Biotech competition

This redherring article highlights the situation with biotech. While cities and states in the US are trying to attract biotech, and tout educational practices that are harmful to scientific progress, other governments are attracting biotech. Money, support, infrastructure are being used to increase that nation’s chances of being a biotech center.

Not sure where the next break through will come from, and for the next few years, it will probably still be from the US. However, with other countries training and educating their own scientists and creating science parks, the concentration of advancement will not continue.

You can look at many governement policies, and see where the incentives exist. Follow those incentives, and you'll have a pretty good scope of where innovation will emerge.

Finding Salesfolks

Surfing around some of the VC blogs out there, I found this bit on hiring sales folks.

It’s good.

It’s hard to get a good sales person.
I know I’m a lousy sales person.

And I know that some of the best sales people to have, are the ones willing to pick up the phone and call.
Call.
Call.

You have to be fearless, because you will get rejected. If you’re afraid of rejection, don’t be an entrepreneur, don’t be a sales person, don’t be in a client facing environment.

Hide away in a nice little cubicle, with a computer that won’t judge you.

Jack Roseman, my first entrepreneurship professor, and one who’s made the statement that the only real PhD in entrepreneurship is a successful company. Also said that you can’t go around and get 100% buy in from all your sales prospects. 100% success rate means there’s a problem. 0% success rate means there’s a problem.

So if you’re going to be a sales person, and everyone who is in a start-up is a sales person, then you’ll need to be fearless. Everyday.

Make calls, get sales.

The Greenies are coming!

Another wired article on the green revolution. This one is on organic clothing.

I'm not so sure. Some folks obviously believe that organic clothing will be the next fashion statement.

But it won't be bulap sacks. It will probably not be staples (sweaters, shirts, pants). Instead it will try and be high fashion.

Only one problem, high fashion is ephemeral. Fashion comes in 4 seasons a year. 3 months, and then it is out of style.

It must look good, to begin with.
There has to be enough supply available to satisfy most (not all) of the consumers.

And here's the killer. The designs/quantities/products must be decided 9 months BEFORE they come into the stores. For some items, the lead time is longer.

What happens if you guess wrong? EVERY SEASON becomes a "bet the company" type of process. With all the decisions/guesses having been done months ago. Wrong color? well too bad. Wrong cut? too bad. Wrong size? too bad.

Fashion works as it does, in part because it can get fabric so cheaply. The stuff that doesn't sell gets donated to 3rd world countries. The stuff that becomes the style, makes up for the shipping/mfg/shelf space/etc. of all the junk that never became a hit.

Maybe people will care about what they put on their bodies, as much as they care about what they put IN their bodies. But I don't think so.

Environmental and pro business

Wired article from Alex Steffen.

His argument that environmental approaches that are profitable will be successful. It's the philosophy that all the investors in cleantech ascribe to. Openly or not, there's supposed to be a lot of money and opportunity in cleantech.

Going away from the sacrifice approach, and moving towards the benefits focus is important. People pay for, encourage, and endorse items that make their lives better. If it's green, then fine, if not, they'll still buy.

We can now redesign, repurpose and recycle. But it takes a long time to initiate change in the lifestyle of consumers. Especially the way we live. A kooshball, that's simple. Fad products come and go. But altering the locations and neighborhood of where they live is different.

The timeline is difficult to tell on these investments, and the adoption rate. There are early adopters, but right now, the chasm/tornado are the challenges. The length of investment can be mercifully short, or agonizingly long. Unfortunately we won't know until the exit.

More powerpoint help

Garr Reynolds’ take on good powerpoint.

But here’s the key element that’s been ongoing through all these powerpoint bits.
The slides shouldn’t make sense without your presentation. One should need the other.

I liked the examples used, they give credence and weight to the arguments provided. Simplicity without being simple is important and powerful.

Look at the slide with just the number, and the picture. Powerful, memorable, and less than 5 words.

E-waste recycling

Usatoday on how hard it is to really do electronic waste recycling.

The line “Some recyclers, particularly those in developing nations, pick out useful parts by hand.” hides a lot more than the author believes.

There’s the classic, burn the plastic, pick out the metal, and let the rest run into the river.

Or, use prison labor and sledge hammers to smash things into bits, and pick out what’s there. Cost of using prison labor is much less than even slavelabor.

What's said, and imagined is usually far from the ideal, or what we would want to have happen.

And on letting heavy metals fall through the screen.

What about the lead, mercury, and other known toxic materials in electronics?

Not all the metals in electronics are magnetic, nor can all of them be considered safe. Toxic waste is a big part of what these guys produce. How to handle it, and be profitable is the challenge.

Profitable Solar

Redherring's article on a couple of profitable solar companies.

Maybe this is the outsized return that everyone is paying attention to.

On SunPower
From their S-1 filing, they initially incorporated in 1985.
In 2004, they were effectively bought out by Cypress Semiconductor corp, which ended up with 100% of the outstanding shares.

Wonder what the initial shareholders got?
And the time frame from 1985-2005 must have hurt someone’s IRR. If they kept anything at all.

