Curt Doolittle

Theme: Incentives

  • ARE PEOPLE LEAVING CALIFORNIA “The Great California Exodus” 1) Density. People f

    http://www.manhattan-institute.org/html/cr_71.htm#.UGD1C_E-us0WHY ARE PEOPLE LEAVING CALIFORNIA

    “The Great California Exodus”

    1) Density. People flee density. Despite the desires of urban planners.

    2) Unemployment. People flee to opportunities.

    3) Uncertainty: The government cannot provide essential services, and tax hikes are imminent.

    They forgot: 4) LA is a few points of pretty amidst a sprawling slum.

    Source date (UTC): 2012-09-24 20:11:00 UTC

  • Startup Skills Vs Startup Ideas?

    I’ve started eight companies, invested in about an equal number, and pitched more times than I can remember or count.

    The idea only matters if other investors are following it.  Investors are sheep. They follow trends in business ideas because trends mean over-investment that they can participate in.  Instead of ideas, they care about the returns on the idea. And most entrepreneurs spend too much time on their idea and not enough on  how they will market, sell, distribute and create their product and service, and who they can exit to if they succeed.

    Ideas are cheap, and plentiful. They are everywhere. The problem is not coming up with an idea. it’s coming up with an idea that customers will pay for and which provides an exit strategy.

    After you have that idea, the next problem is execution. Can your team demonstrate an ability to execute by getting customers, and producing results. The most common problem I come across is confusing learning with producing results.  No one will pay for learning. That’s just a cost. They pay for products and services. For “deliverables.” Customers and investors included.

    And then there is  the problem of cost.  Can you execute and create enough profit that an investor can see a way out, by tripling their money in three years?Or do you not expect to need an investor?

    I’ve probably answered this question a thousand times in my career, but people keep asking it in the futile hope that someone will provide them with an alternative answer.  But that won’t happen. 

    And, using facebook is an interesting analogy.  They started by making a dating tool for exclusive universities, and ended with one of the worse IPO scams in recent history.It’s an outlier.  Outliers don’t teach us anything. It’s the thousand companies that follow a fairly standard path that we learn from.

    https://www.quora.com/Startup-skills-vs-startup-ideas

  • Startup Skills Vs Startup Ideas?

    I’ve started eight companies, invested in about an equal number, and pitched more times than I can remember or count.

    The idea only matters if other investors are following it.  Investors are sheep. They follow trends in business ideas because trends mean over-investment that they can participate in.  Instead of ideas, they care about the returns on the idea. And most entrepreneurs spend too much time on their idea and not enough on  how they will market, sell, distribute and create their product and service, and who they can exit to if they succeed.

    Ideas are cheap, and plentiful. They are everywhere. The problem is not coming up with an idea. it’s coming up with an idea that customers will pay for and which provides an exit strategy.

    After you have that idea, the next problem is execution. Can your team demonstrate an ability to execute by getting customers, and producing results. The most common problem I come across is confusing learning with producing results.  No one will pay for learning. That’s just a cost. They pay for products and services. For “deliverables.” Customers and investors included.

    And then there is  the problem of cost.  Can you execute and create enough profit that an investor can see a way out, by tripling their money in three years?Or do you not expect to need an investor?

    I’ve probably answered this question a thousand times in my career, but people keep asking it in the futile hope that someone will provide them with an alternative answer.  But that won’t happen. 

    And, using facebook is an interesting analogy.  They started by making a dating tool for exclusive universities, and ended with one of the worse IPO scams in recent history.It’s an outlier.  Outliers don’t teach us anything. It’s the thousand companies that follow a fairly standard path that we learn from.

    https://www.quora.com/Startup-skills-vs-startup-ideas

  • How Sound Is The Process Of Providing Government Stimulus Based On Keynesian Economics In A Country With A Large Fiscal Deficit?

    Bertil Hatt answers the question correctly. But I think I”ll try to add an answer to WHY that trust is necessary.

