How Pure is Your Model?

Will Price today touches on one of the toughest challenges any software company faces which is how loyal you stay to your delivery model. At Comcate we deliver (almost) exclusively software-as-service, but as Will mentions, we have occasionally committed "unnatural acts" to close a deal. Similarly, when a client requests custom development, we try to estimate the general applicability of the development (ie whether we could upsell the new functionality to other clients). If the general applicability is low or not on our product roadmap, we try to avoid taking on "bad revenue" business. Will concludes that "good revenue which reinforces efficiencies and scalability trumps absolutely higher revenue" and that "purity is a virtue worth aspiring to." Easier said than done… As Comcate has matured we have earned the luxury of distinguishing good and bad revenue!

The Emergence of Boutique American Cities

Democracy: A Journal of Ideas has a great article (reg required) on the changing role of cities in America. Joel Kotkin argues America now consists of "boutique" cities — Boston, San Francisco, and New York City — which house educated, elite, and wealthy residents at the exclusion of most everyone else. In boutique cities the debate is over where to put the next sushi bar, or if one neighborhood has too many coffee shops, or how condos should be regulated…not how to solve the affordable housing problem.

Spatially, the boutique city can be found in certain locations–Manhattan, Chicago’s "Gold Coast," much of San Francisco, Seattle, and West Los Angeles–but it can best be viewed as an interconnected archipelago of interrelated elite communities. Its fundamental economic power lies not so much in the efficiency of place but in harnessing the influence of the media and financial elites. It depends also on the energies of a steady stream of young, educated workers and legions of poorly paid, often immigrant, service workers.

Boutique cities comprise of the elite and the poor who take care of the kitchens. It’s hard to be a middle class person in San Francisco, one reason why San Francisco’s population is now shrinking and why there are more dogs than kids here. Of course some see this as a good thing — high culture reigns, artists flourish, geeks create million-dollar companies, and every other person you meet has a college degree (SF is the second "smartest" big city).

What boutique cities leave behind, however, is the "incubation of social mobility" that metropolises historically have provided. Houston, Charlotte, Orlando, Phoenix, Cleveland, Cincinnati, Baltimore, Detroit, St. Louis: all these cities are now better "aspirational cities" for middle class people. The problem is they’re all trying (and failing) to become boutique cities by introducing slick cultural ammenities.

Kotkin concludes by asking what the role of cities should be in the 21st century. Are cities as relevant now that an entrepreneur in Bloomington is just as connected to the global economy via the Internet as an entrepreneur in San Jose? Are some cities better served as city-states (Shanghai, London, New York)? Will cities ever return to their roots of being home to a socioeconomically diverse citizenry or will a bifurcation of boutique and aspirational cities continue?

All good questions. But for the moment I gotta get back to fighting for a third sushi bar and fourth coffee shop in my little San Franciso neighborhood!

My College Admissions Decision: Claremont McKenna College


In fall ’07 I will start at Claremont McKenna College!

What is Claremont McKenna College?
CMC is a small, liberal arts college in Southern California. Statistically, it is one of the most selective colleges in the country and, with Pomona College, represents the west coast in the top tier of liberal arts colleges. But the beauty of CMC is its qualitative characteristics.

Unlike many elite liberal arts colleges which all blend together, CMC is distinctive. It has carved out a niche in higher education and, frankly, dominates it. Claremont is all about leadership, government, business, and public policy. The College embraces "life entrepreneurship" more than any other school I visited.

Why Did I Choose Claremont?

First, I believe in the liberal arts college model. Second, the College’s mission fits my life mission perfectly. Third, I love California. Fourth, my Dad had a great experience at CMC. Finally, I had a good visit — the students I stayed with were impressive. My host was an undergraduate doing deep research on the WTO and Taiwan (he chose CMC over UC Berkeley for its economics program), his good friend was involved in political life (he chose CMC over Georgetown for its personalized approach within the famous government department). Also during my visit, the professor of a class I audited asked me if I wanted to have lunch afterwards. She cared.

The Consortia — Claremont McKenna is literally across the street from Pomona College, Pitzer College, Scripps College, Harvey Mudd College, Claremont Graduate University, and a variety of research institutes. All the colleges share resources which means students can take classes at any of the colleges. This means CMC, for example, can have a government department of 40 professors — an insane number given the 2,000 students at the school — and not offer any arts or engineering. Students who want art and engineering take their classes at Pomona or Harvey Mudd (arguably the best liberal arts college in the country for engineering students). Moreover, while you receive the personal attention of a liberal arts education, you are in a town with over 6,000 students, faculty and staff of 3,300, and 2,500 total courses. The Claremont Colleges is perhaps the only place in the country where you can get the best of both worlds in such close proximity — personal attention on the one hand, and the resources and feeling of a university on the other.

Curricular Focus — Among the top 10 liberal arts colleges there is little to distinguish a college like Swarthmore from Amherst, or Carlton from Pomona. CMC has taken a different approach. They have branded themselves as a school devoted to educating leaders. The Kravis Leadership Institute, the Drucker School of Business, and a variety of other programs on campus promote a theme of leadership, business, exploration, and impact.

Peter Drucker — Perhaps the greatest management thinker of our time, Peter Drucker taught at Claremont for the last 40 years of his life. Hence the Drucker School of Business; not a terribly prestigious business school, but an energetic one, with expert faculty, research output, and high level business courses.

