2010 was another lousy year for the music industry – and in particular, the CD. Sales of compact discs dropped last year by nearly 20% percent, according to Billboard. For a while, those shiny plastic discs lifted the fortunes of the recording industry to new heights. But the CD also contained the seeds of the industry's collapse — a collapse that's rattling more than Manhattan boardroom windows.

A Sony factory in Pittman, New Jersey, will see its last CD roll out off the assembly line at the end of this month. At its height, the plant employed 1300 people.

Most people who become entrepreneurs do so because they have a vision.

Here’s another reason though… because they have to create their own jobs just to make ends meet.

Call it Involuntary Entrepreneurship.

I had a friend who once said “‘Consultant’ is what you put on your resume when you don’t have a job!”

Evidently the stats are proving him right as this quote shows…

Continuous innovation is required to survive in all businesses, beginning with your startup, and increasing in importance as your business matures. Technologists often insist that new things can’t be invented on a schedule, but successful companies seem to be able to do it on a regular basis.

Many people have tried to define a process for innovation, but most are too abstract for me. I like the easy to remember approach found in “Robert’s Rules of Innovation: A 10-Step Program for Corporate Survival,” by Robert F. Brands. It seems to be more concrete, and chronicles several decades of practical experience to solidify the principles which together spell INNOVATION:

1. Inspire. The first and most important step is to identify a leader who can inspire and drive the process. In a startup, that needs to be the founder or CEO, and that person has to be regularly and personally involved. This is an imperative.

Let’s face it – we’re all obsessed with creating a great brand. We have to be! With so much competition, so many ways to reach out to customers, and so many chances to be overlooked we have to fight for attention and placement in customer’s top of mind. And that takes creating a brand that doesn’t just exist, but that is irresistible. Because, as the great Unmarketing states, people don’t share “meh”. They only share awesome.

So how do you do that? How do you make your brand one that customers want to share with their friends? By following the 4C’s. No, we’re not picking out a gem here, we’re simply creating one.

Y Combinator's Paul Graham just gave a pretty good interview on Bloomberg TV about startups and the tech industry.

Graham, on top of being really smart, is also the most likable guy in Silicon Valley and very witty, so it's always worth watching him.

Here are some choice quotes (some are paraphrased):

* Y Combinator doesn't invest in startups, they invest in founders. His top advice to entrepreneurs? "The most important thing is your co-founders."

If you've gone to a game at any of the new stadiums erected over the last decade, you're well aware of the differences between them and the older, more traditional stadiums.

Today's teams are not only trying to create more visually appealing buildings, but they're interested in making attending the game an all-encompassing entertainment experience.

Of course, making everything about new stadiums bigger and better means that teams can hike up ticket prices, which has understandably alienated fans in these difficult economic times. Still, there are some pretty interesting new things going on at the ball park.

India will soon have its first online market for venture capital, offering a single platform for fund seekers, investors and other stakeholders to announce their requirements.

The India Venture Board will facilitate primary investments, secondary liquidity and stake sales by venture capital and private equity investors.

The idea was "triggered by the fact that we need to get the whole venture capital ecosystem on a common platform", said Mahendra Swarup, president, Indian Private Equity and Venture Capital Association (IVCA). "It's a very disorganized sector. A lot is happening outside the top cities. The issue is how to bring these opportunities to light."

Today, The Wall Street Journal published its second annual list of the 50 most-promising venture-backed companies. So naturally, Venture Capital Dispatch wanted to find out which venture capital firm owns the most bragging rights.

Martin O

To be eligible for “The Next Big Thing” list, companies must have received an equity round of financing in the past three years and be valued at less than $1 billion, as the aim is to identify lesser-known contenders (so no Facebook, Groupon, Twitter, etc.). Dow Jones VentureSource, which tracks venture deals, developed an algorithm (see methodology here) that ranked all the companies in its database, and then the editorial team of VentureWire weighed in.

A new venture capital firm, Linn Grove Ventures LLC, is taking steps toward doing business in the region.

Leaders are building awareness of the company's intent in a triangle-shaped market area that will be anchored by offices in the Sioux Falls-Brookings area, the Fargo-Grand Forks, N.D., area and Rochester, Minn.

Linn Grove plans to raise $100 million for investment funds, but don't look for a general solicitation. The money is expected to come from accredited investors - wealthy individuals and institutional investors. In other words, if you're not worth at least $1 million or make at least $200,000 annually, you probably won't get the opportunity.

Start-ups with potential for technological breakthroughs in health care, mobile communications and business software topped The Wall Street Journal's second annual Next Big Thing list.

The ranking — compiled by research firm VentureSource, a unit of Journal owner News Corp. — seeks to pinpoint the 50 U.S. venture-backed companies with the greatest promise to succeed. To be eligible, companies must have received an equity round of financing in the past three years and be valued at less than $1 billion, as the aim is to identify lesser-known contenders.

“Steve Beeler,” says the cheery, bespectacled man sporting a bright green tie as he extends his hand to me.

“Nice to meet you,” I reply. “Do you have a business card?”

“Um…no,” Beeler says somewhat sheepishly. “We just settled some issues with our (web)domain name.”

Ah, the life of a high tech startup!

We’re sitting in a small room Wednesday morning at the TechBrewery near downtown Ann Arbor. Sitting across the table from Beeler is Jeff Bocan, managing director of Beringea, the Detroit-based venture capital and private equity firm.

