never-mind-the-valley - ReadWrite http://readwrite.com en Copyright 2012 SAY Media, Inc. readwriteweb@gmail.com http://blogs.law.harvard.edu/tech/rss Tue, 25 Jan 2011 11:00:11 -0800 <![CDATA[Never Mind the Valley: Here's Vancouver]]> When you talk about vibrant West Coast startup scenes, obviously Silicon Valley dominates the conversation. Then there's Seattle, of course. And I'd be remiss if I didn't mention Portland too. But just north of the border, the entrepreneurs in Vancouver, British Columbia insist that their city should be viewed alongside these other prominent West Coast hot-spots.

Home to the recent Olympic Winter Games, the coastal city is Canada's eighth largest, often ranking as one of the most livable cities in the world. Known for its proximity to both the mountains and the ocean, it's a great spot for the outdoorsy, the adventurous, and yes, the entrepreneurial.

In fact, the city's mayor recently touted Vancouver as having the highest number of entrepreneurs per capita in North America.

The Vancouver Startup Ecosystem

Vancouver has a number of local events and programs that connect and support members of the community, including Vancouver GreenTech Exchange, Vancouver Startup Weekend, Mobile Mondays, and BCIC-New Ventures Competition.

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There's also a healthy network of VC firms, including Ventures West, Banyan Capital Partners, GrowthWorks, Yaletown Venture Partners, and Chrysalis Ventures, as well as a strong angel investment community in the city - all providing the necessary capital and mentorship to startups in their developing stages.

The Provincial Government also offers tax credits and cash-back incentives to investors, as well as investment and support from the regional colleges and universities.

Greater Vancouver accounts for more than 60% of the province's 600+ digital media companies, and it's also one of the leading centers for video game production. As such, the city is a blend of both major media and gaming companies, as well as local, indie businesses - Sierra Wireless, Pixar, THQ, and Vivendi/Activision, to name just a few.

The local Internet startup seen is anchored by accelerators like Wavefront and the Bootup Entrepreneurial Society, and companies like Hootsuite, Plenty of Fish, Geotoko, and Compass Engine call Vancouver home.

"For tech startups, Vancouver rocks," says Daryl Hatton, the CEO of ConnectionPoint Systems. "We have a vibrant and creative tech talent pool, tremendous support from the provincial government in helping acquire angel/friends/family financing, and a quality of life that keeps people here. Our proximity and shared time zone with Silicon Valley makes it easier to partner with industry leaders."

On one hand, the proximity to other tech hubs like Seattle and Silicon Valley may make it easy to overlook Vancouver. But with a strong talent pool, a great education infrastructure, and a good economy, Vancouver certainly holds its own.

Photo credits: reach the city

]]> http://readwrite.com/2011/01/25/never-mind-the-valley-heres-va http://readwrite.com/2011/01/25/never-mind-the-valley-heres-va Never Mind the Valley Tue, 25 Jan 2011 11:00:11 -0800 Audrey Watters <![CDATA[Never Mind the Valley: Here's Nashville]]> When I asked for recommendations a couple of weeks ago for sites to feature in our "Never Mind the Valley" series, I was overwhelmed with the response. It's quite encouraging, in light of all the reports of global recessions, slumps, and downturns, to hear from so many people saying that their community is a thriving site for entrepreneurship. You can still send me your recommendations, and I'll be working my way through them in the coming weeks and months.

But we'll kick things off with Nashville.

"The home of country music," Nashville is known for its large music and tourist industry (although the area's largest employer is actually the health-care sector). Not surprising, then, the area has a sizable "creative class" as well as a tech-inspired community that drives several events, Ignites, and unconferences like BarCamp Nashville, PodCamp Nashville, and Nashville Startup Weekend.

Nashville has a generally favorable climate for small businesses, boasts several co-working spaces, and has numerous colleges - Vanderbilt, Belmont and Lipscomb, for example. There's a pipeline of talent here although echoing what we hear in a lot of places, there's always a need for "more engineers."

Incubating and Training for Startups and Small Businesses

Nashville's seed-stage microfund Jumpstart Foundry recently made a pivot to become a full-fledged tech business incubator. It is getting ready to kick off its call for submissions for The Foundry, a 14-week, mentor-driven program that will help identify and fund six startups.

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Also, Jumpstart Foundry is offering a number of continuing education classes - Jumpstart Fundamentals - geared toward startups and small businesses and aimed at helping participants expand their technical skills. The first class, "Startup on Rails," and focused on Ruby on Rails, begins next month.

According to Lucas Hendrickson, the communications manager for Jumpstart Foundry, points to Nashville's blend of traditional and new media worlds and says there are a lot of opportunities for as some of the cities more established industries "find their way into the new (and somewhat unfamiliar) tech-driven world."

Photo credits: Flickr user debaird

]]> http://readwrite.com/2011/01/19/never-mind-the-valley-heres-na http://readwrite.com/2011/01/19/never-mind-the-valley-heres-na Never Mind the Valley Wed, 19 Jan 2011 06:00:26 -0800 Audrey Watters <![CDATA[Never Mind the Valley: Here's Research Triangle]]> Research Triangle Park is one of the oldest and largest research parks in the United States. Created in the 1950s, the RTP development now spans over 7000 acres and is home to over 170 companies and some 42,000 full-time employees. But the concentration of tech research and development extends beyond the bounds of just the research park itself, and the surrounding Raleigh, Durham, Chapel Hill and Cary, North Carolina metro areas are commonly labeled together as the Research Triangle, or "The Triangle."

Like many of the cities, we write about in the Never Mind the Valley series, Research Triangle boasts a strong university and a strong business climate, making the area, in the words of Chris Heivly, "frothy for entrepreneurship."

Heivly is part of LaunchBox Digital, kicking off its third year as business accelerator program in Durham this fall. LaunchBox is one of several Y Combinator-like startup programs in the area. Others include Joystick Labs, an accelerator program aimed at indie gaming startups that launched this summer.

The Research Triangle area is particularly well known for video games. Epic Games - the makers of the Gears of War and Unreal games - for example, is headquartered in Cary. And estimates put the number of gaming professionals in the area at well over 1200.

The area is also home for the Council for Entrepreneurial Development, the longest tenure and largest organiation of its kind. with over 5500 active members representing over 1,100 companies.

There are three major universities in the area, each with a robust entrepreneurial organization. Forbes recently named The University of North Carolina Chapel Hill as "America's Most Entrepreneurial Campus."

The region also boasts numerous co-working spaces, as well as the American Underground, an area of revamped American Tobacco warehouses in Durham that now are home to many companies.

According to Robbie Allen, founder of the sports analytics site StatSheet, one of the main draws to the Research Triangle area for entrepreneurs are the number of funding opportunities. Allen points to the support that StatSheet received from the NCIDEA, a program that grants very early stage companies funding. There are numerous other seed funding sources, including Southern Capitol Ventures, IDEA Fund Partners, and at least three angel groups

There are also numerous regular networking events in the area.

But again and again, the entrepreneurs and investors I spoke to from the area touted "lifestyle" as one of the major boons of the area: cheap real estate, high quality of life - beaches, mountains, and, of course, a great basketball team.

Photo credit: Flickr user Joseph

]]> http://readwrite.com/2010/09/20/never-mind-the-valley-heres-research-triangle http://readwrite.com/2010/09/20/never-mind-the-valley-heres-research-triangle Never Mind the Valley Mon, 20 Sep 2010 11:40:42 -0700 Audrey Watters <![CDATA[Never Mind the Valley: Here's Madison]]> Madison, Wisconsin has always been known as a progressive town - in part because it's home to the University of Wisconsin-Madison. But over the last few years, the city has gained a reputation as an emerging technology startup hub in the Midwest.

Earlier this year, Forbes Magazine named Madison the 7th most innovative city in the U.S., ranking it ahead of the noted startup hotspot of Boston.

Like many cities that foster thriving startup communities, Madison benefits from strong university and government support (the latter in the form of a 25% tax credit for angel investors and a 2% forgivable loan for startups), as well as a number of entrepreneur-friendly events organizations.

Local Programs to Develop Entrepreneurship

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Since early 2009, Capital Entrepreneurs has held a monthly meet-up for entrepreneurs. With over 60 member companies, the group has helped bring the Madison entrepreneur community together. The group also has its own Capital Entrepreneurs Angel List, based off of a similar program out of Venture Hacks.

Based off a successful program at MIT, Merlin Mentors pairs new startups with successful business people in the community, who act as mentors and as an informal board of advisors. Merlin (short for Madison Entrepreneur Resource, Learning and Innovation Network) Mentors was developed with the support of various programs at the University of Wisconsin-Madison.

In the Fall of 2009, the university received a Kaufman grant to foster entrepreneurship on campus. And between the Burrill Business Plan competition, the Entrepreneurial Residential Learning Community - a dormitory that is geared towards those interested in entrepreneurship, and a Student Business Incubator, there are a number of programs on campus that help develop the startup community.

This summer was the first year for the Forward Tech Festival/Conference which hopes to become a mini SXSW for the Midwest region.

Notable startups from Madison include the social media and gaming company PerBlue, social media listening tool Networked Insights, student peer-to-peer support site Student Spill, and Entrustet, which allows people to delegate what will happen to their digital assets when they pass away (and whose co-founder Nate Lustig I'd like to thank for spurring me to write about Madison and for providing much of the research for this article).

Photo credits: Flickr users Holly Ramsey and John Benson

]]> http://readwrite.com/2010/09/09/never-mind-the-valley-heres-madison http://readwrite.com/2010/09/09/never-mind-the-valley-heres-madison Never Mind the Valley Thu, 09 Sep 2010 09:00:03 -0700 Audrey Watters <![CDATA[Never Mind the Valley: Here's Paris]]> If you're capable of seeing past the old stones of Paris and the picturesque rural villages, you'll realize that France is every bit as technologically advanced as any other Western country - more so in some areas. Not only does the country have a higher percentage of homes with high-speed Internet than the U.S. (plus it's faster and costs half as much), it ranks first in the world for number of blogs per Internet user, and has a formidable market of Internet consumers who spent €5.5 billion online in the first quarter of this year.

When I came to Paris in 2006, I had a well-developed idea for a startup and nothing else. It's now been about three years since I joined the fray as an entrepreneur and tech blogger. In that time, I've discovered that the startup scene is infused with passion, energy and a strong spirit of collaboration.

Pamela Poole is a blogger, translator and tech writer, and founder of Francophilia.com, a social startup for Francophiles. Originally from California, she now lives in Paris, where her involvement in the vibrant startup scene keeps her from spending too much time in the bakeries.

There's a thriving geek culture in Paris, and no lack of software development expertise, thanks to superior universities that produce superior engineers. The startup scene is relatively young, however, which is partly due to some pretty fundamental cultural barriers. But these barriers are showing some wear and tear.

Want to start up in France?

While foreign entrepreneurs wait for the Startup Visa to become a reality so they can go launch their startups in the US, France has quietly had a similar program in place for some time. The French government has translated the JEI program into English as the Young Entrepreneurs Initiative, an annual competition run by the French Embassy to the US. The name is a bit misleading - you don't actually have to be young, but your project does. YEI is essentially the same as the JEI program, and winners of the competition can come to France and enjoy the same benefits as startups with JEI status. So what are you waiting for?

There are numerous events and organizations in Paris that exist solely to foster entrepreneurship and tech innovation, many of which get partial financial support from local, regional and national government. France is not a socialist country, but it's a socialized country, and the French get a lot in return for the taxes they pay.

