February 2016

small washpo

Living in the greater Washington region means you are probably not the smartest person at that cocktail party. That’s a plus. Yet being close to the federal government is often seen as an impediment to entrepreneurial activity.

The truth is, this region is intensely entrepreneurial; many are surprised to hear that over the past several years, more new businesses are formed here than in both Silicon Valley and Boston.

Entrepreneurs here know how to build an emerging industry within government regulations. We here acknowledge that in a highly complex post-industrial society, rules will always exist and government will likely set them. Some suggest that entrepreneurs should ignore rules and regulation and “disrupt” them. The point is more nuanced, though, because even when a business seeks to disrupt existing practices, it needs to understand the regulatory environment it is entering. Uber may be disrupting the taxi industry by not working within existing regulations, but it is fully aware of them. It defines its business model and practices by offering more than its regulated competitors.

An entrepreneur who ignores existing regulations fails to understand the competitive environment within which he or she operates. It’s what sets our region’s entrepreneurial successes apart: the differentiator is that many founders here actually played an active role in shaping rules and thinking ahead of them. It’s about both proximity and insight — insight that comes from…

Read entire column at WashingtonPost.com.

 

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Next Friday, a group of experienced entrepreneurs from FounderCorps are doing a panel on the “Top Ten Mistakes Entrepreneurs Make.”  I’ll be joined by FounderCorps members Alex Murphy, Dadi Akhavan, Donna Harris and Tien Wong.  For those of you who can make it, we’ll be at the University of Maryland Technology Startup Bootcamp.  The link for the event is here.  I’ve participated in this bootcamp many times over the years, and I recommend it highly for any budding entrepreneur in the Greater Washington Region.  Knowing my co-panelists as I do, I am sure that they will have lots to share.  I know that they’ve made lots of mistakes over the years (as have I). It will be interesting to see who owns up to them….

In preparation for the panel, I thought I would provide my own list memorable entrepreneur miscues I’ve…

Read entire blog post from October 7, 2011.

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small washpo

I have provided capital for many start-up businesses, and raised money for a few of my own. I am often asked for advice on how or whether an entrepreneur should seek venture capital. My initial advice is simple: Don’t.

Entrepreneurs usually start businesses because they need autonomy and independence; they cannot work for someone else. As my granddad used to tell me, “no one gives you money for nothing.” That is certainly true for investors. They give entrepreneurs cash because they want to make more cash. They expect to be listened to, or at least have their financial interests regarded as the entrepreneur uses their capital to grow his or her business. Boom. Just like that — by taking outside capital — the entrepreneur sacrifices autonomy.

That’s not all. By taking outside capital, the…

Read entire column at WashingtonPost.com.

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I’ve never seen an approach to regionalism in Greater Washington quite like Bob Buchanan’s. It’s methodical, targeted and, for now, mostly covert. And that’s a good thing.

Buchanan, as you’ll recall, is a developer who in 2010 launched The 2030 Group to explore Washington’s future. I lamented at the time that the organization wasn’t really needed.

As data pointed to economic headwinds for the region a couple of years ago, Buchanan got more serious about his effort, enlisting the region’s top economist, Steve Fuller of George Mason University,  to study what Greater Washington’s economy would look like with less federal spending.

It’s been more than a year now, and the effort has mostly been behind the scenes. Fuller used the Cardinal Bank economic summit, where he has spoken for years, to unveil the first tranche of data. The group also paid to publish its work — dubbed the Roadmap for the Washington Region’s Economic Future —in the Business Journal in January.

But the real work is taking place in several “working groups.” As Buchanan says, some are farther along than others, such as the group exploring how to brand our region (starting with selling ourselves about what we are). There’s also an affordable housing group, higher education group and one exploring a regional transportation authority. Last fall, Buchanan, working with Jonathan Aberman of Amplifier Ventures, added another focus — how to develop our entrepreneurial culture. Aberman expects to issue a report…

Read entire article at WashingtonBusinessJournal.com.

