Scratching The Surface

I’m watching this video and all I can think is “I bet every actor and actress in it, with the possible exception of the elderly couple, probably use Macs, iPads and iPhones in real life.” They wouldn’t be caught dead with a Microsoft product.

If they aren’t it’s only because their parents wouldn’t buy them something from Apple.

These new Surface products look great and I’ll be trying them out.

Just like I tried out the Zune back in the day. They had great commercials, too.

Fight Evil Mutant Corn With Facebook Promote And Prop 37

Prop 37 is on the California Ballot. It seems inoffensive enough – all it requires is for food in California to be labelled if it contains genetically modified stuff. Some sixty countries already require this, including all of Europe, Japan, Brazil, Russia, India and China.

Not here, though. Not if the huge food companies can stop it. Nearly $35 million has been raised to defeat Prop 37, with at least $1 million each from companies like Monsanto, Dupont, Pepsi, Nestle, Coca Cola and Conagra. General Mills, Del Monte, Kellogg, Hershey, Smucker, Ocean Spray, Sara Lee and lots of other big food companies have also made large donations.

Supporters of Prop 37 have raised just $4.1 million.

Some people think genetically altered food is just fine, and they may be right. But there’s at least some evidence that it isn’t fine. And while we’re figuring that out, what’s wrong with simply telling consumers what’s actually in the food they’re eating?

Nothing’s wrong with that. Unless you’re a huge food company that uses tons (literally) of genetically modified food in your products and don’t want people to know that.

Tech entrepreneur Ali Partovi, who’s long been interested in the intersection of food and technology, is trying to even the playing field for Prop 37.

First, he’s matching every dollar in donations to support Prop 37. Donate here on indiegogo -”Kick the mutant asses out of your food!” (you have to watch the video above to get the double entendre). Indiegogo is an excellent crowdfunding platform for causes that allows matching funds.

But Partovi is also using Facebook to help spread awareness. He’s asking people to post their thoughts on Facebook and include “Yes on 37 Contest Entry” in the update.

And if you really want to support Prop 37, he’s asking you to use the new Facebook Promote feature where you can pay $7 to make sure more of your Facebook friends and subscribers see your message.

Why Facebook? Says Partovi “My goal is to run ads on Facebook, where you can’t fool people with deceptive ads, because the community’s opinions speak louder.”

Partovi has a good point. We live in a democracy, but too often huge corporations dictate how that democracy works. We can use technology to make it all work again. And what happens in California can snowball into change throughout the U.S.:

What happens in California doesn’t stay in California:

This is just the start. If passed, Prop 37 will benefit not just California but all Americans. To cite Michael Pollan’s brilliant NY Times essay, this is the moment of truth for a much larger nationwide movement.

This vote is also symbolic, because it is not Democrat vs Republican, but people against big corporations. Voters from all points of view care about what they feed their families, and Prop 37 has strong support from both ends of the political spectrum.

What hinges on the outcome is whether the people in this country can take back control of the system. I’m using Indiegogo, the open, global crowd-funding platform, because even outside America, watchful eyes are waiting to see what happens.

We are California. We are the pioneers. We are the creatives and the risk-takers. If anybody can figure out how to win this, we can. Prop 37 FTW!

Do this. Fight the evil mutant corn. Even if it is sort of delicious.

Kickstarter Project For Book On How To Fund Kickstarter Projects Failed To Fund Itself On Kickstarter

My former TechCrunch colleague Nik Cubrilovic has been on a roll lately.

He noticed, for example, how Apple is telling users to drive off a bridge.

His most recent tweet

And sure enough, the project was cancelled due to lack of funding.

Cubrilovic tells me he bookmarked the original post on BoingBoing by author Glenn Fleishman and has checked in on it occasionally.

“I bookmarked it thinking if this fails, it is going to be hilarious,” he says.

And so it is.

Apologies to Fleishman and BoingBoing for pointing out the irony in this (and I remind myself of the Man In The Arena and that hey, at least he tried). But I think I’d even have to make fun of myself if this happened to me.

