TechFluential

When over-sharing gets you fired

2012-05-17T11:36:00.000-07:00

Discretion will never go out of style. Just ask Gene Morphis. Up to last Monday he was CFO at Texas-based Francesca’s, a publicly traded fashion retailer. He was fired that day for "improperly communicating company information through social media.”

That’s Chief Financial Officer. Custodian of a company’s numbers and sensitive information. Guardian of the fiscal brand. Champion of shareholder relationships. Bearer of important fiduciary responsibilities.

And, in Morphis’ case, prolific Tweeter.

Only it took his Board a while to connect @theoldcfo with their very own Chief Financial Officer. Hard to imagine them enthusiastically embracing this quip on March 6: “Dinner w/Board tonite. Used to be fun. Now one must be on guard every second.” And it’s doubtful that this chirp on March 7 would have thrilled Francesca’s Corporate Counsel: “Board meeting. Good numbers=Happy Board”. The company was in a quiet period ahead of its earnings announcement. Nonetheless, Morphis congratulated himself for the positive numbers in this March 13 post: “Earnings released. Conference call completed. How do you like me now Mr. Shorty?”

Evidently the Board was less impressed.

Not surprisingly, his dismissal sparked new debate on the use of social media in corporations. Today only 40% of companies have formal policies to support and encourage high-quality engagement through social media. That’ll have to grow as more digital natives enter the workforce and take leadership positions in public companies.

But that’s a digression. Morphis wasn’t fired for his prolific use of social media. He’s gone because he over-shared. More importantly,it seems he blew off the traditional standards that have long governed financial communications. Like discretion, prudence and caution. Practical and timeless standards that will never go out of style. Business norms that are more imperative than ever in today’s social media world.

From Model Ts to Mobile Tech: Ireland Still a Big Draw for US Investors

2012-04-30T12:48:00.000-07:00

In 1917, Ford Motor Company planted its first offshore production facility in Ireland. Soon Model Ts and tractors rolled off assembly lines in Cork and into the hands of European customers. It probably wasn’t called outsourcing back then. Just a smart strategy to grow market share and boost revenue.

A century later, the same motivations continue to draw US companies to Ireland. Today, though, production lines are morphing into data centers, while smart phones are eclipsing manufacturing equipment. Poster tenants include brands like Google, Intel and Apple. They join more than 600 US companies with subsidiaries in Ireland. And at $165 billion, the stock of US investment in Ireland is greater than the corresponding US investment into Brazil, Russia, India and China combined. Collectively they employ more than 100,000 people and account for 70% of all foreign direct investment into Ireland.

The 12.5% corporate tax rate – one of the lowest in the world - is usually held up as the main draw. Most consider it THE foreign direct investment imperative. Nations competing for the same marquee corporate tenants but burdened by higher tax rates would probably agree.

Turns out it’s not the only draw. In fact, for two newer investors, it doesn’t even top the priority list. At a recent event co-hosted by IDA Ireland and SVForum, executives from San Mateo’s Marketo and Sunnyvale’s Maxim IP cited skilled leadership and a sophisticated tech ecosystem, among other factors, as the greater essentials. At “Beyond the US: Using Ireland to Drive International Growth” held at Microsoft’s Silicon Valley campus, both agreed that the tax rate, while attractive, is only one piece of the investment decision.

Marketo will soon mark its first-year anniversary in Dublin – the software maker’s first offshore location. For CEO Phil Fernandez, landing an expert local GM meant he could kick his Ireland operation into high gear in short order. Facility options were varied and affordable thanks to Ireland’s bruising property crash. And the talent pool is rich with qualified, tech-savvy individuals. Today, 25 people run support and cloud-site operations at Marketo’s Dublin facility – higher than the company’s initial projections. By the end of the year the team will expand to include engineering staff.

Maxim IP also exceeded its hiring projections. Barely two years after arriving in Ireland, more than 80 people staff Maxim’s international business, financial and technical customer services center in Dublin. They include accountants, financial analysts, supply-chain specialists, IT technicians and multilingual customer support staff. Maxim serves its markets in Europe, the Middle East and Africa from this location. Treasurer Peter Campagna said the tax rate was an important factor for this maker of smart TV microchips, but it was dwarfed by the imperative to find people with relevant tech credentials.

For Henry Ford, Ireland held special significance. His Cork-born father left for the US in 1847 to escape the infamous famine. But he had many options when selecting his first offshore location. More important for him, no doubt, and certainly imperative for the hundreds that followed were a business-friendly government, a qualified, English-speaking workforce, a culture of entrepreneurship and a gateway to the European market. He could hardly have imagined that within 100 years, Ireland would rank 2nd behind Hong Kong as the most globalized nation in the world.

Time to Add 'Value' to the Public Relations Definition Makeover

2011-11-22T08:19:00.000-08:00

This week the Public Relations Society of America (PRSA) launched an initiative to find a new definition for Public Relations. One that reflects the changing role of PR practitioners in today’s digital media environment. A statement that improves on the 1982 definition that still endures: 'Helping an organization and its publics adapt mutually to each other'.

It’s time for the makeover. Not just because today’s digital platforms have transformed how we communicate. We’re already years into that revolution.

It’s time because PR has an image problem. Its 'value' is poorly understood. And that’s largely our fault. We’re simply not good at properly defining PR’s essential role in growing businesses. Neither do we adequately promote its contribution to the bottom line. This, when sharp messaging, relevant content and clever deployment of media channels are more imperative than ever.

Remarkably, while we make ‘value’ the centerpiece of client position statements, we rarely do it for ourselves. We talk a lot about ‘what we do’ as PR practitioners. And if we speak of our value at all it’s usually in the context of generating ink. But how often do we link our strategies to ‘what we enable’? The high-value business outcomes that we help engineer. Like capturing the attention of an investor, inspiring a customer to engage, or stabilizing stock-price volatility during a corporate crisis. We probably don’t connect the strategy with the result as often as we should.

That’s why value must shine in the new PR definition.

And now is a good time to do this. While today’s social media revolution prompted the PRSA to re-define our discipline, the ‘value’ fundamentals are more important than ever. PR draws talented people: creative thinkers, smart business strategists and terrific writers, among others. In-house or out-sourced, their outstanding efforts help organizations grow and succeed.

