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ILLUSTRATION: Rust & Ella’s Not-So-Excellent Adventure • watercolor & ink on paper • 5×7″

Here’s how I pretty much felt about Interstellar in four scenes.

Spoiler warnings, I guess.


EMILIO LIZARDO (70) and RUST COHLE (40) in rocking chairs on the porch. A Playa-esque dust storm rips through covering them in sediment. A boy LITTLE CASEY AFFLECK (15) teases his sister MURPH (7).


Shame about all the okra dyin’. And my daughter.


This place is like somebody’s memory of a town, and the memory is fading.


Also shame that you have to travel through a wormhole to save the Earth.


It’s all one ghetto man, a giant gutter in outer space.


Daddy, don’t leave! What about the ghost? It says stay!

Rust walks to his pickup truck and turns the ignition.


Sometimes you gotta go back to actually move forward.


Hey, I thought my truck was contractually required to be a Lincoln?


Lincoln doesn’t make a pickup.


Remember when I visited the 8th Dimension and brought back the Red Lectroids. That movie was way better.


NEIL DEGRASSE TYSON (40) calculates stuff and throws up in a barf bag. ELLA ENCHANTED (30) secretly kisses a picture of her sweetheart and makes puppy dog eyes.

FAKE JAKE GYLLENHAAL (30) puts some more gel in his hair and looks at a map...of Disneyland? He circles Space Mountain and draws a smiley face.


So, explain this wormhole thing to me again, Neil. Is this like the movie Tremors?

Neil rolls his eyes. Rust stops cutting out little spacemen from Lone Star cans.


It’s like in this universe, we process time linearly, forward. But outside of our space time, from what would be a fourth dimensional perspective, time wouldn’t exist and from that vantage could we attain it? You see our space time would look flattened, like a single sculpture, matter in a super position, every place it ever occupied.

Wooderson, I mean, Rust crushes a beer can on his head.


You see everything outside our dimension, that’s eternity. Eternity looking down on us. Now, to us it’s a sphere.

(holding up the can)

But to them it’s a circle.


And love! Love is the most powerful force in the universe.


Yeah, what they said, plus space origami. So have we decided which planet we’re going to land on first?


My ladyboner tells me... this one!

Fake Jake nods his head in agreement just as an AWESOME ROBOT enters the room.


You guys are f*ing useless. The only job you have is sleeping and docking with other spaceships. They could have just sent robots. We’re the funniest, most complex characters in this movie.


Someone put his honesty setting at 100% again.


Rust and DR. MANN (Get it? You will.) tromp across a frozen wasteland that looks like Everest Base Camp.


I get a bad taste in my mouth out here... aluminum... ash... like you can smell a psychosphere.


That’s because I’m about to kill you and steal your spaceship! Bwahahah!


Doesn’t matter. I have seen the finale of thousands of lives, man.


That’s Doctor Mann to you.


Young, old, each one so sure of their realness. You know that their sensory experience constituted a unique individual with purpose and meaning. So certain that they were more than biologic --

Dr. Mann bashes in Rust’s space helmet.


Dammit, do I have to save you guys again? This is why you write three acts, not four.


Black hole! Wormhole! Event horizon! Relativity! Math! You know, basically what that would look like on screen. I give up. GEORGE CARLIN arrives in a telephone booth from the year 2688.


Rust, I’ve been sent from the future to ensure you pass your history --


I mean, wait, sorry. That was a different, better movie about time travel.


Someone once told me time is a flat circle. Everything we’ve ever done or will do, we’re gonna do over and over and over again


Eh. Maybe. I guess, but I’ve been sent from the future to ensure you teach your daughter the coefficients of space time, so she can harness the power of gravity to launch the world’s least aerodynamic building into space.


I thought I was mainlining the secret truth of the universe.


No, sorry. Just stand behind this bookshelf and push books and shit until she understands.


Ah, all your life, all your love, all your hate, all your memories, all your pain, it was all the same thing. It was all the same dream, a dream that you had inside a locked room ... behind a bookcase.


Just push the damn books on the floor already.

“God Gave Rock and Roll to You” by KISS plays.



ILLUSTRATION: Legion of Doom in Las Vegas • watercolor & ink on paper • 5×7″

Click here for a more analytical Part II: Fun with DCFs and Stock Comp.

My parents believed in conspiracies. It was a manifestation of distrust of power in any form. If you think about it, the stories behind events like Watergate or Iran Contra are so batshit as to compel a generation to develop conspiracy theories for just about everything. Fool me once, right?

