The official "blog of bonanza" for Alfidi Capital. The CEO, Anthony J. Alfidi, publishes periodic commentary on anything and everything related to finance. This blog does NOT give personal financial advice or offer any capital market services. This blog DOES tell the truth about business.
Death and taxes are certainties in life, according to folk wisdom. Sarcasm should be an additional certainty.
Argentina moves closer to default by refusing to compromise with its holdout bondholders. I saw this one coming. Go read my previous Financial Sarcasm Roundups if you can't handle the truth or are too dumb to remember what I've been saying for weeks. I note with interest the possibility that Argentinian soybean farmers may hoard their crops. Hard assets like agricultural produce make sense in a high-inflation economy that world markets have isolated.
The IMF is letting us all know that there is no cause for alarm. That's nice to know. It's also nice to know that Chair Yellen acknowledged several equity market bubbles and is helping other regulators put exit gates on bond funds. People should know these things but they prefer to remain ignorant. Trusting some untrustworthy financial officials is going to get a lot of people hurt.
Bank of America hypothesizes that China is buying Treasuries through a European clearing firm in Belgium. That would explain the mystery surge in Belgium's Treasury holdings that market observers noted earlier this year. It's obvious that large holders of Treasuries will have a huge problem on their hands regardless of where they clear their trades. They won't be able to find buyers to take large volumes in a hurry. The Fed's bond fund gates for US investors are a message to foreign central banks. Message received, loud and clear.
I'm pressed for time today because some Silicon Valley techies invited me to a reception down in Menlo Park. I need to be on the road in a few minutes. I will seek out sarcasm there but I don't expect to find much I can use, as these things tend towards proprietary discussions of business models. I hope Models In Tech are on the scene; now those are some models I'd really like to discuss.
I have been a San Franciscan for just over a decade. There are times when I am tempted to believe that is one decade too long. I never give in to this temptation because I am destined to show San Franciscans the path to enlightenment. The local nouveau riche class is still finding its way to acceptance.
The New Yorker article "California Screaming" is the East Coast Establishment's way of looking down its nose at San Francisco's newly rich. That magazine's circulation base is mostly old money trust fund babies who turn into full-time salon intellectuals, plus the libraries and medical offices serving a pretentious crowd. No self-respecting East Coast WASP would ever agonize about how to bring public policy innovation to the lower classes. Such trite notions are beneath them. They would simply write a check to their favorite charity and get back to shopping in the Hamptons. The Bay Area fetish for "getting involved" in solving poor people's problems must amuse the monied elites to no end at the other end of our continent.
We do things differently out here in the Bay Area. I have observed the One Percent of this nine-county MSA long enough to understand that their social cognizance is precisely calculated. The lyrics are a bit different out here but the song remains the same. The social climbers on the East Coast would recognize the tune even if they deign not to hum along. The "do something" impulse in the Bay Area means the nouveau riche tech elite translates its skill set into charitable outreach that . . . further enhances its skill set.
Full Circle Fund is the leading exhibit for the Bay Area elite's attitude toward charity. Its members pay a premium for the privilege of helping accelerate local charities' tech adoption curves. That effort, plus some high-end socializing, is a big career enhancer for mid-level corporate project managers in greater San Francisco. I have nothing against Full Circle Fund, and I would probably join them if I thought my skills fit their needs. The fund and its non-profit clients need well-pedigreed managers whose social connections translate into donations and prestigious board memberships. They probably have no use for a sarcastic financial analyst, like yours truly. I would just get in the way of their latest dynamic change initiatives.
The local social climbers who are not techies have their own philanthropic settings, aping the best salons on the East Coast. I am a longtime member of BRAVO!, Symphonix, and ENCORE! where San Francisco's most pretentious yuppies cultivate a very selective meat market. Quite a few of these people have blood connections to their fellow snobs on the Atlantic seaboard. Some members of those organizations have asked me to leave over the years because they disapprove of my social class origins. I refuse to leave, and that is my declaration of moral superiority over nouveau riche class condescension. They need me around more than they will ever know.
San Francisco's socioeconomic elite has always ranked as the younger sibling to the New York and Boston elites whose ancestors gave the United States of America its founding mythos. The locals are good at copying the East's social rituals but a copy never has the fidelity of the original. Tech-oriented philanthropy is The City's native elite language. Local branches of Eastern families will never grok the tech elite's culture or allow its practitioners to penetrate their hallowed drawing rooms. That's too bad. They're missing a decent sales pitch for the latest gadgetry.
The common link between the two talks was the relationship between diseases and the body's natural pathways. Dr. Schwarzbein's work has identified the chemical building blocks in foods that enable the body's "building" hormones. Dietary changes that support the body's cell repair ability can mitigate long-term diseases. Dr. Krogan described the large-scale data collection effort for disease as the next health care revolution. Malfunctioning protein complexes occur in disease states, and mapping the mutations in cell function pathways enables precision medicine.
I am not a physician, biochemist, or nutritionist. It is beyond my professional skill as a financial analyst to describe how chemical changes affect cells. The medical community's attention to the interaction of chemistry and genetics is enough to signal that biotech entrepreneurs should offer disruptive solutions. The channels for these solutions abound. The Silicon Valley Health Institute's speaker series is probably a good forum for startups to show early adopters their latest ideas. The Gladstone Institutes link scientific investigators to emerging research; startups should look there for research validating their business models. The California Institute for Quantitative Biosciences (QB3) operates Bay Area incubators for promising startups. I believe venture investors would look very favorably on a startup with a QB3 pedigree.
The combined effect of these two talks reminded me that the San Francisco Bay Area is ground zero for biotech innovation. Scaling entrepreneurs need to hang out with endocrinologists, biochemists, and gene therapy specialists at major medical research centers. I once connected with the California Institute for Regenerative Medicine on behalf of a health care startup in my own portfolio. I would do so more often with other entrepreneurs who seek my wisdom, if I owned an equity stake in their enterprises.
Lynden Energy (LVL.V, LVLEF) is a Canadian company drilling for oil and gas in Texas. It is very uncommon for a low-priced stock to have a positive P/E ratio. I wonder what's going on with this company. The management page does not list detailed bios at this time, so it's hard for me to judge their skill.
The company's projects page mentions two projects. The Mitchell Ranch 50% working interest has little detail describing the project's status. I find their Wolfberry project to be similarly confusing. I honestly cannot tell what these land holdings are doing at this stage from reading these few paragraphs.
