The FountainBlue High Tech
newsletter is designed to communicate and connect regularly with our high tech
entrepreneurial members, to make special offerings to our members, and to share
wisdom gained from our community. It is sent free monthly to all FountainBlue
entrepreneurial technology members of our community, with additional
information and access to our members through our Wild Apricot site.
Sign up for our free newsletter by completing the form to the right.
February 2012: What's New with FountainBlue: Advisory Boards
We are serving on the advisory boards of for select members of our community, supporting their marketing, business development and recruitment efforts. Currently, we are providing advisory and business development support Speck Design and their product innovation services http://www.speckdesign.com, and advisory and investment strategy support for Bell Biosystems and their research on heritable magnetic signature in therapeutic cells, with huge implications for diagnostics, cancer, regenerative medicine and cell therapies. http://www.bellbiosystems.com. For more information about any of these organizations and the services they provide, and more information about the organizations where we serve, visit http://www.fountainblue.biz/consulting/advisory.html.
January 16, What's New with FountainBlue: Members as Referral Partners
At the request of our members, we will be sending out our job reqs to our members, inviting everyone to strategically forward them on to their networks of contacts. Thank you in advance to everyone who elects to forward our reqs. Please tell your contacts to mention that you connected him/her to us, so that we can track the origin of our candidate leads. We are happy to pay a referral fee to members who recruit candidates who get hired and stay for a ninety-day period. You may also elect to donate your referral fee to a FountainBlue-approved nonprofit or a nonprofit of your choice. For more information about our job leads, visit http://www.fountainblue.biz/openreqs.html.
January 9, What's New with FountainBlue: Giving Back
Since our launch in January 2006, FountainBlue has been committed to giving back to the community through active participation and financial support. As we shift into recruiting and consulting, we are pleased to contribute financially to nonprofit causes providing executive education, educational benefit, and women-in-leadership. Currently we are supporting the following types of organizations:
Executive Development Organizations:
Career Actions
Educational Organizations:
A Schmahl Science Workshop, as a member of the advisory committee.
Women-In-Leadership organizations:
Global Fund for Women
Global Women Leadership Network
Women's Initiative
Please e-mail us with the following information at info@whenshespeaks.com or complete the form above if you would like to considered an approved, adopted FountainBlue cause.
Your name
Recommended Nonprofit
Your involvement with Nonprofit
Why you would recommend this Nonprofit
Why FountainBlue's membership of clean energy, high tech, and life science entrepreneurs would find this nonprofit beneficial to the community overall
We are happy to profile a nonprofit each month, and recommend any of these nonprofits as worthy causes.
If you’re interested in catching up over the phone or in person, please visit http://meetwith.me/lindaholroyd and suggest a good time to connect. Please also let us know if we can support you with your recruiting, consulting and coaching needs as you grow your business.
January 2, What's New with FountainBlue: A New Year, A New Newsletter Format!
We are looking forward to an exciting new year, and an exciting new time for the valley and the global community! It is our hope that our weekly newsletter will provide you with relevant, useful information about business and market trends and their implications for your business. We invite your inquiries, suggestions, feedback and interest as we continue with our consulting, coaching and recruiting efforts! If you’re interested in catching up over the phone or in person, please visit http://meetwith.me/lindaholroyd and suggest a good time to connect. Please also let us know if we can support you with your recruiting, consulting and coaching needs as you grow your business.
Hot High Tech Trends
Every month, we will highlight a High Tech trend and
also profile a local innovator leveraging that trend. We distribute our trends
and profiles to our community of about 3,000 Silicon-Valley based,
entrepreneurial high tech advocates and innovators through our web site,
through direct, permission-based e-mails and through our groups, including
LinkedIn and YahooGroups.
Convergence Emergence. For a glimpse into how social will further integrate with "real life," we can look at what Coca Cola experimented with all the way back in 2010. Coke created an amusement park where participants could "swipe" their RFID-equipped wristbands at kiosks, which posted to their Facebook account what they were doing and where. Also, as part of a marketing campaign, Domino's Pizza posted feedback — unfiltered feedback — on a large billboard in Times Square, bringing together real opinions from real people pulled from a digital source and displayed in the real world. These types of "trans-media" experiences are likely to define "social" in the year to come.
