I confess — I’m a recovering engineer. And Guy Kawasaki’s latest top ten list brought a smile to my face: The Top Ten Lies of Engineers

Late last year, Joe Cullinane and Roger Green began creating a series of podcasts called The Cullinane and Green Report. While eating lunch today, I listened to their recorded interview with venture capitalist Tim Draper of Draper Fisher Jurvetson.

Draper didn’t hold back much when it came to expressing his views on Sarbanes-Oxley (SOX) and the government’s approach to business in a flat world. His comments on SOX were so enlightening for me that I couldn’t help but transcribe them:

[SOX] is one of the big nightmares that we have in business now. [SOX] came, and rather than just fixing one or two companies that seemed to have some problems, they tried to do something that was blanketed to the entire US corporate world. It has made it so expensive for a public company that these companies that used to be able to go public with $20 million in revenues and growing, and things are going very well, are now in a position where they have to wait until they’re doing $100 million in revenues. So, what used to be a 5- to 7-year process [from start-up to IPO], is now a 10- to 12-year process. And the entrepreneurs are [now] saying, ‘Well gee, I think it’s time for me to sell out, because this IPO thing isn’t going to work for me.’ So this is one of those situations where the US is not properly competing. A lot of the entrepreneurs I’ve talked to who have very successful companies who are going to take them public are going to take them public on the London exchange, or the Singapore exchange, or the Hong Kong exchange, and not on NASDAQ or the New York Stock Exchange because the restrictions and [SOX] have just made it too difficult. Because, if a company is doing $20 million in revenues, and they make about $1 million a year in profits, that used to be enough to take a company public. Today, with [SOX], it takes about $1.5 million just to comply with all of the [SOX] laws. As a result, that company that was profitable and growing is now in a loss position because of [SOX], so it has been a real disaster.

You can find the entire Draper interview here.

Update:

Dennis Howlett makes a case for small UK accounting firms:

UK markets are more conservative than the US and might need to pick up some high tech expertise. They’re not the lesser for it - but knowledge is a powerful thing. the smaller folk could offer a more attractive fee structure for starters and a more personal approach than you get from the sales-led big boys.

He also mentions AIM, the London market for the kind of small but growing companies Draper mentions in his interview. From the AIM web site:

AIM gives companies from all countries and sectors access to the market at an earlier stage of their development, allowing them to experience life as a public company.

In 2005, the London Stock Exchange attracted a record 19 companies from the US to AIM, raising a combined total of $2,126 million. There are now a total of 29 companies from the US quoted on AIM.

A handful of my US readers might be thinking that I’m betraying the folks at NASDAQ, NYSE, and the US accounting firms. Hey, it’s a flat world and global economy now. Many of us shop at Wal-Mart, which gets most of its inventory from China. We’ve been buying cars from Europe, Japan and Korea for decades now. Nearly 60% of the oil we consume is imported (per the April 2006 update of this site) — many would probably be surprise by this list of sources of oil imports. We’re more than ten years into the practice of off-shoring IT functions such as software programming. I don’t even need to say, “Get used to it” — we already are.

Seth Godin in the April 2006 issue of Ode magazine:
How to tell a great story

A couple of my favorites:

Great stories are subtle. Surprisingly, the fewer details a marketer spells out, the more powerful the story becomes. Talented marketers understand that allowing people to draw their own conclusions is far more effective than announcing the punch line.

Great stories are rarely aimed at everyone. Average people are good at ignoring you. Average people have too many different points of view about life and average people are by and large satisfied. If you need to water down your story to appeal to everyone, it will appeal to no one. The most effective stories match the world view of a tiny audience—and then that tiny audience spreads the story.

Earlier this month, the world finals of the ACM International Collegiate Programming Contest were held in San Antonio. Here’s a breakdown of the top 38 schools by country:
8 from Russia
6 from China
5 from Canada
3 from Korea
2 from [4 other countries]
1 from [8 other countries*]
* - including the US
(for complete results go here)

For the computer science (CS) field here in the US, the picture ain’t pretty – which explains why Business Week is waving A Red Flag in the Brain Game. Here’s the gist of the article:
In 2000, 3.7% of college freshmen surveyed planned to major in CS. Then the dot-com bubble burst, and off-shoring started gaining steam. New students, fearing they’d lose a job in programming to cheap labor in India or China, begin migrating away from CS studies. Today, CS has an image problem – a 2005 survey of freshmen showed that just 1.1% intend to pursue a CS major. To make matters worse, US employers can no longer rely on foreign talent to take up the slack. Immigration policies beefed up after 9/11 have limited the number of foreign students who can stay following graduation, and growing economies in their home countries are drawing away many of those who could stay.

Why is the US really losing ground in the global CS field? Here’s one theory (from the article): “It’s not that foreign students are any smarter, say U.S. university leaders. They just have relentless discipline.” Nicholas M. Donofrio, executive vice-president for innovation and technology at IBM, has noticed the same thing I’ve seen in many of the Indians I’ve met: “You can see the passion in their eyes. They’re people on a mission.”

Maybe the threat from these fast-growing Eastern economies hasn’t been taken totally seriously because of the American economy’s reputation for strength in creativity and innovation. Until recently, the knock on technical talent from India and China has been that they haven’t demonstrated such mental processes. That may change sooner than later. Thomas Friedman recently wrote in this NY Times column that China and India are working hard to inspire more creativity in their math and science students.

Some of that inspiration may already be kicking in for the folks in India. As I mentioned in this post, Tara Hunt heard better ideas at BarCampBangalore than any she’s heard at similar US events.

Friedman’s The World is Flat included words of warning from tech entrepreneurs in India and China:

“Is America prepared [for the flat world]? It is not . . . You’ve gotten a little contented and slow, and the [technical talent pool from India, China, etc.] are really hungry. Immigrants are always hungry – and they don’t have a backup plan.”
- P.V. Kannan, CEO of 24/7 Customer

“Americans don’t realize the challenge [from China] to the extent that they should.”
- Win Liu, director of U.S./EU projects for DHC, a software firm in Dalian (the so-called “Bangalore of China”)

I recall the wise words of Louis Pasteur: “Fortune favors the prepared mind.”