Microsoft makes software free to start-ups

Weekender Alex Keenan found a great deal on Microsoft software.

According to IT Business Edge, "Microsoft’s newly launched BizSpark program is looking to kindle the esteem of some small business owners across the globe.

According to CNET News, the initiative will be open to private companies that have been in business less than three years and bring in less than $1 million in yearly revenue. Eligible organizations must be nominated by a Microsoft partner company. Participants in the program will have free access to production licenses and technical support for several Microsoft products, such as Visual Studio, Windows Server, SQL Server and Sharepoint, reports Computerworld. The licenses are free for the first three years, after that the companies in the program will have to pay."

See the rest of the article here: http://www.itbusinessedge.com/blogs/hdw/?p=3508

Google's CEO talks about innovation, competition, and Google

In this video interview with James Manyika of McKinsey, Google's Eric Schmidt talks about everything from competition, to innovation, to global issues surrounding the future of the internet.

A few highlights:

Schmidt starts off his view of the future, asking the question: "If people have infinitely powerful personal devices, connected to infinitely fast networks, connected to infinitely fast server rooms... What will they do?" His take: these super devices will allow the consumer to make decisions easier and faster, fundamentally change how companies market to consumers, and considerably speed up the rate of change in the world. No matter how powerful, he notes, they won't replace human insight.

In his interview, he stresses that while marketing to the long tail can be profitable, catering to the 'head' is still important. In fact, contrary to some of Chris Anderson's work, he believes that hits will become Super Hits as a result of the global reach of the internet.

He also talks about management at Google and how critical it is to keep an open, loosely organized culture to sustain innovation, avoiding siloed divisions. He also stresses the importance of deadlines to get things done ("otherwise you're a University"), and views created crises as tools to get through the knothole. (Hmm... crises that are artificially created? Crazy deadlines? Sounds like InOneWeekend!)

His take on work-life balance? There is no balance. Executives that will do really well in his view love the crises.

Probably most interesting are his comments about policing the internet and the potentially tragic balkanization of the internet. Different countries have different laws... how do we stay connected without building police states around our internets?

To see the video of McKinsey's whole interview with Eric Schmidt, click here: http://www.mckinseyquarterly.com/Googles_view_on_the_future_of_business_An_interview_with_CEO_Eric_Schmidt_2229?pagenum=1#interactive_google_schmidt

Celebrating 50 Years of Computing History

If you had the chance to attend Judy Estrin's talk a few weeks ago about her book Closing the Innovation Gap, then you heard quite a bit of solid information about the need to strengthen the basic research infrastructure in the US. In her book, Estrin lobbies for a renewed focus in the US on basic research that allows breakthroughs, like the Internet, that require 30 years to incubate. As the US competes with the rest of the world we compete with the massive populations of India and China that, due to their sheer size, have more honors students than the US has students. We need a strengthened infrastructure to build a strategic workforce and not just a commodity workforce.

The University of Cincinnati will host the conference Celebrating 50 Years of Computing History next week, November 10th and 11th. At this conference you will have the chance to hear from some of the original researchers that made the breakthroughs that allow computing as we know it today. You'll also have the opportunity to understand some of the foundations that Estrin discusses and just what the scope of basic research is.

- Andy

Don't forget rural society

The McKinsey Quarterly just came out with a great article about entrepreneurship - in rural India and China - and how important rural society is to overall economic growth. A sharp contrast is drawn between China's approach in developing investing in its agrarian villages and India's still poverty-stricken outlands.

Excerpts from Tarun Khanna’s article:

“In China, for instance, the government actively spurred the village economy, largely through agricultural-reform measures implemented during the 1980s.”

“India, however, has not. The nation’s government has failed to invest in its villages. The farmers who sold their produce in a mandi in Bangalore live a daily struggle for existence in their home villages. Today, 89 percent of all rural households do not own a telephone, and 52 percent have no domestic power connection. The average village is two kilometers away from an all-weather road, and 20 percent of rural habitations must walk for miles to obtain safe drinking water, have access to it for only a few hours a day for much of the year, or have no access at all.”

