I Love You

Each and every one of you. Some of you are annoying. Some of you are despicable. Some of you are rude, arrogant, narcissistic, or egotistic. Some of you hang participles and some of you serially misuse the word "ironic." Some of you are careerists, and you are the worst of all. Human progress is what truly matters to me, and when you impede it to suit your personal goals you stretch the definition of shameless. And let's face it: most of you are blatant hypocrites.

But I love all of you. Inside you there is the fire of Life, the unchecked ability to imagine, and the power to achieve things that no other species in the Universe could achieve. I may hate your opinions, but I love you for having them. I may hate your immoral career, but I love you for working. I may hate your taste in television shows, but I love you for having tastes.
We live in a world with a million options, and I love you because you create the patchwork quilt of humanity where 7 billion people can exist and not one of us is identical to another.


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This Absurd Flap About Horse Meat

As I sat there, eating a McChicken Sandwich (containing whitish-pink paste that vaguely resembles chicken), I had to wonder why everyone is freaking out over horse meat in the other meat. Is the righteous indignation over the fact that poor widdle helpless horsies are getting ground up into burgers, or is it that we're eating something that is "one thing" but its actually "partially another thing?"

Because let's face it folks, if there was one thing we could say about the First World Diet, it's that deception is the key to success. Nacho Cheese Doritos aren't actually slathered in nacho cheese. The "cheeseburger" at McDonald's contains a cheese-like square of oil on top of a soy-burger hybrid. Subway's menu, though featuring roast beef, ham, and turkey, quietly admits "all meat products are turkey-based".

Let's be honest with ourselves: our food isn't what they advertise it as. Only the blissfully naive really think "burger" is all burger. Only a fool thinks "organic" is really organic.


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That 3D Pen on Kickstarter

So a "pen" that writes in 3D is on Kickstarter right now, and everyone is freaking out because it raised 1,850% of its funding goal in about 24 hours. You can see it here.

As someone with an extensive background in 3D printers, let me just say that the Reddit commenters put it perfectly:
"all the gross, weak, wispy aspects of 3D printing with none of the automation!"
"Spend hours making 'close enough' art that can be completely destroyed by the slightest breeze!"
"so, it's a $75 hot glue gun?"

The fact that "backers" are falling all over themselves to buy this is what really amazes me.


*In the time it took me to write that, they've raised another $10,000. Ridiculous. People are ridiculous.
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Facebook vs Medical Device Companies

As the head engineer at a medical device company, I groaned with chagrin when the government put a 2.3% tax on all medical device sales "to help pay for the PPACA." In addition to what I outlined there, here's the sad bottom line: we'll just increase our price to offset the tax. Don't blame us. We have to make ends meet. We don't have a free 2.3% margin (on gross revenue, not net profit...don't get me started) to give away.

Meanwhile, Facebook appears to be on the other end of the Federal tax table, as they should get a $429 million dollar refund from the government for 2012. I'm not joking. They reported $1.1 billion in pre-tax profits. Which means their effective tax rate for 2012 is -40%. My company gets to pay an extra 2.3% tax, and Facebook pays -40%. What is really baffling about this is that in order for the government to recoup the $429 million it is handing out to Facebook, it would need to tax medical devices companies on revenue of the order of $18.65 billion dollars. Facebook makes $1.1 billion and gets a $429 million rebate check. Medical device companies will have to make $18.65 billion dollars to balance Facebook's little bonus.

