Author: Gil

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Present success is no indication of future failure

In the New Yorker, James Surowiecki tells us to take a chill pill over Airbus’ current struggles.

In 2003, Business Week declared that Boeing was “choking on Airbus’ fumes,” and warned that Boeing’s “slip to No. 2 could become permanent.”

The problem with such prognostications is that they infer basic truths about a company’s prospects from its short-term performance. In fact, present success is often determined as much by context and chance as by fundamental viability. This is particularly true of the aerospace industry, because success is heavily dependent on a small number of big gambles. If you bet right, you look like a genius for a few years, even if the success of your bet was due to factors out of your control.

In the first few seasons after Jason Kidd joined the Nets, he would have two- or three-week stretches of lights-out shooting, leading commentators and sportswriters to announce that Kidd had “turned the corner” and become a good shooter.

Unfortunately, Jason Kidd is a career 40% shooter. All the good runs have been balanced out by below-average runs, leaving him exactly where he’s been since the start of his career: hitting 40% of his shots.

It doesn’t mean he’s not one of the best point guards of the last 30 years; he is. He’s just not a good shooter, and statistical blips are just that.

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Dog, hair, etc.

Surprise, dear readers! Amy & I are down in Louisiana, having surprised the official VM mother-in-law for her brithday yesterday! While we did keep it a secret from almost everyone, I’m starting to think we could’ve told them all we were coming, since no one would believe that people would actually come down here in late July.

Because it’s flat-out hot, brothers and sisters. The humidity adds a layer of stank to it, but the heat is just awful. The weekend after I proposed to Amy, we sat down with a 2006 calendar to figure out what weekends we could have the wedding. Our first move was to cross out the 5-month span between mid-May and mid-October.

We’ll spend time in New Orleans on Sunday, and I’m hoping to get some good pictures for your edification & enjoyment.

On the flight down here, I got upgraded to first class, which is always nice. It was a 7am flight, so I was too exhausted to get nervous about the flight. I just got some coffee and read for a bit. My co-first-class-ters, on the other hand, felt that 7am is a good time to start drinking. I mean, I know that the drinks are free in first class, but having a Jack-and-coke at that hour doesn’t seem like a smart strategy to me, unless maybe you’re seeking a homeopathic remedy for New Orleans.

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Search terms

We all know people who have Googled past girlfriends or boyfriends (“just to find out what they’re up to,” of course).

Okay: we’ve all Googled past girlfriends or boyfriends. Fine.

Sometimes, the former partner’s name is common enough that the search is fruitless. Other times, the person has a really distinct name, like, I don’t know, “Gil Roth” or something. (Actually, a search on my name does turn up a few other namesakes, including a NASCAR racer and an exec at a supply chain software provider, but hey.)

I’m not sure what people are looking for when they do this. Optimally, the former partner

a) has come into lots and lots of money and

b) still thinks highly of you.

But this doesn’t happen often, I bet. In my case, when I look up absent friends and comedians, it’s generally out of curiosity. A bunch of years ago, I looked up an old college buddy to discover

a) he was in the Squirrel Nut Zippers’ original lineup

b) he quit shortly before they had their hit single

c) he died of a heroin overdose a few months before I looked him up.

That was pretty freaky, but it led me back into contact with another old college buddy, which worked out okay.

All of this is prelude to letting you know, dear reader, that your Virtual Memoirist has been Googled by Not Just Anybody. No, I get hits on this site all the time from people who look me up on Google and other search engines. I admit that it’s kinda befuddling, trying to figure out who’s searching for my name or site, based on the general geography of their IP address (thanks to the SiteMeter code on the page). Sometimes it’s a relative, or an old friend, or a reader of my magazine. Someone goes to a public library in Trenton, NJ and searches for “virtual memories gil roth” almost every day.

But this was Not Just Anybody. No, dear reader, I was Googled by the very first girl ever to, um, google me. That’s right; this site has been discovered by the first girl I ever had sex with (my brother’s been complaining for a long time about a lack of ex-girlfriend stories on this site, but this is as good as it’s going to get, so deal).

She sent me a very nice e-mail Monday morning about this discovery, and told me a little about the intervening, um, eighteen years. Once my proto-Art School Girl of Doom, she’s now living a much more conventional life, and seemed a little embarrassed by that fact. There were a lot of other details, but she might get really pissed off if I mention any of them.

I tried writing her back, and realized how insane it is to try to recapitulate the second half of my life. It was tough enough when a friend I both met and fell outta touch with in 2002 recently wrote and asked me what’s gone on in the last 4 years. Writing back to her, I started to look over old posts from this site. I had trouble figuring out who was writing here sometimes (guest-bloggers excluded). It made me think about the mini- and maxi-transformations we undergo, the revolutions, the minor fall, the major lift, etc., etc., amen. Eighteen years is more than half of my life. The good half.

