GM & Segway Partner on PUMA Urban Vehicle

Allright, this is sweet… especially to a guy who loves Segways (that’s me). GM and Segway are working together on a two seater mini-car that they hope will decongest big cities (some pictures). They’re calling it PUMA for Personal Urban Mobility and Accessibility. For one, it’s really cool. It has two wheels (plus four more little training wheels on the prototype) like a Segway but has seats like a car. In fact, two little seats. Secondly, it will use energy as efficiently as a car that gets 200 miles per gallon. Fantastic. They make a few good points about the demand for this vehicle probably coming from outside of the US where bicycles are currently a primary method of transportation.

Although I do understand that an electric vehicle is clean energy and if it replaced normal vehicles it would remove some congestion from big cities where cars are the primary mode of transportation, I don’t get how this would really benefit cities where everyone bikes. You can fit more bikers in an area than PUMAers and biking is clearly a very clean energy. So, at the moment it seems that the target market of their product wouldn’t receive the primary benefit of this vehicle. Regardless, it’s a Segway so I think it’s totally cool. I drive two miles to and from work each day so a super lightweight vehicle that I could plug in at night that had 35 miles of range during the day would be more than I need. Thank goodness I can take back roads (two lane roads) to work. This thing would become a pancake in an instant on I-40.

Facebook Co-Founder Speaking at CED Venture Conference in Three Weeks

Chris Hughes, Facebook co-founder and Obama insider is speaking at CED’s Venture Conference in April in Pinehurst. The recent announcement of Chris’ addition to the lineup makes this conference a whole lot more interesting. I’ve blocked off the dates on my calendar and will be attending now. His short bio is on the CED Venture website now. I also learned a lot more about him (his Obama campaign involvement, etc) through a quick Google search . There’s a good article on FastCompany about him as well.

The last time I attended the Venture conference with CED was a few years back when it was in Pinehurst as well. This was one of the best entrepreneurial networking events I’ve ever attended as the large porches outside of the Inn where the conference is held become crowds of investors and entrepreneurs milling around with drinks and cigars in hand in the late evening. A very neat opportunity to meet folks from all around the country. Drop me a note if you’ll be at Venture and we’ll catch up.

Pre-registration for Venture 2009 closes on 4/16 and you can register online.

Building Philanthropy in the Triangle

My friend Dan is launching a great organization called Triangle Gives Back with the goal of engaging corporations in the Triangle area of North Carolina to give more back to the community. The Triangle area ranks highly in many national lists that compare quality of living, education, business climate, universities, etc but its rankings for philanthropy are a little further down the list. Triangle Gives Back will be a hub for businesses, employees, organizations, and individuals to discuss opportunities for giving and partnering across the divide between for-profit and not-for-profit sectors.

As one specific example, businesses will pledge discounts to qualified member not-for-profit organizations who can then take advantage of the service or product discounts. Preation has pledged a discount for Eden Platform’s monthly subscription cost to Triangle Gives Back. Under this arrangement Triangle based charitable organizations can optimize their websites with no technical or marketing expertise required at a low and discounted cost. Eden Platform is offered with no setup fee and no term commitment so not-for-profit organizations can rest easy knowing that Preation has entirely removed the risk from the process of optimizing a website for the search engines. Non-profit organizations use Eden Platform to reduce cost and delays, empower staff and volunteers, and expand the reach and influence of their missions online.

Net Job Growth is Bigger in Texas

The Triangle business journal highlighted a few local cities, Greensboro, Durham, Raleigh, that ranked in the list of best of national job growth in 2008. Out of the top 88 cities only 15 actually had a net gain in jobs in 2008 with most losing several thousand net jobs within the year. The article didn’t seem to have much to say about the fact that four out of the top five cities on the list were in Texas (Houston, Dallas-Fort Worth, San Antonio, and Austin). That was pretty impressive to me.

Only Washington DC represented any other part of the nation in the top five. Each of the cities in Texas that topped the list gained ~10,000+ jobs and Houston gained nearly 60,000. I need to visit Texas some more this year and talk to some business owners to find out what’s driving the growth down there. Many of those cities and certainly Austin are known as up-and-coming technology business centers but I didn’t realize the growth was so out of proportion with the rest of the country. Or maybe it was simply that the job loss due to macro economic challenges was less for this region. Regardless, something is different and inquiring minds want to know.

