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.