Benjamin Kuo’s Blog

Stacey Higginbotham at GigaOm has an interesting commentary on the New York Times recent news item on the loss of women in science and technology.

Having worked with many excellent female engineers and software developers — as an employee, manager, coworker, and colleague — in my time working in the technology industry, I believe the New York Times is correct in pointing out a problem with a “pervasive macho culture” in many — but not all - technology companies. Unfortunately, you often see this repeated in the online blog world, where there has been a dramatic degradation of standards in terms of treatment of women. There’s been (at least to me) a noticeable shift in many technology blogs (which tend to be dominated by single males in Silicon Valley) which sometimes feels more like the boy’s locker room than the professional environment you’d expect in the technology workplace.

I’ve found — both through engineering school (the top Electrical Engineers in my graduating class were all female), in the workplace (I have hired as many top notch female software engineers as male, perhaps more–and worked for many brilliant women), and in industry groups (there are many very good technologists in the standards groups) — female engineers and scientists are as good as, and often have to be better than their male peers. The issue here isn’t competence or ability, it’s one of culture.

In some part, it feels like the more hostile environment is partially linked to the merging of professional and personal life, and a less professional work culture. The inherent mixing of personal pursuits and professional pursuits tends to encourage a much more relaxed atmosphere in male/female relations; which in many cases is more negative than positive. It also feel to me like there’s more issues with this in the online world than in the hard core technology rank and file–which has tended to be more of a meritocracy.

So what to do? In the blogging and online publishing world, at least, here’s what I think ought to be happening:

• Readers of blogs — that is, you and I — should complain, in comments and personally to people who insist on covering women in a degrading way.
• People should reward their attention, time, links, and referrals to bloggers who encourage, not discourage, women in technology.
• There needs to be a refocusing of priorities on substance, rather than style. In particular, I’m personally tired of “you should watch this video blog because the hostess is hot.” Really folks…
• Finally, we (men and women) should make an effort to point out the successful women in engineering and technology.

Message to new SoCal entrepreneurs: get over your Silicon Valley envy.

I’ve run into quite a few entrepreneurs lately who have what I like to call Silicon Valley Envy. It’s the–somewhat defeating–attitude that everything in Silicon Valley is better, that in order to validate your startup you need to have approval from the “in” folks in Silicon Valley. This is usually manifested to me by startups who gush that they had so-and-so Silicon Valley media mogul or so-and-so angel investor or VC talk about  their company.

One thing Southern California has been very good at, is going our own way. That means, we’ve create our own startups — kept our companies here even though Silicon Valley venture investors may have pressured companies to move to Palo Alto — developed companies which made business sense or which serve a market need — rather than just followed the latest “trendy” startup idea. This independent spirit set the stage for the last round of successful companies here in Southern California. The big successes here in SoCal — the Overtures, Pricegrabbers, MySpaces, Jamdats, LowermyBills, etc. in the world — didn’t have competitors and weren’t following the lead of the hot Silicon Valley startup of the day/hour.

I’ve always felt, personally, that bucking the trend, finding a different angle on the market, having somewhat of a renegade attitude has been one of the most valuable traits that an entrepreneur can have. About the last thing you want to see in an entrepreneur that is being unoriginal and just trying to “follow the crowd.” Following what “Silicon Valley” thinks isn’t going to get your startup — or Southern California — ahead.

I was chatting with a well regarded venture capitalists here in the area last week, and he was telling me how he looks for companies which aren’t trying to follow Silicon Valley’s “group think” — companies which are different, and which won’t have to compete in the intense pressure zone that is Silicon Valley’s “hot next thing.”

It’s one thing to take the lessons and successes of companies in Silicon Valley, and use that to your advantage to create the next big Southern California sucess — it’s another thing to latch onto the idea that you can’t consider yourself “made” until you get that pat on the head from the Silicon Valley “in” crowd. My advice to you: get over it, and start focusing on if you’re creating a sustainable, worthwhile business and less about becoming a Silicon Valley darling.

On of the more perennial questions I am asked by people is “how do I get into venture capital?”. There are plenty of venture capitalists offering up their words of advice, but here’s mine: sell your company for $1.4 billion dollars.

Jeffrey Stiefler, former Chairman and CEO of Calabasas-based Digital Insight, just joined a Bay Area venture firm, Emergence Capital Partners, and is just one of the many post-big-sale CEOs who have moved to the venture capital industry. Stiefler sold Digital Insight in February of 2007 for $1.4 billion. The firm was already public (having made its backers money in an IPO already), but the pattern is consistent with a long tradition of finding those deal makers who know how to build — and sell — their firms as venture partners.

