Innovate Arkansas Blog

Book Review: Cats: The Nine Lives of Innovation

Well-known innovation author Stephen C. Lundin this week announced the upcoming release of the follow-up to his bestseller, "FISH: A Remarkable Way to Boost Morale and Improve Results." Lundin and co-author Jimmy Tan's new book is called "CATS: The Nine Lives of Innovation" and, according to Amazon.com, will be available in the U.S. in January.

Maree Harris, EzineArticles.com's "expert author," offers a sneak peak in her review:

You would remember him as the author of the best selling book FISH: A Remarkable Way to Boost Morale and Improve Results, which was inspired by the Pike Place Fishmarket in Seattle. Remember the message in FISH - Be There; Play; Make Their Day; Choose Your Attitude - simple but immensely powerful. The Pike Place Fishmarket, as a result of his book, is now an international tourist destination!
CATS, his new book, is the same - a simple but powerful message, communicated within an innovative framework via a fun process that makes the message of innovation accessible to all. So if innovation has always been a mystery, or even a threat, then this book is worth a read.
A CAT, for Stephen and Jimmy Tan his co-author, is "an everyday human being who learns how to release his or her creative potential and develops the skills and understandings critical to innovation," those creative and imaginative people who are invaluable to any organisation caught in the rapidity of change in the twenty-first century.
...
What makes this book different to so much of the reading I have done on innovation, however, is that its message is that innovation begins with the individual and that it begins with being innovative in the ordinary and the small in our lives. That's where the process of becoming a CAT begins. Innovative organisations are just organisations with lots of individual CATS in them who are supported by a seasoned CAT that Stephen and Jimmy call a CAT Wrangler - a leader who knows "the difference between a meow and a purr." You'll have to read the book to find out what those kinds of leaders are really like!
The journey they take us on teaches us how to deal with the four challenges of innovation, live the nine lives of CATS and earn the five CAT Belts that tell us how successful we are as a CAT and even what sort of a CAT we are.
For Lundin and Tan the four challenges of innovation are:
1. Overcoming our doubts and fears.
2. Getting beyond "the normal."
3. Creatively managing failure.
4. Leading through change.
The nine lives are:
Life One: CATS overcome the clutter of life.
Life Two: CATS are always prepared, especially for the unpredictable.
Life Three: CATS know that innovation isn't normal.
Life Four: CATS welcome real provocation.
Life Five: CATS promote imaginary provocation.
Life Six: CATS say "How Fascinating!"
Life Seven: CATS fail early and well.
Life Eight: CATS pounce on change.
Life Nine: CATS love CAT Wranglers.

More here.

Click here to read the press release from London-based SourceWire.com.

Little-known Southeast Arkansas Tech Co. Uses Cryogenics

A little company called Down River Cryogenics in Jefferson is on the cutting edge of cryogenics - freezing things, not bodies, that is - and is providing the hi-tech service to a variety of industries.

"People ask us all the time what it is we do here. I guess a lot of people think we freeze bodies," owner Michael Pate said.

He explained "cryonics" deals with freezing bodies, whereas "cryogenics" is the study of low temperatures and how materials are affected by them. The term also refers to the creation of low temperatures.

Customers seek cryogenics treatments for items ranging from machine parts to musical instruments.

Pate, his wife Judy Pate and two employees use two processors he built himself. They use liquid nitrogen to lower the machines' internal temperatures to -316 degrees Fahrenheit, hold the temperature for 32 hours then temper the contents at 450 degrees for two cycles of 10 hours each.

The business has been operating for nearly eight years and uses a variation of a process that developed from a discovery by NASA scientists during the early days of the U.S. space program.

Read more from ArkansasBusiness.com here.

Getting Your Foot in the Door

It's something every entrepreneur ponders: how to get off on the right track during the first conversation with a potential business partner.

From Entrepreneur.com blogger Ray Silverstein:

The first thing, of course, is to establish an initial rapport. Thank the prospect for the appointment and employ a bonding statement. Then start a prospect's first sales call with this question: "Just out of curiosity, why did you agree to this appointment? Why are you taking the time to see me?"
Most of the time, prospective buyers will respond by describing their trials, troubles and tribulations. They'll tell you why they're seeking a solution--the perfect setup. Now you have the opportunity to drill deeper, discovering your prospect's actual needs. This information will help you position your product or service as the prospect's best solution.
Of course, be careful not to ask questions that may be perceived as rude, intrusive or nosey. For example, many professional sales people like to ask, "What would you like to accomplish in your business?"
Sounds innocent enough, but research indicates that in the early moments of a sales call, this line of questioning provokes a negative response. You can ask this type of question successfully, but only after you've established a greater degree of trust and rapport. If you ask too early in the game, you may get an answer, but not necessarily a truthful one.

More here.

Governor Names ASU's Glen Jones to ASTA Board

Gov. Mike Beebe recently named Glen Jones, senior associate vice chancellor for academic affairs and research and executive assistant to the chancellor for diversity at ASU-Jonesboro, to the Arkansas Science & Technology Authority.

Jones replaces John White, former UA-Fayetteville chancellor.

ASTA is one of Innovate Arkansas' strategic partners.

From the ASU news release:

The Arkansas Science & Technology Authority (ASTA) was created by statute in 1983 with the mission to bring the benefits of science and advanced technology to the people and state of Arkansas. Twenty-five years later, ASTA's mission is served by the development of strategies to promote scientific research, technology development, business innovation, and math, science, and engineering education throughout the state.

Dr. Jones, whose term will expire Jan. 14, 2010, said, "I am honored that Governor Beebe appointed me to the Arkansas Science and Technology Authority. I look forward to working with the staff and fellow board members of ASTA as we serve the citizens of Arkansas by fulfilling the mission of the Arkansas Science and Technology Authority."

More here.

Swedish Co. Eyes Fayetteville for Potential Biodiesel Plant

The owners of Sweden-based Ageratec, which manufactures biodiesel fuel and equipment, have their eyes on Fayetteville as a potential new site.

Company founders Gert and David Frykerås, father and son, opened up shop in Sweden in 1996. Since then the two have expanded their business to more than 60 locations in 20 countries, including four locations in the United States. David Frykerås said there's a chance Fayetteville could be the fifth location.
In a presentation to the Fayetteville Economic Development Council Wednesday, David Frykerås said that he's flown over Arkansas plenty of times but never thought of stopping there until he was notified of Fayetteville's reputation on sustainable business practices.

More here.

Reminder: SBIR/STTR Deadlines Approaching

The Arkansas Small Business Development Center reminds entrepreneurs of approaching SBIR/STTR deadlines:

Listed below are the upcoming deadlines for entrepreneurs planning to compete for Phase I awards under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

For details about SBIR/STTR and advice on proposals, please contact Mildred Holley at mxholley@ualr.edu, 501.683.7700 or 800.862.2040 (AR only).

Agency: U.S. Department of Transportation
IMPORTANT - Revised Proposal Deadline: October 3, 2008 [5:00 p.m. EST]
Web Link

Agency: U.S. Department of Health & Human Services - National Institutes of Health/Centers for Disease Control Contract Solicitation
Proposal Deadline: November 3, 2008 [5:00 p.m. ET]
Web Link

Agency: U.S. Department of Education
Proposal Deadline: November 10, 2008 [4:30 p.m. EST]
Web Link

Agency: U.S. Department of Energy
Proposal Deadline: November 20, 2008 [8:00 p.m. EST]
Web Link

Agency: National Science Foundation (SBIR solicitation only)
Proposal Deadline: December 4, 2008 [5:00 p.m. proposer's/submitter's time]
NOTE: Proposals submitted for December 4 deadline accepted beginning November 4, 2008
Web Link

Agency: U.S. Health & Human Services -- National Institutes of Health, Food & Drug Administration & Centers for Disease Control
Proposal Deadlines (AIDS related): January 7, 2009
Proposal Deadlines (standard): December 5, 2008
On-time submission requires submittal by 5:00 p.m. proposer's local time
Web Link

UA to Spend $28M on Nanotechnology Building

UA-Fayetteville trustees recently approved plans for a $28 million nanotechnology building.

