Posts Tagged ‘Randall Smith’

Holy Cow: Wall Street Journal Reviews Creative Capital

May 21, 2008

Well, just as I had given up hope on landing a review in the Wall Street Journal, lo and behold, in the May 21 issue of the paper Creative Capital got some major ink with a 915-word review. On p. A17 in the Opinion section, Randall Smith reviewed Creative Capital in a piece titled “Money to Make Things New.”

All I can say is: booyeah!!!!!!!!

“In Creative Capital, Spencer E. Ante traces the origins of the investment world that gave us semiconductors, videogames, and personal computers to Georges Doriot, (1899-1987), a French-born Harvard Business School professor, and to the Boston-based company he took public in 1946, American Research & Development (ARD). “I want money to do things,” Doriot liked to say, “that have never been done before.”

Smith described the book as “richly researched with the cooperation of Doriot’s surviving colleagues” and that it is “studded with inside details.”

At the end of the review, Smith takes me to task for not discussing the dot com bust, “when individual investors lost billions investing in stocks that had been brought public by the VC communty. One of the stocks that tanked was a throwback to ARD called CMGI, Inc.”

I never thought that it would make any sense to cover the dot com bust in this book, which basically ends in 1980s with the death of Doriot and the rise of Silicon Valley. Plus, if you understand Doriot, you know that he would be very critical of the dot com boom.

Back in the 1960s during America’s first love affair with high-flying technology stocks, Doriot railed against short-term oriented investors–he called them speculators actually–for inflating the prices of stocks beyond any rational expectation. He joked that investors had traded price-to-earnings ratios for price-to-hope ratios. His philosophy was to build companies for the long haul, not flip them for a quick profit–the antithesis of the dot com boom mentality. So even though I don’t directly address the dot com bust, I think my analysis of that period is embedded in the book.

Still, when the paperback version of the book comes out, maybe I will add a postscript analyzing the dot com bust from the perspective of Doriot.