I agree a certain intellectual laziness, a certain tendency to seek for the time-saving short-cut in decision-making (in part caused by above) exists. The "one-minute manager" syndrome is a true problem. It should be applied for the inconsequential, not for the essential...
BadExample 12/4/2012 | 10:14:30 PM
re: VCs Slammed in Poll "Just about everyone here is a simpleton, judging by the fact that no one can seem to identify more than one cause for the bubble and subsequent crash. It's either "all the government's fault," or its "all the RBOCs' fault," or it's "all the VCs' fault," or it's "all the analysts' fault.""

This is so steroetypically American. This country has fudged its way through life with sloppy thinking, protected by natural bounty, two oceans and an energetic population. I submit that, from now on, in the post-Sept. 11th world that taught us that the U.S. is no longer isolated, everyone in this country will need to be smarter.

=====
I think most people here realize (I hope) that there are more than a few responsible for previous disasters, but they voice their opinion about who was 'most' responsible.

As for being stereotypically American, I probably couldn't agree more.

I think US is a very fortunate country and does have energetic and passionate citizens, but at times believed itself to be untouchable, and that has to change.

Wouldn't it be great if everyone was smarter in this world? *sigh*

st0 12/4/2012 | 10:14:31 PM
re: VCs Slammed in Poll rj,
good idea....it is a long way to reality...

question for you:
you said: "Ubiquitous and affordable connectivity networks which support
democratic access and participation of all citizens must be deployed.
These networks must be protected from monopoly control. "
What is "democratic access and participation"? do you really mean RBOC get 4 votes, carrier get 1500 votes?

st
strands555 12/4/2012 | 10:14:34 PM
re: VCs Slammed in Poll Pablo, fair enough on your clarification on innovation. Sorry for the mis-read.

re: RBOCs, I did not quote you, I inferred, and thought I did that clearly in terms of punctuation and word choice. There was no intent to defame; just commenting on my interpretation.

re: "If [RBOCs are] really such a low-tech, unsophisticated, unworthy insutitution - aren't network system technology innovators wasting everybody's time and money by trying to get them to adopt cutting-edge stuff?

To some degree, yes. I don't think it is any great revelation that bureaucracy rules at RBOCs, which means change is extremely difficult, and in some cases not possible or feasible. At best it is reactive not proactive. The purpose of bureaucracy is to make change difficult, and to lock in the success of the existing cash cow, and provide layers of protection against attackers and change. Decades of procedures and policies got wrapped around it.

Yes, they have technologically advanced groups, even bleeding edge. The same is true of the cable guys, and I have worked with their advanced development guys. They are one frustrated group, and it is frustrating to work with them because of it. I assume the RBOC adv-dev people face the same internal hurdles as the cable adv-dev guys. The bureaucracy works against internal as well as external disruptive forces. It is rare that internal adv-dev gets over even the first 5 hurdles, let alone the whole line. Especially if there is no competitive threat that makes the adv-dev effort necessary as a defense.

In essence, that is the short summary: it is a defense, to have some response in the back pocket, rather than an offense. It has no high level visibility or importance until it needs to be deployed as a defensive weapon.

-------
re: "Gross simplification of things is not going to help anybody, either."

Well, it may not help the detail-oriented people, but gross simplifications are the order of the day in the higher ranks, where people are spread a mile wide and can therefore only be a micron deep. This is a piece of the overall problem, and I have not seen one hint of change (or even realization of the problem). It is a cultural problem, where (lots of) activity is rewarded, rather than achievement, quality, and accuracy.

Some (maybe even most) of the very bad and most costly decisions were fueled by lack of depth, which is driven by lack of time, which in turn seems to have at its root a perpetual belief that the market window (doesn't matter what market) closes tomorrow. This has not changed one iota that I have seen. It needs to. Overuse of market research reports that allege to have expertise and future-predicting capability only exaccerbates the problem. None of those companies would still be in business if their revenues were tied to accuracy and timing of their predictions.
rjmcmahon 12/4/2012 | 10:14:34 PM
re: VCs Slammed in Poll On the investment side, greed combined w/ignorance caused the bubble. Leadership w/integrity must emerge. Punishment of the blatant thieves will be required before investor confidence can be restored.

On the productivity side, real broadband must be deployed where the assertion of bandwidth scarcity is replaced by an assertion of bandwidth abundance. A viable service provider industry must emerge.

On the consumable side, the free-rider problem must be eliminated and consumers must learn to pay for content which is expensive to produce (which requires respecting intellectual property laws). Fair use must be preserved else consumers will never pay but rather continue with their stealing. New digital consumer electronics products w/integrated DRM will need to emerge.

On the network side, content and connectivity must be decoupled. Ubiquitous and affordable connectivity networks which support democratic access and participation of all citizens must be deployed. These networks must be protected from monopoly control.

When we achieve these will be on the right path.
nbwaite 12/4/2012 | 10:14:35 PM
re: VCs Slammed in Poll Let's get back to the central question: The cause
and the cure.

My view of the cause is a national devotion to
over simplicity and, thus, in the media and other
sources, a shocking lack of information.

Or, when an IPO had a big first day pop, the solid
information available was meager.

The business news media treated their audience like
overly emotional tots from the Teletubbie set. So,
they assumed we didn't want to know anything at all
important about the companies, and they told us at
most that much. No one should expect to make good
investment decisions from such information.

Part of the cure, then, is for the audiences of the
business media to shout loudly and clearly that we
really do really want the really solid, deep,
detailed, thorough information and don't want the
emotional Teletubbie treatment anymore.

Lacking good information, investors might go on
reputation.

