Author Archives: George Dearing

About George Dearing

George Dearing is an Austin-based consultant and writer with roots in enterprise software and digital media. He founded the Dearing Group and consults with companies on technology and sustainability. George has a B.A in Journalism and PR from the University of Houston - University Park. Follow him on Twitter here

Startup Showdown A Welcome Addition To ATC’s Second CEO Summit

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The second day of ATC’s CEO Summit wrapped up last Friday with the Startup Showdown, featuring Baytan Labs, MapMyFitness, Convergence Wireless, VivoGig, and Toopher. We captured some tweets along with commentary and have more coverage planned this week, so stay tuned. We used Storify’s tool to craft the original piece. You can see that version here.

Baytan Labs kicked things off by showcasing their Guardian Trace app, a local positioning service (LPS) for the iOS platform that addresses personal security. It uses Google maps and provides emergency contacts with the users last known location. I caught up with the Baytan team and heard from CEO Mike Davis on markets outside of personal security. They plan to market to enterprise customers as well, providing a cloud-based offering that employees can use to set up monitoring through their department, on a per-seat basis. As good as that sounds, the consumer is still the main focus, with a commercialization strategy that hinges on the home monitoring market.

The next pitch came from Convergence Wireless. They’re in the red hot energy efficiency sector, focusing on tech that delivers wireless-based automation around things like lighting controls. Local startup advisor Ben Dyer told us the company is well positioned with a solid portfolio of IP. We’re hearing it might skip the company build-out and license its IP to someone like Schneider Electric.

The third pitch was from MapMyFitness, a company positioning itself in the health and wellness industry. The guys did a great job conveying the market potential for its approach. They’ve built a solid social network around fitness enthusiasts but were quick to point out the other areas ripe for expansion. They emphasized the fact that there’s really no companies addressing the fitness and diet market on large scale. Their CEO said the number one thing prescribed by doctors to combat illness is 30 minutes of exercise. The other most prescribed was diet.

Needto.com was next up, a company positioning itself to disrupt a few spaces. Their marketplace serves the adhoc tasks and jobs market. At first glance, you’d think the company’s competitors are solely the Craigslists and Angie Lists of the world. But if you grasp where they’re headed, the competition is actually closer to companies like ServiceMagic and RedBeacon. They plan to take the best of what traditional directory services do, and throw in some Craiglsist-esque features to drive user participation and scale. If they can fill in some voids that some of the incumbents aren’t providing — like richer profiles and commerce, watch out. This space is ripe for disruption.

If you were there, there wasn’t any doubt who put on the best show. It’s tough to beat a guy that pulls out a blender. But it wasn’t all show for Toopher’s mobile authentication technology — they pulled out the win. Like some of its peers, Toopher’s market spans across a few sweet spots: identity theft and the broader market for newer security apps. Replacing older methods for logging into apps and services — like USB fobs — is the obvious one. They’re taking that further, though. Because they piggyback on existing logins with location services, your mobile essentially becomes an extra level of security by pushing each request to your phone and giving you the option to approve. Toopher likely has some additional work to do as it moves upstream, especially in larger enterprises and public sector environments. Simplicity and a strong mobile and security combination seem to working for them now, with more visibility sure to come with the ATC win..congratulations.

The last pitch came from Daniel Senyard and the Vivogig team.They describe themselves as a live music photography platform, but hearing Senyard and their head of strategy pitch, you can see the broader opportunities. They’re a content company that enables a huge audience segment (music fans) to create content. And increasingly that creation is happening in real-time and on mobile devices. Musicians and artists are in dire need of tools to get closer to fans, so while that might carry them, it’s easy to see how brands, events, and even sports franchises could tap into VivoGig’s stream. They’ve built a nice web front-end, but more importantly their capturing data. And that data is gold to companies building businesses around advertising and content. You might think of Facebook first, but I heard them mention a linkage to Billboard’s music group. That seems like a viable match. Being the source of data for artists to grow their brand is attractive, but the better bet might be providing real-time fan sentiment and content to the business side of the music industry.

We’ll be publishing some pieces on a few of the other panels, but before that, here’s a few items that were relevant to the competition. John Stockton (not the hoopster) at Mayfield Fund had a few zingers during the VC panel, not the least of which was captured by Doug Bain below.

One of the more colorful VCs was NEA’s Jimmy Treybig. His quote below was particularly timely as much of the second day’s discussion focused on how big the market opportunities need to be to even get the attention of many venture capitalists.

