On Summers, Sandberg and Hughes

Barack Obama recently announced his economic team. The markets reacted well to the news that Tim Geithner would be the new Treasury Secretary but from the point of view of the technology world the more interesting appointment was Larry Summers as White House economic advisor.

The reason is that Summers’ chief of staff when he was Treasury Secretary in the Clinton administration was current Facebook COO Sheryl Sandberg. I’m willing to bet that ever since the election she has been dying to get back into the Washington game and this is the opportunity to do so. Summers will have known about this appointment for a while and will have been thinking about his staff. People usually like to assemble teams from others they have worked with before so the feeling is likely to be mutual. The question is whether Sandberg will jump.

As tech entrepreneurs we see Silicon Valley as the epicenter of the world. However to most people the real centre of the world is Washington DC. At this point in time with Obama about to take office and the Democrats in the ascendance on Capitol Hill that is doubly, trebly so, especially for a Democrat like Sandberg. No matter its central importance in Silicon Valley, Facebook will start to feel like a backwater to someone of Sandberg’s background.

The return of Chris Hughes

If Sandberg does leave it begs the question of who should become Facebook COO. It should be Chris Hughes. The Facebook co-founder left early to work on then Senator Obama’s nascent campaign. He revolutionised political campaigning by building a set of volunteering tools which contributed to the Obama campaign being the best organised in history.

Now with Obama elected that purpose is gone. Four years is a long time in Politics and a lifetime in technology, someone like Hughes will never be content to twiddle his thumbs for four years and I doubt the 2010 midterms will be able to match the energy and excitement of 2008. A beginning for Sandberg will be an ending for Hughes – timing and opportunity in perfect alignment.

There are two reasons Zuckerberg should bring back Hughes. First is that with the departure of Dustin Moskovitz there are none of the original founders left apart from Zuckerberg. Second the Chris Hughes that left Facebook in 2006 will not be the Chris Hughes who goes back in 2008. He spent 2 years at the epicenter of one of the best organisations, political or otherwise, and has been on an unbelievable learning curve. David Plouffe is one of the best managers in the world, judging by his achievements, and Hughes has spent the last 2 years alongside him. So if a slot does come up for Facebook COO there should be only one name on the shortlist.

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On President Obama

The first president I can remember is Ronald Reagan and although Barack Obama is a very different man it is Reagan that he brings to mind.

I was not an Obama supporter from the outset. I remember his speech at the 2004 convention and I was impressed with it. He was mentioned as a potential Presidential candidate in 2008 but when he declared I thought it was too soon. He had barely 2 years in the Senate before he started his campaign and in the early days I thought that he was getting an easy ride from the media so eager were they to see a viable black candidate.

What changed my mind was his reaction to the Rev Wright affair. Looking back it had the capacity to sink Obama but the way he dealt with it was impressive. He stayed calm and delivered a speech which sought to explain the root of Wright’s anger without giving succor to his extremism. Again when the financial crisis hit he responded with calm. Added to that he built an incredible organisation which fused technology and inspirational leadership to show what is possible when a leader appeals to people’s highest motives.

We are with America

What is most striking is the symbolism. America has elected a son of Africa to its highest office. It shows Africa is perfectly capable of producing able leaders and there is now no longer any excuse for the corruption and bad governance which plagues that continent. Somalia is of course my main concern and I am happy it is no longer possible for the small number of extremists who have plagued the country to point at America as the great enemy. Now when they look at that country they see a man whose father who was born not far from their borders and who does not look much different to them.

Americans should not underestimate the impact Obama’s election will have on the rest of the world. For those of us who have always considered America an amazing nation we now have the best example of why we think that. Too often when the world looks at America they see only the great power rather than the product of the thirteen colonies who took on the world’s greatest military power to win their independence. With Obama’s election America’s friends can now go out into the world with the most powerful argument in its favour. And the power of ideas is ultimately far greater than any weapon or army. From one person outside America I say, we are with you President Obama.

Photo by Stan Honda/AFP/Getty Images

On predictions

There’s mine. Not long to wait to see how I fared.

