More Fallout from the Zuckerberg Files

Should the unintended consequences that emerge in the course of a company’s evolution be a primary concern of management?

Is the exponential creation of shareholder value still the overriding force when a wildly successful company grows even faster than its own outsized vision?

Are the naive philosophical aspirations of under-experienced entrepreneurs a get-out-of-jail-free card from the ramifications of otherwise noble intentions?

In answering these and similar questions, is Facebook somehow a different animal?

These are some of the issues examined by a new Frontline documentary recently aired on PBS that frames a deeply damning critique of Facebook and its leadership team. While purposefully steering past the warm-and-fuzzy aspects of Facebook’s innocent exchanges of family photos and recipes, The Facebook Dilemma dives into Facebook’s structural roots.

The critique presented is strident but not unfair: Why didn’t Facebook as an enterprise heed the many early warnings of the pervasiveness of its influence and more strongly consider mitigation strategies, and now that the political chaos has been unleashed, is there any possibility of getting the bad genie back in its bottle?

When Facebook launched, founder Mark Zuckerberg braved a bold and curious global community manifesto:

“Our mission is to make the world more open and connected.”

That sounds good on the surface, and it sounded so good to so many of Facebook’s early employees that they rallied around the life-affirming purpose. They believed they were building a platform toward the betterment of humanity.

Simultaneously, the size of the audience embracing the platform created a media opportunity unlike any other in history. No company has ever thought about achieving monetization of a billion (heck, now two billion) individuals. To make sure no money was left on the table, Zuckerberg hired Sheryl Sandberg from Google to build that side of the equation.

The inherent conflicts soon became apparent. Facebook claimed to be a technology company, not a media company, even though its business model was selling advertising, which is what a media company does. To be the most valuable media company it could be, it needed two things: the world’s most in-depth data warehouse, and a rule set of utilizing that data with the fewest possible restrictions.

As a business, this all made sense. As you can see every day in the public company’s enterprise value, it worked beyond all expectations. The problem remains, it was initially fueled by another slogan:

“Move fast and break things.”

This ethos is not unique to Facebook. One of the tenets of Silicon Valley is to drive value from what is called an MVP, a minimum viable product. The point is to get a functional offering in the market quickly, find where it is successful, worry little about its failings, and start to iterate while building cash flow. Success is defined first by penetration (audience reach) and second by monetization (lifetime customer value). When things go sour, startups try to fix them, but because success is winner take all, most teams unapologetically expect there will be a lot of sourness to sweeten.

The question Facebook has encountered is unsettling: Is its very business model antithetical to fixing the byproducts of its success?

The Frontline documentary illustrates many of the ways Facebook has gone sour. Arab Spring. Fake news penetration in the 2016 U.S. presidential election. Russian intervention in media buying in the same election and outrageous exploitation of privacy by Cambridge Analytica. Violence in Myanmar.

Even Roger McNamee, a celebrated early investor in Facebook, took it upon himself to act counter to his own financial interests and ask Facebook management to step back and rethink the implications of its mindset. They did not heed his warnings. They were either too optimistic, too idealistic, too hooked on winning, too greedy, too ambitious, too arrogant, too busy to see the light of day, or a combination of all of those.

Facebook management has been reactive on all these fronts and done what it can to play whack-a-mole as crises emerge. Executives and managers there admit repeatedly they have been “too slow” to address the ramifications of their global viral adoption. The “too slow” apology parrots Zuckerberg’s appearance before Congress. It was a well-played chess move. It reveals no ethos of a fundamental commitment to a proactive playbook of innovative solutions. It’s a cost center, not a profit center.

Traditional media companies work under the direction of a qualified, responsible editor. When a journalist makes a mistake, the media brand runs a retraction. Facebook doesn’t want to be a media company, and it doesn’t want to be an editor, but any way you slice it, the algorithm that sits under News Feed is a robotic editor more likely to show you what it thinks you want to see than what is true or real. Then a perfectly targeted ad is inserted. That is how the game has been won at Facebook. It’s a winning formula. Any risk to changing that is far riskier to the company’s stock price than a few incidents of political unrest.

