So the folks at ad:tech is helping to solve this rather large problem. Innovation Alley is a new section of the ad:tech exhibit floor that is dedicated to interesting new startups in the advertising technology world. There are plenty of conferences that focus exclusively on technology and web startups but they’re attended largely by people within that world. You rarely find customers at these kinds of startup conferences. Industry conferences for different verticals such as advertising, healthcare, transportation, etc., could take ad:tech’s example and devote space to highlight innovative new startups that would normally not have resources to buy exposure to influentials and decision makers from the industries they’re targeting.

The startups I found most compelling at Innovation Alley were ones that addressed the emerging importance of social media in advertising and marketing. I haven’t watched television for a long time. Most of my friends haven’t as well. Not only do we not see mass market television advertising, we don’t trust it anyway. And while we begin many of our purchases online through search engines, we will increasingly get influenced by our social networks of friends, colleagues and relatives to buy things we hadn’t considered before. This is why Google the Goliath is afraid of David Facebook.

Peerset helps advertisers improve their audience targeting. From what I gathered by talking to some of Peerset’s employees, the company combs through social network profiles to construct anonymized data sets of interests and behaviors. The more you reveal about yourself on your profiles and social status updates, the more you will receive relevant advertising. As much as we’d like to believe that we’re individuals with unique tastes and opinions, we’re very much like the rest of our friends. We are more easily put into a group or several groups that share common characteristics than we believe. What I’d like to see is “data profiling” companies like Peerset and probable competitor Rapleaf use their technology to not only help advertisers serve advertising more accurately but to also just produce more interesting content. Sort of advertising by not advertising. Yes, that’s very vague and unhelpful but I think someone will figure out what I mean.

140 Proof delivers advertising exclusively on Twitter. The company helps brands target the right people in the Twitter universe. This is another example of the increasing importance of social networks and the opportunity to customize messages based on personal, yet public, information. 140 Proof claims that great tweets get retweeted. The retweet function, which was invented by users and not Twitter’s management, is one of the most simple, brilliant, and elegant ways to make a message viral. It would be interesting to get real hard data on how often marketing and advertising messages get retweeted versus “regular” tweets.

Brickfish helps brands create campaigns that get consumers to create user-generated content revolving around the brands. Many startups have tried to accomplish this kind of concept. It’s really difficult. As much as we’re becoming more social, we’re also becoming more cynical or skeptical. Consumers are trained to beware of blatant advertising. We might be even more cautious of blatant attempts to get us to help create still more blatant advertising. I’m sure that Brickfish has encountered resistance in some of their campaigns. Perhaps they’ll figure out how to systematically incent customers to sing the praises of brands. If someone can figure this out, I think they have a big hit.

I’m looking forward to the next ad:tech in New York. I hope they will continue to allow startups onto the show floor through the Innovation Alley program. You expect to see the big guns like Microsoft (MSFT) and Google there. There should be room made for pleasant surprises.

Are you judging your personal, professional, and organizational results on a superficial basis? Do you just ask, “Did it work?” When the results are great, people celebrate. When the results don’t meet expectations, people panic or start pointing fingers. I think that’s the typical response. Very much like the New York Yankees under the reign of King George Steinbrenner. It’s the reason why turnover was so horribly high, Brian Cashman and Joe Torre being the exceptions.

Process over results. You should be asking, “Regardless of the results, did we go through the right process?” Design the right process and you can confidently stick to it. The results will still be highly uncertain but you won’t blame yourself for random effects outside your control. You’ll also be able to stay faithful to a good process despite less than stellar results.

These recent events highlight the lucrative nature of infrastructure investments and the persistent and controversial trend of foreign companies and sovereign wealth funds acquiring huge infrastructure assets in the United States. The political environment grows increasingly hostile as national and local politicians, including the presidential candidates, look to explain Americans’ economic struggles with a cornucopia of reasons including free trade agreements like NAFTA, a “corrupt sitting president,” and globalization generally.

This issue of foreign investment in public infrastructure has been on my radar since late 2006. Below is an essay I wrote for an investment newsletter published in January 2007 distributed to high net worth clients.

