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Brainstorm 2004







Brainstorm 2004

Brainstorm 2004 07/14/2004 03:25 PM

I'm at Brainstorm 2004 which should be fun. It's my favorite conference of each year. I'm going to be taking notes and will encourage anyone else here wants to use the space to put notes on the Brai nstorms 2004 page on my new public SocialText wiki. I'll also be hanging out on #brainstorm on Freenode on IRC.

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Blogging Brainstorm 2004 07/15/2004 12:18 PM

Davi d Kirkpatrick, the man behind Brainstorm said I could blog this event. Rockin'! I'll post some of the notes from my wiki over here too.

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Brainstorm 2004 - Eisner liked
Fahrenheit 9/11


Brainstorm 2004 - Eisner liked
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Michael Eisner is on a panel now at Brainstorm 2004. He was asked if he regretted not distributing Fahrenheit 9/11. He said no. Disney is not partisan and the movie was clearly political. Disney is an entertainment company. He said Rupert Murdoch said no for a completely different reason. Murdoch said he hated Moore and liked Bush. That's not why Disney didn't distribute the film.

When asked whether he liked the movie, Eisner said he loved it. It was like going to a rock concert. It was entertaining, hilarious. He loved it in a non-political way.

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Brainstorm 2004 notes - Bill Joy


Brainstorm 2004 notes - Bill Joy 07/15/2004 12:18 PM

Bill Joy

I think there will be a crisis or catastrophic event that will take our attention away from terror or war and as a positive response may redefine our focus of the century.

A global pandemic/epidemic - the positive response: New found respect for natural systems and focus on health.

Environmental tip. A phase change with a irreversible climate change - the positive response: Understanding balance with natural systems.

Over self-consumption like the oil supply - the positive response: Might help wastefulness and make it a century of efficiency.

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Brainstorm 2004 - Quotes from Wesley
Clark


Brainstorm 2004 - Quotes from Wesley
Clark
07/15/2004 01:34 PM

Some good quotes from Wesley Clark...

Wesley Clark: The responsibility of Abu Ghraib does not lie in the men and women in the armed forces. It lies in with the commander and chief.

Q: Why isn't the administration being held accountable for this?

Wesley Clark: They will be held accountable in the elections.

--

Wesley Clark: You can't win the war on terror by killing terrorists. You have to cut of the recruitment. It doesn't involve killing people.

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Brainstorm 2004 - interview with Ashraf
Ghani


Brainstorm 2004 - interview with Ashraf
Ghani
07/15/2004 12:18 PM

Ashraf Ghani is Afghanistan's finance minister. He was interviewed by David Kirkpatrick

Here are my notes.

Q: What's at stake in Afghanistan.

A: Positive and negative. Freedom from terror and freedom from drugs. Afghanistan can easily be turned into a mafia state. Afghan heroin has made it to California.

We have on our borders some of the largest energy producing states as well as nuclear states. The stability of Afghanistan could help stabilize this region.

Even people who's homes were accidentally bombed by Americans still welcome American soldiers. This is different than the rest of the Middle East.

We've been a trading people for a couple of thousand years. We thrive in networks, but not in hierarchies.

Q: Give us an update. The US media says Afghanistan is in quasi chaos.

A: Quasi chaos is quasi progress. US is not known for depth or understanding. They don't take push-back. They don't engage in debate.

Can't type fast enough, but he's giving a update on all of the great progress they are making.

Progress is good, but problem is expectations. Bush and Blair got up and promised a miracle.

70% of our people live under $1 a day. How do you convince people $1B is a small amount of money.

I'm not going to chase foreign aid and I want to get out of foreign aid in 10 years.

$1 of foreign investment is worth $5-$10 in foreign aid.

Kofi Anan is a great leader but the UN system doesn't work. There are lessons from Afghanistan that can help other countries.

Q: What is the prospect that you can get a grip on the drug mafia in Afghanistan.

A: They told me I had 0.1% chance of success. Cotton will not compete with poppy, but the T-Shirt will.

Poppy is a male crop. Women are not involved in the cultivation of poppy. What a family looks for is its overall income. How do we connect the women to the market. The management skills to get them to the value change.

Every drug producing center of Afghanistan is a center of cotton production. Tax incentives for textile companies would help. Security for textile cities.

Seasonal labor is the weak point of the drug industry.