Click here to read the full article.

New Site for Searching VC's

The Arkansas Small Business Development Center has discovered a new Web site called Punctuative! that could prove useful.

Here's more from the Tech Track e-newsletter:

Matt Winn of Chrysalis Ventures has created a searchable venture capital database that contains 492 venture capital firms. The database includes 6,773 investment professionals in 863 locations. The search feature allows users to search the VCs based on geographic location, investment parameters, professional bio keyword and similar criteria.

A quick search for "Arkansas" in the bio keyword field turned up three professionals in three separate venture firms. A search for "nanotechnology" turned up 23 matches with 27 professionals found.

Take a tour of the VCDB at http://punctuative.com/vcdb.

From Idea to Patent: Tips from IEC at Fort Smith

There is a wealth of information about obtaining patents in the September e-newsletter from the Innovation & Entrepreneurship Center at Fort Smith. Check it out; you might learn something.

Patent Pending: Protecting Your Ideas

Inventing something new is a thrilling time, especially once you realize that your new invention has market potential. Whether you sketch the invention on paper, create a prototype or type up code for a new software application, creating a new product that could make money often begins the process of starting a business.
However, this is a time of exponential learning experiences. To start, the business will not have much to grow upon if the intellectual property is not protected. Understanding intellectual property law and how to protect what you develop can be a confusing bureaucratic process filled with lawyers who cost a sizable amount of money. Start your quest at the library or bookstore. Read about the different types of intellectual property and the basics that you need to understand before you put your idea or invention in public view. Nolo's "Patent, Copyright & Trademark: An Intellectual Property Desk Reference" is an easy to understand guide through protecting your property.
If you are seeking a patent for an invention, there are a few difficult decisions to make. First, is deciding to file a provisional patent application or not. A provisional patent allows you to use the term "patent pending" on the product for 365 days only. You only have 12 months from the date you filed your provisional patent application to file your full patent application. The difficult decision with this is spending money to prepare and file the provisional as well as the money that you will need to file a full patent application.
The benefit of filing a provisional patent application is that you have 12 months to prepare the full patent application and safely conduct market research to see if you have a viable business opportunity with this product. That includes conducting consumer focus groups and engaging in market research. The downside of the provisional patent includes the cost of filing this application in addition to the full application, even though a provisional should not cost as much as the full patent application.
The next big decision is whether you wish to patent the invention at all. A utility patent typically costs $10,000 - $18,000. The price varies based on the complexity of the invention, who helps you in filing the patent and whether your patent is contested or not. Additionally, once you file your patent, all the information included in the application becomes public record. Once you have your patent, you have 20 years to break even and make a profit off your invention before others are able to copy and sell a similar product.
Patent applications are complex and you will have to hire either a patent attorney or a patent agent for assistance in filing your application. A patent agent is an engineer who has been certified by the U.S. Patent and Trademark Office (USPTO) to represent you in the preparation and filing of the provisional or patent application. A patent lawyer is a specialist in the area of intellectual property law who can prepare and file you provisional and regular patent applications. The difference between the two is the patent lawyer will also be able to represent you in court if your application is contested by others or by the USPTO.
While inventing something new is exciting, it is also a challenging time. Whether to seek intellectual property protection on the invention immediately and risking the finances needed to obtain a patent, or conduct market research first to see if there is a viable market for the product is a difficult decision. Statistics show that 90% of inventions that are patented never make it to a market place, which shows that there is more to selling an invention than the actual patent protection. However, a patent is often necessary to safely introduce the product to the market.

UCA Biz Profs Publish Study on What It Takes to Get IT Jobs

Four professors from UCA's College of Business recently published the results of a two-year study that outlines what skills graduates need to get good jobs in the information technology field.

Their two-year study proved successful. Those four individuals Mark E. McMurtrey, James P. Downey, Steven M. Zeltmann and William H. Friedmann published their findings in the new issue of The Journal of Information Technology Education.
The article, titled "Critical Skill Sets of Entry-Level IT Professionals: An Empirical Examination of Perceptions From Field Personnel," details skills any recent business graduate should have before going out on that job search.
The six businesses questioned were Alltel, Blue Cross Blue Shield, Acxiom, DataTronics, Dillard's and the Information Technology department at UCA. McMurtrey stressed that they polled employees in the field of information technology, not recruiters.
"What we found was that the hard technical skills are still very important, like the programming, communications and networking skills," McMurtrey said.

More here.

Deadline Reminder For SBIR/STTR Proposals

The Arkansas Small Business Development Center reminds entrepreneurs of upcoming deadlines for Phase I awards under the Small Business Innovation Research and Small Business Technology Transfer programs.

For details about SBIR/STTR and advice on proposals, please contact Mildred Holley at (501) 683-7700 or (800) 862-2040.

Agency: U.S. Health & Human Services -- National Institutes of Health, Food & Drug Administration & Centers for Disease Control
Proposal Deadlines (AIDS related): September 7, January 7, 2009
Proposal Deadlines (standard): December 5, 2008
On-time submission requires submittal by 5:00 p.m. proposer's local time
Web Link

Agency: U.S. Department of Defense, SBIR 2008.3
Proposal Deadline: September 24, 2008 [6:00 a.m. EST]
Web Link

Agency: U.S. Department of Defense, STTR 2008.B
Proposal Deadline: September 24, 2008 [6:00 a.m. EST]
Web Link

Agency: U.S. Department of Health & Human Services - National Institutes of Health/Centers for Disease Control Contract Solicitation
Proposal Deadline: November 3, 2008 [5:00 p.m. ET]
Web Link

Agency: National Science Foundation (SBIR solicitation only)
Proposal Deadline: December 4, 2008 [5:00 p.m. proposer's/submitter's time]
NOTE: Proposals submitted for December 4 deadline accepted beginning November 4, 2008
Web Link

Bartering: Making a Comeback

Businesses are increasingly using barter and trade practices to save a buck in their tight budgets. And in case you didn't know, there are resources to aid in that endeavor in our own back yard, so to speak. The American Exchange Network is based here, with offices in Bentonville, and Southern Barter Exchange is located in Little Rock.

More than 350, 000 businesses in the United States and Canada participate in organized bartering in about 400 barter offices in both countries, according to the National Association of Trade Exchanges, which has U. S. and Canadian members. "Those businesses do between $ 3. 8 billion and $ 4. 3 billion a year in trading," said Tom McDowell, executive director of the Mentor, Ohio-based trade association.
The sluggish economy is creating more interest in barter possibilities from businesses. For the past year, consumers have been taking hits on several fronts, including high gasoline prices, a weak job market, tight credit conditions and an eroded housing market.
"From what we're hearing from our members, most are up about 12 percent in new members over the past two years," McDowell said. "The big deals where you refit a whole office or print catalogs or put on conventions - those are the things we're seeing people coming to us for instead of wanting to pay cash for."

More here.

Fort Smith Innovation & Entrepreneurship Center Looking to Expand

After opening its door only a year ago, the Innovation & Entrepreneurship Center at Fort Smith is looking to expand. The Southwest Times Record reports this week that the center is considering changing locations and adding programs. The idea of a business incubator there is also being tossed around.

Michelle Stockman, IEC executive director, said the center's client list has grown from 20 at its start to almost 150 today.

Fortunately, some have varying degrees of need from simple referrals for information to hands-on help with business and financial plans.

Some also go through periods of dormancy before they need help from her again, Stockman said.

"The IEC and (Small Business Development Center at the University of Arkansas at Fort Smith) are at full capacity right now, and we're still probably only touching about 3 percent of the businesses that are out there," she said. "The need is much larger than the resources."

More here.

State Classrooms Headed into Hi-tech Territory

A task force has developed curriculum for 21st century classrooms, which was presented to state lawmakers yesterday. The goal: You guessed it-taking the state a step closer to a knowledge-based economy.

