Trump and Immigration

As someone who went through the US immigration system, I'm dismayed at Trump's mishandling of immigration.  As appalling as it is to shut the door on refugees (who certainly aren't here trying to "take-yer-jobs!") I think the more disastrous part has been shutting the door on *legal* green-card and visa holders.

There is a certain contract - you, the immigrant, will pay thousands in fees, be subjected to all sorts of paperwork and background checks, and will suffer with a life on hold (and possibly be trapped working in a company you don't like, but can't leave) and in exchange for that necessary evil, the US will process your application as quickly as it can and either accept or reject your stay.

However, to then take people who have gone through that process and to lock them out is a complete violation of that contract.

I'm pleased that the outrage has been this acute, and I'm pleased that the White House has backtracked on the green-card restriction.

Oh, and, not for nothing, I'm not at all surprised that Trump made sure the ban doesn't touch any countries that he does business with (from the left-wing rag Bloomberg).

Make America Great Again

This is an open letter to President-Elect Trump:

Mr. Trump,

You speak of making America great again.  In your campaigning, you've captured the frustrations and concerns of many members of American society who have been left behind by globalization and technological advances.

It is difficult to make America great by simply turning back the clock, closing the borders and pretending that it's 1955 again.  In many ways I thought your slogan was hollow.  After the last eight years of job growth and rebuilding America's image in the world, who's to say we aren't great now?

However, there is one area that I feel that America excelled at, back in the 1940s, 50s and 60s.  There is something that has been lost.  If you truly want to make America great again, you can start with this one thing.

We used to celebrate intelligence and science.  Remember that?  Remember when we sent rockets to space and landed on the moon?  Remember when Disneyland unveiled the promise of Tomorrowland?  Remember when the American future would be built by American ingenuity?

Remember when people watched the news?  People like Cronkite were revered for telling it "the way it is" - I imagine that you would have liked him.  People watched the news to learn and be informed - not to bicker and be entertained.  Citizenship mattered.  Contributing to the national discourse mattered.  Being ill-informed was not celebrated.

When I see that you've appointed climate change deniers to the EPA and the DOE I can't help but contrast that decision against our previous head of the DOE who held a Nobel Prize.  Climate change due to greenhouse gases is real and it will permanently ruin life on this planet for your kids, their kids, and the rest of this world unless we reverse it.  This is the type of moonshot thinking that America excels at - and yet we're timid, cowardly, and unprepared to show leadership.  We should demand the world reduce carbon emissions - we should lead the way - and then we can reap the economic gains of being the market leader - just as we have done time and time again in industries such as automotive, aerospace, computers, telecommunications and medicine.

Now, it isn't just the right wing that has embraced ignorance with regards to climate change.  The left has it's own shame in the anti-vaxxer movement, or the concerns about GMOs.  These concerns are also not founded in science, and should likewise be addressed.

America is great.  America has been great.  But if you really want to make America great again.  If you really want to turn the clock by 60 years - then I implore you to make leadership in science, and leadership in forward thinking in addressing climate change central to your position as President.

Sincerely,


Aaron Fyke

Paris Climate Summit

This quote is pretty apt at explaining our situation:

 Still, the rest of the world must be clear about the implications of the agreement shaping up in Paris. Calling 2.7 to 3.5 C of warming a success is akin to saying, when leaping a canyon 15 feet wide, that leaping only 10 feet is no cause for alarm. After all, 10 feet is farther than you’ve leaped in the past and represents undeniable progress towards the ultimate goal. 

 http://www.thenation.com/article/the-most-ambitious-emissions-pledges-on-the-table-in-paris-would-still-result-in-catastrophic-warming/

CREE Connected Bulbs

So, I'm jumping into the latest thing and dabbling with home automation.  After some effort, I've managed to get my Wink system talking to all of my stuff.

Highest marks goes to Nest and Ring for being the most seamless.  Well done!

One particular challenge (and the point of this post) was my CREE bulbs.  The help manual says to cycle the power 2seconds on and 2 seconds off in order to reset the bulb for pairing.

However, it is actually ONE second on, 2 off.  Then it worked just fine.

Here's Aloysius from Cree:

Hello everyone,
This is Aloysius from Cree's Connected Bulb support team. I apologize for the troubles some of you may be having. Please go ahead and try resetting our bulbs with the following procedure which should resolve all the issues.
Here is how to manually reset the bulb,
Our Cree Connected bulbs need to be turned on for 1 second and then off for 2 seconds over and over until there is a noticeable flash letting the user know the bulb has been hardware reset.
-Note: The (1-sec-on : 2-sec-off) iterations can be done with a stopwatch but it isn't an exact science. Basically you need to turn it off long enough for the power to become completely exhausted in the capacitor and then add power back to the capacitor and do process again. Bulb is meant to hardware reset after 4 iterations.
This procedure is most easily done with a regular light switch rather than screwing the bulb in and out of the fixture by hand. Most bathrooms are a good candidate since they generally have easy access fixtures with a light switch. Also, please don't use a 3 way switch for resetting.
I hope this helps,
Sincerely,
Aloysius
From Cree Support

Gas Volatility

Back when I was trying to make Energy Cache work, a big headwind that I ran into was the falling price of natural gas due to fracking.  The EIA reported that gas prices for electric power generation were hovering around $3.

