My Podcast with SSTI – Ben Franklin wins National Entrepreneurial Capacity Builder of the Year 2012

 

ssti award with Dan Berglund

We were delighted to win this award last year and had a chance to talk about it with Phillip Battle of SSTI.  SSTI is a national nonprofit organization dedicated to improving government-industry programs that encourage economic growth through the application of science and technology.

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Scalawags, Scoundrels, and Other Corporate Partners

dirty-rotten-scoundrels-tope-10-films-by-genre1

Steve Martin and Michael Caine…charming scoundrels or true partners?

If you only quickly scan this post, you may get the impression I’m suggesting that relationships with companies larger than your start-up are not a good idea.  If you are getting that impression, please keep reading.  For almost all B-to-B types of start-ups, corporate partnerships can help in a variety of ways.  They can provide investment, credibility, a path to customers and important supplier relationships and you SHOULD seek to formalize them.  My clients have had many successful corporate partnerships in all these areas…and many unsuccessful ones as well!  The impression you should get from this post is that, although probably unintentionally (but not always), some partners can turn out to be dirty rotten scoundrels.

The prospective partners take you to the brink of forging a formal and enthusiastic business relationship, or sometimes even do formalize the relationship and then – poof – all those promises turn out to be false. Were they really scalawags…or were they just victims themselves of complex competitive businesses?  Ultimately, to your start-up, the reasons are irrelevant when the realities are so important.  Here is some advice for finding and managing your corporate partner relationships.

TechonomicMan Guideline #1: Don’t get fixated on one potential partner.  I’ve seen numerous clients land the attention of one big potential partner, work that relationship for 9 months under the impression that the partner and “start-up” were in love, only to have the partner evaporate.  Big partners have internal complexities that your start-up cannot imagine.  If they’re publicly traded, the complexities are compounded.  Big corporate strategies and fortunes and personnel can change overnight inside a large partner and your little start-up is certainly in no position to handle the strength of a stormy wind of change from a single corporate partner by which you’ve set your sails. Never stop prospecting for new corporate partners.

TeconomicMan Guideline #2: Let your love blossom inside your corporate partner.  If your relationship with a corporate partner begins advancing, develop multiple other relationships with individuals inside that corporation. Some of the best potential relationships can run aground when your start-ups sole champion inside the corporate partner disappears.  Your champion can get promoted, demoted, relocated, or in the occasional headline-making change, arrested! If that person was the only one inside the partner who really knew what your company does, you’re doomed.  Your champion, in truth, becomes your weakest link to that corporate partner.  You must work with that person to begin deepening your relationship network inside the partner and this usually means that you need to be able to explain your value proposition in ways that appeal to an ever-wider array of people and roles inside the partner.  In other words, the Head of Engineering who is so stoked about what your technology can do probably isn’t the one who can turn that excitement into money for you.  You’re going to need help from product managers, business development people and, probably, higher echelons of executive management.  Ask your champion for help in making these connections happen and for help keeping them moving.

TechonomicMan Guideline #3: Guard against trophy hunters!  Large companies sometime get the strategic urge to pursue new technologies.  Competitive forces inside industries change and occasionally, being able to make headlines for acquiring and generating new technologies can help one large company compete more successfully for customers, and so they are drawn to your start-up.  Sometimes this strategic direction is not fully or deeply backed inside the partner.  Your relationship may allow them to say to their customer base, through public relations and marketing, “Look at our new wild and crazy technology.  We’re actually old and shriveled, but man don’t we look good standing next to our new tech?!”  In these cases, your partner’s love for you is not likely to last…it is only skin deep.  Their sales force might never be fully empowered or engaged to sell your stuff.  The biz dev team may quickly move onto other sexy technologies and have decided to impress the market with quantity rather than quality of new tech rollout.  In your agreements, do all that you can to create “take back” clauses so that only a limited amount of time can pass between your marriage and a chance for annulment.

TechonomicMan Guideline #4: Develop a set of targeted partner characteristics that would be desirable.  The best bet is to determine what a perfect partner would look like.  They have to be the right size, so that your opportunity provides them with enough incentive to sell it. If the partner is too big, they won’t be motivated.  If the partner is too small, they won’t be effective.  If they don’t have a history of successfully rolling out partner capabilities…they probably won’t get better with your stuff.  Target partners who are experienced in your target industries.  Target potential partners in the same way you would target potential customers.  Just because they found your website and called you does NOT mean they are the perfect partner.  Evaluate each new opportunity critically.

