Timothy Chen

Friends familiar with me know that I like to observe subtle interactions among colleagues. I like to separate managers into two categories, those who lead naturally, and those who lead by position power. Sometimes you follow orders not because you believe it’s a right decision, but because you fear that the manager might score you at the bottom 5%. Most managers have the power to lead because they can impact subordinates’ fates. They review your performance, they decide your salary, and they are your step-stones to higher positions. living in the bubble of power, a manager tends to regard herself/himself as a leader while actually it is the position that exerts every single order.

To know whether one is a “equipped” manager or a natural leader, just calculate the ratio of the number of his/her subordinates to that of friends at workplace.

I’ve read tons of blog posts, tech news and analysis since late 2006, most of which come from the writing of “armature” journalists (or those without formal training on relative areas). I was fascinated by the diversity of perspectives among the bloggers then. I remember that Robert Scoble used to be the first one jumping into the then newest online services and came up his own thoughts. Jason Calacanis always did surprising things like turning off his blog and starting a “traditional” newsletter subscription model for readers instead. Tim O’Reilly’s posts were always thought-provoking. He was the advocate of free-Internet. I also learned the concept of “unconference”, such as BarCamp, FooCamp, and BoF from him. During the peak of my information-addictiveness, I subscribed more than 100 RSS sources and read almost half of them everyday.

However, I don’t do this anymore. As I suddenly realized that content from social media can only expend the horizon of knowledge, but no the depth, I began to cut down the number of RSS subscriptions. Today I read only filtered feeds from Techmeme and Fred Wilson, my most admired VC’s blog. Sometimes, I may turn to Michael Arrington’s posts for the important issues. Meanwhile, I’ve reduced the time spent on social media activities because links shared by friends, though interesting nevertheless, always distract me from more important things. But I still read links shared from my friends via MSN messenger. As the saying goes, “if the piece of information is worthwhile, it will come to you eventually.” The time saved is allocated to book reading. 

Throughout the last couple of years, the number of English books I’ve read more than doubled or tripled what I’ve read for the previous time combined. I discovered Ayn Rand and Benjamin Graham. I read the biography of Warren Buffett and the making of Goldman Sachs. These are “brick-books” and I won’t bother reading them until I really believe that I’m able to finish them.

What I found is that I couldn’t remember the majority of blog post I read two weeks ago, but I can still recall the famous quotes from books even a year later. As the trendy topics yesterday fall apart, be it Kin or Google Wave,  I laugh to myself. Tim, were these applications worthy of your excitement? Was I excited because of the innovation by its own virtue, or I was excited because others were excited? In contrast, the thoughts-turned-texts on books are timeless. I was thrilled to hear Ben Graham lectured,  “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right. ” It was true, it has been true, and it will be true. True wisdom never goes outdated. I so spend a majority of time seeking wisdom, and a minority of time chasing trends.

I’ve learned from a case-study interview today. I spent 5.5 hrs on the railroad and only 1 hr on the interview. Apparently it is not a good way to utilize your employee’s time. Some more problems:

1. The interviewee, who was the project owner, didn’t fully understand the details of the project. He kept saying about the applications while what we needed most is the pros and cons of infrastructure deployed.

2. The interviewer (writer) was not well-prepared. He didn’t pinpoint the critical issues such as reasons behind platform choices and comparative advantages of our solutions.

3. The partner representative, who introduced the case, didn’t mention that the project owner was not a qualified interviewee. The interviewee was not committed. The partner should have known the personality and inclination of the project owner through previous business contacts.

4. I didn’t ask for detailed briefing in advance, so when I found the nature of the case was not aligned with our goal, it was too late.

5. I followed what my manager told me to do, without questioning it. I knew the direction was wrong, but I didn’t take my own position.

In all, a phone-interview could achieve similar result (though it would still be a somewhat unconvincing case-study) at a lower cost. And if I took the courage to lead, perhaps, such an interview would not exist in the very first place.

Yesterday, I happened to read a line, “how do you survive in the world of capitalism while doing the right things?” It’s indeed a paradox. The opportunities of promotion are scarce so that you can’t move forward without taking advantage of your colleagues. Teamwork? If you threaten experts to tell the truth, they will admit that it’s actually a zero sum game. Remember the last time you pretended to be part of a homogeneous culture by sacrificing self identity ? My friend said that in order to survive in his company, he has adopted all the similar ways of composing emails, speaking at meeting, and even telling jokes. Meanwhile, the HR Dept. keeps reminding every staff the “one-[company_name] way”. However the executives, whenever appear on TV spots, always repeat the cliche, “we value diversity.” Most of the time, the CEO, delivering a speech at school, tells students that “be yourself”, “do whatever you like”, and “passion is what you must bring along with no matter what kind of jobs you do in the future.” In contrast, during dinner time, it’s not uncommon to witness managers complain about how boring their jobs are, or regret that they haven’t spent enough quality time with family. I believe only a few of us could ever understand the meaning of pursuing success.

One of the highest level executive, along with his secretary, went to the seat of a young intern students and had a small talk with him. Under normal situations, it is difficult for a new hire to obtain such a greeting, not to mention he is merely a kid just graduated from junior high school. What makes it possible is the acquaintance between the executive and the intern student’s father, who is a important client. Perhaps this kindness will lead to another transaction, who knows. Is it a bad thing? Is it unfair? It Depends. This is part of business. By doing someone a favor, you may get the return in the future. This kind of relationship building works especially well in Chinese culture in that everyone regards kinship as the prerequisite of successful negotiation or effective cooperation. The phenomenon is unique since no other animals will do the same to achieve their goals. One monkey may help another to fetch bananas by lending its own sticks, by it will never temporarily includes the offspring of another as one of the family members in exchange of future rewards. Maybe even more important is that does the student really want to be a "catalysts" to facilitate such a relationship?

Yesterday on the way to office, I saw two workers putting tiles on the pavement of an intersection. It was hot, and it would be pretentious to say that they were happy. Nevertheless, they were making meaning. If there were no tiles, pedestrians would find it difficult to pass through the way without getting wet during a rainy day. Toilsome, but meaningful. The same day, Steve Jobs announced that iPhone 4 sold 170 million unites in the first 3 days of sale. Were it be no such genius and dictatorship, the smart phone industry would grow at a much slower pace. Glorious, and meaningful. So, what do we learn? While some contribute either at the bottom or at the top of the value chain of economy, some at the middle of the pyramid take advantage of both at the top and at the bottom. Like parasites, these people drain the blood of a healthy organization. The bad news is: most people must go through the middle to reach the top. The good news is: we can change.

How do you spend most of your time at work, dealing with people or dealing with things? Admittedly, if more than 50% of your time and efforts are spent on relationship building and gossips gathering, and less then 50% of your time and efforts are spent on jobs to be done, you will be somewhat successful as an individual, at the expense of an organization. If more than 50% of staffs in a company do so, I will certainly short the stock of the company.

“The future is not set. There is no fate, but what we make for ourselves.” This is the motif of Terminator series. Brought with him the message, Kyle Reese, John Connor’s father, a member of the rebellion and sent by the leader John himself in 2029 to protect his mother, met Sarah Connor in 1984 and together they gave birth to John Corner. In everyday life, I’m not sure to what degree we can make our own fate, or the fate is already predetermined by God beyond our comprehension. However one thing is for sure: always be a fighter as well as a dreamer. Think like a dreamer, because the day you stop dreaming, you become part of the machines as dominated by Skynet; act like a fighter, because the “present” may act against you from time to time. Fight back. People may betray you, may lose confidence in you, may misjudge you, but do not give up believing in the bright side of human beings. After all, if a machine, a Terminator, can learn the value of humanity, why can’t we?

