Tech Trends

I’m not a big fan of lists, but here are a couple that you might want to pay attention to from Venture Beat. Five Overhyped Technology Trends and Five Trends You Should Pay Attention to, both for 2011.

Keeping the Start Up Alive Inside

Take a look at the article from the NY Times, How to Shape the DNA of a Young Company. It is an “interview with Jeremy Allaire, chairman and chief executive of Brightcove, an online video platform for Web sites, and was conducted and condensed by Adam Bryant.”

From the article:

Q. How has the culture evolved as your company has grown? How do you maintain that original DNA, as you call it?

A. It’s a huge challenge. One point is that you always need to have everyone feel like they’re on some broader mission. In the early stages, the mission is: Are we going to survive? Is there a product? Does it work? Is anyone going to want it? Is there a market? They’re like existential questions for a business, but I think those core mission tenets remain important through that growth stage. It’s something that people can attach themselves to, so people aren’t just coming into a job. So I’ve tried to really provide that narrative over and over, even as the milestones just keep changing.
The other thing is to hold onto that feeling of being a start-up, and it actually relates very deeply to how you go to the next phase of growth. Companies that figure out how to really become significant in scale reinvent themselves and create completely new things. Just as an example, a little over a year ago, we created a start-up inside the company to create new products. That was so galvanizing and so energizing, and it kind of cascaded across the company. People were saying, “This isn’t the kind of same old, same old — we’re reinventing ourselves.”

Good Days Ahead?

I attended today the Centerstate CEO’s (Corporation for Economic Opportunity) Economic Forecast Luncheon, with the keynote speaker being noted economist Hugh Johnson, Chairman and Chief Investment Officer of Hugh Johnson Advisors. It was a very interesting and entertaining presentation, which included a historical comparison to the banking crisis of 1907. In between a couple of very interesting comments on the Fed, he told the group the following:

· The conditions in the economy that accompany a recovery are all in place
· Leading indicators for the economy are rising. We are early in the economic recovery which should continue through 2012.
· By 2012, the economy should recover 7.0 million of the 8.3 million jobs lost in the recession.
· Short term interest rates will start to rise late in 2011
· Stock prices should rise 7.8 percent annually for the next two years
· While we are in a recovery mode, the recovery will be anemic by post-war standards as a result of the drag caused by real estate and the housing situation

Small Ideas

Get yourself a cup of coffee, settle back in a comfortable chair, and enjoy 15 minutes with Allen Kupetz. Allen’s outstanding presentation took place at the recent TEDxOrlando conference and it considers things such as purple catsup, the Segway, and the interesting notion of The Small Idea.

Learning from Six Companies That Didn't Make It

In business schools, we love to talk about the successes. Nothing like talking about Starbucks, Zappos, Five Guys, Amazon and many of the other startups that became the big guys. And while I have no problem discussing these companies, I think it’s important that we also talk about those that didn’t make it. The successes are certainly what we want our students to aspire toward (and perhaps give a nice gift back to the school that made it all possible), but it’s also important to take a look at those businesses that didn’t make it, and learn from them as well. Often times those that failed to make it, if we listen carefully, have more to tell us.
To that end, take a look at the article from the NY Times, How Six Companies Failed to Survive 2010 by Eileen Zimmerman.

Twitter and the NFL

Ever since we used to live out west, I’ve been a Denver Bronco’s fan. Yes, they were an absolute mess last year(there is a lesson for all us to heed in that mess dealing with hiring), but I thought the article in today’s Denver Post on John Elway, the NFL and Twitter was interesting.

From the article:

"It was important to us to reach our fans directly and in the most personal way, and it was important to restore some of the credibility in our organization that might have been lost in a challenging season. We owe that to our fans."

VC's and the Choices That They Make

Not the first time I’ve run across an article on how VC’s make their investment decisions, but given the amount of time that we spend talking about institutional investors, it makes sense to take another look at this topic. So here is the SF Chronicle article, How Venture Capitalists Make Investment Choices by Ben McClure.

From the article:

With mature companies, the process of establishing value and investability is fairly straightforward. Established companies produce sales, profits and cash flow that can be used to arrive at a fairly reliable measure of value. With early-stage ventures, however, VCs have to put much more effort into getting inside the business and the opportunity.
Here are some of their key considerations:

1. Management
2. Size of the Market
3. Great Product with Competitive Edge
4. Awareness of Risks

Why Businesses Fail

Interesting blog in the NY Times by Jay Goltz on what he feels are the top ten reasons businesses fail. The entire article can be found at his blog, but I’ve listed below his top ten:

1. The math just doesn’t work.
2. Owners who cannot get out of their own way.
3. Out-of-control growth.
4. Poor accounting.
5. Lack of a cash cushion.
6. Operational mediocrity.
7. Operational inefficiencies.
8. Dysfunctional management.
9. The lack of a succession plan.
10. A declining market.

While I agree in general with those reasons, I’ve also seen businesses fail because of poor customer service, poor hiring practices, an owner who always had to be the smartest person in the room, owners who wouldn’t listen to their employees, poor (or no) use of technology and finally because of a lousy business model.

