As 2008 takes its final breaths, I am sitting in my apartment, which is enveloped in a thick fog that’s hiding both the ugly high-rises and the beauty that is the San Francisco Bay. The fog is also muting the sounds of the city — a […]

As 2008 takes its final breaths, I am sitting in my apartment, which is enveloped in a thick fog that’s hiding both the ugly high-rises and the beauty that is the San Francisco Bay. The fog is also muting the sounds of the city — a good enough reason as any to ponder the year that was.

Many of us who obsess about the minutiae of Silicon Valley were slow to respond (at our own peril) to the credit crunch and the financial tsunami that it unleashed. After all, who could have imagined that within a few short months around the world, banks would be quasi-nationalized, capitalist governments would have to adopt socialist principles to save failing enterprises and seemingly astute soothsayers would turn out to be worse than than highway con men.

Whether or not the bailouts were needed remains up for debate. I will let others scream and holler in outrage about the immorality of the actions taken by our completely biased politicians. I will let those who are suffering tell their tragic stories on national media. All I am going to say is this: In 2008, U.S. society — from the very top (our political leaders) to the very bottom (our bankers) — came to embrace mediocrity.

In offering money to bailout failed bankers who couldn’t bank, car makers who couldn’t make good cars and chipmakers who have seemingly no business acumen, we stood on the top of the roofs and said: Mediocrity is OK. In the meantime, not one person has been held accountable for bringing fiscal, moral and social Armageddon to our doorstep.

Think of it this way: If a waiter spilled hot soup and scalded you, you would have him fired. A cab driver who had the nerve to take a longer route wouldn’t get his tip. And yet the bankers who turned out to buffoons are being paid to save institutions that in a free market should be left to die. Fox Business’s Cody Willard put it best here:

The liars and crooks who run the investment banks that are now the largest welfare institutions on the planet took out almost $2 billion of money JUST THIS YEAR that they should have been saving for the rainy day that’s now here and handed it to the 600 people they thought were most important to their companies’ well-being. And now they’re still driving around in corporate jets even after becoming welfare institutions?

We spent tens of billions of dollars to save a car company (Chrysler) that not only makes cars that are of questionable quality but also is owned by Cerberus, a vulture fund that has proven itself to be bad at its job — after all, only an idiot would buy something that’s already broken. Cerebrus also owns a big portion of GMAC, the financial arm of General Motors, that is anything but savvy about money. Never mind the fact that losing their money is a risk that goes with investing in distressed assets. They got a bailout from Treasury, too. (The Bush administration’s Treasury secretary before Henry Paulson, John Snow, is a big guy at Cerebrus).

Rewarding mediocrity by bailing out these companies is incredibly short-sighted. As my buddy Pip Coburn, a long-time technology investor, often says, companies that are in survival mode don’t do anything that would make them go from being mediocre to being great — because they are too busy just surviving.

Let us not wash off our hands as well. It is our acquiescence that has led to the spread of this culture of mediocrity. We accept dropped phone calls on our wireless networks, computers that constantly crash, broadband networks that are best effort.

Our acceptance of mediocrity is the reason why Apple’s iPhone hasn’t had a credible competitor. Today, RIM Co-CEO Mike Lazaridis, in a chat with CNET Asia, compared the BlackBerry Storm — an iPhone rival — to a netbook. I recently had a chance to use the touchscreen Storm and within an hour of using the device, it was more like a Touch Scream Storm. It is beyond bad! Any self-respecting company should think twice before putting that device into the market, but as I said, in 2008 we came to learn and reward mediocrity.

But why pick on RIM? After all they have made some great devices, among them the Pearl and the Bold. Let’s look instead at Dell, which today announced it’s rearranging its management to do something — I don’t know what! Dell embarked on a turnaround effort two years ago, but HP is still the No. 1 PC seller, Dell’s shares are down 60 percent on the year, and the company has slashed and burned its work force. It’s fighting a slowdown in demand for PCs with a product line that seems to be utterly forgettable. The company should heeds the words of Warren Buffet: “Turnarounds seldom turn.