Durham created 1,700 net jobs and ranked 11th which was due in small part to iContact hiring around 80 employees in 2008 which was pretty cool to see.

The Quirks of Entrepreneurs

A friend of mine passed on an article to me tonight on the topic of (warning: some possibly offensive content on this site) dating an entrepreneur and I thought it was good enough to be shared. I don’t believe I ever dated an entrepreneur actually thinking back on it now. These days my wife is becoming a bit of an entrepreneur herself so I guess I’m wading into this situation slowly. In her article Kelli looks at what it’s like to date an entrepreneur, a reflection probably not far from the conversations in the heads of everyone I dated in my single years. I will mention as a marital-peace disclaimer… I do not remember these years.

Entrepreneurs can do very abnormal things but I think they are driven my pretty normal motivations.

I heard a great analogy from John Grinnell of Grinnell Leadership the other day about two different people approaching the same problem from different angles. The story goes like this. Two people with identical assets and situations see a beach house for sale and the first person decides that the monthly payment is simply too much for them so they turn down the opportunity to buy it. The second person sees the beach house and knows that they cannot afford the monthly payment but notices that because of the structure of the house two additional downstairs entrances would easily allow it to be subdivided into three units. Because the property is undervalued two units could easily be sold for the total value of the house which would yield them a free house at the beach. The house is smaller and the risk required to purchase the house and divide it into three separate units may be high… but the reward of a free beach house is high.

The funny stories you hear about entrepreneurs come in the midst of these little projects and I bet many of them rise out of the stress that comes from taking unusual risks. Using money and time carefully and seeing business opportunities everywhere comes naturally to this type. They can also be seen as loners because the large majority of the population thinks like the first person in the example above who would never consider subdividing the beach house.

Seeking a Job or Business Success in a Tough Economy

Thanks to Rick Smith at WRAL LocalTechWire for covering an interview we had last week about surviving what he is calling a “nuclear winter” in the business world. He also highlighted my advice for job seekers in his The Skinny column as well where I think he did a great job of capturing the urgency that I think job seekers should take to building their personal brands online before looking for that dream job. Thanks for the coverage Rick and Happy New Year!

The Story of the Brainwashed American Consumer and Stuff

I was at Macy’s on Tuesday December 23rd at a time when I’m usually doing my last minute Christmas shopping. Since my immediate friends and family and I decided not to exchange presents this year (we donated two water buffalo to the Heifer Project instead) I basically just used the day to visit the local mall to pick up some things I needed.

While walking through Macy’s at the top of my mind was a recent online presentation I watched called The Story of Stuff with Annie Leonard. I think my little younger brother Bryon was the one who sent me the link recently although I remember hearing about the Story of Stuff first about four months ago when my friend Katie and her husband Shawn linked to it from their wedding website. The Story of Stuff is a great discussion of the negative long term affects on American culture and the environment caused by the consumer products industry.

Essentially the process works like this:

  • Companies rape the earth of natural resources through political and economic leverage
  • Those resources are processed into products through chemical processes that add a number of harmful substances into our environment and the products themselves
  • We ship the products around the globe and then buy them in large volumes
  • Within three years 95% of those products are sent to waste processing facilities where some are burned which creates toxic gases and others are put into the ground in dumps.

Over time this process essentially cheapens the earth and leaves us with little value while big corporations make profits all along the way. The Story of Stuff seems to be quite anti-corporate in nature so the bias is obvious but the validity of the process cannot be denied, at least upon my analysis.

The Story of Stuff goes on to explain that the primary driver of demand for the high volume of products in this process a strategy put in place by big corporations called planned obsolescence. Planned obsolescence means strategically building and designing products in a way that they must be replaced within a short period of time. Annie explains that planned obsolescence was an important idea that entered the corporate scene several decades back and that it has worked very well for the corporations. Essentially if the big corporations can convince people that the products they currently have are not the newest and best products available or if those products become less useful for a variety of reasons then consumers will have to purchase the new thing. This keeps steady cash flow coming to the corporations over time.

