Two Studs

Little Bear Park, the kiddie park where the
Rizzo gang told Vives & Gottlieb to meet them.

I've resisted following up on the City of Bell crimes til now, but the trial of assistant city manager Angela Spaccia -- guilty -- and the plea by slimeball Robert Rizzo of no contest to 69 counts has resurfaced this "huge little story." So, while the big EM08 dawgs (continue to) sip cognac on yachts and laugh at the little peeps, at least these medium gangsters are getting bracelets. 

Here's a pretty good talk with Pulitzer Prize winning journalists Ruben Vives and Jeff Gottlieb. What I appreciated was how they detail that from deciphering contracts to interviewing to forensic accounting to making simple requests that can stretch for days if not weeks... this is long, painstaking work that only investigative journalism can do. They remind me of my television hero, Columbo; persistent, a focus on detail and a poker pro's nose for horseshit when they smell it.

More, their talk underscores why media is so crucial to freedom. Rather, a media that values sunlight, can figure out the dollars and has the balls to stand up to power.

Back on the ground, reporters Vives and Gottlieb deserve some kind of medal. An unlikely pair, Gottlieb is the grizzled vet, having bounced round honing his skills, while Vives shouldn't even be in his position if we listened to some. As a kid he was an undocumented immigrant (Guatemala). That he's here, standing with a Pulitzer in hand speaks well for our country.

These guys are studs, and really make me proud. Sometimes our country works pretty well.
(Doesn't Gottlieb have a passing resemblance to Bob Odenkirk? Don't know who Odenkirk is? Better call Saul....)

This Broad

"Don't hate me because I don't do anything
but somehow get you to pay me. Hee hee!"

Who was it -- Goebbels...? -- that said if you keep on repeating a lie enough the plebes will believe anything?

Marketers practice the blunt force mind-screwing they do and feel it's a science; one technique they call impressions.(1) I don't know what the current rate is, but as I recall back in the stone age it was in the teens before a sheeple converted. That's a marketing slime $5 word for when you finally break down and buy after the Nth time seeing that NIKE ad, despite it having Lebron even when you HATE Lebron.

When I bring up the subject of marketing to crazy liberal groups like Occupy, they look at me as if I'm Count Alucard standing at high noon in defiance. They conflate "marketing" with "spam" and the evil empire, and I get it, but would they do the same with "project management" or "operations" or "customer service"? Of course not. 

One of the examples I usually cite (as I did with the crazy Occupiers) is during my pitch about marketing being an integral part of change (AND stasis!). Back in the stone age, America had a problem: trash. Litter was everywhere on sidewalks, and roads, not just gutters and alleys. What cleaned it up? Marketing, the Keep America Beautiful campaign. It ran everywhere: magazines, billboards, radio, newspapers, and, perhaps most famously, the Clio winning tv spot with "Iron Eyes Cody" (not a native, but an actor) turning to the camera as it dollied in to a close up, a tear running down his cheek. It raised awareness and exerted social pressure on the bad habit.

The key was impressions, a consistent stream of them. The medium may be the message, but so is access and the resources to deliver them.

Leading us to the current Commissioner of the Bureau of Labor Statistics, Erica Groshen. Newly minted as of 2012, the BLS has been chest thumping about unemployment having dropped to 7%. That of course is a lie, there being any number of ways to slice and make mincemeat of their hubris. But oh, they know marketing, and they own the media, which has no hesitation about carpet-bombing this "good news" every chance they get.

And who is Erica Groshen? It reminds me of Marcello's line about his betrothed, Giulia, in Bertolucci's masterpiece, Il Conformista, here paraphrased; She's all theory and academy. As if that weren't bad enough, she's also ex-NY Fed Reserve; double whammy for us, two for one for the evil empire! And before her? Another academic/bureaucrat, Keith Hall.

During the prime bubble inflating years of EM08, yet another academic-- see a pattern here? -- was honcho: Kathleen Utgoff. She hurts in more ways than one; she's an LA gal from Cal State Northridge and UCLA, where econ was her poison. And boy did she ride that pony; by my estimate she retired early (Phd in '78) and ...

...chose not to continue for another 4-year term and completed her term as Commissioner in July 2006. Secretary of Labor Elaine Chao and others honored her for her service. Although she has not ruled out future opportunities to serve the Nation, she now spends her time with her family and does volunteer work in her community.(2)

These are people who have never run a business much less been an entrepreneur and know nothing about the real world because they've never had to sustain themselves in it. There's not an innovative, problem solving bone in their bodies.

