How the House of Representatives Could Choose the President

It’s entirely possible in this election year for the House of Representatives to select our president this year.  What few realize is that a victor in the general election must reach an absolute majority – that is, at least 50% plus one int he electoral college.  There is no runoff election.  Why is this important?  The Democratic base needs to consider paths to prevent this from happening.  Given the House is controlled by Republican’s, we would expect them to choose a Republican, even one who may not have been vetted during the election process.

From our vantage point today, here are the possible lineups for the general election and how things could play out. The major consideration is under what circumstances would a 3rd party candidate jump into the election process and cause no candidate to reach the majority that is needed.

  1. Michael Bloomberg, has said he’s considering a 3rd party run if its a Sanders vs. Trump choice.  Bloomberg is a moderate that would appeal to many center-left and center-right voters.  Bloomberg was a Democrat, then a Republican, and is now a moderate independent.  While he might pull many voters away from a Trump or Cruz ticket, he could pull a enough independent voters  from a Sanders ticket to deny Sanders a majority.
  2. If Donald Trump loses the Republican nomination, he’ll likely run as a 3rd party candidate, regardless of what he is currently saying or has promised, which we know he’s willing to flip-flop on issues for his convenience. While Trump is a Republican (and was once a Democrat too), many of his current supporters are independents that don’t like Cruz or Rubio.  Trump’s biggest wins have been in states with open primaries, which allow independents and Democrats to cross over during the primary.  If Cruz wins the nomination, Trump would certainly dent Cruz’s campaign, even putting Cruz in third in a three-way race.  But Trump’s ability to pull just enough independents from a Democratic candidate so nobody has a majority would likely put the House in charge again.
  3. If Trump wins the Republican nomination, and Clinton heads the Democratic ticket, this is the least likely scenario for a 3rd party candidacy.  However, with the amount of money from billionaires floating around, its entirely possible for them to fund a 3rd party candidate because they don’t like Trump or Hillary.  The set of them could fund even more than one candidate, further slicing up the electorate and denying anyone a majority and turning this over to the House.

Given this election year has gone against all conventional wisdom, it’s entirely possible one of these situations might occur leaving the Republican controlled House of Representatives to make the choice, leaving us with the possibility of an unelected President.

The bottom-line to all this, Democrats need to go all out to do what ever it takes to get people to vote for the Democratic candidate!  Democrats must vote.

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Risks in Selling Disruptive Technologies

New, disruptive technologies generally are incubated best in small, entrepreneurial start-up companies.  However, selling these sorts of technologies can become a daunting task.  One example of a highly disruptive technology is software-defined networking (SDN).

SDN has been a glimmer in technologists eyes since its original inception shortly after Sun Microsystems launched Java in 1995.  But it wasn’t until 2011 that the Open Network Foundation was created to promote SDN technologies.  And, today in early 2015, the technology still hasn’t quite taken off in a big way.  However,  most technologists and analysts believe it will be at least another year before SDN deployments become more common place and that it will be another 3-5 years before the market matures.

The advantages of SDN are quite substantial over today’s technologies. With current network architectures, applications must conform to the rigidity of the network.  As billions upon billions of new connected devices are added, current technologies will be unable to manage this new environment.  Signs of this are already happening.  With SDN, its 180 degrees opposite, where the networks becomes a natural extension of the application.  Eric Schmidt, recently commented that “the internet will disappear,” which in essence is saying the same thing.  Connectivity will just become a natural state.

Fundamentally, SDN, especially overlay technologies are much simpler, more scalable, and more secure than today’s equivalent technologies.  Connectivity becomes embedded as part of the application. SDN provides a path for companies to dramatically reduce network costs and become more agile and innovative.

So if the advantages are so great, why is it taking so long to see adoption?

I’ve identified at least four risks:  technology, market, operational and vendor risks.

Technology Risks

SDN is new technology.  It is not well-understood by CIOs and the IT management teams. They need a tremendous amount of education just to understand how to operate an SDN environment.  In addition, it hasn’t been fully proven and field tested so CIOs are rightly concerned in wanting to know it works as advertised.  Since the technology is an inline solution they can’t afford to add new technology that may bring down their communication networks or create new security threats.

