Maury Albertson

Maury Albertson, a CSU Engineering professor, passed away yesterday. Maury was a BOPreneur for sure, and an inspiration to many of us through his work at CSU, the Peace Corps and Village Earth.

He may be best known for his work in helping start the Peace Corps. An opportunity, which, according to one story, he learned about from a student. But he is also an example of a lifelong learner and teacher, who worked well into his 80's with energy and persistence. Most recently, he has been pushing for more rapid adoption of a hydrogen fueled economy.

Maury's stone has caused many ripples, and I hope the organizations he started, the students he taught, the thousands of Peace Corps volunteers he helped go abroad, and the many other people he has inspired amplify his ripples and cause many waves in the future.

As Churchill said, "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty." I am not sure Maury ever thought a problem was unsolvable. Not a bad approach, or legacy.

R.I.P. Maury.

Lone Wolves

I saw my first wild wolf yesterday. A half hour south of Jackson, WY across the frozen Hoback River. It was a lone wolf, and it had taken advantage of the snow pack to corner 2 elk. The elk sunk deep in the snow, the wolf did not. The wolf was about 25 feet from the elk, waiting. It appeared to have one thing on its mind.

Seeing a wild wolf had been something I thought would take more work. A visit to Yellowstone, for instance. Yet here was one just a hundred yards off the highway. They are beautiful animals. At least from a car- I don't think the elk were appreciative of its beauty. The site made my neck hairs crawl just a bit. To me, who read all of Jack London's stories when I was young, the wolf is the epitome of the wild.

It was surprising, however, that there was only one wolf. How could one wolf take on two elk? Where was the proverbial pack? Was this a scout? Were the other wolves back in the timber, hidden from the highway? Or was this a true "lone wolf"? I don't know. Soon a pickup came up behind me and stopped, and the wolf disappeared into the trees.

Lone wolves are the stuff of myths. The term is used to describe loners (often dangerous or anti-social ones) from software programmers to terrorists. Since this is a blog about business, I will briefly write about a different type of lone wolf.

A lone wolf is an "outlier" (but not one described in Gladwell's new book). Some entrepreneurs (only males, which is actually appropriate) fancy themselves as lone wolves. Outsiders, toiling away against the entrenched economic interests. While iconic, these are not typical. The term can be ironically descriptive, as lone wolves are often the pack's weakest members, and are driven from the pack. Sometimes, they find a mate, and start a new pack. But not always. Their fate is not always a good one. A lot of howling at the moon, so to speak.

Of more interest to me is the lone wolf investor. Usually an angel investor (doesn't business just love its metaphors?) and doggedly independent from other investors since he is smarter/wiser/more experienced/less trusting. Most investors display a pack mentality- they take comfort from seeing others sharing the risk, and often share duties (due diligence, board directorships) to hunt more efficiently. [Note: Please don't infer that I think they view the company as prey. In fact, I think I am being charitable, as some have described investors as having a herd mentality, which implies a different role in the food chain.] These investors see the entrepreneurs they fund as joining their pack, not as their prey (I don't buy the whole "vulture capitalist" theory).

But not the lone wolf. The lone wolf is often a former executive from a related industry, but not necessarily an entrepreneur. Particularly if the entrepreneurial founders are more technically oriented, the lone wolf may be seen as an attractive "business guy" to round out the team. But as with the wolves who wear sheep's clothing, or are the mythic shapeshifting wolves, entrepreneurs will need to be VERY careful. There is a reason this wolf doesn't have a pack, and the story he tells will need a little checking. "What a big set of teeth you have, Mr. Gekko." "All the better to chew up your company, darling."

The value of an investor pack, in terms of their networks, is often very useful in the early days of a company. With a good pack, you get wisdom, connections, and advice far beyond what a single person can provide. And, if it is a healthy pack, there seems to be a social norm that prevents bullying by a single individual (not always). My other concern with the loan wolf is that he will scare off other investors. Investors are familiar with pack rules, but the lone wolf often tries to cut special deals that don't work when a pack comes along. Special anti-dilution rights, or voting rights, or valuations.

While the many myths and legends surrounding wolves may seem unfair when applied to the beautiful animal I saw yesterday, I think they raise good cautionary instincts for entrepreneurs. Pay attention to your neck hairs.

*the picture is not mine, but looks most like the wolf I saw yesterday.

Capitalism, Death and Sex

One of the things I am truly grateful for with the internet is the access to great talks by great thinkers. TED, ForaTV, YouTube. It is a moveable feast and a great way to "sit in" on lectures around the world. I do realize, however, that watching videos of lectures is less popular than other forms of adult internet video entertainment.

A friend recently sent me a link on a FORA.tv talk with Hernando DeSoto, Joseph Stiglitz and Naomi Klein (well, two great thinkers and Naomi) discussing economic power and the financial crisis. The meta-topics of globalization, politics and economics. Stiglitz starts out the forum saying that the financial crisis has caused the death of "market fundamentalism." Klein is also well known for her antipathy to capitalism, which she calls Disaster Capitalism, and she too seems to think capitalism is gasping its last breaths. So, is capitalism dead? Is it truly a disaster? Or will it evolve and survive?

Not surprisingly, I find DeSoto's viewpoints the most convincing. In his view, unfortunately, the US is beginning to look a bit like a banana republic, where our promises (or "paper") are no longer trustworthy. But that is not a fatal flaw of capitalism, just of the way it has been practiced lately. Sick, maybe, but not dead.

I think the topic is more nuanced than Stiglitz and Klein present; there is not one way to do capitalism, anymore than there is one way to have sex, swing a golf club or brew beer. And some ways are better than others. Baumol, Litan & Schramm have classified four types in their book Good Capitalism Bad Capitalism; entrepreneurial, big firm, state-directed and oligarchic. And there are mixes of the four (they prefer a blend of entreperneurial and big firm). Here is a video link discussing the options (for capitalism, not sex, golf or beer).

Of interest on the political side is Paul Collier's recent work. Collier wrote the Bottom Billion in 2007 and offers a lot insight into why the poor countries have been left behind as the rich world has developed. He has more recently been poking around about the role of democracy in development, particularly with respect to commodities booms. As he pointed out at TED, commodities offer tremendous opportunity for development (commodities revenues dwarf foreign aid). But commodities revenues can have an adverse effect on development if governance is off. Even in democracies. The emphasis on democracy in the developing world has been on elections, not on checks and balances. His recent studies of commodities booms indicate that they are unhealthy for economies if they don’t have the checks and balances. It seems that there is such a thing as unprotected democracy. That the outcome of a quick election is not enough.

So, I think capitalism "is not dead yet," and I don't think that our recent experience was Stiglitz's "market fundamentalism." Some of Stiglitz's own data in this month's issue of Harpers seem to indicate we have been experiencing a blend of big firm and state-directed capitalism (with some old fashioned cronyism tossed in as well). This is hardly "market fundamentalism," as it is hard to see free markets at work in his data. Rather, it seems to be the effect of a number of political decisions (two wars, Medicare) which have increased the role of the federal government in our economy for years to come. To update an old (if misattributed) saying, “a trillion here, a trillion there…pretty soon you are talking real money.”

It is really discomforting to see how large the role of our government has become in our economy while there was a “Conservative Republican” in office. I sure hope the incoming “Liberal Democrat” administration proves to be as paradoxical, and moves us toward a policy favoring a more entrepreneurial capitalism. That is likely to be the better path for recovery, as opposed to an embrace of further government regulation of the affairs of business and society.