The Cult of Influence. In much the same way that Google has defined a system that rewards those who produce findable content, there is a race on to develop a system that will reward those who wield the most social influence. One particular player has emerged, Klout, determined to establish their platform as the authority of digital influence. Klout's attempt to convert digital influence into business value underscores a much bigger movement which we'll continue to see play out in the next year. To some degree everyone now has some digital influence (not just celebrities, academics, policy makers or those who sway public opinion). But for the next year, the cult of influence becomes less about consumer plays like Klout and more about the tools and techniques professionals use to "score" digital influence and actually harness, scale and measure the results of it.
Gamification Nation. No we're not talking about video games. Rather, game-like qualities are emerging within a number of social apps in your browser or mobile device. From levels, to leaderboards, to badges or points, rewards for participation abound. It's likely that the trend will have to evolve given how competition for our time and attention this gaming creates. Primarily, gamification has been used in consumer settings, but look for it in other areas from HR, to government, healthcare and even business management. Perhaps negotiating your next raise will be tied to your position on the company's digital leaderboard.
Social Sharing. Ideas, opinions, media, status updates are all part of what makes social media a powerful and often disruptive force. The media industry was one of the first to understand this, adding sharing options to content, which led to more page views and better status in search results. What comes next in social sharing is more closely aligned with e-commerce or web transactions. For example, Sears allows a user to share a product or review with their networks directly from the site. Sharing that vacation you just booked, or recommending a product, or service from any site to a social network is where sharing goes next. We probably don't know what we are willing to share until we see the option to do it.
Social Television. For many of us, watching television is already a social act, whether it's talking to the person next to you, or texting, tweeting, and calling friends about what you're watching. But television is about to become a social experience in a bigger and broader sense. The X Factor now allows voting via Twitter and highlights other social promotions, which encourages viewers to tap social networks while they watch. Another way media consumption is becoming social comes from a network called Get Glue which acts as something of a Foursquare for media. Participants can "check-in" to their favorite shows (or other forms of media) and collect stickers to tell the world what programs they love. Watch for more of this year as ratings rise for socially integrated shows.
The Micro Economy. Lastly as we roll into 2012, watch for a more social approach to solving business problems through a sort of micro-economy. Kickstarter gives anyone with a project, the opportunity to get that initiative funded by those who choose to (and patrons receive something in return). A crowdsourcing platform for would be inventors called Quirky lets the best product ideas rise to the top and then helps them get produced and sold while the "inventor" takes a cut. Air BnB turns homes into hotels and travelers into guests, providing both parties with an opportunity to make and save money. These examples may point to a new future reality where economic value is directly negotiated and exchanged between individuals over institutions.
Emota is our February profile in innovation in social TV, social sharing, and convergence emergence as well as gamification.
Under the auspices of the National Science Foundation SBIR Phase II program, Emota http://www.emota.com produces Healthy Lifestyle applications which blend mobile, digital living room, and social networking technologies to help people stay active, healthy, and connected. Emota's focus is creating pleasurable consumer experiences that enrich life through better social and emotional connectedness, while working with health and service providers to deliver personalized health & lifestyle services.
At CES 2012, Emota will be announcing three new products which together form a social experience platform designed to engage friends and families across a broad age and culture spectrum.:
emota.ME - A Facebook app that provides a private and fun place for people to stay in-touch with close friends and families. It’s like friends hanging out around a good bonfire, doing spontaneous fun things together, having the occasional voice/video chats, sharing life moments even though they can be far apart in distance. http://youtu.be/zB_u0vyLbKI?hd=1
emota.TV - A SmartTV app that is designed to bring the Emota experience into the living room. Perfect for those who want to stay close with remote friends and family without having to learn computer and internet skills, or for those who just want to stay away from the computer when they are home. http://youtu.be/7e8gfenafRw?hd=1
emota.THINGS - A series of wirelessly connected objects in the living room designed to emotionally engage the user and to create a sense of social connectedness in the living space. http://youtu.be/7e8gfenafRw?hd=1
Past Trends and Profiles in Innovation
For the month of January 2012, we
are featuring “One of the Six Investment Themes for 2012”, International
Business Times, written by, Moran Zhang, December 23, 2011, Opinion of Kent
Croft, portfolio manager at Croft Value Fund:
4. Broadband Internet
Broadband internet penetration
growth has caused IP traffic to increase eightfold over the past five years
with continued robust growth expected in the future driven by mobile devices
and bandwidth-intensive streaming video. The key beneficiaries are companies
who provide better service and enrich the online experience via their software,
hardware, and applications.
