Straw Man CRRM Funding Proposal

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Straw Man CRRM Funding Proposal

Postby Mike McCarthy » Thu Aug 27, 2015 5:46 am



Alan and Donald,

Kindly forgive the rambling nature of this long email. Various thoughts have been stewing in my brain for several days now and I need to get this email out and off my back for better or for worse. Otherwise Polar Express is going to suffer and none of us wants that.

I hope you will be able to forgive me for exceeding the limits of what volunteers normally do. All I can say is that I'm not a normal volunteer. I'm a heavy duty business guy disguised as a tour guide and photographer.

I'm now going to click Send. I hope this is the beginning of something beautiful.

Summary ...

I recommend that sometime next summer, before Thomas 2016, the museum make a formal request for $100M in private angel funding over a ten year period, the funding to come in three rounds -- $10M immediately after formal application, $30M after five years, and $60M after ten years. I have computer industry connections that should allow us to network our way to Bill Gates, not for his money but instead for the right to use his name when contacting five targeted people for substantial museum angel funding. The five people I see at present are Jeff Bezos of Amazon, Sergei Brin of Google, Paul Allen (retired former business partner of Gates), Charles Szymoni (current Microsoft Research Fellow who has twice flown to the ISS on his own nickel), and steam enthusiast comedian Jay Leno.

Our ability to bring this off is going to depend not so much on my connections but instead on the depth of business planning that will go into the appeal for funds. The connections themselves are guaranteed to work because in addition to the computer industry people, I'm well connected in the music business both directly going back to the late 80s when I was a music producer for three years, and indirectly through my boyhood friend rock/metal producer Tom Werman, who has given us permission to make unrestricted use of his good name. Through my son, former science fiction author and Wired Magazine science columnist Wil McCarthy, we can network our way to anyone in the Hollywood scene because Wil's literary agent is the wife of film director James Cameron. (Apart from several recording artists I could call, my direct music industry connections include the chief legal counsel at Warner Brother's Music, the chief legal counsel at RIAA, and the head of the Fox Office as well as one of his top aides.)

While the pitch itself probably won't be ready for a year, it is none too soon to find out whether Gates is receptive to the idea of his listening to the pitch when it is ready. This should be done by following through on my plan to involve former DEC technical guru Richie Lary, probably on sat22aug-15, this visit to include Richie sitting with Donald for at least an hour and quite possibly much longer. With Richie convinced and on board (and having made a financial contribution), he should call Dave Cutler and let Cutler sound out Gates. (I know how to get Gates to take a call from me, but it wouldn't have nearly the impact as would a call from Cutler telling Gates what Richie has found.)

I should add that from my perspective, what's truly unique about CRRM is the Richardson Library. I would love to see the board set a goal of making the library project as definitive for mankind as CRRM's putting on of Thomas is definitive for how to do a Thomas. I think it's this possibility that will really excite potential angel investors -- to show people how to do a document research library that is online to researchers -- professionals and amateurs alike -- all around the world. In fact, if only the library were to be massively funded I would not be disappointed in the slightest.


Details ...

This email is a straw man proposal for getting CRRM funded in a big way. Straw man is a NASA term for a proposal that is reasonably complete but in reality is intended simply to be a jumping off point for discussions. I've been back at CRRM for three weeks now, I think I understand the major problems and opportunities well enough to construct a straw man, and that is what I have done. Hold onto your seats ...

I believe CRRM should be thinking big -- $100M in all over perhaps a ten year period, with $10M in first round financing, $30M in the second round and $60M in the third. These numbers are, of course, subject to change, but they serve to indicate the kind of scale that I believe ought to be considered. Unless and until someone comes up with a better set of numbers I will continue to go with 10+30+60, and these are the numbers I will have seeded in the brain of Richie Lary when he comes to visit the museum and Donald on or about sat22aug-15, unless something has happened by then to materially change the straw man, in which case Richie will be presented with the updated straw man for discussion with Donald.

