The Vile and Un-American Reality of Shark Tank

Shark TankI’ve been a big critic of Shark Tank — the venture capital (VC) “reality” show. It’s interesting that I seem to be one of the few people around who has a problem with the very idea of the show. Most of the “sharks” on the show are not what I would consider entrepreneurs. At best, most of them are deal makers. To me, an entrepreneur is someone who comes up with a new idea and brings it to market. It isn’t about money. I would call Richard Stallman an entrepreneur and never call Mitt Romney one. And most of the “sharks” are just people who used other people’s ideas to enrich themselves.

So I find it annoying to watch many actual entrepreneurs stand up, cap in hand, asking their rich “betters” for a little money to move their businesses forward. And I really don’t like the way that the “sharks” are presented as gods. Look at the way the set of the show is designed. Unlike other “reality” contest shows, the “sharks” (judges) are not seated behind a desk where they might, I don’t know, take notes. No, instead they sit in comfy chairs like they are the Council of Nine on Mount Olympus. Or, if you want to be a bit less fanciful: like a king listening to subject requests.

The average deal ends up with the “sharks” taking a 39% share of the company. But in the real (non-television) world, the number is only 15% (or 30% for preferred equity deals). So the show screws the actual entrepreneurs.

But I’ve also had a practical problem with the show: it is not how venture capitalists do their work. Most interactions with VCs are done on paper. It is far more about management teams than it is about what may or may not be the next big thing. You don’t get to talk to a VC until you’ve been checked out pretty thoroughly, because they don’t want their time wasted. But I heard something from Mark Cuban that made me feel that at least this aspect of the show is okay. When asked what happens after a deal is made on the show, Cuban said, “We get the opportunity to do due diligence. Sixty to seventy percent of my deals close.” (According to Inquisitr, Two-Thirds of Shark Tank Deals Never Close Off Air.)

Ah! So they do this work afterward, because it is a television show. That makes sense and it makes me feel that the show is much less of a fraud than I had thought. But this brings up something I discussed before, Herd Mentality on Shark Tank. One of the common things that happens on the show is that they argue about the valuation of the company that is being pitched. If the due diligence gets done after the deals are made, then the valuations that the “sharks” put forward with such assurance are indeed nothing but guesses — guesses that just so happen to benefit the sharks.

I found a very interesting article from a couple of years ago by George Deeb at Forbes, Comparing Shark Tank To Venture Capital Reality. He made some back-of-the-envelope calculations about how much money startups got and how much their valuations were. He compared those on Shark Tank with VC deals that did not take place on television. (Note: the data are not completely compatible, but it’s close enough.)

The average deal ends up with the “sharks” taking a 39% share of the company. But in the real (non-television) world, the number is only 15% (or 30% for preferred equity deals). So the show screws the actual entrepreneurs. A big part of this is that there is incredible pressure on them to make a decision now, now, now! As as I discussed in the article above, there is a lot of shaming that goes on, “How dare you question the combined wisdom of the sharks!” The implication is that if one of the sharks is willing to back a company, the entrepreneur should take it — no questions asked. In point of fact, actual VC negotiations go on for months and even years.

Shark Tank is still a vile show. It tells Americans exactly what they do not need to hear. It’s kind of the thinking person’s Lotto. It is more show than reality. But if you look at it the right way, it is a great illustration of what’s wrong with America. The “sharks” have no information about the companies before they start, yet they speak like they are experts. That’s what the rich in America are all about. They might as well be the kings of old. And this is not what I was raised to think that America was all about.

The Disingenuous Trey Gowdy

Trey GowdyI just read a remarkable article over at Rolling Stone, The Endless Trial of Trey Gowdy’s Benghazi Committee. It is written by Andy Kroll, who clearly looks at Gowdy was a jaundiced eye, but wants to be super fair to this man who heads the latest and biggest investigation on just what happened in Benghazi three and a half years ago. No, wait. That’s not what they are looking into. They are looking into what happened afterwards, because exactly what Susan Rice said on Sunday talk shows is really important! In the end, the entire Benghazi investigation has come down to whether the Obama administration was spinning the attack for political advantage. So even if everything Gowdy and company says is true, it is a witch hunt.

But reading the article, you get the impression that Trey Gowdy is the true victim here. He used to be a prosecutor, and by all accounts a great prosecutor. And now he is so upset because it is all so partisan and unfair. He has to wait forever to get documents. And then Hillary Clinton would only testify in public, as if a closed door testimony would have disclosed something important. (Let’s face it: the public testimony just showed that the worst things we thought about the hearings and Trey Gowdy were exactly right.) Oh, how the Benghazi chairman wishes he had stayed a prosecutor!

Gowdy just wanted “to run a serious, document-centric, fact-centric investigation.” And that’s why again and again he leaked information to damage Democrats in general, and Clinton in particular.

