Gordian Knots

The National Geographic Society and IBM are teaming up to map the history of human migration using DNA. The Genographic Project aims to collect 100,000 genetic samples which will be used trace the movements of humans out of Africa and around the globe. While the most useful samples will come from indiginous populations, members of the general public will be able to mail in their own DNA on special cheek swabs.

When I was researching the above article, the following projects caught my eye:

cytoscape.org: ‘Cytoscape is an open source bioinformatics software platform for visualizing molecular interaction networks and integrating these interactions with gene expression profiles and other state data.’

geneontology.org: ‘The goal of the Gene Ontology project is to produce a controlled vocabulary that can be applied to all organisms even as knowledge of gene and protein roles in cells is accumulating and changing. GO provides three structured networks of defined terms to describe gene product attributes. GO is one of the controlled vocabularies of the Open Biomedical Ontologies.’”

The National Geographic Society and IBM are teaming up to map the history of human migration using DNA. The Genographic Project aims to collect 100,000 genetic samples which will be used trace the movements of humans out of Africa and around the globe. While the most useful samples will come from indiginous populations, members of the general public will be able to mail in their own DNA on special cheek swabs.

When I was researching the above article, the following projects caught my eye:

cytoscape.org: ‘Cytoscape is an open source bioinformatics software platform for visualizing molecular interaction networks and integrating these interactions with gene expression profiles and other state data.’

geneontology.org: ‘The goal of the Gene Ontology project is to produce a controlled vocabulary that can be applied to all organisms even as knowledge of gene and protein roles in cells is accumulating and changing. GO provides three structured networks of defined terms to describe gene product attributes. GO is one of the controlled vocabularies of the Open Biomedical Ontologies.’”

Seth Levine of Mobius Capital talks about how to become a venture capitalist:

“I get asked this question a lot and while the real answer is ‘I have absolutely no idea,’ I thought I’d make something up here so I at least have a place to send people who ask me this question (as well as anyone else who happens to stumble upon this blog searching for ‘getting a job at a venture capital firm’). This post is for aspiring analysts, associates and principals and has little to do with getting a job as a partner (which I hope to figure out one day too . . .)

Step one: Assume you will not be able to land a job as a venture capitalist. This is the realistic outcome of trying to get a job as a VC. I imagine the market is a little bit better in places like Palo Alto, but here in Denver I can count on one hand the number of VC jobs that have opened up since I joined Mobius in 2001. Only a couple (I’m thinking about 2 at the moment, but there may be a few others) actually went to people who weren’t already in the industry. Even in larger VC markets (specifically the Bay Area and Boston) there are many more people who are actively looking to get into the VC world than there are positions open.

Step two: Understand the math. It’s critical to understand how VC’s make money and therefore the fundamental request you are making when asking for a job as a VC. Venture capitalists make money in two ways, from management fees (a percentage of funds under management) and from carry (a percentage of the return on investment). The partners of the fund use the management fee to pay the expenses of running the business (office space, technical infrastructure, travel, support, etc.) and then pay themselves with what’s left over. As a non-partner you are fundamentally a cost center. The partners are quite literally taking money out of their own pockets and giving it to you. Rationally, they will only do this for one of two reasons, either you are significantly impacting their lives in a positive way that makes the trade-off worthwhile for them (you cost less than the marginal life benefit they get from having you around) and/or you will help create more carry (i.e., they can manage more deals with you around and therefore deploy more capital; you have a skill set that will positively affects the portfolio, etc.). If you fail to do these things you are just eating up management fees. There is a grey area here for Principals (called VPs or SVPs at some shops, junior partners at others) who are managing their own deals as well as supporting partners’ deals.