The real question remains: If Facebook’s mission requires that the company remove most obstacles to the free flow of information, the result of which is to facilitate unfiltered speech, the result of which is chaos, can it both stay true to its values and smooth over the chaos? And if the company is selling some of the most valuable ads in the world because the vast archive of privacy data is what makes those ads click, how can it impose limits on the interests of its ownership?

It’s a greater good question, one that capitalism believes is best left to the free market to solve, but in this case, it’s almost impossible to see how that gap is bridged.

Zuckerberg likes to say that Facebook is an “idealistic and optimistic” company. He said it when we was hauled before Congress to address the breach of privacy trust. When he was a younger man, it was a quaint proclamation I could have believed were it not for the true origin of Facebook as a college hook-up site. When he says it today, it sounds cynical. People who work for him might still be drinking the Kool-Aid. He’s selling advertising, justifying it, and trying to dodge regulation. To wit, he’s doing his day job as CEO.

Part of the problem might be social media itself. Its greatest strength is its greatest weakness. While pure democracy of publishing without a filter is liberating, audiences can easily be misled and mislead each other in chaotic exchanges of raw opinion. Add in bad actors buying access for covert agendas and the danger can become uncontainable.

Shortly before Zuckerberg testified earlier this year, I wrote a post entitled Is Facebook the Next AOL? At that time I wasn’t sure. Now I am. The byproducts of Facebook are so pernicious and likely unresolvable, I do think at some point the vast audience will abandon the platform. The cost of trading one’s privacy for family photos and recipes is too high. I don’t know when that will happen, and Facebook has a ton of cash so it can last a long time, but I expect the devoted masses will eventually exit their loyal addiction in self-defense. I don’t think this invention can adequately address the inherent conflict of interest it has created to thrive. Creative destruction will replace it with a better, more respectful product.

A brand is a promise. When trust is eroded, a brand dies.

I remain active on Facebook, but the broad notion that the world would be better as an open and connected place has always troubled me. Maybe it’s because I grew up as a kid learning of Nixon’s enemies list. Privacy to me always seemed to matter. Today’s political climate almost makes the Nixon era seem welcoming.

I’ve long subscribed to the notion that technology is advancing much faster than our ability to understand its implications. I saw that in my early career with the addictive nature of computer games. We see it all around us with people’s attention glued to mobile screens as they bump into each other and fall into fountains. We don’t really know what this stuff is doing to us. We buy it and use it and another tech company goes public.

Silicon Valley moves fast and breaks things because it’s good for business. Collateral damage is expected and as long as a company survives and grows few real tears are shed. Expecting it will change is unrealistic. It’s a form of realpolitik. Expediency wins over ideology because of the vast money at stake.

Since you’re probably staying on the social media playing field indefinitely, protect yourself. No one else will.

_______________

This article originally appeared on The Good Men Project.

Image: Pixabay

Advertisements

The Many Lessons of Andy Grove

Time 1997We lost a great business leader earlier this year. His name was Andrew S. Grove, known to many as Andy Grove.

He survived Nazi-occupied Hungary as a child, then Soviet-controlled Hungary, immigrating to the United States at the age of 20 in 1956.

He received a Ph.D. in chemical engineering from U.C. Berkeley and became a star engineer at Fairchild Semiconductor.

He left the stability of Fairchild Semiconductor with Silicon Valley legends Robert Noyce and Gordon Moore when they co-founded Intel. Together they later entirely reinvented Intel from a manufacturer of memory chips to the dominant producer of microprocessors.

He was Intel’s CEO from 1987 to 1998, the famous “Intel Inside” years when personal computing exploded from the hobby to the consumer market.