Cypress must have held all the cards. Now SunPower is profitable, and is making sales. However, from the investor perspective, only one major shareholder made out.

Q-Cell was started in 1999. So the time to exit falls within the range that the dot-com, internet VC investor would feel comfortable with. It went out in October 2005.

If this is the type of story that’s attracting all the investment attention, then it can help bring new money in.

But the time frame will vary, and can go beyond the comfort zone of many investors. Here we have two examples of companies. The challenge is not getting hosed as an investor.

Biodiesel without the vat

From the AP, via Wired, a small pump that essentially creates biodiesel from alcohol and vegetable oil.

This is what we want to see.The way the article describes this reaction: Vegetable oil + Alcohol = BioDiesel. It’s easy, and it’s part of the dream for clean fuels.

But what happens to the oxygen that's in the mix?

Let’s not deal with any messy things like, water being in the mix of biodiesel, thereby lowering the energy content of the mixed fuel.

As wonderful as this might be, I'm sure there's more to the story than the AP article.

Where we look

Got this off digg, It tracked the eye movements as people read webpages. Interesting how people’s eyescan works.

The F pattern should be taken into account when preseting anything to your readers. Webpages, or presentations, people in countries that read left to right/top down will see and scan in the same pattern.

Don't let your text get lost in the mix, otherwise your message gets lost in the aether.

Cures for what?

Glad to have this

So we can prevent graying hair now.

Not that this isn’t important. Some folks must believe it to be very important.
But we have now gotten drugs to solve erectile dysfunction and gray hair, before we found a cure/vaccine for AIDS, Malaria, TB, diarrhea.

This is an open/free market system, and right now, we want erections and colored hair, more than we want a few more lives saved.

I'm the first to say that free markets should be allowed. But sometimes, the market doesn't always seem rational. But it's always right.

Another Cleantech article

Now the Washingtonpost has an article on the techies going into CleanTech.

The good news is that these people are big names: Gates, Case, and Doerr. So where they go, people follow. And with the opportunities this big, there are billions/trillions at stake.

One solution that takes off is not limited to the developped world. Cheap clean water, cheap clean energy, these answers can and will be used everywhere. Playing with the long tail will be more than niche markets of the web enabled.

This is playing with the bottom of the pyramid. Cellphone adoption in Africa is a very good example of how people can pay for what they want/need. The market was bigger, the usage wider, and it surprised everyone who was expecting an European, or Asian business model.

And we're talking about fundamental needs being solved.

Someone's going to make a lot of money here. Some others will lose their shirts. But everyone's jumping into the pool.

A Greenie's look

Here is Patrick Moore's essay on Nuclear power. Moore was one of the founders of GreenPeace, and he has come out as a supporter of Nuclear plants.

So it seems there are no absolutes for some folks. Here, green house gasses are worse than nuclear power and the chain required to secure the material.

It might end up being part of the solution. Today it is part of the solution.

But in a world with no absolutes, we do the best we can.

Another look at Customers

Horror stories from IT support.

And yet, this is the Same type of person who makes up your retail customer.
And the same type of person who makes corporate buying decisions.

Thus, don’t expect too much from them.

If people are willing to do these things to their own co-workers. What do you think they’re willing to do on someone they don’t have to see every day, and who doesn’t have access to their email account?

Don't let sales support destroy the economics of your business.

More attention to Cleantech

AP article in USATODAY about Doerr and KPCB going into cleantech.

As far as I understanding it:

Energy’s only answer is Solar.
More people are going into cities.

Unfortunately, what hasn’t been said: More people in cities = Slums

We are not talking about corporate housing, apartments and planned cities.
This is a huge populace going into shanty towns, a few pieces of wood/cardboard. Tin roofs.

No running water, no clean air, no clean soil.

Maybe Slums will be addressed later.

First get enough energy, electricity too cheap to meter, and then clean up the air, the water, the soil, build homes, make food, and provide jobs for everyone. Big problems, big opportunities.

It’s not fair to ask too much of anyone right now. Investors are still learning about the space. People listen when the big boys come to play. The list is big and getting longer on the experienced fundmanagers going into cleantech. More headlines can only help, not hurt.

Founders know best?

Money article on founders that still run fortune 500 companies.

27 of 500. That’s about half a percentage point.

Not a lot of companies. There are 3 things that stop founders from being the CEO by the time a company is on the fortune 500.

1. Death
2. Firing
3. Company blew up before reaching the list

I do agree that industry expertise is important. And how founders want a success more than they want a paycheck.

However, anyone else with deep industry knowledge, good management skills, and drive could be as successful. Founders have the advantage of already being in the top management position, and the "luxury" of learning on the job.

But saying founders get good returns makes for good copy.

Don’t let it get to your head.

First Steps

One of many articles on how TV shows are available for free download.

I don't think it'll take 5 years to figure out what will work. However, just like early "talkies" were silent films with sound, and TV was first radio with pictures, this is just TV on download.

I've already said it would be video game cut scene directors who would understand this new medium best, but I forgot about machimania. That will probably be the venue from which the next great director of mobile video comes from.

One who understands the challenges behind small screen/micro screen video.

