On the road again

I made it out for my second bike ride of 2007 yesterday (Sunday). I did my "regular" 11 mile training route from home up the Comm Ave carriage lane (Boston Marathon's famous Heartbreak Hill) to BC and then west to Route 16 and back home again. This was twice the distance of my first ride this spring last week. Although the ride itself was fine and fun, it became clear during the evening that I was exhausted. The great thing about my recumbent bike is that hard rides don't result in aches or pains ... just stiff muscles and general tiredness. Hannah and I plan to be in much better shape for this ride, and I am enjoying the thought that I am going through the early training pain in April and May (not July and August, as last year).

Several friends are already signed up to do the Hazon NY ride with Hannah and I this year ... and several more are still considering it. Let me know if you are interested and have any questions about the ride. Now is the time to make up your mind ... my guess is by the end of May registration may be getting full.

Healthcare Dx Rx

I have not previously discussed my interest in the healthcare world on this blog. Since my days as a founder at Phase Forward (NASDAQ: PFWD) I have had an interest in this area. At Sigma Partners I am involved in two healthcare IT investments: Silverlink and CaseNET. Each of them expose and exploit specific characteristics of the US healthcare system. Each are relevant to government health plans (Medicare and Medicaid), but each would find it hard to succeed (especially as startups) if they did not have commercial healthplans as customers.

Although I wish for the success of our investments, my personal opinion is that the US healthcare system would be much better served by a single payor system. This is based on two thoughts: first that the employment based insurance system is clearly flawed, and second that the profit margins of insurance companies take funds away from better care (or better administration). Clearly the outcome is terrible: the US spends a higher proportion of our economic output on healthcare than other developed countries for much poorer results measured in many ways.

Thus it was with interest that I read today a recent post by David Harlow at his HealthBlawg in which he headlines the Medicare For All bill filed by Sen Kennedy and Rep Dingell. This seems to me to be a very sensible approach, and I hope it succeeds. I think, overall, the flaws of a single payor system are less than the current system. I used to be persuaded that a single provider (like the UK's National Health System) is the best arrangement, but I am no longer sure of that.

David Harlow's post refers on to another article which provides further clarity about the relative value of the private sector compared government in administration of the healthcare system. In it the author reasonably contends that the private sector's pursuit of profits is a good driver towards the most efficient utilization of capital in the administrative process. This is consistent with the idea of outsourcing administrative work to more efficient providers. However, this does not address the issue of profiting from the insurance of healthcare. Treating healthcare from an insurance view is itself questionable. Is education treated as insurance? Yes, the analogy is a stretch, but much less so for readers in the Europe, I guess. Dividing the healthcare risk pool (rather than having a single risk pool) and attempting to profit from it leads to a variety of behaviors, none of which relate to better care.

For those of us living in the US, I recommend we all start to learn more about the economics of the healthcare system. I predict many attempts at changes to the sytems of healthcare over the next few years, some of which will succeed, but not all of which will be in our best interests. If you are so inclined, I recommend you read Paul Levy as well as David Harlow.

Dx: Diagnosis
Rx: Prescription
Prognosis? ... no shortcut for this, it seems

VC:VC Homonyms

A homonym (Wikipedia tells me) is one of a group of words that share the same spelling or pronunciation (or both) but have different meanings.

When I first came to the US as a consultant I quickly learned about homonyms and synonyms in business analysis and data modelling. When building computerised business systems you talk to various people in the business and ask them about the work they do and try to build computer systems that automate or assist or support doing those things better. The problems of homonyms and synonyms are persistent and ubiquitous. Two words are synonyms if they are different words with the same meaning (eg quickly and speedily). If you are working with a business where people are using different words for the same thing it can be confusing, and getting computer systems to work together when using different terminology is fraught with issues.

A homonym is often worse ... what happens when the word product means different things to different people in the same company. A soft drinks company had the problem that the manufacturing people defined a product by its formulation, but the marketing people defined a product by its packaging. It turns out that soft-drinks are formulated differently for different parts of the country (more sugar in one area, more vanilla in another etc), but they are all shipped in the same cans or bottles. Counting products sold becomes a problem when homonyms compete. When big companies try to integrate all their information (into things called Data Warehouses, believe it or not) they come up against pretty complicated problems of ensuring all the synonyms and homonyms are resolved so that the consolidated numbers are meaningful. This was a problem 20 years ago, and it is still a problem today. At Sigma, in my venture capital world, we are looking at yet another company trying to solve this problem, and we may yet invest in their promising approach.

