After months of speculation, it’s finally official: the Chinese economy, as measured by GDP, is larger than the Japanese economy. In the second quarter of 2010, the Japanese economy was valued at about $1.29 trillion, the Chinese economy at $1.34 trillion. The gap will widen next year and for the foreseeable future.

The swap of the number two and three spots in the world, behind the U.S., is heralded as (i) a sign of Chinese ascendance and Japanese stagnation; and (ii) proof of the superiority of the PRC’s state-led development model. This swap is certainly not the result of a superior development model and it might not even say too much about Chinese ascendance. This is because, while GDP does measure size, it is a flawed measure of economic performance and prosperity.

At a startup dinner I had with a bunch of really smart software entrepreneurs in Austin, Texas during SXSW earlier this year, something really struck me.  Of the 8 founders at the dinner, half of them had a design/ui/ux background.  This got me to thinking: What would the ideal founding team at a web startup look like?

#1. Developer.  If a web startup has only one founder, it should be a brilliant developer.  And by a developer, I mean a developer — someone who can produce, release and maintain working code.  Not a CTO or “architect”.  Not someone who thinks they can recruit developers or someone who knows someone who runs a development shop in Croatia.  An actual developer. 

#2. Designer / UI / UX person.  If the startup has two founders, the other founder should be a brilliant designer-type.  By this, I mean someone that can take a problem that humans have and come up with a software solution that humans want to use — repeatedly and delightedly.  I think great design talent has always been useful in a software company — now, it’s become crucial.

Felicis Ventures, the firm created by early Googler (and VentureBeat investor) Aydin Senkut, just announced that it has raised $40 million. It’s the firm’s first institutional fund.

Felicis says it will continue to focus on early-stage mobile and Internet investments. Senkut has invested in more than 60 startups, and 15 of them have already been acquired. Purchased companies include personal finance startup Mint.com (acquired by Intuit), semantic search startup Powerset (acquired by Microsoft), and mobile gaming startup Tapulous (acquired by Disney).

The Palo Alto, Calif. firm describes this as a “super angel” fund, and the fund was first revealed in a Wall Street Journal article about the super angel trend — namely, the rise of angel investors who form an “unofficial upper class” thanks to their cachet and ability to attract other investors. The article highlights how, as Redpoint Ventures‘ Geoff Yang puts it, venture capitalists are still trying to figure out whether these investors are friend or foe.

Electric vehicle startup Tesla Motors’ $226 million IPO in June marked the first debut by a car maker on Wall Street since Ford Motor began public trading more than half a century ago. Now two months later, century-old Detroit automaker General Motors, having emerged from government-managed bankruptcy, is gearing up for an IPO of its own and is widely expected to file its prospectus with financial regulators this week for a planned IPO in the fall (shortly before its plug-in Chevy Volt goes on sale).

Despite the fact that GM earned $1.5 billion in its latest second quarter earnings — its biggest profit in six years – and Tesla isn’t expected to turn a profit at least until 2013, the bar for success will be much, much higher for GM than it was for Tesla, say analysts. Tesla’s IPO was all about hope for the future of electric vehicles and green car innovation from a Silicon Valley startup that fancies itself a technology developer akin to Apple or Google. GM’s IPO is about overcoming its long and recently tumultuous past, and about delivering a solid business as a manufacturing company.

The Michigan Accelerator Fund I launched today with $10 million for early stage life science and technology companies in West Michigan.

The Charter Group, a Grand Rapids, Michigan, mergers and acquisitions adviser, and the Michigan Strategic Economic Investment & Commercialization Board said it’s their community’s first venture capital fund focused solely on life science and technology.

The accelerator fund was developed to leverage hundreds of millions of dollars already invested in West Michigan’s science and research infrastructure by filling the region’s early stage funding gap and creating jobs.

Greentech Media catalogs the ghosts of greentech IPOs past, looks at firms ready to float, and predicts a few likely candidates for the public markets.

As Michael Kanellos reported, recent greentech IPOs have had mixed and less than stellar results.  And we've looked at many of the greentech IPO prospects in the past.

The public market regurgitated Solyndra, unable to squeeze that debt level and fragile value proposition down its craw.  The shiny bolus of Tesla has been swallowed, although that firm's value proposition has not been fully digested or priced.  