I tried to make the argument that, long term, prices would go back up.  And by early 2014, they had - almost to $8/MMBtu.

However, I just checked recently and they are back to $3.  This is crazy.  Look at the Year on Year variability!

It's not that uncommon for the price of gas to be either 50% higher or 50% cheaper than the year prior.  Hedging this risk must be crazy expensive, and there has to be an opportunity in here somewhere.

Of course...we think there is - by moving your peaking and firming fuel from gas to the sun.  :-)

All data from:
http://www.eia.gov/dnav/ng/ng_pri_sum_dcu_nus_m.htm

Lean Startup and the Importance of Doing the Right Thing

I just watched a great video from the Lean Startup conference, by Dan Milstein:

It's 20 minutes long and worth watching.  However, before you run off and do that, I'll let you know why I thought it was interesting. 

In it he discusses the detriment of working on the wrong thing.  It's fascinating (but true), when he says that you are better off working on NOTHING at all, than working on the wrong thing.  This is a complete contradiction to the workplace biases and pressures that are so common. 

Secondly, he talks about how to determine what is the right thing.  In it, he gives an example of a teleportation technology, and a simple healthcare app (which reminded me a lot of my post on Type I/Type II companies).  If the technology is uncertain, but the market is guaranteed, then spend time on the technology, not the market.  If the technology is certain, but the market is not, then spend time validating the market.  Because so many IT/app companies really have little technology risk, so much of the Lean Startup movement focuses on market validation.  However, in the energy space, where I live, I think that the markets are known and regulated, and it is the technology risk that is the bigger piece.

However, as interesting as that was, his real point was that the greatest uncertainty (and therefore the greatest value for the company to understand) can shift several times in the company development.  It is the ability of the company to recognize the shifting risks and adjust what they are working on (to avoid working on the wrong thing), that is the greatest value to the company.

It's a great video.  Have a watch.

For all entrepreneurs

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

― Theodore Roosevelt

A good day

Today was a good day.  My prior best at Disneyland's Astro Blasters was around 800,000.  Today:

Yes, that's right.  2.7 million!  My new strategy of only going after diamonds and triangles paid off.  After getting my picture I was told that I was one of the top 10 for the day.  When I had a look to see where I ended up, I saw this:

Numero uno!  By a pretty healthy margin!

Sorry BF...

Why an exploding offer can blow up in your face

Today Y Combinator had a great post called "Exploding Offers Suck".  The key take-away is in the first line:

Exploding offers suck.  Founders should be able to choose the investor they want to work with, not have to make a decision based on time pressure.

I think this is a smart move on YC's part.  They are positioning themselves as being founder friendly, further strengthening the desire of good founders to be with them.  They then get the best founders and the positive cycle continues.  It's also smart for them to be very public about this because they want the perception of YC to extend their reach even ahead of anyone's actual experiences with their policies.

Exploding offers are pretty bad.  This can be common even beyond the accelerator stage.  VCs can and do provide term sheets with short fuses.  One very real reason for this is that the VC does not want to be used as a stalking horse.  If a VC is willing to put their neck on the line by making an offer, they don't want that simply to be used to get a higher offer somewhere else.  This is a completely fair position. 

On the other hand, decisions made by time pressure can backfire.  Back when I was finishing up at business school, a major car company that some of my classmates were interviewing with came up with the following strategy.  They took eight students from top business schools (two from MIT, two from Stanford, two from Harvard, etc) and brought them all together for interviews on the same day.  And the end of the day they announced to the group that they were happy with everyone and that they had two job offers, which would be made to everyone.  The first two people to accept would get the job.  Brilliant idea, right?  What a great way to implement competitive tension and ensure that they would be able to fill the positions!

Wrong.  Out of disgust (for being put in the position, for feeling like this is how they are valued, for feeling interchangeable with everyone else in the group) NO ONE agreed.  It is my understanding that the positions remained vacant for several months.

None of this, of course, addresses the obvious issue of how loyalty will be affected down the road by starting the deal this way.

So, the best approach is to build a strong relationship with someone (as an investor, accelerator, employer, what have you) and make someone WANT to be with you.  Be the VC firm of first choice, independent of valuation.  Make your new employees loyal and excited before they even sign for your company.  Foster a sense of transparency and openness, and that will pay dividends that overcome the stalking-horse problem.