The Big Players

Silicon Sentier is perhaps the best-known player in the Paris startup scene. It's essentially an ecosystem whose mission is the care and feeding of innovation. Among other activities and programs, Silicon Sentier runs La Cantine, a coworking center, hip geek hangout and bustling hub for Paris tech events and activities: barcamps, workshops, competitions, launch parties, press conferences - you name it.

Cap Digital and System@tic are among a number of tech clusters in Paris. The boards of these organizations include large companies, local and regional government representatives, universities/public research labs and SMEs. Through them, entrepreneurs can hook up with R&D resources in universities and companies, and get access to a robust support network that provides opportunities for visibility, growth and financing.

Fing, another major player, is "an idea accelerator, a think tank and a resource for innovators." Fing may be a think tank, but it fosters startup success in very concrete ways. Startups can submit their projects to Fing, which provides support to over 200 projects a year through events, programs, and access to a large network of resources.

LeWeb, Europe's largest (and the world's second largest) Internet conference is held in Paris every December. It was created and is run by French entrepreneur Loïc Lemeur (Seesmic), and it includes a competition for European startups. Yes, it happens in Paris, but it's held in English because it's an international conference. LeWeb is a world-class tech conference, and the speakers on the program are always the crème de la crème of the startup world.

Incubators, Accelerators, Competitions

We have those too. Some, like Seedcamp, Startup Weekend, barcamps and the OpenCoffee Club are imports from other countries. Others are homegrown, like SeedNetworking, the brainchild of some alumni of HEC (one of France's best business schools) and Ecole des Mines (one of the excellent engineering schools), who tweaked the speed-networking concept to get entrepreneurs who need developers and developers who need projects in the same room for some fast and furious face time.

The major engineering and business universities have incubators for students and alumni, though some of them are less Internet oriented than others, and there are a few unaffiliated incubators as well, like Paris Pionnières, which receives both public and private funding and supports women-owned startups, and the incubators of Paris Développement, which is funded by the city of Paris and the Paris Chamber of Commerce and Industry. Big names like Microsoft BizSpark and Sun Startup Essentials have a presence here, of course, and The Funded recently launched their Founder Institute in Paris as well.

One thing we are missing here in Paris is longer-term intensive accelerators of the Y Combinator variety, but they exist in the U.K., so it shouldn't be long till they hop across the Channel.

The Funding

The funding landscape is complex from a foreigner's point of view because the government is very often involved somehow. There are public entities that seem to be frequently renamed or merged, as well as semi-private and private organizations, and their activities are all very intertwined with each other. And it's acronym hell. But the bottom line is that there is money for startups, and a lot of it comes from those taxpayer Euros I mentioned earlier. In fact, about three fourths of startup money comes from public funds.

One obstacle startups have traditionally faced here is that public and private funding is largely skewed towards projects that involve an R&D/new technology component. French investors are more risk averse than their American counterparts, and the possibility of a patent is reassuring to them.

And, until recently, business angels have been relatively few and far between. This is in part because the government historically filled the seed-funding void, and that is where people tended to turn. But angels are getting more structured, more active, and there more of them. Plus there's been another important new development: Several highly successful French Internet entrepreneurs-turned-investors, who are considerably less skittish than your traditional French investor, are taking matters into their own hands (Meet France's New and Awesome Super Angels).

The chart below shows the general funding options available to French startups.

Startups can access public funding in a number of ways. A rite of passage for many is to go through OSEO, which will analyze and validate a project. OSEO validation in turn makes early-stage startups eligible for a variety of support services and funding options. OSEO can be involved during very early stage activities, such as business plan creation and feasibility studies. It also provides support and guidance well beyond that phase.

A startup can be designated a Jeune Entreprise Innovante (Innovative Young Enterprise). The JEI program was created in 2004 and is managed by the Ministry of Research. Having JEI status is pretty much a golden ticket to financing, and JEI startups also get tax breaks and other benefits. To qualify, your project has to have an R&D element. There is also the Concours national d'aide à la création d'entreprises de technologies innovantes (National competition to help create innovative technology companies). Winners of this contest can be awarded up to €450,000 for R&D.

Private individuals who want a tax break can put money into special investment funds (Fonds commun de placement dans l'innovation) that are meant to be invested in innovative companies. These are managed by various wealth management entities (Conseils en gestion de patrimoine indépendents, or CGPI). The condition for receiving the tax break on these investments is that 60% of the money must go to early-stage, innovative companies, and it must be invested within two years of receipt by the CGPI. OSEO can designate a startup as an Entreprise innovante au titre des FCPI, which makes it eligible for this kind of investment. This designation is similar to JEI but has a broader view of "innovative" and is less strict about the R&D element.

Pôle emploi is the government agency that provides unemployment compensation, but it also helps those recipients who are creating a small business or startup by providing extended compensation and breaks on the social charges (retirement, medical, disability, etc.) that businesses normally pay to the government.

Réseau Entreprendre Paris, a network of business owners, and France Initiative, a network of local organizations, are examples of the many semi-private organizations that support startups. They themselves receive both public and private funding, which they use in turn to provide financial support to startups through incubators and other established channels.

I've focused on some options for early-stage startups here, and haven't discussed VC funding or the many organizations here that help French startups expand internationally. For a comprehensive guide (in French) to starting up in France, I highly recommend Accompagnement des startups high-tech en France [PDF], and for an overview of the funding cycle, Exemple de cycle de financement de startup en France [PDF]; both are by Olivier Ezratty.

Photo by Konstantinos Dafalias

The Startups

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You may think you've never heard of any French startups, but it's possible that you're using apps you don't even realize are French. If they've picked a name English speakers can pronounce and translated their sites into English, they blend right in. Take Netvibes, the pioneer in the personalized dashboard space, which has been written about a number of times here on ReadWriteWeb. They're going strong, and constantly adapting their platform to users' changing needs for information and social media aggregation. And there's DailyMotion, which is eating into YouTube's market share and had a 70% jump in US traffic in 2009.

There are plenty of successful startups in France that cleverly capitalized on the fact that startups in other countries didn't localize for the French market. The model of Sarenza is similar to that of Zappos, and it dominates the European market for footwear online. There are also original models that are either being copied or stealthily moving into English-speaking markets, like Vente-Privée and PriceMinister. PriceMinister, a site for C2C/B2C sales of new and used goods (at a fixed price) is the top e-commerce platform in France (recently surpassing eBay.fr and Amazon.fr). It has infiltrated the U.K., and I wouldn't be surprised if the U.S. were on its radar, where it'll surely give eBay.com some healthy - and much needed - competition. Vente-Privée is a retail site selling designer products at invitation-only online sales. One of the top e-commerce sites in France, it has expanded into other European countries and its model has given rise to some me-toos in other countries.

The French have their share of exemplary startups in the enterprise space as well, including BlueKiwi, an enterprise social platform, and Exalead, which offers powerful and easily integrated search tools to help businesses and institutions get the most out of their information assets. Exalead's true entrepreneurial colors still show, thanks to its internal project incubator, Exalabs. (Exalead was just acquired by the technology giant, Dassault Systems.)

These are some French startups that have made it to the big time. But what about the little guys? All those struggling, bootstrapping, Ramen-eating founders? As a matter of fact, Paris is crawling with them. Some are clearly aiming no further than the French market, but a number of them are out of the gate in at least French and English with a view to conquering the Web. Just like anywhere else, French startups run the gamut from basic Web apps that focus on a specific niche need, to ambitious and powerful platforms that are likely to give the current leaders a run for their money. Here's a list of just a few of our jeunes pousses (sprouts).

(E= in English)

English Attack: Edutainment site that teaches English using Internet content that real people actually use: music, video, gaming, and more. (E)

GameCreds: Impressive social universe for gamers. (E)

Kontest: Ready-made solution for creating and managing a variety of interactive contests to provide user communities memorable experiences on Facebook and the iPhone. (E soon!)

Meetings: Nice collaborative app that manages all activities related to meetings: communications, attachments, agendas, action items, scheduling, etc.

MonArbre-MaTribu: Crowd-sourced reforestation project, very nicely done. One Euro plants a tree. (France only, for now.)

Pearltrees: A bookmarking site with a new approach to organization of content that resembles mind mapping. (Covered previously on RWW.) (E)

Plyce: Feature-rich location-based social network. They appear to be of the opinion that badges and mayorships are so last week. (Gotta like that thinking.) (E)

Regioneo: You know all those cute little French open-air markets where small producers sell their amazing artisanal food products? This site lets you order directly from the producers. (France only, unfortunately).

Synthesio: Web app that provides extensive data from multiple sources for companies that want to track buzz and reputation, and identify trends and influencers. (E and more)

TellMeWhere: A real-time urban guide powered by user recommendations on everything from bars to barbers across the globe. Web and mobile. (Covered previously on RWW.) (E)

Yoocasa: A private online space, developed in collaboration with child psychologists, where families interact in real time through photo slideshows, video chats, interactive games, and more. (E)

Ulule: Beautifully designed crowdfunding platform for projects that are artsy or for the betterment of society. (E)

]]> http://readwrite.com/2010/09/02/never-mind-the-valley-heres-paris http://readwrite.com/2010/09/02/never-mind-the-valley-heres-paris Never Mind the Valley Thu, 02 Sep 2010 17:01:00 -0700 Guest Author <![CDATA[Never Mind the Valley: Here's Montreal]]> The largest primarily French-speaking city outside of Paris, Montreal is the second largest city in Canada and the largest in the province of Quebec. Despite some claims to the contrary, Montreal still maintains it is the cultural capital of Canada, and the city is often rated as one of the world's most livable.

Montreal is an important center for Canadian finance, telecommunications, aerospace, and software industries. Some reports state that as many as a third of the region's workers are part of the "creative class" - scientists, technology workers, entertainers, artists and designers. Montreal and Quebec have the highest level of tax credit support for developer salaries: For every $1 spent on developers, companies can get up to 65 cents back in cash from the government. And with six universities and twelve junior colleges within a 5 mile radius, Montreal has the highest concentration of post-secondary students of all the major cities in North America.

And it's that blend of industry, education, creativity and finance that might be the key to making Montreal a good site for startups. As Aidan Nulman, co-founder of YouPhonics argues, "Montreal's been a great community to incubate my company in. What's not to like about universities feeding fantastic talent into a bilingual global arts hub that gets major support from its provincial and federal government?"

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There are numerous networking events held in the Montreal startup community, including StartupDrinks, a monthly freestyle gathering hosted in pubs and bars.

Montreal boasts several programs to support entrepreneurship, including Flow Ventures, a tech startup accelerator that provides seed capital and hands-on operational support to early-stage ventures.

According to investor and entrepreneur Mark MacLeod, a partner at Real Ventures and a blogger at StartupCFO, "Montreal is poised to become a dominant player in the market for startup capital in Canada. Real Ventures is getting set to announce a new fund. Larger players like Rho and others will all be announcing new funds soon as well. And of all the provinces, Quebec is most committed to funding technology with a $ 700M fund of funds being created less than a year ago."

MacLeod and others point to the "world-friendly angle" of Montreal, its multicultural and multilingual make up, arguing this makes the city a good link between the European and North American tech industries.

