VCs, Angels, Incubators, Accelerators: What Are You Doing With Your Rejects?

From Sramana Mitra blog here: What are you doing with your rejects?

...we recently spoke with a VC in Boise, Idaho, who gets 500 deals a year. His firm invests in four. That means that less than 1% of the entrepreneurs who apply succeed in getting financed. If you look at the numbers of super angels in Silicon Valley, they are even more scary. Mike Maples told us that he gets 7,000 deals a year and invests in 12 to 15. That’s a 0.21% hit rate. The flip side: a 99.79% rejection rate.

Entrepreneur Commons is catering to the 99% who cannot get help from VCs or Angels, and what we offer is peer-support for entrepreneurs. It scales, and it brings a lot of value of entrepreneurs participating in the regular peer-support meetings. It would make sense for every VC, every Angel Group and every bank to host Entrepreneur Commons meetings so that if they cannot help with funding they can still keep the people within their ecosystem and allow them to grow to the best they can be. All it requires is a room and coffee once a month and it would allow them to switch from scarcity thinking to abundance thinking. We went in 2010 from 2 chapters to 19 chapters around the world, and there is no reason that we cannot grow to hundreds of chapters moving forward - www.entreco.org.

Young Entrepreneur Council study

Very interesting data on how young people (16-39) feel about entrepreneurship.

YEC/Buzz Marketing Group Youth Entrepreneurship Study

View more presentations from Buzz Marketing Group.

Startup America launched!

The White House is launching the Startup America initiative today - great news for entrepreneurs in the US, and for entrepreneurs around the world - http://www.startupamericapartnership.org/news

From the State of the Union speech:
Innovation, education, infrastructure.
We do big things!

And who are the people doing big things? Entrepreneurs!
So this year again is a year for entrepreneurs.
They deserve a better system for support and funding, let's give it to them in 2011.

Interview at Incubate 2.0

The video is now published:

Incubate 2.0 - Tim Delhaes interview - First Tuesday Americas

Incubate 2.0 - short presentation of the event and videos coming up

Incubate 2.0 is also available on the web (live streaming)

Event concluded

Get ready for Incubate 2.0

The Incubate 2.0 conference promises to be a really interesting event. We have gathered a great group of speakers, all involved with incubation and acceleration and working at the edge of this market, bringing innovation into the ecosystem.
The conference is going to give attendees an overview of what the state of the art is in this area, and I am even more excited about the 2nd day, which will be an un-conference to discuss on what is being done today and how we can do better to have massive and global on entrepreneurship.
If you have not seen it yet, take a look at what is coming up: http://www.incubate2.com

Microblogging should become a standard

The beauty with microblogging is that you are limited to a few lines. And really this is a standard that should apply to all written communication. If you need more than two or three lines to say something, really you should pick up the phone or meet with people. Who has time to page long emails? And are they really needed anyway?

feature or bug?

Facebook is giving me an opportunity to post via email, so they setup an email address that can be used to send something on my wall, except that the only people who have been using it so far are spammers who figure out somehow what the email address is and post updates in my name. Obviously the secret email is not so secret.
Now that's a great feature (not), and the best of all is that I cannot disable it. Really a bug in my system!
I know that Facebook wants us to share as much as possible, but I wish they would be less agressive about it...

Collaboration and funding

I am happy to report to this group that the concept that I was pushing to use collaboration to improve the world of seed funding is getting traction:
I presented the concept at Socap08, and I discussed the idea with Bob Patillo and the people at First Light in 2009, and they decided to implement.
They were so happy with the results that the are announcing now that more investments will be made. See this announcement http://goo.gl/fu6t

Please spread the word and if you have time to do hesitate to comment on the blog that this model for seed funding deserves to be expanded to more entrepreneurs and outside of just social entrepreneurs.
The Entrepreneur Commons blueprint rules - http://www.entreco.org

The new Inc 500 is out - VCs are not in

From this year Inc 500 top fastest growing companies data: where did entrepreneurs get the money to get started?
- 87% personal savings
- 26% friends and family
- 23% angel investors
- 22% credit cards
- 18% bank loans

VCs did not make the list. Their successes are well advertised, but they are not really where entrepreneurs get the help.
Something worth keeping in mind when you are considering starting your own venture!