“Instead, India should seek to empower its villagers and nurture entrepreneurial activity, while also taking advantage of its strengths in the private sector. Corporations need a seat at the table of village reform—even multinationals, because the task of reform is so enormous. Outright foreign direct investment, by Düsseldorf-based Metro AG, for example, should be welcome, as should joint ventures, like the one between Bharti Enterprises and Wal-Mart Stores. Such businesses, together with local ones, can lay the foundations for a modern agricultural supply chain linking the village farmer with the urban market.

Only then will India, and not just its global cities, rise.”

About the Author
Tarun Khanna is the Jorge Paulo Lemann Professor at Harvard Business School and author of Billions of Entrepreneurs: How China and India are Reshaping Their Futures and Yours, published in 2008 by Harvard Business School Press and Penguin Books India. This is an adaptation by the author of a broader perspective on India and China that appeared originally in an online publication of the Center for the Study of Globalization at Yale University.

You can read the full article here:

http://www.mckinseyquarterly.com/Nurturing_entrepreneurship_in_Indias_villages_2237

Net net: don't forget about rural economies! In fact, according to the USDA, rural America is home to a fifth (49 million) of the nation's people, comprises over 2000 counties, and accounts for 75 percent of the America's land.

- Elizabeth

Obama’s support of start-ups and technology

Now that the results are in, let’s take a look at what’s in store for start-ups and technology. The following is from the economic section of Obama’s website, much of which focuses on investment and incentives for technology.

You can view his entire economic policy here: http://origin.barackobama.com/issues/economy/index.php


Technology, Innovation and Creating Jobs

Barack Obama and Joe Biden will increase federal support for research, technology and innovation for companies and universities so that American families can lead the world in creating new advanced jobs and products.

Invest in the Sciences: Barack Obama and Joe Biden support doubling federal funding for basic research and changing the posture of our federal government from being one of the most anti-science administrations in American history to one that embraces science and technology. This will foster home-grown innovation, help ensure the competitiveness of US technology-based businesses, and ensure that 21st century jobs can and will grow in America.

Make the Research and Development Tax Credit Permanent: Barack Obama and Joe Biden want investments in a skilled research and development workforce and technology infrastructure to be supported here in America so that American workers and communities will benefit. Obama and Biden want to make the Research and Development tax credit permanent so that firms can rely on it when making decisions to invest in domestic R&D over multi-year timeframes.

Deploy Next-Generation Broadband: Barack Obama and Joe Biden believe we can get broadband to every community in America through a combination of reform of the Universal Service Fund, better use of the nation's wireless spectrum, promotion of next-generation facilities, technologies and applications, and new tax and loan incentives.

Support Small Business

Provide Tax Relief for Small Businesses and Start Up Companies: Barack Obama and Joe Biden will eliminate all capital gains taxes on start-up and small businesses to encourage innovation and job creation. Obama and Biden will also support small business owners by providing a $500 “Making Work Pay” tax credit to almost every worker in America. Self-employed small business owners pay both the employee and the employer side of the payroll tax, and this measure will reduce the burdens of this double taxation.

Create a National Network of Public-Private Business Incubators: Barack Obama and Joe Biden will support entrepreneurship and spur job growth by creating a national network of public-private business incubators. Business incubators facilitate the critical work of entrepreneurs in creating start-up companies. Obama and Biden will invest $250 million per year to increase the number and size of incubators in disadvantaged communities throughout the country.

Venture funding cut backs... and start up opportunities?

This is a great article from The Economist about venture capital funds cutting back and how start-ups are reacting with layoffs. You can always count on the Economist to be balanced... This author points out that the start-ups who DO survive Armageddon will benefit from fewer competitors. There's a whole Inc. magazine issue from earlier this fall that profiles companies that did well starting up during recessions. The net net: no more sweet VC deals with a simple powerpoint - start thinking of businesses that can gain traction with limited capital (maybe your own?).

