Mark Pincus Blog

open letter to the new dean of harvard business school

dear dean light,

as an HBS grad ('93), i'd like to give you a bit of feedback. my hope is that we might start a dialog and that you might make some changes at the school that could help to save our capitalist system.

while i'm appreciative of the experience i shared, i found the school and community devoid of real concern for ethics.  i believe that this lack of an ethical backbone is part of a continuum that starts with boarding schools and flows into fortune 500 board rooms. rather than making a difference, i see HBS as helping to fuel this problem.

let me start by telling you about murry gunty, one of my classmates who was caught cheating on the election to head the finance club. rather than expell murry and send a real message to him and the community, HBS welcomed him back the following year asking him to teach a case study about his 'ethical dilemma'. this seemed to be an HBS euphemism for cheating.

now i dont blame HBS for the existence of a few bad apples. however, i believe that corporate america much like our government has institutionalized corruption. from wall street scandals to enron; and to the 10% of US corporations who restated earnings last year; how many of these executives are graduates of your school? when does the buck ever stop?

if i were dean of HBS, i would take advantage of this regime change to ask my faculty, students and alumni whether 'we' are following the mission of google's IPO prospectus, 'dont do evil'. i would assess objectively what our market share is of corrupt execs and subjectively whether the community perceives this problem. i would then ask the community to help me define and retake the moral high ground.

HBS should stand for doing good in the world and not just making a lot of money exploiting it. HBS needs to start teaching 'community capitalism' and stop teaching 'corporate capitalism' or we will have many more enrons and they will be populated with our fellow alumni.

the corporate capitalism that predominates today is based on a principle that owners and managers are not accountable for their actions. being protected by a 'corporate veil' they are free to exploit their workers, environment and investors as long as they dont break the law and even then it really just means dont get caught. murry gunty was playing by the same rules but just got caught.

i believe we are the beginning of a new form of community based capitalism where owners and managers will not be able to avoid accountability. we have already seen a few successful companies like ebay, google and now craigslist - all of which are in some way co-owned by their broader interested communities. walmart is now having to spend some $500 million to buy back its community reputation. is this being taught at HBS?

finally, i recommend that you come to burning man (www.burningman.com) this year along with some of your faculty and students to see what community is about. you will learn more about this new future than any HBS case study can teach.

dean light, you have a terrific opportunity to make history. you can produce real leaders who stand for more than the next big hedge fund or corporate scandal. i hope you will call on the whole community, especially your alumni to help.

best wishes and luck in your new position,

mark pincus

--- Jay Light <DeanLight@hbs.edu> wrote:

> Dear Alumni,
>
> I am honored and thrilled to be named Harvard
> Business School's next dean.
> This is a remarkable institution, with a long legacy
> of leadership and
> innovation.  It's been my home for more than three
> decades and is an
> important part of my life.
>
> In the months to come, I look forward to connecting
> with many of you at
> reunions on campus, at the Global Leadership Forum
> in Washington DC, and at
> various regional events we have planned.  I am
> excited by the opportunities
> that lie ahead.  Working with the School's faculty,
> staff and students, and
> with your help, we can ensure that Harvard Business
> School completes its
> first century -- and begins its second -- building
> on our strong foundation
> and moving forward on key new initiatives.
>
>
> Dean Jay Light

One more on lay and enron too

Who really believes that ken lay knew nothing about enrons two decades of corruption. Is there anyone who saw the enron documentary (thank you mark cuban!) Who believes lay is innocent? No way!

That movie documents a culture of deception and greed first going back to the 80's. Every time lay was presented with clear evidence that subordinates were breaking rules and laws he chose to tap them on the hand and hand out promotions and bonuses.

I remember the movie showing how his trading unit was taking enormous unauthorized positions and running afoul of laws, lay lef the guys in place because he couldn't lose their profits.

Or how skilling's most 'brilliant' career building move was to start to book profits for the expected future value of deals just signed. I believe they did this with their blockbuster video delivery idea. They would literally come up with an idea, sign a partnership and then book a paper profit.

I hope and pray that the prosecutors are presenting this basic evidence.

I'd like to see what percent of enrons earnings in yrs lay was in charge resulted from these fraudulent markup deals.

What's pathetic is that lay isn't stepping forward as the 'captain of his ship' to take responsibility for all the actions of his subordinates. Who gives a shit that he comes from humble beginnings? Hopefully not the judge.

Lay symbolizes all that is wrong and corrupt in our country and a lot of it comes from texas. He made a career out of buying presidents and how easy when they live so close.
Sent wirelessly via BlackBerry from T-Mobile.

More on CA/kumar fraud

So the paper goes on to say that the former chairman, charles wang, can't be charge with fraud because there's a 5 year statute of limitations. Now why do you think that exists? Wonder who paid off lawmakers to buy that piece of insurance.

Kumar admits that the company was cooking its books all through the 90's when wang was running the show but pretty convenient for kumar to wait till just after the 5 yrs is up. Wow. Loyal to the end. Even the mafia has its own ethics code.

So wang, you piece of shit. You better hope we never meet in a public place. Ill be sure to tell you what I think and could care less how many dollars or politicians are lining your pockets.

