Monday, December 1, 2008

Why we didn't cancel our Holiday Party ..

Hope you had a wonderful Thanksgiving and beginning to the Holiday season.

I look forward to seeing our OCTANe "Family" for our Holiday Party on Dec 2nd. However I have gotten a few comments on "why aren't you cancelling your party given this environment." Certainly a legitimate question; so I thought about it, thought about it a little more and then decided to give my ..."Top 10 reasons OCTANe did not cancel its Holiday Party." (In semi-random order).


10. It is a FREE reception for our members, partners, supporters who have been working with us for years to develop OCTANe into a true, national "innovation development" best practice that continues to grow and get results. PLUG INTO something special if you haven't yet.


9. We tucked the costs into the AIG bill at the St. Regis (and still weren't a line item)

8. Related to #9, the reception will be bare bones and modest ... exactly how OCTANe is run (we don't do hype, BS or overhead here! ... everything supports our mission).

7. I like Mistletoe better than garlic.

6. There is never a #6 (please someone get this one).

5. The show must go on... innovation and bringing talented "minds and money" together to network, form new companies etc. IS our primary economic driver in this country. One day soon I hope we (as a country en masse) invest in Science and Tech instead of saving dinosaurs who ride on corporate jets. I am a dog lover (my 2 labs are 10 and 12) but sometimes a dog ain't sleeping; it's dead.

4. I saw Bolt recently with my kids and got all misty...then watched Bad Santa after they went to bed to balance and remind myself I will not have to wear a Santa Suit.

3. OCTANe had double digit growth AGAIN in 2008 (thxs to our supporters/members! This reinforces the notion that if you stay laser focused on creating value and results, you will always rise at the end of the day), so we will be lowering our membership price next year...stay tuned!

2. It's been a "dramatic year" on all accounts; from Wall St. stock drops, to real estate drops to Obama being elected (incredible on so many levels) to recession, to well, you get the picture. Taking a step back to spend a little time with friends to celebrate the fortune we STILL have is both warranted and healthy as we head into a challenging 2009.

1. OC venture capital investments in 2008 is already the highest in four years!!!! ... and OCTANe absolutley played a tactical role; certainly worth at least one glass of egg nog.

A safe and happy holiday season to all.


Gary

Tuesday, October 28, 2008

Friends,

I sit here one week before the Presidential election and am thinking about the state of the country, but not so much the candidates to be honest. Not sure what that means but here is what I see (and do not see):

1. We are going through the worst economic mess since...well before I was born.
2. The US is the 3rd best performing country stock index over last year...ouch.
3. We are throwing around TRILLIONS of dollars like they are pennies...twelve 0's in a trillion.
4. Over 20+% of US mortgages are “under water”...but long-term, is this a bad thing?
5. Unemployment should be at 7-8% within 9 months...and those numbers don't include people NOT looking.
6. States are on the cusp of bankruptcy...or “pulling an Iceland” as it is now called.
7. Goodbye Princeton, hello University of Illinois...college fund/401K drops and Risky Business reference for everyone my age.
8. The Fed will be lowering borrowing rates to at or BELOW 1% tomorrow...and it is irrelevant due to credit blockage.
9. I attended my first home auction in my “McNeighborhood” recently...auctioneer was from Oklahoma City, the least expensive city in US. Go figure.
10. And on and on and on...it really is amazing the amount of news every day that matters.

But one thing I don’t see...where is ANY government help and investment in what REALLY drives the US: education, innovation and infrastructure? We are quick to bail out the mortgage industry (don’t think we aren’t) and Detroit (now there is a great return) and aggressively throw into the bailout ridiculous things about arrows and other stuff I am too insulted to comprehend. Some say that this is the democratic process....well I think it’s [editor's note: explicative removed].

Therefore, I am calling for a 1% “Innovation Tax” for the US effective immediately. Imagine what that could do to spur growth. Did you know we could have seeded 700,000 entrepreneurs and start-ups (at $1 Million each) with that 700 Billion dollar (which is now about double by the way) bailout? Think that would create more high-paying jobs than the bailout? Think we could invest 10X more in University commercialization and tech transfer and get a better return? Think we can train more people in science and technology? Yes I know we have some STEM initiatives going on and they are helpful, but why not THINK BIG and develop an innovation platform for which the NEXT generations can prosper? 1% should do it.