So, another part of the cure is to keep in mind the
VCs and IBs that sold solid companies, still doing
well, versus those that were selling junk companies.

Of course the VCs need to make money, and they
should.

But, it is not so clear that in the last two years
or so the VCs have made much money: When the bubble
burst, many VCs were still holding on to illiquid
investments and lost. And, recent investment
activity has been a bit too slow to support the
number of VCs and the amount of money they have from
their limited partners. So, the VCs need to do
better. If bubble blowing is over, then what might
they do?

So, another part of the cure is for the VCs to do
better at making money. Waiting for more
opportunities for bubble blowing is not promising.

So, what is promising? Well, powerful new
technology to provide valuable solutions to
important problems in our economy is promising.
While that may be less promising than some of bubble
blowing, it's what technology is supposed to be
doing in business and, I submit, the best we can
hope for now.

For this cure, all concerned will have to get
serious, really, REALLY serious about things that
are REAL.
willywilson 12/4/2012 | 10:14:40 PM
re: VCs Slammed in Poll You are correct that there is no one reason for the current situation, but it was not the fault of anyone in the White House.

--------------

Depends on which situation you're talking about.
willywilson 12/4/2012 | 10:14:41 PM
re: VCs Slammed in Poll Does the S&L crisis offer us any lessons on roads to recovery? Were the S&Ls guilty ones punished adequately? What specific policies and actions helped with that recovery?

===========

A fair number of these people went to jail, though not nearly enough of them given the damage they caused. Because the government was on the hook through deposit insurance, it was able to force the reorganization of the sector and the fire-sale of empty office buildings.

In the case of the telecom/Internet sector, this was "privately" financed, so the government's role is more of a law enforcement one. All they really have to do is enforce the laws we now have. There's nothing like the sight of bodies hanging from the lampposts (and mansions foreclosed upon) to scare the hell out of anyone thinking about taking that road again.
brotjo 12/4/2012 | 10:14:41 PM
re: VCs Slammed in Poll An idiot in the white house??? That sounds like a simpleton statement to me! The current resident of the White House doesn't have any bearing on the intelligence of the masses. You are correct that there is no one reason for the current situation, but it was not the fault of anyone in the White House.
rjmcmahon 12/4/2012 | 10:14:42 PM
re: VCs Slammed in Poll Punishing the guilty is INTEGRAL to the recovery process.
_________________

Does the S&L crisis offer us any lessons on roads to recovery? Were the S&Ls guilty ones punished adequately? What specific policies and actions helped with that recovery?
willywilson 12/4/2012 | 10:14:42 PM
re: VCs Slammed in Poll 1. But at a business level, this blame game is getting a bit pathetic. It either shows lack of faith in business opportunties ahead or simple recessive-obsessive behavior.

2. There are some damn good VCs out there, guys that have been in business forever and that have have a track record of helping companies out. There are also several newcomers to the game that have to prove themselves - if they don't, things will take care of themselves anyway.

3. It's a harsh reality in a climate like today's, where some companies that are genuinely good go under through little fault of their own. But the VCs are not solely responsible for the overall business climate in telecom.

4. There is not *one* entity that should be blamed ... we were all very willing accomplices to the whole thing while we thought we could help ourselves to some of the $ that was going around.

=========

1. What you seek to belittle and dismiss as the "blame game" could also be labeled as "failure analysis." Hey, there's a new concept for the VC fashionistas! Let's get a well known startup team to start a failure analysis company!

2. It's not a matter of experienced VCs being good and newcomers being bad. Some of the most experienced Silicon Valley VCs were thoroughly corrupt; fearless analysis and investigation wouild show that some of these VCs took and gave payoffs in one form or another, and actively participated in fraud and market manipulation.

If you wanted to learn from all of this, rather than just whitewash it because you'd rather not think about the massive opportunity costs, you'd be all in favor of finding out exactly who did what, when and how. That's the only way we can protect ourselves from the next go-round. Oh, and justice demands that the guilty be punished. Or do you only believe in punishing the guilty if they are poor, black and violent?

3. VCs are not solely responsible. Reprehensible, but not solely responsible. Hey, they got nothing but glory for many years, so let's not cry too many tears if they have to eat some crap for a while here, and maybe even have a few go to jail. What's wrong with finding out the truth?

4. This is what I'd call "the let-them-off-the-hook game," which is infinitely more dangerous than the blame game.
willywilson 12/4/2012 | 10:14:42 PM
re: VCs Slammed in Poll Interesting. Government is always at the root of all evil! the 1st great corporation.

============

Just about everyone here is a simpleton, judging by the fact that no one can seem to identify more than one cause for the bubble and subsequent crash. It's either "all the government's fault," or its "all the RBOCs' fault," or it's "all the VCs' fault," or it's "all the analysts' fault."

Others are just complacent, because they go to the other extreme and say it's everyone's fault and therefore no individuals are to blame.

This is so steroetypically American. This country has fudged its way through life with sloppy thinking, protected by natural bounty, two oceans and an energetic population. I submit that, from now on, in the post-Sept. 11th world that taught us that the U.S. is no longer isolated, everyone in this country will need to be smarter.

A difficult task given that we have an idiot in the White House, but we can all start on this board by not picking a *single* "scapegoat," but at the same time not denying that there was massive fraud, waste and abuse. We can argue about what to do now, but how about getting the analysis out of the junior high school level for starters?
willywilson 12/4/2012 | 10:14:43 PM
re: VCs Slammed in Poll We've all lost a big chunk of our 401K as a result of these shysters and we are all mad, but there is not a damn thing that you and I can do to recover our losses. Whining about it will not undo the damage that has already been done. The best anyone can do is to learn from this fiasco so as to not repeat the same mistakes that led us to this mess.