You never want to fail because you didn’t work hard enough. I never wanted to lose a competition or lose an election because I didn’t work hard enough. I always believed leaving no stone unturned. Mohammed Ali, one of my great heroes, had a great line in the ‘70s when he was asked, "How many sit-ups do you do?"

 

He said, "I don’t count my sit-ups. I only start counting when it starts hurting. When I feel pain, that’s when I start counting, because that’s when it really counts." That’s what makes you a champion.

 

So let me tell you, as you prepare to go off into the world, remember those six rules:

 

Trust yourself,

Break some rules,

Don’t be afraid to fail,

Ignore the naysayers,

Work like hell, and

Give something back.

 

- Arnold Schwarzenegger, Commencement Address at USC (source)

Then there is another thing I want to tell you. You have achieved your goal, and now you are ready to begin another chapter. Now you really start real life. Real life may be more complicated. It is bound to face some unhappy things and hindrance and obstacles, complications. So it is important to have determination and optimism and patience. If you lack patience, even when you face some small obstacle, you lose courage. There is a Tibetan saying, ‘Even if you have failed at something nine times, you have still given it effort nine times.’ I think that’s important. Use your brain to analyze the situation. Do not rush through it, but think. Once you decide what to do about that obstacle, then there’s a possibility that you will achieve your goal.

 

- Dalai Lama, Commencement Address at Emory University (source)

Well, class of 2005, that about does it for me. I’m fresh out of material. I guess what I have been trying to say here this afternoon can be summed up by the old adage that "happiness is a journey, not a destination." Bringing joy and passion and optimism to your work is not what you get to do when you get to the top. It is HOW you get to the top. If I have had any success as a journalist since I was sitting down there where you are 30 years ago, it’s because I found a way to enjoy the journey as much as the destination. I had almost as much fun as a cub reporter doing the overnight shift at UPI, as I did traveling with Secretary of State Baker, as I do now as a columnist. Oh yes, I have had my dull moments and bad seasons — believe me, I have. But more often than not I found ways to learn from, and enjoy, some part of each job. You can’t bet your whole life on some destination. You’ve got to make the journey work too. And that is why I leave you with some wit and wisdom attributed to Mark Twain: Always work like you don’t need the money. Always fall in love like you’ve never been hurt. Always dance like nobody is watching. And always — always — live like it’s heaven on earth.

 

- Thomas Friedman, Commencement Address at Williams College (source)

Leadership is consisted of a number of attributes. Among them, finding the possibilities and creating opportunities for your people is two of the  most important elements. In the short-term, leadership is similar to ownership and managerial-ship; in the long run, leadership leaves much prolong impact to an organization and to people than ownership and managerial-ship do. Leadership is not a means to fulfill personal interest, instead, leadership is a means to serve a vision larger than everyone under its umbrella. Leadership in our organization is loosely defined, and is usually confused with ownership and dictatorship. True leaders don’t need your compliment. It is tyrants who needs it desperately.

Every individual has blind spots. Bill Gates, Confucius, Gandhi, your boss, and you all have blind spots. The first step to overcome blind spots is to admit that we all have blind spots. Interestingly, we can find blind spots of others more easily than those of ours. I don’t know why people are made of this way, but I do know that reminding colleagues, friends, and family members of their blind spots is art that deserves more appreciation.

A secret to succeed has been existed but hasn’t been told. The secret is – finding out the single most import factor in every assignment your manager delegates to you. That was what I learned in a talk with a senior manager yesterday. Take event organization for example. Content plays the most significant role in a PR event, while logistics play the pivotal role in an executive-reception event. As someone who is accountable for thorough implementation, understanding the key factor is a sure way to guarantee staying in the right track. To adopt the strategy, premises should be remembered: Don’t analyze different issues from the same perspective and don’t use the same hammer to fix any problems. The most important factors vary case by case.

Sorry for being abstract. Today I would like to talk about meaning. Although each individual has his own definition of meaning for work, I do believe that doing certain things during work makes no sense for meaning. First, doing whatever your boss tells you is meaningless. Second, doing for the sole purpose of flattering your boss is meaningless. Third, planning to minimize the part of a project for which you are responsible is meaningless. Forth, helping colleagues because of potential benefits you may harvest later is meaningless. Fifth, giving up your ideal and enthusiasm due to rejection from your boss or colleagues is meaningless. Sixth, worrying about political consequence before pressing the “send” button on your Outlook is meaningless. Seventh, communicating your accomplishment, which will be ignored otherwise, is meaningless. Eighth, managing things without managing people is meaningless. Ninth, challenging the above is meaningless. For some, all they want is to survive in an organization; meaning or meaningless, that’s not the question. All that being said, there are still a lot of people who are positive and eager to contribute. One day, I believe, they will find the meaning.

Students in Asia are used to be judged by short-term performance, or to some extent, the performance of one-time exam. Our education as well as measurement systems are designed to facilitate the painful process of selection, but they doesn’t reflect the quality of the end result for a prolonged period of time. One student may get a high score in a math test, but his ability to sustain the same level of performance is not being tested. Likewise, during an interview, a candidate may impress the interviewer at one moment, but outstanding performance in one or two hours can’t guarantee stability of performance in the future. Therefore, past records that demonstrate persistence and consistence of certain capabilities are necessary, as educators in the western countries are taking these factors more seriously. Call-to-action: start to accumulate your records and build evidences to show that your profession is a sustainable one.

The other day, I heard people said, “You can’t do x and y because you’re too young and inexperienced.” I agreed with the naysayer at that moment; however, I was fault. Whenever I accept the notion of “too young” or “inexperienced”, I do nothing constructive but admitting that I’m so young and so naive that I simply ignore the opportunities to innovate the future. Honestly, almost all the great entities nowadays are founded by young entrepreneurs with little, if not none, experience. The more the inexperienced are excluded and depressed, the less the force that drives our world rotating forward. Why are you afraid of failure when you’re bigger than the problem? The best time to act is always, now.

The pursuit of opportunity without regard to resources currently controlled.

- Howard Stevenson (source)

There is a discrepancy between consumer and enterprise software domains which seem to be mutually exclusive an no company on earth has yet proven success of integrating both. Microsoft? Perhaps. Although some technology from MSFT surprises the market periodically, in the long run, the cultures and priorities within the company are incompatible. The root of the problem is originated not from the new hires, but from the middle layers. Whereas the very top executives and the very young talents pay attention to trends, because of their job requirement and passion, a number of middle managers lack the ability to discern and appreciate trends and paradigm shift. Why? Their experience, profession, and most importantly, dignity prohibit them from doing so. Solutions from three angles can be applied – eliminating the existence of the obsolete positions, depriving the dinosaurs of the decision making privilege, or separating the company into two entities, one for commercial products, and another for consumer products.

We tend to associate toughness with the ability to dig the right hole, while in fact, toughness usually leads to  thorough execution, that is to say, dig the hole right. As far as I’m concerned, the result of digging the hole, which is a wrong one however, right, is equal to a multiply of zero and a given score. In other words, ignoring the whole picture is the common failure among managers. On the contrary, leaders with soft skills are sometimes judged as ineffective ones, while in fact, they are more flexible and open to embrace changes and adverse conditions. After all, it doesn’t matter that you dig the wrong hole at the first place, as long as you recognize the mistakes and are willing to change course. Zero and one should be as distinctive as black and white, but in organizations, the pair are always hidden under authorities with obscurity.

