Yesterday, I was in the Startup Camp 6 Montreal and it was an amazing experience to meet with highly motivated people in the Montreal’s community. It makes entrepreneurship to be highly contagious!

I met with Peter from DailyDinner.tv and I was delighted to hear about his entrepreneurial story. He did not have any previous experience in programming, video editing nor starting up a business, but he is an example of a true entrepreneur who is self-reliant and self-learner that can exceed anyone’s expectation.

I checked his website about recipes for dinners and I am impressed by the quality of the recipes, videos, structure of the website and one interface innovation. Don’t be fool to judge the simple design of the website. The site is useful, loads quickly and that’s what a user wants nowadays.

Serving calculator

I visited other recipes and they do have similar features, but they are slow and confusing. Here, you just have to check for the appropriate amount and the AJAX magic updates the page without having to reload the whole pages (other websites reloads the whole page and it’s a hassle).

The website has hundreds of recipes and the only thing that I wish was that the organization of the recipes could be better. Maybe a directory of the recipes would help in this case.

I met with Alain Lavoie and Nicolas Gosseline and they have this great Twitter Search idea of using relevant data from Twitter to display relevant profiles for the subject you are looking for. Differently from other searches, it uses more “sticky” data such as the time length of the tweets to promote relevant profiles that you may like.

I did three searches: venture capital, video game and startups. My main three beloved keywords!

Here is the visual (very interesting) results.

I’ve just found a bit strange that when I typed startups, instead of showing profiles of people for that subject, it came back the profile of @startups which is quite unexpected.

I think they must promote their website and grow as fast as they can because there are a lot of similar (but different) products in the market. Youtube, Facebook apps, iPhone, iPad and BB are the path for growth!

I met with Barry Pâquet and I was very impressed and amazed by his story of how he started up his company. He was working as a consultant for another software company and eventually, he had a great opportunity to come up with a product that was superior from the one his client was using. Then, from that one sales, he built his portfolio of clients and making money.

I always like to listen to how people become entrepreneurs and in my experience, most people became entrepreneurs serendipitously.

His company, Quantum Whisper, offers a nifty solution for product development teams scrambling around coding and user feedback. I used to funnel users feedback to the product team and I knew how messy things can get. From the product team perspective, the challenge is to link the user feedback to the specific code or feature in a solid way. Most of us just uses a kind of spreadsheet or paper to take notes between the bug and the code related to it. However, if the project gets too big, the paper or spreadsheet solution can become very overwhelming.

The solution he has is  a platform that links users feedback directly into the development side, so no programmer nor product manager has to do the dirty work of linking those two things every time. This is a great value proposition and I bet it is going to grow a lot.

The Startup Camp 6 in Montreal was a great event and I could see some very promising entrepreneurs and startups. The scene in Montreal is hot currently and it was a great experience to mingle in the community.

My first blog post about what happened in the event will be about Habit Shaper. I met with Adriano Ferrari and he shared to me about his software that helps people to “shape” their habits. Later, I went to his website, downloaded his software and used it a little bit.

Overall experience: I think the product has potential, however  by being a installation based software in the era of web 2.0 may be disadvantageous. Many people will not be willing to install softwares in their computer, because most of the softwares are web based. I think Adriano is planning to have a web version of his software and I suggested him to have iPad version of it. It would be awesome.

The program offers you two main habit trackers. You can track to create a new habit or track those habits that you want to quit (such as smoking). The interface is pretty intuitive, however, I found a bit quirky in the creation of the habit itself as you can see in the screen shot.

In my testing, I was creating a habit of creating blog posting everyday. The whole process was easy but I wonder if I will be able to keep my blog updated that many times, lately I’m having a very erratic schedule (I’m going to Skopje, Macedonia on Saturday)!

I like the dashboard which shows you the progress. It’s colorful.

I think if Habit Shaper has an iPad version, it would rock.

Kwedit is a strange name for a payment company. This is a startup that offers a new form of payment to social and interactive games that allows people to buy virtual goods. The strange thing is that it allows people to “promise” to pay for a virtual good and the user can pay the promise later with a bar code in a 7eleven store.