It’s time for that value to be reflected in the new statement.

Boosting Global Economies Through Local Technology Innovation Centers

2011-04-20T16:21:00.000-07:00

Last month, the well-known complex at 3000 Sand Hill Road welcomed its newest tenant: The Russian Innovation Center. Its charter is to promote high-tech partnerships and scientific cooperation between Russian and American companies, venture capital firms, and academic and scientific institutions.

The Russians are the latest to plant an Innovation Center in the region. Like others before them, they recognized that Silicon Valley is more than just the Capital of Capital. It’s a unique mindset that inspires entrepreneurs to think big and consider the impossible possible. For the Russians especially, it’s a place that has long produced brilliant technology, often enabled by strong threads of Russian DNA.

With this official channel, young Russian entrepreneurs can more easily tap into an ecosystem that’s wired to create world-class tech companies.

There’s plenty of precedent to validate the Russians’ move. Many Irish companies can trace their early US market success to the incubation services provided by Government agency, Enterprise Ireland [EI]. At EI’s Silicon Valley offices, Irish tech executives get space and practical support, along with access to high-profile local executives who can influence growth for their embryonic businesses. And in San Jose last year, giving a further boost to Ireland-based entrepreneurs with US market ambitions, the Irish Technology Leadership Group launched the Irish Innovation Center.

Others are bound to follow. Foreign-championed Innovation Centers make good business sense and benefit more than just the entrepreneur. While the primary premise for most is to provide small companies with a speedy conduit to US investors, customers and other important constituents, the Centers also stimulate innovation and pump dollars into the local economy. Some entrepreneurs take up full-time residence. They listen, learn, connect, invent and build. Others travel back and forth as they grow their business, planting innovation seeds in their countries of origin.

And those seeds benefit the US in a big way. How? Because success for most entrepreneurs, especially those operating in small countries, depends on building an export-oriented business. Getting there requires a presence in high-growth markets like the US. This means creating jobs in those markets. For Irish entrepreneurs, this is a particular strength, as the 82,000 Americans working at 237 Ireland-based corporations would attest. Not surprisingly, some of the management talent in these Irish companies was nurtured in Silicon Valley. Now that same talent is influencing economic growth in both countries - from a tiny island.

As the Russians no doubt know, their Silicon Valley Innovation Center will do more than catalyze new opportunities for indigenous Russian businesses. It will also ignite a two-way investment flow that transcends nationality and benefits many.

Gen Y Innovators: Doing More with Less

2010-09-09T12:35:00.001-07:00

This month, MIT's prestigious magazine, Technology Review, profiles its annual line-up of “35 Innovators Under 35”. The list reveals a kaleidoscope of nationalities. Entrepreneurial spirits as young as 24 working magic at America’s universities, national labs, corporations and start-ups. Their ambitions are audacious and their accomplishments dazzling. They’re re-programming cells to cure disease, engineering viruses to destroy bio-films, developing software to help communities in crisis, and powering electronics with human motions. And there's a strong philanthropic flair to their efforts.

The list is an inspiring reminder that the pool of next-generation scientists and technologists is deep and rich. And that America's global leadership profile continues to be defined by the quality of its ideas.

Equally inspiring is that in spite of dismal capital markets, the pace of innovation hasn’t changed. Thin funding and razor-tight budgets, notwithstanding, these young entrepreneurs continue to transport clever ideas out of the lab and into commercialization. Which means that most are doing more with less. Probably much less than many veteran entrepreneurs. Other than the intrapreneurs at Google and Microsoft, few on this list will likely benefit from the type of gigantic funding rounds that saturated the tech sector not so long ago. The $100M+ payouts to Silicon Valley clean-tech companies must seem like an oddity to the young inventors – unless they’re being courted by Better Place.

With their lean operating models and frugal business cultures, these star innovators have more to pass along than just brilliant ideas. In today’s start-up land “doing more with less” is an absolute imperative, not just to appease demanding VCs, but because the money simply isn’t there. According to the National Venture Capital Association, raising funds is tougher than ever for US VCs as investors abandon this traditional investment channel and pour money into emerging markets or other vehicles. In the second quarter of 2010, just $1.9 billion was raised by 38 VC funds – a 47% decline when compared to the first quarter which saw 38 funds raise $3.7 billion. Worse yet, it is the lowest by dollar commitment since the third quarter of 2003. Not surprisingly, the number of US venture firms is expected to decrease over the next 5 years. This means less money for start-ups.

But the gloomy VC data points are probably not top of mind for MIT’s humanitarian [innovator] of the year, Kenya-born David Kobia. Building an inventive way to mobilize communities in crisis was just the start for this former University of Alabama student. He’s got much bigger aspirations. He wants to grow Kenya’s economy by harnessing Nairobi’s burgeoning software talent. He tells individuals at his new innovation center in the East African city that it’s their duty to participate in the community by building their own business. I suspect he also told them they needed to do it on a shoe-string budget.

A master of doing more with less. And a tough act to follow.

Water: Ripe for Innovation

2010-08-09T13:46:00.000-07:00

By the end of 2011, 10 million Pacific Gas & Electric (PG&E) “smart meters” will be deployed across the State of California. The meters will help consumers conserve energy and contain utility costs by providing real-time information on their gas and electricity use. The multi-phase meter roll-out began in 2006 and created new market opportunities for inventive hardware and software technologies. Today, approximately 300 million meters are deployed across the US.

But when it comes to water, we’re way behind. With just 70 million meters monitoring and measuring this vital resource, a similar “smart-grid for water” initiative is in its infancy. Yet there are virtually no investment dollars going into this sector. In fact, according to investors at SDForum’s recent Green and Clean event in Menlo Park, only 1% of VC dollars are being applied to start-ups with inventive water-related technologies and services.

Seems like a very low figure for a $400 billion industry.