What had this got to do with the Venture Cycling world (this is a VC:VC posting after all)? The venture cycling side of me is the idealistic side doing the Hazon NY bike ride, and maybe, one year, the Israel ride.

During our recent family trip to Israel I was talking with a friend, Avi, whose English is worse than my Hebrew (a rare Israeli). I was explaining in more detail than I can usually muster in Hebrew what a Venture Capitalist is and does. At one point I talked about profit, and did not know the word. I looked over to our wives (old friends from university days) and asked what is the word for "profit" in Hebrew. Both of them triumphantly told me, in unison, "na-vee"... which even I knew means "prophet" (think of Isaiah). Homonyms strike again.

For those who like recursion (all good techies, at least), the fact that it was this pair of homonyms, profit and prophet, that caused the confusion, makes this posting particularly delicious. Here I am comparing Venture Capital (following profits) with Venture Cycling (following prophets) ... now if only the words were homonyms in Hebrew, we would have the perfect story.

PS: The Hebrew word for "profit" is "revakh"

Late, but moving fast

Douglas Adams said about Dirk Gently early in The Long Dark Tea Time of the Soul, "late, but moving fast"...

Late, but moving fast, today was my first bike ride for 2007. In fact I was moving at an average of 10 miles per hour, over about 6 miles, with a max speed of 20 mph. This was an end of day, after work, get out there before the spring weather turns cold again, ride.

It is good to reclaim the cyclist in Venture Cyclist.

Silica to Silicon

In a recent post I made an aside about the difficulty of making semiconductor-grade silicon from sand. Such silicon is used for electronic chips, and also for solar panels.

The information I could find on the internet was not particularly clear on the issue of raw materials for making this high-purity silicon. Science News has a 2005 article (Sun and Sand: Dirty silicon could supply solar power) that implies the problem exists by describing a possible new method for solving it.

My partner Wade helped me out with the following explanation. The more junk in the raw materials, the more work is needed to purify it. This is not rocket science but takes lots of work and lots of capital. The primary issues have been (1) allocation of capital in the presence of demand risk, and (2) plant construction lead time (compounding #1). There are new technologies for turning sand into silicon, but the real value seems to be in the project finance.

The last note from Wade is telling. We at Sigma tend to avoid the kind of project where the financial engineering is more important than the real engineering. So, much as I would love to see Israel's silica valley become a real silicon valley, perhaps using all that solar energy to make it happen, I will have to watch from the side, if it happens at all.

Small Footprint, Big Shoes

My sister, Deborah Jay-Lewin, and her family live at Findhorn in the North of Scotland. Findhorn is a wonderful community, which we have visited on a couple of occasions. It is one of the longest established "new-age" communities in the world.

Findhorn and its residents are rightly proud of a recent study showing that they have the lowest ecological footprint ever recorded in the developed world – just half the UK national average.

An ecological footprint is a measure of the ecological resources required to support an activity, a person, a family or a community. Wikipedia has a helpful article (as usual) describing the concept. When any of us try to do something that is good for the environment (lower energy use, recycle materials etc), we are reducing our ecological footprint.

Hence the title of the posting: Small [ecological] Footprint, Big Shoes [for us all to fill]!

Food and Civilization

Adin, an 8th grader Jcarrot blogger, just read The Omnivore's Dilemma and reminded me that Michael Pollan started by thinking deeply about the question "What should we have for dinner?"

Of course, no-one has thought more about this than Douglas Adams, author of Hitchhiker's Guide to the Galaxy who wrote that civilizations go through three stages: Survival, Inquiry and Sophistication. These stages correspond to the questions, What are we going to eat?, Why do we eat?, and Where are we going to eat lunch?

He also wrote perhaps history's most sublime philosophical comment on food:
Time is an illusion. Lunchtime doubly so.