So I remember them cheering every line by Dan Aykroyd’s character Mother in the 1991 film Sneakers, from claims about faking the moon landing to the CIA’s involvement in the Managua earthquake. Not necessarily because my parents believed the theories, but rather because it gave voice to a seemingly logical, yet underrepresented, distrust in government (before the web provided a bullhorn for nutjobs, of course). One of Sneakers’ many successes comes from balancing Aykroyd’s out-there conspiracy theories with Sidney Poitier’s frustrated reaction for comic relief all while the heroes themselves are caught in one of those out-there conspiracies. If you haven’t seen it, do so—I’m not the only one who feels this way. Sneakers is subversive without seeming so, with a postscript that generates a kind of fictional universe dramatic irony where we know more about the world than its population.

And that’s exactly what’s so compelling about conspiracy. Conspiracy allows us to structure narrative where there is none, to believe ourselves smarter than the horde at large, to recognize a subtext that others have clearly missed. Conspiracy is awfully good at bringing order to what is merely chance—a universe determined by the decisions of millions of people often disinterested in anything other than themselves. Conspiracy can be a shorthand for a mess of incentives and the folks who have benefited disproportionately—at least that is when the conspiracies don’t involve alien abductions or Kenyan birth certificates.

Viewed in this way, conspiracy might come from a cynical, untrusting place, but it’s idealistic in nature. Somehow vast as in “vast right-wing” or “vast left-wing” only involves a relative handful of selfish people looking to bend the world to its will instead of a massive number of selfish ones looking to get while the getting is good. Evil might indeed be banal, but in a conspiracy, evil is the realm of supervillains, not your neighbors.

Shit, it’s also probably comforting to think that there’s someone, somewhere in charge, even if their results aren’t very good. Returns regress to the mean, after all.

Imagine a system where highly-paid Ivy League grads invested public pension dollars into investment firms run by even more highly-paid Ivy League grads?

Imagine if these firms invested in a lot of companies run by other highly-incentivized (if not also highly-paid) Ivy League grads who then sold their businesses for a ton of money to public companies run by other highly-paid Ivy League grads?

Imagine all of those folks switched roles all the time from LP to GP to startup CEO to large company CEO and back.

Imagine a system where it appears that a ruling class makes a lot of money and a large number of folks work earnestly yet unsuccessfully for high-risk lottery tickets to join it.

Ugh. Of course, of course, that’s not exactly how venture capital works. It’s just money. It’s just incentives. But imagine what it might look like to someone outside the system. You know, someone who’s priced out of San Francisco real estate and calls into Michael Krasny’s Forum on NPR.

It might look like a cabal, like a conspiracy.

Even if it’s not.

In 2007, a senior advisor for the private equity and venture capital firm where I worked asked me rhetorically, “Do you know why so many of the presidential candidates are in DC today?”

The International Association of Fire Fighters (IAFF) was holding a presidential forum, and each candidate from each party was coming through to appeal to the union ahead of important March primaries. With more than 300,000 members in 3,200 locals, the IAFF reached almost every community in the United States. Hence the forum was more important than any state a candidate could be visiting that day instead.

“Now compare that to this so-called Private Equity Council which only has six members.”

He had clearly made this argument to others in the firm without success that creating an organization to represent six members with hundreds of billions in capital could only galvanize public opinion against its causes. Act alone, and you may fly under the radar (or you may not). If you do organize, certainly don’t tout it. An organization of six kajillionaires arguing for tax benefits for carried interest doesn’t look like a union to the public.

It might look like a cabal, like a conspiracy.

Even if it’s not.

In 1999, The New Yorker published an essay by Nicholas Lemann called “The Kids in the Conference Room” later collected into a fantastic book called The New Gilded Age: The New Yorker Looks at the Culture of Affluence edited by David Remnick. I found my copy among twenty-five sitting on a shelf at Morgan Stanley because of another collected essay entitled “The Woman in the Bubble” about my boss at the time.

Lemann discusses the rise of McKinsey & Co., and in general management consulting and investment banking, as the stepping stone par excellence for elite college grads in the 1990s. As Lemann describes mordantly, “To get a business analyst job at McKinsey is to add another glittering credential to your string, since you’ve beaten out so many people to get the job, and working there offers the comfort of knowing you’ll be among your own kind (applicants have to submit their SAT scores). The world’s infinite possibilities haven’t been reduced by a whit, only enhanced.” Of course, elite colleges (and elite pre-schools) benefit from serving as the gatekeeper to these elite careers. Higher tuition, larger endowments, plum administrative salaries—sending kids to McKinsey instead of to study Italian neorealist films or the lexicon of Finnegan’s Wake in grad school has its distinct financial advantages.

