About Jean-Louis Gassée


Posts by Jean-Louis Gassée:


Last week’s dismissal of Healthcare as one of the subjects to watch in 2009 was met with strong retorts. Difficult, confusing, fraught with ideology, demagoguery, logomachies, it doesn’t matter, readers write back.  This is the most important topic of all, without health, nothing else counts, look at how much of the GDP gets into healthcare. More

Things to watch in 2009

No predictions, no forecast, that’s above my pay grade, just sifting through this coming year’s most interesting trends.  The Chinese curse, May you live in interesting times, being upon us, we might as well try and make the best of this New Year. More

Energetic Feedback

Last week’s column got me the most energetic feedback – so far. Some dislike what they call my negativism, my being a non-believer in a bright future for new energies, others think I’m wrong to call the electric car an out-of-reach dream.  Look at ethanol, a green replacement for Foreign Oil, look at the Tesla, right in my Silicon Valley backyard.  Add a few ad hominem barbs and the picture is complete.
This is understandable.  The general topic of new energies, of our dependence on foreign oil, of lowering CO2 emissions, of replacing today’s gas-guzzling vehicles with electric ones is loaded with strong emotions.  One doesn’t have to be a climate scientist to worry about the effects of dumping ever-increasing amounts of CO2 into the atmosphere.  Some of us criticize China for burning more coal than the US, Europe and Japan combined in its 541 coal-fired power plants.  Sure, but how do we convince the Chinese they shouldn’t aspire to the same level of electric power consumption as ours?  And India and Indonesia…  Add oil prices rising to $145 a barrel before falling below $40.  Both climate and economic ruin threaten us. More

Energy: Dreams and Realities

More good news this week: On January 20th, 2009, reality will re-enter the White House. As a Silicon Valley type, by reality I mean technology, science, you know, facts.  We’re happy to see a real scientist as our next Energy Secretary, for example.  Obama just appointed a Physics Nobel Prize winner, Steve Chu, to the post.  Before running the Lawrence Livermore Labs, as he does today, the gentleman used to be a Stanford University professor.  This is reassuring. More

The Web of Objects

For more than two decades, we’ve seen a succession of attempts to “connect everything”. One of the real fathers of the Internet, not Al Gore but Vint Cerf, once graced the cover of a geek magazine wearing a t-shirt with the now famous slogan: IP on Everything.
He was and is right.  The destiny of every meaningful object in our lives is to have sensors, actuators some time, and always an IP stack for wired or wireless communication. Destiny is the operative word here, because we haven’t made as much progress as we hoped.  In 1986, Mike Markkula, one of Apple’s early backers and leaders, started Echelon.  The idea was to make chips so small and inexpensive they’d be everywhere, even inside a light bulb socket.  Thus, using the electric wires as the network, the Echelon chip would monitor the lamp and report the condition (healthy or soon to fail) of its filament, for example.  Same idea for industrial or home furnaces, security systems, meter reading and the like.  Here and there, we see experiments but no broad use, not in the sense of personal computers, WiFi, cell phones or GPS units. More

What’s good for General Motors…

Fair or not, we Silicon Valley types maintain a low opinion of ‘Washington’, as in Congress and the Executive, the Federal Government.  The Bush years haven’t helped with a long list of offenses against liberties, science, fiscal prudence and just plain decency.  And, just when we thought we’d hit bottom, we reach a new nadir.  I’m referring to the shameful spectacle of our solons, civil (self-) servants and Detroit executives all haggling over the why, how much, when and how of the US auto industry bailout. More

The (All Too) Convenient Invisible Hand

Remember Adam Smith, the man who coined The Market’s Invisible Hand phrase, the author of The Wealth of Nations? He gave rise or, rather, a voice to a philosophy of laissez-faire, of as little government intervention as possible.  In his view, the forces in presence, buyers and sellers, producers and consumers would always end up in balance benefiting everyone.  Prices too high? Competitors see an opportunity, customers go elsewhere, prices come down.  Consumers consume less?  Prices come down, demand restarts.  That, in an admittedly simplistic rendition, is what became known as the Invisible Hand keeping things in balance.  But there was/is another idea behind this: Government is inherently dangerous, once it acquires power, it won’t let go, it will oppress the very people its was supposed to serve.  America’s Founding Fathers remembered Pilgrims and their flight from an oppressive king.  And, in the 20th century, Friedrich von Hayek wrote the Road to Serfdom, describing and predicting (the book was written between 1940 and 1943) the ills of centrally planned economies. More

