Thursday, 23 June 2011

Being Right or Making Money

A number of conservatives and conservative groups in Washington, D.C. are pushing yet another pledge. This one is to cut, cap, and balance. They want you to pledge to urge your Senator and Congressman to oppose any debt limit unless all three of the following conditions are met: (1) substantial cuts in spending; (2) enforceable spending caps; and (3) passage of the Lee-Cornyn-Hatch Balanced Budget Amendment, known as S.J. Res. 10 in the Senate and H. J. Res. 56 in the House.

The pledge is wonderful. I fully support it. I also think any conservative and conservative organization that signs the pledge is feckless, spineless, and gutless unless one additional step is taken.

And the sad thing is, I suspect I am one thousand percent right that we’ll all be disappointed by the conservatives and conservative organizations signing the pledge. Here’s why.We’ve reached the point of no return in this country, but Republicans keep making deal after deal after deal. They’ll negotiate their way to hell and our country to fiscal ruin all while nuancing around pledges.

Meanwhile, the pledge makers and pledge signer really do nothing other than say “Oh my, Senator/Representative X broke the pledge. Tisk. Tisk.”

The time for tisk, tisking is over.

I’m calling on the conservatives and conservative organizations who agree to “cut, cap, and balance” to put up or shut up. Here’s the Erick Erickson Pledge:

I pledge that if any Republican votes to increase the debt ceiling without first cutting, capping, and balancing using Lee-Cornyn-Hatch, I will work like hell to beat the hell out of him/her in a primary, even if their election is 2014 or 2016.

The time for nuancing and diplomatic niceties in Washington are over.

Instead of standing around in a circle of Washington hoo-haaing like conservatives are prone to do lamenting their sorry fate and wringing their hands on what strategy to take to Speaker Boehner and Leader McConnell, conservatives need to adopt a very simple strategy:

Hold the freaking line.

If any Republican votes to raise the debt ceiling without forcing (1) substantial cuts; (2) enforceable caps; and (3) sending the Lee-Cornyn-Hatch Balanced Budget Amendment to the states, the conservative movement must unite to beat the hell out of them in a primary. Period. End of Story. No more wimping out.

It really is that simple — or at least it is that simple unless your brain has atrophied from being inside the Beltway. Just don’t raise the debt ceiling. Oh, I know, some of you are getting sweaty palms thinking about it and insisting that we must raise the debt ceiling.

That’s what we always do.

Putting it bluntly — it is time to be a hostage taker and take the debt ceiling hostage to cutting, capping, and balancing the budget.

Will conservative organizations actually stand up and wage scorched earth in the name of saving the Republic, or will they yet again go limp when sold out for the billionth time. My money is on limp, but I hope others will stand on either hand and save this bridge with me.

By the way, the Lee-Cornyn-Hatch Balanced Budget amendment is non-negotiable. Other Republicans are offering up balanced budget amendments, but the alternatives either don’t limit spending or make it too easy to raise taxes instead of making spending cuts. Lee-Cornyn-Hatch has both a spending limitation component and requires a super-majority to raise taxes.

Folks, talk is over. It’s time for action.

Wednesday, nearly eleven years after Tim Westergen and his colleagues started Pandora, it began trading on the public markets. I posted a blog post on the news, and suddenly was overcome by emotion, tearing up a little as I thought about Westergen who has been through hell and back as the founder of this company. His story is no different from any entrepreneur who dares to try to capture lightning in a bottle – but it is one with a happy ending.

There are two ways of looking at Pandora. You could look at through the lens of a life-long skeptical reporter who cannot reconcile the valuation of the company with its business reality — and there are many who are doing exactly that. The other extreme view is to look at it from the point of view of a startup founder, one who has been through his or her own ups and downs. I will let the skeptic take the day off for today. To me, Pandora’s story is about hope.

A Savage Beast

I remember meeting the Pandora team days after my former Red Herring colleague Alex Gove, then at Walden VC, introduced me to Larry Marcus (partner at WaldenVC and an investor in Pandora)  and Westergen. The company was at that time called The Savage Beast and was building a music-genome project. Being a reporter who normally focused on the nuts and bolts of the Internet, I didn’t much care for the company, but I liked Westergen.

Over the years, he and I stayed in touch. The boom turned to bust and what was an idealistic quest turned into a journey over burning coals, with constant rejections and a test of faith. He has bobbed, he has weaved, he has pivoted –- and he has survived.

After all these years, and many rounds of funding, Westergen is not making billions of dollars, as many would assume – in fact, he owns a miniscule share of the company: 2.39 percent, which is worth just over $60 million at the closing price of $2.8 billion, a fraction of the money his investors are making. Something isn’t right about that, but that is the way of the world.

Can’t Buy Me Love

I know Westergen and I don’t think he started Savage Beast/Pandora for money anyway. All these years, he has been the same guy. A pair of jeans, a simple t-shirt, plain old sneakers and a bag slung across his shoulders –- and more importantly, an easy smile and willingness to believe that things will get better, if only he could fight for one more day. He did Pandora for one reason: love.

He loved the idea of building a music genome. Eventually the company figured out what the business model would be — and the team there will figure out profits as well. Most startups come from love, not a desire to make pots of money.

These days, it is commonplace to lionize the amount of money a start-up snags from venture-capital investments or billion-dollar valuations some investors place on a company and the insanity of the public markets. Nothing annoys me more than “money” defining one’s convictions. The world unfortunately tends to focus on the destination, not the journey undertaken. And raising money or the public markets are those destinations.

I often joke with my friends that startups are like climbing sheer rock without any support, always slipping a few feet, and then gaining an inch. It is that inch you climb that brings immense joy, even if it is short-lived. The rest is just fighting to stay alive, trying to get ahead and just getting it down.

Rejection shapes us as much as the positive news. Just ask Tim! Or Reid Hoffman! Ask them about how many times venture capitalists rejected their quest for investment dollars. Just because twenty investors reject the idea of a social network for professionals doesn’t mean that it is a bad idea or it is wrong -– it is just an idea that the world doesn’t quite understand yet.

Being a real entrepreneur is a long, lonely road as Tim’s journey tells us. Creating something that is lasting — something you love — takes time. Often a very long time! But in the end, the journey is worth it.

Related content from GigaOM Pro (subscription req’d):

  • Infrastructure Q1: IaaS Comes Down to Earth; Big Data Takes Flight
  • Can Social Media Save the Music Business?
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