Don Dodge on The Next Big Thing

TechStars 2008 accepting applications

TechStars is an entrepreneur boot camp based in Boulder Colorado, founded by David Cohen. TechStars selects 10 startup teams from a pool of about 300 applications. The selected teams get up to $15,000 in funding, community office space, operational support, and mentorship from former entrepreneurs and business leaders.

TechStars takes a 5% equity position in each company. At the end of the 13 week Summer session the startups present to a large group of Venture Capitalists and Angel Investors. Last year I attended and wrote about the Investor Day. Eight of the 10 companies received Series A funding. Some even got acquisition offers.

TechStars is managed by Brad Feld, David Cohen, Jared Polis, and David Brown. They provide the money, offices, and support for the companies. There are also more than 20 mentors and former entrepreneurs who help the companies with advice and introductions.

Get details on how to apply here.

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Microsoft Startup Accelerator Fuels Startup Success

Microsoft Startup Accelerator  is a special program for innovative early-stage startups that are a strategic fit for Microsoft.  The Emerging Business Team, the group I work for at Microsoft, is leading the program. There are currently over 50 companies in the program with a goal of reaching 100 companies worldwide.

Several of the startups I work with are part of the Startup Accelerator program including; Lijit, Me.dium, Xobni, Clarizen, and RingCentral.

   Me.dium is a web browser plug-in that turns web browsing into a social experience. It gives you a personalized map of the Internet showing you what web sites your friends are visiting in real time. You can use it to discover new people and places that are relevant just to you. It also allows you to surf with friends in real-time. It's just like hanging out in the real world, but online.

Listen to what David Mandell, VP at Me.dium has to say about the Microsoft Startup Accelerator Program;

Getting direct connections to developers within Microsoft speeded our own internal development time significantly, I would estimate about a 50% velocity increase. In addition, gaining exposure to some of the Microsoft MVP’s gave us critical product feedback that we simply didn’t have the manpower to gain on our own. Getting on the Windows Marketplace site quickly took our customer mix from almost completely Firefox users, to a ratio of 75% IE to 25% Firefox, all through new customer acquisition. 

The Emerging Business Team and The Microsoft Startup Accelerator Program have truly turned into an invaluable resource for Me.dium.  We would never have imagined that a company as large as Microsoft would have the desire to focus on a small startup such as Me.dium, but we were completely blown away by the attention and access to people that we were given and owe much or our current success to that relationship.

Microsoft is committed to serving as a valuable technology and business partner for emerging startups and investors. The Microsoft Emerging Business Team (EBT) has been working with the startup community since 1999, and today engages with hundreds of technology startups each year to identify those with the strongest potential to succeed in the market, shape the industry’s future, and enhance the overall value of Microsoft products and services for customers.

The team looks at a number of criteria, including marketability, growth potential, funding, management and management history, platform decisions, and strategic importance to Microsoft. The Microsoft Startup Accelerator Program has local implementation in France, Germany, India, the United Kingdom and the United States. Interested startups can apply via the process outlined at the Microsoft Startup Zone at http://www.microsoftstartupzone.com.

The Best OF CES - Robotics, Green Tech, and Zink

The Consumer Electronics Show in Las Vegas, better known as CES, was overwhelming. Over 140,000 attendees, 2,700 exhibitors, and over 20,000 products on display. It was geek heaven!

There were several highlights for me. First was the Bill Gates keynote speech and hilarious video "Bill Gates Last Day at Microsoft". The Comcast keynote and cameo appearance by "The Flight of the Conchords" was also fun.

Three Big Things jumped out for me; Robotics, Car Technology, Inkless printing from Zink.

Robotics were a big focus at CES this year. There were lots of cool gadgets but the ones that caught my attention were from Ologic, a small robotics design company. Ologic, and their technology partners NPC Robotics, NeuroSky, and TankChair, introduced some of the most innovative products I have seen in a long time.

Ologic demonstrated several robots that could balance on two wheels (similar to the Segway) and maneuver around obstacles by using cameras as eyes. They also showed a cool  reconnaissance robot with a telescopic arm and camera (pictured right) that could elevate straight up to 25 feet in the air. The whole robot was only about 12 inches tall, but the telescopic arm magically appears out of nowhere and goes 25 feet straight up. It works like a carpenters tape measure...the metal just rolls in and out from a coil hidden inside the robot. It is strong and solid because it uses three coils to form a triangular shaped arm. The three coils connect by folding together like a zipper on your jacket. Amazing!