I had to check out their financial statements. Their unaudited statements from March 31, 2014 show US$12.8M in cash on hand and positive net income, although their income is much lower than what they earned one year prior. This continued profitability enables them to work down their accumulated retained earnings deficit, which is always good in any company. They do admit in that document that access to capital impacts their future as a going concern and that they once took an impairment charge from writing off a bad investment in natural gas transmission operations. I find it odd that they noted a disposal sale of some Wolfberry wells and leases for a one-time gain, in the same area they tout in their website's project listings.
The numbers look alright but I can't figure out from their publicly available material just how they're making this work. Lynden should publish their properties' 51-101 reports on their website if they have competed versions. They also need continued access to capital and to stay away from non-core operations like gas transmission. I just don't know enough about their operations to figure out their chances for success, and that's why I can't expose my portfolio to this company.
Full disclosure: No position in Lynden Energy at this time.
The genius of Alfidi Capital is reaching into new corners of social media. Two digital media sites have picked up my exclusive commentary on common-sense financial solutions this week. Check it out.
Direct Capital's Point Blank blog published my brief discussion of a business loan. I do track the banking sector and it's obvious to me that a bank is not going to risk a loan on someone whose income does not meet their internal criteria. I disagree with some of the other commenters who claimed that a business owner should rely upon their business plan and financial forecasts to secure a loan. That might be fine for a borrower with an established credit history and personal assets that can secure the bank loan. I'm pretty sure a brand new college graduate with no income, assets, or credit history will have a tough time getting a conventional bank loan with nothing but their startup's fundraising pitch deck, unless of course a parent co-signs the loan.
YoPro Wealth shared my insights on the basics of investing. I lived within my means for many years until I had enough capital to say goodbye to bad employers. Living frugally is the kind of habit that turns an ordinary working stiff into The Millionaire Next Door. It takes a while but starting sooner and saving more accelerates the date of financial emancipation. I am not a millionaire yet but there are probably a few in my neighborhood. There are certainly more than a few of them in San Francisco.
I do not give personal financial advice and I would prefer that social media publishers refrain from describing my wisdom as "advice," but I don't control their editorial habits. The lessons I share are hard-won from my own life. I don't need a securities license to showcase common sense. My musings used to be common sense for many people but those days are long gone. It falls to me to relight the world's lantern.
Okay, it's just after an options expiration weekend and that means I had to reexamine my portfolio choices once again. All of my covered options from last month expired unexercised. I renewed my covered calls on GDX and FXF. I sold a very small cash-covered put position under GDX, because i wouldn't mind picking up some at such a low valuation.
I am still long FXA and FXC, but I simply could not write any options around them this month. The option chains for those ETFs just aren't very lucrative right now. Only the stability of FXF, thanks to Swiss monetary policy, makes writing call options attractive.
I still own my long put position against FXE. I continue to marvel at how the ECB and IMF keep the jerry-rigged euro together. Spain isn't looking very healthy these days and Greece is still in debt up to its eyeballs.
My longtime readers know that I own these ETFs on gold miners and select foreign currencies as hedges against a potential hyperinflation in the US. My basic thesis has not changed in a long time. I believe positions in Swiss, Canadian, and Australian currencies will hedge my portfolio against the potential devaluation of the US dollar. Owning a gold mining ETF like GDX is one more hard asset hedge among many possibilities. I await the opportunity to own long positions in a timber REIT, public storage REIT, and other securities that will strengthen my portfolio against hyperinflation.
The opening keynote from Micron set the right tone. Once I got past the corporate rah-rah about new tech converging with smartphones, I heard the news about evolving computing models requiring more power and reliability to knit logic and storage together. I can't wait to see who emerges on top of the next wave of semiconductor sector consolidation. I also can't wait for the quantum computing revolution. SEMICON speakers on my agenda didn't mention quantum computing, but they should if Micron's estimate of the end of lithography walls means ordinary tech can't scale up power and speed anymore. Micron has also caught the innovation bug I keep seeing in the startup sector, if they're serious about chip fabricators seeking partnerships in other verticals like packaging and assembly.
The DOE SunShot Initiative presenter reiterated their awesome multifaceted program. DOE's EERE is funding the reduction of solar's cost per kWh and they even incubate startups. I think EERE's Funding Opportunity Exchange might be a decent source of non-dilutive funding for startups if they can pivot to government's needs. Here's a hint for aspiring solar entrepreneurs . . . basic color properties matter. Black solar cells absorb more sunlight than other colors like blue. That's so simple that everyone in solar should know it. I was particularly impressed with the presentation from Bandgap Engineering, one of SunShot's incubated startups.
I kept busy in between presentations by browsing the expo floor. Booth babes made rare appearances compared with 2013. Shoals Technologies Group had the best babes by far at their Intersolar display.
I must have been distracted by something at their coffee bar. Perhaps it was the soft pretzels they were giving away. I should have grabbed a pretzel before they ran out. I never turn down free food if I can help it.
You can see that I have my hands full with these babes. They were just as soft as the pretzels and probably just as tasty. Feast your eyes on the incontrovertible proof that gorgeous women cannot resist yours truly, Anthony J. Alfidi, CEO of Alfidi Capital.
SEMICON's Silicon Innovation Forum featured Dr. Robert Metcalfe as keynote speaker. This brilliant guy has created enormous value in multiple verticals and I was privileged to hear his insights. I will add his mention of the Doriot Ecology and Christensen Disruption to my latticework of mental models (nod to Charles Munger here). I learned a new acronym from Dr. Metcalfe: FOCACA = Freedom of Choice Among Competing Alternatives, i.e. the state of affairs in a free market when consumers don't have to live with tech monopolies. His formula for a successful startup in a Doriot Ecology combines an academic professor and talented students working with laboratory tech, a scaling entrepreneur who provides adult supervision, and venture capital. I note with interest his preference for tech developed in university labs with government agency sponsorship, rather than tech from government-run labs. Dr. Metcalfe thinks universities that compete with each other are more productive than federal labs, which show poor research output per dollar spent. That throws cold water on my hopes for commercializing the federal government's science. IMHO the missing ingredient from the government's commercialization efforts is competition that will sharpen the federal labs' abilities. Analysts tracking tech innovation need more laws in their mental latticeworks . . . Shockley, Grosch, Moore, Rock, Cooper, Metcalfe, and maybe others I heard for the first time from Dr. Metcalfe. He plugged NSF's US Ignite project to seek killer apps for the Gigabit Internet. Hey entrepreneurs, there's your big hint about what's coming next after the social / mobile / Big Data convergence, and venture funding will follow a hot trend. Dr. Metcalfe closed with some cautionary observations for would-be entrepreneurs. He said Solyndra was a classic scaling mistake where a political commitment to job creation drove failure, and their tech had everything but silicon (uh, yeah, that would be pretty crucial to have in solar).
