Archive for the ‘Personal History’ Category

Father’s Day Special: Reflections on Baby Clothes

3 D Baby clothesFathers Day 2I am blessed with three wonderful children. The oldest two are now over twenty, and my youngest is 7 months old. As an older father, I’ve experienced a sense of déja vu and even surprise when I can do something really well on the first attempt, such as swaddling or changing a diaper, even though I had totally forgotten that I knew how to do it.

But one thing I still absolutely can’t understand, twenty years later, is baby fashion. Seriously, who makes all these ugly baby clothes?

Fathers Day1My wife sent me clothes shopping the other day, and it was a tough mission.

In my view, most baby clothes are plain ugly. They feature staggering color combinations that make disco lights look dull. From baby-shirts to pants, blouses to bibs, everything is plastered with weird looking creatures. A dreadful pink bear with a scary smile, an oversized violet dog with a square snout and brown stripes, a red elephant with blue polka dots and a yellow palm tree. How would YOU like to wear this to anything other than a Halloween party?

It gets worse when it comes to gender management. Store shelves, and most salespeople, dictate two iron rules for infants: 1: Girls are condemned to wear pink in all its forms and variations: light pink, dark pink, pink with pink dots, pink with light pink stripes, pink with pink animals and lots of pink bows. And if you have a boy, of course, there is the inevitable, inescapable blue. Blue pants with dark blue ladders, blue with blue little cars, light blue shirts with very light blue hippos…

 

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My daughter has piercing blue eyes, and we love to dress her in matching blue (if we can find anything without a printed tractor, a car, or a sailboat, which is tough). Of course, every person we meet in the street or in the park admires our “cute little boy”.

And I can’t understand baby clothes sizes! In the US, baby clothes are indicated with “NB – 3 months”, “3-6 months”, or “12-18 months” etc. This sizing can only make sense to people who don’t have children. I wonder who came up with this bizarre matrix that ignores the fact there are small babies, big babies, thin babies, and plump babies – and all of them may be of the same age.

My daughter fits nicely into baby suits for 18-month olds, a sleeping bag for newborns, and pants for 4 month old babies — all at the same time. I don’t know what to buy! Do I have to bring my baby into the shop to try everything out? Adult clothes aren’t sized by age… Why can’t we have real baby sizes?

Let’s address the actual design of those clothes and their functionality. In my view, three things are essential to a great design for babywear:

(1) It must be easy to put on (even for Dads) without hearing squeals of discontent from your little one;
(2) It must be easy to remove (especially for Dads), and especially under the following use case: baby just spat up a small sea of milk on you, herself, and innocent bystanders; and
(3) It must be easy to open on the bottom in order to change diapers whenever and wherever that task must occur.

Sounds straightforward, right? Nope…  Small sweaters with tiny openings for her head, requiring an experienced pair of hands to pull through her unwilling, wiggling baby head; Tiny buttons that need to be opened and closed each time you attempt to dress your child (do that when she is crying, hungry, or with a colic, and you will understand what I mean). And there are those heavily adorned suits with cool pockets, zippers, and other bells and whistles, but no buttons on the bottom. Which means you have to take off the entire suit just to change a diaper.

Fathers day 6And there’s plenty of fancy, tight pants with an even tighter waistband that don’t allow for important things like breathing, and that’s without a diaper (did I mention these tights pants are for a baby?).
The 2-piece outfits with a bright-colored shirt and matching pants crown my “pointless” list. Babies move constantly, and the shirt always gets pulled up around their neck, leaving them with bare bellies – unless you also dress them in a body suit. But if your baby isn’t eating yet with a fork and knife, and if your baby has a habit of spitting up, you will spend most of your day with her on the changing table.

And those “cute” little nightgowns and dresses that her flying legs kick up and over her waist as soon as you put them on, they leave three-thirds of her body naked.

