Making A Connection Between Politics, Startups

Published in the San Diego Union-Tribune, June 6, 2016

I am addicted to politics. I can’t get enough of both Rachel Maddow and Megyn Kelly. Tomorrow is Election Day in California.

So what is the nexus between elections and entrepreneurship? (And as a note of full disclosure, I do have a dog in this fight, since my bride, Ms. Bry, is running for City Council – but no more will be said on that matter.)

Two things interest me. Why do people run and why do people vote – or not vote? And what about running a campaign shares characteristics that are similar to founding or participating in a “startup?”

So first, let’s analyze money. No one runs for public office because of the salary. They pay City Council members approximately $80,000 per year, and you will spend north of $500,000 to get the job. In contrast, I think a large amount of starting a company is about money, about personal wealth. But again, you will raise millions to try to create that wealth – with a statistical likelihood greater than 75 percent that in fact you will fail and lose it all. Neither job has great economics – if you are only thinking linearly.

But the reason that people do both of them is that they believe they can make a difference and advance an agenda, a point of view, that they believe is advantageous to the community or society. Companies get started because the founder thinks he can build a better mousetrap and that when people see the genius of his/her mousetrap, they will support it and buy it.

So there clearly is an element of arrogance or self-confidence that propels the adventure forward. You have to believe that YOU are worthy of someone else’s money in the case of a startup or someone else’s vote. Getting “funded” is a strong validation of your personal worth and vision. However, not getting funded, or worse yet, getting funded and then presiding over a failed company is NOT repudiation of your worth. The two are not symmetrical. There are too many factors – what I often call the “don’t bet against the macro” syndrome that contributes to an event of failure or loss. There is stuff outside your control. If a tornado blows through and your house is destroyed, that fact alone does not reflect on you personally. Consider solar or fintech. The darlings of yesterday are the dogs of today – but people still use electricity and borrow money.

Now this voting thing is vastly more nuanced, since as everyone knows, America has a miserable record for being interested enough to go to the polls in large numbers. Politicians are like startups on Kickstarter seeking crowd funding. They advertise the vision, show you the prototype and hope you will buy the product before it is actually produced – “but trust me, if I get enough money, I will start to make the stuff.”

As most of you know, I am a big fan of Dan Kahneman, the guru on how to make rational decisions in your own best self-interest. So here is a recent letter to the editor that ran in The New York Times.

Len DiSesa, a Democratic state representative from Dover, N.H., said, “When I was campaigning last year I met an elderly woman who gushed to me that because of Obamacare, she no longer had to pay out-of-pocket costs for her monthly foot treatments. I was sure she was a vote for me and the Democratic Party, but when I asked for her vote, she said, ‘No sir, I always vote Republican.’ I asked her if she realized that the Republicans want to repeal Obamacare. She looked at me and said, ‘Oh, they wouldn’t do that, would they?’ ”

I played golf with my gang as usual this weekend, and I teased them that because of Trump, they would probably have to vote for Hillary. After all, these are moderate men, rational people, solid members of the community – and they simply said “no, that would never happen.”

I understand fraud and stupidity, fatally flawed business models, corporate malfeasance, missed numbers, bad business decisions, broken software, asset fire sales and going broke, but politics is simply beyond my comprehension.

Rule No. 468



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