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Recent Entries
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I enjoyed tonight's talk by Peter Thiel at NYC Junto, on "How New Technologies Thwart Government and Promote Freedom". Junto is a libertarian-focused discussion group organized by Victor Niederhoffer. I've been following Peter's writing for a while, since we overlap directly in our interests in investing and in online networks. Peter is President of Clarium Capital Management, an investor in both LinkedIn and Facebook, and was co-founder and former CEO of Paypal.
Peter started with two questions:
1) Let's assume libertarian view is correct. Why aren't more people libertarian?
2) What do we do about it? How do we make the world more libertarian?
Answers to question 1
- maybe libertarianism is not in peoples' interest
- lack of education
- [Cf. Bryan Caplan's book, The Myth of The Rational Voter]
Answers to question 2
When Peter was an undergrad, he might say:
- Education
- Go door to door
- Convince people to vote for candidates
But as he got older, he saw this is very hard to do.
(highlight of the evening: Victor Niederhoffer's toddler son wanders around Peter's legs at this point)
An IQ test for libertarians: ask them how optimistic they are. The more pessimistic they are, the smarter they are.
One solution: move control of money from the government to individuals. But you cant do this via plebiscite. If there was a form of money that government couldn’t measure or track, you'd have a powerful alternative. This insight was genesis of Paypal in late 1990s.
In mid 90s, several companies were creating alternative currencies: Cybercash, Digicash, etc. All of the initial attempts were going out of business. Money has a network-like aspect. How do you create a new currency when no one else is using it?
All these efforts had run aground against this rock. So Paypal started by leveraging against existing systems: credit cards, checks. Send money to anyone with an email address. Started with 24 employees at Paypal. Preloaded accounts with $10. Started to spread. We grew at 5-7% compounded daily.
Einstein, "Compound interest is so miraculous it could only be created by G-d".
Initial theory was very idealistic. In reality we ran up against many obstacles, the first of which were customers. Massive amounts of emails/customer service inquiries.
Spring/summer 2000: discovered bad people are out there. Whole wave of fraud, including Russian mobsters, tried to exploit Paypal. Someone threatened Peter's mother unless PayPal unfroze his account. Then that person ended up shot dead.
Found dystopian website in Former Soviet Union: "Carders World". A carder is someone who steals financial information on people. This was a marketplace for personal financial information. They had a manifesto saying that they were going to take down the capitalist system. Paypal information was there.
2001 period: next obstacle was government. Initial Paypal strategy was to ignore government regulations—'we are not a bank'; ' none of these laws apply to us'. If we rolled this out quickly enough, the government couldn't stop us. "If you have a world where everyone is a criminal, you have to change the law."
Visa/Mastercard tried to come up with rules to prohibit Paypal from using their service. Government was even slower. Radical technological change must be fast.
In 2001/02, when company went public, things really hit the wall. The person investigating their S-1 thought that his job was to stop companies from going public. "He was demoted in government, which is a really extraordinary thing to happen."
Businessweek article said that state of Louisiana hadn't quite signed off on this. SEC investigator told Paypal management that state of Louisiana was going to shut this down. So in middle of roadshow, Peter had to track down government regulators in Louisana and convince them that Louisana did not want to get reputation as a particularly backward place. "So within 2 days, we managed to get that stopped. At the time we had 100,000 Louisana users."
"We are now in 100 countries. 3rd largest payment brand after Visa/Mastercard in the world. "
How successful were we? Paypal currency is still denominated in national currencies. If you only have one form of currency, you're beholden to the issuer of that currency. Our initial vision inspired in part by Argentinean economic turmoil. If you can force competition between governments, you'll have stabler currencies.
Early 1980s: high inflation rates all over the world. Since then, it's gone down almost everywhere. Forms and symbols can persist well after the substance is gone, e.g., Queen's face is still on UK currency. Technology has been a very powerful force for decentralizing things.
1960s Time magazine cover: picture of 1 big computer that could run the world. Cf. Hal 2001. Computers as a force for centralization is a classic image. In the 90s, power shifted to individuals.
Famous early example: Soros distributing fax machines throughout Eastern bloc.
If everyone becomes a currency dealer thru Paypal, it changes the world.