Photo credits: Flickr user Richard Taylor

]]> http://readwrite.com/2010/08/16/never-mind-the-valley-montreal http://readwrite.com/2010/08/16/never-mind-the-valley-montreal Never Mind the Valley Mon, 16 Aug 2010 05:30:57 -0700 Audrey Watters <![CDATA[Never Mind the Valley: Here's Toronto]]> While not the political capital of Canada, Toronto is certainly the cultural and financial capital of the country. With over 5 million residents, Toronto is the largest city in Canada, sitting in a densely populated part of Southern Ontario. With over 200 ethnic groups speaking over 130 languages, Toronto's cosmopolitan population makes it one of the world's most diverse cities. Toronto also boasts a clean environment, low crime rates, a high standard of living, and incredibly nice folks who live there, all helping make it one of the world's most livable cities and according to a recent Huffington Post article, "the capital of cool."

It's also by all accounts a thriving startup hub, with both strong investor presence - the National Angel Capital Organization and Extreme Venture Partners are headquartered there, for example - and with a lot of entrepreneurial talent and activities.

Events and Education for Entrepreneurs

"Obviously it's no Silicon Valley," says Sprouter Community Manager Erin Bury, "but it's definitely a thriving community with a ton of tech entrepreneurs, some great funding opportunities, and a hopping event scene." A Toronto-based startup itself, Sprouter helps facilitate networking and collaboration between entrepreneurs globally, but also sponsors regular meetup events.

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MaRS, located in Toronto's Discovery District also holds numerous events as part of its mission to help early stage science and technology ventures grow in the Greater Toronto area. MaRS offers entrepreneurs a variety of services, including mentorship and strategic planning guidance. MaRS also has an Investment Accelerator Fund, a fund with an investment strategy to provide early stage seed capital for emerging science and technology companies.

A Culture of Entrepreneurship

Communitech, located in the neighboring city of Waterloo, in another organization helping to promote regional entrepreneurship through mentorship, training, networking and promotion. And while there are multiple universities in the area and strong government support for startup endeavors, Communitech CEO Iain Klugman attributes the vibrancy of the region to a "culture of entrepreneurship." The region has a long, long history of fostering entrepreneurs (the Seagrams distillery was founded there in 1857, for example), and encouraging entrepreneurship happens not just at the business level, but with targeted school programs as well.

Joseph Puopolo, Director of Marketing and Community for the Toronto-based startup, OPENapps points to the important role that this supportive culture has played in helping OPENapps move forward. According to Puopolo, company has "benefited greatly from the technology community in Toronto and surrounding areas like Waterloo, due to the access to regular technology networking events and strong talent pool. Toronto and Waterloo truly foster a climate of innovation."

]]> http://readwrite.com/2010/07/29/never-mind-the-valley-heres-to http://readwrite.com/2010/07/29/never-mind-the-valley-heres-to Never Mind the Valley Thu, 29 Jul 2010 05:35:04 -0700 Audrey Watters <![CDATA[Never Mind the Valley: Here's Finland]]> Finland is quite a paradox. One would not think that a country with only 5 million people, plunged into darkness for a greater part of the year, would be the inventor of Linux, SSH, IRC, Nokia, F-Secure and MySQL. While the country is known for its technical feats, heavy metal bands, saunas, and educational system, it's less known for its startups.

Success stories include Sulake, owner of Habbo Hotel (one of the largest virtual worlds, with tens of millions of users, and pioneers of micro-transactions several years before Farmville) and Irc-Galleria, which is the largest social network for Finns.

Guest author Ramine Darabiha is an entrepreneur and occasional blogger at Nerdstalker and his own blog. Disclaimer: He is the CEO of MySites, which also partners with Xihalife, Dazzboard, Wreckamovie and Breezetags. He will also be a mentor at Summer of Startups.

There was the $1 billion exit of MySQL to Sun, as well as Dopplr and Jaiku (the Finnish Twitter that was bought by Google and used as a basis for Google Buzz). Star Wreck was started by a group of friends from Tampere, and ended up having thousands of contributors and 8 million viewers, making it the most successful Finnish movie ever and the first major crowdsourced movie production.

The Finnish ecosystem is facing many of the same challenges as other small European countries (I've made a list of the 10 major ones here). There is a lack of entrepreneurs. Only 3% of the population wants to become entrepreneurs, and only a fraction of them want to create startups. Joining or starting a new venture is seen as a very risky thing, and there is still a strong stigma that people who are self-employed probably couldn't find a "real" job in the first place.

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As is often the case in Europe, failure is perceived as extremely negative, rather than a learning opportunity. There is also a lack of visibility for Finnish startups. The local press and TV mostly ignore them, and blog coverage mainly comes from Arcticstartup, as well Nerdstalker.

Venture investments are fewer and comparatively smaller than with U.S. companies. However, there is strong government support to improve things. For example, Tekes provides grants and low interest loans to tech companies. Vera venture is a "government VC" that will follow investments made by others. There is also a program called Tuli, which gives "free money" to students to explore ideas that could become startups.

Despite the hurdles, there is still a vibrant, creative startup community in Finland. During the past year, there has been a growing number of entrepreneurship societies in the major cities. Their goal is to get students excited about startups, have them meet role models, hear stories and help them get off the ground with their ideas - and even give seed funding through government support.

The leading group is called Aalto Entrepreneurship Society, which has 5,000 members, has helped with the creation of 40 startups last year and organized excursions to Silicon Valley.

Other entrepreneurship societies include HUES, Hankenes, Boost Turku and Stream Tampere. Together, they're organizing a program similar to Y-Combinator this summer called Summer of Startups where students can receive seed money to create a startup, rather than getting a summer job.

Photo by Skazama.

Who are the Finnish startups?

I've compiled a list of 30 that I find most interesting and active. Keep in mind this is in no way a definitive list. There are plenty more in stealth mode or really early stage and hopefully you'll hear from them soon.

The big ones
  • MySites: Millions of photos, videos and documents uploaded and shared every month. Also provides cloud storage and media hosting for startups.
  • Xihalife: The world's largest multilingual social network. Recently received 1 million euros in funding. Jyri Engerstrom (formerly of Jaiku) is on its board.
  • Muxlim: One of the largest Muslim online communities. Has received an Internationalization Award form the president of Finland.
  • Dazzboard: iTunes for Android (and everything else). One of the few Finnish startups to relocate to the U.S.
  • Wreckamovie. From the makers of Star Wreck (the most watched Finnish movie ever), a collaborative moviemaking platform. 100-plus movies in progress.
Gaming
  • Everyplay: Makers of Kamu World and Kamu Town. The founders also happen to organize Assembly, the largest LAN party in the world!
  • Ironstar: Makers of the virtual world Moipal. Graphically, think Maniac Mansion graphics meets Farmville. Funded by Monty Widenius (creator of MySQL).
  • Heiaheia: Social game mixed with exercising. Get achievements and badges for grinding in real life. Started by ex-Nokia people.
  • Huikea: Social and mobile game developer, founded by Teemu Kurppa, one of the founding members of Jaiku.
  • Relationship games: Social game for couples, where the game suggests tasks to please your partner. Game design helped by members of Sulake (makers of Habbo Hotel). Video here.
Consumer
  • Hitlantis: Spotify for indie bands. Provides a visual music discovery engine to find new bands.
  • Sofanatics: Social TV for sports. Lets you watch sports games together with friends online.
  • Widsen: Think Google PowerMeter but add RFID chips to your power plugs so you can shut down your devices directly from the Web. Winner of the Bootcamp program. Video here.
  • Foodie.fm: Smart grocery list. Tells you what ingredients to take, in which amounts. Browse recipes.
  • Bambuser: Technically Finnish/Swedish/Norwegian. Live video streaming service. Nice Facebook and Twitter integration, plus chat. Used by the number one TV channel in Finland, YLE.
  • Shobble: Makes it easier to find and rate shops to order from around Europe. Video here.
  • Lucsens: Augmented reality dictionary for Japanese and Chinese characters. Video here.
Local
  • Finderbase: Lost your keys? Found a wallet? Post it online, get rewards. Video here.
  • Eat.fi: Yelp for Finland. Find and review restaurants near you.
  • Netcycler.fi: An online place to give or trade your old stuff instead of just throwing it away.
  • Kassi. Still in private beta, no link yet. Post messages, offer services, find stuff in your community. Video here.
Services and tools
  • Scred: Manage payments for your site, association or band. Keep track of expenses, send invoices and get stats. Video here.
  • Flowdock: Real-time chat with tagging. Helps groups, bands and communities talk more efficiently. Video here.
  • Hammerkit: WYSIWYG editor for Web services. Also lets designers create Web pages from their creations more easily. Video here.
  • Breezetags: A service to share links by SMS, email and social bookmarking sites.
  • Audiodraft: Allows collaborative music creation through a Web-based audio editor. Video here.
  • Microtask: On-demand, scalable labor. Similar to Crowdflower but aimed at solving more difficult tasks.
  • Balancion: Bank account as a service? Manage your account, get stats, ditch your old netbank.
  • Gigswiz: Allows bands to find where their fans are and find a place to play their gigs, together with analytics.
  • Hipui. Still in closed beta. Developing a platform to host and stream cloud apps to any device - think Onlive or Gaikai for apps.

    ]]> http://readwrite.com/2010/06/03/never-mind-the-valley-heres-finland http://readwrite.com/2010/06/03/never-mind-the-valley-heres-finland Never Mind the Valley Thu, 03 Jun 2010 16:00:00 -0700 Ramine Darabiha <![CDATA[Never Mind the Valley: Here's SXSW 2010]]> A ReadWriteWeb Guide

    For all of our startup friends from coast to coast and around the world, we look forward to seeing you at SXSW Interactive!

    More and more, we're seeing good folks creating great products outside the SF Bay Area, and we love highlighting and showcasing vibrant startup communities in unexpected areas. As it turns out, we're not the only ones who have a penchant for non-Valley startups! While you're in Austin, check out these ten panels, parties and events focusing on entrepreneurialism outside Silicon Valley.

    This is part of a series of ReadWriteWeb guides to SXSW Interactive 2010. If this guide isn't your cup of tea, be sure to check back for more information soon!

    ReadWriteWeb Summit Coverage:

    More RWW SXSW 2010 Coverage »

    "It is difficult to establish a startup no matter where you are in the world, but there are great companies and events that began life outside of Silicon Valley. Threadless, 37Signals, FeedBurner, BIG Omaha conference, and SXSW itself are proof that technology life exists away from the coasts. These less-than-obvious locales are becoming hotbeds of innovation and attracting talent and capital." With Michael Samson and Ross Kimbarovsky of CrowdSPRING.

    How Geeks Grabbed Philadelphia by the Balls

    "Ready to skip town because you think it's played out? Techies aren't techie enough? Creatives aren't creative enough? We'll talk about how Philadelphia turned around in just 2 years by embracing its strengths and local flavor, helping to build new leaders, and inspiring an intense city pride. It's not as tough as you think: blending socialization with education, this new generation of Philadelphians share their recipes for you to take back and make your city the next big thing." With Alex Hillman of IndyHall and Geoff DiMasi of P'unk Avenue.

    The Silicon Prairie Party

    "Join the speakers, organizers and attendees of Big Omaha to party with the up-and-coming entrepreneurs and innovators based on the Silicon Prairie. There are big things happening on the Prairie and here's the opportunity to connect with those making an impact!" Hosted by Big Omaha.

