Despite new signs of life in Silicon Valley, venture investing slowed in the first quarter.

http://bits.blogs.nytimes.com/2010/04/16/venture-capitalists-continue-to-take-it-slow/

This is very helpful for my New Venture Project timeline.

Quick summary:

1. Trying to raise money too late
2. Trying to raise money too early
3. Lacking a realistic assessment of the companys’ value
4. Not building enough substance before approaching investors
5. Not splitting the message into smaller chunks
6. Preparing poor pitch material
7. Pitching to the wrong investors
8. Not pitching at all
9. Getting too greedy
10. Not willing to share risk

Read the whole post at Arctic Startup via 10 Mistakes Entrepreneurs Often Make When Raising Capital.

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?

Times Skimmer

I was reading this news Google Faces A Different World in Italy from the New York Times and it is about Google’s criminal charges related to privacy in Italy. A senior executive in Italy may get to jail because of an outcry over an online video involving an autistic boy.

The implication if Google loses is that opens the discussion of who should be liable for information in the internet platforms, such as YouTube and even Google Search, in Europe. In the US, most of this discussions were solved by the Digital_Millennium_Copyright_Act that creates a safe harbor for online service providers. Basically, people can only sue internet companies if it’s proven that the company hasn’t  done anything to stop the offence (copyright or other legal offences). I’m impressed that Europe does not have such laws protecting online service providers yet.

It reminds me of a similar situation when the Google Brasil’s managing director was being held accountable for pedophile pictures on Orkut. Google Brasil and US created huge task-force to curb the infestation of that problem with people and new tools for the federal police. The initiative went really well and the government abandoned the charges. However, there is still no laws defining clearly what the responsibilities are for online service providers regarding about illegal or offensive material in their websites in Brazil.

I’m worried if governments start demanding companies to act as a censor for information flow. The cornerstone of Internet as we know is sharing information. When companies and government start blocking access to information, the internet will not be the same. Consequently, the way we use and do business on the Internet may also change.

I was using Hunch this weekend to see how it works. It is a quiz guessing website. You make questions and it gives you its hunch about what the best thing is for you.

I chose the What’s the best profession for me quiz. It started showing me the following questions:

And I’ve got the results here.

I’m currently taking the MBA course at Ivey business school here in Canada. I started on August and it is impressive how many things we learned until now. I am very sure that I do not see business, organizations, finance, accounting and career management in the same way as I used to. Even though I’m just here for about 4 months in the course and in Canada, my knowledge about business has improved significantly. For instance, I can provide assessment in the optimal capital structure of a firm, I can read and understand balance sheet in the point of view of managers, investors and shareholders, also I am starting to see how strategy can drive employees and managers behavior and how a leader can drive the direction of a company.

The course lasts for 1 year and its main focus is in general management.

Besides the academic life of an MBA, I’m participating in many different activities. Maybe too much.

I’m one of the four Executive Directors of LEADER Project, a student run not for profit organization aimed to teach entrepreneurship in universities in Eastern Europe countries (Russia, Macedonia, Moldova and Ukraine). I founded with Ali the Innovators club. I’m member of the Finance, Entrepreneurship, Marketing, Wine and Presentation Skills clubs in the MBA side and I’m member of the French, Portuguese and Visual Arts clubs in the University of Western Ontario side.

Also, I’m creating a business plan with John, John, Matt and Pema. We think we may have a great opportunity in the online advertising industry (I always worked in Internet monetization, my expertise). Besides, I’m participating in the Canada’s next top ad executive competition with John. I will also participate in some others competition in the beginning of next year.

After all of this, I’m also making some new friends! Friends from China, India, Venture Capital industry, Automobile industry, Canada, Peru, etc.

A lot of things are happening, that’s why I am not updating my blog as much as I used to. The great thing is I’m able to manage and prioritize all my activities. Thanks for my Google experience where I learned how to do things fast.

My next posts will be focus on the monthly Canada’s Venture Capital Firm list (I’m posting on December 3rd). I will add more information for each of the firms. Also, I will resume my posts about the case studies from the Entrepreneurial Finance from the MIT OpenCourseWare. I promised in the beginning of this year that I would go through all the cases from that course at MIT and I think I am much more prepared to discuss the cases in that course.