Market Risks

Risk averse buyers, such as CIOs, like to buy when other similar buyers that are like them have already bought and successfully implemented a similar solution. Most don’t want to be first to market and want to see others work out the kinks of a new markets and new technology. These buyers like to do a lot of research and talk amongst their own colleagues at other companies to learn what challenges there are, what works and doesn’t work, what things they need to consider, and which vendors are best to work with.  This is a very slow process.

While current network technology has been around for 10-20 years and is ripe for change, it’s also often easier to stick with something you already know and understand than to jump to newer technology.  Perhaps even more relevant is that Cisco and other established players provide FUD in the market since there is a lot of potential downside impact to their businesses moving too quickly.

Operational Risks

Most CIO’s operate to an annual budget.  They know how the business is expected to grow and what their needs will be over the course of the year.  It’s relatively easy for them to anticipate how many more servers, routers, switches, load balancers, and the like to buy, however, because SDN is so new, they don’t yet know what it will cost them to deploy.

Even if they fundamentally believe in the benefits of SDN, they don’t yet understand the investment costs to achieve those benefits. Supplier pricing models are different.  Also a challenge to vendors is if IT hasn’t calendared a project for the budget year, you are fighting other established priorities for the business.

And because SDN changes the very nature of the role of network management and cyber security incident response teams, they may not have the proper skill sets in place.  Cisco has done a great job indoctrinating CCIE’s in a way to think about networks, its going to take them time to understand a software-based approach when they are used to lots of hardware boxes.  So, not only does SDN introduce new products into the environment, it may require substantial changes is processes and training.

Vendor Risks

Most new SDN technologies have been launched by small start-ups. Who’s going to win?  Which ones can CIOs depend upon to survive when they are about to make potentially dramatic changes to their networks.
What does this all mean?  Some disruptive technologies can cause change quickly.  The calculator replaced the slide rule rather quickly but that still took several years to accomplish.  Disruptive technologies that have broader implications across a company will take much longer.  This is why most analysts predict SDN to take another 1-2 years for live, broad based deployments and another 3-5 years to begin to reach maturity.

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Why are there no “B” size batteries?

Actually, “B” size batteries, as well as “A” and “F” batteries do exist.  “C”, “D”, and “AA” and “AAA” batteries have just become the most commonly adopted by most consumer manufacturers and the others never really caught on commercially.



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A Social Capital Model for Business

What is “Social Capital?” It is a measure of both the economic and non-economic value of ones social ecosystem. And the context of this article, the online social network. More specifically, it’s about engagement. At an individual level, most of us measure the value of our social connections using very soft, non-economic terms, who we dialog with, who we follow, what we self promote, etc. A business should take a more nuanced and qualitative approach by developing an ROI model of their social capital.

However, measuring social capital can be a real pain. What do you measure? The easiest metrics like the number of connections, the number of follower or the number of posts, really don’t give true insight as the value of the network.

Also, by focusing on an ROI model, it lends greater credence to its overall importance to one’s business – and that it is as importance as any other financial metric of a company. Start at the end – that is, what metrics best reflect the value of social capital. Once there is an understanding of these metrics, we can better understand the strategies and tactics to increase the value of our social capital.

The 3’Rs of Engagement

Social capital is fundamentally a measure of the type of social engagement among participants within your ecosystem. Every business is different but there are three fundamental metrics, or the 3’Rs, reputation, referral and reach. These three can then be combined into a singular, Net Social Capital Index.

Reputation is a reflection of how well a company is in building their brand online. These include such components as thought leadership, innovation or customer satisfaction.

Referral is a more active metric. That is, does your community recommend your company to others? This is much different than what is often done in a customer satisfaction survey where a customer is asked it they are willing to recommend or have recommended the company to others. These are you influencers of opinion – a very important element to know. Online, we can actually see what members of your network are telling others about your company and/or its products and services – both positive and negatives.

Reach is a measure of the ability of your network to amplify your messages, that is, what is commonly referred to as the network effect.  Its not simply the size of your network. Reach is an exponential metric. For example, having 100,000 connections within your network is one thing but if each of those connections have reach of 100, that is orders of magnitude more powerful.