Tax treatment of early-employee options

There is a great post from Sam Altman on Employee Equity.  I think it reflects many things that I've agreed with for quite some time.  The paragraph that I think is particularly salient is as follows:

With regard to tax treatment of options:

I think there are a lot of ways to fix this.  The easiest would be if the IRS would agree to not tax illiquid private stock until it gets sold, and then tax the gain from the basis as long-term capital gains and the original value as ordinary income.

Another might be to create a new class of employee stock.  Today, in an early-stage company, common shares are usually worth much less than preferred shares.  It might be possible to create a class of shares with less rights than common and thus worth even less.  The idea would be to convert these shares into common on an acquisition or IPO, but before that, they would be non-transferable and have no value.  If it were possible to create a class of stock that the IRS agreed had next to zero value, it might be possible to grant employees this sort of stock, have them owe a tiny bit of tax on it now, and then have normal long-term capital gains treatment years later when the startup goes public.

What about it IRS?  I think that it is high-time to fix the tax treatment for early employees of companies.  Right now, there is a huge divide between those employees wealthy enough to hang on to their options, and those that cannot.  This needs to be changed.

Green Power Report

I was interviewed recently on AM 590's Green Power Report and it was a pretty good show. Check out their back catalog of previous interviews; they have some good names on them. At any rate, the audio is attached. I speak about ocean power, California's energy policies, and Energy Cache.

Solve for X Talk

The conference was pretty interesting. Here's a link to the talk.

Solve for X in Washington DC

I've been invited by Google and USAID to speak at the Global Diaspora Forum in Washington next week. If you are going and would like to check it out, I'll see you there!

Register for the next Solve for X, at the Global Diaspora Forum in DC, May 13: goo.gl/ROSmr See you there!

— A Googler (@google) May 9, 2013

Aaron Fyke MIT talk part of Google X - Solve For X Series

I am privileged to be in some pretty impressive company.  My recent talk at MIT was picked up by Google and is hosted as part of their "Solve for X" series of moonshot thinkers.  Link is below.

https://www.solveforx.com/moonshots/global-diaspora-forum-aaron-fyke

Immigration Reform - "Back of the Line"

Obama said something interesting with his speech about comprehensive immigration reform the other day.  He said that illegal immigrants would need to go to the "back of the line".

For unskilled immigrants, there typically *IS* no line.  There is basically no way to legally come to the US, unless they are family members of existing US citizens. See the chart below.

So, I wonder what he was talking about?  I think immigration reform is a necessary step, but I'm really interested in how this is actually going to be implemented.

Politics and Entrepreneurship

"Obamacare" has been cast as a left vs right issue.  Democrats are in favor of it.  Republicans hate it.  However, the reason for this is that it is framed as a "lazy do nothing people being given healthcare paid for by good, hard-working citizens who already have healthcare".  This is silly, yes.  However, as far as entrepreneurship goes, there should be far more right-wing support for Obamacare than there is.

Why is this?  Because, here in the US, healthcare and employment are very tightly linked.  This is fine for those with a job.  However, it is not so fine if you want to quit your job and start a company.  I thought Obama's remarks yesterday summarized it perfectly:

    "They do not make us a nation of takers; they free us to take the risks that make this country great."

Government programs which allow people to walk away from their job and start something new are critical for new company development.  Entrepreneurship and free enterprise should be cornerstones of the Republican platform, and they should favor any policy which promotes new company development. It seems that this point is being lost in the noise.

The CEO's job

I don't often have the opportunity to post on my blog. Usually what I'm doing with Energy Cache is not something that I can talk about. However, recently I had a great experience that I thought was worth writing about.

The job of the CEO is to best manage the company on behalf of the board, who in turn, represent the shareholders. Therefore, it can be an easy assumption that the CEO reports to the board and attempts to meet their needs. While simplistic, and often generally correct, it is a false simplification. There can exist the possibility that different board members have conflicting needs/desires. Under the "serve the board members" model, this puts the CEO in a difficult role if he or she is trying to make everyone happy.  However, truly serving the board means doing what's best for the company, regardless of whether you make people happy. People are looking at you for the decision on what is right - not what everybody else thinks is right (and certainly, not what's right for them). 

Not making these decisions, even to attempt to address the wishes of those you report to, is a breach of duty.  This is a key distinction why the CEO's job differs greatly from many other jobs out there.  In pretty much every other job, your job is to support your customer, who is almost always the person you report to.  With the CEO, it may seem that the customer is the board, but it isn't.  It's the company.  I'll say that another way.  A CEO may serve at the pleasure of the board, but the CEO doesn't serve the board - he serves the company.

As CEO you aren't paid to be popular. You are sometimes paid to be unpopular - even if the people that you are unpopular with are the ones paying your salary.

