Minnov8

Showcasing Minnesota Technology Innovation

FanChatter Goes to the Valley, Tapped by ‘American Idol’ for Startups: Y Combinator

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FanChatter-logoHere’s a story many in Minnesota have been waiting to hear — including several of you out there in the local developer and ad communities who knew something was up. FanChatter-clients Yes, our friends at Minneapolis startup FanChatter have finally gone public with what they’ve been doing for the past four months.  FanChatter is a site that “helps sports franchises and other businesses create a more profitable level of fan involvement through real-time content sharing.”  (More on the company’s About page.)  In April, it was chosen as one of the lucky few to be accepted into the summer program of Y Combinator (YC). Though the actual numbers aren’t announced, I’ve heard only 30 startups were chosen out of almost 1000 that applied. YC is an organization founded in 2005 that does seed funding for startups. Here’s how it explains what that means:

“Seed funding is the earliest stage of venture funding.  It pays your expenses while you’re getting started. Some companies may need no more than seed funding. Others will go through several rounds.  There is no right answer; how much funding you need depends on the kind of company you start.  At Y Combinator, our goal is to get you through the first phase. This usually means: get you to the point where you’ve built something impressive enough to raise money on a larger scale.  Then we introduce you to later stage investors or occasionally even acquirers.” (More on Y Combinator’s About page.)

YC’s application process is well explained on their site, a process FanChatter went through earlier this year, before their selection in mid-April.  After sitting on this story for some time, waiting for the TechCrunch post to break first (which is the normal way YC companies get announced), what follows is the result of a phone and email interview I did over the past few days with FanChatter founders Marty Wetherall and Luke Francl, who remain in Silicon Valley through August. (The third founder, Norm Orstad, was not available.) …  [Read More…]

VC Ann Winblad on Cloud Computing

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annwinbladAnn Winblad, a well-known and respected software industry entrepreneur and technology leader (and Minnesota bred entrepreneur!), is the co-founder and a Managing Director of Hummer Winblad Venture Partners. In 1976, following a stint as a systems programmer at the Federal Reserve Bank, Ann co-founded Open Systems, Inc. with a $500 investment, and turned it into a top selling accounting software company; eventually sold for over $15 million.

As a sidenote, I worked for a company called Clothier-Herold Co in the early 1980’s on the side of the firm that represented this little company called “Apple Computer.” The other side of the rep business sold Visicorp (Visicalc, etc.), Microsoft (which, upon going public, I thought would never make it) and a bunch of PC-oriented lines of product. In addition, our firm represented Open Systems, though none of us ever met Ann at the time.

A strategy consultant for prestigious clients such as IBM, Microsoft, Price Waterhouse, and numerous start-ups, Ann has co-authored the book Object-Oriented Software and has written articles for numerous publications. Ann received a BA in mathematics and in business administration from the College of St. Catherine, and an MA in education and international economics from the University of St. Thomas (Minnesota), which also subsequently awarded her an honorary Doctorate of Laws. She currently serves as a director of Voltage Security, Krillion, Mulesource and Star Analytics, a member of the Board of Trustees of St. Thomas www.stthomas.edu, and co-chair of SD Forum www.sdforum.org.

In this Idea Projects video, Ann talks about cloud computing and how by moving technology from location-based servers to a virtual environment, with expanded if not universal access, the opportunities for innovation increase exponentially. As a software funder she sees a trend towards 100% presence on any device at any time.

httpvh://www.youtube.com/watch?v=ip3kgMKvyIw

JPMorgan Internet Investment Guide

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Nothing But NetFor Minnesotans interested in starting up or expanding within the internet space in these challenging economic times, solid financial sector analysis is often difficult to obtain. For anyone who has pitched their idea, concept or business plan, it’s clear how important it is to put oneself in the shoes of investors, venture capitalists and banks providing the capital you require, and a great way to do that is to gain a more solid understanding of the data they’re using to make strategic investment decisions.

In addition, if you’re an investor with any money left in your 200.5k (i.e., half of a 401k) and could stomach some internet investing, then viewing opinions and recommendations on where to invest is key.

In both cases, an analysis of the potential of various sectors of an internet economy — by one of the world’s leading financial institutions, JPMorgan — is reason enough to spend the time necessary go through their “Nothing But Net” report.

Highlights of areas covered within it include:

  • US Sector Outlook
  • Ad Networks on the Rise
  • eCommerce Outlook
  • The Mobile Market
  • Social Networks Primer
  • Cloud Computing Outlook
  • Internet for Social Good

…and much more.

