Ross Mayfield comments on Heidi Rozen’s reflection about the impact underhiring has on a startup’s potential success.
Amen. In my experience, many start-up CEO’s can’t believe how much time it takes to get the hiring right. It’s consistently underestimated. And, following a bad hire, the time lost to correct it is also way too long. I can’t remember anyone saying “Gee, I really wish I had waited a while longer before letting that person go!”
Big news in the banking world last night with the announcement that JP Morgan Chase and Bank One are merging — becoming the second largest bank in the US. More information about all of this over on Payments News.
The Bay Area Economic Forum has announced its latest report on the economic profile of the San Francisco Bay Area.
Sean Randolph, president of the Bay Area Economic Forum, said, “The Bay Area’s extraordinary resources of human capital, venture capital, and research capacity underpin its ability to innovate, and give it a unique position in the national and global economies. Despite the economic downturn and its devastating effects, the region’s fundamental strengths remain intact.” However, the Bay Area is slowly losing its once-insurmountable lead over other metropolitan regions, and the report raises basic concerns about its economic future.
The Bay Area’s economic productivity is almost twice the U.S. average
(194 percent). While this reflects the caliber of the Bay Area workforce, its strength in research and development, and its emphasis on high value economic activities, the high cost of living is shrinking its competitive edge.
What’s not at all clear is what can proactively be done to address some of the key issues raised. Clearly things like taxes and the high cost of workers compensation insurance could be addressed by legislative action. But, realistically, what can you do about high prices on homes in an area with limited usable land left for building? How can you best force a consolidation of the many transit administrations to reduce overhead, ensure area-wide policies are effective while remaining responsive to local needs?
Back to taxes, a key issue here is the dramatic surge in costs associated with retirement benefits for public service employees at both the local and state levels. As those costs have exploded, other budget categories are being tightly squeezed with services suffering — dramatically in many cases. Here’s an example of the issue for Menlo Park (from The Almanac):
Menlo Park is expected to pay $260,000 in retirement benefits in 2003-2004 and $1.75 million the next year, Mr. Boesch said. The numbers are so dramatic in part because higher benefits negotiated with the police department a few years ago don’t take effect until 2004, he said.
Sacramento Bee columnist Daniel Weintraub shares his point of view re: the benefits Wal-Mart brings through lower prices.
So for the sake of 250,000 grocery store clerks and baggers, and their employers, the other 35 million people in this state are asked to agree to pay billions of dollars more than they ought to for the necessities of life, and to deprive themselves of choices that could make their lives better. You don’t have to be a Wal-Mart shopper to see that this is not a bargain that makes sense.
He follows up with some additional commentary on Wal-Mart’s medical plans for its employees.
Some alarming words last night on NewsHour from former Secretary of the Treasury Robert Rubin:
PAUL SOLMAN: So when you talk about the ’90s, when you were in the administration, as a period of a virtuous circle, where lower deficits led to more confidence, lower interest rates and so forth, you were concerned about this famous vicious circle, I take it, of higher interest rates, lower confidence and so forth?
ROBERT RUBIN: Yes, I’m very concerned about it, Paul. I think the probability that the course that we are now on, the fiscal course that we are now on is going to lead to serious trouble is exceedingly high.
PAUL SOLMAN: 70 percent? 80 percent?
ROBERT RUBIN: No, I think it’s probably materially higher than that unless it’s repaired, but the trouble is the repair of it is going to be very difficult. Alan Greenspan said about a week or two ago that our future depended on fixing it.
Rubin has a new book out: In an Uncertain World.
BusinessWeek has a scathing cover story article about just resigned Boeing ex-CEO Phil Condit. Reading it, one has to wonder what the board of directors was thinking during the relatively long tenure that Condit had as Boeing’s CEO. Amazing — and disturbing…
Flawed strategy. Lax controls. A weak board. Personal shortcomings. CEO Phil Condit lasted longer than he should have. The really surprising thing about Philip M. Condit’s resignation as chairman and chief executive officer of Boeing Co. was not that his seven-year tenure ended so abruptly on Dec. 1, but that it lasted so long.
When the risk takers come into their own – John Cook writes in the Seattle Post-Intelligencer:
Despite the uncertainty in the current economic environment, a number of entrepreneurs and VC investors are convinced that now is an auspicious time to start a new venture.
Notes one VC: “Only good sailors go out in stormy seas. The teams and the people who are willing to head out with a new enterprise right now are good people to invest in.”
In fact, some investors point out that three current technology behemothsËœOracle, Microsoft, SunËœwere all started during a down technology cycle. The article includes a review of potential advantages for a business started during an economic downturn (e.g. less competition, greater access to intellectual capital).