Joi Ito's Web

Joi Ito's conversation with the living web.

Although I had some problems with the Plaxo model, I hate hearing stories like this. Sean Parker, the founder and visionary behind Plaxo was kicked out rather rudely by the VCs. I don't know the details, but it sounds bad.

The company sent out an anonymous, terse statement that Parker is ``no longer with Plaxo,'' but called him a ``visionary, creative entrepreneur'' and ended with: ``We thank him for his hard work and wish him well.''

In reality, though, a source said Parker has been locked out, and everyone at the company has been instructed not to talk with Parker, except by way of the company's lawyer, Ray Hickson.

When contacted and asked whether this arrangement is ``normal,'' Hickson said: ``I can't discuss a client personnel matter with newspaper reporters.''

Parker himself issued a terse statement: ``While the company is moving to a new stage of its growth, the management team remains committed to executing my original vision,'' he said. ``The company remains in capable hands.''

I've founded several companies and as companies grow, the skills required to be the chief executive change. When I've founded (or helped found) companies in the past, I've usually stepped aside to allow someone with better administrative and sales skills to lead the company after it's up and running. This was the case with Digital Garage and PSINet Japan and to a certain extent Infoseek Japan. I seem to be the most useful getting things going, not running them.

As a VC/investor, I've seen my share of visionary CEOs who can't run the company, but we usually try to keep them involved in some way and stay on good terms so we can invest in their next good company. I don't see how you can continue being a VC in the valley being cruel to serial entrepreneurs.

Pierre Omidyar of eBay is probably one of the best examples of knowing when to bring on a real CEO, but staying involved as the founder. I think he and his investors were smart about this.

Jason Calacanis blogs about this on thesocialsoftwareweblog


i agree, to my experience there is a big difference in the type of person who can successfully start up a company compared to a person who is good at running a company. it is very rare that you find someone who is good at both.

i think for a startup you need to break the rules and to continue you need to follow some rules.

I don't see how you can continue being a VC in the valley being cruel to serial entrepreneurs.

A sign of changing times. VCs no longer call, they are being called, and even inside the already over-inflated Social Software bubble, companies to provide basically the same services are a dime a dozen.

Still, being an arrogant VC will not get you anywhere with entrepreneurs. Word gets around and entrepreneurs share a lot of information about VC. Many start ups do not have the luxury of choosing who they can take investment from, but occassionaly some can be a little more picky.

There is a whole different discussion about the wisdom of pushing someone out like this. A friendly hand over will keep your employees happy and focused on building business. Pushing out a popular founder pretty much insures turnover. Plaxo will probably lose some good employees and if two or three key people go, the game could be over. VC often think they can recruit and replace people easily. Sometimes they can pull it off, but other times, they botch the job and load a fragile start up with the wrong people.

One wonders what Kohei “Techno Maestro” Minami-san’s CEO potential might be :-)

The devices he’s working on, if they perform as advertised, are, um, interesting. Ito-san, given your connections with ECD and the Ovshinskys, this area is also something that might be of interest to you. Minami-san’s company might benefit from some angel-stage investment to productize his ideas before his patents expire.

However, fate dealt the investors and Minato’s business a serious blow when the World Trade Center was attacked in New York. The Saudis retreated, and Minato’s plans fell back to square one.
Well, duh. If his motor/generator system has an over-unity efficiency, with the mind-boggling consequence that it produces more energy than it takes in, I can see why it might not be in the oil-selling Saudi’s best interests to fund the development of such an energy source... :-P

Seriously, though, Minami’s ideas are intriguing. Permanent magnets are bizarre creatures. A lump X of ferromagnetic material, released near a permanent magnet M, will be attracted, accelerate and thus gain kinetic energy. Now, does the total energy of the thermodynamically closed system M+X increase if lump X’s kinetic energy increases ? If yes, is there a way to extract lump X’s kinetic energy from the system ?

If, instead of a magnet, we had an object G generating a potential field — e.g. a gravity potential — the closed system G+X’s total energy would be equal before and after the object X was released and accelerated by the field, because potential energy+kinetic energy is a constant.

It’s unclear whether a magnetic field can be considered to derive at all times from a potential where the Ep+Ek=constant law holds true. One must take into account e.g. the magnetic field lines’ inhomogenous spatial distribution, perturbated by the very presence of the ferromagnetic object over which it acts. Field saturation and hysteresis effects in ferromagnetic materials might have to be considered too.