And I love that the company agreed to a 225m restitution fund for injured investors. So now that these crooks have taken their profits, make the new equity holders payoff the old. That way we can fine even more innocent investors for being dumb enough to buy stock in a US F500 corporuption. Sent wirelessly via BlackBerry from T-Mobile.

Two more major public execs admit cooking the books

Todays nytimes reports that sanjay kumar and stephen richards, former heads of computer associates admitted to “conspiracy to inflate the company's sales and interfere with the federal inquiry” which included sanjay paying 3.7m to buy off one witness.

My own experience with CA was during my tenure as ceo of an enterprise sw company in the late 90's. It always felt like I was dealing with the mafia (which I've found true at some other companies too.) I always called the company a figment of wall streets imagination. We never encountered them in the marketplace. Our customers had given up on their flagship unicenter product years earlier.

Now its great that these two execs have admitted guilt and some justice will be served but the bigger points for me are a) that these guys don't have to return their wealth (which includes owning a pro hockey team) to the injured investors and b) that the founder and former chairman, charles wang, still walks totally free with all his illbegotten gains.

Course the age old refrain is that this didn't happen on his watch. I say first that I don't believe this is all rogue subordinates like fastow from enron. Come the fuck on! We are seeing the results of corporate cultures that foster numbers at all costs, that as long as you don't break the law or get caught its all ok.

This isn't about a few bad apples. The whole fucking forest is infected. This isn't about teaching 'ethics' for 4 weeks at harvard b school. Where are the cries for reform? Oh, maybe sanjay or CA bought them off too.

10 % of US public corporations restated earnings last year. How many do you think revised upward?

So now sanjay and his partner face 20 yrs. Are they a threat to society? Do they deserve that? I don't give a shit about either of these guys. I say let them buy the years down. What's 20 years of your life worth? whatever you can afford to pay.

If the SEC would just enact my proposed rule - that insiders have to disgorge profits from stock sales made during periods of fraud - this would be a mere formality. We wouldn't need a trial. Wouldn't have to prove guilt. Mr wang would be contributing his half of the islanders too.

Common mr levitt, wouldn't you like to own your own pro hockey team?

Many people (like my dad) believe that sarbanes oxley will stop this type of curruptiuon in the future. How? What would sanjay have done differently? Would a more independent board have somehow figured out he was inflating sales? Maybe, but I don't buy it. Boards read carefully prepared statements and ceo's can easily convince them of just about anything.

One lesson we should all learn from watching ceo pay skyrocket is these guys care more about their personal wealth than anything else. So let's talk the lingo they get, money! Ill bet the 80 % prospect of losing all their money will be a bigger deterent than the 1 % prospect of jail time.

Having attended hbs, I can attest there is nothing an hbs trained ceo, banker or consultant cares about more than money.

Sent wirelessly via BlackBerry from T-Mobile.

Auren's Radleaf reputation idea

My friend auren hoffman is launching a novel idea to independently host people's reputations.

Its great to see entrepreneurs like auren experimenting with new models.

In general, I agree that there is a need for a portable reputation system that can enable non-ebay p2p transactions.

However, I question the potential for a system that has no obvious way to achieve the critical mass and network effect necessary for this to work. A voluntary system seems unlikely to be accurate too.

If however auren can get bizdev deals with major sites like amazon and yahoo he'd have a great shot. My own experience has been that its a major uphill battle convincing walled garden sites that benefit in the short term from lockin to act in the long term interest of their users.

I wish auren luck. Success on this front would be highly valuable and no matter what we'll all learn. Sent wirelessly via BlackBerry from T-Mobile.

Anyone noticing huge spam on their blackberry?

My dad and I have both noticed that we get a massive amount of spam on our blackberries. Way more than our regular email accounts. Wondering if these service providers do anything about it? Sent wirelessly via BlackBerry from T-Mobile.

What's next for social networking?

I'm sitting by a in florida wondering about this question. (Don't believe in real vacations:)

First, what have we learned? The facebook has shown us the power of both closed trusted networks and highly penetrated communities. I've been waiting for some researcher like danah boyd to show us a graph. I'm sure it would prove that there is an exponential increase in user value as a network goes from 1 % to 10 % and 30 %. (And if someone has already shown this, let me know.)

Myspace has shown us that people (kids so far) have a real interest in an online identity that they *completely* control.

Friendster showed people's real interest in seeing their extended social maps but so far has fallen short of showing any utility with it.

My take is that kids have a lot more time and therefore interest in just checking each other out and that is why myspace and facebook have shown more growth and staying power.

As people get older and have less free time they are more concerned with the utility of a service and that is why craigslist may be the only large and sustained social network for adults. Some people may question inclusion of CL here but I believe it is a loose knit community network and not just a free classifieds site. How else does one explain its growth in seemingly dormant markets like phila or greenbay.

So what's next? Well, I don't believe its over. I think we will yet see one or two more services reach the audience sizes of myspace/facebook but they may look far different than the hosted portal model.

I think the functions of social networking will become more *owned* by communities and end users and less controlled by large media services as their interests are not well aligned.