He wrote the legendary book Only the Paranoid Survive, published in 1996 and still a must-read for anyone who wants to understand innovation and the power of creative destruction.

For many years he co-taught a course in strategy with my dear friend Robert Burgelman at the Stanford Graduate School of Business.

If you think everyday people always had the internet, email, streaming video, and smart phones, you have a loose grasp on current events, let alone history. Andy’s leadership at Intel took us from the 8086 to the Pentium chip, from monochrome to color displays, from floppy to CD disks, from no hard drive to software that could be installed.  If you didn’t live through the transformation of the universe from analog to digital, from buying hardware and software at Computerland and Electronics Boutique to Best Buy and Costco, it’s hard to explain the magnitude of this growth cycle. Andy is one of those guys who really changed the world.

Okay, you get the point, about 0.001% of mortal beings have a resume close to his. You can read his full bio on Wikipedia. I want to share something more personal about him, the key takeaways from the few times I met him in person during roadmap briefings at Intel in the 1990s. Among the many lessons I learned from Andy Grove, here are five that continue to guide me daily:

  1. Creative Destruction Is Real – Whatever product you ship today is already obsolete, no matter how well it is selling. If you are not working on the replacement for it, someone else is. That is why you have to be paranoid. You will always be correct if you presume you are about to be outperformed in the marketplace of goods and service. Never get comfortable, never rest on your laurels, or you will be gone in a heartbeat, wiped off the map while you are collecting your awards for last year’s success. I learned from Andy that almost every startup that presumes it is built to last is almost certainly on a crash course with obsolescence, that the vast majority of even robust corporations today last about half as long as a human life. Companies don’t reinvent themselves, they are reinvented by courageous, visionary people.
  2. Beware the Strategic Inflection Point – By the time a market has fully morphed at scale, it’s way too late to react. You can’t see a strategic inflection point coming, you can only acknowledge it in hindsight while confessing your memoirs. Sorry, Monsieur Business Plan, the landscape changes in real time! Because you have learned to be paranoid, you are going to figure out one dreary morning that something you are doing in your company is hugely wrong. Some product you are readying for release is going to tank no matter how much you spend on marketing. Remember when Bill Gates discovered the internet? Remember when Mark Zuckerberg discovered mobile? Those were Intel-inspired moments. They turned their companies on a dime the same way Andy helped turn Intel on a dime when they realized the market for memory chips had commoditized and microprocessors were the way forward. I learned from Andy to always remain nimble, that sunk cost is always sunk cost, eat it and move on. Achieving competitive advantage before others see it coming is where your investments must be all the time.
  3. Science Is Inescapable – No matter what your market cap might be, you can’t fake math. Pithy slogans don’t make better computers, engineers do. For Moore’s Law to work (roughly twice the computing power will be available every 12 to 24 months for the same cost) staggering volumes of calculations have to take place on a tiny silicon chip without the transistors melting down. If you want to win at the engineering game, it takes the boldest and brightest team of advanced engineers you can assemble. They need the time to do the math, which is why Intel was already designing the 486 chip while shipping the 286. You can’t predict when the equations will be solved, you can only form a thesis and test your working models until they clear quality assurance. I learned from Andy that there are no sustainable shortcuts in quantifiable outcomes, the minimum viable product be damned! If you try to cheap your way through a poorly constructed algorithm, science will have its way with you and the result won’t be a proud moment.
  4. Constructive Confrontation Works – A lot of people who didn’t grow up in the Intel culture found it an impossible place to survive. Intel was a place where undisciplined, random conversation was never the norm. Almost anything anyone said could be challenged directly and aggressively by anyone in the hierarchy. Even when you were visiting Intel as a channel partner, anything you said could get shoved down your throat as instantly as you said it. Was this nice? It wasn’t meant to be nice. It was meant to improve products, driving ceaselessly toward unattainable perfection. That was how Intel maintained design and manufacturing leadership for a generation, by always challenging assumptions, never accepting compromise or forging an unholy consensus simply to move on. It isn’t the right culture for everyone, but at Intel, you bought into it or got your walking papers. I learned from Andy that in constructive confrontation, it’s always the idea that gets attacked and never the person. You might feel that you are being attacked, but you aren’t. Your ideas are being made better or mercifully eviscerated.
  5. Resilience Is a Mandate – Imagine a guy who made it from the Holocaust to the highest level of American thought leadership—all the obstacles, all the challenges, all the knock-downs, all the reinvention. To embrace the example of Andy Grove is to embrace the notion of resilience as the single greatest motivator available to anyone at any stage of emergence. You don’t give up, you don’t give in, you don’t quit. You always expect more from yourself. You learn from your mistakes, you study your failures, you learn from your adversaries. Want to survive? Want to triumph? Want to leave a legacy? There is no other way. I learned from Andy that you stay in the game, you look forward at opportunity, and you try again—only harder. Resilience isn’t a nice-to-have. Resilience is fuel for the soul.