I ask again, who designs this ugly and impractical baby clothes? We didn’t have the Web when I first became a father. I am hopeful that help is on the way! I can’t wait until I can have my own 3D printer to design and print my own baby clothes at home, maybe a designer will see that there is a bigger 3-D clothing market for babies than for Victoria’s Secret models.

 

 

I’m Back!

DSCN2594After a one-year hiatus, I am back.  Stay tuned for new posts on venture capital, corporate governance trends, and current public policy issues that impact investors and entrepreneurs. I have also done a lot of hiking throughout America and Europe in the last year and will share highlights from my hiking experiences as a new topic.

Over the past year I’ve made meaningful personal and professional changes. Today I am healthier, happier, and more energized than ever. I look forward to sharing my thoughts with readers and welcome all constructive comments.

Major Victory for Jewish Religious Pluralism in Israel: Reform and Conservative Conversions Will Finally Be Recognized by The State of Israel

Congratulations to the Israel Religious Action Center for their tireless efforts!  This is a big deal! I am the product of an inter-faith marriage, and my mother completed a Reform conversion in Canada over 50 years ago; I grew up in a Conservative congregation in Puerto Rico; and I have been a leader in the Jewish Reform community in the San Francisco Bay Area for over 17 years. I am very gratified to see this day.

From the press release:

On Tuesday, May 19, 2009, the Israeli High Court of Justice, in a ground-breaking case, awarded equal funding to Reform and Conservative Jewish conversion programs. The Israel Religious Action Center (IRAC), the legal advocacy arm of the Reform Movement in Israel, originally filed this petition in 2005 against the Immigration Absorption Ministry for discrimination and today the Supreme Court agreed.

To date, the State of Israel funds privately-run conversion centers alongside state centers; however, only Orthodox centers are recognized and therefore only Orthodox centers received state funding.

The State defended its position in court based on the fact that Reform and Conservative conversions are not recognized in Israel.

The Court noted that most converts in Israel immigrated by the Law of Return, but are not Jewish according to halacha, traditional Jewish law. They wish to convert in order to embrace their Jewish identity and to become more integrated into Israeli society, a goal achieved in conversion programs of all Jewish streams.

The Court called the State’s practice of favoring only one Jewish stream discriminatory and contradictory to the State’s responsibility of ensuring freedom of religion: “The duty of the State to pluralism is not only a passive duty, but an active one as well.” They also sited their previous ruling (Naamat and IRAC in 2002) that “Jews in Israel cannot be seen as only one religious sect.”

The verdict in this case calls for all private non-Orthodox conversion programs to be reimbursed retroactively for the years 2006-2009 and for all future funding to be given equally to conversion programs of all Jewish streams.

Attorney Einat Hurvitz, IRAC’s Legal Department Director, responded to the Court’s ruling: “Today's verdict reaffirms the fundamental right to equality and religious freedom by ruling that the State may not discriminate between people based on their choice of Jewish stream. Today, the Court set a precedent, mandating State-funding for religious services of the Reform Movement and other non-Orthodox streams of Judaism. We hope that this clear message from the court leads to a change in government policy and puts an end to the exclusion of the Reform movement by the State."

More on Financial Regulation, Its Unintended Consequences, and the Geithner Plan

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The media is full of negative reactions related to
the announcement of Treasury Secretary Geithner’s extensive regulatory reform plan for the oversight of the capital markets. I can't imagine that an announcement of this nature wasn’t widely
expected.  On November 28th,
2008 I posted a warning on this specific issue:

A Case
Study in the Unintended Consequences of Financial Market Regulation: The Death
of the Small Cap U.S. IPO?
:

"The first 100 days of the Obama administration
are widely expected to usher in a new era of U.S. capital markets regulation
designed to restore the public’s trust in the decimated institutions that
provide much of the liquidity infrastructure for the global capitalist
system.  It is imperative that improved financial oversight be achieved
swiftly through the enactment of effective regulation so that the markets can
re-equilibrate and resume their normal function.  Without these necessary
changes, global economic growth will continue to falter.
  At the
same time, we must recognize that regulations enacted in haste can have severe,
negative unintended consequences." 

