Venture Capital

“Writing the check is the easy part.” Genentech, Apple, Intel, Cisco, Oracle, … none of them would exist, nor would a hundred others that created billions of dollars worth of new wealth by delivering new inventions.  More than the money – though there was that – venture capitalists brought expertise in management and marketing, guiding start-ups, connecting people with each other, sometimes even making the most difficult of all decisions, to fire the founder CEO for the good of the company.

 

Everyone knows Steve Jobs and Steve Wozniak; many recognize Nolan Bushnell, Gordon Moore, and Mike Markkula.  Fewer have heard of Arthur Rock, Tom Perkins, or Don Valentine.  Something Ventured (website here) is their story, the viewpoint of the venture capitalist.  They are a humble lot.  At the end of the movie, they admit that writing the check is the easy part. Without the inventors, the creators, the innovators, the visionaries, the venture capitalists would have nothing in which to invest.  But, invest they did – and do. 

 “They saw opportunity where others only saw risk.”

Arthur Rock was working as an investment banker when his firm received a letter from a group of engineers and scientists who were unhappy working for Nobel laureate William Shockley and were looking for an employer to take them all as a group.  Rock convinced them to start their own company.  Rock approach thirty-five companies – Chrysler, National Cash Register, Curtiss Wright, Borg Warner, Ford, Champion, Motorola, Magnavox, … - and no one wanted to invest.  Then, Arthur Rock met Sherman Fairchild.

Fairchild Semiconductor led to the “Fairchildren” the entrepreneurs within the “Traitorous Eight” of Shockley’s lab who would go on to form their own firms with other venture capitalists backing them. 

“I do not know how to write a business plan. I only know how to read them. We start at the back; and if the numbers are big we read the front to see what kind of business it is.”  (Tom Perkins investor in Genetech, AOL, Compaq, and Amazon).

When Dr. Tom Kodadek spoke to the post-doctoral biological student association at the University of Texas (see Disruptive Diagnotics here), he touted “angel funding” and warned against venture capitalists who take 30% of your firm.  Like a good scientist, he admitted that his narrative was a personal story.  Thirty percent is much less than the half that others have been willing to trade for $1 million or $2 million in start-up funding for an idea that might be (at best) three pages badly written.  Venture capitalists have vision.

“We turned down Jobs and Wozniak.” (Don Valentine) “What are you going to do with a computer in your home? Put recipes on it?” (Pitch Johnson)  “I sent my partner down to look at it and he said, the guy kept me waiting for an hour and he’s very arrogant, and of course that was Steve Jobs!” (Bill Draper)  “They offered me a third of Apple Computer for $50,000 and I said, ‘Gee I don’t think so… … but I said, ‘Call Don Valentine.’ (Nolan Bushnell)

“… and Steve asked me, What do I have to do to have you finance me and I said, you need someone who knows marketing and distribution and he said, Fine, send me three people and one did not like him and one he did not like and the third was Mike Markkula. Mike Markkula worked with me at Fairchild before he worked at Intel.” – Don Valentine. 

Mike Markkula wrote the check for Apple and his first order of business as CEO was to build a board of trustees and his first call was to Arthur Rock.  “Arthur said, ‘I want to put some money in that company,’ and I said, ‘Then you have to come on the board.’ His expertise was in marketing and distribution and how to choose people.”

“I was 32. I was retired from Intel, but that’s what I did on Mondays: I helped people write business plans, just because I liked meeting bright people with fire in their belly. ... The business plan said that with $142,000 we could be cash flow positive in nine months.” – Mike Markkula about Apple.  

• Mike Markkula -- $142,000 

• Arthur Rock -- $57,000  

• Don Valentine -- $150,000  

• Apple's 2010 Market Value: $220 billion

The Austrian School of Economics advocates consistent laissez faire.  They are different from the Chicago School, made famous by Milton Friedman.  The Chicago school argues macro-economic policies with its Keynesian rivals.  The Austrians focus on individuals.  Israel Kirzner, Frank Knight, Peter Klein, and others have attempted to understand and formalize—and continue to investigate – entrepreneurship.  However, as individualists, they argue what the word means, not how to produce more of the same by some cookie-cutter process.  That cannot be done.

The "Traitorous Eight" of Shockley Semiconductor
Who Formed Fairchild Semiconductor

Arthur Rock grew up clerking in his father’s candy store from the time he was six or seven.  Don Valentine’s father was a union organizer and once he understood what a union was, they fought constantly.  Dennis Kramlich was about twelve or thirteen when he bought half a freight car of light bulbs from Sylvania and sold them from his wagon.  “I called it the Bright Boy Lightbulb Company.”  Tom Perkins earned a degree in electrical engineering from MIT and found the work incredibly boring. He then went to Harvard Business School where his professor, George Doriot, taught a unique class in entrepreneurship.  (Doriot’s own company, American Research and Development, made only one insightful commitment, to Ken Olsen’s Digital Equipment Corporation.) Doriot’s students included Perkins, Kramlich, Pitch Johnson, and Bill Draper. 