The paper is embedded after the jump along with a download link….  [Read More…]

2008 Investor Fraud Traps

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Whether you’re an angel investor listening to startup pitches or an innovator considering funding sources, now is a time to be extra careful with anything related to money, credit, lending or capital of any kind — especially if you’re a participant in a social or affinity network or if you’re transparent with your blog and other online participation (which give scammers lots of ammo to use to pitch you).

The Minnesota Department of Commerce just released this 2008 Investor Fraud Traps listing (in alphabetical order) and offer it as a warning:

Deficient Disclosure: The recent investigations by state securities regulators related to auction-rate securities (ARS) have reinforced that investors should remain cautious when pitched complex investment products accompanied by deficient disclosures or when advised to concentrate their investments too heavily in one investment product. It is best to avoid investment pitches that would lead you to put all of your eggs in one basket, especially if it’s a basket you don’t fully understand.

Energy Scams: The substantial increase in energy costs has made scams related to energy more prevalent. State and provincial securities regulators are seeing not only shady oil and gas investments, but also scams that promise the development of new technologies to increase the efficiency of energy consumption or to extract energy from sources previously thought too expensive to develop.

Online Affinity Fraud: In a new twist on affinity and online investment fraud, Tyler said NASAA members are concerned that unscrupulous individuals are trying to use social networking websites to lure people to meetings that may promote fraudulent or unsuitable investment products. “Social networking websites create an environment ripe for affinity fraud,” Tyler said. “Fraudsters can take advantage of the fact people freely share information with both their real and ‘virtual’ friends by posting it to their profile,” Tyler said. “Communication tools provided by some social networking websites make it easy to advertise and promote investment scams to a wide audience for free.” Investors need to do their own research before making an investment and should not simply rely on ‘expert’ advice given at a seminar or meeting.

…  [Read More…]

Best Buy Shakes Up VC Liaison Group

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The longtime head of the group within Best Buy Co. that served as liaison to the venture capital community is out, replaced by two senior VPs. Martin Nyman told me his position was eliminated June 30. He had been with the company for approximately seven years, with a recent title of Director-Global Innovation Network. At one time, Nyman had a staff of four, but that group was cut in April 2006 as part of a headquarters staff reduction.

A source inside the company described the recent moves as “the usual restructuring.” I was told that all VC-related activities are now under Rick Rommel, SVP-Emerging Business. Rommel reports to Kal Patel, whose title is EVP-Emerging Business. Also within Patel’s organization, I learned, is a second SVP-Emerging Business, Neil McPhail. My source tells me McPhail’s responsibilities are “less direct VC-related, although there is some overlap.” His main responsibilities relate to the stores and to the company’s “growth accelerator” initiative.

Yet another group within Best Buy is one that deals directly with the company’s own VC funding investments. That function has been headed for some time by Kuk Yi (first name pronounced “cook”), and is a part of the Finance function, specifically the Treasurer’s office. Yi also has a “dotted line” reporting relationship to Patel, I was told.

Late in March of 2008, a story broke via the blogosphere that Best Buy was forming a new VC fund of its own — actually two funds — which I later learned was an initiative headed by Kuk Yi, and it was seeking to hire Principals and Associates for those VC funds (as many as four positions). Here’s a blog post I did about the blog buzz and speculation going on at that time. The local Business Journal weekly broke the story in the Twin Cities media on March 28, picking up on the earliest blog reports.

No Action Since March?
The most surprising thing I learned from my sources recently is that no one has yet been hired for any of these positions. So, the question remains: just what is Best Buy doing in regard to formalizing its own venture investing function? And what changes, if any, can be expected in the liaison activity with the VC community at large, based on Nyman’s departure?

One thing is certain: Marti Nyman leaves Best Buy with a wealth of relationships with scores of VCs, including many of the most successful ones in Silicon Valley, where he spent much of his time. While assessing his next move, Nyman is doing business development consulting with a Twin Cities-based technology startup that had previously raised $5 million in venture capital and, he says, is on the verge of achieving significant adoption of its technology.

Thirty Semifinalists Named in ‘Minnesota Cup’ Business Plan Competition

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I attended and Twittered a bit at a reception Wednesday evening, June 25, at the grand, old James J. Hill Library in downtown St. Paul. (You remember old J.J., don’t you, the Bill Gates of his era?) It was an event to honor the startups who made it to the next round of the Minnesota Cup, an annual, statewide competition that seeks out aspiring entrepreneurs and their breakthrough ideas. The 30 lucky semifinalists were selected from a record of 840 entries in this fourth and largest year of the competition, and will vie for prizes that include $50,000 in cash for the first-place winner. An interesting tidbit I picked up at the reception: about 10% of the 840 entrants were Web 2.0 related.

