International Startup Festival Celebrates Entrepreneurs

It’s a great time to be an entrepreneur.  It seems like everywhere you turn, someone, some organization, some company is throwing a party in honor of the starters.

This summer’s newest event is the International Startup Festival (www.startupfestival.com), to be held July 13-15 in beautiful Montreal.   The two-day conference focuses on the business of startups, and like any great festival will feature talks, pitches, panels, demos, and surprises on multiple stages around the venue.   The festival brings industry veterans and renowned pundits together with young entrepreneurs and disruptive thinkers to talk about the issues and ideas that span the startup life cycle: early-stage innovation; growing the business; and exiting with success.  I’ll be speaking there, along with Dave McClure, Paul Kedrosky, Jeff Clavier, Howard Lindzon, Andy Nulman and a dozen others. You can track the evolving program at  www.startupfestival.com

In addition to talks and round tables, the Startup Festival will showcase new companies from around the world to pitch and demo the latest innovations. There’s even a plan to do elevator pitches in an industrial elevator that seats 30.  Startups interested in pitching at the Festival need to apply to the event organizer.

The event is being organized by my friend and startup champion Philippe Telio, creator of the event and president of of Embrase Business Consulting.  His goal: to make the event smart, fun, and global.  As if hanging out with smart entrepreneurs isn’t enough fun, the Festival is running in parallel with multiple Festivals in and around Montreal: the Just For Laughs Festival, Cirque du Soleil’s Complement Cirque, The International Fireworks Festival, and the Fantasia Film Festival.

4 Principles for Enabling Innovation

I started my day at SAP Labs in Palo Alto moderating a panel discussion about “Enabling Innovation: How does it happen? What’s the secret sauce?”  The room was filled with the managing directors of SAP Labs worldwide and their invited guests, the vast majority of them representing multi-billion dollar global businesses that are challenged, presumably, by the task of continual innovation.

The panel was representative of the of the Silicon Valley ecosystem:

  • Kimber Lockhart and Jeff Seibert, co-founders of Increo Solutions (the entrepreneurs)
  • Mark Radcliffe, partner at DLA Piper (the lawyer)
  • Dan Pistone, SR VP for tech banking at Bridge Bank (the banker)
  • Gamiel Gran, VP Business Development at Sierra Ventures (the VC)
  • and me (the analyst)

We started the conversation by level setting around the idea of innovation itself.  I usually argue that the word “innovation” is so easily tossed off that it has lost its meaning.  Everybody is “innovative,” even when we can’t be sure how or why.   I contend that innovation is what someone will buy.  Jeff’s definition is even better:  “delivering creativity to end users.”

As this part of the conversation unfolded, though, it became clear that innovation isn’t  a thing; it’s a process. Innovation doesn’t just happen.  It’s exercised and deliberate.  And it that regard, it also may well be a culture, a state of mind, a core value of an individual or organization.

So what marks an innovative company?  Surely, the list is longer than that which we discussed in 45 minutes this morning  (and I invite your additions to the list in the comments, please).  Our conversation kept coming back to these four ideas:

  1. Vet ideas early and often. Jeff and Kimber told the story of founding Increo as a process of testing ideas.  Did they dig the idea?  Did it resonate after the initial excitement wore off?  Did other people see value in it?  Brain storming twice a week helped the vet countless “incredibly great bad ideas.”
  2. Try something. Feedback is critical and there’s no better way to get feedback than to put something – anything – out for response. Again from the Increo founding story: “We weren’t coming up with any great ideas for a business, so we decided to just build an idea sharing site,” Jeff said.  The site morphed into an enterprise idea bank which morphed again into the Increo document collaboration platform, acquired by Box.net in August.
  3. Embrace failure, fail fast. Mark Radcliff was quick to point out that Silicon Valley is distinct from other technology ecosystems in its acceptance of failure, almost as a price of entry for innovation.  You can imagine that a roomful of corporate lieutenants would be loathe to celebrate failure with their management.  And frankly, I think “fail fast” is one of those Valley pablums that lose their meaning in bad practice.  Rather than failing fast, companies need to learn to fail smart.  They need to understand what went wrong and why, do it quickly, reset, and try again.
  4. Balance innovation and invention. As “delivered creativity,” Innovation implies an immediacy with the customer.  That’s great for solving today’s business problems, but may leave a large company like SAP flat footed in the long term if they don’t also engage in primary research on the path to invention.