When might the push for funding begin in earnest? Certainly not till after 2015 Polar Express, and even then there is a large business plan to be written, and this can't happen till the major museum strategic decisions have been made by the board, which will require the researching of many options by your Friendly Neighborhood Staff Guy (that would be me). Even so I would bring Richie on board as soon as is practical, and Dave Cutler too so he can establish whether Gates is interested in principle. All in all I think we're talking a year from now till we contact Gates formally, though I would want Dave Cutler to fill him in informally regarding the ground that will be covered in the formal pitch. (If Gates proves not to be the right guy to fan out from, we would want to know that sooner rather than later.)

Now ...

Even the $10M first round financing sounds like a lot of money, and by CRRM historical standards it most certainly is -- roughly five times the museum's current annual budget. However, please understand that by the standards of the computer industry in general and Silicon Valley in particular, a $100M 3-phase startup is nothing special. I haven't researched it but I'll bet there are between fifty and a hundred such deals every year -- one or two per week -- the vast majority of these far more speculative than CRRM, which brings to the table Donald's spectacularly successful eight years of growing the CRRM business (and it is a business) under what amounts to financial combat conditions.

So ... We're talking big numbers by standards of CRRM, but small numbers by other standards. Please don't be afraid to think big. If $100M isn't enough and you conclude that we really need $250M, then let's plan to get $250M. It's probably simply a fourth financing round, this one of $150M perhaps fifteen years from now. Again, $250M startups are not all that unusual, we're actually quite low risk thanks to Donald, and we're stretching things out over a very long period of time.


What If ... ?


What if the board does nothing differently from what it is doing now?

It's easy to see that the risk of the museum's dying goes way up under this scenario. I see a contract heavy equipment operator on the ground who is doing excellent work, but he isn't working for free. Similarly I see two contract welders who are also doing excellent essential work but who also are not working for free. I'm not privy to the numbers but I see that the library is running with fewer days being open and a skeleton volunteer crew.

Polar Express will help but it too is dependent on paid contractor help, as are the weekend presidential addresses and folk sing alongs. I assume that if attendance rises sharply net income will grow faster than contractor expenses, but what if the economy tanks and museum guests stay home in droves at the same time that contractor expenses are rising?

The danger of chasing a shrinking business base is that soon it will be impossible to generate new sources of revenue. The UP dining car experience is probably a great marketing idea, but if the cars can't be renovated, or if the cooking contractors can't be hired, that revenue stream will never come online.

My point here is that, if it is to survive and then prosper, the museum probably has no choice but to seek angel funding in order to develop the new sources of revenue that net income can no longer fund.

If this isn't done I personally would not be impacted. You see, this would cause my emphasis to shift away from service to the board and toward writing the several books I have in me. I'm not going anyplace even if the museum is failing around me. A large part of me would welcome peace and quiet in which to emulate my hero, Bob LeMassena, who wrote until he could write no more.


What if the museum is trying to grow at the same time that railroading volunteer workforces are shrinking irrevocably in spite of best efforts to expand them?

I think the museum would be well advised to rely on contractors rather than employees, and on employees rather than volunteers. If the purpose of a volunteer labor force is to hold down operating costs, but if money is not a concern, then much of the motivation for having a volunteer workforce goes away.

In this kind of scenario most of the volunteers probably would be apprentices in whatever railroading programs the museum was trying to carry out.

Some will decry turning the museum into a theme park in order to pay the bills. I would ask the purists what their better idea is for paying to keep the roundhouse open and to keep the steamers supplied with coal. If they cannot get with the program -- cannot abide by the fact that this and any other museum inevitably must be operated as a profit seeking business, then I would get rid of those people, plain and simple.


What if the economy tanks and angel funding dries up?

At least we can keep the war plans dusted off and ready to go when economic conditions improve. That's what the WW2 island hopping campaign in the Pacific was -- a tweaked version of a Navy staff study made in the mid 1930s. The war college analysis had been so thorough that they simply updated some of the logistics numbers to reflect improvements in naval vessels, after which they executed the mothballed plan with few other changes.


