October 6, 2022

Silicon Valley Had Its Heyday. Can Tech Ecosystems Now Grow Inland?

I’ve heard some concern, particularly when the Supreme Court decision [overturning Roe vs. Wade] was made. But I have not heard of any specific people who were going to move and decided not to, or had moved and decided to leave.

You lived through a tech bust. Are there similarities to what’s happening now?

In the first decade of AOL, nobody knew or cared about the internet, nor cared about AOL. In the second decade, suddenly everybody wanted to get online, and AOL ended up being the on-ramp. And when that was happening, you saw our stock price soar. Others said, “Wow, this internet thing is really interesting.”

And suddenly there were hundreds of other dot-com companies, many of which were concept stocks that went public quite early. And then in 2000, obviously, it turned. Today, it’s fair to say that we’ve seen a 13-year bull market, with valuations holding for most companies, especially at historic levels for fast-growing tech firms. Recently, policy changes around things like interest rates have resulted in some of the air coming out of that balloon.

What’s different is that most of the companies that have gone public in the last five years are more fully developed. And so what’s happening now is a reset in their valuation. But the vast majority of the companies will still be around years from now, as opposed to what we saw in 2000.

How could rising rates mess with tech investing? What kind of companies do you think are most vulnerable right now to missing out on investment at a 3 percent or 4 percent benchmark rate?

What we’ve seen so far is more of a reset in the later-stage growth rounds, including by some of the very active crossover funds — Tiger and others — that are pulling back from investing in public companies. In the earlier stages, when you’re investing, call it a million dollars, and the valuation might be $10 million, there’s going to be less of a reset than when companies are worth hundreds of millions or even billions.

Article source: https://www.nytimes.com/2022/09/24/business/dealbook/steve-case-rise-of-rest.html

Silicon Valley Slides Back Into ‘Bro’ Culture

“We made a bit of progress, but I feel like that was almost a smoke screen,” said Christie Pitts, an investor at Backstage Capital, a venture capital firm. Now “there’s definitely a feeling of backsliding.”

Two parallel Silicon Valleys have emerged. There’s the ThunderDome of Twitter, where tech thought leaders collect likes by posting edgy memes and spouting flip political takes — then invoke cancel culture when they are criticized. They troll their way into impulsive $44 billion acquisitions, then back out. They promote an entirely online existence inside the so-called metaverse.

Then there’s the day-to-day reality, where women still get just 2 percent of venture capital funding and Black founders get 1 percent, where the largest tech companies have made negligible progress on diversifying their staff, and where harassment and discrimination remain common.

Last month, Estelle McGechie, the former chief executive of Atomos, sued the electronics company for gender discrimination and retaliation. She said she had been fired after she alerted the company’s board to fraud. This month, a Vox report about sexual assault and victim silencing at Launch House, a hacker house backed by Mr. Andreessen’s firm, went largely unremarked-upon by the tech industry’s most prominent voices.

Then Verkada, a security start-up that has faced accusations of harassment of female employees and lax internal controls over access to its surveillance tools, raised $205 million from top venture firms. And Shervin Pishevar, a venture capitalist who was accused of sexual misconduct by five women in 2017, resurfaced as an executive at Kanye West’s company, Yeezy.

Article source: https://www.nytimes.com/2022/09/24/technology/silicon-valley-slides-back-into-bro-culture.html

Herbert Kohler, Plumbing Mogul Who Created a Golf Mecca, Dies at 83

Mr. Kohler’s instincts proved correct. The hotel, the American Club, opened in 1981. Augmented by a private hunting and fishing preserve, a tennis club, restaurants, shops and a spa, it was soon a tourist magnet.

Still, something was missing.

“You have this boutique resort hotel, but you don’t have your own golf course,” Mr. Kohler, speaking in a 2015 interview, recalled customers telling him. “That’s kind of embarrassing for a C.E.O.”

Mr. Kohler had little interest in the game, but he quickly immersed himself in it.

Working with Pete Dye, who was once called the Picasso of golf-course design, he developed two nearby championship-caliber courses, Blackwolf Run and Whistling Straits.

Mr. Kohler deepened his golf investment in 2004, buying a hotel alongside the famous Old Course in St. Andrews, Scotland, and the nearby Duke’s Course.

Not all his golf projects have gone smoothly. Local environmentalists thwarted plans for a course on the Oregon coast, and the development of a new one near Kohler has been slowed by residents opposed to its reliance on public land, and by the discovery of Native American artifacts and human remains on the property.