Just Say No: What the Venture Guys Really Mean

I had a delightful lunch yesterday with Howard Hartenbaum, a general partner at August Capital.  The lunch was offered as a “prize”  during Lunchster‘s  six-minute product launch at DEMOfall. I’d agreed to have lunch with whomever won the draw, even these are the sort of promises that can pretty rapidly go bad.  You have no idea who you’ll end up sitting across from, wishing that you’d suggested Taco Bell drive through as a speedy alternative to the white-linen dinning you had to endure.

When I got the email that Howard would be my lunch date, I felt like I was the winner.  I’d first met Howard as part of the team that launched Public Minds’ response aggregation system at DEMO 2001.  Since that time, he’d made the move from entrepreneur to VC and scored his “big win” – an early investment in Skype. His choice of Palo Alto’s Tamerine Restaurant only confirmed that Howard still picks winners; it’s a local favorite of mine).

Most charmingly, Howard didn’t seem to want to monopolize the conversation with shop talk.   Instead, shared restaurant tips, swapped medical mystery stories, railed on litigation-happy parasites, and concocted an elaborate story of long-suppressed love unleashed by a chance encounter courtesy of Lunchster.

Since I was pretty sure no one would believe that last yarn, I asked Howard what he didn’t like about being a VC.  “I don’t like saying no,” he responded without hesitation, adding that it’s made worse by the fact that as a VC one must “say ‘no’ 99% of the time.”

Okay, I’m a bit cynical when it comes to what venture guys say and what they do, and in my experience, most VCs don’t say no.  They say things like “I need you get more customer traction” or “this deal is too early for us but come back in six months” or “I’ll need to get my partners on board with this” or a couple dozen variations on these themes.

Howard seemed to sense what I was thinking. “Venture capitalists have two responses to entrepreneurs,” he said, “yes and everything else.”

To his great credit, Howard decided to take on “no” head on.  “In life and in work, when there is something that makes me really uncomfortable, I make a point of doing it in the hopes that I’ll become inured to it.”

So when he decides to take a pass on a company, he calls the entrepreneur directly and tells him no.  Has it gotten any easier?  “No.”

But he does it.  He does it because he respects entrepreneurs. He does it because he isn’t going to waste their time.  He does it so that entrepreneurs know the why behind the no.

A “no” is such a rarity in the venture hunt that entrepreneurs may not know how to act.  Here’s my advice:  don’t argue, don’t debate, don’t tell a guy like Howard that he’s wrong.

Listen for the no and be glad for it.  That VC is saving you time and heart ache.  Listen to it, accept it, and move on.

The Vortex: Oversharing

I’ve spent the last seven days trapped in the house with two sick children, which means I have more links piled up than I know what to do with, and my fuse is shorter than Balloon Boy’s 15 minutes (too soon?). So if I offend anyone, deal with it. This Vortex will also have to tide you over for a bit, as I am moving to Austin next week (whoop!) and will be offline. Now that you know far too much about my personal life, on to technology.

News from the Social Media Vortex

–This is biased but I don’t care. If you haven’t read Chris Shipley’s response to the latest Calacanis rant on angel investors, please do so posthaste. Surprise – she actually agrees with him! But she has some fun with it too.

–If a Nordic country falls from the Internet and no one notices, does it make a sound? Due to a typo in a script, Sweden dropped completely off the Interwebs for an hour and a half Monday night.

–Comic book fans now have reason to join Twitter. Neil Gaiman is conducting a storytelling experiment on the service, enlisting followers to help him create an audiobook. Madlibs for nerds, if you will.

–In news that surely made old-media stalwarts curl into the fetal position, the Huffington Post passed the LA Times and Washington Post in site traffic this week.