Even though this seems to be a great innovation, the idea of printing a bar code and pay it in a retail store is nothing new to date. The strong differentiator of Kwedit is the idea of promising to pay later. I wonder what would happen if everybody promises to pay but none of the actually pays anything. I believe that the CFO of the company would be scare of the increase in the account payable of the balance sheet.

This type of payment for virtual goods reminded me of Habbo Hotel. Habbo is a Finnish company that started its virtual goods operations before the internet boom. It is probably the first company to have a business model based on selling virtual goodies to users. Interesting enough, Habbo targeted in a very narrow market segment. Its targets on teenagers that love to chat in pixel-lated environment.

Habbo and its many forms of payments.

Habbo offers 7eleven payments too. OK, they sell pre-paid cards and Kwedit doesn’t.

In my humble opinion, Sulake could have grown much more if it had focused on the virtual good market as a whole market instead of just that niche teenager segment. It could have created a strategic plan of reaching all types of games and services based on virtual goods. Well, other companies grew upon this model and they are newer than Habbo. C’est tant pis.

Spudaroo.com

Spudaroo.com is a website that allows people to pay 3rd parties to create website documents, business plan, blog content, slide presentation, and even resume for lazy people. This is a Canadian startup and I wonder how effective is to outsource this type of work to others. I can’t imagine someone who doesn’t know me to write up my resume. Even worse, it is not a great idea to ask someone else to write a business plan for you if that other person doesn’t know the business or the industry at all.

Lastly, I think the name is really hard to spell and search on Google. Though, it is creative.

Bookhu is a book review website that shows if a book is read more by men or women. It is a food for thought website. It shows if I have more male or female preference. In my searches, most of my books related to entrepreneurship, venture capital and languages are read more by men. However, my books related to culture are read more by women.

I should be studying for my final exams, but I couldn’t resist reading posts from Startable. This time, they are sharing a neat and simple framwork to make a great business plan pitch. After reading it, it actually gives us tips to how to write and organize a business plan. I was very interested in the marketing part where it gives an idea of what VCs are looking for marketing data in the business plan.

Quick summary of the post:

1. Passion - training and training will lead to a passionate pitch.
2. Simple, Short and Concise - grab your audience attention in less than 10 minutes.
3. Pictures are worth a thousand words – avoid putting all your business plan in one slide, use images instead.
4. Convey what your business is in 90 seconds – tell your audience what you are offering to the market in 90 seconds.
5. Keep text in a slide to no more than three lines – don’t put all business plan in one slide!
6. Target market and market size – who you are selling to?
7. Marketing - how are you going to sell to those people?
8. Competition – list 3 competitors and why you are better then them and barriers to entry.
9. Product - what makes your product unique? Any IP?
10. Revenue potential – project and assume with pride, don’t be over consevative nor creative.
11. Costs - identify cost and provide scalability savings.
12. Team - why your team is the best to run the business?

http://penzu.com/

This is strange. A Canadian company created a blog system that provides private blog posts as a default choice. This means that users of this blog system will create their blog post privately and not sharing to other people. This defeats the notion of blog because blog’s main objective is to share and not to hide. Also, WordPress and even Blogger provide privacy settings that block the public access to blogs or specific blog posts. So, there should be no need to create a service specific for that. Maybe, this is an indication of asymmetric information.

http://sprouter.com/

Sprouter is a social network that connects entrepreneurs around the world. It is one of those website for grass-rooting campaigns for entrepreneurs to share their ideas. I’m not sure if that’s effective given that there are many social network dedicated to the same thing.

http://tinychat.com/

Tinychat provides free video and audio chatroom for the mass. People can use this tool as a DJ room, virtual meeting presentation room or live interactive TV. I like this website because it’s free and for startups, this tool can connect our team member even if they are in different parts of the world. I think this is a Webex competitor only that Webex is focused on corporate customers and Tinychat is focused on the consumer customers.

If this service catches on, it would be a great acquisition target for big companies like Cisco, Google, Microsoft and even Yahoo. I believe that with the adoption of higher speed internet network and the integration of video and audio into gadgets, the reality is that people will prefer to use video and audio to communicate rather than writing, SMS or IM.

