December 2008 Archive

'Tis the Season of Disasterous Unintended Consequences

As I've said before, I'm starting to get irrationally freaked about the downturn and just how much worse 2009 could get. But my fears of every employer of ours going insolvent, and Mr. Lacy and I ending up in the poor house are-- by any stretch-- a long shot. Even the worst case scenario is likely some belt tightening, which we've done before and can do again. (Tip: Short Diane Von Furstenberg if this occurs.)

But there is something else I'm very scared about, and it's all too rational: Unintended consequences of government intervention. The TARP bailout was merely the beginning to a drunken spree of spending, regulation and scapegoats that'll continue at least through first quarter of 2009, and I'm betting even longer. It's a mad-dash to soothe the stock market, which is irrational at best. And you know what happens in mad-dashes? People fall and trip on scissors.

First, consider, a cautionary tale from the last bust: Here's a great piece in the Wall Street Journal by Mike Malone, one of my very favorite authors. (In fact, Infinite Loop is the best book written on Apple IMHO. Not too late to get one for your favorite fan boy for Christmas....) Malone's piece echoes several of the "Nontrepreneur" chapter in my book, and a good many columns I've written about the very real problems venture capitalists are facing, although I tend to point the finger at Wall Street more than Washington. As usual, Malone makes his points in elegant style.

And now a cautionary tale for 2009. Paul "It's only fairly apocalyptic" Kedrosky likes to come up with doomsday scenarios, and sadly in 2008 a lot of them were right on. But this situation he describes in our video below is one of the scariest. (Hint: ZOMBIES!)

This is what happens when we slap-dash regulations and bailouts to pacify voters and mob-investors. I don't know a single expert, journalist, commentator or luminary that said the bailout plan was well thought out. But at the same time there was high-pitched screeching when it wasn't immediately passed. This is just one unintended consequence of the "YOU HAVE TO DO SOMETHING!" school of governance. Do you know how many we haven't even seen yet?

I started my career covering regional banks and you can't overestimate how much the fabric of America is woven into them. The U.S. Government certainly can't afford to bail them all out. Already we're stretched so thin, China is downgrading our credit rating for the first time.

I know, I know, not exactly happy Christmas wishes. The above video is far more suited for Halloween.

Morning Don't Episode 5: Descent into Madness

So, I've been in my hometown approximately 10 hours, and I've already agreed to drive out to the suburbs, to the MALL to buy new clothes with my Papa Bear, and then head out to the ninth layer of hell known as Sam's Club to gather supplies for a holiday party. Two days before Christmas. Yay Memphis!

Although my head did spin around a bit, I'm actually fully prepared for this horrorshow. How? Mr. Lacy and I already had a little Costco  adventure this past weekend. I think he suckered me into joining him by mewing all cute and doe-eyed "Well I can't possibly go alone...Think of the choice people watching!" Those @sadkids. Two hours later, this is what had transpired...

Morning Don't Episode 5: Holiday Edition. Subtitle: All I want for Christmas is some sanity.

The Long but Very Skinny Tail

Interesting article today about a forthcoming study that says "The Long Tail"-- the idea that online niches add up to way more money than mainstream hits-- is only good in theory. Indeed, to give the Tail's creator Chris Anderson credit, it's more than just "good" in theory, it seems ironclad. I remember when I first saw it drawn on a white board. It was that perfect writer's dream of a concept that's universal but only obvious once someone else has uttered it. (Well, it's a dream if you're the writer who came up with it. The rest of us say, "Doh! Why didn't I come up with that?" It's usually accompanied by that dorky I-should-have-had-a-v8 head slap.)

But I've since wondered if the Long Tail actually is true in practice or like one of those baseball teams that looks great on an opening day roster, but somehow finishes dead last. Sure the Web allows us to buy that extra 80% of things out there. And if we did, in any kind of individual volume, it would surely add up to a huge number.

But do we? I know a lot of startups who pitched themselves as Long Tail businesses and are out of business now. Personally, I'm hard pressed to think of many examples where I've paid money for an obscure song, book, or product. For one thing search and discovery just don't work as well as they should on the Net. The study certainly backs up this anecdotal experience:

"However, a new study by Will Page, chief economist of the MCPS-PRS Alliance, the not-for-profit royalty collection society, suggests that the niche market is not an untapped goldmine and that online sales success still relies on big hits. They found that, for the online singles market, 80 per cent of all revenue came from around 52,000 tracks. For albums, the figures were even more stark. Of the 1.23 million available, only 173,000 were ever bought, meaning 85 per cent did not sell a single copy all year."

