Every time there’s an economic downturn, the spotlight shines on the super-rich and their out-of-touch lifestyles.  The iconic moment of the 1991/1992 recession was then President George Bush looking bewildered at the supermarket checkout line during the 1992 “It’s the Economy, Stupid” presidential campaign.  In 2001/2002, it was Tyco’s CEO Dennis Koszlowski spending $1 million of shareholder money on his wife’s 40^th birthday party (mine is coming up this summer, by the way, and I don’t think it will cost my LPs very much at all, really).

But this latest financial crisis has seen an unparalleled amount of grotesque behavior.  First, we learn that auto industry executives flew into Washington DC to ask for taxpayer bailout money on corporate jets.  Then, it’s discovered that Merrill Lynch CEO John Thain spends $1.2 of his shareholder’s money redecorating his office (Michelle Obama’s redecoration efforts, using the same designer, is apparently only $100,000 for the entire White House!).  And most recently, we learn that AIG executives plan a junket with their bailout money and then seek to pay out bonuses to the tune of $165 million – and if Congress doesn’t intervene, we taxpayers are going to end up getting stuck with the bill.

Why is it that so many Fortune 500 CEOs simply don’t get that they are simply agents of their shareholders, not Masters of the Universe that deserve to be put on a pedestal?  Harvard Business School professor Michael Jensen has written about this time and time again in his seminal work on Agency Theory and human nature – the shareholder is the boss.  The CEO is merely a well-paid agent.  Can anyone imagine this behavior if the money they were throwing around was actually their money, as opposed to some collective of nameless, faceless shareholders?  And yet time and time again, corporate boards with their cozy inter-relationships don’t seem to get it.

I have a simple solution.  Have every Fortune 500 compensation committee run by a start-up CEO.

Perhaps the most successful venture capitalist in history, Sequoia’s Mike Mortiz (backer of Google, Yahoo, Paypal, to name a few reasonable wins), said in a recent interview that one of the ways he decides whether to invest in an entrepreneur is how much they plan on paying themselves.  Moritz views high salaries with immense suspicion.  If the founder takes a modest salary (in start-up land, that’s typically $100-200k per year – well below even President Obama’s $500k cap), he knows they believe in the future value of their business.  We at Flybridge Capital Partners are currently looking at a new deal with DFJ and one of the general partners there reported that her best CEOs are proactively, voluntarily dropping their annual salaries to $75-100k in this environment.  Last month, one of my CEOs informed me that he has decided to forgo his 2008 bonus, which he earned by beating plan (how many Fortune 500 companies beat their plans this year?).

Why this seemingly irrational behavior from entrepreneurs?  Remember, entrepreneurs aren’t saints or selfless do-gooders.  They typically work 80-100 hours per week for two reasons.  First, they are PASSIONATE about their venture for the sake of the business and its impact on the world more than the money (“Ask me about my business and you can’t shut me up,” confessed my friend Scott Savitz, CEO/founder of Shoebuy.com, the other day).  Reid Hoffman, CEO/founder of LinkedIn and an early executive at PayPal, told me last week that his whole motivation in life has been to create products or services that impact millions and millions of people.  Second, when it comes to the formula for making money, they care only about the value of their equity – current cash is to pay the bills (in some cases, not even that).  They want every possible dollar to go towards building shareholder value.  They want to prove to their investors and employees that the risk they took in investing in them and joining their cause will pay off.

Why don’t Fortune 500 CEOs feel the same way?  Why is it that they don’t view their role in life to prove to the shareholder that buys their stock in the public market that they took a worthy risk and they’ll be darned sure it pays off?  Instead, they think it’s culturally acceptable to take outsized pay packages and perks that no educated, rational shareholder would ever approve if given the chance.

The behavior is in such stark contrast to what’s going on in the small business, job-creating end of the economy, it’s absurd.  The public is understandably outraged.  I am too.  That’s why I’d fire all the compensation committee heads and turn the reigns over the start-up CEOs.  After forgoing a $50k annual bonus, can you imagine my portfolio CEO’s reaction if he were the chairman of the compensation committee on the board of Merrill Lynch and learned that John Thain spent $1,400 on a wastebasket?  But do me a favor – if this actually gets implemented – please don’t choose any of Flybridge Capital’s portfolio CEOs.  They’re too busy working 80-100 hours a week trying to build equity value for our investors that we VCs are accountable to:  our own shareholders/limited partners!

FYI:  you can follow me on Twitter at www.twitter.com/bussgang.