Andy was a living example of realizing possibility through discipline. It is extremely rare to find an innovator with startup DNA who can personally evolve into the CEO of a multinational corporation. It is equally rare to find a top-notch engineer who embraces consumer marketing as a key strategic initiative. Andy championed the “Intel Inside” campaign as a branding mechanism that made an otherwise invisible component a necessity for personal computer manufactures to tout. When the consumer press seized upon an obscure failing in a sample of Intel microprocessors, Andy accepted the criticism as a byproduct of his brand promise. He insisted his team correct the deficiency with renewed quality assurance rather than defend the company’s position with arguments the consumer would never understand. He was book smart, business smart, and street smart all at the same time. He gave back way more than he ever took off the table in every way imaginable.

If you ever worked on one of my teams, I probably bought you a copy of Only the Paranoid Survive and quizzed you on it a week later. Andy’s words, thoughts, and ideas remain that important to me. He was an industry icon and a human being impossible for me to forget. I hope none of us ever forgets Andy. He remains a truly one-of-a-kind inspiration.

_____

This article originally appeared on The Good Men Project.

Photo: Time Inc.

How That Vicious Inner Critic Can Be Your Closest Ally

TMT1There’s something about optimism. Nothing in business is quite as powerful in motivating people to believe in a mission as a leader who undoubtedly believes. The energy that radiates from a passionate entrepreneur is engaging, uplifting, and inspiring. When we hear someone tell us he or she is following their muse, boldly pursuing a personal dream, we want to root for them. We want to become a part of it. We want to hitch our cart to their wagon. We want to step out of the ordinary and get onboard the outrageous.

A leader who won’t be deterred can bring purpose to a business enterprise.

A leader who rises above petty criticism and backstabbing naysayers can turn a hundred dollars into a hundred million dollars.

A leader who is “all-in” and won’t be dissuaded from a cohesive, organic vision can literally change the world.

Over and over we hear the speechifying that tells us never to give up, that resilience is all that matters, that we should forget the critics and ignore the naysayers.

Already doing that? Great. But there’s a catch.

Walt Disney was told he was no good as an illustrator, that his characters would never be popular. Steve Jobs got fired from his own company for being difficult, and refusing to compromise his ambitions. They were never dissuaded. They were resilient and persevered. They could not have cared less what their critics were saying.

Walt and Steve are held up as classic examples of rejecting rejection. They maintained an uncompromised vision and carved their place in history because of it. Detractors who called out “their folly” could do them no sustained harm. Walt and Steve evidenced a form of courage that set a new high water mark for leading teams beyond the fog to unbridled innovation. They remain heroes to those who aspire to transcend the ordinary.

So what’s the catch? You want to be That Leader, right? Or maybe you just want to sign on with That Leader? What’s the missing element that is most likely to take you down?

Is it that the odds against a startup succeeding are enormous?

