Scope out the views

Although I’m now officially an old man, I’m still trying to prove otherwise. On Sunday I biked from San Jose to the top of Mt. Hamilton, site of the Lick Observatory. (On a clear day, you can see the domes from Silicon Valley). It’s about a 20 mile, 4200 foot climb to the summit, and 20 back again. It wiped me out. But the Tour of California did Mt Hamilton and Sierra Road on a 120 mile stage into San Jose. Those guys cannot be human.

The ride was worth it though. I finally got to tour the grounds and see the old telescopes: the 36 inch Great Lick Refractor and the 120 inch Shane Reflector. Elegant instruments, from a more civilized age…

The only time I’d been up there was 19 years ago, at night, when the place was closed to visitors. It was the first week that I was in California as a summer intern at Intel. I arrived with two other Canadian graduate students from MIT. We “Three Amigos” had just gone out for dinner with our manager when I caught sight of the domes reflecting the setting sun. I had the bright idea of driving up to the observatory, even though I had no idea how far away it was.

So the three of us piled into the rental car and I drove up the steep switchback road to the summit. It seemed to take hours, and when we finally arrived at the summit, there was nothing to see but “No trespassing” signs. On the way back down, I had to stop while poor John got sick on the side of the road. That was our first ill-advised adventure of the summer, and set the tone for the next few months…

Lick Observatory - Wikipedia
Lick Observatory - Wikipedia

Nvidia GPU – the new hacker tool

Nvidia is justifiably proud of how their GPU can accelerate scientific applications. People have been able to speed up everything from ray tracing to computational chemistry by 10x to 50x. Unfortunately, tools for good can also be used for evil. In this case, accelerating brute-force password cracking, for Wifi network encryption: Turbo-charged wireless hacks threaten networks.

Russian firm ElcomSoft has applied GPU acceleration technology to its password recovery tool to allow PCs or servers running supported NVIDIA video cards to break Wi-Fi encryption up to 100 times faster than is possible by using conventional microprocessors.

Tough love from Sequoia Capital

Sequoia Capital hosted a big meeting with their portfolio companies a few days ago. Today someone posted what he says are the slides of their presentation. It’s an analysis of the trends that got us into this financial mess, and some brutal recommendations to startup companies: Sequoia Capital on startups and the economic downturn.

Om Malik at GigOM posted more details about meeting today. He says general Partner Doug Leone advised startups:

  • Unprofitable companies would have a tough time raising cash, so get cash-flow positive as soon as possible.
  • Cutting deeper is the formula to survive, and this is an era of survival of the quickest.
  • Make sure you have one year’s worth of cash.
  • If you have a product, reduce expenses around it and boost sales. If the product is ready, cut the number of engineers.
  • Focus on building the absolutely essential features in your product.
  • Be brutal when it comes to marketing — anything that isn’t working, cut it.
  • Don’t burn through your cash, for cash is king

Advice to young startups

The NYT reprinted an email sent by angel investor Ron Conway to his portfolio companies. And it is the same message that he sent out in May 2000: Godfather Tells Start-Ups to Fire People and Raise Cash.

You should lower your “burn rate” to raise at least 3-6 months or more of funding via cost reductions, even if it means staff reductions and reduced marketing and G&A expenses. This is the equivalent to “raising an internal round” through cost reductions to buy you more time until you need to raise money again; hopefully when fund raising is more feasible.

If you are in a funding cycle, you should raise your funding as soon as possible and raise as much as possible but face the fact that if you can’t raise money now you must cut costs.

Now, I wonder what advice he has for employees at those companies?

Venture capitalists not known for patience

I.P.O. Crisis Could Have Lingering Effect on Start-Ups

Many think start-ups won’t have a shot at an I.P.O. until 2010. If the United States is in a recession that lasts through 2009 and if the credit markets remain closed, only a very high-profile company would be able to make its debut […]

Venture investors who had planned to take companies in their portfolios public this year are left spending money and time keeping these mature companies alive, instead of investing in new start-ups.

Unemployment rate spikes

Job losses more than double in September

The Labor Department’s monthly report, released Friday, showed that 159,000 non-farm payroll jobs had been slashed, more than double the 73,000 jobs lost in August. First-time claims for unemployment benefits had increased last week to the highest level since the period after the 2001 terror attacks.

A deeper look at the labor data, some economists said, showed the “underemployment” rate had jumped to 11 percent — the highest level in 14 years — and the number of “discouraged workers” not seeking employment work also climbed.

“Factoring in discouraged workers raises the unemployment rate to about 7.9 percent,” said the University of Maryland’s Peter Morici, former chief economist of the U.S. International Trade Commission. “As the economy slows further, this figure will likely exceed 10 percent.”

Silicon Valley has been shedding jobs at a slower pace, with tech giants anticipating a continuing slowdown in their business. The most recent state jobs report showed unemployment in Santa Clara County at 6.5 percent and statewide at 7.7 percent. California and Silicon Valley may see some “pretty scary” unemployment numbers in months to come, Levy said.

Dark clouds spilling over the East Bay hills

Credit Crisis Spreads a Pall Over Silicon Valley

According to a quarterly survey by Mark V. Cannice, director of the University of San Francisco Entrepreneurship Program, the confidence of venture capitalists has plummeted to the lowest level since the survey began in 2004.

“Investment in venture firms could dry up if the drought continues and venture firms cannot show returns,” said Ken Wilcox, chief executive of SVB Financial Group, the parent of Silicon Valley Bank.

The Seven Habits of Highly Ineffective Terrorists

The conventional view of terrorists is that they are focussed on political or economic gains. So a common strategy to prevent terrorism is to provide people with non-violent ways of achieving those goals. But Max Abrahms of Stanford has studied terrorist groups, and he concludes their motivation is not political gain.

The Seven Habits of Highly Ineffective Terrorists.

Terrorists, he writes,

  1. Attack civilians, a policy that has a lousy track record of convincing those civilians to give the terrorists what they want;
  2. Treat terrorism as a first resort, not a last resort, failing to embrace nonviolent alternatives like elections;
  3. Don’t compromise with their target country, even when those compromises are in their best interest politically;
  4. Have protean political platforms, which regularly, and sometimes radically, change;
  5. Often engage in anonymous attacks, which precludes the target countries making political concessions to them;
  6. Regularly attack other terrorist groups with the same political platform;
  7. Resist disbanding, even when they consistently fail to achieve their political objectives or when their stated political objectives have been achieved.

Abrahms has an alternative model to explain all this: People turn to terrorism for social solidarity. He theorizes that people join terrorist organizations worldwide in order to be part of a community, much like the reason inner-city youths join gangs in the United States.