So much has changed. For example in 1971: it was illegal to own gold and other currencies in the US. 1971 Treasury Secretary said, "It's our money---we can print as much as we want and it's the rest of the world's problem". You can't imagine Hank Paulson saying something similar today.
Power is shifting ineluctably away. Will technology continue to be a force for decentralization?
Why did 1960s vision of centralized computer not happen?
Peoples' ability to process information is flat, but the amount of information has gone up dramatically. So the only solution is decentralization. This is also why Moscow can't set the price of potatoes in Vladivostock.
You may be able to approximate information processing to a problem solveable in polynomial time---and then you have AI, and the 1960s vision of a centralized computer processing everything.
By 2050, we could have thousands of different countries. We have 10-20 years to push as hard and far as we can in direction of more liberty.
Q: How do you prevent Paypal from being used as electronic hawalla---form of terrorist financing?
A: We have protections in place---abide by Patriot Act.
2002: first year number of printed checks in US went down.
Q: question about Second Life and inflation
Q: question about goldmoney.com
A: The problem with gold is that when you really need it, it's not there. In 1933 the government confiscated all the gold bullion in the US.
Q; How do you promote libertarianism?
A: When I was young I tried to reduce the demand side (demand for regulation), but then I saw it was much too hard. So now I focus on the supply side. If I expand the supply side (e.g., more options for currencies), I reduce the amount of government in the system.
I want to promote change without being obliged to go through an election or plebiscite.
Governments are losing power to inflate because of technology. The risks are now tilted to deflation, not inflation. A deflationary environment is hard to invest in, because you can't just lever up and pay things off in cheaper dollars. Private equity and real estate are bad ideas in a deflationary environment. Donald Trump's argument is that you should be short dollars by going long real estate, is disastrous.
Q: How does Facebook promote libertarianism?
A: Facebook will be the dominant next media company . Since the old media companies are non-libertarian, this in itself is good.
Hedge funds are a way to bet against stupidity of governments.
Q: Could you comment on US visa policies and their impact on competitiveness.
He commented that once a tipping point happens, it's impossible to go back. Once the camel's back is broken, it can't be healed. Right now the marginal tax rate in NY is ~50%. In London it's 0%. So it's compelling for a hedge fund to set up shop in London, not NY.
There's a definite shifting of centers of quality overseas. It's happening faster in finance than in technology, but it is happening. (Audience member mentioned that Microsoft is setting up research centers in Canada and elsewhere specifically because they cant bring the researchers they hire into the US.)
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Author: David Teten |
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Jason Alba at JibberJobber added a JibberJobber profile to the Virtual Handshake social software company wiki. Barbara Safani writes,
A successful job search campaign requires exceptional organizational and follow-up skills. Jibber Jobber provides an easy to use interface that takes the drudgery out of the job search process while improving efficiencies and accelerating search activity.
What I like about Jibber Jobber is that it addresses a clear need among job-searchers: managing their job search and all of the people and companies with whom they interact during the course of their job search. The great majority of people I meet have very primitive personal CRM systems--often as primitive as a shoebox of business cards. So there's a large opportunity to provide people with more sophisticated tools.
Jibber Jobber's challenge is that it is so narrowly focused on the job search, whereas every professional needs a personal CRM tool (e.g., Act, Microsoft Business Contact Manager, etc. They may find that they successfully penetrate the job-seeker market, then at some point rebrand and target the broader professional market.
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Author: David Teten |
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Charlene Li writes that Forrester just released a report on "How Consumers Use Social Networking Sites". "Social networking sites like MySpace and Facebook have seen tremendous
growth over the past two years, attracting a young and engaged
audience. Frequent users of these social networking sites not only
engage in more activities and have a more positive attitude about these
sites, but they are also far more interested in profiles from their
favorite companies. Marketers interested in reaching their audiences on
social networking sites should: 1) dispense with traditional Web
marketing tactics, 2) encourage "friending," and 3) regularly refresh
content." more...
