Tag Archives: technology

Minnesota’s Technology Scene Needs to Break out of its Shell

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A recent report from personal finance website NerdWallet ranked the 10 best cities to start a business in the U.S. Among the cities, Minneapolis was ranked 8th overall. The report was based of information dealing in small-business lending in 2012, average income, population growth rate and business per 100 residents. But in order to get more attention, Minnesota needs to open up its communication borders.

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.

Crowdfunding in People Over Projects

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Last Friday, David Girouard posted an opinion piece on Wired discussing why he sees the future of crowdfunding going towards investing in people over projects. Girouard is the co-founder and CEO of Upstart, a company that allows investors to back both college grads and up-and-coming grads for a portion of the money they make in the next ten years. So naturally, this idea is one he is very passionate about.

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.

Dell Goes Private While Best Buy Could Be Taking Note

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So if you haven’t heard by now that Dell is going private for $24.4 billion I have to seriously question your news insight. It’s almost terrifying how well this announcement plopped into Hot SQL Injection’s lap. Dell, a major tech player for over three decades, is going private after some serious roller coaster rides.

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.

Coursera Blunder Could Affect U of M

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courseralogoAfter somewhat recovering from flu-like symptoms over the weekend and a 24-hour delay in posting to my site I’ve woken up at 4 a.m. to filter through the news and ponder: what is newsworthy nationally that I can also bring down to a Minnesota level?

If you have been reading Hot SQL Injection for awhile, you know how passionate I am about online education and how it should be viewed in the same way as universities and community colleges. Being an open advocate for free education, it brought a post-secondary tear to my eye when I read about Coursera failing to teach how to run an online class, with the causal effect of “Fundamentals of Online Learning” being taken down from the course catalog.

Through the Twitter backlash, founder Andrew Ng stuck by the teacher of the course, Fatimah Wirth, saying he really “believes in experimentation” and “gives her a lot of credit.” While this is an admirable statement, it is still a blunder to the movement of MOOCS, which Coursera has arguably led.

Having taken multiple courses on Coursera, I find it to be a very good experience. It caters more to my learning style than any class I took at the University of Minnesota – Twin Cities. I’m a person who doesn’t learn from lectures, but rather from reading the material on my own and digesting it as I see fit. That was always a huge issue with me in college, and led to lots of absences which showed in my GPA.

I currently work at the University of Minnesota Foundation, and through OIT know that Scott Studham, the CIO of the U, plans on integrating MOOCs into the University. This would be a huge step up for people that learn like I do. It allows for a more robust form of learning.

Currently the U only offers partial online classes. Over the excitement of Coursera, Udacity and many others the talks ramped up about MOOCs here at the U. It is my hope that this current blunder does not affect the U’s moves towards online learning. It is the future, even if the courses don’t currently qualify for credit equivalency.

A Boost for Healthcare Funding

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CrowdfundingFor the duration of 2012 we saw many social media sites battle for status, innovation, and maintaining an audience. Facebook acquired Instagram, ultimately leading to Instagram being knocked off of Twitter’s API, followed by Twitter introducing photo filters, which allows users to take pictures and add some snazzy after effects.

In all the turmoil, many people were talking about an “Instagram for video.” This would allow people to create, edit, and share short moments in their lives. Last week, that idea came to fruition with Vine. The launch was less than perfect, but the enthusiasm and potential for the application has the masses buzzing.

With all this excitement and repetition in the national news cycle, it may have slipped by midwesterners in the startup scene that an innovative new crowdfunding site was announced. Minnesota-based LiifGroup, LLC announced the launch of Liifmed, which focuses on crowdfunding the world’s healthcare companies.

As you may recall, I mentioned previously the need for MN healthcare accelerators. While this is not an accelerator, it still allows for innovation in the healthcare marketplace. Better yet, your company won’t have to dig itself out of a financial hole.

One of the intriguing pulls of LiifGroup’s platform is the ability to receive all the funds people donate. Unlike Kickstarter and other crowdfunding sites, LiifGroup does not make you set a fundraising benchmark, and you don’t have to reach a certain goal to receive funds.

From the press release:

“Being in the heart of the medical device and healthcare center of Minnesota will allow us to provide options for upstart medical technologies that previously struggled to attract investment dollars,” Dr. Mark Connelly.

Minnesota has nearly 700 healthcare businesses and organizations. Headquartered in Savage, MN LiifGroup will have an opportunity to directly impact local companies. Having already received pledges, Liifmed is on track to accelerate a thriving industry that suffers from limited funding.

Best Buy Makes Promising Move on Dismal Week

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leap-motion-at-best-buyThe morning coffee is on, I have the day off work, and last week’s news cycle is still fresh in my mind’s eye. The major tech story last week revolved around Facebook, which recently experienced a surge in share prices due to an invite sent to tech journos asking them to “see what we’re building.” On Tuesday, Facebook Graph Search was introduced as a way to search within Facebook for activities, places and brands that your friends enjoyed. If FB’s search cannot help, you get to use Microsoft’s Bing. For all intents and purposes, this successfully saw FB’s stock drop down to $29.

