New Software Pathways

The Vilna Shul’s Speakers Series took a hiatus over the summer but we are back with a great fall schedule.

I’m very excited about the speakers, topics and panels.

In one week - Wednesday, September 16, 2009 - at the usual time (6 - 8 pm) we will hold a panel discussion on the topic: “Are Blogs and Twitter Improving the Dissemination of Information and News?” Judging from the early and strong response to the invitation this topic is hot and the moderator plus panel is perfect to address the topic. Dan Kennedy (@dankennedy_nu and blog), Professor of Journalism at Northeastern is the moderator and the panel includes Scott Kirsner, The Boston Globe’s Innovation Columnist (@ScottKirsner and blog); Douglas Banks, Editor, Massachusetts High Technology (@eDougBanks); Dharmesh Shah, Hubspot, CTO (@dharmesh and blog) and Adam Gaffer, a prodigious blogger (blog)

Don’t miss these upcoming events, including:

• Fireside Chat with Joe Finder, author of Vanishing (on the NY Times bestseller listing this and last week) – and expert on the CIA and intelligence. Date: October 7^th, Time: 6:00 - 8:00 pm.

• Fireside Chat with Alan Trefler, Founder and CEO, Pegasystems Inc. Date: November 4^th, Time: 6:00 - 8:00 pm.

• Fireside Chat and Panel with Noam Wasserman, Associate Professor, Harvard Business School – Expert on founders and startups (blog). Date: November 18^th, Time: 6:00 - 8:00 pm.

For more information, see the Vilna Shul’s website (here). Other speakers will be added to complete the ‘09-’10 series calendar in the coming months.

The Herald reports taxi cab drivers largely ignoring a city ordinance that bans them from using cell phones while driving.

Taxi drivers have a mission but when they drive poorly, aggressively, dangerously and recklessly and ignore the pedestrian cross law they diminish Boston as a great city. They relegate Boston to a category of city which includes Mexico City, Mexico or San Paulo, Brazil which are very dangerous cities to walk and drive in. You take your life in your hands when you do so.

Most of Boston’s roads evolved from Native American footpaths. Today, these former footpaths are narrow and windy modern roads which are full of potholes, seams, fissures, ruts and all kinds of other hazards. Also, you may have noticed, the weather changes frequently here. With these road conditions – outside the direct control of drivers – why does driving a car or walking have to be made worse by taxi cab drivers talking on a cell phone and speeding through crosswalks?

Policemen in Boston have a tough job. They have endured all manner of budget cuts and face daily threats from armed criminals and abusive citizens. While breaking these laws is not equal to committing a felony, in some areas of the city – like around the Common and on Beacon Hill – they involve life-and-death situations.

The Boston PD should enforce the cell phone and pedestrian crosswalk right of way laws. As a walking city, and as a great city, Boston demands this.

The New England Clean Energy (NECEC) fellowship program started on May 5^th and concluded last Wednesday, July 29^th with the presentation of capstone projects and graduation.

The NECEC has run this fellowship program for the last two years to educate and socialize the next generation of clean tech CEOs for new ventures, mature startups and established companies. This year the NECEC selection process was very competitive: 25 executives were selected out of 226 applicants, double the number selected in 2008 – the program’s inaugural year. This year’s class consisted of twelve current or former CEOs; materials scientists and CTOs from software – especially IT and semiconductor arenas. There were 20 men and 5 women; 21 fellows came from Boston-area, and 4 came from out of state.

We covered a huge amount of material in and out of class and acquired a firm base of the relevant chemistry, physics, materials and other science and economics of clean tech. Subjects were divided into the demand side (efficiency measures such as green buildings, green IT, etc.) and the supply side (representing energy generation and renewables, such as solar, wind, current/tidal power, etc.), policy and finance. There were some glitches (e.g., late arrival of the syllabus) but there were no major problems. For me the objectives were met.

All this background now enables me to make some observations about the Clean Tech space:

• First and foremost, failure is highly probable. Science drives clean tech ventures and patents don’t guarantee success. In addition, market factors have a profound impact of the probability of success. There’s the “Valley of Death” that represents the funding gap between startup and the realization of a project – this happens frequently. And government, an unpredictable long-term partner, plays a role in the life of many ventures.

• In fact, the role of government is very big. The Federal Government could be your development and funding partner – that’s really different from software. Also, government policy is a critical success factor for the sector and specific technologies. The case in point is the Bush administration’s support for Big Oil versus the Obama’s administration’s stimulus funds and across the board support for renewables and oil independence. State government is super-important for siting, permits, policy, etc.

• A strategy of pursuing multiple new ventures is a requirement. With the probability of failure so high and projects taking two to ten times longer than software to bring to fruition, entrepreneurs have to pursue multiple projects. This is a portfolio management approach that VCs have employed since early 1980’s. Software entrepreneurs, by contrast, really have to focus on one or two ventures at a time; as a clean tech entrepreneur I plan to be involved in four to five ventures at a time.

