discourse and notes «

Justice, according to one definition from antiquity, is carrying out one’s duty to one’s station. Plato did not strictly speaking have only professional specialization in mind, and he was probably not thinking about justice in the way we have come to think of justice. As a general rule, however, it was agreed that minding one’s business and perfecting one’s trade were positive attributes that would advance the health of a society. There is a lot to be said for this, even now, but it is also possible that Plato, who anticipated many things, did not anticipate confluence and falling barriers.

For several decades now of an economy that is increasingly powered by services, we have seen service providers increasingly compete on the basis of specialization. To play a generalist role, for example, in consulting, finance, law, medicine, may have its place, but is not nearly as valuable – when push comes to shove – as proving one’s mettle in a concentrated field. Because service providers tend to follow the course set by their clientele, for many specializations this pattern has been in imitation of underlying industries. A sector such as technology, for instance, that has included memory chips and turbine engines and biotech research and Google’s algorithmic products, is clearly too vast to either operate or be served in a generalized fashion.

But an undercurrent is now beginning to stir, causing some of these sectors to blend and overlap. Whether Amazon, say, is more properly speaking an Internet company or a consumer retailer, and whether the Internet is a sub-segment of technology or media, are increasingly fuzzy judgment calls. There used to be a distinction between traditional media and new media, but that’s even going the way that apps and mobile access leads the two categories in tandem. Hardware and software are migrating towards one another as trends in open-source and 3-D printing take hold; and financial markets and info-tech are converging as themes of democratization and access do likewise. In the case of markets there even seems to be a movement of asset classes towards one another, as large institutions do smaller deals, as illiquid investments are made more liquid, and as the distinction between early- and late-stage diminishes and fizzles.

It’s hard, in such an environment, to stay true to the Platonic ideal. And one might even say that to do so would be to do one’s chosen field injustice. A narrow perspective, picked up in whatever classroom one has continuously sat, as it were, becomes a constraining and counterproductive feature. But it is equally hard, on the other hand, to break the hyper-specialized mold in which many, as a matter of course, have been shaped. This requires a perpetual education, re-education, and expansion. More than expertise, perhaps, success in such an environment is determined by one’s ability to adapt. And to take this argument one step further, this ability to adapt may be an expertise in itself, perhaps the most important there is, requiring hard work and special training.

Despite the temptation to think otherwise, seeing does not come natural. Sometimes we look and we confuse the activity for seeing, but looking is a limited accomplishment. Looking is not nothing, but really no big deal after the fact unless retention and comprehension follows. That requires effort, if correctly done, for two reasons that are related: The object of our view is sometimes masked or distant, and we in turn are trained to filter. When on the rare occasion our filter is off, while, simultaneously, an object is presented bare, then there is vision, if we happen to be looking.

To make matters worse, or better, depending on one’s goal, there is now also a growing multitude of objects to see and it’s becoming overwhelming. Some would call this a superior information flow, and others a clutter. While the things accessible to our perception have multiplied, the density bothers us, and perhaps our filtering mechanism kicks up a notch as a result. Truly, it is a difficult dilema, and it is at the very least debatable whether the free information flow we now enjoy makes us more or less visionary. The answer isn’t obvious, and the results aren’t yet in.

Content curation platforms and filtering tools have been made available, but this top-down approach to information organizing can be troublesome: There is now an added filter and it isn’t even one’s own. The distinction between curation and censorship may well be one of intent, but when the result is to limit completeness, does this distinction matter all that much? In a way it does, of course, but it is more an issue of picking battles than finding value. If one truly wants to see (big if) then the objective is to seek the atomic fact as Wittgenstein called it, and this is perhaps more of a bottom-up construction than a top-down procurement, a synthesis that precedes analysis, as it were.

These ramblings have more than theoretical significance I think. In a business and capital markets climate that is almost as breathless as the information flow it parallels, the ultimate value – maybe more so than ever – is the correctness of one’s vision. One might even argue that quality of execution, the more fashionable frontrunner in the race to success, is part and parcel; that execution not only starts with vision but is predicated on its continuous pursuit. When, on the other hand, entrepreneurship is encouraged to exist without idea and platforms to repurpose on a dime, we may stop and wonder.

