The New York Times is running a series of articles on the last days of the Enron crisis (actually excerpts from Times writer Kurt Eichenwald’s forthcoming book on the subject).   It reads like a soap opera (by both design and because that’s really what this story amounts to).  The amazing take-away for me was just how far Enron had strayed from the most basic forms of financial management (they didn’t track their cash balance, nor did they track when their debt came due – so they had no idea either what they owed or how much they had available to cover that debt).
Take a look at the article here (in case the link doesn’t work the url is http://www.nytimes.com/2005/03/13/business/yourmoney/13enron.html?) .  It’s worth a read.

Ernst and Young puts out a quarterly report on the VC industry.  It’s full of fantastic data (from their VentureOne group).  I just got my book today and am still sorting through it – I’ll put up a post soon with some of the take-aways.

Something that struck me right away was the list of the top acquirers of VC-backed companies.  They are :

IBM (5)
Cisco (5)
Tekelec (4)
C-COR (4)
Broadcom (4)
Thomson (3)
Motorola (3)
IAC (3)
Alcatel(3)

Not surprising to see IBM and Cisco on the list.  I was surprised not to see Microsoft,  Mercury (both of whom seem to be pretty active acquirers)  and a few other names on the list (didn’t Siebel acquire 3 or 4 companies last year?).  My  real surprise though was that this group of the 9 top acquirers of venture companies only accounted for only about 8% of all the venture backed m&a last year.  I thought there would have been more of a concentration of buyers, but apparently the majority of the list is made up of companies that bought only one venture backed company during the year.

In case you haven’t noticed yet, Google has made their news page customizable (see the  “customize this page” link on the right of the screen).   Not all that surprising a move (what took them so long?) . . .  they are a media platform after all – even  though they want us all to think they’re  really just focused on search . . .

One of the nice things about sitting on the beach for a week is that it gives you time to think about a few things. I won’t profess to having had profoundly deep thoughts, but I’m working on a few posts that cover some of the topics I was thinking about as I soaked in the rays.

First a light topic, but one that actually does have a real message despite its levity.

My 13 month old daughter discovered the joy of Oreo Cookies on our trip. Here’s the catch, though – she knew exactly how to eat them.  Seriously. Having never ever eaten or even seen an Oreo before in her life, she proceeded to pick up the cookie, pull it apart and eat the frosting out of the middle and then eat each of the cookies.  She did this every time she ate an Oreo. That’s how intuitive the Oreo Cookie is – a one year old can figure out the right way to eat it without any instruction or guidance.

All of the companies I work with should strive to have a product with that kind of appeal . . .

I’m really bad at taking time away. I mean real time away where I’m completely out of touch and can fully recharge – not the run away for a long weekend but bring your laptop with you kind of away. I need to get better at this – it’s not fair to my wife and daughter and it’s not fair to me. Brad is very consistent about taking real time off – he and his wife take one week a quarter where they go away and completely relax. I need to follow their example more.

My wife and daughter and I are going to do just that for the rest of the week and into next week. We’ll be soaking up the rays and relaxingtogether. And no – I’m not bringing my laptop with me . . .

I’ve been involved in executing mergers and acquisitions for a large part of my career. I’ve never stopped to count the number of deals I’ve been involved with, but would guess that the total is several hundred, with probably somewhere between 50 and 75 where I had primary responsibility for negotiating (the rest I was an advisor to). I’ve seen a lot of different types of deals over the years and many many different negotiating tactics (my own style varies from deal to deal, and my default style has changed a lot over the years – a topic for another post). Over the next few months I’m going to do a series of posts on m&a – some general comments on the subject; some war stories; some m&a 101; etc. I’ll try to keep them short and to the point. My first post is on a topic that I’ve experienced a lot recently – ultimatums. There’s definitely a place for ‘this is the best we’re going to be able to do’ statements in deal negotiating, but too often people use this tactic when they don’t mean it. The result is something akin to the never cry wolf fairy tail – but with a faster outcome. It only takes one time drawing a line and then crossing over it to completely lose your deal credibility. Hearing about a company’s ‘best and final’ offer 5 times over the course of 2 days doesn’t drive the best deal – it just annoys all involved and has the affect of disengaging the party you are negotiating with and ultimately making you negotiate against yourself (which is #1 on the negotiating 101 list of things not to do). I respect that there is a certain amount of gamesmanship involved in negotiating a transaction – both sides in a deal understand that. But outright lying (i.e., saying something is the best you can do when its not) and then stepping right through your lie flies in the face of good negotiating tactics and leads to busted deals and to the party you are negotiating with retrenching rather than trying to reach a happy medium.

So . . . please feel free to draw a line in the sand – just only do it when you really mean it.

Ever notice that the nicer the hotel you stay in, the more you have to pay for? It seems to me that the more I pay for a room, the more likely it is that I have to pay for local phone calls, internet access, breakfast, gym access, etc.

I was thinking about this a couple of weeks ago. I was in San Francisco and staying at a reasonably nice national chain hotel and paying over $200/night for the privilege. On top of that I had to pay  forInternet access ($9.95 for crappy 200kps throughput), local calls ($0.75 a pop) and access to their gym ($10/day).  Not so  when I stay at cheaper hotels(particularly down on the peninsula, but I’ve found this to be true all over the country) – I rarely pay for this stuff.  On one recent trip to Palo Alto I stayed at a  hotel that was less than $100/night, had fee internet access, free local calls,a descent work-out room and provided me with a nice continental breakfast (also for free).

I guess you don’t always get what you pay for . . .

Ok – short post on a real pet peeve of mine.  The word “data” is plural. See the following examples:

Incorrect: Them data is cool!
Correct: Them data are cool!

It’s a minor annoyance and, coming from someone who can’t figure out when to use affect vs. effect, perhaps you should just ignore me . . . but really – data are plural.

Ok – I’m a little late to the party on this one, but I promised NewsGator that I wouldn’t forget to drop a post on their recently announced deal with VNU (see the press release here; Brad has a post on the announcement as well – view it here).  The two companies are going to co-brand an RSS aggregator for 7 European markets(VNU is a big tech publishing house in Europe).  It’s a great deal for both companies and an important step forward for NewsGator in their continued development.

Someone asked me the other day with all the noise in the RSS aggregator market, what is going to set NewsGator apart?  There are multiple parts to the answer to this question, but developing strong partnerships with distribution partners (to drive their subscribers/readers to NewsGator’s platform) is a key part of the mix.  (More on my thoughts on the rest in a later post.)

Here’s an interesting experiment to try. Get a friend. Think of a song (one that you would reasonably expect your friend to know as well). Tap along with your finger while you play the song to yourself in your head. Now ask your friend what song you were taping out.

It turns out that the taper’s estimate of  how easy it will be for someone to guess what song they are tapping is vastly greater than the success their friend will have in actually coming up with the correct song. The taper believes they are conveying much more information than they really are.  (Apologies for not being able to find the actual study reference I was looking for – I couldn’t find it on Google Scholar and I’ve long since thrown out the psychology textbook I had that referenced the study.)

There’s an important lesson in this experiment. Often times we’re in a position where we have an idea, thought, emotion, etc. that we are trying to get across to someone else. As humans its our nature to overestimate the ease with which other people can understand the information we are trying to convey. What we may feel is very clear – tapping our finger to a song that we think is very obvious – may in fact be completely obscured to the people we are trying to convey this information to.

Something to keep in mind thenext time you’re waiving your arms around at a meeting boisterously trying to make a point . . .