New era of the Great Instability

The downgrade the U.S. caused panic in financial markets.
Somehow unnoticed was the same signal in Japan. The corresponding position of experts of international rating agency Moody's Investors Service will win in the weekly report Weekly Credit Outlook.
In the new era of instability of the Great - the old principle of counter-productive of rating as cause more volatility in the markets.
The basis of the Western economy - the rating agencies. Their behavior is plunging the world into a vicious circle of sales and impairments of assets - and this despite the enormous liquidity for investors! The money supply will result in the commodity market and cause hyper-inflation. Greater volatility in the global economy will last until you change the principle of the existence of rating agencies.

The charges leveled against Western rating agencies that their actions caused the global financial crisis are unfounded, says head of McGraw-Hill Companies, which owns the international rating agency Standard & Poor's, Harold McGraw III (Harold McGraw III), whose words led online edition of The Financial Times.
Nevertheless, the head of McGraw-Hill expressed confidence that the S & P has come out of this situation, an updated and larger, and the idea of ​​nationalization of the Chinese rating agency seems he was not too successful. "Agency to trust, it must be transparent and independent, open to clients - said McGraw.

John Connor comment:
An era of great instability, which I wrote since the beginning,  will be until the rating agencies change their operating principle.

Super angels

There are the three contributing factors to the emergence of the current angel investor ecosystem:

1: With the emergence of new platforms and channels (like, but not only, the internet) the capital barrier to entry for new companies has come way down.

2: Now that we’re 10+ years into new media, there’s a large pool of experienced people who have accumulated enough wealth for speculative investments (and have the knowledge/courage to do so).

3: It’s fun to be part of the creation of new products!

Based on these three factors, I don’t see angel investing going away any time soon, in fact, I think we’re only at the beginning of a capital market that is going to be a major part of the innovation ecosystem for a long time to come.

What I like most about the proliferation of early-stage capital sources is that it means entrepreneurs have a wider array of choices, and thereby a greater ability to align their, and their investors’ objectives.  If you want to create one of Mike Maples’ Thunder Lizards and take over the world, you can call Mike.  If you think there’s an untapped niche and you’re sure you can create a highly-targeted service for it, you can give Dave McClure a call and be one of his 500 Startups.  You can swing for the fences, or try to lay down a bunt. 

I also think, in the end, the proliferation of early-stage capital sources will be a good thing for the big VCs, it means they’ll have many more sprouts from which to choose.  I do think it’s going to slightly push the focus of “traditional” VCs towards slightly later stages of company development. In the end, however, that will probably be a good thing as I think it will take some of the risk out of their deals.  So, yes, valuations will rise (a common complaint made by VCs about angels), but in parallel risk should fall.

What entrepreneurs really want

The law firm Dorsey & Whitney did a great study on “The evolving investor landscape.”  

What I liked most about the study are the quotes at the end. The themes in these write-in responses are probably worthy of being on the first page of the report rather than the last. What they illustrate is that what matters to entrepreneurs isn't just the financial dynamics, but the investor’s experience, trustworthiness, ability to form capital and if they’re availability to even return a phone call (or get a beer).  My guess is most top entrepreneurs would be flexible on valuation in order to get the right investor team pulled together.

Additionally, the right angel investor can make meaningful contributions to the development of a company. On stage, at a recent Vator splash event, Neil Young, the founder of ngmoco, recounted a pivotal moment where Mike Maples, one of his angel investors and board observers, made a key insight about their business model: http://vator.tv/n/1788 (right around minute 20:30) – having an experienced entrepreneur and angel investor at the table at that moment added a tremendous amount of value. This is a great example of why having a mixture of VCs and angels can, at key moments, be good for companies

Venture bubble 2.0

More than $5 billion of venture capital investment flowed into young web companies globally in the first four months of the year, data from Thomson Reuters Deals Intelligence shows.

Though small compared with the boom years, the sum puts 2011 on track to be the busiest in dollar terms since 2000, when more than $55 billion was deployed to back nascent technology firms.