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Author: David Teten |
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I am prone to agree with Robert Frank's argument in " A Career in Hedge Funds and the Price of Overcrowding". "[The market for hedge fund talent] is what economists call a winner-take-all market —
essentially a tournament in which a handful of winners are selected
from a much larger field of initial contestants. Such markets tend to
attract too many contestants for two reasons. The first is an
information bias. An intelligent decision about whether to enter any
tournament requires an accurate estimate of the odds of winning. Yet
people’s assessments of their relative skill levels are notoriously
optimistic. Surveys show, for example, that more than 90 percent of
workers consider themselves more productive than their average
colleague. This overconfidence bias is especially likely to
distort career choice because, in addition to the motivational forces
that support it, the biggest winners in many tournaments are so
conspicuous. For example, N.B.A. stars who earn eight-figure salaries
appear on television several nights a week, whereas the thousands who
failed to make the league attract little notice.... A second reason for persistent overcrowding in
winner-take-all markets is a structural problem called “the tragedy of
the commons.” This problem helps explain, for instance, why we see too
many gold prospectors, an occupation that has much in common with
prospecting for corporate deals. In the initial stages of exploiting a
newly discovered gold field, adding another prospector may
significantly increase the total amount of gold found. Beyond some
point, however, additional prospectors contribute little. The gold
found by a newcomer to a crowded field is largely gold that would have
been found by existing searchers." more...
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Author: David Teten |
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In our latest FastCompany column, we summarized best practices in managing virtual employees at Evalueserve:
...Daigle observed that the virtual structure eliminates many political issues: "Not only do we not have much of the water cooler, idle time type of communication, and resulting issues -- we don't have time for it. I think there is some truth that the four of us [of the EVS management team] have got by without serious conflicts over 6 full years because we're somewhat forced (by geographic non-proximity) to stay out of one another's way, trusting each other to execute. Despite being geographically dispersed, all four senior managers are actively involved in both sales and operations, in touch via email, instant messaging, and phone daily. However, because we are distant we are forced to act independently and to focus on execution."
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Author: David Teten |
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Our new parent company, Evalueserve,
is highly dependent on email for internal and external communications.
They also hire every year hundreds of recent graduates (particularly in India, China,
and Chile)
who are usually not familiar with the protocols of business communication via
email. The guidelines below, crafted by my Evalueserve colleague
Ramakrishnan M., provide guidelines from which many other companies would
likely benefit. All new employees at Evalueserve/Nitron are asked to hold
by these rules.
Corporate Email Guidelines
Address
-- Ensure that the “To” and “CC” boxes are left blank, while
typing the mail content, so that the message is not sent accidentally. Type the
client’s mail id the only after the mail has been written, QCed and accepted.
-- It is best to avoid BCCs in business mails
-- Maintain Protocol for “CCs”, i.e., first mention the Client
name, and then CE name.
Subject
-- Provide a Subject. The subject should be brief and to the
point.
-- Ensure that the subject is changed appropriately when
replying to old mails
-- Mention the project
charge code in the subject of status updates/deliverables/call
summaries etc to the client. This is very important from a tracking
perspective. Going forward, please follow the nomenclature given below:
o EVS Deliverable,
June 9, 2005 - XYZ-US-B-001 - Brief Project Title
o EVS Call
Summary, June 9, 2005 - XYZ-US-B-001 - Brief Project Title
o EVS Status, June
9, 2005 - XYZ-US-B-001 - Brief Project Title
Salutation
-- Mails should start with “Hi XYZ,” (including the comma)
o Choose “Hello”, if the
client is based in Europe
or if the relationship is more formal
o
You could also
write “Hello Mr. Last Name” if you do not know the person too well and wish to
be extra formal
o The best way to decide how
to address the client is to follow the way he/she addresses us
Body
-- Provide a suitable reference or background/context (This is
with reference to your mail dated …)
-- Please categorize all the points into appropriate buckets
-- Use “bold” , “italics”, etc. to highlight important points
or headings/topics . Avoid using CAPITAL LETTERS. This is considered as
angry/rude/arrogant.
-- Ensure that the subject matter is MECE (Mutually exclusive
and collectively exhaustive)
-- Be crisp, and to the point
-- Especially be clear about action points due from the
client’s side, as well as from EVS side
-- Broadly, all project-related mails should
cover .
o The objective of the
project
o
The work done
o Clarifications needed
o
Plan of action
o Red Flags (if any)
-- Follow the EVS template for guidance on how to categorize
sub-sections in the email
-- Use standard EVS bullets
-- Avoid full stops at the end of bullet-points if it is not a
complete sentence
-- Avoid contractions, such as “let’s” ,
"pls" –use full forms “let us” , "please" etc.
