Alibaba and Oculus – Our Failed Capital Market

Alibaba is in the news – running an IPO aimed at raising $21 billion. Oculus, the once darling of crowd funding fans, sold to Facebook for $2 billion after raising $2.4 million on Kickstarter. The Alibaba IPO won’t fund Alibaba’s growth or create employment, and the Oculus deal snuffed out an independent company and does nothing for its early supporters.

Let’s start with first principles – what is the purpose of the capital market? Cynically, and with some reason, we can say it exists to enrich a very small segment of our society, but a better answer is the capital market exists to fund the nation’s enterprises and generate prosperity. Clearly this is not what they are doing. To our mind, prosperity comes from distributed wealth, and today’s market serves to concentrate wealth.

I have a background in financial markets and tech startups. I’d like to be able to fund my current company in the public market, and I’d like small investors to have the chance to buy our stock. We would have a better chance to pursue our strategy without a dominant investor, and if we succeed as we intend, small investors would be able to come along with us. The market I have in mind financed the creation and growth of the tech sector from the 1970s through the late 90′s. That market no longer exists, IPOs are now reserved for exits, not beginnings, and crowd funding is no substitute.

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bWare and the Internet of Things

The Internet of Things, like most things that seem new and exciting, is really based on what has gone before, and it will be built incrementally. It is not, and it will not be, a revolution. What is SCADA if not the precursor to the IoT? The difference is that today we can find most of the infrastructure needed already created, and SCADA systems typically were built from scratch.

From the perspective of the designer considering how to add Internet enablement and reporting to a device that (today) is inanimate, most of what you need is there for free. The Internet is ubiquitous, and 3G/LTE, WiFi, and Bluetooth® are pervasive. That smart phone in your pocket means you have a screen, keyboard, and network connection for just about any device that needs one. The question becomes, what do you need that is NOT there for you to use/repurpose, and how do you add it? Read more