They need to be given an assurance that things will get better.

It took Thailand 10 years. Afghanistan doesn't have 10 years because it could be taken over by the mafia before that.

Q: Moving companies to Afghanistan could help deal with this mafia issue which is putting the world at risk. They aren't coming because they are afraid?

A: July of 2002, there wasn't a single mobile phone in Kabul. Now my mobile phone from Afghanistan works here. The US spends $11B / yr security in Afghanistan. Security is not about spending money on military. It's about jobs.

Afghanistan is growing quickly. If it could be given a push....

Q: Are you optimistic long term with relationship between the region and the US.

A: The classic age of Islam needs to be understood. We didn't go through the medieval period. This is a confident culture. The extremists exist because of lack of open debate and dialog and this is because of the cold war. Most muslims are moderate. Go to muslim countries. You'll find people like you. We are in clashes. We are not focused enough on solutions.

I'll turn it around. Can you function without the Middle East? Can you exist without oil from the Middle East? If you can't exist without us, we need to focus on solutions.

The risk to my life is about 95% which is worth the risk of saving the millions of people of Afghanistan. I was educated by the people and it was a price I was willing to pay.

Q: You talked about the drug mafia but not about warlords? What do you do with the rest of the country where you can't protect people from the warlords.

A: The ministry of finance is collecting from every corner of the country and we have influence across the country. We need to look at diverse sources of power.

Up until now, monopoly of violence was the source of power. Rules are also power. These people are afraid. Human rights prosecution, etc. They are afraid. We haven't addressed these issues. 80% of Afghanistan has always been self-policed. Need to enhance the social capital of the regions. Communities that ensure security should get reconstruction assistance. Getting free of drugs should provide more assistance.

The answer is about understanding cold self-interest. We've rebuilt the country a hundred times in the past. We'll rebuild. But the rest of the world has to understand the issues to provide help.

Q: Are the terrorists working with the drug mafia.

A: Drug money is easy fast money. $4B in Afghanistan, $40B outside of Afghanistan. The ability for this to do harm is huge.

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Brainstorm 2004 notes - Bjorn Lomborg


Brainstorm 2004 notes - Bjorn Lomborg 07/15/2004 12:18 PM

Bjorn Lomborg

What if hospitals only dealt with patients who made the most fuss. That's what it seems like we do with global resource allocation for global problems. Why don't we prioritize? What if we had an extra$ 50Bn to allocate. What would you spend it on?

HIV aids?
Schools?
Climate age?
Malnutrition?

W need rational basis on our spending.

The Copenhagen Consensus was a group of leading economists who got together to try to prioritize based on best information available.

What we would do:

1- Prevent HIV - $27Bn will save 29M lives
2- Micronutrients - $13Bn will help more than 1/2 the world
3- Free Trade - would create more than $2000Bn / yr
4- Treat Malaria - $12Bn could come back 10X or more

What we wouldn't do?

Kyoto (global warming) is not a good use of money

Focus on high benefit projects.

We now have the list. We have to get the rest of the world on board.

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Brainstorm 2004 notes - Teresa Heinz
Kerry


Brainstorm 2004 notes - Teresa Heinz
Kerry
07/15/2004 12:18 PM

Teresa Heinz Kerry: "If you leave children behind, it has been for naught." "People want America to be great again." The Republican party is totally different from the days of her late husband. Back then they used to even intermarry with Democrats. Back then they practiced the Socratic method.

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Brainstorm 2004 tutorial notes -
Rational Executive


Brainstorm 2004 tutorial notes -
Rational Executive
07/15/2004 12:18 PM

The Agency Costs of Overvalued Equity - Michael C. Jensen

Here are my notes. They are rough notes and may be a bit inaccurate or unclear.

Any time two or more people try to engage in cooperative activities, there is a cost because they never have the same preferences.

Stock options should be adjusted to dividends and cost of capital or their incentives are not aligned with shareholders.

If you as a manager find yourself in a situation where your stock is overvalued. It sets up pressures that cause people to destroy value. When an executive commits fraud to deliver market expectation, they know it's overvalued. 70bn peak but was worth 30bn for Enron. They had a choice of defending the 70bn or confess that it's really only worth 30bn. The board and the investors won't feel that it is value reseting, but rather value destruction and would fire the CEO and look for someone who could perform. No easy way to correct. Probably prevent from getting there. If you're there, you've probably lost your job.