    I tend to criticize Keynesian advocates daily, Krugman included, for arguing under the pretense that people do not understand the Keynesian model and the value of Keynesian stimulus.  It’s not that they don’t understand.  Its that the act of providing such a stimulus rewards and expands the government and its influence.  And the citizens have become polarized, into the the masculine hierarchcal model (conservative aristocracy) and the feminine communal model (social democracy), and no longer trust the government to spend in favor of all, but in favor of their cultural constituency.

    Small homogenous cultures tend to be redistributive.  One of the sillly myths, is that 350M americans of various value systems can be governed as are 10M northern european protestant germanics.  Majority rule assists us in selecting fiscal priorities when our interests and values are the same.  But as the values of a country become heterogeneous through immigration, or the breakdown of the nuclear family that allows women to return to their communal state of bearing children but asking others to pay for them, we render majority rule impossible. Because now we are not selecting priorities for the use of scarce resources, and generating laws to prevent privatization of those investment ‘commons’, but we are instead, generating laws to advance one system of moral codes at the expense of another, and using money from one group to achieve what is amoral to them.

    This is why democratic government is limited to homogenous cultural entities.  And why the market serves us across heterogeneous entities.  Our institutions of majority rule are not competent to solve this problem of heterogeneous values.

    So in a heterogeneous state, the Keynesian stimulus only works if the government can spend on investments that do not favor one constituency or another. And that is impossible.

    https://www.quora.com/How-sound-is-the-process-of-providing-government-stimulus-based-on-Keynesian-economics-in-a-country-with-a-large-fiscal-deficit

  • KRUGMAN Straw Man Of The Day : iPhone 5 Shows We Are All Keynesians?

    Krugman’s straw man of the day uses discussions about the impact of the iPhone 5 release on the economy to suggest we are all Keynesians, and that government should spend more money.

    [callout] [/callout]

    But all actions have costs. And Americans have decided that the cost of funding expansion of government influence, power, and corruption is so high, that government stimulus is even worse then continuing recession. So, while Americans may understand, within reason, the value of stimulus. Unlike Keynesian economists, American’s also understand the cost of the expansionist state. And they have had quite enough of it. Unlike certain Nobel laureates.

  • ENTREPRENEURSHIP Money itself gains one status. And money is made by providing o

    ENTREPRENEURSHIP

    Money itself gains one status. And money is made by providing others something that they desire, and will pay for. Too many aspiring entrepreneurs look for opportunities that are fashionable and from which they can obtain status directly from the association with the endeavor, rather than possession of wealth.

    So while opportunities lay about on the ground ready for anyone to pick up, most people search endlessly for some opportunity that inspires them, but that the market does not need because its in low demand, or is in over supply.

    I don’t care what business I am in as long as it’s not immoral in some way, and the people I would have to work with or employ are pleasant to spend time with. I literally tend to sieze what’s just in front of me, because I see the ground as absolutely littered with opportunities, all of which can be made into something with a little effort. And those opportunities either provide wealth in exchange for ones effort or they don’t. If they do, the wealth confers status, and freedom to do what one wants. And it is more likely that one will obtain wealth doing what others desire, than doing what one desires for its signaling benefits. It would not matter to me if I owned a commercial cleaning service, a garbage collection service, or any other common business, as long as it provided the returns that would allow me the freedom to enjoy what I wished.

    The market serves to provide us with wealth by serving others out of our own self interest. Prices ensure that we do not live illusions about what others desire, and how much tehy desire it. And the opportunities for entrepreneurship are everywhere.

    I’m not surprised at how many people who have worked for me have gone off to create new businesses. It’s the kind of person I’m attracted to hiring. But I’m always impressed with their ideas and achievements. And I’m more impressed with the fact that they seem to be successful.

    Just in the last few years:

    – Live Area Labs (Creative – and good work as well)

    – Tier 3 (IT/Cloud)

    – Salient 6 (Tech Services)

    – A specialty legal services business (which is fascinating) that I won’t name.