=============

If the criminal behavior during the bubble goes unpunished, you can kiss goodbye future direct investment and subsequent stock gains. Punishing the guilty is INTEGRAL to the recovery process. You cannot have the second without the first.
pablo 12/4/2012 | 10:14:44 PM
re: VCs Slammed in Poll > .. I still think VCs are shit brained morons. I
> ought to know. I used to be one. :) ...

You're obviously biased, then. :-)
BadExample 12/4/2012 | 10:14:48 PM
re: VCs Slammed in Poll Nothing quite like first hand experience :] I remember a time when VC's were reverred and held in a different light than common business people.

That's obviously long gone, and people have started to realize that they can be misleading, uneducated, and self invested just like any other business person... they just apparently have more connections
pablo 12/4/2012 | 10:14:48 PM
re: VCs Slammed in Poll
Dear flanker:

" .. its called a news story. And it even has a poll. .."

Yeah, which reflects the fact people are still all caught up in finding someone to blame, pretty much two years after the melt-down. Which is my point: as a news story it's hardly entertaining, as a poll it is reflective of a collective inability to throw that so-2000 sense of entitlement out of the window.

I am not disputing there are serious issues. I am not disputing there's a hell of a lot of sadness and disappointment and worry going around at a human level. But at a business level, this blame game is getting a bit pathetic. It either shows lack of faith in business opportunties ahead or simple recessive-obsessive behavior.

".. That doesnt mean they are not shit brained morons. .."

All of them? Nice to live in a world where generalizations come so easy, where everything is black and white. So many complexities and shades of gray one can ignore then. It's a very dark night, and all cats are black.

There are some damn good VCs out there, guys that have been in business forever and that have have a track record of helping companies out. There are also several newcomers to the game that have to prove themselves - if they don't, things will take care of themselves anyway. Everybody operates within the laws of market economy, and VCs that don't make their clients money do not last long. Just like companies that don't make anyone money can't and shouldn't last long. It's a harsh reality in a climate like today's, where some companies that are genuinely good go under through little fault of their own. But the VCs are not solely responsible for the overall business climate in telecom.

It was not only the VCs. It was a good old symbiotic relationship between VCs, entrepreneurs, legislation in the carrier environment, and flocks of people like you and me joining in on the action and at some point in time forgetting the pangs of reservation I am sure many of us felt at some point or another and buying in on the hype. There is not *one* entity that should be blamed. And if there was one, at least for some time out there they were providing us with a hell of a good time, and we didn't much complain when the party was going on and we were all drinking. But let the hang over come, and it was someone else that perverted us into action.

To a more or far less influential degree, we were all very willing accomplices to the whole thing while we thought we could help ourselves to some of the $ that was going around. But let the well run dry, and let us engage in the good old blame game. The VCs manipulated it all. Yeah, and the tobacco companies force people to smoke, it's the airbag that kills (not the inattentive driver), and fast food companies make overweight people eat crap food at gunpoint or something.

I never claimed to making utterly new or mind-opening points. They're very basic, I admit. But it seems many people have forgotten some basic operational realities and rather would blame everyone else.

But neither do you, despite the fact you're quick to point out how unenlightening someone else's opinion might be.
BadExample 12/4/2012 | 10:14:48 PM
re: VCs Slammed in Poll Interesting. Government is always at the root of all evil! the 1st great corporation..
pablo 12/4/2012 | 10:14:49 PM
re: VCs Slammed in Poll strands555:

Good reply, but missing my point. I never said or remotely meant that technology innovation should stop. But innovation for innovation's sake without a *solid* business case and a *solid* operational foundation is a waste of everybody's (especially ours, as employess) time and money.

It's about a healthy *balance* between new products and a true market opportunity that gets exploited correctly.

And I never made anything that can be remotely construed as a statement that RBOCs are technology companies, even though the point is worth discussion. If they're really such a low-tech, unsophisticated, unworthy insutitution - aren't network system technology innovators wasting everybody's time and money by trying to get them to adopt cutting-edge stuff? RBOCs are not entirely homogenous entitites - they are complex organzations, with some true cutting edge technology centers that often are far more experienced and skilled than the folks that are trying to sell 'em new gear.

Gross simplification of things is not going to help anybody, either.

To claim innovation stops here is a lunatic point no one's made. To manage said innovation to find its most profitable niche ASAP is what start-ups have to be about. Every fashionable high tech management book makes that point, so it's not like I am making a stunning new discovery here.

lighten up!! 12/4/2012 | 10:14:49 PM
re: VCs Slammed in Poll So, when someone burglarizes a home or sticks up a 7-Eleven, is this how you want the police to act, i.e., to tell the homeowner and the proprietor to consider the theft a learning experience and move on?

Or are you only this lenient with white collar criminals because they are much more likely to be well-spoken, white, middle-aged men with whom you identify?
=========

We've all lost a big chunk of our 401K as a result of these shysters and we are all mad, but there is not a damn thing that you and I can do to recover our losses. Whining about it will not undo the damage that has already been done. The best anyone can do is to learn from this fiasco so as to not repeat the same mistakes that led us to this mess. Three years ago many were jumping on to the startup bandwagon, mainly because of greed and the desire to become an instant millionaire... Well many of those dreams didn't come true and they all knew the risk they were taking. You can't have a 1000 startups going after the a handful of large providers with the same value propositions, it just doesn't work...All these startups did was create unnecessary turmoil and drove prices down to unprofitable levels in both the equipment sector and the services sector...Remember when the price of bandwidth goes to down zero so does its value to the end customer...
rjmcmahon 12/4/2012 | 10:14:49 PM
re: VCs Slammed in Poll It doesn't help our industry if much of our energy is wasted in whining and complaining about things which we have little or no control over...
___________________

LightenUp; Your question of "How do we fix this?" is the right question. Answering it seems to be the key to all meaningful progress. I contend that we first need to understand the problem before we can fix it.

