Archive for Outside the Valley

Silicon Ivy and Main Street: Both Need a Thriving Ecosystem

Last week, my friend Ami Kassar posted a Facebook note coining a phenonomon he called the “Silicon Ivy Bubble.”

He wrote:

In the Silicon Ivy bubble, there is a perception about entrepreneurship. In Silicon Ivy, an entrepreneur tends to look like this:

1. You need a unique proprietary idea that could grow into a billion dollar company;

2. You must raise rounds of capital – b, c, angel, bridge. There is an entire ecosystem built around supporting this bubble.

3. You must follow these steps.

Ami’s conclusion, though, is that these Silicon Ivy startups are far outpaced by businesses that “start on Main Street” where there is “typically no ‘secret sauce’ at the core of the business.”

Main Street businesses are traditional companies where an entrepreneur’s recognition of the need to provide for family and a need in the community coincide.  They are businesses funded by savings or maybe, if the entrepreneur is both lucky and good, a bank loan.

Ami sees plenty of Main Street businesses at his ideablob site, where entrepreneurs post business ideas and receive business advice in return.  The site is the kind of ecosystem that Ami laments is missing from the Main Street business arena, a vibrant ecosystem of support akin to that which supports those Silicon Ivy businesses.

As I thought about Ami’s post, my first inclination was as you might expect: the dynamics and metrics of a venture-fundable business are vastly different from those of the sort of lifestyle businesses that pop up on on Main Streets everywhere. Silicon Valley – or Silicon Ivy – is home to a high-stakes ecosystem exactly because the stakes are so big. It takes a lot of heavy lifting to build a $100M company, then grow it some more.

It’s different on Main Street.  A sole proprietor, a banker, maybe a real estate agent.  Set up shop. Hang out the shingle. Get to work. Bring home the bacon, fry it up the pan.  Feed the family. Pay the mortgage.

As if there is something wrong with that.

Yes, venture-backed businesses require a certain scale and ambition. They are bigger businesses, potentially, than Main Street businesses.  But not necessarily better businesses.  Main Street businesses, or what some folks describe (often with derision) as “lifestyle businesses,”  are good businesses. Some are even great businesses.  They simply don’t scale the way a venture capitalist requires in order to make an investment.

Main Street businesses, writes Ami, “need a place to feel the energy that exists in Silicon Valley coffee shops. They need access to financing for their businesses. They need mentors and cliques like the entrepreneurs in Silicon Valley. They need hip, cool resources that keep them inspired.”

I’d argue that they also need our respect.  These businesses deserve a vibrant ecosystem of support because they are, in fact, the life blood of the global economy.  They create jobs and drive productivity.  They are arguably the lever in economic recovery.

And, oddly enough, many – and I might argue, most — of Silicon Valley startups are Main Street-scale businesses masquerading as venture-investable enterprises simply because they are based on that spit of land between San Francisco and San Jose.  These are business that won’t find success with the venture community, but wouldn’t dare to identify themselves as Main Street businesses.

Maybe in all of this discussion, though, is the realization that a large part of Silicon Valley is Main Street. . . and a block or two of Main Street in most every global business center is, in fact, Silicon Valley.

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Where To Now?

Chris and I have been asked one question many times in the past few weeks: how will the financial crisis impact the start-up ecosystem? The answer depends partly on your place in that ecosystem but if I were forced to boil it down to one pithy statement, I’d say this: The real world has horned in on our heady idyll and that is a very good thing.

If there’s one point at which Guidewire Group relentlessly hammers, it is this: Remember the Masses. And when cash and attention are flowing to ideas that don’t make sense for everyday consumers – as they have been the past few years – it’s hard to keep that point top of mind. So what if Joe Six-Pack (sorry, couldn’t resist) doesn’t understand lifestreaming? He’s a hopeless fellow who doesn’t understand technology and should stick with digital picture frames, assuming he can get them to work. But as anyone at Pets.com can attest, Joe Six-Pack very much matters. Without him, your product is destined to a very small market of people who will leave you when the next big thing comes around.