Lastly, let’s not forget the ATC Council team and their hard work. It’s these kinds of events that help connect the ecosystem of entrepreneurs, business leaders and passionate Austinites. Great job on a great event.

Software Talent Tops The List In Door64′s First Hiring Survey

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Austin’s burgeoning ecosystem of startups is in high gear, buoyed by the rise of cloud-based infrastructure, mobile development, and cleaner technologies. Behind that growth is a vibrant tech community of software engineers, analysts and project managers. But what about more established companies? What types of skills are hiring managers seeking? That’s what Austin’s largest tech community, Door64, wants to answer with the initial release of its Hiring Priority Survey.

“We all know, it is often one or two key holes in a company that can impede growth,” said Door64 founder, Matt Genovese. “We are stepping up and surveying the hiring managers of a set of sizable Austin area technology companies every quarter starting now with today’s survey results, to get deliberately granular about what these hiring shortages are.”

Door64 gathered more than 100 responses and whittled down the results to represent more than 50 managers with companies in full business operations. When polled on their top 3 hiring priorities from 15 specific categories, 56% cited software as number one, more than hardware, semiconductor and Information Technology (IT) skills – combined.

The IT component was the closest category after software, tallying a meager 20%. That shows enterprises are eager to get new apps and toolsets to market, with extra lift coming from the mobile space as iPads and smartphones continue to proliferate.

Digging deeper into the software category, four skills accounted for 40% of hiring priorities, with Java, User Interface / User Experience (UI/UX), Software Quality Assurance, and .NET skills topping all others. The UX needs aren’t surprising with the challenges of adoption in large enterprises, and as Door64 notes, neither is the Ruby on Rails results.

“Ruby is often used in the earliest stage build of technology companies, and startups were not included in the survey,” it said in a prepared statement.

Conversely, the data showed Java is still the front-runner in Austin’s enterprise market, as it garnered 16% of responses in the software category, good enough for 30% of total software needs. That seems to mesh with what’s happening on a larger scale. The bigger companies are tying together applications, building private and public clouds, and launching all sorts of mobile capabilities. Enterprise java is often the glue that unifies these disparate systems. And java demand likely won’t see a slow-down as business units continue push the consumerization of IT.

One other thing that jumped out was the SharePoint piece, Microsoft’s 800-pound gorilla for corporate collaboration. Door64 says only one or two companies even mentioned it. Some of that can be attributed to an organization’s size, but the cloud is also eating away at SharePoint. I’d guess companies are realizing the cloud model works pretty well for breaking off pieces of your collaboration needs, not to mention easing the the maintenance and integration often associated with SharePoint.

Two other skills, Database Architects (DBA), and PHP developers, also sparked little interest. It would be interesting to hear more details from the respondents on this one. With big data’s rise, I’d wager most good DBAs are transitioning to some of the open source data engines and honing in on the demand to make sense of unstructured data. Just a hunch.

Lastly, and highly welcomed, Door64 says it’s planning to formalize its findings and poll 100 or so local technology companies each quarter and publish those results to an Austin Index of sorts.

But wait, there’s more. They’re also applying the findings to the Austin Pain-point Job Fair coming up June 29 at the AT&T Conference Center at University of Texas. You might call it a data-driven job fair. How fitting. :)

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A Simple Message From Tim O’Reilly: Create More Value Than You Capture

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Image from Flickr, Via InUse Consulting

Value is a term that’s thrown around quite a bit these days. And when it lives in the context of the corporation, it tends to get scrutinized even more.

If you’re familiar with media CEO and web visionary Tim O’Reilly, you know he’s been pitching a simple message around value for some time: create more of it than you capture. During last month’s SXSWi session, “Create More Value Than You Capture,” MIT researcher Andrew McAfee and O’Reilly analyzed its role in the rise of sustainable business, outsourcing, and machine-driven automation.

“Consider Microsoft, whose vision of a computer on every desk and in every home changed the world of computing forever, and created a rich ecosystem for developers. But as Microsoft’s growth stalled, they gradually consumed more and more of the opportunity for themselves, and innovators moved elsewhere, to the Internet.”

While it’s easy to beat up on big companies, the idea is that an ecosystem is essentially a company’s lifeline. And Redmond, for better or worse, is a classic example because so much of its software business rides on the integration and development expertise of channel partners.