I’ll leave the process of how one actually measures the 3’Rs of social capital and how to combine them into the Social Capital Index for another article.

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Angel Investing: Think Exit Strategy First

Many angel investors in start-up companies really don’t know what they are doing.  Although there are some  smart angels investors who make a good return, I’d say the majority don’t.   However, there is clearly a “coolness” factor to being an angel investor.

If you consider the general rule of thumb among venture capitalists, approximately 40% of the companies they invest in fail.  Another 40% return only the invested capital.  That leaves about 20% that provide most of the returns.  Its also important to note that about 2/3’s of all VC firms deliver returns below what can be achieved in public markets.

So if you consider that VC’s have access to capital, have substantial market and technical knowledge, have a network of resources, and are typically more experienced than angel’s, why would an angel investor believe they can achieve substantial returns.

Investing Gone Wrong

Start-ups are by their nature risky investments and only a few really make it big.  Below are a few examples of angel investing gone wrong:

  • Most angel’s don’t truly understand the technical or market risks of the companies they invest in.
  • Most angel’s get enamored by the founder on how cool an idea and how big the opportunity  is but the angel doesn’t do the detailed due diligence necessary to be fully informed.
  • Most start-ups need additional cash after the initial angel investments but most angel investors don’t have the deep the deep pockets to maintain their investment through its ups and downs.  This leads to either losing there total investment or getting crammed down in future rounds.
  • Angel’s don’t take an active role with their investments like VC’s will.  VC’s typically find ways to help their portfolio companies with introductions, networking, and guidance – not something typical angel’s have the wherewithal to do.

A successful investor friend of mine, Michael Slater who is CEO of Entry Ventures, talks about dreaming or thinking backwards.  This is a powerful lesson for angel investors.  Think first about what an exit will look like.  I’m not talking about the actual  size of the return but what will the actual success factors be to achieve an exit and how will that exit happen.  And make sure your exit strategy in in line with the founders.

Classic Angel Exit Strategies

  • Get acquired by a larger firm that will have a need for the start-ups business
  • Find replacement capital, such as from a VC or from company profits, to buy out early investors
  • Take the company IPO

It’s important to understand the exit timeframe you are targeting as well.  With this knowledge, then you can work with the founders to work backwards to determine what milestones must be reached to reach your goal.



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Why Do We Like to Sing in the Shower

showerMany reasons can explain why we sing in the shower. The most obvious reason — the acoustics in the bathroom. We just sound better to our selves in the bathroom. Because sound more easily bounces off tile and walls in the bathroom it provides more reverberation and realism to add to vocal styling letting us sound more like we are in a concert hall or studio. And because of the relatively smaller space, it gives a significant boost to our voice while adding more bass, which alls goes to making our voice sound more powerful.

Most of us also imagine ourselves as a top vocal artist and where better to do that than in the privacy of our own bathroom. For most of us, breaking out in song in public would be quite embarrassing. The bathroom is the one place we can have our most private thoughts. Just imagine as warm water is cascading over our body. That water is relaxing you, reliving you of stress and overall making you happier releasing your inhibitions. Singing also makes you breath deeper, increasing your oxygen intake, which in turn adds to your improved feelings of relaxation. For some, may create a more meditative state that further improves your ability to relax.

No matter what the reason you sing, if it feels good, keep it up!

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Life’s Greatest Mysteries

Ponder these questions that contribute to life’s greatest mysteries:

  1. If it’s zero degrees outside, how cold is it if it will be twice as cold tomorrow?
  2. Why does “sour” cream have an expiration date?
  3. Who decided on what the alphabetical order should be?
  4. Is there another word for synonym?
  5. Why is the word “bra” singular but the word “panties” plural?
  6. If “con” is the opposite of “pro”, then what is the opposite of progress?

For those mathematicians:

  1. Why is 0.999999… equal to 1?
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My Predictions for 2015

Many predictions lists are published at the beginning of the year. They are almost as prevalent as New Year’s resolutions. And, with lots of good intentions, which fail sometime not long later. Here’s my first attempt at predictions. It will be interesting to reflect back at the end of the year to see just how well I’ve done. Some predictions are more obvious that others – the main point is if these help to create more dialog.