–It’s pretty hard to win the Worst. Post. Ever. award. When you consider the millions of blog posts that appear each week – many of which feature piano-playing cats – one would have to write something really painfully awful to win this award. So let’s all send hearty congratulations to John Biggs at MobileCrunch.

Apps on the Radar

Jason Meserve pointed me to the super-cool AutoStitch app, which lets you create panoramic pictures on your iPhone.

–During a search for a friend, I was referred to Get Apps Done, something of a clearing house for iPhone app developers and the people who need them.  Love stuff like this – a simple, logical concept that is needed by a large group of people.

–Were it 1989, I’d be excited about this.

–And finally, thanks to Apple’s new policy allowing developers to build paid upgrades into free applications, the follow-up (or part of it at least) to hugely popular game Rolando is now available for free.

Tweet of the Week

–It’s rare that the winner triumphs so easily but you’d be hard-pressed to trump Billy Ray Cyrus this week. After his daughter Miley threatened to leave Twitter, he responded with this:

Miley. You are a light in a world of darkness. You were born “Destiny Hope Cyrus” for a reason. You can’t leave everyone now. We r countin on u.

If I’d known the messiah was going to come in the form of an autotuned child star, I’d have watched more Disney Channel.

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Rage Against Angels Or Reach Out a Hand?

Jason Calacanis is at it again, and this time – dare I say it – the man has a point.  In a post last Friday, Jason rails (does he do anything other?) against angel investor groups that charge startups a fee to present at their forums.

He writes:

Recently, I was made aware of a group of angel investors that were charging startups to pitch them.

Yes, you heard that correctly: the rich people (angels) are charging the poor people (startup entrepreneurs desperate for cash to fuel their dreams) to hear their pitch. No, I’m not kidding. This is actually happening — and it’s widespread.

While I’ve long found insulting Jason’s “payola” rants and the accompanying characterizations of first-time founders as poor, lost and naïve inventors unable to make reasoned and reasonable decisions about how best to apply their scant resources, this time he’s got a point: savvy investors should bear the cost of meeting entrepreneurs and reviewing deal flow as the price of entry to the venture asset class.   But rather than decry the practice and advise young entrepreneurs, Jason does what he always does:

When I heard this, my blood started to boil immediately. So, I did what any maniacal, self-absorbed CEO from Brooklyn would do: I started a jihad against this dispicable [sic] form of payola and the people doing it. It’s on people … it’s on like a Donkey Kong.

. . . [If investor groups do not disclose their practices or stop charging fees],  my group of startup CEOs and angel investors will begin targeting specific groups for elimination. We will launch competing, fee-free events directly opposite your events. We will encourage angels [sic] investors, service providers and startups to boycott your events. You may even find our street teams outside your events handing out flyers.

So, while Jason arms his (cough) “Nation” with fliers and vindictive, how about some clear advice for entrepreneurs?

You see, unlike Jason, I don’t believe that entrepreneurs who pay to participate in investor pitch events are “ugly, unpopular and lack talent.”  Come on. Even Hugh Grant paid for sex.

Let’s face it: For the vast majority of startups, fund raising is a full-time occupation. Silicon Valley is a tight-knit and sometimes insular environment. It’s an environment of networks where who you know and how you know them is the difference between a call back and deafening silence.  And, frankly, an environment in which one should never confuse luck for talent.  Great entrepreneurs learn to navigate into that network, establishing relationships, seeking advice, giving as good as getting in order to be seen and heard above the throngs of entrepreneurs who also have dreams that just need a dose of capital to be realized.  For entrepreneurs relocating their businesses to the Valley from overseas or even across the Continent, the networking is even that much harder.

So, it’s tempting to want to shortcut that process, and nothing says “shortcut” like cash. Why not spend 1,000 bucks if a kiretsu of wealthy angels will listen to your pitch? And make no doubt about it, every entrepreneur who has ever pitched at a PlugAndPlay Expo has been told by at least one “investment consultant” that he’ll have to hire his way to venture capital.   A fifteen grand retainer and five to 10 points are table stakes.

