Technology Invasion 2018

It has been a few years since I witnessed a remarkable public event in San Francisco. It was not an ordinary tech conference or seminar series. It was literally an invasion. The invaders were not your ordinary conquering horde from way back in ye olden days of yore. These aspiring techies were positive go-getters looking for something productive in the next chapter of their lives.

There is a huge job shortage in tech these days, with tens of thousands of available positions going unfilled. Plenty of organizations and partnerships want you (yes you, dear reader) to get in on this tech action. The Cyber Threat Alliance is one starting point for anyone who wants to learn about how fighting online threats demands a high degree of cooperation across industries. Building your own Linux box qualifies as a job skill. Being the one person on a cybersecurity volunteer committee who actually does the work sounds like a success story that predates the cybersecurity field. Lockheed Martin's Cyber Kill Chain is a good reference for anyone in the field. The Palo Alto Networks Cyber Security Canon is a similarly good reading list, and Palo Alto's Unit 42 is good for current threat intelligence. I have no idea whether the Security Roundtable experts actually sit at a round table, but they probably know more about fighting cyber threats than the legendary knights of King Arthur's round table.

The cyber career bonanza is not limited to security. Product managers determine what to build, coordinate across job functions to get the product completed, and then sell it with evangelizing optimism. Product execution requires tradeoffs between time, budget, and functionality; two out of three is typically good enough, given capacity limitations.

Wanna grow your startup? Of course you do. Every execution is a trade-off between time available, budget constraints, and product functionality. Getting two out of those three right is typically good enough. The simple math of "frustration equals expectation minus results" is humbling for every startup launching a product. Startup founders are always a little bit crazy to launch something radically new. They should take the Strong Interest Inventory before founding a startup to figure out if the entrepreneurial path is right for them. Right path or not, product launches confer lifetime transferable skills upon the launchers.

Founders do not need to be lawyers but they must know the law. Know current case law on corporate finance and private equity (check out the Practising Law Institute for case studies). Document everything from day one because VCs will ask to see your paperwork during their due diligence phase. Your corporate structure is your first business decision, so you had better have a standard equity structure with agreed roles and control authorities if you are serious about raising outside capital. Delaware C-corporation law is robust and predictable in the eyes of VC and private equity investors. Assigning all IP to the corporation via a proprietary inventions information and assignment agreement with technical employees will prevent your tech developers from ripping off your ideas. 

It is sad that America's military veterans are not tapped in to the right insider networks (Stanford, Harvard, Google, etc.) that feed the tech and finance sectors. That holds them back from key careers. Bad leadership is common in startups and our veterans would bring the discipline that startups need. The magic formula for a founding team would be veteran founders teaming up with elite network contacts.

Funding pitches to investors can be fun and rewarding (yes, I'm serious). Professional VCs understand that startups lose money and are prepared for long relationships. It's easy to say that founders should find out how VCs behaved with other startups during hard times but such knowledge is not always publicly available. The founding team that has enough of a stake to work through hard times and a critical mass of competence at the start will have an advantage, even if the starting team is not the same team that makes it to the exit event. Gallup Q12 model questions will help founders understand whether their team is engaged.

I said all of this without telling you much about who these people were or what they represented in 2018. I met some of them through VetsinTech (big clue right there). They're still around today in San Francisco and other tech clusters around the country. They are my kind of people. Get to know them, just in case you end up working for them someday.

Author's Note: I am gradually working through a backlog of writing material that I have gathered since 2018. It will take me some time to get caught up to the present day.

The Haiku of Finance for 05/31/20

Curfew in Frisco

All business at night cut short

Lost due to vandals

Recapping Alfidi Capital Coverage of JPM Healthcare Conference 2018

Hey folks, I know it's near the end of 2019 already, but I had a really interesting 2018 and 2019. I am just now publishing my thoughts on attending events around the JP Morgan Healthcare Conference in 2018. It's been quite some time, but the next conference will soon kick off in San Francisco, so I might as well look back to see if anything from 2018 is still important to know.

I still wasn't important enough in 2018 to score an invitation to the main JPM conference, so I kept busy attending a few sideline events. Someday the big shots running the big show will realize just how much they're missing by not having me inside the big tent. Anyway, here we go with some real knowledge.

Data-empowered consumers and capital efficiency were some popular concepts, staring into the face of GDPR implementation. Superfluid markets were supposed to disintermediate middle-level provider organizations, with tech shifting power to payers and patients. Gene editing got some attention, which turned out to be pretty prescient as CRISPR developments became news later in 2018. I still think it's premature to announce the death of Big Pharma, as major drug makers still survive and thrive into 2019. I can't wait to see how new "platform-based" business models will foster collaboration among insurers and lets everyone see transparent licensing data, all while somehow magically preserving privacy. Bite that silver bullet if you can, folks. I still have not seen how life science business models are moving towards the type of CX interfaces that make Uber and Amazon so easy to use. I also have not seen how open architecture models adapt to life science. I agreed with some experts who thought AI could dramatically accelerate drug trials, but I think they are too conservative in estimating that AI is still years away. The AI revolution is right here, right now, and any drug startup that leverages it now will be an immediate buyout target. Sorting through unorganized dark data that degrades machine learning capability will IMHO be one big challenge for AI use in drug development.

The Alliance for Regenerative Medicine presented their rundown of the sector's status. The regulatory approval pipeline for cell therapy products was moving along just fine. The FDA approval pathway for cell therapies called Regenerative Medicine Advanced Therapy (RMAT) designation reminds me of the orphan drug category. I wonder about the downsides to cell/gene therapy, like whether it can be weaponized by rogue actors. It's chilling to think of threat actors using open source tissue engineering for homemade bioweapons.

I cam up with some bold-type original ideas thanks to the Alliance for Regenerative Medicine presenters that investors should know, because I am a bold genius. Automated processes and AI will make the supply chain cheaper for cell and gene products, and that sounds like an opportunity for pick and shovel plays in life science stocks. I'm thinking specifically of specialty REITs for medical labs and data science companies running apps. Data libraries have a big opportunity by licensing gene population data to life sciences companies that adopt machine learning as a core function. Compare the opportunity with Microsoft's ownership of GitHub and LinkedIn as the analogy. The data populations within those two acquisitions are leverage for Microsoft's enterprise services.

There was a "leader's forum" on health care services that made me smarter. Everyone was optimistic for strong M+A and private equity buyouts, but of course this was long before the equity markets started having chest pains (pardon the health care pun) in late 2018. I wanted one of these leaders to explain their checklist-driven process for a health service provider's valuation, something investment banks and other valuation experts use prior to shopping a transaction around. Local geography still matters in service delivery, so bonus points in a valuation must go to local practices that can leverage any national networks to control their costs. I was dismayed to hear that these experts still used EBITDA to value mature medical practices, as if they were new tech startups with unproven revenues. That is really amateurish. There cannot be that much uncertainty about revenue collection even with reimbursement concerns.

Some other revelations from this leader's forum got me thinking. Medicare's definition of a hospital is based on the number of beds available and the level of care provided, which determines how providers structure their business models and how investors value these providers. I suspect there's a bubble in acquirers paying much higher multiples of revenue to acquire practices, based on unrealistic expectations in either future patient population growth or rising reimbursements.I do not expect the Affordable Care Act (ACA) structures to indefinitely continue subsidies for health care plan buyers, so take that revenue stream out of valuation calculations. The 21st Century Cures Act has now aligned multiple US government agencies on med-tech regulation, thus removing some uncertainty from the marketplace and reducing friction in medical companies' go-to-market strategies. Gene therapy needs a lot of infrastructure; retail pharma, drug manufacturing, and distribution will add up to one big bonanza.