The last mile monopolies are the problem.

Last mile monopolists hold power by hereditary controls over a public communications infrastructure. These monopolists bypass universal suffrage as they are not elected. Nor do market competitors exist to check their powers.

These unregulated monopolists exert their controls over our communications infrastructure to

o take and spend money not authorized by the state legislatures nor by market competition
o unduely influence our election outcomes and our election candidates
o manipulate public opinion and censor public scrutiny, further strengthening their unregulated powers

The FCC and these monopolists have become the wolves that Jefferson warned us about. An inattentive and misinformed public have been ripe for the pickings.

The public must act. A democratic society does not merely mean we have the duty of voting at periodic elections. It means the government must be held accountable to the people *between* elections. It means that when marketplaces fail to provide for the foundational principles of a society, the public must fulfill these needs via democratic actions.

We can fix this problem. It starts by becoming active and participating in our local governments. These local governments must build the muni-nets so our communities can progress.
willywilson 12/4/2012 | 10:14:51 PM
re: VCs Slammed in Poll Yeah! we've all been screwed in one way or another but we have to get over it and chalk it up as a learning, and move on.

===========

So, when someone burglarizes a home or sticks up a 7-Eleven, is this how you want the police to act, i.e., to tell the homeowner and the proprietor to consider the theft a learning experience and move on?

Or are you only this lenient with white collar criminals because they are much more likely to be well-spoken, white, middle-aged men with whom you identify?
willywilson 12/4/2012 | 10:14:51 PM
re: VCs Slammed in Poll The criminals will pay their dues sooner or later...if we want to turn our industry around, we can't waste our energy moping and casting blame...The market forces will decide if monopoly is what's best for our industry...The "Everything is Free" Internet business model will not sustain the Telecom industry...The Internet which created a "freebe" mentality in the consumer is another reason for the demise of telecom. To revitalize this industry, content providers and telecom operators need to work together to create value for the consumer for which it is willing to pay. The regulatory hurdles and archaic legislations need to be reformed if we as nation want to stay ahead of third world countries in broadband deployment...

=============

Translation: Let the criminals keep what they stole, and "fix" the industry by allowing it to be monopolized.

Another translation: I've got mine and therefore I don't care who got ripped by the criminals.


yikes_stripes 12/4/2012 | 10:14:52 PM
re: VCs Slammed in Poll Excellent post!!!! Very similar experiences. Even with making off with the business plan. Bastards! They screwed our industry. Watch out, they're still out there trying to find the next big thing.
BadExample 12/4/2012 | 10:14:53 PM
re: VCs Slammed in Poll Picking up the pieces and moving on is integral in turning this industry around, but punishing those responsible is nearly as paramount..
lighten up!! 12/4/2012 | 10:14:54 PM
re: VCs Slammed in Poll Bringing the criminals to justice now, as opposed to never, is neither moping, nor casting blame. It is an integral part of fixing whats wrong with the industry. Namely that it was "lead" by a bunch of greedy know-nothings. Justice for them is not being given a multimillion dollar severance package - nor control over a monopoly. It is being kicked out on the pavement!
==================

I'm not blaming anyone for having these sentiments after what these bums and scums have done to our industry. We all want these guys to be brought to justice. Question is, do we waste our energy over what has already happened or do we get past this and start the healing if we want to be still employed in telecom? It doesn't help our industry if much of our energy is wasted in whining and complaining about things which we have little or no control over...Yeah! we've all been screwed in one way or another but we have to get over it and chalk it up as a learning, and move on...
fusionboy 12/4/2012 | 10:14:55 PM
re: VCs Slammed in Poll "The criminals will pay their dues sooner or later...if we want to turn our industry around, we can't waste our energy moping and casting blame...The market forces will decide if monopoly is what's best for our industry..."

What rock do you live under?

Bringing the criminals to justice now, as opposed to never, is neither moping, nor casting blame. It is an integral part of fixing whats wrong with the industry. Namely that it was "lead" by a bunch of greedy know-nothings. Justice for them is not being given a multimillion dollar severance package - nor control over a monopoly. It is being kicked out on the pavement!

As for your belief in "market-forces" What exactly is the Market Force behind the FCC? behind Congressional Regulation? The only Market DC respects is the steak & Cabernet trade at the Capitol Grille - a trade stoked heavily by lobbyists.
strands555 12/4/2012 | 10:14:55 PM
re: VCs Slammed in Poll re: "...The market forces will decide if monopoly is what's best for our industry...
====
It's nice to see some things never change, and the sheep live for the "advice" of the shepards.

What "market forces" and who's market? The end users ARE the market, though the masses have been brainwashed to believe the monopolies are the market, and that they know best.

The monopolies cannot support an end user that wants/needs inexpensive services, including some which rightfully ought to be free because the monopolies add no value to them (caller ID and its 6000+% profit margins comes to mind).

Instead of dismissing the "freebie mentality" (which is a twisting of the facts by those with vested interests in having you think that is the mindset; people WILL pay for things if there is value), and rebuilding with the belief that it was a ridiculous phase people went through, you'd better begin to recognize that needs to in fact be the central objective of any rebuilding process.