SF Creamery Now Sells Churchkey Beer

The CrunchFund 1 Party at the Creamery last night was a ton of fund fun. Attendees included our portfolio companies, most of Silicon Valley’s early stage VCs and plenty of others. We’ll be hosting these regularly.

We’re also happy about two other things.

First, we were able to make a really nice donation to Collective Roots from attendee donations.

And second, everyone got to drink a lot of awesome Churchkey beer (one of our investments).

And better yet, Ivor Bradley, the owner of the Creamery (and the next door Iron Cactus) has decided to keep Churchkey on the menu at both locations permanently.

So drink good beer while pitching your startup. The world is a slightly happier place this morning.

Picture via MG Siegler right as the party started. All those cans are empty now.

Klout Gets Binged

Great news today about our portfolio company Klout: TechCrunch reports that the company is getting a strategic investment from Microsoft and Klout will have a two-way data relationship with the Bing search engine.

This means you’ll see Klout scores in Bing results, and Klout will use Bing data in determining Klout scores. For example, when people search for you in Bing, your Klout score will go up.

The reason Klout was able to get a deal like this done is because they have a lot (a whole lot) of data on people. This data, along with the fact that they remain a neutral party working with all the giants, allows them to create a sort of Page Rank that tells others how influental you are in given areas.

See my post from August with more thoughts on why we invested.

When you forget all the weird perks people get for having a high Klout score and the sometime hilarious errors that the young service sometimes makes in assigning Klout, you can start to see the real power of the service. Big, big data. And useful.

The easiest way to see this yourself? Download the Klout for Twitter Chrome extension and see people’s Klout score as you interact with them.

Congrats to Klout and Microsoft. This is a good partnership.

See the Klout blog for more.

CrunchFund 1 Party At SF Creamery

Buy Tickets Here

It was late 2005 that we had our first TechCrunch get together in Atherton.

The events got progressively bigger and eventually they evolved into a once a year event at August Capital. But I remember those first few parties the most fondly.

Let’s do some more. At the center of the San Francisco startup ecosystem.

Our first CrunchFund event will be held this Thursday, September 27, at The Creamery in San Francisco, from 6:30 to 9:30 PM.

We’re taking over the Creamery as well as the Iron Cactus next door, and both patios, which will safely hold around 300 people at one time. The beer taps will be open, as well as soft drinks and a taco bar and other food.

Get your ticket here. This is just the first batch, we’ll try to open up more later. You will not be able to get into the event without a ticket.

We’re charging $10 for each ticket, which experience has told me will minimize no shows. The entire ticket price, minus Eventbrite fees, will be donated to Collective Roots, an East Palo Alto sustainable food nonprofit organization.

All food and drink at the event is complimentary. So prepare to drink some beer and eat some tacos.

Update:We’ll also be serving Churchkey beer. Thanks for sponsoring!

iPhone 5 v. Lightsabre Chainsaw

If you’re a man about town like I am, and that town happens to be San Francisco, you’ve got better than even odds of walking by someone who’s already brandishing an iPhone 5 loaner from Apple.

Today I had my first hands-on with the phone during a meeting at Darwin Cafe in SF. MG “This Is The Greatest Apple Thingy Ever” Siegler had it in his hot little hands and was willing to hand it over, in a supervised, hovering manner, for a good 90 seconds or so.

Physically the phone blows away the iPhone 4. It’s lighter, thinner and longer and it fits more naturally in the hand than the 4 does for me.

It’s also significantly lighter than the iPhone 4. It just feels cool in your hand. A feeling very much like the first time I held the original iPhone; but I haven’t felt that feeling of “happy/peace/power” since then.

Unless you count the feel of my light sabre chainsaw in my leather sheathed hands as I prepare to take on the Zombie Apocalypse. You can see it in my Facebook profile picture. It’s perfectness is marred only slightly by the fact that it does not, of course, exist.

