Startup Notes- Tales from the Entrepreneurial Front

How to build a successful board for your company - great resources

2010-01-27T16:58:00Z

Last week, Utah's chapter of the NACD (nat'l assoc of corp. directors), UTC and MWCN co-sponsored a luncheon on building a great board of Directors called "Boards that Work - How CEO's Find Them and Flourish". Jim Jensen was the moderator and the materials provided had a lot of value along with the discussion. He has graciously posted them on his website and I wanted to recommend them to you, as many entrepreneurs either are wrestling with creating a strong board, or should be, but haven't started the process yet!

The overall site for articles on governance from Jim is here

The specific handout I recommend to you is here

In particular I recommend that you start on Page 5 and read the "discussion questions". It really gets at the issues of recruiting a strong board and things to consider in that process. The first 5 pages are about the dynamics of an existing board, and very insightful if you already have a functioning board that may or may not be working.

More on VC - Slight uptick in Q4 might signal better times ahead

2010-01-26T21:19:00Z

The Silicon Valley Mercury News also summarized the PWC/NVCA Moneytree Report, with an emphasis on Silicon valley

The amount of venture funds into Silicon Valley fell to $6.98 billion in 2009, from an average over the last 3 years of more than $10 billion, the lowest level since 2003. However, the rest of the country faced its lowest level of funding since 1997 at $17.7 billion.

Some signs of an uptick from NVCA:

"The venture capital industry had no choice but to slow the investment pace in 2009," NVCA President Mark Heesen said in a news release. "Now that the economy has begun to show signs of improvement, we expect to see dollars flow more freely."

and from PWC directly

"VCs placed more bets in the fourth quarter of 2009 than we've seen all year," said Tracy T. Lefteroff, who leads the venture capital practice at PricewaterhouseCoopers. "They're investing fewer dollars in these companies, but the fact remains that there are still entrepreneurs out there with great ideas who are getting the opportunity to take the next step forward with their businesses."

Dow Jones VentureSource has their own methodology of surveying venture firms, but their data also showed a slight uptick in activity and funding levels in Q4 2009. From a press release posted by Trading Markets,

"Venture investors put $6.3 billion to work in 743 deals in the most recent quarter, up slightly from the $6.1 billion invested in 619 deals during the same period in 2008, according to statistics released today by Dow Jones VentureSource. In total, 2009 saw 2,489 deals completed and $21.4 billion in venture capital invested in U.S.companies, a 31% drop from 2008 when $31 billion was invested in 2,817 deals. "

Latest MoneyTree analysis of venture capital investing

2010-01-26T20:38:00Z

Lipper Current did a nice analysis of PWC/NVCA's latest Moneytree report on Venture capital. In short, Utah got 1.3% of the deals and 1% of the money with 35 deals for 2009 and just over $176 million in total venture funding for the year (compared to a national total of $17.7 billion) .

Overall, 2009 posted a 37% drop in venture capital funding overall, but the pain seemed to be evenly distributed.

The complete post can be found here including a nicely laid out table by quarter and by State for convenience.

CES 2010 - Super Wow Technology!!!!

2010-01-12T19:53:00Z

Okay, it takes quite a bit to wow Brad and I....but JVC really did it this year! And we almost missed it!

SUPER WOW technology - JVC brought to the show the "$1 million theater". In it they were showing their new D-ILA RS 4000 video projector. This baby shows 4096 pixels across each image and 2400 pixels down the image - or the equivalent of 4 concurrent HDTV video streams (approx 10 million total pixels per image).

JVC filmed some gorgeous content in Okinawa, including several ladies is full traditional Japanese kimonos. As they played it, it seemed that we could literally walk into the picture - you could see the threads of their kimonos - the quality and richness were unbelievable - it really was like a full movie theater image, right there in the living room. The projector can either play one image at full resolution, or can play 4 concurrent HDTV images.

Either way - Super WOW! At the current price (overheard) of $175,000, it's a bit out of the range of most consumers - but it does give us a sense of where the technology is heading - to truly lifelike color and richness. They also showed a 3D clip from an upcoming Imax movie (about endangered Reefs) - using TWO of the RS 4000's. We just used polarized plastic glasses like in the movie theater - but it really delivered a phenomenal 3D experience -dramatically richer than what is currently coming on to the market. Stay tuned for that in your living room!