The Arkansas Task Force on Knowledge-Based Technology Curriculum compiled 240 teacher-created lesson plans that integrate technology into core curriculum and that teachers can access online, said John Ahlen, president of the Arkansas Science and Technology Authority.

The plans are in response to legislation passed in 2005 authorizing ASTA to develop a knowledge-based technology curriculum for use in grades seven through 12 to develop students into effective and productive global citizens in the 21st century and meet challenges in education, economic development and community development.

Ahlen and others presented a report to members of the joint House and Senate committee on Advanced Communications and Information Technology.

Using free online tools, students could compile data and hold discussions potentially with students at other schools, all while teachers incorporate lessons on graphing, prediction-making, economics, entrepreneurship and other topics.

More here.

Small Business Leaders to Pryor: Federal Grants Shouldn't Go to VC-backed Firms

Arkansas entrepreneurs tell U.S. Sen. Mark Pryor, D-Ark., that venture capital-backed businesses should not be awarded grants from the SBIR program.

The federal Small Business Innovation Research program is set to expire Sept. 30 and the Small Business Technology Transfer program next year. The House and Senate currently have different reauthorization bills.

"The House bill would be pretty disastrous to the things that are going on in Arkansas related to business development through SBIRs," said Calvin Goforth, president of Fayetteville-based Virtual Incubation Co., which develops new companies by partnering technology entrepreneurs with business experts, technology experts and seed stage investors.

The two bills have many differences, including the programs' length of extension, allocation methods and the amount of money available at different phases.

The difference that most concerned business leaders was a provision in the House bill that would open the SBIR to firms funded by venture capital.

Click here to read the full article from Arkansas News Bureau or here to read more from the Arkansas Democrat-Gazette.

Deadline for Arkansas Business of the Year Entries Set for Sept. 26

Arkansas Business Publishing Group is taking nominations for the 2008 Arkansas Business of the Year Awards, which honor businesses, nonprofits and executives from throughout the state.

The deadline for entries is Sept. 26. Click here for more information on how to nominate.

Awards will be given in the following categories:

Category I (1-25 employees)
Category II (26-75 employees)
Category III (76-300 employees)
Business Executive of the Year (Executive's company must have fewer than 300 employees and meet all criteria of the Company category)
Nonprofit Organization - $25 million or less budget - 501(c)(3) designation - Organization must be three years or older
Nonprofit Executive of the Year - 501(c)(3) designation - Budget of $25 million or less - Organization must be three years or older
Arkansas Community Foundation's Outstanding Philanthropic Corporations

Award winners will be named at a Feb. 24 banquet at the Statehouse Convention Center in Little Rock.

Arkansas Entrepreneurs Should Apply for Grants, Agency Director Says

Larry W. Walther, director of the federal Trade & Development Agency, tells entrepreneurs in Rogers that they should apply for the agency's $40 million in grant money.

ROGERS - The new director of the U.S. Trade and Development Agency encouraged Northwest Arkansas smallbusiness owners to apply for an estimated $ 40 million worth of grants issued by the U. S. Trade and Development Agency each year.
Larry W. Walther of the Arlington, Va.-based federal agency suggested that experienced business operators and hungry entrepreneurs help fulfill its mission of advancing economic development and U.S. commercial interests in developing and middle-income countries, according to its 2007 annual report.

More here.

Companies Respond to Shrinking Innovative Productivity

The latest research shows that innovators aren't as productive as early in life or for as long as they used to be, and tech companies are doing more to increase meaningful entrepreneurial activity.

The Wall Street Journal takes a look at how they're doing it. One popular strategy is teaming college grads with more seasoned mentors, which is being done at companies like Texas Instruments and Sun Microsystems.

A particularly stark view of age-related constraints on researchers' work comes from Benjamin Jones, an associate professor at Northwestern University's Kellogg School of Management. He examined biographical data over the past century for more than 700 Nobel laureates and renowned inventors.
His conclusion: "Innovators are productive over a narrowing span of their life cycle." In the early 20th century, he found, researchers at the times of their greatest contributions averaged slightly more than 36 years old. In recent decades, innovation before the age of 30 became increasing rare, with the peak age of contribution rising toward age 40. Meanwhile, the frequency of key contributions has consistently diminished by researchers in their early or mid-50s.

More here.

Connecting to Internet a Slow Process in Arkansas

Arkansas ranks 46th in the nation when it comes to how long we have to wait to connect to the Internet, according to a study released today from the Communication Workers of America. The state's Internet connection speed actually fell in the ranking from 42nd in 2007.

Rhode Island took the top spot, with Kansas and New Jersey just behind.

What's really scary: at the present rate - a gain of only four-tenths of one megabit per second - it will take the U.S. more than a century to catch up with current Internet speeds in Japan.

Connect Arkansas could be a saving grace for our state, as it is implementing a community-based initiative to link all Arkansans, especially in rural areas, to the Internet. The Connect Arkansas Broadband Act was signed into law by Gov. Beebe last year to ensure the creation of a competitive broadband, or high-speed Internet, infrastructure.

Read more here, or click here to view the state rankings.

Economic Leaders Say State Should Invest in Technology Companies

The Task Force for the 21st Century Economy, at the behest of Little Rock attorney and Accelerate Arkansas member Watt Gregory, is considering lifting a constitutional ban against investing public money in private enterprise.

Other leaders like John Ahlen of the Arkansas Science & Technology Authority support the change as well, saying it will increase the number of knowledge-based businesses, a goal of the Arkansas Economic Development Commission and its Innovate Arkansas program.

Gregory told the Task Force for the 21st Century Economy that allowing the Arkansas Economic Development Commission and other state development entities to invest in small start-up "knowledge-based" businesses would pay off with high-paying jobs unlikely to be moved offshore.
The Legislature would define "technology companies," Gregory said.
Provisions in the state constitution - Sections 5 and 7 in Article 12 - that prohibit state equity investments are archaic and should be repealed, Gregory said.
He said that state-economic development levers need to be "more nimble." The draft amendment should be ready for review within a couple of weeks, Gregory said. If the Legislature approves it next year, it could be on the November 2010 general election ballot for voters to decide on, he said.

More here.

Little Rock Inventor Markets Product in Vegas

Check out the Las Vegas Sun's feature on Scott Bonge of Little Rock, inventor of the GoateeSaver. Bonge, who also was featured in an Innovate Arkansas article about his membership in the Arkansas Inventor's Network, has just returned from a trip around the U.S. to market his invention.

In Las Vegas on Tuesday, Day 5 of his 8,000-mile road trip (he says he's glad he's driving a hybrid), Bonge was searching out the press, celebrity goatees and strangers on the street. He is selling the GoateeSaver for all he's worth.
And these days, most of what he's worth is in the GoateeSaver.
In the past, Bonge was a stockbroker making seven figures a year. After the dot-com crash, he worked as a pharmaceutical salesman, making six figures a year. Then, two years ago, he was laid off. He found himself unemployable, because of his old salary. No one, he says, wanted to hire anyone who had grown accustomed to such a salary.
So he turned to an idea he'd had five years earlier - one that was right under his nose.

More here.

Innovation ROI Leaves Much to Be Desired

A study conducted by Boston Consulting Group and BusinessWeek found that company execs aren't satisfied with the ROI from innovation spending. The study also found that fewer companies plan to increase innovation investments.

The study, conducted with BusinessWeek earlier this year, surveyed nearly 3,000 executives worldwide. The report reveals that 43 percent of executives surveyed said they were satisfied with their return on innovation spending. This is down from 46 percent last year and 52 percent in 2006. The number of executives who said their company will increase investments in innovation continued to fall. This year, 63 percent of executives said innovation investment will rise at their workplace, compared to 67 percent last year and 72 percent in 2006.
Innovation that leads to new products and services for existing customers is the most critical type of innovation to their company's future success, according to 89 percent of executives surveyed.
The report cites lengthy development times and risk-averse corporate culture, along with the difficulties of finding the right idea and the lack of internal coordination as the top four factors driving down the return on innovation spending.

Read more from The Boston Globe here, or click here to view the study (pdf).