Other five investment trends are
natural gas, fresh water, agriculture, timber and electric grid.
Ruckus Wireless is a profiled January Company highlighting the importance of internet broadband.
Headquartered in Silicon Valley, Ruckus Wireless is a supplier of advanced
wireless systems for the mobile Internetworking market. Ruckus Smart
Wi-Fi delivers higher capacity and more reliable Wi-Fi connections to client
devices. The patented BeamFlex adaptive
antenna technology optimizes RF signal
paths in real-time to increase signal strength and dramatically improve overall
capacity. Carriers and enterprise have the option to optimize their
networks either for coverage or high capacity by deploying as few or as
many Ruckus APs as desired to meet their goals. Ruckus, led by Ms. Selina Lo,
president and CEO, has shipped over 2 million Smart Wi-Fi systems. http://www.ruckuswireless.com
Complete the adjacent form if you have
a recommendation for a Silicon-Valley based company we can feature as a
‘Profile in Broadband Internet Innovation’ for next week's newsletter.
You may also elect to e-mail us at info@sventrepreneurs.com with the information below:
Name and Company:
100-word description of why it is
innovative:
Link for more information:
URL with picture of innovation:
Company Contact Details:
This Year’s Funding Trend
2012: The Year the #Startup
Playbook Changed, posted by Don Adeo on TheFunded.com, December 29, 2011
2011 was an amazing year for
startup financing.
While traditional sources of
investment declined, such as venture capital and angel groups, tens of billions
more capital was still invested in private companies through a variety of new
sources. A completely new financing landscape started to take shape in 2011,
making 2012 the year that the “playbook” changed for startup financing.
Just a few years ago there was
one startup playbook that was fairly consistent worldwide;
Step 1: A promising startup looking to
change the world would pitch a local angel group and raise a few hundred
thousand dollars.
Step 2: If everything went well and they
were able to get traction, they could raise a $1 to $5 MM Series A from
hundreds of venture funds spread throughout the world.
Step 3: When the revenue model of the
company was proven out, the startup, now classically called an upstart, would
raise a $5 and $15 MM Series B or Series C from dozens of later stage VCs.
Step 4: As the company scaled the revenue
and the team, they would arrange a mezzanine round with a few strategic firms,
a bank and a private equity firm to share up their balance sheet before going public.
This has been the playbook for
the 18 years that I have been running technology companies, but it is quickly
starting to look like ancient history. What has taken its place? Dozens, if not
hundreds, of varying financing options now entice and confuse the startup
entrepreneur. There is a complex tapestry of capital sources, vehicles and
deals for every stage, including liquidity. There are so many options, that
2012 could be called the year of optionality, but the outcome of many of these
financing routes are uncertain. So, in 2012, I predict that we will start to
see some of these options group together into new viable funding paths for
startups.
Let's take a look at just a few
of the new options available today that, for the most part, did not exist just
a few years ago. How do they work, and what viability questions will be
answered in 2012?
Crowdfunding
Almost overnight, crowdfunding
has emerged as a viable financing option - especially for companies who produce
a premium offering. Startups usually pre-sell access to media, hardware and
software through crowdfunding sites, like Kickstarter.com, which allow the
public to contribute different levels of funding based on access. The success
of this model has been so dramatic that there are two proposals in the US House
and Senate to formally legalize the practice. But can a single crowdfunding
round be enough, and can crowdfunding expand beyond movies and hardware
accessories?
