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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.

Article ImageSince popular unrest in the Arab world took root, followed by international armed intervention in Libya, a predictable outcome has been a steep rise in oil prices. Brent crude for May reached US$118.70 a barrel, its highest since August 2008, and in late February, it reached a two-and-a-half-year high of US$119.79. U.S. Crude followed a similar pattern.

Another predictable outcome has been a call to end reliance on oil and to replace it with new, sustainable alternative energy sources. In his recent weekly address, U.S. President Barack Obama again promoted a national plan to cut oil imports. “Real energy security can only come if we find ways to use less oil,” he stated, “If we invest in cleaner fuels and greater efficiency.”

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Some call a “No” the next best thing to a “Yes” when you are fundraising. Part cliché, part true, in my opinion. Because a “No” is only valuable if you understand it. Otherwise it can be a huge time waster. And getting a clear and fast “No” from angels and VC’s is not always that easy.

Before we got a firm “Yes” we got our share of “No’s”. Here is my personal guide to the land of “No” when you are raising seed capital.

I have found basically five kinds of “No’s” – and I have come to truly respect two of them
and found ways to deal with the others:

1. The “No” in advance. This kind of “No” you get on angels’ and VC’s websites, in interviews and other sources like Quora and Formspring. Here are some examples:

* “We never invest outside the US”
* “We only invest in B2C”
* “We have never invested in a company which hasn’t been referred to us by someone we trust.”

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Two million dollars invested; twenty-three startup companies formed! So much from so little. But how can that be? Is it magic? Or is it more like the 1965 tune by John Sebastian and The Lovin’ Spoonful where “you’ll see how the magic’s in the music and the music’s in me?” Have we truly found a silver bullet to accelerate the commercialization of university research? First, a history lesson on the Texas Ignition Fund and what it is about.

In 2006 the Office of Research and Technology Transfer at The University of Texas System administration formed a small working group to search for mechanisms to enhance the formation of startup companies based on discoveries from the research laboratories of its fifteen member institutions. Arjuna Sanga, Associate Vice Chancellor, Matt Blanton, founder CEO and managing partner of STARTech Early Ventures, and Madison Pedigo, manager of the Texas Instruments Venture Capital Program, comprised the group. After a year of study, the group proposed a model similar to the Deshpande model used at MIT – the core being a “proof of concept” or POC fund. The Board of Regents agreed to the plan in December of 2007 and invested two million dollars in a POC grant program called the Texas Ignition Fund, or TIF.

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They were among the recession's most inspiring stories: laid-off workers who went on to start their own businesses rather than dropping out of the labor force or crawling back to corporate America.

But a recent analysis of Census data calls into question the popular belief that the financial crisis spurred American entrepreneurship. Instead, entrepreneurial activity took a nosedive during the downturn, according to a new paper from the Federal Reserve Bank of Cleveland.

The new report challenges another study that used identical Census data. According to a widely-circulated study by the Kauffman Foundation, a Kansas City-based entrepreneurship advocacy group, new business creation spiked during the recession. Released last May, the study found the monthly rate of people transitioning into self-employment steadily rose from late 2007 to a 14-year high in 2009.

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An effective networked workplace can be viewed as a three-sided framework, with a leadership/management strategy (radical & wirearchical) that supports collaborative work enabled by social learning.

All three are necessary. If there is any degree of complexity in the work, collaboration needs to be supported by a flexible management framework that encourages social learning. This is especially true for creativity and innovation. These cannot be forced, yet many of our organizational practices still reflect cultures that do not trust individuals.

Just read any HR or IT policy of a large firm. Most do not start with, “we trust you to do the right thing …”

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March has been a rather exciting month, research-wise. But before we do anything else, let’s take a look at what has become our monthly check-in with the economy.

Jobs and Other Numbers

The jobs numbers for small businesses are either good or better, depending on whose data you look at.

According to Intuit’s Small Business Employment Index for March, small firms created about 50,000 new jobs this month. That’s a 0.2 percent increase from February’s reading but it’s also an annual growth rate of nearly 3 percent. Even better, Intuit notes that small businesses have created 820,000 new jobs since the labor market started recovering in October 2009.