Like the Steve Martin and Michael Caine characters in Dirty Rotten Scoundrels, appearances are not always accurate representations of reality.  Most professionals working for large potential partners do not intend to cause you strife.  But they can tie up your technology, keep you out of markets and burn your limited resources even if they mean well!  Partnerships with larger entities are probably critical to the success of your business.  Do not trust such a critical factor to chance…take a proactive approach to targeting and securing these relationships.

Here are a couple of other related posts/thoughts on building your start-up:

Don’t Overlook your Customers as your Most Valuable Asset

How NOT to Negotiate…lessons from former Washington Nationals manager Jim Riggelman

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How Much Money Should I Raise…$29,542?

Hilarious scene…serious question.

Hilarious scene…serious question.

Hopefully, you remember the classic TV show Taxi and its despicably lovable character, Louie DePalma.  In one memorable episode, the unforgettable Jim Ignatowski accidentally burns down Louie’s apartment. Jim’s wealthy father sends Louie a signed blank check to cover the damages and Louie faces the question that every high-tech entrepreneur faces:  How much money should I ask for?” (Trust me, you’ll like the rest of this post more if you spend the 4 minutes to watch the clip!)

It’s a classic strategic question asked by every entrepreneur that I’ve ever worked with.  And it is obviously a good question to spend some time thinking through because the amount you ask for reveals how much logic and business savvy you have in your bloodstream.  By the way, you will always be wrong in the eyes of at least half the experts you ask.

I certainly can’t answer your specific “how much” question in a single 1,000 word blog post.  But I will suggest there are only three main buckets in which to place your answer generally.  Once you’ve placed your trust in one of these buckets, then you can get to work on your specific amount:

  1. “raise no money now, keep bootstrapping” (~20% of deals should do this)
  2. “raise only what you need to get the current job done” (~70% of deals should do this)
  3. “go big or go home” (~10% of deals should do this)

Understanding the value of your business is a major factor in raising money.  Remember, that investors typically obtain ownership in your company in exchange for their investment.  If, like some that show up at my door, you are only part-time at your venture and the product isn’t quite built and you have no prior experience in a market, your business is not going to be worth more than $1 million in all likelihood.  If you were successful at raising $2 million, the new investors would own 2/3 of your business.  You probably don’t want that and believe me, THEY don’t want that.  These early-development stage companies should continue to bootstrap until they have created some value.  It’s also possible that your company may fall into this category and not be so early-stage.  If you’re just beginning to find your way in a market, or have discovered some traction after a strategic pivot, grinding it out for another 12 months at less than optimal cash positions may be the right path. Developing a proven business model, even the earliest stages of one, is a sign that it may make sense to raise some outside cash.

Raising capital when you shouldn’t is extremely frustrating.  Most experienced investors understand that they may not be the final investors in your company.  If more money is needed later, those later investors will get to set the rules and those rules may not be friendly to earlier investors. This awareness adds to their reluctance to invest so early and, rather than ask for more onerous terms from you, they simply decline to invest.  And you are likely to spend a lot of wasted time and face a lot “no’s”.  The smart founder knows the difference between dogged persistence and foolhardiness.

If you’ve decided that raising money NOW is the only way to go, I find that a majority of early stage companies should probably be raising a moderate, specific inflection-point-inducing amount of capital (#2 above). This is true whether your company has no revenue or millions in revenue.  And this is really where the Louie DePalma conundrum takes hold: How much to ask for?  Here is how I typically go about helping my clients figure out how much to raise.

