Nearly twenty-five years ago, the Soviet Union pulled its last troops out of Afghanistan, ending more than nine years of direct involvement and occupation. The USSR entered neighboring Afghanistan in 1979, attempting to shore up the newly-established pro-Soviet regime in Kabul. In short order, nearly 100,000 Soviet soldiers took control of major cities and highways. Rebellion was swift and broad, and the Soviets dealt harshly with the Mujahideen rebels and those who supported them, leveling entire villages to deny safe havens to their enemy. Foreign support propped up the diverse group of rebels, pouring in from Iran, Pakistan, China, and the United States. In the brutal nine-year conflict, an estimated one million civilians were killed, as well as 90,000 Mujahideen fighters, 18,000 Afghan troops, and 14,500 Soviet soldiers. Civil war raged after the withdrawal, setting the stage for the Taliban's takeover of the country in 1996. As NATO troops move toward their final withdrawal this year, Afghans worry about what will come next, and Russian involvement in neighboring Ukraine's rebellion has the world's attention, it is worth looking back at the Soviet-Afghan conflict that ended a quarter-century ago. Today's entry is part of the ongoing series here on Afghanistan. [41 photos]

A low-flying Afghan helicopter gunship in snow-capped valley along Salang highway provides cover for a Soviet convoy sending food and fuel to Kabul, Afghanistan, on January 30, 1989. The convoy was attacked by Mujahideen guerrillas with rockets further up the highway, with Afghan government troops returning fire with artillery.

Many years ago, I worked as a tour guide in Alaska, falling deeply in love with the state. One of my favorite drives was along Turnagain Arm, a long and shallow branch of Cook Inlet, a beautiful landscape that is home to a fascinating natural phenomenon. Bore tides occur when an incoming high tide collides with the outgoing tide in a narrow channel, generating a turbulent wave front. Getty Images photographer Streeter Lecka was recently lucky enough to spend six days on Turnagain Arm, photographing the brave souls who venture out onto the mudflats to ride these waves. Waves can reach as high as 10 feet tall, crashing over calmer waters, moving upstream at 10-15 mph. Gathered here are some of Lecka's images of the surfers riding the bore tides of Turnagain Arm. [21 photos]

A surfer rides the bore tide on Turnagain Arm near Anchorage, Alaska, on July 12, 2014. Alaska's famous bore tide occurs in a spot southeast of Anchorage, in the lower arm of Cook Inlet called Turnagain Arm, where wave heights can reach 6-10 feet tall and move at 10-15 mph. The water temperature stays around 40 degrees Fahrenheit.

In early April a series of reports appeared online in the United States and the United Kingdom lamenting the “lazy French.”  A new labor law in France had apparently banned organizations from e-mailing their employees after 6 p.m. In fact, it turned out to be more a case of “lazy journalists” than “lazy French”: as The Economist explained, the “law” was not a law at all but a labor agreement aimed at improving health among a specific group of professionals, and there wasn’t even a hard curfew for digital communication.

Like all myths, however, this one revealed a set of abiding values subscribed to by the folk who perpetuated it. Brits and Americans have long suspected that the French (and others) are goofing off while they — the good corporate soldiers — continue to toil away.  They’re proud about it too. A Gallup poll, released in May, found that most U.S. workers see their constant connection with officemates as a positive.  In the age of the smartphone, there’s no such thing as “downtime,” and we profess to be happier — and more productive — for it.

Are we, though?  After reviewing thousands of books, articles and papers on the topic and interviewing dozens of experts in fields from neurobiology and psychology to education and literature, I don’t think so. When we accept this new and permanent ambient workload — checking business news in bed or responding to coworkers’ emails during breakfast — we may believe that we are dedicated, tireless workers. But, actually, we’re mostly just getting the small, easy things done. Being busy does not equate to being effective.

And let’s not forget about ambient play, which often distracts us from accomplishing our most important tasks. Facebook and Twitter report that their sites are most active during office hours. After all, the employee who’s required to respond to her boss on Sunday morning will think nothing of responding to friends on Wednesday afternoon. And research shows that these digital derailments are costly: it’s not only the minutes lost responding to a tweet but also the time and energy required to “reenter” the original task. As Douglas Gentile, a professor at Iowa State University who studies the effects of media on attention spans, explains, “Everyone who thinks they’re good at multitasking is wrong. We’re actually multiswitching [and] giving ourselves extra work.”

Each shift of focus sets our brain back and creates a cumulative attention debt, resulting in a harried workforce incapable of producing sustained burst of creative energy. Constant connection means that we’re “always at work”, yes, but also that we’re “never at work” — fully.

