Thursday, March 18, 2010

Steve Case Is Back In The Garage

Steve Case, the former AOL Chairman, looks thin and fresh as he takes the podium. He’s here in Stanford’s Hewlett hall, taking a photo of the audience before launching into his speech. “You don’t look so great as a group,” he cracks.

Case is the co-architect of the biggest merger in history, the infamous AOL-Time Warner deal, which Vanity Fair journalist Nina Munk described in detail in her 2004 book, aptly titled “Fools Rush in.” The merger was a failure, with both part of the new company ignoring the other one, and posting a loss of $99 billion in 2002 - still the all-time record for a company. Former Time Warner Inc. CEO Gerald Levin recently apologized for the merger, calling it “the worst business deal ever.”

“We seem to be lacking entrepreneurship today. Old companies always play defense, and we need the new guys to play offense,” declares Steve Case at one point. The remark might have had more to do with soccer than football - his daughter Annie, a Stanford freshman, plays defense for the women’s soccer team. “She’s here somewhere, but I won’t embarrass her by asking to stand up,” says Case.

That one sentence seems to sum up Case’s explanation for why the merger failed. For him, Time Warner was the big, old company, playing defense, while AOL was the aggressive newcomer. “Vision without execution is hallucination,” he says at one point, “and we should all accept responsibility for not making it work.”

After being ousted as the Chairman of AOL Time Warner Inc. in 2003 - right before the company went back to its old name, “Time Warner Inc.” - Case focused on his non-profit, Case Foundation, which helps fund and promote new projects “that can change the world.”

“It feels like my early days - I’m in a garage, working on projects I like,” says Case as he concludes the speech.

Monday, March 1, 2010

Fishing for a Compelling Story

Theresa Lina Stevens and Forrest Glick of the Stanford Technology Venture Program (STVP) present a workshop on how to effectively pitch and present ideas to an audience of investors.

The Hasso Plattner Institute of Design was a location befitting to the nature of the presentation and the diversity of the audience that attended. Adorning a blue foam tugboat sticker (my pass for the event) I walked to a back room and sat on a lime-colored plastic chair amidst the red retro couches, black foam cubes and various other unidentifiable seating furniture.

I watched as attendees trickled in with their yellow train, orange plane and green sports car passes, taking a foam cube or wooden crate to relax and wait as the café-style lounge music played in the background. The setting was, in essence, an art studio filled with ‘artists’ ready to workshop. Stanford alumni, students, entrepreneurs, international visitors, and interested locals alike brought enthusiastic energy, sharing their thoughts and ideas with others in the room.

Theresa Lina Stevens, a core member of the Stanford Technology Venture Program (STVP), opened the workshop by offering advice on how to structure the content of a presentation. “Don’t try to pitch your audience,” she stated, “Your number one goal is to get their attention and you lose it as soon as you start reciting a sales pitch.” According to Stevens, the biggest problem that presenters face is failure to hook the audience’s attention. Stevens explained how using a “Why/what/how framework” can solve the problem.

· Why is there a problem?

· What needs to be done about it?

· How have you uniquely solved the problem?

“Bait them, hook them, and reel them in!” became the theme for the day when declared by Stevens who threw on a yellow rain jacket and cast out a fishing rod with such speed and gusto that anyone who blinked missed the transition. Stevens proceeded to throw plastic eggs with examples of pitches inside into the audience and asked, “Now who here was not excited about me throwing things into the audience?” A simple yet effective tip, the idea of turning attention onto the audience grabs everyone’s interest.

“Enslave me!” echoed through the room as the first egg holder read her pitch aloud. Stevens explained the pitch was the subject line of an email from an intern looking for a job. The intern was hired.

As an interactive workshop, everyone in the room had the opportunity to break into groups and practice pitching while also providing feedback. One of the most difficult tasks was the “tweet test.” “Can you tweet your pitch?” Stevens asked. Cutting a one minute pitch into a twitter message with all elements intact constitutes a “tweet test.”