The latest frenzy bears some of the hallmarks of the previous web investment craze -- exuberance over "concept" start-ups that have not launched their sites and intense competition among potential backers to place bets in presumptive hot spots, such as the social media space now defined by the likes of Facebook and LinkedIn.

Entrepreneurs such as Clara Shih, chief executive of Hearsay, a San Francisco-based specialty software provider, enjoy more leverage with investors than last time and talk about having their pick of potential backers. Shih said she had already raised $3 million, when cash came knocking at her door.

"Honestly, we weren't thinking of raising money, but now it's kind of landed on our lap, we may be open to it," Shih said in an interview with Reuters Insider.

Herd investment behavior gives rise to talk that another Internet bubble is forming, particularly when analysts see valuations on the order of $70 billion for Facebook and $15 billion for Groupon calculated from private investments.

"I've heard ... many venture capitalists who are saying, 'No, there's not a bubble,'" said Dana Stalder, a partner in the Silicon Valley office of the venture capital firm Matrix Partners.

"When you're seeing valuations double in the last 12 months for the same company, the same team, it feels like a bubble to me."

But other characteristics of the current boom do set it apart from the one that ended in collapse 10 years ago.

* VC investors say more of today's young companies are profitable or on a clearer path to profitability as the advent of cloud computing helps to lower operating costs dramatically from a decade ago

* Online advertising and e-commerce, in their infancy a decade ago, have matured into accepted and more reliable revenue sources

* The rush to cash out through an initial public offering has slowed. Bountiful sources of private investment, a raft of new public company disclosure regulations and the growth of alternative venues for trading private company shares provide the means and incentive to delay going public

Perhaps the most distinguishing factor from the "It's different this time" litany is that today's web frenzy is global.

In the three years that marked the height of the last boom, 1999 through 2001, the VC industry sank $96.4 billion into web start-ups, with more than 80 percent of that or nearly $78 billion in the United States alone, the Thomson Reuters data show. Of 10,755 VC deals over that run, 7,174 took place in the U.S. market.

Not so today. Of the more than $5 billion of VC money invested so far in 2011, just $1.4 billion has been deployed in U.S. start-ups. according to Thomson Reuters data. Roughly three quarters of the 403 deals have taken place overseas.

Moreover, it is the big deals that as often as not are now happening outside of the United States. Of the 25 biggest consumer Internet deals last year, 15 were non-U.S. investments, according to Quid, a Silicon Valley research start-up that tracks VC investment flows. Nearly half, 12, were Chinese.

The investors as well as the start-ups have an increasingly international flavor. Perhaps the most notable new face among today's Internet king makers is Russian billionaire Yuri Milner, CEO of DST Global. Milner has invested hundreds of millions of dollars in Facebook, Groupon and Zynga. Last month his firm invested $500 million in 360Buy,com, China's biggest business-to-consumer website.

The Disruptive Technology Rating

More than $22 billion of venture capital investment flowed into young companies globally in the first ten months of the year, data from Thomson Reuters Deals Intelligence shows.

Analyzing the distribution of investment in the aspect of technology, as well as conducting a content analysis of the views most cited expert, John Connor has made a preliminary rating of breakthrough technologies

The complete Rating of disruptive technology will be done by Edward Musinski

TOP 30 of disruptive technology

1. Mobile payments
By 2012, smartphone shipments are expected to exceed the sum of desktop and notebook PCs, according to Morgan Stanley research. Mobile payment platform – the most important technology for future
2. Real-time data connectedness. This is secret weapon of Google and other company which take control over many sites, marketing platforms and social networks
3. Clean energy including water purification. Future scarcity of water makes a demand of water purification technology with simultaneous production of energy
4.     Medical testing micro devices
5. SaaS and the ‘cloud’
6. Internet and mobile social network
7. 3d
8. Trading software
9. Online interactive games
10. 5G and LTE