They produce NOTHING. Well, unless you count bureaucracy under the guise of policy-making.

Or paperwork. In the aftermath of the Pecora Hearings, the Glass-Steagall Act was an utterly ridiculous 37 pages or something. And yet, it protected us in terms of its goals for half a century. Meanwhile, the Dodd-Frank Act? Over 800 pages.

Is it really any wonder why we're so jacked?

Then that numbnut Phil Gramm decided to grow a hair up his ass and, with then Travelers honcho Sandy Weill's cash in pocket, began to methodically work his slimeball routine on congress. And it worked. See the Gramm-Leach-Bliley Act of 1999.(3) Weill, by the way, was so confident that Gramm-Leach-Bliley would pass, that he applied for and received -- evidently with our bureacrats' blessing -- a special dispensation to go ahead and merge with Citibank before Gramm-Leach-Bliley passed, and America crossed an historic line with the creation of its first Frankenbank: Citigroup.

Personally, having taken econ in school I can safely say that, as taught in the academy, it's a sure cure for insomnia, and has as much relevance to the real world as rocket science to workers eking out an existence in East LA.

As a friend pointedly put it recently when talking about bureaucrats, academics and theorists: If they didn't have their "jobs", these are people who wouldn't know what to do with themselves.

And lest you, dear reader, think I have some inborn sense of disdain for theorists, let me disabuse you of such; one of the most influential books in my life is Noel Burch's seminal Theory of Film Practice, and I have nothing but respect for Bill James.

And as if it wasn't a cruel jester ruling this sad universe, here's a bit of recent history: the one recent presidential advisor who has business experience? None other than Obama hand-picked slime ball, the former GE CEO Jeff Immelt, one of the worst CEOs ever. Maybe not Rick Wagoner bad, but horrible by any standard. Look up both of their track records if you don't believe me.

Immelt and Wagoner do share something else quite significant by the way: both have MBAs. From Harvard.

Then again, so does Groshen. Patterns, indeed.

---------------------------------

1. For those with a case of auto-masochism, it also quantifies and therefore justifies marketing and therefore marketers. Slap up flavor of the month singer/actor/athlete in a campaign on billboards, mags, site banners, commercials... and sit back and wait for the magic. If revenue goes up, well, there it is, and they're off to bonus land and the Clio awards. Next to bankers, pols and Hollywood execs, marketers have a bad case of full of shit. Interestingly enough, if the company posts negative during the campaign, well, it must be "the economy."

The corollary in sports are athletes and incentives. Star clauses have things like making the all star team will get you X amount over and above, or leading the league in scoring, etc. But I've often wondered why it doesn't work the other way if an athlete has a dog of a year. Or is just plain overrated. For NBA fans, think 19 mil and then picture Rashard Lewis (pre-Heat stint).

Back to the point about brilliant marketers (and bankers, pols, etc.) and blunt force; that entertaining old curmudgeon of Hollywood, Sam Fuller, said something funny once and I paraphrase:

Know what they do to ferret out snipers? They send a lone soldier out into the open; when the enemy shoots at him, they can get a bead. They thought that one up at West Point.

2. http://www.bls.gov/bls/history/commissioners/utgoff.htm

3. Gramm's balls only grew once he'd decimated Glass-Steagall; he then turned his best evil eye toward derivatives, and cheer-led the Commodities Futures Modernization Act a year later, in 2000, which kept derivatives dark. Thus, the fertile ground was perfectly primed for EM08.

And lest anyone still believe in the big game of "Democrats and Republicans" let me point out that each of these bedrock EM08 laws were of shepherded by a Republican -- Gramm -- and signed into law by a Democrat: Clinton. Americans should use a Q-Tip as history once again screams at us. 

Barnum's Dictum: snapchat

This fish is a sucker.

If you want to get a close up look at how stupid America is, look no further than this, from snapchat's Wiki:

As of October 2012, Snapchat had not made any revenue.^[7] Spiegel said in October 2012 that the Snapchat team was unwilling to be acquired.

As of February 2013, Snapchat confirmed a US$13.5 million Series A funding round led by Benchmark Capital, which valued the company between US$60 million and US$70 million. On June 24, 2013, the company's blog welcomed IVP as the lead investor from the Series B financing round, in which General Catalyst, Benchmark Capital, Lightspeed Venture Partners, and SV Angel also participated.^[22][23]

A mid-July media report valued the company at US$860 million.^[24]

On November 14, 2013, The Wall Street Journal reported that Snapchat declined a cash offer from Facebook of US$3 billion to acquire the company.^[25]

According to Om Malik, on November 15, 2013, Google offered $4B for the company but Evan Spiegel declined.^[26]

          --source: http://en.wikipedia.org/wiki/Snapchat

The key line, of course, is the first: As of October 2012, Snapchat had not made any revenue. NOT profits, but ANY cash flow.