For some entrepreneurs, the gamble pays off.  It’s an expensive way to raise money; before you’re even started as much as 10 percent of the raised capital is gone.  But, again, let’s be real:  the vast majority of startups don’t raise money from name-brand angels or top tier institutional investors.  In fact, the vast majority of startups aren’t successful in raising outside money at all.  These pay-to-pitch venues exist as a resource of last resort for entrepreneurs who haven’t had the good counsel to consider other options.

Railing against investor groups is one way to fight pay-to-pitch sessions, but I doubt it will work.  So long as there are entrepreneurs who relentlessly pursue their dreams, someone will find some way to exploit them.  But again, it needs to be said: no one is forcing those entrepreneurs to pony up for a pitch.  They make that (perhaps bad) choice all on their own.

Picketing investor meetings may make a statement, but if Jason – or any of us – really wants to support entrepreneurs, we’d do well to open our minds and our networks to them, remembering to give as good as we got when we first came to the Valley.

DEMOfall 09 is Nigh

Happy Friday, all.  Never fear, a snarky Vortex approacheth. In the meantime, I want to take care of a little business and remind you that DEMOfall is coming up September 21-23 in San Diego and you don’t want to miss it for several reasons:

-60 fantastic new technologies launching

-Chris Shipley’s last DEMO and Matt Marshall’s first as executive producer – there’ll be lots of fun happenings around both

-A once-in-a-lifetime gathering of 20 years of DEMO alumni for the Lifetime Achievement Awards, including Donna Dubinsky, Diane Greene, Jeff Hawkins, Shai Agassi, Ben and Mena Trott and many others

Friends of Guidewire are eligible for an exclusive discount, so click here to take advantage. And if you’re an unfunded startup, drop me a line at carla@guidewiregroup.com and we’ll see what we can do to get you through the door.

Hope to see you in San Diego!

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Finding Support from Women Entrepreneurs

Sometimes, I don’t exactly know what I think until I read what I’ve said or written in someone else’s media.  Such is the case with this interview with TheNextWomen, the London-based media startup that bills itself as the “business magazine for female Internet heroes.”

The site describes itself as. . .

the first Women’s Internet Business Magazine, with a focus on startups and growing businesses, led, founded or invested in by women. We bring news on business, events, funding and tech from a female angle and interview and profile Female Business Heroes, make them notable and quotable.

We are the female Business Week, the female Techcrunch and the business Red.

We [are] compiling a database on female founders, CxO’s and VC’s of internet companies.

Among the site’s heroes (thank, you, God, that they haven’t reclaimed that horrific feminist label “sheroes”) are women as diverse as Esther Dyson, Catherine Fake, Arianna Huffington, and Queen Elizabeth.

But enough about them. . . this was an interview with me.  Site founder Simone Brummelhuis’s questions were wide ranging, but the one that jumped out, asked what European women entrepreneurs can learn from their U.S. counterparts.

My simple-to-say-but-apparently-complex-to-do answer:

There are still far too few women who take the path of technology entrepreneur. No doubt there are many subtle and obvious reasons for that path.

I think at base, though, the best thing women entrepreneurs can do for each other is to challenge them to perform at exceptionally high standards, to create businesses with meaning and impact.

If women drive women to be the best entrepreneurs they can be, supporting their unique talents and limitations, then I do think we’ll see more women choose the path of startup CEO.

The fact is that women entrepreneurs do support other women entrepreneurs.  And we need to because frankly we often don’t get the kind of support we need from women who are outside the startup world and don’t understand the life choices that entrepreneurship requires.

Building a business is hard work (for women and men) and there is really no “balancing” of work and personal life in the earliest days of a company.  We need strong support systems: of other entrepreneurs, of family members, of our friends, and of communities both inside and outside the startup world.

Which reminds me: Thank you, Nancy, Mom, and all those friends I don’t see often enough.  You all, as much as my colleagues inside the company, allow me to do what I do.