Here are some of my previous posts about the Entrepreneurial Finance course:

Horizon Communication

Venture Capital Valuation Method

What happens when the schedule slips in startup?

Technical Data Corporation

I will resume from the Horizon Communication case. Probably, I will make a podcast for about it.

Stay tuned!

Compared to others

The Elevator Pitch Contest

The Elevator Pitch Contest – MIT 100K

Venture Investment Increases for Some Start-Ups

Venture Investment Increases for Some Start-Ups

How to choose your co-founders?

5 tips for choosing a co-founder

Stanford and its $ 1 billion sell-off of private equity

Stanford Said to Offer Sequoia, Kleiner Funds as Prices Recover

US investment in VC decreases to new low levels

Investments in U.S. Venture Capital Funds Plunge

Potential recover for the VC industry

Signs of life in venture capital

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.

The trouble with venture capital

There is an article from the Financial Posts (a prestigious finance newspaper in Canada) that backs the idea that there are too much money in the venture capital industry. It says almost the same thing from my older post that the VC industry must shrink in order to get a higher return to investor. Read the older post here: http://www.chimkan.com/2009/06/18/kauffman-foundation-says-u-s-venture-capital-industry-must-shrink/

Folha de Sao Paulo - Prestigious newspaper in Brazil

It is nostalgic to see some of my texts written for Folha de Sao Paulo in 2003, a prestigious newspaper in Brazil.

I worked for a couple of time and I wrote technology news, such as new wireless and mobile services, reviews about new notebooks, digital camera and printers and big technology expositions, for the newspaper. It was a great experience to work in one of the most respected and trusted newspaper in Brazil. Also, I was a huge fan of the newspaper, so knowing how the company works was great.

This experience laid a solid base of my PR and media sensibility.

Here are some of the news I wrote at that time (Portuguese only):

Serviço Download é novidade da Telesp Celular na Telexpo 2003
Câmera digital tira fotos e passa vídeos na rede
Câmera faz auto-retratos faz auto-retratos
Primeira impressão: Rede pode falhar ao enviar fotos

I hope I will be able to write news in some Canadian newspaper some day. Obviously, it will be about technology.

Mr. & Mrs. Pump from Flickr

Summary:

The number of new funds focused on bankrolling early-stage startups appears to be growing.

Data from The Deal and other sources that focus on venture capital concluded that in the last six weeks that about $1.2 billion has been raised by firms for dedicated venture capital investment, with another $3.3 billion for funds-of-funds that will back new venture capital (and private equity) vehicles in the future.

VCs are planning to concentrate on finding IT startups with limited capital needs rather than late-stage companies that may need significant sums to ramp up production or to weather a downturn in business until the recession is over.

It’s not only entrepreneurs targeting the next generation of startups: Venture capital firms Spark Capital and Sequoia Capital each made moves toward increasing their funding, specifically for seed-stage companies, in late March.

Read more at: http://www.thedeal.com/dealscape/2009/05/new_venture_funds_focus_on_the.php

My comments:

1. Comparing the latest bad news related to VC industry with this one, it seems that some problem may arise.
2. VC firms are raising a lot of money, they will need to invest in many more companies.
3. Many firms with more money means that entrepreneurs may drive up the valuation.
4. However, given the economic crisis, people are more conservative in taking risky ventures (less people going for entrepreneurship).
5. The end result may that the current rate of return from VC firms may stay the same, but the amount of deals may shrink.
6. There is also a bad news from Obama’s new financial revamp which may limit the size or the freedom of how VC may work.

‘Super Angels’ Shake Up Venture Capital

Business Week has a great article about a type of angels investors called “super angels”. Although, the magazine didn’t state exactly in this way, super angels are high net worth individuals and small venture capital firms that invest around $ 1 million dollar in seed stage companies.

It illustrates the super angels with Josh Kopelman and his First Round Capital’s story.

The importance of this article is the visibility it gives to the venture capital industry and specially in this economic downturn.

I recommend reading it.

Read more here:

http://www.businessweek.com/magazine/content/09_22/b4133044585602.htm

Wow, this is increadible. 

