Category Archives: Uncategorized

Apparently video games aren’t tools of Satan after all!

A fantastic story via Dave Winer, in the Erickson Tribune, an in-house newspaper for a chain of retirement communities:

This summer, residents at Erickson communities around the country proved that video gaming isn’t just lounging. In fact, it’s downright physical and pretty competitive too.

In a series of three matches filled with intensity worthy of professional athletics, four teams representing Erickson’s Greenspring (Springfield, Va.), Oak Crest (Baltimore, Md.), Sedgebrook (Lincolnshire, Ill.), and Highland Springs (Dallas, Tex.) communities vied for the title in Erickson Sports’ first Nintendo Wii Bowling Tournament.

To the winners will go a trophy and the usual bragging rights fundamental to any sports victory, but the tournament also drew on Erickson residents’ camaraderie in spirit and performance.

Members of the four competing teams—the Oak Crest Mighty Oaks, the Greenspring Strikers, the Sedgebrook Alley Cats, and the Highland Springs Texas Highlanders—took virtual bowling to a new level, even practicing for the tournament beforehand.

“We practiced four to five days, maybe two hours a day,” says Mighty Oaks team member Carolyn “Little Sib” Sibley. “We were pushing it because we wanted to win.”

The environment itself also contributed to the competitive atmosphere that characterized the event. Players experienced every angle of the tournament, from live crowds and virtual bowling lanes to team uniforms. “We had shirts made for us, and the crew that came from back east really set up the area beautifully,” says Pete “Sidewinder” Robertson of the Highland Springs Texas Highlanders. “They had lights that outlined the lane that the bowler was bowling on, and we had a nice group of people turn out just to watch and cheer.”

The Nintendo Wii has become a popular entertainment fixture at many Erickson communities. The system combines a first-person point of view with actual physical interaction, immersing players in the game’s environment. “I never played a Wii game, and I was kind of anxious to do that,” Robertson says.

Next up: a Grand Theft Auto tournament.

Joke! Joke…

Patrick Goldstein of the Los Angeles Times on Hollywood owner/entrepreneurs

Top-notch entertainment reporter Patrick Goldstein picks up the baton:

Hollywood is a town awash in hyphenates. TV is loaded with writer-producers. The movie biz is full of writer-directors. There’s even a legion of actor-filmmakers like Clint Eastwood and George Clooney. But as the writers strike enters its third week, I think the future belongs to a tantalizing new hyphenate: the writer-entrepreneur.

Visiting a UCLA film class the other night, I was asked to name the most influential filmmakers of our era. The choices were pretty obvious: Steven Spielberg, Peter Jackson, John Lasseter, George Lucas. . . . As the names spilled out, I realized they all have something in common. They’re filmmaker-entrepreneurs, artists-turned-businessmen who helped start their own companies to further their work, became financially independent and created a world that operates under a radically different set of rules from the vacuous studio assembly lines. It’s telling that the current strike is about new media yet both sides seem to be following old-school models.

Writer Guild members, listen up. There is a lesson here. Just ask Tony Gilroy, the writer-director of “Michael Clayton,” a nervy thriller that’s won critical raves this fall. Gilroy had a script that was dead in the water until a total outsider — a Boston real estate developer named Steve Samuels — said if Gilroy could get a star and stick to a budget, he’d bankroll the film.

Gilroy didn’t see himself as an entrepreneur. He just had a script that was burning a hole in his pocket. “I’d say the experience was more about my wising up than becoming a visionary,” he explained the other day. “But the moment I started chasing private-equity money, it didn’t take me long before I’d realized that I’d short-circuited the formula for getting a greenlight. I didn’t need studio approval. All I needed was one guy who believed in the movie.”

Gilroy is now a convert. “The studios have got to be hoping that this idea about being entrepreneurs doesn’t sweep over the TV show runners, because once you start seeing really good production values on the Internet, I mean, what does Larry David really need HBO for? This is all everybody is talking about on the line. They’re not talking about healthcare. They’re going, ‘Wow, is there a different way to get our movies and TV shows made?’ “

It’s the kind of talk that’s contagious. Scott Frank, who wrote hits like “Minority Report” before directing “The Woodsman” this year, has been speaking with Samuels about financing a new film. David Twohy, writer-director of “The Chronicles of Riddick,” has lined up financing for a new thriller, “A Perfect Getaway,” from Relativity chief Ryan Cavanaugh, who also bankrolled “3:10 to Yuma.”