"These were companies with a lot of things missing.  And our approach was always, ‘Is our Rolodex strong enough to help these people?’”  -- Don Valentine.

This film glorifies the essential individualism of investment capital and entrepreneurship. No formula exists. No formula can exist. Each of the venture capitalists in this documentary has a unique narrative. In every case it reduces to the same primary: “I thought that it was a good idea.” Not everything turns a profit. Ultimately, something does, some ventures do. 

“At the time we started Genentech, there was no such thing as genetic engineering. The risks were enormous.” 

A quarter million invested in Genentech in 1976 became $47billion when sold to La Roche in 2009.  Five million invested in Intel became $90 million.  $1.4 million invested in Tandem Computers in 1974 became $3 billion when Compaq bought the company in 1997.

I was told by a guy at Salomon Brothers, "We’ve heard the pitch, but you did not go to Harvard Business School.”  -- Don Valentine, founder of Sequoia Capital, investors in Apple, Cisco, Oracle, Electronic Arts and LSI Logic. 

• “There are no firm rules in the venture capital business, except that there are no firm rules.”  Reid Dennis
• “I would trust him with my life, but not with my money.”  Eugene Kleiner.
•  "You gotta get money from strong people because weak people don’t invest in tough times, but that is when most of the big winners are created. ”Jimmy Treybig, co-founder Tandem Computers.  
• “I am not interested in entrepreneurs who want to do things our way. I am not interested in entrepreneurs who come with a dress code. I am interested in entrepreneurs who want to something new that preferably becomes big.” -- Don Valentine

 For all of its individualism – and Donald Valentine is a supporter of the Ayn Rand Institute – capitalism depends on the bourgeois virtues of community. (See the works of Dierdre McCloskey.)  To fund Atari, Sequoia found Fidelity Ventures and the Mayfield Fund to share the burden of risk in return for the opportunity of profit.

PowerPoint was like the Night of the Living Dead, a company that never failed, but just sucked a lot of life out of other people…. until it was sold to Microsoft…

Something Ventured movie website here.

PREVIOUSLY, ON "NECESSARY FACTS" 

Entrepreneurship
Atlas Shrugged's John Aglialoro
Capitalist Culture: Cairo 1600

Tribute to Steve Jobs

The One Percent are the Atlases 

Fortune Cookie in Hex Code

Twenty years ago, a friend of mine with two satellite dishes to the Chicago Board of Trade and the Chicago Mercantile Exchange had a problem. His IBM-PC/ATs, running the “Windows” interface for MS-DOS, and programmed in Basic, could not properly translate data.  The trading floors identified futures contracts by codes representing commodity and date.  Most troublesome was “26” because ASCII code 26, control-Z, looked like “End of file” to his computers. 

I had him lock me in his office on Friday and let me out on Sunday morning.  We actually worked together, ate breakfast and lunch, but overnight, I was alone with the computers and Peter Norton’s books on IBM-PC Assembler.  Working in Debug, after re-keying versions of the same code over and over, I said to myself, “I wish I had an editor” and I heard the voice of Obi-Wan Kenobi: ”Beware the dark side of the Force.” 

The project was successful. 

Afterward, I wrote a “Fortune Cookie” program for myself.  It is an old hack. On boot-up, the computer displays a random good-luck saying. I chose 60 of them and called the seconds counter of the system clock to point to one.  I wrote it in hex in Debug. 

B4 2C

CD 21

B0 46

F6 EE

05 20 01

89 C2

B4 09

CD 21

BA 18 01

CD 21

CD 20

Debug has an Assemble command to display a more English-like translation of the hex codes. Each of the sayings was limited to 80 characters with 40 more spaces for some margin and to create a buffer offset.

B4 2C        MOV AH,2C       Get the clock

CD 21        INT 21          execute

B0 46        MOV AL,46       Get the seconds

F6 EE        IMUL DH         multiply the DH by the seconds   

05 20 01     ADD AX, 0120    add 120 to that

89 C2        MOV DX,AX       put that number in the DX register

B4 09        MOV AH,09       display to screen

CD 21        INT 21          execute

BA 18 01     MOV DX, 0118    end of line

CD 21        INT 21          execute

CD 20        INT 20          quit

Negotiate to the Command Prompt. Enter DEBUG.
The command "d" is for Display memory.
The ? Question Mark brings up all available commands.