“If you have too small of a group capturing value then the whole ecosystem breaks down,” he told McAfee. Soon after, O’Reilly eased up on the Microsoft example, saying it had never been an evil empire. Almost on cue, the other favorite evil empire, Google, surfaced. O’Reilly urged business leaders to stay focused on big, hairy, audacious goals, and described how some of the greatest companies always have a higher sense of purpose.

“As Google is increasingly dominated by economic concerns, they will become less successful,” he said. “Our job is to work for all of us, not for this or that interest group.”

From there, the conversation turned to areas where technology-driven disruption is occurring, something McAfee researched and co-authored in his book with Erik Brynjolfsson, Race Against the Machine.

McAfee touched on the rise of automation and outsourcing, commenting that the gains from replacing people with machines and overseas labor is taking a toll on the economy.

“It seems the value is be going into the paychecks of CEOs, instead of back into society. More and more jobs are being taken over by machines,” said McAfee.

One of the scenarios mentioned was connecting Apple’s SIRI application to Moore’s Law. Both men agreed the result could be less human-powered customer service, especially in e-commerce environments.

The other business models mentioned revolved around peer-to-peer and collaborative consumption as the basis for unlocking value. Both strategies are built on the idea that there’s plenty of value within a community of users. Unlocking that value is where the magic happens, and what eventually leads to value creation and monetization, explained O’Reilly. He went on to reference Couchsurfing.com and AirBNB.com as examples.

Both panelists were asked to elaborate on other areas ripe for disruption.

Not surprisingly, manufacturing, government, and education were the top three picks from O’Reilly. And while manufacturing might be having the biggest renaissance, he seemed to think government could be the biggest opportunity of all. His comparison was one the tech-rich audience appreciated.

“Government should focus on being a platform provider instead of a solution provider,” he explained. As the session ended, a humble O’Reilly recapped some of his ideas, all grounded in his consistent message of working on stuff that matters.

“Find people as passionate as you are,” he said. “It’s important to create value for society and make the world a better place to fill in the needs.”

Austin Looks Well Positioned For Future Job Growth

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John Rogers > Visualist Images

With the economy in a lukewarm recovery, it appears companies are starting to ramp up hiring efforts. If we look at the broader recovery, it’s easy to get excited about Austin’s momentum. Take a look at the map from Atlantic Cities (below) showing the most recent data from the Bureau of Labor Statistics.

Austin ranked number one in job growth (2010-2011) out of 51 U.S. metros with populations of one million people or more. Number two, you ask? San Jose. So what’s behind the growth? And how is Austin positioned for the future? As far as growth, we can start by looking at the creative sector. A recent Statesman piece had details on its impact, highlighting how it pumped more than $4 billion into the local economy in 2010. According to data from Austin-based TXP Inc., that translated to almost 49,000 jobs in 2010 — a 25 percent increase over five years.

That alone makes for a healthy ecosystem, certainly one that can feed other models where knowledge and creativity intersect. Washington DC-based Brookings analyzed population growth and trends since the 2000s, and summarized what’s at stake: “metro areas with diversified, knowledge-based economies are likely to attract and retain population over the long run.”

That’s music to everybody’s ears, not just management consultants and filmmakers. And while the creative sector is a big driver, the diversity and flexibility of Austin’s workforce is perhaps more important. There’s a convergence happening in energy and technology, as well as gaming, enterprise software and media.

Cloud computing is changing software development, digital is spurring media, mobile and content businesses, and energy is being disrupted by alternative fuels and cleaner technology.

Part of what’s happening is a migration from one sector to another. It’s not necessarily a permanent shift, but one that has some advantages.

One example is the IT and semiconductor effect on things like the smartgrid and gaming. Companies are able to draw from a local workforce that has transferable and sought after skills. Large parts of both gaming and the smartgrid are heavily IT-driven, but also require a certain amount of design thinking. It’s that type of scenario that makes Austin attractive for large employers, like one of the biggest around.

Another way to see how Austin stacks up is to look at recent data from LinkedIn and the Council of Economic Advisors. They analyzed the fastest-growing and fastest-shrinking industries since 2007, (below) and the results are telling.

Green jobs continue to have a polarizing effect in political circles, but “Renewables & Environment” had the fastest growth, while newspapers were a strong last. If we map some of the data back to Austin’s creative sector for instance, you’ll see the Internet, online publishing and a few related verticals showed positive growth.

