SiliconBeat

With millions of users and more joining every second, LinkedIn has become a data nerd’s delight. And it allows for intriguing experiments like the one recently conducted by Monica Rogati, LinkedIn’ senior data scientist.

Rogati was curious: What could that rich set of data tell her about the factors that go into making an entrepreneur? Or, as she put it in a study released today, “Sequencing the Startup DNA.”

If there was a big surprise for her, it was this:

“Geography matters, even if you like to think it doesn’t,” Rogati said. “Even if you like to think starting a company is democratic and the world is flat.”

Rogati basically took about 10,000 profiles of people who had started companies in some fashion. Interesting to note that only about 2 percent of those people go on to start another company, becoming so-called serial entrepreneurs.

But looking at geography, the most likely place someone will start a company is San Francisco. Indeed, someone is twice as likely to start a company in SF as they are in New York. And in turn, they are twice as likely to start a company in NY as they are in Boston.

The data on age is also interesting: 40 percent of founders were between 30 and 39 years old; 20 percent between 40 and 49; only 34 percent between 20 and 29. That means that over 40 percent were over 30, which challenges the conventional wisdom about startups being a game for the young.

The other data point likely to get tongues wagging is the schools where founders are mostly likely to come from. Number one is Stanford’s Graduate School of Business, followed by Harvard’s biz school, Berkeley’s Haas School of Business, MIT Sloan, and Tuck School of Business at Dartmouth.

There’s other data in there, of course. Check it out and post any other thoughts below.

Last January, the Merc’s Dana Hull wrote a tough but fair story about Solyndra, the solar manufacturer in Fremont that had fallen on rough times.

The company was in full denial. Just a few weeks earlier, when I was speaking at a media forum, I made reference to Solyndra’s problems. A PR rep came up to be after the event and insisted things were going well and the company had big plans.

And then, after Hull’s story ran, we received the following email from the Solyndra CEO:

“Fremont’s Solyndra is on the right track

Dana Hull’s article (Page 1E, Jan. 30) does not tell the full story of Solyndra’s potential.

The piece focused on old news, missing the facts that we cut costs in half in the past year, had record consumption in the fourth quarter, will ship our 100th megawatt within the month, and expect to be cash-flow positive this year. That sounds like a good news story to us.

Our company has had growing pains, like many Silicon Valley startups transitioning to full production. But we have moved forward, and are proud to manufacture here in Fremont. We invite the Mercury News, and anyone else interested in our future, rather than our past, to meet the Solyndra team and get the real Solyndra story.

Brian Harrison

President and CEO Solyndra, Inc.

Of course, on Wednesday, we finally got the real story: the company is shutting the doors. There’s no shame in failing. This is Silicon Valley, after all. But it’s hard to respect corporate leaders who expended so much energy spinning their problems, rather than facing up to them.

Following my Sunday column, “Who will be Silicon Valley’s next Steve Jobs?” the most common response I got was: Why wasn’t Twitter co-founder Jack Dorsey on the list? That was echoed in comments, tweets and emails.

In fact, I did strongly consider Dorsey. But ultimately, I dropped him.

There are certainly many intriguing parallels between the Twitter co-founder and Jobs. Like Jobs, Dorsey created a remarkable technology company that has had huge impact. And while there are several people considered co-founders of Twitter, Dorsey is usually credited with the concept, and the development. And, of course, he was the first CEO of Twitter before being pushed aside a couple of years ago — just like Jobs!

Rather than sulk and withdraw, Dorsey started another company, Square, a mobile payment service that has shown strong growth, attracting a recent venture round of $100 million that values the company at $1.6 billion.

And then, Dorsey made a triumphant return to Twitter earlier this year to lead product development, while remaining CEO of Square. Again, shades of Jobs, with his creation of NeXT, his role at Pixar, and then returning to Apple at first as an advisor.

And certainly, many others have made the Dorsey-Jobs connection. For instance, BetaBeat recently wrote:

“What we were startled by was the growing feeling feeling that there’s something about Mr. Dorsey that just sounds so familiar. A heavy emphasis on clean design. A charismatic presence at public announcements… wait a minute: @jack is kinda like a young Steve Jobs. Apple has even started selling Square in their retail stores.”