I take the founders best assumptions and projections for 2 years after I’ve begged them to be as objective and cold-calculating as their entrepreneurial minds will allow!  Then we spend about 4 hours talking about a much more modest set of assumptions for both revenue and expenses.  Then you add up the shortfall and add 6 more months of burn rate to get your total.  Now stand back and stare at the number and assess what that number means for ownership in regard to the current value of the company. Evaluate what that number means in terms of milestones you’ll achieve and what timeframe is targeted for them.  Be sure to tie these…amount, milestones, timeframe…together in your investor pitch as you start to consider whom to approach and it should yield a rational and credible amount of cash to seek.  Yes I know…you hear that devil on your shoulder saying “go big or go home” and you’re afraid you’ll regret, like Louie, not listening to that voice when he discovers $200,000 was possible.  (To be clear…if you are offered a larger amount of money…consider it and its implications, of course.  What I’m talking about here is what you go out there asking for).

Trying to raise a distractingly large amount of money…say enough to pay for operating shortfalls AND enough to pay for a new round of product development AND get through regulatory approvals AND begin making product in quantities AND launch the sales effort on that new product…is a “go big or go home” strategy.  I do not advise this strategy in most cases, especially in the past 5 years or so.  The funding climate and valuations have not warranted it.  If your company has gotten to 1) rapid revenue growth (10-20% per month?) and 2) operational normalcy (i.e., predictable margins) and 3) you are facing a very large market opportunity for which you’ve  placed yourself at the forefront in your industry and 4) the external funding winds are in your favor then a “raise as much as you need to get you to an exit” strategy may be worth considering.  I’ve often heard this strategy espoused by very respectable people who understand well the dynamic in raising capital.  They say it this way, “You’re not raising enough money.” Maybe you set out to raise $500,000 and they say “you should try to raise all $4 million you need for your plan.”  There are times when this could be true, but usually, I find that founders are blinded by the flattering nature of this comment. “Yeah, I deserve to raise more.”

As I said at the beginning of this post, what your company should specifically raise can’t be handled by the advice in a single blog post.  You should seek out some objective advisors who can help guide you first to the right “high level strategy” and then within it, figure out the detailed strategy.  I’d also suggest that you create a strategy for each…that is, know what you would do with a bootstrap, middle-of-the-road or go big strategy amount of money.  Don’t present each scenario, pick your preference.  But do be prepared to discuss each with investors.  Or, at your own peril, follow Louie’s lead, just stick a finger in the air and ask for a number between “whoa” and “meh”.

Check out these other posts on starting and financing your venture

Ohhhhh. I Get It Now. You Said Valuation…I Thought You Said Value.

Every Top 10 List Deserves a Few Cautions

Let Us Begin with the Beginning

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VentureTips: Don’t Say It! Don’t Say It! Don’t Say It! Ugh, You Said It.

What Not To Say To An Investor

What Not To Say To An Investor

I get to listen to the stories of lots  of entrepreneurs.  I’ve probably spent at least 30 minutes with more than 1,500 of them by this time.  Many of them say some pretty naive things. In fairness, most of them have never stepped out onto the ledge of entrepreneurship before, so a little naiveté is to be expected. Despite this, it is hard to not roll my eyes or sigh audibly when some classic uninformed comment comes out of an entrepreneurs mouth.  I apologize to any entrepreneur who has received this reaction from me…I know you’re just learning the ropes and some of the things to not say to an investor may sound logical.  In order to make a good early impression, please consider the following advice carefully and take it to heart when approaching someone from the investment community.

Do not say “I need you to sign an NDA”

Probably 10% of the first time callers or emailers to my office lead off with a statement like “I’ve been working on something really incredible for 3 years and I need investment to change the world. I’d like to tell you about it, but I need you to sign a confidentiality agreement first.” Before we’ve spent 2 minutes together, I’ve decided that you have nothing that you can turn into value.  In general, it is good to be careful with the amount of information that you share with strangers.  However, we do not sign NDA’s at the very beginning of our relationship with you.  In fact, it will be a fairly infrequent event for us to do so at any point.  We see ideas all day long every day.  Investors will dig into the validity of your technology at some point, depending on the nature of the technology, but for the first few conversations, we want to understand the bigger business context of where your concept fits in the world. Who will use it? How will you sell it to them? Who are you, anyway, and what experience do you have with the customer set? How much will it cost to sell the first one? Etc., etc.  You need to be able to describe a LOT about the technology and potential business without me signing a document.

