December 2015

small tbt

I am often asked by entrepreneurs to sign NDAs before they will share their business idea with me.  Putting aside the issue of why VCs can’t sign NDAs for the moment (no, we can’t, sorry), the request reveals something more significant.  Entrepreneurs usually believe that their business idea is unique, and that it is the entrepreneur’s competitive advantage.  Some go to almost ridiculous lengths to be oblique, or to otherwise keep from revealing their “secret sauce.”

What is interesting to me is how often an entrepreneur’s unique idea is similar to an idea I heard the week before from another entrepreneur or team.  Sometimes I’ll hear

Read entire blog from August 13, 2011.

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small washpo

As someone who makes his living spotting economic and technology trends, I find the holiday season a good time for reflection and consideration of the year ahead. The ever-growing interconnections of Washington, technology and the world economy will make this year particularly interesting.

While we enjoy our holiday presents, and wonder if we can safely return that hideous sweater, here are a few technology market trends I will be watching in 2016.

The slow motion train wreck. Venture capital will continue to decouple from the “disruption everywhere” keg party prevalent in Silicon Valley. The valuation of many so-called $1 billion unicorns will …

Read entire column at WashingtonPost.com

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This Friday I’m joining my good friend Jim Chung over at GW for a talk on “what makes a venture backable team?” As I prepared for the event I thought I would share some general thoughts on the topic in this blog post. I hope it’s useful to you if you are considering starting a business and putting your execution team together.
The first point I want to emphatically make is that I would not focus on putting a team together for attracting Venture Capital; I would focus on building a team to grow a businesses. If a business can be grown, and the team has the skills to grow it, then in my experience capital will find that business. Put another way – good entrepreneurs, and good teams, find a way to win.  A great idea in the wrong hands is nothing more than an idea. A great idea in the hands of a strong team is likely to become a business.
Therefore, when I look at a team I am focused on whether this is a group that can succeed together. I want a team that has many, if not all of the attributes below. But, most of all, I am looking for teams that believe that they will succeed and have the depth and chops to do it.

Also, my thoughts below are focused on the attributes of the initial team – the one that is going to take a business from concept to the first $1,000,000 in revenues. Teams and leadership for businesses that have more than 20 employees, or more than $1,000,000 in revenues, need some distinctively different attributes from a start up team. The same team can do both, but there are differences. The largest differences center around organizational development and management. Most entrepreneurial businesses won’t scale without skills in those areas, but that is a story for another blog post.

With that in mind, here are the characteristics that I believe are essential for a good start up team:

Read entire blog post from November 12, 2010.

 

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If you don’t like the real world, you will soon have a choice — a choice with broad implications for our society and technology industry. Facebook, Google, Samsung and many leading venture investors and technology companies are betting that within five years we will be able to strap on some goggles and immerse ourselves in a virtual world of our making.

Virtual reality — and its close cousin augmented reality — are expected to either substitute, or overlay our current ability to experience only what is immediately around us. It promises to allow us to go to the Taj Mahal without leaving our living room, to see the bio and name of the person standing before us in the blink of an eye and be “inside” completely artificial worlds for our entertainment. These technologies promise to blend the “thereness” of experience — where we are the middle of a four-dimensional map we call reality — into the ability to be in the center of new worlds that exist only in software. We would be able to move around those worlds completely independently of our location in reality.

Some have scoffed at the money being spent on developing these technologies. They point out the nerdiness of augmented reality glasses (I see you Google Glass) or the vertigo-inducing first generation Samsung VR headsets. They suggest the technology is not up to the task, or that it is still missing the “killer app” that will …

Read entire post at WashingtonnPost.com.

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Buried among all of the articles surrounding Steve Job’s resignation, I found this interesting post in the National Review.  Basically, the post notes that Steve Job’s was a successful entrepreneur because he failed so often.

Actually, as I think about all of the entrepreneurial characteristics that are most salient to success, an entrepreneur’s ability to “fail upward” seems to be the best predictor of subsequent success.  This is something that I see many investors and hiring managers use as a primary criteria.  Has a person overcome a failure?  But, what it is about managing failure that is predictive?

It strikes me that failure provides a number of challenges to a person, and it is in the overcoming of these challenges that personalities are formed and strategies for success are created.  It is not the failure in itself that matters – it is what the person learns from the failure.  But, what does an entrepreneur learn from failure other than “gee, I won’t do that again?”

Read the whole blog post from August 25, 2011.

 

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small fed news

The Defense Advanced Research Projects Agency is thinking small. In seeking the next generation of technologies and the companies that invent them, it’s not focusing on the standard Defense Industrial Base. I was on a road show with DARPA and Arlington County officials and I explain the new model for generating future government contractors on Federal Drive with Tom Temin.