Local economists had their own perspective on how the health care sector impacts the San Francisco Bay Area's economy. The potential repeal of the ACA without a suitable replacement is a poor approach to policy planning. There is bipartisan support for innovation in Medicare, but Medicare's political immunity from reform is partly due to resistance from insurers. I dislike any "health policy nihilism" that destroys existing architecture while leaving us bereft of whatever comes next.

My fun meter was pegged at Freemind's 13th Annual Non-Dilutive Funding Summit. I never turn down the chance to learn about how for-profit companies can get so much of their early operations funded without surrendering equity. Get the NIH and other federal partners to jumpstart your med-tech startup's research, and it enhances credibility when you seek more private funding. Check out public-private consortia like Medical Technology Enterprise Consortium (MTEC) and Advanced Technology International (ATI) as tech development accelerants. I think there's a big bonanza opportunity in combating antibiotic resistance, and BARDA's participation in the CARB-X portfolio is a funding opportunity for just such an approach. Tracking the resources at the US Government's Medical Countermeasures effort offers insight into funding for biodefense priorities. I still think crowdfunding is a option for med-tech startups; it cannot be ruled out completely as long as it's not the main effort in fundraising. The nonexpert layperson investor may not be professionally equipped to evaluate a crowdfunded med-tech project. The NIH I-Corps brings the lean startup methodology into the US Government's medical research community. Read each Funding Opportunity Agreement (FOA) carefully when you apply for an NIH grant. Uncle Sam does not mind at all if its researchers and funded programs make American entrepreneurs rich as long as they enhance our nation's security in the process. God bless America.

I don't mind taking longer than usual to evaluate what I learn at these events. Anything worth doing will be more difficult than it looks at first glance. That's why the events around the JPM Healthcare Conference 2018 were worth attending even if I could not get access to the main show. Those VIPs should save me a seat.

Author's Note: I am gradually working through a backlog of writing material that I have gathered since 2018. It will take me some time to get caught up to the present day.

Alfidi Capital at Dreamforce 2017

Salesforce held its annual Dreamforce convention for 2017. I missed attending in 2016 so I definitely had to catch up. This is by far the most complex, high-profile, and costly corporate event I have ever experienced. The spectacle is always impressive. There's a ton of stuff going on all over the city, including affiliated events for people who want the Dreamforce experience but don't need to attend certification sessions. Here come several badge selfies, with summaries of some very rewarding events.

Alfidi Capital at Trailhead, Dreamforce 2017.

The Dreamforce designers had wood carvings and other outdoors decorations all over the ground floor of Moscone West, where the Trailhead exhibits dominated the event space. The chainsaw-made wood sculpture at the front door was such a nice touch. I was a Boy Scout once and I never was very skilled at woodcarving. People who complete Salesforce training modules earn badges that look like Scouting merit badges. It's all so positive and benign, you'd almost think no one is making a buck off people. Dreamforce is an amusement park for techies.

Alfidi Capital at Customer Success Expo, Dreamforce 2017.

The Customer Success Expo was festooned with the latest tech tricks, and a whole floor of exhibitors giving away free coffee and T-shirts. I scored enough coffee and candy to fuel my entire week. It takes a lot to get me excited sometimes, but free goodies never hurt. I got some hands-on time with several AR/VR displays, which are becoming very common at major tech shows.

Fake rock cliff on Howard Street, Dreamforce 2017.

The Trailhead logos and mascots were front and center in many ways. I don't know whether the real Albert Einstein ever went to the woods, but Salesforce has him climbing fake rock cliffs with fake animals. Pop music tribute bands played on the outdoor stage. I wonder which Dreamforce attendees came just to goof off on Howard Street and not tell their head office back home. I only had time for the free coffee and snacks at various places on Howard Street, because that's how I totally score in between events at Dreamforce.

Radius B2B Champions Club, Dreamforce 2017.

I attended the Radius B2B Champions Club affiliated event to get a fresh perspective on, what else, B2B sales. The new B2B buzzwords are revenue operations (RevOps), Chief Revenue Officer, Chief Product Officer, and Account-Based Marketing (ABM). The CEO's span of control is expanding as executive suites decide they need more complex teams enabling their work. Marketing ops people can join MOCCA for the full flavor of sales tech buzzwords. Remember ABM because vendors are building services around the concept.

I believe DevOps teams have become a mechanism for discovering new revenue sources via ABM, using IT systems to establish links between sales (account managers) and marketing (product development). They find data to demonstrate new sales opportunities. DevOps generally means integration of different functional silos' contributions to the enterprise's strategic plan. It matters because goals are now aligned and validated by data rather than assumptions.

Here's new math: sales + marketing = revenue ops. Hmmm . . . DevOps + RevOps = Bonanza! I cannot claim to have coined the term "RevOps" because revenue operations is already in action at firms doing ABM.

Listening to sports marketers talk about how they use tech made me smack my head. I can't believe that old-school pro sports talent scouts still refuse to use Moneyball metrics. Sometimes adoption of new techniques unequivocal management support to either use the new method or be fired. Jeff Bezos did this at Amazon to make development products compatible with public interfaces, thus paving the way for Amazon Web Services and the cloud.

Executive Briefing Center, Dreamforce 2017.

The Dreamforce Keynote with CEO Marc Benioff was more low-key than I recall from years past. It's always cool to hear Mr. Benioff talk about love, family, and magical mahalo stuff. People love the guy when he does that. Giving props to Salesforce's big corporate clients enhances his persona as the noble bringer of light and wisdom. My goodness, no wonder Dreamforce is such a costly spectacle, because it costs a fortune to buy such an image of generosity. I trust the guy, and I understand the need for a spectacle to convince everyone else that doing the right thing is worthwhile. Using relatable people as expert examples of Salesforce power users in the keynote's vignettes is a very effective way to make emotional connections in marketing. I have to hand it to Mr. Benioff and his image consultants for pulling off this masterstroke of sincerity.

The keynote rolled out the Trailhead learning platform as some white label solution, much like their Einstein AI predictive analytics solution. Co-Founder Parker Harris did not wear a costume this year. I was disappointed that he had no skit to play. The good news is that Salesforce is now attached to some Google platforms. I'm sure I'll know more about that once I complete some of Google's free training modules. I tried not to LOL that their vignette touting a mobile sales platform used the same scenario (shopping for customized athletic shoes tied to a celebrity's brand) that Oracle OpenWorld 2017 used in a major product keynote. I can't make this stuff up.

Ops-Stars, Dreamforce 2017.

I spent some time at the Ops-Stars affiliated event. I really wanted to hear what a VC had to say about his investment criteria, and he surprised me by emphasizing a "go-to-market architecture." The cloud sector's declining costs and increasing quality must make it easier than ever for startups to immediately have world-class IT architecture. The VC guy clearly used the term "RevOps," so my chance to claim ownership of the term vanished into thin air. Oh well, my genius is sufficiently expansive to pioneer other concepts. Any ops team is the CEO's direct strategic presence within a functional silo, so the innovation of RevOps removes the thinking and planning function from sales and aligns marketing with sales in a fusion cell. If you can follow my paraphrasing of that VC's wisdom, then congratulations, you may be qualified to work in RevOps.

It sounds like integrating DevOps and RevOps into an enterprise's strategic plan requires a knowledge management officer (KMO) to synch them. An integrated approach to participating in different functions' working groups is definitely under a KMO's purview. RevOps still uses recognizable KPIs like LTV and CAC, so we don't need a completely new vocabulary.