Facebook is receiving $ 200 million for 1.96%!
 To calculate the post valuation, we just need to do this:

X = post-valuation
X = 200 million / 0.0196 = 10 204 million = $ 10 billion roughly.

Amazing how this company is able to draw more investment. 

Read more news about this event here:

Russian firm invests $200 mln in Facebook
What Is Facebook Actually Worth?
Why Facebook needs DST in Russia

DreamingWith BRICs: The Path to 2050

BRIC is an acronym which means the fast growing developing economies of Brazil, Russia, India and China.

The BRIC concept was developed by Goldman Sachs’ Dreaming with BRICs: The Path to 2050 article.

The article states that if these countries follow some of the recommended conditions for growth such as macro stability, institutions, openness and education, the BRIC countries will be better prepared to achieve economic hegemony in 2050.

The article says that in 2050, Brazil, Russia, India and China will become a larger force in the world economy. Goldman Sachs used the latest demographic projections, model of capital accumulation and productivity growth to map GDP growth for each of these countries. Some of the highlights:

- The BRICs economies together could be larger than the G6 in US dollar terms
- About two-thirds of the increase in US dollar GDP from the BRICs should come from higher real growth
-The key assumption underlying our projections is that the BRICs maintain policies and develop institutions that are supportive of growth
- Higher growth may lead to higher returns and increased demand for capital
- Rising incomes may also see these economies move through the ‘sweet spot’ of growth for different kinds of products, as local spending patterns change

Read more at: http://www2.goldmansachs.com/ideas/brics/book/99-dreaming.pdf

There is a very interesting article about this question: http://bits.blogs.nytimes.com/2009/05/14/do-web-entrepreneurs-still-need-venture-capitalists/

It basically says that given the lower cost to create web companies, the current venture capital model may not be attractive enough for those web entrepreneurs. It gives some examples such as the iPhone Apps developers that do not need a huge  amount of money to create their products. 

However, it ends the article saying that is why some venture capital firms are changing its strategy by creating special funds for this type of development or some VCs creates smaller fundings specially designed for these web entrepreneurs.

I believe it is a must read for web VCs and entrepreneurs.

I’m posting this news because it is very impressive this merger of two most important food company in Brazil. It is going to create some market concentration concern. At the same time, it shows the M&A market potential of this country.

Sadia and Perdigão are forming one of the biggest food company in Brazil. It will be called Brasil Foods.

Sadia and Perdigão Merging to Brasil Foods

After a disastrous finance decision that Sadia made about currency investment last year, losing roughly $ 2 billion dollars, it had decided to merger with Perdigão, a similar size food company.

One of the things they will start to do is the release of  US$ 2 billion of new shares of the new company. The money will be used to decrease the company’s debt to US$ 3 billion from US$ 5 billion.

The new company will be the tenth biggest food company in the Americas. 

Brazil Foods will have over 120.000 employees with EBITDA of R$ 2.4 billion.

One of the biggest concern as a consumer is the possibility of monopoly. Both of the are strong players in the consumer food market in Brazil. They have over 70% of the frozen food market.

This is a very good example of the M&A market landscape in Brazil.

Leslieville is home to an array of cafes and antiques stores.

Toronto is a very international and diverse city. It is one of the biggest city in Canada with 2.5 million of people (Greater Toronto has 5.6 million). 

I went there three times in my life and I have to say that it has its own big city charm with its Eaton Center and the Queen West District. Compared to other Canadian cities, it has a metropolitan vibe with its traffic and people rushing to schools, work and entertainment. 

It has a strong theater, music, painting and modern art scene. 

You should read the New York Times ‘36 Hours in Toronto‘ and follow its recommendation of how to visit this pretty city.  Also, visit my Google Maps that I created based on the article.

Many of you may not like Microsoft, but most people are sure that Microsoft’s CEO, Steven Ballmer, has a strong leadership presence in the company and in the market.

There is an interesting short interview from New York Time with Steven. He talks about leadership, job interview, what he is looking for at Microsoft and he gave some recommendations for b-schools.

