Kevin Warnock

Autonomy should remain autonomous.

The planned purchase of Autonomy by Hewlett Packard was part of Léo Apotheker’s plans to remake HP into a company more like SAP, which Apotheker used to run. Now that he’s out of HP, why should HP close its purchase of Autonomy? What is HP going to do with Autonomy the company?

This is going to spell the end of Autonomy. It might take five years, but this purchase will mark the beginning of the end. I say this not even knowing much about what Autonomy makes — but it doesn’t really matter what they make. These huge software deals are fraught with risk and trouble, and now that the guy that wanted Autonomy is unemployed, what’s the point?

Sure there might be a huge breakup fee to be paid to back out of buying Autonomy. But I’m sure the fee is less than USD $10B+, the reported cash purchase price of Autonomy.

Here’s an article in the Wall Street Journal detailing some of the silliness around this deal.

Ellison Stirs the Pot Over H-P Deal

Networking hour at the Berkeley Entrepreneurs Forum, September 22, 2011. Photograph by Kevin Warnock.

The Lester Center for Entrepreneurship has been hosting The Entrepreneurs Forum for about 20 years. I have been attending the forums for about 19 years. I have written occasionally about some of the events, such as when the finals for the Berkeley Business Plan Competition are held.

I have never tried to simply write about each forum to spread the word about what goes on there. I am a big fan of the forum, and I like to blog, so you would think it would have occurred to me to blog about each forum. But I didn’t think to start regular blogging about the forum until yesterday afternoon, hours before the forum last evening.

I brought my Canon 5D Mark II DSLR camera and shot some stills and video. I uploaded the stills at full resolution. Click once on a picture to present it alone on a webpage, and then click a second time to enlarge the picture to full 21 megapixel size.

Cupcakes by That Takes the Cake cupcakery, 2271 Union St., San Francisco, CA

The title of the forum this month was Food Entrepreneurship: Surviving the Recession — Strategies to Remain Profitable in Hard Times.

Here’s the description of the event from the website of the forum:

“The Bay Area is home to many innovators in the food industry. Each year, new food start-ups crop up at the ready to take their products to market. It is a notoriously competitive industry, made more difficult in a down economy. Come hear from Noah Alper, the Founder and former CEO of Noah’s Bagels, and in-the-trenches executives of food companies as they discuss lessons learned in the challenges of a down market and how their companies have responded to them.

The evening will also include a special networking hour, prior to the panel, featuring displays from some of the Bay Area’s most beloved, as well as up and coming food companies including 18 Rabbits Granola & Bars, Alicia’s Tamales Los Mayas, Bridge Brands Chocolate, Casa de Chocolates, Fava, Slow Girl Foods and Sukhi’s Gourmet Indian Foods. [note I removed one of the companies linked to from the forum website because there appears to be a technical problem that needs to be fixed before visiting.]”

This session sold-out Andersen Auditorium last year and is not to be missed for anyone interested in the business of food!”

There were perhaps a dozen food businesses in attendance. To promote their products, each business set up a table in the Bank of America Forum, the large lobby area outside the Anderson Auditorium where the forum programs are usually held. The food was delicious and photogenic.

The panelists Bob Burke, Joel Gott and Noah Alper were engaging and entertaining. I learned a lot about the restaurant business, a business I knew little about before this forum. The panel was moderated by Greg Beattie, a Partner at MBV Law.

I was surprised to hear Burke give what I thought was a good word for Groupon, a company I don’t think much of. He said it’s expensive but it drives instant traffic into restaurants.

All the panelists were very bullish on social media. Burke said traditional media like print and radio has mostly been supplanted by social media. Burke advises some fancy restaurants. I was surprised social media is now so important to costly restaurants.

Perhaps the most famous panelist was Noah Alper, the founder of Noah’s New York Bagels, which he built into a chain of 38 stores before he sold them in 1995 for USD $100,000,000.00. Noah’s Bagels is an institution in the San Francisco Bay Area where I live.