Alfidi Capital at Sales Enablement Soiree, Dreamforce 2017.

The Sales Enablement Soiree was another affiliated event that I found intriguing. I had never heard of the "sales enablement" discipline. I worked in sales once and we had "sales support" people who programmed product training. The sales systems have obviously evolved. The Salesforce people were on hand talking up Trailhead for employee on-boarding. It is hard to believe that business leaders still need to "buy in" to enablement, or maybe that imaginary obstacle is just more rationale for an upsell into Trailhead. I cannot find an industry standard definition of sales enablement, so I'll offer my own. Sales enablement is an internal function ensuring sales teams are trained on product knowledge, certifying them on the corporate message, and collaborating on content production.

Other Salesforce keynotes back at the main Dreamforce event clarified a few things. A "Trailblazer" is someone who uses the Trailhead platform. Customer service systems can now instantly perform multifactor ID authentication (i.e., facial and voice recognition) on mobile. The Einstein AI auto-generates graphs produced from the user's data priorities. It's all so pretty to watch from the audience. It must be even more fun up close for users.

Mascots dance at Equality Keynote, Dreamforce 2017.

The Dreamforce Equality Keynote had something to do with art and activism. Expect professionally unqualified cultural icons to assume leadership roles when political leaders' inaction leaves a vacuum. Americans follow celebrity leadership anyway, so most people won't notice the change. One of the celebrity panelists argued that setting political speech to music gives it mass appeal, moving the media and politics. We saw in 2016 and 2017 how extremists can use the same techniques to promote bigotry and hatred. Look no further than the foreign bots pushing derogatory memes on social media to divide Americans. If artists are fighting back in the name of freedom and equality, then they're doing the right thing for America.

Einstein AI solution, Dreamforce 2017.

The Compassion in Action Keynote was difficult for me to witness. I have experienced that building compassion into organizations denies human nature; productive people are grasping, vicious, and cutthroat because our species evolved to favor those qualities. Even advocates for compassion recognize how humans respond to transactional initiatives, because generosity must have some self-interest payoff to be sustainable. Allow me to set aside my skepticism for once and recognize some truly good things in this keynote. It's good that we now have evidence that people want to work for companies that offer compassion, meaningful work, and support during adversity. It's classic Stoicism to identify one's own emotional triggers and rehearse a controlled response that is productive and maintains emotional equilibrium. These Dreamforce keynotes do offer good life advice. Marc Benioff brought out a surprise guest at the keynote's end: Metallica drummer Lars Ulrich. Mr. Benioff convinced Metallica on short notice to headline a relief concert for the Santa Rosa wildfire victims. I totally agree with Mr. Ulrich's stated formula for enduring success: look forward, be open to inspiration, and have empathy when working with others.

Dreamforce 2017 was a winner. It is the place to be for ginormous amounts of free wisdom. The outside world gets to see San Francisco and Silicon Valley at their best when sales and marketing types converge at Dreamforce. Sometimes getting people to do good is as simple as cajoling them into a decent mindset.

Alfidi Capital at Data Connectors San Francisco 2017

I fondly remember my first Data Connectors conference a few years back, so of course I had to make a repeat appearance when the show returned to the San Francisco Bay Area in 2017. Tech sector trackers like yours truly get to hear straight from small firms that would otherwise fly under the radar at larger conferences. The concepts I discovered probably work best in a listicle, but I need to relate these things to my own experience in business. Prepare yourselves for some definitions.

Malvertising is a recent weaponization of the ad networks and pop-ups that the business world has grown to trust. Malware isn't just for spam email links anymore, and now it penetrates our networks through buffer overflows, code injections, and stack pivots. Root cause analysis (RCA) of malware  vulnerabilities means looking at gaps where firewalls should exist. Rectifying said gaps requires strong mobile threat defense within enterprise mobility management (EMM), because I suspect that mobile apps and platforms still do not receive the security attention they deserve. Mobile consumption of Web data now exceeds desktop consumption, but security spending in the mobile sector has not caught up.

One vendor at the conference had a very compelling demo on countering malicious profiles. Such demos are effective sales techniques for endpoint detection and response (EDR) solutions. The proliferation of mobile within enterprises means these solutions must now incorporate entity modeling for real-time simulation of all devices on the network. A complete network map gives network defenders information asymmetry over attackers. An end-to-end encryption (E2EE) system prevents a malicious profile attacker from breaking open a packet in the event they penetrate the network, and such an attempt is the kind of abnormal activity the security information and event management (SIEM) would catch.

Strong data security enables business continuity and disaster recovery (BCDR) plans. Regular BCDR auditing will establish a recovery time objective (RTO) and recovery point objective (RPO) as loss-minimization baselines. Lowering the RTO and RPO will save money, so a Cloudonomics analysis must show the ROI impact of spending on resilience solutions.

Virus publishers now produce viruses for sale at dirt cheap prices. They also offer customer service to buyers. Illegal enterprises have now adopted the practices of mature business models. It's ransomware-as-a-service on the dark Web. I believe there is a market for automated countermeasures that hit back at attackers, but there is legal risk because those active counterattacks may themselves be considered malware. The tech sector really needs to collaborate with the US federal government and sort this out.

Speaking of government help, the US's NIST maintains a National Vulnerability Database (NVD) for automating data security. The NIST also maintains a Computer Security Resource Center (CSRC) with a large library of standards publications. Anyone supervising an information security operations center (ISOC) should incorporate those database updates into their network defense protocols and drills. Building an ISOC from scratch starts with the CIS Critical Security Controls, aka the SANS Top 20.

Gartner's continuous adaptive risk and trust assessment (CARTA) interprets cybersecurity governance in the language of business practitioners. A good business rule management system (BRMS) makes adaptiveness easy by generating continuous analytics. The BRMS should produce user and entity behavior analytics (UEBA) tracking system anomalies.

The average time to detect an organization's data breach is measured in months, leaving a huge window of vulnerability. Just like the market for automated counterattacks, there is certainly a a market for automated forensics solutions that accelerate attack reviews to discover vectors and data anomalies. Sandboxing is one way to identify indicators of compromise.

The ISO/IEC 27001 information security standards should guide a CISO's design effort, along with the NIST, CIS, and CARTA approaches. The ever-helpful Gartner people also have a Market Guide for Mobile Threat Defense Solutions just in case the CARTA approach doesn't identify the most obvious vendors.

I will conclude with an observation about what sells in cybersecurity. Solutions vendors tout their deep learning automated analytics, advanced heuristics, and other factors appealing to people enamored with buzzwords. All such factors are amenable to optimization via machine learning (ML), which is fast becoming a fundamental investment. The CISO is the decision maker in security purchases, and must now have a minimal competence in data science just to accurately evaluate the effectiveness of ML-driven security solutions.

There's a lot to know for anyone who buys, sells, or operates cybersecurity systems. Organizations that get security right will make a lot of money. That is why I will continue to attend these Data Connectors events.

Alfidi Capital at BoxWorks 2017

Here we go with another very special description of my experience with the Box ecosystem. I'm talking about BoxWorks 2017, of course, and I attended for more than just the free food. Check out my badge selfie below, and then we can get to work talking about enterprise cloud computing.

Alfidi Capital at BoxWorks 2017.

Box CEO Aaron Levie is still as dynamic and charismatic as ever in his public appearances. He had a nice dig at Juicero's failure: "The only sector not disrupted (by digital tech) is juice." I'm glad I never bought a Juicero machine. There weren't any clear breakpoints between the four eras of content management's evolution he described, but the clear driver of progress is the cloud's ability to rapidly scale up processes. Study up on information governance and encryption key management to know how IT pros manage their secure clouds.

