The Option Backdating Story Grows

I had a feeling this would be a story that would grow over time, with Rambus joining the list of companies doing an "internal investigation" on option backdating. Electronic News has thoughtfully put up a page that will keep track of each company's investigation as it unfolds.

Since I work in tech I will say that I do not think MY company will be joining the list. I say this not only because I think my company's management is ethical, but also because my company hasn't been public long enough to backdate anything. Heck, I think some of the management's stock is still locked up from the IPO.

But I think the uncertainty of how wide and deep this problem runs is starting to hit a lot of people who work and invest in tech. It has become Chinese water torture, with a new company disclosing problems every day, and it's casting a pall over the entire tech market.

Buyers Buy, Sellers Sell

Simple sentence, isn't it? Pretty friggen obvious. But most people don't get it.

This was told to me by a realtor friend of mine trying to explain how she stays successful. A more detailed version would be "don't waste your time with people who aren't serious about doing business."

But I don't know how many times I have been sent out on wild goose chases, am chastised by people in other groups that they can "get a deal done thanks to their connections", and so on. One of the marks of a good salesman is knowing when a customer is playing hard to get and when they just aren't interested.

That's not to say you don't keep tabs on customers who say they aren't interested - things always change. Even my realtor friend knows that people who aren't interested now will ONE DAY buy or sell a house. The difference is knowing when to put them on the "keep tabs on" list and the "engage" list. A salesman has people in both camps, but knows the quality time is spent with the ones that are serious. The other list will hopefully feed into the engage list and needs to be managed, even if it takes years, but a good salesman knows how to distinguish between the two.

My New Facade - Architectural Concept In

After a month of waiting, the architect's concept for My Fabulous New Facade is in and I am quite pleased:

The main change I wanted, to get rid of the "triangle" look, is quite nice, pulling out various sections of the house. There is a front patio on the left along with a courtyard that ties in nicely with my Fabulous New Back Yard. The garage is pulled forward, allowing me to add space to my home office behind it, plus there is square footage added to the top floor above the garage.

The architect is going to look at some minor changes we suggested, but this is pretty much it - he nailed it on the first try, speaking volumes as his ability as an architect as well as his ability to understand his clients' tastes.

So it will be about another month before I get blueprints - an engineer has to be pulled in due to the structural changes - after which I will go to the next stages of the process that I will do in parallel: Pulling Permits and Interviewing Contractors.

A Bummer for the Business World

I come back from Europe to find that a tragedy struck one of the corporate giants there: Head of Michelin Drowns off French Coast

Edouard Michelin, 43-year-old head of the giant tire company that bears his name, drowned in a boating accident off the coast of Brittany in northwest France, police said.

His body was recovered floating among lobster traps Friday, hours after he had left on a fishing expedition in good sea conditions with a friend.

Apparently he was one of the few European CEO's who advocated American style capitalism in Europe, even earning the nickname "l'Americain" according to the Wall Street Journal.

I was at TI when it lost its CEO, Jerry Junkins, to a heart attack, and I know this is going to mean a lot of upheaval within the corporation.

One Snowflake Can Start an Avalanche

In a staff meeting three weeks ago, I casually mentioned a company I heard of that was in my market space, saying I could investigate them as a potential partner, customer, or even acquisition candidate. It was two sentence defensive response to a sharp inquiry from my EVP asking if I was "shaking enough trees". They were way down on my engagement list, and I figured I would do some light research on them while I focused on the 20 other companies that are higher on my list, are more serious, have more money, and are consuming 110% my time. I didn't think of this company as a real engagement candidate, but figured I could throw an email or two together on them to keep the EVP mollified that I was keeping my queue full.

But those two sentences were overheard. Next thing I know someone else in my group - either looking for something to do, or to do a deal behind my back - sent inquires to two other departments asking about this company. The Legal Department got wind of the inquiry, and started a due diligence report so that we would "not be blindsided in any discussion". During Legal's research, they asked questions to R&D, who promptly decided they should spend time creating a competitive comparison. During their work, an engineering VP engineering who thinks himself as better "connected" than yours truly started talking to vendors and other companies in the industry, getting information and creating a dossier.

