The GOP should dare Obama to do more.
Steep stock market corrections often create shrouds of pessimism that do bad things to people’s brainpower. And one of the absolutely stupidest things I have heard in recent weeks is that the recent drop in oil prices is bad. You heard me right. Serious people on financial television are saying lower oil prices are a signal of worldwide economic collapse. Here at home that translates to recession, deflation, a profits collapse, and rising unemployment.
I’ve been around for a while, and I’ve seldom heard such gibberish.
The latest stock market scare stems…

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I’ve just seen the video below of virtual popstar Hatsune Miku, a virtual popstar from Japan, as a guest on the David Letterman show. If that’s not enough for you check out this video of her performing live in front of thousands of fans in LA (caveat: the quality is poor and you have to wait until near the end to see her). She’s a blockbuster in Japan with hit video games, sold out shows, #1 singles and a virtual opera, and opened a tour for Lady Gaga in the US earlier this year.

Hatsune was created seven years ago by Japanese company Crypton Future Media as a visual representation of their song making software, i.e. a marketing gimmick, and developed into a phenomenon when people started remixing her tracks and an open source remixing community exploded online. Crypton Future Media says that Hatsune Miku fans have created over 100,000 original songs for her, over a million pieces of art and 170,000 YouTube videos. Google “Hatsune Miku fan site” and you get close to 150,000 hits.

The interesting question for me is whether Hatsune is a one off, or a sign of things to come?

From an emotional perspective it seems to me that absent human level artifcial intelligence engagement with a virtual popstar can’t be as rewarding as with a real person, but from the perspectives of engagement, participation and a feeling of co-ownership a virtual popstar community offers much more. I suspect we will see more of this.



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It was about a year ago when I was busy trying to work out and describe how the intersection of the global dollar short, through eurodollars, and the Federal Reserve’s very clumsy attempt at trying to carefully back its way into an eventual (and very much predetermined) exit from years of “emergency” intrusions might lead where they never expected. At the time, the yield curve was moving quite disorderly toward interest rates everyone was convinced were harmful. How times have changed, as this week the very clear disorder is now in the opposite direction, but curiously validating in many…

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Oh! What a Lovely Pestilence!
Ebola has come to America. Paul Krugman and Joseph Stiglitz must be delighted.
The core story of Keynesian economists is that government demand, as ideally embodied in war spending, enables economic growth. To illustrate, in a column called “Oh! What A Lovely War!” Krugman asserted: “World War II is the great natural experiment in the effects of large increases in government spending, and as such has always served as an important positive example for those of us who favor an activist approach to a depressed economy.”
It is never quite explained how removing…

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The following quote is up on The Heretic today. It’s a great reminder:

Efficient people are well organized and competent. They check things off their to-do list. They complete projects. They get stuff done.

Effective people do all that, but they check the right things off their to-do list. They complete the right projects. They get the right stuff done.

I guess we all know this but great entrepreneurs always focus on the thing that moves the needle the most. No matter how hard or personally difficult, they take on that problem. Company needs profile: they take the stage. Distribution deal not working: they pound the streets looking for direct deals. Co-founder no longer pulling his weight: they have the difficult conversation. Biggest customer not profitable but investors don’t want to let go of the revenue: they take the hit. Burning too much cash: they act sooner rather than later.

Other entrepreneurs however, are clearly efficient but keep themselves insanely busy chasing the wrong opportunities of focusing on tangential tasks.

Prioritisation, then is the difference between efficiency and effectiveness. It’s important that from time to time we take stock and make sure we are spending our precious time on the right stuff.



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Everyone knows that economic inequality has increased dramatically since the 1970s, and this has created a new cottage industry: dissecting “the top 1%.”
We now have a study from three economists that broadens what we know about these top earners.The study’s biggest news: Economic inequality is becoming more gender neutral.
Go back to the early 1980s, and almost no women were in the top 1%.
Now there are lots, says the study, though women’s representation still remains well below their overall share in the workforce, about half in 2012.
The study was conducted by Fatih Guvenen of the…

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In an article in the UK’s Telegraph on October 10, veteran economic correspondent Ambrose Evans-Pritchard laid bare the essential truth of the nearly universal current embrace of inflation as an economic panacea. While politicians, CEOs and economists talk about demand stimulus and the avoidance of a deflationary trap, Evans-Pritchard reminds us that inflation is all, and always, about debt management.Every year the levels of government debt as a percentage of GDP, for both emerging market and developed economies, continue to go higher and higher. As the ratios push out into uncharted…

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Something peculiar is happening to our nation’s food assistance program. The recently renamed food stamp program - now called the Supplemental Nutrition Assistance Program or SNAP - is supposed to respond to difficult economic conditions by providing financial assistance to purchase food to poor Americans. As bad times hit and more people need assistance, SNAP caseloads should go up. And as the economy strengthens, the number of SNAP recipients should decline - at least in theory.
For most of the history of the program, that is what happened. As the accompanying chart shows, from 1969 until…

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techbubble

Venturebeat published an interesting survey this morning which found that 42% of the tech CEOs they interviewed see evidence of a bubble. The infographic above shows the companies they are most worried about.

The market is definitely hot right now, but in the UK at least it doesn’t feel like it did in 1999, nothing like. That said, entrepreneurs and early stage investors should keep in mind that current conditions are unlikely to persist indefinitely. It’s more likely that there will be a period of meaningful market downturn at some point in their 7-10 year journey. Some will get lucky and exit much faster than that, but it is unwise to plan for luck. Better then, to keep touch with the fundamentals of building something that people love and that has attractive economics.