11.      Contactless interface

12.      Discount E-commerce

13.      Geolocation

14.      Biodegradable polymers

15.      Software-powered brain devices (NBIC is mega-trend of XXI century)

16.      Informational security using artificial intelligence

17.      Real-time images identification technology 

18.      Augmented Reality 

19.      Vebinar and interactive video

20.  Regenerative medicine (Stem cells)

21.  Real-time speech recognition and voice translator

22.  Nanotechnology filtration

23.  P2P-lending

24.  OmniTouch display

25.  The Tip-Based Nanofabrication

26.  Energy Storage Materials

27.  Open source app

28.  Personal Genome Machine

29.  Wireless energy transfer

30.  Nano-drive

Startups In The Startup Genome

Based on the first Startup Genome report we are releasing a new survey for entrepreneurs to assess their startup. Entrepreneurs that fill out the test will be given their startup personality type, with personalized advice for what to focus on based on aggregate data from the startup genome project. The data we collect with this survey will allow us to give entrepreneurs even more granular feedback.

In the 20th century large companies became dramatically more efficient as a result ofscientific management. This was arguably one of the biggest causes for the explosion of wealth the world saw in the last century. The Startup Genome Report is a major step towards triggering the same transformation for entrepreneurship and innovation. In a time where progress seems to be slowing down, this could unlock another century of transformative growth and prosperity.

Following are 14 more of our key findings. If you would like to read the full report, you can download it here.

1. Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.

2. Startups that pivot once or twice times raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all.

3. Many investors invest 2-3x more capital than necessary in startups that haven't reached problem solution fit yet. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success.

4. Investors who provide hands-on help have little or no effect on the company's operational performance. But the right mentors significantly influence a company’s performance and ability to raise money. (However, this does not mean that investors don’t have a significant effect on valuations and M&A)

5. Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot.

6. Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups. 

7. Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects than with product-centric startups that have network effects.

8. Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.

9. Most successful founders are driven by impact rather than experience or money.

10. Founders overestimate the value of IP before product market fit by 255%. 

11. Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely.

12. Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.

13. Premature scaling is the most common reason for startups to perform worse. They tend to lose the battle early on by getting ahead of themselves.

14. B2C vs. B2B is not a meaningful segmentation of Internet startups anymore because the Internet has changed the rules of business. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time, product, market and team.

http://startupgenome.cc/discover-the-patterns-of-successful-internet

New Capitalist Manifesto

The Capitalist Manifesto is an inspiring, thought provoking and important book. Forget all about classic CSR – Umair Hague is much more radical in his approach. A must read for everyone interested in making his or her company or organizations ready for the 21st century.


 In The New Capitalist Manifesto, Haque advocates a new set of ideals: (1)Renewal: Use resources sustainably to maximize efficiencies, (2) Democracy: Allocate resources democratically to foster organizational agility, (3) Peace: Practice economic non-violence in business, (4) Equity: Create industries that make the least well off better off, and (5) Meaning: Generate payoffs that tangibly improve quality of life. Yes, adopting these ideals requires bold and sustained changes. But some companies-Google, Walmart, Nike-are rising to the challenge. In this bold manifesto, Haque makes an irresistible business case for following their lead.


Haque contrasts the clumsiness and inefficiency of 20^th Century firmspushing products towards customers, with firms like Lego (toy bricks) and Threadless (T-shirts) that use the power of pull (or spinning), by incorporating the customers into the very process of decision-making as to what will be produced. As a result, the firms make quantum leaps forward in the agility of decision-making; the firms systematically make better decisions sooner.

Haque contrasts competitive advantage (lower costs) of the 20^th Century firm with constructive advantage, i.e. an advantage in both the quantity and quality of profit. Constructive capitalists have an advantage in the kind of value they are able to create, not just its amount. Because higher quality value is "less risky, less costly, more defensible, and more enduring, it is usually worth more to stakeholders of every kind: people communities, society, future generations, employees, regulators and investors alike."

Like Ranjay Gulati (Reorganize for Resilience), Haque envisages a fundamental shift from inside-out and top-downmonologues (“You take what we make”) to outside-in and bottom up conversations (“Let’s discuss how we can understand and solve your problems”). To be real, such conversations need to be participative (a right to take part),deliberative (a right to discuss not just vote), associative(space to conduct the conversation) and consensual (a right to express dissent). 