When I stumble upon obstacles, John Roark always comes to my mind. I would ask myself, “What would John Roark do?” Will he take a stand? Will he speak out loudly for things that ought to be done? Will he hesitate to face himself? If one can’t face oneself, how can he speak for justice and fairness? What has he seen? Will he has the courage to challenge the status quo, the so-called authority, or the so-called experienced? Will he insist on the ideal? Supposing he was seemingly defeated, what will be his next step? Is now the time to wait, or the time to act? Will he involve in, or stay indifferent to, the issue, saving efforts for things deserved his attention? Nevertheless, in addition to these question marks, I know one more thing for sure – never will he stop believing in himself, in the way Atlas would bear the world, and in the way the ideal man should be.

So what do we make of all this? Let me speak directly to the graduating class.

 

As you pursue your goals in life, that is to say your future, pursue your past. Let it be your guide. Insist on having a past and then you will have a future.

 

Do not descend too deeply into specialism in your work. Educate all your parts. You will be healthier. Replace cynicism with its old-fashioned antidote, skepticism.

 

Don’t confuse success with excellence. The poet Robert Penn Warren once told me that "careerism is death."

 

Insist on heroes. And be one.

 

Read. The book is still the greatest manmade machine of all — not the car, not the TV, not the computer.

 

Write: write letters. Keep journals. Besides your children, there is no surer way of achieving immortality.

 

Serve your country. Insist that we fight the right wars. Convince your government that the real threat comes from within this favored land, as Lincoln knew. Governments always forget that. Do not let your government outsource honesty, transparency, or candor. Do not let your government outsource democracy. Steel yourselves. Your generation will have to repair this damage. And it will not be easy.

 

Insist that we support science and the arts, especially the arts. They have nothing to do with the actual defense of our country — they just make our country worth defending.

 

Do not lose your enthusiasm. In its Greek etymology, the word enthusiasm means, "God in us."

 

Good luck. And God speed.

 

- Ken Burns, Commencement Address at Georgetown University

I’m not that interested in charity. I’m interested in justice.

 

There’s a truly great Irish poet his name is Brendan Kennelly,  and he has this epic poem called the Book of Judas, and there’s a line in that poem that never leaves my mind, it says: "If you want to serve the age, betray it."

 

America is not just a country, it’s an idea. You see my country, Ireland, is a great country, but it’s not an idea. America is an idea, but it’s an idea that brings with it some baggage, like power brings responsibility. It’s an idea that brings with it equality, but equality even though it’s the highest calling, is the hardest to reach. The idea that anything is possible, that’s one of the reasons why I’m a fan of America. It’s like hey, look there’s the moon up there, lets take a walk on it, bring back a piece of it. That’s the kind of America that I’m a fan of.

 

But my point is that the world is more malleable than you think and it’s waiting for you to hammer it into shape. That’s what this degree of yours is, a blunt instrument. So go forth and build something with it. Remember what John Adams said about Ben Franklin, "He does not hesitate at our boldest Measures but rather seems to think us too irresolute."

 

- University of Pennsylvania Commencement Address by Bono (source)

The future turns out to be something that you make instead of find. It isn’t waiting for your arrival, either with an arrest warrant or a band, nor is it any further away than the next sentence, the next best guess, the next sketch for the painting of a life portrait that might become a masterpiece. The future is an empty canvas or a blank sheet of paper, and if you have the courage of your own thought and your own observation you can make of it what you will.

 

- Lewis Lapham, Commencement Address at St. John’s College (source)

Two young guys joined a company twenty years ago. One is now the CEO, the other stuck in the middle position. Why? The scope and the openness of minds rule their careers. What they choose to see, what they choose to listen to, and what they choose to believe matter. 

I don’t throw darts at a board. I bet on sure things.

- Sun-tzu, The Art of War

Every entrepreneur-to-be should read this line. Paradoxically, if entrepreneurs care about risk and possibility of success, they won’t be entrepreneurs in the first place. At the same time, every entrepreneur believes that whatever she/he bets on is sure to win. And they ignore, in practice, the ratio of a successful endeavor to a failed one is 1 to 10 on average.

It’s the entrepreneurial spirit that drives your gut, passion, and urge to set off, and it’s the hedging spirit that mitigates the risk of failure, guides you to the lucrative exits, and gives you peace of mind every night.

That’s why I come to believe that most great business owners are born with characters of a entrepreneur and arbitrageur. Think about Bill Gates, Warren Buffett, and JP Morgan.

When I interview MBAs for analyst positions here at Clarium, my standard question is this: We’re a macro fund paid to identify markets that are enormously mispriced. What in the world do you think is incredibly out of kilter right now?

In summer 2004, our head of research scared our interns a bit by starting off their first day saying. “Anybody who declares that they think markets are efficient will be fired at the spot. If you think markets are efficient, there is nothing for you to do here. But you shouldn’t worry about being fired, because if markets are truly efficient, then you won’t have trouble immediately finding an equally attractive job somewhere else.”

 

- Peter Thiel, Interviewed by Steven Drobny, Inside the House of Money, Top Hedge Fund Traders on profiting in the Global Markets, p.214

After brain-washed by Burton Malkiel’s random walk theory, I’m glad to know that no efficient market exists, as claimed by another school. Real world evidences supporting the latter are derived not only from equity markets, but also from job markets. The question is: how do I spot the mispriced opportunities?

What I learned is that burning out isn’t just about work load, it’s about work load being greater than the motivation to do work. (source)

Early on, before I began case work, one manager I befriended gave me some advice. To survive, he told me, I needed to remember The Ratio. 50 percent of the job is nodding your head at whatever is being said. 20 percent is honest work and intelligent thinking. The remaining 30 percent is having the courage to speak up, but the wisdom to shut up when you are saying something that your manager does not want to hear. (source)

The above quoted from a former consultant at BCG. He just graduated from MIT (supposedly a MBA graduate) and joined the prominent consulting firm. This means a dream came true by most ambitious young talents. He brought with him solid analytical skills, sophisticated models, and most importantly,  eagerness for contribution, to tackle tough problems faced by fortune 500 companies, but only found that what he learned from school was almost useless. His profession, passion, and idealism were compromised to clients’ political correctness. He couldn’t stand anymore, so he quitted. BCG paid him a handsomely $16,000 check attached with an NDA prohibiting him from disclosing any working experience there. He rejected both and choose to tell his story to the rest of the world.

My thought? It’s obvious that there are two worlds, one from textbooks and another from Main Street. Before transitioning from the former to the latter, as all MBAs have to, You got to set the right expectation, equip yourself with political savvy, and be ready to deal with ambiguity. The business world is brutal, not because of its intensive competition, but because of its reality that destroys what you have leaned and believed since day one at school. One must accept that the “unacceptable”, “immoral”, or “unethical” parts of business are the underlying force that builds customer relationship and drives transactions. The educators can leave students themselves to figure out how the real world operate, or they can include the dark side of business and of humanity in the courses.

All recently graduates have the right to know the ugly truth. Only then can they decide whether it’s a war worth fighting.

Hedging, he explains, is basically a speculative tool used for conservative purposes. Without it, he says, “I would not have been able to sleep so well at night.”

 

- quoted from Alfred W. Jones, written by Peter Landau, 1968 (source)

Dr. Jones was a sociologist and journalist before he invented the concept now called “hedge fund”. In 1949, he set up a limited partner, A. W. Jones & Co., putting hedging philosophy into operation, to test the validity of his research on “technical approaches”, an investment style that relies heavily on odds, statistics, charts, patterns, and other quantitative measurements. The return of his portfolio for the 20 consecutive years was spectacle.