Oh well, enough of my soapbox, just some random musings on what I consider important, I guess more than who the next President will be.

Gary

Tuesday, September 16, 2008

The Need for Innovation Association reform

Greetings and salutations fellow members of the innovation, entrepreneur and capital society.

I was going through my schedule last night for the next several months and there are a lot of upcoming programs/initiatives; I mean a lot. This led me to think .... "Do we have too many innovation focused, entrepreneur, trade associations, lobbying, and venture capital support organizations? Would less be more, and is more...well, less?"

I read recently where AeA is in talks to merge with ITAA (article). And I thought, good for them! That makes a lot of sense. There is power in scale, consolidation and a common voice, particularly for advocacy issues, purchasing and the other trade groups. (As a note at OCTANe, we decided not to focus in this area (we partner instead!) and focus on pure company development; the ONLY full-time model in OC/So Cal laser focused on this!)

Some people think consolidation is a bad thing; I am not so sure. Having scale, focus and working together to "move the needle" is what innovation support groups should be about. Right? Having less money spent on admin/hotels and more helping to create, grow, support, staff and fund innovative companies should be the goal for any business support organization. Shouldn't it?

Is there harm in having a plethora of volunteer or other business support groups? Probably not. But imagine if there were a few strong ones working more together (more partnering) and applying resources to solve (not just report on) our innovation economy problems; this is what is needed.

Additionally, there is an inherent urge for a successful support association to expand (I get asked all the time why not do OCTANe in LA or SD or AZ or Guam). This is the easy/overhead route. What is hard (and needed) is for organizations to continually innovate (yes non-profit business groups should innovate themselves) and focus on developing local IP driven companies and jobs ...minds and money are our future economic drivers here in Orange County.

We are in unprecedented economic and financial times here in the US. We have some serious issues but developing and growing innovative companies and high paying jobs needs to be one of them!!!!!! We must develop a robust, efficient, RESULTS ORIENTED local/national innovation ecosystem to help grow our regions and industries.

So how does everyone think we are doing?


PS: I'm not alone in my thoughts...check out a recent LA Times blog that shares my views.










Tuesday, August 12, 2008

The drought is OVER ...

The drought has officially ended. While many of you may have thought I had been on vacation for months, a fugitive from the innovation law, still recovering from my Celtics winning the NBA championship or "gee another blogger who starts fast and fades like the French swimming relay team anchor" but I have been waiting to blog for a reason. My last blog was about little to no venture-backed IPO's in the US this year; so I thought I would wait and blog when the next IPO went to market. Hence, I waited, waited, and waited.



The wait is now over. Rackspace went public last week; the first venture backed IPO since Cardionet on March 19th; first technology IPO since Valentine's Day ish (sorry Hallmark).



So does this mean the flood of IPOS will begin now? Will the "pearly gates of liquidity" open freely? Some thoughts:



1. No



2. Rackspace is a company with size $300+MM in revenues and profits. It also has been around awhile and has a model of hardware and services that makes sense. Will it commoditized soon? maybe, but for now it's the best we got.



3. One of the uniqueness of my job at OCTANe is to hear "what is going on in the trenches and on the street" .. from hi-tech to biomedical to clean tech. Softness in consumer technology started mid last year, consumer oriented medical products within the first half of this year, clean tech? .. still sexy and getting money like women's based reality shows. (question is what will last?).



4. Early stage money is still not flowing in earnest, but you HAVE to consider this as an opportunity for asset allocation advantages now that the bloom is off real estate (my 2 cents .. another 12 months of real estate weakness for you investors).



5. Now for the good news, for you entrepreneurs and the community, innovation driven businesses that solve real problems are getting funded and I think, always will. During times of softness, focus on the science, the technology and develop value in the business. You can not predict or time the end game, just create value and ultimately you will be rewarded.



So, I am back to blogging on my semi-regular basis. Out.



Gary

Tuesday, June 3, 2008

Quiz time: The last venture-backed IPO in 2008 was when? How many in 2008 YTD?