So now I have a pile of information sitting on my desk along with contact information and a complete company dossier. My EVP is now wanting to know when I am go close a deal.

Now, mind you, if I had ASKED these groups to do this work for one of the top 20 companies on my list, I would have waited. And waited. And waited. And ultimately not gotten a response until I went and twisted arms. But when the information is being fed by rumor and innuendo, then EVERYONE wants in on the deal.

Next time I'll keep my mouth shut.

Options Backdating - Just the Beginning

I've been watching with interest the options backdating stories. I work in tech and am familiar with all the companies that are being investigated. Tech companies rely heavily on options, so it is not surprising that the industry is being hit. It's just sad that this level of greed exists in the industry, but I guess that isn't surprising either.

At this point more than six tech companies are under investigation, and I think this is only the tip of the iceberg. By the time this is through I bet more than a dozen companies will be under investigation.

Already the executive suite at Vitesse has been emptied, and my guess more is to follow.

I Thought The Food and The City Were Linked!

I've been here a whole day and have yet to see a frankfurter. What gives?

That reminds me of an old joke: Buddha went to a hotdog vendor and asked to make him one with everything.


(Think about it)

Ich Bin Im Vaterland

Mein Boss hat mir gesagt die andere Woche dass ich uberseeisch muss gefliegen. Ich habe gedenken dass er an Japonien nachdenken. Ich habe desagt "OK".

Er denkt nach Frankfurt! Leider, ich werde in Frankfurt nur 24 Stunden - nur eine Nacht im Biergarten sein. Nicht zu viel Zeit gutes Bieres getrinken.

Blogging from 35,000 Feet

So here I am on Luftwaffe Lufthansa Airlines using their WIFI. I have to say there are a lot of good and bad things about this airline:

The good:

• WIFI - This should be mandatory on all flights over four hours. Yeah, they charge through the nose, but it is well worth it.
• Bier - Unlike AMERICAN carriers that stopped serving free alcohol in coach for overseas flights, Lufthansa still pours. I asked what kind of bier they had, and the stewardess frowned and said they "only" had Warsteiner Premium, probably assuming I wanted a Bud. This is a fine bier, full bodied and flavored. I had them bring me a couple.
• The Staff - My stewardess is Martina Hingess. Okay, probably not, but it looks just like her.

The Bad:

• Coach Seating - This coach seat has got to be the smallest, most cramped seat I have ever been in. That is saying a lot considering the Asian flag airliners I have flown, which scale their seats for smaller nationalities. Right now to type this blog entry I have the notebook screen pulled straight and angled down on my lap since the seat in front of me is in my lap.
• Check-In Line - Again, the worst line I have ever been in. My visions of German efficiency went out the window as I waited over 90 minutes in a line that went 150 yards out the door of the LAX terminal. I didn't freak out since it just meant I waited there instead of a bar, but still, pretty annoying.

Does the WIFI make up for the cramped seat? No, it doesn't. So I don't plan to fly this airline again unless I get business class or they improve seating in coach.

For a Diet, There is Only One Rule

For those of you commenting that this is becoming Mitch's Exercise Blog, I think maybe that is going too far, BUT I thought I would point to a recent article that gave six rules for dieting success:

1. Make a Commitment
2. Get Emotional Support
3. Set a Realistic Goal
(nothing about eating or exercise yet!)
4. Enjoy Healthier Foods
5. Get Active, Stay Active
6. Change Your Lifestyle

Okay, about half is the usual touchy-feely BS, but the Director Mitch diet has only one rule:

1. Expend more calories than you consume

Pretty damn easy. Elements of the above certainly help (get active, eat healthier foods), but it comes down to simple math. You can eat five fudge sundaes a day and still lose weight if you work the calories off.