Eight percent ain't great, but it's better than nothing.

That's how much of the total pool of venture capital cash female founders raised during the first half of 2010, according to a study by CB Insights. And while the bigger numbers on the male side of the equation have dominated the coverage of the study, women's numbers are up from 4.6% reported in 2000. The study differs from earlier examinations of the VC industry by focusing on so-called "human capital"--that is, who's getting the funding.

Female business boosters, including Shaherose Charania of Women 2.0 and Wendy Beecham from Forum for Women Entrepreneurs and Executives, said the results were fairly predictable. Not inspiring, but predictable.

Following up on chatter following my blog last week discussing the need for caution around the quality of interventions that seek to provide technical support to entrepreneurs, I will continue the conversation thread this week with a post discussing another  innovative entrepreneurial support program  - iStart, which happens to open for business today.

The creators of iStart at the Kauffman Foundation took a tool already in use - business plan competitions - and expanded its impact by simply broadening the competition life cycle. This white labeled online platform provides back office support for a common, yet complex, engagement and education method for encouraging entrepreneurs. Business plan competitions often serve as the spark that gets great entrepreneurial ventures started.  The program is a resource for those running and judging a competition, as well as for those competing in one, anywhere in the world.

There are several reasons why I’m excited about this platform. First, it is global in reach. Second, iStart is an entrepreneurial innovation itself. Beyond help with logistics and guidance on building a strong business plan, iStart offers a way to connect entrepreneurs, mentors and investors. And it does so beyond the competition period by allowing applicant teams to make their plans and their companies searchable on its website. This will make thousands of plans available to the world as models for aspiring entrepreneurs and possible mentorship and investing opportunities. As the iStart entrepreneurs put it, “there’s a big, wide entrepreneurial world out there. Established business owners. Student entrepreneurs. Investors. Researchers. Financial gurus. Legal eagles. Mentors.” The program aims to connect them.

Anyone who knows cornhole knows Peter O’Neill.

By day, he’s Cleveland Clinic Innovations’ senior commercialization officer. Once a year, though, he becomes one of the most sought-after cornhole players in Ohio.

O’Neill and Innovations Executive Director Chris Coburn won the 2009 MedCity News Medical Cornhole Tournament. This year, two other teams have tried to get O’Neill to leave the Innovations squad for their teams. One local law firm tried to poach O’Neill, as did the Global Cardiovascular Innovation Center, where O’Neill also works as a product commercialization manager.

“This has somehow become my most notable athletic accomplishment,” O’Neill said.

Pew's latest research about American broadband shows that 21% of U.S. adults don't use the Internet.

Why not? Almost a third say they're "just not interested." Others find it too expensive, too difficult, or think they're too old. Pew also says 22% of the people who don't use the Internet used it in the past but don't anymore.

Angel investors will get a federal tax cut for investing in government-funded technology start-ups under proposed legislation.
 
Five members of Congress – including Jared Polis, the founder of Proflowers.com and Bluemountain.com and a first-term Democrat from Colorado – are proposing a new tax break that would provide a 25 percent credit for an equity investment in a company that has already qualified for a federal research and development grant program for small businesses. 

Poor European entrepreneurs.  They can only dreams of SuperAngels, salivate from afar about the land of Ron Conway, the cool shirts of Sacca and the awesome dollar power of Angellist, whilst they're stuck with old school business angels or fee-charging networks, whilst European VC's, never a risk taking breed as we know, have all retreated back to the safer havens of "venture growth".  They can only wish there was a seed bubble. No wonder that governments feel there is an "equity gap" they need to fill, or that entrepreneurs feel compelled to leave for the promised land.  Everyone wants to be Bart Decrem (with better glasses, like mine), move over there and make it happen !

The truth is, we've been seeing Euro SuperAngels emerge for a while now.  When I came across Nic's question on the topic, and Fred Wilson's thoughts on London, I thought it would be worth writing them down.  My question is: "are we Europeans guilty again of beating ourselves over the head with a stick instead of focusing on, leveraging and celebrating what's there ?"

The idea to write this post started with a twitter conversation Jonathan kicked off with these words of wisdom:

Don’t lead with “how’m I gonna make money?” Instead, ask “how’m I gonna blow people away and change lives?”