  TankChair teamed with Ologic to build some amazing wheelchairs. One of them has cool racing wheels (pictured left) and can reach speeds of 30MPH. My guess is that they will need to get DOT safety testing certification before this wheelchair will be made available to the public. The other wheelchair (pictured below) was equipped with a tank track system to allow it to go through mud, sand, up hills, over rocks...you name it. Imagine the freedom of movement this brings to wheelchair bound people. It gives me goose-bumps just thinking about it. Ted Larson and Bob Allen are the brains behind Ologic. Smart guys having a lot of fun doing what they love to do...invent. Brad Soden is the creative force behind TankChair. Rich Reed from NPC Robotics provides the "ribbon technology" for the robotic arm, and Stanley Yang from NeuroSky provides the motion sensor technology for the amazing two wheel balancing robots. It was a pleasure meeting all of you.

GreenTech and In-Vehicle Technology - General Motors chairman Rick Wagoner gave a great keynote speech and unveiled several new "green-tech" multi fuel cars. Wagoner emphasized that GM cars today have more powerful computers on board than were generally available 15 years ago. The car business is really about consumer electronics and technology with GPS systems, ONstar security systems, amazing sound systems, and now hydrogen fuel cell technology. GM showed the Chevrolet Volt, a hybrid electric concept car that could be released in 2010.

The GM Volt features a 1.0 liter, 3-cylinder gasoline engine which is solely used to recharge the onboard lithium-ion battery pack. GM says that the Volt can travel for up to 40 miles on battery power alone. After the 40 miles, a gasoline engine kicks back in again to recharge the battery pack.

The most amazing new car concept was the Cadillac Provoq, a hydrogen fuel cell car, coupled with Lithium-Ion batteries, unveiled for the first time at CES. The Provoq can travel 300 miles with a full load of hydrogen, and another 20 miles on battery power alone. Wagoner said the Provoq will be able to go 60 MPH in just 8.5 seconds and reach a top speed of 100 MPH. What is driving all this new technology? Wagoner said, "The auto industry can no longer depend entirely on oil... It is critical as both a business necessity and as an obligation to society to develop alternative energy."

Zink - The zero ink, environmentally friendly printer. I first wrote about Zink more than two years ago. I predicted that Zink would disrupt the printer industry and be The Next Big Thing in printing. Since then Zink had a successful unveiling at DEMO 2007 and was a huge hit at CES 2008. (Picture credit SF Chronicle) See the full San Francisco Chronicle story here. Clayton Christensen, The Harvard professor who wrote "The Innovators Dilemma" is a big fan of Zink and has declared that Zink will disrupt the printing business. The San Jose Mercury News says "look out HP..." I started my technology career 25 years ago in the printer business. I lived through the dot matrix, ink jet, and laser technology curves. Zink thermal transfer is the next big printer technology curve and it is starting to hit in 2008. Zink is a company to watch.

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Scoble's reasons NOT to start a business

I spend most of my time talking to entrepreneurs who have started companies. Reading Robert Scoble's story about why he decided to not start a company, and instead go to work for Fast Company, presents the other side of the story...the more common path.

Robert Scoble is a special person too, and a rare talent. He is also my friend. Robert worked at Microsoft for several years and I got to know him there. In fact, Robert really got my blog started by linking to me several times in the early days. I will always be a Robert Scoble fan. Pictured above is me, Robert Scoble, and Alfred Thompson at a John Edwards campaign appearance in Portsmouth NH.

Robert Scoble's Reasons For Not Starting A Company

• Understanding what you are good at..and what you love to do - Robert loves to blog, interview people, and spend time with his family. Doing all the other things required to start a business takes time away from the things he really loves to do...and what he is really good at. This is probably the number one reason that most people don't start a business.
• Building a diverse set of income requires a sales crew and attention to client happiness. - Leading a sales team and hiring the right sales people takes a lot of time and skill. Robert was honest with himself and concluded he didn't have the time or interest in doing this.
• Setting up a business requires a ton of other tasks. - Setting up a sales organization, accounting, HR, hiring and firing people. All these things take special skills, and take time away from what you are really good at.
• Doing a business is stressful on everyone involved. - Om Malik, a blogger turned entrepreneur, recently suffered a heart attack. Mike Arrington, another famous blogger / entrepreneur, works 24X7 and is perpetually tired. These guys are the best of the best. I admire them greatly and count them as friends. But Robert  decided the stress wasn't worth it to him.
• Brand extension is hard when running your ass off to build your own business. - Robert knows that he would need to build a business beyond just one blog or media site. He concluded it was much easier to do that as part of Fast Company.
• Getting access to things, when running your own business, is tougher. - Robert Scoble is basically a reporter who needs access to top CEOs and entrepreneurs, trade shows, and industry parties. Robert already has access to nearly anyone or anything but even Robert can't get access to everything. For example, he didn't get invited to Steve Jobs keynote at MacWorld, but he would have been invited as a member of the press at Fast Company.

I completely understand Robert's reasons for joining Fast Company and not trying to start a blog/media business on his own. He was honest with himself about what he is good at, what he wants to do, and what it really takes to make a business successful. The money quote for me was this "Life is too short and if that means I leave a few million on the table because I gave up equity in my own thing, so be it."