Here's the thing: I don't begrudge Facebook for playing fast and loose with their taxes. Everyone would do the exact same thing...in fact we all do. The annual game to get the biggest tax refund possible is as much a part of American culture as baseball. Companies move assets to the Cayman Islands, farmers buy a bunch of new tractors, people dump money into their HSA...everyone has their devices for hedging the smallest possible tax burden to Uncle Sam.
What fills me with rage is that Facebook and its ilk do not produce stable, lasting jobs, nor do they produce strong, lasting economic gains. And the benefit of their 'product' to society is debatable. Whereas small medical device companies are job creators, are producing an obvious good for society, and are working in a high-risk, low reward field that takes intestinal fortitude, cunning, and the ability to successfully complete a very-long-term plan.
If everything, and I mean everything, were to go flawlessly for the company where I work, by 2018 we might have about 20 new medical devices on the market. My engineers would have slogged, day after day for five years, against the impediments of short-sighted investors, an anti-science state government, the FDA, and the extremely adept competition rushing alongside us. And at the end of the day the tax system is actually rigged against us and makes it harder for us to save lives. But Facebook gets a huge tax rebate.

Imagine, for a moment, you are me (lucky you). You're trying to convince a software engineer of appreciable talent to join the company. She also has interviews with Google, Facebook, and some app developer. If she joins our company, she can be a part of producing novel, life-altering medical devices. In five years a few of her projects will be in the market. Or she can go to the app-developer company and make apps. In 3 months, she'll have 2 or more apps. She'll produce an app a month for a couple years, and probably make a decent profit on one or two of them. It is extremely hard for medical device companies to attract talent when you are competing against tax-sheltering social fluffware companies that can produce instant profits.

Imagine, once again, that you are me. You're trying to convince an investor to put in $2 million towards a medical device, in exchange for 25% equity. You tell the investor that they won't get a dime back for 3 years at best, and more likely it'll 5. Then the next guy comes in and pitches to the investor a new cloud-based app that allows facebook-integrated file swapping. Basically its your Facebook Friends List + Dropbox*. For $150,000 the investor will get 25% equity and the ROI will start in 3 months and they'll probably make back 5X their initial buy-in in the first year. How can my medical device company possibly recruit investment when these flash in the pan apps are so profitable?

Now, it is good and right that I acknowledge that this is much more meta than just Facebook. The American Innovation System has become intrinsically skewed towards short-term gains and quick thrills. On the one hand, I understand. Only a fool would forego quick profit for a higher risk long-term profit. But on the other hand, consider this:
In 2010, Instagram, a popular app that applied filters to photos taken on smartphones and then allowed the users to upload them to Facebook, Myspace, Google+ etc, raised $500,000 in seed funding. In 2011 they secured $7 million in Series A venture capital investment. In 2012, they secured $50 million in investment. Later in 2012, they sold to Facebook for $1 billion dollars in cash and stock options. At the largest, Instagram had 13 employees. 
What did Instagram do? What was their product? Their product was a FREE app that applied a  hazy filter that made otherwise clear photos look awful. And VC money rained in. It poured in. Do you know how hard I would have to work to get $57 million in Series A venture capital? The answer is I would have to work infinitely hard; I will never be able to raise that kind of money for cutting edge medical devices that can positively change lives. Why would they? They can make way more money, way faster, on some stupid app. Greed and the desire for quick returns has effectively strangled innovation.

Social networking, (most) apps, its all nonsense. There's no long term value. Few, if any, jobs are created. All we're doing is robbing stable industry of talented engineers and programmers.

Let's give a massive tax refund to Facebook, raise taxes on medical devices, and cut Medicare. America has gone insane.



*This is a good idea, why isn't someone doing this?
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Tesla Model S - NYT, Musk, and CNN

Many of us are now familiar with the NYT story claiming the Tesla S - and its Supercharger network - is not the gas-free revolution in cross-country travel that Tesla Motors had claimed it was. Let me explain. No, that would take too long. Let me sum up: Tesla built a car called the Tesla S, an all-electric car with a ~270 mile range. They have been building "Supercharger Stations" along the east and west coast so that you can recharge your Tesla S mid trip if you want to go a long ways. The NYT tested this and the reviewer, a guy named Broder, claimed in his review that at one point he had to call in a flatbed truck to get his Tesla because the battery had died.
Elon Musk, supergenius, responded exactly like an engineer would: here's the data. Data cannot lie. Turns out the Tesla S has a revolutionary 'black box' that records everything the car does, including GPS, speed, battery power, time spent recharging.The data, indeed, seems to indicate that Broder drove erratically, did not obey speed limits, and potentially flat-out lied in his article about what speed he drove the Tesla S.

