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innovation DAILY

Here we highlight selected innovation related articles from around the world on a daily basis.  These articles related to innovation and funding for innovative companies, and best practices for innovation based economic development.

paris france

Your startup should have a presence in Europe from its inception, argues Ifeelgoods CEO Michael Amar. Just be prepared for culture shock, a contempt for entrepreneurs, and daily Skype frustrations.

Michael Amar, the CEO of the digital promotions platform Ifeelgoods, has advocated the idea of startups having a presence in the European market from Day One. The French-born Amar lives in Silicon Valley, but collaborates with members of his team in Europe. The rewards of focusing on Europe early on can be great--a cheaper talent pool and the chance to head off pesky copycats are among the main perks. He concedes, though, that it’s not without its challenges.

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Failing

It looks so easy from the outside. An entrepreneur with a hot technology and venture-capital funding becomes a billionaire in his 20s.

But now there is evidence that venture-backed start-ups fail at far higher numbers than the rate the industry usually cites.

About three-quarters of venture-backed firms in the U.S. don't return investors' capital, according to recent research by Shikhar Ghosh, a senior lecturer at Harvard Business School.

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startup

Foodspotting, a Silicon Valley technology company, has created one of the most delectable iPhone apps: it features not just nearby restaurants, but the most popular dishes that are closest to you: cobb salad just .2 miles away, cheese enchiladas right near the subway stop. Perfect temptation for hungry foodies.

The woman-led company is doing well by many standards, including its ability to successfully pitch to venture capitalists. Foodspotting raised $3 million in Series A funding in early 2011, soon after the product reached one million downloads. Previously the company had raised around $750,000 in seed funding. Foodspotting’s founder, Alexa Andrzejewski, has been featured in Inc Magazine’s “30 Under 30” and Gourmet Live’s “50 Women Game-Changers” in food.

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unaccountable

As patients, we don't know nearly enough about the care that we are receiving in our hospitals, and the closed door culture of medicine prevents us from gaining the tools to make vitally important health decisions, argues Dr. Marty Makary, who attacks the corporatized hospital culture contributing to unreasonably high rates of medical errors in Unaccountable, released yesterday from Bloomsbury Press (you can watch the intriguing book trailer here).

A surgeon and professor of public health at John Hopkins University who has already made innovations in the improvement of patient care, Makary draws on his years of experience -- and leverages his influential position in medicine -- to step forward as a whistle-blower. He shares striking anecdotes from a system gone wrong, where 25 percent of all patients are harmed by medical mistakes and a focus on the bottom line leads to overtreatment at the expense of quality care.

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money

Startups ask me “How much money should I ask for?” The simple answer is the absolute minimum amount you need to make your plan work. Some entrepreneurs try to start with a huge number, hoping they can negotiate and close on a smaller one, while others understate their requirements, in hopes of getting their foot in the door with an investor.

Neither of these strategies is a good one, as both are likely to damage your credibility with potential investors, even before they look hard at your plan. Here are the parameters you should use in sizing your request, and be able to explain in justifying your request to investors:

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Unemployed workers receive training under Georgia Works, which served as a model for new federal efforts. (U.S. Department of Energy)

An unprecedented bid to let states experiment with the unemployment insurance system has gotten off to a bumpy start.

As part of a deal reached in Washington earlier this year, Congress approved a plan to let up to 10 states develop demonstration projects in which businesses could hire unemployed workers and essentially pay their salaries with money from the unemployment insurance fund (UI).

Typically states can’t use UI funds to pay for wages, but only unemployment benefits. The 10 states picked for the program would be allowed to use UI funds to subsidize employer-provided training or to pay employers that hire UI beneficiaries.

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remember

We’ve written a few things recently about funding and venture capital (here and here). It often seems you can’t talk about startups without discussing how company X raised Y in round Z. Sometimes, this is a good way to gauge the future or current success of a startup – sometimes it is not. If you’re an entrepreneur this can be a crucial topic. Here are a few important things to consider when considering the issue of venture capital:

  • VC is actually a small way entrepreneurs fund their companies. From 1981-2005 .11% of new companies received VC. In the hay day of VC investing, 1996-2000, this number was double that…at .22%. 
  • Not all VC-backed projects go public or become highly profitable. The nature of venture capital, and entrepreneurship to a degree, is that you are more likely to fail than to win big. One study found three out of four VC-backed entrepreneurs get no return while one in four receives an average of $5.8 million upon exit.
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USDA

On October 28, 2011, following a series of reports identifying the status of technology transfer from federal funds and federal laboratories, the White House issued the Presidential Memorandum – Accelerating Technology Transfer and Commercialization of Federal Research in Support of High-Growth Businesses” (attachment 1). The memorandum requires federal agencies – within 180 days -- to submit 5-year plans to accelerate technology transfer and commercialization, and to report annually on progress toward achieving these goals.

