The Real World

Okay in my last post I said I had some gripes with a recent issue of “Phoenix Business Journal“.  Let’s just say that the fact that we still devote a major spread to “Commercial Real Estate” when it’s in the crapper, tells you a little bit about how the main stream media and local governments don’t understand other economies.

First article of refute “Skysong has risen”

228,000 square feet of research, development and commercial space… $300 million valuation… The project is distinguished by a soaring 125-shade structure…

That’s right folks.  $300 million from this brain trust gets us an award winning and noteworthy, SHADE STRUCTURE.  While art is important and the piece out front gives Skysong a hint of character (something it completely lacked before), it still is a poor investment of $300 million.

But once it was off the ground, would tenants come?  They did.

*cough* bullshit *cough*.. Your biggest draw is Ticketmaster.  Yeah, Ticketmaster, innovator of the bend you over ticket convenience fee.

The connection with ASU has driven a majority of tenants to date.  The school has a great global reach and they’re a huge innovator and technology engine in North America

Unless we are counting the innovative ways ASU students have advanced consuming alcohol, I suspect this is a purely speculative comment.  The statement might hold for Standford or MIT, but ASU…  Not to mention if they are developing such great innovators why is Skysong recruiting international companies instead of bolstering ASU grads/alumni?

that was the plan all along: Leverage ASU’s global connections to attract international companies, then use that to appeal to local, more conventional firms

Well I’ll be a monkey’s uncle.  You mean this craptastic execution was in fact the plan all along?  I know so many startups who are clamoring to locate next to a no name international company that it’s not even funny.  No wonder Skysong is leasing space so quickly (sic) everyone wants to be next an international power house like Litree or iAxil.

his team developed a strategy they hoped would put Sky Song on foreign companies’ radar screens.

Because spending millions to beg international firms to locate a few workers in Arizona is a way to build a technology/innovation economy from the ground up?  Don’t get me wrong, having some international players and recruiting in companies to the economy is important, but the money would be much better served helping the local start-up scene.

The big lie here, is that Sky Song is NOT an innovation center, it is a REAL ESTATE DEAL.  It’s true motive is to make money for those that invested in it. Pure and simple.  Think anything less and you are a fool.  In fact two of the developers are not even based in Arizona, Higgins Development Partners (Chicago) and USAA Real Estate Co (San Antonio).  There is nothing wrong with real estate deals nor making money on them.  There is just nothing innovative in doing so.

Opened up the May 29th issue of the Phoenix Business Journal after traveling almost the entire month of June and it was just loaded full of stuff that I have strong contrary opinions about.  Perhaps I’m just tired and onery today and I should let it go, but I can’t.  So I will confront them piece by piece in a series of posts.  I will put in bold the items direct from the article and in plain text my response/criticisms..

Let’s break down the first piece “Valley tech industry No. 29 among 100 U.S. metro areas”

The study lists Tucson 18th and Phoenix 29th

I think you have to be kidding.  I would love to see the data they are using to produce these rankings.  This is not a knock on Tucson, I think they have a ton of potential and a solid foundation, but I do not think they are 11 places ahead of Phoenix.

During the past year, Science Foundation Arizona teamed with industry leaders to launch the Aerospace Institute and the Solar Institute.

Launching institutes only helps those launching them stroke their ego, they are largely ineffective in “instituting” real change.  Less saying, more doing please.

Arizona’s leaders have shown recently they understand the state’s future depends on investing in our technology base.

I can’t even hold a straight face on this one.  All that can escape my lips are expletivies and I’m trying to cut down on those for pieces that I hope a larger audience might be interested in.  WTF have they done that shows they understand any form of economics much less ones that deal with increasing technology?

But only 7.5% of the area’s residents have master’s degrees or doctorates, placing Phoenix well below San Jose, at 17 percent, or even Tucson at 10.2 percent

Is this an advertising pitch for our universities?  They seem to indicate that because 4 of the top 5 “ranked” cities are in the top 5 in masters/phd’s that this is the reason for their success.  This is just faulty logic.  There are plenty of people that have masters/phd that fail in high tech and lots of people that do not have masters/phd that have success in high tech.

We are not aggressive enough in supporting corporate relocation, and need to take a longer view on the sustaining benefits resulting from an increase in corporate headquarters.

I agree with the increase in benefits of having corporate headquarters.  However recruiting outside corporations is NOT the answer.  It is extremely expensive and short sighted.  We rarely are able to recruit the headquarters and instead end up with some operational arm instead.  Think “Give a man a fish, feed him for a day.  Teach a man to fish, feed him for a lifetime.”  If we really want a SUSTAINABLE technology economy we need to invest in people starting tech companies.  Growing and not recruiting future head quarters is where we need to be.

The technology industries that create goods, engage in trade and create higher-than-average paying jobs are the underpinning for the state’s entire economy.