Enron could have stopped the run-up, but they didn't see the downside of the run-up. "Charlie and I get just as uneasy when a company is selling for more than the intrinsic value than when it is trading at less." - Warren Buffet.

Overvaluation is managerial heroin. Feels good at the beginning, but turns out really bad at the end. The pressures of the market cause messing with the gray area of accounting. People raise money to buy companies and destroy more value. Funding of risky investment.

For every $1 in the purchase price, $2.31 is lost in the value of the firm for Nortel when investors realized that the acquisitions were not adding value. Companies destroy value with acquisitions. They con the market into believing that they can add value so it postpones the day of reckoning, but it eventually comes and comes bigger. Bad acquisitions were overwhelmingly with stock. Auctions with multiple irrational people increasing irrationality.

Throwing stock options in is like throwing gasoline on the fire. The solution is in the governance system. Can't solve all problems with incentive systems. You need honest and intelligent people who are monitoring. Unwinding constraints. Lockups after vesting.

Why did the shorts shut down shop at the beginning of the turn-around and didn't correct the problems.

95% of waste from stock options went to people lower than the top five officers. Some people think it is costless to issue options, but this isn't true.

DON'T LET YOUR STOCK GET OVERVALUED. If your stock is overvalued, YOU ARE GOING TO BE IN TROUBLE.

Solution for not having stock overvalued. Communicate your strategy. Don't forecast earnings in value. Publish audit-able metrics for strategy. Stop producing short term earnings forecasts. Would not even do rolling 12 month earnings forecast. Managers should not be in business of forecasting.

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Brainstorm 2004 session notes - The
decline in America's reputation


Brainstorm 2004 session notes - The
decline in America's reputation
07/15/2004 12:18 PM

Now is tutorial session: The decline in America's reputation - Keith Reinhard w/ Pattie Sellers - What imact does it have on the U.S. and American brands? Reinhard will speak about a major new study.

Here are my notes. They are rough notes and may be a bit inaccurate or unclear.

Most people associate America with American's brands. Interesting to note that Carly Fiorina said that she didn't think that she suffered from America's bad imaged in response to a question by Martin Varsavsky.

"If you must talk, can you at least lower the volume..." - advice by foreigner to American about their voice.

The presentation made it clear that people outside of America have many negative feelings towards America and that most American's didn't care. The question they are addressing is, what can businesses in America do?

Tools to help Americans behave seems to be one of the answers...

Singaporean participant : suggesting that it's not just behavior of individuals, but that financial and business decisions made in America impact people in other countries that also affects opinions about America.

It's not business that's the biggest problem, it's US policy. It's the people who can cause changes in US policy and the only way to get people to change is to get them to understand what people think of the US. Most people don't know.

Chinese participant : doing all this work to get US image back will never get the image back to the original big brother image of the US and maybe the goal should be to just become a global peer.

African participant : is there a way for cultural exchange that is less superficial than movies and brands. Maybe people are more similar than we think. How about exchange programs that allow people to live together.

Japanese participant : Q: To what extent does change of government affect how people hate America. A: Resentment has grown over a long period of time, not just during this administration. "Insensitive, arrogant and materialistic." These issues we can address without just government change. Business could address non-government issues and also influence government.

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26-firm consortium to brainstorm 3G 2.0


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New: Web Crossing Brainstorm Plug-in


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Mobl0gging Fortune's Brainstorm Con in
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Joi Ito phonecammed this moment of zen at the Brainstorm conference. Link< /a> to moblog snapshot, and see Joi's wiki for multiple posts about his experience at the Fortune confab. Including these words from Ted Turner:
[Turner] "The invasion of Iraq was the biggest debacle in the history of the world... except maybe the AOL Time-Warner merger. The AOL Time-Warner merger was bullshit.
[Moderator] You were quoted as saying that signing was as good as having sex for the first time.
[Turner] I was just being a team player. It wasn't really. It was the stupidest move I've ever seen. Almost as stupid as the war on Iraq... Gerald Levine was like Rasputin. He was my enemy. But he said he was my best friend. I said to him, "Gerald, I've never been to your home." But I was a team player. I always pulled for the team. We split the money with Jim Baker 50/50. We used to open the envelopes together as they came in because we didn't trust each other."
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