The Silicon Innovation Forum continued with a venture investing panel. They were refreshingly candid, unlike some of the self-serving blather I tend to hear from VC panels. They see very few good opportunities now but are looking for IoT to impact sensors and MEMS. I believe any startup that can push back the limits of Moore's Law and Dr. Metcalfe's other laws above would be compelling. I was pleased to hear these VCs say they look at a startup's supply chain when scaling it up to see where bottlenecks will appear. I hope they apply that perspective to the IoT applications they claim to like in precision agriculture, because a farmer's subscribed sensor arrays assessing moisture and temperature all need power sources of some sort. I wonder if a farm drone could power the sensors with wireless transmission of electricity at the same time it makes a recon overflight . . . hmmm. They would all tie in together to optimize pesticide spraying and hydrology. "Sustainable differentiation" was a common buzz phrase from this panel. I don't think they mean that in the cleantech sense of sustainability, but in a scaling sense.
The game-changing startup success stories from Silicon Innovation Forum were mostly products of NSF SBIR funding. Such early non-dilutive funding proves something to future funders by underwriting early research. Competitive manufacturing costs and capital efficiency matter.
Intersolar allowed me to attend their press breakfast on the second day because they recognize the value I bring as a sector analyst. My reputation must be seriously growing if this very important conference series has let me into the tent. I got some insights into the segmentation of the grid-connected storage market and the very versatile modularity of battery tech. DOE's Global Energy Storage Database links regulatory policies to notable projects. The National Alliance for Advanced Technology Batteries (NATTBatt) noted that batteries allow the solar sector to sell more product of higher quality by bundling storage solutions with solar production, and I wish I had attended their separate talk on strategies to reduce storage costs. The California Energy Storage Alliance, California ISO Energy Storage Roadmap, and EPRI advocate public policies that will make the storage sector even more complementary to solar. They need to address costs, especially since the economic losses of short-term outages make storage a compelling mitigation tool. Storage factors of response range and speed enable storage solutions to be scaled and customized for local markets. The battery sector can make its case effectively by linking storage costs to the range of battery materials that deliver different gravimetric and volumetric energy densities.
The next SEMICON keynote from Microsoft was the expected commingling of value chains and supply chains in connected networks. I thought ERP was supposed to have solved that already. Does any big strategic investor like Microsoft, Cisco, IBM, and others still believe that the mobile / social / cloud / Big Data fusion will drive value?! That train left the station in 2013. There's little room left for disruption in retail users' verticals. Let's move on to IoT and M2M already. I still hear too many business intelligence solutions sales pitches disguised as these multi-sector fusion case studies. Microsoft does recognize the importance of enterprise security but I'm not sure where it resides in Azure or their other offerings.
One other product pitch mentioned NREL's calculations of site survey costs for solar installations. I couldn't find the data on NREL's Open PV Project but a Google search reveals tons of data from NREL and others on soft costs. Geographically precise data helps with lead generation and prospect qualification, especially when an integrated solar installer shows cost advantages from policy, taxes, storage integration, and soft cost savings.
The highlight of my Intersolar experience is always the Joint Forces for Solar series of presentations. CALSEIA was first up discussing the West Coast market. The California Solar Initiative (CSI) will end soon and it would be a shame to lose access to the valuable California Solar Statistics it generated. A statistical void makes the market less transparent and homeowners will be inhibited from comparing pricing. I liked the "duck curve" chart showing the daily production ramp that utilities want to moderate with storage. I asked the presenter about the typical salvage value and recycling cost of a solar system at the end of its useful life, but I should probably look that up on my own.
I was all over the Joint Forces for Solar section on solar PV financing opportunities. Chadbourne and Parke's Project Finance Newswire covers plenty of good info on financial innovation. Securitization has come a long way since solar investors first started weighing the tax equity of a project. The yield co model does for solar what MLPs do for hydrocarbon and pipeline projects. Yield cos remind me of REITs but the difference is their securitization of cash flows from solar leases, not the physical system assets themselves. Watch the Alfidi Capital blog for a whole separate article on how yield cos compare to other instruments, and how they can theoretically commingle with tax equity via inverted lease structures. Property owners in special tax districts can still use property assessed clean energy (PACE) payments for solar upgrades. I was delighted to hear that NREL data on solar performance can validate the credit default risk of solar securities. I want to consider whether NREL's RReDC data can evaluate credit risk for yield cos in any renewable sector besides solar, and whether NREL's Solar APIs can adapt to publishing that data in formats usable to the finance sector. I am intrigued by NREL's backing of Sunspec Alliance's Open Solar Performance and Reliability Clearinghouse (oSPARC), which may fill the immediate market need for solar performance data. Anyway, the presenter for this session did mention that state-chartered green banks are emerging, along with green bonds and holding company loans as additional vehicles. I searched around the Web for insights on those subjects. The Coalition for Green Capital is pushing for more green banks. The World Bank knows something about green bonds.I haven't addressed these topics in a while but rest assured they are fodder for my future blog articles. If NREL's Renewable Energy Project Finance site doesn't cover it, just watch for it from Alfidi Capital.
I left Joint Forces for Solar early to catch the SEMICON Bulls and Bears session. Splitting my time between two sessions oriented to the finance sector is how I optimize Alfidi Capital coverage of major developments. Anyway, the bull and bear analysts from major investment banks presented their thinking on cost and competition in the semiconductor sector. Slowing demand all around was a major theme. I can easily summarize everything they said. Leverage points in a production process determine where semiconductor manufacturers have a competitive advantage. Simple, low-cost supply chains matter. The ability to continually make incremental improvements in a production process matters. The Alfidi Capital official definition of the one thing that matters most is a durable competitive advantage (a la Warren Buffett) that generates the surplus earnings funding a constant search for the things that matter! I suspect that such an advantage comes down to a mix of advanced material science and the ability to match chips to form factor changes. I don't follow semiconductors as closely as I follow renewable energy, so I'll just have to wonder. I also wonder why so many people attending the SEMICON Bulls and Bears session looked like total douchebags. Maybe they were all Wall Street investment bankers looking for someone else's work to pass off as their own. That happens in the bulge bracket all the time.