Forrest Glick, the Director for Educational Technology at STVP, took over the second half of the workshop dedicated to working on the visuals of a presentation.

“It’s like a sculptor carving stone,” Glick stated, “as you continue, you reveal the form of your presentation.” Glick prefers to start “in the analog,” looking for opportunities that are uniquely presented to the speaker rather than relying on a PowerPoint to structure the presentation.

“Think like a designer,” was Glick’s main advice, “We have so many tools at our disposal.”

A video of Guy Kawasaki offered pitch advice. Glick emphasized, “People can read faster than the presenter can talk,” so don’t get caught up on a bulleted presentation but rather “Simplify and amplify” using visuals.

Both Stevens and Glick concluded by reiterating their main points, “Be a student of the topic,” and don’t forget to “Bait them, hook them, and reel them in.”

Sunday, February 28, 2010

Have you tried putting algae in your Mercedes’ engine?

Solazyme CEO Jonathan Wolfson thinks that research into bio-fuels has finally approached a level that makes production scalable to meet mass-market demand.

by Poornima Weerasekara

A few years ago no one would have used the words Merceds and Algae in the same sentence. But now Solazyme, Inc., a South San Francisco, based biotechnology company has developed an algae oil-based biodiesel which it has road tested on a Mercedes Benz C320.
“We have Road tested algae fuels unmixed in unaltered engines for over 10,000 km. The oils produced by Solazyme’s algae would be a full replacement for petroleum-based fuel, not an additive,” Wolfson said, at the recently concluded Stanford e-Week seminar that focused on the challenges of commercializing bio-fuels.

The department of Defense in Sept. 2009 also switched to using jet fuel made entirely of algae derivative supplied by Solazyme.
Earlier the company had its research and development funded by the Navy in exchange for 20,000 gallons of fuel for its ships.
“The department of defense cares about bio-fuels because it gives energy security. The Environmental protection agency wants greater progress in this area because it’s a source of clean energy. There is a lot of momentum in the bio-fuel sector,” he said.

According to Wolfson, the biggest challenge facing bio-fuel companies is finding a production process that makes the “cost per unit” competitive with conventional oil.

“Can u do it at the right cost? Our target is to design a process that converts a pound of bio-feed stock to oil at 0.25 – 0.50 cents per pound. That’s the key to making production scalable,” he said.

Algae bio fuels reduce carbon footprint by 80-90% vs. ultra low sulphur petroleum source – source: life cycle association.

Byproducts of algae based oil production can also be converted into consumer and industrial chemicals, including food additives and cosmetics,” he added.

Taking a greenleap forward
But Solazyme didn’t stumble on the right production mantra for several years.
“When we started we were making a lot of algae in these bio-reactors. But this path was not commercializable in the near future,” Wolfson said. “Then we found this angel investor – who had launched several bio fuel companies- that had failed. He said if you guys succeed you would disintermediate conventional oil.”

“That is when we realized that conventional oil companies owned over a $1 trillion worth of distribution infrastructure. We realized that if we wanted to make it big we needed to leverage on this infrastructure. We threw out our first production platform and from then on the only thing we care about was SCALE,” he added.

Solazyme entered into a biodiesel feedstock development and testing agreement with Chevron Technology Ventures in late 2008. Industrial fermentation – the same tech used to make beer or wine – is at the heart of their new proprietary technique to turn algae into oil.

Why algae?

“Algae are single cell organisms that have evolved to compete in very harsh environments and as a result have evolved incredibly strong pathways to store oil,” Wolfson said. “It has the highest energy density compared to other plants used to make bio-fuels like Canola or Soy. Algae production processes are yielding 10 times more oil per acre than soybeans,” he added.

The future ain’t slimy

“When we started the company – the weren’t many algae fuel companies. Now there are over a hundred of them,” Wolfson said adding that There weren’t many Venture Capitalists that were funding clean-tech.

“Literally less than half a dozen VCs were making energy investments 5-6 years ago. But now everyone wants a piece of the algae pie. So the future of this sector is neither slimy nor slippery,” he added.

