Monday, February 1, 2016

Why the Best Way to Partner With Giants May be Through the Side Door

Why taking your idea directly to a Microsoft, IBM, Google or anywhere else is probably wrong – and how hackers teach us a completely different approach.



The winner at the PITCH 2016, CareThread.com reminded us of a critical point for all Entrepreneurs: be careful which door you go through. Most companies are geared towards telling you no – if you are lucky – and getting a free look and chance to knock you off if they don’t. But then again, you might need to partner with them in some way.

So how do break this conundrum. Last week’s winner and a notorious hacker’s story could show you just how…..


Nick Adams’ Care Thread sells a kind of secure “Twitter” service for healthcare, particularly hospitals. But knowing that hospitals are extremely cautious, they found a side door, a special critical care unit that really needed their solution and so, as they built trust they have been able to grow their user base. 


Most Startups with a great idea, tend to do just the opposite, they try marching in the front door only to be rebuffed, strung along or, in some controversial incidents, find their idea slyly misappropriated. Sometimes its coincidence, sometimes its venal. But in most cases it’s a big disappointment.

Gary McKinnon.jpgGary McKinnon, the celebrated British hacker with self-described Asperger’s syndrome, is little known in the US but something of a folk hero in the U.K. is a useful example. He was able to penetrate the US Military and then NASA’s computers with an IBM PC XT and a 64K baud modem that he borrowed from his girlfriend’s aunt.

Obviously, if he asked his nearest US military commander or a visiting astronaut for permission, they would have told him no. Perhaps they would have shot him. But when Gary explored the US military, which at the time was getting into online networking (this dates back to the early 2000’s) he realized that it included the mess halls too. Persuading ol’ cookie that he needed to share his password to get the potatoes delivered, or something along those lines, wasn’t that hard.

From the kitchen, Gary assiduously worked his way up to the top of the military and then on to NASA, where he claimed he saw evidence of UFO’s.  After almost 10 years, the US eventually gave up on trying to extradite Gary. He remains a folk hero in the U.K. and entrepreneurs every might want to borrow a lesson from him.

So, when looking for a big partner, try a side door where you can prove yourself, create a dependency and prove the superiority of your technology.

Gary McKinnon references:
http://kernelmag.dailydot.com/features/report/6243/what-did-gary-mckinnon-actually-find/
http://freegary.org.uk




Friday, December 4, 2015

What We Learned From Angel Week

The 2 Themes that Emerged from the Weeklong Conference: Angel Protection and Useful Technology
Angel Investing was never easy but you can win. You could be smart and lucky - or you could find a resource that was underused. You could also be useful – and increasingly, Investors are seeking that out.
Keynoter Kevin Harrington, one of the original sharks on Shark Tank, who opened up on the Gathering Angels day, talked about the Infomercial and how he came to invent it. It is a reminder to us all about how to discover value. He saw test stripes on the cable channel screens after prime time programming. That gave him an idea about a cheap, underutilized resource. But it was when he stumbled upon a great pitchman with a new kind of knife - the Ginzu knife – and a circuit of pitchmen just like him, that he saw the potential for a new world of selling. And so the infomercial was born.
How many Investors are on the look out for that type of combination? Kevin believes he sees that again on your cell phone and so he is introducing Starshop – a celebrity based sales channel on your mobile.
Brian Cohen, Chairman of the New York Angels, discovered Pinterest by dint of smarts and luck, and yet his keynote was all about caution in Angel Investing. There are only a few good deals and many, many more that could go astray.
While Angel Investing goes on and innovation continues, Brian talked about how few Angel Investors profit from their risk. There was even a hint of push back by Angels. It is hard to imagine a million Angel march or even the unionization of Investors, but there clearly was a sense that they need to organize in some way to reduce risks and minimize dilution. That is part of the mission of a Gathering of Angels at Angel Week!
In our award to the Angel of the Year, Bernard Rudnick of MidAtlantic BioAngels, who not only profited for his group by over 5x but also instituted a startup dividend pool forcing a payout back into the Investors.
In my opening, I celebrated Angels by remarking that it is not government that drives innovation but the hopeful entrepreneurs and the Investors willing to back them.
That became one of the themes of the day – the kinds of investments being made which were a renewed interest in infrastructure innovation and confronting real problems solvable by technology and other innovations.
Now that the never-ending search for a paradigm shift is focusing on real world and infrastructure problems, we are working on a kind of X-Prize for Startups that solve problems that matter. Stay tuned. www.angelweekny.com
We thank all of you who helped make Angel Week a success:
Microsoft
Syzygy3
Medstartr
Private Equity Forum (Innovation and Investment)
IEEE and IoT Central
We expect to be back with an even bigger and better Angel Week in Q2!