It’s not like we don’t need to modernize the water industry. 36% of the world’s population lacks access to sanitation. That’s a crisis. In California, we’re fortunate to have access to clean water. So, according to the classic definition of a water crisis [i.e. withdrawal exceeds replenishment], we’re not in trouble. Yet. But few realize that the State’s water supply depends on an antiquated infrastructure with century-old pipes transporting water from north to south. Not surprisingly, with minimal upgrades in the last 100 years, this creaky system is at breaking point. Not only that, it hogs nearly 19% of California’s electricity, according to Bill Kocher from the City of Santa Cruz Water Department who spoke at the SDForum event.

This exposes myriad opportunities for entrepreneurs and technologies - not just for IT products like those that are enabling PG&E’s smart-grid initiative, but for purification, filtration and other often non-capital-intensive technologies that have long proven successful in sectors like life sciences and semiconductors.

But it will take courageous investors to look beyond today’s discouraging credit and exit markets and back an idea that promises to bring greater efficiencies to water treatment and management. Virgin Green Fund’s Anup Jacob sees technology risk as the primary turn-off for investors, not market or execution risks. Kocher’s comments support this sentiment. In his lengthy tenure with the Santa Cruz Water Department, he has never used an unproven technology. In deference to county rate payers, he feels duty bound to stick with field-proven products. An understandable position for sure, but hardly conducive to innovation.

Savvy entrepreneurs are finding ways to circumvent the status quo. They're commercializing technology by teaming with engineering firms that offer one-stop-shop solutions to water companies. But the bigger problem remains: water is not getting the attention it deserves. And innovative water treatment and management technologies are not considered attractive investment opportunities. The US spends less on R&D in this sector than Canada. And the pace of R&D investment has been in decline since the 1970s.

According to Kocher, the most prevalent myth concerning water is that it’s plentiful and free. We continue to believe this at our peril.

Got a Start-up? Get a Visa

2010-04-15T16:07:00.000-07:00

There’s an important immigration initiative percolating in Congress. And it's one that might even escape an acrimonious debate.

It’s a proposal by Senators John Kerry (D-Mass.) and Richard Lugar (R-Ind.) to award green cards to foreign entrepreneurs. It works like this: you enter the country with a great idea and $250,000+ in start-up capital from a U.S. investor. After two years if you provide full-time employment for at least five people, raise $1 million in additional financing or generate $1 million in revenue, you get a green card.

It’s a job-creator visa proposal. A smart and practical idea to ignite innovation and create employment.

After all, it’s brains AND capital that drive innovation.

One only has to look at Silicon Valley to see how immigration shapes U.S. innovation. More than 52% of the region’s technology companies were started by immigrants. And a quarter of all U.S. patents involve an immigrant inventor. It certainly helps to have great Universities cultivating a continuous stream of international entrepreneurs. In fact, almost half of Stanford’s graduate engineering students hail from outside the U.S. And while influential voices are calling for a green card to be stapled to every graduate’s diploma, many students choose to apply their learning and talent back home.

As opportunities grow for entrepreneurs in their countries of origin, the U.S. becomes less alluring. So it’s more important that ever to find practical ways to keep them coming with their inventive ideas. In California the appeal is still strong. Even within my own small portfolio of technology start-ups, immigrants far out-number native born CEOs. For example, of five client CEOs that raised capital from Silicon Valley investors in the last 18 months, only one is native-born. Two are Irish, one is Iranian and the fifth is Chinese. They are scientists and engineers ranging in age from 30 to 64. Between them, they employ more than 150 Americans. And of course they’re inventing phenomenal technologies.

Detractors call the visa proposal a poor deal for entrepreneurs. They argue that the threat of deportation makes failure more of a risk [the antithesis of how failure is viewed in Silicon Valley). Some believe that it gives investors too much power. They've got a point. But I can't see that dissuading ambitious foreign grad students or passionate inventors with big ideas. The kind of smart individuals that compel investors to engage and inspire talented Americans to join their team.

Their DNA tends to contain a high tolerance for risk.

Are Women-led Firms Greener?

2009-12-09T10:17:00.000-08:00

An analysis of data collected in the 2009 UC Davis Study of California Women Business Leaders suggests this may be so. The Study evaluated the presence of women at the very top of the 400 largest publicly held corporations in California. In an otherwise discouraging report of their minority status in the executive suite, this intriguing data point stood out.

To test the hypothesis that women are more apt to pursue eco-sustainable business practices, the UC Davis Study authors drew on information from two sources: Census data from their own study and a report by KLD Research & Analytics, Inc. and Newsweek Magazine which ranked the largest 500 U.S. firms on the extent to which they pursue eco-friendly policies. 62 of California’s largest 400 firms in 2009 were included on the list.

Here’s a summary of their findings: “Firms that had no women directors or executives had the poorest environmental performance. Firms that had both women managers and directors had the best environmental performance. Firms that had at least one woman director (but no women executives), and firms that had at least one woman executive (but no women directors) had environmental records in between these two extremes.”

Although the survey sample was small and it didn't evaluate for a correlation between better environmental performance and higher revenue, the results are still intriguing. Especially in California where “green” jobs are on the rise - up by 35.9% since 1995 according to a new study by public policy group, Next 10. The total number of jobs grew by only 13.3% in the same period. The study defines green jobs as those that develop new energy sources, save energy, conserve natural resources or reduce pollution.

If it’s true that women-led firms are greener as the UC Davis findings suggest, it will be a great travesty if women are as under-represented in the executive ranks of the growing clean-tech segment as they are in other industries.

The "Maternal Wall": Sturdier than Ever

2009-11-30T15:57:00.000-08:00

This month, two important studies revealed disappointing trends for women in business.

The first is the fifth annual UC Davis study of California Women Business Leaders: A Census of Women Directors and Executive Officers. The study examines the presence of women at the top of the 400 publicly held corporations in California. Among the key findings: Women hold just 10.6% of the board seats and top executive officer positions. 29.5% of the companies have no female board members or executive officers. Only 15 of the 400 companies have a woman CEO. And while San Francisco boasts the highest percentage of women directors (15.7%), its neighbor, Silicon Valley boasts the least (8.2%). Silicon Valley. Seriously!

