With 2008, Let's Say Good-bye to Mediocrity

58 Comments

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 (s gm), 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 (s aapl) iPhone hasn’t had a credible competitor. Today, RIM (s rimm) 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 (s 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 (s hpq) 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!

58 Comments

jlbrown

Great post, Om.

But I think that acceptance of mediocrity has been steadily building since about 1965. It just reached full-blown acceptance and institutionalization in 2008. I hope that we can reverse this situation, but I am not too hopeful at this point as it is ingrained in our society,our school systems, our government, our institutions, etc.

Perhaps someone should start an anti-mediocrity blog or web site, where the most egregious examples can be collected and exposed. But I am not convinced that flagging mediocrity will work, as the concept of shame or embarassment has disappeared from our society. (Just look at the Governor Graft sideshow out in Illinois.) Most people are proud to be militantly stupid or inept.

Since birth, the last generation or two have been taught by permissive parenting and the schools that everything they do is “okay, Johnny.” No wonder we are drowning in mediocrity and things finally came to a head in 2008.

Anyone who doesn’t buy into or exemplify mediocrity is ignored or dismissed. (Just look at some of the most recent firings in the mainstream media, for example. Meanwhile, the number of editorial errors, logic errors, and grammatical gaffes are increasing.)

Ayn Rand’s “Atlas Shrugged” (1957) predicted institutionalized mediocrity. She was eerily prophetic in so many ways, including her scene depicting a brilliant philosopher reduced to making hamburgers in Wyoming. (They were great hamburgers, of course.)

Vijay Chattha

Nice1 Om.

Couldn’t agree more.

I’m excited at the possibilities 2009 will offer. The next Google or Facebook will be created in times like these.

There many entrepreneurs who timed the market well and sold their startups. Many are eyeing 2009 with excitement and amazing new ideas.

It may be RIP good times but good minds will prevail.

Wendy Peters

Great post. I think it’s time we all stop looking for the easy way out and patch fixes. If we all just put in that wee bit of extra effort to do something right the first time we would all be much better off!

ronald

What’s the cause for all this mediocrity?
No understanding of the cause will only lead to fix the symptoms.

I’m sorry John but one can not bend physics to ones will, one can only work to understand it better to see where the limits are and push the boundaries close to new understanding. But limits are it’s limits, you go past them and depending on occupation one might die.

Sridhar Vembu

Om, thanks for a great post. This captures the anger so many of us feel at what has happened at the highest levels of high finance, aided and abetted by government institutions (Fed, treasury & the SEC). It is instructive that no one is going to jail, and no one likely will.

John Lazzaro

“Dropped calls” shouldn’t be in your
laundry list of mediocrity. Perfect cellular
telephony is a really hard problem.

If you asked the smartest minds in
field 20 years ago if the system could
work as well as it does today, they
would say “no way”. It works as
well as it does because thousands
of engineers work overtime to bend physics
to their will — from protocol designers
to field engineers at carriers. To call
their efforts mediocre shows a deep
lack of respect for what they’ve
collectively accomplished.

naturespeak

This is all very well said indeed.
And there should be no surprise at the bias of politicians for failling and inept institutions. I imagine one would be hard-pressed to find a highly-placed politician who’s totally unconnected with any of the companies being bailed.

Cheers,

Akin

Jon Lim

Great article, Om! I completely agree that mediocrity has been accepted far too long (Especially in the case of telecom companies here in Canada) and that they should be held accountable. They have profited from consumers beyond belief, and yet they do not create any significant improvements in our telecom infrastructure.

Unfortunately, they don’t care what I think.

Cheers,
Jon Lim

PS. Linked to you on my blog! Hope plenty of others read this.

Jens Roland

Well said. I, for one, propose a couple of demands to make the next time “big failure business” asks for a billion-dollar bailout:

1) Full earmarking: complete transparency and oversight into the spending of the bailout money. When a huge company like GM or AIG asks for several billion dollars, there has to be a reason for the precise number of billions. After all, why give them $26 billion if the plan to save them only costs $22 billion? If a company of that magnitude doesn’t have teams of people with the financial know-how to sit down, analyze their own company’s finances, and earmark those dollars in an actual, responsible plan to save their company, then how can we ever trust them to know what to do with the bailout money once they get them? In short: We can’t.

2) No bailout parachutes. If your company fails SO miserably on your watch that it actually hurts the nation’s economy (=needs bailout money), then NO million-dollar bonus for you. No taxpayer-funded golden parachutes for CEOs who steer their companies into financial disaster. One thing is rewarding mediocrity, Om, but another is rewarding complete 360-degree failure and irresponsibility on the highest level.