There are many critical elements to starting a business of which “having the idea” is only one.  I can’t steal relationships that you have with people important to your business. I can’t purloin your professional experiences. I can’t abscond with your know-how and education about your target industry. Your idea is important, but not all-important. It is ok to say something like “If you’re interested in getting to know the secret sauce, we can move into confidential due diligence later, but here is the business plan for what we think we have.”  But first, be sure you have more to your story than just a technology concept.

Do Not Say: “We have no competition for this product”

Probably 2/3′s of founders I work with have uttered this to me, and it has been a lie every time.  And, when you say it, it is obvious to me that you have not done enough to understand the environment in which you’ll be competing.  Don’t ever think of your “competition” as a product/service that your product will sit next to on a shelf.  Rather, think of the “competitive landscape” in which your business will operate.  When you think of your competition more in terms of “what other courses of action might my ultimate customers have”, you would never say “my customers have no choice but to buy from me.”  I don’t think you’d ever suggest this to a potential investor…would you?

I’m sure that the particular configuration of your product or service is new…but in the end, your specific product or service configuration is irrelevant.  The problem that it solves is what matters and you have to view your product or service in terms of the problem it solves as opposed to its intrinsic values and characteristics.

Do Not Say: “We’re a virtual team”

I completely understand the idea of how “Skype, dropbox and IM make us productive even though we’re 3,000 miles apart”.  However, in my opinion, this is an organizational model that is only relevant to an investor when used in the past tense.  As in “we hacked our prototype in a virtual way”.  A serious business has a founding team and that team is in a room together often.  You can build a functional prototype, a beta site or a proof of concept working from 2 or more garages or kitchen tables.  But you cannot build a serious, scalable business from them.  You can have high-performing, valuable team members and outsourced service providers at globally diverse locations, but the big strategic decisions that need to be made on an ongoing daily, and sometimes hourly basis must be made in a synchronous manner; on the same whiteboard in the same room kind of way.  Read the histories of the successful companies.  A lot of virtual hacking probably occurred, but the BUSINESS…where the real value was created for founders and investors…emerged from a single room where the team was together for a majority of the working week.

There are other things we investors don’t like to hear.  Personally, I don’t like to hear “We’re going to replace the need for landfills in 5 years” or other audacious mankind-saving prophecies.  We’re trying to build a business together, not a new society.  None of us like to hear “Our projections are conservative” or “We only need 1% of the market to be a $100 million business” or “Our competitors are too big to react quickly enough to us”.  I know you mean well, and I do greatly respect your hopes and dreams, even though I may cross my arms and shake my head.  Just be careful what you say!

Other Venture Tips from TechonomicMan:

Writing a Business Plan

Your Customer Base is your Biggest Asset

Where to Get the Best Advice

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The Four Seasons of Your Start-Up…Winter

If you’ve been reading along in this 4-part series of the evolution of your start-up, you may be expecting that Winter is the end of the line.  You may be thinking that somehow I’m going to wrap up the series with a story about a wintry mix of decline and a slide into a dark and cold and gray well of business-dormancy.  That is not, however, what happens in the Winter of your start-up.  As with life on earth, Winter inexorably leads to Spring.  In start-ups, this transition takes you from the Winter of your start-up to the Spring of your growth-stage company.  If you want to catch up on the series, click here for Spring, here for Summer and here for Autumn

Only in the Winter of your start-up do your financials start to normalize into some repeatable mode.  You probably start to notice some predictable seasonality in customer acquisition.  Volatility in margin swings is reduced.  The top line growth rate may take a flatter-curved breather.  Your start-up venture has reached a sort of cruising altitude and the turbulent air of your ascent is just a confidence-shaking memory.  After several years of mostly probing markets, experimenting with sales models and reacting to obstacles…the Winter is a time to think and maneuver with strategic intent about what comes next and how to find that next level of revenue.

Winter inside your start-up does not really look like this.

Two lines of thinking typically emerge at this point inside the management and investment team of the start-up.  One line of thinking takes the founders down the path of “growth capital”.  On this path, the founders would be looking at their situation and thinking things like “we’ve got a huge pipeline of customers that we just need to follow up with”, and “version 2.0 of our product will allow us to serve a new group of customers that we’ve had to turn away before” and “we’re winning customers from our competitors, several of whom are going out of business.”  If these are the lines of discussion going on at board meetings and in management team conversations, then your conclusion is likely to become something like ”We should try to raise $3-4 million in equity, and grow from $5 million to $10 million in revenue in 12-18 months.”