Steve Zaillian, who wrote “American Gangster,” has a deal with Mandate Pictures to make under-$10 million character-driven films where he is a 50-50 partner in all the projects. Mandate has a similar partnership with writer-director Sam Raimi of “Spider-Man” fame. Mandate also has a writers program in which, in return for initially cutting their fee, writers can get 25% of the gross after a film goes into profit and have approval rights on hiring the movie’s cast and director.

“Writers who create something rare — a story with great, original characters that movie stars will cut their price to play — have a real value,” says Mandate production chief Nathan Kahane. “But that value doesn’t get unlocked in the studio system. If writers are willing to share our risk, then we’re willing to give them a lot of control and share in the profits too.”

This kind of entrepreneurial formula couldn’t have existed in the era when the studios had a stranglehold on every facet of the business, notably talent, money and distribution. But those days are gone. The stars became free agents long ago. In the last few years, with billions of private-equity dollars flooding the business, the studios have lost their lock on financing too.

All that’s left is marketing and distribution. It’s hard to equal the way studios launch their summer popcorn extravaganzas with a $40-million marketing blitz. But as more entertainment migrates to the Internet, where distribution is basically free to anyone with a computer, the studios will lose that monopoly as well. If the last couple of weeks are any indication, with clips from out-of-work comedy writers popping up every day, the Web could be littered with new must-see video sites by Christmas. Remember: After barely a year in existence, YouTube was bought by Google for $1.65 billion. On the Internet, good ideas travel fast.

“The world is about to change,” Frank says. “Anyone with an Apple computer can make a movie now — it’s never been a more democratic medium. The studios should be very afraid. Once the independent financiers start going directly to writers, things could change really fast. I ask myself every week — why aren’t we all working with them? Look at the movies they’ve made. They are the new Medicis.”

While the studios peddle dreary remakes and special-effects extravaganzas, the movies that really get people talking — such as “Crash,” “Brokeback Mountain,” “Michael Clayton” and the upcoming “Juno” — have been financed by outside investors. None of the films had a big budget, but fiscal discipline and artistic autonomy often fuels creativity. “Ten million dollars to $30 million is where ambiguity stays alive, where you can have complexity in storytelling,” Gilroy says. “When you get up to a certain budget number with studio films, the bad guys have to all wear black hats.”

The WGA is fighting the good fight. But the glory days of “Norma Rae” are gone. Real change in today’s world comes from the energy and ideas of entrepreneurs, not from labor negotiations. To take control of their work, writers have to cut out the middleman. Marshall Herskovitz and Ed Zwick, who just struck a deal with NBC to air their “Quarterlife” Web-only dramatic series, will reap most of the rewards, since they own the show. Not every writer has the clout of that duo to attract outside investors. But as the Internet has proved time and again, game-changing ideas are more likely to come from an unknown 26-year-old newcomer than a fiftysomething veteran.

The models are everywhere today, especially in the music business, where economic upheaval has given birth to a new array of artist-entrepreneurs. Radiohead and Prince have both bypassed the soul-killing tangle of retailers and promotion people by releasing their latest records themselves (with Radiohead using the Internet as its distributor, even letting its fans set the price of the record themselves).

Being entrepreneurial isn’t for the faint of heart. If you want a sweet upfront paycheck, you may not have the stomach for it. But after seeing studios bowdlerize their scripts, many writers will swap a big payday for more control. Twohy says that after Relativity read his script, “They told me, ‘Script approved as-is.’ I’ve never heard a studio ever say that.”

This kind of creative freedom already exists in Silicon Valley, where the creators of product are its owners. Software entrepreneur Marc Andreessen, who helped found Netscape, makes an eloquent argument on his blog that a prolonged strike could undermine the studios’ control of production and distribution, ushering in a new showbiz model built in the image of Silicon Valley.