Essentially, hedge fund by and of itself is not evil, neither are hedge fund managers. Although the press always portrays, especially in economic downturn, hedge fund managers as vultures or demons by their own design, a few of them, including the founding father, regard venturing into hedge fund business as an efficient way to “reallocate fortune” to those in need.

Jones says frankly that he wanted to make money in Wall Street because he eventually wanted to be able to “slope away from business and pick up my old interests in social affairs." Moreover, he wanted his limited partners, many of whom were active in scientific and artistic fields, to be free from financial worries. So they can devote themselves entirely to their creative efforts. (source)

He did so. After 1984, Dr. Jones gradually disengaged himself from fund management and shifted his attention to Peace Crop. And it’s the beauty of capitalism. Compared with governments, sometimes capitalists are in a better position to allocate wealth. For the system to work, the premise is: don’t over regulate, allowing capitalists to make tons of money first. It doesn’t matter that 95% of top hedge fund managers are greedy and selfish. The world is already much better because the other 5% are philanthropists.

Where there is a sell side, there must be a buy side. The middleman’s duty is to provide liquidity for both sides, not to backup quality of investment instruments. (Otherwise I believe that tons of brokers whose interest is volume rather than quality would be found guilty.) Thanks to hinder sight, we now know that housing market was destined to crash, and that John Paulson cashed in at the expanse of other ABACUS investors’ ignorance, but how could we foresee that two years ago? Wasn’t Paulson taking great risk against the market which had gone mad and kept skyrocketing during February 2007 to October 2007? Don’t forget that Dow Jones Industrial Average raised from 12767 on February 16, 2007 to all time high, 14093, on October 12, 2007.

We should make things clear that it’s final decision makers’ responsibility to pick up investment portfolio. Investors, instead of traders, brokers, or salesmen, are the final decision makers, and in the world of business, we often attribute the ultimate responsibility to final decision makers. (Otherwise, what to justify their high salaries and bonuses?) In theory, middlemen as a whole act as a platform, and their neutral existence is for the only purpose of facilitating end-to-end transaction. But in practice, because of the way in which incentive system operates, financial middlemen may be encouraged to shift their neutral position to a biased one, and therefore to what extent Goldman Sachs is biased will be the subject to be further explored.

As a result, two variables left. One is whether Goldman Sachs didn’t disclose enough information, or didn’t tell the the so-called “truth”. In this case, I don’t think they are guilty. (We can’t convict somebody of a crime just because of not telling anything, including the truth.) Since no law requires brokers to inform their clients who is selling short and who is buying long for certain targets, disclosing that Paulson & Co. was betting against the Synthetic CDOs was not necessary. And as reasoning above, even though GS did so, under the over-optimistic market, no one would care much. Another variable is whether Goldman Sachs did mislead, or lie to its clients with a false claim that ABACUS was selected by a neutral 3rd partly, ACA, but in fact it was selected by Paulson & Co.. If that is proven to be true, it would be impossible for GS to walk away innocently.

在我們團隊之外，或許只有投資大師華倫．巴菲特的話值得一聽，他不只對房市，還對所有一切的成長週期做出評論：「有三個 “I” 一直存在。第一是創新者 (Innovator)，然後是模仿者 (Imitator)，再來便是笨蛋 (Idiot)。」講得真對，巴老，現在笨蛋來了。。

 

- 雷曼啟示錄, A Colossal Failure of Common Sense, The Inside Story of the Collapse of Lehman Brothers, p178

Social media marketing, or more specifically, FB marketing, is currently at the 2nd stage, and moving forward to 3rd stage. How many new campaigns are launching without a FB fan page alongside? How much attention and tolerance could be divided by ever increasing sugar-coated baits? As palatable as they appear to be, baits that all tasted quite alike have been overwhelming. Since the total amount of human attention is fixed, this is a lose-lose game.

Time may tell, I don’t know. In the last decades, it takes a while for the crowd to learn to distinguish spam from newsletters, and to distinguish newsletters from eDMs. People who can’t tell ads from information are those you lest want to target. Unfortunately, we’ll witness more and more fan page followers to be categorized as ads-illiteracy. Brilliant marketers will advance from one less effective vehicle to another. Only the idiots stay.

The other day, I had lunch with friends and much of our talks were about careers. I shared 4 criteria to evaluate the intrinsic value of a job. They are:

1. current pay – your relative “market price” which may shapes how you view yourself. How much you earn is less important if you are a recent graduate, but believe me or not, it matters more than you think when you get older. From time to time, however, job markets could be quite inefficient. For example, you may find your colleagues, inferior to your intellectual capability, work less hard and achieve poorer results, but they are nevertheless “quoted” at a higher price than you. It’s time to choose whether to take advantage of the “market inefficiency”.

2. future growth – if more than 50% of the skill you perform everyday is what you are already good at, you should consider another job. If your pay is strongly correlated to and will grow along with your profession and experience, and there are no glass ceiling for such growth, you should consider staying. On the other hand, some positions are going nowhere, even though they are landed on a top-tier company listed in Fortune 500. Take a while to identify them beforehand, and don’t lie to yourself when you are in such roles.

3. your colleagues – you may spend more time with them than with your family. Everyday you learned from them, or even imitate them. Colleagues not only influence your value, but also form an important network that you may find useful during the later stage of your career. So choose your “business partners” wisely.

4. your customers, partners, and vendors  - make sure they are the kind you like, otherwise you won’t succeed. If you despise geeks and nerds, you won’t succeed in IT or gaming industries. Interaction with external business counterparts may occupy as much as 80% of your job scope, so you should regard them no less than your colleagues. They are important constituents of your network, too.

When it comes to career seeking, the ultimate rule, as Steve Jobs already told us in his commencement address in Stanford University, is straightforward:

And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

這就是避險基金 101：

Historically, hedge funds bought individual stocks, and shorted (or borrowed against) the S&P 500 or another market index, as a hedge against the stock. (The funds bet against the S&P in order to reduce their risk.) As long as the individual stocks outperformed the S&P, the fund made money.

 

- Tom Lott, Derek Loosvelt, and the staff of Vault

 

但這種奈米級的 spread 是要賺到民國幾年才像樣呢？答案就在 leverage。

The surest way to convince yourself that you are passionate about something is when you hear that “something”, be it a quote or a short speech, you feel certain chemistry changing inside your body. Your adrenal gland and lachrymal gland secrete. You feel the thrill, the urging, and the undeniable body response. All happen at once, just as you hear a song and it’s rhythm and lyric touch you so deeply and, so suddenly.

It’s a moment that you can’t explain, but you just know when it comes to you.

Large technology companies, taking advantage from their resources and understanding of market, are good at sketching the right vision, but, unfortunately, usually poor at execution. From an overall perspective, misalignment of incentives among divisions and implementation of imbalanced scorecards are two major causes of poor execution.

Ironically, most corporations in the developed countries implement “balanced” scorecards, and these scorecards contain shared goals, which are vital to new R&D effort, assigned to more than one department. Some professionals believe that the concept of shared-goals described in scorecards has been the best realization for collaboration management so far, but I would argue that though the application of scorecard is a good way to increase revenue, it is not necessarily a good way to foster internal cooperation. Instead of being a mechanism to drive commitment, shared goals are more often than not to become an excuse for not taking thorough responsibility. Because each division has their own priority delegated through organizational hierarchy, shared goals are inevitably give ways to primary goals. And because managers’ incentives are bundled with the achieving rate of goals, and their time and resources are limited, they tend to emphasize on objectives they have full control and neglect shared goals which require more effort on inter-departmental communication and resolving conflict among stakeholders. The consequence is obvious – lack of teamwork and less efficient execution that make the right vision broken.