And you can’t help but giggle now at Lemann’s prescience when he argues “the consulting vogue won’t last forever” given the late-90s pull of technology startups with “young hot shots … standing in the office of their converted warehouse space waiting for their IPO money to roll in.” However when the bubble inevitably pops, “technology will begin to look, to Ivy League seniors, risky—really risky, not just acknowledged-as-a-grace-note risky.” 2010s take note.

Lemann ends, fittingly, with a McKinsey-style three bullet point summary. The McKinseys of the world “stand at the end of a huge system that sends tens of millions of people to American public schools every year, administers the SAT to two million people, and processes more than a hundred thousand applicants to Ivy League colleges—all of this done either directly by government or by non-profit organizations subsidized by government—and then they pluck its very ripest fruit.”

It might look like a cabal, like a conspiracy.

Even if it’s not.

It’s the shorthand of incentives and long-term trends all ascribed to the particular actor currently benefitting disproportionately. No one set out to conspire for this to happen. It just kind of did. Incentives. Luck. Privilege. Maybe the hard work, wits—and greed—to take advantage.

In Silicon Valley these days you’re apt to hear that unlike the last bubble in 1999, many companies make real money. And of course there exist a large number of successful, profitable enterprises that can clearly re-invest in important employee retention perks such as lap pools and Halloween carnivals. At the same time, there are a number that aren’t yet profitable or won’t be able to sustain their current revenue or their current opex without additional financing made possible by extremely cheap capital happy to chase growth (Hello QE4!).

The current sentiment (eep… sarcastically summarized as “it’s different this time”) also assumes there weren’t companies making money back in 1999 or thereafter when things were pretty ugly. That every company was But in the lead up to Google’s IPO in 2004, I remember rebuilding the valuation models for The Woman in the Bubble’s team at Morgan Stanley with some shock at how reasonable some of the winners’ financials were such as Yahoo! and eBay. Certainly there were some stinkers like Ask Jeeves and CNET, but not all of them. You could definitely build a DCF to support a theoretical valuation. Like today, those valuations were based on long-term cash flow growth and market expansion and new products and the outright destruction of traditional industries as we know it.

For all the excitement of today’s companies making real money because of “network effects,” “software eating the world,” and, come on, “app install ads” and “monopolies”, there’s also this latent fear that popular services will stop being popular because some other service has become cool—if not less popular with consumers, then less popular with the fickle advertisers who foot the bills. It’s the other side of the coin to “disruption.” (Ick, I feel gross using that word.) To put it another way: wasn’t Facebook also supposed to be Instagram without paying $1 billion for it?

What if “Internet companies” have to be acquisitive now? Not just for growth, not just for accretion, but as a matter of course, to replace future product development? What would happen to public Internet valuations if acquisitions were considered a form of maintenance expenditure like capex? That’s the hypothesis I want to test. What if overvalued acquisition currency is the type of misplaced incentive that’s too-clever-by-half and looks incredibly shady when the bubble pops?

You know, like a conspiracy.

So. Imagine a system where large companies realized that lower barriers to entry created so much market noise that traditional R&D investment broke? Not in core products, per se, but in new products and adjacencies. Perhaps even the success of core products didn’t last as long as people once modeled.

Imagine if the odds against creating a successful new product were so high that large companies decided it was cheaper to buy the most successful startups rather than invest in core R&D? Especially if they could buy startups with overvalued equity. A steady supply of battle-tested companies would be nice.

Imagine if there were a large, underemployed generation of 20-somethings who each believe they should be CEO and focus on “strategy?” Like all inexperienced 20-somethings before them, by the way. And there was ample cheap capital from incentivized VCs/angels/incubators to allow our 20-somethings to each become founder and CEO of his or her own shitty startup.

Imagine our founder and CEO plays company 100+ hours per week for a modest salary and lottery ticket promises, even though the features she’s working on would be the responsibility of an assistant junior product manager at a regular company. But she gets psychic CEO benefits while waiting for a table for two hours at Country Fowl Comestibles.

Imagine if a cottage industry grew up around “foundering” supporting product press releases, celebrating failure, teaching hacking, selling hoodies, and providing on-demand snacks? “Foundering” could become the awful entrepreneurial cousin to Gawker’s concept of “writering.” Do you want to just fill-in-a-blank on a generic convertible note rather than deal with pesky lawyers or negotiations or even f***ing understanding the difference between equity and debt? We could make that happen.

