““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
After reading Esther Dyson's résumé, you might conjure up a Type A executive juggling urgent phone calls behind a massive desk. Dyson, after all, has spent decades–and earned millions–advising, buying and selling companies and shares of companies. Fortune magazine has called her one of the country's 50 most powerful women, saying, "A nod from her can increase a product's popularity or get the venture capital a startup needs."
But Dyson in person seems like anything but a Type A executive. She ushered me not into a fancy office but a small, windowless cubbyhole whose door she fanned periodically to let in fresh air. She has been known to show up barefoot for meetings and she comes across as low-key and self-deprecating. (Her 1999 inclusion on Fortune's list happened "early on," she explained, "when there weren't that many women around.") She never glanced at her watch during our long talk, never got interrupted by calls or associates and appeared in no hurry to stop chatting.
She may not be as laid-back as she seems, however. Dyson mentioned that she's on the go by 5 every morning and hasn't had a vacation since she spent three days in Acapulco sometime in the 1990s. She added that she also took three weeks off between jobs in 1977, which suggests that she has had all of two vacations in 34 years.
Dyson said her childhood "felt perfectly normal, because every child thinks what he's doing is normal." Maybe so, but her brand of normal included being raised on two U.S. coasts by divorced parents who became prominent in quantum field theory and solid-state physics (her father, Freeman Dyson) and math and philosophy (her mother, Verena Huber-Dyson). She grew up in a family that had Nobel Prize winners as dinner guests and she headed for Harvard at age 16.
After earning a B.A. in economics in 1972, Dyson wound up at Forbes, where she worked as a fact checker and then as a reporter. After that, she moved to Wall Street, where she focused largely on the tech sector at New Court Securities and Oppenheimer Holdings. Then she took a job at Rosen Research, which she bought from her employer in 1983 and renamed EDventure Holdings. She sold that firm to CNET in 2004.
At EDventure and also via a New York Times column, a Web blog and her investment activity, she made a name for herself as a savvy commentator and innovative thinker on technology, space travel, health care and BJT's favorite topic.
What got you interested in business aviation?
When my friend Vern Raburn started this air-taxi thing [by founding Eclipse Aviation], I thought it was really cool. I've always loved airplanes. It's a logistics/scheduling business and a marketing business. I'm fascinated with how it works. And I still think the idea of DayJet [the now-defunct air-taxi service that used Eclipse very light jets] made total sense. They were trying to make aviation more efficient and, therefore, make products like the Eclipse cost-effective.
Do you blame the economy for DayJet's failure?
It was pretty much the economy. The timing was so sad. I firmly expect something like that to arise again. It's like Federal Express, which is the first company I worked on when I went to Wall Street. They said we now have computers where we can create optimized schedules every day almost in real time and be much more efficient than with a prescheduled airline.
You've said air taxis are kind of like PCs were in the '90s. What did you mean?
Steve Jobs called the PC a bicycle for the mind. [An air taxi] is my thing, going where I want to go rather than taking [public transportation].
You've organized a series of workshops on business aviation and space travel called Flight School, where your speakers have included a who's who of bizav. What have you concluded about private aviation's future?
The biggest thing hanging over it is fuel and environmental stuff. But people's time is getting more and more valuable. And general aviation gives them time. So I think it has a promising future.
What about VLJs?
VLJs make total sense. There will always be people who have their own 767s, but VLJs are cost-effective for someone who's not a Wall Street tycoon–a high-end sales guy, for example.
You've said bizav is inefficient now and you've talked about deadheads.
It's not just the deadheads that make it inefficient. It's the financial structure of the industry. A lot of these planes are a tax loss for somebody, so nobody's trying to make them terribly efficient. The fractional cards are a bizarre industry because they're based on a quirk of the tax law. The irony is, the more you fly, the more you pay of the capital cost, which is nuts. Instead of amortizing the capital costs over a larger base of flying, you're actually paying more capital costs because the card includes this. The economics of private aviation are as weird as the economics of health care.
Why did you invest in Icon Aircraft [a startup manufacturer of light sport aircraft]?
I liked [founder and CEO] Kirk [Hawkins] and his approach. He was the first guy who recognized this market. It wasn't pilots going down market. It's sports enthusiasts going up market. And he's as fanatic about design as Steve Jobs.
You have two airplanes on order from Icon?
Yes. I figure I'll give one or an order for one as a gift, depending on how generous I'm feeling.
You got into the tech field very early. Were you aware then of where it was headed?
You had to be. If you understand the present, you understand the dynamics of the future. It was pretty clear then that computers were a huge thing and that individuals would have computers.
I didn't quite see the Web coming.
