via The Atlantic and NPR

Today, at least 90% of the country has a stove, electricity, car, fridge, clothes washer, air-conditioning, color TV, microwave, and cell phone. Take a moment to savor this graph from Visual Economics, which shows the adoption rate of new technologies across the century:

One way to parse it is to ignore everything at the top and trace your eye along the 10% line:

– In 1900, <10% of families owned a stove, or had access to electricity or phones

– In 1915, <10% of families owned a car

– In 1930, <10% of families owned a refrigerator or clothes washer

– In 1945, <10% of families owned a clothes dryer or air-conditioning

– In 1960, <10% of families owned a dishwasher or color TV

– In 1975, <10% of families owned a microwave

– In 1990, <10% of families had a cell phone or access to the Internet

In his final of 3 posts, Derek Thompson of The Atlantic notes: “In 1900, less than 10% of families owned a stove, or had access to electricity or phones, and the Model-T was still a full decade away.” His first installment of this series followed shifting family budgets between 1900 and 2003. The second explained why food seems so much cheaper at the dawn of the 21st century. The third is different because it goes beyond numbers, to include issues of quality of life and the question of progress: “It’s not just that life expectancy at birth has grown from 49 years in 1900 to 78 today, but also the quality of our lives has been improved by law (e.g.: new safety and anti-discrimination laws), by culture (e.g.: women’s ascent in college and the workplace) and by technology.” (Believe it or not, the boom box was the fastest-adopted gadget of the last 50 years.)

Another piece from NPR traces the Birth of Silicon Valley. Now a well-known hotbed of innovation stretching along the peninsula southwest of San Francisco Bay, the story that emerges from this timeline is the transformative power of venture capital, as well as the onward march of technology. Click on the image below to explore the timeline.

By Christine Negroni

via NYTimes


The old Town Hall in Stamford, Conn. has been renovated and will become a home for aspiring entrepreneurs.

STAMFORD, Conn. — The old Town Hall here, a Beaux-Arts building on the National Registry of Historic Places, has sat unused for 25 years, a victim of Stamford’s rapid growth in the 20th century. But the Town Hall will join the 21st-century economy, with the announcement this month that it would become an incubator for business start-ups in a 10-year lease agreement with private investors.

The Stamford Innovation Center, as the venture is called, is expected to open by summer, and aspiring entrepreneurs will get work space, mentoring and access to investors.

Acting as a corporate sponsor for the venture will be Sikorsky Aircraft, the helicopter maker and military contractor based in nearby Stratford, Conn. The company, a subsidiary of United Technologies, has leased 2,000 square feet on the building’s second floor, and will coach tenants and may even invest in them, said Chris Van Buiten, the vice president for Sikorsky Innovations, a network of employees focused on finding new technologies.

Sikorsky is priming the pump by issuing five technological challenges to the public that, on the surface, are aviation related. It is seeking proposals on, among other things, ways to apply wireless monitoring to digitized aircraft and to obscure the visibility of airplanes in flight. Successful applicants will have use of the company’s space at the Town Hall for a year.

“In much the same way that Sikorsky does not make the engines or avionics that are installed into our helicopters,” Mr. Van Buiten said, “likewise will some next-generation technology solutions not be produced by us.”

The Stamford Innovation Center is renting most of the old Town Hall from the city. The Connecticut Department of Economic and Community Development provided a half-million-dollar loan to turn the building into modern office space.

In 2008 the city began renovating the Town Hall, with the hope of finding a tenant. It spent $16 million enlarging the space and making it handicapped-accessible. Patty Meagher, a founder of the Innovation Center, remembers the time she and the others involved with the project first considered leasing the building as the work was completed in 2010. “Remember the line from that movie, ‘You had me at hello’? That was the initial reaction,” she said when they first saw the limestone facade, iron-railed staircase, terrazzo floors and brilliant murals on the walls of several rooms.

The location was also an asset, she said, in the shadow of Stamford Town Center mall, steps from the city’s library, theater, shopping and dining districts. There are no restrictions on the kinds of ideas that will be considered for the center, so long as the directors believe there is potential for turning them into successful businesses. A few start-ups are already working in the building on projects as varied as a GPS-enabled community news site and the use of cloned immune cells for medicine.