So as markets crash around us and VCs become increasingly skittish, what’s an entrepreneur to do? Read the rest of this entry »

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IVA’s Startup Competition Finalists…And the Winner Is…

The honor of announcing the winners of the Israeli Venture Association’s Startup Competition, a business pitch event co-sponsored by DEMO’s partner in Germany.

Sixty-nine Israeli startups submitted plans and 11 finalists were selected by a panel of judges to present during the conference in DEMO’s tried-and-true six-minute format. A few of the finalists should be familiar to DEMO devotees. DEMO alums Worklight and Delver each made it to the final round.

Here’s a quick rundown of the final pitches:

Techtium is a fables semiconductor company developing an integrated circuit that allows portable electronics and other consumer devices to run on hybrid rechargeable power as well as alkaline batteries. The company’s Energi to Go implementation is an external charger that adds three hours of talk time to a mobile phone.

Worklight (which was Serendipity Technologies when it launched at DEMO 07) allows businesses to easily integrate salespeople and channel partners into the the enterprise data flow using secure RSS or AJAX widgets.

Diagnostic Technologies is medical diagnostics company developing a biomarker that detects the risk of toxemia in pregnant women. As many as 207,000 women die from pre-eclampsia each year, women who can be saved by this company’s $50 blood test.

WeFi is creating a world-wide network of open WiFi hot spots. A small client application identifies available WiFi hot spots, while collecting data about open networks that is added to the company’s comprehensive database.

Redbend Software develops Fota – firmware over the air: The company’s technology enables mobile operators to update mobile firmware over the air, reflashing the device even while it is in use.

ID-U Biometrics uses unique eye-movement patterns to identify people. This very early stage company is developing an application that detects eye movement as users engage with online commerce applications.

Delver, which launched its technology at DEMO 08, crosses social network concepts with search to allow users to find content, media and people within their social networks.

Modu is a tiny, modular mobile phone, that can be slipped into a wide variety of modu jackets – stylishly designed phone enclosures – and modu mates – modu-enabled consumer electronics devices.

Petnovations is developing products to improve the lives of pets and pet owners. The company’s first product is CatGenie, a self-cleaning litter box. To come soon: a dog collar that automatically dispenses anti-flea solution.

Gizmoz is a consumer entertainment site that lets individuals create 3-D avatars from their 2-D photograph. The company is soon to release Be A Star which combines content from branded media, such as feature films, with the company’s avatars.

Nearly 1,500 people voted by SMS for their favorite businesses. Their choices, organizers told me, aligned with the top finishers as determined by the judges. The IVA Startup Competition prize went to an unfunded, incubator-based company: ID-U Biometrics. The company automatically receives a spot at DEMOgermany in October.

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The Week That Was and Will Be

I’ve resigned myself to the fact that I’ll never be an A-list blogger, primarily because I just can’t keep up a daily flow of posts. I intended a quick piece on the CBS/CNET story yesterday but the day got away from me. In short, I agree with Marshall. (Perhaps that’s my new blogging philosophy: “Ditto.”) I am bound and determined though to dash off a quick post on the week behind and the week ahead.

Chris and I ran through a day packed with meetings in Austin earlier this week, screening potential startups for DEMOfall. While I can’t reveal particulars, I can say that there were multiple “Wow” moments. And the companies were overwhelmingly un-Web 2.0. Energy conservation, computer security, wireless USB – Austin startups are innovating across the technology map. We ended the day with a jam-packed cocktail party and all manner of great conversations. It was an excellent conclusion to a road show that has taken Chris across the US. For anyone in doubt, innovation and thriving tech communities are by no means exclusive to Silicon Valley. Can’t wait to reveal more on these companies in September.

