The Incubator Bubble

by Francine on April 14, 2014

There’s a bubble.

It’s not in startups, or in valuations, but in pitch contests, challenges, and incubator/accelerators. In Arizona, we used to have two or three, and now we probably have more than two dozen. They have different conditions, rules, and metrics. Every week I get an email from some incubator or agency asking me to share their challenge, event, or contest with my network.

Although I dutifully do it, because I want to support the community, I feel more than a little guilty. Most of the startups we deal with do not have the time or energy to do two or three of these applications a week, and end up being ineligible even if they do participate. This takes time away from product development, and even if they do get into an incubator often the services don’t match up with their needs and cash is not given.

This week I’m acting as a judge for the Arizona Innovation Challenge. Although I don’t get a view into all the applications, the ones I’ve seen this spring are not as exciting as the ones I’ve seen in seasons before, and I’m seeing more from out of town. This worries me. It may mean that companies we saw in the past that weren’t ready for AIC have not re-applied (and I don’t know the reasons). I’m once again seeing companies that are too early for this competition, or sometimes barely eligible because they don’t have teams.

Some startups simply focus on building a sustainable business and we never see them in these challenges. If they can raise money, great. But they don’t spend valuable time chasing it all over the United States, which is a signal that there is no “Plan B” for what happens to the business if funding isn’t attained. And truthfully, in the case of most early stage companies, it isn’t. I’ve seen applications lately where the founder does not have any money in the company — no skin in the game. As a seasoned investor, I am willing to invest beside a founder I know well, and in whom I believe, but I certainly wouldn’t invest in a team I didn’t know or a company where the founders have no investment.

We seem to have lost sight of the fact that most startups fail. As Steve Blank (The Startup Owner’s Manual) says, a startup is a science experiment. It is designed to test the hypothesis that there’s a market for a certain solution that is large enough and passionate enough to pay for the product or service. If there isn’t, well then we have to change the ingredients, or the proportions, and in the most extreme cases even give up the experiment.

Spending all your waking hours chasing down the elusive “funding” in no way advances the experiment. It tests no hypothesis. A far better way for a founder to spend time would be to find those early customers — the ones who need the solution badly enough to pay money for it and perhaps even pre-fund the company.

I fund projects on Kickstarter all the time. In fact, I’m doing more of that these days than conventional investing. Why do you think so many experienced entrepreneurs who could raise money from angels  are doing Kickstarter projects, especially those in which the donors can get the product before it ships commercially?

Because they are testing the market, that’s why. They’re looking for people who want what they’re building enough to put up a small amount of money in advance for it. And that’s the true purpose of crowdfunding; to provide a market test for startups.

If you are doing a startup, perhaps it’s best to go heads down on your product and see if anyone wants it before you reach out for funding.,



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Silicon Valley Only Looks Like a Man’s World

by Francine on April 6, 2014

The NY Times article on the bro culture of Silicon Valley, celebrating the male engineers who “own the code,” should look below the surface of the people the article tries to portray. Underneath that testosterone-charged surface, much more is happening.

I’ve been a woman in a man’s world for over 50 years. When I went to Bronx High School of Science, it was dominated by men. Cornell University had three times as many men as women, and so on and. Everywhere I went I was one of very few women. Still am.

The advertising industry, where I started in the Mad Men era, was composed of men and their secretaries, just like the series says. The men started as account executives in training, while the women started as typists. (I’m still a very fast typist.)

The menial jobs open to highly educated women were the reasons I kept leaving the workforce and going back to school. When I finally had a PhD, and could become a professor, I could shut the door of my classroom and ignore my gender. The students were not thrown off my a woman professor: I had the power.

Until I got pregnant and the Mormon dean tried to suggest that I quit as soon as I began to “show.” I politely told him there was no chance of that, and continued to each even as I went into labor, frightening the hell out of my three male officemates. I brought my baby to class in a backpack, and nursed openly. I did not quit.  It was the 70′s, and the women’s movement was going to win, I thought. I wanted to be there.

In 1980  I left academe, bored by politics and curriculum committees, to start my first company.

So I am stunned to read all these articles about the experience of women in tech, the field I’ve worked in for the past 25 years. Oh yes, I’ve worked on the soft side of it — marketing, not code. All of my businesses were either PR or marketing, or, as now, now entrepreneurship coaching.  But to do any of those well, I argue, you have to know more than the “owners of the code” do; you have to know how to make users care about the code. You have to teach them to use it, and you have to be able to help the guys who own the code stay in business. There are plenty of women in SIlicon Valley who do that really well.  The obvious ones are Sheryl Sandberg and Marissa Mayer,  but there are also Clara Shih, Victoria Ransom,  Randi Zuckerberg, Esther Dyson, Barbara Bates, Ellen Leanse, Rashmi Sinha — I could go on. They’re in the tech industry, they make valuable contributions, and they don’t spend time thinking about discrimination. And those are just my friends.