I can imagine the social networking function hosted on my own pc, possibly integrated with my email and other communications services. This should be totally seamless. When I meet someone I want to add to my network I should be able to just beam them with my phone or blueberry. This should automagically connect our networks.

The resulting social map should me MINE and usable across all web services.
* listings on craigslist or ebay I should be able to invoke it to find trust.
* dating profile on match or jdate * fast reference checking on a resume for personal assistant * new entrepreneurial services should sprout up that offer tons of other services. Let me know if a tennis player I kinda know is nearby and interested in a game. Find me a house to rent or swap in south of france from another sorta friend. * google, yhoo, amzn should all build open social maps into everything they do

Paul martino, marc canter and others designed the open FOAF standard for this purpose a few years ago. While FOAF (friend of a friend) is an open (but encrypted) xml file format for a totally distributed and user controlled approach, the open map could also work like DNS and be replicated openly across many services acting as brokers.

I wouldn't be surprised to see google local be a first large mover with something like FOAF as they may have the most to gain from more useful local services. Sent wirelessly via BlackBerry from T-Mobile.

Myspace revenue $200M this year

Todays nytimes has a great piece on myspace. Highlights include

* company says it will top 200M in revs * second most trafficked site at 30B pv's/mo * no idea how to monetize beyond banners * banners selling for .10 cpm * implication that fox will make more acquisitions * disagreement between founders and fox execs on how to monetize (hope they let founders decide) Sent wirelessly via BlackBerry from T-Mobile.

Why the US is becoming China - arresting you for smoking pot

today's nytimes had a disturbing headline - the FDA now officially claims that marajuana has no medical benefits. this comes on the heels of the supreme court's recent decision that the federal government can arrest anyone using marajuana even in the 11 states that now approve it.

it just amazes me how similar the US is to china. both countries are ruled by conservative old regimes that are painfully out of touch with the needs and aspirations of their citizens. in both countries, the citizens naively believe that they can go on with their lives, pursuing their progressive goals - make money and have fun.

in both cases, there is the feeling of a vise slowly closing. in the US the conservatives have been playing a brilliantly patient chess game. with control of the supreme court and both houses they are in sight of the end game already. we can all see the last moves coming...

- abolish abortion...prosecute personal marajuana use...reinstitute the draft...checkmate...now they can throw any youth political movement challenging their authority in jail or at least draft them (arguable a worse fate).

its normal these days for people to tell me i should be careful what i say on my blog. implication - that i shouldnt risk pissing off the government lest i face the FBI, IRS, CIA. are they serious? i say fuck that and shame on them for being too cowardly to stand up for our rights. wow. our forefathers had to fight real wars and put their lives on the line. my peers are too concerned with their comfortable lives to even risk a bad tax return. what happened? maybe it's easier to have resolve against an enemy you can see.

now i'm not saying i'm doing much about this, cause i know i'm not. but we all have to start somewhere and saying out loud and in public what we all know in our hearts and share in our homes is a good start. revolutions start when with small steps. what's our equivalent of a tea party? how about the washington pot party? why dont we get a million of us to smoke pot on the lawn of the washington monument? would you do it or would you rather wait till they come for you and then ask your silent scared neighbors to help?

and how about our new 'leaders' like mark warner or barak obama? where's the outcry? their silence on these and many more issues is deafening. how is it that we dont have one mainstream leader, dem or republican, that's got the balls to stand up to this totalitarian regime? hmm...maybe it's because they all work for the same donors as we learned from mr. abramoff. 

i for one look forward to the checkmate. lets see the government clamp down. go after those pot smoking liberals. throw a few goldman sachs i-bankers in jail along with some rabble rousing ivy league kids. hell, maybe they can even nab mark warner smoking a J on his farm. overthrow roe v wade and arrest some prominant young women on murder charges. then just wait for the kids to start protesting. oh yeah. it's on. we've been waiting for you spoiled brats. maybe we can shoot a few and really shut you up....

only then will we see the everyone wake up. and then we will finally see the revolution that has been 14 years in the making. we will see real leaders emerge with real missions (to replace these hollow stick figures). there wont be room for apeasement in the midst of all out warfare. and we ants, armed with the internet will triumph.

here's my questions to those of you loony enough to still be reading this.

1. do you agree that we have a corrupt government that no longer represents the people?

2. if so, are you doing anything about it? why not?

3. would you fight if there was a clear path?

4. why is your voice silent? why arent you joining me in this fight?

finally, i am launching a web based political party - the ant party. (you will find it antparty.org once matt puts it up.)  i hope you will help me make this a reality. it's my attempt to fight back the only way i know how.  the idea is user generated politics. the idea is that we the people should set the agenda and pick the candidates and those people should be elected without selling their souls. i dont know if this is a good idea, and feel confident already that we arent getting the site right. so help us! we need people to think through the details of how the party should work, of site layout/UI.

flock makes bad decision to go with yahoo search

i've been playing with the new flock browser lately and like some of its inline features. however, i think it's pretty lame that  flock makes yahoo search the default. companies have to decide whether they are user driven or business driven or both. choosing an inferior search engine just for the business deal seems to be pretty strong indicator.