Even if the strike is settled soon, dramatic change is coming. As more outside money pours into Hollywood and as our computers begin to merge with our TV sets, the studios will have less control over content than ever. NBC’s Jeff Zucker can sneer at the paltry dollars to be made from selling TV shows on iTunes all he wants. But if old media keep pulling their product away, surely the day isn’t far away when Steve Jobs will bankroll his own programming to keep our iPods full of compelling entertainment. [He already did; it was called Pixar.]

Whoever enters the fray will still need writers to create this new content. So writers should keep their eyes on the prize. Getting a few more pennies of digital loot is just a beginning, not an end. The ultimate goal should be finding ways to own a piece of your own work.

“If I were someone like Les Moonves, I’d be scared,” Gilroy says. “You don’t want your employees thinking about opening their own store around the corner. We might be really tough competitors.”

Great talk by Stephen Wolfram on starting companies

From Stephen Wolfram, one of my entrepreneurial heroes, who (unlike me) was able to start and run a successful high-tech company in Champaign, Illinois…

A great talk on how to start and run companies. Worth reading the whole thing, but here are my favorite parts.

Motivation for starting Wolfram Research, the maker of Mathematica:

[As a physicist,] I’d been used to using all sorts of separate programs — and custom software — for things I wanted to do. But I had the idea that perhaps I could make one really general computational system that I could just use forever.

And that lots of other people would find useful too.

Well, that was what launched me on building Mathematica. I was pretty definite and determined about it.

And I knew I needed to start a company.

Starting focused, but learning and adapting as you grow:

I had made a little money by then. And quite a few of the first people I collected were basically moonlighters. So I didn’t need any outside money.

And pretty soon I started making deals with companies like NeXT and Sun and IBM to pay up front to have our software for their machines.

And after a year and a half — June 1988 — Version 1 of Mathematica was released, and made a nice splash.

I think I had about 15 employees by then. I hoped I could keep the company really small. A pure R&D company. With the sales and marketing — or at least the sales — left to the hardware companies.

Well, despite lots of good intentions, that didn’t work out. There were too many cultural impedance mismatches. And pretty soon I realized I was just going to have to build everything directly in my company.

And I’m happy to say that that worked out really well. The company’s been going for more than 18 years now. And been consistently profitable.

I’ve been the CEO all the time. I’ve kept the company small. The core of it is still only about 350 people.

On the value of tapping a rich vein of potential development and expansion from a deep core idea:

You know, Mathematica is really based on fairly deep ideas about computation. That particularly come out in the notion of symbolic programming. That lets one unify all sorts of constructs and operations. And manipulate the structure as well as the content of data.

That’s been at the core of Mathematica for 18 years. But it’s a difficult idea, that takes a long time to get absorbed.

But it’s what’s let us build the huge web of algorithms and things inMathematica.

And over the last ten years we’ve gradually realized that it lets us build some pretty major other things. Which are going to be really exciting when they’re finally out. I think a bigger step even than when MathematicaVersion 1 came out.

Why start a company, and why not start a company:

Well, of course, people are all different. And I think what’s crucial is to understand one’s own capabilities, and one’s own motivation.

A lot of what goes into starting companies is turning nothing into something. Starting with a blank slate, and just inventing all kinds of stuff.

You’ll never know if it’s ultimately correct. You just have to use your judgement, make decisions, and move on.

To some people, that’s pretty scary. Not to have any answers to look up in the back of the book. Just to do stuff.

People have different motivations, of course. A lot of people think the big thing with companies is money.

Yes, if you luck out, you can make a lot of money. But it’s really rare that money carries people as a motivation.

You have to actually care about what you’re doing.

For some people, like me, it’s the actual creative content that they care most about. For other people, it’s the act of building the company. For others, it’s making deals. Or winning against competition.

But there has to be something you really care about.

Why the CEO should be a founder:

And I think it’s important that if you’re the one who cares, you should be the one pushing things forward. If you’re smart, there’s a good chance you can learn the detailed skills to run a company. But to make the company really work, you need someone leading it who really cares about it.

You can’t delegate the core motivation.

On the role — or non-role — of business plans, and the sources of real value:

But in the things I’ve done — and all the various CEOs I’ve counseled over the years — I’m not sure if writing a detailed business plan would ever once have been worthwhile. I’m as analytical as anyone. But somehow there are always variables one doesn’t know. That can just turn numbers and things upside down.