Ego Trips Rule!

Hmmm…not sure I agree, but take a look at this from Saturday’s (January 8, 2011) Wall Street Journal:

College students would rather have their self-esteem stroked than eat their favorite food, have sex or drink beer, a study found. In one scenario, 130 subjects were asked to think of something they knew boosted self-esteem, such as getting a compliment or a good grade.

They were then asked to rate, on a 1-to-5 scale, how much pleasure the experience brought them and how much they "wanted" it (right now, in general, in good times, and in bad). In the same way, they rated the experience of having sex and eating their favorite food.

Overall, the students valued the self-esteem increase more than good food or sex. The ratio of "wanting" to "liking" was used to gauge the addictive qualities of each pleasure: Addicts can want a fix more than they like it. While students said that they liked all of these things more than they wanted them, the gap was narrowest in the case of self-esteem—which hints at the intoxicating effects of ego, the authors said.

From "Sweets, Sex, or Self-Esteem? Comparing the Value of Self-Esteem Boosts with Other Pleasant Rewards," Brad J. Bushman, Scott J. Moeller, and Jennifer Crocker, Journal of Personality (forthcoming)

I'm Not a Horse, I'm a Person

Ran across this piece from Daniel Pink about what motivates us. I’ve found myself lately thinking a lot about what motivates (and what kills motivation in) people and the research behind this “mini-lecture” is interesting. As entrepreneurs, we’ve got to be the master motivator for our teams, because they are typically small and underfunded. Based on the research, the lack of money for salaries isn’t a killer because it appears to be not that important in the grand scheme of motivation.

Founders Workbench

Sean Branagan sent over a link to the website, the Founders Workbench. The Founder’s Workbench was created by the Technology Companies Group at Goodwin Procter, LLP. Lots of good, free resources for the entrepreneur.

From the website: As part of our ongoing commitment to start-ups, emerging companies and the entrepreneurial community, we are providing access to critical forms, memoranda, best practices and other resources to enable capital efficient company formation. Our Technology Companies Group is a focused team of 160 lawyers who provide dedicated representation to over 500 technology and life sciences companies and 200 venture capital and private equity firms. We take pride in understanding our clients’ businesses and sharing their entrepreneurial spirit and drive. We counsel emerging companies on formation matters, venture financings, intellectual property transactions, employment matters, M&A transactions and IPOs. We have been recognized as one of the leading venture capital law firms by independent publications such as Chambers and Private Equity Analyst.

Crowd Accelerated Innovation

While aggregation and syndication are the some of the watchwords of the internet, in an interesting article in Wired magazine, they’ve given me another phrase to think of: Crowd Accelerated Innovation. That article, written by Chris Anderson, made me start thinking of my own Center’s website, and the website’s of so many companies that I’ve visited lately. Here at the Falcone Center for Entrepreneurship, we’re capturing everything we can on video and getting ready to use them in our soon-to-be-updated website. I’ve also passed on the information to two of my daughters who are thinking of launching their own business. No matter what you’re doing…video makes things so much more interesting and exciting for the viewer/reader of your website.

From the article:

I believe that the arrival of free online video may turn out to be just as significant a media development as the arrival of print. It is creating new global communities, granting their members both the means and the motivation to step up their skills and broaden their imaginations. It is unleashing an unprecedented wave of innovation in thousands of different disciplines: some trivial, some niche in the extreme, some central to solving humanity’s problems. In short, it is boosting the net sum of global talent. It is helping the world get smarter.

"How Was Everything?"

How many times have you heard those words from a company you were doing business with? How many times have you wondered if they really care, or if those are just words that the employees are trained to say?

I thought of this because of an experience my wife and I had the other day. We were on a driving trip, and stopped in for a meal into one of our favorite waitress-service restaurants that you often times see just off major highways. We sat down early in the evening in a moderately crowded dining room, and placed our orders. After doing so, we found out that they were out of both of the items that we ordered. They were also out of the featured item, and were also out of the featured dessert. While it didn’t bother us, what got me was what happened when we were paying the bill at the cash register. The employee manning the register asked me, “How was everything?” In a very polite way, I told her, “Well, not so good. The kitchen was out of what we wanted to eat.” What surprised me was her reaction. She looked absolutely stunned, and then turned to finish the transaction. She didn’t say a word to me about my comment.

Now, I’ve owned a restaurant, I've worked in food industry, and have an enormous amount of appreciation for those who work in this very tough and demanding part of our economy. But what got me was that the chain that runs this restaurant, did just such a poor job of training their people that the girl at the register didn’t know what to say. If you aren’t going to give your employees the tools to deal with a simple statement, if you’re not going to train them about what you say when someone says something other “fantastic,” then all of the team-building exercises, all of the mantra’s of providing exceptional service, is just a bunch of words that mean nothing.

I’ve also been following an interesting blog in the NY Times that is written by a first-time restaurateur, Bruce Buschel. For more inside info on the entrepreneurial journey of someone opening a seafood restaurant, take a look at The Startup Chronicle.