The "wow" moments for me came during some of the product demos. Box workflows now enable assigning business tasks to trusted partners outside the enterprise. The BoxSkills video search can map facial recognition by frame, make tags searchable in a content management system, and extract an entire transcript of a video's conversation into text and closed captions. That is a big leap in machine learning (ML). It can do similar things with audio file searches, and it performs a sentiment analysis of the voices in an audio file. Wow, I mean, like, wow.

Airbnb CEO Brian Chesky came out for a chat with Aaron Levie. I did not know that these hoteliers started by selling boxed cereal. Mr. Chesky had a bunch of insights to share on innovation, especially on building a team that actually pushes an innovative project. His description of a handcrafted design thinking process is also covered in Reid Hoffman's Masters of Scale podcast, which used Airbnb as one of its many case studies. Yes folks, I pay attention what these experts broadcast.

Building apps without coding is the future of development. Low-code development platforms (LCDPs) are part of the low-code/no-code (LCNC) movement that enables non-computer scientists to build business apps. Box showed off their LCDPs where an amateur's business apps can integrate with workflows and define triggers for actions. The revelation for me is that any API connection (as a process) can be automated, and even blockchain integration is possible with these homemade apps.

American companies must now prepare for the EU's General Data Protection Regulation (GDPR), a very comprehensive regulation that touches any data process touching an EU nation's citizens. Expect serious fines for even inadvertent violations. Businesses developing binding corporate rules (BCRs) for GDPR compliance will pay premiums for "good practice" (GxP) implementation consultants if they don't have in-house EU expertise. They can start by reviewing the Privacy Shield Frameworks the US has worked out with its European counterparts. Cloud providers in particular will need to implement the BSI Cloud Computing Compliance Control Catalogue (C5) and Trusted Cloud Data Protection Profile (TCDP) if they do business in Germany. Attend BoxWorks and you learn about this stuff.

I had an epiphany during the second day's keynote. We need new metrics to evaluate both revenue per user and the cost of API calls per month for cloud companies and the data sector. It's no longer sufficient to process huge numbers of API calls per month, because call usage must be profitable to sustain the cloud enterprise. These metrics work just like revenue passenger miles in the airline sector and ton miles in trucking. Atomized revenue metrics determine whether an enterprise's assets are adding value at their full capacity.

The fun Crystal Ball keynote used a fake "Space Ham" movie production as a vehicle to Box's planned future product functions. No one outside the company will know whether these dream products make it to market. I was more impressed with the audio and video products they already have. The audience was seeded with Box employees for recognition at the end, and they obviously led applause prompts at key moments. Every aspiring enterprise tech startup should learn how to evenly distribute the ringers throughout their sponsored conference. Enthusiasm is contagious.

Dr. Neil deGrasse Tyson gave the closing keynote, and he was a knockout as usual. The dude had galaxies on his necktie, which just reinforces my opinion that he should run NASA. I noticed a typo on his slide showing this 2017's Santa Rosa, California wildfires dated "2018," the wrong year. That's a trivial error in an otherwise flawless presentation on species intelligence, global consciousness, and the humility that comes with a cosmic perspective. He got a standing ovation at the end after totally capturing everyone's attention and imagination. Dr. Tyson is definitely qualified for national and global leadership roles.

BoxWorks exceeded my expectations, just like the other Box events I have attended. If you're putting on a tech show, it needs to be big, loud, and most of all packed with expert wisdom. I will see Mr. Levie and the rest of the team in years to come.

Alfidi Capital at Oracle OpenWorld 2017

I attended Oracle OpenWorld 2017 because I am all about tracking cloud sector action. Check out my Oracle badge selfies below so we can get right to work talking about important cloud stuff. I dare you to keep up with all of the photographic proof in this article that I really got a lot from this conference.

Oracle had its sign up at Moscone West.

I sat way in the back for Larry Ellison's welcome keynote, figuring that a speedier exit to the next event was better than being up close with the star himself. The opening speakers introduced the concurrent events like JavaOne and Oracle Code. Some SVP from Intel got going about "blah blah transformation" (that's exactly what I wrote down, it was all about blah blah). I totally called it when Intel's video teaser said data is the most powerful force in the world, because I'm awesome. Intel did impart some wisdom about the Open Platform for Network Functions Virtualization (OPNFV) and the Open Network Automation Platform (ONAP).

Oracle had another big sign over at Moscone South.

Intel and AT+T talked the talk about network capacity and virtualization before Larry came out. All of these concepts, including future blockchain execution, validate my belief that data center REITs as a "pick and shovel play" on the cloud sector will see massive growth for years. These kinds of REITs can handle both cloud expansion and legacy on-premise computing. All of those servers need to sit somewhere, and REITs owning the buildings will get paid to keep them secure.

I saw a large number 9 at Moscone West.

Larry came out and hit a few themes, like autonomous databases in cybersecurity, that I'm pretty sure he's promoted at previous Oracle OpenWorld keynotes. Automated detection and response to intrusion reminds me of his pitch in 2015. Whatever happened to the software that was supposed to be hard-coded into the servers? Is that product still available? I have no idea, because I don't work at Oracle. Anyway, Larry said that Oracle's auto-cyber machine learning security thing will be half the cost of Amazon Redshift. I wonder whether any of Amazon's cloud offerings will still be part of big Amazon after the next downturn. Larry taught me a new catchphrase, "automated hardware resource elasticity," his term of art for planning network and cloud capacity utilization. The term IMHO implies automation of purchase and leasing decisions for new capacity. Whoa, I would not trust a machine learning algorithm to make financial commitments.

IBM sketched storage and next-gen ERP at the Expo.

The Tuesday morning keynote gave me food for thought about virtualization. I do not consider virtualization to be synonymous with optimization, partly because containers are compatible with cloud virtualization. Object programming has now come full circle; DBAs can connect action blocks to process flows and search fields, using free-form natural language that tells bots to process cloud server requests with no programming language needed at all to configure cloud settings. Business rule management systems (BRMS) are moving from rule-based processing to inference-based processing; it's how e-commerce sites push product recommendations across social media channels. I did not know that lift analysis was amenable to A/B testing, but that's how smart business users adjust product positioning and avoid brand conflicts between competing products.

IBM sketched boxes and clouds at the Expo.

Larry's second keynote was his chance to tell us all how he's making a more secure cloud. I was not surprised to hear that Oracle's cloud security concept is still not 100% automated after all the hype people in this sector are putting into AI and machine learning. We're not yet at the nerd nirvana of total security automation. Larry's insight that standard log analytics are hard to run for data security due to different data silos tells me that there's a developmental opportunity for something that compares different silos simultaneously.

IBM sketched excellence and migration at the Expo.

The Code Conference Developer Keynote had lots of gems for Oracle developers. I am not a developer, so they can't make me do their work for them. The lesson from all of these "ecosystem development partners" was that other tech companies' APIs and microservices can reside on Oracle's IaaS and PaaS. These people are the developers building the code behind the plain language business objects demonstrated in OpenWorld's keynotes, complete with staged problem-solving vignettes.

It was a privilege to hear Patrick Debois, founder of the DevOps movement, speak on the DevOps mindset at the Code Conference. DevOps people grok the outsourcing movement to the cloud. Patrick envisions cloud services as an application of Promise Theory where DevOps people must collaborate with third parties outside their enterprise, so customers have more realistic expectations of service reliability.

