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What '60 Minutes' didn't tell you...

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What '60 Minutes' didn't tell you about the Silicon Valley investor behind smart guns


On Sunday evening, 60 Minutes, the renowned newsmagazine program, wondered if Silicon Valley and the tech world could change the U.S. gun market and upend the nation’s political debate over guns by backing so-called smart guns.

60 Minutes correspondent Lesley Stahl interviewed Ron Conway, a famous Silicon Valley player who is known as an angel investor. 60 Minutes touted Conway’s big successes investing very early in companies like Facebook and Google, two of the most successful tech companies on the planet. Conway was said by 60 Minutes to be looking for the Mark Zuckerberg of guns and to have invested in 15 smart gun projects.

“This is going to happen outside the gun industry,” Conway told 60 Minutes, adding that the tech world could ignore the politics of guns in America. “You cannot stop innovation. And this is an area where innovation is taking over.”

60 Minutes heard claims from the nation’s gun makers that it’s the proponents of gun control who are advocates of smart guns. It also reported that the NRA sees smart guns as the kind of thing that could lead to bans on other kinds of guns, citing a law in New Jersey.

But what 60 Minutes didn’t say was that Conway’s investment ideas usually don’t work. Conway has in the past said that generally one third of his investments fail. He has said that another third of his investments simply return the money he has invested, which doesn’t mean much given the relatively small amount of money he typically invests. Another one third of Conway’s investments return four to five times what he invests.

In other words, two thirds of Conway’s investments really don’t have much of an impact on businesses and consumers. Conway considers the one-third of companies that only return the money he has invested in them as a success. In one talk a few years ago, Conway said that between 2002 and 2010, 40% of his firm’s investments had failed.

This is actually a pretty strong and admirable success rate. Conway is one of the nation’s most prominent angel investors, otherwise known as seed investors. The San Francisco-based angel investing firm he co-founded, SV Angel, invests in dozens of start-up companies and its portfolio consists of investments in hundreds of companies, many of which might have a great story and idea—but little else. He invests very early on when companies are just getting started and have often not proven much. He has called this investing in raw start-ups, defined as four people or less who have started a company. There is a lot of risk involved in each of these investments because chances are things won’t work out. That’s why Conway invests a relatively small amount of money in each deal as institutional investments go.

Conway has a great reputation in the Silicon Valley investing community. His business is premised on failure—the idea that a few winners will make up for a large number of losers.

The tech world has disrupted many industries, but the technological optimists in Silicon Valley sometimes don’t succeed, especially when they take politically charged issues head on. For example, not so long ago some top dogs of Silicon Valley rushed into the green energy space fueled partly by their belief that they could make the politics of clean energy work for them. But many of their efforts disappointed.

One of the most notable Silicon Valley players who invested a lot of money into green tech was billionaire venture capitalist John Doerr. One of his biggest such investments was fuel cell maker Bloom Energy. In 2010, Lesley Stahl of 60 Minutes got to be the first journalist to get an inside look at the company and interviewed Bloom Energy’s CEO.

60 Minutes reported about the company’s “little power plant in a box” that could soon be found “literally in your backyard.” The piece talked about the “well over 100 start-ups in Silicon Valley working on green energy” and made a big deal about Doerr, his investment in Bloom Energy, and his past early investments in Netscape and Google. Bloom’s CEO said he hoped that within five years Bloom boxes would be found in every home. Do you know anyone who has a Bloom box? The company has been described as an “unrealized money pit.” Last year Stahl and 60 Minutes did another report, this one called “The Cleantech Crash,” that also focused on Silicon Valley, but not Bloom Energy.

For his part, Conway is making a bet on smart guns. He has a good track record and might succeed. But the odds are against him.
 
It's that small chance of success that scares me on this one. .....followed by a overly idealistic legislators....
 
Yeah, let's make guns "idiot-proof."

Of course smart guns can be hacked. Anything programmable can be re-programmed.

And anything idiot-proof just hasn't been discovered by a big enough idiot yet.
 
If the tech was there. Police and military would have had them decades ago.

It's faulty and unreliable.
 
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