What a lot of the current diets try to exploit are "value" of the calories you consume, whether you are burning carbs or fat, the "net calories" (since it takes more calories to digest some foods), and so on. But if you just work on the burn side, you really don't have to worry about all of that.

So how to figure what you burn? Here is a handy calculator that gives calories burned. I found it interesting to get what my regular exercise burns (Tae Kwon Do Training - 764, Yoga - 458) as well as what I burn if I blog for an hour (137).

With Apologies to "A Few Good Men"

Sales: "You want answers?"

Finance: "I think I'm entitled to them!"

Sales: "You want answers?!"

Finance: "I want the truth!"

Sales: "You can't handle the truth!!!

Son, we live in a world that requires sales. Those sales made by people with skills. Who's going to make them? YOU, MR FINANCE? YOU, MR. OPERATIONS?

We have a greater responsibility than you can possibly fathom. You scoff at the sales division and you curse our incentives. You have that luxury. You have the luxury of not knowing what we know: that while perks are expensive, they drive sales. And my very existence, while grotesque and incomprehensible to you, drives SALES!

You don't want to know the truth because deep down in places you don't talk about at staff meetings...YOU WANT ME ON THAT CALL! YOU NEED ME ON THAT CALL!

We use words like comps, golf outings, and five course dinners. We use these words as the backbone of a life spent negotiating something. You use them as a punch line!

I have neither the time nor inclination to explain myself to people who rise and sleep under the very blanket of revenue I provide and then question the manner in which I provide it. I would rather you just said "thank you" and went on your way. Otherwise I suggest you pick up a phone and make a sales call. Either way, I don't give a damn what you think you're entitled to!"

Finance: "Did you expense the lap dances?"

Sales: "I MADE THE SALE"

Finance: "Did you expense the lap dances?"

Sales: "You're goddamn right I did!"



(No, I didn't write this - it is making the rounds over email)

Republican Party: I'm Done

I watched a Tivo-delayed Bush immigration speech last night. I thought his effort to move everyone to the center was pretty effective. I am pretty hostile (aka "right wing") on the immigration issue, but I understand that I am not going to get everything I want. What Bush proposed seemed a fair compromise that gave me some of what I wanted while sticking it to me a little. This is what politics - office and state - are all about, so I thought I would go along...IF it was sincere.

The Republicans today showed they are not sincere: Senate Rejects Enforcement First

On a vote of 55-40 that crossed party lines, the Senate rejected an appeal from Sen. Johnny Isakson, R-Ga., to require the border be secured before other immigration law changes could take place.

(emphasis mine). So what this means is that the part of the speech that I did like - strengthening the border - isn't really going to happen. It's just lip service. And the part that pisses me off is going to happen - letting more unskilled workers flood a country that is already outsourcing unskilled work.

I am willing to give Bush a pass to say he was sincere, but he isn't running again and is done with politics in three more years. And if the Republican led senate won't support his proposal and see what illegal immigration is doing to this country - if they are no better than the democrats - what the hell am I doing supporting them?

They can kiss my ass in 2006.

Read This Blog and Learn Something

I found out that at least one of my blog entries was used in a business class. I got emails from a couple of students at DeVry asking about my entry on valuating a start-up. I asked for a syllabus on the class where I was referenced and got the following:

This course covers issues unique to small business establishment, operations and management including the steps involved in improving the success rate for new firms; financing small businesses; analyzing means of regulatory compliance, and methods of collecting data in order to achieve improved performance.

Most of my business entries are marketing related, so I am pleasantly surprised that this is the entry that found its way into a classroom.

Is This a Time to Lie on a Job Application?

Great situational/ethical question from the mail bag:

I have a question for you in regard to your article of Fired vs. Being Asked to Resign.

While I agree with a majority of what you said, I have a question. I am looking for a job now after "resigning" as an HR executive employed by at-will employer. From my new boss, I was not given any notice or explanation of why I was being asked to resign. I am still unsure and doubting myself. As I seek new employment after 8 months of unemployment, I am being asked" "Were you asked to resign or discharged from a previous employer, if so, please explain."