-- Be extra careful when copy/pasting from multiple mails
o
Select all the
text, make the font “Arial, 10” with color “automatic” or “black”
o
Ensure all
signatures (from others) have been removed in the final mail
-- Always propose a tentative solution when you need to get the
client’s go-ahead; Let him/her get back with an alternative way, if need be
o
This way you
show that you are thinking on your feet
o
You are not
sitting idle, waiting for the client to hand-hold you
o
This is
applicable to time for a conference call as well – always propose a tentative
time. Please be sure to add conference
bridge details
-- Avoid any form of ambiguity. Indicate concrete time (date, time, with time zone) for all
deliverables
o
If possible,
avoid EoD ("End of Day") India Standard Time; this does not tell the
client much (especially if he hopes to work on it). Instead, write 09:00 PM IST
o
Monday (June
06, 2005) – no “early next week” or “Monday” or anything incomplete
o
06:00 PM CET –
Be clear about timeframes. For assistance, use http://www.timeanddate.com/
o
Even if the
client uses wrong terms (EST instead of EDT, for instance), be sure that you
use the appropriate term
-- Use your discretion on whether to reply to old mails or
start new mails
o
If client’s
chain/previous comments need to be referred, use the old chain
o
If it is a
fresh mail/deliverable, start afresh
o
Please
be very careful that no internal mail exchanges are sent
across unless necessary
Complimentary Closing
-- Mails should end with “Thanks and regards,” or “Best
regards,” (including the comma)
-- Ensure that your signature (with updated extension number) is
included
-- Ensure every aspect of the signature is consistent with the
EVS standard
-- Mention your first name at the end (even though the
signature is right below that)
Last, but not the least
-- Ensure that you run a spell-check before delivery -
please activate automatic spell check option in your Outlook configuration.
-- Ensure that you read the mail twice before
sending. Think critically and revise suitably. Check not only the
grammar and spelling aspects, but also the tone. Ensure that you don't sound
rude.
-- Ensure that you check and confirm that the document attached
is the right one . If it is a spreadsheet deliverable, ensure you have
brought the cursor to the beginning of each page using 'Control+Home'
combination. Also, the document should be saved with the cover
page active, so that it opens with that page when the client receives
it.
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Author: David Teten |
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I hope that some of you can join me at the conference below---I'll be on the panel discussing user-generated content.
Web 2.0 NY - June 14, 2007 | |
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Combined with Local Ad World & Madison Ave. 2.0 |
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- Collaborative & Social Tools applied to Business & Media
- Web 2.0 Business Models with far-reaching influence
- Disruptive new technology and business applications
- How AdSense is fueling the Land Grab on Madison Ave.
- Why NY Digital matters as post-Industrial economy puts Advertising ahead of manufacturing
- How to raise Capital and grow your Web 2.0 enterprise
- Must attend for: Media, Advertisers, Agencies, Entrepreneurs, Digital Marketers, Tech Co's, Investors and Educators.
Esther Dyson to Keynote Web 2.0 NY Summit Industry pioneer, visionary and backer of Flickr and Meetup speaks at Web 2.0 NY Summit.
Shawn Gold, SVP MySpace
Other Speakers and companies like Michael Dubin (Yahoo), Jack Myers (Myers Report), Shelly Palmer (TV Disrupted), Kara Nortman (Interactive Corp.), Shaival Shah (Oddcast), Seth Haberman (Visible World), Doug Perlson (TargetSpot), Jenny Mullen (OgilvyOne), Andrew Weinreich (MeetMoi), Connie Connors (HitTail), Wayne Reuvers (LiveTechnology), Andrew Bloom (Spot Runner), Chris O'Brien (MotionBox), Allan Grafman (AllMedia Ventures), David Teten (Circle of Experts) Gregory Galant (RadioTail), Steve Rosenbaum (Magnify), Bob Rustad (Collarity, Dylan Charles (Crimson), Dusty Wright (Culture Catch), David Marder (Eurekster), David Rose (NY Angels)...........