As fledgling businesses develop, tenants will be introduced to venture capitalists, many of whom live or work in the area, Ms. Meagher said. The investors and entrepreneurs, she said, “will be meeting each other, interacting, and that’s how these companies could very well get funded.”

Business incubators are very of-the-moment across the country. In Chandler, Ariz., the City Council financed a biotechnology-themed center, while a center in Portland, Ore., focuses on sustainability. Nearly three-quarters of these enterprises are sponsored by economic development agencies, governments or academic institutions, according to the National Business Incubation Association. The Stamford Innovation Center is among the 25 percent that are private, with aspirations to become profitable businesses based on rents charged to tenants and educational programs offered to the public.

Over the last five years there have been 150 incubation centers opened nationwide, the association said. While no studies cite the recession as motivating that growth, Linda Knopp, the group’s research and policy director, said she believed the economy played a role. “More communities at least start considering the business incubation concept during economic downturns,” she said, “as they’re looking for ways to stimulate economic growth and create jobs.”

Certainly that is the goal in Stamford, with a population of 122,643, which has an unemployment rate of 7.1 percent, lower than the state and the nation as a whole, but which has lost jobs in the financial and manufacturing sectors and has had an increase in office vacancies. One quarter of the city’s 13 million feet of business space is unoccupied, said Laure Aubuchon, the director of the Stamford Office of Economic Development.

“We are a victim of our own success, because we keep building space,” Ms. Aubuchon said. But she said the upside is that when the entrepreneurs are ready to start their businesses they will be able to find affordable rents in Stamford.

Sikorsky has set a goal of incubating at least two viable companies a year. Barry Schwimmer, a founder of the Innovation Center who is managing the opening, said Sikorsky was setting an example that he hoped other large companies would follow.

“It is a fairly unique model,” he said, adding that such communication between large, established businesses and small, untested ones was “virtually unheard-of.”

What is developed here will most likely have wider applications, Mr. Van Buiten of Sikorsky said. He offered the example of paint that changes color on a military helicopter, which could also be sold to the automobile industry. “We’d be willing to spend a lot of money,” he said of a product like that. “But think of how that would appeal to teenagers if a car company could offer that kind of paint on a Scion at $1,500.”

By Caitlin Mac Neal

via Slate


A driverless car is tested in Germany. Photo by ODD ANDERSEN/AFP/Getty Images

Yesterday, February 16th, Nevada became the first state to approve regulations that permit self-driving cars. Since the legislation process began last June, Nevada officials worked with insurance companies, car manufacturers, law enforcement and testing professionals to develop rules mainly aimed at safety, according to PC magazine.

The regulations spell out procedures for testing the vehicles now and requirements for use by residents in the future. The robocars in the testing phase will have red license plates. Cars that have been approved for use by Nevada residents will sport green plates. The person in the car is considered the operator (and two people will be in testing-phase cars at all times). TechCrunch notes that as of right now, while people cannot operate the car drunk, they are allowed to text and make phone calls.

In order for a company to test its self-driving car, the company must purchase a bond from Nevada, at the price of somewhere between $1 million and $3 million.

While Nevada is the first state to approve and regulate robocars, Google has already tested its self-driving cars on public roads (see the car in action here). There were always people manning the cars (its first crash was actually the fault of a human), and Google notified local law enforcement in advance of any tests. Audi and Voltswagen are also working on robocars, according to PC magazine.

The main benefits of self-driving cars include reduced fuel consumption as well as less traffic congestion and accidents. Widespread consumer adoption of the technology is still far away—taxi drivers, your jobs are safe for now. But the new regulations could have an immediate effect on the Nevada economy. The state has the worst unemployment rate in the country, having been hit hardest by the recession, according to CNN. As the first state to develop regulations for this emerging technology, Nevada may experience an economic boost as companies flock to the state to test their vehicles.

By: Richard Florida
Via: The Atlantic Cities

The venture capital industry bounced back considerably in 2011, according a report released last week by PricewaterhouseCoopers and the National Venture Capital Association. Investments totaled $28.4 billion, an increase of 22 percent over 2010 and a whopping 44 percent from 2009. They are almost back to their 2007 pre-crisis high of $30.8 billion.

