Nathan Hurst also had an insightful piece on platforms now challenging Kickstarter. They try to take advantage of what Kickstarter lacks, or provide attention to a more niche-specific market. For example, CrowdIt is a new platform that will launch June 4, and plans to roll out equity crowdfunding once it becomes legal with the JOBS (Jumpstart Our Business Startups) Act.

What the real question that these new sites offer and what Kickstarter already has implemented is who decides who can raise money through crowdfunding? Should Kickstarter or any other platform discriminate on who can launch projects? The answer is no.

Kickstarter only vets projects that might not meet its Terms of Service Agreement. The fact that there is not a preventative celebrity clause means Zach Braff is in the right on this one. If you’re against celebrities using a platform to help them further themselves, there are other platforms you can use with more restrictions.

The other side of this is people backed him. He wasn’t just given the money. The general public made a conscience decision to back Braff, and in the process brought the most traffic Kickstarter has ever garnered in a single day. This no doubt lead to more people seeing more projects.

What would happen if anything changed with Kickstarter is it would effect people who made successful campaigns in the past. Would the makers of the Pebble Watch ever be able to put up another campaign since they received $10 million in funding. An alarming 10,266% over funded project? Couldn’t they just afford to make something themselves?

What needs to happen is good projects need to continue getting backed. Whether it’s a previously successful crowdfunded company, a celebrity, or someone trying to breakout in the scene.

Throughout all the events I’ve attended and folks I’ve talked to in the scene, it’s painfully obvious that more attention needs to be brought to Minneapolis and the state of Minnesota in general.

The scene is thriving, even if VC is down, and the excitement is here along with the traction and local user groups to keep things churning. The only issue is we are closed off. Social media isn’t used efficiently, and many publications in the Twin Cities refuse to step outside the boundaries of B2B.

It’s not emulation, it’s a refusal to take advantage of precedents set up in major technology hubs. What Minnesota needs to do is advertise itself and let go of the ‘Midwest pragmatism’ that we all suffer from. Sure, modesty is great, but taken to an extreme it can prevent prominent business interaction.

As my coworker Holden Page wrote on his blog, we need to have a voice for Minnesota’s thriving tech scene. The hesitancy and procrastination needs to stop. We could be Austin, albeit with worse weather, and we could drive web traffic to our region besides our own.

What we need is a grand, statewide marketing campaign. Someone needs to speak up and take action. Let the national public know what’s going on. The fact that Wisconsin is emulating our success in enough to show we have something going on. They have dominated us in small business for years, and now they’re starting to pay attention.

We need a collaborative movement to bring attention to the scene. Something that truly represents Minnesota. A local initiative, ready to deliver our skills and contributions as a state. There is nothing wrong with B2B publications, but in my experience it keeps the already interested up to date. What we need to do is bring in people to the growing scene. People that may have different ideas, and allow for more collaboration in a promising space.

The main argument of the article describes the difficulty in predicting the outcome of a start-up, and if a VC firm struggles with its predictions, how can someone with no prior investing experience hope to get a good return? The answer, according to Girouard, is investing in people.

While the idea of investing in people is a fascinating one (Read: The Man Who Sold His Fate to Investors at $1 a Share), the limitations of what Upstart offers in investment seem to drag the fledgling philosophy down.

I love the idea of putting money into a person over a business. It gives your investment more reach. If one project fails, the next could gain traction and vice versa. However, it could be argued that an individual has much more variables to consider than a standalone project.

If you invest in a project, you invest in a team that has assembled itself because they think their strengths and weaknesses accent one another in a positive way. With only investing in a single person, you get all their strengths, but also all their weaknesses — they don’t get distributed into a collaborative group.

This may work for some individuals, such as Steve Jobs, Bill Gates and even Mark Zuckerberg, but the majority of startups are formed by teams and collaboration from the get-go.

The other problem is the way Upstart determines how much income an individual will eventually make. The article describes the process like this:

“It’s not unlike the logic used by big companies or universities faced with countless candidates, by recruiting firms and talent agents, and others. By using data and algorithms — in this case, a sophisticated regression model that considers variables like school, area of study, standardized test scores, internships, job offers — we can statistically predict a person’s future income.”

To me, the idea of entrepreneurship and what makes an entrepreneur is to cross over these statistics and create your own path to success. For example, what would Bill Gates’ estimated income be when he dropped out of college? Would Upstart’s process have truly predicted the success of Microsoft?