Now of course there’s a certain discipline to writing a business plan. And seeing whether someone can actually put together a logical plan can be a good way to assess them.

It’s like whether one has a good website. That looks nice, and is well organized. Or has some educational degree that proves one can finish something.

Well, OK, I could go on for ages about things to do and not to do with companies.

After a while one gets a certain intuition for what’s going to work, and what’s not. I’m always trying to test my intuition, by watching how things actually play out, and comparing with what I expected.

There are certain constants. Get-rich-quick schemes almost never work. Even if they sound really clever. It takes actual hard work to build things. And usually at the core of anything successful is something difficult. It may not be what people talk about. It might be something technical. It might be a business structure. But there’ll be something there that’s sort of a hard idea. It’s always a good exercise to see if you can figure out what it is.

You know, sometimes there are things in business that just don’t seem to make sense. Some deal that’s too good to be true. Some magic solution to a problem. But somehow those never really seem to work out. Somehow in the long run things always arrange themselves to sort of be fair. To get out what gets put in.

Finally, check this out. Wow.

Nixon White House tapes: the gift that keeps on giving

Via David Corn:

President Nixon: What’s your evaluation or Reagan after meeting him several times now.

Kissinger: Well, I think he’s a–actually I think he’s a pretty decent guy.

President Nixon: Oh, decent, no question, but his brains

Kissinger: Well, his brains, are negligible. I–

President Nixon: He’s really pretty shallow, Henry.

Kissinger: He’s shallow. He’s got no…he’s an actor. He–When he gets a line he does it very well. He said, “Hell, people are remembered not for what they do, but for what they say. Can’t you find a few good lines?” [Chuckles.] That’s really an actor’s approach to foreign policy–to substantive….

President Nixon: I’ve said a lot of good things, too, you know damn well.

Kissinger: Well, that too.

President Nixon: Can you think though, Henry, can you think, though, that Reagan with certain forces running in the direction could be sitting right here?

Kissinger: Inconceivable.

President Nixon: Back to Reagan though. It shows you how a man of limited mental capacity simply doesn’t know what the Christ is going on in the foreign area.

If this is true, someone’s going to jail

You heard it here first…

Carol Loomis buries the lede:

At bottom, the countdown to both [Citigroup CEO] Prince’s exit and Citi’s November shocks began in [the] summer crisis period for the credit markets. Citi started then to have ominous dealings with CDOs [financial instruments that consist of bundled debt] that carried a “liquidity put.” Never heard of a liquidity put? Google will give you a few uninformative references. But it is testimony to the obscurity of this term that [Citigroup Chairman and former Treasury Secretary] Rubin says he had never heard of liquidity puts until they started harassing Citi last summer.

What Citi did a couple of years ago was insert a put type of option into otherwise conventional CDOs that were backed by subprime mortgages and sold to such entities as funds set up by Wall Street firms. The put allowed any buyer of these CDOs who ran into financing problems to sell them back – at original value – to Citi. The likelihood of the put being exercised, however, was regarded as extremely remote because the CDOs were structured to be high-grade entities called “super-senior.”

Meanwhile, you might think the existence of the put would make it impossible for Citi to get those CDOs entirely off its balance sheet. [Yes, you might.] But in fact Citi found a complex accounting rationale for doing exactly that, and the CDOs jumped entirely to somebody else’s balance sheet. All that remained in Citi’s realm was this sticky little matter of the puts – which, as we shall immediately see, ultimately worked to get these CDOs right back to their creator, Citi.

Last summer, with the whole world suddenly unwilling to finance CDOs, the holders of the liquidity-put CDOs began to return them to Citi. And that’s where they now reside – $25 billion of them, a very large lump in Citi’s $55 billion of subprime-related securities. That entire package of trouble was the subject of Citi’s Nov. 5 analyst call. This was the third presentation that Citi had made to analysts in five weeks – each of these confessionals more anguished than the last – and in that time Citi’s stock and Prince’s credibility had been punished.

But remarkably, Nov. 5 was the first time that Citi mentioned liquidity puts to the world. CFO Crittenden says the need to make disclosures about the puts did not arise until the last part of October…