I would love this to be true, but right now it’s just not.  Technology is light years behind land development and tourism with regards to how it’s viewed as an economy in Arizona.  This needs to change if we want to avoid being crushed every time real estate takes a dip.

More criticisms coming soon…

On June 6th we had our first Gangplank Jr event.  GPJR is something we have talked about for a long time.   We have wanted to provide something for the next generation.  We want them to be passionate about what they do.  We want to expose them to their creative and innovate side.  We recently had a TEDxPHX event that focused on education.  We watched Sir Ken Robinson’s “Do School’s Kill Creativity” and Dave Egger’s “Once Upon A School“.  This motivated us to really get off our rears and stop saying and start doing!

We had been approached by Jay McGavren about doing something with MIT’s Scratch programming language.  So we set a date and told a few people.  Jay came in and got computers setup and ready to go.  Before we knew it the day was here.  We had over 40 people show up including over 20 students under the age of 13.  It was glorious.  With nearly no instruction (just exploration) every kid created at least one working software program.  They even published them for others to see in many cases (you can find examples here).  This was merely an expirement.  We have so much more planned.  If you are interested in helping in the future direction of Gangplank JR please let me know.

My favorite of course happens to be my son’s master piece “Demond Spin” (You can click the image to play).

So the other night I was talking with a good friend and colleague Steve Swedler, who is also Chief Product Guy at Gangplank.  We were talking about product development, the state of things in Phoenix and a myriad of other topics.  I tend to be a fairly hard core pragmatist.  I generally tear ideas apart (including my own), even when I really like them.  This has earned me a little bit of a reputation as the dream killer.  I have agreed to only “kill one dream per day” in the spirit of innovation.  I remain oft conflicted as I am also a staunch idealist.  Always believing and fighting for the underdog in most fights, especially when a great idea/ideal is at stake.

Steve mentioned he had been thinking about “how children believe anything is possible and that we tend to try to be realists as we grow up.  No matter how much of dreamers we think we are, but the truth is that anything is possible…”.  Oddly this is something I think about intensely on a regular basis.  I think we crush the creativity out of our children and limit our potential daily because we don’t “believe”.  However, I also think that dreaming big without having the capability is ultimately frustrating and so at some point there has to be honesty within ourselves and others.  This is my notion of practicing “pragmatic idealism”.

If I wanted to become a professional soccer player, when I’m on the verge of turning 35 and being overweight by 100lbs.  I might be pushing the limit of pragmatism, but it might not be entirely impossible either.  However, I suspect it would end in frustration.  However, there are many dreams that are not likely possible in fact even highly improbable, but attainable given the right circumstances.  For example creating a search engine to displace Google.  While not likely and highly improbable for most people it is certainly possible, despite what others may think.

I think the pragmatic part comes in being honest with yourself and in your pursuits.  Too often we continue down paths that aren’t going to happen far too long.  I definitely think it’s worth STARTING down the path, but knowing when it’s becoming fruitless is the hard part.  I have observed over time that people generally fall into one of two buckets when pursuing their dreams (self included).

1. They keep going down the path long after they have passed the law of diminishing returns.
2. They turn and go back (give up), just before they are really ready to hit stride.

*Note this would be similar to Seth Godin’s concept of “The Dip”

Overall, when I look at those that have come out as the dream catchers and successfully hit their goals, I see a pattern, a wisdom.  I think perhaps my mother’s favorite singer (Kenny Rogers) nailed it best.

You got to know when to hold em, know when to fold em,
Know when to walk away and know when to run.
You never count your money when youre sittin at the table.
Therell be time enough for countin when the dealins done.

Now evry gambler knows that the secret to survivin
Is knowin what to throw away and knowing what to keep.
cause evry hands a winner and evry hands a loser,
And the best that you can hope for is to die in your sleep.

You see dreams are kind of like a poker hand.  Regardless of what you are dealt you stand a chance to walk away a winner.  It’s all a matter of knowing the game, the players and when to go all in and when to quit.  I encourage you to at some point watch professional poker players.  They usually know their strategy the minute they see their first two cards for a hand.  Sometimes they fold before placing a bet and other times they will ride what appears a miserable hand to glory.

They are able to quickly assess their hand, their competition and the situation.  Calculate the odds based on all three factors and make a gut decision.  When I get pitched an idea, I kind of think of that as the first two cards dealt.  I have to take a hard look at what those cards are and what I think the competition is holding as well as the situation and the odds.  Sometimes it is time to fold them and other times it’s worth putting some ante on the table to see the flop.  Generally I see the prototype as the flop.  This gives a good indication on how the other players are perceiving the market and how strong the hand really is.

Remember there are many factors that go into folding or calling.  Including how many chips you have on hand (are you playing a short stack or leading the table?), the presence of the players in the game and how you are feeling at the moment.  Life circumstances dictate how aggressive you can be in taking risks on your dreams.