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small tbt

If you have been watching Europe over the last year or two (or have been reading my blog), you know that there is a slow motion car crash happening over there.  As I have written about previously, the European Union is caught in an apparently unreconcilable conflict between Germany’s fear of inflation and a need to rationalize government spending and investment in a more flexible manner.  I am afraid that a breakup of the Euro is looking more and more likely, and in light of the path that Europe is on right now it could be argued that the sooner the better.  The similarities to early 1930s economic history with today’s Euro substituting for gold as the main protagonist are troubling.  Unless Germany dramatically changes its position and willingness to support monetary expansion in the EU, it is likely that a number of EU nations will be forced to take back their right to issue currency or fall ever deeper into a deflationary spiral.

Before I go on to the main point of this blog posting, I do want to emphasize that the breakup of the…

Read entire blog post from May 9, 2012.

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small washpo

Yesterday’s technological breakthroughs are — quite literally — now sitting in the palm of your hand.

The semiconductor, GPS, Internet protocol — and even that annoying know-it-all Siri — are all in your smart phone, and they were all invented by scientists financed by national security research spending.

The indisputable link between national security spending and development of new industries can be seen in railroads, highways, aviation, telecommunications, and computer software and hardware.

Next year, the federal government plans to spend more than $140 billion on…

Read entire column at WashingtonPost.com.

 

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small tbt

Recently, I was asked by the Washington Business Journal to provide my ten best hints on managing growth in an emerging business.  You can find that article here.  I believe that the challenge of growing a business past the start up phase is actually much harder than appreciated.  But, there is much less in the startup media about these issues.  Actually, what happens after “acceleration” is more important and much more littered with failure.  With that in mind, here are my ten keys to meeting the challenge of growth.

1.       Match Money to Growth. Corporate finance is not about getting a particular type of financing as a way to signal your importance. It’s about getting capital that has the right growth expectations for your business’ likely path.  Money is only a way to keep score once it’s yours.  Until then, it’s a resource to get the things you need to succeed.

2.       Avoid Burning Hair.  If everyone at your company is…

Read entire blog from October 6, 2013.

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small washpo

We are living Groundhog Day in the capital region.

The greater Washington region is poised for growth if we learn from the past. Sometimes you need to keep having the same conversation repeatedly to be able to define differences and opportunities.

I have been at a few discussions recently about regional economic growth — and some passionate business people admitted that sharing their ideas felt a little like the Bill Murray movie “Groundhog Day.” They have said to me, “What’s different now?”

You might remember that Murray’s character keeps repeating the same day over and over. What you might not remember is that…

Read entire column at WashingtonPost.com.

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Helped by falling oil prices, airlines are reporting record profits, but for many passengers this sudden bonanza has meant little more than extra bags of free peanuts and pretzels.

The four biggest domestic carriers — American Airlines, Southwest Airlines, Delta Air Lines and United Airlines — together earned about $22 billion in profits last year, a stunning turnaround after a decade of losses, bankruptcies and cutbacks. A big reason for this is the plunging price of jet fuel, which now costs only a third of what it did just two years ago.

But that windfall is only slowly finding its way down the aisles. Days after reporting record profits, for instance, two of the nation’s biggest airlines brought back free snacks in coach.

United said it would begin serving complimentary stroopwafels, which it described as “Dutch-made toasted waffle treats,” and American said it would offer free meals in economy class on flights between Dallas and Hawaii, and free snacks on all domestic flights.

Airfares, however, have remained stubbornly high.

Rick Seaney, co-founder of FareCompare.com, says airfares have been essentially stable for the last two years except on some routes where airlines have faced competition from low-cost carriers like Spirit Airlines.

Analysts say there is little mystery why. A decade of consolidation has reduced the number of airlines competing in many markets, making it easier for dominant carriers to charge more for flights. At Newark Liberty International Airport, for example — where United, which merged with Continental Airlines in 2010, accounts for 70 percent of flights — airfares are the…

Read full article at NewYorkTimes.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…
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