YouNoodle Claims to Predict Startups' Worth

A new startup called YouNoodle claims the ability to predict the valuation of early-stage startups. Its database was developed by assessing 3,000 companies using a model with four components: the team, financial factors, the concept and advisors. Startups fill out a survey about these topics and receive a valuation based on their answers.

The new venture has caught the attention of folks like Michael Arrington of TechCrunch, a company that YouNoodle values at $85 million.

If YouNoodle actually works--and that remains a big if--it could drive substantial change in the venture capital industry. Historically venture capitalists used their wisdom and judgment to inform investment decisions. Investors that demand lower stakes or less control in companies could more confidently invest in startups.
There's an important lesson in YouNoodle's algorithm for innovators inside a corporation as well. Most corporate innovators spend a great deal of time thinking about one of YouNoodle's four variables - the concept. But almost everyone knows that highly innovative concepts will necessarily require numerous iterations before succeeding. Having the right team, the right advisors--inside and outside the company--and the right approach to financing are under-appreciated factors that influence the ability to iterate to success.
You can reasonably predict that venture capitalists will be highly skeptical of the ability of algorithms to trump their judgment. That skepticism might be warranted. But YouNoodle is just one articulation of a general movement bringing greater predictability to the fuzzy world of innovation. People who understand how to use predictive patterns like YouNoodle's or the disruptive innovation model can position themselves to beat the so-called experts.

Read the full Harvard Business Review article here or Arrington's posts here and here.

Task Force Suggests Linking State Agencies

The Task Force for the 21st Century Economy released its interim report to the governor and legislature yesterday. One suggestion from the group is that the Arkansas Economic Development Commission, Arkansas Development Finance Authority and Arkansas Science and Technology Authority be better linked.

Click here to view the full report or here to read more from the Arkansas News Bureau.

Also, KTHV featured UAMS professor Bill Gurley in its report on the study. Gurley is the developer of Omnibalm, which is sold by Innovate Arkansas client Balm Innovations, LLC.

Senate Committee Passes SBIR/STTR Reauthorization

Rick Shindell of SBIR Gateway reports in his SBIR/STTR Insider newletter today that the Senate Committee on Small Business and Entrepreneurship passed the "SBIR/STTR Reauthorization Act of 2008."

The following are some (edited) items of interest that Shindell notes are included in the bill:

1. Award Amounts - Both SBIR and STTR raised to $150k phase I, and $1m phase II, with the ability to exceed the guidelines by a maximum of 50%. The agencies must report and justify all awards exceeding the guidelines.
2. Increase in SBIR/STTR Cap (allocation) - SBIR will be increased from 2.5% to 3.5% at a rate of .1% over 10 years, EXCEPT for NIH, which will stay at 2.5%. STTR will double from 0.3% to 0.6% over 6 years.
3. VC Eligibility - A "small business" that is majority owned and controlled by multiple VCs will be eligible to participate in the SBIR program under certain conditions: No single VC can own more than 49% of the small business entity; the VC must be a United States Venture Capital Company; the VC owned small business must register with the SBA when they submit an SBIR proposal. The NIH will be limited to awarding not more than 18% of their SBIR award funding to such VC owned small businesses, and the remaining 10 agencies are limited to 8%.
4. Length of Reauthorization - 14 years, resulting in new sunset dates of September 30, 2022, for SBIR and September 30, 2023, for STTR.
5. Agency Administrative Funding - Not mentioned.
6. Direct Access to Phase II (bypassing phase I) - A defiant "no no"
7. Crossover between agencies - A phase I at one agency becoming a phase II at another is permitted.
8. Crossover between SBIR and STTR - A phase I of SBIR can become a Phase II of STTR, or vice versa.
9. Commercialization Pilot Program (DoD) - Is supported.
10. Commercialization Pilot Program (Civilian Agencies) - A new pilot program that requires expert analysis, not within the scope of this report.
11. FAST/ROP - A refocusing of the Federal & State Technology Partnership Program, and the Rural Outreach Program, that the SBA Administrator may fund up to $5m per year, sans any new appropriation.
12. Ability of a small business to partner/subcontract or enter into a CRADA with a federal laboratory or FFRDC without the need of an SBA waiver.

Click here to read the full text of the bill.

Class on Business Growth to Be Offered in Hot Springs

Starting in September the Henderson State University Small Business Development Center will begin offering the FastTrac GrowthVenture program to aid business owners looking to grow.

Here's more from the ASBDC's Biz Bytes e-newsletter:

FastTrac GrowthVenture is designed for existing small business owners, with the focus of helping them learn and implement key business strategies to transform and improve their business. This 10-week program provides participants with information on strategic planning, legal issues, market research and analysis, financial documents and cash flow management. It also covers financing methods and growth strategies for small business owners.

More here.

Walton-backed First Solar to Build 2nd Power Plant

First Solar, which is funded by the Walton family of Wal-Mart fame, announced this week that it will build a second solar power plant in Nevada using thin-film solar technology.

Tempe, Ariz.-based First Solar has already broken ground on the project with completion expected by the end of the year. That's record time, given that solar thermal power plants - which tend to be larger by orders of magnitude - can take years to receive regulatory approval and build. Also of note: The solar modules for the project will be manufactured at First Solar's Ohio factory, one of only two commercially operating thin-film manufacturing facilities in the United States. (The other is Energy Conversion Devices' thin-film factory in Michigan.)

Click here to read the post on Fortune's Green Wombat blog or here for a previous INOV8 post on First Solar.

Fayetteville Company Expects to Produce Alternative Fuel Globally

Fayetteville-based Bioengineering Resources Inc. is partnering with British chemical company INEOS to produce bioethanol fuel, according to a recent article from the Northwest Arkansas Times.

INEOS, the third-largest chemical company in the world and largest privately owned company in Britain, announced Monday that it aims to produce commercial quantities of bioethanol fuel from landfill waste based on technology developed in Fayetteville.
"This could be a pivotal event for Fayetteville. It could be a pivotal event for the world," said Steve Rust, president and CEO of Fayetteville Economic Development Council.
The process developed under the leadership of James L Gaddy, president of Bioengineering Resources Inc. of Fayetteville, changes any carbon-based material into ethanol.
"We expect the Fayetteville site to continue to be the technology center for INEOS Bio as it grows," said Bruce Walker, site manager for INEOS Bio in Fayetteville.
INEOS Bio was created July 1. It was created, according to a press release issued at locations worldwide Monday," to commercialize and license" the technology that developed during the last two decades by BRI.

Read more from the Northwest Arkansas Times here or click here to read the press release.

Open Innovation Continues to Gain Ground

We've mentioned InnoCentive here before, but a recent article from the New York Times sheds more light on how far the company has come, as well as the ever-growing trend of open innovation, or open-source science. Since the novel concept hit the software scene with open-source code, it since has emerged as a way to encourage innovation in areas ranging from academia to government.

InnoCentive began in 2000 as e.Lilly, an in-house innovation "incubator" at the pharmaceutical giant Eli Lilly, Mr. Spradlin said, with the company posting problems that its employees had been unable to solve. From the beginning the results were good, he said. "Most of our companies tell us they have a one-third or better solve rate on their problems and that is more cost-effective than anything they could have done internally."
The company says solvers come from 175 countries. More than a third have doctorates, Mr. Spradlin said, and while motivated by money, they also have a desire to solve "problems that matter."

More here.

Green Technology Gets Investment Boost

Investors are turning their attention to green technologies, a growing trend across the globe. GreenBiz.com provides analysis of the World Wealth Report 2008 by Merrill Lynch and Capgemini, which shows that high-net-worth individuals have increased investments in clean technology.

Total investments in clean technology in 2007 added up to $117 billion, up 41 percent from investments in 2005, a "robust" increase, according to the report. Venture capital investments went from $3.6 billion in 2006 to $5.2 billion in 2007. Most of the investments, according to the report, are from wealthy private clients.
Globally, 12 percent of HNWIs include green technology and alternative energy investments in their portfolio, and 14 percent of ultra-high-net-worth individuals (Ultra-HNWIs, those with at least $30 million in financial assets) have invested in green technologies.
...
North America comes in with the lowest percentage of investors, with five percent of HNWIs and seven percent of Ultra-HNWIs.
North American investors were the only ones to report that social responsibility was a primary driver of green investments. About half of other investors said financial returns was the main motivating factor.

