Public Sector v Private Sector; will (can) the private sector continue to carry the load?

Well, this is going to be a different kind of post for me.

I wrote it because I believe the original core values that helped to create and shape the US, and a state like California, are under duress. Some may view it as a political rant due to the subject matter but I actually think it is a bipartisan issue as it affects everyone on either side of the political spectrum. So, here it goes.

This weekend, due to the last minute intervention of California Governor Jerry Brown forcing a 60 day cooling off period, the SF Bay Area was able to avoid another  BART strike by Service Employees International Union Local 1021 over financial and safety concerns.

When interviewed by the local media, union negotiators made statements alluding to the fact they are focused on “public safety concerns”. While those statements are clearly designed to engender public sympathy and support, when you get details of the discussion the motivation appears to be primarily financially oriented.

On July 27, 2013 the San Jose Mercury News published an article titled, “BART workers’ paychecks already outpace their peers” which asserts the following:

  • BART workers earn the most money on average in 2012 among the 25 largest government agencies in the Bay Area
  • Average gross pay for blue-collar BART union workers threatening shutdown was $76,551 in 2013
  • BARTs top-paid train operator grossed $155,308 and top paid janitor made $82,752  and BART’s top paid electrician made $149,957.
  • Overall, BART’s average employee – including executives – made nearly $30,000 more than employees at Los Angeles’ transit line
  • BART has highly favorable rules that allow workers to “pile up lots of overtime and cash out unused sick time
  • but…25% of BART employees made less than $62,680 median income in the SF-Oakland-Fremont metropolitan areas

The article claimed that BART union workers are demanding a 20.1% pay raise over the next 3 years. One BART worker who was interviewed stated he is “tired of people thinking they are just drones who only push buttons and that, “employees work hard, often on off-hours, holidays and weekends, for their money.”

Why AngelList Will NOT Become the Android of Venture Capital

I just finished reading a recent guest article on VentureBeat titled, “Why AngelList Will Become The Android of Venture Capital” written by Gaurav Jain. Unfortunately, while it may make good fodder for those entrepreneurs who have a love/hate relationship with the traditional venture capital community, I disagree that AngelList will replace more traditional venture capital any time soon, if ever.

Letter To IBM

Dear IBM:

Congratulations on your recent acquisition of Kenexa for $1.3B. The HCM application market has been steadily heating up and with SAP’s recent acquisition of SuccessFactors and Oracle’s purchase of Taleo, this looks like a good counter move.

Your announcement coupled with the recent news that Apple has become the most valuable company in the world prompted me to write this.

As I thought more about Apple and IBM and their respective positions in the current technology markets, I realized just how different the two companies are today from two decades ago.

Twenty years ago, when I worked for Apple as a young engineering director, IBM was “the” business information technology brand. Apple was nowhere — except in niche areas such as graphic design.

Under Steve Job’s leadership, beginning with his return to Apple in the mid-90’s, Apple emerged from near oblivion to become one of, if not ‘’the’, most powerful consumer — and business — technology brands.

Today, Apple’s products are used pervasively by people — at home and at work –  throughout the world. Apple has become the leading mobile platform developers target for consumer and business applications.

IBM, in the early 90’s, was faced with its own set of challenges stemming from poor financial controls, lack of innovation and other issues. Gerstner is appropriately credited with solving these and his successors — Palmisano and Rometty – have continued that success.

Now, IBM’s stock is at a near all time high, more than doubling over the past 3 years.  The Company invests in all the right buzz areas: Cloud Computing, Analytics, Mobile, etc. Wall Street is singing IBM’s praises.

Yet, in spite of all outward appearances, I respectfully submit that IBM may be headed toward another very rocky and challenging stretch of waters.

Do Venture Capitalists Suck?

Dave McClure, formerly with PayPal now at 500StartUps, posted a great article this past week he titled, “Scaling Venture Capital. We suck. We can do better.” I encourage you to read it.

Dave makes two points. The first point is that most venture capitalists are hypocrites. They expect entrepreneurs to build large, global companies while they as venture capitalists have never personally held an operational role nor built and scaled a large, global successful company.

I think it is this issue that tends to cause a lot of friction between entrepreneurs and venture capitalists and it is this point I am going to focus on here.

Are You Capitalizing Upon Your Social Media-ness?

I had a great meeting with Bindu Reddy last week. Bindu is the CEO of MyLikes and the former head of product management for Google Apps. Her husband and co-founder of MyLikes, Arvind Sundararajan, is the former tech lead for AdSense.

The premise behind MyLikes is simple: we are more likely to trust the recommendations of our friends, colleagues and advisors more than we trust consumer ads and the opinions of people we don’t know (with the exception of Hollywood celebrities and sports stars because, of course, we all know they are completely believable, role models for our children and extremely well educated – sarcasm intended).