Saturday, February 27, 2010

Never Miss an Opportunity to be Fabulous

Tina Seelig stimulated the minds of hundreds of parents in the Hewlett Teaching Center at Stanford University this afternoon by showing them how to see the world through a lens of possibility.

"This isn't about turning lemons into lemonade," Seelig said. "This is about turning things like lemonade into helicopters."

Seelig is the Executive Director of the Stanford Technology Ventures Program, as well as author of the book What I Wish I Knew when I was 20.

She was the featured speaker at the class called Entrepreneurship as an Extreme Sport that was offered to the parents of Stanford students who are in town for Parent's Weekend, an annual on-campus event that gives parents a glimpse into their child's academic life.

Animatedly clarifying the visuals on her PowerPoint with multiple anecdotes from her own life, Seelig drew a comparison between the courage needed to jump off of a cliff and the fearlessness you need to be a successful entrepreneur.

"Value can be found anywhere," Seelig said. "You just need to get out of your comfort zone."

One of Seelig's most engaging tales was the one most relateable to everyday life. She was shopping at the grocery store one day to pick up some frozen lemonade mix when she bumped into a guy who was also in the market for concentrated refreshment. They began to chat about something random and she found out that he was in Silicon Valley from Chile to learn about entrepreneurship.

Coincidentally, she teaches a course on entrepreneurship at Stanford, gives him her card, and they go their separate ways. Later, she was traveling to Chili, so she e-mailed him prior to her departure to see if he wanted to grab a cup of coffee with her while she was in the country. He does, but is so busy that he can't meet up. However, he said, she should invite some of her colleagues to join her on the trip and go to a certain building at a certain time when they arrive.

Not knowing what to expect, she agreed to do it. When she and her colleagues arrived, a member of his family greeted them and escorted them to the family helicopter. They get in and are swooped away to the family ski resort, and later flown around the country. Talk about being fabulously lucky!

Or is she? Seelig told the crowd that successful entrepreneurs learn to be lucky, for luck is a learned behavior that is the byproduct of experience and value assessment.

Turn problems into opportunities #stanfordeweek on Twitpic

Professor Richard Wiseman, author of the book The Luck Factor, is a former magician turned psychologist who studied the science behind the lives of lucky people. His most revealing experiment took two groups of people and tested them to identify how luck factored into their success rates.

The groups were separated by the way they self-identified. One group consisted of people who called themselves lucky, while the other group labeled themselves unlucky.

Wiseman gave them a task: Look through this news paper and count how many pictures are in it. The unlucky group took a very very long time; but the lucky group found the answer within a matter of seconds. What was different about the lucky group's experience that allowed them to find the answer so quickly?

Written on the front page of the paper in bold were the words: "Stop reading. There are 42 photos in this paper." The unlucky group was so busy counting the photos that they didn't see what was right in front of their faces.


Much like a cliff jumper, an entrepreneur sees the world as a place full of possibilities in which they can challenge assumptions and create value.

"The most successful entrepreneurs are the ones who are aware of things in their environment, and leverage the surprises that come their way," Seelig said.

She illustrated her point with a 25-second clip of Vinod Khosla, former general partner at the venture capital firm Kleiner Perkins.

With an open mind and shrewd networking skills, the world is a place full of possibility.

To see Tina Seelig in action, check out her videos on Stanford's Entrepreneurship Corner. Here's one in which Seelig talks about why failing will actually make an entrepreneur more successful.

Women Who've Launched

by Susana Montes-Delgado

Women entrepreneurs are seldom the majority at Silicon Valley events. But when they get together, their combined experiences appear to increment the sound and the energy of a room.

Last Wednesday, women flocked from all corners of the world to see Gina Bianchini, co-founder and CEO of Ning; Judy Estrin, CEO of JLABS and Mae Tai O’Malley, founder and managing attorney of Paragon Legal, who came together to speak about entrepreneurship at the Stanford Alumni Center. Their goal: To shed light on the challenges and rewards of being a businesswoman in the 21st century.