More here.

Phase I Funding Deadlines Announced

The Arkansas Small Business Development Center announces upcoming deadlines for entrepreneurs planning to compete for Phase I awards under the Small Business Innovation Research and Small Business Technology Transfer programs.

Agency: U.S. Health & Human Services -- National Institutes of Health, Food & Drug Administration & Centers for Disease Control
Proposal Deadlines (standard): August 5, December 5, 2008
Proposal Deadlines (AIDS related): September 7, January 7, 2009
On-time submission requires submittal by 5:00 p.m. proposer's local time
Web Link

Agency: U.S. Department of Agriculture
Proposal Deadline: September 4, 2008 [5:00 p.m. EDT]
Web Link

Agency: National Aeronautics & Space Administration
Proposal Deadline: September 4, 2008 [5:00 p.m. EDT]
Web Link

Agency: National Science Foundation (SBIR solicitation only)
Proposal Deadline: December 4, 2008 [5:00 p.m. proposer's/submitter's time]
NOTE: Proposals submitted for December 4 deadline accepted beginning November 4, 2008
Web Link

ASTA Announces New Fiscal Year Funding

Need funding? The Arkansas Science and Technology Authority has roughly $357,000 in grant funding through the Technology Transfer Assistance Grant program.

The program, created in 1994, assists Arkansas enterprises in the improvement of products or processes through the transfer of technical solutions to technology-based, industry-driven problems to enhance competitiveness.

Qualified applicants are eligible for up to two grants, each valued at $3,750 per fiscal year, to cover costs associated with transferring new or existing technology from a qualified provider such as a public or private consultant, laboratory or institution. Each project must have a time frame of no longer than 90 days.

More here.

Sustainability Taking Hold in Arkansas

Case Stack CEO Dan Sanker makes the case for sustainability to the Governor's Task Force for the 21st Century Economy, The Morning News reports.

Arkansas' leading industries did not create new products so much as refine and improve ways to make existing ones, Sanker said. That was the secret to the success of Wal-Mart, J.B. Hunt and Tyson Foods, among others, he said. "This wasn't Silicon Valley. It was another guy who made cheaper chicken," he said.

What if "sustainability" is "just another buzzword like 'green,'" asked task force member and Arkansas Economic Development Director Maria Haley. "How can you assure us that's not what this is?" By moving his company here, Sanker replied: "I'm staking my life on it."

We can live the lifestyle we want and so can other people who are catching up to the West economically, Sanker said. "We can do this through technology, and sustainability is technology. It is a business. I'm not a philanthropist."

More here.

Choosing the Right Bank

Forbes offers small business owners some advice on how to choose the right bank.

The first: online services. In today's hyper-competitive environment, dashing to the bank during daylight hours is a quaint notion for many busy entrepreneurs. "The Internet is having a huge impact on small businesses," says Sanjeev Dheer, chief executive of Cash Edge, a Manhattan-based software developer for more than 600 banks around the globe. "It allows them to be more accurate and efficient than ever before."
...
Next on the menu: specific industry expertise. Not all banks are comfortable financing companies in certain industries or in certain stages of their growth cycles, notes Bob Siewert, director of the Center for Commercial Lending and Business Banking and senior vice president of the American Banking Association.
...
Finally, says Siewert: Get to know at least two people at the bank (say, the credit manager and the local branch manager). It never hurts to hedge your bets--especially in a credit crunch.

More here.

The Case for Open-Source Innovation

Check out the Wall Street Journal's interview with MYSQL chief Marten Mickos, who talks about why open sourcing fosters innovation.

MYSQL chief Marten Mickos isn't afraid his rivals in the database-software industry will ever overtake him. "Let them try," he says. "Our secret is in the way we operate our culture, and I'm convinced others cannot imitate that."
Mr. Mickos has about 12 million reasons to feel that way -- the number of (mostly unpaid) programmers in MySQL's collaborative community. The company has been committed to "open-source" innovation since its founding in 1995.
Like Linux and others, it shares its source code free of charge, giving programmers everywhere permission to debug, add capabilities or otherwise modify the product before redistributing it. (The company makes money by selling commercial licenses and offering support and services.)

More here.

Is Venture Capital in Crisis?

The National Venture Capital Association is calling it a crisis, though others say it's not that serious. According to the NVCA, for the first time in 30 years not one company backed by venture capital went public in the second quarter.

Here's an excerpt from Red Herring:

Also down were mergers and acquisitions involving venture-backed companies. For the quarter, the NVCA counted 50 deals worth a total of $2.4 billion. That meant first half's total of 120 M&A deals declined 28 percent versus the first half of 2007.

Still some VCs with a contrarian bent maintain that truly innovative companies should not fret. After all, it was in this kind of climate that the last world-changing company was spawned-Google.

"I think this is a great environment to launch a company," said Rick Heitzmann, managing director at FirstMark Capital, the backer of StubHub, Flarion and Netegrity that was formerly known as Pequot Ventures. "Look at Google. That [company] got a lot of traction during the last recession. It's a great time to start a company, but you've got to find patient investors."

More here.

In other news, find out what the NVCA is lobbying for in a recent report from Forbes.

Learning from Failure

Jia Lynn Yang poses a familiar question to three innovation experts in the July 7 issue of Fortune magazine (sub. req'd.): "My latest product launch was a failure. How do I move on?"

The gist of the article is best summed up with a quote from James Dyson, inventor of the Dyson vacuum cleaner and founder of Dyson: "...failure is essential to innovation."

Dyson, along with Bobby Kotick, CEO of Activision, and Tom Kuczmarski, consultant and Kellogg School of Management professor, outline techniques for using failure to your advantage.

Here's an excerpt:

How can I learn from the experience? "Look at the underlying assumptions that were made in the development of the product. Examine it from three angles: What was the intended benefit for consumers? Did you anticipate the competition? And what did you assume about cost and projected revenues?" -Kuczmarski

Entrepreneur Resources Hone Skills

Entrepreneur.com offers a few tips for becoming more business savvy, from learning a new language to streamline overseas endeavors to playing games to polish finance skills.

Think Globally
Your life may not be rife with diabolical foreign agents, but chances are you're finding more reasons to do business overseas. If you wish to talk with your vendor from Shanghai in his native tongue, the Rosetta Stone language-learning software is one of your best bets. But Denise Dubé, a staff writer with travelgirl magazine, suggests checking out Earworms, which is popular in Europe and was also recently introduced to the United States. What's an earworm? When catchy song lyrics seem to be stuck in your brain--that's an earworm. The software uses earworms--memorable music--to help teach languages.
...
Play Some Games
Maria Elena, 43, a Midland, Texas, business coach, public speaker and adjunct business professor at Midland College, highly recommends Cashflow 101, a board game created by author and business guru Robert Kiyosaki.
Though it aims to help individuals understand how to create passive income, "it's great for businesspeople," Elena says.
Carol Cole-Lewis, 53, is equally enthusiastic about Cashflow 101. She is the co-owner with her husband, Jim Connolly, 51, of CEO Chef Inc., a Los Angeles firm that uses cooking to help companies with team building, and Cole-Lewis says that it's "a great tool in learning the basic principles of accounting through a fun and realistic business simulation." And in certain instances, Cole-Lewis adds, you can plug in your own numbers instead of the ones Kiyosaki provides and get a lot of perspective on your own situation.

More here.

From Layoffs to Startups: Legal Implications of Telling All

Been laid off recently? Well don't be too eager to vent about your experience to the world via blog post or other Web content.

As the New York Times' Shifting Careers blog points out in a recent post, those who go on to start their own businesses may jeopardize their ventures. The legal implications surrounding such rants - using or exposing confidential information, violating a non-compete agreement or defaming a former employer - may come back to haunt you.

More here.