• There is a ton of technology sitting on shelves. In the software world you redesign the wheel every time you start a new venture; in clean tech someone has seen the problem before and filed a patent seemingly covering it. This creates all kinds of challenges on the IP side – a much bigger concern in clean tech than software. As a result, engaging with wizened professors with a patent portfolio is a frequent occurrence in the process of commercializing clean tech.

• Like Bell Bottoms, good things come back. There’s new interest in nuclear and 25 year old coal gasification technology. This is a corollary of the previous point but is grounded in generational changes and society at work. Nuclear, for example, was a non-starter in the ‘70’s until today. Now it’s being reconsidered in many ways, sizes and forms. Efficiency was a ‘30’s and 70’s concept that is coming back, along with Government funding and policy support.

• There is a huge schism between the clean tech and energy supply cultures. Clean tech ventures are tiny companies with a “conquer the world” orientation; energy suppliers are huge companies which already dominate the world. At a “Smart Grid” seminar, a power company executive told me he was not interested in cool technology — it could pollute or bring down the grid. If the technology is built into a regulatory requirement, that’s a different story. The supply side is dominated by men in gray suits; clean tech is peopled by guys in jeans and t-shirt. Therein lies the schism.

From my pov the biggest, single benefit was the relationships with other fellows in the program. In many cases, we taught each other specific areas of clean tech: PeterV, brought new insights into water; BobG provided a shitload of information about waste; PeterVM delivered new insights into aspects of solar thermal; Maureen uncovered the world of ESCO’s (energy services companies), and Jeff re-educated me about chemistry, and more. These interpersonal teachings brought great passion and insights which established important intellectual connections I did not possess before the program and could not have done on my own. It was great to have my great friend Imran Quidai (VP Engineering at MessageMachines) in the program as well. Establishing new friendships was certainly a huge plus for me.

In fact, we renting space together on Totem Pond Road in Waltham, MA thanks to the NECEC, Boston Properties and T3 (an NECEC sponsor and real estate firm). I will also be partnering with several fellows on new ventures. These partnerships started the day after the program ended. An exciting new future in clean tech awaits the fellows and me.

In the coming months and years I plan to be very busy. I will continue to maintain my board position with Black Duck Software and advisory roles with several companies. Also, I plan to do consulting projects in both clean tech and software to keep afloat while developing new ventures.

I will keep you informed, gentle reader, partially via this blog site. While the title of the blog is not pure clean tech, I will maintain it since involvement with software is still central to my life, consulting projects and new startups.

To those who argue that we do not yet have the
technology to accomplish these results with
renewable energy: I ask them to come with
me to meet the entrepreneurs who will drive
this revolution. I’ve seen what they are doing
and I have no doubt that we can meet this
challenge.
–—Al Gore (2008)

As quoted in “The landscape of social entrepreneurship”, Business Horizons (2009) 52, 13—19.

Read this article here.

peHUB Wire analyzed The Blackstone Group’s financials (read it here) and determined that they saved their portfolio companies a total of $150 million by volume purchasing healthcare.

I wonder why VC with large portfolios and especially corporate venture capital firms don’t do the same?

Corporate venture capital firms are different, by definition, from conventional VC. They are typically a customer of the company receiving a venture investment; bring brand value to the table and channels of distribution – but mostly brand value. They often have a very large employee base and a purchasing organization that make them, once again, different from conventional VC.

Unfortunately they are often side-lined because of quarterly earnings, re-org’s or other traumas.

Why don’t they simply extend their corporate healthcare plans to portfolio investments? Are they afraid that frequent exits will complicate the administration of these plans? They should know better that exits have a longer time horizon these days. Besides employees join and exit the plans in the some time horizon as startups join and exit corporate venture portfolios.

This is a tangible benefit corporate VC could offer. It is interesting to see how passionate corporate VC are about terms and special conditions – especially information rights – when it comes to term sheets and final doc’s. How about offering some tangle value to companies they make investments in? If Blackstone can make it happen, why not Intel Capital, SAP Ventures, or others?

And while I’m fantasizing, why doesn’t the National Venture Capital Association (NVCA) do the same? On the home page of their website, NVCA, they brag about 60,000 plus companies which have received funding from members of their association. Share the leverage! Bring some value to the hard-toiling startups that are the real raison d’etre for your association. Right?

(multi-part blog post)

Today (July 20) we celebrate the 40^th anniversary of one the human race’s greatest accomplishments: Landing on the moon. President Kennedy set the goal for the US and by extension mankind to land on the moon in a remarkable speech at Rice University averring that we had to explore space not because it is easy but because it is difficult. (Read it here) This speech mobilized a nation – not just one government agency, leading the country and world to great prosperity and much more – mostly good.

