Startup Blurbs

If you are serious about entrepreneurship, startups, or venture-capital and you don’t know about the Kaufmann Foundation, you should take a few minutes to visit their web-site and most likely bookmark it. From insightful essays on entrepreneurship and education, to a dedicated Kauffman Fellows program that aims to identify and educate future leaders in the venture capital industry, their site is simply awash in useful information and interesting perspectives. Recently, they published Version 2.0 of their research and policy guide, titled On the Road to an Entrepreneurial Economy. This paper is not a short read by any means, coming in at a nice and healthy forty pages, but don’t let this scare you away for the paper is well written and covers a wealth of topics. In a nutshell, it concentrates on policy measures that the federal government ought to follow in order to promote innovative entrepreneurship. While this paper mainly focuses on the current state of affairs in the United States, the outlined policies are general in nature and can be implemented in other countries as well.

Here are a few key takeaways. For the economy to continue firing on all cylinders, it is in the government’s best interest to ensure that individuals that enter the workforce not only have twenty-first century skills and knowledge, but also have the ability to overcome the fear of using these skills to generate and commercialize new ideas, products and services. In the same sense, individuals need to be encouraged to view themselves as their own firms, who are selling their labor to others or to themselves, should they want to start their own businesses. For this to happen on a large scale, entrepreneurship needs to be instilled in individuals at an early age, and not be relegated to MBA courses at universities. Additionally, the paper argues for the disbanding of the H1B visa cap, based on an analysis of the amount of businesses that have been started by foreign workers over the last several decades. While this is a good point, I think it needs further study as recently there has been an increasing trend for foreign nationals to obtain an education in the United States, but to return home afterwards to start their new enterprises in their homeland. This of course, can be countered with the fact that several of the companies started abroad have since expanded and have a significant presence in the United States hiring workers over here as well.  Another interesting point that the paper makes is a call for healthcare to be decoupled from employment. The argument being that startups, because they lack critical mass in terms of employees, are unable to provide affordable healthcare, and are thus at a disadvantage compared to large companies. This in turn limits the number of individuals that are willing to take a risk of starting or joining a startup. But fostering startups and innovation is key to ensuring the future prosperity for the United States – for example, did you know that firms with fewer than 500 employees generate thirteen to fourteen times more patents per employee than larger firms? And to add insult to injury, these patents are usually twice as likely to be cited by other patents and papers.

I could go on for pages discussing all the info contained in the policy guide, but you are probably better off reading the actual paper yourself so that you can draw your own conclusions. In any case, whether you agree with the points in the policy guide or not, the Kauffman Foundation web-site is a very good resource for entrepreneurial information.

If you have ever filed a patent, you will know that after writing it up in your engineering notebook one of the next steps is to do some preliminary research on prior art. The problem is that searching for prior art is not exactly the easiest thing in the world. The United States Patent and Trademark Office (USPTO) provides a very up to date database of patents and disclosures but the search functionality and presentation is mediocre at best. Google has also ventured into the patent search field and scientific publications with Google Patent Search and Google Scholar. Both tools are pretty good, for example, Google Patent Search, unlike the USPTO, allows one to view all the related images without the need of a plugin. Additionally, the full patent document can be downloaded as a PDF for future reference. On the downside, on occasion I have found it to be a bit out of sync with the USPTO and also not listing all the related citations. Further, I would also be concerned about whether Google stores the search terms and if they might get published.

Google though, is not alone in the intellectual property search and exchange game. Today, SparkIP launched SparkIP.com, which is billed as an intellectual property exchange for the scientific community. Ed Trimble, the Chief Executive Officer of SparkIP, will be familiar to many since prior to SparkIP he was the CEO and founder of EzGov Inc., before it was acquired by ChoicePoint. In essence, SparkIP intends to bring universities, innovators, corporations, attorneys, and researchers together and make the research on emerging technologies as well as the brokerage of IP easier. For now, the SparkIP database contains over 3.5 million US patents, with plans to add patent applications and international patents in the upcoming weeks. They are also seeking to partner with universities and labs from around the world and make their technology listings available on the site.

What is unique to SparkIP, as opposed to the other sites mentioned before, is their concept of SparkCluster maps. Basically, any search on the site will return a list of SparkClusters, each of which is a map of contextually related items which are arranged in clusters. Each cluster is represented as a node which is connected to other related nodes via edges. The size of the nodes represents the number of items that are contained in that cluster. Clicking on a node brings up another screen that shows filtered items based on the query. One also receives additional options such as that ability to filter by assignee name and date range.  The visual presentation is very appealing and the navigation is quite intuitive, except for the required double-click in the SparkCluster view. On the other hand, either the database might still be incomplete or the search functionality might need some improvements, since queries for recent patents that yielded results on other sites yielded none here. Overall though I think that this clustered approach and visualization has great potential in terms of IP search, and the dreaded search for prior art might become a lot less time consuming soon.

There are many great ideas out there, but few ever make it from the concept phase into an actual product, and even fewer end up as profitable business ventures. Money, while not the magical pill as was proven by countless .com companies towards the end of the nineties, can however go a long way of at least helping you get out of the starting block. But with so many ideas, and just as many failures, it is not surprising that venture capitalists are very selective about where they choose to invest their assets. Any tips that might help score that money are therefore much appreciated. Conveniently, CNNMoney just published a short article titled 5 Tips to Score Venture Capital Funding, in which venture capital representatives from Safeguard Scientific, Beringea, Cross Atlantic Capital Partners, and Kodiak Venture Partners comment on what they like to see in a startup. According to the VCs the people that are behind the business plan are more important than the plan that got them in the door in the first place, since the plan is likely to change over time and it will be up to them to make sure that it does as market conditions change. Thus, the things they look for are: passion, focus, the team that has been assembled to take on the challenge at hand, uniqueness of the approach or in other words innovations, and finally a potential product that will make enough money to make it a worthwhile investment. Generally, pretty logical things and what one would expect VCs to say, the only point that I would elaborate on is the innovation part and that statement that the product needs to be different as opposed to more and better. There has to be some innovation for sure, but what needs to be kept in mind that the innovation does not need to necessarily come on the product itself, but can be on the process for creating a similar product. The market place is littered with examples where the first company to deliver a new and unique product eventually fell by the wayside after being outdone by someone who had a better process of creating a very similar clone.