Mr. Kohler shrugged off such obstacles. He pressed on, guided by a phrase adapted from the 19th-century British critic John Ruskin and found in an old stained-glass window at the American Club: “Life without labor is guilt. Labor without art is brutality.”

Kitty Bennett contributed research.

Article source: https://www.nytimes.com/2022/09/16/business/herbert-kohler-dead.html

A $100 Million Bet on Finding the Next ‘Mr. Beast’

The company, which will have offices in Austin, Texas, and San Francisco, will hire a small team of investors from TCG and Night Media.

The concept of Night Capital was fleshed out at a steakhouse in Austin in 2018. Over dinner, Mike Kerns, a co-founder of TCG, told Mr. Duchscher that he was interested in finding creators who could replicate the success of Mr. Beast in other categories. Mr. Kerns said Night Capital would look to take large ownership stakes in profitable businesses rather than make venture investments.

By giving creators equity in the businesses it buys, Night Capital aims to upend the traditional compensation model for influencers, Mr. Kerns said. Creators have historically received only a small portion of the revenue generated by their posts and videos, while the digital platforms they use to publish their content have gotten the bulk of the proceeds. But that’s changing, he said.

“The platforms all have incentives to help their top talent become more successful,” Mr. Kerns said. “And, if they don’t, that talent will shift to a platform that enables them better audience, better revenue and better technology.”

Mr. Kerns said the concept of Night Capital was informed by TCG’s investments in firms that pair content with e-commerce, such as Barstool Sports, the sports-media company; Food52, which focuses on cooking; and MeatEater, which caters to carnivores. Hello Sunshine, the media company founded by the actress Reese Witherspoon, was also an inspiration, Mr. Kerns said.

Night Capital’s thesis results partly from Mr. Kerns’s experience as the head of Yahoo’s media business from 2013 to 2015, when he saw Facebook overtake the company’s ad business. If Yahoo, with a billion monthly users and thousands of engineers, could not expand its online advertising business beyond Facebook’s, what chances did start-ups like Vox Media and Bustle Digital Group have to make a major dent?

Article source: https://www.nytimes.com/2022/09/13/business/media/mr-beast-night-capital.html

Twilight of Entrepreneurs in China as More Leave the Country

Their resignations underscore the growing concern among private entrepreneurs that China is veering away from the freewheeling capitalism that Deng Xiaoping and former Premier Zhu Rongji pioneered. Mr. Deng turned to entrepreneurs in the late 1970s to rebuild the economy after the devastation of Mao’s Cultural Revolution, and Mr. Zhu then led China into the World Trade Organization and toward its role as the world’s largest exporter.

Xi Jinping, the country’s leader since 2012, has moved China instead toward a much more authoritarian, state-led society in which national security concerns increasingly take precedence over economic growth. Business leaders and human rights activists alike who dare to question Mr. Xi publicly have been jailed as China has tightened the reins on the private sector.

Very wealthy entrepreneurs used to be “able to operate as they wished, as long as they did not step over certain political boundaries, but those boundaries were pretty loose even through the first term of Xi Jinping,” which ended in 2017, said Victor Shih, a specialist in Chinese business and politics at the University of California San Diego. “All that changed. They are no longer such stars.”

Jack Ma, a co-founder of Alibaba who went on to lead it to dominance in China’s e-commerce sector, has stepped down from the top jobs at the company. Colin Huang, founder of Pinduoduo, a rival to Alibaba, resigned as chairman early last year, less than a year after he stepped down as chief executive.

A year ago, Zhang Yiming, founder of TikTok’s parent company, ByteDance, said he would hand over the chief executive post to focus on long-term strategy. And as Shanghai went into a two-month lockdown in the spring as part of China’s “zero Covid” strategy, Zhou Hang, another prominent tech entrepreneur and venture capitalist, left the city for Vancouver, British Columbia, where he issued a strong denunciation of China’s current policies.

Article source: https://www.nytimes.com/2022/09/08/business/soho-china-entrepreneurs.html

The New Wave of Tasting Menus Is Affordable and Approachable

Her Place shares qualities with Mosquito Supper Club, the New Orleans restaurant where food from the Cajun coast of Louisiana is served family style around communal tables. Beyond offering creative freedom, the tasting menu allows Melissa Martin, the restaurant’s chef and owner, to pay higher wages.