I was reading the daily Venture Wire blurb last Friday. Usually these are "quick reads" and sort of a mix between a story in the LA Times and Food and Wine, but the content in this one was particularly fascinating and alarming at the same time.


The last IPO this year was on March 19th. It was CardioNet , which is a great company Jim Sweeney started/runs down in San Diego (and participated in OCTANe's CA Medical Device Forum in 2006) at the intersection of health care and wireless data. (Congrats, Jim). However, that was MARCH 19th and it's June now!! There have been hundreds of venture-backed investments since March 19th, but none of the existing investments have gone IPO?

Sure many have been bought or "monetized" by VCs, but what is going on? The total number of IPOs is six for 2008 per the article and no "tech ones" since Valentine's Day? How much love is that? The trend is alarmingly getting worse as detailed below. Some points to ponder....

1. Is this tied to the subprime mess? Does a "spooked" capital market in one asset class bring down the whole capital chain as far as investment capital realization and availability?

2. Is an IPO not a real relevant option for VCs anymore and companies are being "built to be sold; not built to prosper?"

3. Will global, non-US markets with less regulations, be the choice going forward for IPOs?

4. Are we producing just "incremental innovation companies" instead of TRUE disruptive innovative companies? (Everyone these days talks innovation and brands it, but where is it?)

5. Or is it just one heck of a St. Patty's Day hangover....

Well 12 companies are filed and ready to go and let's wish them well as risk taking venture capital needs liquidity options to prosper; staying private usually does not pay the bills.

Interesting factoid ... last time there was this IPO lull was 2003, oil was about $25-$30 a barrel. Here in 2008 it is around $130. So while we lament our VC-backed IPO drought, we also get to regret not buying the oil futures index 5 years ago.


Thoughts?

Wednesday, May 28, 2008

Is Obama Technology's first Presidential Candidate?

I was watching a great movie called Recount on HBO last week. The movie stars Kevin Spacey, Dennis Leary and others and is about the Bush-Gore paper "hanging chad" fiasco in Florida during the 2000 election. Really entertaining TV in a day when if it were not for animated movies, we would have little to watch. Reality shows for me are for people without a reality. But I digress.

It got me to thinking, "what if technological advances in voting" had been around in 2000 like they are now in elections? Who would have won? Would Al "Green" Gore have been our President? Possible. Can't "hang a chad" online until 3-D virtual reality comes around. One thing I wouldn't want to see is Catherine Harris in virtual reality, but I digress.


Fast forward to today, Obama (funny how he has elevated to "one name" status with Prince and Madonna) gets the great majority of his fundraising war chest (it is 3X Hilary Clinton) through use of the Internet and the concept of "social communities meet giving". One of the early founders of Facebook has helped design this "technology driven community and donation model".

Hence, since more money brings more votes in most cases, can you make the case that technology, the non-use in year 2000 and the extended use in 2008, is influencing our Presidential election? Could Obama become America's first "technology president"?

Wonder what the future holds for us in the electoral process? Come hear these discussions at the So Cal Digital Tech Forum on June 9 - 10 However, at this pace of technology advancement, I will be voting for an Avatar for President by 2020.

Thoughts?

Monday, May 19, 2008

Stem Cells: The Holy Grail, The Jury's Still Out, or Somewhere in between?

Stem Cell money and grants are starting to work their way into California universities and communities, as it has in many other states and countries (congrats to UCI being awarded $27.2M for the new stem cell building) most of the initial expenditures, of course, are on critical facilities, training and faculty. This is how core, fundamental developmental research is ignited.


Normally the public would not look for a direct, economic benefit from such research (translational is another story), but would the public feel short changed if stem cell research does not have a direct impact and create the "next greatest drug or medical advance"?


I think they might. Are Stem Cells being 'set up for the fall' years from now? Will stem cell methods and processes further develop? Of course they will; but quickly enough? Or does it really matter as fundamental research is paramount?

Monday, May 5, 2008

How come kids get a trophy for everything these days?

I was enjoying a nice Saturday afternoon with my 6 year old working on the computer (after his baseball game and after he helped his little sister as he will be "well rounded" if it is the last thing I (or he) does; but I digress).

Forget the fact that he can search web sites, has his favorite pulldown menu and knows how to naviagte the control menu, I noticed his sports trophies...all SEVEN of them! We had to buy a side table to hold them as the top of his dresser became too crowded. He is 6!