Have a Happy Holidays.

Intro & Keynote: https://www.youtube.com/watch?v=IVfeZLaN-Tw#t=234    http://bit.ly/1lzcVb0

Interview:  https://www.youtube.com/watch?v=dJpeVYyNiRI#t=60   http://bit.ly/1OAv57Z

Wednesday, October 14, 2015

Steve Case, the 3rd Wave & Taxis Going Uber


Last week, Steve Case, the legendary founder of AOL spoke at the NY Media conference about his investment group Revolution Growth, which is focused on 3rd Wave investments.

He sees this as the next frontier for the digital revolution: transforming older, traditional and infrastructure industries. This is not sexy and it requires partners in disruption. Often, the required partners are those who would reflexively resist progress with all their might.  Therefore changes are likely to be slower and more complex but they also run deep.

These changes are also likely to be more transformative than anything we have seen before. Or perhaps not. They just might become the new normal for traditional industries – adapt or die. The floor has just risen. There may be a race for who is most innovative and so the stumbles may be in the direction of innovation and not resistance.

The perfect example is Uber, which has been rocking the transportation industry worldwide. For years, the taxi industry fought them in courts, legislation and in street riots. But never with technology. Until now. New York now has two apps than can order your yellow cab exactly the same way as Uber. The cabs come at about the some time, you pay less and maybe the taxi industry has chance to survive, sending the value of medallions back up – just a little if too late.

The two apps Way2ride and Arro take Uber head on. Arro is said by the Wall Street Journal to be better than Way2ride and seems to be more of startups product while Way2ride has more of the corporate development origin. This is probably the signature story, the public case study of the old empire taking adapt and survive via technology vs. the old Luddite sue ‘em, legislate and agitate approach.

We could compare this to VW’s diesel division which used adapt and die via technology the wrong way. Instead of fixing their diesel emissions they simply faked it through software. That was a devastatingly bad idea that only an entrenched company might come up with. But they would not be alone in trying to rig the system rather than fix the problem. U.S. Railroads, are mandated to fix their safety system by 2015 through a technology paradigm called Positive Train Control. The vast majority of railroads including most of the commuters either couldn’t do it or just didn’t try. So they went back to Congress and told them to push back the deadline and in some cases threatened to halt their trains and cause and estimated $30 billion in economic damage.


In the Railroads case, which may be emblematic of most infrastructure fixes, the protocols were so overdesigned and obsoleted by the time they came out in 2010, that they we overpriced beyond reason. Today, they could simply leverage existing technology, Elon Musk-style and do everything plus a few extra things like adding genuine safety to their antiquated railroad crossings, for pennies on those federally mandated dollars. Smart sensors with WiFi, Bluetooth, RFID, webcams and communications are cheap tech commodities now. A group of enthusiasts from Maker Faire with $40 Raspberry Pi's could fix almost everything in about a month.

So it goes for bridges and roads. Do we not have new liquid graphene technology that can shore up rusting old bridges? Is there no new polymer that can resurface roads or fix potholes so that post-winter driving is no longer driving through the jungle?

I’ll bet there is a startup in some remote part of country with a laptop full of solutions and none of the right connections. Naturally, government isn’t looking there - they want their familiar suppliers and their trusty old pals. Then they have entrenched stakeholders, union members and civil servants whose main mission is to rack up overtime and accumulate pensions. Not all, of course, but enough that they have zero interest in improvement for the public interest.

The good news, if we have any, is that innovators are running out of new Social Media and Ad Tech wrinkles and will be forced to look at real industrial issues. For example, when we run our Startup events in Boston we see some of this - like Concrete Sensors, a startup that puts sensors into poured concrete so engineers get a real time readout of its curing rate – essential before proceeding to the next stage - which is currently being done with expensive pilot drillings. Innovations like these could push the entire industry forward.