In Europe, the data is even less encouraging. Here, women are [probably unknowingly] sacrificing career advancement for generous maternity benefits. A survey from Sweden’s Research Institute of Industrial Economics finds that the more weeks of paid maternity leave a woman gets, the less likely she is to break through the glass ceiling. In Britain, women are entitled to 39 weeks of paid maternity leave. A Swedish mother fares even better with 60 weeks of paid leave. But both are more likely to hit a “maternal wall” than their US counterpart who benefits from no paid leave.

Here’s the sobering data: Females account for 42.7 % of managers in US corporations while only 34.4% of management positions in British companies are held by women. And the numbers fall as the maternity benefits rise. Danish women enjoy 50 weeks of paid maternity leave but hold only 27.7% of management positions. So, although female executives in California still occupy few seats in the board room as the UC Davis study reports, they still have it better than their EU sisters.

No doubt, there are lots of ways to interpret the data from the Swedish study. But as the first decade of the 21st century nears its end, it’s beyond time to redress the gender imbalance and think differently. Paid or unpaid, a short break from the workforce shouldn’t invite retribution in the form of reduced opportunity.

After all, our business world is rapidly changing. There are more women in the workplace than ever. Our working lives are now extending into our 70s. Many of us—men and women—will experience bouts of unemployment, often for longer periods than a standard maternity leave. More will take temporary sabbaticals to pursue a passion outside of work. In this altered business world, the notion, therefore, that a short maternity absence from the workforce might punish a woman’s prospects and diminish her earning potential is absurd. Taking the time to nurture a newborn during its delicate first year of life is hardly an indulgence and should not carry career-limiting consequences.

Innovation....with a little help from the Yente

2009-09-25T17:45:00.000-07:00

Yael Weiss calls herself a Yente. Only instead of matching couples, she scouts for promising biotech innovation then marries it to opportunity at pharma giant, Merck, where she serves as director, licensing and external research. Here she’s infusing the old drug discovery R&D model with new flair by providing Merck with early access to brilliant ideas from the outside to accelerate their product development initiatives.

Weiss was the spirited warm-up speaker at the Women in Science luncheon held earlier this month by the Bay Area Chapter of Israel’s Weizmann Institute. She didn’t just graduate from the Institute with a Ph.D. in molecular genetics, she also grew up on its campus, shadowing her scientist parents as they pioneered their own inventions. She holds an M.D. as well. And although she practiced medicine briefly, she found a more fulfilling path at Merck where she blends her passion for new therapeutic discoveries with her love of medicine.

The drug discovery process remains frustratingly long and expensive so it’s no surprise to see Merck exploiting all avenues to augment its R&D. But, by turning to expert scouts like Weiss, Merck is vastly expanding its talent pool while simultaneously providing opportunities to emerging entrepreneurs.

It’s a model supported by serial entrepreneur Judy Estrin who delivered the keynote address at the lunch. Today, said Estrin, the world is harvesting the innovation seeds that were planted 15-20 years ago—by entrepreneurial scientists like Weiss’s parents. But, in a sobering assessment of the current landscape, Estrin worries that we’re not planting nearly enough seeds to keep our edge. She fears an innovation deficit that will seriously impact future generations by diminishing our global competitiveness. To Estrin, there are several types of innovation: breakthrough innovation, like the discovery of DNA; incremental innovation—inventions that enhance existing technologies, and orthogonal innovation, applying existing discoveries for use in a different way.

While Estrin’s concerns are shared by many, it’s impossible not to be optimistic. Certainly we could benefit from an innovation “Marshall Plan”. But it’s hardly likely in today’s acrimonious political climate. Meantime, organizations like Weizmann are marching ahead with their own Marshall Plans. They’re incubating innovators who are seeding invention across the world—scientists like Orna Man—the Institute’s 2008-2009 Postdoctoral Fellow who was recognized at the lunch for her ground-breaking genetic research. And at the other end of the pipeline, Yentes like Weiss are linking the innovators and their research to commercial opportunities.

A New Shade of Green Employees

2009-08-12T14:56:00.000-07:00

Yesterday, at the National Clean Energy Summit in Las Vegas, Labor Secretary Hilda Solis predicted that hiring for “green jobs” will pick up over the next 12 months, but it will be some time before these jobs become a large part of the US economy. Secretary Solis was referring of course to the alternative energy industry. But this narrow definition of “green jobs” may need to be adjusted. Because, as capitalism converges with environmentalism, a “green” priority will soon be attached to all job descriptions, making every employee—especially within large corporations—a “green” worker.

This trend was discussed at last week’s SDForum event on “Where the Enterprise is Going Green”. Panel participants included: Matt Denesuk of IBM Venture Capital Group, Chris Erickson of ClimateEarth, Chris Farinacci of Hara Software and Amrit Williams of BigFix. Cisco's senior manager of sustainable development, John Hailey, and Hewlett-Packard's marketing manager, Green Business Technology Initiative, Ann Marie Feldhusen, also contributed to the discussion.

So, where is the enterprise going green? It turns out everywhere. And it’s not happening incrementally, nor is the movement confined to the enterprise alone. It extends across the value chain as companies mobilize to build products that deliver economic and environmental value to customers. This is challenging the entire workforce to think green—all the way from sourcing raw materials to designing, developing, marketing, packaging and delivering the product to customers. And in the common push to maximize operational efficiencies, the trend is also inspiring vendors and customers to share best practices.

Companies like Cisco and H-P are leading by example. Cisco’s Hailey described how his company is greening its 66,000-person/600-building enterprise through an array of sustainability initiatives, while delivering technology that furthers its customers’ eco-agendas. By using one of its own products, the TelePresence videoconferencing solution, Cisco has slashed corporate travel costs by more than 40 percent—inspiring customers through invention and by example to reduce their own carbon footprint.

A tribute to the Cisco “green team” that brought TelePresence from concept to commercialization. They may not fit the conventional description of “green workers”, but their contribution to greening America’s enterprises is immediate and enormous.

InterSolar 2009: Pragmatism Trumps Exuberance

2009-07-13T10:14:00.001-07:00

This week, San Francisco plays host to a simultaneous staging of the annual SEMICON West and InterSolar tradeshows.

