Thursday, December 9, 2021

Due Diligence in the Valley of Deception

 The Theranos trial reminded me of my experience at Nortel doing "due diligence" on a silicon valley startup that Nortel wanted to purchase.  Due Diligence is the process of checking out an acquisition, in my case, checking it out technically.

I got a call from my boss saying that the corporation wanted me to do diligence on a startup making small low cost GSM network equipment.  This had to be done quickly, quietly, and I needed to follow the lead of one of our more eccentric (crazy) execs who was in charge of the project.  Quickly meant in a few days, quietly meant no technical testing, do what you are told, etc.  I had never done diligence before but no one cared.

So off we went to the valley and met with the CEO of this company, who was as eccentric (crazy) as our exec.  She described their product and its maturity and it sounded too good to be true.  We then had a bunch of presentations (all positive), toured the lab (everything works well), and wrote up our report - remember they wanted this done quickly.  Our report basically said that we found nothing negative, but we did not do anything in depth, it sounded too good to be true and the company should be cautious.  We got profuse thanks for our report.

Then I found out that one of my old colleagues had worked for this startup for a year and than had returned to Nortel so I decided to phone him.  He told me that this startup had failed due diligence previously when they were trying to sell themselves to a German company, the CEO was a nutjob, staff turnover was very high, and anything they said about their product was probably a lie.  Basically, they knew how to deceive us since they had failed diligence previously.

So I called my boss in a panic and told him to stop the acquisition, which was not completed yet!  He then shocked me by saying that Nortel didn't really care if the startup was a shambles, they just wanted the positive publicity from acquiring a new innovative company!

This contributed to my loss of faith in Nortel and big corporations in general.

Friday, November 5, 2021

Disappointment in the USA

 It is November and we have witnessed another set of US elections.  I continue to be disappointed in the USA, just as I was when Biden defeated Trump with a slim majority in the house and senate.

The Republican party has grown more corrosive since the 2020 election - propagating lies that the election was fixed, that the riot at the Capitol was not a problem, that COVID precautions are an issue of freedom for the folks who want to infect others, women do not control their bodies, climate change is a myth, and everyone must kiss Trump's ring and declare their undying loyalty to one horrible narcissistic man.

Yet the public votes for a Republican governor in swing state Virginia and almost elects one in New Jersey.  Obviously, the faults of the Republican party are not important to these folks and I think it means that the USA is heading for a breakup.  Eventually, the country will break into a few chunks with free trade and a common defense policy:

  1. Northeast: progressive, urban, secular
  2. South: conservative, rural and industrial, christian
  3. Midwest: conservative, christian, rural
  4. West: progressive, urban, secular
  5. Texas: they will probably be independent and separate completely but have close ties with the South and Midwest
I am sure that Putin, Xi, and the billionaires like Musk, Bezos, and Zuckerberg will be delighted as they will have more power and the Ununited States of America will be a lot weaker.

Friday, September 10, 2021

Bob Leroux

 My friend Bob Leroux recently passed away.

I knew Bob for over 50 years and remember him as a person who would help anyone with anything. Always on the move and always happy to assist. We formed a group in High School with Bill Evans and did all sorts of fun and crazy things together - model boats, model planes, board games, going to his cottage, bicycling. I remember the time Bill and Bob actually cycled from Montreal to the cottage (about 100 miles) in one day to prove it could be done. Over the years, as we moved around, we kept in touch and got together, I was best man at his wedding. I remember once being stranded in Toronto due to the airports being closed and spending the night at Bob's little apartment. I napped when he cooked dinner and woke up to the apartment being full of smoke as Bob was barbecuing vigorously on the balcony, I thought the place was on fire. As we got older, Bob was always the same, a happy bundle of energy helping folks. People say he had a strong temper like his father, but I never experienced it personally, although I saw it when Bob and his Dad would be knee deep in mud under the cottage arguing over what was wrong with the jet pump (which seemed to fail every year). Was it the check valve, the jet valve, the foot valve, or the pump, who knows? I also remember when Bob met Diane and was smitten by her. We once drove to the cottage with Diane in the passenger seat and Bob driving with me telling Bob every 5 minutes "look at the road, not Diane!". I am still wondering if they were the ones who planted flamingos on our front lawn for my birthday. Bob was also an inventor, I did not know until recently that he had patents from working at Nortel, Dragonwave, and Huawei. Anyway, we kept in touch and visited as we moved around. Finding out that Bob had PKD was terrible news, and its progression was tragic, but I want to remember Bob for who he was, a great friend and a great person.

Thursday, March 18, 2021

Why Canadians Think the USA is Terrific

We know a lot of Canadians who winter in the USA and/or visit a lot.  They love America - the weather, shopping, entertainment, restaurants, roads, etc etc.  "It's a great place, why is Canada so far behind?" they lament.  Having lived in the USA for 20 years recently and in Canada for about 40 years, I was a little puzzled by this absolute affection.

Well, I figured it out.  When you visit from Canada or spend 4 months in Florida during the winter, what do you do?  You shop, go to the beach, entertain yourself, eat out, drive around on the nice big roads...  These are all things that America does better than Canada.  What don't you do?  You don't interact with the government, you don't use the medical system, you don't go to blighted areas, you don't deal with natural disasters, you don't deal with insurance companies, you don't buy medicine, you don't deal with the justice system, etc.

These are the Achilles heels (both feet) of America:

  1. Governments at all levels are starved of cash and cannot provide adequate services.  Try lining up at the Social Service bureau, try getting a license at the DMV, try to get help on your taxes from the IRS.  Trust me, it is almost always a nightmare, and you feel sorry for the poor civil servants, who look like all they can afford for clothes is the bargain section at Walmart.
  2. Some areas of town are so blighted that you never go there at night and you keep your car doors locked if you go during the day.  Your American neighbors will advise you to get a gun for personal protection, in spite of the fact that these guns are almost exclusively used for suicides and family violence.
  3. The rules for health insurance and Medicare are almost undecipherable.  Did you get COBRA when you were laid off?  Did you turn 65 and stay on COBRA?  If yes, you will pay a penalty for Medicare for the rest of your life because you saved the government money.  And good luck if you get a bill from the hospital, it will be pages long, and show that you owe a lot even if you have insurance, and you will spend hours on the phone trying to whittle it down to something like your insurance deductible.
  4. Many areas of the USA like Texas routinely experience major natural disasters like tornados, hurricanes, and flash floods.  Yet the building codes do not mandate much in the way of protection.  If you get hit, your home will be featured on the 6 oclock news as they show the pieces floating down the street.  Your insurance company will then tell you that you are not covered for floods so tough luck.
  5. If you get an exotic disease or condition, your drugs may bankrupt you, in spite of whatever government or private drug insurance you bought.  In the USA, there are typically over 30 drug plans for the elderly on Medicare and you get to choose one a year and it may not cover your particular condition.  Better luck next year!
  6. Don't get involved in the justice system!  The conviction rate is over 99%.  So if you drive drunk, get into a fight, decide to make extra money selling drugs to friends, get into a family fight, you will go to jail for years and years if you get caught.  You will also get convicted even if you are innocent.  The prosecutor will offer you a deal: "plead guilty to this charge and you will get 2 years or go to court and the maximum sentence is 15 years and we will demand this punishment."  Unless you have the best lawyers, lots of money, and lots of luck, you will plead guilty even if you are innocent.
So yes, America is better than Canada in many ways, but it has a dark side that you never experience as a visitor.