Gina Bianchini said she launched the social networking platform Ning after several successes and failures in her business career. Her vision materialized when she decided to break the mold and innovate the social networking world. In 2004, she started Ning with one idea in mind: To provide freedom to social networking users.

What differentiates her company from other social sites like Myspace and Facebook is that Ning allows users to create their own social networks with customized layouts and features based on their interests, she said.

If you give people space to create their own experience online," said Bianchini. "Really interesting things happen."

Judy Estrin, CEO of JLABS and author of Closing the Innovation Gap, agreed with Bianchini.
Behind any new innovation there is an adventurous spirit who is not afraid of failure, she said. Estrin believes all good business ideas grow if there is a clear mission and purpose--and a strong leader who moves that enterprise forward.

"If you are afraid of failure, the entrepreneurial path is not for you because it is definitely not a straight line," said Estrin. "Entrepreneurship is a state of mind."

Estrin believes the most profitable businesses grow when they stop focusing on making money. The best way to grow a business is to work with flexibility and patience, she said. This comes from a woman who has co-founded 7 successful technology companies and who has been named to Fortune Magazine's list of the 50 most powerful women in American business.

"We need to change our focus. Businesses should be about making a difference," Estrin said. " They should be about creating products that can change the world."

Mae Tai O’Malley, a lawyer and founder of Paragon Legal, one of the nation's fastest-growing alternative model law firms, said this was her case: Her company took on a life of its own without her even knowing, she said. O'Malley began her career at Morrison & Foerster and then worked in-house for Symantec and Google before founding Paragon in 2006. She has been featured in numerous publications including the Wall Street Journal, National Law Journal, and SF Business Times.

Instead of a traditional lawfirm, Paragon Legal puts lawyers on-site to work at senior level positions within companies. Today, her company provides legal counseling and services to Netflix, Yahoo, LinkedIn and Cisco, to name a few. And most of the attorneys are women.

"I didn’t know what I was doing at the beginning," O'Malley said. "But you've got to stick in there, keep on going."

The three women agreed that women entrepreneurs not only need to have discipline, drive and passion. They also need to balance their time and ask for help, when necessary. The three of them have raised children and businesses at the same time. And they said they have gradually learned to find a balance between work and play.

"Think about jugglers: They know how many balls they can keep in the air," Estrin said. "The key to work-balance or life-balance is to pick the number of balls that you can juggle. What are the balls that are most important to you? You've got to know yourself. Put down a ball-- or ask for help."

Estrin added that sometimes taking unnecessary risks to start a promising business idea is not recommended. Women, in particular, need to be careful about their investments, she said.

"I encourage people not to invest what they cannot afford to lose," she said. "You've got to have enough of your own resources. If you can’t afford to do start your own business, stay in your job while you put together your business idea-- and then find somebody to fund it."

Friday, February 26, 2010

Cleantech and Cloud Computing Tie the Knot

Quote of the afternoon: "Entrepreneurship is in full throttle. It’s a great time to start a company when there isn’t a shining rainbow in the distance," Warren Packard said this afternoon in Bishop Auditorium.

As the Managing Director at Draper Fisher Jurvetson (DFJ), a venture capitalist company that has managed over $6 billion, Packard knows a thing or two about investing in start-ups. Or 600 things, the number of investments his company has made.

This was refreshing to much of the audience, who was accustomed to hearing what a cacophonous disaster job searching was. I was hooked, ready to hear how these two former GSB students found success along their own separate paths. Yet as is the case with most Stanford students, their career plans converged once again.

Both graduates of '97, Packard and Seamicro CEO Andrew Feldman began talking business again when Feldman stumbled across a great need in the data center industry: power.

"I had no interest in cleantech," Feldman said. "But I saw that data centers like Facebook and Google were such huge power sucks that I thought, 'I gotta solve this.'"

Feldman explained how these giant media companies would trek miles and miles to rivers just to get cheap power. It just didn't make sense for such successful, large companies to have to do this. So with potential customers like Yahoo, Feldman said he saw an opportunity.