But the mood isn’t great. Semiconductor equipment providers are finding it hard to shake the gloom that clouds the sector, while the sparkle that glossed the solar industry seems to have lost a little luster since last year’s show.

Still, with San Francisco showcasing so much remarkable innovation this week, there’s reason for optimism. For more on what to expect at the shows, TechFluential asked Andy Skumanich, Ph.D., a former Applied Materials executive and Business Development VP at solar start-up Innovalight. Now, as CEO of SolarVision Consulting, he charts strategies for technology companies parlaying their innovation in the solar space.

The following is a summary of our conversation.

TF:Funding of solar-related companies has taken a hit this year. According to Q2 data from the Clean Tech Group, solar saw its lowest level of investment in over three years. Does this suggest that the days of massive $100-200 million capital infusions into PV companies are over?

AS: The days of unfettered large-scale spending are indeed over. Now, investors are more savvy and more aware of how the market requirements have to match with the technology. The best example is for low-efficiency thin film. Today, investors are saying that unless the technology can provide about 10% conversion efficiency, we’re not interested. That’s a far cry from the early days (2 years ago) when the investment decision rested simply on a company’s ability to make something that converted light into electricity.

TF: On a related note, are stimulus dollars pouring into the coffers of local PV companies yet? And how many are taking advantage of the DOE Loan Guarantee Program?

AS:Not yet, but it’s starting. So far this year, multiple funding opportunities have opened. But because of the overwhelming demand, and the review process, even the January close date funding programs are just now being published. The Government is trying to balance getting out a large amount of support while doing so with a measured review. It’s possible that the pace will pick up in the next couple of quarters.

As for the number of companies taking advantage of the Government-matching development funds and the DOE Loan Guarantees, I can say from my experience that if a company is NOT applying for something, they are in the minority. They all know about the resources. Academic institutions are also well appraised and pursuing their options as well.

TF:What topic(s) will likely dominate the discussions at InterSolar?

AS:Two topics will likely dominate the discussions: (1) just how bad is it going to be this year for PV, and (2) how far along are we coming for grid parity.

With regard to the first, even though the industry is staggering out of the double-barrel hits of the global economic crisis and falling off the cliff of the PV drop in Spain, companies are not on their feet just yet. There is substantial uncertainty about what the eventual size of the PV market will be this year. But, speculation by industry experts suggests that we’ll be doing well if we are flat from last year. And there may even be a drop-off. Of course, there are companies that will do well--because of their momentum and market positioning, First Solar being the prime example. However, many companies have taken a hit and are hurting.

On the issue of grid parity, the more than 30% drop in module prices is a “good” thing one might suppose. In fact, the current levels actually bring us closer to the historical trend curve. Prices had shot up from that dropping price trend curve in the previous 2 years due to high demand and low poly availability. Now, however, there is reduced demand and extra capacity. So, the industry is reaching the lower targeted costs, albeit in a painful way, which brings the reach to “nominal” grid parity that much closer.

However, grid parity is a simple term for a complex entity simply because of the high upfront costs for PV installation. The biggest impediment for PV implementation currently is the tight credit market. I personally know of specific installation attempts in Germany and other locations where the project is not getting the right up-front funding. So, grid parity really must reflect the complex financial requirements and configurations needed to address the up-front expenditures.

Recently, I talked with a property development firm that had the most unusual combination of circumstances that allowed for “grid parity” installation. They had: (1) lots of roof space, (2) the proper appetite for the various tax credits and incentives, (3) the in-house expertise to navigate the financial complexities, and (4) a tech-savvy in-house team. They became their own PPA. That is quite the combination, but it reflects the gap between just having low $/W product and actually having that product on roof-tops generating grid-parity electricity.

TF:Beyond PVs, what’s happening in the solar value chain? Are you seeing any specific technologies taking root?

AS:Actually, it’s exciting to see the breadth of exploratory technologies from my vantage point. If anything, the notion that there’s not much left to do in c-Si wafer-based PV is completely wrong. There are interesting developments in all aspects of the c-Si value chain which run the gamut from elegant and quite promising (SiGen’s new mode of wafer exfoliation), to evolutionary but valuable changes, such as improved production standards and more deliberate module testing. In all likelihood, the various technologies are all running ahead, and there will be a lot of good developments for the foreseeable future. We really do have the attention of the country’s best-and-brightest, and that’s a tremendous opportunity for both the PV community and our global community.

TF:Do you see similarities between the emergence of the solar value chain and what happened in the semiconductor industry when IC manufacturers began outsourcing for critical process technologies more than 30 years ago?

AS:There are many parallels between the solar and semiconductor worlds and this overlap makes for fascinating comparisons and contrasts. But that would take us beyond the question at hand. The question about outsourcing of critical process technologies is not yet happening in solar. In fact, for the companies that I’m in regular contact with (including many of the top 15 global companies), the opposite is true. They are more concerned about maintaining their competitive advantage by keeping that very element (their process knowledge) in-house and carefully guarded. The PV manufacturing companies see themselves as defined by their technology capabilities so there won’t be any of that outsourced for a good time to come, unlike the current IC sector.

TF:Are there particular semiconductor process technologies/tools that are proving a natural fit for PV manufacturing applications?

AS:The two worlds are really quite different in terms of what drives the tools. Whereas the IC world is driven by increasing complexity and reducing dimensions with 100s of wafers-per-hour throughput, the solar PV world is driven by ideally reducing complexity and increasing dimensions (size of cells), but having multiple thousands of wafers-per-hour throughput. This mis-match—namely the need to drive production to the stratosphere, not the dimensions to the atomic level--is what catches many IC refugees off-guard. The most common cross-over from ICs to Solar is really in “best-practices”. An interesting example can be found at SunPower, where in the early days as part of Cypress Semiconductor, they indeed benefited from being in the IC environment to implement the latter’s methodologies and rigor.

To Tweet or not to Tweet....if you're a CEO

2009-07-05T19:41:00.000-07:00

A recent survey conducted by UberCEO, laments the lack of engagement with social networking tools by Fortune 100 CEOs. Among the findings: 2 have Twitter accounts, 13 maintain Linkedin profiles and 19 have a personal Facebook page. No executive maintains a blog.