See the whole article - with nifty pictures and graphs - here: http://www.economist.com/business/displaystory.cfm?story_id=12474626

Fright night in the valley
Oct 23rd 2008 SAN FRANCISCO From The Economist print edition

Having learnt from the dotcom bust, technology entrepreneurs hope to stay afloat this time around

HALLOWEEN is still a week away, but homes throughout Silicon Valley are already adorned with images of witches, skeletons and assorted ghouls and gargoyles. Horror stories have also been plentiful in the Valley, courtesy of the region’s high-tech companies. On October 21st Yahoo! said it would cut its staff of around 15,000 by at least a tenth. Given the internet firm’s woes—its third-quarter profit fell by 64%, to $54m, as online advertising withered—the cuts were perhaps inevitable. Equally striking has been a wave of lay-offs at much smaller start-up companies, which are bracing themselves for a coming recession.Unlike firms in most other industries, which have not seen a severe downturn since the early 1990s, tech companies still bear the scars of the dotcom bust of 2001. The folk that ran them then learnt painful lessons that many of today’s entrepreneurs appear to have taken on board—and that managers in other companies would do well to reflect on. Chief among them are the importance of swift and deep cost-cutting; of focusing scarce resources on core activities; and of convincing investors that your business strategy is a winner.

Given that entrepreneurs tend to be tireless optimists, even experienced hands need a scare. And they are getting it from the venture-capital outfits that have backed many fledgling firms. Sequoia Capital, a leading investor in start-ups, began a recent presentation to bosses of companies in which it owns a stake with a Halloween-style image of a gravestone carrying the words “R.I.P. Good Times”. Sequoia went on to urge the executives to cut costs fast so that their firms would not run out of money before becoming profitable. Other venture capitalists are echoing its message. “Rule number one is to take immediate measures so you can stay in the game,” says Mike Speiser of Sutter Hill Ventures, another VC firm.

Life will be hardest for the many start-ups that are still in the red. Those that need more capital soon will get it only at a very high price if they can get it at all, as venture capitalists tighten their purse strings. According to the National Venture Capital Association, a trade group, and PricewaterhouseCoopers, a consultancy, VC firms provided $7.1 billion of funding in the third quarter of this year, but are likely to cut that amount in coming months.

Venture capitalists are feeling the pinch too. They are finding it harder to unload the stakes they own in start-ups. Big companies which are themselves short of cash are extremely wary of splashing out on the minnows in VC firms’ portfolios. At the same time, investors are shunning initial public offerings of venture-backed firms (see chart), which have fallen to their lowest level since 1977. Experts reckon that the market may remain comatose until at least the end of next year.

All this explains why the bosses of several start-ups have started to wield a big axe. Redfin, an online property-broker, and AdBrite, a web-based advertising network, which both had about 100 employees, have slashed their headcount by 20% and 40% respectively this month. Pandora, a music-streaming business, and Searchme, a visual search engine, are among the rapidly growing collection of other start-ups that have also announced job losses. Deep cuts like these may be painful in the short-term, but they are better both for profits and morale than repeated rounds of small lay-offs. In 2001 many firms trimmed too little, too late.

Of course, slashing the workforce now may not make sense for some start-ups. Those focused on areas such as gaming and health care, which may be less vulnerable to a recession, are likely to keep hiring. And companies making big lay-offs could still add new heads in some areas. Announcing a 25% cut in staff numbers at Zillow, another property-related website, Rich Barton, the company’s chief executive, said in a blog posting that the firm would still hire people in ad sales and other revenue-generating roles.

Another useful strategy is to shed projects that are not central to a start-up’s business. Executives at Jive Software, which produces online collaboration tools for corporate clients, say it is now far better at scrapping initiatives that do not seem to be paying off. Once these have been placed on a “kill list”, there is no further discussion about them. In the past the lack of a formal process for canning ideas meant that many lived on, absorbing time and resources better spent elsewhere.

Elon Musk, boss of Tesla Motors, a start-up that recently began producing an electric sports car, learnt useful lessons from the dotcom bust. He steered PayPal through the early days of the shakeout by maintaining a focus on its core online-payments business and by ditching plans to develop other offerings. Thanks to this discipline, PayPal continued to grow and sold itself to eBay in July 2002. At Tesla Motors, he has delayed plans to add an electric sedan to its product-range from 2010 to mid-2011 so that the company can concentrate more resources on improving margins on its existing car and on expanding its profitable business of building powertrains for other carmakers—a decision partly inspired by his experience at PayPal.
Mr Musk is also trimming jobs at Tesla. “You need to show investors that you have been super-frugal with their money,” he says. More than ever, entrepreneurs need to be able to reassure VC firms on the basic principle that their business models can in future throw off far more cash than investors have pumped into their firms. Mike Kwatinetz of Azure Capital Partners, a VC firm, reckons that many of what he calls “carpetbagger entrepreneurs”—inexperienced youngsters who turned up in Silicon Valley in recent years with a view to getting rich quick—will come a cropper in the downturn because they do not have the foggiest idea of how to turn a profit. Yet Mr Kwatinetz is bullish about the prospects for those start-ups that manage to survive the crisis. They will face a much less crowded field and their managers will have honed their moneymaking skills in the harshest of all environments. He is on the lookout for firms that could become the next Bill Me Later, which Azure Capital bought into in 2001. Founded the previous year, the company lets internet users make online purchases without using a credit card. After surviving several ups and downs, it was sold to eBay on October 6th for some $945m. It is such Croesus-like sums that make start-ups worth all the toil and trouble.