So, why didn’t I put him on the list? Part of it was the conceit of the list. I needed to keep it narrowly defined to be able to make comparisons, and so I decided to stick to people who were all CEOs. Yes, Dorsey is the CEO of Square, but that’s not why he’s such a big figure at the moment. Square is still tiny in impact compared to Twitter. It’s his role at Twitter, both as co-founder and now lead product designer that makes him a figure of note.

And in that regard, Twitter is still a mixed bag for me. The company still has scant revenue, and is still struggling to get its arms around a complex set of design and feature issues. The most interesting things about Twitter are often built by third parties, and the company needs to redefine its relationship with its ecsystem.

If Dorsey sorts all of that out, and he helps create a core, unified Twitter experience, then he’s certainly on the path to demonstrating a Jobs-like prowess. And if he can actually help the company figure out a business model, and even return to the CEO chair, then I think he’s someone to be considered for legendary status.

Everyone on that list has a lot to prove to be considered heir to Jobs’ legacy. But right now, compared to other folks on the list, Dorsey has even further to go.

Joe Nocera is one of the business columnists I respect most. So it’s rare that I find myself in strong disagreement with his take on an issue. But his blistering column about why he thinks Hewlett-Packard really got rid of CEO Mark Hurd is one of those instances. And since things in the New York Times have  way of becoming conventional wisdom, I think it’s worth explaining why his theory is almost totally improbable.

To be clear, I’m not defending the HP board or Hurd. As Nocera writes:

“In fact, the directors should be called out for acting like the cowards they are. Mr. Hurd’s supposed peccadilloes were a smoke screen for the real reason they got rid of an executive they didn’t trust and employees didn’t like.

The stand-up thing would have been to fire Mr. Hurd on the altogether legitimate grounds that the directors didn’t have faith in his leadership.”

I agree with that statement as written. And yet, I don’t agree with its larger implication. Yes, HP’s board is looking more and more like craven weasels every day. And they’re digging their own hole by not coming out with a plausible explanation for why Hurd was really ousted. I agree with Nocera completely on that point.

(As an aside, it seems the board is waging it’s own battle of counter spin by leaking at least one version of what happened to the Wall Street Journal this weeked. I’ll come back to this story at the end.)

While we don’t know exactly what Hurd did, it’s clear he did something. He had some kind of relationship with Jodie Fisher that went beyond professional but stopped short of sex. And whatever it is, he clearly shouldn’t have done it. He put himself in this pickle and has only himself to blame for that. And like the board, Hurd is also not explaining himself to the world, though most likely his separation agreements contains a non-disparagement clause of some kind. While telling the truth and stating the facts ought not to be considered disparaging to anyone, even if it makes them look bad, no doubt HP lawyers would use anything as grounds to recoup the $40 million or so that the board is paying Hurd to go away.

So where does Nocera go wrong? It’s with his conjecture on what the board’s real motivation was. In a nutshell, Nocera is arguing that the board secretly has disliked Hurd for years, in part due to his power play during the HP spying scandal. In the recent book, “The Big Lie: Spying, Scandal and Ethical Collapse at Hewlett-Packard,” former BusinessWeek writer Anthony Bianco claims Hurd was really the main actor, but managed to pin the blame on board chair Patricia Dunn.

Nocera then goes on to note that employees detested Hurd, citing an internal survey in which two-thirds of HP employees said they would bolt the company for another if they could find a similar job. Nocera writes:

“Then there were the company’s employees. The consensus in Silicon Valley is that Mr. Hurd was despised at H.P., not just by the rank and file, but even by H.P.’s top executives.”

So here’s the leap Nocera wants us to make: After several years of massive layoffs, savaging the HP way, and not being a nice guy, the board was looking for an excuse to ditch him. In essence, Nocera wants us to believe that all of the sudden, the board of HP developed a conscience.

When you look at it like that, you realize this theory is nonsense. First, let’s remember this is, in fact, just Nocera’s theory. Like all of us on this story, he’s on the outside looking. He doesn’t point to a source or an internal memo or anything that bolsters this theory. He mainly relies on conversations with ex-HP workers, who not surprisingly despise Hurd.