The aforementioned philosopher, who has been cited in this space before, wrote down his thoughts meticulously, succinctly, systematically – almost in the form of programming language – while in the chaos of the battlefield. Our frenzied state pales in comparison, and the least we can do is take time to better understand directions and the objects in our line of sight. “What can be said at all can be said clearly,” Wittgenstein suggested, and we might expand on this notion as follows: “What can be looked at can be seen.” But one has to make an effort. Vision can’t really be automated.

There are three ways to fit a square peg into a round hole. The peg may be circled, or the hole may be squared, or both the peg and the hole may be reshaped in some other way to fit with one another. A fourth tactic, that of brute force, whereby the peg is plowed through with a heavy hammer, is in actuality the same as any of the three listed alternatives, from which there is no escaping. Though none of this is news, I bring it all up now because of developments in venture capital and the startup scene.

To clarify the analogy before proceeding to developments, the conceptual misfit is this: Startups are high-risk undertakings (perhaps the highest-risk there is) and these have been financed within a highly illiquid asset class. A volatile operation is thus supported by rigid funding parameters. The issue is not only one of duration – as has been discussed in this space before – but also capital efficiency. That is to say, funds should flow to their most optimal uses in an environment where those best able to assess and mitigate risk most efficiently price it. In an environment in which the nature of the risk is fluid, the funding mechanism should ideally be liquid.

The puzzling over inconsistent venture returns in the past two decades of digitally fueled innovation can (to a large extent) be put to rest when the environment is framed in this fashion. The only time when the segment (as a whole) produced returns commensurate with its risk was the time when market liquidity – rightly or wrongly – supported the concept. That the support happened to be in a late-90s bubble is only pertinent to present discussion in that the bubble’s rupture caused liquidity to disappear. But liquidity does not only happen in bubbles, and is not always necessarily financial. We are beginning now to observe certain trends which bode well for the venture investing climate. In addition to financial liquidity enhanced by new markets and new information mechanisms, we now begin to also see operating fluidity, which is just as interesting.

As the round hole, in other words, is getting squarer with improved liquidity in a previously illiquid market, the peg that passes through is becoming rounder through a mechanism commonly known – and increasingly accepted – as the pivot. For those uninitiated in entrepreneurial lingo, to pivot is to change the direction or even the very nature of one’s business undertaking, sometimes (but not necessarily) leveraging technology or other assets created to that point. Because of the relatively low cost of building a web-enabled technology platform nowadays, and because of the relatively high density of ideas and inspiration sources, one may change course, as it were and almost literally, on a dime.

The effect of the phenomenon – observed all throughout the continuum from the earliest seedlings to the highest-profile sensations and back – is that in essence the liquidity of a venture investment is now determined as much by external as internal dynamics. When the business you buy today becomes another business entirely next month, it is as if you only owned the first business for a month before exchanging your investment for another. This, to repeat the point, is a new form of financial liquidity, and it may be in some ways as real as the more conventional kind of selling the position outright. (Cash does not change hands, true enough, but the optionality is extended, maybe enhanced, and cash is at least in theory an accounting entry only – it gets used, it is spent, converted or invested, it rarely just is.)

All else equal, the depicted landscape should serve to improve venture returns or, at the very least, the opportunity to achieve these. But all is never equal, and all is also a function of what is priced into valuations and how far ahead of or behind fairness these might move. As fairness is mainly a matter of interpretation, perception, and academic study, the market – which contains all of that and more – will give its guidance surely enough. Until then, we bear witness to a changing equilibrium of uses and sources that now complement one another with something that approaches elegance.

A fellow once wrote this: “We are what we pretend to be, so we must be careful about what we pretend to be.” He was a clever fellow, prolific, argumentative, a blogger in his way, (but who isn’t?). He died, alas, before this medium really took off, and anyway, he was probably more of the typewriter variety. So it goes. The cited wisdom could be applied to many a context, some of which may have been imagined by the author, but for some reason it currently makes me think of the media sector, which nowadays comprises many things, (more below).