When I was a kid, I was obsessed with the newly invented personal computer.  In 1982, I used my paper route and Bar Mitzvah money to purchase an Apple II+ PC (my parents did subsidize the purchase somewhat, I confess).  I was mesmerized by the magic of the personal computer and all its possibilities:  games, programming, communications and more.  But what I really fell in love with was this new, magical thing called the reset button.  Don’t like where you find yourself in the middle of Space Invaders?  Hit the reset button.  Frozen out in the midst of trying to log on to a bulletin board?  Hit the reset button.  Mad at your older sister for messing with your top score in Asteroids?  Hit the reset button.  This magical button represented a unique opportunity to erase the past and begin anew with a clean slate.

Will these efforts work?  On the economic front, there are pernicious, cascading effects to these “resets”.  A rather depressing but insightful recent Merrill Lynch report, titled "Some Inconvenient Truths", suggests there is $6 trillion in private sector (household and corporate) debt that needs to be eliminated before we can embark on a fresh credit cycle.  To date, there has been “only” $1 trillion in write downs.  The implication?  We are nowhere close to hitting bottom, and hitting the reset button is a necessary but painful part of the process.

That’s the macro picture.  At the micro level, I am seeing people hitting the reset button all over the place as well.  For many, the wealth trajectory they thought they were on is no longer the case.  The expectations they may have had for themselves or their children are being re-examined.  Many are sitting down and revisiting all the assumptions they had made a year ago about their assets, retirement and job security.  My portfolio companies are all questioning their old assumptions and making tough choices about how much to invest ahead of revenue, and how many products and markets they can pursue in parallel.

But my rabbi made an interesting point to me this weekend.  He pointed out that there is a silver lining in hitting the rest button.  Rather than simply wallow in the bad news, people can view hitting the reset button as an opportunity, rather than a burden.  It allows them to let go of unrealistic expectations and focus on reality in a new way.  It allows them to reset priorities, zoning in on what really matters to them and eliminating distractions.  An economist’s view of this sage rabbinical advice would be to observe that when your opportunity cost to pursue alternative paths has plummeted around you, anything is possible.

As a result of the opportunity for deep personal growth and new direction, hitting the reset button all around the world should mean more entrepreneurship everywhere.  This trend appears to be playing out.  I met with the co-head of Harvard’s Entrepreneurship Forum last week and she couldn’t have been more excited to tell me about the burgeoning entrepreneurial culture that’s emerged at Harvard.  “The current economic environment has freed people up to do what they really want to do,” she observed, “not just follow a certain path that they think they ought to follow.”  She reports that submissions to Harvard’s business plan competition are double this year as compared to last year.  Similarly, participation at the MIT $100k competition was stronger than ever.

Many economists are pointing to the parallels between our current recession and that of the one in 1982.  That was the year I learned the magic benefits of the reset button.  Hopefully others will as well.

Follow me on Twitter at:  www.twitter.com/bussgang

I love Thomas Friedman.  I was first exposed to him when he was the NY Times Jerusalem bureau chief and wrote a terrific book on the Middle East, From Beirut To Jerusalem.  Since then, he's become more famous and influential in economic matters through his book, The World is Flat.

So I was perplexed and dismayed when I read his editorial in today's NY Times:  "Start Up The Risk-Takers".  In it, he suggests a silly stimulus idea – "Call up the top 20 venture capital firms in America, which are short of cash today…and make them this offer:  The US Treasury will give you each up to $1 billion to fund the best venture capital ideas that have come your way."

There are numerous reasons this is a dumb and impractical idea.  Friedman threw out another dumb idea a few weeks ago in an editorial titled "The Open Door Bailout".  In this article he opines:  "I would have loved to have seen the stimulus package include a government-funded venture capital bank to help finance all the start-ups that are clearly not starting up today — in the clean-energy space they’re dying like flies — because of a lack of liquidity from traditional lending sources."

Government funds for the VC industry is simply unnecessary.  At $30 billion per year, there is no lack of VC capital being deployed in America.  The bottleneck in the VC-entrepreneurship equation isn't in the inputs of capital, it's in the outputs.  The lack of exits and the dearth of the IPO market is what needs to be fixed to open the floodgates of innovation. 

But then I thought – let's not go overboard with our criticism by taking Friedman literally.  The guy's a huge fan of global entrepreneurship (I loved it when he referred to the worthy work of the global non-profit, Endeavor, as the "best anti-poverty program of all").  His heart and priorities are in the right place.