A Message to the Guidewire Community

It’s been an exciting morning around here, with the news of Chris passing the DEMO Executive Producer baton to Matt Marshall and DEMO’s new partnership with Venture Beat. Chris has detailed her personal feelings on leaving DEMO after 13 years, but we also wanted to take a moment to share a bit more about where Chris and Guidewire Group are going.

Over the next six months, we’ll continue to work on vetting and selecting startups for Chris’ final DEMO in September. At the same time, we’ll be starting a new chapter at four-year-old Guidewire Group, energized by the thought of having Chris’ undivided attention in the not too distant future! Most of you know Guidewire Group as a partner to DEMO. We are also the world’s leading analyst firm focused exclusively on startups and emerging markets. In that role, we work with young companies at key transition points, when every idea looks good on paper and every decision counts, to deliver unparalleled counsel on a variety of topics – from business and monetization strategies to market validation and competitive analysis delivered through custom and retained projects, events such as Innovate!Europe and our intensive in-residence program for young companies, Guidewire Studio.

And the best part is there’s a growing movement in the entrepreneurial ecosystem that believes “thinking is cool again” – that building companies that deliver long-term value through technology and business innovation trumps the “be here now – be gone tomorrow” mentality of pop culture startups anytime. As this movement gathers steam, we’re finding that Guidewire Group is in demand for our insight into emerging market trends, best practices, and common mistakes and for our ability to bring clarity, focus, and decades of emerging technology experience to the art of transforming ideas into successful enterprises.

Our wonderful experiences with DEMO allowed for short, intense opportunities to engage with startups.  We now look forward to extending those engagements, working more closely with companies to help them validate and strengthen their critical opportunities.  We’re passionate about startups and we know we can help them be more successful.

There’s much to share with you in the months ahead so we hope you’ll check The Guidewire blog regularly, follow us on Twitter, and visit our Facebook page.  New paths are always the most interesting to travel and we hope you’ll be right alongside us.

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Changes at DEMO: Chris Passing the Torch

Who could ask for a better job? For the past 13 years, I’ve spent my days talking with some of the smartest people on the planet. People passionate about technology and the art and science of molding that technology into products and services that address real challenges and bring new capabilities to people’s lives.

I’d be hard pressed to make an accurate count, but I’d guess that since taking the reins of DEMO in the spring of 1996, I’ve met no fewer than 15,000 entrepreneurs, inventors, and innovators, and helped about 1,500 of them launch their products to market on the DEMO stage.

DEMO has given me the opportunity to travel the world; meet with government officials and business leaders; interview certified geniuses and a few certifiable nut cases, and through newsletters (back in the day), blog posts, speaking gigs, interviews, and the DEMO conference itself share back a bit of what I’ve learned and the realizations that learning sparked.

DEMO, with its emphasis on product innovation, is an amazing lens and filter through which to gauge the future of the information technology industry and the markets as they open, undulate, and fold over time. The conference is a tremendous reviewing platform for new ideas and a lookout post for emerging and impactful trends.

It may not be surprising, then, to learn that after all these years, the lookout perch that is DEMO gave me the opportunity to see a new future for myself and for my company, Guidewire Group.

So early last year, I began the process of transitioning from DEMO so that I could start my next career in earnest. The first step, of course, was making sure that this was the right new path for myself, my family, and my Guidewire Group colleagues. DEMO has been a big part of all our lives for a long, long time. We all did a lot of soul searching and determined that, yes, we were ready to put our full energies behind the Guidewire Group business: working with technology companies during the critical transition points in their businesses to identify opportunity, define strategy, and accelerate the path to success.

The next step was more difficult: working with our partners at IDG and Network World to identify a successor. DEMO is a great job and a challenging one, and it’s not an easy post to fill. We found the most perfect fit in an accomplished journalist, entrepreneur, and kindred spirit, Matt Marshall. Over the last year, I’ve had the opportunity to work with and get to know Matt and his team at Venture Beat. He is a talented, smart, deeply ethical journalist and he and his writers have created a remarkable, respected brand and business. And he is the perfect person to pick up the reins of DEMO as I lay them down after the DEMOfall event in September.