I am thinking that media, as a general category of industry, is uniquely positioned to report upon and conduct its own assessment. A sector populated (and even defined) by carriers of the message – bloggers, analysts, researchers, marketers, advertisers, publicists, podcasters, broadcasters, journalists, tweeters – can shape the message and define itself with few checks and balances. Any such controls would necessarily also come from within, from other carriers of the message. The situation is a little bit analogous to, for instance, Michael Jordan calling his own fouls. Some secretly suspect that this happened all the time. So too with media: A sector that gets to call its own game. What luck.

But not really. One could argue, in fact, that this is a misfortune. To illustrate, let’s take a scenario of a different type from that of an arbitrary calling of shots. Take for example, software code. Putting aside qualitative aspects like programming efficiency and elegance, in a very fundamental way the code either works or doesn’t. This is a binary condition that cuts to the truth of the case very precisely, so that a syntax error could throw the whole thing off. In one way of looking at it, and as painful as such a process may appear, this binary precision is its very beauty and is the trait that gives it lasting value. On the other hand, when one gets to define one’s own reality freely, that is where true anxiety lies. (The concept of anxiety and freedom is not new, “we are what we pretend to be, so we must be careful about what we pretend to be.”)

Now, media is a vast universe and getting vaster. Not only is this true in the sense of new technologies and modes that have entered the domain and continue to enter – mobility, interactivity, data and its assortment of branches, security, artificial intelligence, and others – but also in terms of enriched applications. As has been contemplated in previous articles here, the segment also comprises capital markets – perhaps this was always so (the example one likes to use is Bloomberg, media or financial technology company?), but now maybe more obviously than ever – and this is where the notion of self-reporting takes on a more than philosophical turn. We see, for instance, Facebook preparing for an IPO and we assess the opportunity on the basis of opinions and analysis often disseminated through… Facebook.

The circularity is wonderful, and so is the snowball effect that sometimes perpetuates. In certain instances the snowball becomes a bubble that pops, and sometimes it grows like any rolling snowball. Sometimes, as well, observers get swept up by the rolling mass and cycle through it actively, perpetuating whatever fashion the sector’s trend-setters-cum-trend-reporters lead. When in rare instances an industry observer is able to step out of the cycle and look upon the scene with a fresh and distant perspective – such as, for example, Peter Thiel in his current lecture series – the experience is refreshing to the point of being almost hypnotic. (Perhaps this is so because of the nearly mathematical logic and clarity of Thiel’s overviews, and the feeling one gets that maybe he isn’t even “talking his book.”)

But precisely because of expediency and improved efficiencies enabled by the technologies now residing in the media domain - mobility, interactivity, data and its assortment of branches, security, artificial intelligence, and others – we should not have to rely on rare instances of individual vision. Because of digital technology and its binary sophistication, in short, because of coding, we should be able to diminish the anxiety of the free flow. In other words, the opportunity exists, in capital markets and in media – which have become increasingly synonymous - for information flow to be optimized, scrubbed clean, and made useful. That, ultimately, will be the dominant and lasting value-proposition of our evolving field, and it is the direction in which the sector is heading.

I miss the old-fashioned investor. Long ago, when I was newly minted, I catered to a retail clientele. A market-leading mutual funds organization, when this market was still small, saw fit to hire me and round out a class of youngsters staffing up its service center. I sort of knew how to brush my teeth, was then experimenting with my shoelaces, dabbled in some other stuff, mildly incidental to the job. This résumé was acceptable enough. The risk that came with it was diminished by the product being mutual funds, and by a branch manager who hovered like a cloud.