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Headlining several news channels this week, word has it that the innovators of Google are in the process of creating a new facial recognition app. Though currently in the testing stages, the idea is clear – users will be able to take a snapshot of someone with the purpose of finding information about them.

Isn’t that just dandy?

Imagine, instead of spending 5 months trying to figure out if that person you’re dating really does enjoy basket weaving or instead of beating around the bush, you can quickly find out if they did a few years of hard time. Now you can skip all those fact-checking mindless dates and zoom in only on your actual procreating prospects.

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The global recession has brought new attention to chronic structural flaws in current economic models and assumptions. As economies struggle to recover, many are taking a closer look at the broad concept of a “Green Economy,” one that simultaneously promotes sustainability and economic growth What would this type of economy look like, and how could we get there? WRI Managing Director Manish Bapna responds to some of the most commonly-asked questions:

What is a Green Economy?

A Green Economy can be thought of as an alternative vision for growth and development; one that can generate growth and improvements in people’s lives in ways consistent with sustainable development. A Green Economy promotes a triple bottom line: sustaining and advancing economic, environmental and social well-being.

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You win some, you lose some. You get the perfect job—the one your heart is set on. Or you get snubbed. You win the girl (or guy) of your dreams—or you strike out. Such are life’s ups and downs.

But what if you win and lose at the same time? You land a good job—but not a great one. Or you do get a plum offer—but not the one you wanted?

A study published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, says you’ll find a way to be happy anyway.

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My company had its first meeting of its strategic advisory board this past week.

All I can say is wow – I benefited from it in ways that I barely could have imagined when first organized.

Here is what I got out of it:

That Often It is Better to Receive than to Give: While advisory board members, unlike a formal board, do not have liability nor fiduciary responsibility, their time and energy requirements to participate are significant.

And for most smaller companies, the financial incentives it can offer advisory board members are relatively little compared to the value of board members’ time.

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The term ‘mobile marketing’ is thrown around a lot these days, but many people are only vaguely familiar with what it actually is. It’s important to understand the fundamentals of what this new breed of marketing is, how it works, and why it’s important to begin utilizing it for your business.

Nearly every business can benefit from using mobile marketing and advertising methods. Whether your business is virtual, brick-and-mortar, or both, you can utilize this new and powerful marketing tool in some way.

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It's a simple formula: Investing in high-growth companies creates jobs while generating more wealth for investors. The formula has worked for America's private venture capital investment community for 65 years.

Unfortunately, no such active community exists in Black America.

This week, the National Venture Capital Association and the Angel Capital Association meets in Boston for the ACA Summit (April 4-6, 2011) and NVCA Annual Meeting (April 6-8). Together, these organizations are comprised of more than 500 groups of private equity investors who make up a large portion of the reason why the 21st century Innovation Economy races along at breakneck speed and offers solutions to the problems of high rates of unemployment and diminishing levels of wealth.

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Six years ago, John Webster and Chris Stakutis wrote a book called “Inescapable Data,” in which they talked to nearly 50 corporate executives and entrepreneurs about how massive accumulations of data could transform their businesses and their lives.

Stakutis, who’s a specialist in sharing file systems over storage area networks, was then the chief technology officer for International Business Machine Corp.’s Tivoli software group. He had become interested in “data emitters” – devices like refrigerators that could have IP addresses and could share data over the Internet.

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During this recession, much has been written about the psychological toll of unemployment, but it turns out those with jobs are feeling stressed, too. The 2011 Work Stress Survey conducted by Harris Interactive on behalf of Everest College finds that a whopping 77% of Americans are stressed at work, with low pay the most common reason cited (14%).

The other reasons?

* Commuting (11% of workers)
* An unreasonable workload (9%)
* Annoying coworkers (8%)
* A bad boss (5%)
* Poor work-life balance (5%)

This follows on the heels of news from the American Psychological Association that 36 percent of workers report experiencing chronic work stress and almost half say low salary has a significant impact on their workplace stress.

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Decoding Innovation DNATechnology Forecast: Decoding Innovation's DNA examines enterprise innovation and the role of information technology. It answers the question, is innovation the result of inscrutable, opaque genius, or can innovation be treated as an end-to-end process subject to performance optimization by adopting proven methods and systems?