Incubators and Accelerators
Hundreds of incubators and
accelerators have sprung up to the point where there are now several in most
major cities worldwide. Startups can trade a small amount of equity, normally
less than 10% of the company, for some cash, usually less than $20,000, and
some services, such as facilities, guidance or launch promotion. Incubators,
which tend to be earlier stage and have more services, and accelerators, which
tend to be later stage and provide more capital, have replaced many of the
angel groups that serve a similar function. But can the hundreds of copycat
programs in various markets around the world re-create the success of the early
pioneers?
Online Networks
AngelList has grown over the last
12 months to become "the" social network for startups and angels to
connect. A startup with a credible lead investor can use the added exposure
from AngelList to create a "snowball effect," sometimes turning a
five-figure round into a seven-figure one. But what are the regulations that
apply to these networks, if any, and can the communities maintain the quality
of participants as they expand?
Competitions and Prizes
A number of "demo day"
competitions have emerged with large attendance, pitch guidance, strong media
exposure and cash prizes, such as SeedCamp, TechCrunch Disrupt, and the Founder
Showcase. Successful companies have won tens of thousands in prize money,
secured extensive press coverage and raised millions following such events. But
can these competitions be scaled to bring success to multiple companies in
multiple locations?
Secondary Markets
A number of secondary markets,
specialty brokers, and secretive funds have emerged to purchase the stock of
private companies in both "on the books" and "off the
books" transactions, including SecondMarket and SharesPost. Shares in high
profile upstarts are sold to private individuals, providing both growth capital
and employee liquidity. There is even a vehicle for employees to borrow money
on their employee stock options, pledging the options as collateral. But how
will these markets be legitimized, accepted and regulated over time?
The Mega Round
A few late-stage investors, such
as DST (now Mail.ru), venture capital firms and investment banks, such as
Goldman Sachs, are doing mega rounds - otherwise known as the "IPO
replacement" rounds. The fastest growing startups are skipping Series B
funding and raising hundreds of millions of dollars at multi-billion dollar
valuations. But are these mega rounds sustainable, and will they grow to
replace the IPO?
Multistage Funds
Most of the remaining 200 venture
funds that still operate worldwide have moved into stage-agnostic investment,
participating in deals from incubation to mega rounds. Today, startups can
pitch most venture capitalists at any stage in their lifecycle, and there are
opportunities to raise anything from a hundred thousand dollars to millions.
But can stage-agnostic funds be successful with such a diverse approach to
funding?
Super Angels/ Micro-VCs
Prominent regional angels around
the world have amassed $5, $10 and $20 MM funds to make dozens of local
investments. Startups pitch these super angels to receive tens of thousands of
dollars in investment plus instant exposure to the local angel funding
ecosystem. But can this model work outside of Silicon Valley?
Government Programs
Governments around the world have
been trying to jumpstart local versions of Silicon Valley with a wide variety
of programs, such as Startup Chile, Skolkovo Russia, and the IDA in Singapore.
With these initiatives, there are usually conditions to receiving capital, such
as using the money to hire locally. Are these programs short-term stimulus or
long-term value creation?
As if all of these new options
were not enough, there has been an explosion in corporate investments, new
university funds, philanthropic funds, sovereign wealth funds, industry-focused
incubators, prize programs, and multiple other sources of capital.
In general, choice is good for
entrepreneurs, but as I outlined above there are still some serious concerns.
First, many of these new sources of capital are unproven, and, in some cases,
their legal and regulatory future is uncertain. The party can end very quickly.
Second, there are no best practices, transparency or guidelines for all these
new vehicles - so hiccups and failed experiments are to be expected. Lastly,
there are some looming structural problems that could bring the whole boom
crashing down - specifically, the billions of unsecured convertible debt issued
throughout late 2010 and 2011.
But in the end, we are in the
largest startup funding boom since the dotcom bubble burst in 2000, but with
probably more money being thrown around. After all, nobody really knows how
much capital is being poured into startups since many of the new vehicles are
not tracked.
2012 is looking to be a bright
year. It’s the Wild West in startupland, and 2012 will be a wild ride. Hold on
tight!