Note, it doesn't even seem to be on the website yet, and the D-ILA link as well as this press release on a more consumer oriented product in the family, was as close as I could come. If you can afford it, ask your favorite dealer!

CES 2010 - Top items 8-14

2010-01-12T14:49:00Z

These were themes that are somewhat minor in their overall impact, but showed up surprisingly consistently throughout the show. Not necessarily game changers, but interesting to watch.

8) After market in-vehicle true multi-media sytems (retrofit your ride with built in TV's and players - cheaper than a new car!)

9) Electronic cigarettes - strange but true, electronic cigarettes that don't burn tobacco were all over the Asian Vendor pavilions - success in US? not very likely

10) A continued push for the networked home (sort of) which has been going on for over a decade - still too complex and difficult for consumers to manage

11) Lots and lots of personal audio bling! Crystal encrusted "over the ear" headphones, crystal cases for phones, crystal "clip on" bling for your ear buds - it was the year of glitz for your personal audio environment!

12) Smart phones, smart phones everywhere!!! Windows phones, Android phones, almost every other kind of phones, smart phones were everywhere at the show.

13) Charging technologies - several different kinds of systems to make it easier for people to charge all their consumer electronics devices - pads, docks, etc. Consumers are "all tangled up" in all their cords. Will these be "big" - remains to be seen.

14) Another interesting insight from IDC analysts about the photography industry, "Photography has never been so hot, and the industry has never been so miserable!" They don't know how to make money in the current environment. An interesting perspective on printing - older people print pictures in 4" x 6" just like they did with film, somewhat younger people want to print "customized" items (books, calendars etc), and very young people don't print at all (it's "live" and video), but as they age, they want to decorate their house with their pictures and their memories (esp. kids), and they begin to print!

CES -2010 Marketing Tips and Tricks (or What Not to Do at a Major Tradeshow!)

2010-01-12T14:08:00Z

After walking over 1 million square feet of tradeshow space at the 2010 Consumer Electronics Show, the marketing side of me just couldn't resist recounting the "what not to do" of tradeshows - illustrated by real life examples.

Here I'll list the tips, and in subsequent posts, I'll tell the stories - some of them even include photos of offending behavior!

Don't disgust your customers
Don't confuse your customers
Don't make your customers nervous
Don't ignore your customers
Don't assume your customers care (it's your job to make them care)
Don't let your team behave like barbarians
Don't be a Little Fish in a Big Pond, when you can be the Big Fish in a Little Pond!
Don't substitute Cleavage for Content

CES 2010 - Top items 2-7

2010-01-11T23:42:00Z

Okay, the top 3 TV's themes were the "#1" cool thing at CES. Here are items 2 - 7, in mostly descending order of interesting. Again, I'm looking for themes that impact the industry, not "yet another gadget". There were thousand, probably 10's of thousands, of gadgets, most of which will be 'yesterday's news' by mid- year. I have tried here to identify those themes will are indicative of shifts or impacts on the industry.

2) Better power management for the home - we saw a number of devices such as monitors and smart plugs to reduce home power consumption by powering down or managing the consumption of energy by CE (consumer electronics) products

3) Green awareness on the part of vendors - all of the "big dogs" were talking about eco friendly policies, energy consumption by their products, recycling etc. Green is the new Hip.

4) Evidence of a market shift in computers, indicated by IDC - 15 years ago, consumers had a desktop with then hopefully got a laptop for their mobile needs. Now, it seems, that many are buying "large" laptops/notebooks as their primary machines (up to 20" screens), and buying netbooks or mini-notebooks for traveling. Synchronization and data management needs sound just like 15 years ago.

5) According to IDC, consumers appear to be buying more than 1 PC per family - now looking for 1 PC per family MEMBER. PC sales are on the RISE (although ASP's - average selling price - are dropping). This is a very mature market and this is a surprise, especially since consumers are driving the increase.

6) Laptop cooling - this was introduced last year, but was a big theme this year with new chemistry and new systems evolving to help cool laptops - probably related to the earlier trend of larger, more powerful laptops as people's primary machine.