Matt and I share many of the same values, foremost of which are the respect for entrepreneurs and the process of innovation and the commitment to act with integrity and fairness as we serve our customers and communities. But Matt and Venture Beat are more than a pin-for-pin replacement for me and Guidewire Group. They bring new perspective to DEMO. While much about DEMO will remain the same, surely Matt will make a wonderful impression on the brand and the business. The new partnership between DEMO and Venture Beat promises a broader platform for the DEMO community and a richer conversation that will span the events. Together, Venture Beat and DEMO have an exciting future, and I’m eager to see it unfold.

I’m equally eager to unfold the future of Guidewire Group, a company I co-founded in 200 with Mike Sigal. In the past four years, Guidewire Group has evolved into an analyst firm laser-focused on startups. We work with young companies in the U.S. and Europe at key transition points, to develop and deliver business strategy and monetization and market validation. Through custom projects, events such as Innovate!Europe, and Guidewire Studio, our exclusive in-residence program, we’re doing the work I love most – helping startups thrive.

We have an exciting future planned for Guidewire Group and I look forward to sharing our vision with you in the months ahead. We have been privileged and honored to work with this great brand and the amazing people who have been associated with DEMO across the last 13 years.

And we’re looking forward to the next six months as we work just as diligently as we always have on DEMOfall 09, while transitioning the Executive Producer mantle to Matt and his team.

The Vortex: The Volcano Bubbles

Lots o’ links saved up this week. Let’s see if I can adequately sort through them without boring you. No Vortex next week, as Chris and I are headed to London and Dublin for the next round of Innovate!Europe workshops. Pip pip.

News from the Social Media Vortex

-Twitter possibly raised another round of funding, on a rumored $250 million valuation. Here’s the question you should ask yourself: if Twitter started charging $20 a month to use it, would you pay it? If not, would you truly miss it? Be honest. Duncan Riley’s assessment is so apt, I may just make it the motto of this weekly review: “Until the very end, the citizens of Pompeii continued their decadent lives, until being buried for eternity.”

-Here’s a fun one. A conservative take on Wikipedia, called Conservapedia, has been taken down after Wonkette revealed a not-so-veiled hit list of Democratic senators on the site.

-The Boy Genius Report posted a spot-on list of things to hate about the iPhone. I would like to add the awful Google Voice Search to that list, which translated “Who directed A Fish Called Wanda” into “bass fish called wanda.” Not helpful.

-And I suppose we have to mention the kerfuffle of the week. Michael Arrington was spat upon in Munich and Jason Calacanis immediately responded with a call for an industry-wide group hug. I’ll simply posit that civility and manners in the technosphere should be an everyday fact of life, not a one-day occurrence when spittle is hurled.

Apps on the Radar

-Sarah Perez pointed me to RepairPal, an incredibly helpful iPhone app that uses GPS to deliver roadside assistance, auto repair estimates, and a repair shop directory.

-Hangman Cheat – if anyone can beat this thing, you are my linguistic hero.

-Not so much an app as a new feature, you can now submit news items to Techmeme via Twitter. Good idea in theory but I pity the soul who’ll have to wade through all the PR tips and self-promoting bloggers. (God knows I’ll be promoting myself shamelessly.)

DEMO trends – where the innovation lies with DEMO 09 applicants

-rich media publishing integrated with key back-office tools

-more location-aware mobile couponing – really getting a lot of traction this year

-highly personalized semantic networks

Tweet of the Week

-I swear I’m not kissing butt here. Chris Shipley’s tweet from the DLD Munich conference made me guffaw – and wish I was there: “At #DLD: ‘moving to an era of bio spare parts’ – Philippe Poullety. After visit to beer garden last night, I await the spare liver.”

Ephemera

-In the This Should Help You Sleep at Night department, a New Zealand man bought a used MP3 player filled with US military data, including personal details of US soldiers in Afghanistan and Iraq. The worst sentence: “He says he will hand it over to the US Defense Department should it ever ask.” Um, let’s go ahead and ask, shall we?