    Crowdfunding: How The SAfrican Community Financed Online Businesses

    "The story of how otherwise unconncted South African citizens pooled together their money and resources, and thus helped seed over a dozen online businesses in South Africa - when no other realistic options of finance existed. The presentation will cover lessons learned, and tips for replicating the model in other regions." With Eve Dmochowska of Idea Bank, Brett Haggard of Hypertext Media, Gareth Knight of Technovated, Heather Ford of GeekRetreat and Justin Spratt of Internet Solutions.

    Don't Move! Build a Startup Community Where You Live

    "As eyes are focused on places well-known for startups and innovation, hear three up-and-coming cities discuss how they're building and fostering their entrepreneurial communities. From Portland, Boulder, Omaha, and beyond, exciting things are happening in places you don't expect." With Erin Kotecki Vest of the Queen of Spain blog and BlogHer, Jeremy Tanner, Rick Turoczy of Silicon Florist and Jeff Slobotski of Silicon Prairie News.

    Time Travelers: Why Australians are Virtual World Innovators

    "Australia has suffered the 'tyranny of distance' since colonization. Now, for the first time, those barriers are dissolving as the land downunder shifts timezones to be in a virtual playing field. When you login as a virtual avatar there are no international calling codes, no day or night and only the funny accent remains distinctive. Hear how panelists Keren Flavell, Bruce Joy and Santosh Kulkarni spend their time meeting with colleagues and prospective clients in the USA and Europe by teleporting to meetings in seconds, right from their desks in Melbourne, Australia. This discussion will demonstrate how the world is becoming flatter by the day through technology creating a single place for interaction and enterprise." With Santosh Kulkarni of NICTA, Phil Tripp of IMMEDIA, Keren Flavell of Treet TV and Bruce Joy of VastPark.

    Tech Scene Smackdown: LA vs. SF vs. NYC vs. Boston vs. Austin

    "Presently the online social media space consists of hyper-localized
    bifurcated tech communities: what is problematic is that many of the more successful cool kids are guilty of being at every single party and using the scene as a way to fameball, i.e. gaming it to advance their own popularity instead using it as a platform to advance ideas and exert influence. With great power comes great responsibility - and in line with your vision this panel would bring together figureheads/influencers from each of the 5 nationally prominent tech communities as well as bring up possible conflicts and misconceptions relating to each; that L.A. is full of "un-employeds, that New Yorkers are shills for traditional media, that people from S.F. are just Spocks with no social skills or perspective. Rather than just pit influencers against each other, our moderation would highlight the strengths and weaknesses of each and hopefully faciliate a forum for dialogue and cooperation between all members of what is positioned to be global phenomenon in the way people mobilize online and off." With Erin Broadley and Alexia Tsotsis of Village Voice Media.

    How Austin Got Socially Experienced

    "While known as the live music capital of the world, Austin is making serious inroads as the most social media savvy city. With major tech companies as city residents, Austin tech leaders will provide attendees social media best practices and insights during this interactive panel." With Nigel Dessau of AMD.

    Innovation Overseas - The European Startup Environment

    "U.S. companies often know little about the European startup environment and the opportunities to be found there. Panelists will share both the highs and lows of their startup lives and will answer questions regarding funding opportunities, cultural idiosyncrasies, legislation and differences between Europe and America." With Marten Mickos of Benchmark Capital, Peter Robinett of Bubble Foundry, Felix Petersen of Plazes and Reshma Sohoni of Seedcamp.

    Coconut Valley - Building a Tech Community on the Beach

    "Starting from a mere handful of people and growing into the thousands, come learn how we grew our tech community out of the sand in South Florida. Learn tips and tricks for growing your own tech community even in the most unfriendly/untechy areas of the world." With Brian Breslin of infinimedia and Davide Di Cillo of Thirtynine.

    Those are our SXSW Interaction recommendations for non-Valley startups of all stripes. If you've got suggestions or feedback, let us know in the comments! See you in Austin, folks!

    ]]>     http://readwrite.com/2010/03/03/never-mind-the-valley-heres-sx http://readwrite.com/2010/03/03/never-mind-the-valley-heres-sx Never Mind the Valley Wed, 03 Mar 2010 09:00:57 -0800 Jolie O'Dell     <![CDATA[Never Mind the Valley: Here's Chicago]]> Holding down the proverbial fort for the mid-west, Chicago, the Windy City, is the third largest city in the U.S. and the most populous city that doesn't sit on an ocean coast. The city, which does, however, rest on the shore of Lake Michigan, is home to a unique culture of nearly 3 million people and countless numbers of Fortune 500 companies condensed into its 234 square miles of city. Though the city is often passed over for Silicon Valley and New York in terms of startup cultures, Chicago has a expanding repertoire of companies, entrepreneurs, investors and organizations helping put the city on the startup map.

    RWW's Never Mind the Valley series:
    The site Freshwater Venture has begun to profile Chicago companies and people involved in the city's startup scene, and thus far has created an extensive list. Among some of the most popular startups to come from Chicago include Basecamp developers 37Signals, travel booking site Orbitz, FeedBurner, Apartments.com, and more recently, the hyper-local news site EveryBlock.

    Chicago startups suffer from the same difficulty that other cities without a rich startup culture do: a lack of venture capital. EveryBlock was funded by a grant from the Knight Foundation, Orbitz was funded by airlines looking to compete with Expedia, and 37Signals was originally funded by the founders themselves. Before being acquired by Google, FeedBurner raised funding from multiple venture capital firms, but only one of their funders, Draper Fisher Jurvetson Portage (which is actually just one of over a dozen arms of DFJ) was from the Chicago area.

    Chicago does, however, have its own native venture capital firms, such as Origin Ventures, OCA Ventures and Illinois Ventures, but a majority of Chicago-based VC firm investments are aimed at companies in other cities. The growing problem in Chicago over the last several years has not been dissimilar to other fledgling startup communities; the talent and the ideas are there, but entrepreneurs are drawn to places like Silicon Valley, New York or Boulder where funding is more readily available for startups.

    "Chicago is a great town, but there isn't really a startup culture here. The majority of people that have done well have left Chicago and found more success elsewhere," said Brenden Mulligan of ArtistData in an article on the Northwestern University blog Medill Reports. "We've lost some great entrepreneurs to other cities."

    But things are not entirely dire for Chicago; new incubators, venture firms and second and third generation entrepreneurs are helping the city grow its startup culture. It also doesn't hurt that Chicago, the third largest city in the U.S., has not only a massive community of customers to provide services to, but also a thriving technology economy. Increased investments in high-tech and medical companies has pushed Chicago into the forefront of cities creating technology jobs.

    Sam Yagan, CEO and founder of online dating site OkCupid, SparkNotes and eDonkey is the executive director of Excelerate, a new startup incubator taking root in Chicago. Early-stage companies can apply for the premier thirteen-week "bootcamp" experience this summer where they will receive as much as $20,000 in funding along with mentoring from a laundry list of over 40 participating entrepreneurs. Among these mentors is David Cohen of TechStars, Harper Reed of Threadless, Seth Stemberg of Meebo, and Kevin Willer, head of Google's Chicago offices.

    Excelerate's VP Kelli Rhee is also the VP at Sandbox Industries, an incubator and venture fund that has been active in Chicago since 2003. Sandbox's venture fund provides anywhere from $50,000 to $2 million in early-stage seed funding, and manages the BlueCross BlueShield Venture Fund which invests up to $10 million in health care tech startups.

    Matt McCall, managing director at DFJ Portage, was recently interviewed by Fast Company for their piece Why You Should Start a Company in... Chicago, and gave his reasons why the city is a good place for startups. Among his reasons were the massive population of customers the large city provides, the government money provided for research at the Universities, and the connectivity of the mid-west alumni that have become successful in other locations. Finally he says that the "family trees" created by the various generations of entrepreneurs are helping build the city's startup culture.

    "You've got entrepreneurs that are fourth generation entrepreneurs. As a result, they played at the big leagues," said McCall. "They've got a mafia of people that they can pull in to the companies... And as a result, when you start a company, you've got kind of these built-in talent pools that you can reach into that you didn't have say in 2000."

    With the help of incubators, organizations and events like Excelerate, Sandbox Industries, Chicago Tech Scene, TechBuzz Chicago, Startup Weekend Chicago, TechNexus and TECH cocktail, the Windy City is on the rise as the startup playing field levels out. No city will ever match the atmosphere found in Silicon Valley, but Chicago's unique ecosystem of their own has and will continue to produce noteworthy startups.

    Photos by Flickr users David Paul Ohmer, Christopher & Amy Cate, and Mike.

    ]]>     http://readwrite.com/2010/02/25/never-mind-valley-chicago http://readwrite.com/2010/02/25/never-mind-valley-chicago Never Mind the Valley Thu, 25 Feb 2010 11:30:00 -0800 Chris Cameron     <![CDATA[Never Mind the Valley: Here's Washington DC]]> The words "fat cats in Washington" have been uttered in every corner of the nation from Texas to the Bay, yet DC's tech scene is anything but sluggish. Companies like AOL, Nextel, MCI and Uunet found early success in the region and since then, a slew of young entrepreneurs have emerged to follow suit. Some of the companies include LivingSocial, Clearspring, CareerBuilder, OPower and iPhone app development service PointAbout.
    ReadWriteWeb caught up with some of the industry's movers and shakers to find out what the DC scene has to offer for entrepreneurs.

    RWW's Never Mind the Valley series:

    Funding and Resources

    Technosailor editor and author of the WordPress Bible Aaron Brazell believes that the funding scene in DC is still in its infancy. Brazell mentions email tool AwayFind, advocacy platform Grasshopr and Africa Rural Connect as some of the great DC projects that, had they not been in DC, might have sought VC investment."

    Says Brazell, "There are compelling stories of entrepreneurs and startups struggling to exist in a policy/advocacy based world. We're not getting the support of VCs, particularly in the Valley - who have myopia about what a successful startup should look like...We need more entrepreneurs. We need more big names to attract funds. We need people who can see beyond Twitter and see bigger societal and cultural issues."

    But it's a Potomac Falls company named Summize who recently made headlines after being acquired by Twitter to become the real-time service's search feature. Still, the region's startups are by no means Twitter-centric. It's defense, government and telecommunications that make up the majority of the industry plays.

    When asked how the government influence shapes a company's business development and funding pitch Zoetica Media cofounder and Now Is Gone author Geoff Livingston replies, "If you want to sell to the government, you can't act like a flippant startup pushing 'free'.  Free doesn't fly with taxpayers or conservative public servants who are constantly under fire for overspending. FortiusOne is a great example of a startup that's 2.0, but also sells to the government.  If you visit Google or Microsoft's west coast HQ you have a very free work culture, but conversely their DC offices are large, hip, but still conservative DC."

    That being said, Livingston sees enormous opportunity for startups in the DC area as $80 billion dollars of the President's budget is expected to be invested in the region for new technology and IT infrastructure.

    Some of the existing government-related funding sources include DARPA, The National Science Foundation and the CIA venture fund In-Q-Tel. Meanwhile firms like Novak Biddle, Valhalla Partners and Grotech offer opportunities for large-scale investment. Other sources include the Maryland Venture Fund and the Center for Innovative Technology.

    Mentorship and Mindshare

    The region's best known accelerator program is Launchbox Digital. Launchbox's founders Matt Jacobsen, Mark McDowell and John McKinley are heralded as the mentors that are bringing the YCombinator-model to the nation's capital. The group offers entrepreneurs modest seed funding and similar to many of the region's incubators, participants also receive space and mentorship. Some of the group's advisors include former FCC Chairman Reed Hundt, AOL's Ted Leonsis and General Manager of Microsoft Mobile Eric Engstrom.