Come to the Web 2.0 NY Summit to learn how this is changing content, marketing and customer interaction. Learn how to develop your company, sell your products, acquire new customers and raise capital at our afternoon pitching event.
Evening Cocktail Party sponsored by Live Technology
Registration: http://web2ny.com/
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Author: David Teten |
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I hope that some of you will join us for the program below.
CONSULTING OPPORTUNITIES WITH HEDGE FUNDS, PRIVATE EQUITY FUNDS, MUTUAL FUNDS AND OTHERS
Webinar with David Teten, Co-Managing Director, Nitron Circle of Experts
Friday, June 08, 2007, 1:00 - 2:00 PM EST
Sponsored by Execunet, the executive network for the $100K+ executive.

David is Co-Managing Director of the Nitron Circle of Experts ( CircleofExperts.com ), an independent research firm that pays senior industry executives to consult with professional investors, law firms, and a range of corporate clients. Our clients learn from experts like you through one-on-one consultations, customized surveys, and interactive events. Nitron is a subsidiary of Evalueserve, an offshore research & analytics firm.
Joining the Circle of Experts never costs you a dime. Your benefits:
- Interact and learn from the leading institutional investors.
- Work on strategic, thought-provoking projects.
- Monetary compensation. We pay a competitive hourly rate, varying depending on your experience.
- Convenience. Most consultations are over the phone, at times you choose.
- Privacy. Your consultations are entirely confidential. Only discuss topics of your choosing.
- Earn additional compensation to introduce qualified colleagues.
Among our Circle of Experts are alumni of:
Premier companies:
AIG, Cisco, Dow, DuPont, GE, IBM, McKinsey, MetLife, Microsoft, Pfizer, Shell, Sony, Toyota
Leading universities:
California Institute of Technology, Columbia, Cornell, Dartmouth, Duke, Harvard, MIT
Scientific institutions:
National Institutes of Health, National Science Foundation, Harvard Medical School
Update:
Execunet has posted a recording of the presentation, available free at
http://www.execunet.com/execunet_ondemand/FTBREATETE_tetan_coffeebreak/ondemand.html REGISTRATION
(Requires membership in Execunet )
https://members.execunet.com/e_membership_alertlogin.cfm? redirfile=e_network_online_register.cfm& fmtid=7a56&CFID=9087973& CFTOKEN=4193b43320a9da58-C37A4E8C-EA68-1A78-C8A40DD1F900B762
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Author: David Teten |
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I'm happy to report that Evalueserve has acquired Nitron Advisors. I originally met with some of the senior management at EVS because I was recruiting them to consult for some clients. That conversation led to another conversation, and another, which led to an offer, which led to an acquisition. I plan to continue running Nitron Circle of Experts with my partner Scott Lichtman, now with a much larger platform in the emerging markets.
Evalueserve has been a rocket ship of a company, and a perfect fit for our long-term strategy for Nitron. Both our clients and our experts will benefit from this relationship. Clients will get access to the largest knowledge process outsourcing company, with 1,800 people in India, China, and Chile. Experts will see increased consultation volume from a wide range of clients.
We have already launched an Indian expert network, which should be of particular interest to any readers who are investing or doing business in India. We have also launched a Media Source Center, a service to provide a very small number of elite journalists with free access to high quality media sources, for stories related to the emerging markets. If you know any journalists covering the emerging markets, they are welcome to contact us to apply for this service.
More details here: http://www.circleofexperts.com/nitron-evs-merger.aspx .
You can read more about Evalueserve at http://evalueserve.com/ . UPDATE: For Integrity Research's comments on the acquisition, see http://integrityresearch.blogdrive.com/archive/826.html .
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Author: David Teten |
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The folks at Landslide have figured out a great marketing strategy: If you view a demo of their "sales workstyle management" system, they'll give you a free copy of The Virtual Handshake--Opening Doors and Closing Deals Online.
Alex Salkever of Inc. wrote in Turning Sales Into Science that Landslide "gives sales staffers what they need, when they need it, to close a deal." In other words, Landslide provides salespeople more infrastructure, so that they can focus more on selling and less on all of the other activities that distract them from their main job.