Step three: Get close to VCs. The road to becoming a VC follows many different paths, but fundamentally your first step in landing a VC gig is likely to be figuring out who the VCs are in your area and trying to get close to them. If you’re still in college, consider a job in an investment bank or other financial services firm (even VC analyst jobs are hard to come by straight out of college, VCs tend to hire people with at least some financial training at those levels) to get the best possible training for an entry level job in VC. If you are in business school, look for internships that will allow you to meet venture capitalists (either at a VC directly or for a portfolio company of a VC). If you don’t fit any of those categories, take a job at a company backed by venture money and try to get exposure to the venture capitalists on the company’s board. In short do what you can to get to know VCs in your area so that when a position opens up you can be both top of mind and a known commodity. Take a longer term view of your approach and remember that many VCs got there not by following a traditional path (banking –> b-school –> VC) but have years of operating experience, were entrepreneurs themselves, or were somehow else involved in the business of building and growing companies.

Step four. Be smart about networking. I’m writing a separate post on the subject of smart networking, but suffice it to say here that you should put some thought in how you use your network to meet VCs. Figure out who you know who also knows VCs that you’d like to meet and play the network game as best you can. It can take a long long time to get meetings set up, be patient about it (Brad probably doesn’t remember this, but when I was first introduced to him in what was a very ‘hot’ introduction from someone who he trusted a lot and who had worked very closely with me, it took three months to actually get in to see him ).

Step five: Don’t get discouraged. If you remember back to step one, you weren’t going to be successful getting a job in VC in the first place, so all the progress you are making is gravy, right?!?

Seth Levine of Mobius Capital talks about how to become a venture capitalist:

“I get asked this question a lot and while the real answer is ‘I have absolutely no idea,’ I thought I’d make something up here so I at least have a place to send people who ask me this question (as well as anyone else who happens to stumble upon this blog searching for ‘getting a job at a venture capital firm’). This post is for aspiring analysts, associates and principals and has little to do with getting a job as a partner (which I hope to figure out one day too . . .)

Step one: Assume you will not be able to land a job as a venture capitalist. This is the realistic outcome of trying to get a job as a VC. I imagine the market is a little bit better in places like Palo Alto, but here in Denver I can count on one hand the number of VC jobs that have opened up since I joined Mobius in 2001. Only a couple (I’m thinking about 2 at the moment, but there may be a few others) actually went to people who weren’t already in the industry. Even in larger VC markets (specifically the Bay Area and Boston) there are many more people who are actively looking to get into the VC world than there are positions open.

Step two: Understand the math. It’s critical to understand how VC’s make money and therefore the fundamental request you are making when asking for a job as a VC. Venture capitalists make money in two ways, from management fees (a percentage of funds under management) and from carry (a percentage of the return on investment). The partners of the fund use the management fee to pay the expenses of running the business (office space, technical infrastructure, travel, support, etc.) and then pay themselves with what’s left over. As a non-partner you are fundamentally a cost center. The partners are quite literally taking money out of their own pockets and giving it to you. Rationally, they will only do this for one of two reasons, either you are significantly impacting their lives in a positive way that makes the trade-off worthwhile for them (you cost less than the marginal life benefit they get from having you around) and/or you will help create more carry (i.e., they can manage more deals with you around and therefore deploy more capital; you have a skill set that will positively affects the portfolio, etc.). If you fail to do these things you are just eating up management fees. There is a grey area here for Principals (called VPs or SVPs at some shops, junior partners at others) who are managing their own deals as well as supporting partners’ deals.

Step three: Get close to VCs. The road to becoming a VC follows many different paths, but fundamentally your first step in landing a VC gig is likely to be figuring out who the VCs are in your area and trying to get close to them. If you’re still in college, consider a job in an investment bank or other financial services firm (even VC analyst jobs are hard to come by straight out of college, VCs tend to hire people with at least some financial training at those levels) to get the best possible training for an entry level job in VC. If you are in business school, look for internships that will allow you to meet venture capitalists (either at a VC directly or for a portfolio company of a VC). If you don’t fit any of those categories, take a job at a company backed by venture money and try to get exposure to the venture capitalists on the company’s board. In short do what you can to get to know VCs in your area so that when a position opens up you can be both top of mind and a known commodity. Take a longer term view of your approach and remember that many VCs got there not by following a traditional path (banking –> b-school –> VC) but have years of operating experience, were entrepreneurs themselves, or were somehow else involved in the business of building and growing companies.