Alper warned against giving out free product to drive store traffic. He said Noah’s Bagels tried that once and their stores were overrun with guests for the day of the promotion. However, he said traffic died back down to exactly normal just a few days later. The result was they had given away a ton of bagels for free with nothing much to show for it.

Gott said that the employees his businesses are able to hire during this recession are truly outstanding compared to during the original dot com boom in the late 1990s. He said they get stacks of resumes from great candidates. He said employees in San Francisco cost him 5% more than elsewhere, a figure I was surprised by since the City requires restaurants to provide sick days and health coverage, unlike almost all other jurisdictions in the United States.

Noah Alper, founder of Noah's New York Bagels, September 22, 2011. Photo by Kevin Warnock.

I met and spoke with the founders of two of the exhibiters:

Arcelia Gallardo - chocolatier and owner, Casa De Chocolates, September 22, 2011

Casa De Chocolates — Arcelia Gallardo, chocolatier and owner — casadechocolates.com

I was drawn to Gallardo’s chocolate display by the sparkly sheen of the shiny smooth half spheres of rich chocolate. The sparkles were reminiscint of metalic automobile finishes — I’ve never seen such beautiful chocolate before. I spoke for a few minutes with Gallardo, and she told me how she got into the chocolate business. Sadly, I didn’t write any notes, and over the excitement of the rest of the night I forgot what she said. Here’s what the ‘about us’ page of her company’s website has to say about Gallardo:

“Arcelia Gallardo, owner and chocolatier, is passionate about pre-Columbian culture, chocolate and food. She started the company after graduating from UC Berkeley while working at the Le Cordon Bleu culinary school in Pasadena and has received training from world renowned pastry chefs Ewald Notter and Andrew Shotts. She was also a chef instructor at the Summer Cooking Academy in Los Angeles where she taught children and teenagers to work with chocolate.”

Derrick Jones, founder of cookie and truffle company Derrick Sky, September 22, 2011

Derrick Sky — Mr. Derrick Jones, owner — www.derricksky.com (note that you must prepend ‘www.’ to derricksky.com or the website won’t load)

Derrick Jones started Derrick Sky in 2009 after he almost died due to his undiagnosed food alergies. I tried all of his company’s products on display without knowing the story behind them. The products were apparently all vegan, delicious, inventive and scrumptious. It turns out they are perfect for those with allergies. I normally avoid gluten free products since I’ve assumed they sacrifice taste. But Jones’ products were really tasty, and I wasn’t aware I was eating something special for those with restricted diets.

The food at the Berkeley Entrepreneurs Forum is always delicious

The Berkeley Entrepreneurs Forum is captured to video by a professional videographer. The full video is typically posted to the Lester Center website a couple of weeks after each forum. The official videos don’t include two key parts of each forum — the networking hour and a sequence of short ‘elevator pitches’ called ‘the numbers.’ I made a recommendation last evening to the videographer that he begin taking video of the elevator pitches. I think these pitches are part of what makes the forum special. I am fond of these pitches because I was a ‘number’ in early 1999 and I raised money for my first Internet company as a direct result of that pitch. I think these pitches should receive a wider audience than just those in the room, which is why I have decided to capture and publish them until the forum itself takes over, if ever. Note that I will be very upset if these videos are ever used to get somebody in trouble. The Berkeley Entrepreneurs Forum is a small gathering of smart people. If people ask for something in a pitch, please don’t give it to them casually. Investigate carefully, and be sure to comply with rules of the relevant authorities, such as the United States Securities Exchange Commission. By posting this clip and ones like it in the future, I do not intend to make any public offering, and I do not intend any harm to any presenter. I do not know any of the ‘number’ presenters.

[Note: I am a member of the Advisory Council for The Entrepreneurs Forum but I am writing here as a private citizen. The views I express here are my views alone, and I do not represent the Advisory Council, The Entrepreneurs Forum, The Lester Center for Entrepreneurship, the Haas School of Business or The University of California.]

There are rumors circulating this morning that Meg Whitman will be appointed the Chief Executive of Hewlett Packard later today.