InterClick is a company that provides traditional approach of supply chain methodology into optimization of ROI over advertising spending. I’m writing this post because I’m so impress that the market has so much appetite for advertising systems and tools and ad networks.

Traditional approach to online marketing

Basically, it treats publishers and ad inventory from ad networks as suppliers and the demand is generated from advertisers’ needs. interClick than provides a system that control, monitor, and optimize the ad spending.

It raised $18 million! It is not clear how different this system is from other well established players, such as Doubleclick, Atlas, etc. Most of this one-stop platform monitoring systems are also ad servers. The integration of ad server is an important technical aspect of the monitoring and optimization process of online marketing campaign.

The ad server provides the user, ad and result tracking. It tells us about where the ad was clicked and if that ad generated a sales or not. Most monitoring systems use those data and provides meaningful reports and some of them provide tools to manage campaigns more effective.

I’m not sure how if there’s a space for one more player.

InterClick Website

From Silicon Alley Insider:

via Nasdaq’s Only “Pure-Play” Ad Network Raises $18.1 Million (ICLK).

Zynga is the company responsible for all those spam like games, such as FarmVille or MafiaWars. All these games are targeted to Facebook and they make money by showing advertisements. All these social type of games target the very basic human emotion of achievement. Most people play these games because they want to receive a higher status or position in their character or their skill level. In Facebook, players can show off their “new virtual and acquired ability” and get recognition from friends and other players. This is a big driver for the success of these games.

Zynga

I wonder why Facebook doesn’t merger or buy these game companies. It is part of Facebook anyway. It should acquire and get the game revenue. Currently, game companies can show ads from AdSense or any other place. Facebook loses ads revenue because of this.

The impressive thing is that the company is receiving more $180 million. I wonder what they are going to use that money for.

More at http://www.businessinsider.com/zynga-takes-180-million-venture-round-from-dst-others-cue-russian-mafia-jokes-2009-12

This is a special blog post dedicated to Brazil’s venture capital firms.

Before getting into the list, I want to make it clear that private equity investments are much stronger than venture capital investments. There may be four reasons for a small venture capital market in Brazil:

High interest rate – competition for capital, government bonds are much safer and provide better return, the current real interest rate is over 8%.

Entrepreneur unwilling to exchange equity for capital – the idea of having a 3rd party controlling or on the verge of controlling someone’s company is not very common yet.

Venture capital is unknown – the word venture capital is not a very known word in Portuguese, some people call venture capital as Capital Empreendedor or Capital de Risco in Portuguese. A literal translation of those two words is  entrepreneur capital or risk capital respectively (capital risque in French and riskkapital in Swedish). The meaning of risk is too explicit in those words.

Capital competition from other source of funding – there are big private equity firms and very wealthy individuals that can take the risk of new ventures easily, the capital is highly concentrated.

Sao Paulo - Copan

That is why there are not many venture capital firms that have look and feel of a American or Canadian venture capital firm in Brazil.

Here are some of them:

Monashees Capital + – currently with 7 portfolio presented to the public, Monashees is one of the two firms that fit into the typical venture capital firm (early stage investment, nurturing startups).

Adrenax Capital – this is new for me. It is dedicated to early stage and high-tech investments. This is the second firm that fits into the definition of a typical venture capital firm.

FIR Capital – a hybrid of venture capital and private equity firm, linked to DFJ.

Ideiasnet – This is a hybrid of incubator and venture capital firm.

Rio Bravo - imagine Goldman Sachs + Carlyle + Sequoia in one single firm.

Green Capital – private equity in green tech. Green tech is usually related to agro and ethanol industries in Brazil.

Invest Tech – a fund that invests in technology firms.

DGF Investimentos – it is a venture capital and investment fund firm.

Brazil is such a big country and I am puzzled to see that the venture capital industry is still so small. If the Brazil’s economy continues to rise, maybe there will be market space for more venture capital firms. Also, Brazilian people are known to be very creative and talented. There is no lack of talents for development of new technology and companies.

Lastly, most of the venture and investment firms are located in Sao Paulo. If you are interested in investing in Brazil, this is your city.

