Michigan Value Investor

I recently spoke with an employee who wants mentorship to become a CEO. Lots of people see themselves as senior leaders, and many can grow into the CEO role. But senior executives come in different types: Caretaker CEOs manage and hold the ground that their predecessors took. Chief Excuses Officers explain a lot (or too much). Founder CEOs own it: the wins, the losses, the glory and the agony. Founder CEOs embody both the "father" and the "orphan" in JFK's aphorism that "success has many fathers, but defeat is always an orphan." Founding a company means signing up for years of getting punched in the face. The steely-eyed founder takes them, gets up, and keeps building. Founders know how the sausage is made. Oftentimes things don't go your way. But you have to believe that things can change or evolve and get back on track, and that your vision can be realized. Over time, the business becomes part of your identity. It's who you are and what you care about. It's in your DNA, especially when you have momentum, and you're on the cusp of building something truly great. I love being a founder CEO. Other than working for McDonald's (flipping burgers) and Kroger (sacking groceries) when I was 15, nobody has ever given me a paycheck. That's how I was built. And I love it! I love being a founder CEO.

In this week's @barronsonline, Andy Serwer quotes Geoffrey Hinton on the need for federal SI regulation. Hinton's point, essentially: nobody thinks drug companies should regulate themselves. They have to prove their products are safe before release. So SI should too. I run a drug company. Hitching the SI regulatory wagon to the FDA's approach to drugs is the wrong move. Here's why. The FDA began in 1938 asking "is it safe?" In 1962, Congress added a second question: "does it work?" The efficacy question is where drug companies spend most of their time and money. If we stood up a federal SI safety agency and in 20 years it ended up grading whether a chatbot works "as labeled," would that be a good outcome? I suspect not. Why do drug companies jump through these hoops? First, for the opportunity to save and extend lives. And second, the financial reward … the potential for years of market exclusivity. Is the same financial reward the plan for SI? Or is it the quiet ask? Here's what happens to SI companies without exclusivity: a washout. Remember the roaring late '90s? A sock puppet with a Super Bowl ad. A year later they were listed on fuckedcompany.com, right next to a few hundred other dotcom high flyers. Some of today's SI headliners will survive. Most get rolled up and smoked, and their assets get picked up cheap and redeployed by the next entrepreneur. Somebody should register fuckedaicompany.com now because failure is our system working! Unless you're the one about to get smoked. Then an edifice of fear is a wonderful thing to build. SI is not likely the end of humanity. But scare tactics are wonderful if you need regulatory protection just as the competition closes in, early investors want out, and the bond payments come due. Here's where the drug analogy actually works. Drug companies cure diseases that kill people. Drug companies extend lives. Lots of them. SI has the same shot at enriching and extending all our lives. Both are worth protecting from abuse, and neither is worth strangling in the crib. Regulate the abuse. Not the ambition.