I therefore recommend a radical way to align incentive with each division and stakeholder. For each scorecard, there are some items more difficult to accomplish than others. Top executives should assign each items a “risk factor” – the ranking of rick that a certain goal may not be able to be achieved. The higher the risk, the higher the incentive would be rewarded to those who reach the goal. For example, shared goals that are neglected or dodged by most managers last year are those with higher risks of not being well executed this year, and should be assigned with higher risk factor and higher incentive to catch managers’ attention. Once the new model introduced, shrewd managers who tend to calculate what are best for them will reconsider whether the high incentive justify the time and energy they will invest. Equally important is that objectives with higher risk rankings should not be divided into shared goals; instead, they should be assigned to a single owner who deserves all the returns to ensure thorough execution. After all, risk-sharing is the source of the financial crisis in 2008, and it didn’t and won’t go well with human nature.

One of the reasons why I always enjoy reading TechCrunch is that, Michael Arrington, the founder and editor-in-chief of TC, always takes a stand bravely.

Yesterday he publicly criticized the political stunt orchestrated by US Congress, GoDaddy and, you guess it, Google. Among the trio, Senator Chris Smith, in order to exemplify how wrong it is to “exist” and “do business”  in China, made a comment about Microsoft as below:

They [Microsoft] need to get on the right side of human rights rather than enabling tyranny, which they’re doing right now.

 

And Sergey Brin, interviewed by NYTimes a few days ago, attributes Microsoft’s position against Google to loser’s mentality:

I’m very disappointed for them in particular,” Brin said. “As I understand, they have effectively no market share – so they essentially spoke against freedom of speech and human rights simply in order to contradict Google.

Here I present the arguments Michael Arrington brought up to challenge comments on Microsoft’s ignorance of human right. It’s up to you to determine how valid and convincible these arguments are.

1. Both Google and GoDaddy made political donation, $8,500 and $19,500 respectively, to Senator Dorgan’s campaign fund.
2. Why doing business in China was just right in December 2009 but doing so is very very wrong now?
3. .cn domain registration accounts for a tiny portion of GoDaddy’s overall business (2700 v.s. 35 million, 0.08%). And this contradicts to Sergey Brin’s suggestion that companies with effectively no market share spoke against freedom of speech and human right.
4. The US government, doing nothing to fight the “evil “ existing in China, backup certain companies while blaming some others.

I would like supplement that, just because Microsoft makes excessive profit doesn’t mean that Microsoft does excessive evil to human rights and freedom of speech. Moreover, associating too much social responsibility and moral standard to profit-making companies, is basically, irresponsible and anti-capitalism. On the other hand, the fact that “most” of Chinese people are comfortable with the political and economic status quo makes the claim that the Chinese live under oppression ungrounded. All that being said, we should regard Google’s leaving China as pure business decision even though some of the underlining causes are political ones, and respect decisions made by companies, such as Microsoft, which decides to stay in China, obeys the local laws, and continues to do business as usual, as business decisions.

忍不住再來寫點 GOOG 關閉 google.cn 的後續想法。引發我這個動機的是官方宣稱的「我們將留下 R&D 以及 Sales 人力。但保留多少則要視之後中國政府的動作而定。」這樣簡單的一句話，外界多解讀為 Google as an entity，只是關閉 google.cn，最終將「留」在中國。然而卻很少討論中國數百多名員工的去留問題。

一般來說，軟體外商在大陸設分公司，組成架構不外乎 sales & marketing、R&D、customer support、general administrative 等部門。其中公司要維持營運，GA 不可能整個砍掉，Google 看起來也沒在中國投入太多 customer support 和 marketing 方面的預算。因此，Google 官方宣稱要留下來的，可以說是重要的核心部門，或說是原本釘子釘太深，現在不能說拔就拔的業務單位。而不留的，也可能是老早就想「精實化」的支援單位。假設未來受影響的業務只有搜尋引擎，這次在中國會裁掉的員工數目，頂多只能算是進行一次去除多餘 support function 的瘦身運動。

但如果未來連 AdSense、Android、Google Apps、Search Engine Outsourcing 等業務都受到影響呢？那麼將免不了大量裁員，或是大量 re-locate 員工。這時，如果我是 Google 的高層，我想我會先砍 direct sales，接下來是 partner sales，最後才是 R&D。畢竟最初 Google 到中國設點的主要目的之一就是拉攏高材生 – 未來的天才工程師，以防他們跑到 Microsoft China，特別是頗負盛名的微軟中國研究院。當然，現在也要防止人才外流到 Baidu。

如果最壞的情況真的發生了，也就是 Google 中國不得不大量釋出 R&D 人力到市場 (雖然官方聲明稿並沒有直接點出 R&D 人力配置會受到影響，但我認為在 Google 處境有機會轉壞的前提下，就不能排除 R&D 也裁員的可能性)，Google 輸掉的，恐怕不只中國市場。Google 也可能間接把人才「餵」給未來最大的直接競爭對手 – Baidu。我們都知道研發中文搜尋引擎的門檻比英文搜尋引擎還高，光是處理中文的「分詞」問題，就夠讓研發人員頭疼了。對 Baidu 來說，硬柿子啃完後，後面的軟柿子就容易消化許多。Baidu 進軍英文搜尋引擎市場？現在聽起來也許有些荒謬，但三五年後，Baidu 員工或投資人也許就會問：why not？

如果我是 Baidu 高層，現在除了晚上抱著股票邊睡邊笑之外，白天我也會開始著手規劃招募策略，來向 Google 的外流人才示好。因此無論如何，Google 都要守住當初李開復老師辛苦巡迴校園所䀻僱來的菁英。若是最壞情況發生，也許把中國分公司轉型為區域研發中心也不失為一個進可攻，退可守的戰略。轉型為類似微軟亞洲研究院的單位，也較不會受到政治因素干擾策略。當然前提是母公司要持續挹注預算。

終於證實 GOOG 將關閉 google.cn ( 流量導到 google.hk，但過不久 google.hk 被封鎖的可能性也很大 )，保留在中國的 R&D 和 sales 資源。但沒了在地搜尋引擎，Google 的 sales force 還要賣什麼呢？contextual ads？Google Apps？

GOOG 的廣告營收來源大致可分為 O&O ( owned & operating ) properties 與 partner sites。前者如 Google 搜尋引擎本身、YouTube、Google Apps 等網站或服務，後者如加入 Google AdSense program 的部落格或入口網站。

很明顯地，如果 local owned & operating sites 不是關閉，就是被擋掉的話，那就幾乎不會有本地流量，沒有本地流量就不會有業主想下廣告，如此一來，當地的 sales force 也就英雄無用武之地了。剩下的機會，不外乎 international sites 或 partnership sites，但眼看市場大餅一夕之間變成一人份比薩，真是令人 ( 投資人？ ) 不勝唏噓。

另一方面，就 Google Apps Premier Edition 的業務推廣來說，倘若 Google.hk 被封鎖成真，那大概也沒有業主敢用 GAPE 了。哪間公司敢把資料放在說不定哪天就突然被勒令禁止「拜訪」的雲端服務呢？( 請參考 Google Mainland China Service Availability，每日更新。 ) 在充滿不確定性的環境下，Google 留在當地 sales force 也是有場苦戰要打。