If you have any interest to know more about current condition of investing in Brazil, please drop a comment and I will post more things about it.

http://squareup.com/

Square is a startup based in San Francisco and promised to revolutionize the payment for small and medium size companies. It provides an almost free add-on to your iPhone, so you can slide your customers’ credit cards and the iPhone will take care of the payment transfer from the credit card into your Square account.

They are offering the device for almost free because they gain money through each transaction.

The idea of mobile payment is not new, but this is a strange and somewhat innovative way to make payments. However, there will be more competition for micro-mobile-payment systems and I’m not sure if this is a definite winning proposition. The mobile payment system is really well developed in Japan and some parts of Scandinavia and they do not need to use any add-on system to make transaction. Most of the cellphones in those countries have microchips that register payments to the carrier. The carrier becomes the middle man in the business.

If that’s true, the mobile carriers could release a mobile payment system that avoids the use of the add-on device. That would block the development of this company.

But, maybe this company is just growing in a way that will sell itself to those big carrier companies. Who knows?

I am very impressed and glad by the speed that Stribe has replied to my post. A good entrepreneur should be able to react to the current dynamics of how people comment and make opinions about his product. A fast reply like that is a plus. He got me from this positive attitude.

I registered for the beta and I will check it out and compare with other similar tools from the web. I will update my findings in another blog post once I tested them all.

Below is the reply from Kamel, the CEO of Stribe.

———————————————————–

Hello Chim Kan,

Thanks for sharing. it’s very interesting to have your point of view. I am going to try to show you the key differences between Stribe, Facebook Connect and Google Friend Connect :
- Stribe is an embeddable White Social Network. That means the social network can be fully branded with look & feel of the website;
- Stribe is a B to B service. The ownership of data and content generated by the users of the community is the ownership of the “Stribed” website.
- Stribe provides the analytic of the social activity of the community to let the website drives and understand their members online;
-There is no downloading neither technical requirement to stribe a website. Indeed, you just a Javascript code let you embed a Stribe Social Network. All Internet users will be able to see/join/share with your community IN your website without downloading anything.

Finally, the speed of the website is not impacted by the Stribe Social Network because it is loaded only if the end-user want to interact or engage with the community.

What do you think about these explanations? it is helpful to better undersdand our value proposition?
Feel free to contact me to move forward.

Thanks again for sharing.

All the Best,

Kamel
@stribe

——————————————————————————–

http://www.stribe.com/

People from the Le Web 2009 in France was making such a fuss for Stribe. Stribe is a company puts a social network bar in your website. Basically, people who are signed in to the Stribe network will be able to have social network experience in websites that installed their Stribe social bar.

http://developers.facebook.com/connect.php

http://www.google.com/friendconnect

Honestly, this is similar to what Facebook and Google Friend connect already provide. These services allow publishers or website owners to know who the visitors are by asking users to sign-in using their Google or Facebook account. Then, the FB or Google Friend Connect bar can link people who are visiting that website and provide guestbook and comment tools to the publishers.

I don’t know what the differentiations from Stribe, FB Connect and Google Friends Connect are.

Plus, when you install these bars, your website gets slower because the user has to load the extra bar in your website. I do not advise installing this for now. Check my new post: http://www.chimkan.com/2009/12/13/stribe-fast-response-to-my-previous-post-about-its-product/

This is another great post from Startable about pitching tips for venture capital meetings. Healy organized and shared all posts in one single place for easy access. I will remember to read this for my New Venture Project final meeting.

VC Pitch Tip #1 – Turn off your screen saver
VC Pitch Tip #2 – You won’t be eating much lunch during that “lunch” meeting
VC Pitch Tip #3 – Get to the venture capitalist’s office early
VC Pitch Tip #4 – You don’t need to wear a tie to meet with an early stage venture capitalist
VC Pitch Tip #5 – The Venture Capitalist will want to hear a lot about your team
VC Pitch Tip #6 – Bring a USB drive with your pitch saved on it
VC Pitch Tip #7 – Format your financial model for printing
VC Pitch Tip #8 – If you are going to use WebEx to during your venture presentation, send the slide deck over email ahead of time and have a direct phone line available
VC Pitch Tip #9 – Don’t show the VC the IRR they will get
VC Pitch Tip #10 – Technology venture capitalists love demos
VC Pitch Tip #11 – Keep the actual slide deck short but sweet
VC Pitch Tip 12 – Be able to complete your entire fund raising presentation in 10 minutes

Read more at Startable

via Pitch tips for venture capital meetings.

