A Plan for American Tech and How to be an Angel Investor
BY Max Chafkin
Geek squad for the common good. What should President Obama's tech policy look like? The Yankee group released a paper yesterday with some suggestions, including mandating that new multi-tenant buildings have fiber installed during constructions and using femtocells (a wi-fi alternative that extends coverage indoors) in federal buildings. Meanwhile, Stacey Higginbotham at GigaOm is jazzed about one suggestion in particular: a national Community Service Geek Squad that could "help seniors and other-technology-challenged communities become more connected with society while providing experience to young people at the same time." Wait, does that mean we can get paid for showing our parents how to text?
The real cause of the IPO drought Don't blame Sarbox for the IPO drought, says Henry Blodget of Silicon Alley Insider. Blame crappy companies. Blodget points out that the seemingly hot IPOs of 2007 have performed abysmally: "But the industry's complaints about how these regulations have killed the golden goose will have more weight when the industry is producing dozens of rapidly growing, high-quality emerging companies every year."
Persistence Pays. Buried in peHUB's recap of a study by Harvard Business School professor Josh Lerner are some interesting statistics about serial entrepreneurs. According to the study, entrepreneurs who've run at least one previous successful venture-backed business have a 34 percent chance of having their second venture-backed company succeed. By contrast, the success rate of entrepreneurs who failed previously is just 23 percent. There's also some fascinating data that suggests it doesn't pay to hold out for an offer from those blue chip VC firms. PeHUB writes: "If a company is started by someone with a track record of success, then that startup's future isn't going to be impacted one way or the other if it takes company from a top fund, or a firm in a lower tier."
Consumers drastically cut back on food. According to the Commerce Department (sans Judd Gregg), food spending fell by 3.7 percent in the fourth quarter of 2008, the sharpest drop since the government began measuring. That, according to an article in today's Wall Street Journal, is a really bad omen for the economy.
Small business job losses could double. More bad news: the Los Angeles times reports that in the next year there could be another million lost jobs. The estimate comes from Joel Prakken, chairman of Macroeconomic Advisers, the St. Louis firm that creates the monthly ADP National Employment Report. "I think when we finally turn around it will be small business whose employment ramps up first," Prakken said. Still, he predicts "many more months of sharp declines."
Tax burden shifting to local businesses. Over at the New Entrepreneur blog, John Tozzi found something interesting while scanning the SBA's small business economy report. The data's from 2007, so it's a tad out of date, but it suggests as larger companies become more sophisticated about choosing to pay in more favorable tax districts, the burden will shift to smaller local businesses. As Tozzi points out, look for this to become a bigger issue as money gets tight in state and local governments.
So you wanna be an Angel Investor. YCombinator, the startup investment fund, is putting on a free seminar in Mountain View on how to become an angel investor. Speakers include Paul Graham and Ron Conway. You can request an invitation here. (Via TechCrunch.)
Weekend watching. PBS's Nightly Business Report has been airing a series on the top innovations of the last thirty years. (The past segments are available on PBS's website.) The first featured medical innovation? The Nintendo Wii. Incidentally, a Google News search of "Wii therapy" turns up 80 stories in the last month alone. A typical one from the Milton Daily Standard: "Together 'Wii' can."