These are some of the 60 sayings:

Beam me up, Scotty: there's no intelligent life down here $

8 + 8 = 10 $

4 + 4 = 10 $

5 + 5 = 0Ah $

5 + 5 = &12 $

Daisy, Daisy, gove  m   y  r   ans er  ru  $

Hello, Dave, it's good to be working with you again! $

TRON to user: Send me a disk. $  

In the beginning was the Word $    

If A is A, how can X = X + 1? $ 

A program is a selective recreation of reality...$   

... according to the psycho-epistemology of the programmer$ 

I am alive and I have rights!$ 

ALSO ON NECESSARY FACTS
Basic: Turing's Truth
Claude M. Watson
Kemeny Knew: We Shall Have Computed
Visualizing Complex Data
The Code Book

BASIC: Turing's Truth

Alan Turing showed that any finite-state machine can model any other.  That is how the team at Bletchley Park built the Bombe to imitate the German Enigma machine.  Today, we have “virtual machines” that let us put Unix and Windows on a Macintosh or Linux and Windows on a PC and so on.  The C language is actually an extension of itself, a realization by Kerninghan and Ritchie that inherent extensibility would allow programmers to create a language that would never become archaic.  And today we have C+, C++, and C#.  In fact, Ruby is just a set of macros written in C.  Once you have that, you can create your own Ruby objects, classes, and methods.  

 

The “Venture Rocket” blog presented a cute history of computer languages.  While one graphic did acknowledge Visual Basic as the seventh most popular development language, their history below that ignored Basic entirely. (They did cite Fortran and Cobol.) 

Earlier this month, I answered a challenge from the Praetorian computer security company to decipher this block of text.

Mpyza johsslunl ZWXY, Zluhabz Wvwbsbzxbl Yvthubz (Aol Zluhal huk Wlvwsl vm Yvtl), aolzl hyl aol budhclypun hsslnphujlz vm Aol Wyhlavyphu Nbhyk, luaybzalk if Jhlzhy av wyvcpkl aolpy lspal zljbypaf zlycpjlz huk luzbyl aol zhmlaf vm aol nsvihs Yvthu Ltwpyl. Hz aol zhfpun nvlz, "Hss Yvhkz Slhk av Yvtl", ovdlcly aol whao vm h Wyhlavyphu pz ulpaoly zayhpnoa uvy klalytpuhal. Aolyl hyl zlclyhs whaoz av qvpupun aol Wyhlavyphu Nbhyk, iba aol whao dlss-mvbuklk pu tlypa pz aol tvza ovuvyhisl. Pa pz mvy aopz ylhzvu aoha Jhlzhy ohz klcpzlk aopz zlyplz vm johsslunlz av qbknl aol tlypa vm wvaluaphs Wyhlavyphu yljybpaz. Fvb ohcl wyvclu fvbyzlsm ylzvbyjlmbs, iba kvu'a sla fvby nbhyk kvdu hz mhy tvyl kpmmpjbsa johsslunlz spl holhk. Av hjjlwa fvby ulea johsslunl, fvb dpss ullk av zluk tl h tlzzhnl vu Zrfwl. Av hkk tl hz h jvuahja, zluk h jvuahja ylxblza jvuahpupun aol alea "Zluhabz Wvwbsbzxbl Yvthubz" av "wyhlmljabz.jhzayvybt", aolu zluk tl h joha tlzzhnl av sla tl ruvd fvb'yl aolyl. Zll fvb vu aol ihaaslmplsk.

To do that, I wrote this program in BASIC.

10 REM Mike Marotta. June 21, 2013. Praetorian challenge.

11 REM: Claudic.bas compares cipher with known transposed key

12 REM: prints deciphered text

15 ON ERROR GOTO 199

20 P1$ = "ABCDEFGHIJKLMNOPQRSTUVWXYZabcdefghijklmnopqrstuvwxyz"

22 C1$ = "TUVWXYZABCDEFGHIJKLMNOPQRStuvwxyzabcdefghijklmnopqrs"

40 OPEN "i",1,"praeto.txt"

42 OPEN "o",2,"plain.txt"

50 LINE INPUT #1, X$

53 E = LEN(X$)

60 FOR I = 1 TO E

62 Q$ = MID$(X$,I,1)

63 REM Accept punctuation as is

64 IF ASC(Q$)<65 THEN PRINT#2,Q$;:

70 FOR J = 1 TO 52:

73 IF Q$=MID$(P1$,J,1) THEN PRINT#2, MID$(C1$,J,1);

80 NEXT J

85 NEXT I

90 GOTO 50

199 CLOSE 1: CLOSE 2

200 END

The program returned this decipherment.

First challenge SPQR, Senatus Populusque Romanus (The Senate and People of Rome), these are the unwavering allegiances of The Praetorian Guard, entrusted by Caesar to provide their elite security services and ensure the safety of the global Roman Empire. As the saying goes, "All Roads Lead to Rome", however the path of a Praetorian is neither straight nor determinate. There are several paths to joining the Praetorian Guard, but the path well-founded in merit is the most honorable. It is for this reason that Caesar has devised this series of challenges to judge the merit of potential Praetorian recruits. You have proven yourself resourceful, but don't let your guard down as far more difficult challenges lie ahead. To accept your next challenge, you will need to send me a message on Skype. To add me as a contact, send a contact request containing the text "Senatus Populusque Romanus" to "praefectus.castrorum", then send me a chat message to let me know you're there. See you on the battlefield.