People and organizations looking for brave new ideas or significant critical thinking need to recognize that disconnection is therefore sometimes preferable to connection. You don’t ask a jogger who just ran six miles to compete in a sprint, so why would you ask an executive who’s been answering a pinging phone all morning to deliver top-drawer content at his next meeting?

Some parts of the workforce do rely on constant real-time communication. But others should demand and be given proper breaks from the digital maelstrom. Batch-processing email is one easy solution.  Do it a few times a day and reserve the rest of your time for real work.  Most colleagues and clients will survive without a response for three hours, and if it’s truly urgent, they can pick up the phone.

The great tech historian Melvin Kranzberg said, “technology is neither good nor bad, nor is it neutral.” That statement should become a real tenant of the information age. I don’t advocate abstinence or blanket rules like that fictional post-6 p.m. email ban.  (Though, if you want to try unplugging for a weekend, check out my “analog August” challenge.)

However, I do think our cult of connectivity has gone too far. We can’t keep falling prey to ambient work or play. Instead, we must actively decide on our level of tech engagement at different times to maximize productivity, success, and happiness.

terrestrial-organic-matter:

VIVA LA REVOLUTION

More than two generations ago, the venture capital community — VCs, business angels, incubators, and others — convinced the entrepreneurial world that writing business plans and raising venture capital constituted the twin centerpieces of entrepreneurial endeavor. They did so for good reasons: the sometimes astonishing returns they’ve delivered and the incredibly large and valuable companies that their ecosystem has created.

But the vast majority of successful entrepreneurs never take any venture capital.

Take Claus Moseholm, co-founder of GoViral, a Danish company created in 2005 to harness the then-emerging power of the Internet to deliver advertisers’ video content in viral fashion. Funding his company’s steady growth with the proceeds of one successful viral video campaign after another, Moseholm and his partners built GoViral into Europe’s leading platform to host and distribute such content. In 2011, GoViral was sold for $97 million, having never taken a single krone or dollar of investment capital. The business had been funded and grown entirely by its customers’ cash.

In fact, venture capital financing may even be detrimental to your startup’s health. As venture capital investor Fred Wilson of Union Square Ventures puts it, “The fact is that the amount of money startups raise in their seed and Series A rounds is inversely correlated with success. Yes, I mean that. Less money raised leads to more success. That is the data I stare at all the time.”

Wilson’s observation reflects the fact that there are a number of serious drawbacks entailed in raising capital too early, drawbacks that have profound implications at all stages of the investment cycle:

1. Pandering to VCs is a distraction. Trying to get a fledgling venture off the ground is a full time job, and then some. But so is raising capital, which demands a lot of time and energy on its own. It will distract the entrepreneur from doing the more important work of getting the venture onto a productive path. As Connect Ventures founder Bill Earner argues, “Finding the right customers and getting them to fund your business [constitute] a great step-by-step guide to raising venture capital — build the business first and the investments will follow.”

Why spend your time trying to convince investors to invest, when you could spend the same time convincing prospective customers to buy — or perhaps learning why they won’t — before you burn somebody else’s money! Besides, as customer-funded entrepreneur and investor Erick Mueller recalls, “It’s a lot more fun dealing with customer needs than pandering to investors.”

2. Term sheets and shareholders’ agreements can burden you. Investors don’t like risk any better than you do. If you’re raising money before traction is in hand, so-called “market risk” is higher than if demand has already been proven. To protect their downside, investors will require what are often seen by entrepreneurs as onerous terms. And when the concise prose of the term sheet is fleshed out into the fine print of the shareholders’ agreement, the terms get even worse.

3. The advice VCs give isn’t always that good. According to an analysis of venture fund returns by Harvard Business School’s Josh Lerner, more than half of all VC funds delivered no better than low single-digit returns on investment. Worse, only 20 per cent of funds achieved 20 per cent returns (or better), a figure that they might be expected to deliver. Incredibly, nearly one in five funds actually delivered below-zero returns.  Given this performance, you would be forgiven if you wondered just how helpful most VCs’ support or “value-add” is likely to be! Unfortunately, you will very likely to be obliged to follow their sage “advice.”

4. The stake you keep is small — and tends to get smaller. When you raise angel or venture capital early, as Jobs did to fund Apple, you start giving away a portion the company — often a substantial portion — in exchange for the capital you are given. And that portion grows over time, as additional rounds of capital are raised. Dell, on the other hand, used his customers’ pre-payments for their PCs to fund his startup and its early growth. Claus Moseholm and his partners, who managed to go the distance at GoViral without ever raising outside investment, retained their stakes in the business (bar one co-founder, who sold his stake to a growth capital investor) until they eventually sold.