Public Infrastructure Sales: Samurais, Jihadists, and Masters of the Universe

“The Japanese are coming!” Remember when modern-day Paul Reveres shouted this refrain in the 1980s? Honda (HMC), and Toyota (TM) earnestly began their conquest of the American driver and, resultantly, Detroit’s mammoth metal benders. Would-be samurais from a nation of diminutive conformists threatened our towering sense of American exceptionalism by snatching up national treasures from our private sector like Pebble Beach, Columbia Pictures, Universal Studios, and Rockefeller Center. Although the apocalyptic visions of Japanese dominance and American indentureship have faded, the “buying of America” continues today.

Only now, the purchasers hail from different shores and their acquisition targets are of a more public flavor. In January 2006, a plan to privatize the Indiana Toll Road came to fruition when the State of Indiana entered into an agreement with Cintra (a Spanish construction firm) and Macquarie Bank (an Australian bank). The Spanish-Australian partnership paid the Indiana State Government $3.85 billion for a 75-year lease to operate and maintain the toll road. The same consortium recently entered into a $1.83 billion lease to operate the Chicago Skyway Toll Bridge. As these foreign entities begin to exact payments from beleaguered commuters, resistance to foreign ownership of public infrastructure grows.

Free trade and free markets be damned. Early this year, public sentiment derailed the proposed Dubai Ports World acquisition of U.S. ports facilities in New York, New Jersey, Philadelphia, Baltimore, New Orleans, and Miami. In a cacophonic display of bipartisan zealousness, Republican and Democratic members of Congress questioned the wisdom of selling strategic infrastructure assets to not only a foreign country, but one which two members of the 9/11 hijackers called home. The overall tone could be summed up by the mordant one-sentence letter Representative Sue Myrick (R-NC) sent to President Bush that read, “Dear Mr. President: In regards to selling American ports to the United Arab Emirates, not just NO – but HELL NO!”

Being neither knee-jerk nationalists nor adherents to Ricardian economic orthodoxy, the editors of this publication acknowledge the merits of both the free market argument and the argument for excluding strategic infrastructure from the free market. One of the tenets of free trade asserts that private industry is more efficient at delivering services than government, and experience has confirmed that theory. But, when does that precious efficiency bump up against national sovereignty and security? Pragmatic protectionists should point out that ports and roads are different species in the genus of public infrastructure; that roads are strategic but ports are more strategic.

Do we as a nation make distinctions between domestic private players and foreign entities? How do we respond to foreign companies that are not entirely private, being controlled by foreign governments? In the case of Dubai Ports World, the United Arab Emirates government owns a stake in the port operator. How do our reactions at home affect the ability of our own private companies to venture abroad and invest in and own foreign assets?

Through all this brouhaha, the editors of this publication see an opportunity for the many domestic leveraged buyout firms within our own borders. With over $175 billion raised in 2006 alone, the industry is flush with liquidity. At the risk of sounding cliché, we echo the industry’s mantra that there is “too much capital chasing too few deals.” With all the largest funds finding themselves in highly contested auction environments for companies suitable for buyouts, even the most sanguine investors admit that future returns will lag past performance. Public infrastructure as an asset class represents a potential opportunity to deploy some of that excess liquidity and to diversify LBO or private equity portfolios.Some questions beg consideration. This asset class will no doubt offer lower returns than traditional private equity investments; does the stability of returns compensate for that shortfall? What are the reasonable exit opportunities? What consequences might arise from shifting concepts of private and public property? How can the public be safeguarded from the specter of crony capitalism?

Questions notwithstanding, infrastructure investments with their super-stable revenue and profit streams offer the possibility of smoothing out the volatility of returns in portfolios otherwise dependent on the ever shifting environment for initial public offerings, mergers, and acquisitions. The promise of stable returns is causing some financial masters-of-the-universe to contemplate establishing investment pools to capture this opportunity. Goldman Sachs (GS), the Carlyle Group and other top institutions are all rumored to be pitching this idea to limited investors. We’re quite sure that hedge funds will want to get into this game too.We suspect there might even be an inefficiency here for domestic buyout firms to exploit. Public sentiment against encroachment by foreign firms might allow for lowball bids by domestic buyout firms. This compromise between public and private could placate the citizenry. The Golden Gate Bridge anyone?

New York Governor Eliot Spitzer’s public statement in response to his alleged involvement in a prostitution ring and his patronage:

Good afternoon.