Of course, this is merely a transliteration.  I already broke the cipher.  I found the common three-letter words, and guessed “the.”  I also guessed that the longest word would be “Praetorian” which then validated two of my letters in “the.”  All I wanted to do next was avoid the grunt work of writing out the answer. Computers are good for that.

Previously on Necessary Facts

A Tribute to John Kemeny, inventor of BASIC.
Fortune Cookie in Hex Code
Claude M. Watson
Visualizing Complex Data
The Code Book

Awesome Austin Foods

Locally crafted foods abound here in Austin. The list of "must" places to eat runs for long pages in the Chronicle.  Even The Onion is basically a few columns of timely humor wrapped around page after page of bars and restaurants.  Oddly enough, perhaps, for me, food is something my body demands that my mind pay attention to.  I weigh 140 pounds (64 kg) soaking wet.  Mostly, I eat food to provide uptake for vitamin pills.  And yet...  

Lovebean (here) (or info@lovebeanfudge.com) produces a confectionery fudge made from coconut oil, coconut nectar, and cacao beans.  A jar costs about $13 retail and contains the weight of four or five bars.  The problem is stopping at one bar.  I do not have a sweet tooth. I do not eat deserts.  But this stuff is great. It would be perfect with peanut butter for long bicycle treks.  They say:

"Our line is certified USDA Organic and all our ingredients are sourced for their nutritional and planetary benefits. Here’s the low down: . . . The Original Vegan Spread starts with lots of fresh-pressed Organic Coconut Milk. . . .  Our Raw Vegan Fudge Spread is never heated during processing. Not to say we don’t go over 115 F or anything, we don’t need to heat it a bit. All the magic happens at room temp in the Lovebean Raw Fudge Machine. We simply combine our 100% Raw Organic Coconut Nectar with Organic Raw Cacao Powder and Organic Raw Coconut Oil. We top it off with a touch of Raw Organic Vanilla Bean Powder . . . "

Jade Monk® Chai Spice, Cranberry Blood Orange, Lime Blossom, Palau Peach

Jade Monk (website here) teas are packets of powders.  Again, for the trekker, or your office backpack or desk drawer, I found them handy, tasty, and healthy.  The powders could dissolve a bit faster, but zen teaches patience to all grasshoppers.  You can find them on LinkedIn.  Of themselves, they say: 

Jade Monk® offers a healthy and delicious alternative to the processed, syrupy tea beverages of today's market. By blending the potency of legendary Matcha green tea with all-natural low calorie sweeteners and flavors, Jade Monk® distinguishes itself as a beneficial and alluring instant powdered functional beverage.
Ample scientific research shows Jade Monk ® matcha green tea assists the body in maintaining excellent health, serves to reduce stress and calm the mind, and provides sustained energy for up to six hours. 

But man does not live by tea alone.  We drink a lot of beer here in Austin.  Even in IT, traditionally a crowd that opts for CNS stimulants such as coffee, colas, and energy drinks, presentation meetings at user groups feature beer with the pizza.  High tech social hours are everywhere. We even have a Meetup called "Social Techies" (as if the others are just putting on).  That said, Texas beers will not win contests.  This is a southern state, recently dry, still heavily regulated.  Compared to Chicago or Portland, the local beers are just PBR and Budweiser dressed up in cowboy names.  However. . .

Technically, not local to Austin, Perdenales Brewing is located in Fredericksburg.  I met the president, Lee Hereford, at Whole Foods.  He was demonstrating his product.  You get that kind of entrepreneurship here, where the guy normally in the paneled corner office is actually behind the counter or at a desk. Personally, I like IPAs, but I had to admit that most are over-hopped.  His is not.  It is balanced, with a good grain base, and a light spice finish. 

Baby Zack's smoked hummus brings an array of Texas flavors to this international staple and snack treat.  Dip your favorite chips, or spread it on bread when making sandwiches, including burgers and franks.  Myself, I often pass up hummus because the first ingredient is water.  I prefer to pay for garbanzos (cici or chickpeas, call them what you will). With Baby Zack's you get hummus.  The spices are there for flavor, not to optimize the cost of production.  

PREVIOUSLY ON NECESSARY FACTS
South by Southwest 2013 here and also here
Dressed for Success in Austin
Austin at Night
South by Southwest 2012

Meanwhile ...

For the past three weeks, several projects took me away from blogging. "Documentation for Developers" was the topic when I addressed my Ruby on Rails group.  I spoke on the subject of private security to my local DefCon group.  Then, last week, I volunteered to present a chapter of exercises from Wireshark 101 to an OWASP lunchtime study cell.

Over the years, working on projects for different companies on different platforms for different audiences, I developed a set of guidelines for creating documentation.  The focus of this presentation was that developers can begin that process by relying on tools such as Microsoft Visio to design their systems.  Other tools include Nassi-Shneiderman charts and Warnier-Orr diagrams. "Do not design in code" is the only mandate.   Creating a software system and then calling in a technical writer is like building a house and then calling in a drafter to draw the plans. Documentation is specification.