In the end, imagine 1% of our junior assistant product managers/CEOs win the startup lottery and join that rarefied air of true executives, VCs, GPs, and LPs. And the other 99% of founders founder along until they found a winner. Mathematically, it only takes a hundred tries, a hundred hours per week, another hundred thousand dollars in angel investment.

Rejected Deals: Six Flags Over Beijing

ILLUSTRATION: Rejected from the Stanford Freedom Project #2: How I Wish Rocky IV Had Ended When I Was a Kid • watercolor on paper • 5×7″

Passing the overpriced gift shop at the Loews Santa Monica on my way to the valet, I attempted to make my escape from the pit of despair that was/is Digital Hollywood. The nerds-in-blazers-and-jeans look had not yet reached its crescendo, even in its birthplace. MySpace and Bebo and DRM were still real things on real conference panels. Outside Jason Calacanis jumped into a ridiculous looking corvette, and I laughed to myself “Ja ja ja, mach schnell mit der art things, huh? I must get back to Dancecentrum in Struttgart in time to see Kraftwerk.” It was 2006.

I had a quirky job working ostensibly in venture capital for The Carlyle Group. It said so right on my name tag which had just been noticed by an attendee looking for someone more important with whom to speak.

“Ah, The Carlyle Group? I would love to talk to you about something. You make investments in China, right?”

“Well, not me, but yes.”

“You’re big in real estate.”

“Again, not me, but…”

Given his resemblance, I’ll call him Fake Billy Zane to protect the innocent. Billy was a tall half-Persian, half-Japanese man who now lived in Beijing. Like me, he also thought the conference was going nowhere (you know, at least until it packed up for greener pastures at the Marina del Rey Ritz Carlton and talk turned to YouTube and Blu-Ray). But Fake Billy Zane was going somewhere. Fake Billy Zane needed capital. Big capital to fund big ideas. $100 million to build a theme park. The first theme park in Beijing.

His business card read: Beijing Future World HOLLYWOOD Theme Park.

fake billy zane

Despite our conversation derailing somewhere between the stop for a commuter train that he claimed would land at the doorstep of Beijing Future World HOLLYWOOD Theme Park thanks to someone’s government bribes and the district I must visit where “girls in Beijing” would really love “getting to know” someone like me, I agreed to learn more.

“Okay. Lobby of the Fairmont at, um, 7… Uh, I have a hard stop at 8, ” I lied.

Fake Billy Zane chortled and slapped me on the arm. “And after I know you’ll come visit Beijing. I will show you a very good time.”

“Uh, there’s my car.”

I chose against jumping in Dukes of Hazzard/Jason Calacanis-style.

I’m not certain what I was thinking at the time. Okay, no, I know what I was thinking in a constant loop…

  • “My boss had said his best investments came from the strangest places.”
  • “Public place, public place, the Fairmont lobby is a totally safe public place.”
  • “The Loews is much nicer than the Fairmont. I’ll have to book there next time.”

The next morning at 7am I was greeted in the lobby not just by Fake Billy Zane but also his boss: an older Chinese woman squeezed into a white, rhinestone, skin-tight, spandex mini-dress that stopped just short of the legal definition of indecent exposure. The clerk at the front desk tried not to stare and shuffled her papers over and over thinking surely that incidents like these were why she moved off the night shift. Let’s just call Billy’s boss Sally.

“Do you know Sally? She’s a famous former Chinese pop star, like China’s Britney Spears.”

“Wow. Very nice to meet you Sally,” I said, noting to myself that at somewhere between 40 and 70, Sally was really more like China’s Debbie Gibson or Donna Summer. Luckily there had been no paparazzi to capture what surely had been a flashy Spears-esque exit from their car. I gestured toward a giant ottoman-like table surrounded by chairs where I could listen to their presentation.

“Oh, first we take photos,” said Sally.

Of course, what investor meeting doesn’t start with photos? I’ll admit my naiveté on international manners in this context. The Japanese bring gifts and long presentations on their corporate structure since 1872. The Germans tease you for years that they’ll actually acquire something in-between mandated bank holidays every other week. Perhaps standard meeting protocol for Fake Billy Zane and Sally was taking photos. So I posed with Sally in the middle of the lobby of the Fairmont Santa Monica trying not to smirk at the desk clerk, as she facepalmed with one hand and gestured silently for the attention of her desk companion with the other.