This appointment I predict will not work out for HP, and Whitman will eventually be fired. Whitman will make a fortune that I predict she will not deserve.

I have met Whitman. I shook her hand at one of her houses without knowing who she was. I ate dinner at this house, and my table was next to her table. Even though I didn’t know who she was, I noticed her and remembered her when I found out who she was about two hours later.

I noticed and remembered her because she displayed atrocious table manners. She was hunched over her plate, not sitting up straight. She grasped her fork in her fist, with all five fingers encircling the handle of the fork.

This dinner I was at was well attended, with over 100 guests. The house I understand was Whitman’s house for entertaining, not the house she resides in. Yes, the huge house in the pricey town of Atherton, California USA, similar in size to Ron Conway’s old Atherton house dating to the original dot com boom, was just for throwing parties. That probably explains why the building didn’t look lived in — everything, especially the huge kitchen, was too clean and perfect.

I’ve been to a lot of fancy sit down dinners, and Whitman displayed the worst table manners I have yet witnessed.

I mentioned to my date for the event that the woman who shook hands with us as we departed looked a lot like Meg Whitman of EBay. After some talk, we concluded that it was in fact Whitman, though neither of us knew it when we were in her presence.

It was noteworthy that as we shook Whitman’s hand, she said something to the effect of ‘it was nice talking with your earlier.’ This was interesting because we had not spoken with her earlier.

I hope Whitman took a class in table manners before she ran for and did not win the governorship of California.

Whitman demonstrated the table manners of a poorly raised grade school student. I was shocked and I remain shocked.

Normally I would not write about the table manners of anyone. But Whitman is in line to lead one of the most important companies in the world. She’s certainly a public figure, and how she comports herself in public is news.

Kevin Warnock photographed by Kevin Warnock, September 18, 2011

Kevin Warnock photographed by Kevin Warnock, September 18, 2011

I took some self portraits of myself today. This is the same location where I photograph the models I usually photograph.

I used my Canon 5D Mark II camera with a Canon 135mm soft focus lens that was not set to soft focus.

Click these pictures once to see them on a page alone, and then click them again to see them full size.

I placed the camera on a tripod and used the self timer to give myself time to jump into the picture. This was a tricky shoot since I shot these pictures at F2.8 for the shallow depth of field.

Michael Arrington 2011

It was a mistake for AOL to recently allow Michael Arrington to depart TechCrunch as Editor. If Ariana Huffington and Arrington couldn’t work together, Arrington should have been made to report to AOL CEO Tim Armstrong rather than Huffington.

If that wouldn’t work, then Huffington should have been fired.

On a much smaller scale, the harm done to TechCrunch by the removal of Arrington reminds me of the damage done to Apple by the removal of  Steve Jobs by John Scully.

I once read that Arrington wanted TechCrunch to be as big as CNet was at its peak. I predict that will never happen without Arrington at the helm.

CNet used to be worth USD billions of dollars. TechCrunch to date has peaked at a mere USD $30 million, and is likely worth much less this moment.

I doubt Arrington really wants to run TechCrunch long term as it must be grueling and exhausting work. I think Arrington will do well as a venture capitalist. I wonder how long his non-compete lasts. I can see him starting a personal blog. I can see him becoming one of the most read individual bloggers in the tech world when that happens. I’ve already read Arrington intends any day to start a personal blog. It must have been unwieldy towards the end with so many writers to oversee at TechCrunch. I bet Arrington would welcome a return to simpler times where he’s the primary or only writer on a site. People will read what he has to say even if he increases his number of conflicts dramatically.

I wish Arrington well. I’ve only met him once for a few seconds, but he was nice, already knew I founded gOffice and was not dismissive, which I appreciated.

Phil Ting, Assessor-Recorder for the City of San Francisco, California USA

For years now I have been trying to get the assessed value of my house lowered. Right now the appraised value is USD $140,000 lower than San Francisco’s assessed value. That means I am paying too much in property taxes, which is unfair.