Nope. Most entrepreneurs know this long before they quit their day jobs. Many are wacky, but few are stupid.

Is it that capital is very hard to raise, especially for a first time entrepreneur?

Nope. Most entrepreneurs discover this lesson the first time mom or dad says, “What!? Are you kidding me? You’re not a CEO… you can barely manage to get matching socks on your feet!” They secretly know that mom and dad are just negotiating their share of the deal for the seed round.

Is it that it’s nearly impossible to get super-talented people to work for deferred or limited pay for the long runway until a business is cash flow positive?

Nope. Most entrepreneurs are confident that if they articulate an exciting enough plan, the right people will get with the program no matter what, and the ones who said no just saved the entrepreneur the pain of having to fire them later for their mediocrity.

Then what is it? What is the Achilles Heel of the resilient? What is the repelling force that stands counter to the success of leaders brave enough to shake off a world that tells them No No No when all they hear in their heads is Yes Yes Yes?

Presume for a moment this entrepreneur is You. Get your highlighter ready. You’ll want to make note of this for the rest of your career.

The problem might be YOU.

Don’t highlight that. I haven’t gotten to the important part yet. The part you need to highlight is this:

If you’re not going to listen to the critics who will tell you every reason in the world why you are going to fail—and believe you absolutely must tune them out in order to be a renowned, world-class leader—you are going to have to be the hardest critic in the world on yourself.

Yes, in order to earn the privilege of ducking all the pessimists trying to steer you away from your dream, you must beat yourself up in ways they can’t even imagine. There is no luxury in resilience. There is only a level of self-critique so necessary that the pain it will cause you as a lone wolf makes child’s play of the third-party negativity you will never hear. What you hear in your head must be far more thundering—and far more impactful.

The real reason most startup leaders fail

It’s not because of a lack of devotion, or a lack of passion, or even because of a lack of talent.

They fail because of a lack of self-critique.

Does this apply to you? Have you actually established yourself as your own toughest critic? I don’t mean a little tough. I mean vicious, brutal, send yourself into a tailspin tough. Sorry to break the news, but that’s why Walt and Steve were often perceived as miserable. They were always very, very tough on themselves, an order of magnitude more thrashing than what any bleacher critic was or even could have been.

I have had the privilege to lead a handful of creative companies and I have had the privilege to be a published author. In all cases I was told innumerable times why I would not be successful. I didn’t hear a word of it. I didn’t need to hear a word of it. In all cases I was already way ahead of the peanut gallery, working and reworking the scenarios of why I wouldn’t be successful.

I study product features like I study word choices. I might tell you that no one on the market has anything like this, but before you’ll hear me utter those words, I have done the homework to assure myself this is worth defending. No one else can do that as stridently as I can. I say “no” to a sentence a hundred times before I let you see it. I edit it, erase it, rewrite it, rework it, change it, question it, then pick it apart word by word until I have exhausted all its failures. Same with a product. Same with a service.

I can only ignore the amateur naysayers because I am my own best professional naysayer.

Let’s take it deeper, to a place you may not want to go. Here’s another reason why startup leaders fail: they doggedly champion a product that is no good. It’s not because the naysayers are right. It’s because the startup leader doesn’t embrace the radical discipline to relentlessly question themselves and, by extension, their product.

If running out of time and money don’t apply as explanations, most entrepreneurs fail for a very simple reason: their idea was not good enough to create a category defining product or service. Too often we dupe ourselves into believing the ordinary is extraordinary. We fall in love with an idea because we gave birth to it, and rather than beating that idea into something exceptional—or dumping it, learning from it, and finding the fortitude to reinvent it into something else—we tell ourselves we will not be dissuaded and we go to market with mediocrity. That’s when we get walloped.

Once again, the tough love, get out the highlighter:

The only way you can defy the odds and ignore the critics is if you have a massive built-in crap filter. If you don’t want someone else to tell you your product is crap, you better be willing to tell yourself it’s crap or you’re going to blow a lot of time and money on nothing.