7) eReaders - everyone jumped on the bandwagon after Amazon demonstrated significant success with the Kindle. Unfortunately, all of the eReaders we saw were impossible to use! They were a) small b) light c) used E-ink (high contrast B&W low power display technology), but they all had software interfaces that were TERRIBLE!!!! So, concept is good, andd there were a lot of content providers and systems popping up, but if a "book replacement" isn't as easy to use as a book, people won't use it! CEA is projection - $1.08 billion in eReader sales in 2010, while only $1.4 billion in Blu-Ray DVD player sales during the year. (see Twice Daily Magazine, January 7, 2010, page 1, "CE Sales Should Rise 0.3% in 2010")

CEs 2010 - Top 3 TV themes

2010-01-11T22:26:00Z

CES is the show for TV's. Here are the three biggest trends we saw this year. Note, Brad and I are a little jaded after attending CES for more than a decade, so the fact that there are thousands of versions of TV's - thin TV's, skinny- edge TV's, grouped TV's, TV's with better contrast etc etc, but these are the "big picture" trends that we saw that will impact the entire industry in some way.

1) 3D TV - we saw "for real" players, TV'sand (some) content for 3D TV in the home. Think Avatar in your livingroom. This has been a huge pushfor Sony. Good news for industry - allindustry players are aligned and there does not seem to be contention,bad news, it may not really cool enough to get consumers to swap outthe brand new HDTV's they just bought for a new one.

Honestly, the 3D experienceis a little "thin" with most of the systems we saw - you don't reallyget convincing 3D. Small good news - most 120Hz HDTV's probably canbecome 3D TV's with the right 3D source (i.e. 3D cable, satellite or 3DDVD), and special synchronized (read "connected to player") glasses. There are a few 3D sets / prototypes that do not require glasses - coolbut a narrow field of viewing and still "very early".

1a) IPTV (Internet protocol TV ora.k.a. Internet connected TV) A number of the new models were internetconnected "internally". Several, including Panasonic and LG, wereshowing integrated "Skype" phones - so that you could skype from yourliving room. Also integration with Netflix for quick download fromNetflix right to your TV. IDC analyst made an interesting comment onthis - in research they conducted, when asking consumers, "Do you wanta connected TV?" - they routinely say "no", but when you ask consumers,"Do you want content from the Internet on your TV?" they routinely say"YES" - so consumers don't really "get" the value on its face.

1c) "Hello Yellow" - Sharp Aquos showeda new TV using RGB + Y. Most televisions use Red/Green/Blue colorsources (such as LEDs) to create all the colors that we see - Sharpshowed a TV using 4 LEDs - Red, Green, Blue and Yellow - whichdelivered dramatically improved Yellow and Gold tones. Brad thinksthat the industry will move to "6 color" separation - 6 LEDs would fitin the shape of a hexagon - 1 pixel. Stay tuned to see if he's right -our experience of color at home would certainly improve!

Crisis at CES 2010 - or Lost in Las Vegas

2010-01-11T20:12:00Z

We just got back from 3 grueling days at the 2010 International CES. I have a number of posts, about the show, about the newest gadgets, and a slew of "marketing "what not to do's". Stay tuned.

The Big News at CES - how small CES was this year compared to previous years! CES has been the biggest US tradeshow ("13 footballfields of technology" or over 1.8 million square feet in 2007 ) andthe second biggest in the world (behind CeBIT in Hanover). However, Iestimate that this year the square footage of exhibit space was 20%-30%smaller than 2009. In particular, last year CES included 3 of the 4halls of the Sands Convention Center, but this year those halls of theSands were empty! In addition, many of the remaining Halls (NorthHall, Central Hall and South Halls 1-4) were notably smaller withsections of the floor closed off with curtains.

Why, you ask? Well, for one thing, HP, an exhibitor last yearwith a HUGE booth, did not exhibit at all this year and others, such asGoogle and SanDisk, which had mid-size booths last year, were likewisenot exhibiting (some companies had meeting rooms, but did not exhibit). Second, exhibitors like Creative Labs, last yearwith a 50' x 50' booth (my estimate of cost $1-$1.5 million for the show,space, booth and staff for a booth that size), this year exhibited in what looked like a 20' x 20' booth (15%of the size!) showing only 1 newly announced product.