What is it with trophies for just "showing up"? Is this good enough? It is certainly a positive step to "get started" but is this a good example for teenagers and young adults that as long as they show up they will be rewarded and all will be fine? Is this REALLY in the best interest for them down the line? What the heck happended to struggling, competing, winning, losing, celebrating, crying and challenging yourselves to be better? Is that not "in vogue" anymore?

Well it should be. Efforts like OCTANe Next, MIND Institute and other innovative groups focus on results and help PREPARE our youth in an "outcome driven way"; that is future careers and the hope that a high value job will enable them to have a good and productive life.

After all ... business is not an intramural sport.

Thoughts?

Monday, April 28, 2008

Social networking...the future or a waste of time?

You can't read, view or listen to any news media channel (Web mostly of course because mainstream old news media pretty much discounts Web 2.0 and vice versa...just like viewers ignore Katie Couric ... but I digress) without seeing articles/blogs relating to social networking, VC "overheated fundings", communities of millions run by kids at Starbucks, and "how many people follow me on Twitter when I say I am going to bathroom." Seriously, this happens.

Which got me to thinking...is Web 2.0 useful or a waste of time? As usual in life, the answer is somewhere in between. A couple points to consider:

1. Social networks are still relatively new. The "excess inflection point" hasn't been reached yet.

2. The phoenomenan will probably mirror the bubble companies in the late 90s...look for 2-3 "Amazon's" to grow, excess bubble and valuations to the moon, then a 95% valuations/stock price crash and no new venture fundings. Then, the companies with brand and a business model will re-emerge and make billions (look at the Amazon 10 year stock chart, it's amazing).


3. The key is that social communities haven't REALLY figured out how to make money. Period. Great article in Boston Globe the other day (checking on my Red Sox who got swept by Devil Rays...but I digress) on this topic. Conferences like the So Cal Digital Tech Forum are starting to form to talk business; not just "techie" hype.

4. Most people over 30 with family and jobs and kids and sick parents and (on and on and on) will NEVER have the time to spend on social communities en mass; they will find 1-2 they like and stick to it. I wonder if there is an inverse correlation between "having a life" and number of hours on social networks... but I digress.

In summary, we all should "plug in" but the business impact of social networking is still in its infancy. In the coming months/year it will - and should - be monitored by the business community.

Thoughts?

Monday, April 21, 2008

VC fundings down...tied to economic recession?

Was having pleasant cup of joe reading the paper (yes once in awhile I still like the "print dinosaur") when I read the article on slowing VC fundings in 1q 2008. Both PWC and E&Y do a great job covering the field.

On the same page or close to it, was an article on recession and unemployment rising. So is there a link? Who is the tail and who is the dog? (I will skip the easy analogy of an ass). Is there correlation between the two and what is the lag effect, if any?

My 2 cents...a recession, oil at a gazillion dollars a barrel and gas at $4 a gallon does not make people feel good. Quick poll, who has gone over $100 on an SUV fill-up? Let me start the list, but I digress.

If you were a VC, why would you deploy risk capital - particularly early stage - in a time of upcoming economic uncertainty? For the most part, the answer is - you wouldn't. You'd cherry pick your opportunities and be conservative and ride out the storm. I think this is much truer in the IT world than in biomedical, as biomedical sectors are influenced more by reimbursement, government, legal and market issues than consumer spending. (Note: Botox has passed milk in the family home and happy hours in the single home on the list of “critical needs,” so that isn’t really a discretionary spend).

Hence as VCs take a breather and raise more money/new funds as many are now doing, entrepreneurs should keep plugging away, increase business value and be realistic that although there is a lot of money out there, it might stay “out there” for awhile. Focus on capital efficiency and position for a stronger 2009.

Thoughts?

Monday, April 7, 2008

People people everywhere and not a one to hire ...

Was at a great program last week about the "War for Talent" ... the same day the March unemployment figures came out and the US lost about 80,000 jobs in March, to run the total job loses this year to 230,000 and the unemployment to go to 5.1%. Wow. We're in the crapper.