Perhaps the biggest black eye is the restaurant segment, though Austin’s arguably well insulated against too much of a restaurant dip with festivals and the like. And let’s not forget how some of the data correlates to some of Austin’s other anchor industries. Education, energy, and the utilities sector all showed growth nationally. If anything there’s a bit of cushion there as other, more volatile industries fluctuate over time.

Lastly, we can’t forget perceived intangibles. On a sunny and 65 degree day back in February my neighbor described it to me so eloquently. “Who needs fancy industry clusters when you’ve got this?” as both arms reached to the sky.

Indeed.


Big Data Has Entered The Building

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Unless you’ve been under a big rock, you’ve heard the chat about big data. It describes the tools and practices associated with unlocking the value in large amounts of structured and unstructured data. If that sounds confusing, just think of of how much information is being created daily. Now think of what it takes to find the nuggets that matter. Big data means big business.

According to analyst firm IDC, the big data market will grow from $3.2 billion in 2010 to $16.9 billion in 2015, growing 7 times faster than the information and communications technology (ICT) market.

To get a sense for how fast the space is moving, MIT researcher and author Andrew McAfee points to a project from Allstate that was submitted to Kaggle, who runs data prediction contests.

More than 200 people on 107 teams submitted 1290 entries to try and win the $10,000 prize.  What’s more striking is that the winning entry was 340% more accurate than Allstate’s existing methodology for predicting claims based on vehicle characteristics. Oh, and it took only 90 days. [chart below]

McAfee says that the prediction models, tools and techniques have changed so rapidly over the last decade, large companies are simply outgunned. Predictably, that’s forcing those same organizations to rethink their core competencies.

 

“If a bunch of kids and outsiders, who don’t know our customers, markets, and histories at all, can make much better predictions that we can in critically important areas, what does this imply? Do we need to completely rethink how we make our predictions? Do we need to outsource or crowdsource the making of predictions, even if we currently think of it as a ‘core competence?’

So what other areas are ripe for the reach of big data? Booming industries like oil and gas are one of the obvious segments. There’s tons of activity, an ecosystem of companies providing complementary services, and of course cash on hand to hire the data scientists and number crunchers.  Austin’s own Drilling Info is a case in point. It closed a big round of funding recently, one that shows when industry processes can be transformed, the money will likely follow.

“If you go back 10 years, oil and gas companies would hire consultants to go to repositories of information at the state level, and manually collect data, put it into a spreadsheet and analyze it,” says Deven Parekh, a managing director with Insight. “What we’re really doing now is making that data available through regular workflows on a daily basis.”

Insight’s Parekh also mentions the importance of domain expertise, something often overlooked as organizations dive deeper into analytics.

“In three or four years, the technology itself may become fairly standard, but the key will be in having the deep vertical knowledge.” Of course, as we saw with AllState, data-driven insights might actually alter what some companies see as their real expertise.

Lastly, McKinsey published a report last Fall on the big data movement. One of its notable excerpts was the image below, showing an industry-specific view of big data projects as well as which segments stand to gain the most.

Their report also identified one of the biggest challenges lurking  in large organizations — the dreaded silo.

“One big challenge is the fact that the mountains of data many companies are amassing often lurk in departmental “silos,” such as R&D, engineering, manufacturing, or service operations—impeding timely exploitation.”

But surely we can unlock all this data with all the technology we have, right? Sure we can. But just in case, let’s hear it for big data’s next hero, the system integrator.

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How Important Are Industry Clusters To Startups?

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If I suggested a way for your clean energy startup to set-up shop near a bunch of companies involved in things like renewable technology and the smartgrid, what would you say? If I sweetened the deal and told you the list of companies included a few of the Fortune 500 and a slew of established mid-market companies, you’d probably say, “sign me up!”
 
So goes part of the argument for industry clusters, a term that Harvard Professor Michael Porter explored in the late 1990’s. And with the economy in somewhat of a rebound, there’s more discussion around how industry clusters can spark regional growth. But there’s obviously more to it than filling up business parks with like-minded corporations in similar verticals. Or is there?
 
A recent Forbes piece highlighted an industry cluster in the Midwest, where a smaller startup was able to ramp up operations because of its alliance with a larger, more established company.
 