Google: deconstructing itself

One more time I have to give Google credit for doing the right thing - clearly they keep working on "do no evil":
- After building Gmail, they introduced Google Apps, as a way for anyone to have their own Google Apps for their own domain name.
- Then they have opened Google Apps to others and provided a Google Marketplace where you can get all kinds of Google Apps plugins to enhance your own experience. And you have the choice of maintaining several Google accounts separately (per domain name).
This is a great example of building services to the point where they gain critical mass (Gmail), to then deconstruct these services into independent sets (Google Apps) so that you can give more control back to the user and allow the creation of a healthy ecosystem around the IP created (Google Marketplace). The next step for Google is to open the hosting itself to other service providers so that you can have "Google inside" in a completely independent system, creating an architecture with no single point of failure.
In the meantime Facebook, LinkedIn and other silos should learn from this approach and open up their services. A Facebook for my own domain? Google Buzz may get there earlier than the others. Google Wave is now a plugin for Google Apps, so it may not be that long before Google Buzz becomes one too, and if they do it will be interesting to see what happens.

Google Wave in Google Apps

A great step forward that will certainly help adoption: Google Wave is now a plugin (from Google Labs) in Google Apps.

We are fools

There are about 300 million people in the US, and the census bureau just collected information on where we live, how many people are in the household etc... And when a government ask this kind of questions, you cannot help but feeling a bit nervous and wonder what they will do with the data. There is a fear of Big Brother watching us, and we do not like to see the government gain too much control over the details of our private life. I was actually surprised and relived to see how little they were asking from us. But still the thought remains present.

Meanwhile Facebook is now 400 million active users. And we are all happily sharing information on what we do, where we are, who we know, including data that is becoming even more accurate with the latest social graph implementation. All this info is controlled by one corporation that we the people do not control, with no requirement for transparency other than what Facebook themselves have agreed to in the "term of use" of the website. But how many of us have really read the details of this agreement?

Something is wrong with this picture!

The platform brings us convenience but we should not allow the concentration of so much data into the hands of a just a few. We should remember that corporations are managed by CEOs whose fiduciary duty is to maximize profits for the investors, and by a board of director who is representing these investors. Of course they operate within the law and within the constraints that they have imposed on themselves through the term of use agreement. But Enron had the same constraints, and corporations have not always behaved like good citizens with the best interest of the public in mind (should I mention BP and their lobbying efforts?). And Facebook is not even a public company, so there is no reporting requirements.

Now that social media has been proven to be something that users want, we need to take a serious look at how we do this.
400 million people on Facebook is not right. If we are going to be 400 million citizens of a social media platform in cyberspece, this platform once proven needs to be deconstructed and opened so that it can be sustainable over time.

Status.net and microformats are a step in the right direction. We need to wake up, shake our laziness and get serious about building the right architecture for the web.
I want better control over my own data, and I do not want any corporation to accumulate so much data that they can gain control over more people than the entire population of the US.

Everything you want to know about Status.net

From its founder Evan Prodromou:
check out the video

If you have a doubt that this is a way forward, think again.
The word needs OStatus, and Twitter is the new AOL, unless they decide to change their current strategy.

Is Twitter another AOL?

If you remember the early days of the Internet, the hot place then was AOL. You could dial up into a world of content and services, all within the AOL walls.
And then there was the internet itself.

Now you can plug into an infinite stream of tweets through Twitter, and there are thousands of developers who built great tools and services around the core Twitter system. And then there is the rest of the world, with open source and open standards like OpenID, OpenStatus (OStatus), etc...
Twitter is a great public infrastructure today, and they provide huge value, but there is one flaw in this system: it is owned by one corporation controlled by just a few people and these people are on a deadline to sell Twitter to the highest bidder, so that they can return the money they invested, plus profit, to their limited partners. And it could be an IPO, which means that the control is transferred to another few people seating on the board of directors, whose fiduciary duty is to maximize the return for stockholders. Or it could be sold to a large corporation controlled by another set of few people on the board of directors, with a different agenda but a similar duty to maximize returns.
The users in this picture are just fuel into the system, they are not even customers at this point, not the best position to be in.
And similarly, all the developers who built services on top of this infrastructure are dependent on a system that they do not control. Not a good position to be in either.

So while AOL was great for a while and Twitter is great for now, I think that the real future is with a distributed network of Open Status enabled services like status.net. You can get the same functionality of publishing notices and following as many people as you like, and letting other services access your info to provide you additional value, but in a much more transparent, sustainable way.