The other type of discussion that might be occurring inside the business would sound something more like “Our valuation won’t support a $3 million raise given our post-money valuation from the last round,” and “we spent way too much on developing version 2.0 to support a solid market rollout,” or “Founder A can’t keep bootstrapping after all these years,” or “Investor A, the largest, says he needs to find a way to liquidate his holdings.” 

Whichever conversation is occurring, and my experience tells me that both sets of conversations are going on simultaneously, a major self-analysis should be underway by all involved.  The late stages of “start-up” are a good time to think about re-writing the business plan.  Not an update…a start-from-today-oriented plan.  Your business has taken countless zigs and zags and pivots and plot-twists since first writing the plan.  Without a doubt, external factors have changed dramatically since the business launched–the economy is up/down, the stock market is up/down, private sector investment climate is up/down, etc.  It is important to allow senior management team to take a serious look at where the business is and where it is going strategically.  Whether the “go forward for growth capital” or “go forward with a partner-merger” path is chosen, this is a good time to re-evaluate how your company is positioned against others in your industry. 

Compare yourself on size, market segments, breadth of product offering, etc., and be objective! Plot your company and your competitors on a series of X-Y axes that compare some of these attributes and position yourself on the graph. You know much more about your industry now than you did when you started your multi-season journey…use that knowledge to take some reflective time and assess where you are and how to maneuver to get where you’re going.  

You’ll also want to use the X-Y analysis approach to give some thought to your potential acquirers.  Who are they and how do they compare to each other?  Obviously some potential acquirers will also be on your “competitor” chart, but there should be numerous others as well on your “strategic acquisition fit” chart.  Based on what you see, what sort of story do you need to tell each one in order to be attractive to them?  To which among them do you offer the most value? This is probably a good time to spend a little cash on those investment banker types.  If you do, make sure you find one who’s been in the middle of lots of similar transactions to yours.  It can become very compelling to select an investment banker who has done deals with the biggest stars in the universe.  Don’t be starry-eyed…select the one with the best fit with the groups that you think are the best potential fits for you.

Transitioning from a nice start-up story to a nice growth stage story is perhaps more difficult than passing through the other seasons you’ve had to pass through with your start-up…and they were ALL difficult.  This season is all about strategic maneuvering…and like with the other seasons, evaluating the people involved is critical.  Your “start-up” should feel more like a business now, and a certainly a bit more bureaucratic than it was when it was 2 or 3 people in an incubator.  Know who you are as a person, and that will help you know whether you’ll be able to live inside this structure…or whether you’ll need to start something new.  Either way…the Spring once again awaits!

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The Four Seasons of Your Start-Up…Autumn

The inner dynamics of a start up…like time through the year.

The temperature outside my window last night dipped to 24, the crickets have stopped chirping and my wife told me that she “can’t manage all the tomatoes I’m bringing in from the garden.”  Hmmm…kinda like life inside a high tech start-up.

The spring and summer inside a technology start-up can be, hopefully, times of growth.  Sometimes the growth is frustratingly slow, as can be true in the earliest months and years…the spring.  Founders spend the spring probing their potential customer base for the right mix of product, pricing and proposition of value (see part 1 of this Four Seasons series).  A successful spring leads to a summertime filled with rapid growth in revenue.  Your company’s offering has struck a nerve with a customer base and rapid customer acquisition and revenue growth leaves your team elated, but that rapid growth and strain it can put on your growing staff and operating systems can stretch your cash to the breaking point with all it’s heat (see part 2 of this Four Seasons series).  It is critical that your start up gets some relief and the Autumn can bring it.  Autumn in your start-up is the time to operationalize your organization and to build your WHOLE business instead of just your customer base.

This is what your business can look like as Autumn in your start-up breaks…a lot of tomatoes, no organization, and a pulpy mess.