But back to this iPhone. If the lightsabre chainsaw actually existed I wouldn’t hesitate to call it an iPhone 5 killer. I could then follow up with a literal demonstration if you like.

This phone is lighter, longer, thinner and feels of even higher construction quality than the already impressive iPhone 4S.

Next I’d like to review some of the software updates that come at the same time as the phone is being released. But alas, Siegler swiped it back from me before I was able to touch too many of his precious virtual buttons. It sure did look sparkly, though.

I’ll be getting one shortly.

“Huge tax cuts for the rich”

An addendum to my notes from yesterday.

One of the big talking points for people is the notion that the Republicans want to “sharply cut social services for the poor to pay for huge tax cuts for the rich.”

example

This talking point really works, because everyone knows the Republicans want to rework entitlements and they don’t like raising taxes on the rich. People get really pissed thinking about it. Rich people want a new ferrari or something, so some dirt poor family has to go without shoes.

But anyone who says this is either completely misinformed or (worse) dishonest. Most of my friends here in San Francisco are one of these.

And this is the kind of dishonesty that is really going to make the final reckoning a
whole lot more painful.

Because it doesn’t matter how much you tax the rich. At some point this country is going to have to deal with the unfunded entitlement obligations that are going to crush us. That are already crushing us.

At some point we’re going to have to find some $47 Trillion dollars to pay for exploding Medicare and Medicaid obligations.

That’s not going to happen. The government will either create massive inflation to deal with this, or entitlements will be rewritten and gutted.

Either way everyone is going to get crushed.

If you don’t understand this but you continue to throw out ridiculous statements like Romney believes in “sharply cutting social services for the poor to pay for huge tax cuts for the rich” you’re part of the problem.

As I’ve said before, go for it! Destroy the rich. Take it all. But when you’re done, someone’s going to have to deal with the financial mess we’re in. Because destroying the rich will do absolutely nothing to fix this problem.

The problem is so big that we’re not going to deal with it no matter who wins this election because U.S. citizens don’t yet understand how hard things are going to get down the road. My guess is in another 5 years or so the shit will really hit the fan and everything will change.

But in the meantime, if you’re going to throw out righteous opinions, at least take the time to understand exactly what the problem is.

Mike’s Tax Notes

I’ve been spouting off a bit lately on politics and I keep making the same arguments to people, one at a time, on Twitter and Facebook. I’m aggregating some of them here so I can point to it later.

First, I’ve recently said I won’t vote for a Republican again unless the candidate explicitly approves of gay rights and is pro choice.

That doesn’t mean I support all (or most, or even many) of the core beliefs of Democrats. I’m with them on the social rights stuff, and I’ve made it clear that those issues matter enough to me that I’ll hold my nose and vote for a Democrat, or not vote at all.

But this tax stuff is just ridiculous.

1. The Tax Base.

Wealthy Americans pay almost all the taxes in the U.S. Only about half of Americans pay federal income tax at all.

A lot more pay payroll and state and local taxes, but it’s a specious argument to say that it’s the same thing.

If you don’t know what specious means, look it up. Don’t just glance over it because it’s the core issue.

The federal budget is financed with debt and with the income tax. Payroll taxes are used to pay social security and unemployment.

When only a fraction of the population pays taxes democracy will break down. See “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

This isn’t revolutionary France, where the poor were incensed over being taxed. The argument now has assumed that only the wealthy pay the big taxes. The discussion is just that they should pay more.

2. The Rich Don’t Pay Enough.

This is a complicated argument that ends up boiling down to sound bites. Warren Buffett made it all worse by confusing all kinds of stuff.

I wrote about it here.

The super rich don’t pay much in taxes. But the sort of rich really get crushed. Mostly because the super rich and the poor/middle class team up to screw them bad.

People with relatively large incomes (think $500k or $1m/year) pay lots of taxes – 35% of their 2012 income, for example.

Everyone’s running around now saying that the rich don’t really pay that rate, though. Again, Warren Buffet really added fuel to this fire when he said he paid a lower rate than his secretary.