Artists and inventors have a crap filter no matter how successful they are. Walt did. So did Steve. Walt was told that audiences would never want to see a feature-length animated motion picture. He didn’t hear it, because Snow White and the Seven Dwarves was already worked out in his head, after he had rejected every possible way to make it something people would never want to see.

Steve was told there would never be a market for something as intimidating as home computing. He didn’t hear it, because the Apple II was already worked out in his head, after he had rejected every possible way that it would intimidate people.

Both of these visionaries agonized over perfection and were never satisfied. When they were starting out they were never satisfied. When they were at the bottom they were never satisfied. When they were at the top of their game they were never satisfied. The critics failed to resonate with them because they were lightweights in comparison to their own pounding criticism.

Are you embracing this burden of innovation?

Why do I need you to hear this? Why is this so desperately important to everyone who wants to make a difference and change the world? Because too many hopeful leaders are embracing the rhetoric of “going their own way” without embracing this burden of innovation. Every single day someone shows me a derivative app and begs me to believe in them. It’s a minimum viable product, they tell me, they will build on it and make it great later.

Right, after customers have yawned.

You really think they’ll give you another chance? So yours is 12% faster than your competition? So what? So yours addresses a tiny niche with a quirky set of differentiating features that matter mostly to you for pitching on demo day… So what? Get your eyes off the IPO listings and back on the shelf where the war for customers is lost or won. Don’t be Happy. Be Grumpy.

Incrementality is toxic. Don’t tell me how all your competitors have slightly weaker products than what you’re proposing. Convince yourself you can blow my mind with something that leapfrogs the entire market if not in one product cycle then over a generation. If you don’t want me to tell you that your app is crap then be sure you’ve asked yourself a hundred times before you ignore me. If you don’t know that your app is crap because you aren’t being honest with yourself then you haven’t earned the right to ignore the naysayers.

That’s the secret sauce—knowing when you are ready to play and when the cards you hold are not worth playing. Be that critic and you’ll never need another. When you stand up onstage and tell your story of success, it will undoubtedly be preceded by the chapters of failure that led you to your day in the sun. I want to come to that speech and applaud. I want to see you do it again and again. I want to see you tell the naysayers to jump off a peer.

Are you ready to take on the responsibility of being your own toughest critic? Wield your inner critic in such a way that it allows you to do the best work of your life. Then yeah, tell us all to bugger off and let’s get to work changing the world.

_____

This article originally appeared on The Modern Team.

Photo Image: Courtesy of Exclusive Collections Gallery (Fabio Napoleoni)

Piercing the Bubble

Almost daily now I’m asked my opinion of whether we are in a stock market bubble. It’s a curious line of inquiry, and inevitably leads to any number of further ponderous meditations that follow:

“What do you think of that King Digital IPO; did Candy Crush get crushed for good?”

“Is Bitcoin for real, and is now the time to get in?”

“Does it look like Zynga is on the mend? Did they hit bottom and create a buying opportunity?”

“What happens to Yahoo’s price post Alibaba?”

“Box or Dropbox, which do I want to own?”

GodotI can almost imagine Didi and Gogo having this conversation in a contemporary reworking of Waiting for Godot. They’d go back and forth on each headline for a few minutes, and the resolving cadence would always be the same: “Nothing to be done.”

They’d probably be right. And wise. And existential. And of course they would be ignored, two bums with nothing but holes in their shoes, playing insufferable word games beside a dying tree.

And I’m probably the wrong person to ask. Crystal-ball predictions of dicey, professionally picked over offerings seem as wacky to me as hardworking people forking over portions of their paychecks to the state government for lottery tickets.

Speaking of which, there’s something even stranger afoot of late, a new pattern of dialogue running through the frenetic networking schmooze scene. It goes something like this:

“WhatsApp wasn’t worth $19 billion.”