Food for thought - Thought for food

Kosher Vegan Organic Bakery (photo from my recent walk up 6th Avenue in Manhattan) ... pah! how un-PC! ... I only eat Glatt Kosher Vegan Organic Local Uncooked.
Jcarrot asks if we know where our organic food is coming from pointing us to the work of Dr. Phillip Howard at Michigan State University who as created a flowchart that depicts the connections between organic food companies and the large, conventional food corporations that have purchased them.
Finally on this topic for today, especially for Gregg, a long article on MSN Health and Fitness about entitled "Organics: Are They Worth It?" The author follows some of the same paths I did in my previous posting about the same topic, finding (different) government data to underpin the analysis.

Natural Newton

Good friend Jon Regosin has started a wonderful blog: Natural Newton. In it he chronicles his observations of nature in our city.

If you are a resident of Newton then I highly recommend subscribing. If not, I recommend finding something for your city which mirrors Jon's approach to local nature reporting.

Silica Valley

The Arava is a region in the far south of Israel and denotes the valley stretching from the Dead Sea to the Red Sea at Eilat. The valley is actually a section of the Great Rift Valley which runs from Mozambique and continues north into Syria. Our recent trip to Israel included a wonderful few days in the Arava on Kibbutz Ketura, with our friends Susan Silverman, Yossi Abramowitz and family. The border with Jordan runs along the bottom of the kibbutz fields, and it is good to know that now the border is open, you can drive for just a couple of hours into Jordan to see Petra (of, dare I say it, Indiana Jones fame).

My brother lived in the Arava for many years, on Kibbutz Lotan, and I spent a few months on neighboring Kibbutz Yahel after high school. At that time, like most of the kibbutzim in the area, one of the main economic drivers was winter vegetable agriculture: growing tomatoes, watermelons, onions and more.

The Arava really is desert receiving about 350 days of direct sunshine each year, and only a couple of inches of rain in the remaining two or three weeks. Winter night time temperatures can drop to around freezing, and summer surface temperatures can be around 120 degrees Fahrenheit (around 50 degrees centigrade). I remember visiting my brother in the late 1980's and him proudly showing me a kibbutz grown tomato with both frost damage and sun/heat damage.

Over the last 15 years or so, the kibbutzim in the region have started to realize that growing vegetables, which needs lots of water, is not a great use of resources in the desert. Instead, they are switching to increased growth of date palms (much more sensible desert agriculture), and appropriate industry.

Given the title "Silica Valley", and my own career in information technology, I would love to tell you that this region is becoming a new Silicon Valley. However, silica is not silicon, and my understanding is that regular sand is not a great raw material for silicon (I am prepared to be corrected). There are certainly some small businesses taking advantage of tele-commuting, and providing high-tech services to Israel and the world. The main trend, however, is that the residents of the Arava are developing an ecological, environmental and green technology cluster. This includes eco-tourism, environmental studies centers and very high tech industries based on harnessing the climate (not fighting it). The Arava is on a main route to and from Africa for migratory birds from Europe and Asia, and so it attracts birdwatchers. At least two kibbutzim (Lotan and Ketura) house environmental institutes, and Ketura has a company, AlgaTech, harnessing some of that solar energy for rapid growth of growing very high value algae.

My current favorite is the Arava Institute for Environmental Studies, on Kibbutz Ketura. Students from Israel, Jordan, the Palestinian Authority and (in the past) Egypt study and work on regional environmental issues together. It is a model for peaceful co-existence based on the absolute reality that the environmental issues of water, warming and weather know no borders. The Hazon Arava Institute Israel bike ride is a key fundraiser for the Institute, and the 2007 ride from Jerusalem to Eilat starts on May 1st. Several of my friends are riding this year, and I wish them all congratulations and happy riding.


Regular readers will have noticed a hiatus over the last couple of weeks. We just came back from a marvellous family vacation in Israel over Passover. More on that over the next few posts.

Meanwhile, I found another VC to add to Venture Capital and Venture Cycling ...

Just last week we were sitting with old and new friends on the deck of Sara and Cecil on Kibbutz Ketura in the Arava. As might be expected, the conversation turned to "what do you do" and when I was asked I said "venture capital". I must have spoken quietly because Cecil said "veggie capital?", and someone else said "yes, that's what I heard".

Veggie Capital ... what a great addition to my VC collection (having given up on a Victoria Cross a long time ago). In so far as Hazon's main programs are currently focused on bikes and food, this would be an ideal counterpart to my Venture Cycling. Watch out for future Veggie Capital posts.