Monthly Archives: January 2006

Davos — or Kansas City?

This is quite a week for travel. The world’s economic leaders are at Davos, the cinemaphiles are in Park City, the golfers are in Phoenix, and I am in Kansas City. You may think I’m lost, or at least misplaced, but I’m where I belong — in discussions of entrepreneurship.

The world’s leaders may be talking about what drives the global economy, but so am I.

After a long wait, the Kauffman Foundation has released the materials for its program fostering technology entrepreneurship, Fasttrac Tech Venture. True to form, Stealthmode started offering this program while it was still in pilot phase, with photocopied materials and rudimentary preparation. Now I am with a group of other technology supporters in a group to share best practices and get trained on how best to deliver these materials and get the most value out of the national efforts of the Kauffman Foundation. I can’t wait to go home and share what I’ve learned with the beta testers in our pilot program.

The Foundation has totally re-focused on high growth businesses, and is trying to foster them at every level. For kids, they have developed (with Disney) a game called Hot Shot Business ( that is aimed at introducing young teens to the joys of the business world. If you can read, you can play this on line, starting a pet spa or a landscaping business.

For those of us who lack an inner child to play the game with, Kauffman has launched a new site called EVenturing, collecting resources for entrepreneurs. And then there’s the Angel Capital Education Foundation ( to educate potential angel investors.

But the jewel in the crown is really Fasttrac Tech Venture, the program that prepares would-be technology entrepreneurs for the realities of business. For two days, we’ve been sitting around discussing how best to deliver to engineers and life science researchers the realities of starting a company: the chance that you might part company with your co-founder buddies; the day you wake up and find out your independent contractor owns your company’s intellectual property; the ramifications of taking outside money from people whose motives you don’t understand.

The coolest thing about the new materials is probably the toolkits – everything from dilution calculators to 6-year financial projections, employment agreements, and free access to competitive data and market research. These documents have been prepared by experts and placed online where participants in the programs can see and use them during the course of the program.

Now that this program is generally available, the real test will come: to what extent can the process for starting and growing tech ventures be standardized? If Kauffman’s programs take the mystery out of running a business, will they free innovators to concentrate on their creations or solutions? Will the Foundation’s program for tech companies be as successful as its previous two programs in helping businesses grow?

On a grander scale, can this program foster American competitiveness, providing a support system for tech entrepreneurs that replaces the government support of countries like India and China? Will it raise the success rate of tech companies?

Not without the full spectrum of other initiatives — especially those aimed at instilling the spirit of entrepreneurship in youth and the ones aimed at capital formation. The Foundation has figured out that all these pieces work together, creating an environment that both prepares us for the future and takes our country back to its roots. Face facts: when the first colonists came to America, there were no jobs waiting for them. What powered our economy yesterday will have to power it again tomorrow.

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This is Paul, my Ugandan friend

This is Paul, my Ugandan friend. We met when I was in Africa, and have been writing to each other ever since. He is in his second year of higher education, and studying to go to work as a social worker or at an NGO.

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I have been an online

I have been an online trader of securities since I first found out that I could be � on AOL in the early to mid �90s. Back in the day, AOL had a service of its own; or at least a service it branded as its own. Perhaps it was called PCDirect; I�ve forgotten. All too soon, that service got sold to a securities firm, and that firm in turn got sold. Over the course of the ten years I had the account, started with my AOL screen name, about five different companies have owned this account.

Now it is owned by ETrade. And that�s where the nightmare starts. Some time back, Harris Direct (my account�s most recent domicile) was bought by ETrade, along with the usual assurances that nothing would change. Same great service, only improved. Indeed, nothing did change, except that I could withdraw money by having it transferred directly to my bank account. That constituted an improvement.

One day last week, because the end of the year had past, I logged into my account to see what my tax implications would be. That�s not interesting enough to report.

The very next day, I was reading something about energy EFTs and decided I wanted to buy one. I clicked on my Harrisdirect bookmark and was redirected automatically to the ETrade site; the Harrisdirect site had simply vanished overnight. It took me a moment to find the place to login. Then it took me a couple of seconds to find out that my login no longer worked.

I scrolled down to read the instructions for Harris customers, and clicked on the �help.� This word is in quotation marks for the sake of irony. The �help� site told me a �small number� of Harris customers had been given new login information. These customers would find the information on the first page of their welcome packets.