Step four. Be smart about networking. I’m writing a separate post on the subject of smart networking, but suffice it to say here that you should put some thought in how you use your network to meet VCs. Figure out who you know who also knows VCs that you’d like to meet and play the network game as best you can. It can take a long long time to get meetings set up, be patient about it (Brad probably doesn’t remember this, but when I was first introduced to him in what was a very ‘hot’ introduction from someone who he trusted a lot and who had worked very closely with me, it took three months to actually get in to see him ).

Step five: Don’t get discouraged. If you remember back to step one, you weren’t going to be successful getting a job in VC in the first place, so all the progress you are making is gravy, right?!?

If something cannot go on forever, said Herb Stein, ‘it will stop.’ The subject of this now-famous dictum by the chairman of Richard Nixon’s Council of Economic Advisers was a balance-of-payments crisis stemming from the dollar’s exchange rate, which was then fixed at an unsustainably high level. Sound familiar?

If you have been reading the world’s financial pages, it should. The overvalued dollar and the massive interventions by Asian central banks, particularly China’s, to keep it that way, have created a global economy that is growing quickly but unevenly. The result has been a ballooning current-account deficit in America, an overheating economy in China and a global economy dangerously dependent on American consumer demand, which in turn is dangerously dependent on heavy borrowing and ever-increasing house prices to keep consumers feeling flush. In rising numbers, at rising volumes, economists have been telling governments that this cannot go on forever. But when, and how sharply, will it stop?

“The myth of the American Dream, from bootstraps to billionaire, if that is what you are capable of achieving, has been well explored. But what of this nation’s losers? If we live in a country where anything is possible, then what do we think of those who don’t succeed? What do people who fail think of themselves?

In his book Born Losers: A History of Failure in America, Carnegie Mellon history professor Scott A. Sandage looks at the stories of near-anonymous people who dreamed big and fell far, while at the same time exploring our shifting attitudes toward those in our midst.”

About TOR:

Tor is an overlay network that lets you browse and use other TCP based services anonymously. Normally if you use a secure tunnel an observer can still see the destination and origin ip addresses; They may not be able to tell what the payload is, but they will be able to tell who is talking. Onion routing uses a series of encrypted hops to hide this information. The Tor client creates unique routes through a network of Tor nodes. First the client contacts a node and negotiates an encryption key with it. Once that link has been established the client instructs that node to contact another and get the next key. Once all of these keys have been collected the client can begin encrypting its information. The payload is encrypted by each key in route order. When the first node decrypts the payload it determines where to send it next. The encryption is removed one layer at a time as it travels along the route arriving at its destination fully decrypted.

Tor recently reached 100 verified nodes.

Merriam-Webster Online says: “What a lovely bunch of vocabularians (persons who make up new words) you are! Lasterday (refers to any day before today) we squinched (action required to fit something into a space that is slightly too small) a schmiglet (a small unit of measurement) of your awesomtastic (so wonderful the words just meld in your mouth) one-of-a-kind entries into this space in preparation for today’s Top Ten reveal. With so many chizzy (awesome, super, happening) creations to choose from, we admit to becoming a bit flusterpated (a state of being flustered that’s so intense, one’s actions and words become bound up) and fahoodled (confused, esp. when trying to think of too many things at once). We craughed (to cry and laugh simultaneously), we troddled (to wander around without knowing of doing so), and finally decided to use the schwack (a large amount) of multiple entries received as the basis for the Top Ten?this is, let’s not forget, all about favoritism.