Taking the diametrically opposed, monopoly-spoon-fed view that you are taking, i.e. that things should be rebuilt with a monopoly centerpiece, and that the end users are immaterial whiners in the grand scheme, is absolutely, positively a strategy for failure. Hopefully it won't take another 5-7 years of sliding FURTHER, down that cleverly set trap, to see it will fail. And fail miserably, with billions of additional financial losses and thousand more jobs.

lighten up!! 12/4/2012 | 10:14:56 PM
re: VCs Slammed in Poll Translation: Let the criminals keep what they stole, and "fix" the industry by allowing it to be monopolized.
==============

The criminals will pay their dues sooner or later...if we want to turn our industry around, we can't waste our energy moping and casting blame...The market forces will decide if monopoly is what's best for our industry...The "Everything is Free" Internet business model will not sustain the Telecom industry...The Internet which created a "freebe" mentality in the consumer is another reason for the demise of telecom. To revitalize this industry, content providers and telecom operators need to work together to create value for the consumer for which it is willing to pay. The regulatory hurdles and archaic legislations need to be reformed if we as nation want to stay ahead of third world countries in broadband deployment...
willywilson 12/4/2012 | 10:14:56 PM
re: VCs Slammed in Poll 1. As an industry, we need to move beyond blaming and come out with ways on how we can get out of this mess... Given that greed, clueless analysts, and crooked VCs are not going away, how can we as an industry avoid this catastrophe from occurring again... Here is a thought provoking idea:

2. For stability our industry needs only a handful of service providers and a handful of large end-to-end suppliers. We don't need 1000 MSPP vendors trying to carry IP on everything including IP on Rope...While competition is always healthy, you can't have everybody and their mother in telecom. The pie is only so big to keep the big players healthy so that they can compete and innovate without going bust...In the end if the big players fail, it will be catastrophic for our entire economy... Bob's Photonics will not be able to keep the networks humming... Given that I've been around in the industry for over 20 years and seen it all, I can say that this is the lowest of the low that I've felt being in Telecom... Thanks to all those innovative startups who could barely spell the word Optics and were given millions of dollars to come up with a killer box...

===========

Translation: Let the criminals keep what they stole, and "fix" the industry by allowing it to be monopolized.
lighten up!! 12/4/2012 | 10:14:57 PM
re: VCs Slammed in Poll As an industry, we need to move beyond blaming and come out with ways on how we can get out of this mess... Given that greed, clueless analysts, and crooked VCs are not going away, how can we as an industry avoid this catastrophe from occurring again... Here is a thought provoking idea:

For stability our industry needs only a handful of service providers and a handful of large end-to-end suppliers. We don't need 1000 MSPP vendors trying to carry IP on everything including IP on Rope...While competition is always healthy, you can't have everybody and their mother in telecom. The pie is only so big to keep the big players healthy so that they can compete and innovate without going bust...In the end if the big players fail, it will be catastrophic for our entire economy... Bob's Photonics will not be able to keep the networks humming... Given that I've been around in the industry for over 20 years and seen it all, I can say that this is the lowest of the low that I've felt being in Telecom... Thanks to all those innovative startups who could barely spell the word Optics and were given millions of dollars to come up with a killer box...
willywilson 12/4/2012 | 10:15:00 PM
re: VCs Slammed in Poll Here is an interesting take:

http://www.spectrum.ieee.org/W...

===========

A classic article. As someone who understands the VC community quite well, this is the most accurate portrayal I have ever read. Every single person ever thinking of dealing with a VC should read it.
Iipoed 12/4/2012 | 10:15:01 PM
re: VCs Slammed in Poll VCs mostly invest other people's money

Greenspan is undoubtably the brightest person in the world. 400 to 600 or more price to earnings on companies that are doing 100 million in revenue. He waited as long as he could to stop the insanity hoping that common sense would come into play. It did not.

Fortunately I got out with my .33 options price at 120.00 per share.

Now I have nightmares of guilt regarding those poor investors that bought shares of Juniper, Extreme, Foundry and the optics companies at those triple digit stock prices
photonicGuru 12/4/2012 | 10:15:01 PM
re: VCs Slammed in Poll Many messages on this board about slamming VC, blame game and hating VCs...but Come On Guys!!...they are investing others money on your plans w/o any product in your hand or revenue in your bank. I consider them as a virtual capital provider. They let others to feel about that you are driving real company and real products with good people...and, i think, this is more than enough in the beginning. Do not expect much from your VCs....if you wanna like to have good relationship with them.

Enjoy!
Dr. Smallberries 12/4/2012 | 10:15:02 PM
re: VCs Slammed in Poll
You're right. Everything sucks and it's not YOUR fault. Be negative forever, Babylon.

For all we know, you work for LR, just logrolling to keep the hit counts up.


>What a load of self-justifying crap. Grab a few >headlines and pretend that this is the full extent >of the corruption rather than the tip of the >iceberg.
flanker 12/4/2012 | 10:15:03 PM
re: VCs Slammed in Poll ...2 years after the bubble burst, is this the best our industry can do - still sit there whining, unable to snap out of it and move forward with some enthusiasm?

No, its called a news story. And it even has a poll.

Some body show some enterprising pioneering spirit, please.

You are a little late to the game. We're in the ninth inning.


As long as the best business plan people have in their heads is "eventually, CY2000 will be here again and we'll all somehow make gobs of money again by sheer luck" this industry is not going to turn a single degree, and rightly so. It means it is still caught up in a sense of entitlement.

You are contradicting yourself.

This still is a $80B industry.

The equipment market isnt. Not anymore.


I can not blame VCs for trying to exploit it.

That doesnt mean they are not shit brained morons.

I can not blame analysts for writing the stuff "the market" wants to hear anyway - they represent consensus rather than anything groundbreaking. This is all market economy in effect, and we are all very willing accomplices to it.

blah blah blah

There's just one thing to it: good old fashioned operational excellence.