So before folks get up in arms about "bailing out VCs", let's take Friedman's comments figuratively.  He's dead on when he points out that entrepreneurship is what is going to get us out of this mess.  The government shouldn't focus on silly notions of VC subsidies that nobody wants.  Instead, the policy agenda to foster entrepreneurship and the flow of capital to entrepreneurs is very clear.  The National Venture Capital Association (NVCA) laid it out nicely in a crisply worded memo to the Obama transition team.  Policy makers need to focus on three things:

1) Reform Sarbanes-Oxley.  We need to fix this terrible piece of legislation which has created a terrible IPO bottleneck.  If VCs can't get good companies public, they will dramatically slow down their investment pace.  In my view, this is the single largest issue in hindering American entrepreneuship.

2) Increase the number of H1-B Visas.  This was Friedman's main point, by the way, in his earlier editorial when he called for the VC bailout, so let's give him his due as he's been beating the drum on this important issue for years.  Let's allow ourselves to continue to be a talent magnet for the world's best talent.

3) Keep capital gains taxes low.  The government should look elsewhere for incremental revenue sources.  Gas taxes are smart because they have the dual benefit of reducing gas consumption (Governor Deval Patrick is appropriately pushing this forward in Massachusetts).  Increasing capital gains taxes will reduce productive capital investment and should be avoided like the plague.

So let's not slam Friedman, but instead let's harness his passionate support for innovation and entrepreneurship and, as Rahm Emanuel famously observed, not let a good crisis go to waste.

By the way, I'm now using Twitter with great enthusiasm.  You can follow me at www.twitter.com/bussgang.

In that 1984 classic, Revenge of the Nerds, a group of outcasts and misfits fight back against their better-looking, "cool" rivals, ultimately winning the girls and glory.

I was reminded of the movie over breakfast this morning with the CEO of one of the major ad agencies.  Just as you'd expect a high-powered agency executive to be, he was smooth, smart, suave and urbane.  But his industry is under siege from the Nerds.  On one side, he has techno-media companies like Google, Yahoo and MSN using technology and data to eat into the traditional ad agency value chain.  On the other side, he has advertisers like P&G, Ford and Coca Cola demanding more sophisticated targeting and effectiveness for their incremental ad dollars – no longer accepting the old way of doing business over a three martini lunch.  The stakes are getting higher:  Think Equity estimates the global online advertising market will be north of $40 billion in 2009 and still growing at 15-20% per annum while TV remains flat and radio and newspapers suffer.

And so Madison Avenue's chic "Mad Men" are under siege.  And the Nerds seem to be winning.

But the cool guys are fighting back.  If you can't beat 'em, join 'em.

They are buying technology companies (witness WPP's acquisition of 24×7 and Publicis' acquisition of Digitas) and embracing the digital world in spades.  This CEO, for example, talked to me about three Nerd-like priorities:  striking the right technology partnerships (typically with start-ups, like the new one I'm funding in this space), hiring the right in-house technical resources, and wresting control of the data from the publishers.

This final point struck me as a very intersting one.  Ad Age reported this week on the gauntlet that has been thrown down by GroupM, WPP's major media buying organization.  The agencies are wising up to the value of the data in online advertising and are trying to regain control over it.  In many cases, the data can be more valuable than the actual served ad itself.  Thus, Group M and other agencies are changing their contracts to tighten up the ownership of the data and prevent ad networks, publishers and the techno-media firms to use the data for their own profit purposes.
Soon, agencies may disaggregate buying media from buying data – in other words, there may be data insertion orders placed right next to media insertion orders.  This would put a specific price and explicit rights control on the data.

But the cultural change required is perhaps the most difficult one for these large ad agencies.  How will the agencies compete for great technical talent and recruit and retain innovative entrepreneurs?  Will they be able to outsource some of the technical capabilities that their clients are demanding (e.g., with the likes of digitalArbor)?  And who will win in this battle to own all this incredible data being collected on consumer behavior?

If I remember correctly, the Nerds won in the first movie, as well as in Revene of the Nerds II.  Maybe Madison Avenue needs to make a third sequel:  "Revenge of the Mad Men".

Billed as "Silicon Valley meets Madison Avenue", today's AlwaysOn conference in NYC was somewhat reassuring.  Attendence was up from previous years and attendees were there to do business – raise money, look for deals, develop partnerships.