    – A financial sector startup (which is really fascinating) that I won’t name.

    And that’s just off the top of my head. I should start collecting a list.

    It’s a beautiful thing. 🙂

    Source date (UTC): 2012-09-18 10:29:00 UTC

  • THE DEMAND CURVE FOR COCAINE Thanks to the irrepressible Robert Murphy. A humoro

    THE DEMAND CURVE FOR COCAINE

    Thanks to the irrepressible Robert Murphy.

    A humorous way to teach a basic idea: prohibition increases price and demand, and by means of artificial scarcity, distributes vast amounts of money to producers of banned substances. One of the best ways to make money is to provide something that people want, and are willing to pay for, but it subject to extraordinary tariffs.

    Oh, to be a pirate on the seas. 🙂

    Source date (UTC): 2012-09-08 21:58:00 UTC

  • PROBLEM The American Austrian school (The Rothbardian MIsesians) are motivated p

    http://www.professorfekete.com/articles/AEFATaleOfTwoSchools.pdfONE PROBLEM

    The American Austrian school (The Rothbardian MIsesians) are motivated primarily by political rather than economic interests. Their leadership, in particular, that of Rockwell and the MI, adopted the Marxist ideological strategy of the community organizers on one hand, and public intellectuals on the other.

    And that strategy has proven eminently successful – nearly taking over the term ‘libertarian’ as ‘liberal’ was taken over by the left. So the American Austrians should be appreciated in the context of their ambitions and achievements. Intolerance is necessary for including people in an ideological identity. Politics is emotional by its nature, and ideology is more effective at inciting political action than is reasoned argument. So with their strategy, the Rothbardian Misesians of the American Austrian school have altered the political landscape – for the benefit of all libertarians.

    They have been so successful at introducing anarchic thinking that the rest of the libertarian movement has adopted their methods. And as of last year, have begun openly fighting for their identity against the Rothbardians.

    It is probably a better strategy to criticize the intellectual problems in their message while complimenting the ideological success. By doing so we do not violate their principle of purity, which we see as intolerance.

    (FB Note: Shared so that I don’t lose this comment)

    Source date (UTC): 2012-09-06 13:05:00 UTC

  • WHAT PERCENT OF YOUR PORTFOLIO IS IN GOLD? So, I have this little hobby forecast

    WHAT PERCENT OF YOUR PORTFOLIO IS IN GOLD?

    So, I have this little hobby forecasting currency changes. And, really, I do pretty well with it. That’s because governments are predictable and slow moving. And economic instability has created plenty of opportunity since 2008.

    Now, I’m not a gold bug. Like most analysts, I just view it as another form of manipulatable currency. And I’m not a trader. I invest in my businesses. And my cash reserves are defensive. So, gold is just a currency to move to when others are going to fall. The ticker symbol GLD is a fairly safe way to buy.

    And since gold is fairly volatile, you can buy it gradually over time in the valleys.

    I’m going to increase my GLD holdings by 5%, even though my intuition says to increase them by 10%.

    This election is going to have an enormous impact on world affairs. And like I wrote in 2006, the only way they’re going to fix the problem is to all but destroy the currency both here and in Europe. I just don’t see a way around it at this point without pervasive civil unrest.

    Source date (UTC): 2012-08-28 16:20:00 UTC

  • CONSERVATIVES WANT AN END TO TRANSFERS? Conservatives want to engage in exchange

    CONSERVATIVES WANT AN END TO TRANSFERS?

    Conservatives want to engage in exchange rather than transfer.

    But what is it that they desire in exchange?

    They desire aderence to virtues. Adherence to virtues is a cost for impulsive.

    The virtues compensate for the unfairness of biological differences.

    They drive down the cost of such subsidy and charity.

    But no. Instead the less able are due redistribution, obtained by force, due to the nature of their existence, rather than due to their actions.

    Societies will not bind on theft. All societies bind on exchange.

    Source date (UTC): 2012-08-17 13:58:00 UTC