Yet he also notes the constraints on implementing the vision:

...for most industrial age companies, empowering the community equals disempowering layers of managers. Hence, responsiveness is more easily gained for start-ups, where there aren’t layers of middle managers fighting to retain their empires.

Haque believes in firms that have a philosophy, particularly “a philosophy that emphasizes the first, fundamental principle of value creation, rather than planning planning a strategy focused on value extraction.” There is thus a shift from an overriding preoccupation with financial value and costs to instilling real values that create the basis for generating thick value that makes a difference in people’s lives. He cites Google (GOOG) as an example of a principle-driven business with such a philosophy, with its celebrated commitment to do no evil, its preoccupation with speed (fast is better than slow) and its furious experimentation to enable continuous improvement.

How far has the revolution already happened?

“If you look closely and patiently enough, you might not discern full-blown revolution (as in “the successful overthrow of authority”)–yet. But I wager that you’d at least detect, in vivid detail, its prelude…. Examining it carefully, you might see what I see: the first tiny shoots of what scholar Thomas Kuhn called a paradigm shift—not a small step, but a giant leap from one system of thought to its successor, which recasts an art or science in a radical new light.”

Mobile trends

These are the trends we expect to see in mobile advertising over the next several years. We hope the result for users will be a less annoying, more useful ad experience.

1) More interactivity and "apps as ads."

You use your phone for different things than your laptop and your TV. So ads should be different, taking advantage of unique things you can do on your phone -- like touching its screen, moving it around, accessing its camera, and using it anywhere.

That's the basis for interactive mobile ads, or the concept of building ads like mini applications. Apple's iAds are perhaps the most famous interactive ads -- letting you explore a tiny virtual world inside the ad, watch video, enter contests, play games, etc. -- but they're far from the only ones. Other companies like Medialets and Crisp Media offer similar tools to app makers and ad agencies.

We expect to see more of these interactive "apps as ads" as brands and agencies discover all the things they can do with mobile ads. The key is figuring out a way to make these ads useful and engaging, not just annoying pitches.

One big question is whether people will care enough to bother playing with these ads, or if they'll ignore them. Another is whether they'll actually buy stuff.

For an example, here's a screenshot of one of Apple's early iAds, where you could goof around with the way this kid looks.


2) Deals and rewards, not just empty pitches.

One of the coolest mobile ad models we've ever seen is from a new startup called Kiip. Their ads -- rewards and coupons -- show up in mobile games when people reach certain points in the game. For example, if you beat a level, you might be rewarded with a free cup of coffee or a discount on new shoes.

We're also intrigued with real-time local offers like the new Groupon Now service from Groupon.

The idea is that you can get a short-term deal on something right now -- like a sandwich or a haircut -- which encourages you to do something right away. This is the sort of thing that could be expanded into an ad product for other apps over time, if Groupon wants.

The big idea is to give people a reward or save them money for using these ads. That seems more worthwhile than just sticking ads in someone's face.

3) Companies using cool mobile products to reach consumers directly, instead of ads.

New distribution tools like the iPhone App Store are giving brands unprecedented direct access to consumers, without the need to necessarily buy actual ads to reach people.

4) Ads helping save you money on mobile gadgets or services themselves.

Wouldn't it be cool if you can get a discount on mobile service, or even on the price of your gadgets, if you agree to spend some time with ads?

Amazon is leading the way here with its new Kindle with special offers, which is priced $25 cheaper than its ad-free Kindle models, with the requirement that you see some ads instead of its typical screensavers. Since its launch, it has been the best-selling Kindle that Amazon offers.

This may be the future of how gadgets are sold. If companies like Amazon, Google, mobile carriers, and others figure out that they can earn a certain amount of advertising revenue per customer, per year, they may subsidize your device or service.

5) Mobile ads linking up with mobile payments to "close the loop."

Mobile ads have information about you that other types of ads don't, including your location and the apps and music on your phone (Apple's iAds). But in most cases, they still can't tell the ad buyer that you've purchased something after seeing the advertisement.

http://www.businessinsider.com/future-of-mobile-advertising-2011-6