The Riots

This post is by Jeff Carter from Points and Figures

Riots all over the country because of the murder of one black man in Minneapolis. It was murder.  I am empathetic to the anger.  I am angry too for a lot of reasons.  I get it.  I even agree to a point.  If there was a peaceable march I’d listen more intently.  But, the destruction of private property crosses a line with me.

Conservatives are unfairly maligned as racists.  Interestingly many conservatives see the policies put forth by the liberals as racist.

The other thing that crosses a line with me is allowing people like Jesse Jackson, Al Sharpton and others to swoop in and “lead” and “speak” for the people.  They have their own agenda and it’s putting money in their pockets.  When it gets messy, just call Jesse.  As soon as he speaks, any shred of credibility is lost with most of America anymore.

By the way, in Chicago, we call him the “King of Beers” because the Daley’s paid him off by giving him a Budweiser beer distributorship.  Notice, he never went after King Richie.

I would agree with anyone that there are all kinds of racism in our country but I do not believe it’s institutionalized.  I don’t think it’s automatic.  I don’t think that just because someone didn’t get something it was race that was the cause. We can all point to different anecdotes of racism.  But, not everyone is racist.  Because if everyone is racist it would be a lot worse….for everyone.  My personal life would be a lot worse off if I was a racist.  Gary Becker proved it empirically.

When I played hoops on playground in Maywood, I was always the last guy picked.  I understood.  I had to prove myself.  I can still hear Clint Hakes voice, “He ain’t got that disease.” ringing in my ears.  When I played on my college team, I had to prove myself.  Even after my freshman year when a new crop of people came in, I had to fight and prove myself again.  It was because I was white.  But, my experience there really helped my life.  I learned that I could have relationships with people that were a lot different than me and it wasn’t just skin color.

Whenever I see one of my old teammates, and it is a rare occurrence, we always hug each other.  I saw Rico one day after a black tie and saw Rodney just walking down Michigan Avenue one day.  It’s tougher to recognize one another now since I don’t have hair and they might not either.

When I read the Ron Chernow biography on President/General Ulysses S. Grant one of the most enlightening, dreadful, and upsetting things I read was what happened after Lincoln was assassinated.  America would be a far different country today if Lincoln had finished his term and Grant succeeded him.  The roots of Jim Crow, the KKK, and all the other bad racist stuff that became entrenched in America came out of that one act.  Andrew Johnson has to be one of the five worst Presidents in American history.

In recent years, we have seen other sorts of things that could be described as racism.  How about the higher admission standards at elite institutions for Asians?  How about the fact that if you are a white male and apply for a spot in an elite academic institution, you go to the back of the line?  How about the way Democrats treat Republicans and Republicans treat Democrats?

I am a huge proponent of school choice precisely because I think the way government allocates money to schools is gerrymandered against the poor kids.  They don’t get the resources and they never will.

Funny story:  When I was working for 3M ($MMM) I was working a big show at McCormick Place in Chicago.  A black guy walked up.  He wasn’t in a suit, and he started looking around at the stuff we had displayed.  I saw him, walked over and engaged him.  Turns out, he was in Chicago and he wanted to have a 3M rep call on him.  It was in my territory, so I said I’d be there next week.

The next week, I drove down to his place of business.  It was on the far Southside of Chicago. Not exactly the greatest neighborhood then and I suppose it hasn’t changed much.  I pulled into his garage.  There was a gigantic white Caddy painted with glitter chicken feathers with a huge rooster tail coming out of it. They were working on it.

I walked past the car and up some stairs.  There was a Doberman of course which was restrained, barked, but for sure was set loose in the shop at night.  A lot of shops I called on had some pretty mean Dobermans all over the city.

I knocked on the door to his office.  Sat down and we started to chat.  Toward the beginning of our conversation, he asked, “Are you the guy I spoke with at the show?”.  I said, “Yes”.  He mumbled under his breath, “They all look alike.”   I burst out laughing.  He didn’t think I heard him.  He started laughing.  I said, “Hey, that’s what we say about you.”  We started laughing again.  I pulled out my order book and went to work.

He became a good customer.  He had a detail shop and a body shop.  He owned a business.

The point is, why was his neighborhood so run down and other neighborhoods not run down?  I don’t think race is the silver bullet answer.  I do think that public policy is a huge part of the problem.  It’s not that we don’t spend enough on poverty or things like that.   It’s that when the government spends money on things like that it doesn’t wind up in the spot it is supposed to.  It winds up in the pockets of people like Jesse Jackson or career politicians and their cadre of patronage workers.

When you delve into data, the answers seem somewhat clearer but certainly not cut and dried.  A simple blog post can’t even start to scratch the surface.