One top Oracle honcho gave a keynote on how to "own your next," playing on some theme around the word NEXT. True believers want us to know that blockchain will solve all of our problems. Get ready for more blockchain-as-a-service things like Oracle Blockchain Cloud Service. Finally, we see blockchain in its originally intended use as a transaction audit ledger instead of its miscast role as an asset. There was a retired NBA legend on hand in this keynote to share with us the typical motivational speech on humility, persistence, and setting goals. The legend did cite Malcolm Gladwell's Blink as an example of NBA superstars' abilities. Uniquely wired brains can explain so much of superperformance. I always knew that, because I have a uniquely wired brain myself.

Mayor Ed Lee addresses OOW 2017.

San Francisco Mayor Ed Lee took time out of his busy schedule to rededicate the renovated South Hall of Moscone Center. I scored a front row seat for his talk because I'm special. Actually, I just showed up early to get in line. Yeah, that makes me pretty darn special. I heard there was free stuff for the first people who arrived.

Mayor Ed Lee cuts the ribbon at Moscone South.

Mayor Lee cut the ribbon re-opening Moscone South with help from one of Oracle's top executives. Oracle could not have timed this event any better for the free publicity. I would have helped cut that ribbon but no one asked me, so I guess the folks in charge had it all under control.

Oracle also held its NetSuite SuiteConnect conference in conjunction with OpenWorld. I did not have enough time to review this suite's shiny features. Oracle acquired NetSuite in 2016 to have a turn-key, all-in-one ERP offering that SMBs can use. I don't know what's wrong with Oracle's existing product line that they must add a one size fits all solution, unless they feel the need to keep up with Salesforce.

Duke points the way to the JavaOne Keynote.

The Java Community Keynote was the JavaOne wrap-up, and a continuing lesson in how the developer community generates its own mythos. The perfunctory JavaOne keynotes opened with IBM Open Source project team introducing its Open Liberty platform for building Java microservices and cloud apps. We also got to hear about how the Eclipse Foundation supports microprofiles that build enterprise capabilities for microservices.

Java coders explored the Matrix.

The fun started when one of Oracle's top Java evangelists came out to set the scenario for the long skit the Java community performs as the culmination of its keynote. This year's theme was a spoof of the Matrix movies where Neo, a Java developer, must use his coding skills to defend the Oracle community. There were lots of inside jokes about programming, a "bullet time" motion capture demonstration, and a light sculpture installation from an artist playing the "Oracle" (get it?). Juggy J. Finch, the puppet mascot of the worldwide Java user community, played the Morpheus role. I liked how the coders poked fun at the buzzword bingo of AI, blockchain and other popular terms.

I support VetsinTech.

I must bring this summary of Oracle OpenWorld 2017 to a close. You can see from the above photo how strongly I support VetsinTech, a non-profit organization that gets US military veterans into tech careers. Oracle and its partners would do well to hire our veterans. The Java Community Process is big enough to accommodate them. I shall return to future Oracle events to watch it all unfold.

Alfidi Capital at The MoneyShow San Francisco 2017

I had to attend the MoneyShow San Francisco 2017 because it has long been one of my favorite conferences. It has never lost its appeal since the first time I attended back in 2001 (or maybe it was 2002, I can't remember). I have my favorite speakers picked out weeks in advance but I try to learn something new every time I attend. Those of you who did not attend are about to get my full blast of recollections.

Kim Githler was as optimistic as ever in her welcome address. She has been running this conference for three decades and I don't think she ever gets tired. The webcast attendees now far exceed the live attendees. The future has arrived and my fellow Gen-Xers are the last generation to fully experience live trade conferences before they all completely migrate to AR/VR webcasts. Ms. Githler noted that her investing success factors included luck, something no analyst can ever quantify. Analysts will also never fathom the sheer greatness that my badge selfie below represents.

Alfidi Capital at the MoneyShow San Francisco 2017.

I picked up some useless knowledge right away from people I won't mention, and I put it down right away. The culprits shall remain nameless but their specious wisdom will become infamous. There is no way to determine whether trades in dark pools appear in NASDAQ Level 2 block trade quotes, or whether they indicate something directional for a ticker symbol. I had never heard of "stupid spreads" in options but apparently they're a periodic thing with professional traders who have worked in the big exchanges' trading pits. I had also never heard of a "double diagonal" spread, a much more frequently executed options play.

Other introductory speakers had more interesting things to say. I have my own thoughts about their theories in the next few paragraphs. Cash flow return on investment (CFROI) is an alternative to valuing equities by earnings. I think it's more reliable than venture investors' EBITDA method but less reliable than Buffettologists' earnings-based method. I can evaluate these methods by their real-world results. Venture investors lose a lot of money relying on EBITDA and Warren Buffett made a lot of money focusing on on earnings. The CFROI comparison to IRR and hurdle rate metrics reveals its limits, as those things fell out of favor with academics long ago when the CAPM came along.

Institutional investors are using more than a "periodic table of country returns" to allocate their portfolios among emerging markets. They are really counting on middle class growth in emerging markets to drive international stock returns, while they totally ignore geopolitical and country risk. It's the new BRICS-like fad. The whole BRICS concept was a Goldman Sachs marketing gimmick and the BRICS countries themselves fell for it by holding BRICS Summits. I am less interested in who the CCP Congress invites as its annual guest speakers. I am more interested in China's rank in highly credible indexes for economic freedom and development.

Advocates who say we have entered a new era in investing remind me of the Internet apologists common during the dot-com boom's terminal stage in 1999. People now totally ignore the tech unicorn bubble, the commercial real estate debt bubble, the high yield debt bubble, and the corporate debt bubble driving stock buybacks. The same people totally dismiss the ongoing retail collapse. Journalists are as guilty of this behavior as economists and analysts.

There is no obvious secret to investing success. Purveyors of said secrets totally ignore the Federal Reserve's ZIRP role in pushing stock market gains after the 2008 financial crisis. One such purveyor is a "Sovereign Investor" service, which I recognized as total baloney long ago for its non-stop hawking of extreme fear and greed. More conventional publishers ignore the hazards of extreme debt levels. Corporate balance sheets are more laden with debt than ever, and rising interest rates will increase interest expenses hardest for those companies with high short-term debt burdens, thus hurting earnings. A good basic thesis is to find undervalued stocks paying dividends, which is hard to do with the S+P 500 P/E ratio at an all-time high.

George Gilder thought there's life after Google. I think there's life after George Gilder. He still likes Bitcoin and gold, for crying out loud, a disappointment for me since I've actually studied the efficacy of hyperinflation hedges. He made no sense discussing IPOs, bizarrely comparing Bitcoin to the FANG stocks by saying Bitcoin's growth outperformed Google since that stock's IPO. Dude, Bitcoin is in a huge mania-driven bubble. The guy says free product giveaways prevent companies from learning; I say that's baloney. He should know that Google's main products are free (Search, Docs, Maps, etc.) yet obviously they are learning to make money selling ads and data. Sheesh, George. I think he's finally exhausted my patience by comparing Bitcoin and copycat ICOs to FANG companies with real earnings.

The featured artificial intelligence (AI) advocate mentioned The Innovator's Dilemma in the context of large companies pushing AI development. If his claim that 10.5% of Fortune 500 companies mentioned AI in their most recent conference calls is true (and I have no way to verify it), then he should not limit his picks of AI winners to the typical FANG stocks.