The Government Department — After Harry Jaffa, a protege of Leo Strauss at the University of Chicago, went to Claremont and founded his "Sousa" school of Straussianism, the Claremont government department has attained national profile. As the chair of the dept wrote to me, "CMC’s government department is the largest and wisest of any liberal arts college in the country." One Government major actually dropped out of CMC a couple years ago to be George W. Bush’s personal secretary (he’s now going to be the first HBS student who doesn’t have an undergrad degree).

Faculty — You probably haven’t heard of many of Claremont’s professors. After all, they focus on teaching undergraduates, not appearing on CNN. This is fine by me — I want a professor who I can have dinner with! That said, there are a couple people on-campus who fire me up by name alone. David Foster Wallace, one of the best American writers in his generation, teaches at Pomona. Mihaly Csikszentmihalyi, author of Flow: The Psychology of the Optimal Experience, one of my all time favorite books and a landmark in positive psychology, teaches at Claremont Graduate University. A friend from my high school is a freshman at CMC and his government professor is Charles Kesler, the famous head of the Claremont Institute and editor of the Claremont Review of Books, a conservative counterweight to the New York Review of Books. His economics professor served in an advisory capacity to the current Bush administration. (The faculty and student political split is 50/50 liberal and conservative.)

Athenaeum — CMC hosts guest speakers for lunch and dinner four days a week, every single week of the academic year. Definitely the most guest speakers in an organized fashion than any other liberal arts college, and probably most large universities too. Top speakers — Janet Reno, George Will, etc — are invited for dinner inside the Athenaeum dining room. You must make reservations, wear nice clothes, and not only listen to the speaker but discuss the relevant issue at your table. This is one of CMC’s shining points and given my propensity to meet new people and discuss all sorts of issues, it suits me perfectly.

Los Angeles — Even as a San Franciscan I can admit that Los Angeles is a tremendous city. My company Comcate works with many cities in LA County, including a big contract with the City of Pomona, CA. Claremont is an hour east of LA.

    • Weather — Incredible weather. BBQs and sandals. I’m told Claremont is sheltered a bit from the smog.
    • Platform — Great city for me to operate on. Tons of interesting people and companies.
    • VC/Entrepreneurship — Southern California may soon eclipse Boston as the #2 most active VC region in the country, behind Silicon Valley
    • Brains — UCLA, USC, Occidental, California Institute of Technology, and the Claremont Colleges all make Los Angeles full of bright students.
    • In-N-Out Burger — SoCal is home to the original In-N-Out Burger location, and there are two in the City of Pomona alone.

Networking — Because so many CMC grads go into business or the professions, the network of CMC alumni is incredible for a small college. I’m not even at the college yet and I’ve already tapped into it.  Every day I find someone new who’s a CMC alum — Patrick Lencioni, author of the popular business fable books, or Jonathan Rosenberg, one of the top Google executives.

Henry Kravis – Kravis is one of the most successful investment banker in U.S. history, with a legacy that will stand alongside J.P. Morgan as one of the titans in American finance, says Kravis, a CMC alumnus, is perhaps Claremont’s most notable patron. I hope to develop a relationship with him while I’m there.

If you don’t know much about Claremont, don’t worry, that will change over the next five years!

Book Review: The Starfish and the Spider

The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations by Ori Brafman and Rod Beckstrom has the potential to be the hot business book of the fall.

Full disclosure, I had a great lunch with co-author Ori a few weeks ago and I’m a fan. He sent me an advance copy of the book. It hits bookstores October 5th.

The premise of the book is straightforward: Cut the head off a spider and it dies. Cut off a Starfish’s leg and it grows a new one. Decentralized organizations — Skype, Wikipedia, Cragslist — can endure because they rely on the power of peer relationships.

This thesis won’t strike anyone who’s been swimming in the peer to peer production / blogging / user generated content world as incredibly profound, but Ori and Rod have done a great job at organizing examples, contrasting rigid hierarchal organizations with decentralized ones, and offering ten concluding rules to remember in a "starfish world." They have provided a good framework for talking about these topics.

The absence of value judgments / interpretation is the only part that left me wanting. There are times when I wanted Ori and Rod to express an opinion about the goodness of the starfish model. They start to walk in this direction when discussing file sharing and the music industry, but in the end back away and say maybe labels should focus just on auxiliary revenue streams such as concerts. They also don’t discuss the other side to the Wikipedia revolution, or what Jaron Lanier calls "Digital Maoism: The Hazards of New Online Collectivism."

But those kinds of discussions probably extend beyond the purview of this book. Starfish and the Spider is focused, engagingly written, and makes important points about what kinds of movements will survive in the 21st century. I recommend it. Congrats Ori!

Tyler Cowen on My College Process

One of my intellectual heroes, Tyler Cowen, a professor and "Economic Scene" columnist in the New York Times, has some kind words and observations on my college admissions experiences on his must-read blog. Thanks, Tyler.

Tyler’s breadth of interests makes him one of the most provocative public intellectuals. Here’s my review of his book Creative Destruction, here’s a long debate I hosted on independent book stores based on one of Tyler’s articles, here are my notes from Tyler’s talk in Zurich this past summer.

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