The map above, by the Martin Prosperity Institute’s Zara Matheson, shows the regional breakdown. (The PWC MoneyTree data is only available for this set of regions). Silicon Valley remains the leading center for venture capital investment with $11.6 billion, 40 percent of the total. New England (mainly the greater Boston area) was second with $3.2 billion in capital, 11 percent of the total. Greater New York was not far behind, with $2.7 billion or almost 10 percent. It also bested New England in the third quarter of 2011.


The graph above tracks venture capital investments since 1995 for the five biggest regional centers for investment. While much has been made recently of New York’s rise in venture capital and high-technology, the graph shows a pretty stable baseline over the past decade with a modest uptick over the past couple of years. If anything, Silicon Valley’s overall lead, and the gap between it and New York, New England and other leading regions, appears to be increasing.

Venture capital investment can and does flow widely across regions and is attracted to areas with the best deals and strongest ecosystems for innovation and entrepreneurship. It is largely a myth that a lack of venture capital funds in certain places holds back innovation there. Generally speaking, efforts to publicly provide or subsidize venture capital in and to certain locations have been fraught with difficulty.

By Mark Fidelman, Seek Omega
via BusinessInsider.com

H.R. 2930 or the “Entrepreneur Access to Capital Act,” would provide companies the ability to raise up to $1 million (US) to fund projects and companies. The bill will ease fund raising restrictions and regulations on both companies and investors.

So if you are a start up in need of an early round of financing, you no longer need to ask friends and family, you can ask friend of friends or their extended network for seed capital. And that’s where companies like Kickstarter will have an advantage over Angel Investors.

Let’s face it, the Professional Angel community is insular. They invest in each others deals, they invest in similar types of deals, and they invest in who they know. Why? Because it’s safe and they have a legitimate need to protect their client’s capital. But that has led to a lack of investment diversity and has created an investment “group think” that is limiting the potential of the community.

Conversely, sites like Kickstarter and IndieGoGo enable people with a diversity of knowledge, skills and experience to fund projects and receive rewards for helping entrepreneurs. It’s called crowdfunding and it allows almost anyone to give money to an entrepreneur to complete a project.

In some aspects it’s like American Idol. Because it enables anyone to vote (by making a prescribed monetary pledge) and become a fan of a project (by following it). At the end of 30 days if the pledges don’t meet the minimum requirement as set by the entrepreneur, then the money is refunded to the investors. If the project funding goals are met, then the project moves forward, but with an important added fan base.

Today on crowdsourcing sites, project funding ranges between $100 – $8000 and pledges a fraction of that amount. But if H.R. 2930 passes, you can bet crowdfunding sites like Kickstarter will quickly move into the business of helping entrepreneurs raise Angel levels of capital ($100,000 to $1 million) .

So why will the Professional Angel Investment community die? Because, if entrepreneurs are given a choice between raising funds through an opaque, arduous and slow Professional Angel route versus a much more efficient, diverse and knowledgeable path, the latter will win ever time.

Case Study: KickStarter
Rather than speculate, I decided to invest in a Kickstarter project myself to understand how it all works. I chose an iPhone/iPad game called Stop Those Fish by Eye Interactive for three reasons.
First, I know the founder of Eye Interactive and he sent me an invite email to participate. Second, I could tell that Eye Interactive’s new game was creating buzz from my personal network which provided me with social proof (due diligence). Third, his first game Zombi Samurai reached #3 on the charts making it one of the most successful games in the last few months.

I asked Jason Seldon, Eye Interactive’s founder why he decided to raise funds from Kickstarter versus taking a more traditional route through Angel’s or friends and family. Seldon responded, “I believe Kickstarter’s value goes way beyond their stated value proposition of being a new way to fund creative projects. In addition to helping individuals and small businesses fund these creative endeavors, I believe it is also a way to generate tremendous pre-release buzz for a new product and to build a fan base prior to launch.”

Seldon continues, “It gives early adopters a unique sense of ownership over a new product. In our case, project backers actually get their names in the game credits. So it really encourages a deep connection with consumers. In a sense, you are building a street team comprised of all of your project backers prior to product launch. These individuals can then serve as brand ambassadors to help make your newly launched product a success.”