Moral of the story?  The best way to get good at poker is to play a lot.  I think the same goes for pursuing dreams.  Invest in yourself and your dreams.  Teach yourself through trial and error to know when to hold them and know when to fold them.  When you think have it down, start to go after your really big dreams, but above all don’t get caught up in the game.  Be honest with yourself and know what your odds are and what you are risking and bet accordingly.  Most of all, have a blast doing it.

So several months back I was approached by someone at CloudMade about using Gangplank for an OpenSreetMap party.  I agreed, because that is what we do.  I happened to stop by the party and talk to some people about what it is they do.  I left understanding very little and wondering how this was different than google maps.  The following day I talked to Todd Huffman in some detail about mapping Afghanistan and it all clicked.  This stuff is very important.  I instantly started to do mapping and contributing. A few months later I answered a survey on the work I was doing and I ended up winning a Garmin eTrex.  Yesterday I opened up a FedEx package and a new Garmin and bag were enclosed!!!!!  Thanks CloudMade!

At our tech accelerator Gangplank we get pitched an idea at least once a week that attempts to solve one of two problems.

1. Local businesses have few effective options to advertise because direct mail, radio and newspapers are losing traction.
2. Existing marketers/advertisers are running out of viable mediums to use for their customers.

We have been tracking the space for the last 12 months with lots of interest, but have long struggled with what is the right strategy to “track” effectiveness. While newspapers, magazines and radio have no real way to track effectiveness, they tend to get away with it because they were “grand fathered” in as already being accepted. Counting the number of “eye balls” is sufficient for them to base pricing on.

Click-thru web advertising has ushered in a the age of “prove it” before I will pay you. Something similar needs to happen on the non “internet” side of things. A “brick-thru” so to speak. A way to track conversions and pay on a sliding scale.

The mobile company I’m involved with Held, LLC has put together a platform to address some of these concepts. We have working pilots and companies actively testing the platform. Initially we started the platform as a research project to test all functionality of the iPhone including geo spatial awareness and connecting back to the cloud. It wasn’t until we started sharing our research findings that we realized the true potential.

I opened the Wall Street Journal the other day and saw the following graph:

These numbers are in BILLIONS!!! Everyone seems to indicate newspapers are failing. Radio and magazine’s are not growing. Think about that for a minute. That is $50 billion in advertising looking for a home. As you can see by LOCAL TV @ $28.8 billion that local is important. I think that mobile which is not on the chart is going to be competing for those dollars. Mobifestival this weekend will hopefully explore these opportunities more. If you are interested in this space or technology drop me a line. I’d love to meet and discuss.

DHH. I hate you. Wait I love you. Er I love to hate you? I don’t know which one it is. I guess it depends on the day or the topic. Lately I find our common ground growing. The other morning I was catching up on old podcasts (yes I’m horribly behind). I ran into David Heinemeier Hansson’s Legacy Code talk from Rails Conf Europe 2008. It was excellent. So much so, I’m recommending you take the time to listen to it. If you are a programmer (Ruby or otherwise), take the hour and listen to this. It will give you new perspective.  My favorite line “Legacy is just you over time”..

Metro Phoenix municipalities let me start by saying, “you don’t get it”.  You have spent billions on things like light rail and revitalizing your down towns.  You do this to look attractive to large businesses.  You think if you can provide this massive infrastructure, that they will bring their billion dollar industry to you.  “Build it, and they will come.”  This is a fantasy land you live in.  You think far too small.  This mentality belongs in movies not in economics.

Some day you will understand that bringing the operational arm of fortune 500 companies only brings “here today, gone tomorrow” jobs to the area, but an economy it does not make.  If you want to stay a tourist and land development economy you can stop reading now.  Go back to collecting your tourist taxes and your system development fees.  If you want to become a leader in technology, bio sciences and energy keep reading.  You won’t compete with the Midwest, South and foreign countries when it comes to providing cheap operational labor forever.  It’s a bad strategy anyhow.  Call the mayor of Detroit and ask him how being the labor force for American Automakers is working out.  Stop targeting yourself as the call center hub of failing banks or as the fabrication farm of major chip makers.

Instead, let me tell you a little story.  One that reads like the Soprano’s built off real life events.  Let me introduce to you the Pay Pal Mafia.  Several years back there were several great stories written on the “crew”, in reputable places like Wired, Fortune, Forbes and the NY Times, so I won’t rehash that.

They are important because they got it.  The inner circle of Pay Pal founders and executives took the money they received when they cashed out to eBay and REINVESTED it into local startups that their network of peers had been sitting on, just waiting for capital.  They now control much of the economy in Silicon Valley having a piece of action in nearly every major new startup in the last 4 or 5 years.  See the list below to see the reach just 11 guys have in personal investment.