I also drew on the allusion from Joseph Weizenbaum of the compulsive programmer as a compulsive gambler.  The code developer's superstition is that one more patch, one more fix will overcome a lack of knowledge of the substantive literature of the application field.
(The slides are on Slideshare here.)

For the hackers at DefCon 512, my goal was first to overcome the common myths about security guards.  We are subjected to ridicule.  Self-deprecating humor works for Big Bang

Theory because we have A Beautiful Mind, Sneakers, Johnny Mnemonic, and Hackers (with Angelina Jolie) to provide depth and drama.  Nothing like Law and Order: Special Victims Unit exists for private security.  That pro-police propaganda is contradicted by the absolute facts that more money, more resources, more personnel exist in private security, as much as three-to-one over public policing. Most people do not know that 36 private guards died when the Twin Towers came down.   I have worked with a Ph.D. philosopher, a nuclear engineer, two ministers, and an airline flight attendant.  Security guards are not the buffoons we are caricatured to be by mass media presentations in service to the central government.  Moreover, if you let us, we prevent problems because that is the nature of all businesses: business looks to the future; government attempts to remediate the past. My PowerPoint for this is on Slideshare here.


Wireshark is a tool for computer network security analysis.  Our study group is sponsored by OWASP, the Open Web Application Security Professionals.  They meet once a week at lunch for an hour to work out of some chosen book.  Our current project is Wireshark 101 by Laura Chappell.  I volunteered to work all of the labs in Chapter 3: Display Filters.    As a technical writer, I do this all the time, coming in to some technology, getting a handle on it, and presenting it to others.  

This is Chappell's smaller book on Wireshark.  The labs are direct, step-through exercises to show how the toolbars, menus, options, and selections all work.  I captured one or more screens for each lab, and made them into a PowerPoint presentation.

Previously on Necessary Facts
The Shifting Paradigm of Private Security
Private Security in the 21st Century
Locksporting
Redshirts: Expendable in Fiction and Fact

Readability is the Only Metric

What you can measure, you can improve.  Whether you need creative content for e-commerce or step-by-step instructions for machine repair, you must reach your audience.   Microsoft Word offers metrics for readability, from the Grammar and Spelling checker, under Tools.   We have no quantified methods for creativity, invention, cleverness, or insight.  We can measure word length, sentence length, and sentences per paragraph.  

It is not perfect. In fact, it can be gimmicked, tricked, and gamed.  But it works.  On a project to develop a multiprocessor industrial controller, the other technical writer was a young guy from an advertising agency.  He did not know manufacturing, but he was good writer.  We enjoyed finding some of the many failings in the MS-Word readability scales. We still used them.  They proved that we documented the interactive debugger to a 6th grade reading level.  When the line is down, no one is looking for a literary experience. You need answers.

Texas Department of Information Resources
IT Policy - Originally at 12.9 reading level

Same IT Policy - Rewritten to 12.0 reading level.

Of the 300,000 main entries in the Oxford English Dictionary, only 3,000 are Basic English; and most of us speak only 10,000 distinct words.  The average college-educated American recognizes about 100,000 words.  Whether "fardels" in that list is putative.  So, Hamlet's rhetorical question might pass the readability score, but not carry meaning.  Whether "putative" is in your speaking vocabulary may be arguable.

The fact remains that we have an objective measure for readability. 

Also on Necessary Facts
Visualizing Complex Data
Documentation is Specification
The Art of Typography
 The Genius of Design
How to Hire a Technical Writer

How to Hire a Technical Writer

Readability is the only metric.  Microsoft Word offers a readability score under the Grammar & Spelling checker off the Tools menu.  The Readability score has flaws; and it can be tricked.  Those are old problems.  But even a stopped watch is right twice a day.  A programmer can write their own lexical analyzer.  It is just a parser with more rules.  Back in 1990, I wrote one in Fortran to prove to a manager from Digital Equipment Corporation that I write technical documentation at a ninth grade level.  It is not that programmers, engineers, or accountants cannot read.  Rather, when you are in trouble, you need answers.  You are not looking for a literary experience.

 "Austin on Rails" is a meetup for Ruby on Rails software developers.  On Tuesday, May 28, I will be the "Introductory" speaker.  My topic will be "Documentation for Developers."  A software developer can rely on a hefty toolbox of programs for planning code.  Those plans are among the key documents.

Warnier-Orr for Greeting Guests

Ideally, the user manual is the first product. I look to the Warnier-Orr method for that.  According to Warnier-Orr, you start with your intended final output and work back to the primary inputs.  Warnier-Orr helps to plan large data structures.  It can include decisions and loops. Mostly, however, other tools make that work easier.  