Annie believes that American corporations have taken planned obsolescence a step further by advertising and marketing the act of frequent consumption as a type of success or exercise of personal freedom that is rightly American. She even cites George Bush’s plea to Americans to shop after the tragedies of 9/11 as if even our president wants us to remember that blind consumption is our fundamental right… a right that the terrorists threatened and that we should now flex in response. The point here being that if these corporate advertising and marketing campaigns have brainwashed Americans successfully then we don’t make buying decisions anymore based on fundamental needs. We instead make them based on fulfilling our psychological need to consume more and frequently.

I tell you all of this to return you back to my story of walking through Macy’s at Southpoint Mall in Durham earlier this week. After recently reading the Story of Stuff and having blind consumer consumption on my mind I saw a great sign above a table top of discounted jewelry. The sign was large and colorful and stylish and it was the only indication of what I might find on the table below. Instead of explaining some of the reasons that I might want to purchase jewelry (ie: show a loved one how much you care, or mark a special occassion) or highlighting the fact that discounted jewelry would save me money (ie: more money in your pocket, or same great product at a new lower price) it instead suggested I spend more through a trickily crafted message of consumption. The sign read “CLEARANCE EVENT” in large letters and then following in a festive holiday ribbon it said “if you get a good price on one, splurge on another.”

Could you imagine actually saying this to someone in person? What if you were telling this to someone who needed to purchase four new tires for his/her car? Sir, if you get a good price on these four tires, splurge an another. In this case the ridiculousness of it all is obvious. You don’t need five tires for a car so spending more because you can get a good deal just doesn’t make sense. On the other hand splurging on more jewelry totally defeats the value one would normally get from a clearance event in the first place but it isn’t quite so obvious. I’m reminded of the common advertising saying “the more you buy the more you save” which for years has dumbfounded me how this could possibly have any influence on people. It must since I continue to hear it being used in TV and radio messages for furniture stores across North Carolina every day.

So, in closing I’d just like to make my own plea of the American consumer. When you are shopping please, please, please use your logical brain to consider what advertising and marketing messages are trying to get you to go. Determine and understand their bias and don’t fall victim to the use of consumption motivation tactics that try to correlate your spending more with your fundamental rights and needs as an American. In my opinion real freedom probably has more to do with the ability to think for yourself than the ability to express yourself through consumption.

Eco Cycle Bicycle Storage System in Tokyo

My business partner at iContact Ryan sent me the neatest thing in an email tonight. It’s called the Eco Cycle. it is an underground bicycle storage solution currently being used in Tokyo, Japan. It reminds me of those cart dispensers in airports where you can rent a cart to help you move your heavy luggage to and from baggage claim. But this is even better. This system not only accepts your own bike as input but it stores it neatly out of sight underground in a huge stacked cylinder. The system appears to be a whole lot less space efficient than the common side-by-side bicycle rack you can find on any street in a bicycle friendly city but it has several key advantages.

The first advantage is security. Bicycles can be expensive and at the end of the day finding your bike missing is not only a loss of money but also a loss of a ride home that may cost you dearly in a cab or on foot.

The Eco Cycle system is also much more visually appealing as it has a similar visual footprint as an ATM.

I would bet that the system also provides a benefit to the long term maintenance costs of a bicycle by keeping it stored in a dry environment out of the elements and the wear and tear and risk of frequent passers by.

Finally I think the advantage of using underground space instead of above ground space is exceptional. In busy cities where a high percentage of commuters move around via bicycle the space to park those bicycles along a sidewalk is a hindrance to pedestrians who use the sidewalk space to walk.

Considering the moderate failure rate of other automated systems we use every day like parking payment systems and drink vending machines I wonder what you would do if this machine ate your bike. Hopefully there is someone on site with a ladder and access to a hatch in the floor.

The Eco Cycle is a fantastic innovation and I love how it resolves an interesting problem in urban planning with a very creative solution. Has anyone seen one of these in person? It almost seems too good to be true.

Tyler Hansbrough Breaks Phil Ford’s UNC Career Scoring Record

Sarah and I had great seats tonight at the UNC game against Evansville at home in the Dean Dome in Chapel Hill. Our friends at Trust Company of the South provided us with a nice upgrade to our normal season tickets which are literally the four worst seats in the Dean Dome… an upper level corner section in row Y.