To compare entrepreneurship logic with that of logic used by big companies is to miss the point entirely. The algorithm shouldn’t rely on standard forms of success, because no successful startup has followed the exact same path. And likewise, no individual pursuing entrepreneurship finds success in the same way.

While crowdfunding has become a major trend in early investment, it is important to remember areas where it falls short. Mainly, the idea of mentorship goes out the window. While this idea may seem a stretch, many early stage, first time entrepreneurs gather an assortment of skills through experienced investors.

Without this experience and mentorship, it can take longer to fully develop a product as well as a plan to get it out to the public. This takes away from efficiency  and could easily affect your reception and traction if the product takes too long to ship, and it can also take away form your products market placement.

That being said, if you are an experienced founder, crowdfunding could benefit you immensely. You already possess the skills needed to turn a product around and meet goals without the need for mentorship. In fact, you are most likely in the position to mentor, and have already had experience garnering the necessary funds for pre-Series A investment.

An important fact to remember is crowdfunding is a young idea to early stage investment. If it were a new drug to help concentration, the long term effects would not yet be known and the success stories could begin to have major side effects in the next 30 years.

Whether you go with crowdfunding, VC or bootstrapping it is important to measure the positives and negatives of either situation. Otherwise, your great idea could be squandered before it starts.

In all, the first article describes that VC in big data/enterprise solutions is jumping and analysts predict it will stay that way for upwards of 7 years. They link multiple trends that brought on this trend such as BYOD, cloud computing and the growth of data sets. With all of these innovations, it leads to disruption which entrepreneurs can then make more efficient, thus garnering a considerable amount of funding for early stage investment.

And with this trove of innovation comes companies that would like to be at the helm of it, which is why you see accelerators such as Microsoft Accelerator for Windows Azure, Citrix Startup Accelerator and many more. And yet, with all the funding and moves happening within the industry  IT professionals are still hearing more and more about how their jobs are being outsourced.

And so we are led to the second article, which describes ways in which IT departments can still be effective. And while Bart Copeland, the author of the piece, describes the theory as ITaaS, it seems awfully familiar to a theory we all know and love: consumerization.

Consumerization is the main argument behind BYOD, and describes that information technology that first shows up in the consumer market then trickles into a work environment, which IT departments then have to manage.

In all, IT is shifting more towards a service industry, this is true. But while it is so easy to find an SaaS package to help your department become more effective, whether it’s accounting, communications or anywhere, companies still need professionals to be able to vet which applications make the most sense in their work environment. Without those professionals, environments can become clogged and take away any efficiency gains.

So while the IT department is being changed due to emerging technology trends, it is now necessarily in a bad way. Instead, it is shifting towards a more service-based industry.

Last week the 49er’s announced plans to build a behemoth of a WiFi network in their new Santa Clara Stadium due to open in 2014. With the assistance of Dan Williams and Kunal Malik from Facebook, the ambitious plan aims to have over 68,000 devices connected at one time. More than double the size of devices connected during Super Bowl XLVII. Now if only they make an app so I can order more nachos…

EA’s CEO John Riccitiello announced he was resigning and stepping down March 30 and Larry Probst will be stepping in as Executive Chairman. The announcement was made in response to EA’s poor financial performance this quarter. The resignation supposedly has nothing to do with Sim City’s poor reception at launch.

A report released last Tuesday described a massive botnet that reportedly drains $6 million a month from the online ad industry. These “ghost sites” work buy getting ad revenue put on sites viewed heavily by bots and not actual internet users. If only I had ad revenue…

ARM CEO Warren East is deciding to step down after 12 years at the company and being at the forefront of the mobile computing processor market. Simon Segars will be stepping in as CEO after working with the company for 22 years.

Along with the news that Richard Schultze is rejoining Best Buy as the Chairman Emeritus, CEO Hubert Joly announced a move to redirect funds from Best Buy Capital to more pressing issues like price matching and store sales. Best Buy Capital was formed in 2008 and funded several start up companies, but was met with little success.

Small businesses were very vocal on the tax, which would forced many companies to look to other states to provide computer services, making the issue more about jobs than the tax itself. But while all this was occupying the news cycle, something else was brewing at the U of M.

Last week the U announced the Entrepreneurial Leave Program, which grants faculty the option to temporarily leave to assist other organization in commercializing products or services with University intellectual Property.