When you talk with people like my friend Charles Love, or you talk to people like Bob Woodsen, you really understand how the policy has to change, how the dialogue has to change to make it better.


Applying effort

This post is by Seth Godin from Seth's Blog

How will you spend your resources? If you want to open a can of tomato juice, you can squeeze the sides of the can as hard as you can, for as long as you can, but it’s unlikely to open. You can also focus all of your energy on a very tiny point and perhaps, with the right tools, make a small puncture. But it won’t help you get the juice out. What you’ll need is a can opener, focusing your force at the right sized spot with the right pressure.

The same is true for the way we bring an idea to the world. One thing you could do is spam a billion people, once. Another is to identify a single individual and spend a year bringing this person just the right message, with relentless frequency.

You’re probably better off with something in between.

We can allocate our resources into a portfolio. Even if we don’t know precisely where to put the effort, a focus on the right categories pays off. Too often, we aim too wide (it feels more deniable). And sometimes, more rarely, we aim too narrowly.

Every day, we use our resources to make change happen. Which means that every day we get to choose.

South Philippine Dwarf Kingfisher 

This post is by Caterina Fake from

The South Philippine Dwarf Kingfisher (Ceyx mindanensis) was first described 130 years ago during the Steere Expedition to the Philippines in 1890, and was photographed this year for the very first time. So beautiful. Via @rogre.

Leaky roofs

This post is by Seth Godin from Seth's Blog

In many situations, a leaky roof is worse than no roof at all.

If there’s no roof, we’re not surprised or disappointed if we get hit with some raindrops. But a roof that leaks has raised expectations and then failed to meet them.

Promising us a roof and then breaking that promise might be worse than no roof at all.

Founder Real Talk Episode #36 with Slavik Markovich, Founder & CEO of Demisto

This post is by Glenn Solomon from Going Long

For Part II of our Israeli series, Oren and I met up with Slavik at Palo Alto Networks HQ

After a brief Covid-19 related hiatus, Founder Real Talk is back in action! Episode #36 continues our Israeli Entrepreneur Series, a group of episodes dedicated to getting to know Israeli founders and their companies. My colleague Oren Yunger and I interviewed Slavik Markovich, Co-founder & CEO of Demisto, a leading Security Orchestration, Automation, and Response (SOAR) platform that helps security teams accelerate incident response, standardize and scale processes, and learn from each incident while working together. From his early days in the Israeli military to selling Demisto to Palo Alto Networks in Feb 2019, less than four years after its founding, for over $560 million, Slavik’s story is full of memorable anecdotes and important lessons for founders. We learn why listening to your customer is so important, how Demisto was inspired by Slack, what the best falafel is in Silicon Valley and much more about Slavik’s incredible journey. Enjoy!

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The post Founder Real Talk Episode #36 with Slavik Markovich, Founder & CEO of Demisto appeared first on Going Long.

Let’s just get rid of peer review

This post is by Alex Danco from

As you may know already, ten years ago (before I got into the tech world) I lived in the academia world, as a grad student doing neuroscience research. Scientific research, to put it bluntly, needs to be fixed. There are so many smart and well-intentioned people working really hard in university labs and research institutions, but whose best years are getting wasted through no fault of their own. It’s not an easy problem to fix, but we’re going to have to.  Several months ago I wrote a post called Can… Read more Let’s just get rid of peer review

Fascism In Chicago, Nothing New

This post is by Jeff Carter from Points and Figures

This morning as I rubbed my bleary eyes I read a couple of stories that should really make Illinois people upset.  It’s disgusting.

The first was from The Patch.   Read it. It’s how politicians in Illinois dole out hush money.  Here is the infuriating part though.  The reporter, Mark Konkol, started asking tough questions and was threatened legally by the Pritzker administration.

Sure, I could have snuck a question in at Pritzker’s daily televised pandemic updates, filed a series of Freedom of Information requests, appealed the administration’s almost certain denial and tried to convince the boss to pony up for an expensive legal fight in the name of “gotcha” journalism.

But really, that’s a waste of time. During the pandemic, I’ve learned from experience that the Pritzker administration dodges questions, ignores interview requests and blocks access to public information with vigor. The rest is details.

That’s why I wasn’t shocked over the holiday weekend when Pritzker put out a public statement disavowing a provision tucked in “Restore Illinois” legislation that would have limited access to public information.

Simple acts of reporting made it clear to me that the governor’s administration doesn’t need any help or extra time keeping secrets from the public.

Around the time we first learned African-Americans were the hardest hit by the pandemic, the state didn’t just deny my request for coronavirus death demographics.