Now, consider an electromagnet EM attracting a lump X of ferromagnetic material. Modeling EM as a voltage source, a switch and a pure resistance R in series with a zero-resistance ideal coil L, the steady-state electrical energy consumed by EM is R*I where I is the current intensity. When the switch is thrown in, the current intensity will vary from zero to an asymptotically steady value I dictated by the coil’s inductance and the series resistor value. Some of the energy supplied by the voltage source will be stored as magnetic energy in the coil L.

Assume coil L has a core made of a material like ferrite that can be magnetically saturated — i.e. that there is a maximum magnetic flux density through the core that cannot be exceeded.
When object X is released and its distance relative to EM diminishes, it should in principle induce perturbations in EM’s magnetic field, and hence in the magnetic flux through EM’s core. If the core is magnetically saturated, or if one takes into account hysteresis effects, it’s unclear whether the variation in the magnetic energy stored in the coil would exactly equal the kinetic energy gained by lump X. The electromotive force, and resulting variation of current intensity I through EM’s coil might thus not necessarily match the energy expended to accelerate lump X. Hmm.

Oops. Substitute all instances of “Minami-san” with “Minato-san” in my comment above.
All these Japanese names sound so similar ;-)

Woot! No follow­ups thrashing my hoaxy comment about Minato’s “free energy” invention from anybody after a full 24 hours?
Joi, I'm afraid your blog’s readership’s geek quotient leaves a lot to be desired ;-)

Lest anyone take the (April fool?) article seriously, here’s a debunking of the notion that magnets, permanent or otherwise, might be a source of “free energy.”

In the closed system M+X where lump X accelerates, the magnetic energy stored in magnet M decreases while X’s kinetic energy increases. As long as lump X keeps moving, inductance effects will oppose, and thus lower, M’s magnetic field. The system’s magnetic+kinetic energy sum thus remains constant, and there’s no need to bring a conservative potential field, or hysteresis, or magnetic saturation in the discussion. Energy conservation laws are thus NOT violated, and the system will NOT produce any more energy than has initially existed.

The apparent discrepancy in Minato’s observed input vs output energies probably comes from an incorrect measurement of electrical quantities. In Minato’s design, the motor’s stator is apparently fed by well­timed pulses. The input voltage and current profiles are probably thus quite peaky. A high­fidelity signal capture will thus probably show high­frequency components, which will NOT be detected by garden­variety frequency­limited volt­ and ammeters. The latter will thus display RMS voltage and/or current values that are much lower than reality, and lead to an under­estimation of total input energy.

A real test of such a "330% efficiency" [sic] system would be to cycle the generator’s electrical output back to the motor driving it and to an array of resistors. If that self­contained perpetual motion contraption generates heat energy in the resistors and yet continues to run, then we’d really have something worth talking about.

As things stand, Minato might be getting a JPY 100 million loan from some bank just to finance the manufacture of 40,000 motor-driven fans which might cost several thousand yens apiece in manufacturing costs. Provided Minato didn’t misrepresent the fan’s energy consumption numbers to his client — which might lead to some messy lawsuits and payment withholdings, — this just looks like a small company bootstrapping the initial manufacturing run of its product by borrowing an appropriately­sized chunk of working capital from a bank. Nothing to write home about, thus.

Mostly Vowels, you're off topic. Does anyone have a good biography of Sean Parker? I'd like to know about the Psychology of the kind of person that can have started two prominent online businesses as 23 (or is he 23?)

Off-topic ?
“Visionary” comes up with a “business” idea of dubious viability, optimistic investors pour in — and hemorrhage — money, founder is eventually driven out by people with more business acumen trying to salvage some value out of their investment.

Osewa, focusing on age might be appealing, but shouldn’t you rather look for actual success stories involving twenty-something entrepreneurs?


I have most certainly _not_ gone as far as this guy, yet, so I find myself quite impressed. Think of it, he got booted out of Napster and in months found himself in another startup.

Invitation Spam coming from social software services like Plaxo is easy to manage from the technical end: keep a record of how many e-mail invites are sent to each e-mail address and limit the number of reminders you send to that particular address. That is, don't let the number of reminders a person recieves to be directly proportional to the number of friends he has. The people with lots of 'friends'(contacts) are the main assets of a social networking service, so you don't want to annoy them.

At 23 I'd say VCs could invest in your idea but if you didn't have some serious knowledge they won't allow you to run the ship like Sean Parker has been allowed to do. Or what do you think?

1 TrackBacks

Listed below are links to blogs that reference this entry: Sean Parker kicked out of Plaxo.

TrackBack URL for this entry:

Sean Parker kicked out of Plaxo . Read More