Anderson counters that this is but one example, and it hardly undercuts the whole theory, and that's a fair point. But I wonder if a better defense would be invoking one of the most important maxims of Silicon Valley: People frequently overestimate what a company, trend or technology can do in a year and underestimate what it'll do in ten years. Think online video: Remember when Yahoo was laughed at for Finance Vision? Today, TechTicker is arguably the most widely watched financial show in less than a year of its launch. We even shoot in the same studio.

Perhaps Anderson was a bit too breathless in just how much, how fast the Long Tail would revolutionize business. But with better discovery, search and even more targeted advertising through social networks, I could see a scenario where that tail fattens out. It's not that I don't want to discover obscure music and books, after all. It's just that most of the Web is aimed at demand fulfillment, not demand generation, and we're likely to want the things we already know exist. Those are likely to be the most well known and popular items, right? There's no doubt the infrastructure for the Long Tail exists online, it's really just a question of demand.

Never Can Say Goodbye

As you are aware, 2009 is going to be a year of changes- namely, that I will no longer occupy the role of assistant here at SarahLacy.com. However, I will be occupying the back bedroom, the spot in front of the fridge, and the large(ish) butt groove on the living room couch here at SLDC HQ. That's right- I will continue living and laughing with Sarah and Mr. Lacy when I return after the holidays: co-hosting shows, cat-snuggling, and rocking the Flipcam at events both big and small. Just save a spot on the dancefloor for me, ok?

In all honesty, I wasn't mincing words when I said that San Francisco is my dream city. I am eager, excited (albeit a tad nervous) to take on this town and really go after my passions and solidify my place here. As the holidays are upon us, and everyone gets all squidgy and lovey dovey during this time of year, I want to send an @livandlove thank-you to @sarahcuda and @sadkids of course, as well as one to the Valley entrepreneurs and friends that have opened my eyes to such an intriguing and awe-inspiring world. The UGBT was undoubtedly the most amazing five months of my life, and I hope to continue the relationships Sarah and I established in each stop across the country and abroad. The email's still olivia at sarahlacy.com, y'all, so keep in touch.

In the meantime, I know you're gonna miss me until I return in January, so I've compiled a little gift for you. Let's just say it's the UGBT you didn't see.....

Untitled from sarah lacy on Vimeo.

Seeking Jenni

I forgot to mention in my post about Olivia, I will be hiring a new assistant, but I really want to wait until I find the right person. If you know someone awesome, drop me an email. It's an hourly, contract job and does involve international travel. It's fun, because at its core my job is about seeking out and meeting with the most interesting people in business and the Valley. But it's also work and that work is frequently making calls, running errands, and taking stuff off my plate so I can focus on all my projects.

I basically want Jenni from Flipping Out, because I'm almost as difficult as Jeff Lewis. Seriously. You need to master this sideways glance (below) because you'll be making it a lot.

I even have the demanding pets. Wondering if I should make anyone who thinks they want the job watch the DVDs? Or at a minimum have a sit down with Olivia...

Ch-Ch-Ch-Changes, Part One

I have three pretty exciting changes happening over the next few months, and one bittersweet one happening now. The first three are still under wraps. The last one is that Olivia is no longer going be working for me at SarahLacy.com, as of yesterday.

I know. I know. I KNOW!

Everyone is universally shocked,because she's fit so seamlessly into the burgeoning SarahLacy.com world. I couldn't have asked for a better travel companion during the User Generated Book Tour, and Mr. Lacy couldn't ask for a better Kelly to his ever-cranky Regis.

Don't worry: Olivia will still help out with Sarahlacy.com events, and appear on FlipCam probably just as much as before. And since she's still living in our house, "Morning Don't" will continue uninterrupted. (Sigh of relief washes across twenty, maybe thirty of you...) And as long as Mr. Lacy continues to carry a camera everywhere he goes, the impromptu photo shoots will continue. But as my life is moving out of promotion mode and more back to blogging, writing and reporting, the job is changing.

It's sad, but also good for everyone involved. No doubt, Olivia will go on to something bigger and better even in this economy. But I do want to emphasize, especially after my post freaking out about the economy, that this wasn't a layoff. 2009 is looking to be a great year for us. I could tell you why, but then I'd have to tell you the other three things and they're all still secrets.