“We’re very happy to meet with The Carlyle Group. We will add this to our photo album. You can see how excited others have been about Beijing Future World Hollywood.”

Sally opened a photo album where I was greeted by photos of Sally with politicians, dignitaries, celebrities, and business types. I can’t remember all of them, but I knew how they had answered when someone said, “Oh, first, we take photos.”

“Is that Jiang Zemin?” I asked.

“Yes. Yes. So surprised you know Jiang Zemin. Yes, indeed.”

Then I was directed to another picture with one of the President Bushes (I can’t remember which one) where Fake Billy Zane continued excitedly “And look! He is involved with The Carlyle Group too, no? Do you work with him?”

“Used to be. Used to be. No, no, I’ve never met him. I’ve only been with the firm for a year,” as I tried to manage his expectations and my now increasing concern over the odd, foreboding, brown paper envelope tied with string that I had just been handed. The type of envelope that holds a Grail Diary or bomb plans or, you know, anthrax.

Mind racing — I am not important, and I do not know important people. I was at Digital Hollywood. No one important goes to Digital Hollywood. It’s just a typographical error that the White House thinks my office is Frank Carlucci’s. I’m wearing jeans and a blazer, for goodness sake. — I unwound the string to open the envelope — Oh God, the news reports will say that the poison originated from an idiot who brought the envelope back to his office on a cross-country flight. I will be in critical condition and under investigation at a federal facility. I will whimper out a description to a sketch artist in Hungarian: “Keyser Soze! Úgy nézett ki, mint a hamis Billy Zane” — But inside there was no white powder to speak of, just a typical plastic-bound investor presentation.

Except on the first page was one of those spoon-eyed aliens in a regal cloak holding court among the planets. And then more pictures of aliens followed on each subsequent page. You know, kind of like this.


“We wanted you to get a feel for what the theme park would be like. Space is very popular. Like Star Wars. Very popular.” I decided it would be rude to mention my childhood fear of these aliens (which hadn’t been helped by my mom taping up pictures of the aliens looking into my bedroom window as a joke when I was seven).

The presentation was mostly pictures of those scary-ass aliens interspersed with section headings such as “Financials” followed then by more aliens. Sometimes there were unlabeled grids with Xs and Os printed out on a dot matrix printer.

“That X is where we will build the theme park. Let me show you more.”

Billy reached for a tube and unrolled a giant swath of paper covering the ottoman and extending to the floor: a completely unintelligible topographic map of Beijing.

Imagine a map from an early 20th century war room where a general would chomp on cigar under a harsh uncovered single light bulb and signal his decision to attack by advancing troops across the map before then retiring to his tent to work on a spicy and sweet fried chicken recipe that would truly change the world. There were no roads, no city center, just contour lines and Chinese characters. It could have been Beijing just as soon as it could have been Kansas or Neptune. What with the aliens and all.

“Beijing Future World Hollywood Theme Park will be located here,” he pointed to a tiny shaded area. “You can see how close this is to Beijing. Just 25 minutes from the airport by train.”

“Uh huh.” Or close to Topeka. “And this train is going to be built?”

“Assuredly. We just need $100 million.”

“That’s a lot of money.”

“But we’ve run the numbers. Let me show you.”

Billy flipped past more pictures of aliens to a page that looked like this:


They had run the numbers… all over the page. On what and for what purpose, I will never know. It could have been the paprika concentration in the Colonel’s Original Recipe. What is it with military leaders and fried chicken?

“So you can see how this will work. We’ve run the numbers, and you will make money.”

For some reason, it was the random page of Stata numbers, not the ottoman-swallowing map, or the rhinestone minidress, or the pictures of aliens that had once haunted my dreams that made me decide it was time to just play along with yet another deranged founder. “So $100 million?”

“Yes, and if you raise $100 million for us, I will give you $10 million,” said Billy.

“That’s not really how my job works.”

Fake Billy Zane and Sally chuckled. “We’re among friends. It’s only fair.”

“No, that’s not how my job works. We find investments, and I get paid for that.”

“You would be helping us out a lot. And in China, we help you too.”


Fake Billy Zane winked as only a Fake Billy Zane can. “At the very least, you will visit Beijing soon. Sally, won’t the girls love him there?”

Sally’s coy smile grew to match the gleam in the rhinestones in her dress, and I returned the presentation to the brown envelope filled with unknown yet imaginary poisons, slapping it between my hands in earnest consideration and conclusion.