I never recall receiving a welcome packet, probably because I moved in November and either the post office didn�t forward it, or I didn�t read it when it arrived, thinking it was just another statement. I no longer keep those when they arrive in the mail, because I know I can download them from the web site. So I just shred them unopened. The more fool me.

I clicked on �contact us.� As usual in these cases, the contact page has an email link, but when I clicked on the link I was informed that I would have to log in first before I could email ETrade. Once again, I was reminded that my log in information was in the welcome packet.

Although I hate doing this �it�s a recipe for depleted cell phone batteries, extra minutes, and frustration �I called the toll-free customer service number. I have grown to know the lady who answers these toll-free numbers quite well; she answers at a surprising array of numbers I dial. She�s the IVR lady. She usually tells me to say or press something, and often tells me she couldn�t understand what I just said and asks me to repeat it.

This time she asked for my account number, and then told me I couldn�t use the automated systems because I had to log in to the web site at least once before I was eligible to do so. The IVR lady promised to connect me to a representative.

Promises, promises. Now I know how men feel about women. The IVR woman was lying. I held for over thirty minutes, listening again and again to how important my call was to ETrade, before I had to hang up and go into a meeting. Afterwards, analyzing what my mistake had been, I realized that I had called on the day after the changeover, and that they were probably deluged by the �small number� of Harrisdirect customers whose log-ins had changed.

I determined to change my strategy and bide my time.

Four days later, I woke up in the middle of the night. It was about 3 AM the morning of Martin Luther King Day. The markets would be closed. Even on the East coast it was only 6 AM. I thought I knew my moment.

Once again, I dialed the �customer service� number for �help.� The friendly IVR lady asked me for my account number, assured me that my call was important, reminded me that I needed to log in on the site at least once before I was eligible to use the automated phone services, and cheerfully placed me on hold.

I reached for the remote and turned on the TV, a rerun of Larry King interviewing James Frey.

When I awoke, with the Bluetooth headset still in my ear on the pillow, it was daylight, and the phone battery was dead. The mendacious IVR lady had deceived me again. I�ve decided to resort to that time-honored strategy, snail mail, to close my account. If I can find a two cent stamp.`

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Every state is trying to

Every state is trying to attract biotech companies. In fact, even China and India are chasing them. Why? At present, the industry in aggregate is not profitable, and is not likely to be so until 2010, partly because of continued regulatory hurdles. According to a new report by Ernest and Young it�s not even a very big industry, although it is growing steadily.

Although it�s still relatively small, on the eve of its 30th birthday, biotech in the U.S. is very strong. The U.S. is the dominant leader, but it�s being chased by Asia. Last year, the industry reached $46 billion in revenue, fueled by product sales that have in turn been accelerated by product approvals.

But unlike tech companies, very few biotech public offerings have raised more than $100,000,000. Of the three companies that raised over $100,000,000, only one has continued to price above its IPO offering price and 80% of deals have to reduce their pricing ranges, although the deals are getting done. Classically, the IPO has been the exit activity for a biotech company, but in the last several years there has been a trend toward mergers. The mergers have reduced the distinction between big biotech and big pharma � a distinction I�m not sure was ever real.

Ernst and Young�s report only measures public companies; it says there are 330 public Biotech companies in US, as opposed to 131 in Asia-Pacific and 98 in Europe. Last year, these companies averaged a 5% increase in employees and a 17% revenue growth. But the public companies are the tip of the iceberg; there are countless early-state private companies, funded by grants, strategic alliances, partnerships and VCs.

The good news is that biotech�s revenue growth is beginning to come from product sales, rather than simply from grants and venture capital. This change indicates the maturing of the industry; we are starting to see products that have been approved for a longer period of time and are beginning to be used widely by clinicians. We also see an increase in products that are in clinical trials. There are 365 products from biotech companies now in Phase III clinical trials– the last phase before we Baby Boomers get to take the drug.

For a long time, biotech was seen as the research arm of the pharmaceutical industry.Biotech spends 150% more on R&D than big pharma. Last year, there was a 12% increase in R&D spending in the biotech environment. And it has been getting a better return on its R& D dollars than big pharma�drug approvals for biotech firms are far outpacing those of big pharma. This situation seems to work well for both industries.

Biotech is a pretty efficient machine for getting products to market. And it�s very hard to kill a biotech company. They seem to restructure and downsize until they make it to the next round.

Once these companies get a product to market, they use big pharma�s salespeople through their collaborations. Biotech has the ability to drive the dollars where they will do the most good in the future � in the science.