Pui-Wing Tam of the Wall Street Journal interviewed me this past Friday
and asked how I felt about increased regulation of venture capitalists as part
of the Geithner plan.  Her article
is published in WSJ Blogs in the Digits Blog and is titled Views From VC-Land
on Regulation
.

My quote was given in the context of whether
becoming a
Registered Investment Advisor presents an undue burden for venture
capitalists, which, based on my previous professional experience as a
Registered Investment Advisor, I believe that it does not.  

More important is my first point, which
is that we have experienced a massive failure of oversight in this country. 

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Both the Government and the private
sector agree that we clearly have a regulatory process problem and that it must
be resolved.  We should not forget
that convicted felons such as Bernie Madoff were not only Registered Investment
Advisors, they actually passed inspections by the Securities Exchange
Commission.  The colossal systemic
failure of this country’s regulatory oversight of the capital markets has been
exposed by the SEC’s own inspector general, David Kotz, in an extensive report on the
SEC’s failure to enforce a whole body of regulation governing the now largely
defunct investment banks
.

A series of unintended consequences stemming
from over a decade of misguided federal securities regulations is also at the
root of the structural problems that currently prevent liquidity from coming
back to the public equity markets for emerging growth companies, and this has
been exposed succinctly in the white paper
“Why are IPOs in the ICU”.

I think it is unrealistic for investment
managers in any sector to anticipate less regulatory oversight in the US going
forward—but it is incumbent upon Secretary Geithner, President Obama, and the
Congress to recognize the proclivity of regulation to fail to accomplish its
intended goals.  We are already
living with those consequences right now.

 

 

 

New Study Shows America is Losing the Best and the Brightest Foreign Entrepreneurs

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We should pay serious attention to the message that we are getting from the next generation of entrepreneurs: that America is no longer as appealing as it was.  Multiple measures of economic trend reversals strongly support the argument that America's global competitiveness is declining, and the worst part is that our misguided current immigration policy is contributing to this trend. The Kauffman Foundation released a study on March 17th that points to the negative implications for our country and also distinguishes between the desire to protect American jobs and the destruction of future jobs created by immigrant entrepreneurs.   

The study "indicates that reducing the number of immigrant students in U.S. jobs may be detrimental to the economic health of the country by accelerating the return of talented immigrant students to their home countries.

“Highly skilled foreign national students used to come to the U.S. to study and stay. They start innovative companies that employ millions or  used their engineering and science skills to benefit U.S. companies. Many now believe there are better future prospects in their own countries,” said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. “Policymakers are misguided if they believe these talented next-generation entrepreneurs and innovators threaten U.S. jobs. They, in fact, offer the promise of more jobs by building successful, high-growth companies—either in their own businesses or those for which they work.”

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The study, conducted by Duke professor and Harvard researcher Vivek Wadhwa and titled “Losing the world’s best and brightest: America’s New Immigrant Entrepreneurs, Part V,” surveyed 1,224 foreign nationals currently studying in institutions of higher learning in the United States or who had graduated by the end of the 2008 academic school year. The survey was comprised of responses from 229 students from China (and Hong Kong), 117 students from Western Europe and 878 students from India.

“What many people do not realize is that these foreign nationals are making a job, not taking a job,” said Wadhwa. “According to research by the National Science Foundation, foreign students received more than 60 percent of all engineering doctorates and more than half of all science and mathematics doctorates awarded in the United States. That’s a lot of talent to lose to other countries.”

According to the findings, many respondents do not wish to live in the United States permanently, with 55 percent of Indian, 40 percent of Chinese and 30 percent of European students reporting that they want to return home within five years. This shows a stark reversal from past retention rates. In the past, greater than 75 percent of Indian and Chinese students who received science and engineering advanced degrees in the United States remained in the country for extended periods or permanently.


Among the study’s findings:

•    A key impetus behind students’ intentions to depart is the fear that they will not be able to find a job in the United States upon graduation and their growing belief that the U.S. economy will lag global growth rates in the near future. 