What the Crowdfunding Critics Have to Say
If the bill passes, the first objection you’ll hear from critics in regards to crowdfunding sites is the opportunity for scam artists to commit fraud and place unsophisticated investors at risk of losing their capital.
My reply to objection # 1 is twofold. First as we’ve seen with Wall Street, even sophisticated systems that are heavily regulated are subject to fraud. In this case, several hundred billion. Second, because sites like Kickstarter do their own background checks, make the process transparent, and allow potential investors to see who has invested (social proof), the risk is mitigated by a number of check points. I’m not saying it’s fool-proof, in fact I am positive we’ll see fraud at some point, but the benefits of crowdfunding far outweigh the potential for fraud.

The second objection I hear is that new start-ups will lose the coaching and networking opportunities from a professional Angel investor. In the short run, I agree with this objection. But in the near future, crowdfunding sites will overtake those basic functions and eventually crowd source the networking, intelligence and strategy aspect the Angels provide today. More, crowdfunding sites like Kickstarter will enable virtual teams to sign on (think eLance meets Kickstarter) to help start-ups fill talent quality gaps.

Who else will H.R. 2930 benefit?
Besides start-ups, crowdfunding sites, and mom and pop investors, companies like Angel List, and Bolstr will offer nearly anyone the opportunity to participate in an investment round.

For example, if the Social Customer Relationship Management (SCRM) start-up Nimble wanted to quickly raise a round of capital, Angel’s List could convert Nimble’s followers to investors by offering them a chance to participate in their next round of funding. If the new bill passes, I suspect Angel List will provide a swipe your credit card platform to participate.

As a quick aside, I’d like to touch on is the rich analytics and statistical information these crowdfunding sites can potentially track. Imagine giving start-ups the ability to see how many page visits, clicks, and conversions they’ve had to their page. More, who is referring potential investors to the page? Which segments of social networks seem to be supporting the idea the most? What is the sentiment of start-ups product?

That information could be used for a variety of purposes from improving the business idea to increased transparency.

The Professional Angel community will quickly lose its wings if H.R. 2930 passes. You can bet on it.
Sites, like Kickstarter, IndieGoGo, Angel List, and Bolstr will offer superior services through the crowd sourcing of funding, talent and the ability to organically build a fan base. These crowdfunding sites will eventually offer superior access to intelligence and strategy than professional Angels provide today. The crowdfunding process is much more transparent but potentially more dangerous than traditional Angel financing.

Read more: http://www.seekomega.com/2011/11/if-this-bill-passes-the-angel-investment-community-is-dead-and-companies-like-kickstarter-take-over/#ixzz1f8vBiwwN

SHELBY CLARK, the founder of a start-up called RelayRides, was honored last week as a rising star in clean technology. But as he took the stage alongside companies creating new kinds of energy, he felt out of place.

RelayRides is a car-sharing start-up. Since when did encouraging people to drive carbon-spewing cars qualify as clean tech?

In Silicon Valley, where venture capital dollars nurture fledgling technology companies, clean tech is getting a makeover. Many investors are shying away from the high risks and costs of creating new forms of energy. Instead, they are doing what they do best — using software to cope with problems, in this case caused by climate change.

RelayRides, which lets car owners rent their vehicles to others, takes cars off the road because people can avoid owning them and the service’s users drive less than other people, Mr. Clark said.

“You can have a major impact on an individual’s carbon footprint by re-creating business models or behaviors without inventing a new energy,” he said.

This strategy has been percolating among some in Silicon Valley for a couple of years. But for many investors, doubts about alternative energy were confirmed last month when Solyndra, which made solar panel arrays and had raised more than $1 billion in venture capital and $528 million in government loans, filed for bankruptcy protection.

“A lot of people see it as a symbol of what they do not like in green investments or government involvement in tech,” said Nathan E. Hultman, director of the environmental policy program at the University of Maryland and a fellow at the Brookings Institution. “If the V.C.’s pull back, then a lot of these companies are going to have to fold, or at least put their plans on hold.

“This is a very familiar stage in the energy industry called the valley of death,” he said.

Green tech investing had been declining even before Solyndra. Venture capitalists invested $891 million in 80 such start-ups in the third quarter, an 11 percent decline from $1 billion in 88 companies in the second quarter, according to the National Venture Capital Association.