The very best companies combine great fundamentals with rocket ship growth, and we all want to be part of those stories, but the difficult situation that arises in current markets is investors offering big rounds before the fundamentals are sorted. Taking the money buys more time to get things working but brings with it the risk of increasing the burn, losing flexibility and running out of money if the fundamentals don’t improve according to plan. Sometimes it’s better to raise a smaller round, stay flexible, and then go for the big round when everything is ready.



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Stanford University. The University of Glasgow. The Educational Foundation of America. The British Medical Association. The City of Seattle, Washington. The Rockefeller Brothers (!) Fund. Amid the tolling of church bells and the thunderous self-applause of the environmental left, the fossil-fuel divestment bandwagon is on a roll. In addition to those listed above, 175 institutions, local governments, and individuals, with a total of over billion in assets, as of last month have pledged to “divest” their holdings in the 200 oil, gas, and coal producers with the greatest “carbon” content of…

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The post below first appeared as a guest post by me on the Web Summit Blog

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If you ask most VCs what they look for in a startup they will say great team, great product and great market. Then, if you press them for more detail most will say that for them the team is the most important (although I think they say that at least partly because it’s what entrepreneurs want to hear). Marc Andreessen wrote about this once. He was on the money when he said that for early stage investments having a great team is most important but for later stage investments the market matters more. That’s because when a company is young there is little in the company except the team whilst more mature companies have customers and a brand that tie them to a market.

Early stage investors like Forward Partners look for a minimum of a great entrepreneur and a great idea. Like many others we believe that at the heart of every great business there’s a great entrepreneur so that’s the first and most important thing to check off the list. A mistake that I’ve made in the past is to think that with my help an average entrepreneur with a great idea can be successful, but I’ve come to understand that that’s a conceit. All that said, it’s crucial that the great entrepreneur comes with a great idea otherwise the investment is likely to be wasted. There have, of course, been many instances where great entrepreneurs have pivoted away from their first idea and still been successful, with Kevin Systrom at Instagram being perhaps the most famous recent example, but that doesn’t happen often enough to bet on and it remains a mistake to invest in an entrepreneur, however good, if you don’t believe in their idea.

Much has been written about the character traits of great entrepreneurs so I won’t repeat that here (this post from Mark Suster has a good list) but I will say that in addition to those traits we want to see they have something special which gives them an unfair advantage for their chosen opportunity. Most often that’s deep domain experience. A great idea is for a company that can be a leader in a sizeable market, has enough upside potential to return the investor’s fund and can get far enough with the money to raise the next round.

As businesses develop investors start to think about execution as well as the idea and the team. The first evidence of good execution in my book is the work done to understand the customer and the problem, then slightly more mature companies should have prototypes and first releases of the product to show, and after that they should demonstrate traction and growth. Across all these areas the execution should evidence rigour, discipline and clear thinking.

Now you know what investors are looking for you might be wondering how to approach them. It’s been said many times before but the key is to build a relationship over time so that when you get to the point of asking for money you are asking somebody who already knows you, and hopefully likes you and your idea. The effort the investor puts into building a relationship with you is a good indicator of how likely they are to say yes when you finally come asking. The best way to to get a relationship started is with an introduction, but interacting on social media, networking at cocktail parties and attending office hours or other drop in sessions also works.

My final piece of advice is to understand that most good investors are incredibly time-poor – they are inundated with requests for calls and meetings and only have enough time to say yes to a very small percentage. Moreover, those ‘yesses’ will naturally skew to the people they already know and know well, making it tough to break in. It’s fine to ask for a meeting, but be prepared to begin the relationship with an email conversation. If you are approaching an institutional investor then people who are new to the firm and/or more junior often have more time, although maybe less influence.

Good luck!



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Last week Mises Institute senior fellow David Gordon reviewed Money, the book released last summer by Steve Forbes and Elizabeth Ames. Gordon described it as “odd” in the sense that he disagreed with how the authors have chosen to define money. What struck this writer as odd is that in lightly attacking Forbes and Ames, Gordon only succeeded insofar as he perhaps unintentionally revealed a strong disagreement about money with the intellectual father of the Institute which employs him, Ludwig von Mises.
Gordon has a problem with the Forbes and Ames assertion that money is merely a measure…

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Many people think that when the Internet Tax Freedom Act (ITFA) expires on December 11, this will open the door for the first time to the taxation of the Internet. Wrong. The Internet is already taxed, and taxation can continue even if IFTA is extended.
IFTA was first passed in 1998 to temporarily prevent taxes on Internet access from state and local governments. It has been extended in 2001, 2004, and 2007. It prevents non-grandfathered state and local governments from taxing Internet access. The bill was set to expire on November 1, 2014, but the date was pushed back to December 11, 2014,…

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In 2010, I co-signed an open letter warning that the Fed’s experiment with an unprecedented level of loose monetary policy - in amount, and in unorthodox method - created a risk of serious inflation. Sporadically journalists and others have noted that this risk has not come to pass, particularly in consumer prices. Recently there has been an article surveying each of us as to why; seeming to relish in, when provided, our various rationales, presumably as they sounded like excuses. It seems none of the responses provided what the authors clearly wanted, a blanket admission of error. I did not…

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Much of the blame for the government pension crisis in America has been aimed at overly optimistic projections of investment returns, which have allowed politicians to promise government workers attractive benefits at what seems like a low cost to taxpayers. When pension funds have missed these investment marks, as they did spectacularly in 2008, pension debt has soared and taxpayers have been stuck making up the difference.
Now a new study by Moody’s finds that state and local retirement debt has grown sharply even during periods when pension funds have largely hit their investment goals,…

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