Typically, these ideas are resisted at first. The big players don’t think they need them or fear disrupting their systems. Then, a competitor somehow breaks through. The old-timers pull off every dirty trick they can think of to resist it. Finally, they capitulate and start begging for innovation. That is generally when they lose leadership, go under or get acquired.

If we don’t learn how to introduce innovation into public works, we will become a new kind of  economy – an ex-first world country with an antique infrastructure, a massive public payroll and a culture that lost its way.



© Alan Brody 2015


Monday, October 12, 2015

AcuteIQ Wins the September Pitching Event in NY

September's event was a typically hard fought event with one clear winner that captured the judges’ imagination and a host of close contenders behind.
Ian Foley of AcuteIQ making his winning pitch
Winner: AcuteIQ
This company mines customer data for better value and relationships

Runner Up: Lybberation

Coming Events - Startupalooza will be back on October 20th.

iBreakfast returns on Nov. 10 - VCs Talk Deals - Listen and ask VCs


Launching on Dec 1st: ANGEL WEEK - the 1st weeklong series of events dedicated to Angel VCs and he Entrepreneurs who follow them.


  • Gathering of Angels  - Dec. 1
  • Super Startupalooza - Nov. 30
  • Healthcare 2.0 Startups - Dec. 3
  • Cannabis Investing - Dec. 2
  • Private Equity Forum  - Dec. 2
  • Moonshine Over Manhattan (Craft Spirit Startups Tasting Event & Concert)
    - Dec. 2

Tuesday, September 22, 2015

What I Said about Trump as President in 2011


My original article, predicting that Trump would be welcomed by the public


Why Donald Trump Could Win in 2012
By Alan Brody   


We don’t elect politicians any more. We elect Superheros. At least, that’s what we are looking for.  Ordinary politicians need not apply.

Guess what, Donald has started to look like one.

Needless to say, Trump could be doing this for the publicity – he certainly has done it before. But this time its different. Not only because he might be at a point where he means it - but because the public could insist on it.

Trump may be tapping a perfect storm of trends that have never really occurred before.

1.     We want mythic creatures – not politicians. In that case, Obama – who has never actually run anything, let alone a country, comes to us as the persona prophesied by Bill Cosby and then Nelson Mandela and godmothered by Oprah Winfrey.

Donald Trump comes to us by way of The Apprentice, with his remarkably sensible progeny and godfathered by Mark Burnett who somehow turned Trump the bombast into Trump the Solomon of managerial talent.

2.     The Age of the Entrepreneur. Nations are a product of who runs them: this country is run by lawyers. Once, we were about robber barons and lawyers. Then we became mostly about corporations and lawyers. Thanks to the Democrats, we are now labor and lawyers - as well as Wall Street or high value companies that can afford to reward their employees handsomely. Corporations are now global and they can sidestep the lawyers if they choose. They no longer control the majority of jobs – small business does. I other words, if this country is not really about corporations or labor all that remains re small business and lawyers. Since small business is by nature fragmented, that leaves us with lawyers. Obama is not merely a lawyer but an academic lawyer a professor of constitutional law. No only is he lacking experience in the rapid decisionmaking of executive leadership – although he is not doing a bad job. He has no idea how to create the future of jobs. Trump is not just a businessman, he is an entrepreneurial figure. He has invested in many kinds of self employment companies like ACN. These are often controversial but they also create masses of independent moneymakers. No politician knows about these kinds of businesses and they are the fture. Politicians can only dream of a better GM. Good luck, there!

3.     World Leadership. Once America stood for something. It may have been wrong at times and it may have been called ugly at others, but it was the alpha male of world countries. Not any more. We are so inept at deciding our economic reality that we are both deeply in debt, exporting jobs and importing people to do many of the remaining jobs. We are ravenous users of energy but have neither the courage to live with the environmental risk of our own energy and are terrified to stand up to the foreign countries that sell it to us. It is quite possible to ague that at a moment when a bunch white republicans came to the conclusion that a multiracial world just hate them, Obama looked like just that person to put everyone not at ease. Heck he evn got a Nobel Peace prize just for showing up.