So, you see the trick here is to spend your money and time (ie: invest yourself) in helping the next Pay Pal.  You know that little company that is from Phoenix and loves Phoenix, but will be forced to move to Silicon Valley to get their first round of funding.  The one that when they make it big will give back in spades to the very community that helps them get there.  The startup that is still an idea, looking for the right connections, the one that will spark the culture and economy of dominance for your future.  Quit investing recklessly on the 40 year infrastructure plan in hopes of landing the billion dollar “it company”, instead invest in the 40,000 entrepreneurs already swimming in your pond looking to break out and be the next big fish.  I know it sounds risky, perhaps even foolish, but you need to invest in PEOPLE!  PEOPLE that ultimately are dying to invest back in you.

Let me break it down for you.  Your next economy will not come from a plane flight out of state to meet with a megacorp CEO.  It will come by going down the street to have lunch with one of your current residents that has some crazy new idea that they are dying to share with you, in hopes that you point them in the right direction or introduce them to their missing contact.  So for the love of your city, please go to lunch with that someone this week!  Please believe in the people you already have.

Some Paypal Mafia Companies

• Facebook
• Youtube
• Yelp
• LinkedIn
• Digg
• Flickr
• Last.fm
• Joost
• Kiva
• Ning
• Geni
• Tesla (Electric Cars)
• SpaceX (Space Ships)
• Room 9 (Movie Production)
• Slide
• Palantir
• IronPort
• Solar City
• TokBox
• Xoom
• Yammer

Here is another short excerpt from my diaries of a mad man.  Written shortly after committing heavily to the concept of making Gangplank a reality and not just an idea that had existed for for nearly 10 years.  I found it fitting reading some of this with other thoughts currently on my mind today.

June 2008
How do we maintain the energy and passion to keep going?  What drives the best?  What is the difference between those that make it and those that don’t?  Is it wrong to dream big?  or Only wrong to not realize those dreams?  Is it possible to transform an industry in a city when you are the little guy? Is there fate, karma or luck?  What makes this city tick?  What do people want?  Am I in the right industry?  I miss God.  — Peace out.

Shaq has 623,000+ twitter followers.  Twitter and Facebook are growing at exponential rates every quarter.  Hell even Barack Obama, the leader of the free world, has a Twitter account.  Social this.  Social that.  We get it?  We have this new “social media” thing figured out.  It’s a way to market and retain customers, right?  Engage them in the “conversation”.  It is going to kill the traditional mediums of advertisers like newspapers and TV commercials.  Facebook, Twitter, etc are all changing everything in media.  Right?

Let me interject that us “old fogies”, you know all of us over 18, don’t get it.  We are missing the boat on this new “social media” craze.  I’m old enough to have teenagers.  While grounding them from a computer (myspace, facebook, etc) causes minor grief, grounding them from their mobile phone is a DEATH SENTENCE.  I have had them tell me it will ruin their life.  Why?  Because they get “social networks”.  Social networks are about people, REAL LIVE PEOPLE.

A mobile phone goes where I go and lets me interact in real time.  It’s real interaction on a portable device connecting me to a networked world.  When those of us building the infrastructure of the future get that, the opportunities will become endless.  Let me give some examples.

Example 1. Soccer Time?

My oldest daughter plays competitive soccer and has a game this weekend.  I ask her where and when the game will take place.  She shrugs and replies, “I don’t know”.  Then whips out her phone.  Five minutes go by and I get up and go into my office.  I look through my email to find the url to the team website.  I start to load the page and while it’s loading she pops in and says, “Game is at 10:00am on Saturday at Reach 11.  Taylor’s mom says that SR 51 freeway is closed to take SR 101 instead.  Kylie said that we are wearing blues, with our white socks and Monica’s dad said to remind you that club dues are due this week.”  I would have NEVER gotten all that information from the website, but one text message to an entire team and my daughter got a very detailed, relevant and human set of responses in a matter of minutes.

Example 2. Science Questions

My youngest daughter was doing a science project and needed to know why blood is red.  My wife popped on twitter and posed the question.  Quickly she got several responses.  One of the responses was from licensed medical doctor who happens to be a surgeon.  How often do/did you have a surgeon help you with your science homework?
Google if you aren’t already shitting your pants, you should be at least stocking up on Depends.  Adding social human interaction to search queries could be the very thing that knocks you off your thrown of search domination.  I know my kids already use cha-cha or their personal network over google for everyday questions.

This of course is just one use of an authentic, mobile, real-time, distributed and social network.  Add to the mix smart phone technologies that are adding GPS and video/audio broadcasting and we need to ask ourselves can we start to think like 14 year olds?  They don’t have a predisposition to use technology as it was “designed”.  Instead they exploit it to get what they need out of it.  If you want a “social media” expert, I suggest you look at the local High School. After all isn’t high school where you live or die by your “social status”.