BUT there are thousands and thousands (OCTANe knows of over 400) high paying, high innovation jobs that go unfulfilled and Biomedical, IT and Clean Tech companies are yearning and competing for talent. What gives?

Simple. Convert mortgage workers to scientists and technology workers. Run a credit report? Just like running an FDA study. Explain an ARM mortgage? Just like writing XML code. No down payment needed with interest rate resets at will? Just like venture capital. Oh if life were that easy...but I digress.

Are we positioning our workforce to be aligned with our future competitive growth industries?

Is there such a thing as an "un-trainable worker"?

How come millions of kids now don't like engineering and "the hard stuff" for careers?

Which brings us to good old supply and demand. We are demanding more innovative talent; just need the supply to catch up. The "War for talent" is now everywhere, from local to regional to global; now only if we can go PC and change the phrase to "quest for talent". Maybe this would help us find more good people.






Monday, March 31, 2008

Innovation Yellow Pages? .. Oxymoron or fascinating?

Flashback ... 1940's, 50's, 60's or somewhere back before the stork landed on Southern St, we used that big fat yellow book and let our fingers do the walking. What house didn't have 10 years worth of phone books in a cabinet somewhere (some still do I bet). It was an efficient (by location by business in alpha order) way to find businesses. Flash forward today to, two issues:



1. The internet and other business models inherently challenging the paper yellow pages. "Paperless society"? .. not exactly (every hear of Medicare), but we are getting there.



2. This is the interesting one, we are fastly become an "IP and information driven society" where things are not absolute (i.e. natural resources) and many not tangible. The US is mostly a services economy with product development driven by the human mind. It is easy to find 1-800-Flowers ... online that is, but what about new business models? Ones that require thought, networks, risk taking capital, market studies, university IP and all other things "non sidewalk".



How do we as a business and social society plug into a 21st century model of global connectivity and capital (minds and money) sharing?



Seems like something that would help that solution would be: unique, precious, valuable and belong in some sort of a vault.

Saturday, March 29, 2008

Scenes from "Community Next"

Forget the coffee...this morning it's red bull (or mimosas for the brave...which I am).

This is my first "live blog" as I'm here at the Community Next: Next Generation Media and the Web event in Hollywood. No suits...no ties...free wireless of course...and a good mid mix of ages (I'm not the oldest or youngest!) A very diverse crowd from start-ups to bloggers to programmers to the "big guys". We're in a night club (Level 3), which I must say beats a conference center.

First, Josh Berman of Slingshot Labs and MySpace is talking about how soon (and for the young - now) everyone will be "living thier lives online." He sees MySpace and Facebook as the main platforms, but they will leverage other social network apps to feed into them.

Now a panel on Entertainment Online with Gaia, Disney-ABC, and Endemol USA. Interesting comment from Charles Hudson of Gaia (a community roleplaying site)...they have an "online movie theatre" for people to put their avatars in the seats...you can watch real movies online, or even old Ricki Lake shows (which he says was surprisingly popular).

Do I need an avatar? lol.

Wednesday, March 19, 2008

What's tougher...An Entrepreneur getting funded in OC/So Cal or Portland State winning the NCAA Basketball Tournament?

I was filling out my winning March Madness Basketball brackets .. oops .. I mean while I was thinking about a hypothetical (and used to be harmless) NCAA basketball contest that doesn't exist to the best of my knowledge ... and I got to wondering, what is easier: an entrepereneur getting venture capital in OC/So Cal (or really anywhere not Sand Hill Road) or a "no-name" team winning the NCAA college basketball championship?

The answer? It depends.

Probability Scenario #1 - The "Duke, North Carolina, UCLA's of the world" - if they were entrepreneurs, they would have good chance to get funded. Have "been there, done that", get great talent, have a powerful network, are serial winners ... they are kind of like the prom queen/king(s); usually they get a date. Venture capital and angels sort of find them rather than vice versa.

Probability Scenario #2 - The "Portland State, Siena, Texas Arlington's of the world" - if they were entrepreneurs, well, the movie Rudy comes to mind ... HUGE underdogs. Probably a combination of "first time tryouts", talent, network and/or even if they had a good idea, it would need some/a lot of "work" and also lack of localized seed capital would hurt it even more. This does not say that entrepreneurs should quit or it can't become a "nice little business", but it is a tough road sometimes; just know what you are getting into.