Then you take a look at their team; go ahead, search them, unless this is the far future and they're long gone by now and buried somewhere on Alexa along with the first round Net bubble burst circa 2000. But to this point I only have this to say: There's a REAL reason why we don't allow anyone to be president that's under 35.

"Irrational exuberance" is one thing. Not learning is quite another. Together, we're talking suckerland part two.

A while ago I was texting on this subject to a friend. I wound up like this:

here's the litmus test for all these whippersnapper start ups and "wantrepreneurs" that think they're so clever and evidently everyone else thinks so smart, innovative, cutting edge...; make their services paid and watch what happens. ha! most people confuse equity market valuation [or in this case, investor exuberance] with real value. the truth is the former is speculation. the latter is vaguely proven, if that. 

Ta da.

Turn it Over

One of the greatest bands ever, in a breathtaking re-mix by Bill Laswell. If Emergency! is one of my desert island albums, and rated 10 out of 10, the old TIO was a 7. And that's for the inherent musical content.

At now over 40 years old, TIO has some dated, corny and well-known elements. But the burning fire of exploration at this band's essence creates a timeless feeling on its best moments. And there are many.

A bow to Laswell, who has almost created a new album. The butterfly has emerged, and she likes it loud.

As Usual, Blues & Sushi

Notice: They're not Japanese

Right now there's a lot of energy circling around the entrepreneurial wagons. In LA, the too So-Cal coined "Silicon Beach," is propelling more networking, seminars, angels, vcs, Meetups, advisors, mentors, consultants, incubators, and crowd this and that than comfort permits. If the word "bubble" makes you shift in your seat, read on.

This is about one facet of this phenomena, the so-called "Lean" approach to startups, popularized by Eric Ries. First off, I'll say that I couldn't agree more with lean principles, but second, not because of Ries, because I've known about lean for a while. Years ago I got interested in how companies ran, and along the way, as millions did, read Peters' &  Waterman's In Search of Excellence. But it was the PBS doc based upon the book, if memory serves, that opened my eyes. In it, I first learned of Toyota's and Honda's different approaches to running a company versus the typical American pyramid.

For those who dig just a bit, it's easy to find that it was Toyota, decades ago, that originated lean principles, not Ries, who in fairness mentions Toyota. And while the "experts" fawn over lean this and that in its processes, they neglect the most important factor: people. 

While implementing lean approaches in process, the most important thing Toyota did was to recognize that you can say "we're gong to be lean," but how, exactly, do you do that? 

Back in the day, Toyota issued a company-wide offer: make a suggestion that helps the company run more efficiently and guess what? You get paid. Honda, meanwhile, took a different approach; while one diagram displayed the aforementioned typical American pyramidal top-down -- and therefore information flow -- approach to management, Honda's diagram was all over the place, with lines criss-crossing in a bird's nest. Their reasoning was simple: open up comm lines so that ideas -- people, not bureaucrats -- begin increasing the probability for synergy.

And here's the crux of the matter: you can have lean principles, mvps, pivoting... but if you give it to a bunch of "twenagers," what's going to happen?

Go back to the example of Toyota soliciting ideas from its crew, high and low. Management thinks they know about the assembly line, but the workers are doing the assembly line. Doing doesn't necessarily confer knowledge, much less insight, but how can it hurt to open up the comm lines to those on the front lines rather than constantly having a one-dimensional view from a bird's eye on high?

This simple thing -- grounded in people -- was the crux of Toyota's lean principles, not process re-imagining per se.

By handing over things such as lean principles and Business Model Generation (Osterwalder & Pigneur, another good read) to skinny jeans, I believe that's a good thing. But without the experience or training and skills that enable one to think so that you can pivot in a logical way, there's a false bubble of confidence bred. The joke goes that youth is wasted on the young, but we don't laugh when we say that a president can't be under the age of 35.

Think about one of my favorite things, basketball. The sport is rife with stories of young, high flying athleticism and enormous amounts of skills. But it's also true that no less than Michael Jordan himself points to the mental aspect of sports as being the toughest challenge. During a revealing interview, the living legend had this to say about his storied comeback to basketball after his brief baseball detour:

Q: When you came back, there was a new breed of players that had not tested themselves against you.