    In addition to Launchbox's mentors, DC entrepreneurs gain new insight from Aaron Brazell's Technosailor, Frank Gruber's Somewhat Frank, Nick O'Neill's Social Times, Jared Goralnick's TechnoTheory and Ernesto Gluecksman's consultancy Infamia.

    iStrategy Labs founderCEO Peter Corbett is an active mentor and strategist in the government-related startup scene.

    Says Corbett, "[Entrepreneurs] should be following what our government leaders are thinking and saying. For example, Minds in the Cloud is a new project we're working on to help people understand the present and future possibilities of cloud computing. If you're working on cloud technology, you need to be listening to what people like Aneesh Chorpa (Federal CTO) and Vivek Kundra (Federal CIO) are doing so you can build your products and services in such a way that they'll integrate well with the administration's technology strategy."

    Challenges like Apps for America and iStrategy Lab's Apps for Democracy also allow technologists to play a role in government initiatives while O'Reilly's Gov 2.0 Conference is always a huge draw for the region.

    The Ups and Downs of Capitol Hill

    With so many great companies in the region, Mixx founder Chris McGill sees DC as a challenging but positive place to run a startup. Says McGill, "The government, defense and telecom industries infrastructure provide an extraordinary business opportunity. The best thing [about DC] is the diversity of people. The worst thing is the distance from the new media epicenter in Silicon Valley and the inability to walk down the street and form a strategic partnership. "

    When asked about how the DC scene has shaped his web-based real estate site, HotPads CEO Douglas Pope replied, "HotPads has tried to use its location and its interest in politics to generate buzz. Each election year we produce Congressional Housing Heat Maps. [We] show the foreclosure rates and home prices by districts and the rates of the parties based on how the districts they control are doing. It's pretty fun and dorky but it gets some good attention and we probably wouldn't think to do that if we didn't see the President's helicopter out our window every day."

    Pope regularly attends events like Tech Cocktail, Twin Tech and Ignite DC to meet other entrepreneurs. Other great networking events include Bootstrap Maryland and HacDC.

    Says Peter Corbett, "By being in the nation's capital you gain a perspective on 'how things work' to a much greater degree than anywhere else. By combining knowledge of government, politics, global NGOs and the technology community, we're able to see opportunities that just aren't visible if you're not here day to day."

    Photo Credit: TechCocktail event by Shawn Duffy

    ]]>     http://readwrite.com/2010/02/23/never-mind-valley-washington-dc http://readwrite.com/2010/02/23/never-mind-valley-washington-dc Never Mind the Valley Tue, 23 Feb 2010 22:33:22 -0800 Dana Oshiro     <![CDATA[Never Mind the Valley: Here's New York City]]> Known by many as The Big Apple, and by some in the tech scene as Silicon Alley, New York City has been an international hub for media, art and business for decades. More recently New York has ebbed and flowed with the success and failures of the Internet startup culture, and is now well on its way to cementing its reputation alongside Silicon Valley as a driving global force in the industry.

    RWW's Never Mind the Valley series:
    Settled in 1624, New York has a long and storied history of entrepreneurship, and in the 1990s the city was on the cutting edge of Internet and Web innovation. In 1993, New York became home to Prodigy, the first online service to provide access to the World Wide Web via a dial-up connection. Throughout the rest of the decade, Internet companies like Pseudo, Razorfish, DoubleClick, Yoyodyne, and Agency.com became the catalysts for an east coast startup gold rush. The most successful consumer Internet startup from this era was The Mining Company, which later became About.com - a site which is now owned by The New York Times.

    New York's media obsession began to enter the tech scene in the mid 90s as new media companies like @NY in 1995 and Jason Calacanis' Silicon Alley Reporter in 1996 began to take off. In 1995, The New York Times experimented with placing content on the Web during a visit to the U.S. by The Pope, and later launched a permanent online presence in 1996. In the same year, Fred Wilson, currently of Union Square Ventures, launched Flatiron Ventures which quickly became the cities leading VC firm of the early Internet era. The following year, online agencies like Razorfish began to consolidate and quickly acquired several companies, while others, like Total New York and Yoyodyne, sold to AOL and Yahoo! respectively.

    As Wilson puts it, 1999 was the year that "all hell broke loose" in New York City for the Internet wave; major offline companies flocked to the Web, and dozens of smaller Internet startups went public or were acquired. According to Wilson, over 500 startups were founded in New York between 1999 and 2000; New York was the place to be, and everything was looking up without a hint of the impending dot-com crash. Wilson jokes that the peak of this era was epitomized in a television interview with Calacanis in which he suggested Harvard students take whatever remaining money they had and use it to start a tech company.

    Over the next few years, New York and the greater tech community saw substantial declines with the dot-com bust, and it wasn't until 2003 with the rejuvenation of new media that things started to look up for the city's tech scene again. Blogging began to take off as specialty sites like Gizmodo and later Engadget launched in New York, spawning online media networks like Gawker, and the news sites of today like The Huffington Post.

    Over the past decade, New York has pulled itself from the ashes of the dot-com crash and has risen back to the upper echelons of the top tech cities. The sheer size and density of the city has helped produce hundreds of startups, many of them, like Delicious, Tumblr and Foursquare, have become worldwide successes. In 2008, New York saw 116 startups receive funding, and in 2009 this number reached 150 - five times the amount the city saw in 1995. In comparison, Silicon Valley, which hosted 230 startups in 1995, saw just 336 receive funding in 2009 - a sign that the mecca of startups is beginning to reach critical mass while New York continues to grow.

    In September of 2009, Fred Wilson spoke at Clickable's Interesting Cafe and outlined why he thinks New York is unique from other startup cities like Silicon Valley, Boston or Boulder. Besides the city's obvious penchant for media and business, Wilson says New York is in itself a lifestyle that promotes social interaction at the benefit of local startups like Foursquare and Meetup which encourage people to go outside. Another key identifying feature of the New York startup scene, he says, is the cities rich artistic culture. Wilson points to Vimeo, Tumblr and OMGPOP as examples of what he calls "the New York school of web design."

    Today, the Empire City boasts an impressive cast of startups and VCs, as well as a plethora of events and organizations geared at young entrepreneurs. Along with those mentioned above, some of New York's extensive list of notable startups includes Boxee, Etsy, gdgt, Squarespace and College Humor. Funding these startups is the city's many venture capital firms, including First Round Capital, Union Square Ventures, Spark, RRE and Founder Collective.

    Entrepreneurs in the big city looking for a place at which to network with the thousands of startup enthusiasts can choose from any of a number of available events, including the NY Tech Meetup, nextNY, Social Media Week, Startup Weekend New York and the Brooklyn Future Meetup. Local organizations like Echoing Green, NYC Seed and StartingBloc all provide excellent resources for different types of early-stage startups in New York. The Open Angel Forum is another event and organization that will hold its first New York chapter event in April with continuing events every three to four months. The NY Tech Meetup, which began with a small group in the back offices of Meetup in 2005, now holds monthly sessions and has exploded to include over 10,000 members.

    First Round Capital entrepreneur-in-residence Charlie O'Donnell is deeply involved in the seed-level startup community in New York, serving on the board of the NY Tech Meetup, founding nextNY and being one of two chapter heads of Open Angel Forum New York. O'Donnell, who compares New York's storied tech history to the various "iterations of the Matrix," says the current version of the startup scene is supported both by early tech adopters and by veteran entrepreneurs from the early Internet days.

    "Early Twitter users helped connect the scene - especially around places like the Shake Shack in Madison Square Park, which played host to many a Friday lunch outside between startups and investors alike," O'Donnell tells ReadWriteWeb. "What's great though is that the current iteration of the community is also supported by veterans of those early days - like Fred Wilson, Kevin Ryan, Dave Morgan, and Scott Heiferman."

    As for the future, things are looking up for New York as the city continues to churn out successful startups at an increasing year-over-year rate. Some wonder whether New York's critical mass is higher than that of Silicon Valley, where innovation has seen a slight downturn coupled with significant job loss. O'Donnell predicts continued productivity in New York, "enough to make folks stand up and take notice," he tells ReadWriteWeb.

    "What I'd love to see is for the [New York] scene to more fully develop the bench players needed to support more startups: like product managers, interface designers, etc," says O'Donnell. "And for the educational institutions to catch up and start producing students that have skills that local startups can use."

    Additions and developments such as these will only help to boost New York's already booming startup scene into a future of prosperity. There will likely never be another city with quite the same dynamic as Silicon Valley, but New York is making the best run to be the de facto alternative with its own unique set of advantages.

    Photo by Flickr user Marco Arment.

    Thanks to Charlie O'Donnell for much of the background information about the New York tech scene history. Additional information and statistics came from Fred Wilson's 2008 keynote at the Web 2.0 expo, as well as Michael Karnjanaprakorn's extensive list of companies, VCs, events and organizations from New York.

    ]]>     http://readwrite.com/2010/02/16/never-mind-valley-new-york http://readwrite.com/2010/02/16/never-mind-valley-new-york Never Mind the Valley Tue, 16 Feb 2010 09:15:00 -0800 Chris Cameron     <![CDATA[Never Mind the Valley: Here's Bangalore]]> Known as the "Silicon Valley of India," Bangalore, the capital of the Indian state of Kamataka, is known globally as a center of information technology, housing international giants in the hardware and software industries. The city's first major step towards its IT reputation began in the late 1970s with the formation the Electronics City cluster, a 332 acre industrial park home to some of the biggest names in IT.

    RWW's Never Mind the Valley series:
    Among these are international companies like 3M, General Electric, Hewlett-Packard and Siemens, as well as Indian corporations like Infosys Technologies Limited, and Wipro. Infosys, a business software solutions and outsourcing provider featured heavily in Thomas Friedman's book The World Is Flat, is one of India's largest IT companies with over 100,000 employees and $4 billion in revenue in 2009.

    Other business clusters have since taken root in Bangalore, including the Whitefield cluster, which formed from the construction of the International Technology Park Bengaluru in 1994. The six building, 2 million square foot region houses offices for Accenture, Symbian, Dell, IBM, Intel and Oracle among others. Other clusters such as the Inner Ring Road cluster, and the Bellandur Outer Ring Road cluster include companies like Microsoft, Yahoo, McAfee, Target, Lenovo, Cisco, Nokia and Honeywell.

    Bangalore, like Silicon Valley, saw a rapid increase in startups around the turn of the century with the dot-com boom, spawning companies like Live Documents, Minglebox and Vaakya Technologies. Recently, however, startups in the region have fallen victim to hesitation from cautious investors. Deepti Chaudhary of the Indian business news site Livemint says that startups across India are struggling despite help from the nearly 40 Indian incubators.

    "It's an act of both desperation and instinct," writes Chaudhary. "The country's most prominent incubators are raising early-stage funds so their fledgling firms have the money they need to grow... VC firms, for reasons ranging from poor mentoring to a lack of quality entrepreneurs emerging from the system, seem to have lost faith in incubated companies."

    Chaudhary points out that Ojas Venture Partners, an Indian early-stage venture capital firm backed by one of Infosys' co-founders, has failed to invest in a incubator-bred startup since 2008. Another large VC firm, IDG Ventures, last invested in an incubated startup in 2007. Other India-centric and Bangalore-based VC firms include Artiman Ventures, Sequoia Capital, Helion Venture Partners and Nexus Venture Partners.