Eventually, I composed a decent e-mail back to her, and we’ve corresponded during the week. Her life’s been tough, but she seems happy that I have my life together.

One thing to note (and she said it’s okay to mention this) is that she’s been clean and sober for five years now. In and of itself, it’s not that interesting a fact. People sober up all the time. What’s interesting is that it adds to the tally of my demented single life.

First girl I ever kissed: Clean & sober for 20 years

First girl I ever had sex with: Clean & sober for 5 years

Number of sexual partners who have gone on to do charity work for Habitats for Humanity: Three (plus another one’s father designs homes for them)

Which is to say either I really knew how to pick ’em, or I really knew how to wreck ’em. Or both.

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And they said I’d never amount to anything

I’m interviewing a pair of companies this morning for an article in my September issue. Their combined 2005 revenues were $126 billion.

One’s a major drug company, the other a major healthcare distributor. Margins are a funny thing: the drug company had around $52 billion in sales, with a cost-of-goods of $8.5 billion, while the distributor had $74 billion in sales, with a cost-of-goods of $70 billion. On the other hand, the drug company’s selling, general, and administrative costs were $17 billion while the distributor’s SGA costs were $2.8 billion.

Reminds me of those differences in R&D costs from a few posts back.

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Alta Vista

Microsoft is trying to get PC designers to get some of that Apple feeling, by incorporating such exTREME! trends as the use of black! and white!

The PC world used to be divided into two camps: those who made lucrative software and the poor schlubs who built the low-margin hardware it ran on.

Apple has turned that model on its head. From the beginning it has managed to create a unified design for its products by building everything itself, first with the Mac and then later with the iPod. Although Apple sells one computer for every 20 PCs, the iPod’s success has proved how crucial it is to create a seamless experience for consumers, who are buying much of the gear these days. Says a top PC design executive: “You’re going to see more and more of this desire to integrate hardware and software.”

Even if it means borrowing from Apple. Microsoft denies doing that, saying it’s simply responding to demand for good design. Yet its approach has more than an echo of the Apple ethos.

“We’re decomposing the look and feel of Vista and bringing it into a language that hardware designers understand,” says Steve Kaneko, design director of Windows hardware innovation. And here’s another Apple-esque detail: The Zune player will work only with Microsoft’s planned music service, sources say. In other words, it will be part of a closed system, like iPod and the iTunes Music Store.

Decomposing? Anyway, given that a huge chunk of the Wintel PC market is based on churning out units as cheaply as possible for a customer base that wants to pay $499 for a computer, it’s unlikely that this initiative is going to yield anything half as elegant as the flatscreen iMac or the Mac Mini. But I give ’em credit for trying, even if it does put me in mind of that great “what if?” video about Microsoft designing the packaging for the iPod.

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Pee Wee Got a Raw Deal

Neat interview with Paul Reubens at the Onion’s AV Club. I first discovered Pee Wee Herman (I was going to write, “My first exposure to Pee Wee Herman”) when I was watching Cheech & Chong films with my dad at far too young an age (like 11). What’s great is that my father had no idea C&C movies were all about drugs. He just found them funny.

Anyway, I went from there to HBO’s showing of Pee Wee’s stage act, which was also transformatively weird. I’m glad he’s rebuilt his career, and I hope he can get funding for his Pee Wee movies.

AVC: The Internet Movie Database says you had “complete creative control over Pee-wee’s Playhouse, with three minor exceptions,” but it doesn’t give any details. Do you remember what the exceptions were?

PR: In the first episode, the network said “You can’t stick that pencil in that potato, because pencils are sharp, and you might encourage kids to stab things.” So we didn’t do that. Let’s see. There was an episode they got a letter about, where there was a fire in the playhouse, and a firefighter showed up and he and Miss Yvonne were flirting, and he said “You have to have a smoke detector,” and she said “I have one in my bedroom, above the bed.” They asked us to change that for subsequent airings of the show, so we went in and looped dialogue over it, so instead, she said “I have one in my kitchen.” I put it back to the original version for the DVD release. There was a shot of a bathroom door that we held for a really long time, and you could hear Pee-wee peeing. They asked us to tone the sound of the peeing down, and add a score so it was a little less graphic. All the changes they asked us to make seemed really reasonable to me, and we accommodated them. I think in 45 episodes, there were only maybe three other changes they ever asked for.

Enjoy.