Jordan: Well, it was a challenge. One of the reasons I left was because I didn't have as many challenges as I [had] previously. Now I had all the challenges in the world. People were presenting different challenges to me and that's something that I was really thriving [on]. Young kids were talking trash to me. Some of them were physically, athletically a lot better than I was. But I think another championship -- to do what hadn't been done as far as I could remember. What separated me from them was I knew more. I knew how to win. I knew what it took. So that was a challenge to prove and see if you could teach these kids what it takes about winning. Not just physical skill but how to apply that in similar situations. The same thing that Magic Johnson and Larry Bird did to me in the 80's basically. It was my responsibility to teach these young whippersnappers how to do that, and in the midst of all that, it was a challenge to come back and win.

--NBA at 50 Interview: Michael Jordan, Part 2

What separated me from them was I knew more.

In essence, I think another bubble has been built, albeit anything that gives entrepreneurship  a leg up on the typical American favoritism toward huge conglomerates can't be all bad. What this bubble boils down to is that by emphasizing process without the skills to think logically through one's business model in all of its contingencies, that false sense of confidence builds. It's a step up from where we were, and in fairness, people such as Ries, Steve Blank and Osterwalder are steps in the right direction, but I'm pointing to something much more fundamental.

One of the things former Apple evangelist Guy Kawasaki says to startups is to hire better than yourself. What he points to is that startups are a far more complex landscape than a game of poker, and that people and thinking are the crux of the matter. There must be a sober way of mapping out one's business model in all of its permutations, not just acquiring a few skills, such as developing an mvp. To circle back to basketball, it's like having a hotshot shooter who can't handle the most fundamental aspects of the game such as switching on defense. Running a business is an ultra complicated affair, and if you're not sound fundamentally, no amount of mvp or testing would cause me to place a bet on you -- which is what an investment in a startup is -- a bet.

Look at the movie studios, one of the oldest institutions to employ the mvp principle in the form of pre-release screenings and focus groups to garner early feedback. Most movies languish and fall far short of expectations, prompting William Goldman's infamous dictum about Hollywood: no one knows anything. This is because of one thing: the studios not incorporating a ground up approach at the very beginning of the development process. By ignoring fundamentals, they automatically incorporate more risk into their formula.

Last, I find it amusing, but not surprising, that lean principles are having a hey day now. Ries has fashioned a career from it. But just as the blues only found its rightful place in American minds when foreigners such as Peter Green, John Mayall and Eric Clapton championed the art form, so too are these Japanese principles now wending their way into American startup circles. Just like sushi, Japanese finger food, now made an entire meal due to white people giving the "this is good" thumb's up.

Go figure.

Chris Herren: "Unguarded"

Some people meditate. I got the pot sink. This is where I found myself.

--Chris Herren

What's valor? Maybe a better question is, what's valorized?

About six months ago, fellow hoop head Johnny S and I were talking and he mentioned the Jonathan Hock, ESPN 30 for 30 doc on Chris Herren, Unguarded. As someone who's been following hoops all my life I knew the surface story about Herren, but when Johnny told me about this flick I made that mental note that sticks.

It's not a great story insofar as surprise, mystery or forecasting. In fact, it's the classic predictable tragedy made right and triumph, much like The Pursuit of Happiness. Yet it's really moving, and credit goes to Hock, who edits Unguarded masterfully, weaving different presentations by the now clean Herren deftly to  various audiences: youth, druggies and cons.

This story formula could have easily sunk to pandering, and the truth is that the major credit must be paid to Herren who deals straight and with the voice of the real behind him, exerting a solid undercurrent that builds empathy.

The coda has his current life in stride; wife and kids, the fans who loved, then  reviled and now respect him, all back on board. That of course is a great thing, but for me, the most moving parts of stories where people triumph over adversity are those moments, those turning points, where a crossroad is approached. For  Malcolm, it was lying in prison, his mind coming alive through books. With Herren, his was also a punishment; having to wash dishes in solitary, the pot sink room, for hours on end. It's where he was alone with the biggest hurdle; himself.

It gets better, and speaks to a rare quality in individuals, the ability to introspect, to really get down and look at yourself. He speaks in the coda about how one day he noticed something about his behavior, that where once before, for years on end, he'd taken his shaver and toothbrush into the shower, but all of a sudden with sobriety, he'd stopped.

And in an insight that speaks as much to psychology as to that ability to really observe yourself, he said that now he was able to look at himself in the mirror.