I know enough about HR to know of the red flags, but in this case, I don't know how to respond to this question -- because I don't know why my new boss asked me to resign. I took the 6 month severance offered by the company however, I am not finding employment as quickly as I expected, either due to my age (51) or other reasons. This has not been a problem in the past.

How would you recommend I respond to the above question being asked on employment applications?

First, my condolences for your situation. I went through six months of grinding unemployment back in '02 and know how it feels.

My first, gut response is this: how will your former employer answer if/when they are contacted about your service there? The answer to that will guide you on what to do.

If your former employer was a large company you're likely in luck. Lawsuits have forced most companies into having official policies that only confirm dates of employment for ex-employees. Nothing else. If it was a small company, a chatty office worker or ex-manager could create problems, but since you cooperated and took the severance package, you apparently didn't burn any bridges.

In either case, I would recommend calling your former employer and sounding them out. Let them know you are interviewing and ask how they will respond to queries about your tenure there.

And then you will have three scenarios:

1. They will say they asked you to resign - In this case you really have no choice but to answer the question with the affirmative. So you will need to come up with an "elevator pitch" - a short but coherent story that puts you in a positive light when they ask about your response. The goal of the EP will be to let your prospective employer know that you are not a problem, it was a personality conflict with the boss, the president brought in his brother-in-law to take the position, etc. In other words a short explanation that really casts the blame on the former employer, but WITHOUT bad-mouthing them. The EP that would work best would depend on how long you were there, which is not in your email.

2. They will only confirm you worked there - If they only confirm your employment dates, then I would, well, lie on the question. You STILL need an EP on why you left, but now you can create an even better picture of yourself ("I took time off to train for my ascent of Everest"). Okay, maybe not that far, but you get the picture.

3. You are unsure - Then go the safe route and go with Option 1. Do NOT go option 2 unless you are absolutely sure.


So is my recommendation for option 2 unethical? First of all - and I know you work in HR - I have developed a low opinion of that organization when it comes to professional staffing. So I see the interviewing process as a battle with HR and will use any means, fair or unfair, to trip them up.

Secondly, I see the question itself as unethical , so I have no problem answering it with the same contempt I feel for it in the first place. You shouldn't be penalized on landing your next job just because you were asked to leave your previous job.

That's my $0.02. Anyone else have any comments?

Two Close Calls

Two close calls this week. The first one almost had T. Kennedy taken off my list of people I wish would die. Perhaps God was sending him a message.

The other close call is just uncomfortable to look at. Reminds me of the Get Smart line, "Missed me by THAT much."

Spanish bullfighter Eduardo Gallo barely misses a bull's horn during San Isidro's bullfighting fair at Madrid's Las Ventas bullring May 11, 2006

The Dark Side of Price Fixing

While at dinner last night (I am actually in Taiwan right now), someone brought up a little fact that I didn't realize, even though I work in the high tech industry: about a dozen guys served jail time for price fixing the DRAM market:

In late March, three executives from Samsung Electronics Company Ltd., the world’s largest manufacturer of DRAM, agreed to plead guilty and serve jail time in the United States. In early March, four Korean executives from Hynix agreed to plead guilty and to serve jail time in the United States for participating in a global conspiracy to fix DRAM prices. And in December 2005, four executives at Infineon pled guilty and faced jail time.

But this isn't the entire story. It wasn't just for price fixing, it was also for colluding to keep a new product - Rambus - off the market.

We all sat there chewing our meal, wondering if these guys were caught up in the rulings as a part of their normal business dealings, especially since all these guys were non-Americans and may have normally operated under different business principles.

California is Driving out Businesses, but Not the People

Nissan last month decided to relocate it's U.S. marketing headquarters from Southern California to Tennessee. All 1300 employees were offered relocation packages. The total number of employees who accepted was 42%. That acceptance rate seems pretty low to me, but I can see why a lot of people wouldn't want to leave here (including me). It seems the tradeoff is low, affordable housing versus weather and lifestyle.