“Vadxx Energy has gained a lot of value from being part of an active cluster of advanced energy companies and organizations. In fact, one of the big reasons our partnership with Rockwell Automation occurred was because of Vadxx’s participation in Northeast Ohio’s advanced energy cluster. Joining forces with a credible, multinational company has helped us accelerate our commercialization activities, raise additional capital, and attract new customers.”

But proximity and a burgeoning market only guarantee so much. It starts with human capital, driven by the innovators and risk-takers that comprise much of the entrepreneurial community. That’s where I see the bridge to Austin’s community, as well as its strength.

Washington Post columnist Vivek Wadhwa amplified that point.

“A recent analysis of 1,604 companies in the five largest Norwegian cities underscores what’s missing from this prescription for a knowledge economy: people. The prerequisite for a regional innovation system is knowledgeable people who have the motivation and ability to start ventures. To succeed, these people need to be connected to one another by information-sharing networks. Basic infrastructure is always needed, but fancy science parks and big industry are just nice to have.”

Now granted, Norway (and other Scandinavian countries) isn’t the most culturally heterogeneous region by any stretch. But more importantly, its leaders are committed to maintaining global ties and welcoming new ideas and inputs — outside of their regional comfort zones. Without that, as the study concludes, regional and national clusters are mostly “irrelevant” to innovation.

Whatever the results, Austin is a classic fit for much of the positives associated with clusters. When you add in the emphasis on human capital, strong industry segments, and access to a top-tier university, it’s hard to see how doubling down on the idea doesn’t make sense.

NYT had a piece this morning on manufacturing, but I was more interested in this stat on where most of the R&D activity in the US takes place.

“American multinational companies that account for about 84 percent of all private-sector (non-bank) business R.&D. in the United States still place about 84 percent of their R.&D. activities in the United States, often in clusters around research universities..”

Again, manufacturing aside, that’s a big percentage of spending that hovers around clusters. And Austin’s familiar with the scenario, especially with Austin Technology Incubator’s alignment with the University of Texas and the fact that accelerators are moving closer to downtown hotbeds of startup activity. And that R&D spending? It’s companies like Dell, Facebook, Samsung and others spending those dollars.

So whether or not you buy into the cluster concept, here’s an excerpt from a recent ITIF report on cities and innovation I’ll leave you with.

“One reason why technology industries drive income growth is that average wages in high-tech clusters are $63,970 versus $43,180 in non-high tech traded clusters. One key factor that appears to drive higher incomes in a region is a higher share of employment in knowledge-based industries.States with higher concentrations of knowledge-based industries, including professional services and high-tech manufacturing, have higher incomes.”

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Latest ATI Graduates Show Incubator Has A Pulse On What’s Hot

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ati-logoIncubators are usually pretty adept at gauging which companies have upside. And while business moves fast, the coaching, mentoring and preparation that aids young startups has to  move faster. That’s where the network comes into play for Austin Technology Incubator (ATI).

“We want to bring the genetics of ATI into the fold,” said ATI Director Isaac Barchas. “It’s really about activating the alumni network.” The network Barchas refers to spans more than 200 companies, $1 billion in raised capital, and almost 25 years of mentoring startups. It’s those kind of credentials that helped ATI graduate 21 more companies at last week’s ceremony on the UT campus.

The companies represented a diverse mix of businesses, from IT-driven technology and mobile infrastructure, to clean energy and biosciences. ATI’s focus on its alumni comes at a time when incubators and venture capital firms are being disrupted themselves. Lean methodologies and data-driven investing are being used by investors and incubators alike to shorten runways and surface new opportunities. Essentially, there’s more pressure to take companies further down the growth cycle.

A recent HBR piece explains part of the trend:

“..accelerators are capitalizing on the decreasing costs of starting a business, new thinking on how to run startups, and the increasing importance of mentorship to take companies further down the path towards success — even with smaller check sizes. To disrupt the larger ecosystem, accelerators will need to evolve their models to push companies through later stages of the business lifecycle. Accelerators might be able to accomplish this task by raising internal funds (which can be tricky) or establishing non-traditional funding partnerships.”

To me, that passage screams two things: network and experience. ATI’s affiliation with the University of Texas provides a unique on-ramp for young talent and innovation. And the strength of the local economy, propelled by the Texas Triangle, also provides some lift as more companies look to transplant or expand in a tech and creative hub like Central Texas.