Similarly, at Juliet, in Somerville, Mass., employees are paid a minimum of $16 per hour — plus tips or service-charge revenue — and guaranteed a raise after a year on the job, said Joshua Levin, the restaurant’s co-owner. The tasting menu is what makes such benefits affordable, he said, even if it has occasionally confused diners who are surprised to find the restaurant in a former coffee shop.

“People show up dressed in a suit, because it’s a tasting menu,” Mr. Levin said. “It’s cute.” (Last week, Juliet opened in a new building next door to its original space, which Mr. Levin said will become a wine bar.)

Mosquito and Juliet both opened in the mid-2010s, following a path forged by stripped-down tasting-menu restaurants, like Dirt Candy, in New York City, and Schwa, in Chicago, that emerged in the decade before with inventive takes on the form.

Washington, D.C., also has a rich modern history of paradigm-busting tasting-menu restaurants, from chefs including José Andrés, Johnny Monis, Aaron Silverman and, more recently, Yuan Tang and Chetan Shetty. Last year, Tom Sietsema, The Washington Post’s restaurant critic, named Oyster Oyster his favorite in the city. The 28-seat restaurant, which opened in 2020, serves a $95 tasting menu of chef Rob Rubba’s idiosyncratic, mainly vegetarian food.

Article source: https://www.nytimes.com/2022/09/06/dining/new-wave-tasting-menus-fine-dining.html

What if You Could Give Start-Up Money to People, Not Companies?

The Libermans Company has raised money in two rounds that equal a little less than 3 percent of equity, and the share price in the second round gave it an implied valuation of $400 million, the brothers say.

One reason people are willing to invest in the Libermans is that they’ve already demonstrated entrepreneurial flair. They built an augmented reality start-up, Kernel AR, that they sold to Snap, the owner of Snapchat, in 2016. At Snap the siblings oversaw an animation studio and worked on 3-D Bitmoji, according to a 2018 Times article.

Governance is a tricky issue for the Libermans Company. Investors get a proportional share of whatever wealth the siblings create, but they don’t have any say over how they allocate their time and effort. They can’t demand a dividend, either. The Libermans decide when to disburse some cash, at which point all investors will get a proportional share of it.

Their concept is a lot better grounded than that of Mike Merrill, an entrepreneur who in 2008 divided himself into 100,000 shares and tried selling them for $1 apiece. As recounted in a hilarious article in Wired in 2013, Merrill gave investors voting power over his life decisions, including whether to have a vasectomy.

There’s some risk that the Libermans will take the money they raise and retire to the beach, since investors have no say. The siblings think they’ve solved that by limiting outside investors to a maximum of 10 percent ownership. Since they retain 90 percent, the Libermans would mostly hurt themselves by shirking their duties.

Daniil and David told me that their Humanism concept is a natural fit for Silicon Valley, where it’s already customary for angel investors and venture capitalists to pick investments based on faith in the entrepreneurs. “People, not projects” is a common mantra.

Article source: https://www.nytimes.com/2022/09/02/opinion/libermans-humanism.html

Kazuo Inamori, Major Industrialist in Postwar Japan, Dies at 90

Kazuo Inamori was born on Jan. 30, 1932, in Kagoshima, a seaside city on Japan’s Kyushu Island, the second of seven children of Keiichi and Kimi Inamori. As the story is told in Japan, when Kazuo was a child, his father’s printing shop was firebombed in the last days of World War II. When the boy, at 13, was bedridden with tuberculosis, a neighbor lent him a book that sparked his interest in religion.

After earning a chemical engineering degree from Kagoshima University, Mr. Inamori joined a small ceramics company in Kyoto as a researcher, but left to begin his own concern after a disagreement with management. He started the business with just $10,000, armed with his own formula for a material to make ceramic insulators for televisions. He soon had his employees swear a blood oath that they would “work for the benefit of the world’s people,” he recounted in the book “From Zero to Kyocera: A Company Philosophy to Grow People and Organizations” (2020).

The business, then called Kyoto Ceramic Company, got its first big break when it received an order to make resistor rods for the Apollo space program. It went on to become one of the world’s top suppliers of high-tech ceramics, making everything from razor sharp knives to casings for Intel computer chips and expanding into other products, including solar panels and mobile phones.