The survey doesn’t reveal if the CEOs previously used the tools and ultimately rejected them. Neither does it evaluate how competently their companies are integrating social networking into their corporate marketing strategies. Nonetheless the data is interesting and provides a useful benchmark to compare against future findings.

That said, it’s quite a stretch to suggest that the absence of a personal blog, a Facebook page or a frequent Twitter stream might make a CEO appear “disengaged, disinterested and disconnected” to customers.

The CEOs I know that don’t maintain Facebook pages are far from disconnected. And their stakeholders generally know it, even without a reminder tweet. In today’s grim economy, the “conversation” (as we communications pros like to call it) continues unabated. It’s happening live in customer boardrooms across the globe where corporate chiefs are fighting to close deals on advanced technology in a cruel industry downturn. Time- and- budget-strapped? Certainly. Disengaged? Hardly.

And they’ve been blogging for years—just not externally. Instead, they’re wisely using this tool to engage candidly and frequently with employees—inspiring confidence and more recently, preserving morale in deeply volatile times.

So before we dismiss as “social networking laggards” those that are not personally a-Twitter, it’s fair to consider that maintaining an online identity may not be the smartest use of their time. Indeed, the Fortune 100 CEOs might already have reached that conclusion. And for many, especially those that operate in diverse cultural and geographic selling environments, blogs, Facebook, Linkedin and Twitter may not be the most relevant mediums to personally communicate with those that influence the success of their business.

"Green" buildings: good for your health

2009-06-17T09:57:00.000-07:00

Seriously. But that’s not all. Studies show that they also make employees happier and more productive. Consider this example from Australia’s beautiful city of Melbourne. At the 500 Collins Street address, the first and oldest refurbished building in Australia to receive a Green Star rating, employee healthcare costs sank by 44%. Billable hours rose by 7%. And, typing performance soared by 49%. Amazing how a 50% improvement in fresh air rates can produce such tangible and important ROI.

Closer to home, Adobe in San Jose isn’t just making employees healthier; the software giant is also using 37% less energy at its Green headquarters, while reducing its water usage by 41%. It’s also diverting 94% of its waste.

This was some of the information shared at Green Tech Media’s recent Green Building Summit in Silicon Valley by a group of passionate eco-materials entrepreneurs and engaging energy-efficiency thought leaders.

Contrary to popular belief, buildings emit substantially higher amounts of Co2 than the better-known pariah, cars and light trucks – 52% versus 9% respectively. And they’re voracious consumers of power, swallowing more than 40% of the country’s energy. According to James Sweeney, director of the Precourt Energy Efficiency Center at Stanford University, energy consumption at the average commercial building breaks out like this: 25% lighting, 13% space cooling, 12% space heating, 7% ventilation, 7% electronics, 6% water heating, 4% refrigeration, 4% computers, 2% cooking and 13% other. 7% is unknown.

Not surprisingly, the national drive to improve building efficiencies is catalyzing the emergence of start-ups offering a rich array of eco-building materials. From ultra-high-efficiency windows, to novel new engineered soils composites, these innovative companies are catapulting what were once niche technologies and products into today’s mainstream. But the leaders of these companies are under no illusions that their products will succeed on the strength of a new eco-conscious mindset. They know that in order to win, their products must be cheaper and better.

Note to Foreign Companies Seeking Silicon Valley VC Dollars: Be Persistent and Patient

2009-06-01T11:49:00.000-07:00

If the current funding landscape is bleak for entrepreneurs in Silicon Valley where a sizable portion of US VC dollars originate, imagine what it’s like for foreign start-ups competing for dollars from the same diminished pot. In the past, VCs were often reluctant to invest in companies outside of their immediate time zone. That changed with the rise of India and China when Silicon Valley VCs not only invested in promising start-ups in those regions, some also planted strong roots there too. But, what if you’re a European start-up with a promising technology and hoping to tap into Silicon Valley for an infusion of capital? How strong are your chances of hitting the jackpot?

For a perspective, TechFluential asked Sanjay Subhedar, managing director at Storm Ventures in Menlo Park, Calif. Here's a summary of our discussion.

TF: The numbers aren’t encouraging. Investments in the first quarter of 2009 shrank dramatically – down 47% from Q4 2008. Does this mean that the pot is shrinking or is the money still there, just sitting on the sidelines?

SS: Both statements are accurate. There is still a considerable amount of money already committed to venture capital and available for investments. But, given the poor state of the financial markets, follow-on financings will be difficult and exits are pushed out (no IPO window). These conditions make venture capitalists more cautious.

TF: What has to change before the tide turns and investment activity increases?

SS: Bond markets have to become more robust, followed by stock markets. Venture capital is the most illiquid of all asset classes. As such, for it to be healthy, assets that are traditionally more liquid (stocks and bonds) have to get healthy first.

TF: What impact, if any, has this downward trend had on innovation?

SS: Innovation continues unabated. It needs to be more focused and capital efficient in the process of commercialization of ideas, but there is no stopping or slowing innovation.

TF: What sector is commanding the lion’s share of Silicon Valley VC dollars? Did most of the money go to local companies?

SS: As in the past, some areas are thought to have greater potential for higher returns and these areas naturally attract a lot of capital. Areas like clean tech, alternative energy and biotech tend to be more capital intensive and have potential for large exits. Hence they attract more capital. Virtualization, mobility and wireless are also interesting areas for innovation. As for location, venture capital is funding companies from Boston to Beijing and Silicon Valley to Shanghai. The internet makes location less relevant, but you must have a product addressing a global market for a Silicon Valley VC to be interested.

TF: How often do Silicon Valley VCs fund non US-based companies?

SS: A majority of Storm Ventures’ portfolio companies have “offshore development” in China, Korea, India or Israel. The HQ is either here in Silicon Valley or expected to move here at some time. It’s getting harder to have a purely US-based company only.

TF: What’s the best way for foreign start-ups to engage with Silicon Valley VCs?

SS: I would say identify VCs that have experience and knowledge of your domain. Then, approach them either directly or through people who might know them. Your lawyers, accountants, suppliers, even your first customers - these connections can all help you with introductions.