A few highlights:

• Ad Networks 3.0:  panelists argued that there remained a huge opportunity, despite investor fatigue in yet another ad network.  Elizabeth Blair, CEO of Brand.net, pointed out that although 30% of direct response advertising dollars had already moved online, only 5% of brand dollars had made the shift, despite consumer reporting that they spend 40% of their time online.  That said, there was clamoring for some way to use data to improve CPMs, particularly for non-premium inventory.
• Mobile Advertising:  panelists laid out the case for why the iPhone was transformational for mobile advertising and that early trials suggest mobile advertising actually works.  That said, they were realistic about the slow growth ahead as mobile works its way into the marketing mix, particularly as a component in cross-platform campaigns.
• Brian Wieser of Magna gave a great keynote, providing overwhelming data to suggest TV isn't dead yet.  "TV dwarfs other media in reach and frequency," he argued.  The data was compelling.  For example, 97% of adults 18-49 turn on the television every week, the same as 10 years ago, and viewing hours is actually growing, now standing at 500 billion person hours (side note:  who the heck is watching 4 hours of TV / day??  That's the AVERAGE consumption!).  Further, even if online video grows at a rate of 35% (roughly the current rate), TV will still represent 100x more hours in 2011!  A sobering view in the world of, as Wieser put it, "Web 2.0%".
• Online Advertising:  Jeff Lanctot, Chief Strategy officer at Razorfish, predicted flat spending, lower CPMs, and argued that the "print dollars turning into digital pennies" simply was not working for publishers.  Perhaps massive publisher consolidation will rebalance supply and demand, but unlikely.
• Smartphone:  this panel was simply an hour long raving lovefest for the iPhone.  Favorite iPhone apps mentioned ranged from the sublime (Amazon, Pandora) to the ridiculous (iFart, iThrow, iFu Kung Fu).  Eric Litman, CEO of Medialets, amusingly pointed out that there are 20 million Windows Mobile devices, but application discovery is such an awful experience that the download rates are a fraction of the iPhones.
• VC Outlook:  Jonathan Miller (Velocity, ex-CEO AOL), Woody Benson (Prism) and I did a panel on the VC outlook.  We tried to provide a balanced view – I think we were all relatively balanced as short-term bears, but long-term bulls.  As Woody pointed out, "You can't do what I do unless you're an optimist.  Otherwise, you'd jump out the window!"

But the real highlight of the day for me personally was closing the New York Stock Exchange (NYSE) – an honor that Tony Perkins was kind enough to make available to me.  Lucky for me the market was up today (Tony quipped that he should change the name of the conference to Always Up)!

I recently read Malcolm Gladwell’s new book, Outliers, with great interest and delight. Gladwell is a fantastic author:  always thought-provoking on human behavior and a quick, entertaining read.  But I confess this book did not resonate with me or strike me as relevant for the VC-entrepreneur dance in the same way his previous book, Blink, did (see:  VCs Blink).  It was intellectually interesting, but not professionally illimunating.

Instead, I have been even more taken by another book, which also analyzes human behavior in a thought-provoking way called Sway. Written by Ori and Rom Brafman, Sway was recommended to me by my friend and co-investor Howard Morgan at First Round Capital.  It is a fascinating analysis of why human beings naturally fall into irrational behavior.  The book has very relevant implications for venture capitalists and entrepreneurs, particularly in today’s environment, as VCs are likely to allow irrational behavior to seep into their portfolio management decisions in the coming years.

Sway points to three central psychological tendencies that cause human beings to behave irrationally, despite the preponderance of facts pointing in another direction.  The first is loss aversion, defined as our tendency to go to great lengths to avoid possible loss – even when it means taking outsized risks relative to the actual loss impact.  The second is value attribution, where we imbue a person with certain qualities based on our initial impressions (or desired impressions!).  And the third is the diagnosis bias, where we allow our initial assessment of a person or situation cloud any further judgment and, in effect, cause us to filter out any contradictory data.

As I look back on the good and bad investment decisions that we have made as a partnership, I see each of these three tendencies factoring into our discussions.  It is not uncommon for a polished, confident entrepreneur to benefit from value attribution, when in fact a deeper analysis of their skills and previous experiences as a result of exhaustive reference checking will reveal a very different prognosis.  We have tried to be more cognizant of identifying these tendencies in the partnership as we contemplate our future investment decisions with our (relatively) new fund.