Yet his projection of the US on the world is not leadership. Its comradeship. When he went to Egypt to show the Muslim world a conciliatory face of America, he prattle on about freedom. Guess what – they believed him and two years later when they revolted, he stood back. His one symbolic moment came with Qaddafi. Here one was the one dictator that we owed a bullet, whom nobody supported and he couldn’t make up his mind to take him out. Instead, he waited until he could put together a posse of NATO countries. This was not hasty leadership and the waste time cost us a quick victory and has delivered a slow, bloody struggle.

Tue leaders have to pick a few moments to strike fast and hard and he missed that. One could argue he did that with health care but so far the results have been a joke. Our rates have gone up dramatically and his supporters have been given free passes.

4.     So Rich You can Trust Them. As voters look at the future we are in a strange place. Wall Street has come back but unemployment is still high. We now compete on the world economy and regular politicians don’t seem to have a clue about dealing at a high level of strategy in the world game.

   

Thursday, August 6, 2015

How I Predicted Donald Trump's Current Success

Several years ago, after I wrote a column about why promoting Entrepreneurship was important for the economy's future. The editor was so impressed, he asked what else I would like to write about.

Since this was at the beginning of the last election, I said my next column would explain why the people will be begging for Donald Trump to run. I never heard from the editor again and Trump chose not to rum (something about his financials).

The editor obviously thought this was the most ridiculous thing he'd ever heard.

So why was I willing to go out on a limb about the Donald for that column?

First, let's understand that I wasn't saying that Trump would make a good president, that he would win or even that I supported him. I was just saying that people would be begging for Trump to run. The editor may have heard what he wanted to hear, but that is all I said.

Why?

The answer is that Trump spoke at the global level and he did with big but simple concepts. In particular, he spoke about how other countries see us. He talked about how they take advantage of our pieties, our political correctness, our petty fears, our blind spots and, most of all, the way we have backed off fearless leadership.

We have gone form being a nation of doers, backed by laws, to one lead by lawyers who just talk about laws.

I have nothing against lawyers. We need them. But they live in a special, cautious kind of world. Just because they write and argue laws doesn't make them leaders any more than accountants should be salesmen or scientists CEOs. They could be, but not all of them.

Most politicians are lawyers and behave not, surprisingly, like lawyers. The better they are, the slicker their speech and we have gotten all too used to it. But once a plain-speaking, popular and successful person shows up that you see the difference.

My point was that once people hear Trump's big talk schpiel they will hunger for it. And they did.

My background with Entrepreneurs tells me that we see exactly the same with Startup pitches: a clear, boldly spoken pitch will win over a slick, incomprehensible mish-mosh that offends no one while sticking to some preconceived party line.

I can't say that I would actually support the Donald for President although I would definitely support for him long enough to keep the game of refreshment going.

Trump may be the genuine bearer of America's future - unlikely as that may seem - or simply the jester who brings truth to the king's court. You decide.

What I can say is that, whatever he is, his is a voice we welcome.

In fact, people are begging for it.

My original article, predicting that Trump would be welcomed by public


Why Donald Trump Could Win in 2012
By Alan Brody   


We don’t elect politicians any more. We elect Superheros. At least, that’s what we are looking for.  Ordinary politicians need not apply.

Guess what, Donald has started to look like one.

Needless to say, Trump could be doing this for the publicity – he certainly has done it before. But this time its different. Not only because he might be at a point where he means it - but because the public could insist on it.

Trump may be tapping a perfect storm of trends that have never really occurred before.

1.     We want mythic creatures – not politicians. In that case, Obama – who has never actually run anything, let alone a country, comes to us as the persona prophesied by Bill Cosby and then Nelson Mandela and godmothered by Oprah Winfrey.

Donald Trump comes to us by way of The Apprentice, with his remarkably sensible progeny and godfathered by Mark Burnett who somehow turned Trump the bombast into Trump the Solomon of managerial talent.

