Monthly Archives: April 2007

Founders at Work

I’m reading a book called “Founders at Work”, by Jessica Livingston, one of the founders of YCombinator. I bet she started it as a research project to figure out how best to incubate companies. It’s a series of interviews with founders of information technology companies, mostly in software, mostly in Silicon Valley. But very few of them, if any, came out of “incubators.” In fact, most of them started their companies while working at full-time jobs elsewhere, or in the few months after leaving their full-time jobs and before getting funded.

I’ve been reminded of a couple of things by reading this book, which might better be called “adventures in software engineering.”

First of all, there’s no such thing as a one-product company. Many of the recent buzzy names in the industry, familiar ones like Bloglines, Flickr, and Blogger, were ideas that were developed into products, acquired users, and got sold. They weren’t even businesses, much less companies. They got sold to bigger companies that actually WERE companies, and needed new product lines. Some of them sold the company before they sold even a single product.

Second, it’s mind boggling how much software today is free or remarkably inexpensive. Quickbooks, FlickrPro, TypePad Pro – these are the more expensive forms of free or bundled software. Most Web 2.0 tools, and many older tools are free. Very few companies actually make a business of selling software. Microsoft is one, Adobe another. Intuit would be a third. The others exist on advertising, or on licensing deals, or on other less obvious business models. So software’s a difficult product to build into a company, from scratch.

Third, most of the companies in this book were incubated by the surrounding environment, not in a physical space. Because they started in places with good lawyers, good mentors, good PR people, and good programmers, they were able to operate on the cheap for a long time, receiving sustenance from the community. Incubators are necessary only for companies that are doing research.

These companies were not doing research. They had already found both the problem and the solution. And they were not building fabs, like Intel. They were not doing research, like Genentech. They were not searching for copper, coal or gold.

The Silicon Valley software startup environment over the past thirty years is unique in history. Because it’s no longer a manufacturing economy, it doesn’t need big infrastructure, or even big teams. “Companies” of two or three people are sold for millions.

Think of the differences between a software company and, say, a mining company or an electric utility. Any company in the manufacturing sector, the natural resources sector, or the agricultural sector cannot be started in a garage by people in their early 20’s with ideas. A hospital chain cannot be started by two guys in a garage with an idea.

And yet the model for starting tech companies has become the accepted model for business startups. Two guys in a garage has become the paradigm for success.

We are facing an interesting future. In most Western nations, an aging population demands health care. In most developing nations, a young population demands technology and resources. Layer on top of these demands the pressure to save the planet from destruction by both sides of this equation.

We might be past the era of the simple software startup. The next generation of venture capital may be given to companies with far greater infrastructure demands and more basic problems to solve: clean air, clean water, affordable housing. Ironically, although the problems are more basic, the tools to solve them will be far more sophisticated. Creating software will increasingly look like a piece of cake.

Will Silicon Valley be able to retain its relevance in the environment I’m predicting? Not without getting on airplanes and going to where the deals are happening. And not without radically re-thinking the concept of two guys in a garage.

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The Obsolete Interview

Jeff Jarvis’ great piece on the future of the interview deserves to be discussed by every PR person on earth. I’m a happy girl this morning.


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What’s Poisoning Your Food?

One of the cool things about working with entrepreneurs is learning from them. Yesterday at lunch with Michelle Hanna, CEO of Ribomed I learned that my food is no longer safe, and that Michelle is going to do something about it if she can get the funding.

Funding is always a problem for young companies, but when you are in biotech in Arizona, it’s especially difficult. Because she’s a superstar researcher, Michelle Hanna has received millions in government grants, but they have had their downside. Every time the government initiatives shift, the money shifts with them, and the grants go away. It makes it almost impossible to develop a product roadmap.

However, Ribomed has gotten around this difficulty by developing a platform, rather than a single product. Michelle founded Ribomed because she was interested in developing molecular tests for early cancer detection. When she started talking about this, no one else thought about it. Now, it’s the hottest area for cancer research.