I sort of did. I'd gone to Russia in 1989 and the only way then to keep in touch with people I met there was email, because with the phone, you'd call an operator and she'd try for 10 hours. But email worked quite well. So my first email correspondents were mostly Russians. And I joined Mitch Kapor's Electronic Frontier Foundation, because they seemed to think about [the Web] more than anybody. And I knew it was going to matter, so I signed up. This is what I typically do–stick myself in places where I'm going to learn something.
You once said, "The sense of satisfaction you get from achieving something you weren't sure you could do–that's usually what leads to happiness."
Well, I keep taking on new things I'm not totally sure I can do. I have a bunch of mottos, but one of them is, "Never take a job for which you're already qualified."
You did early on, though, right? For example, as a Forbes fact checker after Harvard.
Well, actually, no. When I was hired at Forbes, they asked me the difference between a stock and a bond. I said, "I'm not really sure but I will find out." Apparently that's the answer they got back in 1912 from some guy who later became the editor, so they hired me. But I knew nothing.
When you take on things you're not already qualified to do, you must sometimes fail.
I've invested in things that flopped. Sometimes I've misjudged somebody's character or said, "Well, I don't really like him but I like the idea." That usually ends badly. Whereas if you really like the person, you don't regret the investment.
How do you pick your investments?
I like what someone says and I think it's something interesting that doesn't exist. What I don't do is spend three months and have four assistants to do due diligence. So I have very low transaction costs and can do well with a lower rate of return. My costs are primarily the deals that don't work.
You've said you invest where you think you can make a difference. What kind of difference are you trying to make?
I've invested in a whole bunch of advertising things, so I don't think advertising is evil. But I'd much rather do things that would make the world more transparent in the Middle East or make people healthier.
Tell me a few of the best investments you've made.
That's hard because there are so many. One of my favorites–I still use it almost every day–is [the photo-sharing Web site] Flickr.com. In terms of financial return, one of the best was Perot Systems. At one point, it was worth $4 million but I don't think I sold in time. Another was Google. I had quite a few shares at 12 cents a share.
And your worst investments?
In one way, the worst was my own business because I spent 25 years on it and it sold for less than $2 million. But it was an education, a calling card, a vehicle. So financially it wasn't a great investment but in terms of what it gave me it was wonderful.
What do you think of America's patent system?
Patenting things that are genuinely innovative is fine. But what they're trying to patent now in software is crazy. I think copyright makes more sense but [the terms] should be much shorter. People come up with great ideas and they're terrified of someone stealing them. But nine times out of 10, they have a problem implementing the idea, not protecting it. I'd make the barriers [to getting a patent] much higher and if you applied, you'd get it or get refused faster.
In 1994, you predicted that the ease with which digital content can be copied and disseminated would eventually force businesses to sell it cheaply or even give it away. What do you think of how the music industry has handled this issue?
They've handled it incredibly badly. I gave a talk sponsored by the Recording Industry Association of America. I didn't say copyright is evil or people should steal music. I said, "Guys, you have to look at what's going on. The market prices of your content are going down and people are going to copy it and you need to find other ways to make money." They didn't listen. And then they went and sued their
customers, which is a really bad business idea.
Charlie Rose asked you in 2007 when you thought private citizens would be flying in outer space and you said five or 10 years. Five years would be next year.
I was overoptimistic. I hoped the government would fund space travel more effectively and Columbia wouldn't have an accident. But with luck, [Sir Richard] Branson will be flying people regularly in a couple of years.
I think many people, at the time of the first moon landing, thought we'd be further along with manned space travel by now.
Yes, and it wasn't a failure of science. It was a failure of priorities and government, public's interest in science, all kinds of things.
You've suggested that the country's best days might be behind it because we don't sufficiently invest in education and scientific inquiry.
I think that's true. And I don't think it's a question of whether we're ahead of or behind the Chinese. It's where we are as a nation. And we're declining in interest in science, in level of literacy, in public discourse, in so many ways that it's depressing.
Do you have any optimism that that will change?
I am hopeful. But am I expecting it? No. That doesn't mean I'm not pushing it.
I understand you're trying to raise $50 million to go into space.
No I'm not–I'm trying to earn $50 million to go into space. A lot of people think, "Gee, she should be giving money to poor people" or something. I think what I'm doing is fine, but I don't think it's appropriate for me to ask people for money to send me into space. I think I should pay
for it myself.
So will you be able to?
Probably. I have a bunch of promising investments. But it's not like when I die my last thought will be, "Oh, I'm so glad I made it into space," or "Oh, dear, I'm dying and I still haven't gone into space." It's one thing I'd love to do, but not the only thing. I don't want my epitaph to read, "She made it into space." I want it to read, "She wasn't done yet."
NAME: Esther Dyson
BORN: July 14, 1951 in Zurich, Switzerland
OCCUPATION: Journalist, commentator, entrepreneur, investor, philanthropist.
EDUCATION: B.A., Economics, Harvard, 1972.
PERSONAL: Single. Lives in New York.