TF: Beyond a strong management team, promising technology and a high-growth market, what other attributes do VCs look for in foreign companies seeking capital?

SS: At Storm Ventures we look for potentially disruptive solutions (product, service or business model) targeting large or fast-growing markets. In addition, a plan that can provide early (and therefore capital efficient) evidence of success or failure is preferred. If you can make the cost of failure very low, you will find greater interest. This can be done by having a focused plan and early engagement with prospects and customers to determine that your solution has merit, delivers value and can be marketed and sold efficiently.

TF: Are there other non-traditional funding sources [i.e. debt financing/strategic partnerships etc.] that foreign companies should pursue?

SS: There are a variety of sources like “Angel” funds, “Super Angel” funds and “Search” funds, in addition to seed and early stage venture funds that are all prospecting for great investment opportunities.

TF: Beyond the capital, what other benefits can a foreign company expect from their partnership with a Silicon Valley VC?

SS: Entrepreneurs should expect significant “value add” beyond just capital from their VC. Help with prospects and first customers, recruiting talent for the company and advising on strategies to scale the enterprise - these are areas that a VC should be able to help with.

TF: What advice would you give to foreign companies looking for capital from Silicon Valley sources?

SS: Be persistent and patient.

About Sanjay Subhedar
Prior to founding Storm Ventures in October 2000, Sanjay Subhedar was at E-TEK Dynamics, Inc. (fiber optic component manufacturer) since December 1997, serving most recently as its Chief Operating Officer/Chief Financial Officer. Sanjay played a key role in E-TEK's growth from 400 employees to over 5000 employees in less than three years, E-TEK's Initial Public Offering in 1998 as well as E-TEK's merger with JDS Uniphase in July 2000.
Before then, Sanjay was the Chief Financial Officer for StrataCom, Inc. from its inception in January 1986 until its merger with Cisco Systems in July 1996.
Following StrataCom's merger with Cisco Systems, in July 1996 he served as Vice President of Cisco's WAN business unit until October 1997.
Sanjay also serves on the Board of Trustees of Palo Alto Medical Foundation, Board of Directors of The Indiana University Foundation and the Governing Board of the Indian School of Business. Sanjay earned a B.S. from the University of Bombay, India and an M.B.A. from Indiana University. He was born in Mumbai, India.

Looking for Stimulus Dollars? Don't Mess Around.

2009-05-15T16:08:00.000-07:00

Get professional help. Hire a lobbyist. Go the extra mile if necessary and secure expert legal counsel to navigate Beltway procedures and capture a share of the dollars now available under the American Recovery and Reinvestment Act. That was the consensus of financial experts at a recent SDForum panel in Menlo Park to discuss non-traditional funding sources for emerging clean-tech companies.

Participants included Quentin Falconer of Silicon Valley Bank, Erez Levy of TriplePoint Capital, Tom Schulz of Cleantech Circle and Steve Goldby of Venrock. Mitch Zuklie of Orrick moderated the discussion.

The stimulus numbers aren’t small. They include $16.8 billion for energy efficiency and renewable energy technologies, and $4.5 billion for electricity delivery and energy reliability technologies. More money is on tap for other green-related areas.

Music to the ears of clean-tech entrepreneurs, many of whom are struggling to raise capital in an environment that is considerably less buoyant than it was a year ago. In fact, in a report issued this week by Ernst & Young, investment in clean-tech startups in the first quarter of 2009 plummeted by a shocking 63% when compared to the same period last year.

This depressing drought has sent entrepreneurs in search of non-traditional funding sources like debt financing and strategic partnerships. And it has heightened the allure of the stimulus dollars. But where does one start? Well, consider the fact that Federal funding is nothing new. Some of the world's most influential technologies began life as science projects funded by DARPA and mainstreamed by Agencies like the Department of Defense.

So, accessing the stimulus dollars requires the same protocols and patience as it ever did. What’s different now is the urgency of the need [some companies may not survive the funding drought] and the ready availability of designated funds. Pairing the two requires a matchmaker that can deftly communicate the technology value proposition to government finance experts in Washington, DC and seal a funding deal in short order. The advice from the panel: don’t waste time trying to do it in-house. Hire a professional.

Energizing a Nation's Economic Recovery: A Role for the Diaspora?

2009-04-24T14:43:00.000-07:00

Nobel Laureate Paul Krugman discussed Ireland’s economy in a New York Times column this week. Beyond donning a fiscal straitjacket, Krugman suggests that Ireland’s return to economic prosperity may rely on an export-led recovery plan. Assuming, of course that the rest of the world bounces back.

As Krugman no doubt knows, maintaining a robust export economy has long been a national imperative for Ireland. To support this priority, the Government built a dynamic enterprise development infrastructure that nurtures entrepreneurs, helps them create strong sustainable businesses and taps them into a global network to help drive exports. Enterprise Ireland (EI) is the government agency behind that effort.

Ireland also holds another trump card that enables its export economy. Its Diaspora. And it would be tough to find a region with a more engaged and tech-savvy Irish Diaspora than Silicon Valley. Here, a sizable number of bellwether tech giants like Intel, Cisco, Google and many more count Irish or Irish-American talent among their executive ranks.

Just days before Krugman’s article, more than 150 influential members of that Diaspora joined the second annual Irish Technology Leadership Group (ITLG) Silicon Valley awards event at Stanford University. The ITLG is comprised of senior Irish and Irish-American executives dedicated to supporting the growth of Ireland-based technology companies. The event honored seven Irish technology companies for their innovation and potential to build a strong global business. Two were selected for top awards: Powervation for its new class of digital power control integrated circuits and Open Hydro for its tidal energy technology. All seven are EI-supported companies.

If Ireland’s return to prosperity rests on an export-led recovery plan as Krugman suggests, this could well broaden the role and contribution of the nation’s Diaspora, not just in the US, but worldwide. The Irish entrepreneurs feted at the ITLG event are already benefiting from their association with the Diaspora—by way of mentoring and connections with the people, corporations and opportunities that can influence success for their companies in the US market.