Traditional flowcharts are well known. However, they have their own grammar, which is often violated.  For example, lines should not cross.  If they do, you have a potential problem in the flow of work.  Ideally, you should be able to "pick up" a flowchart by its Start, "shake" it, and have it "hang loose" with no tangles.  

For applications with deep and broad arrays of processes, the Nassi-Shneiderman method delivers clear pictures.  

Any significant project will be documented best with several tools. Narratives are among them.  Good technical writing uses short, declarative sentences.  Active voice identifies responsible parties.  The present tense and indicative mood deliver the sense of reality, and intention of purpose.  Convoluted sentences built from subordinate and dependent clauses in passive voice and conditional mood and future tense are concatenated confessions that this stuff should not be worried about.  If it is important, then say so.

Nassi-Shneiderman
for Order Entry

Managers who do not publish professionally think that they need to find a writer who knows some specific package.  After all, their firm has an investment in FrameMaker or InDesign, or RoboHelp.  That investment is quantifiable.  But they never ask me to quantify the readability of my work.  They assume that anyone who claims to be a writer must be good at it.  

Worse, a pernicious sense of democracy lets them believe that all writers are created equal, that we are endowed with interchangeable skills, and replaceable talents, that among these powers are grammar, syntax, and vocabulary; that technical writers are given to project managers to enhance the value of their products, and that when users, customers, and clients cannot find fitness or merchantability in the product, then a long train of abuses will be consequentially deflected to others.  

But I say to you, blessed are the writers.  Ours is the world of ideas.  We are the dream makers.  A writer who does not publish poetry cannot publish schematics.  

You need a master's degree level of literacy to understand the Declaration of Independence.  A child can understand the Sermon on the Mount.  Millions of people have died as martyrs to their religions.  Far fewer went to the barricades for liberal democracy.  Communication matters.  If you  believe in your product or service, then you want other people to accept its truth: you want committed customers.  Information systems win loyalty with technical documents that are alive with the truth of value in the product.

Previously on Necessary Facts: "Documentation is Specification" here.

The Sermon on the Mount is readable at Grade 5.3

Grade level 18.0 to understand the
Declaration of Independence

ALSO ON NECESSARY FACTS
Knowledge Maps
Readability is the only Metric
Documentation is Specification
The Genius of Design
The Art of Typography 

Sándor Kőrösi Csoma

He walked from Hungary to Tibet and brought the language of Tibet to the West.  His grammar of their language is also the foundation of our knowledge of their religion because he worked from the holy books of Lhasa monks.  His name is variously rendered: Alexander Csomo de Körös is also accepted.  He called himself a “Siculo-Magyar” and I thought that (like me) he was Sicilian and Hungarian, but, in fact, “Siculo” is a latization of Szekel, the hereditary guardians of the Hungarian frontier who claim direct descent from the remnants of the Huns. 

Portrait by August Schoefft
from surreptitious sketches

For over a hundred years, the life story of this obscure scholar was presented in a single biography by Theodore Duka, M.D., first written in 1885 and then reprinted in a limited edition of 1000 by Manjursi Publishing House of New Dehli in 1972.  Then in 2001, Short Books of Croyden, Surrey, came out with a new work by Edward Fox, much shorter, but obviously benefiting from resources liberated by the fall of communism.  Fox’s story illuminated details of Kőrösi Csoma’s depth of character. He was consistent, principled, and self-generating. He hoarded the cash coins in gold and silver which others invested with him for his travels and research, while he lived on figs and less.  Trekking with caravans, he had passed himself off successfully as “Sikander Beg” a Persian. 

Sandor Kőrösi Csoma believed that the homeland of the Hungarians was in the Himalaya Mountains.  The theory was widely asserted in his day.  The point is still in dispute.  By our best knowledge today, the Magyars are Finno-Ugritic people, cousins to the Samoyed, Ostyak, Vogul, and Finns of northwest Asia but “influenced” linguistically if not genetically, by Turkic peoples of central Asia.  The Hungarian word for “dog” is “kutya” and would be understood directly by the Ostyaks and Voguls.  The Hungarian word for “three” is “három” which obeys rules supporting the Finnish near-cognate “kolme.”  But in Hungarian, the vowels in a word all have the same pitch, as in Turkish.  For example, a noun becomes an adjective by adding “sag.”  The word for politically or legally free is “szabad”; and “liberty” is szabadsag.  But a nice word for your brother is “tesztver” and “fraternity” is “tesztvereseg”.  The deeper “a” becomes the higher “e” to maintain the consistency of sound within the word.

100-forint commemorative coin
celebrating the 200th anniversary
of the birth of Sandor Kőrösi Csoma.

But all that came after the lifetime of Sandor Kőrösi Csoma: 1784 to 1842.  In his time, Hungary was suffering under the Austrian crown for their revolts, especially that of Ferenc II Rákóczi from 1703 to 1711.  However, that struggle brought sympathy and support from England, evidenced by a trust of ₤11,000 raised and held by the Archbishop of Canterbury. Hungary always had a strong Protestant minority. Csoma’s primary and secondary education was at a Calvinist school where he eventually became a lecturer in poetry. So, Csoma found ready support from British consuls and merchants as he walked from Egypt to Persia, Afghanistan, and India.