•    Chinese students, in particular, strongly feel the best job opportunities lie in their home country—52 percent said their home country has the best job opportunities versus 32 percent of Indian respondents and 26 percent of Europeans respondents. This contrasts starkly with the beliefs of most skilled immigrants in the 1980s and 1990s that the best opportunities were in the United States.

•    The vast majority of foreign students—85 percent of Indians and Chinese and 72 percent of European—are concerned about obtaining work visas; 74 percent of Indians, 76 percent of Chinese and 58 percent of Europeans are also worried about obtaining jobs in their fields.

•    A large percentage of respondents have entrepreneurial hopes; 64 percent of Indian, 66 percent of European and 68 percent of Chinese students indicated they want to start a business within the next decade. For Indian and Chinese students, the majority (53 percent and 55 percent respectively) hope to start businesses in their home countries. Only 35 percent of European students wish to open a business in their home country.

•    All nationalities hold the U.S. educational system in high regard. Indians and Chinese, in particular, found that the United States educational offerings are better than their home countries’, including preparing foreign graduates for entry into their home country’s workforce.

•    Respondents from India and China both expect that the next generation of innovative products and services in their home countries will increase during the next quarter century at a much faster pace than in the United States.

The students’ desires to return to their native country echoes a sentiment expressed by highly skilled Chinese and Indian immigrant entrepreneurs who were surveyed in the recent Kauffman Foundation study, “America’s Loss is the World’s Gain.” In this study, 47.8 percent of Chinese and 46 percent of Indians who had returned to their native country said that they were unlikely to return to the U.S. Additionally, 60.7 percent of Chinese and 53.5 percent of Indian respondents said that opportunities to start their own businesses are better in their home country than in the United States, and 50.2 percent and 56.6 percent respectively considered it likely that they would do so within five years. This study is fifth in a series of reports Wadhwa has conducted on immigrant entrepreneurship for the Kauffman Foundation.

Immigrants historically have contributed to some of America’s most successful businesses and innovations. Between 1990 and 2007, the proportion of immigrants in the U.S. labor force increased from 9.3 percent to 15.7 percent, and a large and growing proportion of immigrants bring high levels of education and skill to the United States. Immigrants have contributed disproportionately in the most dynamic part of the U.S. economy—the high-tech sector—co-founding firms such as Google, Intel, eBay and Yahoo. In addition, immigrant inventors contributed to more than a quarter of U.S. global patent applications. Immigrant-founded U.S.-based companies employed 450,000 workers and generated $52 billion in revenue in 2006.

“Better job prospects, a loosening of visa restrictions and an economic rebound in the United States could prove powerful magnets to recapture would-be entrepreneurs holding newly minted sheepskins,” Wadhwa said. “Incentive programs to encourage foreign immigrant entrepreneurship—perhaps pairing fast-track residency status with launching of companies—also could help ensure that those who want to stay and start companies can do so.”

I am a first-generation American, born in Puerto Rico.  Both of my parents were naturalized Americans.  I'd like to think that America will recognize that the rich diversity of our nation's cultural tapestry must be reinvigorated before we lose the next generation of entrepreneurs to greener pastures. 

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The VC Outlook January 2009: Challenge and Opportunity in a Buyer’s Market

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On Friday,
January 23rd
,
I joined Rob More of Frazier HealthCare
Ventures
to participate in a national press briefing on behalf of the National
Venture Capital Association (NVCA)
, in conjunction with the release of the 2008 Fourth Quarter
PricewaterhouseCoopers/National Venture
Capital Association MoneyTree™Report
.  Joining us on the
call were
Maryanne Coughlin,
Director, Technology Sector Analyst, PricewaterhouseCoopers
; Tracy T. Lefteroff
,
Global Managing Partner,
Private Equity & Venture Capital and Life
Sciences Industry Services
; and
John S. Taylor, Vice
President of Research,
National
Venture Capital Association.