He merged the two hot industries of cleantech and cloud computing. The problem? The idea was extremely capital intensive and needed hundreds of millions of dollars. But because Feldman had already identified potential customers, he had already checked off the first step to convincing a venture capitalist to fund his company, Packard explained.

The next steps?

(1. Identifying potential customers, as I already mentioned above)

2. Build a team: This involves lots of breakfasts, lots of lunches with lots of people, Feldman said. He had to pitch this idea as something revolutionary and new. Just a decade ago, data centers' CPUs were all about handling a small number of large tasks. Now, because search engines offer free services, there is an enormous number of small tasks occurring every second. This causes huge energy consumption that can be greatly reduced.

3. Ask for money: Though it’s the most painful part, it doesn't have to be the most difficult part. Packard explained that you shouldn’t classify your company as a "cleantech" company or "cloud computing," but as a company that will solve a customer need.

4. Raising money: This is where DFJ and Packard come in. The most interesting analogy of the afternoon was used when Feldman explained the relationship between start-ups and VCs. His wife works in the emergency room; she treats patients everyday who will remember their emergency room visits for the rest of their lives. Start-ups are like emergency room patients. When you go in for treatment, it’s something you’ll never forget. For medical professionals, or VCs, it’s just another Tuesday. You’ve got to stand out, and VCs will want to invest in your company.

5. Once the VC has committed, they'll take a Board seat. They will line up prospective investors, establish strategy, and jump on your bandwagon.

6. Execution: FINALLY! DFJ's job is to exit the picture and make sure the company can stand on its own two feet. Right now, not the case, but possibly in the future. Feldman explained that he's looking for engineers right now. And though he must pay them $100K less than bigger companies like Cisco and Juniper, he can provide the best experience possible. "I remove every ounce of BS from their lives so they can focus on their job," he explained. "Anything not engineering related is my problem. They don’t get the garbage from big companies in return for a substantial pay reduction."

Like a marriage, Packard said, the journey for a start-up and VC is a wild one, but if there's a spark, something innovative, and a supportive mutual understanding, it can be an ultimate success.

Thursday, February 25, 2010

Water, water everywhere, and not a drop to spare

A handful of companies are clustered in a corner of the Arbuckle Cafe in the Graduate School of Business building on Stanford Campus. The subject is water.

Water is the ultimate resource, and more frequently, it is a scarce one. Not content to watch an opportunity go by, a handful of start-ups offer ways to save it, use it for irrigation and clean it up.

Not your dad's sprinkler system
What do you get when you combine 21,000 tracking stations across the continental US, a proprietary model to calculate evaporation rates and an internet-connected water sprinkler controller? According to Scott Meinzen of WeatherTRAK, "A system that lowers water bills, reduces runoff, and pays for itself in 24-36 months." Started in 2001 in Petaluma, WeatherTRAK controllers are being installed in businesses, schools and residential sites across the US.

Low-tech solution targets 600 million farmers in China and India
DripTech is a two-year old start-up homegrown out of the Stanford Design School. Their product is a low-cost drip irrigation system for developing countries. "The market is 600 million farmers in China and India," Danny Gilliland explains, "Our product allows them to double their crop yield by allowing them to plant during the dry season." The key to their system is that it does not require a high-pressure water line, a rare luxury in developing countries.

In a reversal of the usual way global economics works, the US manufactured DripTech's first sale was to 100 greenhouses in China. Their technology is a drip-line that can deliver water 100 feet using only 3 feet of water pressude. Their first in-the-field product test is coming up, the Chinese dry season is fast approaching.

Clean up after yourself
At the stairs Terry Appleberg stands next to pamphlets for APTwater. "We clean contaminated groundwater using ozone and hydrogen peroxide to destroy contaminants," he explains. Customers include industrial firms seeking to clean groundwater that they've polluted.

The night ends, the company reps pack up for the drive home without fanfare. These may not be the rock stars of eweek, but these companies are looking to make a splash where it counts. I'll drink to that.