Also, according to Twitter, Scobleizer is telling people that I'm pregnant. Um. That's weird, not true, and certainly NOT one of the secrets just for the record. (Although, this video kinda makes me wish I was. Seriously, I don't even like kids and I've watched it four times.)

I Only Need 8 Jillion More Page Views to Make Rent. Call Your Friends!

In my continuing rant on how most of us are going about blogging monetization all wrong, we get this gem from AdAge.com this week. The headline trumpets that News-Oriented Websites Have a Future. First reaction: Oh thank God, my profession is saved.

We all know traditional media is hopelessly screwed, right? Right. And most of us know that online arms of traditional media agencies aren't really picking up the slack, creating a pretty worrying scenario. Especially because the last few years for media have already been looking like Fall 2008 looked for Wall Street, and now we're entering an undoubtedly horrible year for advertising with no Olympics, no election, no good one-time catalyst to give us a boost.

There is a future for media. There is a business model there. But I think I speak for most journalists when I say we're starting to feel like Moses's people wandering in the desert for 40-years. So was this headline from AdAge a coming attraction of the promised land? Hardly.

Best. Holiday Party. Ever.

If there's one thing we do well at Sarahlacy.com it's throw parties at bars. Of all of our epic parties, last night's holiday happy hour at the Beauty Bar was one of my favorites. Just the right amount of people and many of my absolute favorite people as well.

In what is sure to become an annoying tradition, Olivia and I asked everyone we could find five essential holiday questions. Footage is below. (Om Malik and Julia Allison, you'll want to make sure you watch until the end...)

Morning Don't 4: A Dose of Cheer

So, Mr. Lacy and I have been doing our homework so as not to bore our small viewership with Morning Don't. And by "homework" I mean forcing Mr. Lacy to sit through an episode of Regis and Kelly, so Sarah's claim of "reverse Regis and Kelly" makes sense. Seeing as how Regis is either completely clueless or bored out of his mind, and Kelly is perpetually cheery, Mr. Lacy was not too amused, among other things. So I made him some bacon, and wove in some artful censor beeps, and we started our day.

MD4- NSFW- ish.... from sarah lacy on Vimeo.

Ok, I'm Starting to Freak...

I can't put my finger on it. But in the last week, I've suddenly started to freak out about the economy. Suddenly I'm convinced we're in for years and years of pain, and Mr. Lacy and I will be lucky to keep either of our jobs, our house, our car....wait....we have a shitty car that's paid off. Still, that's the kind of irrational panic I'm talking about.

OK, so why wasn't I more panicked, say, when the rest of the world was? It's the difference between clinically as a reporter seeing how bad things were likely to get and processing the panic on an emotional level. Plus, as a business reporter I can't really invest in individual stocks, so the Wall Street stuff wasn't hitting home the same way. And we have a pretty sane mortgage on a house that according to recent comps hasn't deteriorated in value since we bought it. And as a contractor, I have some idea of what I'm making through the next year, barring any huge tragedies. Also, as a contractor, my revenues are pretty diversified between a few sources. I could lose one of my jobs and it'd be rough, but still be OK. And frankly, having weathered the dot com bust in San Francisco at a time when Mr. Lacy and I were far more junior in our careers and unconnected in the Valley, I felt like it might not be pleasant but we *could* weather anything. And if we did, hey, we'd be better off on the other side. Volatility equals opportunity right? Plus, I have a few cool new projects I'm working on that generally have me super upbeat.

Did something happen to cause this sudden change? Not really. In fact, Mr. Lacy avoided any layoffs (unless things get far worse) and I avoided one at Yahoo (ditto previous parenthetical) and got my BW contract renewed. (They have a fetish for late columns perhaps?) Maybe it was seeing so much other carnage around me, as thousands of others lost their jobs last week, but I've somehow lost the ability to be rational about it all. Hey, isn't that a sign of a bottom? Please? I had such a mini-meltdown midday that Geoff sent me this:

Elsewhere in the world of cute animals, this site is the only thing that cheered me up amid my odd Wednesday economic panic. Isn't it funny how a down economy makes us so cynical that the animal-picture-meme-du-jour has even turned in angrily on itself? Whoever writes that blog, you're my new recession buddy. Please keep posting pictures of animals trying too hard to look cute and mocking them so I can make it on days like today.