In The News

With all the talk of massive amounts of cash sloshing around the web/mobile startup ecosystem (including things I've said recently), you would think that nobody bootstraps anymore. But that is not true at all.

Last week my partner Albert blogged about our most recent investment in Behance. Behance was bootstrapped for its first five years. As Scott Belsky, Behance's founder and CEO, wrote on the Behance blog:

For the past five years, Behance has been a bootstrapped enterprise. We’ve sold Action Pads, books, job postings, conference tickets, and even banner ads (horror!) to generate the income to build Behance. It’s been amazing, and we’ve developed as a team and company in extraordinary ways.

When Twitter’s lead venture capitalist Fred Wilson warned VCs last week that crowdfunding  posed a threat to his industry’s future, he probably didn’t know about START.ac, which went live last night. The newest crowdfund is focused squarely on the world’s tech startups and it seems to be the sort of service that could disrupt traditional early phase investors.

START.ac  just might evolve into venture capital for the rest of us.

Until now, crowdfunds have served either causes or artistic endeavors. Last year, more than a million projects were funded and people who put in as little as $5 were motivated by philanthropic urges rather than any desire to see a business dream become a reality.

For the first time, researchers at the University of California, San Diego have peered inside a living mouse cell and mapped the processes that power the celebrated health benefits of omega-3 fatty acids. More profoundly, they say their findings suggest it may be possible to manipulate these processes to short-circuit inflammation before it begins, or at least help to resolve inflammation before it becomes detrimental.

The work is published in the May 14, 2012 online Early Edition of the Proceedings of the National Academy of Sciences.

The therapeutic benefits of omega-3 fatty acids, which are abundant in certain fish oils, have long been known, dating back to at least the 1950s, when cod liver oil was found to be effective in treating ailments like eczema and arthritis. In the 1980s, scientists reported that Eskimos eating a fish-rich diet enjoyed better coronary health than counterparts consuming mainland foods.

Attention, college students cramming between midterms and finals: Binging on soda and sweets for as little as six weeks may make you stupid.

A new UCLA rat study is the first to show how a diet steadily high in fructose slows the brain, hampering memory and learning — and how omega-3 fatty acids can counteract the disruption. The peer-reviewed Journal of Physiology publishes the findings in its May 15 edition.

“Our findings illustrate that what you eat affects how you think,” said Fernando Gomez-Pinilla, a professor of neurosurgery at the David Geffen School of Medicine at UCLA and a professor of integrative biology and physiology in the UCLA College of Letters and Science. “Eating a high-fructose diet over the long term alters your brain’s ability to learn and remember information. But adding omega-3 fatty acids to your meals can help minimize the damage.”

Programs are popping up across the U.S. encouraging high-tech entrepreneurship in new and unlikely places.

From Denver to Des Moines, incubators and initiatives are popping up all over the country to encourage high-tech entrepreneurship. What does it take to create the “next Silicon Valley”?

Many ingredients go into the cocktail of creating a Silicon Valley environment:

- Desirable area: It helps if your city has good weather, an affordable cost of living, and fun things to do.

- Colleges and universities: Schools provide opportunities for technology transfer, partnerships and business plan competitions. They also attract young people and churn out skilled labor.

The first symposium on "the notion of entrepreneurship" by the newly formed University of Maryland (UM) Ventures was a breakthrough event for technology collaboration between the Baltimore and College Park campuses, said Jay A. Perman, MD, president of the University of Maryland, Baltimore (UMB).

UM Ventures is a joint effort among the technology transfer offices at the two campuses and the entrepreneurial business services programs at College Park, and is a core initiative of the new collaboration called MPowering the State.

The theme of the symposium, held May 11 at the UM BioPark, was starting a company based on discoveries made by University of Maryland faculty. The event featured more than a dozen entrepreneurial researchers.

The Federation of Canadian Municipalities (FCN) and the Canadian Urban Transit Association (CUTA) have expressed serious concern about generally longer commute trip times making Canadian metropolitan areas less competitive. Each has called for additional funding for transit at the federal level to help reduce commute times and improve metropolitan competitiveness.

We often hear that small businesses are the engines of job creation in the United States. Their value and the role they play in our economy is sometimes underestimated because, they are in fact, small. But the truth is there’s nothing small about the impact they have on our economy.

According to Entrepreneur Magazine there are between 25 million and 27 million small businesses in the U.S. that account for 60 to 80 percent of all U.S. jobs. And, a recent study by Paychex, says that small businesses produce 13 times more patents that larger firms.

Recognizing opportunities to invest, change or innovate is now a fundamental part of business. Whether you’re a business strategist, an entrepreneur or an investor, innovation is part of your livelihood. The ability to recognize opportunities must be matched with the ability to experiment and ultimately contribute to the adaptation of current business models.

Yet, moving at the pace of real-time isn’t fast enough anymore. By looking ahead and studying emerging trends, you will have the insights necessary to introduce change into the organization — before “what’s next” becomes the new reality. So how do you recognize those opportunities before they arrive?

One of the qualities that is most helpful in an aspiring entrepreneur is optimism.  Without it you would be foolish to attempt risk. Consider those before us who against the greatest odds managed to start and build successful businesses. What was their secret?

Conrad Hilton and I went to the same high school, N.M.M.I. He started his hotel business prior to the Great Depression and as a result found himself over extended when the depression hit. He lost his hotels but was retained as manager. By 1946 he had bought them back and formed Hilton Hotel Corporation. He was an optimist.

A new public-private effort aimed at strengthening the U.S. “innovation ecosystem” seeks to leverage promising technologies emerging from university labs so that they can quickly be turned into products.