So with that teed up, how do the companies from ATI’s graduating class compare to what’s being funding in the venture capital markets? Pretty well, according to PWC’s MoneyTree report for Q3. Looking at the sectors represented by ATI’s startups, we see information technology, wireless, clean energy, and biosciences technology. You could easily fit all 21 companies in the top funded industry segments. That tells us a few things.

Diversification is actually better than I would have guessed. The pipeline isn’t just dotcoms and consumer web companies, showing Austin’s tech cluster is evolving.

Deals_By_Industry_MoneyTree

It’s similar to what’s happening in some Rustbelt cities. Ann Arbor might be the best example, with its proximity to a large University and Michigan’s ties to a broader legacy industry: automotive. Because of its own creative class (access to higher education) and manufacturing roots, it’s now becoming a hub for innovative battery technology.

In Austin’s case, ATI is proving the model for that type of progression. Of its 21 companies, almost a third of them represented clean energy or clean technology, with all of them certainly influenced by Austin’s strong lineage in semiconductors and energy.

Laura Kilcrease at Triton Ventures says the groundwork was established in the early part of the last decade for cleantech and biomass, and both are ripe for innovation and growth.

“It’s (Austin) a natural environment for cleantech, said Kilcrease. “The infrastructure for it has been growing since the late 80’s, and now we’re starting to see a real nucleus of consistent activity.”

The other notable piece from PWC’s data is the regional breakdown. (below) While the West was the best in Q3, two deals in cleantech and biotech moved Texas into the third spot.


“Texas investment jumped 113 percent in the third quarter, propelled by two large deals in the Biotechnology and Clean Technology spaces.”

 

It’s that kind of momentum that puts ATI and its future crop of startups in a very favorable position.

“I’ve got the best job in Austin,” said Barchas.

Deals_By_Region_MoneyTree

 

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Former Edgar Online Founders Ready To Disrupt Again With 9WSearch

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If you wanted to start a company based on the financial markets, Austin might not be your first choice. Technically, for 9WSearch CEO Susan Strausberg, it wasn’t. “My husband and I picked Austin to start a green-oriented business, but it took a little longer than expected,” said Strausberg.  ”So we went back to our roots and started 9WSearch.”

Those roots run the deepest in financial services, and with Strausberg’s track record in the industry, it probably doesn’t matter much where she sets up shop.

“We’re creating a new paradigm for the presentation and consumption of financial information,” said Strausberg. In the mid 1990′s, she had similar aspirations as the co-founder of Edgar Online, whose model accelerated as the SEC mandated that information had to move online. This time, it’s another ruling that’s proving to be a catalyst.

In 2009, the SEC ruled that companies would have to provide operating data in an easy to use format, opting to push forward with the eXtensible Business Reporting Language, or XBRL. That opened the floodgates for 9WSearch and others. Now companies had a standard to work with, making the development and delivery of specific apps and services much easier. Strausberg says the XBRL mandate, coupled with the fact that between eighty and ninety per cent of companies have a basic commercial or industrial classification, 9WSearch can create a curated view of company data and financials.

“We can create a custom template that gives our clients a tailored view of a company’s core information,” explained Strausberg. Her team has already accomplished much of the heavy lifting, so templatizing a business sector or company profile is a snap says Strausberg. They’ve essentially cleaned up some of the finance-speak and distilled the data down to simple and understandable terms, something 9W likes to describe as “actionable intelligence.”

Co-founder and CIO, Marc Strausberg, says there are more than 18000 tags that were approved under the XBRL mandate. So while the delivery is standardized, there’s still a big challenge fitting all the terminology into a standard taxonomy.

“The reality is many of the descriptions don’t add a lot of value, and what 9W does is surface the items that have value to an end user,” said Mr.Strausberg. He gave the example of an energy company that might be reporting on the success of its exploration efforts. “If we have 200 oil and gas companies and can whittle things down to “dry holes,” we’re saving people a significant amount of time,” he added.

Its filtering and curation expertise is really where the company is banking on separation from its competitors. Although finance is one of the largest silos on the web, mobile access to this information is severely lacking. Both founders also say they plan to involve their early freemium customers in the process of determining what the marketplace will want. In addition, 9W currently has basic social media capabilities, with the ability to share across most social networks.