The principal goal of Federal research and development (R&D) is to solve problems and achieve anticipated public benefit. The U.S. Department of Agriculture views the Presidential Memorandum with a broad interpretation, defining technology transfer as the adoption of research outcomes (i.e., solutions) for public benefit. Seemingly a simple statement, that process of adoption is complicated, requiring integration of many assets from disparate sources in the successful delivery of solutions through public / private partnerships.

Successful adoption of USDA knowledge and research outcomes typically requires complementary assets and services provided by multiple agencies in USDA, including agencies that are not primarily engaged in direct research in the physical and life science arenas. The breadth of scope of USDA science and technology (S&T) agencies – spanning the mission areas of four Under Secretaries -- creates some unique challenges. USDA R&D is conducted in agencies with responsibilities ranging from 100% intramural research (e.g., ARS), agencies with units dedicated 100% to research (e.g., APHIS-Wildlife Services- National Wildlife Research Center), to agencies with “methods development” research elements but also regulatory responsibilities (e.g., APHIS-Veterinary Services, and APHIS-Plant Protection and Quarantine) as well as those agencies entrusted with land management responsibilities, including natural resources preservation (e.g., Forest Service).

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Bees

Johns Hopkins scientists report what is believed to be the first evidence that complex, reversible behavioral patterns in bees – and presumably other animals – are linked to reversible chemical tags on genes.

The scientists say what is most significant about the new study, described online September 16 in Nature Neuroscience, is that for the first time DNA methylation "tagging" has been linked to something at the behavioral level of a whole organism. On top of that, they say, the behavior in question, and its corresponding molecular changes, are reversible, which has important implications for human health.

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Brian Suthoff, vice president of Strategy and Business Development for Localytics, speaks on the phone at their office that operates under Dogpatch Labs, a business accelerator program in Cambridge.

In Sunday’s Boston Globe, Michael B. Farrell reported on the growing number of incubators in the area, including TechStars, Rock Health, and DogPatch Labs. One of the biggest, MassChallenge, has its award ceremony next month where it will showcase 26 finalists whittled down from more than 1,200 applicants. The growth of incubators isn’t surprising given that Cambridge is the home of the grand-daddy of startup accelerators (Y Combinator, which has since left for the warmer, if not sunnier, Bay Area). But is it a good thing for entrepreneurs? Not everyone is sold on the idea. Farrell spoke with Steven Gold, a business professor at Babson College, who told him that incubators were a great deal for investors. “It’s cheap. There’s nothing to lose,” he said, while warning that it might be a one-way bargain. “For most commercial accelerators, I have seen no data that shows any reason for the typical young person to ever affiliate with one of them.” I’ve reached out to talk a bit more with Gold about his thoughts on why accelerators are so attractive to first-time entrepeneurs, and what makes them a bad deal, but I’m not surprised about the sour outlook. A few years ago, I went through the accelerator startup wringer myself, and a lot of them were run by people with little to no actual startup experience. In one, three 20-somethings working on their MBAs listen to our pitch, via Skype, from a porch, wearing T-shirts and flip-flops. We ended up deciding an incubator wasn’t for us, and looking back at where we applied, many of them have since ceased operating or have merged with another program. But while I’ve been impressed by the experience and focus of Boston’s accelerators and incubators, the memory of those flip-flop bedecked funders haunts me. Even if there’s not an incubator saturation point, there’s a very marked curve in incubator quality (just like with startups themselves), and more and more, I’ve talked to founders who casually mention that they’re currently in not one but two incubators, sometimes at the same time. UberSense, a sports coaching app, is one of those double-dippers, having participating in both MassChallenge and TechStars Boston. As Walt Frick pointed out on Twitter, though, the varying intensities of these two different programs makes this doable for some. The fact that MassChallenge doesn’t take equity doesn’t hurt either. But perhaps the best indicator of whether there’s too much or not enough is ultimately performance in the market. As Scott Kirsner reported today, UberSense just raised a $1.1 million round from Google Ventures, Atlas, and others, meaning at least someone must be happy with the results.

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Silicon Valley

Over the past few years, every new day has seemed to bring news of another higher-education technology start-up company promising to change the world. According to the National Venture Capital Association, investment in education technology jumped from $100-million in 2007 to nearly $400-million last year. On Easter weekend earlier this year, I flew to Silicon Valley to find out what was going on. The result was a long article in Washington Monthly, called “The Siege of Academe.” (You can read it here.)

I had known some of the reasons for the start-up boom before arriving in California. The world has changed since the first wave of ed-tech start-ups went belly-up in the dot-com bust. Educational tools have become more sophisticated; computing power is cheaper; broadband access and mobile technology have spread.

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China startup

Venture capitalists who trekked from Silicon Valley to China starting in 2005 had it easy compared to now.