An Illinois Department of Public Health department lawyer called to warn me that possession of data from the Cook County Medical Examiner’s Officer (which I attached to my request as an example of the demographic information I was seeking) violated federal laws.

“You better call a lawyer,” the state lawyer yelled.

In April, my FOIA request for personal protective equipment invoices and an accounting of the state’s pre-pandemic PPE stockpile (and before Pritzker started blaming President Trump for a shortage) got denied like I was asking for wartime secrets. I asked for the documents because a public health department insider told me the state hadn’t replenished stockpiles in 2019.

Conveniently, Amy Jacobsen a conservative radio host and former television journalist started asking tough questions at press conferences.  She was banned from the press conferences for attending a rally in favor of opening the state.

What Pritzker did was a time-honored way in Chicago of paying hush money to a business so they did what the politicians wanted.  It’s a special kind of Democratic Machine fascism that has played out over the last 70 years in Chicago.  COVID 19 will kill the city and state.   The debt load is too high.  Bankruptcy will be the only real option.

Chicago Mayor Lightfoot, no lack of  lust for totalitarian policies, has outlined ways for Chicago restaurants to reopen.  The rules are so onerous, it will be difficult for them to reopen.  But here is the kicker.  If you want outdoor dining you have to buy a permit from the city of Chicago.  Wouldn’t the city just waive the fee this year since it was the city that shut them down?  Butch McGuire’s, a bar that basically built Rush Street, is close to going out of business.  Personally, I have a lot of fond memories of that place and I realize businesses don’t stay open forever but their closing is through no fault of their own.  I backed Lightfoot in the election purely because she wasn’t of The Machine.   I knew she was a socialist but that’s the choice you get in Chicago since heaven forbid a Republican even get on the ballot.  Republicans are so demonized in Chicago they couldn’t get elected dog catcher.  She is exhibiting all her socialist tendencies and she isn’t tearing apart The Machine.  She’s become one of them.

The Chicago policies make it so the Machine can “work” the restaurants for graft.  Cash payments under the table.  It also outlines the way people have to actually dine in public which is so unpleasant who would even go?    I heard about a guy who had a building.  He needed an extra bathroom but it wasn’t up to code. He paid an inspector cash in an envelope, the inspector told him how much and where to put it by the way, so he could get his extra bathroom.  If you think that won’t happen with restaurant re-openings you are smoking some legal weed.

The question that runs through my mind is where are the journalists outside of Mr. Konkol?  Where are the tough people?  The I-Team?  Investigative reporters, that breathlessly relay stories designed to get us to watch during sweeps week are silent?  Their investigative powers seem like they are benign.  Where is that good government as long as Democrats are running it reporter Carol Marin?  Why hasn’t WTTW’s Chicago Tonight been all over this stuff?

It is because they are in the bag for the powers in charge.  They are afraid.  They are afraid of being cast out.  They are afraid of being tagged with some sort of scarlet letters like being a racist or a gay hater for asking the mayor legitimate tough questions.  If you ask Pritzker a tough question, you risk being labeled an anti-Semite.  It’s bullshit and instead of standing up and fighting they are meek.  They are cowards.  When the Edgar County press is tougher than the Chicago press, you know you have a problem.

Meanwhile, I love what this judge in Clay County, IL did.  He asked tough questions.

We will see a sea change post-Covid.  I don’t think television news is going to be a thing anymore and I don’t think newspapers will fare much better.  The Mark Konkol’s of the world will benefit if there is a platform that allows them to benefit.  That’s where there might be room for a cryptocurrency.


Three paths for a soloist

This post is by Seth Godin from Seth's Blog

Consider one of three paths. Which works for you?

  1. Honor the noise in your head. Make the work you believe you were born to make. Create things you can visualize but haven’t seen yet. Do it without regard for critics, the market or the math of it all. It’s your handiwork.
  2. Embrace your market. Make what it needs. Earn a seat at the table by developing an asset, and leverage it to create real value for those you serve. Price it accordingly.
  3. Stay busy. Make slightly better than average work, for less than average pricing.

It’s difficult to see how you can do all three at the same time for the same kind of client. All three choices are valid, any could work for you, but it’s worth choosing.

Golden Bulls: Visualizing the Price of Gold from 1792-2020

This post is by Nicholas LePan from Visual Capitalist

Golden Bulls

Golden Bulls: Visualizing the Price of Gold from 1792 – 2020

Some people view gold as useless metal in the digital age. It does not produce income, it sits in vaults and has limited industrial applications. But nonetheless it consistently goes up in price.

Gold will always be gold, and it has steadily provided security and value as financial markets go up, down or disappear.