Good luck to you Robert!

Best Buy moves into online video with Mydeo

Best Buy has partnered with Mydeo to launch  Best Buy Video Sharing, a new online video sharing service. 

It is a subscription-based service for users to upload their personal videos for sharing on web sites and blogs, with family and friends, or in e-mail messages. You can choose who can view your home videos, and enables them to do so in an advertising-free environment.

Of course you can post videos to YouTube or other video hosting sites, but the problem is those videos are exposed to the world. What if you want just a select group of family, friends, or business partners to have access?

“With the growing popularity of video, fueled in part by social networking sites, we’ve actually seen an increase in customer demand for alternative video sharing solutions. Many customers, particularly families with children, don’t want their personal memories available for anyone to see in the public domain nor do they want to share them in a cluttered environment that includes advertising,” said Kevin Winneroski, vice president, Best Buy. “Through Best Buy Video Sharing, customers can safely store their videos and share them only with the friends and family they choose.”

Mydeo is a UK based company founded by Cary Marsh. Mydeo is part of our Startup Accelerator Program, designed to help startups get fast traction with Microsoft and shine the spotlight on their success. get more details on this program at MicrosoftStartupZone.com

Best Buy is the largest consumer electronics store in the USA. They have several online programs including one for music called Best Buy Digital Music Store, and another service for photos.

Web 2.0 Bubble - Now entering Stage Two

Bubbles always burst. It is just a question of when, and who gets hurt when they do burst.

TechCrunch says that Automattic (Wordpress) turned down a $200M offer. Read/Write Web says Plenty of Fish, an online dating site, may be worth $1 Billion. Last week Facebook had an implied value of $15 Billion. Not to be left out of the Web 2.0 frenzy, BEA  turned down a $6.7 Billion offer. And New York Magazine says, it may be a bubble but New Yorkers should embrace it. There are lots of good reasons to turn down acquisition offers, and it doesn't necessarily signal that we are in  bubble, but it should give pause for serious thought.

Entering Stage 2 - Bubbles go through predictable cycles. Bubbles emerge from the ashes of despair. It takes a while to gain momentum but eventually greed overtakes fear and we are off on another bubble adventure. The first stage of a bubble is when most smart money declares we are NOT in a bubble...it is different this time. The second stage is more dangerous. Many people agree that we are in a bubble, but it will last another year or two, and there is still money to be made. The third stage is when the bubble has burst but most people are in denial and think it is a temporary set back. The fourth stage is when everyone agrees the bubble has burst and life will never be the same. My guess is that we are now entering Stage Two of the bubble cycle.

I have written about bubble cycles before. My favorites are; "Bubble or normal failure scenario?", and "I'll trade my two $50K cats for your $100K dog", and of course "Fear is temporary, greed is permanent"

Bubbles are always different and play out on different time lines...but they all end the same way. Where we are in the current cycle is debatable. But as Mike Moritz of Sequoia Capital said at the recent Web 2.0 Conference

“The great news for me about these times of enthusiasm is that inevitably there’s a lot of bedlam, undoubtedly there’ll be carnage, there’ll be all sorts of carcasses strewn across the road. But there will also be a handful of companies that will emerge to become very significant. And that’s what working and living and investing in Silicon Valley has always been about.”

Mike Moritz (Sequoia) and John Doerr (Kleiner Perkins) have been very successful navigating through these cycles. The interesting thing is that smart entrepreneurs and investors can succeed at each stage of the cycle. There are always inefficiencies in the market and unmet needs. That is indeed what makes this business so much fun. Good luck!

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Tech 2007 this week, Web 2.0 next week

This week I will be at Tech 2007, and next week at Web 2.0 in San Francisco. The week before was DEMO 2007, and TechCrunch40 before that. Then there is Defrag in Denver on November 5th. This is the tech conference season. The fun part is that I have seen over 300 new startups in the past 6 weeks.

At Tech 2007 I will be doing a panel on "Technology Trends of Today and Tomorrow". The panel includes Donna Bogatin of InsiderChatter, and Eric Auchard of Reuters. The panel moderator is Frank Stasio of NC Public Radio. We had our last prep call today, and the debate was already raging. It should be a lively discussion around the impact of technology on the media business. I guess I am the technology guy while Donna and Eric represent media, although they both write about the technology scene.

If you want a quick peek at what I will be talking about check out "Online classified ads take $3.1B from newspapers". It is not technology that is killing media...it is their failure to adapt to it, embrace it, and profit from it. Napster's P2P technology had the same effect on the music business.

Oh...here is another one. Scott Kirsner of the Boston Globe invited me to join a panel on 'Tech Blogs - How are they changing the way tech news is covered?". Register soon because this is sure to sell out. It will be at the Cambridge Innovation Center on October 23rd.