And it turns out that what’s good for Ireland-based entrepreneurs in the all-important US market is also good for the US. In fact, the longtime two-way investment flow between both countries marked a major milestone last year. For the first time, more jobs were created in the US by Ireland-based companies than were created in Ireland by US companies. At the last count, approximately 80,000 Americans were employed by Ireland-based companies.

Lyon, France Rolls out the Welcome Mat for Foreign Direct Investors

2009-04-17T14:46:00.000-07:00

Note to entrepreneurs seeking funding for their start-ups: “No is simply “Yes” in disguise,” according to Jon Bonnano, chair of the Keiretsu Forum’s clean-tech investment committee. One might forgive entrepreneurs for dismissing such sentiments, especially in today’s climate when funding is thin and the world’s financial institutions have yet to loosen the credit strings. But if you’re a promising life science or clean-tech company scouting for a location to plant European roots, you’re likely to hear a lot more Oui than Non from officials at ADERLY, the economic development agency of Lyon, France.

ADERLY’s clean-tech investment manager, Frederic Miribel and Bonnano joined a panel in Sunnyvale hosted by the San Francisco Chapter of the French American Chamber of Commerce. Five executives spoke on “Funding Opportunities in Europe for Clean-tech Start-ups.” Along with Miribel and Bonanno, participants included: Louis Armstrong, VP at URS Corp., Francois Bergasse, CEO of Easenergy EDF Group and Kamel Ounadjela, president and CEO of Calisolar.

At ADERLY, they’re rolling out the welcome mat for foreign clean-tech and life science companies offering an array of incentives largely geared to support R&D operations. Tax credits are the cornerstone incentives and investors can expect a 50% deduction in year 1, 40% in year 2 and 30% in year 3, up to a maximum of 100M Euros. Once ramped up and into production, the incentives are not as generous. However, additional funding is available for employee training and facilities, and for a period of time, ADERLY will also fund new PhD hires from local universities.

Miribel is keen to correct perceptions of France as an impossibly expensive place to do business. He quoted a recent report that ranked France as least costly when compared to other EU countries, and just about 3.4% more expensive than the U.S. Not surprisingly, the U.S. is the top foreign direct investor in France.

France’s economic development efforts are structured around a “cluster” model. This means that certain industry segments are concentrated in one location, typically adjacent to centers of higher learning that focus on specific disciplines. Toulouse, for example, hosts France’s aerospace industry, while Grenoble is a center of excellence for semiconductor initiatives. Clean-tech and life sciences are Lyon’s focus.

But the country faces stiff competition from its EU counterparts. Germany has established itself as an irresistible location for solar companies seeking investment partners to shoulder some of the burden of expensive production fabs. Ireland continues a decades-long tradition of attracting premium foreign companies with its very attractive corporate tax rates, most recently drawing Google and Facebook. And, Eastern European countries like Estonia are also amping up efforts to attract foreign direct investment. All have top-class universities fueling a continuous pipeline of highly qualified talent.

For his part, Miribel hopes that ADERLY incentives will draw the initial investment. Once entrenched, he’s confident that the region’s wonderful food and world-class wine will compel foreign investors to stay!

An Emerald Twist to California’s Green Technology Innovation

2009-04-06T09:44:00.000-07:00

Noel Cotter is doing more than making homes and commercial buildings more energy efficient with his San Francisco-based solar installation business, Luminalt; the Ireland native is also shaping a new breed of green-collar workers. Cotter is a certified Go Solar SF workforce development employer and an early corporate partner in what is the largest municipal solar initiative program in the U.S. He’s applying his decades of experience to train program graduates with panel installation skills—expertise that could be in high demand if California’s solar industry takes off. These are the workers that install solar panels to convert the sun’s rays into electricity that can power things like appliances and lights. And Cotter is one of those quietly leading the charge to provide hands-on skills, knowledge and opportunity to a new corps of San Francisco green workers.

Cotter joined a group of local Irish clean-tech innovators at a recent reception hosted by Biolink at the Irish Consulate in San Francisco. In an appropriate prelude to St. Patrick’s Day, Ireland’s Minister for Energy, Natural Resources and Communications, Eamon Ryan dropped by to hear more from the CEOs following meetings with Silicon Valley companies organized by local IDA Ireland executives. At the event, Ryan was largely in listen mode, but he also provided some interesting commentary on Ireland’s emerging clean-tech industry.

For some, Solar is a relatively new industry. But for Luminalt’s Cotter, it has been his life’s work. A longtime believer in the technical and economic viability of solar power, he completed his first solar project in 1981—a 50KW photovoltaic system for Ireland’s University College Cork. Since then, Cotter has worked on and designed micro-hydro, wind generation, photovoltaic and hybrid off-grid systems. Luminalt is his latest endeavor. And while the recession is tempering what was surging demand just a year ago, Cotter reports that business remains brisk. A glimmer of hope in the face of California’s grim unemployment stats.

Also at the event was Luxim’s CEO Tony McGettigan with his tiny solid-state plasma LIFI bulbs. Luxim’s light-source—the size of a vitamin pill—is dwarfing the capabilities of conventional high-intensity discharge (HID) lamps, with ten times the lifespan and efficiency gains of up to 50%, as well as a dramatic improvement in color quality. And it’s really taking off. At this year’s Prolight+Sound tradeshow, the entertainment lighting world’s annual extravaganza, LIFI was the light source selected by several market leaders to showcase their display of ultra-cool new-generation fixtures.

Rex Northen, executive director of Clean Tech Open was also there. He described the rise of an organization that provides resources, education and support for clean-tech entrepreneurs. Most impressive were the stats he cited that sealed Clean Tech Open’s reputation for catalyzing great ideas that become viable clean-tech businesses. Consider this: since its inception in 2006, the organization has helped more than 120 entrepreneurs launch companies -- and subsequently raise over $125 million in external funding.

Much food for thought for Minister Ryan. He departed San Francisco with a tic-tac-sized LIFI bulb in his pocket, along with a healthy dose of the optimism that characterizes this unique corner of the world. He also returned home armed with ideas for building bridges between the clean-tech communities of Ireland and the Silicon Valley—similar to what event host, Biolink has already done for the life sciences sector.

Jane Evans-Ryan