by Greg Foster on December 8, 2008
I was reminded this past weekend of how loathe the central banks in Europe are to lower interest rates. Many Europeans have some memory of World War II or at least have a connection to someone who remembers that time. And as the baton has been passed from one central banker to another, the last word on the way out has been – “keep inflation in check”. Inflation, in the minds of many of Europe’s banks, is the prime catalyst for chaos which leads to political instability and ultimately, conflict. And so, the fact that the ECB and Bank of England have made an aggressive, pre-emptive move to relax monetary policy in an effort to cut off deflationary trends should be noted – and, indeed, applauded. Compare that with our own Fed, which claims that inflation is its primary enemy, but in reality, sees a falling stock market as the real thing to avoid… In any case, central banks seem to be somewhat coordinated in their effort to shore up the world economy. China is even pushing hard to coordinate with this monetary policy. That, too, is a good sign. All of this is clearly a recognition of an ever-more connected world economy. Coordinated monetary policy will be a key to stabilizing, and ultimately healing, the sick patient.
The key issue in the US over the next 12-18 months will be our government’s use of fiscal policy to build more demand in the economy. Can the new administration and Congress put an end to a growing unemployment number and shore up asset prices? President-elect Obama, yesterday on Meet the Press, seemed to indicate that the deficit will take a back seat to the need for government to provide a proxy for market demand – this underscores the prediction that large public works projects will get underway fairly soon after the inauguration (look out for a big fight about environmental impact issues related to some of these projects). He also test drove an idea to provide foreclosure relief – when pressed by Brokaw on the potential moral hazards associated with this (why should I pay my mortgage if Bob across the street is getting bailed out?), his response was classic law school language – if your neighbor’s house is burning, don’t you have a vested interest in making sure that the fire is put out before it spreads and consumes your house?
by Greg Foster on December 4, 2008
For those of you not familiar with Atlanta, OK Café has been called the “rich man’s Waffle House”. It’s an amazing southern meat and three kinda place right off I-75 and at the corner of Northside and West Paces Ferry (within walking distance of many of Atlanta’ finest homes, including the Governor’s mansion). It is the place to see and be seen in the business community here. I liken it to Il Fornaio in Palo Alto or Beverly Hills. During heady times, it’s not uncommon to wait 30 minutes in the morning for a table. It’s a bit pricey, but you get what you pay for – white napkins, heavy silverware, and bowls of cheese grits the size of your head.
But for all of its popularity with the business glitterati, I sense a change afoot. As the economic downturn persists, folks are opting for something a little grittier (pun intended) – folks are opting for the Waffle House itself. Indeed, if you were at the Waffle House on Roswell Road just up from Piedmont a couple of weeks ago, you would have found Alan Taetle and me breaking bread with a well known Atlanta entrepreneur. While we ordered our eggs, bacon and hashbrowns (scattered, smothered and covered of course), it occurred to me that while the economic downturn is bad news for our 401(k)s, stock portfolios, and near term exits for us in the VC world, these difficult times can sometimes serve as an opportunity to simplify, to clean things up, get organized, and get focused. The Waffle House is all about that – nothing pretentious, nothing over the top. Get in, eat, get out, period, maybe throw a quarter in the jukebox if you’re feeling like a hair band tune or the Dukes of Hazzard theme song. No “air high 5s” and finger-pointing across the room with a smile that you have to fake. None of that nonsense. Just sit down and talk business – and get out of there in time for that 9 AM conference call. Yes, times are tough, no doubt, but I am thankful for the chance to push away all the noise and focus on the real, the stuff that matters, the essence. That… is a very good thing.
Stay tuned…
by Greg Foster on November 20, 2008
Good comments on the last post. So here are my discussion points around Atlanta’s version of RTP. Keep the comments coming – all are welcome…
- Tech folks – yes, your school is at the heart of the innovation infrastructure of the State. Yes, you’ve graduated many of the state’s great entrepreneurs (e.g. Chris Klaus, Tom Noonan, etc.). But guess what? – that university over in Athens has produced its share of great entrepreneurs, too (e.g. Jeff Arnold, Reggie Bradford, etc.) and there are some amazing things happening there – great example is the work Dr. Scott Shamp is doing with the New Media Institute within the Grady School of Journalism. And let’s not forget the work being done in pure science and medicine there – IMHO, UGA has the edge when it comes to commercializing life sciences IP. Check the attitude toward UGA football and basketball at the door – they may be red, we may be gold, but we’re all trying to make more green.
- UGA folks – same goes for you. Yes, you’re the flagship university of the state, but Tech has better resources to manage commercialization efforts in nearly every technology field (Stephen Fleming and VentureLab) and while ATDC has a state wide mission, it’s housed within Georgia Tech for a reason. You complement Tech’s technology prowess with amazing resources in the creative fields of study – can you imagine what we could do if we connected some of that artistic acumen with the technology acumen at Tech? Wow.
- Emory folks – we Bulldogs and Jackets need your help. You’ve partnered with Tech in building one of the world’s most well respected Bio-Medical Engineering programs. You’ve partnered with UGA across a number of disciplines including journalism, medicine and business. We need you to step up and bridge the divide. All three schools have great business programs, but the Goizueta school is probably the best candidate to coordinate those business programs (and the city’s business interests).