I had never heard of the US Regulatory Information Service Center, a GSA project tracking growth in economically significant regulations. One speaker mentioned it as a tracking tool for regulation acting as a drag on the economy. His stock picks for an era in which Ponzi-like government entitlement programs degrade GDP included water, energy, agriculture, and infrastructure, plus VIX volatility call options. I generally concur with that thesis, but timing is everything.

Ed Yardeni had a lot to say about the current administration in Washington. I disagree with his critique of mark-to-market accounting rules, which IMHO are necessary for transparency. It was hard to listen to yet another dismissal of geopolitical risk, assuming away any big wars. It gets tiresome to hear continual Pollyanna-like views that assume indefinitely low inflation.

Peter Schiff led the next introductory panel. I still like the guy even though he's been premature (just like me) on the next likely crisis for the financial markets. I agree with these particular experts that it's hard to find stocks at decent prices with indexes at all-time highs. I look forward to less blind worship of unfulfilled political promises and more attention to how a weaker US dollar will make commodities and emerging markets more attractive. Mr. Schiff is probably correct that excessive automobile loans are driving (no pun intended) the automotive sector's valuations. He appeared again later to reiterate his expectations of the next big market crash, a collapse in consumer spending, a debt default that destroys bonds, and a boon for dividend stocks paying out from earnings in stable currencies. I have had a similar thesis for quite some time. It is difficult to be patient while so many less observant people make money through complacency.

I did not need to see another walk-through of a trading platform but sponsors pay for the prime time they get. The best options trading platform must display Greeks. I learned a new options tactic called a "risk reversal," buying an OTM call spread and selling an OTM put spread. I suspect options will be very useful plays in advance of earnings announcements. Watching options with weekly expirations prior to a highly volatile stock's earnings announcement, along with the option's implied volatility, is probably worth my time.

We are all smarter thanks to the joint FINRA and SEC panel on outsmarting investment fraud. Check out FINRA's The Alert Investor, the SEC's Investor page, FINRA BrokerCheck, and the CFTC RED (Registration Deficient) List to see if someone pitching you a deal is legitimate. The regulators let us know that they have emerging concerns about cryptocoin ICOs, crowdfunding, simple agreements for future equity (SAFEs), and binary options. I will be on the lookout for shady operators in those areas so I can turn them in to law enforcement for prosecution.

Another options broker showcased some revolutionary trading system that promised to do everything except vacuum the floor. The dude argued that high frequency trading (HFT) can compress risk premia and lower volatility, but I think it actually magnifies those conditions. I need to see the dude's evidence. I did agree with him that all of the information available on very expensive Bloomberg terminals is freely available elsewhere. There is no way that volatility measurements will tell investors whether a stock is overvalued, undervalued, or fairly priced. Current data on corporate earnings and P/E ratios at all-time highs tell us more abut valuation than options volatility ever will. I mentioned above that watching volatile options in advance of earnings announcements was worthwhile; I put that activity in the context of making short-term profits from options trades, not in the context of long-term growth from finding undervalued stocks.

Utilities and REITs are still the favorites of experts who want the best of both world in dividends and growth. It's important to assess the predictability of dividends by finding the payout ratio, leverage ratios, and funds from operations (FFO). Higher interest rates will probably hit these stocks' valuations, making their yields more attractive. On the other hand, higher rates will hurt the balance sheets of the most highly leveraged stocks in these categories. Increasing consumer preference for online shopping over retail shopping will hurt REIT retail holdings. I did not believe one person's claim that REITs trading at premium valuations have a lower cost of capital. Commercial lenders are smart enough to distinguish market exuberance from underlying assets and earnings. I finally found good descriptions of the "genco" utility investment I heard about years ago. One MoneyShow expert described them as "merchant generators" where utilities build and operate plants without an exclusive geographic franchise. They are unregulated and risky.

One metric for evaluating an investment manager's track record is the upside capture / downside capture (UC/DC) ratio. A higher UC/DC ratio proves better performance. Most active managers have terrible UC/DC ratios over periods longer than ten years. They also have higher fees than passive investments. Active managers need to get out of financial market careers and do something more productive, like day labor or subsistence farming.

American investors seeking growth opportunities in Canada need to watch out for Canadian rules on something called a passive foreign investment company (PFIC), a designation that incurs an ordinary income tax liability for companies that don't even have income. It's another condition afflicting Canadian junior mining companies that still have difficulty raising capital.

Interest rates govern all yield plays. Martin Zweig's maxim "don't fight the Fed" does not hold for every market all of the time. Central banks must unwind their engorged balance sheets and interest rates are going to rise until those balance sheets return to normal. Watch the US Federal Reserve's bond roll off rate. Track the Fed's monthly "dot plot" interest rate model projections. Know the Atlanta Fed's GDPNow forecasting model. The Fed's political sensibilities determine the length of an interest rate cycle in months and the magnitude of its changes in basis points. The only Fed-proof bond substitutes are those dividend-paying stocks, MLPs, BDCs, and REITs with strong balance sheets, limited long-term fixed-rate debt, and no short-term debt or floating-rate debt.

I had never heard of one very prominently featured speaker in this year's lineup. I had to look him up to discover that he had been some kind of broker for most of his career. Now he produces a bunch of content. His talk reminded me of an old adage I heard about commodities many years ago, that the only people who made regular money trading the most volatile instruments were the brokers, not the traders or investors. He did make one interesting point about society's decline in risk-taking, which coincides with data I've seen on declines in new business formation. The rest of what he said was flat-out bizarre. I had no idea what he meant when he said liquidity providers must improve something or other, like order flow, maybe. Why did he throw disrespect at passive investing just because markets crashed in 1987, 2000, and 2007? They all came back. Oh yeah, it's because he makes money off of active traders who react with extreme panic. His next argument was that managers should show how they reduce the basis cost of their services. Well dude, that's what passive management does. Sheesh.

The star speaker above really tested the limits of my patience. He riffed one non sequitur after another, spouting "mechanics, strategy, repeatable, scalable" in word salads tossed into the air. He invented a new phrase called "economic bias" which seems to be an awkward interpretation of behavioral economics, and it underlies his claim that eBay "trades" improve decision making in business and finance. He cited zero sources for any of his quotes and stats, followed up with pedestrian observations about how important it is for successful people to demonstrate know-how and skill. No kidding, dude. I thought the guy was seriously stupid, or at least addicted to making stupid statements that played to the limited knowledge of his audience. I could not find one single observation he shared that's worth repeating in full, let alone adopting as a guiding mantra. Who knows what his new gig means. Warren Buffett doesn't make a fraction of the trades this guy's archetypal "decision-making skill builder" active trader makes, unless you count the times he says "no" to bad decisions, and he's the most successful investor ever.

Marilyn Cohen is still my favorite fixed income speaker. Check out the data on outstanding US Treasury maturity distributions; it's all free online. There's so much debt out there that it doesn't change Ms. Cohen's investment philosophy. Municipal bond investors will hear a lot more about "dark store theory" as the commercial real estate sector, already under pressure from online commerce, lobbies for reduced property taxes that will lower the revenue available to pay off muni bonds. One key insight she shared was to compare REIT yields to those REITs' bonds' YTMs. Some bonds will pay better yields given REIT share price gains. I attend Ms. Cohen's appearances at the MoneyShow just to appreciate such excellent knowledge.

There was some more nonsense going around another seminar about blockchain tech and crypto-currencies. One person claimed the blockchain's blocks and layers are encrypted, but hackers have proven that's not true for Bitcoin. The same person repeated the commonly accepted falsehood that Bitcoin is untraceable. That is totally stupid!