EBay also announced it’s biggest quarter in company history, lending more nods to the direction of online shopping and what is to come for today’s brick-and-mortar establishments. With both Amazon and EBay seeing record years, it’s hard to see Minnesota’s own Best Buy going through such a slump, closing the week at $14.88.

However, if you look past the dwindling share price, Best Buy has actually made some great moves. It was announced through TechCrunch that Best Buy has teamed up with Leap Motion, makers of a highly accurate 3D motion controller, to be the exclusive retailer of their controller both online and offline. With Leap Motion themselves being the only other seller.

Leap Motion garnered a lot of attention in 2012 for its innovative approach towards motion control, which has been heralded as a dominant Kinect competitor. So far, the company has acquired $44.1 million in funding, just closing its Series B round for $30 million this month.

Not only is this a good move for Leap, which gets displays promoting the Leap Motion throughout Best Buy, but it’s a huge step for Best Buy. One of Best Buy’s problems was in their approach. People would come into the store, check out their devices, and buy them online through Amazon or EBay.

Now Best Buy has attracted an innovative company to give them exclusive rights. Capitalizing on what they were good at in displaying hardware, and pivoting to exclusive online sales. Depending on how this move turns out, we could see a lot more of these deals through Best Buy.

Getting attractive start-ups to exclusively display their products in your stores opens up a new demographic for Best Buy. One which has a cult following, but also has introduced itself in the mainstream. It also gives these companies another outlet for advertising. One in which their products are displayed nationally.

Pre-orders start in early February for the Leap Motion. Once some initial numbers come through it will be determined whether Best Buy made a good move or not, and it will also determine the future of the company.

2013 Investment and MN Health IT Accelerators

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Along with all the 2013 listicles hypothesizing what will happen in 2013 and how 2012 differed from 2011 we were greeted with articles warming our hearts on investment, and how 2012 was a big year for venture capital.

The Upstart Business Journal reported that from 2011 to 2012, VC funding grew nationally by 10 percent. From $18.7 billion to $20.6 billion. However, while the amount of investment went up, there were fewer venture-backed deals.

This typically shows that either excitement in the market grew, which could arguably be tied to Facebook’s pre-IPO months, or that more promising companies opened themselves up for funding in 2012.

Since Facebook went public on May 18, 2012, it has been a roller coaster ride, with most analysts calling it the worst IPO in market history. Starting off at $38.23 a share, prices quickly fell, with the lowest point coming in at $17.73 on September 4, 2012.

It’s hard to believe that Facebook, the most anticipated IPO in recent history, would have such dismal numbers, but it came from the lack of evidence they presented to turning a profit. Where were they going to make the money?

With this in mind, it’s hard to imagine 2012 was the best year for IPOs since 2000. Facebook lead the new wave of companies going public, and while they opened today at around $31, the beginning of the roller coaster ride was severely undervalued.

It was not just a year for VC and IPOs, however. Amazon chalked in a record setting year with its highest priced shares. In the last 12 months, Amazon has seen its shares rise nearly 50 percent. They also recorded their best holiday season to date.

So after all this data, and the ability to see that the market is doing pretty well, what does this have to do with Minnesota?

According to the BioEnterprise Midwest Healthcare Venture Investment Report, investment in Health IT/Healthcare companies in Minnesota was down 23 percent. In 2011, 24 companies received $223.3 million. Looking at 2012, 17 companies received $164.7 million. And here is the kicker, Minnesota received the second highest amount of money. Trailing behind Ohio, which raised a whopping $291.7 million.

So why the gap? And why, after a year of solid national investment, are we down 23 percent in healthcare companies when it is a hot market? The answer may lie in accelerators.

Minnesota is surprisingly lacking in the number of health accelerators. President Kaler of the University of Minnesota has started a new initiative. Over the course of 10 years, Kaler is offering $20 million in investment to promising University startups. However, this funding is only for U of M students.

Another promising peak at an accelerator is Inceptis LLC., which will specialize in Class II medical devices, which Minnesota has been a leading provider in. But again, having such a tight focus doesn’t necessarily allow for broad innovation.

If Minnesota wants to compete with the likes of Ohio, or even on a national scale with its promising healthcare companies, we need to have more accelerators both keeping the talent here and providing incentive.

Now, it seems, is a ripe time to start the debate. Investment is hot, Health IT is blossoming, and Minnesota has the means to secure a leading position in the field. The only real question is who will step up to the plate?

The Series A Crunch

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Below is a response I had to an article on the Upstart section of the Business Journal that discussed what the “Series A Crunch” means for entrepreneurs, VCs and even young technology journalists. It was in agreement with a blog post by ReadWrite editor Dan Lyons, which highlighted the same sentiments but with less tact.