We had a regular guest back then, I don’t remember his name but let’s call him Mr. Blenderbonder, a retiree. Once every week or two Mr. Blenderbonder walked in to check on his portfolio and ask us what was “hot” that day. To be clear, these were mutual funds; as many of us now know, mutual funds are diversified portfolios of securities, designed specifically to not become hot or cold, but to be diversified. So we used to tell Mr. Blenderbonder about whatever fund of ours was receiving the most press attention or brochures from the marketing department, really for lack of a suitable response. “Put me in!” he used to say. (I can never forget that: “Put me in!”)

The manager would talk to Mr. Blenderbonder, and probe to see if he really thought it a good idea. Sometimes Mr. Blenderbonder changed his mind, other times not. Sometimes he lucked out – his account value tweaking up a notch – and sometimes he did not. He would come back to transfer the money into some other “hot fund” – Put me in! – which sometimes we talked him out of but were at other times unable to – the man insisted. I don’t think Mr. Blenderbonder cared about the actual performance, truth be told, as much as he did about the activity, about sitting down with us to dissect the market and his most current perspectives. And by the same token, Mr. Blenderbonder was shrewder than we (youngsters) realized. He knew what he was doing and he knew his limits. His swashbuckling gambits rarely took him out beyond some no-load bond fund or another.

But this was a very long time ago. This was before LTC and sub-prime and Bear and Lehman and the inexplicable flash crash; before hedge funds and high-frequency trading; before, in short, the sophisticates took over. Mr. Blenderbonder, according to reports, has gracefully bowed out, alienated in many ways from the investing ecosystem. The structures and the mechanisms are too complex to suit the retail fancy now, and the pace of flow is too enormous for him or her to fathom. This is speaking figuratively, of course, Mr. Blenderbonder does not in actuality exist. But there is a category of investors out there – I know there is – who would participate constructively in the market if they could comprehend and trust it more. There is a category of investors who would simply like to deal with finance on a human level, and whose renewed participation would make the market more efficient.

There have been many reasons offered for the recent pickup in activity and valuations in the angel and seed-stage investing field. For the most part, these explanations have had to do with diminished entry costs, quicker exits, and flashy exit values. Some of these explanations are more valid than others, but none of these takes into account the human factor: The angel markets (and venture capital) are among the last remaining bastions of purely human interaction in financial capital. These are fields in which investor and investee can still be old-fashioned and deal with each other like people rather than volatile data. One meets with another directly, says “put me in!” and comes back a week or two later to see how things have been going. One gets to posture, spin, digress, and all such things for which people are beloved.

So while it is true that cost and exit economics have played a role in this private finance realm, perhaps these are not so much root cause as fortuitous circumstance in an evolution that runs parallel to an otherwise mechanized and increasingly concentrated institutional landscape. The JOBS Act, in this way of looking at matters, is not so much a catalyst as a natural reaction. And those who are worried about risks to the “small investor,” as he or she dabbles in venture-stage platforms, need not be overly concerned: Remember that Mr. Blenderbonder was savvier than he got credit; and the fat finger, after all, belonged to someone else.

Employment, partnership and investment are all variations on a theme, each blending elements of the other in varying proportion. To clarify the point, investment does not refer to trading, just as the notion of employment in this generalization doesn’t take economic terms into account. But even factoring such caveats into the discussion, we really are dealing in matters of degree, and one way or another these roads all take us to forms of partnership, more or less loosely defined. Not all partnerships are the same, not all have equal durations, not all are based on similar principles, but generally there is a theme of codependency. Employment, partnership and investment are all variations on this theme, (more or less loosely defined).

In matters of finance and markets, there is no better laboratory in which to observe the described notions than the world of entrepreneurship and the sources of capital that support startups through their maturation. In matters of codependency and partnership, this is a frame of reference from which all other samples (at least in finance and markets) may be judged. But for this very reason, because the bond of partnership (good or bad) is so strong in these private-capital instances, these are transactional scenarios that must be looked at through a different lens from, say, the mere purchase of shares – even if in a large block, even if in the outright acquisition of a company. In public trade, the “partnership” can be dissolved with the click of a button, and in buyouts the acquiring entity assumes control. Codependency, in the sense intended for purposes of this discussion, is in its purest state in venture capital as it relates to entrepreneurs.