I walked out of another seminar when the speaker claimed he could outperform Warren Buffett with market timing. The guy made really unrealistic claims about his methodology. It's really dumb to think he can time market entry and exit points based on directional indicators. I could not stand to listen to some totally stupid nonsense about using a 200-day moving average with some standard deviation of volatility to measure the market's natural range.

There's a cottage industry of publishers and custodians pushing "self-directed IRAs" as some kind of magical machine that can process everything but the kitchen sink into a tax-free deal. I have always said these things are a misuse of tax-advantaged retirement accounts. People at this MoneyShow wanted to take it to a whole new level of nonsense by putting real estate into 529 college savings plan accounts and health savings accounts! That is stupid, risky, and possibly fraudulent! One guy who thinks this is a legitimate way to earn a living wasted half of his allotted time on nothing. He offered private "hard money" lending solutions that charged higher mortgage rates to their properties' borrowers than banks, so I guess those small lot home buyers are all poor, stupid, or bad credit risks. Folks, please listen to me very closely now. Self-directed IRAs are the classic baloney shell game for people doing dumb things with real estate.

One of the major wealth management firms made me LOL to myself during their presentation on consumer trends. I just LOL that they thought Nigeria is a growth market for consumers and that every emerging market will follow South Korea's path to a developed market. More investment firms are publishing research on "Peak Auto" to describe the end of growth in the automobile market. IMHO future electric vehicle growth must cannibalize market share from internal combustion engine cars. I will make one other important point about consumer spending that the rest of you should know. Household net worth versus personal debt (as a percentage of disposable income) is an important way to assess consumers' actual capacity to spend, especially compared to consumer confidence.

I always win at the MoneyShow San Francisco. I win by absorbing information and spewing wisdom to the entire world. I also win by exposing stupidity. Alfidi Capital is all about winning. You can be a winner too if you think exactly like me. You'll be winning so much you'll get bored with it. I never get bored with winning. I look forward to attending another MoneyShow to continue my winning. I am willing to speak at the show again (as I did in 2013) to show others what a winner I am. The MoneyShow is for winners.

Alfidi Capital at DevTech Strategy Summit 2017

I attended the DevTech Strategy Summit in San Francisco. I don't recall ever seeing this event before so I couldn't miss it, especially because it's from the same organizers behind DeveloperWeek. The developers have their own show for practical tools, and this one was for executives bringing a bunch of enterprise functions together. Check out my badge selfie below and let's get to work.

Alfidi Capital at DevTech Strategy Summit 2017.

The dialogue between developers and executives got some needed attention. Developing mobile apps in a vacuum makes no sense if it ignores a market segment's pain points. Imagine how Customer Development works for a dev-focused product, then imagine engaging prospects at different levels of the marketing funnel. Use lots of imagination, or borrow someone else's imagination if you're left-brain dominant and can't compensate.

Developers still get hung up on designing the perfect product if they think budgets are unlimited, which happens when overly generous investors support weak managerial discipline. Project leads must show the Cloudonomics metrics demonstrating the lower cost and higher ROI of their preferred solution. My regular readers know that I have harped on Cloudonomics many times as a proof-of-concept guide, yet many developers dreaming of startup riches still don't take it seriously.

The CIO is still the ultimate purchase decision maker for tech not available in-house. They are especially important in minimizing buys of incompatible shadow IT. The key to their success is evangelizing developers who have the authority to recommend software buys. CIOs need Cloudonomics more than anyone but I suspect most don't even look for the metrics. Computer science programs need to start teaching a business-related elective covering the ROI of project development.

The DevTech panelists came with some best practices for executives. Using searches with Bayesian logic in Stack Overflow can measure developers' engagement with a topic by showing how quickly questions get answered. Tracking GitHub updates and following Hacker News are other ways to assess developers' engagement. Executives could also track my blog, for crying out loud, because I discuss the hottest tech sector developments ever.

The debate on open source versus closed source development got me thinking. I believe a freemium pricing and distribution model precludes a choice of closed-source architecture, but a 100% open-source solution is hard to monetize. Yeah, I know, open-source monetization must really be ad-based rather than fee-based.

The town hall toward the end reminded us that the big software companies carry the lobbying burden. Aspiring tech executives in the room should start building their lobbying expertise now by joining tech trade groups and tracking public testimony offered to regulators. Venture capitalists still don't understand devtech business models, which doesn't surprise me since I witnessed the cloud / mobile / Big Data convergence force multiple startups to pivot. The VCs are reluctant to invest in startups that often see little revenue traction from a large customer base. They do want to see KPIs like customer acquisition cost (CAC) and retention, which enables them to see how a prospective startup investment compares to known successes in their portfolios.

Guy Kawasaki always said sales fixes everything, so I can understand such VC reluctance to go for startups with nonexistent traction. The metrics in devtech also apply to other cloud/mobile app startups, so there's nothing surprising about a corporate VC asking devtech people to justify their CAC.

The DevTech Strategy Summit was a winner for any startup executive running a mature business. Anyone pursuing an acqui-hire as a specific strategy can probably find a niche in devtech. I am now such a regular fixture at Silicon Valley's biggest developer events that acqui-hire entrepreneurs are going to see me. Let me know what's working for you, tech community, and whether you benefit from my interpretations.

Alfidi Capital at Intersolar ees SEMICON West 2017

I attended the mighty tripartite conference of Intersolar North America, ees North America, and SEMICON West 2017 at San Francisco's Moscone Center. The south hall of the convention center is undergoing a massive renovation, so the SEMICON folks had to cram into the west building with Intersolar. The reduced expo floor area was tolerable given the action-packed schedule. It's action-packed from my perspective, because I love sitting through long seminars and briefings that lesser mortals lack the fortitude to endure.

The Intersolar opening ceremony is always the first shin-dig on my calendar for this colossal conference. The main Intersolar conference has lots of finance seminars on the first day but I am too cheap to pay. These people had better invite me to speak someday. Anyway, CALSEIA and NREL celebrate their 40th anniversaries this year. I did not see any cake but that's okay, we all need to stick to our diets. Expect to hear more about behind-the-meter consumer-driven storage, because that's the industry term for how building owners are installing their own systems on-site. Everything in capitalism is of course consumer-driven, but the twist in renewable energy is that smaller storage systems give customers a lot more options than utilities have ever provided before. I wanted to hear from California politicians about how the state's proposed Energy Storage Initiative would affect the market but the usual big shots were not on hand. Maybe our mayor and governor had something better to do than promote solar energy, one of the Golden State's biggest growth industries.

It's the Alfidi Capital badge for Intersolar, ees, and SEMICON West 2017.

The opening ceremony left me with more questions than usual. Do solar energy companies really have thin profit margins (compared to, say, fossil fuel energy generators)? If PV costs keep dropping and PV panel volume GW installation keeps rising, why would solar companies have thinner margins than the broader energy sector? Will the solar sector shrink if the federal government cuts spending on solar R+D? If the energy grid evolves past net-metering to accommodate location-based price signals, will this drive demand for beacons and other IoT devices in the grid? Can blockchain tech really enable both on-grid energy trading and PPA investments? I mulled these questions while I was chomping on free food after the opening ceremony. They served roast beef this year, a step up from the usual turkey.