Most of us can agree that this principal is spot on for entrepreneurs with big dreams.

When Nathan Hangen added

Sometimes internal motivators aren’t aligned with success

Stanford University's Entrepreneurship Corner provides a free collection of over 1600 videos and podcasts, featuring lectures by today's Entrepreneurial Thought Leaders.

This is a photo of the Atlantis AK1000, a 130 ton, 74-foot-tall tidal turbine that will be installed underwater off the cost of Scotland. It is designed to supply electrical power for 1,000 households.

Sea water, which is 832 times denser than air, gives a 5 knot ocean current more kinetic energy than a 350 km/h wind; therefore ocean currents have a very high energy density. Hence a smaller device is required to harness tidal current energy than to harness wind energy.

Tidal current energy takes the kinetic energy available in currents and converts it into renewable electricity. As oceans cover over 70% of Earth’s surface, ocean energy (including wave power, tidal current power and ocean thermal energy conversion) represents a vast source of energy, estimated at between 2,000 and 4,000 TWh per year, enough energy to continuously light between 2 and 4 billion 11W low-energy light bulbs.

Both the U.S. and the U.K., for example, have enough ocean power potential to meet around 15% of their total power needs.

New collaboration and strategic innovation tools developed by European researchers will help fast-track creative ideas by networking the most competent people to tackle the job.

Like gold prospectors, companies are willing to go to the ends of the earth to find innovative ideas; and like gold prospectors they often grow old looking.

For all its importance, innovation remains a fundamentally mysterious process, often the outcome of unexpected Eureka moments. It is crucial to competitiveness and it propels the world’s leading companies, but ultimately the reasons why or how it happens often depend on who you talk to.

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The other day, I got an email from a new friend. The subject line read "Are you a TED talk person?"
It linked to an 18-minute video of MIT behavioral economist Dan Ariely talking about the bugs in our moral codes. Other friends have sent me videos of Eat, Pray, Love author Elizabeth Gilbert on the spiritual dimension of creativity; rocker David Byrne on how venue architecture affects musical expression; and UC Berkeley professor Robert Full's insights into how geckos' feet stick to a wall.

Each of these emails is like a membership card into the club of "TED talk people." I love being a member of this club. The videos give my discovery-seeking brain a little hit of dopamine in the middle of the workday. But just as important, each one I see or recommend makes me part of a group of millions of folks around the world who have checked out these videos. What links us is our desire to learn; TEDsters feel part of a curious, engaged, enlightened, and tech-savvy tribe.

I knew I would be touching a raw nerve with my last two posts, on patents. But I was really surprised at the divergence of opinion. Entrepreneurs overwhelmingly supported my stance that software patents hamper innovation and need to be abolished, but friends at Microsoft, IBM, and Google were outraged at my recommendation. The big companies’ executives argued that abolishing patents would hurt their ability to innovate and thus hamper the nation’s economic growth. (They believe that companies like theirs create the majority of jobs and innovations, and they claim that without patents they cannot defend their innovations.) I am not convinced that software patents give Google any advantage over Microsoft and Yahoo, or make IBM’s databases any better than Oracle’s. But I do know one thing for sure: it isn’t the big companies that create the jobs or the revolutionary technology innovations: it is startups. So if we need to pick sides, I vote for the startups.

I have conducted an ongoing email and blog exchange for several years with the Founder and CEO of an entrepreneurial client firm, a fast-growth, B2B cloud-identity-security software provider: Ping Identity.  He comes up with penetrating questions and observations, and I respond.  Maybe others can benefit by following http://andredurand.com/  ?  Here's an exchange between us that occurred a while ago.  Andre Durand's observation:  "What a challenging task it is to keep the torch lit, when so many of the people you started with aren't around."

My response:

Some founding entrepreneurs negotiate progressive stages of funding and growth, and remain CEO, by successfully adapting to the evolving requirements of leadership for a successful emerging-growth enterprise. Rarely do they manage to forge ahead without suffering casualties among colleagues who were crucial in the startup era of the organization. The loss of colleagues outgrown by the business is so common, it is widely considered an ordinary expense of corporate maturation. However, such losses do not come without organizational and emotional costs. Some of these costs are felt immediately. Others take time to incubate and become a source of personal reflection, even misgivings, for the entrepreneur.