For the past seven years, she has been successfully developing a testing platform that has turned out also to be useful for many other kinds of tests, because unlike most of the molecular tests in use now, it is resistant to both blood and dirt

In 2001, after 9/11, the federal government — which has funded most of her research and development up to now –asked her to take a detour from cancer detection into bioterrorism agent detection. Sure enough, her platform worked in this arena as well. But now, the government has decided that a bioterrorist event is unlikely, and has shut down the program that gave her the most funding.

At the same time, Michelle has been growing more interested in what seems to have happened to our food supply over the past six months. She listed some of the more important incidents to me: the current beef recall, the poisoned pet food, the FDA warning about olives, and the outbreak of Norovirus on cruise ships.

Wouldn’t it be nice if you knew the food on your cruise ship had been tested before you boarded the ship? Why pay good money to be poisoned in a Carribbean port? Unfortunately, many passengers do.

In 2007 alone, there have been salmonella outbreaks in cheese, peanut butter, equipment, and milk. If you go back a couple of years, botulism has been found in carrot juice, E.coli has been found in spinach and lettuce, and salmonella has been found again in tomatoes, orange juice, tomatoes, almonds and alfalfa sprouts. In 2002, while Michelle Hanna was combatting potential bioterrorism agents, thirteen people died from Listeria contamination in chicken.

Her research has led her to the conclusion that while certain foods like pork and beef may already be inspected and regulated, and are under scrutiny, produce has been one of the biggest sources of food-borne illness, and continues to go unregulated. And even foods that are tested can yield only certain contaminents detectable with existing tests.

Dr Hanna told me there are easy tests for bacteria like salmonella, which is the largest cause of disease found in poultry or dairy, because you can grow bacteria in a Petri dish. (remember your high school science?) But it’s not so easy to test for a virus, like Norovirus, which is a big source of contamination in produce. For a virus, you need a molecular test. And if you are going to test beef, poultry, or produce, you need a test that’s resistant to blood and dirt.

Voila! Such a test platform already exists, and all Michelle needs to do is manufacture it. I know what you’re going to tell me. Women belong in the kitchen. Only when they can save our food supply 🙂

So Michelle is on the way to altering her product roadmap, which was going to bring her back to cancer detection, in order to fill what she sees as an unmet “market need” — developing the tests that, if used, can make our food supply safe once again.

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Take out your appendix through your mouth

Doctors in New York have removed a woman’s gall bladder through her vagina, according to an article in the NY Times. This after a team of doctors in India removed an appendix through the mouth. These developments have spawned a new professional association, The Natural Orifices Surgical Consortium for Assessment and Research (

This is hilarious and gross at the same time it is useful and interesting. Not that different from doing a colonoscopy by having a patient swallow and emit a nanocamera. Welcome to the future.


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This is my friend Lon

This is my friend Lon Safko being interviewed by my friend Robert Scoble.

Lon is also a great speaker on how to make your company innovative. Get in touch with him here.

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What does VTech tell us?

I hate to think that the masses have begun to rise up against the rich, but it looks awfully like that lately. From the killings in Iraq to the American home-grown terrorists, we have seen how the young Muslims hate our culture (even when they consume it). In prisons, gangs attack other gangs. Most of them are young, too. And looking for community anywhere, even in a gang.

At Virginia Tech yesterday, a South Korean student shot 33 people because he felt left out of our culture.

We have spent the past fifty years in America developing a culture of exclusion and exclusivity. From college fraternities to anti-immigrant uprisings, our first impulse has become to exclude, rather than to include. The murderer at VTECH, a legal immigrant, felt excluded, and was angry and depressed by rich people and charlatans on campus. Sure, he was mentally ill, but that doesn’t excuse us. We don’t come together as a community until AFTER the tragedy.

Having been a foster parent, I see how few people are willing to take needy kids into their homes. And when they reach age 18, most foster parents disgorge them back into the streets. I know this because I am helping my three former foster children struggle through their 20’s. They call me in tears when their cars break down, and my job is just to be there and calm them down, to tell them they always have someone to call.