What if certain desired plans conflict with what the Golden town fathers want?

Perhaps a quid pro quo is possible, as in "If you let us buy up all the property to the west of the museum on the north side of the highway, we'll build a [whatever] for the town."

And so on. The availability of beaucoup bucks becomes a game changer. Alternatives that seem ludicrous on a starvation budget may be very practical indeed if budget is available to support them.


What if the board develops a comprehensive business plan but then can't get it funded?

I guess my view is that dead is dead. It will be better to have tried and failed than not to have tried at all.


The people who have this kind of money to invest as angels will want to know what mankind would get for the angels' $100M -- what the overall vision is, with clear and believable plans for every round including the first. If the museum cannot spend $10M wisely and according to a plan then it could not be trusted to spend the rest of the $90M wisely and in a planned way.

Note that $10M may allow certain problems to actually be solved rather than simply ameliorated. I will address a few of these below.

I will further observe that Donald has been at the helm of this ship for eight years and has exactly the kind of track record that these people like to see -- a proven ability to keep the organization moving upward in a financial sense even in the face of serious difficulties. Most startups are pie in the sky. In contrast CRRM is real, and I could raise my hand in front of someone like Bill Gates and swear to the growth I have witnessed here with my own eyes over a period of 6.5 short years.


Now ... What is Mike McCarthy's role in all this? Answer, CRRM is a lot like the old DEC. In the best DEC tradition I have defined my own job, I have been working this job for the past three weeks, and I have no plans to change my job, only the details of what I get involved with. Some people can't stand chaotic environments, but I thrive in them. I love challenges because it's fun to conquer them, just as it was fun to watch the train ops team build two passenger gondolas in a single morning, an event I called the Miracle on 44th Street.

So what is my role? Answer, staff guy to the board and to the museum's senior management. I'm the best staff guy you will ever meet, and precisely because I'm so good at it I don't want to step outside that role. In particular I don't want to be part of museum decision making -- I only want to develop options and recommendations for the decision makers to consider. I know my strengths but above all I know my limitations. .

I've discussed this posture with my wife Evalyn and she agrees with my position -- things will go that much more smoothly if I am not on the board. This is because I never want to become emotionally invested in any particular outcome. Recommend an approach? Of course. Have a major preference for one outcome over another? I certainly hope not. A good staff guy will cheerfully accept any corporate decision (let's call it that) and will work to implement that decision in a responsible way.


So ... I would expect to receive assignments from the board, for example ...

Mike, the board would like you to investigate alternatives to simply throwing some of the donated railroadiana away based on volunteer assessments of future worth. Please report back in a month with a list of alternatives, costs, benefits and drawbacks along with a recommendation and why you made that recommendation.

I would then do the research, prepare a written report containing an analysis of the alternatives along with my recommendation, and make sufficient copies of that report for each board member to receive a copy. If the board wanted I would then make a presentation or answer questions. When I was done presenting or answering I would leave the room and not be part of the ensuing discussions and decision making

Note that one of the railrodiana scrapping alternatives would be to use a salt mine storage/retrieval service that is in operation today in Hutchinson, KS. I might or might not decide to visit that facility as part of the analysis. If so I would drive there probably non-stop and would bill the museum for associated expenses at IRS mileage rates, napping in truck stops rather than taking motel rooms..

The aforementioned railrodiana scrapping is one issue I'm working on. Another is how best to get roundhouse documentary photography into the museum's Past Perfect archiving software for online retrieval by future researchers around the world, or by museum employees and volunteers for various reasons having to do with ongoing or planned restoration work.


Another activity I specialize in is starting things up and then turning them over to others for operations. We will see this in the firmware for the 2015 Polar Express event. I will craft the firmware in such a way that it will be easy for a different volunteer to take over my code for maintenance purposes.