The Assessor-Recorder of the City of San Francisco is hopelessly behind on processing requests for lowered assessments. The formal appeal I filed about a year ago still has not been processed. The appeal I filed this year is not due to be processed until 2013.

Last year I filed my appeal in person and paid by personal check. The check was not cashed for months after I presented it. This year when I paid, I chose to pay in cash, and I spoke with the woman in charge in the office about the delay in cashing my check last year. Amazingly, she was quite forthcoming with information.

She said that they routinely hold checks for so long that sometimes the checks are refused by the banks they are drawn upon for being too old, or stale. This results in a different department in City Hall charging a USD $50.00 fee, presumably for a bounced check. The supervisor I spoke with today said that her department had to pay lots of these $50 fees out of its own budget. What a mess this is. It’s such a mess I am putting my own appeal in jeopardy to bring this shocking news to my readers.

The office was littered with stacks of paperwork, including personal checks sitting on the counter where the public stands while conducting business. This is simply unacceptable. A person with bad intent could copy down the checking account information and steal money from unsuspecting check writers via an electronic debit transaction. This casualness with checks makes me suspect the checks are not locked up properly for the months that they sit before being cashed. How many people might have access to this sensitive information during this time? Checks are like cash, only more so. Once you have the account number an account can be drained to zero quite easily, I understand. The famed computer scientist Donald Knuth has written that he stopped using paper checks years ago due to their inherent insecurity.

Somebody needs to crack the whip in that office and get them to cash personal checks the day they receive them, or the day after at the latest. By waiting months to cash them, the City is putting people in danger of bouncing checks with their bank. Most people would never suspect the City would hold a check for months before trying to cash it. Yes, people should balance their checkbook and be careful. But I bet banks have made tens of thousands of dollars in bounced check fees over the years because of this incompetence in the office of the San Francisco Assessor.

I ask that my own application not be penalized for writing this post. I am writing this because I sensed that the supervisor I spoke with had the best of intentions but is so burdened by the flood of work that her department can’t keep up. I saw her personally answer the phone and it’s clear she cares about doing a good job as she was helpful and sweet to the people she was speaking with.

I hope that this post comes to the attention of those at City Hall that can help this supervisor process applications more fairly. Maybe they need more staff. Maybe they need better software. Maybe they need to adopt a cash only policy for the time being. There is an ATM in the lobby of City Hall so it would be easy for people to get cash on the spot to pay the USD $60 filing fee.

Finally, I should say that it is unfair to take over a year to process applications. I was faced with deciding to pay a second $60 fee not knowing the results of paying my first $60 fee. Maybe it was not worth it to pay the second fee.

I hope to get my assessment lowered by a six figure sum, as I have paid for formal appraisals in 2008, 2010 and 2011 to support my case. Wish me luck.

Massive default is best way to fix the economy by Brett Arends offers a thought provoking fix for the ailing United States economy. Arends writes for MarketWatch.

I am dismayed with how the United States responded to four plane crashes 10 years ago this day.

Wars were started that still continue. Trillions of US dollars have been wasted destroying much more than just property and life.

How much better would the world be if President George W. Bush treated the September 11, 2001 events as regular police matters.

Osama bin Laden still could have been found and brought to trial to determine his guilt or innocence, and we wouldn’t have wrecked our good will like we have with these needless and counter productive wars that are a drain on the world. Constant war is a drain on the mental energy of everyone in the world, I fear.

President Bill Clinton handled the 1993 World Trade Center truck bombing as a police matter, and I recall that some of the perpetrators were located, tried in civilian courts, convicted and punished. That’s the way to handle both daily criminal and infrequent catastrophic criminal events.

I believe the people behind the 9/11/01 attacks were upset with how the United States conducts itself on the world stage. I think a sane and proper response would have been to admit to the world that the United States does overstep its place more than it cares to admit. We should have attempted to open a rich and ongoing dialog with those who attacked us to solicit their advice on how the United States could tone things down in the future so that others wouldn’t be so hopping mad that they attack us.