Scott Litman, cofounder of the event, told me the competition this year was the toughest ever, and that many plans that might have made the cut in previous years didn’t. He also told me that, unfortunately, many entrants may have had great business concepts, but they were not understandable — the submissions were either poorly written, or riddled with so many acronyms and buzzwords that the judges flat-out did not know what the heck the submitter was talking about. (So, take heart, rejectees. You may be great at selling your ideas verbally — now work on the written word.)

Here’s how the Minnesota Cup site states its mission: “We’re looking for the next great entrepreneurial success story in our state. This competition is for all entrepreneurs, whether your breakthrough idea is high tech or no tech, whether you are just putting your ideas into a business plan or if you’ve been out building your venture.” Well, I wonder if it’s possible that any who entered, and especially the chosen semifinalists, could really be “no tech” in this day and age? That would be hard to imagine. And, in looking over the list, there’s nary a one that would seem not to rely on technology in their businesses. (Although some without a website certainly have the aura of no-tech at this point, perhaps awaiting prize money to build? And what’s with all the student semifinalists being listed with no websites?) As for the lack of a requirement that the business be new, i.e., that older startups can also apply, I know at least two on the list are four to five years old and still chasing $50k. Ah, hope springs eternal. Here’s the full list:…  [Read More…]

Minnesota’s Internet Tech Crowd Flexes Its Muscle

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If one had any doubt about the intensity of our state’s information technology and Internet community, one only had to be anywhere inside the U’s Coffman Union on Saturday for the third annual Minnebar “unconference” (part of an international phenomenon called Barcamp). To say the joint was a-jumpin’ simply does not suffice. And numbers alone don’t tell the story (though attendance was an event record at 430). Rather, it was the intensity of energy through the entire day that could only impress one about this somewhat quiet, and definitely underrated, sector of Minnesota’s economy.

I was there for at least 12 hours of the event — yes, it went on that long, and no one was complaining — and I can surely say that even the most skeptical of attendees who sacrificed part of their spring weekend were impressed with what they experienced, and left beaming with an elevated sense of pride in the industry they’re a part of. One needs only to scan the voluminous talk that went on in real-time — thanks to the magic of Twitter, and all archived here — to see that something big was happening in the Gopher state on this rainy fishing-opener Saturday. (In fact, Minnebar was ranked during the day as one of the top-five conversations going on in the entire, global “Twitterverse.”)…  [Read More…]

State of the State: Technology in Minnesota. A Minnebar Panel Discussion

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One of the highlights of Saturday’s Minnebar was a panel discussion entitled, State of the State: Technology in Minnesota. The panelists included: Douglas Olson (Microsoft), Jamie Thinglestad (formerly of Dow Jones), Michael Gorman (Split Rock Partners), Robert Stephens (Geek Squad), Dan Grigsby (Unpossible), Matthew Dornquast (code42).

Ed Kohler at Technology Evangelist has a post with highlights here. You can also listen or download the one hour podcast below.

Podcast: Download (Duration: 1:00:08 — 74.8MB)

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‘Minnebar’ Becoming Top Event for State’s Internet/Software Developers and Entrepreneurs

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An annual Minnesota event, playfully named Minnebar — which grew out of a grass-roots tech industry initiative called Barcamp — is happening for the third year in a row here in the Twin Cities this coming Saturday, May 10, at the U of M’s Coffman Union.
Minnebar logo By 8:00 am, somewhere between 300 and 400 software developers, startup founders (and hopefuls), web designers, interactive marketers, local media reporters, angels, VCs, and other investors will start converging in one place as they seldom do in any venue in these parts, at any other time throughout the year.

Coffman Union They come to talk shop, learn, share tips, listen to presentations on the latest tech developments and tools, share war stories, listen to startup pitches, and (of course) take notes, blog, and Twitter about all the proceedings on the laptops and smart phones they never seem to have far from their sides. …  [Read More…]

The Latest on U of M Technology Innovation and Commercialization

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The University of Minnesota is among the top patent producers in the world, ranking #4 on Scientist Magazine’s list of “Patent Powerhouses,” behind only three other major American universities. Yet, quantity of patents hardly paints the entire picture. What about helping to start up companies to commercialize those patents?

U of MN logo

According to the U’s own business development people (see link to Powerpoint presentation at bottom), the 20-year success record of the U’s technology company spinoffs is only half the university average nationally — and less than one-fourth the success record of the nation’s premier schools. What’s more, in one recent year (2004), for example, the U of MN spun off only one company compared to 14 at the University of Michigan and 16 at the University of Illinois. Why I am focusing here on spinoffs? Well, because, according the U’s own business development people, creating university spinoffs is “much more profitable than licensing (revenues)” to the school. …  [Read More…]