I sat in on a sponsor's breakfast forum on the final day of SEMICON West. All I needed to know is that material science places the same limits on chip and circuit capacity as it does for energy storage capacity in batteries. The cost factors of chips and their dies seem to multiply each other, especially as die area scales. Mobile computing makes chip design complex because mobile sensors (like modems) are always turned on and processors for graphics and video have high workloads.
I switched back to the Intersolar track to hear a very attractive German woman present on the German storage market. It should not surprise anyone that solar PV systems with a storage component offer a higher NPV for investment that stand-alone PV systems, regardless of feed-in tariffs. Obviously, storage allows energy use in non-peak hours without any additional demand on the grid. It also seems like installer scale matters if big players offer more added NPV. More installers making proactive offers to add storage with their PV installation should expect more market penetration and more profitability. That IMHO is the key for those solar installers who want to survive industry consolidation. This technique should work in the US as well as Germany. The big problem is that battery life is still too short for many household needs.
I went back to SEMICON for their expo floor panel on the 3D printing revolution. You know something, I had mentioned 3D printing in passing to several exhibitors last year and they really didn't see it coming. Now it has arrived. Adapt or die. If 3D printing is at the same maturity stage now as PCs were in the 1970s, then the sector needs a consumer product as elegantly simple to use as Apple's Macintosh. The inevitable game-change is obvious . . Apple should launch a 3D printer! The best part of this 3D maker panel was the presence of 3D engineering goddess Sandra Madrigal. Oh wow, she was one hot babe. She showed an image of a 3D printed version of her head she made as an experiment. I'd like to see more 3D printed versions of her, if you know what I mean. I say the 3D printing sector could jump start its growth by encouraging 3D printed molds of unclad female figure studies. This gal really got me thinking. I could have studied the LLNL material selection chart on the stiffness versus density tradeoff, but after watching Sandra Madrigal I was developing a mental tradeoff of my own. Okay, let's get serious here. I think alloying in 3D is solvable with some elegant nanotech. It probably means using airstreams to bring metal particles down into a melt pool, or using electrolysis plates to to attract them into a honeycombed grid where they can be heated and set. The first desktop device that does that will own the home market for cheap customization. I suspect very few financial analysts follow the 3D printing sector. That's why Alfidi Capital stands out.
I circled back to Intersolar for one last presentation. NABCEP discussed licenses and certifications for solar system installers. I recalled much of the material from past years at this show. The key takeaways for the financial sector are clear. Financial incentive programs for renewables support accredited contractors. NREL's Solar Access to Public Capital (SAPC) standards make that clear.
I did make the rounds of the entire expo floors of both conferences as is my annual habit. Nothing can stop me from cramming as much discovery into my schedule as possible. John Perlin's book Let It Shine got special mention at Intersolar's opening ceremony and he sold copies on the expo floor. TeamCalifornia supported the presence of California Go-Biz, SFCED, the East Bay EDA, and other regional advocacy groups at Intersolar. My round trip of all the exhibitors scored me tons of market insights and plenty of free candy. I informally surveyed some exhibitors on their most significant pain points. The unscientific results of my exploration will be the subject of another future blog post. Like I said above, you need to watch this space.
Intersolar and SEMICON West are always worth my time. I don't attend merely for free candy and photos with booth babes, although those are certainly nice perks. Entrepreneurs and venture investors need analysis of meta trends at the intersection of renewable energy and component manufacturing. I may not be the only person on the planet who sees these connections but I'm definitely having the most fun doing it. I'll see you all in 2015 for the next round of these combined trade shows.
Analysts should not have to guess about a business's R&D spending. It's always in the financial statements for publicly held companies. Finding the numbers requires some effort because FASB's SFAS 2 requires R&D to be expensed as it is incurred, meaning R&D costs are usually considered to be operating costs rather than capex. Assembling a comparable number for the entire US is a different project because the data is scattered in several locations. Government data offers a starting point for the R&D component of spending.
I am intrigued by the US's R&D data because this spending helps determine the nation's future innovation capacity and thus its prosperity. I would like to explore whether a relationship exists between strong R&D spending and a normal US economy. I will have to define my terms carefully before I proceed. I do not yet have a firm definition of what constitutes either variable. "Strong" R&D spending may be what drives normal GDP growth, and a "normal" economy may be one in which Tobin's Q has a value of 1.0 at its equilibrium. The St. Louis Fed's FRED historial chart of Tobin's Q shows a big spike in the 1990s when IT spending for Internet connectivity took off. I would be very intrigued to discover whether a similar spike in national R&D spending contributed to that spike. It may of course be merely a reflection of the insane NASDAQ valuations for tech companies in that era. Perhaps a normal economy displays a "Warren Buffett Indicator" close to its historical average.
Be patient as I work through this research idea. I have other demands on my time.
Gold is a really old metal. It's been around longer than any of us and it has a mind of its own in the markets. Forget for a moment the recent news about bankers fixing the daily spot price of gold. Daily spots can't suppress market pressures forever. Headline news is still a demand factor when something happens to spook traders.
A real conspiracy would be able to smack down the gold price immediately. The contract volume on COMEX would have to rise appreciably to indicate this counteraction was in the works. Come on, gold bugs, there's more to price action than paper claims on COMEX traders' bullion repositories. Surprises in the real world count for much more than hedging.
I recently got a nice surprise from the US government. It all started way back in 1995 when I entered active duty as a US Army officer. I designated a payroll allotment to run for a few months that would automatically purchase some US Savings Bonds directly from the US Treasury. I figured this would be a smart move. It was actually one of the dumbest moves I've ever made.
In the years after I left active duty I allowed the bonds to remain in the custody of DOD's accounting system. My only concern was getting them back in the event of hyperinflation so I could convert them to cash before they became worthless. Uncle Sam took care of that problem this year by deciding he would no longer hold service members' allotted Savings Bonds in trust. The Defense Department sent me my Series EE Savings Bonds and I finally got to hold them in my hands. They looked magnificent. I then dug up some other EE Savings Bonds I had received as compensation for participating in a few online studies. I had not previously considered any of these bonds to be part of my portfolio, but that was an oversight I shall never make again. I did not want to hang on to any of these bonds for very long now that they were finally in my custody. I had sold my more liquid fixed income holdings long ago in anticipation of hyperinflation. I took my EE bonds down to the bank branch where I have a checking account and asked the bankers to redeem my bonds and deposit the proceeds. They were only too happy to oblige.