This samepattern, either absence of exhibitors or shrinkage of the exhibit spacewas repeated all over the show. Below is a quick summary of the keystats for CES since 2007 to give you a sense of the changes in the showdue to the tough economic conditions:

The 2007 International CES - overall attendance totaling 143,695 (includes attendees, press, exhibitors etc)

1.8 million net square feet of exhibit space (with the addition of CES' newest venue, the Sands Expo and Convention Center/The Venetian)

More than 2,700 exhibitor

The 2008 International CES^® - overall attendance totaling 141,150 (includes attendees, press, exhibitors etc)

1.85 million net square feet of exhibit space.

3000 exhibitors

The 2009 International CES - overall attendance totaling 113, 085 (includes attendees, press, exhibitors etc)

2009 attendance (not including exhibitors, press etc) was nearly 68,000 people (with 38,000+ registered exhibitors!
(Note, Breakout not available for previous years)

1.7 million net square feet of exhibit space

2700 exhibitors

2010 preliminary numbers: Gary Shapiro, president/CEO of CEA,said total attendance by the end of Day 2 was 112,515, higher than the98,495 at the end of 2009's Day 2. CEA had forecast 110,000 attendancefigure for 2010 CES

2500 exhibitors (300+ are new this year)

Note that CE sales declined 7% in 2009, while total units grew 10% - the first industry revenue drop in 20 years.
(see Twice Daily Magazine, January 7, 2010, page 1, "CE Sales Should Rise 0.3% in 2010")

Speedpitches at NorthFront alliance - some feedback suitable to all entrepreneurs

2009-11-11T16:56:00Z

I was on a panel sponsored by the NorthFront Alliance two weeks ago and one of the elements were speedpitches by two different entrepreneurial teams and then feedback from the panel. As I looked at the notes I took during the pitches, I thought that this feedback is relevant for almost every entrepreneur.

If you are an entrepreneur, you are pitching! If you're raising money, you're pitching! If you're finding partners, you're pitching! If you're selling (anything) you're pitching!

So, here are some thoughts from the first pitch - and from many others I've seen!

Why do I care? (Tell me what you do)
- Be specific - you CANNOT conquer the world, no matter how cool you are
Tell me about your team - but do that later in the pitch ("why is this the dream team to solve this problem?)
Practice, Practice, Practice!
Show me the numbers on the screen
Explain your acronyms
where are you in your progress (are you currently selling?)
If you have customers, show me the goods
- Don't show the list of every "maybe" you have, because the next time I see you, I'll want to know if they've all signed

Here are notes from the second pitch

Give me the elevator pitch
Where's the Pain
Tell me about your IP
Don't show too many potential leads (see above)

Great Tips on SEO Especially for Entrepreneurs from Todd Jensen and the Utah Fund of Funds

2009-11-10T22:36:00Z

A few weeks ago, the Utah Fund of Funds presented one of their quarterly entrepreneurial mentoring meetings. They invited Todd Jensen of TKonline Solutions to present. Todd did a great job of discussing the current state of SEO marketing. A couple of highlights that I didn't know (for those of you who aren't already SEO pros)

Natural Search:

Give Google the Goods (text, content, not flash and graphics)
- THINK LINKBAIT (Something others would want to link to)
Googles Page Rank (tm) is still the biggest part of the ranking algorithm - this is your "online reputation"
This includes:
- On page factors such as content, Clean code (so they don't get lost - and database driven sites often lose Google)
- Blogging is a great way to get new content onto your site - every new post is a new page for Google to index!

Off page factors: Every link to your site is a "vote" for your site.

All links are not created equal
Bigger name institutions get more weight
- .edu
- .gov
- .org

(I suppose they believe these guys are not commercial or self- interested, but it interesting how Google is thinking

A one way link counts more than a reciprocal link
A press release is a way getting quality links
Link swaps don't really give you credit
LSI - Latest Semantic Indexing
The Context of your Content Matters!
Spiders can "now" look at PDF's - but it's new
If you can highlight the text with your cursor, it can be indexed

Google Analytics is a good, free, way to track who's coming to your site
Todd's favorite resource for SEO info is SEOMOZ.org

Webinar : “The Presentation Secrets of Steve Jobs: How to Create the Story”

2009-11-10T20:26:00Z

The team at GoTo Meeting sponsored a fun webinar last week, “The Presentation Secrets of Steve Jobs: How to Create
the Story”.