On crisis and opportunity

It’s all doom and gloom at the moment amongst the commetariat. Ambrose Evans Pritchard predicts a depression no matter what we do saying that it will take years for the toxins to wash through the system. I disagree. What we are seeing now is the breaking apart of 20th century capitalism to make way for its replacement. Nobody knows exactly what will happen, whether the bailout will fail or succeed but it is clear to me that within this crisis lies the opportunity to reshape the way things work. And the opportunity could only emerge this way.

It is not limited to commerce. Government too is subject to the same decentralising forces and again the replacement is better than the original. Barack Obama has run his campaign in a completely different way than anything which has gone before. This is not to say he has thrown out everything but taken new tools to turbocharge the best of what happened in the past. In a way his campaign is similar to what George Bush did in 2000 and 2004. Both men have a core of ultra committed supporters who galvanise and organise people around them into an impressive ground operation.

The new model

The right wing throws the jibe ‘community organiser in chief’ at Obama to portray him as a lightweight but it’s the reason why he will win. By embracing online fundraising Obama has tapped a new revenue source which is much cleaner and frees him from the rubber chicken circuit. In doing so he has demonstrated a new way of approaching politics and fundraising which is far better than it’s 20th century equivalent. It allows a much more direct connection with his supporters and allows them to contribute much more than just cash.

Another example I have written about before is Kiva. The 20th century model of aid is state to state which has all the drawbacks of bureaucracy at the donor end coupled with corruption at the recipient end. By contrast Kiva makes a direct connection, individual to individual, and as such is far better way of distributing funds. The individual lending the money also acts as assessor of the project and the individual receiving the money approaches them as an equal without having their sense of independence taken away. Aid is good in some short term circumstances but long term, enterprise is the only sustainable model.

What needs to happen is for these experiments to be extended to the Western financial system. In one sense it means going forward to the new model but in another going back to a past in which credit unions and building societies made loans. Regulation will have to change to facilitate these new models. It can be lighter because instead of relying on the state for oversight, just like Kiva, we can rely on the small lender. If the current crisis allows smaller, nimbler lending to take hold and provide real competition to these large institutions which go gambling then hold a gun to the taxpayers head when things go wrong it will be a great thing. As always the best opportunity lies amidst the crisis.

Pic: Julian Bleecker

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On Obama’s plan

Not yet President Obama made a speech yesterday on getting out of Iraq. Now this isn’t a foreign policy blog so I’ll skip straight to the part which interests tech enthusiasts. His long term plan is, sensibly enough, to reduce dependence on oil and to do so he is creating a $150bn clean tech fund.

This money is to be spent in the next ten years which should spark a bull run in cleantech investments. This is long overdue. It always struck me absurd that states like Arizona and Nevada baked under the sun all day yet had hardly any solar provision. These technologies will have the added benefit of helping the developing world. I think the aim for developing nations should be to skip older polluting stages altogether and go straight to cleantech.

It happened in telecoms when African countries skipped fixed line telephony and went straight to mobile. And the really encouraging thing is that Africans can build these networks for themselves. My dad was from Somalia which is a country with many problems, in spite of that the people have built for themselves a mobile phone network, high speed Internet and a money transfer service faster and more reliable than any of its western competitors (Dahabshiil). These developments often go unreported as media outlets like to focus on the doom and gloom. What it does show is that Africans are perfectly capable of utilising the best technology and standing on their own two feet.

Lateral thinking

Investors should look beyond the obvious cleantech investments at companies like TerraNet. This is a Swedish company which has developed technology which creates a peer to peer network using mobile phones which means base stations are no longer required. Many people in developing counties are reliant on their mobile phones for far more than just calling. The credits loaded onto them can be used as a proxy for cash and being able to get in touch easily makes their markets work better. Networks without base stations are a far better solution as they use much less power.

Hopefully some lateral thinking VC will see all the opportunities, not just the obvious ones. And it would be fitting if Obama was the President to get the ball rolling.

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On cleantech

Pic: BikePortland.org

On cleantech

The poster child of cleantech Tesla Motors is looking to go public heralding the start of good times in the sector.

First of all there is the Federal juice to consider. Now, I think that Obama will be elected President and expect that $150bn to come rushing through the pipes. Inevitably this has got cleantech VCs all excited as they know most of it will flow in their direction. One of the consequences of this amount of money sloshing around is that some utterly, utterly stupid ideas will get funded – the cleantech equivalents of the bridge to nowhere. No matter, this is always the way in human progress and amidst the dross there will be gold. The best innovations will probably come from the more radical but less well funded projects. I think a slew of money is rarely the answer to anything and can often stifle projects as they come under pressure to do everyhting then end up doing nothing. Focus is all important.