Monastary at Zanskar
(Wikimedia Commons)

He was 35 years old when he left Bucharest on November 1, 1819.  He had studied and mastered languages all his life, including formal enrollment at the University of Göttingen to attend lectures in philology.  His letters to Captain C. P. Kennedy, assistant political agent at Subathú, summarizing his journey and explaining his intentions, were in English.

Csoma spent eighteen months with the abbot of Zangla in the Zanskar region of what is today the Indian state of Jammu and Kashmir in the Himalayas.  He compiled a 40,000-word dictionary and a grammar of Tibetan.  These he left with the Royal Asiatic Society at Calcutta before traveling back into the mountains where he died of a fever at Darjeeling.

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My Grandmother and Science
Linguistics Debate: What Colors are Your Rainbow?

The Success of the WEIRD People

No single cause explains our standard of living.  From the Renaissance to the Enlightenment, the industrial revolution, and now the information age, the upward rise in standard of living is the material evidence of deeper attributes.  The aggregate of those beliefs – largely unstated and accepted as “normal” – does explain our success. 

“The Weirdest People in the World: How representative are experimental findings from American university students? What do we really know about human psychology?” by Joseph Henrich, Steven J. Heine, and Ara Norenzayan (all from the University of British Columbia Department of Psychology and  published in Behavioral and Brain Sciences, Vol33; 2-3 , June 2010, pp 61-83; available from the authors here) explains that we have

made ourselves – the Western, Educated, Industrialized, Rich, and Democratic people – the standard for “human nature.”  They say cogently that psychological experiments which supposedly tease out the basic patterns of “human nature” really tell us only about a small group: undergraduates in psychology departments, their friends, and sometimes their young children. The paper demonstrates that most people on Earth seem to hold entirely different views than we do.  And “views” is the basic problem.  What we accept as standard optical illusions work differently or not at all among different peoples around the world.  The paper is well worth the time to read through and mark up.

I found in their thesis the unintended corollary argument that our success is the result of those very attributes that set us apart from everyone else on Earth. 

The acronym WEIRD is nice, but does not place the elements in order.  Being educated first led to our becoming rich, and therefore democratic.  That this happened in “the west” (northwest Europe and the English colonies) is observable; but why here and not elsewhere may be an intractable problem.  The Renaissance started in Italy.  The Enlightenment was born in France.  How the Glorious Revolution of 1688 allowed James Watt’s steam engine to empower the middle class of America is complicated; but the facts are observable.

Start with education.  Other cultures have knowledge, even broad, deep, complicated, and consequential.  The difference is that ours is arguable.  It is important that charlatans such as Paul Feyerabend and Jacques Lacan be kept around to remind us of our limitations.  After all, their claims were rooted in the statements of real scientists who themselves explained that discovering deep truths did not come from following the recipe of the scientific method.  (See The Double Life of RNA by the Howard Hughes Medical Institute and PBS Nova about the work of Nobel laureate Thomas R. Cech.)  Insight and intuition nonetheless must be subjected specifically to that scientific method – and must be validated by independent testing.  We test our beliefs and abandon the ones that do not work.  It is not perfect or consistent; but in the main, culturally, our society operates by trial and error, argument and proof.

In her foundation essay, “Bourgeois Virtues,” (on her website here) Dierdre McCloskey pointed out that while the patrician Achilles was subjective and the peasant St. Francis was objective, the bourgeois Benjamin Frankin was conjective.  In other words: price is open to discussion.  She also noted that in commerce we do not convince (conquer), but rather, persuade (soften; sweeten).  That is different from the attitudes of other peoples. 

In the Ultimatum game, one party is given a largess with instructions to share whatever they want with the other party.  If the other party feels that the split is inequitable, no one gets anything.  In our society, most people draw the line at a 70-30 share.  If the recipient does not get at least 30%, then no deal.  Some other people are more rational in the pure market sense: any gain is better than nothing. Some other cultures feel that the distributor is under no obligation to share anything.  Some people (especially in Russia, Turkey, and Saudi Arabia) will engage in "altruistic punishment" where they would pay out from their own share without recompense to bring a loss to an unfair distributor. 

It is hard to say whether any of those is provably better.  But our willingness to accept a 70-30 split but deny an unfair cut explains much about how our democracy works: majority rule; minority rights.  

The fact that 90% of the world is not "individualistic” does explain why 90% of the world is poor.  But that is changing.  Global capitalism brings American (western) values to everyone.  Not every person in every place needs to adopt every aspect of our culture, but education, wealth, individualism, democracy seem to be mutually integrated.