On the customer front, 9W says it doesn’t have one ideal segment, but there are some obvious ones. Knowledge workers inside corporations should be easy pickings as 9W launches, especially as the company adds vertical product sectors.  It also wouldn’t be a stretch to see LinkedIn, Salesforce or other B2B software providers take a serious look at its portfolio. Salespeople, HR managers and certainly the C-Suite are used to buying and integrating content for the business. The difference in 2012 is the modularity of those content assets. You don’t need to buy the whole package from a media company, just the niche you need.

“There’s a gigantic shift in the way people will use information and most of us aren’t educated in the fine points of finance,” said Strausberg.

Neither are most businesses.

Will Software Eat Nonprofits Too?

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When you hear someone talk about disruption in technology, it almost sounds passé. But if you ever want a simple cheat sheet to impress your friends, read this piece by Netscape Founder and Venture Capitalist Marc Andreessen.

It’s basically a series of case studies in disruption, each showing how software-driven services are invading companies large and small.

Recently, I caught up with two tech execs that want to accelerate the way nonprofits are being eaten by software.

lizgreen“There’s all these tools out there, whether they’re free or in-house, and clients are having a hard time pulling anything cohesive together,” said Liz Moise, Managing Partner at Affinity IG, an Austin-based interactive agency. And Moise should know. She’s held a number of positions in the non-profit sector, most recently as head of marketing at Goodwill Industries here in Austin.

If what Moise describes sounds familiar, it’s by design. Affinity IG is taking its years of experience in corporate and startup environments and applying that to advocacy and nonprofit groups. And even though her experience played a big part in Affinity IG’s roadmap, it was the agency’s Founder, Mark Courtney, that refocused its efforts about a year ago.

“We wanted to attack things a little bit differently”, explained Courtney. “We knew we had the DNA of a social enterprise, and with Liz coming on board, working with nonprofit and advocacy organizations just made sense,” said Courtney.

mark_courtney Courtney started the company almost three years ago, mostly helping organizations build online communities. With more than a decade of managing large-scale websites before that, he realized Affinity’s new direction was the perfect fit for Moise’s marketing and branding expertise. The culmination of that can be seen in a recent white paper, “Think Like A Startup, Execute Like a Social Enterprise.” It targets nonprofit marketing and development teams and does a good job blending digital strategy and old-fashioned execution.

“What we wanted to do was provide the strategy and creative on a technical level, without sacrificing our domain expertise in the advocacy area,” Moise said.

Affinity’s heavy digital focus is warranted. Some projections peg the online giving market as high as $30 billion in the United States, according to a 2010 report from Giving USA Foundation. But having solid digital chops is only part of the battle when trying to raise money and recruit new members. You better know the ins-and-outs of the nonprofit world.

Courtney says one of Affinity’s advantages is its growing roster of alliance partners.

“We have some great alliances already”,said Courtney. “Our content and collaboration partners love our model because we’re so agnostic, we’re focused on the business first,” added Courtney.

As basic as it sounds, that’s a hard thing for some of Affinity’s clients to digest with all the tools and technologies available. “For us it’s easy, we put Advocacy at the forefront, then refine it with the right tools and support,” added Moise.

Apparently that strategy is attracting attention from some big names.

fox_trail_finder
In early 2012, Affinity is launching an International version of Fox Trial Finder for the Michael J Fox Foundation, a leader in providing support for Parkinson’s Disease (PD). Affinity says the platform will match clinical trials around the world with PD patients, caregivers and healthy volunteers touched by the disease.

Moise says the development work included matching algorithms and custom analytics, a welcome boost for the foundation as it gears up for Parkinson’s Awareness month in April.

Affinity’s work with the Fox Foundation also shows how client expectations are changing in the nonprofit space. Service providers and agencies aren’t just user interface (UI) and branding practitioners, they’re system integrators and business strategists.

In the past, organizations would look to incumbent software providers for solutions that worked on top of their platforms, often succumbing to the proprietary nature of their systems. These days, in the spirit of open data, those same applications are giving way to more open and expandable systems. Yes, the nonprofit sector is finally experiencing the same consumerization that’s been gripping corporate enterprises for several years.

That should signal opportunity for Affinity IG and others. Not only are there plenty of silos in advocacy organizations, (think integration, collaboration) but it also has its share of clunky, monolithic software vendors.

Addressing those challenges and already having some of the right pieces in place, should make it an interesting year for the agency. Budgets aren’t back to pre-crash levels, but there’s plenty of demand for firms providing turnkey services to an underserved market.

Let’s hope Affinity IG is the harbinger for not only the rise of the social enterprise, but its staying power.