The week ahead has two interesting events I want to plug: SemTech and the French Tech Tour. The Semantic Technology Conference, at the San Jose Fairmont May 18-22, may not immediately send thrills up your spine but I can promise you that semantics is where technology’s future lies. Love it, hate it or completely befuddled by it, semantics aim to transform our Internet into a smarter, simpler, more intuitive world in which to live and work. I’ll be on a panel discussing just how we’re going to draw everyone into this exciting world, Taking Semantic Technology to the Masses. With Chris Morrison of VentureBeat, Mark Johnson of Powerset, Thomas Tague of the Reuters Calais Initiative and Josh Dilworth of Porter Novelli, the conversation is sure to be lively. If you have any issues or questions you’d like us to address, leave them in the comments.

On Wednesday, May 21, I’ll be participating in the French Tech Tour at Microsoft’s Mountain View campus. Hosted by the French Embassy, it will be a day of discussion and networking, introducing French startups in the US. If you’re at all invested in the global tech landscape, don’t miss it. And if you’re looking for the cocktail party to be at on Tuesday night, join us at Mighty in San Francisco.

I’ll do my darndest to blog on all of this, even if they’re just one-paragraph updates. You can also follow my Twitter feed if you’re interested in the minutia. Be warned though, parenting issues and political diatribes sometimes crop up there.

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Imitation Is Flattery? Or Just Bad for Entrepreneurs?

There are a dozen other, perhaps more important and insightful, posts I’d rather be writing today. But, alas, my friends at TechCrunch put a wall in my path today and I just can’t ignore it, despite counsel from perhaps wiser advisers to do just that.

You see, TechCrunch and Jason Calacanis announced their plans for what is now being called TechCrunch50. Reading the TC50 site was a deja vu experience. The concept, the “rules,” the agenda . . . all out of the DEMO playbook.

You might remember that TechCrunch announced its first startup launch event, what was then called TC20, while sitting in the second row at DEMO 07. At the time I believed, as I still do now, that entrepreneurs need a variety of venues and opportunities to address the market. If TC20, which becameTC40 presumably when the blog’s desire to attract more entrepreneurs outstripped its promise of super-exclusivity, can provide a platform and give wings to entrepreneurs, then good on ’em. That can only benefit the tech ecosystem.

But, as I told VentureBeat’s Chris Morrison this afternoon, I’m baffled by TechCrunch’s decision to put its event literally on top of DEMOfall 08. Read the rest of this entry »

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Web 2.0’s Gateway Drug

By gum, I think I’ve got it. My post yesterday on breaking out of our insular tech bubble to evangelize to the mass consumer spurred a good discussion on FriendFeed. There was much agreement around the idea that sharing all these neat Internet tools with mass consumers is needed. But how to do that? There were a couple of angles to the conversation: one, how to share our general insider knowledge with consumers and two, how to get people involved in FriendFeed specifically. Clare Dibble made a good point regarding the latter; that non-techies don’t have to sign up for the myriad services on FriendFeed to delve into the site. Simply by adding the FriendFeed share button to their browsers, they can start submitting interesting articles and watch the conversations ensue.

It was then that the light bulb went off. FriendFeed is the gateway to Web 2.0 for mass consumers. Read the rest of this entry »

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Share the Love

Every industry has a certain level of insularity. It’s human nature to want to be part of the in crowd and knowing the buzzwords and inner workings of a sector carries cache. The emerging tech industry, though, takes insularity to a whole other level. It’s easy to get caught up in the morass of social services and tools; a day spent immersed in tweets and status updates, FriendFeed links and Seesmic videos can easily cloud one’s mind. Spend enough time in here and you find yourself wondering why the gas company doesn’t just send your bills via Twitter. (On second thought, that’s a hell of an idea…) So it’s always a pleasant surprise to talk to my stay-at-home-mom friends, the ones I dragged kicking and screaming to Facebook. They give me a much needed reality check as to what’s going on in the real world.

I had one of those conversations this morning with my friend Polly, who is marginally tech-savvy, mainly because she’s too busy raising three boys to be otherwise. We talked about several tech-related issues, some of which I’ll post about in the coming days. But perhaps the most interesting talk concerned Facebook, in which she bemoaned the hesitance of some of our friends to join the site. Read the rest of this entry »

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