Venture Capital in Bad Times

Here, meaning in Silicon Valley, we’re not waiting for Obama – even if we look forward to his injecting physical and psychological stimuli in our economy. A week ago, our President-elect was politely spinning the “there’s only one President” line, meaning he didn’t want to interfere with Bush’s struggle to right the ship.  But, this Saturday, Obama took over, of sorts, the traditional weekly presidential radio address, also carried on YouTube. Full text here.  This is the new régime: 2.5 million jobs to be created, rebuilding the nation’s infrastructure, energy, ecology.  The works, the public works.  There is an obvious message here: the situation is so bad and the Bush administration so lame (as in “lame duck”) that, presidential transition niceties be damned, I, Obama, must grab the bully pulpit – right now.  Congress must get to work on my plan without waiting for my January 2009 Inauguration. This makes good sense as well as good PR, we’ll see if Congress brings itself to follow with effective – and clean, no pork barrel — legislation. More

What Now?

On November 4th, watching the election results at home in Palo Alto, I’ve seen tears in the eyes of reputedly and professionally cynical French people assembled for the momentous occasion.  We were proud of the country that hosts us and adopts us in its generous melting pot tradition.  Now, we are prouder, even, of its ability to stare at its old demons and to heed, instead, the invocation of its better angels.  One convincing, resounding vote ends eight years of appeal to fear, to mediocrity held up as virtue, of fake religiosity, of destroying liberties at home and lives abroad, of making the Statue of Liberty weep.  All this with a fittingly absurd coda: financial ruin and the socialization of the financial system by rigidly free-market ignoramuses.
So, Barack Obama (see the unusually good) won the 2008 election.  He raised hopes to heights never seen since … I’m not sure when.  I don’t believe JFK rode into the White House on such a combination of despair and hope, of war and recession.  Now, Obama (Barack for “blessed”, if we are to believe dueling Semitic languages) is cursed with winning and having to run the US government, with answering the sky-high expectations his campaign and his person have raised.
Can he deliver?
From a Silicon Valley, VC perspective in my case, there are reasons to see a light at the end of the proverbial tunnel — the light one local wag said George W. Bush had turned off to save energy.  I’ll start with the return of meritocracy vs. the self-defeating, falsely populist mediocracy of the W years. Even the Republican columnist at the NY Times, David Brooks, ended up chastising his fellow conservatives for their low pandering.
In practical, actionable terms, we’re likely to see an overt (and real, let’s not get confused) insistence on science education, high-tech investments in infrastructure, energy and, I’m not holding my breath, high-efficiency vehicles.  Of course, most of us in the Venture Investing biz will have to pay more taxes.  Personally, I want to pay more taxes my way: by making more money, that is by making investments in successful start-ups, that is young companies that sell a lot of their products. And, for this to happen, beyond good products, good entrepreneurs (and visionary but modest investors), we need customers with money to spend on our wonderful innovative products and services, we need a prosperous middle-class.
We tried the trickle-down trick: taking middle-class money to give it to the top 2% of the population. The theory was, you will recall, the 2% would both invest wisely and spend a lot.  As a result, more consumption, more jobs for the middle class. There are no guaranties the new (old, actually) theory will work better. There are plenty of reasons to fear a recession will make the new administration impotent or, worse, that an overly powerful Democrat Congress will keep at its old corrupt games.  Remember, Democrats voted for the catastrophic deregulation of CDS (Collateral Debt Swaps), the most likely trigger, not necessarily powder, for the financial explosion.

No, the real reason to hope was outlined to me at breakfast this last Thursday by an Apple insider. The individual gave money to Obama using the MyBarackObama social network.  Our Monday Note has already sung the praise of what is the most exemplary, most efficient, most grassroots Internet political campaign tool – so far.  What this person told me is the morning after the election, the network was already pinging him, sending him news, calling for action, asking for volunteers to help the Transition now and the new Administration later. Actually, if you want a job in the Obama White House or government, go to change.gov and fill a preliminary application.  I did.  I’m not holding out many hopes of being named Treasury Secretary or Internet Czar, but I’m curious to see what’s going on and if I could help.  Perhaps volunteering as a “good BS” teacher to high-school kids.
Even more seriously, the real point: Obama has built a direct democracy machine second to none.  He’ll have to make real decisions soon.  In plain English: he’ll have to disappoint some people, he’ll have to fight entrenched interests, some very legitimate ones, some richly “lobbied”.  In many cases he’ll have to fight his very own Democrat Congress if he is to perform effective surgery on the tax system and on the country’s spending.  For this, he’s built a network to speak to his supporters over the heads of heavily lobbied, I’m being polite, I won’t write “corrupt” Congress.
Let’s remember: according to Bloomberg, Obama raised the most money, $650M, from more than 3 million Web donors, with smallest average donation, around $200 per person.
I can’t wait to see the Internet Obama machine in action again. –JLG