iBreakfast/iEvening in NJ - A New Yorker's View

Cory Rises to a Packed House and iSpeech Silences - with Awe!

By Alan Brody

Mayor Cory Booker - the media-centric next-generation mayor of urban regeneration -wowed a sold-out crowd with his story of reaching for more. As a former college basketball player and coach he told a story of getting his team members to reach out some more. When he offered an incentive, his team reached for even more. But when a short kid whispered that he deserved the prize, Booker laughed until the kid took him up on the roof.

That’s reaching - and thinking out of the box. The kid won!

This gala event - the first in a series that opens the iBreakfast and iEvening in its decade-long mission to find the next great business and match it to a long list of worthy investors - was the perfect example of where we are. Innovation abounds everywhere and big-league investors want to reach them. These companies have local attributes and they could use the publicity and sometimes, the help. Best of all, the iBreakfast is looking to partner with local influencers like Sperlingreene and the results are spectacular.

This event with John Ason, Angel Investor (diapers.com); Stephen Brotman of GSA Venture Partners; Mike Segal of Joshua Capital, and Chris Fralic of First Round Capital found its star: iSpeech, a profitable provider of cloud-based speech technology and mobile apps will come to a NY iEvening and received an invitation to present at the prestigious Private Equity Forum in New York, to be held in June at New York’s Yale Club. We predict a VC feeding frenzy.

The other companies painted a useful picture of entrepreneurship. For obvious reasons, New Jersey has a lot of bio, manufacturing, med and pharma start-ups. But they haven’t been plugged into the kind of digital growth seen in NY and Silicon Valley. Both have something to learn. Investors need more patience and start-ups need to focus on high growth, scalabilty, ramp rates, avoiding government gatekeepers and not loving their science in front of investors. What is known in the research world as “molecule fondling.”

One presenter waxed poetic about aneurisms and morbidity rates while the panel considered either throwing up or checking in at the hospital the next day, just in case. Another spoke about helping the digital conversation of medical records with great conviction and an overdose of detail until at the very end she noted there was a mandatory set-aside of $40K per doctor in the process. Talk about burying a lead!

Best of all were the oldest start ups in our world - no one under 70! - who promoted their idea with umpteen Burma Shave-like signs and showed how their heat collector beat copper with a gangly display of copper pipe and sheeting. Their real story was their discovery of a high conduction plastic material. It could be huge. They just need the big city boost, a touch of youth and some of the 360 degree thinking we provide at our free, trademark “Power Pivot™ workshop. In short, they need  the high interaction of an iBreakfast/iEvening.

What is Job Generation?

Last week we taped the pilot of “Job Generation” and in March we will roll out our first live events.

So what is Job Generation? It is a variation on Start-Up Presentations to Investors except that we include senior executives seeking leadership positions in the conversation.

The bigger picture – the part that is creating the buzz - is that new business ideas tend to come from young start-ups with little capital and less experience. They are usually energized by real world interaction with savvy execs but are too busy chasing investors to do that.

This is a uniquely informative experience because it brings savvy executives into the conversation at an early stage. Too often these executives are chasing after the same entrenched jobs that everyone else is after - so by putting these two generations of business execs face to face along with VCs, we see a variety of possibilities will occurring: employment, consulting, joint ventures and investment.

More than a "Job Interview"
Job Generation is about about more than savvy execs being interviewed by young Entrepreneur about running their companies. It is telescoping the process than made companies like Google, Apple and Microsoft great - when they raised enough money they hired senior execs that took them to the top. We are starting the conversation now hat these execs are available as a way to increase their chances of raising money or building sales.

Polaroid goes Facebook - Lesson from the Job Generation Pilot

In the first Job Generation, a former exec from Polaroid – a great fallen American business presents to Pixable, a company that generates photobooks from Facebook – where he notes that although the technology is different, the customer base is almost exactly the same, young women. The Pixable founders agree and they want to hire this exec. The VC on the other hand, would prefer they hire an exec with operations experience. The net result is a blend of consulting and strategic rethinking and maybe a hire or a consulting opportunity…….

In this environment have seen roll-ups, consulting arrangement and joint ventures or alliances of one kind or another. After all, only a tiny number of start-ups are investible – somewhere between 2 – 10%. So, to a large extent this is an exploration of what happens to the rest of those start-ups. Often, these are concepts that need further sales or business development provided through a joint venture context. By taking this conversation beyond the purely start-up funding conversation, we allow many more business opportunities to flourish. When business grow through sales, investors find them!

Business Discovery

One thing we learn about what the CEOs bring to the table when they talk to Entrepreneurs is a deeper understanding of the true nature of their businesses. We also have VCs at the table to help the parties understand what each can do to increase the value proposition and make them more investible.

Starting in March we will be doing a regular series of Job Generation events. In addition, all iBreakfasts going forward will still have the typical informative content but will also feature this interaction between Start-Ups and experienced execs as part of the warm-up session.

The Theory Behind Job Generation: Raising the Investibility Quotient

For those who have experienced our “Hierarchy of Start-Ups” presentation, you’ll know the most investible class of start-ups, at lest in sheer numbers re those who have these key attributes:

• 10 Years or more of domain experience in a field

• Identify and industry-specific problem

• Have a team with the solution that the mother company doesn't value

• Have an existing relationship with the natural buyers

If this is you, your check is in the mail! Most start-ups aren't like this but we find that putting them together with savvy execs can get them much closer to this fundability zone - and that is the basic goal of Job Generation.