消息宣佈後，GOOG 隔天收盤下跌 1.52%。相對於 NASDAQ 大盤上漲 0.83%，跌幅不算深。利空出盡的道理莫過於此。理性的 GOOG 投資人看到事情進展到這步田地，應該要調節部份持股以降低風險。畢竟中國方面也釋出頗為不悅的新聞稿，未來 GOOG 僅存於中國的業務會遭逢何種命運？很難說。但就像 GOOG 撤出中國的決策一樣，不理性，有時候才是出奇致勝 (?) 的關鍵。所以如果您也想跟著 GOOG 一起乘風破浪，請準備低檔加碼。

For marketers and analysts… This is an exciting era of publicity, one in which you have more access to data than ever before, one in which you can see people who were previously invisible. But just because you are able to see people doesn’t mean that they want to be seen by you. And just because you think you can interpret what you see doesn’t mean you will do so accurately. We are becoming a data-driven society and, in some ways, this is a very good thing. Goddess knows, I’d love to see more policy grounded in data. But please realize that just because you have access to numbers doesn’t mean that the numbers tell the full picture. Or that people will be happy to hear that you have this information. (source)

Boyd Danah 是任職於微軟研究院的社會學家，也是地球上少數全職於研究 social media phenomena 的學者。這年頭講起 social networking 有 insight 的人不多了。他是我心目中少數的那幾個人之一。這樣的人才願意留在微軟，微軟肯定有它的魅力。

Hindsight promotes overconfidence and fosters the illusion that the world is far more predictable than it really is. The people who sell worthless financial advice may even believe that it is good advice. Steve Forbes, the publisher of Forbes Magazine, knows better and quotes the advice he received at his grandfather’s knee: “It’s far more profitable to sell advice than to take it.”

 

- Burton G. Malkiel

投顧老師：我錯了嗎？

Lotus 1-2-3 之父對 Apple 與 Google 的訴訟之戰做出了以下評論：

Mitch Kapor, the founder of Lotus Development and now a tech investor, describes such infighting as “old wine in a new bottle,” and reminiscent of many past corporate battles in Silicon Valley. He sees the old dynamics between Apple and Microsoft being recycled, with Apple still trying to control every aspect of the user experience, and Google, like Microsoft before it, working with multiple partners to flood the market with a large number of devices. (source)

嚴格來說，微軟的成功是基於封閉的夥伴策略。平台本身封閉，但是平台上的應用卻是開放的。as long as you obey the rules. 這也是 Facebook 現在執行的策略。FB 有把全站的程式碼都開放出去讓 developer 打包回家研究嗎？沒有。它只提供了 API、SDK 和各式各樣的 bridge， 讓 developer 能基於封閉的平台之上發揮最大的創意。

Apple 的 App Store 封閉平台策略不用多說，平台之上的應用也是相對較為封閉。它不允許 developer 開發和 iPhone 既有功能重疊的應用程式，如簡訊、語音通訊、音樂播放器等方面的應用。Google Voice 遲遲打不進 App Store 便是一例。雖說管制很多，令人惱怒了些，但事實卻是：目前這個封閉的 model 造就出 No.1 的 App Store。

Linux 和 Android 則是從核心到應用層完全開放，但 Linux 的自由換來了群雄割據的局面，Android 則讓 partner 廠商開發出來的手機 experience 不一致。Linux 再繼續各玩各的下去，短期內也難成氣候。而 Android 到目前為止成績不錯，不過 Google 逐漸發現：一旦把自由、開放的權利交出去，就很難再收回。上面這句話，完全體現在「 Nexus One 幫我們上的一堂課」當中。

總括來說，封閉的平台也是企業負責任的表徵。因為封閉，所以平台好壞完全掌握在手裡，企業因為要賺錢，所以有足夠理由繼續讓平台發揚光大，永續經營下去。當然，代價是買方必須持續付費。不過付費換來價值，原本就是天經地義的事。此外，封閉平台也有助於維持一致的使用者經驗，最終的受益者還是終端使用者。所以，開放與否的議題爭論，就留給某些激進份子與利害關係人，我們消費者，好好享受封閉平台帶來的便利性就夠了。

幾近完美的獲利模式也有成長趨緩的一天。

(Source: James Mitchell, GOOG Company Update, March 7, 2010)

那麼，到底是哪些原因，讓 paid lead growth 坐溜滑梯呢？高盛分析團隊給了三種解釋：

1. 基期越墊越高，因此無法維持高成長是必然的

2. Bing 的 Cashback program 搶走原先就比較可能點選付費廣告的一群人

3. 使用者花越來越多時間逗留在大型社群網站或購物網站

過去幾年，使用者從大型入口網站被「解放」出來，紛紛產出各式各樣的部落格文章、評論、以及短片等內容。這些內容散居各處，必須仰賴搜引擎來為我們過濾、尋找資訊。不過前陣子開始出現使用者朝向幾個大型功能性網站「匯流」的趨勢。如果大家都一上網就固定掛在少數大型網站，那 GOOG 作為 “pointer” 的身份，就沒啥搞頭了。GOOG 的未來，就看這些大網站資訊雜亂的程度。網路世界越 chaotic，GOOG 就越有價值。

題外話，到底是哪些人會去點 paid links 呢？我還滿好奇 age、gender、intelligence、education、wealth 等個人屬性和 paid link clicks 之間的相關性。

Salesforce.com 創辦人 Marc Benioff 前幾天在 TechCrunch 八啦八啦講了一大串為什麼 “ The Facebook Imperative Cannot Be Stoppable”，換句話說，就是在申論為什麼企業軟體 (或服務) 最終將走向 Facebook 的形式。

Spoiler Alert: Salesforce.com 剛推出一個介面與 Facebook 相仿的企業協同合作服務 – Salesforce Chatter。

台灣企業主的 ultimate feedback：為什麼我們要在員工的辦公軟體中加入 social networking 元素？

如果想讓企業接受像 FB 那樣的 social networking 溝通方式，需要的是行為上的轉變。而這種轉變，我認為短期內不太可能發生。20 世紀的前 90 年，企業透過留紙條、傳電報、打傳真來溝通非口語表達資訊。20 世界的最後五年，企業開始大量採用 email 來傳遞書面資訊。而這些載體本質上都沒有涉及員工行為模式的改變。資訊還是需要完整、有結構性的被傳達。這些載體只是增加訊息傳遞的效率。反觀 social networking 的 fragment information 或 noise 終究無法建構出有效的溝通。不然 5 年前，各大企業現在早該採用 IM 作為主要的溝通管道 (一樣也很 social 啊)，email 早消失了。

說到這邊，我們不得不騰出個位置，讓老闆們表達心聲：「我找你來上班，是請你來 working，不是和同事 social net-working！」

然後，也請各位白領勞工朋友們想想，如果一天突然要多收個 20 封 email 都覺得煩了，現在假如公司導入 social networking applications，一天多個 60 封短訊息要看要回應，這樣您還能專心把眼前的事情做完嗎？

最後，再請老闆英明，有幸在工作時使用 FB, Plurk, etc. 的白領勞工朋友們想想，請問您是拿它來喇賽打屁的成份居多，還是討論公事的成份居多？

如果 Social Networking Services 能在企業 take off，那我們早該在三五年前，企業一窩蜂追逐 internal blogging 和 internal wiki 的風潮中看到結果。而事實呢？時至今日，大企業還是以 email 交流資訊為主，沒人有時間玩 blogging、wiki。這些工具的需求多集中在中小企業，或是大企業的少數 (task force oriented) 部門，既然都是組成特性都是「小」、「少」，彼此很容易在 offline 產生聯繫，不會複雜到需要在網路上 maintain profile，然後一人 assign 一種 expertise，以便於 knowledge search。撇開 people / KB search 不談，其餘 SNS 能帶來的「強大」效益，在組織複雜度還很低的情況下，也不明顯。