For the past nine years, eight years as attorney general, and one as governor, I have tried to uphold a vision of progressive politics that would rebuild New York and create opportunity for all. We sought to bring real change to New York and that will continue.

Today I want to briefly address a private matter. I have acted in a way that violates my obligations to my family and violates my, or any, sense of right and wrong. I apologize first and most importantly to my family. I apologize to the public, whom I promised better.

I do not believe that politics in the long run is about individuals. It is about ideas, the public good, and doing what is best for the state of New York. But I have disappointed and failed to live up to the standard I expected of myself. I must now dedicate some time to regain the trust of my family.

I will not be taking questions. Thank you very much. I will report back to you in short order. Thank you very much.

I’m sure that many of the dens of Wall Street are filled with gleeful joy. Spitzer spent a lot of time making corrupt corporate executives deservedly miserable. He also brought much unnecessary grief to many innocent, but perhaps incompetent, managers. Such is the double-edged blade of overzealousness.

I do take issue with his statement; politics, art, business, sports, history itself are all about individuals. Ideas, as any entrepreneur knows, are cheap. Only determined individuals can execute and bring ideas, good or bad, to fruition. It is how this world remembers triumphs and defeats. Communism, will forever be linked to Marx, Stalin, and Mao, larger than life individuals all. The Second World War is as much a saga about leaders such as Churchill, Hitler, and Roosevelt as it is about battles between heavily armed countries. Apple (AAPL) vs. Microsoft (MSFT) is a narrative about Jobs vs. Gates. Even in this Web 2.0 era, where user generated content empowers the unknown amateur, we fixate on the brightest personalities, names such as Zuckerberg, Brin, and Page.

Ideas only have consequences when individuals act upon them.

“What would you do if you only had a few months left to live?”
My good friend SA, the structural engineer, shrugs and says, “I don’t know, but I don’t like some of the messages in the movie.”
“I loved the movie! It was poignant and thought-provoking,” counters TJ, the beautiful Googler we’re trying to set up with SA.
I’m clinging to a thin strand of hope that opposites indeed attract, but it’s not looking good for my already dismal matchmaking record.

We are coming out of a last minute Sundance Film Festival screening of The Guitar, a beautifully produced film by Amy Redford. The movie wrestles with the question – What would you change about your life if you faced imminent death? With stunningly intimate imagery and a moving soundtrack, the story follows a blue collar New Yorker named Mel, played by Saffron Burrows, as she learns of her terminal cancer and her subsequent efforts to cope. Her journey is a meandering mélange of moments of great sorrow, joy, loneliness, defiance, euphoria, and freedom.

“What didn’t you like about the movie?” TJ asks incredulously.
“Something wasn’t right. Plus I could’ve sworn those were San Francisco streets we saw in the movie,” replies SA.
“Big cities are all the same in a visceral sort of way,” I remark.

The problem is Mel’s answer to the central question of the movie. She changes her entire life by moving out of her old, dingy apartment and into a spacious and unaffordable loft. She abandons her senses and inhibitions (oftentimes a good thing) and discovers the joys of over-the-limit credit card shopping. She orders a luxurious bed, designer sofas and lamps, gourmet food for delivery, and most importantly, a magnificent Fender guitar. Mel eventually maxes out her credit limit on a dozen cards with no intentions of ever paying back her responsibility as she nears her impending death.

“That scene in her loft when she’s alone and playing her guitar in front of those gigantic concert speakers and crying…that was powerful. There is nothing quite like the sound of a great electric guitar. The total release of all her emotions…wow,” I exclaim.
“Yeah, that was an amazing scene,” says TJ.
“Yeah, I thought that was pretty good,” says SA.
There you go buddy, agreeing with her every once in a while wouldn’t hurt your case. Maybe this weekend might end on a high note after all with my two friends getting together.

Mel finds great happiness in finally surrounding herself with objects of her desire. The guitar, especially, leads her to a trembling catharsis. But is that the best way to go out? Isn’t what she does a little, if not a lot, selfish? Is the best way to exit the stage by taking as much as one can? What happened to giving all of one’s self as the candle burns out? The most heroic stories I know involve brave souls facing certain death with newfound generosity, giving of all their time and money to making other people happy.

“What would you do Allan?” ask TJ and SA as we walk toward the parking lot.
“I’d charge a Ferrari and drive forever.”