The data itself clearly shows a pronounced
decline decline in Q4 ’08 venture activity across both Life Sciences and
Information Technology.

Responding to reporters’ questions, I
expressed my strong view that we should expect no quick fixes to the structural
liquidity problems in the US public equity markets for sub $1 billion equity
capitalization emerging growth companies.
 
For privately held VC-backed companies, I explained that one of the
biggest current challenges for many venture capitalists is maintaining economic
alignment with co-investors in venture syndicates for both new and existing
investments. I also identified the Lehman bankruptcy as a factor which gave
pause to all investors in Q4 and as an important signpost in the global credit
crisis because of the counterparty risk issue.

Most importantly, I asserted that the current
period of turmoil is an exceptionally good time to put new VC money to
work.
  After 28 years in business
and over 12 years in VC, I do have some perspective about investing cycles,
having lived through several financial market crashes and resurrections. Looking
back at our 12 year investing record at
Levensohn Venture Partners, our best investments were made in
companies that we identified as differentiated leaders in their sectors at the
bottom of the last VC cycle—in late 2001 and 2002.
  At that time a different set of circumstances made many
investors stay on the sidelines, creating precisely the opportunities that
everyone seeks on sunnier days. We are seeing those exceptional opportunities again
in 2009.
  It’s a buyer’s market in
VC.

A New Dawn for America

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I feel particularly optimistic tonight, and I see sunlight in America's future. Gathering with my family in front of the TV, and listening to Senator McCain's gracious concession speech, my greatest hope is that a sense of bipartisanship, motivated by the desire to act in the best long term interests of America, will drive our country forward to a truly better place through the difficult times that remain ahead.  It is easy to be cynical about politics and elections, but the demographic facts about this election stand cynicism on its head.  As Barack Obama said tonight, in America, anything is possible.  As we go forward, let's not forget this.  We can rise above our own selfish interests to do the right things for our country. Tonight, I am more proud to be an American than ever before, and I feel very fortunate to be a first generation American who not only has lived the American dream, but who continues to believe in the American dream for my children and for all Americans.

"In this country we rise or fall as one nation, as one people."

President-Elect Barack Obama
November 4, 2008

 

Why I am Voting for Barack Obama for President of the United States

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I have been a registered Independent voter since 1994.  Like many Americans, I've given more thought to this election than to any previous political contest. Many of us share a deep sense of unease as we witness a degree of instability and see a snowballing lack of confidence in  our country's economic and political institutions that was considered impossible in America. I feel strongly that my vote in 2008 may well be the most important exercise of this civic duty in my life. 

In supporting Barack Obama, like General Colin Powell, I also believe that Senator Obama is a "transformational figure".  I trust Barack Obama's judgment and believe in his ability to successfully lead this country through the dark period that engulfs our national psyche.  I also believe he is sincere in his desire to "do the right thing" for America.  His specific position on eliminating capital gains taxes for start-ups supports long-term investing through innovation and venture capital.  This approach recognizes that there are no quick fixes to our economic problems and that America needs to resume a path toward sustainable long-term economic growth through new job creation.  

In my view, the Washington Post's endorsement of Barack Obama for President on October 17 most closely reflects my own personal opinions.  Below, I have quoted some excerpts from the Post's editorial which capture the essence of my strong support for Barack Obama:

"Mr. Obama is a man of supple
intelligence, with a nuanced grasp of complex issues and evident skill at
conciliation and consensus-building. At home, we believe, he would respond to
the economic crisis with a healthy respect for markets tempered by justified
dismay over rising inequality and an understanding of the need for focused
regulation. Abroad, the best evidence suggests that he would seek to maintain
U.S. leadership and engagement, continue the fight against terrorists, and wage
vigorous diplomacy on behalf of U.S. values and interests. Mr. Obama has the
potential to become a great president. . . .

A McCain presidency would not equal
four more years [of the Bush administration], but outside of his inner circle,
Mr. McCain would draw on many of the same policymakers who have brought us to
our current state. We believe they have richly earned, and might even benefit
from, some years in the political wilderness. . . .