“Thank you, Billy. I’d love to visit. I’ll take this back to the China team and find out what they think. It’s very compelling. But I should get ready for my call now.”

A postscript. For what it’s worth, I did pass the deal along to the Asia team at Carlyle, and I’m surprised at the positivity and even-handedness of my email to my boss from then:

“Strange project fell into my lap.  I was in the lobby of the conference, and a gentleman saw my Carlyle nametag and came over to talk to me.  He was from Japan and working with a company in Beijing to develop a theme park and entertainment complex there on 8,000 acres of land they’ve been provided 25 minutes from the Beijing airport.  He set up a meeting with me this morning, and he and his partner brought this massive amount of information on all the work they’ve been doing with the government, construction companies and real estate development firms. Very odd, but I wanted to pass it along to Asia Venture or Asia Real Estate just in case.  According to their documents, they’re being backed by Guangdong Bank and are looking for foreign partners.”

And chances are, the Beijing Future World Hollywood Theme Park deal was real. The Atantic profiled the old Wonderland Amusement Park back in 2011 where they say re-development was attempted in 2008 and never got off the ground. The photos are haunting—a real-life Spirited Away—but the description and geography fit. It even sits near the Changping Railway just like Fake Billy Zane had promised me. Maybe I should have listened to my friend Fake Billy Zane. He was a cool dude. He was just trying to help me out.


Riding The Bench

ILLUSTRATION: Crop of Solla Sollew Marshmallowy Pillows • watercolor on paper • 22×30″

Today, I’m finally revisiting the theme of escape, of fight vs. flight, of running to responsibility versus running from it. It’s a theme I’ve wanted to think more deeply about in consideration of what I do next with my work and my life. Since leaving my job in 2013, I’ve tried to define what that path might be in theory…

I knew I wanted to make something myself again (and “something of myself”). If I started a business to do it, I thought it could be a small partnership with a few people I know and trust. If I couldn’t avoid building a company with a larger team, we would most definitely create art / media / content rather than technology to replace it. Ideally consumers, not advertisers, would pay for it. And regardless I would begin by paying my dues creatively—even if it meant working part-time and not grasping out at handholds from the discomfort and discomfiture of being on unsolid ground.

Last night, I attended the Fortune 40 Under 40 party where I was reminded just how unsolid that ground is. Now, I always feel uncomfortable at this party (see FB post in 2012) and know only a handful of people. The crowd seems very pretty and very moneyed and very driven—and very earnest and not conflicted about all three qualities. Looking for friendly faces, I found myself meeting journalists who befitting their profession were also content to observe the scene anthropologically: “As a lion stalks a gazelle, the recruiter deftly touches the arm of her prey and tosses her head back in laughter at an inane joke. Someone will lose a VP to their competitor tonight.”

In a setting like this, it doesn’t help to have an amorphous personal elevator pitch. I’m not exactly on the beach which is the only short break that SF techies give themselves between crushing it at their current company or starting up another one. It feels disingenuous for me to say so. I think I might be riding the bench, playing a little utility infielder for the league minimum. And I’m not looking for a starting gig on another team as much as I am looking to play a different sport altogether.

During cocktail party chattering, my superego tells me it can see one question in any conversation partner’s eyes, never quite voiced: why would anyone ride the bench on purpose? In other words, why would anyone miss out on the greatest period of wealth creation in Silicon Valley since the last bubble? This magazine’s called Fortune after all.

In defense, I’ve come up with a somewhat rational argument for my avoidance, an argument that can be met with more approving nods because I use the words valuation and equity and venture capital:

  1. With valuations so high and bubblicious, it doesn’t make sense to commit one’s soul to working a hundred hours per week only to spend the next four years vesting through down rounds. I took my at-bat with Rhythm, and we reached on a wild pitch. Done and done.
  2. Plus everyone seems like kind of a jerk right now. A bubble is the perfect spot to pick up bad behaviors and learn how to make bad decisions. Blergh.
  3. And if I decided to raise venture capital myself, an economically rational move, I would have to compete in a market full of jerks behaving badly and making bad decisions. I’d also need an idea, I guess.

“And so that’s why I’m waiting things out.” It’s the sort of argument that’s sufficient before clinking glasses to wish each other well. Because it’s important to have manners at a cocktail party and not make anyone too uncomfortable.

I always have this blog for that.