Read his interview at: http://www.nytimes.com/2009/05/17/business/17corner.html?pagewanted=1&ref=technology

Shrinking Canada VC market

The Canada’s Venture Capital & Private Equity Association released a report yesterday (May 12th) that the venture capital market continues to fall in the first quarter of 2009, continuing the shrinking trend from 2008.

In the Canadian landscape, only $ 275 million was invested, down from 25% from the $367 million from the first quarter of 2008. Also, the number of deals shrink from 136 to 102 (Q1 09′/Q1 08′) and the average value per deal is $2.7 million.

The US venture capital market raised $US 4.3 billion in Q1 2009, however Canada’s market only raised $ 149 million.

This is a great signal that something should change in the Canadian venture capital market. 

Read the CVCA’s report here: http://www.cvca.ca/files/News/CVCA_Q1_2009_VC_Release_FINAL.pdf

National Venture Capital Association (NVCA) reported that venture capital performance showed positive returns across all investment horizons 3 years and longer for the period ending December 31, 2008.

As you can see in the table, venture returns across all horizons outperformed public market indices, NASDAQ and the S&P 500, through December 31, 2008.

Venture Capital Funds Return Are Still High Compared to NASDAQ or S&P 500

You can read more from NVCA website:

http://www.nvca.org/index.php?option=com_docman&task=doc_download&gid=424&Itemid=93

PCCW website

The PCCW case is good to analyse its valuation over the years and make a quick comparison to other telecoms’ valuation. However, even if the minority shareholders won the decision to block a privitization of the company by the major shareholders, it is hard to see that the share price of such company will increase.

During the Internet Boom, PCCW’s share was valued at HKD $ 129.25 (FEB 25th 2000). Today, the share is value at 3.33 (APR 27 2009).  The current value is 2.56% of the highest value PCCW ever got.

A lot of people who invested in PCCW during that time are losing significant amount of money now. 

Moreover, a lot of investors do not understand why the company shares declined during all these years, if the company is still doing well and making profits. The lack of transperancy of why the value decline over the years and maybe a lack of good PR made all these PCCW buy-out case unavoidable. 

In Hong Kong, a lot of investors are angry because some of them are losing their life savings with this situation.

But, come on, we are almost in 2010 and I would never invest in a company that is still using a Netscape Favicon in its corporate website! 

PCCW with Netscape Innovation

It is expected that a telecom company innovates over the years. Maybe that is one of the reason why the company’s share value didn’t increase over the years. Also, as you can see from the chart, PCCW’s share never recover from the Internet Burst in 2001. The AOL + Time Warner stocks behave the same.

Time Warner and AOL stocks

This is an interesting case for Private Equity. PCCW has a virtual monopoly in the Hong Kong’s market. Technically, it should have a better stock price because it is not an internet company but a telecom giant. A similar company would be Telefonica.

Telefonica Stock Price

In case of Telefonica, the company (even with all the splits and etc.) increased its value from 2002 to 2007. It is, somehow, expected that other telecom companies do the same (check AT&T). But after a little bit of more research, most of other telecom companies in the world follow the same pattern PCCW has. Most of them had a great valuation from the internet boom and after the burst, the stock price never recovered (Deutsch Telecom, France Telecom, Verizon, etc.) I suspect that this indicates a lack of technological innovation. 

Anyway, the minoriy shareholders are not happy with the current stock valuation and they still hope that the share value increase in the future.

I made a screenshot from PCCW’s website about the PCCW case, when the HK government reverted the decision of allowing PCCW major shareholders to privatize the company.

Maximizing Share Holder Value

It is kind of strange the idea of maximizing value for all shareholders by buying them out (or inviting them to be out of the company).

Based on this, it is hard to believe that the PCCW value will have chances to increase. Instead, shareholders should have quitted the investment after the internet burst, limiting the losses. However, most people have the “sink cost” behavior. They think they should continue in the investment because they lose a little bit before and they hope they will have the chance to recoup the loss later. But in most of the time, it is better to lose a little bit than almost everything at hand. 