Investors, accustomed to financing low-cost Web start-ups, had grown wary of spending the money needed to pay for basic research and build factories to produce energy. Adding to their caution is uncertainty over whether Congress will exact a carbon tax, an increase in natural gas production in the United States and the difficulty of competing with the established energy industry.

But the Solyndra bankruptcy further spooked venture capitalists and particularly the pension funds, endowments and foundations that invest in venture capital, said Mark Heesen, president of the National Venture Capital Association.

Investors, he said, would continue to shift from investing in alternative energy to investing in companies that cope with climate change by, for example, using software to make buildings and cars more efficient.

Venture capitalists are on track to invest $275 million this year in start-ups that make software and other technologies that conserve energy or manage its use, up from $234 million last year and $104 million in 2009.

“Capital-intensive companies that take long cycles to create things, whether they’re solar voltaic cells or giant wind turbines, are not very scalable, so those are really tough businesses to imagine as venture-funded opportunities,” said Bill Maris, managing partner at Google Ventures.

His firm has invested in RelayRides and other start-ups that stretch the definition of clean tech investing. They include the Climate Corporation, for extreme weather insurance; Clean Power Finance, which runs an online marketplace for financing residential solar panels; and Transphorm, which makes tools that reduce power loss when electricity is converted in data centers or industrial motors.

“It’s tech companies that are applying their technology to this industry,” Mr. Maris said. “Those are the kinds of companies we tend to really understand and like.”

At first glance, companies like the Climate Corporation, which insures rural farmers, seem to have nothing to do with either technology or climate change. But David Friedberg, a Google veteran who is the company’s co-founder and chief executive, said its goal was “to help all the world’s business adapt to and understand climate change.”

For farmers, that means analyzing “crazy big data,” Mr. Friedberg said, from weather stations, government data feeds, soil moisture models and Doppler radar images. The Climate Corporation simulates the weather for the next two years and runs a Web site where farmers can enter their location and crop, buy insurance coverage and automatically receive payments for bad weather.

Soybean farmers in the Dakotas were recently paid for delayed planting because of an unusually rainy spring, and wheat farmers in Oklahoma and Texas were covered for a intense drought.

The Climate Corporation this month changed its name from WeatherBill, and Mr. Friedberg said he worried that the connection between his software and climate change was too vague for the new name to make sense.

“We were a little concerned about changing the name for fear of farmers thinking we’re a bunch of hippie Californians,” he said. “But the farmers said, ‘Yeah, it’s the climate that’s totally messing with us. The weather today is not the weather of my pappy or grandpappy.’ ”

FirstFuel Software is another company using computers to cope with climate change. It analyzes a building’s electric use based on data, without visiting the building, and produces an energy-saving plan. It raised $2.4 million from Battery Ventures and Nth Power in September.

Opower, which has raised $66 million from venture firms like Accel and Kleiner Perkins Caufield & Byers, gives electric and gas companies tools to communicate with customers, like text-messaging them midmonth if their electric bill is running particularly high.

Despite the interest in these types of companies, some venture capitalists are still betting on big alternative energy experiments.

Khosla Ventures announced this month that it had raised a $1.05 billion fund, one of the biggest this year. About 60 percent will go into clean tech and the rest into Internet and mobile start-ups.

“We’re not changing strategy,” said Vinod Khosla, the firm’s founder. “We’re sticking to our guns.”

The firm has invested in companies that make engines and biofuels and one that is trying to turn carbon emissions and seawater into cement. Mr. Khosla said he believed that start-ups that built efficiency software did not do enough to address climate change.

“They do the 5 to 10 percent improvements here and there,” Mr. Khosla said. “What we need is the 100 percent or 400 percent improvements.”

The problems brought on by climate change will not be solved without venture capital, he said. But what if Silicon Valley continues to recoil from tackling experiments like creating alternative energies?

“It’s the survival-of-the-species question,” said Eric Wesoff, a senior analyst on energy and venture capital at Greentech Media, a research firm. “If the V.C.’s are not willing to take that risk and the innovation slows, who’s going to fill that gap? Is it going to be China?”

Already, the bulk of the innovation is coming from India, China and Europe, Mr. Heesen said.

“We have been behind,” he said, “and we’re just going to get further and further behind in an area that is one of the few that can actually create jobs in the next 10 years.”

via NYTimes