The Economy

  1. Gas prices will stop its steep decline and begin to rise in 2015
  2. Interest rates will rise about summer time
  3. The economy will grow between 3% and 3.5%
  4. Wages and overall personal income will begin to rise


  1. Big Data will become more self-service
  2. The Internet of Things will gain traction while standards will continue to be lacking
  3. Software-defined networking will also demonstrate more traction


  1. No progress will be made on police reform
  2. No progress will be made on race relations and will likely worsen
  3. Contentiousness will significantly increase between Obama and Congress
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2014 IPOs set 14-Year Record

According to data from Renaissance Capital the number of IPOs launched in 2014 hit a record of 273. That compares to the most active year in 2000, right before the Internet bubble burst and there were 406 IPOs. The number of IPOs in 2014 represented a 23% increase over 2013 and generated proceeds of $85 billion, which was more than 55% over 2013. Proceeds are a bit inflated due to Alibaba’s $22 billion.

100 health care companies went IPO in 2014, followed by 55 technology companies. However, technology generated the largest proceeds with $32.3 billion against $8.7 billion for health care. Eleven IPO’s raised over $1 billion with Alibaba and the only two in the technology sector to do so. The average IPO finished up 16.1% from the offering price, which was mostly from first day release gains – as compared to 15% 10-year mean and the S&P 500 8.9% gain.

Consumer and Health care had the highest returns, technology was just average, and energy companies sank. Energy was doing reasonably well through Q3 but the end of year sell off due to depressed energy prices plagued the industry. Biotech’s dominated the best and worst performers with eight of the top ten IPO’s made up of biotech companies. The top ten averaged 27% gains on the first day and 156% in aftermarket trading.

2015 looks to be a good year for IPOs as well with a large backlog of companies in queue. Renaissance Capital forecasts more than 200+ IPOs for 2015. These include such companies as Airbnb, Box, Dropbox, Godaddy, Spotify, Uber, Yodel, Zoosk and others.

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Critical Factors to Solve Before IoT Becomes Mainstream

By some estimates of market research experts, the Internet of Things (IoT) market will exceed anywhere from 50 to 200 billion new devices will be connected to networks over the next several years.  That’s the hype anyways.  Imagine hundreds, if not thousands of new companies, entrepreneurs and developers creating and launching  new consumer and industrial IoT devices.

Expect adoption to be slow until a number of issues aren’t properly addressed.  Here are the top 5 issues:

  1. Security:  Network access and security issues rates on top of the list.  This past year (2014) saw hackers gain access to even the most sophisticated companies, including JPMorgan Chase, Home Depot, Staples, Sony and more.  This is just child’s play stealing personal and credit card data. What could happen if hackers gained access to our power grid, the nuclear arsenal, our water storage systems, or into the global financial systems?
    With thousands of “naive” developers creating billions of new end-point IoT devices, the problems we have today will only be exacerbated.  It may be less of a problem for consumers but this is a huge problem that needs to be solved before industrial enterprises start adopting IoT devices in a big way.
  2. Privacy:  Who owns all the data generated from IoT devices?  How is that data going to be protected?   Some might say that consumers and businesses don’t care.  I don’t believe that to be true, at least not in the long run.
  3. Standards:  WiFi, Bluetooth, Zigbee, Z-Wave, Insteon, X-10, and other local communication protocols exist.  There are actually over 400 known “standards” that exist today, which really means there is no standard.  This creates added cost, confusion and will make both consumer and enterprise adoption much slower.  Standardization will allow costs to drop dramatically.
  4. Software-undefined:  Development platforms and middleware applications are just as numerous as communication protocols.  This includes API and messaging protocols.  Where does one start?
  5. Power:  As devices become smaller and more numerous, power will become one of the most  critical roadblocks to unlocking IoT potential.  With billions upon billions of devices, each one can’t have its own charger, AC adapter or replaceable batteries.  Ambient sources of power will need to be created – solar, kinetic, RF harvesting, etc.
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