Original Text from The Economist:

The PCCW buy-out in court

The PCCW case - Split decision

Some pension funds and university endowments, which have been major sources of venture capital, have scaled back VC investments in the wake of market downturns. The $129 billion California State Teachers’ Retirement System (CalSTRS), the second-largest pension fund in the US, reduced its allocation for venture capital from 1.3 percent to 0.5 percent of its total portfolio in February 2009, according to Forbes. Reduced participation from institutions will hamper some VCs’ efforts to raise funds.

More news about this

Venture Capital Investment Sinks

State venture capital drops 70% in quarter

*** Venture investments fall 61 percent in 1st qtr

Fewer Venture Capital Funds Are Raising Money

The lessons of adversity

How to attract venture capital funding

Saturday News Briefs

O’Brien: Venture capital needs transparency, not regulations

President Obama’s budget proposal, announced in February 2009, aims to raise taxes on carried interest, which could cause taxes on venture capital profits to more than double.

The proposal calls for taxing carried interest as ordinary income, which could result in a significantly higher rate than the current capital gains tax rate of 15 percent, according to Dow Jones News Service. Proponents of the change argue that VCs should pay the same tax rate on their income as wage-earning workers; opponents argue that higher rates would discourage innovation and entrepreneurship.

More news about this

Say yes to liberty, no to left-wing agenda

GrowthWorks Capital Ltd.: Retail Venture Capital Funds Get Boost …

Some venture capitalists  oppose proposals that stimulus funds be channeled to their industry.

In February 2009, hundreds of VCs across the US came out against a plan to use of bailout funds as a source of venture capital, according to the Wall Street Journal. The VCs argued that easy money might permit bad projects to go forward and that government funding would undermine market discipline in a self-regulating industry that weeds out firms that fund bad projects.

More news about this:

Venture Capitalists Reject Bailout: An Inspiring Dose of Economic Sanity

Is the Bailout Really Innovation?

White House ponders: Are some hedge funds too big to fail?

Banks Are Killing the Next Big Thing

It is quite impressive the amount of bad news from Venture capital industry. And at the same time, it is expected that this industry may suffer from the economic downturn. 

As many of you can recall, the dot-com burst impacted the venture capital industry much more than the current situation. After the burst, the VC industry grew back again and it was very healthy as before 2008.

Based on this, I think the VC industry will have a nice come back after we solve this economic recession mess.

The article I want to talk about is this Venture Capital and Startups Feel More Pain, Study Says from Business Week.

It talks about the “down rounds”, “multiple liquidation” and “play-to-play” concepts.

I will talk about more about these three concepts separately in this blog. Search for these keywords!

Swine Flu - HSBC Pig Saving Ad

Look what I found. HSBC’s ad with a pig linked to the Swine Flu News.

I was searching for more news about venture capital industry and I found out this bad news from Boston.com.

Venture capital sector makes adjustments

Highlights from this news:

- Last year, our industry raised about $28 billion in new investment capital, but VC industry will raise around $8 billion and $12 billion, nationally

- The shrinkage of Boston’s venture capital sector will be tough for the venture capitalists (It was expected anyway, it is losing pace against Silicon Valley and other places)

- The upshot is that venture capital firms will be managing smaller funds, and some firms will go out of business.

- Fewer firms and smaller funds will obviously mean fewer jobs for venture capitalists and the staffers who support them.

Some shootings in the British Game industry

In the Economist.com’s article “Play up, play up“, it shows the hardship the British game industry is suffering with lack of business and political support, meanwhile, it shows the growing strength of this industry in countries like Canada. In Canada, this industry receives foreign developers enjoy a five-year income-tax holiday, and firms get R&D allowances as well as subsidies for salaries. 

I searched a little bit the internet and I found out that Canada game industry is indeed very big (just behind Japan and United States).

14,000 people are now directly employed

247 Canadian video-game companies

Video-game sales at $2.09-billion, a 23% increase over 2007

Video games are predicted to account for 57% of all home entertainment sales in 2009

Electronic Arts Canadian offices showed more than 38 openings for high-paying positions

Some famous videos games developed in Canada:

Assassin’s Creed

Need for Speed: Underground 2

FIFA 09

Grand Theft Auto: Mission packs

A complete list of all video games create in Canada is here: http://en.wikipedia.org/wiki/Category:Video_games_developed_in_Canada

I remember that cities like Montreal and Vancouver are hubs in Canada for Game creation.