The long terms trends are all there, rising energy prices, environmental pressure, increasing instability and so on. In all honesty the sooner oil is condemned to the past the better, more for geopolitical reasons then environmental ones. Mineral wealth almost always curses a country and for every Norway there are plenty of Sudans or Sierra Leones.

On apples and berries

This week Research in Motion announced the Blackberry Bold. I don’t really care too much about the specs, I assume smartphones pretty much do the same thing on top of the basics – email, music, photos, web browsing etc. The two things which count the most for me are design and battery life. I don’t know anything about its battery but this thing looks good:

The early Blackberries did not. I’m sure they functioned perfectly well but it is clear nobody really cared what they looked like. And in the early days it didn’t matter as Blackberries were the only show in town when it came to portable email. More genrally mobile device design has been absolutely shocking. Motorola phones looked ok but the UI is awful, at least it was when I had one and I never went back. Nokia are getting better but still put out some terrible looking devices like the E61 and Prism range.

There is one simple reason for the recent focus on better mobile design: Apple. Jobs-era products are always beautiful and when Apple entered the market they set an exceptionally high standard with the iPhone. People can harp on the lack of 3G which is a dealbreaker for most people in Europe. I would never buy a non-3G smartphone, in fact I doubt whether a smartphone lacking 3G can be described as such but this is a temporary problem. In his keynote announcing the original iPhone Jobs said the stumbling block with 3G was battery life and once they had sorted that out the iPhone would have 3G.

RIM had already started tidying up their act in anticipation of Apple’s entry with the Pearl and Curve. With the Bold they have opted to stick with the keyboard which is the Blackberry’s main distinguishing feature. I think this is a good call, RIM have managed to evolve the design of the Blackberry in a way which has struck a good balance between capturing the sleekness of an iPhone in a device which is still recognisably a Blackberry. If they had gone the whole way to a iPhone style touchscreen they would have lost. When you start to play your opponent’s game you are dead because you can never be the original. A Blackberry without a dinky keyboard is not a Blackberry. The name itself comes from the way the keys make the device look which underlines the importance of design.

Everything flows from good design. The reason facebook is better than MySpace is that it has far superior design. Pages on facebook are clean and uniform whereas MySpace is an eye popping mess. Facebook has deteriorated with the proliferation of external apps leading to attempts by the company to simplify things again. I don’t think there is much mileage in being ‘the new facebook’ but it would be inetresting to see what would happened if someone launched a new social network with a simple design and minimal features.

On our statup we hired a designer before even a developer. When the developers did come on board I emphasised the importance of our design. I wanted it to be stark and different as I think there is no value looking similar to every other website, in startups if you are not radical you are dead. Why would anyone switch to something that is 5% better than the incumbent? Design is not all of this but it is part of it.

The Modernism exhibition at the V&A had a big influence on me, in particular the work of Ladislav Sutnar. When I wrote the design spec for our site it was Sutnar’s influence that I emphasised, in particular the simple shapes and the almost monochrome, sixties look – the banner for this blog is a Sutnar design. The V&A summed up Modernist philosophy as:

Modernists had a utopian desire to create a better world. They believed in technology as the key means to achieve social improvement and in the machine as a symbol of that aspiration. All of these principles were frequently combined with social and political beliefs (largely left-leaning) which held that design and art could, and should, transform society.

I am struck by the paralells between Modernism and web startups. I recognise the tendency of startup founders to proclaim their companies as changing the world. This is rarely true on an individual company level but together we are all part of the patchwork of ideas which make up the web and put together the impact is undeniable both in commerce and beyond.

Barack Obama is rasing more small donations than any other candidate in history to the extent that this is now his main source of funding. This is a far better way than reliance on large corporate donors or state funding. Another example is Kiva which has used the web to connect people in the first world directly to those in the third world. Microfinance is a much more efficent way of redistributing wealth as it makes a direct connection between people and ultimately it is trade, not aid, which will bring an end to poverty. And it is the web which is helping make it happen.