This visionary leadership was a great lesson for all boys and girls, men and women during the 1960’s and thereafter. I was too young to hear the speech on TV or radio or read the newspaper reports at the time but NASA astronauts and space missions became one of the most significant influences on my life especially my work life. NASA’s influence is directly connected to me being an entrepreneur. I played with space ships as a child, wanted to be an astronaut and love reading about the space exploration to this day.

In our times, especially in business, it seems that visionary leadership has been by and large forgotten. While we live in tough economic times, it should be remembered that Kennedy set the goal of going to the moon during a recession and war – both similar to ones we are suffering through today.

Thomas Friedman in his most recent book, Hot, Flat and Crowded: “…the ability to develop clean power and energy efficient technologies is going to become the defining measure of a country’s economic standing, environmental health, energy security, and national security over the next 50 years.”

Quoted by Barbara Boxer in a brilliant op-ed piece“Clean Energy Action Will Jump Start Our Economy”. Read it here.

Right on Barb!

U.S. Labor Secretary Solis said yesterday that the unemployment rate had reached 9.5% in June, up from 9.4% in May. (Read statement here) These percentages stand for 467,000 men and women joining the ranks of the unemployed in June, up from 322,000 job cuts in May. Most academic and Wall Street economists expect the national unemployment rate to reach 10.5% before rates get better. The U.S., obviously, is still very much in the midst of a recession.

Now that we have passed the mid-point of 2009 Democrats and Republicans are arguing about the efficacy of the stimulus package and other economic and fiscal legislation intended to bring about a recovery. Some think tanks and analysts – like Paul Krugman – are calling for a second stimulus package.

You don’t have to be a Nobel Prize Laureate in economics to know that the US and world economy and financial system cannot be fixed in a six month period.

In the technology industry the recession persists and the rate of available jobs for this bellwether industry has not improved much from the past few months. According to the TechCrunch “Layoff Tracker”, while layoffs in the tech sector may be slowing down, a total of 340,000 jobs have been lost.

It’s important to note, however, that these job losses and the slow recovery are due, in part, because of both cyclical and structural changes. Fewer startups are being funded (here) and established startups have shed jobs in the fourth quarter of 2008 and first two quarters of 2009. They will not rehire the same number of employees because of the scarcity of venture capital; the level of operational sufficiency startups have achieved since their layoffs and new productivity technologies (Software as a Service/Cloud Computing, open source software, Ruby on Rails, etc.) which dramatically increase internal startup efficiency and make web-based marketing both easier and less expensive to reach customers.

Finally, the Obama Administration should not be so optimistic about millions of new jobs in the next year which will be generated by clean tech. While job growth will happen, new clean tech ventures are simply not forming and generating high employment that rapidly because, in part, they are dependent on proven science and customer traction – two things which take time to realize.

As the politics of job losses get hotter over time Ms. Solis should take solace from Bruce Springsteen’s lyrics from the song “Atlantic City”: “Well now, everything dies, baby, that’s a fact. But maybe everything that dies someday comes back.” Hopefully the ranks of the unemployed will diminish quickly, especially well in advance of the election in 2012 for her and our sake.

I’m an advocate and have used this blog in the past to support and promote a candidate (Baraq Obama), the General Public License v.3 and AGPL v.3, movies and music, etc.

With this blog post, gentle reader, I encourage you to do something for the future of our planet: To wit, please push your representative to vote for the American Clean Energy and Security Act of 2009 (H.R. 2454), aka “ACES” or the Waxman-Markey bill. (Read drafts here.)

This coming Friday (6/26) the U.S. House of Representatives will vote on Waxman-Markey. I am encouraging you to email, call and fax your representative concerning its passage. Among many things it includes – for the first time ever:

• A cap-and-trade global warming reduction plan designed to reduce economy-wide greenhouse gas emissions 17 percent by 2020.

• Incentives for building owners to make their homes and properties more energy efficient while respecting their historic character.

• A green bank that will create $150 billion in new investments and produce at least 75 gigawatts of clean energy.

• Funding for clean energy cluster development through which NewEngland and other regions could receive $50 million/year for energy research and early stage ventures.

This legislation is critical for the US’ success at the climate conference in December held in Copenhagen, Denmark. (Read more here.) This is our last chance to recover forward momentum on the climate change issue. We lost so much under the Bush Administration when the US did not vote for the Kyoto Accord. Let’s take a major step forward and stem the climate change tide with this legislation.

Please support this bill.

Today the Vilna Shul received an American Express/Partners in Preservation grant for $90,000 to restore the murals on the main wall in the woman’s section of the Sanctuary. This grant was conferred because the Shul is worthy but also, in part, because of a combined Twitter, Facebook and email campaign.

Read more about the Shul here. The article about the grant will be posted soon.

Also read about the latest Vilna Shul Speakers Series panel discussion on Cloud Computing here.

Congratulations to Steven Greenberg and Rachel Cylus for their efforts in landing this grant.