The major highlight of the program is the ability to keep benefits such as health insurance, which were previously not included in the former program. In all, the move proves the U’s progress in becoming a major player in research universities.

The move was made to further the scope of the U’s IP, but more importantly it will attract more talent to the campus.

The snow is falling again in Minnesota and I almost ran into four bikers who were riding down the middle of the street. Who rocks street tires in this weather? People that want to make it into the Darwin Awards.

Personal frustrations aside, it was a good news week for Minnesota, but I would like to start out with Square’s announcement of their “Business in a Box” which was unveiled last week. The solution offers two Square card readers, a stand for the iPad and a cash register for $299. Another package, coming in at $599, includes a wireless receipt printer. This is all excellent news, unless you live in Illinois.

The Mayo Clinic also opened up a business accelerator in Rochester. After a previous post on this blog, you can see why this is a step in a very good direction. Especially after Rochester ranked third in patents issued per capita. 

In Best Buy news, their HQ has laid off 400 employees, leaving many analysts to question why they didn’t close down more retail locations and let go of more blue shirts. Schultze also failed in his bid to retake the company, leaving Hubert Joly as CEO.

Since the Best Buy beat had me thinking all week, the major exploration of this post will correspond with what I think Best Buy should do with their business strategy, and why I think analysts are wrong in doubting Joly’s strategy of cutting the corporate jobs.

Best Buy and their Competitive Advantage

While analysts squirmed about Best Buy’s decision to layoff 400 folks at their Rochester HQ, I think it is in their best intention. They trim off $150 million, and it seems that Joly is positioning the retail giant to their competitive advantage: brick-and-mortar real estate.

Best Buy has suffered from shoppers who go into their locations and buy elsewhere. Typically Amazon or eBay. They have started to counter this trend in price matching online competitors, but it is still wildly inefficient. In order to maker the process easier, the customer should not have to look up competitive prices. Rather, Best Buy should offer some platform (mobile app?) that searches for best prices.

More Efficient Price Matching

While many people will argue this cuts from profits it could potentially raise them. Would you rather wait for shipping or get your product same day? If Best Buy could prove they care about people over profits, they could see an influx in sales which could translate to higher profits.

This is the general theory behind sites such as Groupon and LivingSocial. And while Groupon may not be the greatest example coming off the week they have had, I support it and here is why. Groupon suffered from trying to accelerate themselves too quickly, which lead to an unsustainable growth pattern.

Best Buy is already established with locations across the nation, differing greatly from what Groupon was trying to do. Instead of pushing forward and marketing something new, Best Buy would be offering the same sort of business idea with more efficiency and best practice behind its name. While this is a step in the right direction, I think Best Buy could increase their scope even further.

Turn Retail Locations into Collaborative Workspaces

Another step Best Buy could take is gutting some of their retail locations and trun them into collaborative workspaces much like CoCo Minneapolis has done with the trading floor of the Minneapolis Grain Exchange. This would foster a nice startup environment within Best Buy’s locations, and add to their steps showcasing new technologies such as their recent efforts with Leap Motion. 

GeekSquad could then be an onsite IT department for startups and entrepreneurs, making everything smooth sailing when the pressure is on and adding more strength to GeekSquad’s current plan to integrate more into small business.

Finally, and this is the longest shot of them all, Best Buy could create an investment arm and sponsor an inhouse accelerator program for promising startups that the collaborative spaces help nurture. It’s investing in hometown talent (or anywhere in the nation) and bringing a thriving community to Best Buy’s market.

While it may seem insane, I think it could pose a huge opportunity to kickstart Best Buy back into the innovative shoes it once wore. It ties a more tech-savvy community to Best Buy and and knots a solid hold on a market that is on this rise. If only Hubert Joly would sign my NDA…

It has been two weeks since my last post and much has happened around the industry. Consumers were dazzled with the introduction of the 3Doodler, a pen that allows its users to create 3D-printed works with ease and bypassed its Kickstarter benchmark within a few hours. And it really points to the potential of crowdfunding. Not only was the internet excited for the pen, but our current state of funding allows creators to show off their project without having to manage a huge ad campaign.

In more local news, CoCo announced it was going to partner with Google, and together they will host a two-year schedule of events that will concentrate on entrepreneurship in Minnesota in an attempt to boost interest in the industry. This comes after Google announced support for the STEP-UP jobs program, and after Minnesota’s startup scene has witnessed some tremendous growth.

