Daily Archives: January 11, 2012

Notes from an MBA reunion

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Lovely piece by Megan McArdle in The Atlantic about the 10-year reunion of her University of Chicago MBA class.

I have a theory about what happened to us, and our nation: when too much money is piled together in one place, it starts to decay, and as it does, it emits some sort of unidentified chemical that short-circuits the parts of your brain controlling common sense. When my class matriculated in 1999, ads for a firm called Discover Brokerage featured a tow-truck driver whose passenger notices in the cab a picture of the home—an island—that the driver has purchased with his fabulous online-trading profits. The passenger looks taken aback while the driver muses, “Technically, it’s a country.”

What’s even more amazing than the fact that this ad was ever made is that this sort of triple-distilled balderdash could intoxicate a large group of very smart people at one of the nation’s top finance schools.

Oh, don’t get me wrong: none of us was simpleminded enough to take those ads literally. Oh, ho-ho, no, not us! No, we made only the most erudite and sophisticated sorts of mistakes, like gang-rushing banking internships, and telling ourselves we were “consumption smoothing” as we used student loans to finance vacations. Believe it or not, many of us talked frequently about the echoes of 1929—but we still didn’t necessarily act on that insight, as the markets cratered in the early 2000s.

For my summer 2000 internship at Merrill Lynch, I chose the technology-banking group despite having watched the March 2000 NASDAQ crash from the lobby of Merrill’s auditorium, where we were supposed to be undergoing orientation. Ignoring the helpless, angry flapping of the HR staff, a bunch of us spent the afternoon telling nervous jokes and watching the eerie flicker that billions of dollars give off when they evaporate on live TV.

Predictably, the technology-banking group had almost no work. Also, I was not a good fit with Merrill’s very conservative, very competitive culture. I felt as if I’d decided to intern with a mathematically gifted baboon tribe, and I’m sure they were just as puzzled by me. Unsurprisingly, I didn’t get a full-time offer. Having learned my lesson, I very sensibly turned around and took a full-time job upon graduation at … a technology-strategy consultancy. I got laid off even before the bankers.

I love that metaphor of Merrill Lynch staff as “a mathematically gifted baboon tribe”. But I’ve been reading Michael Lewis’s wonderful book, The Big Short: Inside the Doomsday Machine, and as a result I would delete the “gifted” part and just stick with the baboons. Except that that’s a bit hard on baboons. And they live in troops, not tribes.

The SOPA opera

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Last Sunday’s Observer column.

The key to survival – in business as in the jungle – is to be able to learn from your mistakes. The strange thing is that some industries haven’t yet figured that out. Chief among them are the so-called “content” industries – the ones represented by huge multimedia corporations which own movie studios, record labels and publishing houses.

Every 20 years or so, technology throws up a challenge to these industries. When audio cassettes arrived, for example, the music industry fought tooth and nail to have the technology outlawed or crippled. Why? Because it would encourage “piracy”. What happened? The record labels wound up making lots of money from cassettes as well as records.

Then along came the video recorder, and the movie industry fought it tooth and nail because it was the handmaiden of the devil – on account of facilitating “piracy”. What happened? Same story: it turned out that the studios were able to make tons of money from videocassettes, because films continued to sell long after they had disappeared from cinemas.

Since then the story has been repeated at least twice more – with DVDs and portable MP3 players. So you’d think that the penny would have dropped in what might loosely be called the minds of those who run the content industries. The lesson is that new technologies that look like threats can become glorious opportunities. But there’s still no evidence that media moguls have grasped that simple idea.

The ideas man

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I’ve long been an addict of Edge.org, the website/salon founded by John Brockman. I finally got to interview him for the Observer.

To say that John Brockman is a literary agent is like saying that David Hockney is a photographer. For while it’s true that Hockney has indeed made astonishingly creative use of photography, and Brockman is indeed a successful literary agent who represents an enviable stable of high-profile scientists and communicators, in both cases the description rather understates the reality. More accurate ways of describing Brockman would be to say that he is a “cultural impresario” or, as his friend Stewart Brand puts it, an “intellectual enzyme”. Brand goes on helpfully to explain that an enzyme is “a biological catalyst – an adroit enabler of otherwise impossible things”.

The first thing you notice about Brockman, though, is the interesting way he bridges CP Snow’s “Two Cultures” – the parallel universes of the arts and the sciences. When profilers ask him for pictures, one he often sends shows him with Andy Warhol and Bob Dylan, no less. Or shots of the billboard photographs of his head that were used to publicise an eminently forgettable 1968 movie. But he’s also one of the few people around who can phone Nobel laureates in science with a good chance that they will take the call.