Sacred Cow Dung: DID UC THIS? Notable Links in Venture Capital, Technology, New Media, Bloggging, and Healthcare

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August 09, 2005

DID UC THIS? Notable Links in Venture Capital, Technology, New Media, Bloggging, and Healthcare

[Interesting posts I ran across but didn’t comment on — a reflection of my lack of value-add — NOT the merits of the items themselves. — cgm]

Venture Capital

The Ebbers verdict will likely create a significant opportunity for marketers in privately held enterprises competing against larger, publicly traded enterprises. His guilty verdict will have a major chilling effect (above and beyond that already created by Sarbanes-Oxley) on CEO's running publicly traded enterprises, the result of which will be a risk-averse bias defined by greater transparency and slower decision cycles.

Look for massive turnover in the executive suites, siege mentalities and attrition strategies. Bottom line is that assertive marketers in smaller, privately held enterprises have an immediate opportunity to wage and win battles for share against the larger, publicly traded enterprise.

How can we best exploit this opportunity?

Startup 'founder sales' are hot, growing | Entrepreneurs cash out their shares to venture capitalists

To many venture capitalists, this kind of deal, known as a "founder sale," is generally viewed as a necessary evil, the price of admission for doing a deal with a hot property. An investor would much prefer to see his or her investment used to create a new product, hire new talent or build a sales team -- something that would increase a company's odds of succeeding.

The phenomenon isn't entirely new. John Doerr, a venture capitalist at Kleiner Perkins Caufield & Byers, notes that when he and his partners invested in Intuit, the business software maker, in the mid-1980s, "none of the money went into the company. It was all to buy founders' stock shares."

"We always prefer that the money be used to build the company," Doerr said. But the desire to own a piece of a hot company, he said, sometimes trumps that sentiment. Indeed, he said, Kleiner Perkins was currently considering just such an investment in one enterprise.

The transaction served as a kind of release valve that helped quiet the collective impulse among eHarmony insiders to see the company go public. An incremental payoff for their hard work, Forgatch said, "allows everyone to focus on the mission."

At least one venture capitalist, Thomas Shields, a partner at the Woodside Fund in Redwood Shores, Calif., sees merit in this argument. To Shields, a company founder who is "stock rich but cash poor" just might be overly conservative in his or her business decisions for fear of losing everything.

"If you can give these guys a little bit of liquidity so they're comfortable taking more risk, but not so much that they're not hungry anymore, then it can be a very good thing," Shields said. "You let them take a little bit off the table so they're playing with house money."

Genuine VC: Why I Like Our InterCasting Investment

Blogs, Blogging, and Blogosphere

Global Economics

Recruiting.com: Bangalore Blues

Open Soure

VC Money Continues To Flow To Open Source

Companies building their business models on top of open-source software continue to attract the attention of venture capitalists on the lookout for the next big thing.

Both funding announcements highlight a growing trend that has Silicon Valley venture capital flowing to companies that promise to transform open-source projects into business-ready applications. JasperSoft and ActiveGrid will do this by selling support services to users and by contributing code and features that advance the basic open-source offerings.

"One of the challenges in open source is establishing relationships with programmers who are essentially anonymous," says Paul Doscher, JasperSoft's CEO and former general manager for the Americas at Business Objects. The company has been doing this by soliciting JasperReports programmers in the open-source community for their success stories. "We did this in celebration of JasperReports being nominated for program of the month for July on Sourceforge.net," he adds.

The sales process for JasperSoft's software upgrades and application-management services requires a different approach than the proprietary software world. "You're much more focused on lead generation with open source," Doscher says. "And they're much higher-quality leads because these are people who are already using or interested in using the product."

One of the keys to successful funding for commercial companies supporting open-source projects is to convince investors that a lot of downloads of the software from Sourceforge and other open-source code repositories will translate into a certain number of support contracts, Doscher says. It also helps to be able to attract top programming talent, which JasperSoft did when it hired JasperReports creator Teodor Danciu as its chief architect.

Another key factor to successful funding is to support an open-source project that's in demand. "Everyone we spoke to felt that business intelligence was the next logical step in open source," Doscher says.

The Health Care Blog: TECH: Microsoft spreads Vista FUD

Online Business and Social Networking

Healthcare

Misc

Pew Internet & American Life Project Report: Pew Internet: Teens and Technology

Today’s American teens live in a world enveloped by communications technologies; the internet and cell phones have become a central force that fuels the rhythm of daily life.

The number of teenagers using the internet has grown 24% in the past four years and 87% of those between the ages of 12 and 17 are online. Compared to four years ago, teens’ use of the internet has intensified and broadened as they log on more often and do more things when they are online.

Among other things, there has been significant growth over the past four years in the number of teens who play games on the internet, get news, shop online, and get health information.

Not only has the number of users increased, but also the variety of technologies that teens use to support their communication, research, and entertainment desires has grown.

These technologies enable a variety of methods and channels by which youth can communicate with one another as well as with their parents and other authorities. Email, once the cutting edge “killer app,” is losing its privileged place among many teens as they express preferences for instant messaging (IM) and text messaging as ways to connect with their friends.

In focus groups, teens described their new environment. To them, email is increasingly seen as a tool for communicating with “adults” such as teachers, institutions like schools, and as a way to convey lengthy and detailed information to large groups. Meanwhile, IM is used for everyday conversations with multiple friends that range from casual to more serious and private exchanges.

It is also used as a place of personal expression. Through buddy icons or other customization of the look and feel of IM communications, teens can express and differentiate themselves. Other instant messaging tools allow for the posting of personal profiles, or even “away” messages, durable signals posted when a user is away from the computer but wishes to remain connected to their IM network.

View PDF of Report
View PDF of Questionnaire

Other Family, Friends & Community Resources

Report | Protecting Teens Online

Report | Faith Online

Report | Holidays Online 2002

Report | Parents Online

Report | Holidays Online 2001

Related Topic Areas

Online Activities & Pursuits