Probability Scenario #3 - The "Wisconsin, USC, Clemson's, #5 seeds of the world" - this is the interesting group of entrepreneurs. Passionate and talented people that have "something" but are still "not quite there" .. THIS is the critical piece that we need to focus on. If these entrepreneurs can continue to work hard, got some momentum, build a talent pipeline (patents/people/network), they can develop in the top tier. I will contend this group is the key for regions to focus on and develop. How do we increase/help this group? "Minds and Money" is the answer.

We need to help grow more innovative businesses and provide a platform; a mix of online and offline resources to nurture and advance this group. A serial entrepreneur network, a relevant and ACTIVE angel investor, a university advisor, a "mentor mindset VC", a "kind" lawyer etc... this is what will move the needle and get more entrepreneurs and in the words of Dick Vitale "to the dance, babeeeeeeey!!!!!!

Sunday, March 16, 2008

Luck of the Irish ...

Could St. Patrick's Day turn into a global holiday? Of course not...but why not? For the Non-Irish (disclaimer I am Irish but lost my red hair and freckles as a kid, though I still burn like a SOB on the first sunny Spring day) it is a day to feel good, happy and "full of cheer." Given our US economy presently - and as a consolation to Bear Stearns shareholders - I couldn't help looking for a light-hearted break in the action. Enjoy.



1. Guiness' take on evolution



2. Irish bank robbers



3. Just a lil' Irish humor





PS: little known fact - Ireland is home to hundreds of leading biomedical and hi-tech companies. We live in an era of true globalization where regions (cities, states, countries) can control their economic FUTURE ... maybe pubs, pharma and pentiums aren't a bad economic combination.

Tuesday, March 11, 2008

The Maiden Voyage

And it begins...volume 1, chapter 1, section 1, edition 1 etc. Welcome to my blog. My maiden voyage down the Digital Media Communication Highway … or should we say universe.

Why do this? .. because blogs and other digital communication mediums are FASTLY becoming THE platform for communicating your thoughts, beliefs, knowledge, ideas, and opinions (good and not so good) to a targeted community (social and business networks are just starting folks and it is in the first inning) AND the added benefit of being able to reach out and interact with complete strangers who just happened to “Stumble Upon It”.

I run a company called OCTANe in “a near nirvana neverland” called Orange County, CA. We are driven to help create, grow, support, staff and fund more biomedical and hi-tech companies. More companies created. More jobs. More people connected. More square feet leased. More R&D leveraged. More money deployed to science/tech businesses. Our belief is that innovative, IP driven businesses are our future; both here and long-term, anywhere in the US. “Minds and Money” sitting on a bed of capitalism, freedom and entrepreneurial spirit IS our future. Why we don’t invest more in our future businesses instead of trying to save “the dinosaurs” is beyond me, but I digress.

My goal is to write this blog weekly. As I say, goal. Three kids 6 and under and 2 dogs will make the over/under about 40 a year; as it should be, as family and health are first priorities ahead of business.

What will I write about? Well it will MOSTLY be about various issues related to entrepreneurship, capital, university, medical devices, digital technology, finance, clean and green tech, innovation, communications and similar science/tech/money topics and people. These unique, high value added companies and sectors produce the highest paying jobs, careers and economic impact; not to mention great wealth for “founders and funders” which SHOULD work its way back into society through philanthropy. The need for this futuristic “venture philanthropy” is critical to solve our real problems; which is not if a valuation is 4.23X revenue or 4.22X revenue but how we are so woefully failing our youth in math and science in schools; but I digress.

What this blog will not be? Boring. Long. Academic. Sarcastic (yeah right). Not the “King’s best English” or “By the book”; not even sure there is a book in this new medium; if so it’s already out of date. It will be straight forward, topical and thought provoking. It will not be politically focused but I will talk about the political process including the current election; which I find fascinating in the diversity of candidates as well as how the internet and social networks are SIGNIFICANTLY impacting the election; but I digress.

So that’s the intro blog. Hope you enjoy it even though I feel like I just signed a 78 year ARM mortgage with weekly payments.

I look forward to interacting with 100,000’s of my closest friends real soon.