Don't Underestimate Angels

In a recent interview with The Deal.com, the Angel Capital Association's new chairman says the group has quadrupled its membership as angel investing continues to grow.

Angel investor groups are playing an increasingly important role in funding early-stage tech companies, which requires so little money these days that it's inefficient for venture capital firms to participate in.
"It's become rather common for angel groups to lead $1 million and $2 million Series As," says Huston. "That's good news for the VC community, because when they see the deal, much more of the risk has been baked out of it."
If you're tempted to dismiss angel investor groups as social clubs, consider a recent ACA survey, which indicated that angel investor groups generated 2.6 times their invested capital in 3.5 years from investment to exit, roughly 27% internal rate of return, or IRR, a return that compares favorably to that of other private equity investments, including those of early-stage venture capital, according to the report.

More here.

Deadlines Approaching for SBIR/STTR Proposals

The Arkansas Small Business Development Center reminds entrepreneurs of upcoming deadlines to compete for Phase I funding through the Small Business Innovation Research and Small Business Technology Transfer programs.

Agency: U.S. Department of Homeland Security (Science & Technology)
Revised Proposal Deadline: July 8, 2008 [4:30 p.m. ET]
IMPORTANT: Email required by June 20 to get a proposal number assignment
Web Link

Agency: U.S. Department of Homeland Security (Domestic Nuclear Detection Office)
Proposal Deadline: July 16, 2008 [12:00 noon ET]
Web Link

Agency: U.S. Health & Human Services -- National Institutes of Health, Food & Drug Administration & Centers for Disease Control
Proposal Deadlines (standard): August 5, December 5, 2008
Proposal Deadlines (AIDS related): September 7, January 7, 2009
On-time submission requires submittal by 5:00 p.m. proposer's local time
Web Link
Agency: U.S. Department of Agriculture
Proposal Deadline: September 4, 2008 [5:00 p.m. EDT]
Web Link

Agency: National Science Foundation (SBIR solicitation only)
Proposal Deadline: December 4, 2008 [5:00 p.m. proposer's/submitter's time]
NOTE: Proposals submitted for December 4 deadline accepted beginning November 4, 2008
Web Link

More here.

Social Networking: Innovative or Impractical?

Jeffrey Phillips of Innovation Tools examines whether companies can truly benefit from having a social networking component on their Web sites. Phillips argues that businesses that do may be inundated with too many ideas that will never be implemented.

If it seems to be too easy to be true, then it's probably a new website. Innovation requires more than simply collecting a lot of ideas from a generally dispersed audience and allowing them to vote on the ideas they submitted. If you don't direct the idea generation into topics of interest to you, the suggestion box will be full of ideas of interest to the submitters but quite possibly at odds with your product or service strategy. Then you've collected ideas and set expectations about those ideas with your customers that you don't want to implement.

More here.

Fort Smith Gets Innovative

The winds of change are blowing in the Fort Smith area.

Heeding the call from business leaders, the executive director of the Innovation & Entrepreneurship Center is considering creation of an angel investor forum; although the director says the area still needs more high-tech companies ready to benefit from equity capital.

"Great ideas have to get legs," Mullikin said. "Somebody has to say, ‘I'll put some money into that.' And that's venture capital, and it goes on in the United States all the time. But you can do the same thing on a smaller scale."

But according to Michelle Stockman, executive director of the Innovation & Entrepreneurship Center in Fort Smith, the region just doesn't have the high-tech companies that are ready and able for equity capital.

And while Stainless Innovations' story is great, Stockman said, it falls back on what many small businesses do in the first place to get help - rely on loans or family and friends for investments.

Mullikin acknowledged that talking Bolin into bringing in investors to keep the company going was easier because they were friends, but if there was a place or an incubator for startup companies or struggling companies to turn to, perhaps owners would start thinking more about investment backing instead of winging it themselves.

Stockman said she's had an idea for an angel investor forum, but if the region isn't ready yet and a group is formed, she's afraid they may see an investment opportunity outside the area and take that on.

"It doesn't mean in two or three years we won't be there," Stockman said. "But the ball is rolling."

UAMS Pediatrician Comments on Canadian Pain Studies

Kanwalijeet Anand, a pediatrician and pain expert at the University of Arkansas for Medical Sciences, provided commentary in the Canadian Medical Association Journal recently about studies on newborn pain. Canadian doctors have found that sugar water helped newborns and a cooling spray eased pain for children while receiving injections or having other intravenous procedures.

Helpful Hints from the Arkansas Small Business Development Center

The Arkansas Small Business Development Center highlights the benefits of its online training courses, saving gas being one of them, in its Biz Bytes newsletter.

Relevant - Courses are designed to enhance skills of small business owners and their employees in the areas of Money, Marketing & Management.
Convenient - Train on your time from the comfort of your own home or office with unlimited access 24 hours a day, 7 days a week.
Easy to Use - You can maintain control of your learning by progressing at your own pace.
Immediate - Begin training at the click of a mouse.
Affordable - Keeps your costs low. Courses are only $30 each...plus save on your gas!

Read more here.

Also, the center encourages entrepreneurs to take advantage of the Small Business Administration's online tax savings resource center.

1. The FACT SHEET provides a clear explanation of the small business tax benefits.

2. The DEPRECIATION CALCULATOR tool provides an estimate of the first-year depreciation available under the provisions.

3. The ONLINE SEMINAR, a brief tutorial, summarizes the tax benefits and concludes with the depreciation calculator.

More here.

Kudos to UA's Solar Boat

Not only did the University of Arkansas play host to the 2008 Solar Splash Competition, the school's solar boat team took first place. UA is set to host the event - the world's only international, intercollegiate solar electric boat design and race competition - for the next three years.

Read more here.

Study Ranks Arkansas Low in Knowledge-Based Economy

Arkansas is ranked 49thin the nation when it comes to its ability to profit from hi-tech startups, according to a recently released study from the Milken Institute.

The 2008 State Technology and Science Index ranks states "in terms of their technology and science assets, and their ability to leverage those resources to achieve economic growth." Arkansas ranked in the top ten for verbal SAT scores but 50th for doctoral engineers.

Massachusetts ranked first, followed by Maryland, Colorado and California. Mississippi ranked last for the second consecutive time. West Virginia, Arkansas and Kentucky all remained in the bottom five, just as they were in the last report in 2004.

According to the report, regional competition for technology industries has increased since the last release of the Index in 2004. Not only are states vying with each other for human capital and resources, but countries like China and India are increasing the competition on a global level.
At the same time, the post-9/11 decrease in international graduate students and flat or decreased federal funding for research and development are applying negative pressure to states that are not making serious investments to build and retain these 21st century industries.
"States that have a vision and a plan for building and retaining high-wage jobs and viable industries are finding ways to invest in their science and technology assets," said Ross DeVol, director of Regional Economics at the Milken Institute, and lead author of the study. "The changes in this year's Index give a good measure of who is ahead in the increasing competition for scarce human capital and other resources needed for a successful industry."
The states in the best position to succeed in the technology-led information age are (with 2004 rankings):
1) Massachusetts (1)
2) Maryland (4)
3) Colorado (3)
4) California (2)
5) Washington (6)
6) Virginia (5)
7) Connecticut (10)
8) Utah (9)
9) New Hampshire (12)
10) Rhode Island (11)

Click here to view the full report or here to read the official press release.

Upcoming Deadlines for SBIR/STTR Proposals

The Arkansas Small Business Development Center's Tech Track e-newsletter lists upcoming deadlines for SBIR/STTR proposals.

Listed below are the upcoming deadlines for entrepreneurs planning to compete for Phase I awards under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

For details about SBIR/STTR and advice on proposals, please contact Mildred Holley at mxholley@ualr.edu, 501.683.7700 or 800.862.2040 (AR only).