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Failing Fast It's a good thing

The only thing better than a "Yes" is a quick "NO". When you are raising money, selling a customer, or trying to get a deal done, it is the long drawn out process that never ends that will kill you. It is the same thing with startups. Being successful is always the goal, but if it is going to fail...Fail fast.

The traditional model - When I first got involved in the startup world the typical path was to raise several rounds of VC money, take two or three years to develop a product, then raise more money to hire an enterprise sales force and go to market. Sales cycles were typically 9 to 18 months. It could be 5 years before you really knew if the company had a good chance of success.

Today a product can be built in a few weeks or months. Development tools are powerful, easy to use, and cheap. Infrastructure for hosting, storage, and bandwidth are inexpensive, scalable, reliable, and secure. Ten or fifteen years ago each startup built their own infrastructure at a cost of millions of dollars. 

Who needs an enterprise sales force? Today you can get directly to your customers on the Internet. There are ready built e-commerce systems that can handle sales, credit cards, fulfillment, and shipping.

The advertising revenue model has created a whole new class of businesses that don't need a sales force. The product or service is free. No customer acquisition cost. The revenues come from advertising and sponsorships.

Double Down or Fold? - All of this amazing technology and infrastructure doesn't guarantee success. Far from it. As Paul Graham says  in his post "The Future of Web Startups"

If it gets easier to start a startup, it's easier for competitors too. That doesn't erase the advantage of increased cheapness, however. You're not all playing a zero-sum game. There's not some fixed number of startups that can succeed, regardless of how many are started.

There are more startups than ever before, and more competition. However, the good thing is you will know pretty quickly if your product idea is hot or not. You can get a beta product launched and start getting user feedback within a few months. To use a poker analogy, you can decide very early whether to "double down" or fold.

OK, I have 400,000 users, now what? You might remember a story I did about "Where I've Been", the Facebook App that grew incredibly fast. Lots of users but no business model or revenues. They actually figured it out and are now generating revenues.

Yes doesn't guarantee success, but No avoids wasting time. - So getting to a quick NO is good. Getting user feedback early and often allows you to dump bad ideas early and redeploy onto another better idea. Yes can mean lots of users, but you still need to solve the business/revenue model before declaring victory.

So, next time you get a quick NO, just say thank you, and move on to the next customer, the next deal, or the next idea.

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Microsoft Startup Accelerator program shines spotlight on startups

Microsoft's Emerging Business Team announced today the Microsoft Startup Accelerator Program. The program is designed to help high potential software startups get access to Microsoft people and programs, guidance on future directions, and support to accelerate their success.

The Emerging Business Team, the group I work in, evaluates hundreds of technology startups each year to identify those with the strongest potential to succeed in the market, shape the industry’s future and enhance the overall value of Microsoft products and services for customers.

The Startup Accelerator program shines the spotlight on some of our most promising startup partners and provides good examples of how startups can work successfully with Microsoft. The program is launching with 20 companies and will grow to 100 over the next 12 months. Sign up here if you would like to be considered for the program.

The Startup Accelerator program will provide;

• Access to Premier Support people to help solve problems quickly
• Provide free or discounted software licenses and subscriptions
• Early access to beta software and new technologies
• Free access to Microsoft Technology Centers for consulting and testing
• Introduction to appropriate product and marketing teams inside Microsoft
• Success stories
• Inclusion in Microsoft marketing campaigns
• And lots more

Get full details at MicrosoftStartupZone.com

Walt Mossberg at The Wall Street Journal likes Tubes

Walt Mossberg at The Wall Street Journal is the king of product reviews. A good review from Walt can "make you", and a bad review can kill you. Walt did a review of Tubes, the file sharing application that was at DEMO 2007 last week. I also wrote about Tubes, and Walt was nice enough to give me a link in his story. Thanks, Walt.

Here is a teaser from Walt's story. You can read the whole story here.

Too many times, I've shared a large batch of digital files with friends or family members only to realize that I included an unwanted photo or shared with someone accidentally. But once these documents are sent, they're out of my control and on a server somewhere being distributed via email or through a photo-sharing service. Making certain files private or changing who has access to those files is a complicated, time-consuming process.

This week, I tested another product in the long line of programs that uses automatic synchronization to simplify the process of sharing large files by giving you the ability to change files and privacy options at any time. It's called Tubes (www.tubesnow.com) from Tubes Networks and it takes its name from the pneumatic vacuum-tube system commonly used in bank drive-throughs that motivated me to join my Mom on visits to the bank as a kid. Mom would pull up and a container would whoosh over through a tube to arrive beside the car window; after a quick exchange it returned with her deposit slip and a lollipop for me.

You can try out Tubes for free. Download the app at Tubes Networks.com