From the thousands of submissions we received, here, then, are the ten words (not in the dictionary) entered the most often:

Top Ten Favorite Words (Not in the Dictionary)

1. ginormous (adj): bigger than gigantic and bigger than enormous

2. confuzzled (adj): confused and puzzled at the same time

3. woot (interj): an exclamation of joy or excitement

4. chillax (v): chill out/relax, hang out with friends

5. cognitive displaysia (n): the feeling you have before you even leave the house that you are going to forget something and not remember it until you’re on the highway

6. gription (n): the purchase gained by friction: ‘My car needs new tires because the old ones have lost their gription.’

7. phonecrastinate (v): to put off answering the phone until caller ID displays the incoming name and number

8. slickery (adj): having a surface that is wet and icy

9. snirt (n): snow that is dirty, often seen by the side of roads and parking lots that have been plowed

10. lingweenie (n): a person inca”

Like McDonald?s, Starbucks is a concept driven as much by real estate as it is by coffee and the coffee experience. These days Starbucks opens at least three new locations a day somewhere in the world. It has taken a lot of real estate to open up 9,000+ Starbucks locations and it will take even more real estate to reach their stated goal of 30,000 global locations.

It is interesting to understand the structural gap underlying the Indian banking industry. Economist studies the state of the Indian banking industry:

Some of India’s banks recently made returns on equity of up to 16%, but not by lending. Up to 40% of some Indian banks’ assets are invested in government bonds and other state-guaranteed instruments, way beyond the statutory liquidity requirement of 25%.

According to a World Bank study, 79% of India’s rural households do not have access to formal lending. Of the households surveyed, 44% said they had used informal lending channels over the past year. That can include loans from family and friends, but well over half this finance comes from unregulated moneylenders who charge an average annual interest rate of 48%. There is clearly huge scope for cheaper, more formal lending. One reason banks are not pursuing this market is that the RBI and local authorities discourage them from charging interest of more than 14%. Some rural banks get round this by demanding bribes. Micro-lending, by micro-finance institutions or by self-help groups (in which borrowers club together to provide collateral), is increasing. But it reaches only around 5% of India’s poor, against 60% in Bangladesh.

What may be even more important for the economy is to provide access for the 92% of Indian businesses that do not use bank finance. That represents an enormous potential market for both local and foreign banks, but the present structure of the banking system is not suitable for reaching these businesses. Securitising micro-loans?bundling many loans together and selling the resulting cashflow as a security?may be a way of achieving economies of scale. One private bank, ICICI, securitised $4.3m of micro-loans last year. But most Indian banks are more interested in competing for affluent customers.

Registration is open for the 2005 Google U.S. Puzzle Championship, Saturday, June 18. Two winners will join Team USA at the 2005 World Puzzle Championship in Eger, Hungary (tourist info here if you read Hungarian). If you’re the type who plays 12 simultaneous chess games in your head while debugging code and memorizing logarithm tables, you might have a chance of teaming up with last year’s champ Roger Barkan (previous Slashdot coverage). If you just like puzzles, register here for the most intense (and fastest) 2-1/2 hours of the year. For a faint shadow of the real thing, take the practice test, which Barkan can probably complete in about 8 minutes; for a true challenge, the complete 2004 test is still available.

The National Geographic Society and IBM are teaming up to map the history of human migration using DNA. The Genographic Project aims to collect 100,000 genetic samples which will be used trace the movements of humans out of Africa and around the globe. While the most useful samples will come from indiginous populations, members of the general public will be able to mail in their own DNA on special cheek swabs.

Economist’s Intelligent Life publication has a fascinating look into the science behind the sense of smell:

“When a chemical molecule enters the nose, it finds its way to specialised receptors embedded in the mucous membrane. Rats, the first creatures to surrender their olfactory blueprint, rely on more than 1,200 receptors. In humans, 350 active receptors, each the product of a single gene, stand guard. Another 600 olfactory ?pseudo-genes? no longer sponsor receptors, an evolutionary consequence of less reliance on smell. All told, olfactory genes comprise about 3% of the human genome, a much larger population than other senses require. Sight makes do with three genes and taste with 29?evidence of smell?s complex challenge.