The redemption was straightforward. I provided personal identification and signed each bond on the back before handing them to the bank teller. She tallied them up with accrued interest, transferred the total to my checking account, and printed my receipt. I compared the receipt to the calculations I had performed at Treasury Direct's Savings Bond Calculator before I went to the bank. The amounts were correct but still disappointingly low. I received the full face value of the $1000 face value EE bonds I bought in the 1990s plus miniscule interest. The $100 EE bonds I had received more recently as online compensation were only partially redeemed, as I had not held them long enough to receive the full accruals.
The tiny gains my EE bonds eeked out ignore the opportunity cost of not investing in the stock market during the 1990s. The flip side is that the '90s tech-driven boom and crash destroyed plenty of wealth. It is thus difficult to determine whether I would have been better off just not making those allotments from my Army pay and keeping the cash in ordinary savings accounts. Interest on savings used to be pretty decent until the Bernanke Fed started blowing bubbles.
Feel free to peruse TreasuryDirect at your leisure. It is full of programs for the low-information investor that look like decent savings deals until you compare them to the whole wide world of investing. Americans can open a myRA account in TreasuryDirect. Read my blog article about how myRA is little more than a practice tool for beginning investors. Americans can also buy I-bonds on that Treasury site. I'm pretty sure the government's efforts to reset that inflation-protected bond's value will break down quickly during hyperinflation. I won't revisit TreasuryDirect's cute ideas until after hyperinflation ends in the US. Lame bond returns just aren't for me.
The one point Mr. Levine made that jumped out at me was that organizations now hire people for their emotional intelligence (EI). I can only assume he had senior management positions in mind where skills in managing people matter more than technical competence. I am absolutely certain that EI does not matter at all in low skill, entry-level jobs like the ones I held before becoming self-employed. Some level of experience is still a primary requirement to obtain even the lowest position in a white collar professional career. No amount of EI can replace entry-level skill but EI doesn't matter when working with low skill idiots. I really liked Mr. Levine's advice on dealing with sociopaths: Get away from them.
Collaboration has tons of literature supporting different approaches throughout history. I am more immediately concerned with determining whether managers can measure collaboration's ROI. The Wikipedia articles I like to reference feed a non-profit collaborative platform. Macrowikinomics extends the original Wikinomics model into a for-profit ecosystem. Understanding this framework is key to determining where to make effective investments in something billed as a "collaboration" enhancement.
Investing in collaboration IMHO poses two challenges. The first is how to incentivize collaboration with HR policy. The second is how to track collaboration's results. Solving those two challenges requires a knowledge management (KM) approach integrating two different families of enterprise-wide metrics. Incentivizing people to work together means deploying ERP modules that mine email traffic for expert references and plotting those experts' recorded interactions. Measuring results means scoring the products of group work by market share growth, costs saved, and other bottom-line KPIs. This gets complicated and KM people will have to speak the IT department's Cloudonomics language.
I do not enjoy collaborating with other humans. I usually have to decelerate my thinking cycle, speak more slowly, and use simpler concepts than I would if I were working alone. One major drawback to collaboration is its tendency to produce a suboptimal result when superior performers' work is averaged down to a lowest common denominator acceptable to all. Modern techniques in data analysis and knowledge management are supposed to alleviate this tendency. They may work best when a manager with high EI is in charge of getting the most out of people. Proving a collaboration ROI means connecting the dots between costs of systems deployed to track human interaction and the results of such group work in financial KPIs. Get to work, KM professionals. Your product managers need those collaborative tools.
Open your mouths for a big, fat, heaping spoonful of financial sarcasm. It's good for you and you'll get used to the taste in no time flat.
The Trans-Pacific Partnership is getting hung up on the US's domestic election calendar. That would not be such a big deal if the negotiators stick to their regular meeting calendar. I remember how NAFTA's negotiations had periodic hangups over domestic political pressures but the parties still got a deal done. If the TPP dealers can't even agree on their next meeting date then they've got more severe problems than one country's elections. I say dress up some actors in a Chinese New Year dragon dance costume and have them throw some firecrackers into the TPP's next press conference. That will wake everyone up about the urgency of creating a trade bloc countering China.
A new Great Wall of China is going up around "wealth management" services. Here's why it's very important for the rest of the Pacific Rim to ring-fence China's economy. China has obviously not fully identified the problems in the risky wealth management products (WMPs) that channeled its middle class savings into failed infrastructure and empty residential projects. The inevitable defaults of these WMPs will destroy any Chinese banks that have not pushed them off their balance sheets. China's obvious hope that FTZs will attract enough FDI to soak up WMP demand is not realistic. Western banks with any sense will keep their FTZ branches away from the Chinese wealth management chop shops.
The silver fix is getting a new caretaking team. There will never be a perfect way to set any daily commodity price. Moving the silver fix to exchanges that habitually make pricing transparent is better than leaving it in the hands of collusive bankers. The gold fix is the obvious next candidate, and then currencies and interest rate benchmarks. Regulators are probably tiring of the vast investigations they must launch every time a bank's misbehaving whale trader nearly causes a systemic lock-up. Taking a global pricing fix away from bank trading desks is like taking the car keys away from a drunk teenager. Someone has to be the adult on the scene.
I would like to thank several hot San Francisco women for making my day a bit less sarcastic. They know who they are. I'm always up for harmless flirtation and the ladies do swoon from my attention.
I do not ever use technical analysis to make investment decisions. It has no statistical validity in predicting stock market outcomes. Academic research regards it as little more than cargo cult thinking. I tried to understand it years ago but I eventually saw no value in using such random noise. Warren Buffett's public comments on technical analysis are clear; he couldn't make sense of it as a teenager after turning the charts upside down and finding no different answers.
I have not used accounting ratios like the quick ratio since the years immediately after graduate school. They play an important role in corporate finance as KPIs. Credit analysts for banks will find them handy. They can't make much difference for me while central bank stimulus makes easy credit available to every business borrower, masking the problems that unhealthy businesses would otherwise reveal in accounting ratios. I shall return to using these ratios when central banks cease their stimulus experiments.
I bemoaned the state of the American consumer. Our indebted middle class continues to blow hundreds of dollars on the newest models of smartphones that add only incremental capabilities. Cheaper smartphones are just about to break the $100 price point with most of the functionality of today's elite Android models. That's all most people need.