Young people have a tough time dealing with the world alone. They need much stronger communities, communities based on inclusion rather than exclusion.

Time to think about the people around you, and check whether they are feeling alone. It’s a bigger deal than what fraternity you are in, what country club, or what company you work for.


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Social Media’s Bright Future

The 3000 people who have registered for O’Reilly’s Web2.0 Expo 2007 are a sign that social media is more than just a “narcissystem,” as Chris Pirillo calls it. The precious few hours I spent there have convinced me that this is a trend that will reach the mainstream, even if the jury’s out on how and when.

Although very few people live as transparently and communally as with his 24/7 head cam, or Robert Scoble streaming live from his car on a Sunday drive to Merced, it’s clear to me that these early pioneers are showing us how we can effectively create virtual communities and develop relationships without actually meeting face to face. Fifty people watched Scoble drive to Merced, amusing themselves in a chat room the entire time.

And anything that can develop relationships and nurture them has a reason to succeed. “No man is an islande..” said John Donne, a metaphysical poet from the 17th century. (That’s for all you engineers).

I don’t even think social media has come close to reaching its true potential yet. People are blogging without knowing why they’re doing it, or posting their photos to Flickr or their videos on YouTube just because they CAN. But companies are also beginning to experiment with using these tools to accomplish business purposes. Social media will pass, like the telephone, from a curiosity to something we can’t remember living without.

For example, I saw a speed demo of Instructables last night. And while the demo consisted mainly of things kids made with K’nex and Legos and shared on the site –some pretty cool toy guns and land mines, if you appreciate war like most fourteen year old boys –when I went back to check out the site this morning I also found the instructions for making some interesting squid dishes. Quite frankly, I can see an application like this used to teach people to give themselves injections of blood thinners after surgery, or to practice yoga. Patient education, parenting education – there are many uses for an interactive set of instructions; everyone who has tried to put together a swing set or a doll house knows this.

In the life formerly known as my “First” life, I’m using Ning as a collaboration tool for a class I’m teaching in Networking and Public Relations for entrepreneurs at Grand Canyon University. Ning is a tool that helps you form social networks. Is it perfect? Absolutely not. But it took five minutes to get going, and it is a great place to post class assignments, discussions, and reading. The students use it to communicate with me in between classes. It’s ad hoc, it’s free, and it’s community. It’s less formal and more visual than online learning platforms, but it’s where these platforms need to go.

I also see the application of social media to non-profits, the communities they serve, and their donors. One of my current visions is to put the stories of domestic violence survivors I am working with on a site where they can meet their mentors and helpers – people who want to give money to a good cause and want to know where it is actually going. Remember how powerful those TV ads were about adopting a child in Africa? How much more powerful are they when they become interactive? Social Venture Partners has pioneered the idea of venture philanthropy, and it’s only a matter of time before it goes virtual: see what the youth after school program you invested in actually does – with the help of Google Video.

Right now, we’ve got the tools and technology confused with the purpose of social media, which is to give audiences and consumers voices and faces. We will soon be taking the tools for granted and just putting them to use.

Remember when there was no VCR? No cell phone? No Internet? No email? I do. I remember being an early adopter of each, when they seemed high tech and everybody said we didn’t need them and didn’t need to learn to use them. I even felt that way about television, when it came into my life in the ‘50s.

We can make friends, customers, and partners on the Internet now. We can make our voices heard about who we don’t want for President. We are more powerful as a democracy if we want to be. Bloggers influenced the last election. YouTube will influence the next.

Look what ZipRealty, Zillow and Trulia have done to the real estate industry. Listings, house values, and comparables are online. These were once the secrets of licensees. In Arizona, the state agency that licenses appraisers wants to stop Zillow from issuing its “zestimates” on Arizona homes. That will never happen, because buyers and sellers crave transparency. Realtors® and appraisers will have to adapt to this changing environment.

After all, if medical information’s readily available on the Internet, why shouldn’t real estate values be.

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