It is hard to make money on the Internet. Currently, there are two famous ways to monetize on the Internet: advertising and e-commerce. In the advertising side, we have Google AdWords, Yahoo Marketing or Microsoft Advertising. These companies make money by having big audience that attracts advertisers’ money. For instance, Google gets money when users click ads. In the e-commerce side, we have eBay, Amazon, Newegg, etc. They gain profit from buying low and selling high price. They have strong brands and first-mover advantage. It is almost impossible to create a company to compete against these behemoths.

However, that did not stop entrepreneurs to come up with more startups. A lot of entrepreneurs created other viable ways to make money on the internet. One of the most interesting way is the Make-Your-Own-Stuff Web 2.0 companies. They are characterized by Ajax site structure with big buttons and fonts and crowdsourcing or customization features in their websites. They make money by selling cool things that a lot of people like. Some companies sell t-shirts, mugs or print arts for your iPhone.

I’m going to present four companies that fit in this Make-Your-Own-Stuff Web 2.0 category:

Threadless home page 2009 winter

Threadless is a company that sells crowdsourcing designed t-shirts (from Chicago). Simply, people send their t-shirt designs; other people vote for the best and cool designs; Threadless make t-shirts from those winning designs to the mass. People buy them. [This is a classic successful web 2.0 company that relies on crowdsourcing and social interaction.]

Gelaskins Canada Startup Homepage 2009

Gelaskins is a Canadian company that sells cellphone and other electronic gadget special skin protection with very interesting design. They have a lot of designers that create cool designs for all those cellphone protectors. The protectors are made of a special plastic-rubber easy to remove and glue that not only make your iPhone or Blackberry more beautiful, but also protect your gadget from scratches. [Great potential to grow.]

Scarfmaker an Estonian startup

Scarfmaker.com is a startup from Estonia and it allows users to customize scarf with their own designs. I think the idea is great and it may grow very very fast. Currently, I think the company is backed by Swedish VCs. I will be watching the developing of this company.

Crazy Custom Caps Home page 2009

Crazy Customs Caps is a typical company that offers customized caps. There are many many companies that allow people to create customized caps but not many of them set up a website. Although, the idea of this company may not be original, the business framework of allowing users to customize their products is definitely catching on in the web 2.0 landscape.

All these companies belong to the e-commerce category of money making website, but they are able to compete against big players because they have a special value proposition to customers. Most of them offer unique items created by the crowd or by user’s customization of the product. Interesting niche market.

Thanks for Dan M., JS C., Mark E. and Tim T. for your suggestions!

This is a complete list of all the VC firms in Canada. JS made a good suggestion of adding of which firms invested in the last 12 months. I will add this info in the next update.

= A must see.

= A firm dedicated mostly in early stage companies.

= Firm that invested in any startup in the last 3 months (from September 09). You can click the icon to see the news related to the investment.

= Firm that received fund or selected to participate or manage a province venture capital fund in the last 2 months. You can click the icon to see the news.

= Firm that sold or IPO a company in the last 3 months (from September 09).

VC firms only

Anges Québec NEW INCLUSION!

AVAC Ltd.
Avrio Ventures Management Corp.

Blackberry Partner Fund NEW INCLUSION!

Brightspark Capital
Business Development Bank of Canada (BDC) Venture Capital

Canadian Medical Discoveries Fund Inc.
CAPE Fund/Fonds CAPE

Celtic House Venture Partners
CentreStone Ventures Inc.

Covington Capital Corporation

Desjardins Capital de risque

Discovery Capital Management Corp.

Elgner Group Investments Ltd.

Emerald Technology Ventures

Fond de Solidarité FTQ NEW INCLUSION!

Foragen Technologies

Genesys Capital Partners

Greenstone

GrowthWorks

GTI Capital

Hargan Ventures

ID Capital Management Inc.

InNOVAcorp – Halifax NEW INCLUSION!

Innovatech Québec

iNovia Capital Inc.

Investeco Capital Corp.

J.L. Albright Venture Partners (JLA)

Jefferson Partners

JOG Capital Inc.