I continue to seek hard asset hedges in my own portfolio. I mentioned one possibility but I am still not willing to buy it while its price remains elevated. I still like the shipping sector as a long-term investment but I'm not buying into that either. Everything is just too expensive thanks to central bank intervention.
I did not make any securities recommendations or give any personal financial advice for investors on the Benzinga webcast. That's not my job and my readers know it.
Benzinga's hosts were great. They must be super-sharp to recognize my incredible genius. I will enjoy expanding my reach through future webcasts with any broadcaster who wants me as a guest.
I have attended enough conferences on the social / mobile / cloud / Big Data economic nexus to recognize the new buzzwords entrepreneurs throw around. Venture investors listening to pitches from e-commerce entrepreneurs must be getting pretty jaded hearing about apps. The one key driver of the mobile app revolution is the application programming interface (API). Developers building apps for mobile platforms find they can more easily drive user adoption if a branded platform has an effective API. I now wonder how and why developers choose to enter the API sector.
The US federal government's extensive API collection at Data.gov don't bring in extra tax revenue. They make it easier for businesses to manipulate the government's public data into formats their customers can use. I suspect there's an untapped market among government IT contractors for services that clean up dirty data. They can tap that market if they figure out the APIs that lead them there.
API monetization is probably a tough road to travel for stand-alone developers. Most large enterprises seem to open their APIs to developers for free. A free tech giveaway encourages adoption. The apps employing the API can make money through in-line ads or e-commerce fees. I think independent software developers who focus on creating APIs for enterprises can make money on a contractual basis. This does not mean the API itself is a stand-alone money maker akin to a retail portal. It means API development is a specialized niche. API developers who insist on placing the most desirable features behind a pay wall risk being shut out of an ecosystem if users fail to adopt. Freemium APIs that showcase a developer's quality may be the best way for IT contractors to build a portfolio of work.
Alfidi Capital does not have any APIs available for download. This firm maintains no client data, performance data, or any other kind of data that developers could ever use. The analysis you see here is data-driven but that data is all in the public domain, linked where appropriate in these blog articles. I don't have the computing skills to throw APIs at the public. If I did, I'd deploy an API that enables female tech developers to share photos of their hot bodies with each other and me. That day may never come, so techies will just have to launch APIs at each other and hope some major platform adopts one as its standard.
Alrighty, here comes my first impression of Intersolar North America 2014. I normally roll up my observations of the entire conference in one long blog post, but this year I'm giving the opening ceremony its own special treatment. Politicians were the stars of this particular show.
The Governor of the Golden State spoke about his ancestral acreage filled with wildlife. It had nothing to do with solar energy. In fact, nothing he said had anything to do with much of anything at all. He seemed to lose his train of thought in places, but recovered when he realized he didn't have much to say. He could have addressed the State of California's energy policy, which has a detailed clean energy implementation plan. He could have mentioned the important partnerships working for California's Clean Energy Future. He could have mentioned Go Solar California's roots in the previous Governor's Million Solar Roofs program. I did not hear any details of these success stories. Career politicians have a knack for connecting with people who feel rather than think. This gentlemen excels at his chosen career. He is indeed a man for our times.
I want to touch on a point related to my blog article from earlier today about climate change as a stalking horse for a new green religion. Recall my note above about the CIA's interest in funding climate change research that justifies continued national security planning. Religious fervor motivates behavior. If waving a monotheistic standard is an insufficient motivator for power projection, then another supernatural justification must take its place. A growing body of strategic thinking now supports American intervention for humanitarian and environmental reasons. Americans like to think of themselves as the world's generous saviors. Deploying to save the children and the rainforests is a much easier sales pitch to urban elites than deploying to preserve access to mineral resources.
I'll conclude by saying that I am not disappointed at all to hear career politicians play emotional themes or mangle facts. The ones who talk that way are not really in charge and they probably know it. They like their careers because they love the limelight. The rare politicians who talk sensibly know who benefits from good public policy: voters maybe, businesses probably, deep state elites certainly. I am totally in favor of cultural programming that employs innovative memes to direct public enthusiasm for elite management of civilization. I am totally on board with ruling class direction of public policy. I totally understand the role public leaders play in propagating pre-approved themes. It's a fun game to watch and even more fun to play.
I will attend Intersolar North America and SEMICON West this week. I am totally psyched about entrepreneurship disrupting the energy sector in 2014. I'm even more psyched that renewable energy and other cleantech plays are part of this disruption. I would like my fellow entrepreneurs and investors to get as psyched as I am. That may be too much to ask of some would-be money makers but others will rise to the challenge. Knowing why they should step up requires some truth-telling.
I've attended enough conclaves for renewable energy entrepreneurs to understand that not all of them take their opportunities seriously. The majority of attendees at a recent conference I attended did not take notes during presentations. These entrepreneurs paid serious money to hear from experts. Perhaps they think attending a conference is enough to give their businesses a veneer of credibility without doing any work. Other attendees insisted on taking digital photos of the slide decks during presentations, even though all of the slides would be available for download on the conference's website. These anecdotal observations tell me that some founders are either unserious about success or just too stupid to succeed.
Entrepreneurs aren't the only crowd who may misunderstand renewable energy. Scientists can get it wrong too. I had lunch at that same conference with someone who said he had worked on the IPCC climate change reports. He bristled visibly when I said the IPCC had falsified climate data. After he calmed down, he admitted that the hacked emails showing IPCC officials lying were incriminating and wondered about the real story behind the controversy.
I have an emerging theory about policy makers who alter climate science data to fit a politically-driven narrative. The climate change movement may be a deliberately seeded alternative religion appealing to non-religious pseudo-rationalists. It is useful as an additional means of controlling human behavior, especially financial decisions. The decline of monotheism in the developed Western world means large numbers of people have escaped traditional social control mechanisms. Herding these non-sectarians into a green religion brings them back under elite control. Climate change advocates can be just as duplicitous as "pious fraud" theologians. New theology requires new funding mechanisms. Carbon credit trading is the modern version of tithing to churches in the Middles Ages. Financial institutions endorse carbon credit markets because fear-induced regulations will hand them rentier income.
Civilization needs mechanisms for social control because most humans, especially those on the left-hand tail of the IQ bell curve, would otherwise be out of control. Scientifically derived belief systems may prove more humane than supernatural systems. Global governance advocates have a big philosophical investment in anthropogenic theories of climate change. The central meme is that it's all our fault, just like original sin is all our fault. Both faults require atonement. Paying money to atone is an easy sell.