To understand how receptors distinguish lilac or apple pie from soured milk or cleaning solvent, imagine receptors as an alphabet with 350 letters. Every chemical triggers multiple receptors; resulting combinations spell distinct odours. Do the arithmetic, and you?ll find ample capacity to detect far more than 100,000 chemical odours adrift in the environment. Odour receptors trip neural impulses that notify the olfactory bulb which, in turn, notifies regions of the brain where smell taps primal dimensions.”

Howard Anderson, formerly of Battery Ventures, has some interesting observations in a MIT Technology Review article:

First, technology supply is bloated. Innovation is not dead, but demand for new technologies is moribund and will continue to be weak for at least the next five years. During the boom times, VCs financed more than 5,000 new companies a year in information technology, communications, biotechnology, and the Internet. The problem is that the buyers of new technology cannot possibly utilize all this stuff. There is a very real limit to what can usefully be deployed. IT and communications spending is no longer growing at 15 percent per year; growth will be in the middle single digits for at least the next five years. Therefore, few software and communications companies will enjoy the double-digit growth that inflames company valuations and makes VCs rich.

Second, there’s a good reason why technology spending is stagnant. The hype machine is broken. For years, technologists told the world that “information is strategic”; we said that if companies didn’t overspend to protect against Y2K they were committing corporate hara-kiri. Executives spent like crazy people. No longer. Their new mantra: spend no more than last year.

Third, the financial markets for technology companies are no longer exuberantly irrational. VCs hate rational markets: rational markets value companies at two and a half times their sales at an initial public offering or one and a half times their sales at a merger. We need a little irrationality to earn a living–but the total capitalization for the leading technology companies is now one-sixth of what it was five years ago.

Fourth, these changes in venture funding are structural, not cyclical. VCs actually like cyclical markets; we can buy in cheaply and wait for exuberance to bail us out. Traditionally, we knew that if we picked the right sector we could make 10 times our money. In fact, we knew if we picked the best two or three companies in that sector, we could make 50 times our money–but you get my point. But those days are, regrettably, over.

Here’s why: it takes about $30 million to get a startup software company to break even–and even great software companies rarely grow more than 100 percent a year. In irrational times, a software company with $30 million in sales would have been worth $180 million, or 600 percent of a VC’s investment. Which is good, but not great. Unfortunately, in rational times, the company would be worth $47 million to the investors, or only 157 percent of their investment. But that’s over five years! Per year, it’s a return of only 11 percent–and that’s for a winner. Remember: in venture funds, only 20 percent of investments are winners. Forty percent are in the middle, 20 percent are losers, and another 20 percent are write-offs.

One problem that any search engine has is getting URLs.

How do you index URLs? Simple: you start someplace and spider out from there.

What if people are going directly to unlinked, or unindexable pages?

Well heck, you stick something in the way so you see everyplace they go.

Simple. Google web accelerator is just a way for Google to get a lead on the ‘dark web,’ just like the google toolbar. From your point of view, it speeds stuff up somewhat. That’s it!

“There is really only one way to learn how to do something and that is to do it. If you want to learn to throw a football, drive a car, build a mousetrap, design a building, cook a stir-fry, or be a management consultant, you must have a go at doing it. Throughout history, youths have been apprenticed to masters in order to learn a trade. We understand that learning a skill means eventually trying your hand at the skill. When there is no real harm in simply trying we allow novices to ‘give it a shot.’

Parents usually teach children in this way. They don’t give a series of lectures to their children to prepare them to walk, talk, climb, run, play a game, or learn how to behave. They just let their children do these things. We hand a child a ball to teach him to throw. If he throws poorly, he simply tries again. Parents tolerate sitting in the passenger seat while their teenager tries out the driver’s seat for the first time. It’s nerve-wracking, but parents put up with it, because they know there’s no better way.