2.     The Age of the Entrepreneur. Nations are a product of who runs them: this country is run by lawyers. Once, we were about robber barons and lawyers. Then we became mostly about corporations and lawyers. Thanks to the Democrats, we are now labor and lawyers - as well as Wall Street or high value companies that can afford to reward their employees handsomely. Corporations are now global and they can sidestep the lawyers if they choose. They no longer control the majority of jobs – small business does. I other words, if this country is not really about corporations or labor all that remains re small business and lawyers. Since small business is by nature fragmented, that leaves us with lawyers. Obama is not merely a lawyer but an academic lawyer a professor of constitutional law. No only is he lacking experience in the rapid decisionmaking of executive leadership – although he is not doing a bad job. He has no idea how to create the future of jobs. Trump is not just a businessman, he is an entrepreneurial figure. He has invested in many kinds of self employment companies like ACN. These are often controversial but they also create masses of independent moneymakers. No politician knows about these kinds of businesses and they are the fture. Politicians can only dream of a better GM. Good luck, there!

3.     World Leadership. Once America stood for something. It may have been wrong at times and it may have been called ugly at others, but it was the alpha male of world countries. Not any more. We are so inept at deciding our economic reality that we are both deeply in debt, exporting jobs and importing people to do many of the remaining jobs. We are ravenous users of energy but have neither the courage to live with the environmental risk of our own energy and are terrified to stand up to the foreign countries that sell it to us. It is quite possible to ague that at a moment when a bunch white republicans came to the conclusion that a multiracial world just hate them, Obama looked like just that person to put everyone not at ease. Heck he evn got a Nobel Peace prize just for showing up.

Yet his projection of the US on the world is not leadership. Its comradeship. When he went to Egypt to show the Muslim world a conciliatory face of America, he prattle on about freedom. Guess what – they believed him and two years later when they revolted, he stood back. His one symbolic moment came with Qaddafi. Here one was the one dictator that we owed a bullet, whom nobody supported and he couldn’t make up his mind to take him out. Instead, he waited until he could put together a posse of NATO countries. This was not hasty leadership and the waste time cost us a quick victory and has delivered a slow, bloody struggle.

Tue leaders have to pick a few moments to strike fast and hard and he missed that. One could argue he did that with health care but so far the results have been a joke. Our rates have gone up dramatically and his supporters have been given free passes.

4.     So Rich You can Trust Them. As voters look at the future we are in a strange place. Wall Street has come back but unemployment is still high. We now compete on the world economy and regular politicians don’t seem to have a clue about dealing at a high level of strategy in the world game.

 

Boston Startup Winners: SeedCX: Medical Marijuana "Seeds" the Future in Boston


Winner: SeedCX

Finalists: Human, Spot, MyLumper and Irhad.com

The winnerSeedCX will be participating at the Private Equity Forum at the Yale Club in October.

HUMAN presents at Startupalooza Boston
Commentary:

SeedCX is a new futures exchange for hemp & marijuana growers and traders. They won because of the combination of excellent planning, appropriate background and the offer to participate in once-in-a-generation opportunity at its moment of substantial growth.

MyLumper was a finalist because they represented domain experts in an entirely fresh, payment processing field - truck loading - that had significant potential upside with minimal competition with the introduction of a disruptive solution and significant pain point. However, it is an unfamiliar area to most investors and so requires more due diligence.

Spot is the “AirBnB” of parking spots and lets people and companies rent out their underutilized parking spots - thereby turning empty spaces into hard cash and preserving city resources. This is a very well executed plan that is showing real numbers in the Boston area and could scale nationally. It may not work in all cities and it is not always clear there where the best opportunities lie are, but they are nevertheless, a close runner-up.

HUMAN offers a better way for users of Virtual and Augmented Reality to interact with all emerging platforms as well introduce the element of collaboration - especially in high value business and medical fields. There are patents pending and the team has much experience. Nevertheless, it is a crowded though growing field, where many competitors abound and their positioning is still not quite focused.

Irhad.com is a travel website and mobile app for Muslim travelers in the west with a special focus on visitors from the high value Gulf States. It has special features that offer unique value to these well-heeled travelers. However, the financial model is all advertising and therefore limited, while there is a clear opportunity for a higher value “Freemium" model offering specialized high cost services for the higher-end travelers.

Next Boston Startupalooza: Sep. 29th Register here.