I do think this is a mistake on Nissan's part, but not because they are losing over half their U.S. marketing staff. California is known as a leading indicator of styles and preferences, and as the home of one out of every eight Americans (as well as a large percentage of Mexico's population) I would want my marketing people here rather than the Tennessee. Nissan definitely will save money, but they may lose the market pulse.

Four More Years

No, this post isn't what you think it is. It has to do with four year time spans, not terms in office.

It came to me this week that it was four years ago this month that my start-up was shut down, throwing me into the ranks of the unemployed for the first time. Somehow that didn't seem right, so I counted, recounted, and counted again. I marked it against other life mile markers, and no matter how I counted it, it kept coming up to four years. But it still didn't seem right. It doesn't seem that long ago, and four years is such a long time. Isn't it?

Actually it isn't. But the problem is that a certain four years of my life left an indelible mark in my mind: the four years from freshman to senior in high school, 1982-1986. It seems like I lived several entire lifetimes during those four years. Dreams and dramas of epic proportions were hatched, lived and died during that period. It took forever to live through and I could write several novels on just a few of my experiences during that time. I couldn't wait for it to end and wanted it to last forever.

So four years, using those years as a yard stick, take forever and are enough time to accomplishing something remarkable. Several cultural events back up this sentiment: it's the amount of time it takes a kid to become a high school graduate. It's the time it takes a high school graduate to become a college grad. It's the amount of time for someone to train for the next Olympics. It's the term of a President.

But as I get older, four years is becoming a smaller period of time, largely since I can start pointing to other events that have lasted longer: I have been married for eight years, I have lived in my house for seven, my daughter is nearly five. And, of course, four years is becoming a smaller and smaller percentage of my experiences. When I graduated high school, four years represented over a quarter of my living memories. Today it is close to ten percent.

I also take a longer term horizon for my goals in life and how I approach mastery of the talents and subjects that interest me. I take a life-learning point of view rather than a "when is the next promotion" attitude, which makes the four-year goal post a lot less meaningful.

Since my perception of the four year time span has changed, I shouldn't be surprised that my unemployment stint was "only" four years ago. What does give me pause is the fact that, statistically, I only have about ten more four-year time periods left.

My New Ride

I got my old bike out of storage last October and have been riding regularly for the past seven months. I was just going out for the exercise and didn't care what I was riding, but as I rode more and more I found that certain feelings were starting to surface as I circled the Orange County bike paths: competitive drive and envy.

I am in good shape and have great stamina, but as I slogged around the bike path I kept getting passed by guys (and gals) on impressive looking rides. I would match or beat their pedal stroke, but these people would still pass me, no matter what gear I was in. And while I was straining to keep up, they peddled like they were in no hurry at all. I came to the conclusion that pushing my old bike around was a lot of effort and I could get more speed and mileage for the same amount work if I upgraded to a new bike.

The only question was what to get. I am not a bike expert, but I have a few friends that are, particularly Jim, who blogs periodically on cycling. I wanted something that was a good, solid brand, but gave a lot of bang for the buck. And one brand kept coming back: Giant. I was familiar with Giant not because I was into biking, but because I see their shops all over Taiwan. This seemed like a good start and I looked into their product line.


I am not going to go into the details, but I decided that a Giant OCR composite was the way to go. I checked my local shop, which had a sale on last year's models (like cars, they try to move the old models out when the new ones come in). They were priced only a couple hundred dollars more what I could off the internet, but added custom fitting and free servicing for a year (like a new car they want me to bring it in at one month and three months to check everything, including the fitting). They also threw in a speedometer/computer and clenched the deal.

And the result? This bike rocks. As a composite, it weighs nothing at all and I found that I was not only keeping up, but easily passing all those serious looking cyclists along the bike paths of Orange County. I was going a hell of a lot faster and farther with the same amount of effort as my old bike.

The one thing that is a minus is that with a composite bike and road tires that I definitely "feel" the road more than I did in my old cross trainer. So one change I made was to move the "gel" seat from my old bike to replace the sleek (and very uncomfortable) racing seat. Maybe I don't look quite as cool, but I am a hell of a lot more comfortable.