The Innovation Corps is the National Science Foundation’s (NSF) response to growing economic pressures to find new ways to leverage investments in basic research in science and engineering. NSF Director Subra Suresh spearheaded the launch of the “I-Corps” last July. Suresh is the former dean of engineering at the Massachusetts Institute of Technology, a hotbed for technology spinoffs.

Twenty one teams were selected last October for the first round of I-Corps funding. They received relatively modest $50,000 awards to begin assessing the commercial prospects of their technology concepts. Program managers said they are preparing to select individual projects that would bring together researchers and entrepreneurs to find new ways to transform emerging technologies into viable commercial products.

If you raised seed capital from a DC VC last quarter you are part of an exclusive club.  Only 3 firms raised seed capital from DC firms last quarter from VCs headquartered in our region and 2 of those companies got money from Virginia’s CIT. CIT is a state-sponsored fund chartered to make early stage investments and doesn’t represent the standard risk profile of a traditional VC.

John Backus and the New Atlantic Venture team were the only greed-based, non-state-sponsored fund laying down startup seed-stage bets last quarter with two investments of $3.2M each in American Honors College and Quad Learning Inc.

Four cities, two days, $50,000 in seed funding. AngelHack Summer 2012 hits New York City, San Francisco, Boston and Seattle simultaneously on June 23-24.

About AngelHack: This will be the first hackathon competition (defined as "coding marathons") to unite startup communities nationwide. Bringing together a nation's worth of talent means upping the ante on prizes as well. So this will also be the first hackathon to include the top prize of guaranteed seed capital investments to winning teams.

Malica Astin, 11, never paid much attention to how much physical activity she got. But one day she played basketball while wearing a small activity tracker called a Zamzee on her waist. Later, she plugged it into a computer's USB port and uploaded the data captured by the device's accelerometers. Unlike a FitBit, a popular pedometer geared to adults, Malica's Zamzee didn't tell her how many steps she took or calories she burned. Instead, it gave her points for the movements she made.

Even months later, she recalls the details of that first windfall: 758 points. And why not? The points are a currency that she can spend in the virtual world of Zamzee.com, where she created an avatar and outfitted it with braces, a necklace, and a hula skirt.

Forget the idea of a lone inventor coming up with a genius idea in his garage. The future of innovation is in the crowd, and by using a big group’s best ideas, you can find the best way to solve any problem. 

Whether you like it or not, competition today is fierce. And it’s only going to get fiercer. Where the old battleground was price and efficiency, the new one will be innovation and time to market. The tech startup world has Eric Ries’s Lean Startup movement, which teaches us how to be fast (and iteratively build a product which consumers love, the fabled "market fit"). But it doesn’t tell us a lot about innovation.

This piece is part of a Collaborative Fund-curated series on creativity and values written by thought leaders in the for-profit, for-good business space. Innovation has been studied for as long as economists have tried to make sense of the modern organization. The quintessential question centers around the weird black box with the ominous label "creativity." Today everybody seems to try to emulate the genius of Steve Jobs, not realizing that he’s the outlier. But there is a different way, a way that has brought us many breakthrough inventions in fields as far reaching as technology, sports, and medicine. That way is open innovation.

There has been a lot of SBIR action going on behind the scenes at SBA as work continues on the SBIR and STTR policy directives. Most of the SBA's work has been behind closed doors with federal agency SBIR program managers and the White House Office of Management and Budget (OMB) officials.

To quote my grandmother, "There has been much to talk about, but nothing to say." For the last several weeks her idiom was correct, but now things are a changin'. We are seeing action and it is time to get you up to speed.

As mentioned in previous issues, the SBA's time sensitive mission for SBIR & STTR is the creation of Policy Directives (PD) which serve to guide the running of these programs. In our February interview with Sean Green

While Apple is often the most highly touted company for its innovation success, 3M is a global innovation company that has remained under the radar for its long-term innovation plans and succeses. With $30 billion in sales and products sold in nearly 200 countries, 3M has made significant contributions to the health care, communications and office business - including bringing the world’s most recognizable brands Post-it Notes and Scotch tape to market.

The root of 3M’s success is its business model; to foster organic growth by inventing entirely new, market-changing products. These disruptive technologies have not only led to new products but to the creation of new industries. In order to foster this growth, 3M has always emphasized the important of research and development (R&D) to which the company dedicates six percent of its yearly revenue. Although a high percentage in R&D spending does not guarantee success, 3M is doing very well.

While our nine rules for getting ahead are important for women to follow, they serve as helpful advice for anyone looking to climb the corporate ladder.

Keep reading for more from the "Women in the Workplace" special report:

People often say Silicon Valley is not like the rest of the world. We’re more tolerant of failure, embrace risk-taking more eagerly, get more enthusiastic about technical solutions, and have a huge, deep pool of engineering and marketing talent to draw from.

As a result, the region has produced some of the most disruptive, world-changing ideas: The semiconductor, the integrated circuit, the PC, the Internet, and the search engine, to name a few.

Scott Shane seems to delight in sharing harsh realities about entrepreneurship and economic development.

Shane, a Case Western Reserve University economics professor who authors a regular column for Business Week, castigates a culture that promotes a “naive view of entrepreneurship and starting businesses” in his 2008 book “The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By.”

The reality is very, very few entrepreneurs are successful. “We overinflate the positives and talk only about a small group of extremely successful start-ups like Apple, Google and Federal Express, but ignore the much larger number that fail,” he said in an interview with Case’s news center to promote the book.