I don’t doubt that he does. Nowhere in the article is the most important fact here: prosecutors are by far the most powerful members of the legal system. Everything is set up to their advantage. After OJ Simpson was found not guilty, a lot of people claimed that it was unfair that he was able to spend millions on his defense. So what?! The state spent millions prosecuting him. The state can spend as much money as it likes on any given case. So I’m sure that Trey Gowdy is indeed very unhappy that he now finds himself a fair fight where he doesn’t battle against people who have no real weapons.

The amount of whining that he does in this article is amazing. In fact, it is whining from beginning to end. Listening to him, you would think that he was a babe in the woods — totally unaware of just how nasty politics was. And there he is, like a real life Superman standing up for Truth, Justice, and the American Way! It’s just the media and the Democrats who politicized this. He just wanted “to run a serious, document-centric, fact-centric investigation.” And that’s why again and again he leaked information to damage Democrats in general, and Clinton in particular. In fact, this is doubtless why he wanted a private testimony with Clinton — so he could leak selective bits that made her look bad.

But according to Trey Gowdy, the Benghazi hearings were a success. He said, “We have interviewed this number of witnesses nobody else interviewed, including eyewitnesses, [accessed] these documents from these agencies that nobody else accessed, and, oh, by the way, we have the correspondence from the two people who, one knew the most about Libya being the ambassador, and the other arguably knew more about our policy in Libya than anyone else.” So this hearing — the eighth that Congress had — was all about fact finding. So he found some new facts. And they told us squat. Because there is no there there.

But we are supposed to feel sorry for poor old Trey Gowdy because he was just doing the prosecutor’s job of getting to the facts. Of course, we know that Gowdy was just acting as a hit man and that he was willing to lie to do so. This is the problem that prosecutors face when they have to get a real job: they show themselves to be incompetent and immoral. Rolling Stone shouldn’t have given him space to make his case. It was far more fair than Gowdy has ever been to Hillary Clinton or anyone in the Obama administration.

Morning Music: Jimi Hendrix

Jimi Hendrix - Electric LadylandWhen it comes to guitar sound, Jimi Hendrix is more or less the alpha and omega. Oh yeah, I know that there have been other guitarists who have built a whole lot on what he did. But he’s the guy who really started us on this path where the guitar was something more than just a musical instrument. It probably isn’t a coincidence that he came around at the same time that the Moog really started to enter popular music.

What is there to say about Jimi Hendrix? Really, there isn’t much that I can add. I do think that people tend to forget just how experimental those first few albums were. They are amazing. And I can only imagine what they must have sounded like at the time. When I was introduced to them when I first went to college, they blew me away and I had grown up listening to plenty of people who were ripping him off to one degree or another.

I’d like to highlight something that doesn’t exactly speak to the full complexity of his work, “All Along The Watchtower,” off his third album, Electric Ladyland. It is, of course, a Bob Dylan tune. But Hendrix makes it so much more. And it shows that he could play a straight rock guitar solo as well as anyone. It also shows his absolute mastery of the wah-wah pedal. You don’t much hear that kind of total control of an instrument ever. It’s almost like listening to the very best classical music. And I fully expect that it will still be admired in hundreds of years.

Anniversary Post: Don Quixote

Don QuixoteOn this day in 1605, El Ingenioso Hidalgo Don Quixote de la Mancha was published. Notice that it is not Quijote, as Wikipedia claims. That is the modern Spanish spelling of the title character’s name; we in America still spell it as Cervantes himself spelled it, even though it creates many problems like the word “quixotic.”

This, of course, was the first part of the book. We don’t know exactly when the second part was published, except that it was in late 1615. Over time, I’ve come to be less enthusiastic about Part 1. It is still a great novel. And the reason it is great — at least in a historical context — is that Cervantes tells what seems to be an episodic story. Various things happen to our heroes. But then he ties them all together at the end. I don’t think anyone had ever done that before and that is why Don Quixote is called the first modern novel. Certainly it is true that people had been writing long narratives for many years before this book.

The reason people still read Don Quixote has little to do with its historical significance, however. They read it for the same reason they read it at the time: it’s a funny book. But when it came time to write a sequel, Cervantes’ clever mind took it one more step into absurdity. Since the conceit of the first book was that it was just a translation of an Arabic book by Cide Hamete Benengeli, it was a true story. And by that time, Don Quixote himself was very famous because of Cervantes’ translation. It only made sense to a mind as creative as Cervantes’ that further adventures of the unlikely knight errant would be in that world.

Regardless, for the umpteenth time, you really should read the book. In order to understand literature, you need to read Don Quixote. And in a sense, to understand literature, you only need to read Don Quixote. It really does have it all. I can’t say that literature has moved past it. Earlier novels like the five that make up The Life of Gargantua and of Pantagruel are still fun to read, but they are distinctly from an earlier time. But Don Quixote is not. It could be published today and I think it would still find a sizable audience.