The “owners of the code”  come to them for  business acumen beyond the limits of the code. Like me, they are the owners of the customer, which  makes them the owners of the business model. Without the business model, where would the owners of the code be?

Businesses are made up of more than tech engineers, who often sit in darkened rooms with headphones on and don’t even speak to each other in person. They are made up of people with highly orthogonal skill sets: marketing, finance, legal, and product development. The startup tech industry tends to glorify product development to the detriment of building businesses, but the two go hand in hand. And there’s a major place for the soft skills of women.

Very often, founders I advise or invest in are shown  the exit door from their own companies by investors. Who do they come to first? Me. I know how to advise them to negotiate, or move on, or bear the shame that mistakenly accompanies this all too common consequence of outside funding. I actually have the skills to help them understand why something is happening to them, and how to see it in a larger perspective.

Let me tell you something. When I was young and attractive, and men I worked with teased me and harassed me, I always knew it was my choice what to do: I could ignore it, or I could capitalize on their interest and have myself some fun. Depending on how I felt about the individual involved, I did one or the other. But I was the boss lady.  I owned the company, and even if the harasser was a client, I still knew I was the boss.

Through my entire career, iv’e gone from everyone’s daughter to everyone’s lover to everyone’s mother, and now everyone’s grandma, and I’ve always carried within me the certainty that men can’t do it without me.

I have a deep respect for men, and an even deeper empathy with what they’re facing. Instead of widening the divide between men and women in the tech industry, how about we try to see into each other’s hearts to where those “bro” tweets and Titstare apps actually come from? Chances are, they come from a deep fear — fear of failure — rooted so deeply  in male sexuality that we’re not going to dislodge it with workplace HR policies. The man, after all, has to kill the animal. The man has to get it up. These geeks are just guys who fear they’re not going to be able to do that, and who are growling to scare off a predator they feel they can’t kill.

Give them a break, ladies. We got this.

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My Hotel in New York

March 27, 2014

It’s time I told you a little about my hotel in New York, the one I can afford to stay in for a week at a time, even though no one pays for my trips. My hotel in New York is old. In fact, the elevators are so slow going up and down to my […]

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War After War, with the Same Outcome

March 12, 2014

We human beings never learn. I just finished a book by Mark Harris called “Five Came Back” about five famous Hollywood movie directors from the 40′s who left their lucrative private sector careers to enlist in the Army and Navy during World War !!. The five, John Huston, John Ford, WIlliam Wyler, George Stevens, and […]

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What Do All Those Steps Add Up To?

March 3, 2014

GERO from Gero on Vimeo. If you know me at all, you know that for the past year or so I’ve been working at the intersection of the quantified self, wearable technology and health care. I’ve bought and tried the Pebble, Fitbit, Jawbone, Google Glass, Misfit Shine, Nike Fuelband, and Basis Watch. I’ve used Moves, […]

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Tim Draper Re-invents the Business School

February 13, 2014

On stage with Tony Perkins to kick off this year’s Venture Summit Silicon Valley, Tim Draper welcomed a crowd of investors and entrepreneurs to his brand new Draper University, the home of a series of six-week programs to speed up the pace of disruptive innovation in Silicon Valley. Draper plans to disrupt entrepreneurship education.   […]

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CES 2014 Remembered (Fondly)

January 11, 2014

I bet you’re dying to hear what I thought of CES, especially since there has been hardly any press coverage (not). This year I went with a press pass, and the most amazing thing I saw is the press itself. Trust me, “journalism” is in no danger of dying if the number of press passes […]

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Are Brands Ready for Empowered Crowds?

January 9, 2014

More than ten years ago, the Cluetrain Manifesto introduced us to the concept that markets are now conversations. The Manifesto predicted that with the internet, power would shift from companies to people, and that companies had better get ready for the shift.  Now, with the internet and social media no longer new, people are indeed […]

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Are Wearables Ready for Prime Time?

January 3, 2014

This was the Christmas when the quantified self might have been you. A Consumer Electronics Association (CEA) report found that consumer interest in fitness devices has risen to 13%. Dedicated wearable fitness device ownership has tripled year-over-year and now sits at 9%. CEA also predicts that revenues from fitness and activity tracking devices as a […]

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in San Francisco, Homeless People and Entrepreneurs are in Bed Together

December 22, 2013

Too much money applied to entrepreneurship is evil. If you don’t believe me, look at the evolution of the Bay Area over the past decade. The worship of founders has gradually displaced all other forms of respect. Today if you are not a founder, you’re not worthwhile. Doctors are treated like labor, lawyers are unemployed. […]

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