As I look forward to managing the portfolio during the challenging times that we all face, I can see where loss aversion, in particular, holds sway in a VC partnership. Human beings prefer to avoid a loss, even if that loss is more costly than the price of continuing forward. One of the dangers in the coming years for the VC business is whether VCs are going to continue supporting companies in order to avoid admitting defeat and taking losses. In many partnerships, the culture may naturally encourage covering things up.  Many VC partners are eager to brag about their portfolio successes, but slow to admit when they have made mistakes or when they are in the midst of dealing with a poorly performing portfolio company. Further, partnerships as a whole are going to be loathe to admit problems and failures with their investors, the Limited Partners.  Without any malice, portfolio “cover ups” will be common throughout 2009 and 2010.

Loss aversion will thus cause VCs to throw good money after bad in 2009 and 2010.  Loss aversion will also cause VCs to report overly optimistic quarterly valuations.  I would estimate that many portfolios have valuations that are overstated by 20-30%.  And, as I have discussed before (see:  "Why 'Flat is the New Up' and VC Funds Are Under-Reserved"), it is also the reason why I think many VC firms are grossly under-reserved.  These factors will be exacerbated by most portfolio companies failing to attract outside financings in the coming years and VCs, loathe to admit losses, continuing to support them well beyond the length that a rational investor would.

To be clear, it is not only VCs who are induced into irrational behavior due to loss aversion. Entrepreneurs clearly suffer from this tendency as well, particularly when it comes to hiring and firing key executives. How often have you heard an entrepreneur say that they should have acted 6-12 months earlier in firing an employee that was not working out?  The reason – loss aversion. Entrepreneurs are loathed to admit their own hiring mistakes and are fearful of the impact and magnitude of losing even a poorly performing team member. I know I certainly fell into this trap when I was an entrepreneur, and I see it is repeated time and time again.

Thus, I think the lessons of Sway are ones that all VCs and entrepreneurs would benefit tremendously from when evaluating how they make decisions. In an upcoming blog I might dive into the question of value attribution and the diagnosis bias, which are also a thought-provoking concepts that drive irrational behavior in VC partnerships.  One entrepreneur identified another book for consideration on this topic called Predictably Irrational by Dan Ariely, which I have not yet read.

What are other examples can folks think of that fall into these irrational categories?

One of our portfolio companies is raising money this year.  It's a great company, run by a great CEO, and it will get funded in a competitive process.  The CEO was briefing our partnership the other day and listed the firms he is talking to.  In another start-up a number of years ago, he had been backed by an unnamed firm in Boston, led by an unnamed partner, and made them money.  "Why aren't you going back to [insert name] at [insert firm]?" I asked innocently.  "Life's too short," he replies pointedly, "to work with assholes."

At a time when there is likely to be some shakeout in the VC industry, a question that perplexes me is:  Why do asshole VCs continue to survive?

Now don't get me wrong, I don't think the VC business is unique in its profile or behavior.  According to the NVCA, there are 700 or so VC firms and 8,000 industry professionals (including associates, principals, etc).  The vast majority of these folks are decent people.  There are always a few bad apples in every barrel and an industry with type A, competitive people operating with very high stakes is likely to have its fair share.  Talk to any entrepreneur who has gone through an extensive fundraising process and they will eagerly share some their favorite, colorful horror stories.  So why do these VCs continue to succeed?  Why isn't there a stronger, self-correcting feedback loop?

Here's the logic thread:  the best entrepreneurs have choices, particularly those that have been successful before.  They typically seek out the top VCs who are both smart/successful/value-add/relevant AND who are respectful/decent/good to work with (you can see my BCG roots coming through in the imaginary 2×2 matrix).  Even if a VC is charming during the courting process, with minimal effort, reputations can be investigated and references carefully checked as to how they behave when things don't go according to plan.  So why is it that Asshole VCs are able to persist?  Shouldn't the best entrepreneurs avoid working with them and therefore shouldn't they be less successful over time?

One of my VC friends from Silicon Valley suggested one explanation:  "Entrepreneurs get blinded by firm reputations and look past individual reputations.  They don't do their due diligence on partners and check references carefully on the individual board member."

"If I were an entrepreneur given the choice between banging my head against a cinderblock wall for a year or taking money from [unnamed partner from unnamed firm]," observes one VC friend, "I'd opt for the cinderblock wall."

Ouch.  With fewer financing choices for entrepreneurs likely in 2009, I hope they aren't faced with that sort of painful choice!