In this universe of activity, spheres of influence combine to add value to the whole, or otherwise diminish the same. Strategy, direction, good or bad, are shaped as a result of such combinations. Even in scenarios in which investors are entirely passive, this too sets an important tone and drives a certain course when a new enterprise is groping its way through volatility. In other words, matters of chemistry in this universe of activity take on more than academic stature, and the success or failure of ventures is not independent of the compounds thrown into the mix. More, the way in which elements combine takes on an added level of importance in financially illiquid asset classes – recent developments in secondary markets notwithstanding – where the principals have often to climb or sink together, and it may take some time to arrive.

These subjects came to mind on reading some of the back-and-forth the other day between venture capitalists on the subject of venture capital scalability. I had already been set up to think about these things several days before, when on one hand a very large venture group was profiled in an article about the host of services it offers to its entrepreneurial targets, and on the other a prominent seed fund described new efforts to build and launch its own new businesses (rather than merely fund others to do so). All of these angles considered, in addition to the previously described assortment, one begins to see that early-stage private capital is not financial but rather strategic capital, defined by elements of partnership that are no different from most such forms.

In this way of seeing the world, it isn’t only the business idea and the quality of the entrepreneurial team that determines success or failure of new ventures, and it isn’t merely the funds raised to support execution of the same, but rather all of that and one thing in addition: Hitting on the just-right catalyst in the codependency that is formed between the parties, which may or may not be a matter of luck. In any case, thoughtfulness and planning (on both sides) will certainly not hurt the odds.

Information asymmetry is a slippery subject. Pinning down information and its meanings is as difficult sometimes as determining the correct placement of the line between symmetry and asymmetry. These are complex and heady debates, and where years might be spent in chatter and Nobel PrizeÂ grantings, markets tend to settle issues more gracefully. This is why we love markets so very dearly, among other reasons: There is brevity and insight in markets that are as elegant as any minimalist design.

But even if markets in whole are thus, the quality is based on an aggregation of points more or less “with it” than others. An analogy could be drawn to a large ensemble – thousands of voices in unison, creating harmonies and effects – reduced to grotesquery when the singing stops but for a handful of tone-deaf dudes who haven’t finished their notes. The underlying mess exposed, we have to reconsider the music. But we shouldn’t, because the performance was complete and unified enough. So too with markets, even when they appear to break.

There is no better laboratory in which to observe the described themes than the market presently shaping to facilitate secondary private trade: A market built around asymmetry, where sellers possess information that buyers may or may not have. When a leading platform in this field is forced to substantially reduce staff because one position (out of dozens) is being passed off to another exchange – where, as it happens, information flows more efficiently – this makes us consider the method of markets and wonder. Seeing one piece of a much bigger whole, we are also witnessing an organism in action, where capital flows into its most efficient channels.

With organized secondary private markets, an attempt had been made to bring efficiency to an otherwise illiquid frontier. The emphasis, as this was initially coming together, was on capital formation and the accumulation of sources into a new arena for minority stock positions. We’ve learned, however, that this is a tall order when dealing in uneven information, and volume patterns in these private fields have gravitated to the one crumb of knowledge around – the prospects for an IPO – which is a path to efficiency, liquidity, and a more symmetrical direction.

More than any academic analysis, markets are thus teaching lessons (that we probably already knew): Capital and information follow one another in harmony, and both tend to flow to where the stream runs deepest. And if recent events, as described, are highlighting any one thing in particular, it may be that in the duality of capital and knowledge it is the latter, more than the former, that leads. If so, then capital markets are and have always been segments within media and telecom, which is a point suggested in this space before.

There is a double misconception that financial bubbles are bad and that these are caused by naive excess. In the first case, it isn’t the bubble per se that is devastating, but its eruption. Recall that we didn’t mind it in 1999 and 2006 so much, but we refer to these eras derisively after the fact. Note also that eruptions may sometimes happen even in the absence of bubbles – reflecting on 1987 and 1989, for instance – and maybe there were bubbles we just don’t think about, or were not aware of along the way of market history, undetected in the absence of a burst.