Lumira Capital

McLean Watson Capital Inc.

Mercator Investments Limited

Montréal Startup NEW INCLUSION!

MMV Financial Inc.

Multiple Capital Inc.

New Brunswick Innovation Foundation

Novacap NEW INCLUSION!

Ontario Venture Capital Fund (OVCF) 

Propulsion Ventures Inc

Rogers Ventures NEW INCLUSION!

RBC Venture Partners

Renewal2 Investment Fund

RHO Venture Capital NEW INCLUSION!

SAINT – Saskatchewan Angel Investor Network

Skypoint Capital Corporation

Springbank TechVentures

Société Innovatech Québec

Summerhill Venture Partners

Tandem Capital NEW INCLUSION!

Tech Capital Partners Inc.

TELUS Ventures

Trellis Capital Corporation

VanEdge Capital NEW INCLUSION!

Venture Coaches

Ventures West Capital Ltd.

Walsingham Fund

WesleyClover NEW INCLUSION!

Yaletown Venture Partners

MIT Open Course Ware

Managing Innovation and Entrepreneurship

Managing Innovation: Emerging Trends

Managing Innovation: Emerging Trends

Early Stage Capital

Early Stage Capital

Designing and Leading the Entrepreneurial Organization

Designing and Leading the Entrepreneurial Organization

Law for the Entrepreneur and Manager

Law for the Entrepreneur and Manager

Entrepreneurial Marketing

Entrepreneurial Marketing

Entrepreneurial Finance

Entrepreneurial Finance

Listening to the Customer

Listening to the Customer

Pricing

Pricing

The Nuts and Bolts of Business Plans

The Nuts and Bolts of Business Plans

Technology Strategy

Technology Strategy

G-Lab: Global Entrepreneurship Lab

G-Lab: Global Entrepreneurship Lab

TiE Young Entrepreneurs

I love this competition. It is one of the firsts business competition towards students from 9-12. This business plan is hosted by Carolinas – The Global Network of Entrepreneurs and the award for the winning team is USD 10K.

It is important to foster this type of competitions to children and teens. They will be able to learn and train their guts about the process of creating a new business.

For more information check it here.

For all of those interested in startups, there is going to have an interesting event for entrepreneurs and venture capitalists on October 15th 2009 in Montreal. Here are the details:

Date : October 15th, 2009
Time (Unconference session) : 3pm to 6pm EST
Time (Standard Conference) : 6pm to 11pm EST
Location : SAT – Société des arts technologiques
Address : 1195 Saint-Laurent boulevard, Montreal Google Map

For more information, click here.

I’ve just read news from Revista Exame, a prestigious Brazilian weekly magazine, which talks about the new generation of entrepreneurs in Brazil. According to it, there are 10 million of Brazilian entrepreneurs and the new generation of entrepreneurs are creating companies because they believe they have the skills and will to do it. Compared to the older generation, a lot of self-described entrepreneurs had to open a company because they were not able to get into the job market.

10 million of entrepreneurs in Brazil

Then I went to the Global Entrepreneurship Monitor website and I downloaded the GEM 2008 report. It is a comprehensive survey about entrepreneurs in 43 countries. It separates these countries in 3 categories: Factor-Driven Economies (economies that depend on natural resources mainly), Efficiency-Driven Economies (economies that rely on the economy of scale or comparative advantage in production) and Innovation-Driven Economies (economies that rely on the invention of new technology).

There are some interesting data.

For instance, it seems that the less developed the country, the stronger entrepreneurial activity in that country.

Early-Stage Entrepreneurial Activity Rates and Per Capita GDP, 2008

Early-Stage Entrepreneurial Activity Rates by Gender, 2008

However, the entrepreneurial activity in Technology sector is stronger in more developed countries such as Canada. Although the GEM report doesn’t explain why this happens, it is intuitive to know that the development of high technology needs a strong education system in the country. That is why that you can see that countries such as Australia, Ireland, Denmark and Canada have the strongest entrepreneurial index in the Technology sector.