I dodged the snowflakes and made the trek out to Sin City for this year's Consumer Electronics Show (CES).  Although attendence was down, it is still an insanely large audience of 130,000 attendees and 2,700 companies.  CEA head Gary Shapiro reported in his keynote that industy sales were up over 5% and that 2009 will be flat or slightly down.  Not bad if true.  His speech, by the way, was as much a political speech as it was an industry overview, further underscoring the importance of government activities in business affairs in the coming years.  Two areas he hammered on were immigration policy ("expand H1B visas") and shooting down the ridiculous union-sponsored "card check" law (every large company business leader I have spoken to in the last 6 months is apoplectic over this bill and view it as a litmus test for Obama's centrist economic policies).

Tom Hanks appeared with Sony CEO Howard Stringer to pump Sony products and were very funny.  But by far the funniest line of the day was heard from the very dour and serious head of Intel Capital.  Seeking to assuage the nervous entrepreneurs amongst the portfolio companies that were in attendence at his networking lunch reception, he assured them, "We [Intel Capital] intend to continue forward and be very supportive of your down rounds this year".  Ouch.  He was probably just grumpy from the miserable results Intel announced to Wall Street the day before, with an unheard of 23% forecasted drop in revenue.  That wasn't so funny.

Also not so funny were the general buzz and complaints bemoaning the lack of innovation.  The next generation of flat screen displays and Blu Ray devices just isn't that exciting any more.  Further, I was shocked at how empty the casinos were.  I can see why the casino moguls are sweating it right now.  The consumer electronics industry may be in for a stagnant year, but coming off a record year that would be a victory.  But one look at all the frozen cranes up and down the strip is all you need to know that Sin City is in for a tough run in 2009 and 2010.  But Intel Capital will be happy to invest in their down rounds.

Among my holiday reading this year was Alan Greenspan's biography cum economic analysis, "The Age of Turbulence".  In retrospect, the book's publishing date of mid-2007 preceded almost precisely the unravelling of the housing market in mid-2007 that eventually led to 2008 becoming the year of the largest market crash since the Great Depression.  The book is thus a fascinating glimpse into Greenspan's brain on the eve of the crash.

In short, the erstwhile "Maestro" (as Bob Woodward tagged him in his 2000 book) clearly "missed it".  One quote that really jumped out at me:  "I was aware that the loosening of morgage credit terms for subprime borrowers increased financial risk, and that subsizdized home ownership initiatives distort market outcomes.  But I believed then, as now, that the benefits of broadened home ownership are worth the risk."  Ouch.

To get a glimpse of his current views, read his guest article in The Economist.  At the end of the article, he points out that, to date, there has been $7 trillion in global sovereign credit pumped into the system ($1 trilion presumably from the US, which doesn't include the additional $1 trillion stimulus planned).  This staggering amount of money is going to have to be inflationary at some point.  With US Treasuries at 0%, it appears the market is more worried about deflation.  But many economic commentators are very worried about inflation in years 3-10 (today's WSJ had a good range of interviews with some of them, so called "Doomsayers").  Greenspan himself points to long-term inflationary risk as "the rate of flow of new workers to competitive labor markets will eventually slow, and as a result, disinflationary pressure should start to lift".

So my big prediction for 2009 is that we will begin the year nervous about deflation, and end the year nervous about inflation returning.  Interest rates will need to go up again in 2010 and 2011 to choke off the inflationary stimulus. 

What impact all this will have on venture capital and entrepreneurship, I'm still sorting out.  One thing is true, venture capitalists and entrepreneurs are operating at a very different end of the economic spectrum, creating new products and services that never existed and thereby creating value.  Hence, I remain a long-term bull about entrepreneurial prospects.  As Greenspan points in one section that really resonated with me:  "[The 1990s] technology boom came along and changed everything.  It made America's freewheeling, entrepreneurial, so-what-if-you-fail business culture the envy of the world."  I guess I'll keep that photo of me and Alan on my desk after all…

My firm, Flybridge Capital Partners, launched a new program last week that was inspired by Scott Kirsner's blog post earlier this year on the tragedy of Massachusetts students not remaining in the state after they graduate.  Scott called to task some of the industry associations who, in theory, should be welcoming to students but, in practice, create barriers by charging them for attending the critical industry events that would help weave them into the business community.

We call the program, "Stay in MA" and it's a student scholarship program that allows students who want to attend industry events with participating associations (and nearly every major "innovation economy" association is participating in the program) to attend these events for free.

To learn more, check out www.stayinma.com.  And thanks to all the associations who are participating!