But the best news is this. If you raise money at a somewhat later stage of your entrepreneurial journey, you’ll find that many of the drawbacks have largely disappeared. Why? Because with customer traction in hand, you’ll be in the driver’s seat, and the queue of investors outside your door will have to compete for your deal.

5. The odds are against you. Even worse, perhaps, than the difficult terms, the questionable advice you may get, and the dilution you will incur if you raise capital too early, are the difficult odds faced by companies that do win VC backing. In the typical successful fund, on average only 1 or 2 in 10 of the portfolio companies — the Googles, Facebooks, and Twitters of the world — will actually have delivered attractive, and occasionally stunning, returns. Facebook alone accounted for more than 35 per cent of the total VC exit value in the United States in 2012. A few more portfolio companies may have paid back the capital that was invested in them, but most of the rest are wipeouts. In the VC game the very few winners pay for the losers, so most VCs are playing a high-stakes all-or-nothing game. Are these the kind of odds with which you’d like to put your new venture into play?

Quiérete a ti mismo:

2013 had all the signs of being a comeback year for venture capital. Booming public equities and a recovered IPO market generated record portfolio company exits and distributions from VC funds. The industry realized its highest returns since the Internet boom.

Yet 2013 annual industry performance data from Cambridge Associates shows that venture capital continues to underperform the S&P 500, NASDAQ and Russell 2000.

The industry’s persistent inability to outperform public equities is a disappointment to investors, and a very real threat to the sustainability of the VC industry as we know it. A VC firm is, first and foremost, an investment vehicle created to generate returns for investors that exceed those available in the fully liquid, low cost public equity markets. If that objective is persistently left unaccomplished, investors will allocate their capital elsewhere.

The ongoing poor performance of venture capital firms should be an obvious problem for institutional investors. The public pension funds, endowments, and foundations (called limited partners, or LPs) that foot the bill for the industry through their investments in VC funds do so to realize the outsized returns that VC claims to provide. LPs expect to be paid well to assume the high fees (2% annual fees on committed capital) and long illiquidity (minimum 10 years) of investing in private equities. A minimally viable venture rate of return is 300-500 basis points of outperformance above the public markets, a level of returns that investors haven’t consistently seen since the late 1990s, despite optimists’ predictions of promising technology trends, a smaller “right-sized” VC industry, improving exit markets, and incredible investment opportunities.

There are, of course, individual firms that succeed in generating venture rates of return. But they are too small in size and too few in number to make up for the vast majority of funds that fail to generate attractive returns (or any returns) for investors. They are also inaccessible to institutional investors looking to make either new or large commitments in hopes of generating above-market performance in their portfolio.

But the bigger problem – and the real problem for investors – is how little of a problem this persistent underperformance is for VCs themselves. LPs have created and perpetuate an industry of such structural economic misalignment that VCs can underperform and not only survive, but thrive.

To understand how we got here, we need to understand four major issues:

VCs aren’t paid to generate great returns. LPs pay VCs like asset managers, not investors. LPs generally pay VCs a 2% annual fee on committed capital (which may step down nominally after the end of a 4- or 5-year investment period), and 20% carry on any investment profits. The 2% fee is cash compensation, paid annually, regardless of VC firm investment activity or performance. This fixed 2% fee structure creates the incentive to accumulate and manage more assets. The larger the fund, the larger the fee stream. Raising bigger subsequent funds allows VCs to lock in larger, and cumulative, fixed cash compensation. The 20% carry, in contrast, is paid sporadically (if there’s any generated), not until several years after the fund is raised, and is directly tied to investment performance (or lack thereof).

Given the persistent poor performance of the industry, there are many VCs who haven’t received a carry check in a decade, or if they are newer to the industry, ever. These VCs live entirely on the fee stream. Fees, it turns out, are the lifeblood of the VC industry, not the blockbuster returns and carry that the traditional VC narrative suggests.

VCs are paid very well when they underperform. VCs have a great gig. They raise a fund, and lock in a minimum of 10 years of fixed, fee-based compensation. Three or four years later they raise a second fund, based largely on unrealized returns of the existing fund. Usually the subsequent fund is larger, so the VC locks in another 10 years of larger, fixed, fee-based compensation in addition to the remaining fees from the current fund. And so on. Assume it takes three or four funds for poor returns to start catching up with a VC firm. By then, investors have already paid for nearly two decades of high levels of fixed, fee-based compensation, regardless of investment returns. And the fee-based compensation isn’t trivial – in all but the smallest funds, the partners make high six, and more often seven, figures in fixed cash compensation.