Today’s infographic comes to us from Sprott Physical Bullion Trust and outlines how gold while always valuable, goes through periods of extreme bull markets, one of which we are in now.

Gold as Money: Gold-backed Currency in the United States

During the early days of the American Republic, the United States used the British gold standard to set the price of its currency. In 1791, it set the price of gold at $19.49 per ounce but also allowed silver redemption in silver. In 1834, it raised the price of gold to $20.69 per ounce.

The price of gold remained relatively stable through depressions, civil wars and the first world war. It would not be until the beginning of the great depression when gold really started to shine.

The 1929 stock market crash marked the beginning of the end for gold as money in the United States. In the wake of the financial collapse, investors started redeeming paper currency for its value in gold, removing currency from the economy.

In 1933, President Franklin D. Roosevelt limited the private ownership of gold to discourage hoarding. In 1934, Congress passed the Gold Reserve Act which prohibited the private ownership of gold and raised the price of gold to $35 per ounce.

In 1944, the victorious allied powers negotiated the Bretton Woods Agreement, making the U.S. dollar the official global currency. The United States ensured the price of gold at $35 per ounce until the onset of a stagnant economy in the early seventies.

End of the Gold Standard and A New Economic Order

In 1971, President Nixon mandated the Federal Reserve to stop honoring the U.S. dollar’s value in gold. This meant foreign central banks no longer could exchange their american dollars for gold, functionally taking the dollar off the gold standard.

By 1980, the price of gold had surged to $594.92 amidst an environment of rising inflation in the American economy. The Fed ended inflation with double-digit interest rates which in turn slowed the economy, causing a recession.

The price of gold dropped to $410 per ounce and remained around this price until 1996 when it dropped to $288 per ounce in response to steady economic growth. The shine returned to gold after a series of economic crises, such as the tech boom bubble, 9/11 terrorist attacks and a recession in 2011.

Radical Monetary Policies: Bubble Economies and Paper Mach Policies

In 2008, the Global financial Crisis shook the world which saw the dramatic collapse of asset values around the world, resulting in economic retraction. Policy makers and central bankers embarked on a controversial policy of quantitative easing to support financial markets. Gold rose to $869 per ounce during the 2008 financial crisis and would continue so.

The price of one ounce of gold hit an all-time record of $1,895 on Sept. 5, 2011, in response to worries that the United States would default on its debt. During this period, Gold investors saw returns of 611% over 144 months.

As the economy regained its legs, the price of gold waned during a period of economic prosperity that glossed over the effects of money printing.

Gold reached a peak of $1891 in September 2011, and retraced to a low of $1050 by December 2015. It was not until the beginning of a new American presidency that gold rose again.

Gold and the New Financial Landscape

In the 54 months since December 2015 to today, the price of gold increased 62% and reached a high of $1751 on May 15, 2020. A debt-fueled economic recovery growing old, a trade war with China and the recent COVID crisis has once again provoked economic uncertainty and a renewed interest in gold.

With interest rates already at historic lows and quantitative easing as standard operating procedure, global economies are entering unprecedented territory for the economy and the price of gold amidst the backdrop of a pandemic and record government spending.

Gold in Perspective

In an era to tech startups, ETFs and financial wizardry, many people consider gold as just a shiny paper weight but its performance compared to other assets shows it is far from this.

In 1792, an ounce of gold was worth about $19.49 and as of May 15, 2020, $1751. While no has lived this long, gold has proven its value over time as companies, countries and governments come and go.

Now more than ever in an era of central bank quantitative easing and ending bailouts, Gold will continue to preserve its value and offer its owners value and security against financial markets and currencies.

Golden Bulls are no idle idol worshipers in this era of radical monetary policy.

The post Golden Bulls: Visualizing the Price of Gold from 1792-2020 appeared first on Visual Capitalist.

Great taste is underhyped

This post is by bijansabet from Bijan Sabet

One piece of advice that is often cited in startup land is the idea & importance of building a monopoly or a moat strategy.

I get it. The desire to build something defensible and durable for the ages requires something that suggests you can withstand competition.

But in the software/tech world it is immensely difficult, if not impossible to build a monopoly. There are just too many creative entreprenuers and talented people to build an everlasting moat.

Throughout my career, I find myself drawn to founders less interested in building a monopoly and more drawn to founders with exceptional and extraordinary taste. It’s rare but when you see it, well, it takes your breath away. In fact, I think taste is one of the most under appreciated attributes of a product inspired founder.