Grand Challenges Canada is a way to do foreign aid that should be watched closely and, if it succeeds, be widely imitated. It is a bit of the Own the Podium spirit – Canada setting out to solve the world’s big problems (including neglected tropical diseases and the lack of diagnostic tools where they’re needed) with $250-million over five years from the Conservative government. Included is a fund for Canadian “rising stars” in global health – $100,000 for a promising idea, $1-million if it gains traction. Saving lives at birth, an initiative announced on Wednesday, focuses on the critical first 72 hours, in which 1.6 million babies and 225,000 mothers die in a year.

Henry Blodget’s Business Insider network of news blogs revealed yesterday that their 2010 revenues were $4.8m and they made a small profit. Their revenues came from advertising on their sites and a conference that they ran. Most were from advertising.

I’ve been saying for a long time that their model of free news supported by ads and conferences/other brand extensions is the way forward for news in the digital age and it is great to see another company making it work. There is a lot of handwringing from traditional newspaper businesses who are losing money and don’t want to embrace/can’t embrace a future where content is free and their businesses need to be much smaller, but that shouldn’t obscure the fact that companies like Business Insider are delivering a high quality news product and making the economics work.

R & D tax credits forever? The drive to make the current federal R & D tax credit permanent is fueled by this statistic: the United States is ranked 24th out of 38 developed nations in R & D incentives. The bipartisan legislation was introduced this week.

Obamacare beats its deadline, confusion still reigns. The Obama administration met a deadline to appeal the Florida court decision overturning the president’s healthcare reform laws. The appeal will likely be heard this summer and the Supreme Court may get to it before the next presidential election.

Why Offshoring Some Tech Transfer Functions Could Help Create U.S. JobsU.S. research universities churn out over 60% of our nation’s basic, game-changing research. In this era of tight budgets, some universities are offshoring the work involved in bringing on-campus inventions to market, paying companies in India to do market research and low level legal work such as patent prior art searches. It’s counter-intuitive, but could offshoring the commercialization process of university inventions help bust out some of the un-used backlog of innovative university technologies, and actually *help* our universities create domestic, high-value jobs?

With the rapid pace of events on the web and the information revolution sparked by the Internet, it’s very easy for the technology industry to think it’s unique: constantly breaking new ground and doing things that nobody has ever done before.

But there are other sorts of business that have already undergone some of the same radical shifts, and have just as great a stake in the future.

Take healthcare, for instance.

Many places, such as Baltimore, have the elements of a successful startup scene in place, but they may be missing a spark that create a chain reaction of invention, investment, financial success, and cyclical growth. Programs that jumpstart technology entrepreneurs with small infusions of cash and lots of mentoring have been sprouting up in places around the country the last few years.

Now, Baltimore is getting a program of its own.

Leading the development of the Startup City are two Baltimore tech scene raconteurs: Mike Subelsky, co-founder of Ignite Baltimore, and Monica Beeman, regional director of FundingUniverse Maryland.

So what's Baltimore's Startup City plan about? There's a background and details document here. In its own words:

After years of cloudy skies in Startupland, the sun is peeking out, and investors are tipping their toes back into the wading pool. Last year, venture capitalists and angels who co-invested with them placed $7 billion into seed and early-stage deals, an 11 percent increase from 2009, according to the most recent PricewaterhouseCoopers/National Venture Capital Association MoneyTree report. From the conversations I'm having in the investor community, this year is promising to be even better.

Is this a limited window of opportunity, or more? It's hard to know just yet. But as the stock market edges ever higher and the wealthier feel healthier, there's a good chance that American startups will also get their moment in the sun.

Ever since the days when I was writing Weird Ideas That Work, I have been careful to point out various ways that creative people suffer in comparison to their less imaginative counterparts. My focus has been largely on the differences between doing creative and routine work (see this post on why creativity and innovation suck). Much theory and research suggests a long list, including:

1. Creativity requires failing most of the time; routine work entails succeeding most of the time. So doing creative means screwing up constantly, while doing routine work means you are usually doing things right and well. As Diego and I like to say, failure sucks but instructs.

Although the venture capital industry is only one element of the innovation ecosystem, examples from countries such as the United states and Israel show the potential impact this industry can have in creating technology champions. Unfortunately, Canada is “hitting below its weight” in this respect. In fact, long-term returns in the Canadian venture capital industry are such that capital has fled the market. Recovery will be a lengthy process.

The Business Development Bank of Canada’s venture capital group (BDC VC) has invested over $1.2 billion to support 465 different Canadian technology companies over the past 25 years. Its aim has been, per the BDC Act, to play a complementary role by helping to fill gaps in the industry, while demonstrating the potential of Canada’s technology entrepreneurs.
BDC has delivered on public policy objectives and Canadian technology entrepreneurs recognize the key role BDC plays in venture capital investing. however, BDC VC experiences many of the same pressures and performance issues as other market participants, and BDC VC’s financial results are largely comparable.

Given this, a strategic review of BDC VC’s activities was launched in the spring of 2010 to:

• understand the state of the venture capital industry in Canada;
• assess BDC VC’s impact; and
• develop a strategy for BDC VC to increase its effectiveness as an industry catalyst.

To build an appropriate fact base for this review, 68 interviews were completed with market participants and internal stakeholders, including Canadian and foreign Limited partners (Lps), Canadian and foreign General partners (Gps), portfolio companies, venture capital professionals, BDC management and investment professionals, advisors and experts. A detailed survey of all BDC VC investment professionals was also conducted (Appendix 1).