It's not going to be easy, or obvious. We'll understand after we see it. After all, video, movies, and storytelling have changed dramatically from their origins. It's only reasonable that computer videos will as well.

The other cleantech

Salon's article on how electronic waste is a problem.

It's a problem, and getting bigger. Solving power, air and water are important. But this is the monster hiding under the bed.

There are some ideas out there on recycling plastic (printer cartridges). Or allowing for easy demanufacturing of items for easy reuse/recycling. But this has to be done from the intial design criteria.

Doing so takes a little more time, and while people can throw things away in the local trash, and have someone cart stuff away, nothing will be done.

Heavy metals don't just disappear. They have a nasty habit of sticking around for a while, and most are not as nice as gold.

The fact is, air/water/power are problems that hurt the first world as equally as the third. But exporting trash and toxin will be an expensive solution. Resolving the issue early is the only true solution, everything else is hiding the dust under the rug.

Best tools not used by all

Cedric says that Ruby on Rails not being mainstream.

So what?


Go back to this article on Blub programmers from Paul Graham.

If you're an entrepreneur, and need to have an advantage over your competition. Ruby on Rails is a nice one. It's not much, and it's not enough to determine the success/failure of your endeavor. However, it is enough to give you a man power advantage.

While otherfolks can hire teams of programmers to write in JAVA overseas, you'll have a (much) smaller group using Ruby on Rails.

Speed is only good when it can get you somewhere.

Looking at your Blub coder, is Ruby the new LISP? Yes.

Will it suffer the fate of LISP?
Who cares?

If it's for your business, and if it's the right choice, USE IT.

Determining the right choice is up to you and your customers. USING the right choice is up to you alone.

Biotech Gap

From Redherring, this is what happens when you don't put money into research.

You fall behind in Biotech.

Given that innovation is starting to show up in other parts of the world, research being published from non US universities, and cities/countries are focusing all their energy on specific areas of research. Soon the technology and location will become synonymous. And in most cases, it won't be in the continental 48 states.

What does this mean for investors? Reach out.
And for start-ups? Now you have to keep track of what's going on in your neighborhood, state, country, and global industry.

Unfortunately this is more time and energy sucked away from fulfilling customers. But it becomes necessary as you keep growing.

Look at international sales early. Don't let them distract you, and get as
much money upfront as you can. However, it's an additional path for you to
follow. Just don't let it distract you from your core mission.

Biotech is the first, of many, technologies where the US will no longer be seen as the only innovator.

What do VC's invest in?

Is it team? Or customers?

I've been pounding away at the idea that the customer matters.

And the customer does matter.

But why then do all VC's harp on investing in the management team?

Trust.

No matter what the legal documents say, if your partner/customer really wanted to hurt you, he will find a way to do so.

So in order to have a good relationship, you need to have trust.

Customers trust the company to supply what's promised. In truth, they trust the PERSON to supply what is promised. That person is usually the sales guy, and with a start-up usually on the management team.

Without trust in the team, how can an investor know that a customer will trust the SAME team to come through?

So when an investor trusts in the management team to run the company, the investor also trusts the management team to take care of the customers.

Is this saying the same thing in 2 different ways? Probably. Trust can't be litigated, it can't be enforced. It either exists, or it doesn't. And when it doesn't, walk away.

Road less traveled

Redherring's article on VC's looking off the beaten path.

It's harder than it looks.

There are so many reasons why start-ups fail. Some the fault of the management team, others the investors, and still others are exogenous to the company and industry. But for any reason that causes a start-up to fail, the result is the same. A failed company.

And it takes time/money/effort to restart the company. Or get new jobs for the people involved. When things are going well, money comes in, customers pay on time,
production runs are smooth. Everything looks easy, and everything is on track. But when something causes the company to get derailed, the support of the area is important. Having a spouse ask you to get a "real" job, with a "real" company, has a big influence on the morale of the team. This is especially true when any one person represents more than 10% of the company.


There will be successful companies that sprout out of these areas. But it will take more effort, and mentoring in the areas like the rust belt. The returns will be bigger, since fewer investors will be bidding up the price on initial investment. Also, the founders will do better, because fewer dollars will end up going into these companies.

Maintaining momentum will be a challenge. Whereas after a buy-out or IPO, you can see several of the middle managers start to spawn off other businesses after the lock-up period. You won't see that as often in a rust-belt area. It's a matter of numbers. When 20 M&A transactions happen in the neighborhood, even having 1 person from each spawn a new company will mean 20 new start-ups. But when there was only one big M&A transaction, even getting 2 people to spawn off, means 90% fewer start-ups comparatively.

The VCs working in the neglected neighborhoods can do well. Being #1 in Spain or #2 in Rome, we know where Caesar said he would rather be. And these investors have staked their claim as well.

Bad science

7 basic signs of faulty science.


As amusing as this list is. I will run across one, or more violations of these principles every week. Tech companies, clean energy seems to grow these plans like weeds.

I've had my rant on zero point energy, cold fusion, perpetual motion machines.

If any of these exist, along with the infinite impossibility engine, I'd like to see them work first. After they're working, then I'll write the check. But I won't finance someone to try and discover or build them.