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Umair Haque at Bubblegeneration and the Harvard Business Blog has been talking about the instillation of corporate DNA for years.  It seems that with the increasing media coverage of society’s malcontents, such as global climate and environmental concerns, exploitation of labor, and lack of wealth parity, there has been a shift afoot, among management gurus, towards encouragement of benevolent values in corporate culture.  Google says “do no evil.”  Umair talks about how competitive advantage erodes value.

I don’t think this is new to us.  After all, looking out for your neighbor, while they look out for you, is a fundamental tenet of society, keeping both homes safe while one or the other might be away.  We appreciate these communal values and they are the root of an altruistic, efficient society.  But these traits are somewhat new to corporate functions, as they have thrived under profit maximization, cost cutting, competitive advantage, and crushing competition.  Accordingly, the adoption of a corporate vision, more aligned with basic human values, might be extremely challenging to implement.  What needs to happen?  When Google says our motto is “do no evil,” they don’t just say that this is our magna carta, they explain how to do no evil.  It’s the implementation of Google.org, the famous 70-20-10 rule, the contract with employees that they will provide an environment where one can be healthy, fed, and content (through free food, exercise, laundry).  They establish a framework to achieve this while developing mechanisms for feedback and evaluation.

Corporate DNA has to be bred through a concrete framework with measurables.  It seems that too often small business owners take too much of a touchy-feely approach to it and that’s going to cause confusion.  You need everyone on the same page.  While the themes and values should be touchy-feely and shared, the implementation should be rigorous.

Yikes.  It’s been > 10 days since a last 26.2 post.  Heading to a friend’s destination wedding will clearly do that to you.  That and preparing grants for Federal funding.

Which leads me to this Harvard Business Blog Post.  Since we are fond of both working and marathons, this discussion is apt.  Not much really to say here except make sure to treat yourself to some well deserved time off.  Anyone who has run a marathon knows that rest days during training and the taper prior to your race are CRUCIAL to peak performance during race day.  Fellow marathoner and venture capitalist Brad Feld, takes an off-grid vacation seemingly every other day (which in reality is once quarterly) where he doesn’t answer email, check stock quotes, etc.  It seems to have gotten him to a good place in his life.

Take your break.  Spend some time with family, read a book, or head out for a walk.  And do it while clearing your head from some work.

There are tons of examples of biomimetic work: replication of the stickiness of gecko feet, the anti-reflective properties of moth eyes, and the hydrophobicity of lotus leaves (you can find tons of work that my PhD advisor Bob Cohen worked on here). However for the most part these are designed surfaces which provide a static or passive effect.

There seems to have been a lot of recent interest in self-healing materials. These are materials that repair themselves dynamically in a response to mechanical fatigue. For example you can have a polymeric material which is embedded with microcapsules of a monomer and microcapsules of a cross-linking agent (think of a 2-part epoxy resin). When a micro fracture or craze runs through the material and through the microcapsules, the microcapsules break, the monomers and cross-linking agents mix, fill in the cracks, and cross-link to provide mechanical rigidity. This allows a structural component to continue to operate with relatively little loss in performance. Same as new!

But not really. There is a loss, albeit a small one, which can lead to further failure if the part is not replaced. The self-healing material acts as a safety feature but a sensor will be required to determine if the self-healing feature has been activated.  Once the polymerization reaction takes place, you’ve essentially used up the self-healing property of the material and a replacement is needed.

As self-healing materials make it to the mainstream (which undoubtedly they will as an important advance in the field of structural materials), the market for these fatigue sensors will correspondingly increase. I can imagine many ways in which you might be able to measure this fatigue “non-invasively:” electrical conductivity or thermally.

You can find more information about self-healing materials research at the University of Illinois’ website.

The Predictably Irrational blog brought up a revealing case study regarding organ donor rates across a range of European countries.  Ariely asserts that the discrepancy in organ donors (4.3% for Denmark vs. 85.9% for Sweden) originates from the way the forms are set up; Sweden having an opt-out choice and Denmark having a opt-in choice.  He continues to discuss the notion that indecision often arises when we are forced to make choices that are frightening.  In this case the frightening choice is what to do with our material remains once we pass away.  As we are pushed to consider our own mortality we seize up and select the default choice (i.e. leave the check box unchecked).

How many other scenarios can this be applied to?  Richard Dawkins in The God Delusion, essentially claims that religion is a default option and that we live in a world where no one wants to check the box.  In this situation, again there are quintessential dilemmas regarding life, death, our role in this universe and our purpose for existence, to which we wish to avert our eyes.  Though the fiery rhetoric or the synthesis of the book may not be agreeable to everyone (from the Amazon comments it seems to raise a ruckus with logicists, anthropologists, scientists, atheists, theologists, everyone), in conjunction with Ariely’s hypothesis, we really have to wonder why there are so few atheists out there.

OK, religion is probably a tough one to argue.  But how a grayer area, where we aren’t talking about 95-5 splits but something more akin to 65-35? What about doping in sports?  Are there really, as Jose Canseco said, 50% or some inordinate number of steroid users in the MLB?  Having heard testimonies of current and former users, albeit only a select few, it seems that the choice to do performance enhancing drugs is a difficult one.  On one hand, you want to stay in the league, make more money, or generally attain success.  On the other, you could get busted, suffer health consequences, or be libeled a cheater by people you care about.  We’re not talking life/death decisions here, but undoubtedly this would be a tough decision to make.