    Another obstacle in the way of entrepreneurs across India is the dichotomy presented by cities like Bangalore and the smaller villages nearby. Those in the larger cities like Bangalore and Mumbai have a greater opportunity to find venture funding due to the numerous investors, organizations and events. Entrepreneurs in smaller villages, where the Internet access is less readily available, are additionally hampered by a lack of access to business resources.

    It is also more difficult for entrepreneurs from smaller regions to focus on large market solutions, the kinds of solutions venture firms look to invest in. However, according to the news agency Press Trust of India (PTI), Infosys' Narayana Murthy recently encouraged startups to focus on smaller niche markets. PTI explains that "new start-ups have to demonstrate that the ideas which they are bringing to the table are not ideas which the big companies are working on."

    Despite these struggles, Bangalore has become a hub for information technology, research and development and an excellent incubator for Indian startups. With the help of events like Startup City, Barcamp Bangalore and Startup Saturday Bangalore, the city's potential for innovation and entrepreneurship is quickly expanding.

    Much like London, Bangalore will continue to grow as more 2nd and 3rd generation entrepreneurs begin providing their own funding to the area's startups. The area's universities will provide the technical expertise and entrepreneurship needed for these companies, and the wide variety of businesses located in the city will be eager to snatch up the best of them.

    ]]>     http://readwrite.com/2010/02/02/never-mind-valley-bangalore http://readwrite.com/2010/02/02/never-mind-valley-bangalore Never Mind the Valley Tue, 02 Feb 2010 07:30:00 -0800 Chris Cameron     <![CDATA[Never Mind the Valley: Here's Beijing]]> It's Data Privacy Day and when it comes to generating privacy-related buzz in the blogosphere, there are few governments as controversial as China. From Google's recent security issues, to blocked social media sites to the proposed Green Dan censorship program, Western netizens have always had a tenuous relationship with China. As part of our Never Mind the Valley series, ReadWriteWeb spoke to several investors and entrepreneurs to find out what it's like to run a startup beyond what many describe as the "Great Firewall".

    RWW's Never Mind the Valley series:
    While areas like Shanghai's Zhangjiang Hi-Tech Park and PKU-HKUST Shenzhen-Hong Kong Institution have sprung up as tech hubs, there's no denying that Beijing's Zhongguancun National Innovation Model Park is considered the country's tech epicenter. Nestled in the northwest corner of the city, the region plays host to the University of Beijing, Tsinghua University and the Chinese Academy of Science. Since the early eighties, major players like Baidu, Sina and Sohu have skyrocketed to success while sharing the land with global companies like Nokia, IBM and Microsoft. Today, the region tax breaks and opportunities for large and small companies alike.

    Emerging Markets

    While Facebook often boasts of its 350 million users, in China alone there are 340 million netizens with the majority opting to use alternative social sites like 51.com QZone and RenRen.

    Says Barrett Parkman, International Business Development Manager at Mobile Internet Great Wall Club, "Having user generated content as the core of a company here is risky business. Not to say UGC isn't alive and well, it's just that companies have to take strong measures to restrict it to uncontroversial topics. This is another reason that the gaming sector and virtual goods industry are growing so rapidly since they are generally uncontroversial in nature."

    Because of China's leadership in the gaming sector, CMUNE CEO Ludovic Bodin is taking Chinese revenue models and applying them to his Western-launched products such as Paradise Paintball. Says Bodin, "China is one of the most advanced country in the world for online gaming and has strong knowledge of the sale of virtual goods as a primary business model. CMUNE is taking the best practices in China and adapting for a non-Chinese context and audience. Developing here gives us an advantage to later launch into the Chinese market. "

    Plus Eight Star CEO Benjamin Joffe further addresses China's meteoric growth in gaming and virtual goods. Joffe frequently presents emerging trends in China's mobile, telecom and Internet markets.

    Explains Joffe, "The online gaming market is still booming despite being already very large. There are nine companies listed on NASDAQ and Hong Kong stock exchanges including Tencent." Joffe argues that while many Chinese companies began similar to their Western counterparts, founders quickly realized the need to generate revenue beyond the ad model. As the leading community portal in China, Tencent earned more than $1.5 billion dollars in revenue last year with 90% of that generated through virtual goods.

    In addition to watching the social gaming space, Joffe suggests that technologists look for interesting plays from the business social networking space and from a unique matchmaking service with a hybrid call center/online component called Zhenai.

    Funding

    There is no shortage of venture capital firms in China. Groups such as GSR Ventures, Sequoia China and Kleiner Perkins Caufield and Byers are all present for those seeking large-scale funding. As well, Huang Shengli's China Renaissance and a number of other firms help broker private equity deals.

    On the other hand, entrepreneurs with more modest needs can find fundraising challenging. Says Richard Robinson, CEO of casual gaming site Kooky Panda, "Later stage VC funding is advanced and even frothy here in the Middle Kingdom and the early stage is still quite nascent." Robinson goes to explain how much of the angel funding in China comes from friends, family and industry insiders. Nevertheless, that environment is improving as new groups step up with seed money and mentorship for early-stage investors.

    Former president of Google China Dr. Kai-Fu Lee launched Innovation Works as a $115 million dollar venture fund for early-stage entrepreneurs. The fund focuses on web, mobile and cloud computing technologies targeted at the greater Chinese market and investors include YouTube cofounder Steve Chen and makers of Lenovo, Legend Group. Additional sources for angel funding include associations such as the Asia America MultiTechnology Association angel group, the China Business Angel Network and The Chinese Founders Fund.

    Says Dr. Jovan Hsu founding partner of the Chinese Founders Fund, "There are few funds looking to invest in companies where the valuation is less than $10 million dollars and private equity firms are even higher. Early stage companies need more angel funds. The Chinese Founders Fund finds itself in a good position in the investment food chain in China. We're providing smart money."

    Mentorship and Learning

    Organizations like the Great Wall Club and China Entrepreneurs offer opportunities to network and gain mentorship, while Mobile Monday and Web Wednesday offer regular events for those looking to discuss the latest trends. Meanwhile, research firms like Analysys, iResearch and China ICT host larger conferences for annual business development opportunities.

    Operations

    With 35 million unique visitors per month to his site, CEO Fritz Demopoulos' Qunar is China's leading online travel company. Some of the advantages Demopoulos lists in keeping his business in China is the close proximity to the world's largest internet market, the thriving startup ecosystem with professional firms and universities, and a large number of capable professionals willing to work in a startup business.

    Says Demopoulos, "I've lived in China for many years and I've been involved in media and internet projects for nearly a decade. Globalization provides talent, resources, and the chance to deploy anywhere and seek returns. I'm no exception."

    Says Victor Tong, an angel investor in WebPlus and former director at Talentsoft, "China has built up a market-oriented economy and the business environment is quite free now. Meanwhile, great development in information technology provides companies a lot of support in their business operation...Doing business in China is a great experience. The 1.3 billion person consumer market is a temptation that's too hard to resist. "

    ]]>     http://readwrite.com/2010/01/28/never-mind-valley-beijing http://readwrite.com/2010/01/28/never-mind-valley-beijing Never Mind the Valley Thu, 28 Jan 2010 12:12:00 -0800 Dana Oshiro     <![CDATA[Never Mind the Valley: Here's London]]> A settlement for nearly 2,000 years, London is today the most populous greater metropolitan area in Europe with over 13 million residents. Home to popular tourist locations such as Big Ben, The London Eye and Buckingham Palace, London's skyline is unmistakable. While London often serves as the representative bridge from Europe to the United States, it also is the seat of Europe's rapidly expanding entrepreneurial landscape.

    The London startup scene saw its first major consumer Internet success in 1998 with LastMinute, a travel site similar to Expdedia that eventually traded publicly on the London Stock Exchange beginning in 2000. UK companies like LastMinute were largely able to avoid the doom and gloom of the dot-com bubble burst at the turn of the century due to the nature of the venture funding scene.

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    The key difference between the startup communities in London and Silicon Valley is that the latter has VCs more willing to take risks with their investments and give money to early-stage companies. The opposite is true in London, meaning that during the dot-com era, there were fewer startups and fewer risky investments.

    The more daring VCs of Silicon Valley choose to ride the roller-coaster of risk vs. reward and often find success that way, while London VCs choose to take safer bets, investing money in established companies with traction. The major UK firms, such as Index Ventures, Accel Partners and Balderton Capital used this to avoid the pitfalls of events like the dot-com bust, but they sacrifice the possibility of higher returns because of it.

    It is this attitude that has created a difficult venture funding scenario for early-stage startups looking for seed money in London. Azeem Azhar, founder of Viewsflow, a platform for identifying valuable business information online, says that three obstacles stand between startups and success in London.

    The first problem is the difficulties in securing capital due to apprehensive VCs and a lack of second- and third-generation entrepreneurs. The second problem Azhar notes is one of talent.

    "Silicon Valley's talent depth is astonishing, and when you get smart people in the same room they make better ideas," Azhar told ReadWriteWeb. "The numbers are comparatively smaller in London, and there are better industries for engineers to go into, like banking."

    The third problem Azhar sees is that the markets in Europe are significantly smaller than US markets. According to Azhar, a typical European early-stage company will sell for less than $50 million, while VCs are looking to make $100 million or more. This complements the first problem, allowing already cautious VCs to become more fastidious than before.

    However, things have begun to turn around for the London startup scene. In the past, entrepreneurs would leave the UK and cross the pond to the US to find the money to get off the ground. More recently, however, organizations like Seedcamp and The Accelerator Group, as well as new funds like Atomico Ventures and PROfounders Capital, have begun to provide young startups with funding and resources.

    Mark Littlewood of The Business Leaders Network, a UK-based membership organization that helps connect CEOs and founders with investors and possible customers, says that the VC firms in London are letting their influence slip away.

    "The most significant trend recently has been the decline in influence (in start up terms at least) of the venture community," Littlewood told ReadWriteWeb. "VC firms have either been struggling to raise funds whilst at the same time have focused on investing later in more mature businesses."

    What is driving this new force of organizations and funds for early-stage startups? It's the second generation of entrepreneurs from previous successful London startups. The most successful project to come out of London (and perhaps all of Europe) is Skype, which was founded in 2003 by Niklas Zennstrom and Janus Friis and later acquired by eBay for nearly $2 billion in cash.

    Zennstrom is now the co-founder of Atomico Ventures. The fund is an effort to invigorate the venture capital industry in the London area so that it may be more like the US - a dichotomy Zennstrom knows well.

    "I think we went to over 20 VCs here in Europe, and no one wanted to touch the company," Zennstrom recalled about Skype during a keynote at LeWeb in 2009. "Always the Silicon Valley option seemed very very attractive because it's such a powerful ecosystem with VCs that are brave that are willing to take risks."

    But Zennstrom, along with countless other entrepreneurs, stayed in Europe and managed to create a successful company. Major successes to emerge from London include Last.fm, an Internet radio service acquired by CBS in 2007, Bebo, the largest social network in the UK, which was acquired by AOL in 2008, and Playfish, a social gaming platform acquired by EA in 2009. Other London startups include MOO, TweetDeck, Playfire, LOVEFiLM, Huddle WAYN and Seatwave.

    With the cycle of returning second-generation entrepreneurs like Zennstrom, the startup scene in London is beginning to grow and be more inclusive. Saul Klein, a partner at Index Ventures and a former Skype employee, has played a large role in mobilizing the startup community by founding both Seedcamp and the Open Coffee Club.

