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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
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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.
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 ?
fiber_r_us 12/4/2012 | 10:14:16 PM
re: VCs Slammed in Poll Smoking_craters: Awesome!
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
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 | 10:14:12 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.
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)
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