Cincinnati City Manager Gets It: See his post on Soapbox

I just had to share this post by Milton Dohoney, City Manager of Cincinnati. I've had the opportunity to hear him speak on occasion and have found him to be extremely articulate and innovative - in his support of LEED (Green Building) Tax Incentives for Cincinnati - and here in his perspective on the importance of entrepreneurship in the long term economic growth of our region. He recognizes that headquarters that sustain our economy are not imported, rather they are mostly created by local founders.

See the actual post on Soapbox here: http://www.soapboxmedia.com/blogs/posts/1bmiltondohoney38.aspx#comments


SoapBlog 1 - Ideas + Determination + Affinity = HQs

Posted By: Milton Dohoney, City Manager, 11/4/2008

People with even a passing knowledge of Cincinnati can easily recite that we have professional sports teams and they might know that we are bordered by a river. They are aware of the universities, but they could guess that because one would logically assume a major city would have various institutions of higher learning. When those who are only remotely familiar take a closer look, either by visiting us or doing a web search, they are genuinely surprised by the number of corporate headquarters (HQs) that are located here.

Major Corporate HQs are a significant asset for our community and when we talk about luring other HQ operations here, everybody sees that as a good thing. What’s not to like about expanding the skyline as well as bringing jobs, investment, and new talent to expand our capacity. The Regional Chamber, the City’s Economic Development Office and others charged with growing our pie of prosperity are primed to move towards any viable leads.

If you research company headquarters around the country and probe why they came to be in those places to begin with, you will find that many of them are in city x because their founders are from those cities. They grew up there or came there for college, developed an idea for a product, were determined to make it a reality, and because they liked the city where they lived, they launched their new enterprise there. So from the basement, garage, or virtual office a once budding enterprise blossomed into a giant corporate presence. In the beginning they probably had a healthy dose of skeptics that the ideas being put forth would ever explode but that scenario has been repeated over and over throughout the annals of business lore. I read just the other day about the two young men who began Google in their city with a $100,000 investment from someone who believed their idea could work and now both young men are each worth $19 billion. Hmmm.

So while we are roving the universe looking for corporations who have outgrown the space, talent pool, politics of their current home or simply need a new strategic location to continue the growth of their company, we must also cast an eye towards Price Hill, Carthage, Hyde Park, and Mt. Washington. While we’re at it let’s check in with UC, Xavier, NKU, and our research hospitals to find people who are developing intellectual properties that can be spun off into the future Humanas, Scripps, or Procter & Gambles.

We need local people bitten by the entrepreneurial bug who have ideas that can be translated into viable products or services that can be sold in the global marketplace. We need them to have the determination that they will not accept anything less than success. And we need them to love Cincinnati and have a desire to take their talent and let it flourish right here in the Queen City. While the naked eye might be tempted to dismiss the 5 or 10 person operation starting out, the visionary will see it as the 5 or 10 thousand person HQ 15 years from now. Admittedly, we may be able to lure someone here in less time than that, but you can never underestimate the true impact of a homegrown headquarters that has an affinity for where they are located.

For all of that to happen of course, our climate must include venture capitalists, angels, creative legal support, and systems that strive for fluid functioning not status quo mentalities. As we labor to recruit companies and grow companies, the talent that accompanies it will also help us to expand the culture, synergy, and can do spirit that any progressive city needs.

There is room in Cincinnati for a headquarters epidemic. The thing is, the person whose hand you shook in that business meeting last week in one of our neighborhoods or in downtown just may hold the key to help make that a reality.