Yet another activity is product management. In spite of the name a product manager makes no decisions just as a staff guy does not. What a product manager does instead is make sure that others are making the decisions that they need to make in a timely and informed way, and that buyin from all affected parties has been obtained. Since Jack Campbell is super busy, I expect to do some of this on behalf of the radio linked hardware and firmware modules that will underlie the 2015 Polar Express event.


I mentioned five fund raising targets whom I expect Bill Gates to approve along with the use of his name in contacting them. The list is, of course, subject to revision by Gates himself since he will control the use of his name. Here we go ...

Jeff Bezos of Amazon ... Bezos takes the longest and strangest worldview of all of them. He started the Clock Of The Long Now foundation ...
He is the one most likely to see the value to future mankind of the Richardson Library, which is essentially unique in the world, but needs to be treated on a large scale as if it were Project Gutenberg.

Sergei Brin of Google ... A self-teaching artificial intelligence robot has already won the Jeopardy TV show. Brin will probably be interested in the role that AI might play in replacing today's dying breed of human Richardson Librarian with robot researchers who will teach themselves to become the expert railfans that we are not today replacing as they die off.

Paul Allen ... Allen is Gates' former business partner in starting Microsoft. Allen funded the Joe Kittenger high altitude balloon jump that recreated his 1960? record setting attempt. My guess is that Allen will be very interested in the fact that we need what amounts to a Project Gutenberg to computerize the vast amount of existing and future data that the museum of today can't even catalog let a lone preserve.

Charles Szymoni ... He is a well respected Senior Research Fellow at Microsoft, as I recall. He has been to space twice on his own nickel, on Russian rockets to the International Space Station. He too will be interested in the problems of document storage and retrieval. He will also be interested in my generalization of his C language variable naming convention since this goes to the heart of making someone's code readable a hundred years after the death of the coder in question.

Jay Leno ... Leno has one of the world's largest (if not the largest) private collections of stationary and mobile steam engines, which he loves to show off. (He enjoys driving his Stanley Steamer around the streets of Hollywood.) Leno is a regular guy who just happens to be rich as Croesus. He has banked all of his earnings from the Tonight Show and lives exclusively off his earnings as a standup comic. Maybe now he can be persuaded to do something useful with the money he has never touched. Let the record show that Leno started writing jokes professionally when he was 16 or thereabouts.


Might the actual set of players turn out to be quite different from what I've presented above? Absolutely. Might the museum's actual priorities be something different from what I've presented? Again, absolutely. Yet permit me to blue sky the situation just to stimulate thinking ...

I have a vision of CRRM having become one of the world's major tourist destinations. How? By running a tram from north sidings of today's No Agua yard to the top of the south face of North Table Mountain. Is it politically impossible? Maybe so but by broaching the idea maybe the board will come up with something almost as effective that is not fraught with City of Golden politics.

Combine that with a major steam program of masters and apprentices to keep alive the tradition of railroading. Expand the trackage for tourist trains and maybe have some covered platforms. How? By turning 44th street into a tunnel running under the museum tracks.

If you do that where do you park cars? Oh gee, I dunno, maybe in a hypermodern 300 car vertical parking garage that could be expanded vertically to accommodate a thousand cars.

Again, this is straw man stuff. All I'm seeking to do is stimulate thinking on the part of the decision makers. Remember -- $100M can do a lot if you're willing to think big.


Who we are ...

I come from a family of NYC artists, writers and musicians. (I have all three sets of genes.) My father was English, educated at Oxford. His family was active in British politics both before and after WW2. I'm a dual citizen, my birth registered with the British Consulate in NYC, but I have never claimed my British passport because I'm American at heart, not British.

Evalyn, whom I have known since we were 13, and with whom I have been joined at the lip since age 16 (we are 71), is a descendant of Peregrine White. Her relatives are surnamed Cody (Buffalo Bill came from Evalyn's Florida Cody family), Ingalls (shipbuilding; WW1 naval aviation) and Higginbottom (famous missionaries in India).

We are Quakers who seek only to break even in the charitable work we are beginning to undertake. We can only afford to make small donations ourselves..

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