    Stephanie Robesky, an entrepreneur in residence with Atomico Ventures, says that thanks to the new funds and organizations in London, things are looking up for the future.

    "There are great opportunities for people to start businesses in London with not just financial support, but operational support as well," Robesky told ReadWriteWeb. "I think that it is going to continue developing and maturing. The Valley has years on London and Europe, but the Europeans are ambitious."

    Other London-based startup events and organizations include DrinkTank London, NESTA, Springboard and Glasshouse London.

    Photo credits: Trodel and Ian Muttoo.

    Special thanks to Azeem Azhar, Mark Littlewood and Stephanie Robesky for information and a crash course in London.

    ]]>     http://readwrite.com/2010/01/26/never-mind-valley-london http://readwrite.com/2010/01/26/never-mind-valley-london Never Mind the Valley Tue, 26 Jan 2010 07:25:00 -0800 Chris Cameron     <![CDATA[Never Mind the Valley: Here's Israel]]> Israel isn't just an emerging tech hub, it's a hotbed of activity and has been for many years. Per capita, Israel has the most startup companies and spends more on research and development than any other nation in the world. Israelis lay claim to the invention of Intel's Pentium 4 microprocessor, CheckPoint's firewall, Comverse's voicemail, Amdoc's telephone billing system and a ton of VoIP technology through companies like Audiocodes and Vocaltec. Between a value for innovation and a great funding scene, Tel Aviv and Herzliya are ripe with startup entrepreneurs. ReadWriteWeb caught up with some influencers to hear their thoughts about the country's tech scene.

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    A Culture of Learning

    TechAviv founder and serial startup entrepreneur Yaron Samid worked on BackWeb in Silicon Valley, Pando in New York and recently launched CrowdSpot in Tel Aviv.

    Says Samid, "Tel Aviv melds the best of both the Valley and downtown New York; a rich tech talent pool obsessed with entrepreneurship, in the heart of a 24/7 popping cosmopolitan town filled with beautiful people, artists, musicians and world travelers. Add year-round sun, outdoor cafes and beaches everywhere and you've got yourself geek heaven."

    For all of Samid's reasons, Israel has given rise to a diverse range of startups including face recognition service Face.com, IM / VoIP provider Fring, web analytics service ClickTale, gift-giving platform The Gifts Project, image attribution giant PicScout, gadget guide Walyou and Q&A repair service FixYa.

    Samid's TechAviv organization is one place where leaders from these companies can meet and share advice. Since 2007, Samid's organization has grown from a simple invite-only meeting of founders into a global network with a separate founders club, angel club and business workshop. In addition to TechAviv, Israeli entrepreneurs and technologists have the opportunity to learn from informal events like GarageGeeks and VC meet ups. The Zell Entrepreneurship Program has also proven to be an amazing resource for early-stage entrepreneurs. This formal and informal culture of shared learning is maintained by some of the countries most successful entrepreneurs.

    Ariel Finkelstein, CEO of feedback analytics company Kampyle recognizes the community's contributions. Says Finkelstein, "Other entrepreneurs helped Kampyle when we were growing and we feel strongly about supporting the new startups... It's important for a growing team to get good advice and to understand fully the commitment and hard work that goes into launching a global company."

    In addition to sitting on several boards, mentoring at the Zell program and participating as an active TechAviv member, Avichay Nissenbaum is well known for orchestrating two lucrative exits including the sale of SmarTeam to Dassault Systemes and most recently, question and answer site Yedda to AOL.

    Says Nissenbaum, "What characterizes Israeli entrepreneurs is passion and dedication, high technological skills, openness and directness, and in a formal sense - the willingness to take reasonable risk."

    While he argues that Israelis have the advantage of a global view and the creativity to solve problems under pressure, he also recognizes the challenge of many entrepreneurs targeting an American market from abroad.

    The Globetrotting Leader

    Shuly Galili, Executive Director of the California Israel Chamber of Commerce, is often approached by entrepreneurs to help in the US launch process.

    Claims Galili, "In terms of mentorship, Tel Aviv lacks serious angel investors/mentors to guide entrepreneurs with their launch and market positioning. This is one critical need that is missing and is very evident to us at the California Israeli Chamber of Commerce."

    Entrepreneur Yaron Galai has found a dual-city operation works best for him. After moving his Quigo research team to New York, he found that to his dismay his team's focus changed from innovation to basic maintenance. After selling Quigo to AOL, Galai's new content rating company Outbrain maintains engineering, quality assurance and research in Israel, with sales, marketing and product in the US.

    Galai has found a way to stay close to the company's target market while still keeping productivity and innovation high. Says the CEO, "I think Israeli entrepreneurs should be thinking about how to mix both things: Build companies that are based in Israel, but that can operate and communicate effectively with strong global sales/product/marketing teams in its core markets."

    The State of Funding

    Israel is ranked second in the world for venture funds next to the US. Although we recently reported that Israel's funding saw a sharp descent in 2009, the dollar values raised for a country the size of New Jersey with a population of only 7.5 million citizens is indeed impressive.

    A number of legendary angel investors including Dr. Yossi Vardi, Zohar Gilon and Rami Lipman hang their hats in Israel. Meanwhile, some of the notable angel resources include Israel Seed Partners, TechAviv Angels Club, AfterDox and Startup Factory. Entrepreneurs can also approach firms like Carmel Ventures, Gemini Israel Funds, Sequoia Capital and Bessemer. Another avenue is the Ministry of Industry, Trade and Labor's Chief Scientist Program for seed funding, grants and access to 24 tech incubators.

    Daniel Cohen of Gemini Israel Ventures remarks that Israel's mandatory military service may contribute to startup leadership qualities. Cohen explains that because young people are placed in management roles at a very early age, these skills may contribute to innovation and problem solving abilities in business leaders.

    Says Cohen, "The scene here is vibrant. There are hundreds of new companies that launch every year. Israelis have seen their fair share of funding and exits, Israel's challenge is building longer lasting companies. "

    Agrees Yaron Galai, "We might be starting to see the signs of change in the quick exit mentality with second time entrepreneurs coming back to the game. [They're] free from having to focus on locking in an early sale, and really focused on building bigger, longer-term, sustainable companies. "

    Photo Credit: Or Hiltch

    ]]>     http://readwrite.com/2010/01/21/never-mind-the-valley-heres-is http://readwrite.com/2010/01/21/never-mind-the-valley-heres-is Never Mind the Valley Thu, 21 Jan 2010 13:00:00 -0800 Dana Oshiro     <![CDATA[Never Mind the Valley: Here's Austin]]> Settled in the 1830s along the banks of the Colorado River and named for the Father of Texas Stephen F. Austin, the city of Austin is known for its thriving music scene and as the home of the University of Texas (UT) Longhorns. But in the past few decades, the Texas capital has built up a reputation of a different sort.

    With companies headquartered in Austin like Dell and Freescale Semiconductor, a spin-off of Motorola, the city has become a hotbed of information technology hardware and software. In the mid 1990s, Austin was put on the map by software companies like Motive, Vignette and Tivoli, the latter of which was quickly scooped up by IBM in 1996.

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    But something these companies have in common other than their birthplace is that they were all funded by Austin Ventures, the earliest player in the venture capital industry in the city.

    "Austin Ventures was pretty much the only significant game in town when it came to funding, and they knew IT software best," says Jonas Lamis of Tech Ranch Austin, an incubator for early-stage startups.

    With help from Austin Ventures, dozens of technology companies have grown out of Austin - several of which have been acquired by top IT companies like IBM, Alcatel-Lucent, Hewlett Packard, and Sun Microsystems, to name a few. With just under $4 billion in assets, Austin Ventures has become the largest non-coastal venture capital firm in the United States.

    Lamis says that while a less "sexy" vertical like IT still pays the bills, its proliferation in the Austin area has been both positive and negative.

    "The good news is there's a vibrant market for it," Lamis told ReadWriteWeb. "The bad news is that consumer internet startups were missing from Austin and even today there's very few of them."

    But there are exceptions to every rule. Smaller startups like Gowalla (Alamofire), Socialware, Piryx and OtherInbox, as well as larger ones like Bazaarvoice, Spiceworks and SolarWinds have all found a home in Austin. And of course one would be remiss to forget the Austin community's pride and joy, the interactive portion of South By Southwest (SXSW). A yearly showcase of some of the hottest startups and emerging technologies, SXSW has served as a launch pad for now ubiquitous startups like Twitter and Foursquare.

    Another industry thriving in the Austin startup scene is biosciences and environmental businesses, spurred by the Austin Technology Incubator at the University of Texas. In addition to IT and wireless, ATI hosts divisions devoted to helping launch startups in the clean-tech and bioscience industries. Executive Director of the Austin Wireless Alliance and ATI Director Bart Bohn says the last few years have seen a large uptake in traction for clean energy startups.

    "One event that signaled the transformation was the first Clean Energy Venture Summit in May of 2007 in Austin," Bohn told ReadWriteWeb. "Thirty to forty investors came to listen to 15 or so startups, and 400 people attended. It was standing-room-only in biggest ballroom we could find."

    Along with other groups such as CleanTX and the Solar Energies Entrepreneurs Network, Austin has quickly become known for clean energy innovation. Another organization, the Pecan Street Project, a coalition of various organizations and Fortune 100 companies, plans to redevelop an old municipal airport just a few miles from the UT campus into a community hooked into a smart electrical grid.

    This blending of unique industries in Austin is just a small part of what makes the city unique from other entrepreneurial communities like Silicon Valley. Mike Maples of Maples Investments knows the dichotomy that is the relationship between the Valley and Austin because his Silicon Valley-based agency invests roughly 20-25% of its money in Austin-based startups.

    "Silicon Valley is an acceleration machine for sure, but the downside is there can be a flight of talent to the winning ideas," Maples told ReadWriteWeb. "Austin is a better place to have a stable base of people working at a company."

    While Maples recognizes that Silicon Valley is a mecca for startups, he also says that arguing one over the other is like comparing apples to oranges - each has its pros and cons.

    "The other issue is that sometimes Silicon Valley is like 9-year-olds playing soccer, they just all chase after the ball," says Maples. "Austin benefits from that. You get the occasional idea that no one in Silicon Valley cares about, but its a great idea."

    Helping the Austin startup community take advantage of these opportunities are the numerous organizations and events in the city. Tech Ranch Austin, Capital Factory, Bootstrap Austin, Conjunctured, and the Austin Technology Incubator are just a few of the organizations working with Austin startups. Some of the more popular events in Austin include of course SXSW, Mobile Monday Austin, TeXchange, Austin Tech Happy Hour, and Ignite Austin.

    Maples envisions only more growth from the Austin community in the future and encourages them to not mimic Silicon Valley. Instead he suggests they jump ahead of the curve to the next big thing, which he says could be the consumerization of their already massive IT businesses.

    "For Austin, the opportunity is to merge software and services," Maples says, encouraging the city to focus on what it knows best. "Always try to be your best self."

    Photos by Flickr users roland and Kumar Appaiah.

    Special thanks to C. Enrique Ortiz, Jonas Lamis, Bart Bohn and Mike Maples for their help in gathering information for this article.