Renewable energy and cleantech innovation are worth pursuing even if none of these control systems' noble lies were necessary to govern mass behavior. I look forward to a time when noble lies will no longer suffice to maintain social cohesion. That will take a quantum leap in human evolution. I do not lie in my own life. The truth about renewable energy is that it is finally cost-competitive on distributed grids with hydrocarbons and does not produce carcinogenic emissions. That is sufficient justification for entrepreneurs to pursue success in cleantech.
China's securities regulators think they can smooth the number of IPOs each month. These people still have no clue how capitalism works. Demand for new issues should drive the supply of new shares. Some regulatory impulse to dress up capital markets is probably a reaction to lack of investor interest outside China. American investors have been burned by fraudulent Chinese companies making questionable ADR debuts on US exchanges. Chinese founders thus need a domestic outlet to cash out their stakes before fleeing the country.
The businesses community wants the Ex-Im Bank to stick around. Forget the rhetoric disparaging it as a fountain of handouts for big corporations. That is just for the low-information voters in some districts who get riled up about any government program. If corporate money is behind some government agency, it will continue to operate. The Ex-Im Bank's outstanding loan portfolio is a small amount of the nation's outstanding credit burden. It is unlike the mortgage lending for house-flipping and the revolving credit card debt for mindless consumption. This bank's loans drive export earnings. It's a winner, for crying out loud.
The White House is backtracking on comments about more bank regulation. It's so hilarious whenever a politician's handlers bend over backwards to ensure moneyed backers don't take rhetoric seriously. Here's a lesson in politics for anyone who knows nothing. Political comments to the general public are just noise to fill space. Business lobbies should not be so easily fooled, yet the decline in competence I have witnessed among America's elite class in my lifetime indicates that some of them do fall for the common rhetoric. A few trust fund babies running lousy hedge funds must have made some panicked phone calls to Washington.
The dumb things I've noted above happen all the time. The dumb people doing these things will be even dumber in a big crisis. That will be time for me to make some money at their expense by trading against stupidity. Bring on the panic.
I am entering my second year as a mentor for startups in the Cleantech Open accelerator. I had a great experience last year and I'm taking things to a whole new level in 2014. This year's crop of startups competing for venture investments started off with last week's CTO National Academy West Coast, held at a hotel in Burlingame. I attended and snapped the pic below as proof. The presenters shared some great information that will help entrepreneurs build their businesses. Stand by for my synopsis.
Several CTO participants referenced SolarCity as a benchmark for a cleantech business model. My caveat to enthusiastic entrepreneurs is that Elon Musk helped start SolarCity and they became residential market leaders in California within one year. Those are two success factors most startups can't count on obtaining.
I've heard Steve Blank speak before and he did not disappoint at CTO's Academy. There's no need to repeat his wisdom here for those of us who have his book and read his blog (yeah, that would be me). Startups must iterate products using CustDev, make rapidly revocable changes to business plans that meet sales forecasts, and have advisory boards in addition to governance boards. The one thing entrepreneurs needed to hear most from Steve is that technology is not the same as a business. I tend to tune out prospective founders who talk up their tech without a financing strategy, a go-to-market plan, and the other things they need to run a business. Prequalifying prospects by need and budget is an art but I think a lot of tech-focused founders don't understand it. That's why Steve tells them to get out and talk to 100 customers.
The marketing experts on hand define "traction" as a repeatable sale, with dominant market position in a single segment, and multiple sales to customers within that segment. Folks, that's the only kind of traction that matters. I did not know that a marketing budget should follow the S-curve of product adoption, so it was important to hear that marketing spending matters most after the S-curve accelerates. I heard a lot at this Academy about the importance of picking exactly one market segment to dominate. The implication is that dominance comes after pivoting into a segment that has weak leaders who can't outspend the startup, or one that has secondary market "followers" who will adopt the startup as suppliers. I did the Crossing the Chasm positioning statement exercise last year for Alfidi Capital, and nothing has changed except that my genius is more compelling than ever. Startups need to do that exercise, plus the give-get analysis for partners one of the CTO organizers presented.
I had to choose one of three breakout sessions, and I am glad I chose to pursue sector knowledge of energy and transportation. I now have a firm appreciation for the difficulties facing battery technology startups. Batteries face fundamental limitations in material science. One key to a successful pivot is a controlled burn rate, hence the importance of conserving marketing spending until the path to segment dominance is obvious. The presenter on tidal power mentioned some renewable energy market studies at Altprofits but much of their data needs an update for more recent years.
Transportation is even more difficult to innovate because of slow decision cycles in public infrastructure. Tesla succeeded in addressing the automotive market, once they raised the huge amounts of capital it would take to break high barriers to entry. I see an emerging dichotomy in disrupting transportation. The shared economy in transportation supports high-density urban development, but advances in personal transit like autonomous driving support urban sprawl. Only one of these perspectives will win! I suspect it will be the shared economy, which has already found mass adoption among consumers with severely constrained incomes. The personal transit advances will likely remain confined to niche applications, like traffic in areas where pedestrians are rare.
Day two of the Academy brought me another new vocabulary term from a positioning expert: "brand audit." Do a Google search of that term and see all the pretty charts businesses use to boil such an audit down to a positioning statement with Moore's positioning exercise. Presentation tools like Prezi and Keynote offer alternatives to PowerPoint, and entrepreneurs need to know how to use them/
The VC guy giving the second day's keynote said VCs still want to disrupt the huge energy market but the source of cleantech investment is shifting to corporate venture arms and family offices. This money is chasing later-stage startups. I can infer that VCs are increasingly reluctant to commit to early-stage startups after having been burned in the past few years.
I had to reflect on my own business experience during the CustDev workshop. One marketing truism I learned in financial sales is to use open-ended questions to explore a prospect's need and then use closed-end questions to close the sale. That only works if people think you're trustworthy. Being trustworthy has little to do with being honest or competent. Inveterate liars are able to build trust immediately by manipulating people emotionally. The paradox of trust is the difficulty of building a trustworthy relationship by telling the truth. Most humans are uncomfortable with the truth. Lies and shared myths are more comfortable. I do not tolerate lying. I have had extreme difficulty building trust with people who don't want to hear the truth. That's why I'm an analyst who spews truth at the world. People who can't handle the truth won't benefit from my knowledge anyway.