In I Had Trouble In Getting to Solla Sollew, the eponymous Vent No. 5 of this blog is a messy chute leading the unnamed hero accidentally to Solla Sollew (where they never have troubles, at least very few). In traditional mythology, Vent No. 5 might be described as the hero’s descent into the underworld, a last step before rebirth—very much an Act III sequence when this hero’s goal is reconsidered: survival. With the goal reconsidered, the hero can choose a different path altogether in the end.

It strikes me that one important difference between running from and running to is a difference in attitude. Describing why I’m not taking part in the, well, icky Silicon Valley scene is easy, but negative. I’m only running from this place, running from my responsibilities as an individual.

Describing what I want to do, no matter how amorphous and difficult, is positive—running to something new. As a friend said wisely last week: the act of leaving a bad situation and finding a good one are two separate events, as much as we like to conflate them. It’s good advice.

So now I leave this post strangely thinking not of the underworld journeys in Vent No. 5 in Solla Sollew or Rome in Catch-22, but of a friend’s work on Dante’s Divine Comedy. From my limited knowledge, Dante starts by settling scores with his political enemies in the Inferno before the pilgrim ventures to understand how individuals make amends for their lives or how to attend to some higher purpose (while still settling some political scores, of course—it’s Italy!). It seems appropriate that the pilgrim makes his journey at 35.

It certainly has to be an easier read than Godel Escher Bach.


From FB Post, 2012

Had to leave a party early in SF tonight after apparently using up all of my non-awkward interactions for the week. It was a cocktail party to celebrate Fortune’s 40 under 40 article, and one conversation I struck up went something like this…

Ben: If you can’t see, the Giants are up 2-0.
VC mktg girl: Thanks!
Ben: I’m Ben. Nice to meet you.
VC mktg girl: I’m —–. Good to meet you. Were you on the list?
Ben: Yeah, I mean I checked in upstairs and everything.
VC mktg girl: Congratulations! That’s great.
Ben: Um, yeah… well I only see two people I know here which is really odd. Maybe I travel too much. I don’t know anyone in SF anymore.
VC mktg girl: Did you travel from New York for the honor?
Ben: Oh God, you meant the 40 under 40 list?!? No, no, of course I’m not on that list. I just mean that I didn’t sneak in. I checked in on the list upstairs. I thought you were accusing me of sneaking in.
[awkward silence]

The Problem With Ad Tech

ILLUSTRATION: How Is That Robot Making So Much Money? • watercolor on paper • 5×7″

What’s that? THE problem, you say? Aren’t there lots of problems with ad tech?

If you work in ad tech, chances are right now you’re “fixing” data for the client while marveling at the number of jeans parties your sales team has thrown this quarter.

If you’re a media company or an advertiser, you’re scratching your head at the most recent pitch from a BD guy in taper jeans and a blazer who last week was pitching you on a different solution.

If you’re a consumer, maybe you’re wondering why that inappropriate purchase you considered at Amazon is following you to The New York Times when you bring up an article to show your team in a meeting? (It’s okay though. They missed the embarrassing retargeting ad because they’re ridiculing you behind your back for citing Thomas Friedman.)

If you’re an investor, you’re worrying that you’re the last one in—the sucker at the table—since the best returns come from private market acquisitions when markets are nascent (a fine vocabulary alternative to “early innings”).

The biggest problem with ad tech, though, is that it represents a taking from consumers without a fair value return. Unlike media companies who, in exchange for a word from their sponsors, give you something—content, entertainment, a brief diversion from your miserable existence—ad tech companies give consumers, in exchange for their personal data, close to nothing.

[Conflicts and bonafides, first: I’ve built a company in ad tech, specifically mobile video (although we were loath to call ourselves ad tech, since we tried not to do what I’m about to describe). I have lots of friends in ad tech. I helped take Google public back in the day for Mary Meeker. I’m short a bunch of high P/E digital media stocks. I also write a lot about digital media here on this blog and professionally in my consulting.  My most recent consulting project on YouTube was done in conjunction with Jefferies & Co. and can be downloaded here.]

Here’s how normal, boring, traditional ad sales works: MediaCo sells ads on their site directly to AdvertiseCo. You come to, watch a video, and see one advertisement. AdvertiseCo pays MediaCo 1/1000th of a $20 CPM (or $0.02) for that ad impression. In aggregate, all of those pennies go to fund MediaCo, including the production of content which you enjoy as that diversion from your miserable existence. And over time, AdvertiseCo slowly brainwashes you down the buying funnel to the point that you’re raving to your friends about AdvertiseCo Toothpaste. If you’re like me, you might even feel a twinge of guilt when you choose not to buy Crest.

Everybody (kind of) wins.