Investors have perpetuated a compensation structure where VCs can generate significant personal income over their career, even when they make no money for their LPs. This payment structure perpetuates the economic misalignment between VCs and LPs, fails to create strong incentives to generate outsized returns, and, most importantly, insulates VCs economically from their own investment underperformance. A recent article quoted several VCs supporting the idea that entrepreneurs should be paid $100k (or less) per year until their companies are profitable. What if LPs structured VC compensation that way? Investors would see lower fees and would stop paying well for underperformance, and VCs would rely on their investment performance and carry to generate high compensation. LPs would pay VCs well, through carry, when they do what they say they will: generate great returns in excess of the public markets.

VCs barely invest in their own funds. The “market standard” is for VCs to personally invest 1% of the fund size, and for investors to contribute the remaining 99%. It’s an interesting split, considering that, to hear VCs tell it in a pitch meeting, there is no better place to invest your money than in their fund. Pick up any pitch deck, slide presentation or private placement memorandum and read about the optimistic projections about the VC industry, the fund’s unique strategy, the incredible market and technology trends that support the strategy, and the impressive team of investors that generates “top quartile” returns. The future has really never looked better! Yet, when it comes time to close the fund, there’s hardly a VC checkbook in sight. In fact, many VCs don’t even invest in their fund from their personal assets, instead contributing their investment via their share of the management fees.

Last year I spoke at a conference to an audience of VCs. During our discussion about VC commitment levels, one frustrated VC raised his hand and asked “how much do I have to commit to make my investors happy?” That question reveals the most common attitude I encounter among VCs; they don’t ask how much they can invest, but rather, how little. They seek a minimum, not a maximum. When it comes time to put their own money where their mouth is, there’s a surprising lack of both interest and capital. Investors are well served to pay greater attention to this phenomenon, and watch what VCs do, rather than listen only to what they say.

What is the optimum level of VC commit? Well, it depends. It depends on the partners in the fund, their prior levels of success, their personal balance sheets, and their stage in life. The point of the VC commit is to ensure that each of the partners has a meaningful (to them) investment in the fund. One percent is rarely meaningful. I’ve argued previously that it makes sense to start (and preferably end) the conversation at a 5-10% commitment level, modifying the range, either up or down, to take into account personal asset levels and circumstances of the team. If the partners aren’t enthusiastically committing meaningful capital to their own fund, LPs should assume that the fund is too big, the investment strategy is too risky or unproven, or that the VCs do not have confidence in their own ability to generate the returns they promise. Investors should run, not walk away, from such funds.

The VC industry has failed to innovate. The business model and economic structure of the VC partnership has remained stagnant for the past two decades. Despite enormous changes in the industry — more funds, more capital, bigger funds, lower costs to start companies, poor returns – investors have failed to change the basic economic structure of the VC fund, even when it’s clearly in their economic interest. VCs have hardly taken the lead on “creative destruction” in the industry either, but as we’ve seen, the high levels of asset management style fees and the continuous gush of capital into ever-larger VC funds provides little economic incentive for them to do so.

VCs’ behavior may not be laudable, but it’s understandable. Any changes, then, must come from investors. The good news – and there is some – is that change is starting to occur. The increasing prevalence of small VC funds significantly reduces, and can even eliminate, the misaligning effect of the fat fees that dominate the large funds. It’s very hard to be a $100m fund and coast off the economics of underperformance. Not so for a $1 billion fund. The online investment platform AngelList and its emerging group of syndicates forgo fees in favor of carry, such that the investment upside and downside are shared by VCs and LPs alike. (Disclosure: the Kauffman Foundation, where I am a Fellow, is an investor in AngelList). The absence of fees puts VCs and angels on the same footing as their investors and more perfectly aligns interests.

We’re also seeing some evidence that VCs aren’t entirely insulated from their own underperformance. The latest National Venture Capital Association yearbook (2013) indicates that the number of VC funds has fallen 25% in the last decade, and the number of VC firms has declined 8%. Even more dramatically, the number of VC professionals has fallen 60%. But these are small numbers relative to the size of the underperformance problem.

LPs can certainly do a better job of paying VCs to act less like asset managers and more like investors. We can cut fees dramatically, structure compensation so salaries are small and carry checks matter, and stop paying VCs to raise larger funds. LPs can pay VCs to do what they say they will: generate returns well in excess of the public markets. Until we do that, the enemy of better performance is us.