    ]]>     http://readwrite.com/2010/01/19/never-mind-the-valley-heres-au http://readwrite.com/2010/01/19/never-mind-the-valley-heres-au Never Mind the Valley Tue, 19 Jan 2010 06:05:00 -0800 Chris Cameron     <![CDATA[Never Mind the Valley: Here's Portland]]> When asked what shapes Portland's startup culture, Silicon Florist blogger Rick Turoczy named 3 defining aspects of the industry - hardware roots, open source projects and iPhone development. Turoczy has been in Oregon for the past 15-years and started Silicon Florist as a way to cover the region's early stage startup scene alongside other Portland tech sites like Mike Rogoway's Silicon Forest blog and Strange Love Live.
    Since then he's watched his town grow into a bustling tech hub and enjoyed every minute of it. ReadWriteWeb caught up with Turoczy and a few other Portland influencers to get a feel for the scene.

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    Turoczy explained, when Tektronix and Intel hung their hats in Oregon, scores of great developers and technologists found themselves settling the once sleepy blue collar region. As employees broke off to start new ventures, a startup community was born out of it. Concurrently, the open source communities and iPhone communities sprung up.

    Entrepreneur and Urban Airship CEO Scott Kveton manages to keep a foot in both the open source community and the iPhone community. While Urban Airship focuses on building out iPhone infrastructure for developers, Kveton is also well known for working with Oregon State University to start the Open Source Lab - the first state-wide open source development curriculum. Coupled with the fact that O'Reilly's OSCON and the Linux creator Linus Torvalds call the region home, Oregon's developers understand the value of shared knowledge and community. When asked how the open source movement has shaped Oregon's entrepreneurs, Kveton replies, "Portland has a live free or die attitude. We engage in community and unlike other groups we really share our knowledge."

    The majority of ReadWriteWeb's team calls Portland home. Agrees Marshall Kirkpatrick, "There's a very supportive community, lots of very creative people and a great history of geekery.  People interested in open source, wikis, RSS and mobile apps will find some of the most influential developers and companies in the world available to connect with in Portland."

    Raven Zachary is one such developer. Zachary helped start BarCamp Portland, Ignite Portland, iPhoneDevCamp and still serves on the board of Legion of Tech - a group that organizes Oregon-based tech events. Through his work as the President of Small Society he's built iPhone apps for a number of influential campaigns including the Obama '08 iPhone app. When asked what he thinks of Portland he explains, "Portland attracts people - people who want to stay here and ideally work for local businesses. We have a huge population of telecommuters in this city working for out of state employers, many in California. The talent is here, the greater challenge is the receptivity of investors to bet on Portland-based tech companies."

    Portland Entrepreneur Josh Friedman knows as well as anyone how hard it is to raise funding. Friedman took the skills he'd learned from Intel and applied them to start Eleven Wireless and startup co-working facility Nedspace. Says Friedman, "It was hard as hell to raise money and at the time I was pretty well connected.There's a gap in funding resources for Portland entrepreneurs looking to raise between $25,000-250,000 dollars and it needs to be addressed...While our Angel investors are great, they simply aren't doing the volume to take chances on early-stage companies." Friedman is looking to expand Nedspace to ten additional cities in 2010 and is rumored to be raising a seed fund for Portland-based startups. Says Friedman, "If it wasn't exciting here I don't think I'd live here. I really believe in my heart and soul that Portland can be the best city in the world to start a business. The fact that it's a cheap to live, in addition to being a clean and cool place makes it a good place for entrepreneurs. If we combine that with the right investors, people will move here in droves."

    Says Rick Turoczy, "In some ways this whole town is an incubator. People here view technology as an artistic pursuit and they like to muck about in coffee shops and co-working facilities. In the 15 years I've lived here it's the most cohesive and collegial community yet. This sort of creative spirit doesn't always come with a business plan, but as more companies like Jive and JanRain get funding, we're starting to see the developers and VCs get on the same page."

    Additional Resources

    Oregon Entrepreneurs Network: OEN helps Oregon and SW Washington-based entrepreneurs manage their early-stage companies. The group's programs include the Portland Angel Network, Women's Investment Network and Oregon Angel Fund. The group also hosts conferences including Angel Oregon and Venture Northwest as well as a series of business-related PubTalks on the second Wednesday of every month.

    Portland Ten: Portland Ten is an incubator program where companies buy into their own development and make a goal to reach to $1M in revenue by Oct, 2010.

    Coworking Portland Wiki: This wiki keeps a list of local co-working spaces and requests for shared spaces.

    Beer and Blog:On Fridays between 4-6pm Portland residents meet up at the Green Dragon to share in their mutual love of beer, blogs and all things Portland.

    If you've got more resources for the Portland area let us know in the comments below.

    Photo Credit: Stu Seeger

    ]]>     http://readwrite.com/2010/01/14/never-mind-the-valley-heres-po http://readwrite.com/2010/01/14/never-mind-the-valley-heres-po Never Mind the Valley Thu, 14 Jan 2010 07:49:00 -0800 Dana Oshiro     <![CDATA[Never Mind the Valley: Here's Boston]]> With tourists flocking to the Boston to walk the cobblestone streets of the Freedom Trail and visit various historical landmarks, Boston is often thought of for its ties to the American Revolution. But Boston is also the birthplace of a revolution of a different sort.

    In 1946, Georges Doriot, a professor at the Harvard Business School, founded the American Research and Development Corporation (ARDC) in Boston - one of the very first venture capital firms.
    In 1957, the ARDC invested $70,000 in Digital Equipment Corporation, a company founded by two former Massachusetts Institute of Technology engineers working on transistor-based computing. The ARDC was later able to turn around and sell their investment for $450 million, quite possibly the best return on an investment ever at that point.

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    Half a century later, Boston is a thriving and vibrant community not only for venture capital and startups, but also for large technology companies and research corporations. With nearly a hundred regional colleges and universities - like MIT and Harvard - and over a quarter of a million students, Boston has quickly become a breeding ground for innovation in the tech sector.

    "The thing that's amazing is we don't have to worry about attracting people into the Boston community," said Jeffrey Bussgang of Flybridge Capital Partners in a speech at the Harvard Business School last October (see video embedded below). "The challenge is to retain people."

    And retain them they will, thanks to a plethora of resources available to young entrepreneurs and startups in Boston. Monthly meet-ups like Mobile Monday and Tech Tuesday as well as other events like the biannual Mass Tech Leadership Council Unconference are just a few of the great ways startups can get their feet off the ground.

    Other organizations like TechStars and Stay in MA help Boston startups set up shop in Beantown with scholarships, funding, and mentorship. And why wouldn't startups want to stay in Boston? Massachusetts boasts the highest per capita VC investment rate in the United States, eclipsing California and New York with $457 per person.

    Data released today from information and data-services company ChubbyBrain shows that while other Northeaster states are suffering from floundering VC investment, Massachusetts is alive and expanding. While New York and Pennsylvania fell to just $513 million and $254 million respectively in the second half of 2009, Boston's home state soared to $1.2 billion. Figures like these have vaulted Massachusetts past New York into the number two spot behind California for VC investments.

    Bussgang says that reasons like these and the overall economic stability of the state have encouraged startups and entrepreneurs in Boston, despite being across the country from sunny Silicon Valley.

    "Yeah the winter sucks, but Massachusetts has delivered a budget on time and balanced the last couple years... unlike what's going on in California," he says. Bussgang also points out that California continually ranks last on Chief Executive Magazine's list of Best and Worst States for Business, though Massachusetts is usually not too far away.

    The close-knit technology and innovation community of the greater Boston area has fostered spontaneous collaborations resulting in several successful companies across numerous industries. Cloud computing solutions like Carbonite and GlassHouse, robotics companies like Roomba-maker iRobot, online video providers like Brightcove, and e-commerce startups Vistaprint and Shoebuy are all examples of the firepower Boston's potential can produce.

    Boston has even seen recent expansion from larger corporations, such as Google, Microsoft and Cisco Systems. Having these larger companies in the Boston area provides excellent opportunities for startups, says Bussgang.

    "Boston has become an outpost for a lot of these satellite R&D centers, and a place where the companies that we fund can find a home," he says.

    To learn more about the Boston startup scene, check out Don Dodge's extensive list of events, resources and people, as well as Larry Cheng's Massachusetts VC Blog Directory, which you can import right into your RSS reader to stay on top of what VCs in Boston are talking about.

    Photo by Flickr user the-o.

    ]]>     http://readwrite.com/2010/01/12/nevermind-the-valley-heres-bos http://readwrite.com/2010/01/12/nevermind-the-valley-heres-bos Never Mind the Valley Tue, 12 Jan 2010 03:35:00 -0800 Chris Cameron     <![CDATA[Never Mind the Valley: Here's Los Angeles]]> Best known for its movie stars, sun and surf, Los Angeles probably isn't the first place you'd think to breed technology. But when you consider the influence of investors like Jason Calacanis and Mark Suster, in addition to the fact that companies like Demand Media and Docstoc call Southern California home, it's not surprising that the community is emerging as one of the country's hottest startup hubs. ReadWriteWeb caught up with some defining characters of the LA Tech scene to find out why they've made their homes away from the traditional tech haunts of Silicon Valley.

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    FUNDING Says Sean Percival, developer and founder of LA tech blog Lalawag, "The tech space in the Valley feels over saturated at every level, at least to me. Here in LA there are still so many untapped resources and opportunities." Similarly Twiistup producer Francisco Dao remarks, "There's certainly a smaller funding infrastructure in LA but it is MUCH more accessible. SoCal VC's can be easily found at events looking to meet entrepreneurs. In Northern California, it's harder to get into the loop and get to know some of the VCs and players."

    In some cases, competition to pitch angels in the Bay is so fierce that entrepreneurs have paid to present their companies. Upset by the exploitative practice of pay-to-play angel pitch sessions, serial entrepreneur Jason Calacanis recently launched the Open Angel Forum. Based out of LA, the Forum allows companies to submit an application free of charge with the best applicants invited to dinner alongside some top-tier angels. Other LA-based funding sources include firms like Rustic Canyon Partners and GRP VC. Dealmaker Media also hosts regular LA-based events where founder Debbie Landa invites some of the country's top VCs to coach LA startups through industry trends and tactics.

    MENTORSHIP
    As for mentorship opportunities, in 2009 GRP VC's Mark Suster created Launchpad LA to offer help to early-stage LA-based entrepreneurs. The group meets virtually 2 times per month and seasoned veterans pass their knowledge on to startup newcomers. Some of these newbies include companies like band app-maker Mobile Roadie and parenting social network Totspot.

    Says Suster, "We historically didn't have a ton of successful tech companies. But things have changed and now companies like PriceGrabber, MySpace and Shopzilla are well established. LA is seeing a resurgence in second time entrepreneurs and it's this generation of people that are helping breed success for others."

    Docstoc CEO Jason Nazar also works with Dealmaker to host a monthly Startups:Uncensored meet up series. Meanwhile, Francisco Dao's Twiistup is the event to attend for SoCal tech networking.

    Says Dao, "I think the smaller more familial environment in LA may act as almost a natural incubator. Everyone talks to everyone else here."

    There's an old saying that "a cloudy day is no match for a sunny disposition." Lucky for them, the LA tech scene gets to experience warmth in more ways than one.


    Photo Credit: Lisa Newton

    ]]>     http://readwrite.com/2010/01/07/never-mind-the-valley-heres-la http://readwrite.com/2010/01/07/never-mind-the-valley-heres-la Never Mind the Valley Thu, 07 Jan 2010 07:55:10 -0800 Dana Oshiro