Percentage of Early-Stage Entrepreneurial Activity Active in Technology Sector, 2002-2008

The Ex Post Facto blog commented about a report from the Center for Economic and Policy Research August 2009 about the percentage of total computer-related employment in companies with fewer than 100 employees. It is interesting to see United States in the bottom of the graph. You can find that Italy, New Zealand and Austria have more small companies in the computer-related services than the US.

Ex Post Facto - Entrepreneurs in the US

Definitely, this doesn’t mean that United States lag behind in the entrepreneurial activity. It is totally the opposite. United States have the Silicon Valley.

All these data do not account other many particularities for the US entrepreneurs. Even though the US main not be in the top position for any entrepreneurial index, it does have a strong entrepreneurial culture and environment.

In my experience, there are some strong cultural traits that you can only see in the Silicon Valley:

-          Belief that one can get rich by starting up a new Google or Apple.

-          Low opportunity cost for entrepreneurs.

-          An unusually high concentration of venture capitalists per square foot in the region.

-          A lot of stories of very successful entrepreneurs.

-          Great universities and culture for innovation.

-          Local culture that see failure as a good thing instead of a bad thing.

-          Also, a lot of young people want to follow the entrepreneurship path, instead of going for the traditional and stable way of life/ career (medicine, lawyer, corporate life, etc.)

In comparison to Brazil, most university students and young people don’t have the same type of culture or thinking. Maybe, there is a huge difference of opportunity cost in becoming entrepreneurs.

-          Most university student aim to get to work in a big multinational or for the government.

-          Most jobs don’t pay enough for young people to sustain themselves, so most young people live with their parents until late stage of their lives.

-          Families pressure their sons to follow a more stable career path.

-          There are not a lot of successful entrepreneurs stories to tell, or those who are successful have some kind of special background that most Brazilian don’t have (rich family support, family have money to send children abroad, etc.)

-          Universities in Brazil are followers or they don’t have great innovation in high growth industry such as internet.

-          Venture capital industry in Brazil is still in its infancy (Private Equity is much stronger in Brazil, GP Investimentos is the top firm in Brazil)

As you can see, these “soft” attributes cannot be accounted in any of the researches you have on the market. I believe they can make a significant difference in determine if a country or region will have its own Silicon Valley.

Evan Williams

I became aware of Evan Williams from Founders at Work: Stories of Startups’ Early Days. He had a great and very interesting story about how he founded Blogger and all the hardship he had with it. I think one of the most interesting point is the disagreement he had with the other founders and employees from Pyra Labs. Given the Internet burst, it was really hard to sustain Blogger at that time. The whole team, except Evan, left the company and he worked to have the company running alone for a couple of months.

From the book, you can see that he could sustain Blogger for a while by himself. This happened because there were some paid services from Blogger. Also, in the very beginning of the service, he had asked the users to donate money to buy more servers and other thing.

Of course, all of this became history when Google acquired Pyra Labs. Read more about this here: http://searchenginewatch.com/2165221

Not only, he could cash in his project, but he could develop Blogger in a very different way within Google.

However, he didn’t stay long. After 1 year and 8 months, he left the company by his own decision and he was planning to start another company. You can read his blog post about his decision to leave Google.

Instead of founding a very different company in a different industry, he founded a micro-blogging site that everyone knows now! Twitter.

It looks there is a pattern in the way how he works. He founds a communication platform company, the company gets huge buzz and he sells it to other company. Interesting indeed.

Launch Silicon Valley 2009 Website

When:  Tuesday, June 9, 2009

Where: Microsoft Campus in Mountain View, CA

It is an event to showcase the latest startups from the information technology, mobility, security, digital media, next generation internet, life sciences and clean energy industries.

Entrepreneurs who are interested should send an Executive Summary of no more than 2 pages to Launchsv@svase.org by latest May 8, 2009.

You can read more about the event here: http://launchsiliconvalley.org/index.htm

TheStartup - European startups and entrepreneurs

TheStartup is a blog about European startups and entrepreneurs, it is a quite new website and it looks promising.

Some of the highlights in the website:

European Founders Capital, a 20m fund for european tech startups

yellowBird creates the first 360° immersive video

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Facebook valuation again...