The time is now ripe for organizations to develop, manage, and continually improve an end-to-end innovation process, which moves from ideas to cash. The key area for technology support is the systematization of problem solving activities, which is at the heart of how innovation happens and progresses, and idea management systems that organize and streamline the flow from ideas as they mature into products or services and ultimately business outcomes. Technologies supporting systematic methods of problem solving present the opportunity to make innovation accessible to more of the enterprise, rather than limited to those in research and development (R&D) or product development functions.

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Every time I hear the word “bubble” I think of that quote from Macbeth. I also think of Tulip Mania and the South Sea Company which purportedly was the source of the concept of an economic bubble. And then I remember Charles Mackay’s classic book “Extraordinary Popular Delusions & the Madness of Crowds.”

When I returned last weekend from a week off the grid I encountered the word “bubble” over and over again when referring to the tech industry. A variety of people were using it to describe the current situation.

This has been going on for at least a quarter or two, but the velocity of it seems to have picked up with a wave of high priced financings along with large financings for nascent companies. While plenty of tech bloggers were tossing around the word “bubble”, I also noticed it among the mainstream media. But more interestingly I saw it in my twitter feed from some entrepreneurs and VCs who I respect a lot. So I spent some time on my run yesterday rolling the idea of a bubble around in my head.

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Investments in clean technology startups rose 13 percent in the first quarter this year in North America, Europe, China and India — to $2.57 billion from $2.28 billion in the first quarter of 2010 across 159 companies — according to a report by Cleantech Group.

Investors poured the most money into late-stage ventures that accounted for $2.39 billion of the investments in the first quarter this year. More than half of the deals were late-stage investments, but they accounted for 93 percent of the funds. That’s because just a handful of companies are spearheading innovation in various industries.

Solar power ventures received the most money, bringing in $641 million across 26 deals. That includes a $72 million investment in Alta Devices that involved storied investment firm Kleiner Perkins Caufield & Byers — even though the company was still in a half-stealth mode. The next best performer was the transportation industry, with $311 million across 8 deals. That includes electric and hybrid vehicles that have less of an environmental footprint than internal combustion engine cars. Biofuels came in last, only receiving $148 million across 13 deals.

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A plan to boost Montgomery County's bioscience industry that a consultant outlined today before the County Council is different from past reports because it more concretely offers a "road map" to achieving its goals, say business leaders and county officials.

"This is a call to action," said Elaine Amir, executive director of the Johns Hopkins University's Montgomery County campus in Rockville. She was a member of the county's Biosciences Task Force, which released a report in late 2009. "People don't want another report. ... This is unlike anything else we have done before."

The county hired consultant Richard A. Bendis to draft an implementation plan to execute the task force's 2009 recommendations. A major proposal in the plan is a private-public partnership, or "innovation intermediary," to coordinate the overall strategy. Bendis said he had met with leaders of biotechs such as MedImmune of Gaithersburg, and they wanted to "see something accelerated on this."

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01 / Twitter >>

For ballooning into a global phenomenon that, finally, has a business model. In 2009, Twitter boasted some 20 million users. Today? More than 200 million. During that period of hockey stick-like growth, Twitter unveiled a sleek redesigned interface, played an integral role in recent revolutions in the Middle East, and introduced Promoted Tweets and Trends, a stream of tweet-size ads that reportedly cost major companies at least $100,000 to purchase.

02 / Google >>

For launching the most radical upgrade to search in years with Google Instant--and still boasting a 98% adoption rate. With some 2 million searches per second and 3 billion per day, Google can't alter a pixel in its logo without the world knowing. Yet that didn't stop the Internet giant from unveiling Google Instant, a results-as-you-type search engine that has helped users save an average of 4 to 5 seconds on each query.

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Thanks to recent tech advances, investments by companies like Apple and Google, and the backing of traditional payment processors (as well as new startups), the mobile payments space is white hot.

Consumers, particularly those in parts of Europe and Asia, have been making purchases using their cellphones for the better part of a decade. Traditional ecommerce solutions aside, however, mobile payments have yet to really go mainstream.

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