Just this morning CNN released their own driving test up the eastern seaboard. Lo and behold, they drove the speed limit, used the cruise control...and had plenty of battery power left at the end of their trip.

This is a classic engineers vs. druids moment. And there's a good lesson here for you young pup engineers: collect data. Lean on your data. Worship your data. Believe in the intelligence of humans, and that humans will believe your data over a druid's prose. Present your data in an easy to read format. And you'll eventually win.


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The Pope

I heard the REAL reason the Pope is resigning is because he was ALSO duped into thinking his girlfriend was Lennay Kekua.


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About That Medical Device Excise Tax

We have this term that we use in our company and I am sure a lot of other companies use as well: organic growth. I was hired via organic growth: our existing product line had borne enough profit to fund a full-time engineer to oversee the development of the products still in the pipeline. Essentially, rather than pocketing the profits, the company owners pour it into hiring and R&D.

So, yes, Alec MacGillis, the medical device tax is a shitty idea. I appreciate that you found a couple medical device company owners to quote that happened to support your opinion (claiming an opinion has a plurality based on anecdotes, the oldest form of subpar editorial journalism there is). Yes, Alec MacGillis, the medical device tax will cost this country jobs. And yes, it will slow innovation. I am in a position to know. You, sir, are not.

Let's say I launch a product to market that is a new...um...a new instant x-ray machine. It works in the operating room so that surgeons can get a quick peek inside the body before they close it up to make sure there aren't any foreign objects (like bandages, tweezers, etc...this occasionally happens) in the body cavity. I sell it to them based on the idea that the cost of the device will be orders of magnitude cheaper than a single malpractice lawsuit. I manage to sell one per hospital (it's very portable and can be moved from O.R. to O.R. so they only need one) at a price of $35,000. Of that, 30% is profit. Just for the sake of simplicity, let's say I sell 500 of them a year.
Gee whiz! My company just made $5.25 MILLION in pure profit! I am the owner of an organically-grown company though, so I decide to pour $5 million of that into hiring (50%) and R&D costs (50%) to work on expanding and growth. This gives me $2.5 million to spend hiring kick-ass engineers. Each engineer costs about 125,000 a year for salary and benefits. That means I can hire 20 engineers!

But wait, now we have a medical device tax. And by the way they're taxing gross, not net. So long story short I end up with $5.1 million in profit instead of $5.5 million. After holding back the $250k like above, and split in half for R&D and hiring, I now only have enough money to hire 19 engineers. And my R&D budget, obviously, won't go as far either.
So yes, the medical device tax will cost the biotech industry jobs and will slow innovation.

But then there's a second problem. People like Alec MacGillis seem to think that the logic of "adding 30 million people to the healthcare roll will increase sales and offset any medical device tax losses" is completely obvious and irrefutable. But consider the example above again: I can only sell one x-ray scanner per hospital regardless of patient load. The hospital could do 20% more surgeries a year due to more patients having health care coverage, but because my device is awesome and portable and easy to use, the hospital doesn't need a second unit to cover the extra 20% of people coming through their doors...the medical device tax is applied across the board but the offsetting sales aren't.

Certain groups might say it is a small price to pay. They might say that hiring one less engineer is a tiny sacrifice if the medical device tax helps the PPACA bring 30 million people into the wonderful world of healthcare. But it isn't just one engineer. My company is tiny. I'm not Medtronic. They're going to be in the drink for somewhere around 365 million dollars. That's a lot of engineers. My gut is that medical device companies will slow hiring by at least 2.3%. But it'll probably be quite a bit higher than that.


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The Years Are Rolling By Me

It occurred to me a couple days ago that I am now the age that Hugh Jackman was when he filmed X-Men back in 1999.

When did I get that old?


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