This is a marketing opp for them to show off their "recorded webinars", but I enjoyed the content, perhaps I've just seen, and produced, too many bad powerpoints! The author does a good job of identifying how to declutter presentations and make them more impactful.

To download a copy of the PresentationSecrets eBook, you can visit:

http://bit.ly/Presentations-eBook

To view the recordedWebinar at any time visit

https://www1.gotomeeting.com/register/456993952

You do have to register, but there is no charge.
You will need Windows Media Player 9 or higherto view the presentation.

A look at the Sad reality of Venture Capital

2009-11-05T18:46:12Z

This is a sobering blog post looking at the current state of Venture Capital. The challenges in the public markets, including IPO's and
M&A are hurting liquidity among venture firms. This makes it more difficult for them to take the risk of deploying new capital and
especially to raise new funds.

This has implications for entrepreneurs at every stage of the fundraising process. Capital is
still king in this market. I like to have a minimum runway of 1 year of cash on hand (so cut the burn if that's not a reality). Once you
get to 6 months of cash on hand, you're in a tough spot, and at 3 months, most investors will assume you're going to hit the wall, and
they don't want to bet on losers.

Be sure to check out the charts which really tell the story.

If the embedded version is not displaying correctly, you can visit the original post,.

Key Documents Needed if You are Raising Money

2009-10-27T21:04:19Z

Figuring out exactly "what to write, when" when you are launching a
startup that needs to raise money, can be very challenging. When I
started my first company, I slaved over the complete, prose, version of
our business plan, but neglected the powerpoint slides!

Here is what I recommend for the emerging startup
1) Elevator pitch (see my previous post)
2) 1 paragraph summary of the business (for email)
3) 1 page exec summary (for introductions to angels, VC's, and for
investor beauty pageants) - ONE PAGE ONLY!
4) 3-5 page executive summary (for anyone who is potentially a serious
investor - they will ask for this)
5) A 15 slide powerpoint presentation (NO MORE THAN 15 slides).

Guy Kawasaki says, take the oldest person in the room, divide their age
by 2, and that is the SMALLEST font size you should use. For the
mathematically challenged, if there are mature people in the room (i.e.
people with money) who are, say, 60, then the smallest font size you
should is 30 points. This is great advice, now, go back to your latest
powerpoint and check that font size!

It is MUCH harder to write a short summary, than a long summary, which
is why I recommend these items in the order that I do - to get a really
good elevator pitch, you really have to know your story.

Once you have items 1-5 done, then you can "write" the novel version
(although still, no more than 25 pages of prose), of your business plan.
Of course, by the time you have 1-5 done, you've already done all the
thinking and all the modeling and spreadsheet work to really understand
your business - so the writing / expansion will be much easier. In my
experience, the only person who will read this is the associate at a
venture capital firm which is really interested in your business - and
then only in due diligence. Get 1-5 done and get on the road raising
money, and you'll have plenty of time on the plane to write the long
version!

As a note, if you're new to raising investor capital for a startup,
visit this earlier post.

This is a presentation I gave at the request of the Fund of Funds called
"Designing the Perfect Investor" (tm) which walks through a lot of the
elements of raising money. It is < 1 hour and is designed to be primer
on fund raising and includes the video/audio of the presentation as well
as the direct view of the slides.

A survey of Founders - what's a startup really like?

2009-10-27T01:38:29Z

Paul Graham of Y Combinator did an (informal) survey of many of the
founders he works with, asking them what surprised them about founding a
company. Very worthwhile reading - as he points out, he told them most
of this stuff in advance, but you really don't know what it's like until
you startup....But reading this is pretty handy!

See www.paulgraham.com/really.html for the original post.

A survey of Founders - what's a startup really like?

2009-10-26T15:34:16Z

The War against Angel Groups who charge entrepreneurs to pitch...