Then, the Internet playing field was wide open with leading market positions not yet taken, returnee entrepreneurs were coming home in droves to copy successful business models from the West, and hope sprung eternal that home run deals would be as plentiful as during the U.S. dotcom era.

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crowdfunding

Last month, Amazon pulled the plug on the e-book crowdfunding site unglue.it and a number of other similar sites. Amazon says it is no longer able to support certain crowdfunding or social fundraising sites, despite the wild success of Kickstarter, which was built on Amazon’s platform. (Kickstarter still utilizes Amazon.com payments, however.)

But why? Although standout campaigns have served as great proof-of-concept for crowdfunding’s worth, like the Pebble wristwatch raising $10.2 million on Kickstarter seemingly overnight, the challenges that come along with the medium are almost too overwhelming to enumerate.

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follow the leader

Organizations that make a deliberate choice to build and nourish innovation can earn a significant payoff for their efforts. This conclusion is among the results of the second annual Innovation Quotient (IQ) Survey released September 17, 2012, by the public accounting, tax, and consulting firm Plante Moran and the executive education and innovation training institute NewNorth Center. Numerous studies have shown the connection between innovation and revenue growth. The IQ Survey report goes one step further and turns the results of the 2012 survey of more than 550 innovators into a valuable self-improvement guide for the leaders of businesses, not-for-profits, and public sector organizations.

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A reflection of the Marina Bay Esplanade in Singapore. The nation is increasingly seen as a corporate logistics hub and gateway to the region's emerging markets.

For the past six years in a row, the World Bank has rated the Southeast Asian city-state of Singapore as the easiest place in the world to do business. Drawn in part by this reputation, money and talent are pouring into the island nation's growing technology sector.

One of Facebook's co-founders recently renounced his American citizenship and relocated to Singapore, where he has been investing in tech startups.

One of these firms is Perx, co-founded by former New Jersey resident Andrew Roth.

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run over

As healthcare reform begins to be implemented nationwide, most employers are expected to continue to remain plan sponsors instead of getting out of the business of providing health benefits to employees in lieu of a fine.

That’s according to a new report by Aon Hewitt that surveyed 1,800 U.S. employers covering about 15 million employees with a combined annual health expenditure of $120 billion. But the expense trajectory – in the last six years, expenditures on employee health has skyrocketed increasing by 40 percent to an average of $8,000 per employeeis unsustainable. The report recommends that there are eight human behaviors that must be contained to bend the cost curve.

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bubbles

Coming up with new ideas--and being more accepting of new strategies--strengthens the brain and makes you less susceptible to stress. 

Nursing homes offering activities like writing seminars, poker nights, and pottery lessons might just be on to something.

In a study of 1,349 older male veterans, creativity--serving as an indication of openness, the willingness to try new things and accept new ideas--seems to have predicted a longer lifespan. The Journal of Aging and Health study, which followed the men over the course of 18 years (but did not include any women), found that creative thinking may have led to a 12% reduction in mortality risk.

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Kickstarter’s booth at the XOXO tech conference. Kickstarter has helped about 30,000 projects raise money.

An effort to build a sleek aluminum charging dock for the iPhone generated fervor online when it was announced last December. The project’s creators raised close to $1.5 million through Kickstarter, a crowdfunding Web site, and promised to start shipping their Elevation Dock in April to those who had backed the project. Enlarge This Image

But last week Apple announced a redesigned iPhone that is not compatible with the dock — and because of manufacturing delays, some of the project’s original backers were still waiting to receive theirs. The designers are now scrambling to make an adapter and update the product.

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globe

In a move to gain access to early stage innovation, Johnson & Johnson (NYSE:JNJ) is opening innovation centers in Europe and China as well as in Boston. Earlier this year, its Janssen pharmaceuticals division opened an innovation center within the company’s West Coast Research Center in San Diego.

The centers will be staffed with J&J science and technology experts from the community who will identify early stage innovations and establish collaborations to invest in and speed development of those concepts to solve unmet needs in patients, a company statement said. Areas of potential collaboration include pharmaceutical, medical device and diagnostics, and consumer companies.

The centers will have the flexibility to adapt deal structures to match the early stage opportunity, the statement said. A J&J spokeswoman told MedCity News that the company would enlist “a variety of creative types of deal-making.” The focus is on assets with a strategic fit, she said. It will be working with academic researchers and emerging startup companies.

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draper

If there is blue blood in Silicon Valley, it runs through the veins of Adam Draper. As a fourth-generation member of venture capital's greatest dynasty, he has a curriculum vitae that includes getting bounced on the knee of investing legends like William Henry Draper III, his grandfather.

Adam is now 26, a dropout from his senior year of college and part of a new entrepreneurial generation for whom everything runs faster and a little looser. That explains why, when I was about to press "Send" on a story about his latest venture—a fascinating challenge to the venture capital industry his family helped to build—he did a pivot on me.

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