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Elon Musk is Not a Bad Man or Entrepreneur, He’s Merely a Bad Wizard

And the spell of wizardry, an enchanting but false mythology of leaders beguiling us, is the real culprit we together should be focused on in 2023.

When it comes to the curious case of Elon Musk, and his ongoing sh*tshow in San Francisco, we’re referencing it all with the wrong movie. The film in question is Glass Onion: A Knives Out Mystery, which started streaming on Netflix on December 23rd and quickly lit up the highly challenged Twitter with its evil protagonist’s supposed resemblance to the “Chief Twit” himself.

The conservative pundit Ben Shapiro has led the viral assault on director Rian Johnson for his temerity in parodying the icon of innovation: “His take on the universe is that Elon Musk is a bad and stupid man, and that anyone who likes him — in media, politics, or tech — is being paid off by him,” he wrote on (where else?) Twitter.

Facebook's defining moment

As I wrote about in The importance of an Always Be Learning Life, I go to the TED conference every year and it just wrapped up on April 19. This year was particular poignant and it kicked off with this amazing talk by Carole Cadwalladr, which set the tone for much of the conference. I highly recommend you watch it if you haven’t already before reading further.

Then I was having coffee with someone this week (I’ll keep them anonymous), and they are about to go work at Facebook and having some regrets. You see, around the Thanksgiving table they are now going to be asking this person about why they made that decision instead of them getting high-five’d… because Facebook is really in the arena right now. Their answer isn’t going to be as easy as it used to be. And also this week Facebook just reported an earnings beat, even accounting for a record FTC fine-to-be of at least $3 billion, and once again it stock soared. What’s going on here?

Facebook made the most epic tech company pivot of this decade, and on pivots in general

Facebook made the most epic tech company pivot of this decade, and on pivots in general

Pivots are gut wrenching. The more eyes there are on the company, the tougher they are. Therefore, public-company pivots are usually the most gut wrenching. Many public companies of the past ceased to stay public because their leaders couldn't face the pivot (change is a bitch - who moved my cheese?!), their business radically declined, and they eventually got delisted from NASDAQ or the NYSE.

Why B2C is so hard to get funded in Austin

Why B2C is so hard to get funded in Austin

My good friend and the founder of Capital Factory, Josh Baer, wrote a post last year saying that he will invest in your B2C startup. Well, so will we. We wrote the first check for ROIKOI, which went on to raise well over $1 million, and also made investments in Bigwig Games, Blue Avocado, Deep Eddy Vodka, Dropoff, and Threadover the past two years. We were also one of the first checks for Wisecrack, but that is based in Los Angeles, and invested in the Series A for talklocal, based in DC. And we are investors in several venture capital funds, including Lead Edge Capital, which holds early positions in Alibaba Group, BlaBlaCar, and other large-outcome B2C companies but these are not in Austin so I guess I'm diverging from my point of this post. In any case, that is a total of eight B2C company investments (if you include Wisecrack and talklocal) out of a total of 33 startups we are involved with, representing 24% of our portfolio (and 18% if you exclude Wisecrack and talklocal).Real Massive also has a kind of B2C dynamic, even though it is B2B, so maybe I should count them too as they are Austin-based. But our primary focus is SaaS, for which we have holdings in 19 startups (57% of our portfolio). Both Bazaarvoice and Coremetrics were/are SaaS businesses and we have the most experience to bring to that category. SaaS is also far less risky than B2C, and that brings me to the real point of this post.

Who this new generation of aspiring entrepreneurs are and the new Golden Age of tech (part 2 of 3)

We live in very interesting times. It's 2010 and I'm at a family reunion. We've just barely survived the most cataclysmic global financial crisis in the modern history and one of my cousins asks me, "How can tech be doing so well while the rest of the economy is doing so poorly?". I did my best to answer but the question kept eating at me. I remembered Michael Porter's Harvard Business Review article about the Internet being the sixth force - and how it would disrupt all of the previous five forces cited in his famous strategic model.

Fast forward just four years later and a five-year old company, WhatsApp, is bought for $19 billion by Facebook, a company that itself is only ten-years old at the time but worth a mighty $170 billion. Just two years earlier, when Facebook went public, the media was asking for Morgan Stanley's head - and sometimes Mark Zuckerberg's or David Ebersman's (CFO of Facebook) head - for what was perceived at that time as an overpriced IPO. Except that it wasn't... and any investors that held on to their IPO stock should now be very happy campers.

At age 46, he started his first company and it failed miserably… but then, on his second…!

At age 46, he started his first company and it failed miserably… but then, on his second…!

For all of us Austin fans, I'm talking about Cotter Cunningham, the founder and CEO of RetailMeNot. Last night, Cotter was one of our keynote speakers, along with Mark Cuban, at the University of Texas for Longhorn Startup Demo Day (the event was just fantastic, by the way, and Josh Baer, Ben Dyer, and Bob Metcalfe deserve a huge round of applause for it).

As of today, RetailMeNot is worth $1.33 billion as a public company (it went public in July and just filed for a follow-on offering). It is just four years old - for a value creation of $333 million per year. Who says Austin can't do B2C now? HomeAway is another one of our five tech IPOs in the last five years. It is worth $3.4 billion today as a public company (it went public in 2011). It is just nine years old. Yes, we haven't produced a Facebook or Twitter size outcome - there needs to be a higher volume of failures (entrepreneurial experiements) to do that, but don't forget we did produce a Dell, a National Instruments, and a Whole Foods.

On valuations - Snapchat at $3 billion, and more

Are we back in the tulip days of the Internet? I lived through it in Silicon Valley from the years 2000-2003 (the best years for humility-inducing training for a tech entrepreneur and investor, in my opinion). Facebook at a $113.5 billion market cap (well above their IPO price, BTW)? Twitter at a $22.3 billion market cap as a newly public company? Snapchat at a $3 billion private valuation with only around 30 employees? There is no doubt that we have had major valuation movements recently, including Google now being worth $344.7 billion - to put that in context, Walmart is ranked #1 on the Fortune 500 and is worth $259.9 billion. Apple remains the world's most valuable company at $467.7 billion, with Exxon Mobil in second position at $415 billion and ranked #2 on the Fortune 500. Tech is clearly beating the old world as the world's most valuable companies. But Snapchat, a company with no revenue, at a $3 billion private valuation? When valuations soar like this, I think it is time to pause and ask some questions.