Steve Jobs calling Microsoft out for a lack of taste back in 1995 sums up the point:

“The only problem with Microsoft is they just have no taste. They have absolutely no taste, and I don’t mean that in a small way, I mean that in a big way, in the sense that they don’t think of original ideas, and they don’t bring much culture into their product.”

There are no text book ways to develop great taste. It doesn’t come from countless A/B testing or cloning some successful feature in another app. It often is derived from a some unique combination of vision and talent. And always comes from the heart.

A Trade Made is A Trade Made

This post is by Jeff Carter from Points and Figures

One of the toughest things about trading is you always get a look back. It can be frustrating.  Do it enough, you open yourself up to self-doubt and then erosion of confidence.  A couple of weeks ago, I decided to sell some stock and go to cash.  Since then, the market has been on a tear.  I was wrong.

The decision is made though.  Now it’s time to figure out the next decision.

Businesspeople often make decisions that are binary and set in stone.  Traders get flexibility.

Traders get to make decisions all the time multiple times a day.  That’s not the case in business.  In trading, you try to slow things down.  In business, you try to be quick but don’t hurry.  In trading, you often get the chance to rethink or retrade your decision if the market allows it.

When you are considering making a trade or doing a deal, one thing you have to do is give yourself the mental and emotional space to walk away from it.  If you aren’t willing to walk, you will pay too high a price.  Or, you will sell at too low of a price.  Sometimes, you get a second chance but not often.

I sold stock and I was right for a week.  That was my chance to get back in and get all of the last week and a half rally.  But, I didn’t and I will live with the consequences.  The timing in my life to be more in cash is probably right.  That’s the other thing about decisions, you have to accept the responsibility for them.

One thing I find with traders though is that you get that one chance to make that decision.  Then it’s over and they move on.  In business, sometimes this doesn’t match up with expectations.  People on the other side of the table think you are posturing or trying to get an edge when all you are trying to do is drive a deal.  You lay your cards on the table, they make their decision and you move on.

I heard a great story about decision making like this and it didn’t involve a trader but a tremendously successful entrepreneur.  He loved golf.  He wanted to build an 18 hole golf course in Michigan where he had a summer home.  He started to acquire the land for that golf course.  As he did, certain landowners smelled some blood in the water.  He went to a farmer whose land bordered the land he had purchased and told him that he wanted to buy the land, and build a golf course on it so he could have 18 holes.  He said he would make one offer, but it would be very fair to the farmer.

He offered a price and the farmer rejected it.  The price was above market.  The farmer thought he could squeeze for more.

The entrepreneur went on to build one of the greatest nine-hole golf courses in the United States.  He put in two sets of tee boxes so you could play the full 18 if you wanted.  The farmer kept trying to sell his land to the entrepreneur, but the entrepreneur wouldn’t have it.   He’d moved on.  He’d adapted.

One thing that great deal makers learn is that you cannot make a deal without wanting to walk away from it.  If you are dealing with a trader on the opposite side of the table, usually they aren’t angling to try and work you over for a huge advantage.  They are trying to get a deal done.

Dancing with tools

This post is by Seth Godin from Seth's Blog

How good are you at Google Sheets?

Can you write a query? A filter? Do you know how to install add-on tools to trim extra cells or create a mail merge? If you wanted to learn those things, do you know how to find out how?

It’s an interesting litmus test.

Sheets is free. It’s not particularly difficult to use. You can explore it in private, with no fear of screwing up. And it’s widely applicable to just about any career or community work you might choose to do.

The teenager across the street is far better off teaching herself Sheets than she is doing whatever busywork they’re handing her during the day.

If you get good at a type of technology, you’ll find yourself using it often. On the other hand, if you decide that you’re somehow untalented at it (which is nonsense) or don’t take the time, then you’ll have sacrificed leverage and confidence that were offered to you.

Of course, it’s not just Sheets, or the web, or even computers. It’s a posture of possibility when it comes to the tools we’re able to use.

We can ignore the tools that we have access to. We can fear them. We can understand them.

(And, after we understand them, we’re able to hire someone else to use them on our behalf.)

We can even master them.

The Charade

This post is by Jeff Carter from Points and Figures

Yesterday was Memorial Day.  One of the things that I am reminded by each and every Memorial Day is leadership.  A lot of leaders lead with ego.  Others don’t.

I have been around both. The ones that lead with ego often put up a lot of roadblocks.  They put up a lot of false narratives that have to be run down.   In a startup boardroom situation, this isn’t productive.  It wastes a massive amount of time because at a board level you have a fiduciary responsibility to run down a lot of the narratives.

The ones that lead with ego often are controlling.  They are consistently suspicious and they are always positioning.  They block things that might hurt their powerbase and consistently try to advance their powerbase by any means necessary.

