Roger McNamee is known as one of the smartest investors in Silicon Valley, so we were quick to read the proofs of his new book, “New Normal.” (It will hit bookstores later this fall).
The book is a quick read, providing a sweep of key forces McNamee believes shape today’s economy. Though scattered in parts, and somewhat repetitive, the book offers good insight for anyone who is thinking about technology and how it affects their careers in today’s fast moving environment. Sprinkled amid his essay-like observations on tech, and advice on career development, are rules on how to invest in the stock market, making for a ramble that truly feels as though it was written — as McNamee at one point says it was — on a laptop between bus stops as he tours the nation with his band, the “Flying Other Brothers.”
McNamee has been there. He founded Integral Capital Partners in 1991 to invest in both public and private companies, and liquidated the fund with perfect timing — at the top of the stock market in 2000. As early as 1997, McNamee tells us, he feared hype in the markets had gotten out of control, and began piecing together a new fund, Silver Lake Partners, to take advantage of the coming slowdown. That fund has done exceedingly well, buying undervalued assets such as disk-drive maker Seagate at a low price and selling at a high. And most recently, he leveraged his connections in the music world to to create Elevation Partners, where he teams with, among others, musician Bono — to invest in media and entertainment companies.
Here are the key insights McNamee provides in the “New Normal,” or the post-Bubble era we live in:
1) Individuals have more power than ever. You have increasing control of your life, and just have to take advantage of it. Advances in technology mean that companies are outsourcing as many functions as possible, making remaining employees extremely productive — and essentially groomed to be entrepreneurs. People let go by companies, or forced to fend for themselves, can use technology to offer all kinds of niche products and services to satisfy a booming global demand. That demand stems from the benefits of globalization, where billions of new middle-class consumers are being created in places like India, China and so on.
2) It follows, therefore, that globalization has expanded the economic pie, and therefore increased stability — not decreased it. He argues that the early results of NAFTA have been positive — generating economic expansion in Mexio for example.
3) Technology has become central to our everyday lives. It makes sense to be an early adopter, not only to get early insight into how it can help your business, but also to be a better investor. Technology also helps entrepreneurs build companies faster than ever.
4) Technology helps the new mobile, flexible worker stay in touch and maintain control with those key people — family and close friends — who have become more important in light of the flux in all other aspects of one’s life. Family life can be a great steadying force, and should be a high priority — precisely because everything else in the modern economy is so uncertain.
5) Think long-term. Longer term planning of your career and business plans generally produces much better results.
We also learn that McNamee had open-heart surgery in 2001, and his first day back to work was Sept. 11. Also, McNamee is such a fan of using technology that, at his latest firm Elevation, he’s “outsourced just about everything possible in the investment business.” McNamee also can’t resist a swipe at VCs investing hundreds of millions into biotechnology firms before they reach profitability. “I’m still trying to figure that one out,” he says.