Why I left Goldman Sachs

Interesting look at the culture of Gokdman Sachs, by an insider.

Why Reading Isn’t Dead

The news that Borders Group Inc. has filed for Chapter 11 protection and also plans to close 30 percent of its stores doesn’t come as much of a surprise. Increasingly, consumers and publishers are focusing on e-books, and many readers prefer to order books online through retailers like Amazon.com. I love small bookstores. I have a particular fondness for the Lift Bridge Book Shop in Brockport, New York, my hometown. The store may have more books than there are residents in the community.

I don’t think the Borders bankruptcy is an indication that reading is dying–it’s really a sign that reading is changing. The recording industry faced a similar shift. People hadn’t fallen out of love with music — they just wanted it in other forms.

Excellent point.

I’ve found that my 8-year-old son and his friends may actually be more excited about reading than kids of previous generations. They talk excitedly about Harry Potter, A Series of Unfortunate Events and other book franchises. My son’s 16-year-old babysitter borrowed some of my copies of the Hunger Games books. And on more than a few nights, I’ve had to go into my son’s room and turn off his iPod after he fell asleep listening to the Narnia books or the Secret series.

Flash of genius

Interesting. Nicely done. Took a lot of guts, and money, to challenge Ford Motor Company for breaking his patent.

Googled

Auletta, Ken. (2009). Googled: the end of the world as we know it. New York : Penguin Press.







In "Googled," New Yorker writer Ken Auletta tells the familiar story of the company's rapid transformation from Silicon Valley start-up to global corporation. As expected, we hear about the young Rollerblading employees at Google's Mountain View, Calif., headquarters, with its massage rooms, pool tables and free meals. But thanks to the unusual degree of access that the company granted the author—and thanks to his sharp eye—"Googled" also presents interesting new details. The book describes, for instance, Google's close relationship with former Vice President Al Gore—during a meeting with him, back in his hirsute phase after leaving office, Google executives showed their solidarity by donning fake beards.

Many companies and people are worried abouit the behemoth that is this company.


In contrast to all this corporate anxiety, consumers so far have been upbeat about the extraordinary power that Google wields. As Mr. Brin explains, Google's importance in people's lives comes from "determining what information they get to look at." Lawrence Lessig, who was an expert in the Microsoft antitrust case (and is now a professor at Harvard Law School), tells Mr. Auletta that Google will soon be more powerful than Microsoft ever was, since primacy in search gives the company unprecedented control over commerce and content.

Determining is a powerful word.

Google's favor turned Wikipedia into the world's leading reference source, but a few algorithm tweaks would easily send that torrent of traffic elsewhere. Mr. Lessig says that, for the moment, we take comfort from the fact that Google has been led by "good guys." But then he asks: "Why do we expect them to be good guys from now until the end of time?"

A tweak in the algorithm made Wikipedia be the top result in many searches.

Mr. Auletta notes that many successful companies have appeared "impregnable"—until they didn't. IBM once had a 70% share of the massive mainframe computer market. Then came antitrust action and the personal computer. A company expanding into as many arenas as Google is will almost certainly "wake up the bears," as Verizon Chairman and CEO Ivan Seidenberg puts it.

Problems for Google might lie beyond the horizon, but the immediate future promises more success: Google is well-positioned for the transition to "cloud computing," where software and data are stored online rather than on personal computers. Mr. Schmidt says that cloud computing will be "the defining technological shift of our generation." Accordingly, Google's greatest value creation probably still lies ahead.

Hospitality Department

We Were Merchants. (2009). Hans J. Sternberg, with James E. Shelledy. Louisiana State University, 141 pages, $29.95






Hans J. Sternberg - A Nazi sign warns against shopping at Jewish-owned stores in Aurich, Germany. The truck is parked in front of a shop owned by relatives of the author of 'We Were Merchants.'



A not unknown tale of Jews driven out of Germany by Nazis; this family left in 1936, and 1938. Winding up in Louisiana, they became merchants, and built a successful and popular store.

Hans J. Sternberg - Trying on a prom dress in the late 1940s at Goudchaux's department store in Baton Rouge, La.


Some details are unique.

Mr. Sternberg says that the family found Baton Rouge an "accepting community" from the beginning—the local country club had been admitting Jews since well before the Sternbergs arrived. He didn't experience anti-Semitism as much as he witnessed bigotry against blacks. The racism was especially overt during the civil-rights era. One day at Goudchaux's, Mr. Sternberg relates, a white woman shopper was holding a crystal bowl when a black sales clerk asked if she needed help. The woman said "yes" and asked her to fetch someone. When the black clerk said she was a salesperson, "the woman looked at her, held out the piece of expensive crystal in front of her, and slowly parted her hands. The bowl fell to the floor, smashing to pieces, and she strutted out of the building."

Goudchaux's was unusual for the Deep South in that the store employed black sales clerks and disdained the common policy of barring blacks from trying on clothes in stores. But Mr. Sternberg does not portray the store owner as a saint: "My father did bow to Louisiana law when it came to segregated bathrooms and drinking fountains."