AffinityIG Whitepaper October 2011

“Another Website Isn’t Going To Solve The World’s Problems”

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That’s not a catchy headline. That’s what Ethernet inventor and current UT innovation czar Bob Metcalfe told me at a recent Dell Entrepreneur event. And if you caught Metcalfe’s keynote at this year’s Clean Energy Venture Summit, you know he’d likely tell you to invest in a handful companies in the so-called “enertech” sector.

bob_metcalfe_caricature “I’m waiting for all those tech and social networking investors and VCs to come over to energy,” he said. Jokingly taking it a step further he added, “If I were a clean energy or green tech company, I’d add ‘social’ in front of my product or service.”While it’s hard to argue that energy is the next frontier, part of what Mr. Metcalfe touches on is something that should be a broader shift in the startup community: looking beyond the sizzle and focusing on the non-sexy stuff.

In a recent Washington Post column, Vivek Wadhwa writes about what he calls innovation black holes, describing antiquated industries and their inability to quickly address opportunities. Wadwha says entrepreneurs should be looking in the “nooks and crannies” to see opportunities, dismissing most current industry efforts at disruption.

“Outside of computers, software and a select group of sexy technologies, innovation is almost entirely absent.”

 

yan_engines_site At September’s Clean Energy Venture Summit in Austin, attendees got a glimpse of several companies attacking the seemingly ordinary. Yan Engines is a prime example. Their focus is to reconfigure five parts in existing 4-stroke engines to achieve more torque and provide up to 80% more fuel efficiency. It’s one of those things where you think, surely there can’t be that much innovation left in engine design after decades of development, right? Wrong. Yan is nearing its prototyping stage in Q4’ 2011 and has its sights set on some pilot projects with the U.S. Military.

Vela_gear_systemsNoel Davis, CEO of Vela Gear Systems, isn’t bashful about what his company brings to the table. “We’re like a Chinese company in North America,” Davis told me, referring to the way its customers outsource the design and development of large-scale industrial gearboxes to VGS. In addition to becoming a one-stop shop, the company is locating its facilities close to manufacturing hubs and even some larger technical and vocational centers.

Davis says that’s allowed VGS to improve outsourcing efficiency, fill the staffing pipeline, and ease logistical constraints.
Those pieces put together look impressive and well-timed, especially when you account for a changing workforce and growth in other sectors.

Joel Kotkin explains in a recent piece from NewGeography.

“Driving the skilled-labor shortage is a remarkable resurgence in American manufacturing. Since 2009, the number of job openings in manufacturing has been rising, with average annual earnings of $73,000, well above the average earnings in education, health services, and many other fields, according to Bureau of Labor Statistics data.”

Now this isn’t a pep rally for manufacturing, though. If anything, it’s a wake-up call for the opportunities that lie outside the world of shiny new tech apps and services.
The tech isn’t going anywhere, it’s permeating every industry. What’s different is the breadth of penetration in different industries.That should be an impetus to startups everywhere, reminding them that high-growth business aren’t only born in the cloud or delve out digital deals on connected smartphones. And by the way, all those software engineers might be a little easier to hire over the next half-decade. From that same Kotkin column, he cites an eye-opening prediction.

“A recent study by the economic forecasting firm EMSI found that fewer computer programmers have jobs now than in 2008. Through 2016, EMSI estimates, the number of new graduates in the information field will be three times the number of job openings.”

software_eating_the_world But don’t worry, even though entrepreneurs everywhere (even the Valley) are removing the tech goggles, your software skills are still marketable. They just might be put to use building something outside of your tech comfort zone.

A recent NYT piece showed a diverse set of startups attacking all sorts of vertical applications outside of local, social and mobile. Really.

“The trend reflects the steady march of that most protean of technologies — computing — as it makes further inroads into every scientific discipline and industry. Clean technology, bioengineering, medical diagnostics, preventive health care, transportation and even agriculture are part of the mix these days for the Valley’s technologists and entrepreneurs.”

So whether or not you think we’ve overdosed on the coolness factor, what’s clear is that it’s never been easier to provision tech horsepower to get a startup off the ground. What’s more challenging is coming up with bigger ideas and leaving the herd behind. Blazing a trail has always been a lonely gig.

But alas, Mr. Whadwha summed up it up best.

“Eliminating these innovation black holes could do more to improve our lives and the economic future of our country than the latest Web-based social-networking applications.”