Last year, $21.2b in venture capital was invested, which was a 15% increase over the previous year. Why? Because the market window for biotech IPOs opened in late 2003 and stayed open in 2004 to get a number of deals done. As you know, VCs don�t get in unless they can figure out in advance how they�re going to get out (with huge returns).

So even if the industry isn�t profitable yet, it�s coming along, and no one wants to be left waiting when the train leaves the station.

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Miss Lonelyhearts

Rarely do I make New Year’s Resolutions: I know myself too well to expect myself to keep them, and I don’t like to start things and not finish them. If I don’t start, I avoid that sense of nagging failure most people have. It’s a clever strategy to keep my self-esteem at its best.

But this year I made one. I have resolved to share my life with someone (besides my business partner and my dogs) this year. This was not an easy resolution to make, since I’ve been a widow for more than eight years, and I’ve got a pretty complex life that takes place not only in two states (California and Arizona) but on the many continents to which I travel and on which I have friends, concerns, and interests.

However, I’ve read an awful lot of literature about how people who are in intimate relationships live longer, stay younger, avoid Alzheimer’s disease and depression, and live generally happier lives. These studies, of course, exclude those women of my generation who married wealthy boys because their parents told them to, haven’t worked in their whole lives, and are sitting around waiting for the despicable old man to die and leave them control over the money so they can have a life.

I’ve only known a few of those, but I remember clearly the wife of a client of mine who, at 74 when she was newly widowed by her husband of over 50 years, immediately went out and got herself a life-changing face lift.

Okay, enough about that. I’ve already had a life of my own, and I loved my husband dearly. Nevertheless, he has escaped to Heaven, and I am quite healthy. There’s little chance I’ll be joining him soon, so why wait around? Make the time productive, I always say.

Thus, this morning I filled out the questionnaire for eHarmony after watching about two minutes of an infomercial starring its founder.

Now this is not the first time I tried online dating. A few years after Gerry died, I joined and met a succession of truckdrivers who had never graduated from high school (no offense, but no common interests either), retired insurance salesmen, and people of indeterminate occupation who thought they had correctly surmised that I was wealthy from my profile. I gave up in disgust.

More recently, I tried Now I’m not in touch with my inner Jew, but I reasoned that Jewish men made good husbands and were generally intelligent, so would probably appreciate me.

On jDate I met one man who rejected me because I arrived in my own car to our dinner dates (he thought that meant I wasn�t �serious� about him and the relationship wasn�t �progressing,� ) and two who were terrified of me after simply sitting down to coffee.

But the biggest thing I learned from the jDate experience was that you can never cancel your account. In the time since my jDate disasters, I closed the credit card account to which jDate billed its charges, lost another card, and formally unsubscribed several times. And still I receive an email a month with the subject line �your matches from JDate.� If I looked at these matches, I know I would find men whom I might want to meet, but who probably do not want to meet me.

eHarmony�s biggest differentiator is its endless personality profile � a questionnaire that, even when you answer it quickly, takes an hour to finish. It reminded me of the Minnesota Multiphasic Personality Test: it has hundreds of questions that repeat themselves in different words, purportedly establish an accurate profile of my personality in order to make the best matches for me. I felt like the person who wrote the questionnaire was trying to trick me into saying something that would give me away.

But I slogged on through, forcing myself to finish so I could meet Prince Charming and get on with my life.

Imagine my surprise when I finally finished and received the following message:

�eHarmony is based upon a complex matching system developed through extensive testing of married individuals. One of the requirements for it to work successfully is for participants to fall into a rigorously defined “profile.”

Unfortunately, you do not fit within this profile. eHarmony’s matching system is not suitable for about 20% of potential participants, so 1 in 5 people simply will not benefit from the matching part of the eHarmony site.

This means that our matching model could not accurately predict with whom you would be best matched. We’d rather provide no matches than bad matches, because bad matches lead to bad marriages.

We hope that you understand our regret in our inability to provide our matching service for you at this time.�

Imagine my feelings of rejection! Even software doesn�t love me�

And then, the greatest indignity of all � my personality profile:
�You tend to be a traditionalist, and will enjoy the social environment best if it is stable and predictable. You dislike sudden decisions about where to go or what to do, preferring to think things out first.�

This about a person who had two children out of wedlock, lived in a geodesic dome, was more than once married, moved three times in two years, and went to Africa and China during the same year, neither on business.

Better outsource the next version of that eHarmony software to India.

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