The ones that lead with ego take credit for all the good and deflect or blame for all the bad.  I think we can find plenty of examples currently and in human history that lead by ego.  The leaders that don’t lead by ego are less prevalent and also because they just go about their business you don’t hear a lot about them.

I was reminded about the difference yesterday and the stark distinction between General Mark Clark and General Lucian Truscott.

General Clark was the commander of Allied forces in Italy during WW2.  In histories I have read, he deserves a lot of the blame for the deaths of thousands of Allied GI’s. Rick Atkinson’s book The Day of The Battle, outlines a few times where Clark sent Americans into what became a killing field.

Truscott was the opposite.  He was not a West Pointer.  He rose through the Army because he was good.  He was empathetic of his troops and they performed for him.  Sometimes, he was a sonofabitch, but he was always fair.

Truscott never ran a charade.


Your defining moment

This post is by Seth Godin from Seth's Blog

It’s easy to wait for it. The movies have taught us that when the music swells and the chips are down, that’s when leaders arrive and when heroes are made.

It turns out, that’s not how it works.

Our work is what happens in all the moments. Leadership doesn’t simply appear when the script announces it does: it is the hard work of showing up when we’re not expected to, of seeing what’s possible when few are willing to believe.

Your defining moment is whenever you decide it is, and you get a new chance to lead every day.

Two months ago, we ran our first session of Rising Talent, a special session of the altMBA by and for emerging leaders at Fortune 500 companies.

Our month-long sprint connected senior leaders from SAP, Starbucks, Dunkin’ Brands, Citi, General Mills, Lululemon, NBA, PricewaterhouseCoopers, Adobe, Audible, Barclays, Chipotle, Delta, Trane Technologies, Frost Bank, Kellogg Company, Kraft Heinz, MetLife, Qualcomm, Shopify, Slack and Warby Parker. Even though the world was already turning upside down, this extraordinary cohort showed up and did the work, even as they were contributing at a high level at their day jobs.

The results reinforced what we’ve been saying at the altMBA for the last five years. Possibility is where you find it. We each have more to offer than the world expects. And growth is something we’re capable of, as soon as we’re committed to seeing what we can contribute.

The secret of our workshops is the level of commitment that our students bring. Even in times of turmoil. Enrollment opens the door to action instead of compliance.

Our current worldwide tragedy is a slog, but it will have another side. And the organizations that thrive will be the ones that don’t rely on top-down management to go forward. It’s peer-to-peer leadership and innovation that produces resilience, and leadership that turns any moment into a moment where we can make things better.

Ishita Gupta has written more about the Rising Talent altMBA here.

Pulling Back the Veil Surrounding Nursing Homes…

This post is by ontheflyingbridge from On the Flying Bridge

There is a reasonable chance that you will be admitted to a nursing home or cared for in a long-term care facility at some point in your life – certainly, someone close to you will have been. The adult care industry is massive, currently estimated to be $140 billion in size, and remarkably complex. According to the Center for Disease Control and Prevention’s (CDC) most recent industry survey in February 2019 (Long-term Care Providers and Services Users in the United States), 2.45 million people were either enrolled in adult day care or residents of nursing homes and long-term care facilities. Another 4.46 million were discharged from a home health agency while 1.43 million received hospice services in 2015-2016.

The number of service providers were numerous, creating a chaotic patchwork system with 15.6k nursing homes, 28.9k assisted living facilities, 4.3k hospice providers, 4.6k adult day care centers, augmented by over 12.2k home health agencies. And the need for these services is only increasing as the population ages. According to the National Investment Center for Seniors Housing and Care, the percent of the population 75+ years old in twenty years will be nearly 12%.


Nursing Home Ages
Undoubtedly, these very difficult work environments, made dramatically more challenging by the COVID-19 crisis, have been hit particularly hard. The mortality rates are confounding and staggering. Like prisons, the communal settings found in nursing homes and the fragility of the residents have given us heart-breaking stories of loss while exposing significant industry shortcomings. In mid-March, there were an estimated 28.1k deaths among both nursing home residents and staff with 153k reported cases. These residents were only guilty of being old.


Nursing Home Death by Age


Given inconsistent reporting guidelines by state and the profound lack of testing, there is considerable debate as to the true mortality rates in nursing homes. AARP estimates the mortality rate to be approximately 20% – 25% while the Foundation for Research on Equal Opportunity has painfully tabulated results by each state to conclude the rate is closer to 42% (see map). Commentators have taken to estimating that cases in nursing homes tend to be 10% of the total but 33% of all deaths.