所以，總歸一句話，行為模式不改變，怎麼會有新需求？沒有新需求刺激，怎麼推動 paradigm shift？

到頭來，我有些質疑技術分析以及基本面分析的可靠度。技術分析的立論基礎，在於對過去資訊的解讀，相信歷史終將重演。基本面分析的立論基礎，則是基於對當下資訊的解讀，同時基於對未來資訊 (營收) 的預測 (DCF-based intrinsic value calculation)。多數情況下，基本面分析也需要參考過去歷史資訊，從過去績效預測未來績效。

兩者的相同之處在於「預測」這個動作。差別只在技術分析的信徒看起來像是拿者星座圖 (K 線圖) 唬爛的占星術士；基本面分析的信徒 (a la 華爾街分析師) 則想盡辦法讓自己看起來像是包裝在數字、模型、還有西裝之下的衣冠…專家。

預測之於機率遊戲，贏家都是事後定論。但我沒有其他更好的選擇了。

主要理由是 1) Display Ads (DoubleClick Ad Exchange) 與 2) Nexus One 能為 1Q 2010 帶來 2% 的 QoQ 成長。

另外分析師 James Mitchell 也提到，比起 Desktop Search，Display Ads、Nexus Phone、Mobile Search 的毛利較低。如果想維持 GOOG 股價成長，短期來說，營收成長比維持毛利率重要，長期來說，跨足 Desktop Search 以外的搜市場也比維持毛利率重要。

之前稍微瞭解到過去一二十年 IBD 與 Research 的利益衝突問題，所以看到後來心血來潮，乾脆把投資報告拉到最後的 disclosures 章節， 瞧瞧高盛和 GOOG 是否也有 IB 業務的往來。答案是：

• Goldman Sachs has received compensation for investment banking services in the past 12 months: Google Inc. ($564.21)
• Goldman Sachs expects to receive or intends to seek compensation for investment banking services in the next 3 months: Google Inc. ($564.21)
• Goldman Sachs has received compensation for non-investment banking services during the past 12 months: Google Inc. ($564.21)
• Goldman Sachs had an investment banking services client relationship during the past 12 months with: Google Inc. ($564.21)
• Goldman Sachs had a non-investment banking securities-related services client relationship during the past 12 months with: Google Inc. ($564.21)
• Goldman Sachs had a non-securities services client relationship during the past 12 months with: Google Inc. ($564.21)
• Goldman Sachs makes a market in the securities or derivatives thereof: Google Inc. ($564.21)

投資銀行往往為了維護 IB 客戶關係，而傾向於給予 IB 客戶較佳的投資評等。就台灣市場來看，我們常說外資出的報告擺明就是請散戶幫忙抬轎，而比較少提到外資和本土企業之間的 IB 關係。我想這應該是個不錯的研究課題。

其實現在投銀內部都會築起一道 “Chinese Wall”，隔絕 corporate client department 和 investor client department 之間的訊息流通。經歷了半世紀的 IPO bubble，大多投銀也明文規範 IB 部門的營收，不得拿來 sponsor research 部門的 compensation。但檯面下如何運作，咱們就不得而之了。

The greatest of all gifts is the power to estimate things at their true worth.

- La Rochefoucauld, Reflexions; ou sentences et maximes morales

上回我們提到現金的時間價值，並瞭解到利率可以被拆解成實質利率、通膨率、與風險溢酬的總和。而本週 (好吧，其實是數週前…) 的 MBA Monday Series，我們來看「複利」在貨幣的時間價值中，所扮演的角色。

同樣舉上週的例子說明，如果小明投資 $900 元，年利率 11.1%，一年後可以連本帶利拿回 $1,000 元。假設小明想繼續投資，這時，會有兩種情況：

第一種情況，小明每年領出利息，入袋為安。本例中，假設經過了 5 年，每年都把 $100 元利息領出來包紅包，5 年後，小明連本帶利共得到了 $1,400 元。 ( $900 + $100 * 5 )

第二種情況，一樣經過 5 年，但小明把利息留著繼續投資，猜猜 5 年後，原本 $900 元的資本變成多少？答案是 $1,524 元。較第一種情況多了 $124 元。

此時，請特別注意，這兩種投資情境的年報酬率，都是 11.1% 。上面兩種情況的計算過程，可參考這份試算表。

看到這邊，應該也能馬上想起來，啊，第一種情境講的情況就等同於「單利，第二種情境講的就是「複利」。在情境一中，銀行仍可能是採用複利計息，只是「每年把利息抽出」，這樣的行為，所獲得的結果，和單利記息是一樣的。接下來再透過一個例子讓大家見識「複利」的威力。來看看如果把投資時間拉長，會變怎麼樣。

假設小明大學畢業後，把前 4 年辛苦打工賺來的 $100,000 元存入年利率 11.1% 的帳戶，如果採用情境一的方法，也就是每年把利息領出來，不繼續投資，則 45 年後，等小明退休時，這 $100,000 元將變成 $599,550 元。

如果小明心念一轉，把每年的利息都留在帳戶中再投資，那麼，45 年後，原先的 $100,000 元本金會變成多少呢？答案是 $11,400,000。是的，一千一百四十萬圓整。由此可見，時間是投資人的好朋友，時間會對複利造成很大的影響。本例詳細計算方式，請參考這份試算表。

現在讓我們回頭來看創投產業。一般來說，創投資本的投資期間約為 7 – 8 年。而資金在這段期間並不會滋生利息，因此，必須將初期投入資金採等同於「複利」的方式來計算投資報酬率。

從上述小明的例子可以得知，在一樣的年利率條件下。如果每年領走利息，45 年後連本帶利可得到的現金，是原資本的 6 倍。如果不領走利息，則 45 年後可獲得的現金，是原資本的 114 倍。

在風險創投的領域中，投資期間不至於到 45 年這麼誇張，一般來說，標的持有期間約 7 – 8 年，雖然短了些，但也足以產生夠大的複利效應。此外，大部分創投業者會希望投資組合能有個 40% –50% 的年報酬率才像話，若考量到風險，則相對要求的投資報酬率會更高。

假設你投資 $100,000 元在一間新公司，目標是 8 年後，得到 50% 的年複合報酬率，則在期末，你必須要能收回 $2,562,000 元，也就是投入資本的 25.6 倍，才能達成目標。詳細計算過程，請參考這份試算表。

聽起來似乎很難，然而事實上，大部份的風險創投不會第一年就把所有資本投入，而是採取逐期分批投資的策略，所以晚期投入的資金相對「滾」出來的複利就會比較少，也讓同樣報酬率的達成門檻降低。

從上例瞭解到複利在貨幣的時間價值中所扮演的角色後，我們學到兩件事：首先，身為一個投資人，應該盡量將利息再投資，而不是每回利息一發放，就急著領出來變現。再來，身為一個創業家，應該謹慎使用初期資金，資金存留期間越長，後續能產生的報酬就越多，也越容易達到金主們的期望報酬率。

While global Alpha and its investors suffered major losses, and investors in securities underwritten by the firm experienced seriously disappointing performance, the firm and its own investors enjoyed the substantial profits Goldman Sachs produced by taking an astute and almost unique short position in the subprime mortgage market. While some would question whether the firm did not have an overarching fiduciary responsibility to all clients and customers to share its expertise across all three areas, senior management was and is clear: Each business unit is responsible and accountable for doing its best to complete the mission of that particular business – period. No business is its brother’s keeper. Each tub on its own bottom.