The second misconception (naive excess) is caused by a flawed emphasis. The way up and the way down are both fueled by excess, at least with hindsight, but it isn’t necessarily an issue of naÃ¯vetÃ©. The capital going in and coming out of markets during bubbles and bursts is very largely sophisticated, at least this was the case in the most recent bubble that erupted. Such capital is not easily hoodwinked, but it is highly concentrated and sometimes the various pockets move in concert. It is an excess of herd, perhaps, of fear of missing out, maybe, but this is notÂ naÃ¯vetÃ©, this is more like turning a blind eye.

Whether we speak about dot-com public stocks, subprime real estate, or seed finance for startups, the technical definition of a bubble would be a financial environment in which market values far exceed economic fundamentals. The air in between one and the other is the bubble; but really, who is to say? Fundamentals are so hard to estimate in isolation, and the calculation can be deceptively circular. In a liquid market, capital costs decline and customers spend – both fundamental value drivers that fully reverse course when bubbles pop. Causality is fickle.

So rather than speak about bubbles and bursts, let’s think of the described phenomena as market irregularities, and rather than speak of excess, let’s think instead about concentration. When you get down to brass tacks, as the saying goes, the described phenomena go hand in glove with market inefficiency. What some of us learned when we were little financiers in the schoolyard, feisty and bright-eyed, playing schoolyard games of portfolio theory, weighted average capital cost, discounted cash flow, option pricing, and the like, were fundamentals based on a more or less efficient marketplace… whichÂ presupposes diversity: It presupposes a large universe of willing buyers and sellers with a multitude of opinions and risk tolerances and conclusions drawn. It is a mosaic rather than a homogenous mass. When the mosaic is diminished, when fragmentation is replaced by concentration, market efficiency suffers, and one potential consequence is that which is referred to as a bubble, with hindsight, because it has burst.

Now, this is all looking back, and we have reason to look forward. The market is smart, and while one might lose faith in this organism from one day to the next, one shouldn’t do so for the longer term (loosely defined). As parts of the market were moving towards concentration, with the consequences described, other parts have been conspiring towards an offsetting effect: Technology, consumer habits, and now also the regulatory regime, have almost in tandem progressed towards a democratized flow of information and capital, made possible by social networks and the evolution of transactional media.

The importance of this evolution cannot be overstated, and even as many have correctly flagged increased risks of fraud and bad decisions in a more open environment, the remedy for such concerns is in significant ways already built in. If knowledge is a gating variable that stands between sound and unsound decisions, the suggested progress, based as it is on information access, should bring down barriers that stand between “sophisticated and unsophisticated” investors.Â Some of these themes, and others, are illustrated in a new CoRise overview aboutÂ democratization of markets and the convergence of finance and media. It’s a market trend that bears watching.

Absorption and expression are associated by more than sequence and causality, these are in some ways synonymous. The act of reading and the act of writing are interlinked, just as looking and showing are part of the same inclination. Taking a picture forces us to concentrate on its subject, and it’s debatable whether photography is analogous to reading or to writing, or to both in different ways. The value (for many) in jotting down ideas – for instance, in a blog post – is in the act of learning. It’s in the process of gathering one’s thoughts and sharing these in a concise and logical flow that hopefully resembles truth; just as the process of taking a picture, in the same way, is like an act of seeing. This isn’t as easy as it sounds, it shouldn’t be taken for granted. We look around us all the time, and we occasionally see.