This is EXACTLY what VCs know NOTHING about.


If you're an incumbent, work on quality and profitability.

Assuming you dont go bankrupt first, like LU is about to.

If you're a newcomer, pick a visionary niche that sufficiently differentiates you, work like hell, and cross your fingers.

Did you say visionary or imaginary?

Managing a business towards profitability is not such a revolutionary new concept.

Do tell us more, oh master.

Too many people out there still believe the goal of technology companies is to bring the coolest, latest technology to market, and that is a tragic misconception.

All hail the lord of the techno flies.
tekfreak2 12/4/2012 | 10:15:03 PM
re: VCs Slammed in Poll I don't agree. VC's simply are simpley short term investors. They don't create markets. They invest their money in the sectors that their crystal balls tell them will bring the best return on investment. If they are right they profit handsomely. If they are wrong as seen in the recent telecom bubble then they suffer greatly. IMO, the industry analysts are more to blame than anyone. They continued to hype technology stocks when they were all very well aware that there was no fundamental basis for the valuations. It took Alan Greenspan to bring an end to it with his "irrational exuberance" speech.
Tim Ber 12/4/2012 | 10:15:03 PM
re: VCs Slammed in Poll Here is an interesting take:

http://www.spectrum.ieee.org/W...
LeCastor71 12/4/2012 | 10:15:04 PM
re: VCs Slammed in Poll The results seem to indicate that people are simply "reacting". Hey, most people I knew from the great skilled technical workers on the ground floor who jumped ship after ship for greater rewards or the "new hires" fresh out of college who DEMANDED a sign-on bonus and options in the 5 digit plus range (and for what track record, I ask? They read USA Today and articles on LR?)

And that feeding at the trough went through all levels from the new-hires out of college to the execs (far worse of course, but somehow greed is proportional to time served too) to the lawmakers themselves to the friends and family games played by the startups with the customers to the VCs.

So whats my point in all this?

It seems that apart from reacting, we are demanding a cycle. On one hand a significant % of people said regulators are part of the problem for thwarting competition yet in the next breath, the only hope of recovery is less competition. In a twist of irony it makes sense, the pendulum swings, a vacuum is created either by necessity or artificially to compensate and from that opportunity is born....and back we go to a new growth period.

But we got 4 good years there building a bubble, it'll take another 2, given we've almost been in 2 to even out.

Last thing - comms was always gonna feel a belated response from the dot-com crash. We were servicing their hype and when they went away so did a lot of justification for network expansion, capacity growth yada yada.

Yassou
-LC


lob 12/4/2012 | 10:15:06 PM
re: VCs Slammed in Poll From my own experience, VCs back in the boom years had no clue and/or ability to add any value to the operations they funded. An inexperienced management team needs a lot of babysitting, and you just couldn't get experienced managers if you had really new (and therefore risky) technology. All the "top dogs" went for guaranteed low-hanging fruit - the IPO investors had no clue as to what is a real technological advance, and what is a rehash of common stuff anyway.

Instead what was seen of VCs is once-a-months visits to sit on board meetings (and I'm talking about best VC funds). I've never seen a VC dropping by to talk with employees to learn what's really going on.

Basically, the modus operandi of a VC was (is?) to make sure the company looks like "the real one". This meant, for example, insistence on hiring M&S people when product is not here yet; having no real stuff to sell those guys inevitably turn to internal politics. Or complete disregard to the company culture - forcing companies to hire executives which clearly do not fit, inability to recognize the loyalties of employees, etc.

They also focred companies to take a lot more cash than they generally needed (and to hire a lot more junior staff that can be made useful by the lead engineers - I guess they never bothered to read "The Mythical Man-Month"). Getting more cash in was simultaneously a way to dilute founder's shares (share in the company was generally perceived to worth more to VCs than money they invested) and (again) to make company to look big and "real". A typical startup was overstaffed by a factor of 3 to 5.

The fabled "connections" of VCs are way overhyped. They mostly schmooze with likes of themselves. It may be good for rasing more money, but useless for getting real work done (all the big name VCs did virtually nothing to help getting better attention from suppliers, or to get attention of potential customers). Worse yet, using their connections they effectively fixed the market for terms & conditions - for example, if you have a novel idea and a business plan, they just won't sign NDA. I know people who discovered after being rejected by a VC that their "entrepreneurs in residence" started businesses based on what they disclosed to the VC.

Valuations, etc. were also quite uniform (helping some friends to get started I managed to consistently predict VC's offers without even asking what the hell the proposed business is :)

I would say that an entrepreneur who liked working with VCs is a very rare bird. Most people who went through VC-funded startups ended up hating VCs.
ivehadit 12/4/2012 | 10:15:07 PM
re: VCs Slammed in Poll ""The biggest surprise here is that "less competition" is currently tying for top place with "advances in access technologies," both of which garner 23 percent. Less competition probably equates to carriers being able to charge higher prices for their services -- the hope being that this will lead to more infrastructure investment. (Dream on.)""
-----------------
i think lightreading misread the results here. less competition equates with VC excess, not higher prices on the part of carriers. when someone clicks on "less competition", imho, they are talking about all the equipment startups with nowhere to go, except pull everyone else down with them. thats a consequence of VC excess that the market will have to deal with before the industry rights itself.
boozoo 12/4/2012 | 10:15:09 PM
re: VCs Slammed in Poll Guys, it amazes me how we need to find scapegoats when we don't succeed (of course, that is only after the fact).