Perhaps the biggest news of note is the U of M’s decision to partner with Coursera. So far, five U of M professors have signed up to create courses on the MOOC platform. The U is one of 29 new universities to offer courses over the platform, and Coursera is not the only online education outfit to see growth.

edX also announced the addition of six schools outside the U.S. Launched by Harvard and MIT, edX is a nonprofit with a user base primarily outside the U.S. So far it has 12 institutions submitting coursework to the site. Which prompts the question: how far will MOOCs be integrated in our education ecosystem.

MOOCs and the ever-changing education landscape

The philosophy behind education has stayed the same for centuries. Students meet in a room, teachers teach, and everyone’s happy. However, with technological innovation the education landscape has stayed stagnant.

While there is online integration being used, most classes still rely on a lecture-based model. As I delved into this issue with a colleague, we got wrapped up into why this might be occurring and came up with only one solution: education has become big business.

Education as big business and a job creator

Working in the industry it’s obvious that there is a machine driving education. From my standpoint, it would be the state. States capitalize on education in a variety of ways. For example, the U of M boasts the largest campus of any public campus in the nation. I wonder how much property tax that translates into the for state of Minnesota?

Education also attracts talent to your state. If you have a school with a good curriculum, you can guarantee companies will set up shop and hand select employees from a rich student pool. Look at 3M, Medtronic, Cargill and some obvious others. Would these companies be here if Minnesota didn’t offer significant applicants to there workforce? Probably not.

The threat of online education, and more openly free online education, is it eliminates revenue to the state. Not only that, it would drastically limit the amount of paid professionals that could teach students. Imagine what would happen to professors if they only had to broadcast lectures online? You would not need so many. You could just record and have students watch with ease. No scheduling and less of a time commitment.

Biggest challenge to full integration

Perhaps the biggest challenge for MOOCs is the ability to track students. How would you know if someone was taking the test and wasn’t having a friend do it? What about homework? How could you prevent cheating?

These are some questions to ask when looking into MOOCs and their future. As big of an idea as MOOCs are, they can be somewhat blurry when it comes to these simple questions. There has not been a huge outcry of cheating, but definitely some. Imagine how big of a deal it would become if MOOCs had credit equivalency. It would be a disaster in its current form.

Disruption as a constant battle

As with news media, the education industry is being disrupted. While not to the full extent media is, I believe it will be in the following 2-4 years. Education as it stands now is not sustainable. Financial aid is the easiest loan to get, and constantly becoming the hardest to pay off. This is why we see tuition rise annually.

Platforms such as Coursera and edX offer a way out of these loans, but are not seen to be as valuable as a university education. Coursera has been in talks to make some courses equivalent, but to really dig into the issue some work needs to be done on the cheating front and what it could mean for the education industry as a whole.

Older practitioners will not enjoy a new model, but it has to be realized if we want people to compete on a fair level. The system as it is now gives advantage to people with more money, plain and simple. MOOCs offer a shining light away from an outdated philosophy, but there are huge hurdles to overcome.

With the right people looking into the situation we could see an entirely different landscape emerge in the education industry. However, the business behind higher education will make it complicated for full integration, and I cannot see that happening for a very long time.

If you had to guess what Minnesota-based company is in similar waters, what would it be? A company that has been tempted to go private, but has persisted with a new CEO. The one, the only, Best Buy ladies and gentlemen.

Is there any greater foreshadowing? I have talked about Best Buy and its recent innovations, but in all honesty I believe they need to go private. Whether Richard Schulze buys it out or not. Seeing quarterly declines is not a good way to turn a company around. If Best Buy wants to poke its head above water, however briefly, it needs the efficiency and speed of a private company.

Best Buy is still trading low at $15.30 as of today. While this is the best the company has seen in prices per share in 2013, it is still far below the mark it was comfortably riding throughout the first decade of the new millennium.

The best predictor for whether Best Buy goes private is how the move by Dell will affect their company profile. If Dell becomes a powerhouse again, I would bet Best Buy would look further into going private. If Dell somehow tanks because of the move, Best Buy might keep trying to innovate on public grounds.

In either case, it will make for an interesting case for Best Buy and many other companies looking to go or stay private, and they will all be watching Dell.