Also, I was thinking seriously of getting into this industry before landing a job in the biggest search engine on Earth.

Another great tool from Google: Google News Timeline.

Google News Timeline - Venture Capital results from 2001

It shows all the news that you search in a timeline! You can see the news in a more coherent way. It is much easier to build stories and check for historical patterns.

Before moving to my comparison of Internet Burst news and the current crisis, let me ask you when these headlines were written (don’t read them yet)?

Venture Capital On The Rocks

Venture Capital Firms Face Stricter Regulations

Venture capital harder to find for companies in search of funding sources

Venture capital investments plunge 23%

Boston-Area Venture Capital Firm Slashes Investment Fund by 63 Percent

Attempts to Find Capital Frustrates Toledo, Ohio, Wireless Internet Founders

Venture Capital: Cautious VCs again looking at incubation

Second-Quarter Chill Continues for Venture Capital

Venture capital downturn worsens

Guess what? All these news were written in 2002! They are very similar to the news that we have about the venture capital industry today as you can compare here:

Venture capital slashed $476 million in quarter

Is Venture Capital in Trouble?

Venture capital performance among worst in a decade

College Endowments Deserting Venture Capital

Bleak outlook for venture capital as Silicon Valley tries hand at self-funding

National Venture Capital Association predicts investment slowdown into 2009

Venture capital industry squeezed

Venture capital-backed IPOs hit 30-year low in 2008

Venture Funding in First Quarter Drops 50 Percent

As you can see, it looks that the news are very similar between 2002 and 2009. Who knows if we may have a similar downturn period of two years as you can see below.

Internet Boom Burst

The bad news started to pop up from April 2002, with the news: Venture capital harder to find for companies in search of funding sources, until February 2004, with the news: Technology Venture Capital Fund-Raising Accelerates.

2 years of VC industry downturn.

Current Crisis

It started from October 2008, with: The Tech Sector’s Venture Capital Is Drying Up, and it continues with today’s: Venture Funding in First Quarter Drops 50 Percent.

Seven months of VC industry downturn.

If this pattern happens again, we may still have to wait 17 months before any big good news! It will be the time of my MBA graduation.

Some important highlights:

- Venture Capital firms invested only $ 3 billion in 549 young companies in the first quarter

- Investment was down 47% from Q4 2008

-  Investment was down 61% from Q1 2008

- Internet companies raised $ 556 million, down 31%

- But VC firms raised $ 4.3 billion in Q1, just not investing that much.

Read more in the New York Times’ site: http://www.nytimes.com/2009/04/18/business/economy/18venture.html?hpw

Brooklin - Sao Paulo - Brazil

Brooklin is one of the high-tech hub in Brazil. Many companies such as Microsoft, Terra and many other software and Internet companies are located here.

A long time ago, this place used to be a slum with basically nothing in the place. But the government and private companies invested a lot in this place and now it is a tech hub.

CNN’s has a nice article about this neighborhood. Read more about this place here: http://edition.cnn.com/2009/TECH/04/08/digitalbiz.berrini/index.html

Venture capital funds raised $4.3 billion in the first quarter of 2009, says Thomson Reuters. That was spread among 40 funds, which is one the smallest amounts raised since Q3 2003.  Another couple of quarters of lousy returns, and VC fundraising should drop to zero again.  Which will be an excellent time to make a killing!

Read more here: http://www.businessinsider.com/chart-of-the-day-2009-4

I’ve just read about an article from the Economist about using video games for protein folding problems. It was found that video game players could find the optimal protain solving faster than computers.

This open a new way to problem solving. Have you thought of using video game players to solve other types of problems like in the area of business and other things?

 Chim

I extracted the initial part of the article, but you can read the remaining part later. 

Return to the fold
May 8th 2008 
From The Economist print edition

Playing with proteins

FOR sheer adrenaline, the new computer game “foldit”, does not match the likes of “Grand Theft Auto IV”. But for the world’s obsessive problem solvers, a three-dimensional Tetris which allows them to help design a new life-saving vaccine seems certain to be a hit.

 Read more… @ The Econoimst