“Agreed.”

“It was worth more.”

“You’re kidding. How do you figure?”

“Well, look at what Snapchat turned down at $3 billion. That app had 36 million users and would have gone for $92 per user.”

“Oh, I get it. And WhatsApp had 450 million users, so at $19 billion, that’s a mere $42 per user.”

“You’re right, what a steal. Facebook should have paid more. I bet they would have if WhatsApp had played coy.”

“What about Instagram?”

“I don’t know, what’s Instagram?”

In most discussions of relative valuation based on anything more complicated than revenue, EBITDA, growth rate, and some basic ratios like price/earnings, my head starts to hurt. Ignore all fundamentals, project abstract strategy on modeling unknown monetization value, and you lose me.

That doesn’t mean I’m right, it just means I know when it’s the right time for me to sit out a dance. It’s kind of like someone asking me which is the surer thing in Vegas: poker, blackjack, craps, or roulette. My answer: If you can’t afford to lose, don’t play; and if you can, what does it matter—pick the game that’s the most fun for you and knock yourself out. Someone will take home a mountain of cash every day, because a casino only works if there are winners. Most people will leave their bounty behind, not only to pay the winners but to pay the house for brokering the trade and serving subsidized cocktails—plus the gigantic water fountain out front of the brightly lit, air-conditioned cement tower in the middle of the desert.

Don’t get me wrong, I believe in investing. Most everything I have earned working over the years has more than doubled in value over time because of investing—really boring diversified asset allocation in various index-like vehicles, bolstered consistently over time through saving and dollar-cost averaging. Yes, I have speculated on occasion, and I have even had a winner or two, but even then I looked at the core financial analysis when I bet, and those numbers always had growing dollar signs in front of them.

Now I’m hearing young entrepreneurs echoing the exit lingo. “If we can just get 500 million users of our app, how can we not get bought for $20 billion? That’s a massive discount! And we only need to raise another $65K to make it through beta with a minimum viable product. For another $20K we can stress test the server, too. That’s less than $100K investment for a decent front end and the return of a lifetime. Do you prefer the term sheet via email or text?”

This is a different kind of Gold Rush, with its own beguiling logic and normalized ethos, plus many sideline winners selling new-age picks and axes. Should the notion of Built to Last cross your lips in any public gathering, you are likely to be met with curious stares at best, and more often ostracising scorn. Free salty snacks will not be replenished in the small paper bowl you hold. This is not a discussion of how value is created by serving customer needs with wondrous products scaling in gross margin and the brand extensions that follow. This is a discussion of filling the strategic needs of an acquirer that has slipped into low organic gear and is sitting atop a stockpile of cash, the war chest itself a creation of optimism, inflated promises, and dare I say it, Irrational Exuberance. It’s a party and a playground. Fundamentals are for losers. Job experience is the enemy. Don’t be a downer.

As the JOBS Act begins to open the doors democratically to a new set of speculation-based investors—equity crowdfunding is the freshly cleared frontier—I hope they will do the hard work of learning to assess valuation before they write checks equal to 5% of their net worth or annual income. You’ll hear lots of stories about the next killer app, or the next levitating brick, and you may be lucky enough to be in the room with the next undiscovered wunderkind. But if the story that wunderkind is telling you has lots of math but no defensible revenue and profit realization, ask yourself, Where did he or she learn this math? Is it sustainable? Why hasn’t someone else with a lot more disposable income or risk capital taken this deal off the table if it is so good you can’t say no to it?

There’s always a bubble, and there’s always a bottom. The good news is that once you get past the moonshots, no one has yet figured out where the sky ends in its entirety. Boom and bust. Bust and boom. If you draw a trend line through a lifetime’s worth of data, pacing the erratic market highs and lows, the slope is still northbound.

I like that line a lot. That line protects me from worrying too much about a bubble.