And if you don’t enjoy that, here’s a piece from Foreign Policy about forgotten (but ongoing) territorial disputes. I can’t wait for Canada and Denmark to declare war.

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Hey, Raj, What’s Happ’nin’?

It’s long-ass essay day here at VM! Here’s a piece from the new ish of Foreign Affairs about the economic dynamo in India. I think India’s in a far better position to succeed than China in the long-term. If you read Mr. Das’ article, you’ll see that there are some major reforms India still needs to implement (in order to get itself out of the way), but I think the Indian version of entrepreneurialism trumps the totalitarianism that still lurks over the Chinese model.

I used to think that the main advantage of India was the bureaucracy installed by the British, but Das’ interpretation is that the bureaucracy is a major problem for the country. It’s possible that we’re both right, insofar as the bureaucracy and its focus on education were necessary for India’s development, but have now grown out of control:

Today, Indians believe that their bureaucracy has become a prime obstacle to development, blocking instead of shepherding economic reforms. They think of bureaucrats as self-serving, obstructive, and corrupt, protected by labor laws and lifetime contracts that render them completely unaccountable. To be sure, there are examples of good performance — the building of the Delhi Metro or the expansion of the national highway system — but these only underscore how often most of the bureaucracy fails. To make matters worse, the term of any one civil servant in a particular job is getting shorter, thanks to an increase in capricious transfers. Prime Minister Singh has instituted a new appraisal system for the top bureaucracy, but it has not done much.

The Indian bureaucracy is a haven of mental power. It still attracts many of the brightest students in the country, who are admitted on the basis of a difficult exam. But despite their very high IQs, most bureaucrats fail as managers. One of the reasons is the bureaucracy’s perverse incentive system; another is poor training in implementation. Indians tend to blame ideology or democracy for their failures, but the real problem is that they value ideas over accomplishment. Great strides are being made on the Delhi Metro not because the project was brilliantly conceived but because its leader sets clear, measurable goals, monitors day-to-day progress, and persistently removes obstacles. Most Indian politicians and civil servants, in contrast, fail to plan their projects well, monitor them, or follow through on them: their performance failures mostly have to do with poor execution.

Anyway, Das makes some neat points about India’s development, most notably the fact that it jumped from essentially an agrarian society to a service-based one, without spending much time as a manufacturing/industrial power.

Just another example of stuff I find fascinating, but probably bore the crap out of you.

So here’s Tom Spurgeon’s writeup about the just-concluded San Diego Comic-Con. Enjoy.

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Today’s post is brought to you by the letters R and D

BusinessWeek has an essay about the lack of innovation at the major telephone companies (yet another installment in the “I care about this stuff; no reason for you to” series). Mind-blowing quote:

One way in which these companies are very different from the old phone monopoly is that while the original AT&T had a world-class research operation, its successors don’t. One of the signal facts of the communications revolution is that virtually all the new technologies that made it possible were developed outside the phone world. Last year, Verizon’s revenue came in at nearly $80 billion. AT&T (without BellSouth or Cingular) had revenue of $44 billion. And yet while Intel Corp. spent $5.1 billion last year on research and development, AT&T spent just $130 million. The word “research” doesn’t even appear in Verizon’s annual report.

Now, in the pharma industry, there’s a lot of talk about “rethinking R&D,” as major companies learned that simply pumping more dollars into the process doesn’t necessarily yield results. When I compiled this year’s Top Pharma Companies report, I noticed that plenty of big guns have reduced their R&D budgets — not drastically, but it was certainly a change from past double-digit increases. And these annual R&D figures were at least $1 billion for the top 17 companies on the list.

Obviously, the drug industry is keyed by development of new products; patent terms dictate that every product has a brief lifespan. When the R&D pipeline falls short, companies turn to in-licensing new drugs. In my many Yankees = Pfizer comments, this equates to buying free agents when the farm system isn’t producing good players.

Turns out that this is the main model for the telcos.

There is something to be said for “buying it elsewhere.” If the big telcos built everything themselves, there would be no Cisco and no Motorola. But years of buying it elsewhere has yielded a culture distrustful of technology — and of progress: It’s impossible to imagine Microsoft developing a big new product and having the lead engineer shift from foot to foot in the corner pretending to be just another customer. It has meant, as with AT&T’s Lightspeed, that telcos are likely to offer services that only match, but not surpass, those available from others. And increasingly their approach has put the telcos on the wrong side of technological innovation, leaving them in the position of protecting their investments in their networks from the encroachments of new ideas.

Anyway, I’m fascinated by the ways major industries function, and this essay provides some neat insights into what it’s like to be an $80 billion player with razr-thin (ha-ha) profit margins. So give it a read.