There are two sets of issues that
matter most in judging these candidacies. The first has to do with restoring
and promoting prosperity and sharing its fruits more evenly in a globalizing
era that has suppressed wages and heightened inequality. Here the choice is not
a close call. Mr. McCain has little interest in economics and no apparent feel
for the topic. His principal proposal, doubling down on the Bush tax cuts,
would exacerbate the fiscal wreckage and the inequality simultaneously. Mr.
Obama's economic plan contains its share of unaffordable promises, but it
pushes more in the direction of fairness and fiscal health. Both men have
pledged to tackle climate change. . . .

Mr. Obama also understands that the
most important single counter to inequality, and the best way to maintain
American competitiveness, is improved education, another subject of only modest
interest to Mr. McCain. . . .

A better health-care system also is
crucial to bolstering U.S. competitiveness and relieving worker insecurity. Mr.
McCain is right to advocate an end to the tax favoritism showed to employer
plans. This system works against lower-income people, and Mr. Obama has
disparaged the McCain proposal in deceptive ways. But Mr. McCain's health plan
doesn't do enough to protect those who cannot afford health insurance. Mr.
Obama hopes to steer the country toward universal coverage by charting a course
between government mandates and individual choice, though we question whether
his plan is affordable or does enough to contain costs. . . .

It is almost impossible to predict what
policies will be called for by January, but certainly the country will want in
its president a combination of nimbleness and steadfastness — precisely the
qualities Mr. Obama has displayed during the past few weeks. When he might have
been scoring political points against the incumbent, he instead responsibly
urged fellow Democrats in Congress to back Mr. Bush's financial rescue plan. He
has surrounded himself with top-notch, experienced, centrist economic advisers
— perhaps the best warranty that, unlike some past presidents of modest
experience, Mr. Obama will not ride into town determined to reinvent every
policy wheel. Some have disparaged Mr. Obama as too cool, but his
unflappability over the past few weeks — indeed, over two years of campaigning
— strikes us as exactly what Americans might want in their president at a time
of great uncertainty. . . .

…Mr. Obama, as anyone who reads his
books can tell, also has a sophisticated understanding of the world and
America's place in it. . . .We hope he would navigate between the amoral
realism of some in his party and the counterproductive cocksureness of the
current administration, especially in its first term. On most policies, such as
the need to go after al-Qaeda, check Iran's nuclear ambitions and fight
HIV/AIDS abroad, he differs little from Mr. Bush or Mr. McCain. But he promises
defter diplomacy and greater commitment to allies. His team overstates the
likelihood that either of those can produce dramatically better results, but
both are certainly worth trying. . . .

Thanks to the surge that Mr. Obama
opposed, it may be feasible to withdraw many troops during his first two years
in office. But if it isn't — and U.S. generals have warned that the hard-won
gains of the past 18 months could be lost by a precipitous withdrawal — we can
only hope and assume that Mr. Obama would recognize the strategic importance of
success in Iraq and adjust his plans. . . .

We also can only hope that the alarming
anti-trade rhetoric we have heard from Mr. Obama during the campaign would give
way to the understanding of the benefits of trade reflected in his writings. A
silver lining of the financial crisis may be the flexibility it gives Mr. Obama
to override some of the interest groups and members of Congress in his own
party who oppose open trade, as well as to pursue the entitlement reform that
he surely understands is needed. . . .

… the stress of a campaign can reveal
some essential truths, and the picture of Mr. McCain that emerged this year is
far from reassuring. To pass his party's tax-cut litmus test, he jettisoned his
commitment to balanced budgets. He hasn't come up with a coherent agenda, and
at times he has seemed rash and impulsive. And we find no way to square his
professed passion for America's national security with his choice of a running
mate who, no matter what her other strengths, is not prepared to be commander
in chief. . . .