Here is your problem as autumn breaks inside your start-up: You don’t know what is happening. Revenue growth takes a breather…maybe you simply hit a seasonality lull…but maybe your organization has simply reached an initial capacity plateau.  Two years ago you may have generated $200,000 in revenue.  Last year was $1.2 million.  This year might be over $2.0 million.  So you’ve built revenue nicely (remember when you had no revenue and friends and family told you to give up?)  Well now you’ve got so much revenue it is really all you’ve been able to concentrate on for 18 months.  But you recently heard some expert to a concept you’ve never really heard of…”EBITDA”?  You know, the stuff that is left after you pay for stuff?  You look at your Income Statement and, sure enough, it is there and although probably “negative”,  has been there all along.  Then you went online and Googled it and while you were clicking around, another person mentioned something called a “Balance Sheet”.  Somehow this sheet is supposed to help you understand the financial health of your business.  ”Gee,” you think, “I wonder if I should have one of these Balance Sheet-things.”

Ok, so you may not be that far out in left field, but you do begin to realize in this chillier air of Autumn, that you really have no clue what the health of your business is.  In the spring, you spent all your energy trying to get one single freaking customer.  Then, in the summer, you spent all your energy trying to keep your head from exploding while chasing all the new customers you had.  Well, it is Autumn now, and time for you to focus on the other part of your business…your ability to sustainably deliver goods/services to your current, and more importantly, your future customers.  And you can’t just stop the world while you do it.  If you’re fortunate, revenues will continue to grow, maybe on their way to $5 million.  But it will all collapse if you don’t start putting some ORGANIZATION in place.

For those of you who have read Geoffrey Moore’s timeless classic Crossing the Chasm, this is what that transition looks like.  You’ve secured the “innovators” in your target industry and the “early adopters” are coming aboard or are in your pipeline.  Your organization now needs to make two huge transitions.  One, as Moore points out, is that you need to “normalize” your product offering for the large group of customers who are looking for a different set of clues about the value of your product or service.  You probably need to adjust your sales techniques (those channel partners who weren’t interested a year ago, now might see the light since the hard, missionary selling has had effect).  You may need to add to or subtract from your product offering to reach a customer set just above or just below your current customer set.  Maybe, for your business, geography needs to be added.  More US territory?  Go international? Whatever is next, you need to be aware of the drivers that will move you from a couple of million in revenue to the $10 million mark.

I know they’re apples and not tomatoes, but this is still no way to manage your start-up’s Autumn harvest.

The second, and arguably the more important of the two on this early Autumn day, is you’ve got to get your act together internally.  An inability of the founders to go from “100% entrepreneurial skill” to “75% entrepreneurial skill/25% management skill” can kill your business like the first hard frost of Autumn kills those tomatoes.  Managing cash flow, automating your customer on-boarding process, instituting standardized customer service levels and staffing, maybe creating organization-wide dashboards for measuring the key “profitability” drivers, all need to be front and center now.  If you hope to later emerge from the Winter of your “Start-Up” to the Spring of your “Growth” company, you need to show stakeholders that you can MANAGE all those tomatoes.

If you don’t already have a board of directors, get and meet regularly with a Business Advisory Board.  Seek out a part-time CFO…an accountant alone probably isn’t sufficient.   Consider hiring a top-notch Chief Operating Officer.  Depending on your business type, select and relentlessly install and use an ERP software package and, perhaps, engage a consultant to help.  Think of your business as a machine.  In the Spring, you and your partner were like a little 6 horsepower business…overkill for a $0 revenue business, about right for a $1 million business, but incapable of running a business generating even $1.00 more than that.  Just can’t do it.  As police chief Brody said in Jaws, “You’re gonna need a bigger boat.”

If you haven’t been through this phase before, it can be startling to watch your own growth. Resist the temptation to stand there and watch it.  Groom someone else in your company to prepare all the quotes you need to write.  Your new responsibility is to add horsepower to your business machine.  Take actions to organizationally operationalize your business.  Otherwise, you may as well just toss all those young tomatoes in the garbage disposal.

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Can Humanity Be Saved From Instant Replay?