The value of social media, in this way of thinking, is partly educational. The merest tweet forces its author to think. The most trivial Instagram snapshot forces its photographer to see. Even the falsest Facebook profile is the result of creativity. The self-expression at the core of such activities – within reason, naturally, and not all in the same way or to the same degree – is a mental exercise of measurable value. A trivial tweet may be a missed opportunity, as would be a careless photograph, but neither of these actions is as wasteful as reading or seeing the result superficially. In other words, beauty is in the eye of its creator, and that is a whole other can of worms…

Like many scribblings around this time, this too leads to the new iPad and its retina display. I haven’t seen it yet, but I feel as though I have. So much has been written about the wonder of its pixels, I look for pixels everywhere. I’m typing now and as the letters appear on my screen I feel a little bit jilted that the shapes don’t burst with flash. I look down at the keyboard and I think, how much better the plastic would appear if made of many tiny lightbulbs to accentuate it. Don’t get me started about my chair, that piece of wooden garbage could really use a pixel makeover. I sure would like to see it in high-def, with cracks and all, would make the sitting experience a new thrill each time, might even make the wood somehow softer. If I had a new iPad with its retina display, I don’t think I would ever look away.

This is an exaggeration, as was the prior sequence about the educational merits of a trivial tweet, but in exaggeration some random truth here and there is prone to surface. I don’t know what that truth is quite yet, but I’m nagged by the thought that the iPad’s visual extravaganza and social media are at polar ends of the same continuum – where the former is almost escapist, while the latter is concentrated reality – and that’s probably an exaggeration also. This is all strictly relative, and it’s certainly not a contest of one versus the other. The two obviously coexist, and maybe enhance one another in ways. But this duality of escapism and reality, of bright pixels for all and creativity for the individual, could merit additional reflection. I stumbled upon the notion while messing around on my keyboard and staring at a screen that seems almost analog to me now.

This is the era where everybody creates… Here are two venture-backed companies, united only by investor portfolio. One is a 3D-printing platform and the other a digital sound network: one is physical and the other is virtual. These have paired in the introduction of a new consumer offer: Submit a digital sound sequence – the segment of a song, for instance – and see this converted to a practical object, say an iPhone case. Consider the levels of creativity taking place: The creation of sound by an artist, the selection of sound by a consumer, the design of an individual object, its unique production by a machine, and finally, the creative combination of two companies that are only related by investor portfolio. The chain is tied neatly together in commerce, and perhaps one other portfolio company could creatively serve as an outlet.

The instinct for self-expression that is the creative instinct is the defining aspect of social networks. Whether we share our interests and activities on one, our professional profile on another, our news stream on still a third, or our pictures and our songs and our objects of desire, these are all aspects of ourselves and the social networking activity is our calling out. It used to be an exclusive circle, where entry was permitted only to the starving artists, but this has been democratized and now the starvation is widespread. This is to say, whereas media was once a dissemination of messages from few to many, it is now a network (many to many) and the value of individual content is as a result diminished: Supply and demand, fragmentation, commoditization, and so on. This is the era where everybody creates…

There are two parallel tracks contained in the broader movement. On one hand, the medium is the new star;Â and on the other hand advertising is displaced by direct commerce. The two hands are closely related, and it couldn’t happen any other way. See how one begets the other: If media was conceived as a platform for merchants to sell their wares, in which creative content was only incidental – to attract attention – and advertising was the true message and scope, then the fragmented cheapening of content leads to a fragmented cheapening of advertising, while the social networks become core to (a more effective) direct exchange. Groupon, you know, didn’t happen out of nowhere. Foursquare, like any network, is also self-expression. In networks, buyers and sellers converge, and, arguably, content and advertising are one. This is the era where everybody creates…

When Patti Smith improvised those lyricsÂ in the middle ofÂ coveringÂ the classic Byrds tune, she was promoting records and she was anticipating social commerce as a form of self-expression and sales. She was also describing a quality – so you wanna be a rock’n'roll star,Â perhaps more characteristic to our era than others – of individual ambition for stardom. This makes us the perfect promotional device, and it makes social media both a cause and effect in an era where everybody creates. Recognize my face? They call me broken glass… That’s because… of the sound… of my voice. I love that, I’m going to get an iPhone case to look just like the song fragment, and I will send messages and pictures from my gadget and tell everyone all about myself.

discourse and notes

Adaptation as a specialty

Thoughts on vision

Liquidity and the pivot in a new venture landscape

The fat finger wasn’t his

The strategic nature of all ventures