Next, the Mercury News has reported that Hurd and the HP board were in negotiations for a new contract until the sexual harassment allegation hit. That would seem unlikely if they really wanted to force him out somehow.

But the part of this that I have the hardest time swallowing is that all of a sudden HP’s board suddenly started caring about what employees thought of Hurd. After all, in its various configurations over the past decade, the HP board has signed off on the mass firings of more than 94,000 employees. This was part of a deliberate strategy to reinvent the company that was launched by ex-CEO Carly Fiorina and perfected by by Hurd. Here’s what I wrote on this subject back in June, when Hurd announced another 9,000 layoffs:

“It’s a ruthless, brutally effective strategy launched under former CEO Carly Fiorina and practiced with precision by current CEO Mark Hurd. Without question, the strategy has transformed HP from being the sickly also-ran at the end of the last century to its present position of dominant front-runner.”

The other side of this strategy is the $45 billion that HP has spent on acquisitions under both Fiorina and Hurd. The most recent of the deals was the acquisition of Palm, but HP is still digesting numerous others, including 3Com and the much larger EDS. To one degree or another, these deals were orchestrated by Hurd as part of a relentless march that increased the overall number of employees at HP from 88,000 (pre-Compaq merger) to more than 300,000 (current employment after layoffs).

Many of these most recent acquisitions remain very much works in process. There are complex integration and strategic issues to be worked out. Hurd, though rightfully dinged for being less than a visionary leader, still obviously had some strategic and operational plan in mind for all of this. And no doubt he communicated that to other executives. But he had developed a strong track record for pulling all of these things off. His successor will have to not just lead HP forward, but sort out this massive integration puzzle. HP’s board would be seriously crazy to jettison the architect of all this in midstream without a darn good reason.

Even worse, the HP board got rid of Hurd at one of the most dynamic and challenging times in the industry’s history. As a result of all the mergers and acquisitions by HP and others in recent years, the competitive landscape has completely shifted. HP now finds itself in direct competition with Oracle (thanks to the Sun Microsystems deal) and Cisco Systems (now that HP has gotten into networking via its 3Com acquisition) while at the same time the company is taking on IBM even more directly in the services market (thanks to the EDS deal).

That’s a lot for any new CEO to walk into. Plus, let’s not forget the company now probably needs to hire a new board chair and president. After this, it would smell bad if they don’t break all of those jobs up. When the board says all is well, carry on, well, I can’t believe they’re really that delusional.

For all these reasons, though, I think Nocera’s theory is just plain wrong. I admire him taking a strong stand and delivering a strong critique on the board’s handling this. But his reason for doing so is off base. When Nocera refers to “the real reason they got rid of an executive they didn’t trust and employees didn’t like,” the truth is that we still don’t know what that reason is.

Finally, a word about the Journal story today. The story relies on a source who claims the board was angry about Hurd’s settlement with Fisher, which supposedly short-circuited their own investigation and caught them off guard. I have a hard time buying that the board didn’t know Hurd was talking to the woman about settling, but I suppose it’s possible. But for me, the story boils down to this sentence:

“The account of thinking at the board—which has faced criticism to the effect that it rushed to judgment and that the ouster wasn’t warranted—contrasts with an account given by someone familiar with Mr. Hurd’s thinking.”

In other words, it’s “He said, She said.” And it still feels like we’re not closer to knowing the real story here.

Since the announcement that it was killing Google Wave, Google has turned on the spin by proclaiming how they “celebrate our failures.” There is a lot to admire about Google, and one of those things is its ability to experiment and, as CEO Eric Schmidt said, “try things.” It’s not just hard for many organizations to find the culture and capacity to do that, it’s hard for them to acknowledge when those things don’t work.

Danny Sullivan, at Search Engine Land, mapped out many of Google’s most notable recent failures, and wondered just what the company was really gaining in terms of knowledge:

“But in its statements to the world, Google rarely sounds like it’s celebrating these missteps. It doesn’t really document anything that was learned. It just seems to say as little as possible to move on.”

But the bigger problem I see at Google is its approach to developing those new things. Just because you enable it, or allow it, doesn’t mean your approach to you develop new products and services. And what strikes me about Google is that so many of these products seemed dead on arrival.