Global life is increasingly obsessed with instant replay of all types.  In the pre-digital days, the extent of instant replay for use in judging actions and words by people, was largely limited to newspaper editorial pages.  If enough readers read an article and noted a mistake, AND took the time to write to the editor pointing out the error, the newspaper might print an apologetic retraction that few people would ever see. Humanity has evolved technologies that make these analog days seem quaintly blissful.  Mistakes were more easily hidden and humanity was generally more ignorant of the dizzying magnitude of mistakes being made.  I’ve recently become a bit more worried that technologies making our lives ever more scrutable and may be undermining what it means to be human.  In other words, I think instant replay is destroying humanity.  

Ok, so while that may sound like an exaggeration, I don’t think it is an enormous exaggeration.  My logic is as follows: 1) Mistakes are made by humans and are therefore part of humanity, 2) Humanity learns from mistakes, and therefore improves, even though individual humans are sometimes punished for making mistakes,  3) If humans stopped making mistakes, humanity may stop improving, and 4) Instant replay of all kinds may inhibit humans from taking action in order to avoid mistakes. It’s that last order of logic that may get a bit shaky, so consider this a theory a work-in-progress, but my overriding concern may nevertheless be true: every scintilla of every action by every member of our planet is being increasingly reviewed by others.  I think this direction inexorably leads to a society in which those who review the actions of others have more power than those who take action.  Worse, those doing the reviewing won’t be humans at all…but rather the cleverly automated systems vigilantly ever-scanning for human mistakes.

NFL games have come to epitomize this climate of over-reviewism.  George Will once quipped that “Football combines two of the worst things in American life. It is violence punctuated by committee meetings.”  More recently, a third leg has been added to that stool…violence and committee meetings punctuated by legal proceedings.  Officials seem to gather ever more often to confer on the calls that they made on the field. They use technology to slow down and zoom in.  I can hear a sports broadcaster saying this in a few short years:  ”Was his elbow down at the 2.2 yard line or the 2.1 yard line? If you look extremely closely and FREEZE IT! RIGHT THERE!… you’ll notice that this blade of grass, that looks like a cell phone tower, is clearly touching his elbow. Let me highlight it for you with this scanning electron microscope image overlay.” But that is only the most well-known version of the increasingly ubiquitous instant review of humanity.  The same mentality is increasingly overtaking the lives of all of us.

The presidential debates this week and over the coming weeks are and will be instantly reviewed and the candidates fact-checked.  And this zealous fact checking doesn’t just occur with  the debates, but with public pronouncements of any kind by any person. Calling out a presidential candidate for lying is obviously not a new phenomenon, but the proliferation of so-called fact-checkers has exploded and they provide their truths in a virtually instantaneous manner.  The ability of the media and technology to provide us with these truth powers is, like instant review in pro sports, wonderful at getting the story straight.  But they are having an unintended consequence.  Digital video recorders and giant databases of information are not humans and yet they are beginning to have an inordinate level of control of human thought and action.

Kevin Kelly, former editor of Wired Magazine once provided this spectacular look at “the next 5000 days of the internet”.  In that remarkable TED talk, roughly 1,735 days ago, Kelly pointed out that soon, very soon, “no bits will live outside the one.”  What he means by that is that technology is increasingly making information and data so collectible, analyzable and reviewable that soon every action by every person all the time will be subject to instant replay.  Your life and all its actions are devolving into a long, long series of 1′s and 0′s.  And all of it, every bit of it, is increasingly available to everyone.  Did you zip through the intersection 0.1 second after the light turned red?  Were you at that restaurant in the same 5-minute period that a certain person of FBI interest was also there?  Did you visit a potential terrorist-oriented web site while trying to understand the motives behind 9/11?  Computers are watching everything you do.  Computers are storing every thing you do.  Every 1 and every 0.  And this perfect collection of your bits is increasingly available for microscopic review.  This will make it difficult to be the mistake-making human we’ve all known and loved for the past several hundred thousand years.

Civilized society is protected by a very thin surface from becoming an uncivilized society.  I’m not advocating that law enforcement shouldn’t have security cameras in high crime areas…I’m advocating that we limit the proliferation of security cameras TO high crime areas.  I’m not suggesting that public officials shouldn’t be fact-checked…I’m suggesting that even YOU will be increasingly fact-checked.  I’m not saying that humanity is about to succumb to technologically superior robo-analysis…I’m saying that another very-thin patina layer protecting humanity is in danger of being dissolved.

No need to double-check that.

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