Here’s how exciting, sexy, digital ad tech works: MediaCo can’t sell all of their ads on their site directly, so they push it through to networks, exchanges, and other vendors via supply-side platforms that divvy inventory up. NetworkCo sells an ad for a $10 CPM to AdvertiseCo for men 18-34 who like sports. You come to, watch a video, and see one advertisement. AdvertiseCo pays NetworkCo 1/1000th of a $10 CPM (or $0.01). NetworkCo might have to pay DataCo (who provided the audience demographic data) 10-15% of that penny, and then shares, say, 60% back to MediaCo. Maybe AdServingCo and FailingRichMediaVendorCo take a percentage too. MediaCo takes their <$0.005 and pays some fee to SupplySideCo which sent the inventory to NetworkCo in the first place. As they say in Office Space, “This sounds familiar. / Yeah, they did it in Superman III.”

So, what happens now? MediaCo tries to use this fraction of a penny to fund operations unsuccessfully, so they cut their content production costs. This leaves you less entertained and more depressed than you were before. AdvertiseCo was pretty happy with buying that ad for half as much until they realized they needed an entire DemandSideCo stack to interface with SupplySideCo and not get ripped off since 75% of NetworkCo’s ads are non-viewable. They’re selling less toothpaste than before, but have more SocialProfileCo “likes.” Meanwhile, NetworkCo, SupplySideCo, DataCo, and DemandSideCo have all filed their S-1s, and their executives are going to laugh to the bank as long as the stock maintains its value through the 180-day lock-up.

Everybody (kind of) loses. Except for the ad tech companies.

I’m sure you’ll tell me that I’m wrong: how those fractions provided by NetworkCo to MediaCo wouldn’t exist otherwise, that the $0.005 is supplementary to whatever MediaCo would sell, or that this is a radical new imagining of remnant inventory.


Without ridiculously defined sales rules in place, programmatic audience sales hinder a traditional sales team’s ability to sell. The CPM floor? That’s your new maximum CPM. The provision to sell blind? A whisper in the ear from a salesperson to a media buyer. The list goes on. Networks were built to turn remnant into “gold,” but often the alchemy goes in reverse.

Or you might tell me that ad tech is a legitimate investment for a media company’s internal, first-party, sales team—providing data and results that boost CPMs by showing advertisers better, more measurable ROI.

Also, kind of, bullshit.

Yes, the level of sophistication and measurement in digital advertising will always increase, and media companies have to keep up with the demands of advertisers. However, much of this measured reality is constructed and doesn’t confer as many benefits as people might imagine. Especially for brand advertising where many of the qualities advertisers are looking to improve can’t be measured in real-time anyway. (For more info and historical context on cash register data, I recommend the Harvard Business Review article: “If Brands Are Built Over Years, Why Are They Managed Over Quarters?”)

So why should we allow NetworkCo, DataCo, SupplyCo, and DemandCo access to our data when MediaCo, with whom we have an actual commercial relationship, gets so little in return? And we haven’t even considered what happens when SocialProfileCo uses all your data to sell ads on, because everyone demanded a ****ing “most shared” widget. So now SocialProfileCo gets all the money.

Did I go too far? Probably. Sorry. I know I’m being overly broad here, but you used to trade your time for content. And now you trade your time and your data for fractions of it, and ad tech companies get rich off of owning that data in the aggregate. Perhaps that continues until investors realize that everyone has the same data, declare the gross margins unsustainable, decide to stop funding an arms race without cash flow visibility, and run away from these low-multiple businesses.

I believe deeply that our use of technology can help create better experiences for consumers, creators, and advertisers. Technology has helped the human race progress in so many instances historically that we think “better” is a given.  Better isn’t an inherent quality of technology, and better doesn’t necessarily result from the market either. As I’ve noted, the relationship between society and technology runs back and forth. We have to want to create something better, not just lay in the cut.

I’ve also talked briefly about the economics of data aggregation in my ongoing series on the right to privacy, namely that our personal data is only valuable economically in the aggregate (and within context: synthesized, analyzed, measured). It’s near impossible for companies to negotiate with each of us individually. There’s even a widely held economic theory by Ronald Coase that suggests our data will end up in these companies’ hands regardless, unless we throw up what they call in the biz as transaction costs.

Here’s a transaction cost you can throw their way: Block third-party cookies. Moreover, block Facebook cookies, and use Facebook in a different browser from your regular one. At least make these companies work for it by forcing them to track your IP or your location or something else. Because they are.

And then let’s do better.