The elevator pitch speaker mentioned Moore's positioning exercise once again. I hope you all see a pattern emerging here. There's no "right audience" that will immediately get the pitch. Any pitch must be able to hook a general audience of investors customers, and distribution partners. A public relations pitch is different; that one is specifically targeted to media outlets that will carry a story. Building a media contact list must be a prerequisite.
I have to pause to reflect once again. Startups carry tons of risk. De-risking tech means validating it with certification for industry standards and synching it with the business model's validation. In plain English, show data proving the tech works and show sales revenue proving customers want it. A risk matrix connecting the probability and severity of each business risk category is a template for management decisions that will mitigate each risk. Student interns are an underappreciated source of risk if they haven't signed IP assignment agreements giving tech ownership to the enterprise. Think twice before you accept a university professor's offer to let his students work for you for free so they can earn academic credit.
I won't restate the details of the financial modeling presentation. Suffice it to say that some expenses drive revenue and the business model canvas must show links from a startup's financial model to its business model. VCs have their own metrics in mind for customer acquisition costs and healthy internal ratios. The VCs on a startup's board will want to see more frequent budget presentations than the board of a public company. KPIs driving revenue and expenses are the only things worth tracking. I believe different market segments will have different metrics for costs. That's why it's better for a startup to focus on dominating one segment.
The block of instruction on sustainability would seem at first glance to be obviously mandatory for this crowd. That is not necessarily the case. Steve Blank is probably correct to say sustainability doesn't belong in startups. Here comes my own explanation of why that is true. It raises costs, limits supply chain flexibility, and slows decision speed. Big corporations can easily afford sustainability. Small companies selling premium goods to rich idiots (organic vegetables, artisan chocolate) can afford to make sustainability a selling point because their dumb customers have emotional investments in do-gooder business models. Otherwise, in data-driven startups that aim for market dominance among technically savvy buyers, sustainability destroys scalability!
The third day of this Academy started with important tips for startups who want to win the CTO competition and the larger competition for business success. I'm pretty sure that any entrepreneurs who don't take this seriously won't benefit from my mentorship. The morning VC keynote from one awesome investor named Bill Reichert revealed that VC decisions are just as laden with emotion as the decisions of ordinary investors. I guess all those associate analysts they employ to crunch numbers on segment metrics don't matter as much as whether a VC likes a startup's team. VCs fall in love with a team, its tech, and their vision, in that order. Garage Technology Ventures' "Getting to Wow" and Skillshare's "Art of the Start" curriculum offer tips for crafting this approach.
I'll make a few more original observations on corporate culture based on some material presented at this Academy. Culture is primarily the product of leadership behavior and visible rewards for desired results. Good management deliberately seeds rituals and symbols into a culture that will reinforce desired behavior. I think the concept of a corporate social contract is cute but seeing it violated breeds cynicism. Nothing drives productive people away faster than watching management behavior that contradicts stated organizational goals. Highly compensated labor will remain loyal to a paycheck only so long. Their compensation partly represents the network of clients and contacts they've built, and they take those books of business with them wherever they go.
The attorney panel covered the absolutely necessary legal housekeeping that entrepreneurs ignore at their peril. The lawyers said VC investments set periodic "cliffs" where founder shares will vest, incentivizing them to stay on board. They also warned about miscellaneous people who make minor contributions early on and then show up later as "stealth founders" demanding more equity. These people can derail growth with ownership disputes, and lawyers have strategies for minimizing their disruptions. I do not see the attorneys' point about creating SPVs for single projects somehow ring-fencing these early contributors. I actually think a simple employment agreement will suffice so long as the stealth founder disclaims any subsequent equity claims not covered in the agreement, but of course I'm not an attorney. Startups need to know what constitutes "qualified financing" and why it solves valuation questions early. I've blogged before about the decisions entrepreneurs face in filing their IP. The attorney panel discussed this in the context of the Patent Cooperation Treaty.
I was surprised to hear the lawyers say they think options and warrants are better for sweat equity investors than stock. Those provisions obviously require sweat equity participants to contribute cash in later rounds if they want to realize their rewards. They'd reserve stock for professional investors, not for people contributing in-kind services. One panelist thought a convertible note was okay for sweat equity contributors. Once again, these early agreements prevent the emergence of "stealth founders" later as the IPO approaches.
Some folks at this Academy shared some jarring lessons. One speaker thought a startup should raise the absolute minimum amount of capital needed to execute a project. That contradicts most conventional wisdom to ask for as much money as possible. Perhaps it depends on the stage of the product development life cycle where the startup is raising capital. Another presenter thinks stand-alone pitch decks (i.e., those sitting on the Web not used in a live pitch) are hard to get right. I think crowdfunding portals make these more common than ever and the good pitch decks will stand out. Another comment that VCs care about headcount was left hanging without context. I think headcount matters because it impacts burn rate. Compensation expenses will rise as startups hire more people and spend more on the free goodies common in VC-backed Silicon Valley startups. All of those gourmet food courts serving free arugula salads aren't free to investors. Even VCs track revenue per employee and costs per employee, and I expect them to probe founders on these metrics every quarter.
The final comments on funding were very instructive. Cambridge Associates restated their statistics on cleantech company performance. Like any other investment opportunity, it pays to buy cleantech when everything is cheap and competition is weak. Capital efficiency wins the day because scaling later requires more capital raising. There's plenty of venture money waiting to invest but they like "scaling" from sales growth. One speaker mentioned bank-hosted investment panels as a great opportunity to present to investors. I agree, but they are also expensive because a startup has to hire a good investment bank just to get access. The annual JP Morgan health care conference is a classic example. The startups presenting there already have lots of money from VCs, which is why they can afford to be there to present to even more VCs. I also agree with the speaker who said there are plenty of chambers of commerce between San Francisco and Silicon Valley that hold high-quality meetings all week long. Those venues are a lot cheaper for startups that can't afford to buy their way into a major investment bank's conference.
I blogged about my first attendance at the Cleantech Open National Academy in 2013. Once again, a lot of the participants' knowledge was proprietary and I have been very careful not to reveal details that attendees shared with me in private. Just focus on the common themes: pivot to a segment that allows a dominant position; conserve cash for capital efficiency; construct a detailed positioning statement; focus marketing spending after sales accelerate; protect IP and equity very early; sales fixes everything. Get your startup into an accelerator like the Cleantech Open if you want me as a mentor.