Entrepreneurship

Writing over 300 newspaper and magazine articles about business, technology, and culture, I have interviewed very many entrepreneurs. Perhaps my personal favorite was "The Business of Musical Theater: The Dough behind the Do-Re-Mi" for the New Mexico Business Journal.  I have met all kinds of successful entrepreneurs and all kinds of not-so-successful. "All kinds" describes both the limitations and the potentials. In other words, there is no formula. The Austrian School of Economics has worried this problem for over 75 years. As the leading advocates for laissez faire capitalism, the Austrians have never agreed among themselves what entrepreneurship "is."

Part of the problem is that we were raised in schools to want short definitions that are easy to memorize, like Orwellian newspeak.  The very complexity of enterprise works against that.  The Concise Encyclopedia of Economics from the Online Library of Liberty offers this multi-faceted explanation:

“An entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. An entrepreneur is an agent of change. Entrepreneurship is the process of discovering new ways of combining resources.”  Entrepreneurs also increase the value of the resources under their control. “Schumpeter stressed the role of the entrepreneur as an innovator who implements change in an economy by introducing new goods or new methods of production. In the Schumpeterian view, the entrepreneur is a disruptive force in an economy.” (Read the entire article here.)

Peter Schumpeter, Israel Kirzner, and Frank Knight are among the Austrian school economists who have thought through entrepreneurship.  Of course, Ludwig von Mises and Friedrich A. Hayek also addressed it, but their focus was on other problems and their treatment of entrepreneurship was undeveloped. Even though they were passionate advocates for the open market, they did not study the differences between capitalism and enterprise, innovation and invention, market efficiency and marketing.  

“Kirzner's procedure is based on an analogy, or parallel, between what he calls the entrepreneurial element in individual decision-making and entrepreneurship in the market interaction…He isolates the entrepreneurial element by contrasting routine optimizing behavior with what he claims we can know about true individual action …  Individuals spontaneously discover means of satisfying their wants. … Another term he uses is alertness to hitherto undiscovered opportunities.”  This is not mere “economizing” but a deeper insight. “Third, he identifies what he regards as a crucial kind of action in a market economy -- arbitrage. He associates entrepreneurship in the market economy primarily with this action.” Arbitrage is the engine of efficient allocation. (See “Kirzner” by Prof. James Patrick Gunning, Feng Chia University, Taiwan, on Constitution dot Org here.)

 A more subtle approach is being pursued by Nicolai Foss, Peter Klein, and Mario Rizzo who follow Frank Knight and Ludwig von Mises on the entrepreneur’s judgment of uncertain future market conditions.  “Judgment is exercised in the act of investing in  and allocating resources to specific time-consuming production processes that are organized and controlled by the entrepreneur until the completion and sale of the product.  For Foss and Klein the entrepreneur is therefore a capitalist and owner.” (See “Klein Versus Kirzner” by Joseph Salerno on the “Bastiat”pages at Mises dot Org here.)

Traditional college classes in economics teach that markets move toward “equilibrium” that some magical point exists where supply meets demand at a price.  This is not mere observation, but an implicit worldview.  The goal is a static social world of sustainable predictability.  The Austrian school has a different weltanschauung.

Anousheh Ansari of the
X-Prize Foundation

 “I think it is highly useful to think in non-equilibrium terms, to be open to the possibility of change and surprise. You certainly cannot do good economics without understanding the role of surprise. But if one pursues this to the point where the surprises tend to overwhelm the regularities, then I don't believe you have a science that reflects existing realities. … Entrepreneurship is not always equilibrating. …  The idea I reject is this: there is successful entrepreneurship, there is unsuccessful entrepreneurship, and it's a toss-up which is going to outweigh which in the end. … The fundamental Misesian insight into human action is that it involves a tendency to be right rather than to be wrong. People have an interest in being right. …  This does not guarantee "equilibration always." And certainly a permanent equilibrium is out of the question. It would be incorrect even to imply that in any given time period, the changes we observe are necessarily equilibrating. But there are tendencies which tend to overwhelm disequilibrating forces in the market, most of the time.”(Austrian Economics Newsletter, Interview with Israel Kirzner, Spring 1997, Volume 17, Number 1 here.)  (See also "Supplies and Demands" here on Necessary Facts.)

  

Felicia Day:
Acting as Entrepreneurship

Moreover, traditional business management classes teach that the unremitting failures of inventors and early adopters prove that they are wrong.  Success, the B-schools claim, comes from following the wreckage to where the markets are now ready for a mature product or service.  

The modern history of computing echoed much of the early history of railroading in America.  Failures and successes both combined to re-direct existing capital (whether trackage and rolling stock or software and hardware) and did so to attract ever larger investments.  (See The Man Who Found the Money: John Stewart Kennedy and the Financing of the Western Railroads by Saul Engelbourg and Leonard Bushkoff (Michigan State University Press, 1996).  In the days of railroading, the term “venture capitalist” would have sounded redundant. 

ALSO ON NECESSARY FACTS
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Engines of Creation
Objective Intellectual Property Law
Open Secrets
The Genius of Design