The Senate has passed a bill which would implement significant changes in the U.S. patent system. Bill Waddell has some serious concerns.
Also via Bill comes this interesting interview (video) with the head of GE’s Appliance business, which is significantly expanding its manufacturing operation in Louisville, KY. See also the discussion at Bill’s site.
WSJ reports that the SEC is considering relaxing the limit on the maximum number of shareholders in private companies, currently set at 499. According to another article in the same publication, the SEC is also considering a rather bizarre “crowdsourcing” approch under which companies would be able to sell investments in very small dollar amounts–$100 was mentioned–using social networking sites such as Facebook. (Another related WSJ piece here)
An alternative–perhaps complementary–approach is being proposed by David Weild, a former vice chairman of NASDAQ. Weild would like to see the creation of a new stock exchange, focused on raising capital for emerging companies and with a wider bid-ask spread to make dealing in such companies a more profitable activity for marketmakers.
A Business Insider article assesses recent organization changes at Google as a demotion for Marissa Mayer, based partly on the following reasoning:
Last year, Marissa Mayer was moved from being in charge of search to being in charge of local…Thing is, search is Google’s cash cow, and it’s probably the most important business in tech. So not running it anymore definitely makes her a less powerful executive.
I’m not a Google shareholder and don’t really follow the internal gossip of the company all that closely, so I have no particular opinion on how good a job MM has or has not been doing, nor when I read the linked article did I have any real opinion on whether or not the changes represented a good or a bad thing for her. (Later information suggests probably the latter.) But the kind of thinking represented by the assertion that less revenue responsibility means a less important job can be very dangerous to a business. The bad thinking in this case being done by the author, not necessarily by Google…however, an earlier BI article also observes that core search and AdWords are still king. That’s where the money comes from today, and why the engineers in those groups are treated like kings.
The problem with this line of thinking is that today’s revenue-dominant product is not necessarily tomorrow’s revenue-dominant product, and to the extent that power, resources, and status flow excessively to the current revenue king, tomorrow’s revenue king may never have a chance to be born and to grow up. A recent issue of Fortune offered Microsoft as an example–in a very hard-hitting article, the author argued that the grossly excessive dominance of Windows, aided and abetted by Steve Ballmer at every turn, has strangled many promising initiatives in their cradles.
A very astute and successful CEO observed that “the secret of startups is that you can have very smart people working on very small things.” By “small,” he did not mean unimportant; he meant small in terms of existing revenue. It is possible, of course, for established companies to also put appropriate focus on new and promising initiatives, but this will not happen where the company culture overly associates “success” with “current revenue managed.”
Clayton Christensen & Michael Raynor extensively discussed the tension between new and existing businesses in companies in their excellent book The Innovator’s Solution, which I reviewed here.