Meanwhile, Buried in Section D...

Along with news that the economy is growing, unemployment is low, productivity is up, we have news that tax receipts are pouring in:

A surging economy producing robust growth in federal revenues promises to significantly cut the budget deficit for the current year, the Congressional Budget Office reported Thursday.

The deficit "will be significantly less than $350 billion, perhaps as low as $300 billion," CBO reported, well below the White House's February estimate of $423 billion.

One would think that a deficit coming in around 20% lower than expected would be bigger news. And this is from income tax receipts only; it doesn't take into consideration the higher government revenues that will be coming in thanks to higher oil prices.

Of course if we could get the bozos in congress to cut pork barrel spending that would be even better.

Celebrating an Alternative this May 5

Due to my position on illegal immigration, I will be celebrating the holiday of a country that sends us tons of legal immigrants (including my Tae Kwon Do Master and several instructors): South Korea.

So this May 5 I will be hoisting a cold one for Children's Day, which is celebrated each year in South Korea on the fifth of May.

There's No Such Thing As "Not Political" At Work

Slacker Manager has an entry on how to stay "outside politics" at work:

I think it's just a tad ironic that I have a plan to avoid being political, but my plan basically boils down to being consistently authentic. Seems to work pretty well.

He's fooling himself. By being "non-political", all he has done is farm out his office politics to someone else, probably his boss. Because I am telling you right here: if you are not managing your political position at the office, someone else is doing it for you.

This is true of Slacker Manager, who holds himself above politics, right on down to the computer geek who doesn't look up from his monitor during working hours. Neither gets their hands "dirty" with politics, but all that means is that they have become someone else's pawn (trust me on this - I have taken over the political positioning of several people too lazy or stupid to do it themselves, but always to their advantage because I am such a nice guy).

Because politics are a constant in any human endeavor. You can't separatee the two. And the size of the company doesn't matter. In my experience, the smaller the organization, the MORE political it is. The most Byzantine, back-stabbing, plot-filled organization I ever worked in was a seven-person start-up. It was when it got to forty people that things calmed down to a reasonable level. But that was only because the politics became organizational rather than mano-a-mono. And it's when you are working in a group that you can start covering for each other, and people start having the leisure to be "outside" of politics.

I Fired My Undocumented Workers Illegal Aliens

For every action there is an equal and opposite reaction.

- Newton's Third Law

I'm not sure what today's protests are supposed to accomplish but to piss off a whole lot of people. I already have sky-high taxes, substandard schools and a crappy hospital system because of all the freebees we taxpayers provide to illegal aliens. Every damn government document - including voting ballots - are available in Spanish. Newspapers, radio stations, and every sort of store imaginable exists to cater to these people. We have mass amnesty programs just about every decade. Now they have the gall to scream that we are "unfair" in this country.

We'll, I've had enough. This situation has brought me from mildly tolerant to actively hostile to the cause of immigration. I no longer have any illegal workers working in my household, which means that the Mrs. and I are now doing our own house cleaning. All service providers I hire - like my upcoming house contractor - will be asked questions about the legality of their workers before being hired. And the republican party had better look out since they are going to lose more people like me than they are going to gain from the other side. If they think that businesses - which is the republican group supporting illegal immigration - can support them through this issue, they are going to be sadly mistaken.

Oh yes, another thing to keep in mind that if you suspect a company is using illegal aliens, you can report them and maybe get a reward:

REWARD FOR REPORTING EMPLOYERS OF ILLEGAL ALIENS
CALL THE IRS HOTLINE 1-800-829-0433 YOU MAY BE ENTITLED TO A REWARD

Call the Internal Revenue Service (IRS) hotline 1-800-829-0433 to report all suspected employers of illegal aliens---you are not required to identify yourself and may be entitled to a reward. The Application for Reward (Form 211) can be downloaded from www.irs.gov or call 1-800-829-3676.