- State of GA – aside from the ever important funding formula, you need to take a greater role in encouraging inter-university cooperation. Provide the GRA and other organizations with the proper resources and incentives to build cooperative efforts among the research universities of the State. Direct the marketing resources of the state to build up the idea of Atlanta’s RTP. Oh yeah, and pass SB 80 this coming session so more venture capital stays in the State and is invested in Georgia based deals.
- Entrepreneurs – none of these recommendations are meaningful without companies out there connecting university resources that can work together to help you make progress. You represent reality instead of theory. We need more success stories that come out of that kind of cooperation. You are the only group truly suited to make that happen.
- RTP in NC – help show us the way. The entire region needs stimulus along these lines – you’ve built the blueprint. Share that blueprint with your Southeastern brethren – I can guarantee it will pay dividends to North Carolina and the region as a whole. Strength in Atlanta leads to better deals, more VC money in the region, and more vibrancy everywhere south of DC and East of Texas.
Comments are welcome… Stay tuned…
by Greg Foster on November 14, 2008
As a Georgia Tech student, you are programmed to believe that The University of Georgia is the enemy. Any given weekend in the Fall in which Tech wins and UGA loses (e.g. the weekend UGA fell to Florida and Tech beat FSU) will find most Tech fans in an almost euphoric state. Since I grew up in a “Bulldog family”, I’ve always had a tough time hating UGA even when I was an undergrad at Tech. Most of my college buddies, however, would love to see the entire athletic department at UGA fall off the face of the earth. Given the high number of UGA and Tech grads that stay in the Atlanta metro area, the rivalry between the two schools has, for decades, permeated the business landscape, too. There are certain Tech business moguls (i.e. Taz Anderson, the late Kim King, our own firm’s patriarch Charlie Moseley) and certain UGA moguls (e.g. Billy Payne, etc.). For the most part, these business fraternities remain provincial. Indeed, the rivalry on the football field and basketball court can many times translate into business dealings, too. More importantly, it tends to translate into university relations as well (joint research initiatives, consortia, etc).
For most folks in Atlanta who didn’t go to either school, the translation of the UGA/Tech rivalry into business and academic relations makes no sense. The objective observer looks at UGA and Tech and sees huge opportunity for cooperation and value creation. Throw Emory University into the mix, and we have the makings of our own Research Triangle Park (UGA is our UNC, Tech is our NC State, and Emory is our Duke). One could even argue that in specific programs, Atlanta’s triumvirate trumps the RTP in North Carolina. Add in the fact these schools reside in the largest metro area in the South, and the case becomes even stronger.
So what can we do to build this kind of RTP here in Atlanta? I will discuss this in my next post. I welcome your comments…
Stay tuned…
by Greg Foster on November 10, 2008
What does the home entertainment experience of the near future look like? First thing that comes to mind, of course, is the next generation television, digital surround sound, connected devices of all sort, packed into the living room, remote controls covering the coffee table – basically upgrades of the existing components in today’s living room. All of that is interesting, but the hardware side of things is less interesting to me. What’s truly cool is the convergence of media traditionally consumed in the 2 foot or PC experience and media traditionally consumed in the 10 foot or TV experience. Convergence, as a theory, has been around for a while, but not until IP delivered video became a common time sink for the bored office worker did the theory take on real meaning for everyday folks.
Prior to the emergence of players like YouTube and Hulu, most talk around convergence dealt with the double and triple plays offered by cable operators, telecoms, and satellite television providers. Today, it’s taken on a deeper meaning. The 10 foot experience of the future won’t just be about a long list of professionally programmed channels with expensive-to-produce content, it will be about live local content like high school football, religious services, even your grandkid’s high school play. With the production of content becoming more democratized, audiences will be given a broader group of more relevant and personalized choices. Several new platforms are addressing this phenomenon including Atlanta based Clearleap (full disclosure – we’re an investor). The most successful solutions will be the ones that work with existing cable and IPTV infrastructure to provide consumers with a network delivered “over the top” experience without the need for an AppleTV, XBox or other peripheral.
More info on Convergence - http://en.wikipedia.org/wiki/Converged_device
by Greg Foster on November 5, 2008
Whether you voted for John McCain, Barack Obama, or some obscure write-in candidate yesterday, you no doubt feel different today. While I certainly think our world has changed with the election of a President with a distinctly different agenda from the current one, I’m not sure if we should expect that a new world will appear before our eyes when President-elect Obama takes the oath. Logic would dictate that regardless of Obama’s agenda for his Presidency, he will still manage the world as it is even as he strives to make it different and new (just like every President tries to do). And it also seems logical to believe that with the other party retaining its right to filibuster, both sides will have to compromise to a great extent to get anything done. That’s probably a good thing for everyone.
We in the venture world, like most other investors, have a simple list of wants/needs – we want market stability and some level of assurance that government won’t fiddle too much with the natural workings of the market. We also need a level playing field for our portfolio companies and we want to make certain that the entrepreneurs running those companies have the proper incentives to work hard at growing those concerns. Nothing on that short list of wants and needs is new or different from any list I would have constructed this time yesterday and you can be assured that it won’t be any different a year from now or 10 years from now.
So, President-elect Obama… congratulations. We in the venture/start-up community are looking forward to working with you and the new administration. We appreciate your mandate to change, be different, bring something new to Washington. Just know that we in the high growth business community haven’t changed our agenda – we just want to build enduring companies that provide substantial return to our limited partners and contribute to the overall prosperity of America and the World.