Strange combination of social facts: lack of anti-Semitism, allowing blacks to try on clothing but not drink from a water fountain.

The store was also anomalous in the way it approached the retail business. Erich Sternberg, and later his sons, seemed to have a genius for promotion—hiding a $500 diamond ring in a box of Cracker Jack has a way of bringing in shoppers—and for nurturing lifelong customers. For years, a child could walk into Goudchaux's with a straight-A report card and get a nickel for an icy bottle of Coke from the store vending machine. Within a year of buying the business, Erich had instituted home delivery, an unusual practice at the time. And rather than wait on sellers to offer a limited range of fashions— and force customers to make do with whatever was available—the Sternbergs undertook their own buying trips to Japan, London, Paris and Milan. In my family, receiving a Christmas gift purchased at Goudchaux's meant somebody really cared.

Other retailing innovations followed. Goudchaux's, Mr. Sternberg says, was one of the first big department stores to provide interest-free charge accounts. By the 1970s, the store's best customers were offered "gold cards," interest-free charge plates that cost $30 annually but included travel insurance and discounts on products and services. Soon the cards were bringing in more than $1 million a year; later, American Express bought exclusive rights to the use of the name "gold card."

That was quite an innivation. These days gold cards are no longer the top notch in credit; Amex has black and plum, Chase now has sapphire.

At its height, as the expansion continued, the company ran 24 stores in Louisiana and Florida. From a clothing shop with $270,000 in sales when Erich Sternberg bought Goudchaux's, the family business was ringing up $480 million in sales by 1990.

Then Josef Sternberg died from a heart attack in 1990. Two years later, Hans decided to let go—his children and grandchildren showed no interest in carrying on the family's mercantile tradition. He sold Goudchaux's/Maison Blanche for $277 million, more than 2,500 times what his father had paid. Many Louisianans felt like an old family friend had passed away. I know I did.

Hardball

Looking for Chris Mathews's book, Hardball, I came across a film by the same title. The book I read in a few days, and found interesting. Matthews is fascinating, even if his penchant for interrupting guests in his teevee show, Hardball with Chris Matthews, is maddening. The film was okay.







Keanu Reeves plays a compulsive gambler who smokes (didn't inhale once during the film, though he did hold the smoke in his mouth) and drinks to excess. His life is a mess, a series of spasms aimed at making money, but which invariably put him on the edge of having lost too much. A major problem is that he owes money to people who take great exception to his owing them large sums, and who will go to any length to collect. Bad people. People who use bats and fists to enforce their rules.

Conor O'Neill owes $12,000 and sees no recourse – except to go to his yuppie friend, Jimmy Fleming, and ask for a loan. In short, Jimmy gives him a job coaching a bunch of housing-project smart-ass black kids, at $500 a week. The movie drags in spots, but there is continuity to the story. The pretty woman teacher is introduced, played by Diane Lane; the character is pointless and two-dimensional, and Lane delivers her usual performance: wooden, uninspired, relying on being female and a smile to pass the time.

In the end the story is fun, even inspiring, yet predictable. It does work; being predictable does not have to hamper a story. But what is wrong with the film is its reliance on stereotypes: the white guy figures out a way to make the dreams and hopes of the black kids work, he gets the girl, and everyone is grateful.

The white tige. Aravind Adiga. New York : Free Press, 2008.

26 holds on 39 copies on 7 January 2009. 8 holds on first copy returned of 69 copies on 21 March 2010. In between it was very popular, with high numbers of holds.

Cubicle Conversation

This is funny.

To succeed in business, it's not enough to have the sleekest laptop, the latest iPhone and the brightest ideas. You also need the right vocabulary. But don't worry.

If you want to be the boss or "fancy yourself the savviest kid on Wall Street," what you need instead, says Gregory Bergman, associate editor of Equities Magazine, is a vocabulary replete with "BizzWords." That play on buzzwords satirizes the mania for using internal capitalization in corporate and trade names -- SwingLine, ChevronTexaco, HarperCollins -- a practice that is prosaically called "BiCapitalization." (I like to call it "upsizing.")

ExxonMobil, InBev; the list goes on and on.

BizzWords constitute the "emerging vocabulary" of business English, according to Mr. Bergman, and in his book "BizzWords" he offers us a collection of "some of the newest, hippest, and most important . . . terms used in corporate America today." His dictionary "is all you need to sound like a business big shot," he boasts with marketing tongue in cheek. "Now if you could only figure out how to use Excel."

Consider these: chainsaw consultant, "an outside consultant brought in to fire employees"; brightsizing, "downsizing by laying off the brightest workers"; layoff lust, "the desire to be fired from one's job"; and to Nasdaq, meaning "to sharply decline in value or quantity."

Brightsizing is funny; I had layoff lust my last year at MetLife.

Apparently because the worlds of business and the Internet are now so intertwined, "BizzWords" culls several terms from cyberslang, including clickstream ("the virtual path a person takes while surfing the Web"), Zen mail ("an e-mail message without text or attachments") and Dorito syndrome (dissatisfaction felt after wasting time surfing the Net and accomplishing nothing).

I get Dorito syndrome; Zen mail is brilliant.