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innovation DAILY

Here we highlight selected innovation related articles from around the world on a daily basis.  These articles related to innovation and funding for innovative companies, and best practices for innovation based economic development.

Green Parachute

You have probably heard plenty of times that being an entrepreneur is a risky business, and investors talk all the time about reducing the risk. Yet everyone seems to have their own view of key risk drivers for startups, and I’m no exception. I don’t agree, for example, that the first priority is to avoid startups with a high attrition rate, like trendy restaurants and entertainment.

Here is my own priority list of key risk drivers that every entrepreneur and every investor should evaluate and minimize in starting a business:

Team experience and depth risk. Here I’m talking about both the experience and track record of the founders in starting a business, as well as their experience and knowledge of the business domain. Like most professionals, when I get a business plan, I flip first to the founders section to see if it is a balanced team who has been there and done that.

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It’s a match: Signature Labs founders David Hegarty and Traun Leyden met through FounderDating, a service that helps bring together startup founders with different skills.

For David, it was Traun's intellectual curiosity that got him hooked. For Traun, it was David's warm heart and trustworthiness.

Shortly after their first arranged meeting, at a bar in Palo Alto, California, in April 2010, the pair got together at a nearby café. They kept talking and getting to know each other, opening up about what was important, and by the summer they knew it was a match: David Hegarty and Traun Leyden were going to found a startup together.

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Mobile

To kick off the conference, our BI Intelligence team—Pascal-Emmanuel Gobry, Alex Cocotas, and I—put together a deck on the current trends in mobile. We looked closely at the growth of smartphones and tablets, the platform wars, and how consumers are actually using their devices.

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Steve Jobs

It's no secret that Google's products often fail to win the hearts and minds of mass-market consumers the way Apple's do.

Importantly, this failure generally has nothing to do with the technology that powers Google's products, which is often amazing.

Rather, it's the result of weaker product design.

Google TV, for example, was an absurdly complex flop that was apparently designed for consumers who have been dying to buy a TV that is as complicated as a computer (all four of them).

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startup

Sure, a corporate gig might (initially) pay more than a startup and come with cushy benefits, but there are real, career-defining reasons to heed the siren song of a startup.

You've graduated from college, diploma in hand (or in the mail), and you have a couple of job offers on the table. Other than being one of the lucky graduates in a weak economy, you have a choice to make. On one hand is a high-paying entry level position at a reputable brand in your field. On the other hand is a job offer from a small startup that is just kicking off. You've seen their product, believe in their mission, and like their approach, but aren't sure you want to take on the risk of working at a startup. You're leaning toward that corporate job and good pay with nice benefits. The smart choice.

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The economic slowdown seems to have taken the steam out of entrepreneurship — at least in the campuses of premier business schools.

Data from the Indian Institutes of Management (IIM) and others that have completed their final year placements shows students going for a safer option of picking up a job than donning the entrepreneurial hat.

At IIM, Bangalore (IIM-B), for instance, eight students decided to take to entrepreneurship this year, half of last year’s.

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Venture Deals Cover

Everything that an entrepreneur wanted to know about venture capital but was afraid to ask.  Or maybe you are so lost, you don’t even know what questions to ask.  Term sheets? Accelerators? Convertible debt? When do you use a venture capital firm? All of these were topics completely foreign to me, until I picked up a copy of Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist at the local library.

All entrepreneurs need money to start and grow their business. But how are you going to get it? Bank? Friends? Begging on the street? I first learned about Venture Deals during a panel discussion on micro-VC efforts. The presenter said this would be a good starting point, and he was right.

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Obsession

Obsession is a gritty little word.

It’s when an idea or a thought continually intrudes on a person’s mind. It can haunt you and besiege all your focus and energy. Depending on how well you direct your obsession it can be very bad or very good.

At the core an obsession is the thing that sits opposite of you. There you are at the table and across from you is the thing that you carry in your mind the most. Is it fears and failures that dominate your thoughts?  Or maybe it’s family and the fire for a new idea?

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Brazil

With stadiums rising across the country for the 2014 World Cup soccer tournament and in Rio de Janeiro for the 2016 Olympics, it is clear Brazil itself is rising on the world stage. The country’s economic growth has led it to overtake the UK as the world's sixth-largest economy while the announcement last week that it won the bid to host the next Global Entrepreneurship Congress (GEC) will spotlight the role that entrepreneurs have played in the country’s newfound economic prowess and international standing.

Entrepreneurs in Brazil have a vast market to tap—195 million people with growing purchasing power. Take the vigorous expansion of its middle class, for example. According to a study by Fundação Getulio Vargas, a prestigious local university, the Brazilian middle class (Class C) just gained 30 million people, lifted from classes D and E since 2003. The projection for the richer classes (A and B) is also making the country a hotbed of opportunities for entrepreneurs. By 2014, this richer section of the population will include 31 million people, 50% more than today. These statistics of surging wealth bode well, not just for business opportunities, but for the capital needed to translate them into high-growth enterprises.

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NewImage

Index Ventures made news recently when it announced a new €150 million fund to invest in early-stage, life science companies. With many venture firms scaling back or exiting the business entirely, any successful fundraising is good news. However, two aspects made the announcement from Index particularly noteworthy: first, the fund is focused on early-stage innovation, a segment largely shunned by traditional VCs and, second, two of the industry’s largest firms – Janssen and GlaxoSmithKline – agreed to throw their considerable weight behind the Index team.