“The Series A Crunch is definitely something to look into, but what about Sarah Lacy’s other article which came out the day after which explained Series C investment jumped from $55 million to $70 million and Series D stayed at $100 million? It seems investors are already compensating for the flood of startups given that information. Sure early stage investment is declining, but if you can hold onto customers and show a credible plan for growth, the investment dollars are still there.

Also, you mention Facebok’s IPO which was, indeed, a horrible stint in public offerings. However, they have recently been applauded with the introduction of Facebook Exchange (FBX). Some publications have even hinted at it being more efficient than Google’s Ad Exchange. So while the initial public offering was bad, it seems that FB could potentially recover.

Now this is all from a recent journalism graduate, most likely inexperienced and optimistic, but without optimism, is there even entrepreneurship?” 

This is the natural ebb and flow of startups and markets in general. Something gets hot, and people respond. However, this doesn’t mean investment is done and a new dotcom bubble is resurfacing. It means investors are getting smarter in the later rounds where it counts.

The Ramifications of Intel Switching to BGA over LGA CPUs

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After hearing about intel potentially moving to Ball Grid Array (BGA) CPUs instead of Land Grid Array (LGA) CPUs, I have siphoned through the harsh comments and lamenting modders, possibly coming out of it a bit sad, but mostly optimistic.

I have been building desktop PCs since I was 15 years old. With this experience I have come to love the modding/desktop community, but I have also realized the potential for a better desktop. This does not mean I fully support the move to BGA, but it does mean I support what it could mean for the microprocessor market: a greater wealth of competition.

Intel has come to dominate the CPU market, and it is largely due to their push into mobile chips, where the status quo is BGA. The major downfall of BGA is the inability to upgrade. BGA chips are soldered to the motherboard, whereas LGA chips are mounted. This means you can replace an LGA chip, but replacing a BGA would require both a new chip and motherboard.

While this technique does not concern me, since my norm is to upgrade both my MoBo and CPU simultaneously, it seems that most of the feedback is what it could lead to. Desktops were made to be modular, and with the announcement of intels potential change in design, and with Apple soldering RAM into MacBooks, the community is concerned it could lead to less customization and the potential death of the desktop elite.

One thing to keep in mind, and I strongly suggest it, is intel is not the sole entity in the game. If they choose to go only BGA, that opens up the market to manufacturers. It comes down to a simple question. Do you want a dedicated, almost cult following of computer builders and modders? I would say yes.

Another example is the integration of BGA CPUs in the market. There is a ton of stipulation that intel plans to slowly integrate BGAs and then switch to only BGAs. That seems like a longshot. One, if intel slowly integrates this plan it will give them the data they need to decide if they only produce BGA chips. If the market still wants LGA, and they are selling them in good quantity, I cannot see why they would stop producing them. A major argument is for greater control of the market, but in my opinion, and possibly blind optimism, a manufacturer will realize the market potential and capitalize on both communities. Be that modders, enthusiasts or regular desktop consumers.

Two, if intel goes into only producing BGAs, I am confident there will be backlash. People will be upset, and someone else will step into the game. It’s hard for me to imagine the desktop truly dying. Sure, some of the industry players change, but most change is good and can lead to better ways of building and producing. What is important to remember is this is all speculation. Most reports are coming from rumor mills, and until an intel press release, we cannot be sure.

A Response to Robert McMillan on iOS 6

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After happily drinking my morning pot of coffee and settling down in my cube at work, the first article I came across was by Robert McMillan about iOS 6 giving corporate IT environments “new ways to lock down the iOS 6 OS,”and transition iPads into something “more like cash registers than tablets.”

Besides the many references to “corporate types” that was definitely not needed, and made corporate workers sound more like thugs, the article was, in my opinion, extremely biased. Just because a company integrates certain features into their new OS doesn’t mean some “corporate type” is going to put a stranglehold on your iPad.

The key difference here is who owns the device. If the company bought and gave you the iPad for work, they should be the ones in control of that device. However, certain trends like Bring Your Own Device (BYOD) allow IT environments to focus more on client needs than strangling out features. And it’s your own device, meaning you are in control.

To discuss Apple’s new features in iOS 6 is fine and understandable with the recent release. To attack corporate environments and suggest they will take away all your power as a user of a device is not. That’s simply not how it works.

We recently pushed out iPads in our work environment and I can tell you first hand we’re not trying to take away user power over their device. Yes, we have management tools, but you need management tools in a work environment to keep it secure. It also helps with people who may not be technologically fluent.

If you do not have certain management tools set in place, this can lead to far worse implications such as the release of private data. I, for one, appreciate Apple realizing the iPad is being used in corporate environments. It says right in the article, “94 percent of Fortune 500 are using, or at least testing out, iPads.”

This to me sounds like Apple is not trying to give “corporate types” the right to strangle the iPads usability, but that Apple is compensating for a shift in their demographics, giving corporate environments tools they need to keep their environment secure.