If Dell hopes to make a comeback, it needs to shed this mediocre mindset and instead strive for greatness. And why just Dell or RIM or our politicians — why not set that goal for ourselves? Let’s do that in 2009.

Happy New Year!

By Om Malik

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  1. Great last entry of 2008. These are all ever so valid points. Let’s hope that corporations, those who lead the corporations and the people who fund these corporations learn from the mistakes in 2009 and bring about a change for the better.


  2. A very laudable goal for 2009. Instead of the usual trivia about setting goals for a new year (any new year), this is a goal that we should all try to set and achieve persoanally and collectively as a country.

  3. A terrific call to action, Om. Happy New Year to you.

  4. Om and your team and fellow readers and commenters :-) Wishing you all a Happy New Year

  5. Om – Nice perspective on the fog and the sounds of the city. Makes me listen for a bit to the last sounds of 2008, put into perspective a peaceful city in a tough economy, thankfully not any number of other places.

    Complacency seems to be the oxygen that mediocrity breathes. Unlike North Korea, whose citizens are terrified into complacency (perhaps futility would be a better word), our complacency comes from a misguided notion that our actions, and those of our bankers, politicians and friends, have no real consequences. The danger of the bail-outs is that the Fed’s printing presses may let us just hit the snooze button for a few years, but I’d guess that 2009 will be too rough to let us stay asleep much longer. Those $5 charges snuck onto our monthly bills will be noticed. The call that is dropped may be our first job opportunity in months. We may actually start calculating our individual share of each $100 billion given to a non-performing industry, and we’ll sure as hell check to see if new public policies add up to the promise of hope and change.

    Last night I saw Slumdog Millionnaire. Great flick, and it drove home the value of hustle and initiative. Our current circumstances are nowhere near what the citizens of Mumbai wake up to each smoggy dawn, but we’ll all probably squeeze more out of school, jobs and dollars, and not just fire up the Xbox for another couple hours of distraction. At least more people will. You probably understand this better than most.

    By the way, not everyone focused on IT minutiae was sleeping. Nice move locking up your financing when you did.

    Thanks for another good year.

  6. I agree with most of your points except for GMAC. General Motors is not the only carmaker having problems. Toyota has posted a loss also this quarter. This is global mediocrity not just domestic mediocrity.

  7. Om, your final post of the year makes a lot of sense. Earlier in the year after I had a lost a close friend I fell back and did nothing, I failed two summer classes because of it. I was emotionally crippled, and as much as my family and my friends tried to help me out it was me, myself, who had to bring myself over the hurtle. Its an example of how sometimes we have to do things ourselves if we expect things to be done. I relied on friends and family to help me, and when I hadn’t come out of my valley I blamed my friends and family. I realized the only way I was going to go on with life, and the fall semester, was if I got control of myself and worked my hardest. Unfortunately I didn’t realize this until midway through the semester. I was trying to blame other people for not solving my problems and I forgot the person I had to look at for the solution was myself.

    -Thanks Om

  8. Well said, Om. I raise my mediocre glass of “champagne” to an all but mediocre 2009!

  9. Great thread, Om! (Isn’t that a Hindu chant?)

    Striving against mediocrity can be a thankless task, however… those precious few who strive relentlessly towards excellence disregarding popular opinion are branded by the pundits as arrogant , e.g. Mr Jobs. Envy I guess… though having steered Apple to over $22 billion in the bank and zero debts, I hardly think Steve’s losing any sleep over it.

    Cheers, and I hope you have a happy & prosperous 2009.

  10. And a few more of the people who made Dell a world player – have jumped overboard or been pushed in recent days.

    News junkies like me have enough heartburn that started when Miles O’Brien was pushed out the door at CNN – moved to a high state of acid reflux watching the truly incompetent try to interpret NASA’s info on space disasters over the past 24 hours – which Miles could easily have done.

    Time-Warner moved another half-dozen of truly competent, experienced reporters and producers out the door over the last week – ending up waving bye-bye to Kelli Arena, this afternoon.

    Mediocrity? You ain’t seen nothing, yet.

    Happy New Year, Om.


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