When it comes to school, however, instead of allowing students to learn by doing, we create courses of instruction that tell students about the theory of the task without concentrating on the doing of the task. It’s not easy to see how to apply apprenticeship to mass education. So in its place, we lecture.”

“Researchers (Hayes, Bloom) have shown it takes about ten years to develop expertise in any of a wide variety of areas, including chess playing, music composition, painting, piano playing, swimming, tennis, and research in neuropsychology and topology. There appear to be no real shortcuts: even Mozart, who was a musical prodigy at age 4, took 13 more years before he began to produce world-class music. In another genre, the Beatles seemed to burst onto the scene with a string of #1 hits and an appearance on the Ed Sullivan show in 1964. But they had been playing small clubs in Liverpool and Hamburg since 1957, and while they had mass appeal early on, their first great critical success, Sgt. Peppers, was released in 1967. Samuel Johnson thought it took longer than ten years: ‘Excellence in any department can be attained only by the labor of a lifetime; it is not to be purchased at a lesser price.’ And Chaucer complained ‘the lyf so short, the craft so long to lerne.’”

It is a long story, or rather it is an old story, but it is quite short actually. C. Northcote Parkinson wrote a book in the early 1960s, called “Parkinson’s Law”, which contains a lot of insight into the dynamics of management.

[snip a bit of commentary on the book]

In the specific example involving the bike shed, the other vital component is an atomic power-plant, I guess that illustrates the age of the book.

Parkinson shows how you can go into the board of directors and get approval for building a multi-million or even billion dollar atomic power plant, but if you want to build a bike shed you will be tangled up in endless discussions.

Parkinson explains that this is because an atomic plant is so vast, so expensive and so complicated that people cannot grasp it, and rather than try, they fall back on the assumption that somebody else checked all the details before it got this far. Richard P. Feynmann gives a couple of interesting, and very much to the point, examples relating to Los Alamos in his books.

A bike shed on the other hand. Anyone can build one of those over a weekend, and still have time to watch the game on TV. So no matter how well prepared, no matter how reasonable you are with your proposal, somebody will seize the chance to show that he is doing his job, that he is paying attention, that he is here.

Neil Stephenson writes:

“About twenty years ago Jobs and Wozniak, the founders of Apple, came up with the very strange idea of selling information processing machines for use in the home. The business took off, and its founders made a lot of money and received the credit they deserved for being daring visionaries. But around the same time, Bill Gates and Paul Allen came up with an idea even stranger and more fantastical: selling computer operating systems.

This was much weirder than the idea of Jobs and Wozniak. A computer at least had some sort of physical reality to it. It came in a box, you could open it up and plug it in and watch lights blink. An operating system had no tangible incarnation at all. It arrived on a disk, of course, but the disk was, in effect, nothing more than the box that the OS came in. The product itself was a very long string of ones and zeroes that, when properly installed and coddled, gave you the ability to manipulate other very long strings of ones and zeroes. Even those few who actually understood what a computer operating system was were apt to think of it as a fantastically arcane engineering prodigy, like a breeder reactor or a U-2 spy plane, and not something that could ever be (in the parlance of high-tech) ‘productized’.”

Wired writes that researchers from the University of Southern California and the Doheny Eye Institute have successfully implanted a tiny electronic eye implant with a video camera mounted on a pair of sunglasses into 6 patients, allowing them to detect light and motion.

The implant is a 4-by-4 grid of electrodes which connects to damaged photoreceptors (rods and cones) on the patient’s retina. It works by stimulating the photoreceptors, transmitting signals through the optic nerve to the brain. The implant only works on patients with degenerated rods and cones, and is named after Argus, the Greek god which had 100 eyes. If the implants continue to be a success, the artificial retinas could be available to the public within the next 3 years.