2009-10-20T00:01:00Z

Jason Calcanis is a man at war! He is angry about angel groups who charge entrepreneurs money, sometimes a LOT of money to pitch to their groups. He's received a ton of feedback to his original post , much of it summarized here. The fees being asked are in the thousands of dollars, sometimes exceeding $10k. Brad Feld, of Feld Thoughts (a VC who is still a good guy), responds here with the colorfully named "An Angel Investor Group Move that Makes me Vomit"

In short, Jason names names and exposes bad practices and bad actors. Entrepreneurs, forewarned is indeed forearmed. He is getting feedback from entrepreneurs who have run this gauntlet and exposing the whole sorry sector.

To borrow a phrase, if you, an entrepreneur, are asked to pay a material fee to pitch to group of angel investors, "JUST SAY NO".

2009 Electrical and Computer Engineering Alumni Homecoming Banquet

2009-10-19T20:42:00Z

2009 Electrical and Computer Engineering Alumni Homecoming Banquet

This is the first annual banquet for alumni of BYU's Electrical and Computer Engineering Department.

From the Alumni Committee:
Get reacquainted with old friends on BYU campus, and enjoy some great food and conversation at the same time.

When: Friday October 23rd, 6:00pm
Where: Wilkinson Center Room 3211

We will gather at 6:00pm to meet and mingle. At 6:30pm, there will be a delicious buffet dinner served, following which we will have the pleasure to hear from distinguished ECEn alumnus Nicole Toomey Davis. Nicole is the Director of the Centers of Excellence Program of the Utah Governor’s Office of Economic Development.

The cost is $22.50 per person.
Spouses/Guests are invited.

Please register online at
http://ece.aa.byu.edu/

Seating is limited, so don’t delay.

TheFunded.com helping entrepreneurs with FREE draft VC quality docs

2009-10-07T00:27:00Z

TheFunded.com descrbies themselves as follows:

TheFunded.com is a community of founders, CEOs, and business executives from around the world.

This is a great website that aims to help entrepreneurs have more successful relationships with the venture capital community. They are a great peer to peer resource of other entrepreneurs who are or who have raised money. They just sent out an announcement, offering free Founder-friendly legal documents. I have excerpted the email below to give full credit to the team at TheFunded. This is a HUGE service to entrepreneurs.

From their recent email:

Get a Complete Set of Founder-friendly Legal Docs
------------------------------------------------------------
TheFunded has produced founder-friendly versions of every legal document necessary to launch a new startup. These documents were carefully written from scratch to keep founders in control of the companies that they create. 

* Please help by sharing these documents with anyone that you know who is launching a startup, and borrow some of the founder protections for your own company from the Certificate of Incorporation.

-- http://www.docstoc.com/docs/12233422 - Bylaws
-- http://www.docstoc.com/docs/12233427 - Certificate of Incorporation
-- http://www.docstoc.com/docs/12233434 - Initial Stockholder Consent
-- http://www.docstoc.com/docs/12233436 - Invention Assignment Agreement
-- http://www.docstoc.com/docs/12233437 - Restricted Stock Purchase Agreement
-- http://www.docstoc.com/docs/12233430 - Indemnification Agreement
-- http://www.docstoc.com/docs/12233432 - Initial Board Consent
-- http://www.docstoc.com/docs/12233420 - Action by Incorporator
-- http://www.docstoc.com/docs/10303638 - Plain Preferred Term Sheet

Good to see a set of entreprneur-friendly templates - no need to reinvent the wheel when cash is tight!

Utah's Women Tech Council Announces 2009 Award Winners

2009-10-06T21:16:00Z

Utah's Women Tech Council each year honors women who work in technology in Utah. This year 16 finalists were selected and 6 awards were presented at a sold out luncheon of over 400 people. Nicole Toomey Davis received the Community Builder award. Carine Clark, award winner in Leadership excellence said that the group had more women in technology than she'd been with in one room in years.

See the full release here

Six Award Recipients were announced. Award presenters fromEnergySolutions, Ernst & Young, Epic Ventures, Novell, USTAR, andWorkman Nydegger recognized the following women:

Carine Clark, Symantec — Leadership Excellence
Cindy L. Snow, ContentWatch — Technology Trailblazer
Carolyn B. McClain, Novell — Technology Innovator
Angela Trego, Ph.D., P.E., ATK Space Systems — Rising Star
Nicole Toomey Davis, Governor's Office of Economic Development — Community Builder
Cynthia Furse, Ph.D., LiveWire Test Labs and University of Utah — Education Excellence