Would such a polite and measured response have worked? I don’t know. But I think it would have cost less in every measure.

If a prestigious entity with world visibility were created where we would yearly sit with our attackers and those who think of attacking, we would have taken the wind out of the sails of our attackers to a substantial degree. The entity would need to have power, prestige and money for it to be seen as more than window dressing by those who might attack us. It would need to make sure action was taken after meetings so all those watching would know their voice was being heard and acted upon. This would be one heck of an organization, and I don’t know how to pull it off, but it needs to be built. We know how to build huge, costly organizations that can cause action. The US military is one such huge costly organization, for example. The organization for good I propose might need to rival the US military in size, scope, power and budget. That might sound crazy, but what really are we getting for our military expenditures now? I would argue a lot less than nothing. We are building negative equity like at no time in the history of the United States. We could fund the organization I propose by reallocating half the budget of the US military as a start. With just half its budget intact, the United States would still have a huge military, but we would also immediately have the largest organization for world change on the planet, and just by having made that commitment, I predict more than half our ‘need’ for a military at all would evaporate. Half of our military is still a lot, and think of the new friends we would make with the new organization for change I propose. Far fewer people would wish us harm if we were doing good on such an intense global scale.

Now prepare yourself for the most provocative text I’ve written in my life…

Soon after the September 11, 2001 plane crashes, United States of America President George W. Bush should have said something like this:

“The United States is profoundly sorry and embarrassed.

Without an invitation, the United States has been acting like the policeman of the world.

We recognize that  there are other valid points of view on how to live life. We don’t want to be attacked like this again, so I ask those of you who wish us harm to please share with us how we can avoid such attacks. We are willing to make big changes, and we’re willing to spend a lot of money to be a nicer world citizen. To demonstrate our resolve to change and see the point of view of others, the United States today is contributing USD $100,000,000,000 to get the ball rolling towards a more fair and sane planet. We will spend to improve the lot of the people that attacked us.

On behalf of the United States of America, I am sorry that this country has acted such that you believe you had to attack it. While this country may not agree with your points of view, it does recognize that you view your points of view as valid and worth advancing. Clearly, we need to talk, and we will talk. I personally will talk face to face with your representatives.

The United States feels so strongly that it will learn to play nice on the world stage that beyond the USD $100 billion I just spoke of, I am committed to working with the US House and Senate to gain approval to spend up to USD $3,000,000,000,000 over the next decade to fix what’s wrong with the world.

The United States is not a vindictive nation.

The United States could respond by starting wars and destroying entire countries, but we’re bigger than that, and we will show our attackers that the people of the United States are your friends, not your enemies. War is terrible. Peace is golden. The United States stands for peace, not war.

On behalf of everyone in the United States, including the families of those who lost loved ones today, I appologize for our actions, attitudes and positions that led others to believe that they had to attack the United States so violently to get our attention.

With hard work and determination, today will be the last time that any people of the world should feel that they have to attack us to get us to change our overstepping ways.

The United States in fact is ashamed that it has come to this, that we have upset other people so dramatically and profoundly that they have responded by flying airplanes into our landmarks, ending the lives of so many earnest people in the process.

Let us spend the following ten minutes in silence to reflect on the enormity of the events of today. Let us imagine a world filled with peace, happiness and enough to eat and drink. Let us cast aside our revengeful impulses so that we can come together at a meeting table to plan how the people of the world shall overcome the horror of today in favor of the brightness of a more promising future for all of humanity.

To the friends and family of those who lost their lives today, if you want to be upset with somebody, be upset with me and the past Presidents of The United States of America. What happened today was a reaction to this country overstepping its place in the world. It simply is not nice to tell other people how to live while we consume such a disproportionate percentage of the resources of the planet. In the decades ahead, we will need to learn to share our bounty with others more than we have done so far. Look on this redistribution of wealth as your insurance payment for the future safety of you, your property and your loved ones, not as a handout. The United States has been acting like a rich, spoiled kid on the playground eating the finest candy and laughing while others nearby starve and have little. We can remain a wealthy and prosperous and happy nation while at the same time leveling the playing field. We are a nation of thoughtful and ingenious innovators, and if we put forth our full effort, perhaps 100 times greater than what was required to place a man on the moon, we can solve the really big problems the world today faces.