I can argue that we are in fact guilty because we believed in the hype, we did not look at the economic fundamentals, we were stupid enough to believe them.
Why blame somebody for preaching when you have the freedom to judge for yourself and chose to believe or not?
I know why: because it takes guts to be objective towards onself and most of us don't have it.

Boozoo.
willywilson 12/4/2012 | 10:15:10 PM
re: VCs Slammed in Poll By your definition, RBOCs are technology companies. That is sadly mistaken. If the communications and networking world follows the RBOCs with the mistaken belief they will lead them to the promised land, those followers will perish.

==========

True, how true. Unfortunately -- no, tragically -- the VC-financed shyster fraud CLEC operations and their equally fraudulent equipment suppliers have so royally screwed things up that it looks like there's a damn good chance that the RBOCs might take back everything.

That's what I think on my bad days, anyway. On my good days, I think maybe there will be a second crop of CLECs funded from outside the usual VC groups. If the FCC doesn't get corrupted by TechNet and the RBOCs, the opportunities are still huge. Big "if," though.
skeptic 12/4/2012 | 10:15:10 PM
re: VCs Slammed in Poll I have a friend whose company has received equally valued financing proposals from two groups, one being a private angel investor and the other a major California VC offering "connections" within the industry.

I have advised very strongly to take the private individual's money. The VC has already demanded to appoint a new top executive, which I've told my acquaintance is a prelude to an outright takeover of his firm.
==============

The thing about taking private individuals
(angel) money is that you better be sure that
they are going to be financially able to back
you up if you need more money in future.

There are circumstances where its the right
thing to do, but one of the key things to
evaluate when you are out looking for money
is to figure out how you are going to get
the next round of money, not just focus on the
immediate round.

Because if your angel money runs out and you
need more, your going to end up in front of the
same VCs you are turning down now in the most
unfavorable negotiating position imaginable.

I'm not saying that there is one right way
to fund things, more that with any sort of funding
there are a whole bunch of issues that have to
be watched closely.

And don't have any illusions about "takeovers".
Unless you fund something with your own money,
the people who fund you will always be in charge
whoever they are. Its only "your" company when
its "your" money on the line.





sauron5 12/4/2012 | 10:15:11 PM
re: VCs Slammed in Poll I am definitely not taking any credit or responsibility for exorbitant CEO salaries, clueless analysts, and corrupt accountants. To say that
investing hard-earned money in stocks is "greed" is
the same kind of "it's your own fault" reverse-psychobable BS that turns you into sheeps
in the first place.

Sauron
willywilson 12/4/2012 | 10:15:11 PM
re: VCs Slammed in Poll I have a friend whose company has received equally valued financing proposals from two groups, one being a private angel investor and the other a major California VC offering "connections" within the industry.

I have advised very strongly to take the private individual's money. The VC has already demanded to appoint a new top executive, which I've told my acquaintance is a prelude to an outright takeover of his firm.

VCs are, by and large, stupid and dishonorable and should not be dealt with by honest people unless there is absolutely no other alternative, including suspension of operations to await a better day.
sauron5 12/4/2012 | 10:15:11 PM
re: VCs Slammed in Poll Yeah, and we wouldn't have microwaves, just
better "toaster ovens" :)

Sauron
willywilson 12/4/2012 | 10:15:11 PM
re: VCs Slammed in Poll I believe there are VCs who are so dumb, so irresponsible, that they should be thrown in jail just to protect themselves from their own stupidity, and to protect their even dumber LPs from squandering their money any further. But that said, the VCs are a critical part of the communications business and they can't be blamed for everything. They are just like the rest of us, only richer, smarter, better looking and less accountable.

==============

This idea of diffusing the blame so widely that no one is accountable is a real dodge.

If there was a scintilla of justice out there, the corrupt VCs, corporate execs and Wall Streeters who conspired to manipulate stocks (IPO spinning and laddering; phony "strategic alliances" and other empty press releases; "purchases" of non-working equipment that was never actually deployed) would be investigated, fined heavily (including auctioning off those mini- and not-so-mini mansions) and jailed.

The fact that middle-class engineers accepted jobs at these companies does not make them culpable in fraud. It might make them chumps, but not criminals.

Come on children, at least have the self-respect to acknowledge that you were taken for a ride and to ask that those who stole be brought to justice. Now, was that so hard??
willywilson 12/4/2012 | 10:15:12 PM
re: VCs Slammed in Poll I can not blame VCs for trying to exploit it. I can not blame analysts for writing the stuff "the market" wants to hear anyway - they represent consensus rather than anything groundbreaking. This is all market economy in effect, and we are all very willing accomplices to it.

==============

Nice apology for rampant fraud and corruption.
strands555 12/4/2012 | 10:15:12 PM
re: VCs Slammed in Poll re: Too many people out there still believe the goal of technology companies is to bring the coolest, latest technology to market, and that is a tragic misconception.
===============

No, if technology companies STOPPED believing that, it would be tragic. Sustaining products and tweaking operations is the stuff of low or no growth companies and/or divisions of companies. If the pipeline of innovation is emptied because of short-sighted thinkers, there will be no future growth. None. Zero.

By your definition, RBOCs are technology companies. That is sadly mistaken. If the communications and networking world follows the RBOCs with the mistaken belief they will lead them to the promised land, those followers will perish.

The hype and subsequent losses of the bubble doesn't even compare to the losses we will see if companies, lawmakers, and policymakers believe that is the right path, and take us down that path.
How long, to the Point of Know Return.
willywilson 12/4/2012 | 10:15:12 PM
re: VCs Slammed in Poll Sorry, it's nice to have such a juicy scapegoat as moolah-prurient VCs, but LR has overhyped the blame-hype, as usual. While VCs may have pumped the weasel a few too many times, our market woes are primarily due to:

-the dotcom crash casting shadows
-September 11 blowing them up
-and those Enron boneheads.