Unexpected Entrepreneur? A New Way to Understand Creating Your Own Business

Are you an "Unexpected Entrepreneur"? this popular presentation lists the "secret code" of Start-Ups http://slidesha.re/U12Ik

Unexpected Entrepreneur Presentation

View more presentations from iBreakfast.

Response to Jason Calacanis' Attack on Mike Segal & Private Equity Forumss

I know Mike Segal of Private Equity Forums and we even promote his events. So let me stick up for him in this way: his events bring out-of-town investors and entrepreneurs to New York. That is his strong suit and has been doing that well for years, filling up room after room with investors and entrepreneurs. He deals with what I call pedigreed starts-ups: people who have serious experience in their fields, have put a good amount of money into it and can afford to pay to be in this league. Dotcoms are a small part of his world - most of his Entrepreneurs have biotech, heavy engineering, energy, packaged goods or financial services businesses.

These obey very different rules from the digital world that Jason and his cohort inhabit – so before we get into some version of class war let’s understand that we are dealing with other classes of new enterprise.

As the organizer of the iBreakfast I should state that we run very modestly-priced start-up events and we give our winning entrepreneurs tickets to Mike Segal’s events so they can see what his world looks like. Some of it is familiar but a lot of it is very different – his investors usually look for revenue, tangible assets, assumable debt and a host of things dotcoms start-ups are oblivious to.

I can’t argue with Jason or anyone that access to investors ought to be Free. Why not? If Fred Wilson or Steve Jurvetson wants to see you – go ahead. They might even throw in a VitaminWater or buy you lunch. But unless you’re a serial entrepreneur and were recommended to them, the chances are the don’t want to see you. So events like Mike Segal’s and to some extent, the iBreakfast have emerged put you right in front of investors and get you into the general recommendation system. By organizing it into a marketplace they are entitled to charge what the market will bear. In that respect Mike is no different from a trade show producer or the Wall Street broker that takes his commission and the spread.

If you think he is charging too much – don’t pay. The iBreakfast offers a low-cost pitching event that grooms, educates and gives start-ups access to investors for a nominal $125. We don’t market it like crazy but then we also don’t pack dozens and dozens of investors into one place. So take your pick. As for the groups that do it more or less free, go to them – but they are probably oversubscribed and they’ll make you wait.

So, should one approach drive out the other or should all of these coexist?

If Jason can attract Investors and Entrepreneurs from all over the region – or the country to an event, do it on a regular basis and give it away for Free, I say more power to him. I might have a plan or two I’d like to trot out myself.

But keep in mind a few things. Free often drives out the good. Without a financial incentive there is a good chance the forum will run out of steam. Even if the forum continues, they still have to add some kind of value that makes it worthwhile for the investors to show up and for the best pitches to rise to the top. If they can do that, Free may win. Even so, many companies would still rather pay for all kinds of reasons like speed to the investor market or controlling their destiny.

A big question is why would Jason do it for Free. I buy his “sticking up for the hood” motive up to a point, but the real deal is publicity for his Mahalo “people powered” pedicab of a search engine, he needs to attract contributors, fire up his base them up and make them feel important.

As for the profit motive, well excuse me, Jason had no trouble charging over $1,000 for his Silicon Alley conferences when he could – thereby keeping good information and contacts away from the needy. Tech Crunch 50 is not Free. So why should these organizers behave differently? If Mike Segal can save his Entrepreneurs from traveling all over the country just to see investors and get the word out at once, then there is a value in it. Something like a road show in one place. Plus, many investors take this kind of effort seriously and see this as separating these Entrepreneurs from the pack – those which just can’t afford the effort and therefore may not be as viable.

That’s why these events take place at fancy ballrooms and not at a taco stand – it makes people take these presentations seriously. Maybe the investor should be paying for the lunch but the market dictates otherwise. Trust me, the doctor who just prescribed Jason his self-righteousness pills didn’t pay for his own lunch either if he didn’t want to. The drug company was happy to pick up that tab. More importantly, if an Entrepreneur is flying in from Minneapolis, Free starts to look very iffy while a paid event says “this is happening” and his time and travel costs will not be wasted on a flake out. Likewise, investors realize their time is unlikely to be wasted by people who are not really committed to their new enterprise.

Having said all that, I actually welcome Free because it forces the paid guys to do a better job or else. Plus it gives the posers a chance to discover their real selves before they do something silly like empty their trust funds.

As to which approach is really better – let’s say they are different and serve different purposes that may ultimately harmonize. A free event favors just-out-of-college start-ups with those big moonshot ideas like the next Twitter, iPhone Killer App or Search Engine (know of any?) Few succeed but the ones that do, make it really big. They change the world.

Paid events favor the seasoned player – the pedigreed start-up that has 10 years of experience in a field, often a mundane one where they see the real opportunity in their space, know the players, the customers and so on. There is less pizzazz and few ground-shaking ideas. The payoff is more earthly but to the investor, is also a safer bet.

The true serial (and successful) entrepreneur which includes Jason, only has to pick up the phone. The sensible entrepreneur has to know which category they belong in before they choose their path but they all have their place.

My prediction – a year from now, all these forums will exists in one way or another. All will do a better job and all will charge about the same – even the Free.