Three trillion dollars is a lot of money. We can spend that amount building peace, love and goodwill. We can also spend three trillion dollars killing hundreds of thousands of people and destroying countries.

I am certain that three trillion dollars of peace, love and goodwill is more valuable than three trillion dollars of rubble, hate and death.

May September 11, 2001 be viewed by history as the first day of the most kind and peaceful period the world has yet known.

For those of you that worship a higher power, may that higher power give you comfort on this historic day of new beginnings. Let us rejoice in the saved lives of the hundreds of thousands of people this nation will not kill in response to the events of today. Let us rejoice in the new lives of the hundreds of thousands of babies by coincidence born this historic day. It is tragic that the United States lost thousands of its residents today, but keep in mind more babies were born in the United States today than lives were lost in these four plane crashes.

The United States is your friend, not your enemy. The United States wants peace, prosperity and fairness for all the people of the world.

Tomorrow will be better.

I love you.”

Instead, President Bush said something genuinely and dramatically stupid:

“You’re either with us or you’re with the terrorists.”

This is such an unwise thing to say it sounds like something out of the mouth of a high school student at a third rate institution. Yet his short statement formed the basis for spending of even more trillions of dollars than I proposed the United States spend in my mock speech above.

The United States ruined itself by its unwise response to four plane crashes.

I don’t spend a lot of time delving into the deep details of world politics. I am not a historian. I am not particularly well informed about what I write about here. I admire Noam Chomsky and Dennis Kucinich. I think Chomsky and Kucinich would like what I have written here today. I hope to meet both men one day, perhaps in response to this post if I am really lucky.

I believe I possess a very fine and properly working moral compass. I am proud of and guard my moral compass. I’ve made profound and life altering changes in my life when needed to protect and guard and respect my moral compass, even when it would have been so easy for many others to compromise. Perhaps the above makes me look childish and unrealistic. Perhaps I will lose a friend or three by what I’ve written. But what I’ve written has been on my mind for ten years now, and today I decided to just say what I first thought starting about 2 seconds after I first heard about the first plane striking one of the towers of the World Trade Center complex in New York City, New York, USA.

The United States has ruined itself by its response to four plane crashes.

Why?

PS – I am sorry for the loss of the family and friends of those who lost their lives in the events of and following September 11, 2001. By writing this post, I do not intend to upset anyone who lost a loved one. My heart also goes out to friends and family of those who have been killed or injured in the response to the events of 9/11, including those serving in military forces on all sides. I love the United States, and I love people generally, from all countries. I am so sad that all this death and suffering and hate has happened. It’s all so unnecessary and wasteful. Thank you for reading. I love you.

Kevin Laurence Warnock
San Francisco, California USA September 11, 2011

According to Groupon IPO on hold as SEC questions pile up, it appears that Groupon is having trouble going public.

Maybe people are realizing that selling currency for half price and then giving only half of that amount to the merchant is not sustainable.

Groupon would not be doing so ‘well’  if small businesses had better access to affordable loans.

I feel Groupon is taking advantage of merchants, who jump at the chance to get a check for thousands of dollars up front, while not recognizing they are committing their businesses to deliver goods or services priced 4 times more than the amount of the check they get.

Is USD $25 today worth having to pay back USD $100 in the near future?

I don’t think so, and I believe nearly all merchants over time will agree with me.

This might take five years for the story to fully spread to unsophisticated merchants, but when the story is fully known, Groupon and its clones will have to find something else to do to stay in business.

Do not invest.

Do not buy Groupons or similar financial instruments from Groupon’s competitors. Their products cheat business owners.

I put Groupon in the same category with payday advance lenders, rent-to-own stores and tax refund anticipation loan providers.