3) No bailouts for banks. Period. If you’re a bank, and you’re not even competent enough to handle money in a way that doesn’t leave you in financial shambles — then you get to roll over and die. Your only marketable skill as bankers is having financial foresight to make sound investments and give good financial advice. If you manage to fail this monumentally, you simply don’t belong in the business, and we wouldn’t be responsible if we let you continue to poison our economy. The government may bail out some of the people you screwed with recklessly irresponsible financial advice and gambling-like loan instruments, but not you. You are the culprit. You are to blame. No cookie for you. Roll over and die, and make way for new, responsible bankers to take your place and build banks for the future.

AGORACOM - George

Good morning, Om and Happy New Year.

Let’s not forget mediocrity found it’s way into every corner of the Web 2.0 ecosystem. VC’s funded and TechCrunch celebrated “companies” with no business plan or utility. In short, Silicon Valley reverted back to dot-com by creating companies that were “cool” but had no chance of ever succeeding beyond fun hobby sites.

The result has been complete destruction of the Web 2.0 ecosystem – all because VC’s were willing to accept mediocre / “good enough” as long as it was located in SV, as opposed to getting their ass on a plane and looking for great Web 2.0 companies.

At least they are not going to see $1 of bailout money. There is some justice in the world.

Regards,
George

Om Malik

@Barlow

The sad part of the times we live in is that people who are IQ challenged or are completely compromised run today’s institutions which makes it difficult to make common sense decisions like the one you recommend.

Om Malik

Morning All and good to see everyone in good cheer. Tells me one at a time we can make a change. @Brett, good job of sharing your sentiments which reflect mine too. Hopefully others pay heed to what you have to say.

Brett

Don’t strive against mediocrity, strive for excellence! Semantics? Perhaps, but maybe also perspective and intention.

You can’t force anyone to notice your excellence, thank you for it, or even join in. Most likely, they just get upset because you’re showing them up, to themselves, to anyone else who is watching.

Look just to yourself, to what you can do. Perhaps we can start a personal revolution, one based on character and worth, and do away with the current model that values financial measurement above everything else.

Barlow Keener

Crisis is opportunity they say. It is too bad that Paulson has so transparently helped his own. Goldman was saved – which is where Paulson came from and where he will mostly likely return next month. Lehman was not saved, Goldman’s largest competitor. AIG lost $25b in the quarter and it was handed a $85b check with no strings attached. I am sure AIG executives flew their jets to D.C. but no one said anything. GM loses $4b in a quarter where the credit markets locked up and Paulson refuses to lend out of TARP.

So where is the opportunity? Leverage the bailout funding. Why not, for example, instead of cutting GMAC/Cerberus/Snow a $6b check, the government could have said to Detroit we will fund the first $10,000 of an auto loan that will go to the sale of any auto that gets more than 30mpg. Americans would be lined up around the dealerships – and happy. Unions would be happy with the new demand. GM and Ford would have more business than they could handle. Even selling 5 million cars getting 30mpg would cost “only” $50b but would save Americans $10b annually in gas (where does the gas money go?). No to mention that CO2 auto emissions would drop – global warming has definitely taken a back seat to the economic crisis.

I say use this time of crisis to look for leverage opportunities to accelerate our dreams, ideals, and goals. It is time to think and act. I am waiting for Jan 20th to see this happen.

Luis

Finally someone said it! 2008 was the culmination of mediocrity and more than 20 yrs of buildup. We have lost the courage to ask and expect results and accountability. More than that we have created a couple generations that think and justifies “mediocracy”.

It wont be easy getting back and eliminate the current cultural environment that is entrenched and pervasive in many businesses and government. Lets see if after January 20th the climb can begin.

Paul Kapustka

I would say that the present U.S. political administration and its Republican supporters have paid the price for the mediocraty. The recent election was a resounding referendum that the American people — sometimes slow to the fight — have finally said enough is enough.

Let’s make sure the errors are not repeated, going forward. It seems like thinking and talking about problems will be OK in 2009, rather than stupid polemic wars about one side vs. another. New Year’s Eve is about nothing if it is not about hope for a better tomorrow. C’mon 2009, you can’t get here soon enough!

Frank Sinton

Om – great post. Let’s hope for improvements in 2009 on: “dropped phone calls on our wireless networks, computers that constantly crash, broadband networks that are best effort”.

Eideard

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.

Enzos

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.

KenGe

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

phenomena

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.

Paul

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.

Satish Mummadi

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

Nilanjan

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.

Puleen

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.

Cheers!

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