Link: Watch a Landslide demo, get a copy of The Virtual Handshake
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Author: David Teten |
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I hope to see you at this upcoming event: Sponsor: InfoWorld Title: Social Media Breakfast: Overhyped or Under-executed? Strategies for Success. Location: Roosevelt Hotel, New York City Time: Tuesday, May 15, 2007, 8:00 a.m.-10:00 a.m. Register for this complimentary event by clicking here:http://www.infoworld.com/3909
Social Media is experiencing phenomenal growth. As a highly effective and efficient way to communicate with Information Technology professionals, IT Peer to Peer Communities are gaining ground quickly. Yet key questions remain on how to best market to this new media. Topics includes:
* New proprietary research on Social Media trends and technologies * Hear from expert panelists on Social Media implementation and ROI opportunities * Testimonials from marketing and advertising executives using Social Communities today Experts participating in panel discussions:
* Julien Blin, Research Analyst and Social Media Expert, IDC * Allen Fear, Director of Online Content & Production, InfoWorld * David Teten, Co-Managing Director, Nitron Circle of Experts; Author, The Virtual Handshake * Mike Walsh, CEO, Leverage Software * Additional speakers TBD By attending the InfoWorld breakfast you will gain expertise in the following topics:
* Tips for developing ads that connect with your target audience * Measurement techniques and how new tools/metrics are being used to determine ROI * Ideas on building IT Community loyalty * Evaluating communications potential and coverage * Marketing vehicles used to best communicate in an IT Peer to Peer Community.
http://www.infoworld.com/3909 If you would like to invite a colleague to attend this event with you, please forward this email and have them register for a complimentary pass.
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Author: David Teten |
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I look forward to speaking at the MIT CIO Symposium on May 17 in Boston.
"This year’s theme explores how social networks in business can revolutionize the processes by which people, partners and customers work together to create value. Social networks and related technology have gained prominence recently as sources of entertainment."
Speakers include:
* Dr. Paul Barth Managing Partner NewVantage Partners LLC * Mr. Gary Beach Publisher CIO magazine * Mr. Sean Belka SVP Fidelity * Mr. Sheldon Borkin VP of Technology Progress Software * Prof. Erik Brynjolfsson Professor MIT Sloan School * Alan Chhabra Principal, Technical Program Management Team, Egenera * Mr. Peter Cohen General Manager Amazon Mechanical Turk * Mr. Rich Corley CEO Akorri * Mr. Frank Enfanto VP of Healthcare Services Blue Cross/Blue Shield * Mr. Glenn Engler EVP Digitas * Mr. Charlie Feld Snr. EVP, Applications Services EDS * Ms. Mary Finlay Deputy CIO Partners Healthcare * Mr. John Gallant Editorial Director and President Network World * Prof. John Henderson Professor, Faculty Director Information Systems Department, Boston University * Ms. Rosalee Hermens VP and CIO Timberland * Ms. Jo Hoppe CIO Pegasystems * Ms. Maryfran Johnson Founding Editor in Chief, CIO Decisions Magazine * Mr. Kumud Kalia CIO Direct Energy * Mr. Stephen Laster CIO Harvard Business School * Prof. Thomas W. Malone McGovern Professor of Management MIT Sloan School * Mr. Thornton May Futurist, Executive Director and Dean IT Leadership Academy * Mr. David McFarlane COO, Nexaweb * Mr. Mark McGinness Vice President, Business Development Expedient * Mr. Paul Nielson SVP Monster * Mr. Steve Papa Co-founder and CEO Endeca * Mr. John Polizzi SVP and CIO BJ's Wholesale Club * Mr. JP Rangaswami CIO, Global Services BT * Mr. Tim Rowe CEO Cambridge Innovation Center * Ms. Joyce Salisbury Manager of Interactive Research Tool Development GM * Mr. Claudio Silvestri CIO Cognos * Mr. Richard Soley Chairman and CEO Object Management Group, Inc. * Prof. Glen Urban Professor MIT Sloan School * Prof. Peter Weill Director, CISR MIT Sloan School * Dr. George Westerman Research Scientist MIT Center for Information Systems Research * Prof. John Williams Prof Information Engineering and Director MIT Auto-ID Lab
Register here
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