Some highlights:

Facebook chief executive Mark Zuckerberg just had a board-level conversation about possibly accepting money at a $4 billion valuation, but decided against doing so…

Also, the company has more than $200 million in the bank, which is enough to cover its costs for up to two years…

 TechCrunch says it hears Facebook also received investment offers from two private equity firms that value the company at $2 billion. However, Facebook internally is valuing itself at $4 billion. And if Zuckerberg rejected the $4 billion offer, he’s certainly not going to be interested in a $2 billion offer…

Read more at : 

http://venturebeat.com/2009/04/15/facebook-rejects-funding-at-4-billion-valuation-may-not-raise-more

So, it seems that the $15 billion valuation was certainly overrated.

Another news:

…one potential investor submitted a term sheet for a valuation in the neighborhood of $2 billion.

What we’ve heard: Facebook stock trades privately at between a $2 billion and $3 billion valuation. That’s consistent with the numbers that everybody else is tossing around. And we’ve known for a while that when the ConnectU vs. Facebook legal spat was settled, Facebook valued itself around $3.7 billion.

What’s new this time around is that reports indicate Zuckerberg is extremely adamant about rejecting investment cash at a valuation he considers too low. When Facebook took a $240 million stake from Microsoft in November 2007, the investment was at a $15 billion valuation. Since then, it’s become clear that it was a preferred-stock deal and that Facebook’s true valuation has never been that high. But from what it sounds like, Zuckerberg would like it to get up there.

It was long before the massive Microsoft stake, after all, that Yahoo offered to buy the social network for $1 billion.

Read more at:

http://news.cnet.com/8301-13577_3-10220845-36.html?part=rss&subj=news&tag=2547-1_3-0-20

R.I.P Good Times from Sequoia Capital

In this time of crisis, it is always easy to promote cost-cutting measures as a way to save the company or bring the company back to profitability. Even though, this is a great way to make to companies leaner and more efficient, cutting the wrong costs can actually bring more problems later.

I’ve just read the article “Start-Up Gets Course in Survival” from New York Times’ website and it tells us a successful story of cost cutting from a start-up called Jive Software (one of many companies invested by Sequoia Capital). It tells a little bit of the Jive’s history, success and how it laid off its 25 employees. After all the cost-cutting measures the company got back to profitability.

Actually, everybody knows that any cost-cutting measure can bring a fast increase in productivity metrics and by saving more, with other metrics of the company the same (ceteres paribus condition), the company certainly will get more profitable.

Shouldn’t start-ups focus on cost from start?

They should. By creating an economical company from day 1, the founders of the company establish not only more efficiency but also a culture that will be less prone to waste resources. Dell is a good example of how this can be beneficial.

There is another example of how cost-cutting can make a company survive long enough to be “profitable”.

For example, from the book “Founders At Work – Stories Of Startups’ Early Days“, we can read that Twitter and Blogger.com’s founder, Evan Williams, had to run Blogger with no expenses when the founders and employees had disagreements.

“Yeah, it was just the craziest bad time. The good news about all that was Blogger was still running and, with no employees, we didn’t have expenses. So we went from having $ 50,000 a month worth of payroll, to a couple of thousand for our server infrastructure and our rent. It is probably closer to ten between five and ten, but a manageable number, not paying me anything. I took some money every once in a while to pay rent, and I had long since put all my money in  and credit cards and everything else, but that was actually a much more reasonable place to be because we didn’t have to make $ 50,000 a month to pay people. We had to make a few thousand dollars a month.”

In this case, Evan got cost cut because all the employees and the other founder quit the company. He was able to run Blogger without further loss and eventually, as all of us know, he sold it to Google. Certainly, cutting cost in any company can buy more time for the company to survive any downturn.

Even though the NY Times’ article doesn’t say anything about how to cut cost, it is important to note that cutting the wrong costs can actually have the opposite effect. “BP’s oil spill in Alaska blamed on cost-cutting“. “It was forced to replace 16 miles of pipeline at a cost of $250m.” That is definately a not a good way to cut cost.

So, cost-cutting is not as simple as it sounds. It is not just a matter of laying off people who don’t contribute directly to the bottom line of the company or not investing enough money to the maintanance, but it is a delicate balancing act of revenue and costs.

Take a look at Sequoia’s 2008 Presentation about cost cutting measures.