The SEMICON West welcome keynotes and opening ceremonies were next on my hit list. The hits just keep on coming. The assumed CAGR of 5-7% for the semiconductor sector through 2057 is a long forecast, but it seems reasonable if IoT adds to a mature sector. Anyone who thinks IoT won't drive the next wave of semiconductor volume growth needs to read everything I've ever blogged about both IoT and semiconductors. I keep hearing predictions about AI making the singularity either a decade or two away, but there's no consensus among gurus. We all get to learn some new buzz phrases: edge computing (now with IoT and AR/VR) and fog computing (I've heard that one before). The progression goes from edge to fog to cloud, and into your brain at some point once we hit that singularity. One brilliant executive shared his insights into "Neumann and Neuromorphic" innovation to create intelligence that reminded me of Transhumanism.

I came away from SEMICON's opening presentations with a few original insights. I would post them on SemiWiki but I don't work in the sector. I think that when gross payroll grows faster than headcount at semiconductor enterprises funded as public/private partnerships, it shows the creation of high-income, value-added jobs. The semiconductor sector now uses more elements of the periodic table than ever, so materials sourcing will soon become a crucial "table stakes" factor. The entire tech sector needs to take supply chain security seriously, and that means not taking single sources in the developing world for granted, especially if those sources rely upon transportation links that will be at risk during geopolitical instability. Check out the South China Sea tensions for a glimpse of near-term supply chain insecurity.

The ees people gave us a look at their market, regulatory environment, and some business policies. I would like them to explain why they don't capitalize themselves as EES, but I don't run their part of the show. It's their world of batteries and I just live in it. There should be little concern about backsliding if one speaker is correct about state governments doing 80% of the policy work in renewable energy. I just wonder how they measure that impact, and whether the remaining 20% is crucial stuff like the DOE SunShot Initiative. There is no policy initiative imaginable that will force solar power into the baseload category, because it is physically impossible for the sun to shine at night. Policies favoring storage linked to solar and wind power do not change nature. Power grid management with distributed storage will require revisions to the standard installed capacity (ICAP) the ISOs calculate for their markets. Adding BIPV and and other new tech to generation reduces the ICAP demand-related charges, thus adding value to a property owner's business model.

I want to throw some more red meat buzzwords out there to show the ees people that I paid attention. Electric energy storage used for load leveling is "energy arbitrage," using time shifting to make stored energy available during higher demand periods. Its corollary is "peak shaving," encouraging reduced energy consumption during high-demand periods. California and New York are among the states pushing "distributed resource tariffs" that enable utilities to install more generating capacity on their customers' sites. Virtual power plants will aggregate these distributed generation resources into a cloud-based management model. Anyone making or selling distributed generation or storage solutions must know the NERC critical infrastructure protection (CIP) standards and FERC guidance for CIP implementation. The US Midwest's wind corridor is an underserved market for storage solutions and grid connectivity. Cogeneration (CHP) and trigeneration (CCHP) present a wide array of product choices that storage solutions vendors can adapt into sales pitches.

The ees finance and bankability sessions built on the above policy topics. Vendors who get on a project finance company's pre-approved list of trustworthy service providers have a big leg up in getting customer referrals. Refer to my blog articles on previous Intersolar conferences for PACE explanations, and know that PACE applies to both residential (RPACE) and commercial (CPACE) properties. Storage systems with a useful life less than the typical PACE payback period are probably not worth selling. The bottom line from banks authorizing loans and leases for energy products is a provable revenue stream; no stream means the project developer must seek equity investors rather than issuing debt. Energy storage is now considered a "front of meter" function requiring new metrics for assessing charges, compared to "behind the meter" generation's demand charges.

One dude from a leading semiconductor equipment supplier had a free e-book for those of us attending his talk. I didn't sign up for his e-book because I have way too much stuff to read through already. Early concern among SEMI manufacturers that Moore's Law would stop at one micron no longer applies. He shared a few platitudes on good management and organizational culture. The dude needs to go work at Uber where those factors are deficient. SEMI held their annual awards presentation afterwards and someone mentioned the Hybrid Memory Cube Consortium pushing the next big thing in DRAM design. I'll have more to say about that consortium if they have events offering free food.

The SEMICON keynotes tend to be slick sales pitches from major sponsors, but once in a while some worthy tidbits appear. Leading IoT and cloud providers have latched onto autonomous vehicles as their next big cash cow target because those cars generate continuous large data streams. Expect services and advertising focused on consumers sitting passively in self-driving cars for hours. I expect these cars to converge with the sharing economy, whose consumers are too poor to own their own cars. Most ads they will see will probably be for other sharing services, like grocery coupons. You heard it here first at Alfidi Capital.

I went back to the ees stage to see what tech advancements are maximizing ROI. Track the GTM US Energy Storage Monitor for the latest industry developments. I mentioned peak shaving above, and storage capacity determines its flexibility. The industry claims that storage manufacturing costs have fallen in recent years, similar to PV manufacturers' cost trajectories, as delivered units have risen. Utility tariff structures and time of use (TOU) policies determine use cases that demonstrate demand charge management that storage system vendors can offer. Most states allow net metering of solar but not storage, so using storage means time shifting, peak shaving, and load balancing to manage power costs. Residential HVAC activation and EV charging are primary drivers of daily household power use spikes. It is clear to me that distributed generation and storage will severely threaten the business models of utilities that do not rapidly move to adapt. Utilities that survive should evolve to finance, install, and manage residential generation and storage, just to capture part of those revenue streams.

I enjoyed attending the Intersolar Orange Button Software Launch, and not just because they had free coffee. The SunSpec Alliance Open Solar Data Exchange (SunSpec oSDX) sponsored the launch because it is part of DOE's Orange Button initiative for standardizing solar bankability data. Getting Alfidi Capital into this program is a bonanza for name recognition. I don't offer financing or provide any other client services to program participants. My interests include knowing which tools programmers must use to be compatible with Orange Button APIs.

The SEMICON West Bulls and Bears Industry Outlook was something I could not miss. I would be perfectly willing to present my own sector views at this forum someday. I just don't want other analysts stealing my work. Gartner and other research purveyors still forecast semiconductor sector growth. There's a widespread expectation that IoT will be part of that growth; you know, maybe these analysts have been stealing that insight from me since I've blogged it for years. I believe the IoT automotive apps driving chip demand are also enabling other value-adding services like fleet management and stolen vehicle recovery (tied to insurance coverage). The semiconductor content in AI is hard to predict, with analysts uncertain about higher CAGR forecasts, and they have no idea which processing architecture will win AI. Hey analysts, I'll do you a favor and point you in the direction of the Hybrid Memory Cube Consortium I mentioned above. Now that I've said it, I will fight any lazy analysts who try to steal it. Fighting begins at a time and place of my choosing.

The last major conference event for me was the Joint Forces for Solar 16th PV Briefing. I learned a ton of stuff at past events thank to heavy participation from industry association leaders and DOE subject matter experts. This year was disappointing due to their absence. The solar market's dynamics show tons of solar installed here in California, not including municipal utilities. I asked a question about how geospatial analysis tools would be good sales prospect generators for installers, especially when used together with Orange Button financing data. Whoever answered me said that utilities are indeed building such tools to show customers where they can install distributed generation assets. I thus contributed some massive genius to the briefing that day. One final insight I gleaned from a presenter is that good accountants specializing in solar policies and incentives can add value to business customers installing large energy assets through off-balance sheet financing.

I did prowl all of the expo floors but I did not have time to query enough exhibitors on their business pain points. I did score an armload of free reading material, a handful of free candy, and a brain dump of interactive tech experiences. I even met a local steampunk enthusiast working for one of the exhibitors. Those folks must be all over the tech sector. They go into hibernation when they're not at the Maker Faire or big hackathons.

Intersolar and SEMICON West are always winners for me. I also like ees, and I would like them even more if they adopt proper capitalization. I shall return next year to see if that happens.