For this game I had a great vantage point five rows up from half court. I was able to shoot this video as Tyler Hansbrough scored his 2,292 point at UNC (make sure to click for the ‘high quality’ version once you get to YouTube) in a classic Hansbrousian shot through double teamed defense on the low post. When the shot went in off the bank the crowd erupted and Roy called a time out. Tyler thanked and waved to the crowd and shook hands with the team. Photographers rushed the court and piled up around half court to take pictures of Tyler who was shaking hands with Phil Ford.

The new Chancellor of UNC Holden Thorpe was sitting four rows in front of us. I never really thought about it before but he sure had great seats. Hey Holden, if you’re going out of town for any reason let me know and I’ll keep those seats warm for you. And one more question, did you know about those seats before you applied for the position? Well played sir!

Venture Capital Market Predictions for 2009 to 2010

The National Venture Capital Association is reporting the results of a recent survey of Venture Capitalists in which 60% of VCs believe that a drop of venture capital investments of 10% or more will occur in 2009. Also, the President of NVCA feels that 2010 will be a better year for Venture Capital as investments in private companies are expected increase alongside expecations of reopening IPO markets then.

Many VCs I’ve talked to recently feel like their industry is in real trouble but on the flip side just as many feel like now is a great time to get a deal on a struggling company. I guess one of those opinions will prevail based on how flexible entrepreneurs are willing to be with their company valuations. When Sequoia got their CEOs together a few months back in order to scare them profitable with pictures of pig carcases and economic graphs that would have put Alan Greenspan to sleep they clearly were warning against the risk of a down round if the companies burned to the bottom of their cash piles.

In the same way that the challenging economic environment right now will drive companies out of business across a wide variety of industries who rely on institutional investors, the VCs are also in this boat. They of course are just focused investment vehicles primarily for large endowments in the private and public sector. As those endowments miss cash calls (because of their recent losses in other investment categories) from the VCs some firms will not be able to properly support even their existing portfolio companies. As their portfolio fails so will the firm over time.

I know of a few small VC firms in real trouble right now. Many are essentially non-operational although still technically in business. Some of the larger VC firms are shedding associates right now to cut costs considering the typical job of turning up leads for dealflow isn’t really needed right now… because the firms aren’t planning on putting any money to work anyway.

Additional Note (1/2/2009): Forbes.com has a great article with more details on what they call “Venture Capital’s Coming Collapse.” At the very end of the article (on page three) is a point I think is very valid and reflects a bit of what may ultimately happen in the auto industry (whether right or wrong)… a mention that a consolidation of VC firms (ie: the demise of the lower performing firms) would lead to generally higher returns across the industry.

From the numbers it does appear that mediocre VC funds are not worth a 2% management fee or any management fee at all. A long term 5% fund gain is just terrible considering the risk. The Forbes article mentions that “the median return for all venture funds was just under 5%, or worse than what Treasury bonds would have given you.”

The Forbes article is also a bit unfair since it mentions lots of fund IRR (Internal Rate of Return) percentages for incomplete funds. VC funds, because of their risk, can be extremely upside down through a significant portion of the life of the fund. More interesting numbers here would probably be some trending information on the average length in years of funds (for which general knowledge is telling us that it has been extending in recent years and certainly currently with no IPO market) and also the average percentage of a good fund’s life (maybe defining a good fund as one with an IRR of 10% or greater at its close) that it spends with a negative IRR. Also the average negative IRR for those good funds during their negative IRRs phase (or phases possible?) would also help us evaluate this further. Based on my recollection I would assume that even the good funds have a negative IRR through at least 30% of their lifetime. Anyone have any of this data?

A few more articles came out today highlighting the low point in VC liquidity since 2003 (five years). One of them calls it the complete death of IPOs and the other calls it the lowest point since the tech bust. As an interesting aside the VC market doesn’t look that bad in this article where Mark Heesen of the NVCA mentions that although Q4 2008 venture fund raising was slow ($3.4 billion down from $8.4 billion from the previous quarter and $11.7 billion from Q4 2007) that many funds raised earlier in 2008 and in 2007 and thus because of cyclical timing in addition to economical timing the Q4 raise number is expectedly low.

Mark Heesen is shedding some light on the VC market’s long term gains today in a report stating that the 10 and 20 year VC gains remain around 17%. Right now is a good time to be quoting long term gains in any industry 🙂