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The Fort

A government town like Washington, D.C., isn't known as a mecca for tech startups, but if the folks at The Fort have their way, that soon will change. The Fort is the city's only tech-business "accelerator," hosting an inaugural class of roughly a dozen startups. The Fort provides mentors and capital to these early-stage companies, in hopes of helping them grow faster -- or, yes, fail faster -- so they'll jump to a better business model. Rebecca Sheir heads to The Fort's K Street offices to get an inside look at this brand new spot where risk-taking abounds.

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Year by year, PE investors have ridden a roller-coaster of returns over the decades, magnified by PE’s use of leverage and by the expansion and contraction of purchase multiples. But less visible among the upward and downward gyrations has been a longer-term secular decline in returns, as the industry has matured and competition intensified.

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Genes

While high-fat foods are thought to be of universal appeal, there is actually a lot of variation in the extent to which people like and consume fat. A new study in the March issue of the Journal of Food Science, published by the Institute of Food Technologists, reported that two specific genes (TAS2R38–a bitter taste receptor and CD36–a possible fat receptor), may play a role in some people’s ability to taste and enjoy dietary fat. By understanding the role of these two genes, food scientists may be able to help people who have trouble controlling how much fat they eat.

Most food scientists acknowledge the texture of fat plays a big role in how fat is perceived in the mouth. For example, ice cream is typically “rich, smooth and creamy.” And certain fats, scientists have determined, can be detected by smell. Only recently have food scientists explored that most fats have a taste too. Researchers are now investigating the gene (CD360) that is responsible for detecting the taste of fats (fatty acids) in the mouth.

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NewImage

Where did this pervasive sense of entitlement in our business culture come from? I’ve written about this before, but I was surprised again recently at a conference for startups when a couple of entrepreneurs started berating investors for their low rate of funding for early-stage startups. It sounded to investors like me that they expected a funding entitlement for their startup idea.

As a society, we seem to think we've evolved to the point where we can fashion a large portion of existence according to how we wish it to be. We notice what we like and what we dislike, so we work to make society match our dreams. Somehow, these dreams and wishes have morphed in many people’s mind to an entitlement.

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sharktank

The only show I really enjoy, and learn from, on TV is ABC’s Shark Tank. I actually don’t even watch it on TV because every single season and episode is free on Hulu. The show is produced by Mark Burnett and is based on the Canadian show Dragon’s Den. Each episode features a panel of five rich investors called “Sharks.” The Sharks have either sold their businesses for millions (or billions in Kevin O’Leary’s case) or have sold billions of dollars worth of products, like Lori Greiner did on QVC. They each bring industry knowledge to the table and have different specifications for what they invest in. If you come in unprepared, they will ask you the right questions and you will look like a fool on TV and not get any money. On the other hand, if you have a very strong product, without much revenue attached to it, they may still bid on it. There is no formula for what they will invest in, but after watching every episode, here are some lessons that I learned about entrepreneurship.

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Woman Power

I’m a supermodel man. As a representative of the male supermodel community, I can say we have lots of similarities to women. Recently, I started to say things women say. I did this for fun but also to gauge effectiveness and play.

In playing, I learned the equivalent of a year in business school. These are things they can’t teach / won’t teach.

Here are my insights and here is what you, as a burgeoning fem-preneur, should pay attention to on our specific transition from pre-entrepreneur to founder.

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Sequencing the human genome will lead to many diagnostic breakthroughs.

Science and entrepreneurship are both acts of experimentation. Both involve taking risks to reach a positive end, changing course when needed, and attempting the never-been-done. While many start-ups now are focused on creating the next Facebook or some genius e-commerce play, there are also scientists tinkering in labs.

Biotechnology is sometimes forgotten about, but the field leads to real products — new drugs and medical devices that aid human health. Want to cure cancer? These people will be the ones to do it.

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Book Cover Imagine

Not many writers can make plausible links among musicians Bob Dylan, Yo-Yo Ma and David Byrne, animators at Pixar, neuroscientists at MIT, an amateur bartender in New York, entrepreneurs in Silicon Valley and Israeli army reservists. Not many reporters do research about an expert surfer who has Asperger’s, information theorists, industrial psychologists and artists. But Jonah Lehrer is such a writer-reporter, who weaves compelling and surprising connections based on detailed investigation and deep understanding. He says that working memory is an essential tool of the imagination, and his book is an excellent example of how a dynamic storehouse of captivating information feeds creative thinking and writing.

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EquityNet

EquityNet, LLC, the original crowdfunding platform, is pleased to announce that both the U.S. House and Senate have passed the JOBS (Jumpstart Our Business Startups) Act including legislation to allow non-accredited investors to participate in crowdfunding platforms such as EquityNet.

Judd Hollas, founder and CEO of EquityNet, stated, “We are delighted that Congress has embraced crowdfunding innovation and the economic benefits it engenders.  We envisioned crowdfunding innovation back in 2003, patented it in 2005, and have already developed an advanced online system to enable it.  In addition, our platform includes the essential capabilities necessary for sound self-directed investment decisions – namely, standardization, analytics, and comparable data.”

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CrowdFunding

Congress just passed the most significant legislation affecting entrepreneurs and investors since the Glass–Steagall Act back in the Great Depression over 80 years ago.  The groundbreaking Entrepreneurs Access to Capital Act, aka “Crowdfunding,” passed the House on March 8 and was included in the JOBS (Jumpstart Our Business Startups) Act that the Senate passed on March 22.

Crowdfunding connects large populations of entrepreneurs and investors in online marketplaces to offer businesses better access to investment capital.  It is a real game-changer for an industry that controls trillions of dollars of investment capital and that is the lifeblood of every young U.S. business, as well as the economic and social benefits these businesses engender.

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