Read the rest of this entry »

With everyone talking breathlessly about cloud computing, it seems I rarely hear this mega-trend being called into question. The advantages of moving your computing onto the Internet seem clear: Lower costs, more efficient management of resources. What’s not to like?

According to BitTorrent CEO Eric Klinker, the answer is: Plenty.

I had a fascinating conversation with Klinker about the state of his company, BitTorrent of San Francisco, which became the basis for my Sunday column about how TV remains the dominant way we consume video.

But one subject that didn’t fit into the column was Klinker’s views on cloud computing. In short, he sees the move to cloud computing to be a trend that runs counter to the very nature of the Internet.

“Cloud computing is a harkening back to centralizing everything,” Klinker said. “That’s just not the model that made the Internet so powerful.”

Read the rest of this entry »

I spent Tuesday at the Internet Identity Workshop at the invitation of Kaliya Hamlin. I met Hamlin a couple of years ago while working on another conference, and had some fascinating discussions at the time about the Semantic Web and the future of news.

Hamlin was named by Fast Company last year as one of the most influential women in technology. She’s the organizer of numerous un-conferences around the valley. But in this case, she was being recognized for her co-founding and ongoing role in the Internet Identity Workshop. Started five years ago, the group gathers twice each year and was holding its 10th conference this week at the Computer  History Museum in Mountain View.

The subject of identity on the Web is especially timely right now with the controversy swirling around Facebook. The social media giant wants to essentially be the main repository of your online identity, and allow you to carry that around the Web with you. There are a lot of benefits to that, but there are also reasons to be wary. The folks at the workshop are developing more open alternatives.

What’s at stake here? As Hamlin frames it on her blog:

“The issue at hand is fundamentally about FREEDOM: the freedom to choose who hosts your identity online (with the freedom to set up and host your own), the freedom to choose your persona – how you present yourself, what your gender is, your age, your race, your sex, where you are in the world.”

So I stopped by the workshop for a few hours to sit in on some sessions and talk to Hamlin about the subject of identity on the Web. It was a great conversation, so let me summarize some of her thoughts. And at the end, I added a copy of her presentation that kicked off the three-day gathering.

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After spending the morning at f8, the Facebook developers conference, I’m convinced more than ever that Facebook is about to take over the whole Web. And by the whole Web, I mean, well, all of it.

And if Google isn’t trembling over this, they ought to be. We might look back at this day as the moment when Facebook set itself on a path to eventually dwarf Google in size, power, and eventually, revenues.

Simply put, Facebook is positioning itself to become deeply embedded in almost every single website. And the way it’s structuring this platform, it places Facebook itself at the center of Web more than ever.

Here’s why I think Facebook is about to become a monster.

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I’ve had a couple of days to reflect back on Chirp, the first Twitter Developers Conference held this week. Reading back on my column this week, written the day before, my gut feeling that Twitter is at an inflection point was reinforced by what I heard and saw this week.

What’s amazing about Twitter is how the company has succeeded despite itself. The service is unreliable. It’s hard for newbies to learn how to use it. And there’s been no grand vision guiding it along the way. Just a flourishing of ideas and applications and uses driven by consumers and developers that Twitter has been racing to keep up with. That it hasn’t collapsed completely may be its most remarkable achievement so far.

But while that’s amazing, it also presents immense challenges for building a company for the long term. Twitter execs addressed a range of issues. Some of what they said was good. Some was bad (or troubling). And some is bound to get ugly.

I’m going to walk through each of those, and what I think it means for the future of Twitter. Read the rest of this entry »

This morning, Reply.com of San Ramon announced it had filed its prospectus to go public. Just over the weekend, I wrote a column about how Silicon Valley would be better off with fewer IPOs.

This is just a hunch, but after reading through the filing, I can’t help but think the company is really angling for a sale, rather than an IPO. Time will tell, but this looks and feels like a company that needs an exit soon. And given the numbers and history, I’m betting they’re hoping to attract interested buyers. If they get all the way to the IPO, I’ll be a bit surprised.

Here’s why: Read the rest of this entry »