While the business never made Kyocera a household name outside of Japan, it did make Mr. Inamori fabulously wealthy and brought him a level of prestige and influence in his country that few could equal.

In 1984, after Japan ended the government monopoly on the telecommunications industry, he founded a second firm, DDI, a long-distance carrier that quickly broke the market dominance of formerly state-owned NTT.

Around the same time, reaching beyond the world of industry, Mr. Inamori devoted more than $80 million to establishing the Kyoto Prize, an award recognizing the most important advancement in the sciences, arts, technology and philosophy.

Article source: https://www.nytimes.com/2022/09/02/business/kazuo-inamori-dead.html

Expansion of Clean Energy Loans Is ‘Sleeping Giant’ of Climate Bill

“We have established that the private sector wants to use our resources again,” said Jigar Shah, the director of the Energy Department’s loan programs office and a former solar energy entrepreneur. “We still have to do a lot of work. We have to identify all the areas that qualify.”

One beneficiary of the new loan money could be the Palisades Power Plant, a nuclear facility on Lake Michigan near Kalamazoo, Mich., that closed in May. The plant had struggled to compete in the PJM energy market, which serves homes and businesses in 13 states, including Michigan, New Jersey and Pennsylvania, and in Washington, D.C.

The Biden administration has made nuclear power a focal point of its efforts to eliminate carbon dioxide emissions from the power sector by 2035. The administration has offered billions of dollars to help existing facilities like the Diablo Canyon Power Plant — a nuclear operation on California’s coast that is set to close by the end of 2025 — stay open longer. It is also backing new technologies like small modular reactors that the industry has long said would be cheaper, safer and easier to build than conventional large nuclear reactors.

The owner of the Palisades facility, Holtec International, said it was reviewing the loan program and other opportunities for its own small reactors as well as bringing the shuttered plant back online.

“There are a number of hurdles to restarting the facility that would need to be bridged,” the company said in a statement, “but we will work with the state, federal government and a yet to be identified third-party operator to see if this is a viable option.”

Article source: https://www.nytimes.com/2022/08/22/business/energy-environment/biden-climate-bill-energy-loans.html

Los jefes de Silicon Valley van de salida

En su anuncio, Silbermann dijo que dirigir Pinterest había sido “el regalo de su vida”. Gebbia, que se convertirá en asesor de Airbnb, publicó un efusivo recuerdo de los primeros días de la empresa, junto a fotos, apodos de sus cofundadores (Brian “Jet Fuel” Chesky e “Indiana Nate” Blecharczyk) y lecciones sobre la bondad de la humanidad. (Chesky sigue siendo presidente ejecutivo). Mehta tuiteó que “se preocupaba profundamente” por Instacart, la “única cosa en la que he pensado durante cada minuto que he pasado despierto en la última década”.

Al marcharse como multimillonarios, han proyectado la implacable positividad de Silicon Valley. Pinterest “no ha hecho más que empezar”, Airbnb “está en las mejores manos que ha estado nunca” e Instacart tiene una “enorme oportunidad por delante”, escribieron los fundadores. Tanto Mehta como Gebbia dijeron que tenían planes para nuevos proyectos.

Los inversionistas dicen que prevén más renuncias de fundadores que se dan cuenta de que ahora tienen que trabajar más por menos (relativamente hablando). “Ahora, pueden dejar que algunos ejecutivos den un paso al frente, tomen el relevo y la hagan crecer con diferentes incentivos”, aclaró Cohen.

La semana pasada, Brad Hargreaves, fundador de Common, una empresa emergente que gestiona espacios de vida en común, anunció que dejaría el cargo de presidente ejecutivo y se convertiría en director creativo. La jefa de propiedades de la empresa, Karlene Holloman, una veterana del sector hotelero, asumirá el cargo de presidenta ejecutiva.

La caída del mercado ha influido en la decisión de Hargreaves. En tiempos de crisis, dijo, es bueno tener un fundador en la cima de la empresa que pueda convencer a los inversionistas, empleados y clientes de una gran visión. “Las operaciones no importan tanto”, afirmó. “Nadie está pendiente del balance final”.

El entorno actual requiere alguien con la amplia experiencia y las habilidades operativas de Holloman, comentó. “En una época más ajustada, en la que las operaciones importan mucho y nadie se cree las grandes visiones, se necesita un operador en ese asiento”, añadió.

Article source: https://www.nytimes.com/es/2022/08/16/espanol/silicon-valley-ceos.html