The question is how long will it take to switch from one architecture to the next?
I am there already (http://mdangear.status.net), and you should too.

EAVB_AXWOEJBQPI

Google Apps is the next Google

I went to Lawrence Berkeley National Laboratory yesterday, and I was amazed to see on the doors of the buildings announcement presenting Google Apps. Google is now handling the email system for all these scientists, and not just the email, but also of course calendar, docs, etc...
If you had any doubt about cloud computing being the next generation architecture, here is a proof that it is real. I cannot imagine the security concerns that had to be resolved before Lawrence Berkeley National Laboratory would actually commit to shift their internal system to Google Apps. But if they were confident that it is ok to do it, and get something better than what they had before in the process, there is no doubt that every business should at least take a serious look at the option.
From my side, I have been using Google Apps since the very beginning, it is a great service and it keeps improving, with new features coming out of Google labs on a regular basis. In addition to the basic services that you can expect from such a platform, Google Sites is a great way to get people into "wiki style" collaboration. Google Sites reduces greatly the barrier to entry for collaboration tools, with a simple interface to co-edit documents. A small change in the way you work but a huge impact on team productivity.
If you haven't done so yet, make sure to take a look at Google Apps!

The Social Enterprise Summit and World Forum: why you should attend

Post originally published here.

After my earlier post about the Social Enterprise Summit and World Forum coming up April 28-30 2010, I have had an opportunity to talk to Bill Strathmann, who is the CEO of Network for Good, and also Vice Chair at the Social Enterprise Alliance. Here are my impressions on the summit after that discussion:

1. The Social Enterprise Alliance has a very narrow definition of what a Social Entreprise is. They define it on their website as "an organization or venture that achieves its primary social or environmental mission using business methods". So we are looking at businesses with a very specific focus on resolving social issues, and located somewhere in the middle of the "do-good" spectrum between corporations involved in Corporate Social Responsibility (CSR) on one side, and non-profits on the other. BUT don't feel excluded, please keep reading...

2. Despite this narrow definition, I believe that the summit should be of interest to a wide audience:
- because, on the down side, the reality is that the problems that we face today around the world are too big to be fixed by just relying on Social Enterprises to do the right thing while everybody else keeps doing business as usual
- and because on the up side, the ideas that are coming out of Social Enterprises, and the best practices that can be identified from the existing implementations, can be very useful to corporations trying to get into creative capitalism, and to non-profit trying to evolve towards a more sustainable model of doing business than relying on grants.
So really everybody should come to engage.

The summit is set to deliver a lot of great content to enable real change, because beyond the various tracks offering knowledge sharing and discussions on best practices for social entrepreneurs or would-be social entrepreneurs, it is opening the doors to a larger discussion. The title of this summit is "New Approach, New Economy" and it is bringing up important questions, and prospective from key stakeholders:
- the first plenary session takes a look at what governments are trying to do to help social enterprises, with representatives from Canada, UK and US governments.
- the second plenary session gets into "how to think different", with a look at system thinking
- and the summit offers opportunities for side discussions through the "Dine around" program and through tours of local social enterprises, great opportunities to mix and brainstorm on the next best thing.

With this great content and these key stakholders, and in order to get the perfect mix, who should come?:
- corporations currently involved in CSR and interested in creative capitalism should send people at this conference, so that they can identify opportunities to serve markets that they have ignored so far. The creation of Grameen-Danone Foods is a great example of what can be done by corporations when they open their mind to such new opportunities.
- non-profits should come to learn how it is possible to introduce new revenue streams into their programs so that the people they help can be engaged better and longer, and so that they can become more sustainable by relying less on grants and more on a solid business model. According to Bill Strathmann the message from the Social Enterprise Alliance to Foundations is that they should consider spending more grant money on financing the creation and/or growth of social enterprises rather than on financing spending programs that require new grants year after year. And I agree that they should.
- and of course all entrepreneurs should be involved, because business is social and entrepreneurs achievements emerge from the ecosystem that they were able to build around themselves.

Ultimately the success (from my prospective) of the social enterprise movement will be when we can get rid of the word "social enterprise" because we will have learn to do business the right way, maximizing the returns for all the stakeholders rather than maximizing the returns for the stockholders. This is the culture that Entrepreneur Commons (my own social enterprise dedicated to helping you the entrepreneur) is nurturing, and I look forward to attending this summit, to learn more what can be done and how.