I saw that recently, it is something I'm going to regularly have to force myself to remember, and thought it was worth talking about.

The math of turning 40, Time Dilation and Back to the Future

First - Happy Canada Day!

Second, I'll be turning 40 pretty soon and it got me thinking about the phrase "middle age".  It's always been my observation that life is "speeding up".  When I was a kid, the time between Christmas from one year to another seemed to take an eternity.  Yet now, I struggle to remember that 1993 wasn't 9 years ago, but 19!  What's going on?

My theory is that we are terrible at tracking time.  Instead we can track "relative time".  When we are six years old, the time from one Christmas to the next is fully one sixth of our lifetime - in fact, given that, at age six, we may not have any memories earlier than age three, we could conclude that each year is fully a third of our existence.  However, once we reach age 40, each year is only a sliver of our total existence, and thus seems much smaller.  This seems to be the only reasonable explanation of where my 30s went in a blink of an eye.

So, I decided to model this behavior and see what I discovered.  I made the initial assumption that our memories start at age 5 and end, with death, at age 80.  I then figured out the relative length of each year, to determine how long each year feels to us.  The results are interesting:

Let's first look at the cumulative chart.  This example takes the relative age for each year.  By measuring the areas under the curve we can determine the age of equal "relative age", or the ranges of ages which should "feel" the same period of time, taking into account the apparent acceleration of the years.

This shows that the first quarter of our life is over by age 10, the second by age 20, the third by age 40, and the last quarter, by age 80 (which, if you think of the math, makes perfect sense).  If I think of my childhood, this also feels right as well.  My teenage years, which technically lasted as long as my 30s, were a lifetime!  My 30s, I believed, happened when I went out for lunch one day.

So, the horror that we can realize is that 40 is not middle age - 20 is!  By the time you reach 40, you've lived fully 75% of your apparent life timeline.  Even though you are halfway through your life, the remaining years will seem like the blink of an eye.

Another way to look at this is with this graph:

This lets us determine what age corresponds to the percentage of apparent life lived.  For example, as shown, the age at which you have lived 60% of your perceived life is actually 25.  On one hand, this is a clear call to enjoy your youth, on the other hand it shows that we've all been given the gift that our youth lasts a disproportionately long period of time - which is great if you had a good youth, not so great if you didn't.

Now, interestingly enough, these results are driven by the assumption that you have perfect memory of your life, and thus each minute seems progressively quicker than the minute before.  This leads to some interesting conclusions.  The first is that there is a real cost to memories - their cumulative effect serves to make your life appear to go quicker.  So, if at all possible, there's little point fixating and hanging on to bad memories.  Relieving them serves to slow down the perceived acceleration of time.  As well, there is possibly the saving grace that, as you age, your memory of earlier events starts to diminish.  This will put more relative weight in the later years and appear to slow time down.  Looking at the first graph, if you were able to forget the first 10 years of your life completely, then the effect is dramatic on shifting the relative weights of the later years.  Is it possible that there is some benefit to dementia and memory loss in your later years?  I doubt the benefits outweigh the dramatic costs, but it's an interesting thought.

This also leads to some conclusions about kids.  As I watch my kids grow up, I get to experience, vicariously, their experiences.  While overall life is zipping by for me, and they are growing up at an incredible rate (from my point of view), they also help to slow my life down by providing an external reference point to my life.  Time dilation may be part of Einstein's theory of relativity, but its also alive and well between two people at dramatically different points of their life.

So, as I round out the first 75% of my life, and I see that we are almost in 2015, the year at which Back to the Future will be as far from me as 1955 was for my Dad when the movie first came out in 1985 (and led him to say that he felt old!), I can really question the phrase that "life begins at 40".  If it does, then life sure felt like it took a long time getting started.  Enjoy every moment that you live, and savor every good memory you have.  Even if you live to 80, you're just not here very long.

MIT news article

It's always nice to get some press from MIT.  Here's a recent story they did on Energy Cache.

VCs moving on?

A lot of venture money was raised in the late 90's, before the burst of the first internet bubble (2001).  There has been a lot of talk [citation needed, but I can't find right now] that, since most VC funds are 10 years in duration, we would see a great VC contraction sometime around 2010.  In fact, I had a list of firms that hadn't made any investments in years, and I haven't gone back to check if they are still around.

However, anecdotally, I have witnessed a contraction of another sort.  Good firms, that are still around, losing good partners.  As I've been speaking to investors lately, I've discovered no less than sixnine different partners that I knew personally, mostly senior, from very good firms, have moved on.  They have all taken senior operating roles with technology companies (no surprise, as that is the typical path in and out of VC), but what's interesting is that this seems to be more than the typical gas diffusion mechanic between VCs and tech companies.

What does this mean for the investing landscape, and how those firms operate?  I'm not sure, but I'll certainly be watching.