Listen now:

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Everywhere I go these days, people are talking about cybersecurity and its ability to drive economic growth in the greater Washington region. While they agree on its potential, they often seem to disagree on how we are doing on taking advantage of this opportunity.

If you listen closely, some will say that our region is poised to, or has already become, the “Silicon Valley of cybersecurity.” Others say, “this region has all the attributes, if only we did X” and that until X occurs our region is doomed to have second-class status as a technology innovation community. Some cybersecurity start-ups lament that they need to look elsewhere for product and software development skills and yet others say we have an abundance of cybersecurity talent in the region.

Why is this picture so confusing, and what is the truth?

Read entire column at WashingtonPost.com.

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Mentorship is implicit in so many of our interactions in business. In many instances it is the defining characteristic of a business relationship. It permeates start up entrepreneurship and working in established organizations. Some days it seems that my entire day is filled with interactions that center on mentorship, and it strikes me that for many of my peers it is the same way. What strikes me, however, is that for as many people who seek to be involved in a mentoring relationship in business, not a great deal of thought goes into the quality of these relationships. Mentorship by its very nature can be the most helpful or most damaging relationship an entrepreneur or junior employee can have.

Mentorship is a relationship with the following core attributes:

Read entire blog post from April 4, 2011.

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Many suggest that a lack of coordination between D.C., Maryland and Virginia politicians and institutions is holding our region back — that we could be attracting more innovation, and more jobs. Frankly, it’s a little simplistic to suggest that if we all just play nice, the region will be able to uniformly flourish.

People in the greater Washington region who talk about the lack of coordination among our jurisdictions often point to Northern California and suggest that its existence in a single state is an advantage. In a Lake Wobegon view of economic development, they suggest a nirvana where counties and localities don’t compete for new businesses or trumpet their advantages to new business formation.

After being in California again last month, doing business in San Francisco, Livermore, Redwood City, Palo Alto and Mountain View, what I saw reminded still belies that capital region argument.

San Francisco has spent considerable effort creating conditions for a technology corridor South of Market. Livermore has invested in an entrepreneur-friendly co-working space to keep startups in the East Bay. When I worked at a law firm in Palo Alto we were offered incentives to locate our offices in downtown Mountain View. The same competition for businesses that we criticize our region’s economic development leadership for pursuing occurs in Northern California, yet somehow that west coast region is successfully driving commercial innovation.

Yes, we need regional coordination in areas of shared resources such as transportation and roads — their interconnected nature requires a coordinated response. Our political leaders should be held accountable for those things. However, asking Virginia, Maryland and the District of Columbia to coordinate and innovate on business attraction and entrepreneurial support is not rational.

It’s unfair and unreasonable to expect individuals who owe their financial future to promoting narrow economic advantage to somehow zoom out and take on a regional perspective, particularly if they would undermine their own position in the process.

Let’s be realistic. We can ask our universities to coordinate across the region, but they each have objectives they must meet to satisfy their specific constituencies. Politicians are elected to serve a geographic region. Economic development experts are hired to serve politicians and universities. To ask them to promote broader economic development is both unlikely to succeed and also somewhat irrelevant.

Let’s remember that Northern California’s innovation and new business infrastructure grew up before any structures designed to attract them! Its growth was driven by a combination of federal research and development, an educated workforce and the emergence of a new industry — semiconductors. Even today, people will tell you they “work for Silicon Valley.” Similar stories of the emergence of innovation clusters exist across the country. To the which came first, the entrepreneur or the economic development, data show that generally, the entrepreneur comes first.

Healthy businesses are born when entrepreneurs find capital, necessary resources, a favorable regulatory environment and fellow entrepreneurs. More rapid business growth occurs where they can find a ready buyer for their companies, which is why you see a high level of vertical integration between startups and established companies in our nation’s leading innovation communities. To be blunt, entrepreneurs don’t really care where they are when those stars align, only that they align.

Our society uses free market competition as a mechanism to winnow and sharpen entrepreneurial focus — why shouldn’t the same apply to economic development activities that promote business formation and innovation?

Yes, other regions leading our national economy appear to enjoy a high level of coordination, but for the most successful and durable, this coordination is clearly led by the business and entrepreneurial communities.

Read entire column at WashingtonPost.com

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Recently there has been a food fight in Silicon Valley over the behavior of certain Angel investors. Perhaps you’ve seen some of it playing out in the blogosphere. Riveting stuff to be sure. What gets me though is that a lot of the angst seems to center on whether leading Angel investors are acting like VCs or Angels. My first thought was “well, who cares?” But, on reflection, I thought it was revealing of a continued disconnect in the usage of these terms, and what they actually represent.

I think that it is important to clear this matter up because…

Read entire blog from October 1, 2010.

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