============

What a load of self-justifying crap. Grab a few headlines and pretend that this is the full extent of the corruption rather than the tip of the iceberg.
sauron5 12/4/2012 | 10:15:12 PM
re: VCs Slammed in Poll Personally, I think Vulture Capitalists are
getting a bad rap here. ;-)

Sauron
wilecoyote 12/4/2012 | 10:15:13 PM
re: VCs Slammed in Poll Well put Beez. We're all to blame here. I believe there are VCs who are so dumb, so irresponsible, that they should be thrown in jail just to protect themselves from their own stupidity, and to protect their even dumber LPs from squandering their money any further. But that said, the VCs are a critical part of the communications business and they can't be blamed for everything. They are just like the rest of us, only richer, smarter, better looking and less accountable. And without them, a lot of us have to work for large public companies which really, really suck...as places to work when you like to get stuff done for a living.
let-there-be-light 12/4/2012 | 10:15:13 PM
re: VCs Slammed in Poll I think we should all be honest and just blame our own greed.

Any power the VC's had was in being able to use money to convince many of us to jump ship and try something new (hoping to be rewarded with millions of dollars in a few weeks or months time). Surprise, surprise, things don't work that way for the majority.
wdog 12/4/2012 | 10:15:13 PM
re: VCs Slammed in Poll Peter,

You're asking the wrong question. It isn't who is to blame, but what is to blame. What got us into this mess?... Greed. And there was(is) plenty to go around. Name any group who wasn't looking to make a fast buck. What will get us out of this mess? Once the fear subsides, it will be greed again. Pretty sick, but all too true.
pablo 12/4/2012 | 10:15:14 PM
re: VCs Slammed in Poll
...2 years after the bubble burst, is this the best our industry can do - still sit there whining, unable to snap out of it and move forward with some enthusiasm? Some body show some enterprising pioneering spirit, please.

As long as the best business plan people have in their heads is "eventually, CY2000 will be here again and we'll all somehow make gobs of money again by sheer luck" this industry is not going to turn a single degree, and rightly so. It means it is still caught up in a sense of entitlement.

This still is a $80B industry. I can not blame VCs for trying to exploit it. I can not blame analysts for writing the stuff "the market" wants to hear anyway - they represent consensus rather than anything groundbreaking. This is all market economy in effect, and we are all very willing accomplices to it.

There's just one thing to it: good old fashioned operational excellence. If you're an incumbent, work on quality and profitability. If you're a newcomer, pick a visionary niche that sufficiently differentiates you, work like hell, and cross your fingers. Managing a business towards profitability is not such a revolutionary new concept. Too many people out there still believe the goal of technology companies is to bring the coolest, latest technology to market, and that is a tragic misconception.
xoip 12/4/2012 | 10:15:14 PM
re: VCs Slammed in Poll On top of what you mention very often they are also
- inexperienced
- dont have a clue about the technolgy and what is involved
- dont know when and how to get the company to deliver (when to stop)
- they listen to inexperienced low level managers /directors to come to a conclusion
- they are incapable of identifying talent
- they hope their rolex and porsche will do the talking.

They killed too many companies in california.

There are still good VCs and hopefully one will be lucky to work for one funded by one or start one with their support.The search must go on.

"May passion for technology be rewarding"

XoIP
Belzebutt 12/4/2012 | 10:15:14 PM
re: VCs Slammed in Poll So now the people who took the money from the VCs are blaming them for giving the money. Yeah, sure.

Here's who to blame:
- analysts, for making crazy-ass predictions
- execs, for believing those predictions

Everyone else was just sheep, the people above were the shepards.
Dr. Smallberries 12/4/2012 | 10:15:14 PM
re: VCs Slammed in Poll
Sorry, it's nice to have such a juicy scapegoat as moolah-prurient VCs, but LR has overhyped the blame-hype, as usual. While VCs may have pumped the weasel a few too many times, our market woes are primarily due to:

-the dotcom crash casting shadows
-September 11 blowing them up
-and those Enron boneheads.

Not to mention Tyco and a few others who were monkeying around. The average schmoe investor now thinks we're all crooks. Regardless, start making POSITIVE noises based on REALITY and they'll come back. If you build it, they will come back, Ray.

Everything's a cycle. So, stop wallowing in negativity, put your heads down and grindstone that nose. No whining.

-Dr. J.
BobbyMax 12/4/2012 | 10:15:15 PM
re: VCs Slammed in Poll VCs are very notorious breed of people. This is particularly true of VCs in California. VC thrive very well in a third world country like California. Any productts and technologies coiming from Caliufornia simply cannot be trusted. Because of third world culture of California, it is very easy to form a third class team and present to the VCs. Company valuations are outrageous. Any company that acquires a California company is buying a ticket to hell. Many companies such as Lucent, Nortel, and Alcatel are already in hell.

It is not uncommon for a serial enterpreauner in California to copme out with a business plan after attending a trade show. They usually copy from each other and out with a low technology product.

There are over 10,000 VCs in the US. Probably about 80% of them are located in California.

There are many examples of insider trading but SEC fails to take any action. Any thing goes.

The Telecom Act of 1996 have created many crumy and third rate companies to emerge. These newly started companies wuth dobyful future tend to destabilize larger companies.The net result is commotion in the market place.

There is too much money with the VCs. They misuse the funds. They also feel like king and queens.

There is nothing to stop the trend of making very weak products and use dirty tricks to facilitate acquisitions at exhorbitant prices.
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