But that’s because he’s super rich. The super rich are super cool with higher taxes, because they don’t rely on income each year. They already have tons of money, so even a higher capital gains rate isn’t much of a bother. Just don’t say “wealth tax” to them, they’ll freak out fast if you do.

And there’s a huge gaping hole in the tax code that allows private equity types to take their income as capital gains, which usually means a 15% rate. This is the carried interest exception and it stinks.

That single exception allows people like Mitt Romney and Warren Buffet to pay a very low tax rate on massive amounts of income.

Buffet could have come out explicitly against just that, but instead he more generally said we need to tax the rich more.

When in fact the high income earners are already taxed way too high relative to everyone else.

That’s why people like me don’t bother with normal income any longer. The government takes too much of it, it’s not even worth earning.

I make almost all my money on carried interest via CrunchFund. And I’m telling you right now that it’s undertaxed. It should be taxed at normal income tax rates.

And I’m ok with it if the carried interest exemption goes away (as are lots of VCs who understand how odd it is).

Why? Because it’s more fair. And also because I have stored wealth, which the government can’t touch without implementing a wealth tax or through inflation. A wealth tax won’t happen any time soon. Inflation already is.

3. Inflation.

The biggest threat to my wealth is, simply, inflation. Inflation eats economies, kills wealth, and rewards debtors.

The biggest debtor is the U.S. government. Which is why they secretly don’t mind a little inflation.

The only way to pay the vast amount of debt we have is through inflation. It doesn’t matter if you close the carried interest exemption, or if you tax the high income types into the middle class. That might seem fair but it doesn’t solve the tens of trillions of dollars in unfunded liabilities we have as a country.

The only way to fix it, other than inflation, is to lower spending. And that means crushing entitlements. Even defense spending isn’t enough to make a real dent in things.

No matter what happens to the rich in this country, one thing is clear – entitlement programs as we know them are going to end. Either because we won’t be a functioning country any more, or because government will finally be forced to change them.

Update: Kill The Rich! It Feels Good!

Schonfeld Is Good News For Beleaguered DEMO Conference

Oh, this brings back memories. It seems like yesterday that we announced we (TechCrunch and Jason Calacanis) were going to compete with DEMO, the twice yearly conference that’s been around forever.

They were the only show in town back then and they charged a ridiculous fee for startups to be on stage. Our business model was simple – don’t charge startups a penny to launch. Instead, be thankful for all that great free content and build a business around it.

My favorite moment of the early years was when we just put our new conference on at exactly the same time as DEMO. I said something like “DEMO needs to die.” Their response can be roughly paraphrased as “oh shit.”

VentureBeat soon took over the DEMO conference, and everyone for the most part gets along these days. But DEMO has always taken itself out of the game by insisting that all (or most) launching startups have to pay a fee. With much bigger audiences and the no fee philosophy Disrupt always wins with more attendees, revenue and profit.

The conference last week, a year after I was fired, was their most successful one yet.

I didn’t know that my former co-editor Erick Schonfeld was taking over DEMO until I read the news today.

My first reaction was “perfect.” Erick is very good on stage and in front of a camera and has tons of experience running big events that have crushed DEMO in the past. His joining makes DEMO relevant for me again and I’ll definitely attend the next one, assuming I’m invited.

VentureBeat’s Matt Marshall puts on a brave face with the change, and I believe him when he says the conference is too much work and interfering with other VentureBeat business.

But my understanding was that DEMO owner IDG was paying VentureBeat a handsome fee to run the event and that it provided much needed cash flow for the blog network. If that’s accurate VentureBeat is going to need to find a way to fill that revenue hole. I wouldn’t be surprised if they raised more venture capital to do it.

I also wonder if another former colleague of mine, Sarah Lacy, was considered for the job. She would have been excellent, too, although she would have had the same time conflicts as VentureBeat did since she’s running Pando Daily.

Congratulations to Erick. This is a great place for him to land.

Image credit

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