… Mr. Obama's temperament is unlike
anything we've seen on the national stage in many years. He is deliberate but
not indecisive; eloquent but a master of substance and detail; preternaturally
confident but eager to hear opposing points of view. He has inspired millions
of voters of diverse ages and races, no small thing in our often divided and
cynical country. We think he is the right man for a perilous moment."

Don’t Forget What Makes America Great– Our Diversity

As we celebrate this Memorial Day weekend and remember those who have died for our country in military service, let’s not forget that our young men and women continue to fight to preserve our democratic society and the personal freedoms that define our way of life.

In his new book, The Post-American World, Council on Foreign Relations member Fareed Zakaria reflects on many of the challenges that we face as a country in the 21st century. He also reflects on the strengths that make America unique.

When I describe what makes the Silicon Valley eco-system for entrepreneurs unique and, in my view, exceedingly difficult to duplicate, my description mirrors what Zakaria describes as America’s core strength:

” Per capita, it turns out, the United States trains more engineers than either of the Asian giants. … America’s hidden secret is that most of these engineers are immigrants. Foreign students and immigrants account for almost 50 percent of all science researchers in the country. . . . Half of all Silicon Valley start-ups have one founder who is an immigrant or first generation American. The potential for a new burst of American productivity depends not on our education system or R&D spending, but on our immigration policies. If these people are allowed and encouraged to stay, then innovation will happen here. If they leave, they’ll take it with them. More broadly, this is America’s great– and potentially insurmountable– strength. It remains the most open, flexible society in the world, able to absorb other people, cultures, ideas, goods, and services. The country thrives on the hunger and energy of poor immigrants.”

I am a first generation American who, by the good fortune of being born and raised and Puerto Rico, was an American citizen before my immigrant parents were naturalized. But for the ultimate sacrifices made by American soldiers against the Nazis in World War II, I would not be here.

This Memorial Day, let’s also not forget that the lifeblood of innovation and entrepreneurship comes from many places, but it has found a uniquely fertile soil in an America that embraces and celebrates diversity.

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Memo To United Airlines Management— Don’t Forget Who’s The Customer

My business partner and I landed at Chicago’s O’Hare airport at High Noon today, having awakened far too early for a Sunday, Mother’s Day to boot. We were en route to Rochester, New York, to kick off a week of East Coast business meetings.

With raindrops battering the airplane windows as we approached the gate, we learned that a massive storm system had forced the cancellation of many United flights into in out of Chicago, including our connection to Rochester.

We entered the terminal and saw a line of at least five hundred people trying to re-book their connecting flights—the wait for the “rapid, self-service kiosks” made us wish for unconsciousness. A large dose of good luck and membership in the Red Carpet Club succeeded in getting us re-booked onto a flight to Buffalo which left in 45 minutes, and both of us were upgraded to First Class… As we waited to board, an announcement was made that the First Class cabin had checked in full and that the ten other passengers waiting to upgrade would have to fly coach. We were lucky, indeed.

But that’s not the punch line to this story.

We were the first two passengers to board the 737 and, to our surprise, five of the eight first class seats were already occupied—by United employees. They had even completely filled the overhead bins with their bags, and I had to politely ask for one of the dead-heading flight attendants to move her bag into coach so that I could keep my own bag with me. I even offered to carry her bag to do it!

The flight was 100% full. At least 1,000 paying customers of United Airlines were massively inconvenienced due to cancelled flights throughout UAL’s Chicago hub. There is no doubt that other passengers on Flight 1142 to Buffalo had been re-routed onto this flight. Did United have an opportunity to build goodwill with five more of their loyal customers by moving the extremely unhappy paying passengers up front and having the employees fly coach to Buffalo? Yes.

But that would be another airline in another world and another time. And this blog is about the real world, where airlines, companies that used to be in the customer satisfaction business around circa 1975, no longer consider the lasting impact on every passenger who will not forget the image of five employees hogging 63% of the First Class cabin on Mother’s Day during a massive disruption of service to paying customers.

And I’m one of the lucky minority who got to ride up front…

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