The default decision here is to not use performance enhancing drugs right?  Do we see fewer users of performance enhancing drugs than expected?  And why is the onus on the athletes to prove their innocence even before they are labeled guilty?  Obviously there are many more effects at play in this environment (the current PED witchhunt in MLB, BALCO scandal, etc.) but overall it seems that we are paralyzed by indecision when it comes to difficult choices.  Shouldn’t we assume innocence and test for guilt?

We don’t particularly enjoy delving into politics here at 26.2. But really this will wind up being a post more about the Long Tail phenomenon. I am spurred to action by a unique intersection of events which include waking up to NPR’s discussion of last night’s Democratic primaries and an interview of Arianna Huffington on MobLogic. In the interview of Ms. Huffington, done by the excellent Lindsay Campbell (Stanford alum!), they discuss the “lunatic fringe,” or if you will, the political commentators who sit squarely on the long tail. The low economic costs of production and media dissemination, brought on by the internet, have allowed anyone with any opinion to place it in the public sphere to be consumed. Yes it’s out there, but it’s still damn hard to get noticed unless you have something outrageous to say. Think of all the press Rev. Jeremiah Wright has been receiving and been using, despite my disagreements with his equivocations, to great effect for his own pulpit. Or think of all the “click” grubbers who make stuff up about all three candidates.

In current media, differentiation is key. For large mainstream broadcasters, they differentiate themselves from others through the immense size and scale of their existing distribution channels. For smaller broadcasters (bloggers, the fringe) to prosper or to get off of the long tail, they have to figure out a way to turn up the volume. And unfortunately, without possessing existing influence, that means taking a hard stance, being outrageously sensational, and appealing to the primordial herd nature which exist in us all. All this comes at the expense of rational thought. Regardless, the noise gets heard.

MA just submitted an excellent post regarding dual class structures for companies entering the public market.  He has done a complete 180 on his original opposition to dual class share structures.  Let’s keep in mind that MA, a serial _successful_ entrepreneur with two home runs (Netscape, at least) and working on a third.  His insight is useful for all us entrepreneurs who happen to be lucky enough (<1% or so of us) to have the problem of taking our companies public.

As I was reading through his persuasive series of arguments for why companies with dual class shares may be aligned with long term value creation I began to think about how this could be used as a screen for potentially undervalued stocks.  This should be done, although he also brought up counter examples of net value destroying entrenched management/’Arrested Development’ style families using a public company as their personal piggy bank.

All in all, it seems that dual class shares have value to management and as long as the right incentives are in place, there should be enough gummi bears to go around for everyone.

A recent blog entry from the Long Tail discussed fragmentation of the search engine market, specifically about the trade off between breadth and depth of quality search. On one hand Google crawls the entire web and determines relevancy algorithmically covering a broad space. On the other, there are a bunch of “human-powered searches”, such as Squidoo, who use human interpreted contextual analysis (read: reading with your eyes and writing at your keyboard) to create more depth and relevancy for more common search terms. The Long Tail appropriately described it as “leaving the long tail to algorithmic search and seeking success by relentlessly editing down to a human-edited short head”.

This may be a good strategy if you can achieve strong market share. This seemingly works for Alltop, Guy Kawasaki’s feed sorter. But allow me to invoke the story of Looksmart in the 1990s. Their human ‘categorization’ method, which consisted of my buddy Dave sorting hundreds of websites per day into their appropriate category, was a rough approximation, a web 1.0 version if you will, of Squidoo.

In this age, I’m not sure anyone doing search would be willing to not use Google. It’s the gold standard for long tail searches. But it’s pretty damn good at the common stuff too. They took charge of an industry long before Looksmart even went public.

And you can ask Dave how that good old 24:1 reverse split worked out.

I am not qualified to make any economic forecasts. But I have a gut feeling that over the next decade or so, we will see a substantial movement of left-ish moderates begin to embrace the financial modus operandi of the right. I think there will be a nationwide push to reduce tax burdens. Times are tough right now. If you consider some major factors such as inflation, devaluation of the dollar, the ineffectual fed rate cuts, and toss in a some foreclosures, it looks like you’re gonna have a witch’s brew of stagflation for the upcoming years. And if the belt gets squeezed beyond the last belt-hole, you might get this.

So we’re stuck right? Can’t tax more, yet we’re mortgaging our nation away. I think the way we get outta here is to reinvest in innovation, talent and education before we get to the point that we’re Europe. Let’s get the core of the US excellent again.

Awesome!

I am looking forward to Boston ‘09.  I missed Patriots Day dearly yesterday.

Today is earth day.  Go out and plant a tree or walk to work instead of driving.  Better yet, come up with new innovative solutions and technologies that will help out towards addressing our energy, water, trash, recycling needs.  We’ve still got a long way to go and implementing new technologies is the way to achieve scale.

Whatever you do, don’t give your credit card information to the ‘volunteers’ on the street who ask you ‘if you have a few minutes for the environment.’  I can’t think of anything more value erosive than to give a donation to an organization who pays ‘volunteers’ to collect donations.  At best you are getting a 1x return on your contribution and in reality you are probably giving 10 cents per dollar towards end usage.

Instead I would spend that money educating kids on environmental stewardship.