Agency: U.S. Department of Homeland Security (Science & Technology)
Proposal Deadline: June 27, 2008 [4:30 p.m. ET]
IMPORTANT: Email required by June 20 to get a proposal number assignment
Web Link
Agency: U.S. Department of Homeland Security (Domestic Nuclear Detection Office)
Proposal Deadline: July 16, 2008 [12:00 noon ET]
Web Link
Agency: U.S. Health & Human Services -- National Institutes of Health, Food & Drug Administration & Centers for Disease Control
Proposal Deadlines (standard): August 5, December 5, 2008
Proposal Deadlines (AIDS related): September 7, January 7, 2009
On-time submission requires submittal by 5:00 p.m. proposer's local time
Web Link
Agency: National Science Foundation (SBIR solicitation only)
Proposal Deadline: December 4, 2008 [5:00 p.m. proposer's/submitter's time]
NOTE: Proposals submitted for December 4 deadline accepted beginning November 4, 2008
Web Link

LinkedIn Co-founder Talks Funding

LinkedIn co-founder Reid Hoffman discusses the latest round of funding for the company and offers some insight into the different options for raising capital with Yahoo! Tech Ticker's Sarah Lacy.

Late Wal-Mart Heir Backed Solar Power

Time magazine reports on the status of solar power in the U.S., namely noting a $250 million investment by the late John Walton of Wal-Mart fortune, which has boosted First Solar to the forefront of the industry.

It was that reality that led the solar arm of BP to pull out of the thin-film industry in 2002, claiming that the economics would never add up. But the numbers have changed, thanks largely to the enormous success of Phoenix's First Solar. Though the company was launched in 1999, it has its origins in a solar start-up that had been around since the mid-1980s. First Solar spent years tinkering before moving to mass production. It was able to weather those early days of profitless experimentation because it had a rich, patient backer: Wal-Mart heir John Walton, who pumped $250 million into First Solar before his death in 2005.
Walton's investment has paid off handsomely. Since it began commercial production of thin-film modules in 2002 (much of the output has been sold to small-scale solar farms in Germany, where generous subsidies have primed the market), the company has done nothing but grow. With factories in Arizona and Germany and another being built in Malaysia, First Solar should be producing 1 gigawatt of solar power yearly by the end of 2009. "They've fully overcome the technological barrier with large production and low defects," says Rhone Resch, president of the Solar Energy Industries Association. "Their plants are fully automated--it looks just like a silicon-chip factory."

Read more here.

The Best of Entrepreneur Blogs

The Wall Street Journal has scoured the Internet to find "15 Entrepreneur Blogs Worth Reading." All of the blogs featured "give" their readers something, anything from resources to inspiration.

Check it out here.

Report: VC Funding for Nanotech Startups Doesn't Reflect Returns

A new report from Lux Research says that venture capitalists are short-changing nanotechnology startups in the areas of health care and life sciences, despite higher returns from those companies.

IndustryWeek summarizes the report in a recent article, which states that nanotech startups in the manufacturing and materials industries are closing more deals.

"Healthcare and life sciences companies have accounted for a staggering $1.68 billion of the $2.57 billion total valuation of nanotech start-ups at IPO [initial public offering]," says analyst Jacob Grose. "Correspondingly, revenue multiples at IPO have been an order of magnitude higher for the healthcare segment [206.2x on average] than in the four other segments we track, yet last year more nanotech VC deals closed in manufacturing and materials than in healthcare and life sciences."
...
That's just one of the findings in Lux Research's new report, "How Venture Capitalists Are Misplaying Nanotech." The report also notes:
The top 5% of venture-backed nanotech start-ups, measured by cumulative capital invested, have received $1.24 billion since 1991, which equates to 32% of cumulative venture capital funding through 2007.
The energy and environment segment attracted the most nanotech venture capital in 2007, with 17 deals worth $227.2 million.
The United States accounted for 90% of total venture capital activity by value.

Read more here.

Can Government Drive Innovation?: The Debate Continues…

The debate over whether government should play a role in spurring innovation continues, as Bruce Nussbaum reiterates his stance on the topic in his BusinessWeek blog.

Nussbaum specifically takes aim at a column from The Economist posted earlier this month, which criticizes government involvement in innovation as bad policy.

The article is called "Can America Keep It's Innovative Edge? Yes-If it Ignores the Techno-Nationalists." The heart of the critique is that anyone advocating a government role in promoting innovation is proposing bad policy and is a techno-nationalist. The Economist is looking at innovation policy from a European point of view, where there is a tendency for governments on the Continent to pick high tech corporate champions, with little success. Moreover, heavy government regulation and high taxes undermine entrepreneurship and start-ups.
I appreciate that point of view and agree with much of it, especially the failure to create a culture of risk on the Continent. But The Economist goes on to criticize my post suggestions as "a tax-payer to-do list" of big spending. The Economist thus puts the discussion of a National Innovation Policy within an old paradigm of conservative vs. liberal economic policies--and then comes down on the wrong side of that debate.

Read the full post here. Click here for The Economist's column.

Is Wal-Mart Going Greener in Canada?

An Ontario online publication, the Daily Commercial News, reported last week that Wal-Mart Stores Inc. is working on a plan with Menova Energy to test its solar roof technology at an Ontario store.

Saul Chernos reported that Wal-Mart Canada and Menova have been working on the plans for two years, which would include installation of Menova's Power Spar-brand solar concentrator system. According to the article, the Ontario Ministry of Research and Innovation provided a $2.8-million forgivable loan and Wal-Mart Canada plans to contribute an additional $3 million.

Menova president David Gerwing compares government incentives:

Gerwing says Ontario is particularly attractive for a project like this because the provincial government maintains a standard offer program - currently under review - for renewable energy projects.
The U.S. has capital-based incentives, which only served to raise prices, but Ontario followed the lead of Germany's production-based incentives.
"These things need to be long-term. Germany's is 25 years, and it has the second biggest (solar) industry in the world," Gerwing says.

Read more here.

Nanotechnology in the News

Nanotechwire reports this week on a couple of important items in the nanotechnology industry.

First, the House of Representatives passed a bill that reauthorizes the National Nanotechnology Initiative, a move that is aimed at conducting environmental and safety research in the field.

H.R. 5940 assigns responsibility to a senior White House official to ensure that a detailed implementation plan for Environmental, Health, and Safety (EHS) research is developed and executed - a plan that specifies both near-term and long term objectives, provides a timeline for achieving the near-term objectives, and identifies the funding, by objective and by agency, necessary to carry it out. The legislation also requires the plan to be responsive to recommendations from the NNI external advisory committee and requires the development of a publicly accessible database containing every EHS research project supported under the NNI.
...
In addition to the emphasis on environmental and safety research, the bill requires the NNI to increase its emphasis on ways for moving basic research results out of the laboratory and into commercial products, materials, and devices. The bill also creates new nanotechnology education programs to attract secondary school students to science and technology studies and to help prepare the nanotechnology workforce of tomorrow.

Read more here.

Second, RNCOS recently released "Nanotechnology Market Forecast to 2011," which evaluates the global nanotechnology market and provides an overview of emerging trends.

Key Findings
The rapidly commercializing nanotechnology market presents potential market in various industrial sectors including energy, textiles and life sciences.
The market for nanotechnology in manufacturing goods is forecasted to grow at a CAGR of 33% during the period from 2007 to 2015.
The market for nanotechnology into consumer products is projected to grow at an AAGR of 9.4% from 2005 to 2010.
The global spending on nanotechnology grew by 29% in 2006 with government share standing at 52% followed by corporate and venture capitalist spending.
Nanotechnology investments by the government were initially led by Europe, North America and Japan. However, countries such as Russia, China, Brazil, Turkey and India have joined the trend and are making significant investments into the sector.
Asia-Pacific is anticipated to be the most important region for the sales of nanotechnology products in near future, followed by the US and Europe at similar level.

Read more here.

To Blog or Not to Blog

YoungEntrepreneur has a lengthy, but helpful post this week on everything entrepreneurs need to know about blogging: what it is, how it can help you and how to do it effectively.