 

The Partnership, The Making of Goldman Sachs, p.677

Buffett made his offer “Berkshire is ready to invest $5 billion today in a 10 percent preferred stock convertible at $110 with warrants to buy an additional $5 billion of common stock at $115 per share.” Buffett knew how important his investment would be and, having had real difficulties with his prior investment in Salomon Brothers, knew what term he wanted. Those terms included a unique provision: Each of the four senior executives of Goldman Sachs must sign a pledge that they and their families would not sell any shares of Goldman Sachs stock before Buffett sold his. The details were spelled out to Viniar in a late morning half-hour phone call that ended at noon. Buffett’s offer was firm until four that afternoon. So Goldman Sachs’ leadership had just four hours to decide.

 

They didn’t need four hours. Even with the personal lock-in provision, the answer was clear to everyone by three. Viniar called Buffett. “Sorry, Mr. Buffett is not available. He is away from the office and cannot be disturbed.” It was two O’clock in Omaha — and Buffett was still at lunch with his grandchildren.

 

At 3:30 Eastern Standard Time, Buffett called Viniar back. Goldman Sachs, without question, accepted Berkshire Hathaway’s terms. Done deal.

 

The Partnership, The Making of Goldman Sachs, p.699

 As Blankfein and his colleagues looked around the carnage on Wall Street, a few remarkable realities came into focus: Goldman Sachs was strong. It had more capital than it needed – and even more than it could put to use – and it had great liquidity. Even more important for Goldman Sachs’ long term strategy, every one of its competitors would be significantly less powerful. Lehman Brothers had been broken up and parts had gone into Barclays Bank. This would make Barclays stronger, but would it ever be as strong as Lehman Brothers had been? Merrill Lynch’s organization had been damaged and it had surely lost or would lose some of its best customers and its best businesspeople. Citigroup (including Salomon Bothers and Smith Barney) would mostly do “commodity” investment banking now. Its aspiration to be a formidable investment bank was, for now, just that – and aspiration. UBS, Credit Suisse, and Deutsche Bank would all refocus on their commercial banking business. Even Morgan Stanly was unsettled. Did it really intend to make a major commitment, as announced, to retail banking? Its leadership seemed uncertain about its basic strategy, which was surely not a good thing in such challenging times. Blankfien sees Goldman Sachs in good position to compete with commercial banks in providing credit.

 

The Partnership, The Making of Goldman Sachs, p.702

But Keynes was right too: ”Markets can remain irrational longer than you can remain solvent.”

 

The Partnership, The Making of Goldman Sachs, p.606

Stunning as it is that it took the firm’s management long decades to “get it” about investment management, GSAM’s history provides a crucial illustration of Goldman Sachs’s unrelenting “try and try and try again” approach to building each of it’s many enterprise businesses: Select one or two very able, very ambitious and promising, but not yet proven young stars. Point to a fair hill and say, “Congratulations! You are the Chosen One who can find a way to capture that hill. It will be hard – maybe very hard – but the firm expects great things of you. We know you can do it. Now, get going and… take… that… hill!” When success is achieved, congratulations are given to the successful young stars – and so is another, even more challenging hill. If success is not achieved, the firm selects another one or two very able, very ambitious and promising, but not yet proven young stars. If success is again not achieved, the firm simply selects yet another one or two very able, very ambitious and promising young stars to take the hill. Eventually, the hill gets taken.

 

The Partnership, The Making of Goldman Sachs, p.622

One of Paulson’s great advantages in life is that he is always learning – partly through continuous observation of others, partly because he takes criticism easily with no defenses or resistance, and never personally. A weakness is that he is almost oblivious to office politics and for years had to fight the urge to speak his mind immediately, without caution or consideration.

 

The Partnership, The Making of Goldman Sachs, p.643

Paulson was a serious student of leaders, seeking to understand why some were so much more effective than others: “The more I observed the most effective leaders, the more I became convinced that the key is to have the right people in your own organization working for you and with you.” Within Goldman Sachs, he soon earned a reputation for having the best people working with him to serve his clients, and for identifying outstanding talent early.

 

The Partnership, The Making of Goldman Sachs, p.644

The concept of leadership at Goldman Sachs has changed completely over the past fifty years. Sidney Weinberg was a leader, but in many ways his firm was a proprietorship. While Gus Levy insistently expected many people to do all they could do to build the business, there was no question that he was the leader – in overall pace and direction and on dozens of transactions every day. Whitehead and Weinberg pushed decision responsibility and accountability out to the unit heads. Rubin and Freidman matched even more widely distributed authority and responsibility with centralized accountability to the management committee. Paulson continued the multiplication of decision-making leaders and increased the coordination of operating units through centralized disciplines: risk controls, business planning, and performance measurement at increasing numbers of smaller and smaller, more agile units that were closer to particular markets.

 

The Partnership, The Making of Goldman Sachs, p.648

As Bob Steel explains, “First-person singular is only used to describe a mistake, not an accomplishment. It may sound silly but little things like that are quite significant. I’ve never heard a boss at Goldman Sachs say, ‘I just did this.’ If I ever did, I’d be embarrassed.”

Paulson remembers getting his first Goldman Sachs memo back from Jim Gorter. “Good memo!” was written at the top – and every “I” was crossed out in favor of “we.”

 

The Partnership, The Making of Goldman Sachs, p.659

There are only four ways to gain and keep a significant competitive advantage: more effective recruiting, a stronger culture, a better strategy, and greater intensity of commitment.

 

The Partnership, The Making of Goldman Sachs, p.554

In the late 1950s and early 1960s, few Wall Street firms interviewed MBAs, so Goldman Sachs had little direct competition. Determined to develop intense commitment within the Goldman Sachs system, Whitehead recruited “intensity” people who gave out clear signs of hungering for achievement. Selection was to be based on three equally weighted criteria: one-third on intelligence as measured by grades and SAT scores, one-third on leadership as shown by roles in extracurricular organizations, and one-third on ambition to achieve.

 

The Partnership, The Making of Goldman Sachs, p.558

On purpose, the firm’s offer was – in  comparison to today’s $150,000-plus offers – stunningly small at $3,600, even if adjusted for inflation. Whitehead was determined never to pay more than other companies and preferred to be known to pay less, because if the firm could get the best for less, that sent a message that there must be something special about Goldman Sachs.

 

The Partnership, The Making of Goldman Sachs, p.558

Goldman Sachs doesn’t look for top-quartile –- or even top-decile –  MBAs. Convinced that over the long term there is inevitably a major difference between the top 5 percent and the second 5 percent, the firm focuses on recruiting the very best young professionals, selecting carefully for such characteristics as leadership, drive, and appetite for hard work. Starting with the 5 percent most qualified and capable, the firm proceeds to sort out the most effective team-playing contributors – initially through fifteen to thirty interviews and then through actual work experience and direct observation to find the very best 1 or 2 percent.

 

The Partnership, The Making of Goldman Sachs, p.559

Always stressing the long-term opportunity of a career with Goldman Sachs, the firm wanted recruits to weigh other factors, believing that those who accept jobs because of salary were more inclined to leave later for a higher offer from somewhere else. The worst thing the firm could do was hire someone, train him for a few years, and then have him go elsewhere for more money.

 

The Partnership, The Making of Goldman Sachs, p.561

As J.P. Morgan famously observed, “A man always has two reasons for doing anything thing: a good reason and a real reason.”

 

The Partnership, The Making of Goldman Sachs, p.577