The $350 billion allocated by recent stimulus legislation for small business lending is welcome news for startups and entrepreneurs. Tomorrow, April 3, is the first day that Small Business Administration lenders will be taking applications, and a flood of them is expected. The process, however, seems destined to be somewhat chaotic. Detailed rules to flesh out the process, both for borrowers and banks, have not been issued. No doubt, governmental and bank employees are working long hours to set up a workable system, but be prepared for a bumpy ride – and put your application in early.
goodcounsel has set up a number of pages on its website dedicated to explaining the provisions of recent emergency legislation, including SBA loan programs. The main resource page is here. We hope it is useful to you.
We at goodcounsel, like everyone else, are grappling with the fast-moving COVID-19 situation. Our focus is on keeping up with the legislative and regulatory responses and explaining them to our clients and readers.
There’s so much great content being created today. It’s virtually impossible to keep up with the high quality “television” shows being broadcast and streamed. (Still, do yourself a favor and watch Orange is the New Black and Chernobyl at minimum.)
It’s pretty much the same with podcasts. Fortunately, I have a reasonable amount of commuting, dog-walking, and dish-washing time to pop the earbuds in and listen. Ezra Klein of Vox is so sharp and interesting and I have developed a genuine soft spot for the NY Times journalists on The Argument. However, the podcast that I feel is fantastic and indispensable, certainly for anyone with professional or personal interests in tech, is Recode | Decode with Kara Swisher.
I have been interested in computers and technology since junior high school, when my school acquired its first computer – a lonely RadioShack TRS-80, housed up in the library. Because I was a strong math student, I was selected as one of two kids from each class to visit with the computer a couple of times a week to learn how to program in BASIC. From that point forward, I was enchanted.
In those days (we are talking about the early 1980s now) and for the two decades that followed, the power and sophistication of technology grew exponentially, accompanied by optimism about the promise of offering amazing services and solving big problems. Sure, there were people of great foresight, who saw the darker implications just over the horizon of this rise in processing power and the increasing ubiquity of computer hardware. But these were lone voices in the wilderness, for the most part; I consider myself a critical person yet I certainly did not pay a whole lot of attention to these concerns.
Most companies are aware of issues concerning how they use
and handle “personally identifiable information” (PII) of their customers. In
general, web-based businesses (which is to say, nearly all businesses) disclose
their uses of PII with some specificity in their privacy policies and terms of
use (goodcounsel is often called up to draft these for its clients). PII in the
healthcare context is tightly regulated under the Health Insurance Portability
and Accountability Act, and the
use of PII more generally by the Internet giants has come under increased
scrutiny in the last two years.
Many startup founders don’t really have to sweat board of directors meetings all that much; typically, at the earliest stages, the founders are the only people on the company’s board. If the board meets at all, it’s a “family affair” or otherwise, official actions are handled by written consents outside of meetings. However, once you have outsiders on the board – and especially, outside institutional investors like VCs – there is more pressure to perform.
It’s striking to me how the media hypes certain companies to
ridiculous heights with fawning, uncritical coverage, only to join in the feeding
frenzy of negativity when the same companies inevitably encounter problems. In
that respect, I suppose, the media plays a central role in the tech-era bubbles
that we’ve lived through over the past two decades.
What else could be prompting this observation right now than
the story of WeWork? This story hits home for us at goodcounsel, literally,
since we work at WeWork.
In my last post, I enthusiastically recommended Tim O’Reilly’s piece in Quartz, critiquing the prevailing winner-take-all ethos of Silicon Valley investing.
In this post, I want to recommend a piece animated by a similar spirit: an interview with Bryce Roberts, founder of Indie.vc (and one of O’Reilly’s partners in the O’Reilly AlphaTech Ventures fund) on the Recode Media podcast.
The piece insightfully reviews and critiques LinkedIn founder Reid Hoffman’s new book of the same name. More than that, it takes the reader on a fascinating journey through the history of technology entrepreneurship and investing, going back to Microsoft in the 1980s. O’Reilly convincingly argues that the winner-take-all approach to technology investing is neither the only model nor necessarily a sustainable one, from the perspective both of a particular business and of our society as a whole.
Whether you are an entrepreneur, an investor, or simply a citizen who is interested in understanding the growth of technology companies that profoundly shape our world, I advise you to spend some time reading and thinking about this article.
In my next post, I will describe the alternative to blitzscaling that O’Reilly lays out – “sustainable scaling” – and explore the alternative forms of financing that sustainable models require.
Update 11/19/19: Wired magazine columnist criticizes Softbank’s chief Masayoshi Son as “blitzscaling’s enabler-in-chief” in light of the WeWork collapse.