Treat the disease not the symptoms

One of the things that I have been frustrated with over the last year is that we tend to spend a lot of time talking about the economic crisis and the various government actions without realizing that what we are talking about are symptoms to a disease and the treatments of said symptoms, while we ignore the disease. The economic crisis is simply a symptom of the disease that is the lack of *financial literacy* in the country.

Walk into a room of highly educated home owners and ask them what percentage of their gross income should be spent on housing, and I am willing to bet that less than 10% will have any clue. Ask the average American about interest rates, how much debt they should carry given their income, the costs of credit card debt, etc. and they will look at you like you are their HS math teacher asking them about trigonometry. Yet, these are the practical life financial decisions people make every day.

I had the privilege of going to some great schools and I didn't take a single course that focused on any aspect of financial literacy. We have college students graduating with a mountain of credit card debit, and they don't even understand the hole they are in because they aren't financially literate. How many people who are carrying credit card debt run around passing along hot stock tips? Their financial ignorance results in them not knowing that the best return on investment for them would be to pay off their credit cards.

I believe that financial ignorance + greed is what fuels speculative bubbles and the logical crashes that follow. If the government wants to truly address the financial problems of the country they should put in place policies and programs to address the financial literacy disease that faces our country. After all, it was financial ignorance + greed that took us from one bubble (internet stocks) to the next (homes).

If don't improve our financial literacy today's financial crisis will feel like a walk in the park compared to the decades ahead of us when we will have millions entering their retirement years without the cushion of a pension and social security.

Finally, the lack of financial literacy makes it impossible for our elected officials to make the right financial decisions for our future, because their constituencies don't understand the problems we are headed for with respect to entitlements & our twin deficits.

Until I see action in this area I am going to continue to buy gold, because the worst will be ahead of us, rather than behind us.

Standard vs. Necessary

I am going to test out a new approach to blogging. In the past I wanted to make sure what I had to say was really insightful, well I am going to switch to posting whenever I think what I am going to write *might* be insightful... so here we go.

In the course of starting a new venture co-founders are faced with innumerable decisions in areas they really don't have expertise. The vast majority of these decisions land in the legal arena where the "legaleze" is astonishing - making the decisions harder. I am fortunate in the fact that I have founded a company in the past, so I am able to read through the documents pretty efficiently and comprehend the material well. But I have found that the most important question to ask yourself and your legal counsel when faced with "legaleze" is the following: Is this standard or is this necessary?

Agreeing to terms simply because they are standard is something that I am not a fan of. It results in a situation where you don't really understand what you are agreeing to and why it is important (b/c your lawyer will constantly say "that is standard" and you will just nod and move on, rather than really understanding what is going on). So probe when you are reading through legaleze and understand what is going on and only accept a term if it is necessary, not because it is standard.

It's been a year, and what a year it has been....

It has been over a year since I have posted, and I want to give a quick update to all of you about what has happened in the last year to me personally, and a little bit about what is ahead. Here is a quick run down on what has happened:

- Shortly after my last post in November of 2007, Tara and I had our second child - Samantha Williamson. She came 6 weeks early, but is doing great!

- Last March I had the great fortune to play a role in launching the Dash Express. I never expected to be briefing Walt Mossberg of the WSJ, doing an interview for the ABC Nightly News and the CBS Morning Show, but I had the great pleasure to take on those responsibilities and the launch went well.

- In June I decided it was time to get back in shape, so I applied management and economic theory to weight loss and lost 32 pounds in 90 days, and a total of about 41 pounds since June 1st. (I will post more on this later)

- August was a crazy month with the sale of Shelfari to Amazon and me leaving Dash to start a new venture. (I will post more on my new venture later)

- In September while spending time thinking about new business opportunities I had the chance to spend a lot of time observing the market meltdown (more on this in a later post).

- In Oct / Nov / Dec we formed our new company (Inquisitive Minds), raised a seed round of capital, and are executing on our product & vision (more on this later).

I will be posting much more frequently in 2009 on some of the topics mentioned above as well as on what it is like to launch a new venture in the midst of an economic meltdown.

Shelfari & Open Social

The Shelfari team has been hard at work for while building on the Open Social platform, and last week they taped a video while at Google... here it is:



Great work guys!

what a week!

Last week was crazy! I had a chance to present at the Web2.0 Summit with Rob Currie for Dash. It was a great experience and the presentation went off without a hitch. It really is easy to present when "things just work" and fortunately the hard work of our engineering staff made that happen, so I had the pleasure of showing off all their hard work. Here is a cool blog post from Tim O'Reilly that was written during and after our presentation.

Additionally, Shelfari has been doing GREAT lately. The site is gaining traction, the team is growing, and there was even an short mention in the Wall Street Journal this weekend. This is just another case of a great team doing great work!

Not all weeks are like last week, but I am hell-bent on making weeks like last week more frequent!

Getting ready for Web2.0 summit

I am headed up to SF this week for the Web2.0 summit. I am going to be presenting with Rob Currie (President / COO of Dash) and we will be unveiling some cool new Dash features. If you are attending and want to get sync-up let me know: mark.williamson AT Gmail [dot] com.

Who wants to catch this falling knife?

Click to see full sized picture:

More bad news for housing

So the markets sold off today on the news that housing prices are dropping, and fast. I was happy to see that the data discussed today was the Case-Schiller Home Price Index, because after reading about many methodologies, I think that this is the best methodology out there. This past weekend I read the entire methodology document and I came across the following nugget of information:

The monthly indices use a three-month moving average algorithm. Home sales pairs are accumulated in rolling three-month periods, on which the repeat sales methodology is applied. The index point for each reporting month is based on sales pairs found for that month and the preceding two months. For example, the December 2005 index point is based on repeat sales data for October, November and December of 2005. This averaging methodology is used to offset delays that can occur in the flow of sales price data from county deed recorders and to keep sample sizes large enough to create meaningful price change averages.

YIKES... This methodology means that in times of fairly rapid movement the index can really get behind the actual changes since it is a moving average. I know there is a futures market based on this methodology... next step is to delve into that market and understand where people are putting their money. If I was a betting man I would say that the year-over-year declines are going to accelerate in a significant way over the coming months.

Best Baseball Game Ever!

Last Tuesday night I had one of the best days of my life. My wife (Tara) and daughter (Abbie) bought me Cubs vs. Giants tickets for Fathers Day... and last Tuesday was our night to go. Abbie had so much fun! She sat there for the entire game routing for the Cubs and making friends with all the Cubs fans in the stands. Check out these pictures!

On Intelligence...

I can't get the concepts I am learning from On Intelligence (the book I am currently reading), out of my head. The author is Jeff Hawkins, who is best known for starting Palm (of Palm Pilot fame) and Handspring (of Treo fame). Jeff's theories on how the brain works are fascinating, and the implications of his work, if correct, will be astonishing. A friend of mine named Phil Shoemaker works at Jeff's current start-up Numenta, and I am very glad that he turned me onto the book.

I HIGHLY recommend that new product developers, the intellectually curios, product designers, AI developers, parents, teachers, heck... basically everyone should read this book.