Blogs are not one-way. They are two-way communications that can be observed by millions. Michael Dell has used the feedback very profitably - good and bad. He has used the information to hone Dell Computer's products and processes. This immediate and open communications has enabled the company to gain the #1 position in the PC industry.
As with Dell's and other corporate executive weblogs, the sites also provide a fast and direct means of conducting research of direct customer experience, company perception and review policy and programs in near real-time.

Does your company have a blog? Is it effective?

Read more here.

Online Resources Available for Startup Funding Decisions

Inc. Technology provides entrepreneurs with online resources to learn more about angel, venture capital and bootstrap funding for their startups.

This is an important decision every startup founder has to make -- where to raise their funding. Fortunately, there are resources on the Internet that can help you make the right decision. The three viable sources at the very early stages of a company are:
Friends and family. Or yourself, if you can afford it. The Web provides an assortment of resources to read up on bootstrapping, from online communities of entrepreneurs to Guy Kawasaki's blog.
Angel investors. Usually wealthy individuals, but includes outfits such as Y Combinator. (My firm Cambrian Ventures is also in this category, although we are currently not actively seeking investments)
Venture Capital (VC). These are private firms that manage pools of equity capital that is invested in high growth, entrepreneurial companies. The National Venture Capital Association provides resources about VC as do such private firms as VentureOne and vFinance.

Read more here.

Changes in the Venture Capital Market

Yahoo! Tech Ticker reporter Sarah Lacy talks with Jeff Clavier of SoftTech VC about the changing role of angel investors, the lure of Web 2.0 companies and other venture capital trends.

Asian, European Companies Closing in on U.S. Lead in Innovation

The latest news in the venture capital world is that, while the U.S. is holding on to its lead in innovation, other countries in Europe and Asia are providing some competition. The news comes in the form of a study released Tuesday by Deloitte LLP and the National Venture Capital Association in which venture capitalists around the world were surveyed.

Here are some key findings:

For instance, 21 percent of the 398 VCs surveyed said Germany had the best clean technology versus 56 percent for the United States. Excluding U.S. VCs, however, the gap narrowed to 35 percent for the United States versus 24 percent for Germany.

Though 70 percent of respondents gave the United States highest marks as the primary innovator in semiconductors and electronics, Taiwan’s combined primary and secondary score was 31 percent, while Japan’s was 26 percent.
…
The survey also found that U.S. VCs are putting their money where their map is, with 57 percent investing in foreign markets.
…
Although 87 percent of VCs called the United States the leader in software, 35 percent viewed India as the secondary market, with the United Kingdom (13 percent), Israel (11 percent) and Germany (9 percent) trailing behind.

Read the full article from Red Herring here or click here to read the press release from the National Venture Capital Association.

Book Review: 'The New Age of Innovation'

Check out BusinessWeek Online reporter Helen Walters' review of the popular new book, "The New Age of Innovation: Driving Co-Created Value Through Global Networks" by C.K. Prahalad and M.S. Krishnan.

Here is an excerpt:

The pair's book, The New Age of Innovation: Driving Co-Created Value Through Global Networks (McGraw Hill Books, which, like BusinessWeek, is a unit of The McGraw Hill Companies), revolves around two ideas, laid out on the first page of the first chapter. N=1 states that "value is based on unique, personalized experiences of consumers." That is, even companies serving 100 million consumers need to focus on individuals. R=G, meanwhile, argues that since no company can hope to satisfy the varied expectations of so many consumers, it must diversify how it operates. "All firms will access resources from a wide variety of other big and small firms -- a global ecosystem," write Prahalad and Krishnan. In other words, companies' internal focus should be on gaining access to resources, not necessarily owning them.

Read more here.

More Venture Capital Flowing to India, China, U.S. Medical Device Industry

The San Francisco Chronicle reported recently on Dow Jones VentureSource's latest look at where U.S. venture capital dollars are going.

The report focuses on the first three months of 2008. It found that consumer and business services firms in China and India are getting more venture capital, along with the medical device industry in the U.S.

In the U.S., 603 deals totaling $6.8 billion were made.

Here are some highlights from the article:

India was the focal point of the report that Canning issued Thursday. She said investors are backing consumer and retail firms that benefit from the rise of the Indian middle class, as well as business services such as printing that cater to the nation's growing economic sector.
Canning said the same pattern holds true in China, which is drawing deals and money focused on startups that expand the country's industrial and consumer base. She said the capital flowing to India and China is designed to expand existing companies. By contrast, venture capital in the United States, Europe and Israel is usually dedicated to backing new technologies or services.
In the United States, Canning said, one noteworthy development has been growth in the medical device industry. In the first quarter of 2008, medical device companies got $866 million to develop new products. She said it was the first time that devicemakers got more money than biopharmaceutical startups, which received $771 million in the first three months of the year.

Read more here.

Non-compete Agreements: Do They Stifle or Spur Innovation?

Xconomy blogger Wade Roush discusses how the debate over non-compete agreements continues to be hashed out.

Boston, Mass.-based venture capital firm Spark Capital is partnering with Harvard Law’s Berkman Center for Internet & Society for a panel discussion later this month on the merits and drawbacks of non-competes.

People like Bijan Sabet, a general partner at Spark Capital, argue that non-compete agreements squelch the kind of unbridled innovation that occurs in Silicon Valley, where they are unenforceable.

Sabet is quoted as saying:

It’s an important topic. Ask anyone who isn’t free to accept an ideal job offer because of a non-compete. Or who essentially can’t work in their field of expertise at all for a year or two, since it’s so specialized that every company in the market segment is considered a competitor. Or, who has a great idea for a totally new business, but worries that the non-competes hammer will smash them if they try to make it real. (Those are the ones that we in the VC business come across most frequently.)

Of course there are arguments for the other side as well: Have you heard about key members of a company’s engineering department leaving en masse to start at a new company? Or a talented employee who created an innovation only to leave his present job to bring that innovation to market? There are legitimate issues of protecting intellectual property and trade secrets at stake.

If innovation is truly the engine of our ongoing economic growth and well-being—and I believe it is—then we need to take a hard look at this issue, and come with something better than what we have now.

Read the full post here.

You may also want to check out the Arkansas Business Litigation Blog's discussion of non-compete agreements.

How do you feel about non-compete agreements? Do they hinder innovation? Do they protect companies and their clients?

Green Innovations Gaining Ground

Going green is becoming a growing trend in the U.S. corporate world, with many new and existing businesses jumping on the bandwagon.

GreenBiz.com reported on the Environmental Defense Fund's first attempt at an annual review of green business practices, Innovations Review 2008:

This first edition of the annual review highlights more than 20 processes, products and technologies that were chosen based on four criteria: good for business, good for the environment, ready to be implemented and innovative. The Fund stayed away from concepts still in the research and development phase or anything that has been widely implemented and documented.
The report includes innovations in real estate, operations and manufacturing, fleets, packaging, finance, human resources, shipping, retail, banking and food and agriculture. In future editions, the Fund will look at innovations in other sectors.

Read more from GreenBiz.com here and from the EDF here.

Fayetteville Nanotech Company Receives Phase II SBIR Funding

Nanotechwire.com reported recently that Nanomaterials and Nanofabrication Laboratories, LLC (NN-Labs) of Fayetteville has been awarded $224,997 from the Environmental Protection Agency and the Small Business Innovation Research program to develop a "green alternative to fluorescent lighting."

The company is one of seven small businesses that will receive a total of $1.6 million to work on green technologies.

NN-Labs was awarded a Phase II SBIR contract, which is given to small businesses that successfully complete Phase I contracts. The company received a Phase I award for $69,988 in 2007.

Read more here.

Branding Your Business: Get Consumer Feedback

Anyone who knows even a little about marketing realizes the importance of brand recognition. That is, customers need to be able to recognize and identify with your company's logo.

BNET looked at one way to gauge consumers' reactions to your company's brand is through a project developed by Noah Brier, a strategist at Naked Communication. Visitors go to his "brand tags" site and enter the first word that pops into their heads after looking at a particular company logo.

Branding Your Business: Get Consumer Feedback

Anyone who knows even a little about marketing realizes the importance of brand recognition. That is, customers need to be able to recognize and identify with your company's logo.