Darwinism and Technology Investing
They finally posted a link to the full article and I think that the links already provided lead there. In the past, the observation has been made that venture investment is a very subjective event. Even if your company's business plan is outstanding and even if the product or technology is unique (or as some people say, "disruptive"), if the investor doesn't like paunchy, bearded men, they might not make an investment.
So we have the case of a local company, lauded in the past as a "super star" and was the recipient of state funded venture money that went belly up, that is now resurrecting itself. One of the legacy members of the management team is at the head. That person has a "legal history" and according to the Sunday paper article, in its first life, the company was known to be very litigious. How could this be? Does a company with a "history" deserve a second chance? How is the "survivial of the fittest" more important than integrity, honesty and perseverance?
There are plenty of quality technology companies that never get the one chance to see the gold. Some companies toil long years before getting their first chance. But a second chance for a previously bankrupt company with a management team with a criminal record?
This is the article that appeared in the San Antonio Express News on Sunday. It's just a partial. But the title is very revealing, Business success story or new drama?
Will anyone really invest in a business lead by someone who has a record? I understand that part of the issue was that they were streaming "questionable" material.
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This is actually
This is actually inadvertently humorous. I was a customer of his other company, "Total Access," in Elgin, and I can attest that it was one of the more incompetently run, consumer-hostile operations I've ever had the displeasure of dealing with. I cheered when it went under, even though I hadn't been their customer for more than a year (and they were still trying to bill me). It's funny how the same shady characters keep bobbing to the surface, like something you'd find lurking in the waters of a sewage treatment plant.
I think it has little to do with a "second chance" or what anybody "deserves." It's up to the investors to decide what is deserved or not, and if they have as much issue with the company and its leadership the second time around as they did the first, this one will go under as well, and good riddance. I agree, its unfortunate to see that kind of money being thrown around on ideas that have questionable merit. I know of a guy who has a stack of patents on very fundamental technology, stuff that could cut power consumption in processors by 80% while increasing density five-fold. He couldn't get any of the US investors interested in it, at the same time they were sinking millions into the next "Facebook."
You appear to denigrate "survival of the fittest." Isn't that capitalism at its most basic? The real trick is how to define "fittest." I'd like to think that "integrity, honesty and perseverance" would be attributes of "fitness," but my cynical side isn't convinced--not when I've seen too many VCs bamboozled by flamboyant personalities, and too many people getting rich from snake oil and puppet shows. In the end, much money will be thrown at flashy presentations while struggling innovators with solid ideas look on in envy.
This one looks no different. A few seconds with a calculator shows that he's trumpeting his ability to move data between servers at somewhat less than OC3 speed ("up to" 133 Mb/s), and gullible investors, unfamiliar with the current state of technology, might be impressed. These are the same people who would invest in perpetual motion engines. But in this case, I firmly believe the market will punish Darwish one more time. His track record of failure, and the past evidence of his personality flaws, makes that a pretty high probability.
I don't denigrate "survival
I don't denigrate "survival of the fittest" at all. When you understand my perspective, you'll better understand my points. However, considering that the first version of the company was lauded for its "superstar" qualities. The "fittest" (or the best) do not always win the race.
If my company was guilty of even 10% of the things detailed in the article, we would most certainly be dead. As for dishonesty, we learned that one of our financial people had hidden (not disclosed) certain "issues" and he was immediately jettisoned. When I learned that one of my tech people was up-rounding his time sheets, he was fired within 72 hours. No margin...none.
"We got to make some
"We got to make some money,” he said. “We can't keep spending our own money.”
I guess there was a time when people DID spend there own money when they started a business, or else borrowed it with the requirement that they pay it back. Poking around on the web I see numerous flashy sites with apparently not much behind them. Some of them have "jobs" posted which remain for months at a time. Often the "about us" page has a list of 10 or so guys with sterling resumes, vice president of this, director of that....who is doing the work at these places? Is there goal just to spend up the venture capital and move on to the next trough?
Now, in the current case, does the speaker mean "we've got to make some money" , or does he mean "we have to find some other fool to give us some more cash to burn?"
Aside from the fact that the
Aside from the fact that the World of technology companies goes far beyond IT or web site companies.
Most investors want to know that the entrepreneur they are about to invest in has "some skin in the game." So that means that many investable entrepreneurs do spend their own money as well as other peoples' money before they get the investment banking or VC infusion.
In the case noted in the referenced article, it is hard to say how that company intends to spend the money if they are able to raise it.
I know that our use of funds is specific and our roll-out plans fit the money raise. Whether we raise the money still remains to be seen. Between "own" money and OPM - we have nearly $800K plus "in-kind" service of approximately $1 million plus contract R&D of approximately $2.5 million.
It's tough out there :(
That is a fascinating
That is a fascinating article...
The story is one of
The story is one of perpetuating [fill in the blank]. SWJ, I'd like your take on the "fascinating" article if you have the time.
It really amazes me how an
It really amazes me how an obvious huckster can keep coming up with money over and over again, even after spending time in jail and having companies go bankrupt. Most people would be ruined forever the first time they crashed. This guy just keeps coming back. Makes a person wonder how he does it. Is he just such a slick talker he can get people to bite or does he have some mystery source of funding he is tapping into?
I've seen it before though...
Slick talker was the
Slick talker was the conclusion in a discussion at a C of C tech lunch today.
There are some people who
There are some people who can sell snow cones to Eskimos...
But when the Eskimos are
But when the Eskimos are local bureaucrats...