Nursing Home Deaths

The nursing home industry is very competitive, and success is largely dependent on case mix and occupancy rates, which have been running around 90% across all senior housing. There was a significant and immediate decline in occupancy rates at the onset of the pandemic, largely attributed to fewer discharges to post-acute settings. At the outset, hospitals were discharging COVID-19 positive patients to woefully unprepared nursing homes in search of beds. In 3Q19, the most recent available quarterly data, “fee-for-service,” Medicare reimbursement rates were on average $523 per day, while Medicaid rates were $214 per day. With expansion of Medicaid rolls, expect this situation to get worse. In fact, 3Q19 was the first quarter where more than half the nursing home days were Medicaid at 51.5%. Analysts estimate that the profit margins tend to be 3 – 4% at these facilities.


Nursing Home Occupancy

The leading nursing home operator in the United States is Genesis Healthcare with nearly 400 facilities and is also a provider of a number of ancillary services (more on that shortly). In 2019, revenues were $4.6 billion and after a handful of years of significant operating losses ($1.8 billion cumulatively for four prior years), pretax income was barely $10 million. With an overall occupancy rate of 84% and 76% Medicaid patient-days, Genesis has a market capitalization of only $170 million, which increased 35% last Friday likely on news that the Department of Health and Human Services would provide $4.9 billion of federal aid to nursing homes and that a number of influential states (now over 30 states) will provide liability immunity shields related to COVID-19.

Given the high fixed cost structure and razor thin operating margins, it is no wonder that these facilities tend to be “under-utilizers” of technology. According to the CDC National Health Statistics analysis in March 2020, residential care facilities that utilized electronic health records (EHR) increased from only 20% to 26% from 2012 to 2016. Of those that actually used EHR platforms, only 55% actually had health information exchange capabilities with doctors and pharmacists in 2016. In general, larger facilities (presumably better capitalized, better resourced) were more likely to use technology, while paradoxically, “for profit” operators were less likely to do so. Shocking.


Nursing Home EMR

Approximately 70% of the nursing home industry is “for profit,” with private equity investors playing a significant ownership role, and not always a great one at that. Since 2000, a recent New York University study concluded that there were 119 leveraged buyouts in the nursing home sector. Often times these nursing home investors controlled companies that were providing necessary services such as cleaning, facilities management, medical equipment leasing, and other ancillary services at significant margins (see Genesis Healthcare above) to those same homes. Notably, in “for profit” facilities the number of hours of care per patient declined 2.4% and according to federal quality guidelines, staff quality decreased by 3.6% since being acquired. Investor appetite has not let up – according to a survey by Senior House News (February 2020), nearly 40% of respondents assumed private equity will continue to be the leading investor in the asset class.

Nursing Home Owners (2)

An analysis by the Journal of Post-Acute and Long-Term Care Medicine, determined that the Omnibus Reconciliation Act of 1987 was a landmark in overhauling nursing home quality assurance systems and led to much more impactful oversight. Given the “lock down” now in place at nursing homes, the first two lines of oversight (family members, government regulators) are blinded to conditions inside of most facilities. According to U.S. Government Accountability data, the number of abuse violations more than doubled from 430 to 875 between 2013 and 2017. It is estimated that 20% of all emergency room visits by nursing home residents is due to neglect. There are now significant concerns about current conditions.

Tragically unforgiveable, there also appears to be a racial overlay to this nursing home crisis. A recent detailed New York Times analysis determined that 60% of all nursing homes with a minority census greater than 25% of residents had at least one COVID-19 case, which was twice the rate in facilities with minority census less than 5%. This phenomenon did not correlate to location, size or quality rating.

The immediate path forward is unclear. Recent Centers for Medicare & Medicaid Services (CMS) guidance strongly endorses that nursing homes should be the last facilities to re-open, providing a nearly unattainable checklist of conditions to be met. Massachusetts recently put forth a four-page “Nursing Facility Infection Control Competency Checklist” with 28 required items! The American Health Care Association estimates that it will take at least 2 – 3 months to have adequate protective equipment and 4 – 6 months before appropriate testing capabilities can be instituted. But what regional case counts will be acceptable to allow visitors? Quite clearly, inexpensive healthcare technology platforms such as telehealth, remote monitoring, and contact tracing will be an essential cornerstone of managing nursing homes going forward.

If Your Pitch Deck Has a Competitive 2×2, I’m Going to Ask You This Question

This post is by hunterwalk from Hunter Walk

As an early stage investor I look at A LOT of pitch decks. In the seven years since we started Homebrew there has been some evolution in this area – Docsend, videos, the occasional memo – but the lingua franca among founders and investors is still largely 10-25 slides with several expected sections. And while some of us have very strong personal reactions to certain portions (seed decks should never include an exit slide), we’re generally aware these are lowest common denominator methods of ordering and conveying thoughts in a consistent format. But there’s one common slide that I’m *always* going to offer the same question about – whether you’re building a spaceship or a shoe. If you show me a competitive 2×2, I’m going to ask you what the competitors on the slide would say about it if they were critiquing the matrix categories and their placement.

You see, I’ve never been presented one of these slides where the startup pitching isn’t in the “upper right” (canonical best) square. Sometimes alone by themselves, incumbents and adjacent startups spread elsewhere. Often with another logo or two, but with the startup in an advantaged differentiated position. Very occasionally with a simulated time lapse – ie “Pitching Startup 2020” located one place and “Pitching Startup 202X” located elsewhere, to depict how, over time, the company will move from an unassuming position to one of dominance.

So I’ll review the slide, grok what they’re basically trying to convey and ask “what would your competitors say about this slide?” It’s not meant to be a gotcha! If it was, I just kinda blew it by publishing this post. Rather it hopefully leads to an interesting conversation about how the entrepreneur sees the market. Or how articulate (and intellectually honest) they are about why they selected the two matrix attributes versus any other comparative set. When the discussion falls flat it’s often because the slide isn’t based in reality, the matrices are swerves made to enhance the startup’s position but with very little actual connection to customer needs or strategic advantage. Or it reveals a lack of understanding of the competition.

This is one of those pitch deck slides that’s similar to an iceberg — 90% of the the mass is below the surface. And if we’re going to work together for many years, it’s worth including a thoughtful understanding of your market. Otherwise you’re better off leaving it out – or just taking money from someone who will focus only on the iceberg’s tip.

A Tough Memorial Day

This post is by Jeff Carter from Points and Figures

The National World War Two Museum has had it pretty tough over the course of its existence.  The museum is located in New Orleans.  It’s not run like a typical museum and runs more like a startup.  The ribbon-cutting ceremony for the museum was in 2000 on Jun 6.  Since then, the museum has made incredible progress in building what Trip Advisor calls one of the best museums in the entire world.  That progress was made despite some significant setbacks and challenges.

  • There was the stock market drop in 2001.
  • In 2005, Hurricane Katrina happened.  Even the President of the museum was cleaning bathrooms.  All hands on deck.
  • 2008-09 happened
  • 2020, COVID19 happened

I don’t know if you know this but COVID19 has been worse for New Orleans than Katrina.

The museum has steadfastly marched on, fulfilling its mission.  This year has been especially difficult purely because of the lockdowns and the understandable reticence of people to make travel plans anywhere.

The museum will re-open the first week of June.  During the COVID 19 lockdown, the staff has done a very bang-up job teaching history to shut in children and offering virtual programming for anyone.

You can help them with a small donation.  Every little bit helps and your donation will help the museum fulfill its mission.

Memorial Day is for remembering the ones that didn’t come back.  There were 60 million people killed during World War Two.  A lot of folks didn’t come back.  When we think about the Greatest Generation, they are rapidly going away. Every new day brings the death of another 400-600 American World War Two veterans.  In seven to ten years, it is highly likely that there will be no one left.

Hope you can make a donation, share it with your friends on social media, and help remember the fallen today.


Craftspeople and time

This post is by Seth Godin from Seth's Blog

Tell us when you’re going to finish.

Tell us if you fall behind.

Don’t make us ask.

It’s difficult for a small organization or a dedicated craftsperson to run an operation as punctually as a large bureaucracy. After all, the bureaucracy exists mainly to be sure that deadlines are honored and variances are not exceeded.

Your customers are aware of this. It’s one reason that they chose you–because you’re doing the work yourself, you’re a person, not an industry.

Don’t hide this unless you can hide it completely.

It’s amazing how much slack people will give you if you’re proactive about what you see and what you know. No need to make promises you can’t keep, and no need to hide from the promises you’ve made.

We’re buying the process from you, not just what you’re making.

A Break

This post is by Jeff Carter from Points and Figures


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Campari and soda tonight

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A small business isn’t simply a little version of a big business

This post is by Seth Godin from Seth's Blog

Fewer meetings, fewer resources, fewer constraints.

The biggest advantage that a small business has is that the owner can look customers in the eye. And vice versa.

Instead of policies, groupthink and leverage, the way forward for a small business might be the very thing that fueled you in the start: find out what people need and help them get it. Right away.

It’s never been easy to be a small business and it’s even more difficult right now. But resilience and flexibility go together.

The first rule remains: figure out what people need and bring it to them.