I get countless numbers of people — from all parts of the high tech industry — who ask me how to get a gig as a venture capitalist. There’s lot of MBAs, quite a few business development folks, a few product managers, and countless VPs who’ve approached me over the years. Unfortunately — unless you’re lucky — it’s actually quite tough to find a position at a venture firm. Most VC firms are fairly static, not likely to hire very often, and there’s not a lot of latent demand for new talent.

However, successfully selling your company seems to be a more sure route to a venture role; some folks who have done this include Leo Spiegel over at Mission Ventures (he was chairman/CEO of Sandpiper Networks); Bill Woodward at Anthem Ventures (founder of Paracomp, which merged with MacroMind and went IPO); and Dave Gross and Rusty Reed of Great Pacific Capital (founded Fastclick, made enough to just start their own VC fund) — just a few of the folks that come to mind.

This is an occasional post to thank Clearstone Venture Partners, the venture firm which makes this blog page possible.  Clearstone — with offices in Santa Monica, Menlo Park, and Mumbai — it a top tier venture capital firm with a significant focus on Southern California. Some of the firm’s most notable investments: Overture Services (acquired by Yahoo); PayPal (IPO/acquisition); PeopleSupport (IPO); United Online (IPO); and many others. Please tell them you appreciate their support of socalTECH!

Comscore is reporting today that online video views grew to 11.5 billion views during the month of March, up 13 percent from February, and a 64 percent year to year gain. Most of those views — not a surprise — come from Google, and its popular YouTube video sharing site. 38% of the video market is represented by Google. The next most popular site for videos was Fox Interactive Media (namely, MySpace) which had 4.2 percent of the views for March.

Aside from the continuing domination of Google, I find it interesting that more and more of the ISPs and bandwidth providers I speak to out at conferences and events tell me that video now represents a huge majority of the traffic they deal with on a regular basis. Video has overtaken HTTP (web) protocol traffic as what they watch, tune their networks for, and gauge in order to plan and manage their networks.

The telecom folks I talk to tell me that this growth in video traffic has helped to fill what had been very empty (and expensive) pipes, which had been overbuilt during the dot com boom.  Although it looks like there’s still lots of un-used capacity out there in the world (I haven’t seen anybody building new capacity nowadays — mostly just buying up unused telecomassets), it should be interesting to see if the increase in content and use of video online will help spur another surge in the telecommunications and equipment provider market, as we finally grow past the latent capacity available today.

I’ve gotten a lot of response from my interview earlier this week with Richard Wolpert, about his new venture fund — which is backed by William Morris, Accel Partners, Venrock, and AT&T. It turns out, Richard also has his own blog — albeit mostly personal observations rather than info for entrepreneurs and others — althought a good one is his look at the difference between Hollywood and Silicon Valley: Valet Parking.

Jerry Greenfield — co-founder (and the “Jerry”) of Ben and Jerry’s Ice Cream, was the lunch keynote at the Los Angeles Venture Association’s annual Investment Capital Conference Wednesday. He spoke about the whole story behind how Ben and Jerry’s started, gave out lots (lots!) of free ice cream, and also talked about social responsibility and business. In telling the story’s of Ben and Jerry’s, Jerry spoke about how both Ben and Jerry knew nothing about ice cream or about business–not a great way to get a loan from the bank to start their business–and how, despite that, they opened up the first Ben and Jerry’s in Vermont and grew to become one of the most celebrated names in ice cream. (Photo to right: Jerry Greenfield on Wednesday at LAVA’s Investment Capital Conference).

Interestingly enough, I find in my wanderings around the technology industry here there’s a huge gap between the typical, first-time (and even second-time) entrepreneurs, and the folks who finance, service, and otherwise enable startup ventures. Even those agencies and nonprofits whose only purpose in life is to enable entrepreneurs to get to the next step find it extremely hard to reach out to entrepreneurs–who, typically, don’t know a lot of people and circulate in different networks than a venture capitalist might, for example.

I have frequently run across entrepreneurs who tell me they don’t know any venture capitalists or how to find them; on the other hand, I will be at a local business event and capital providers will talk about how they’re trying to figure out where the engineers hang out. There’s a gap between the many groups of folks who might find it useful to know one another, but who just don’t hang out with the same crowd.

It’s not all that surprising. Having been on one side of the gap when I was an engineer, often the typical entrepreneur is someone who has a lot of technical ability or a great idea — but really only knows the technical folks they work with. You know other engineers, the folks who sit on either side of your cubicle, and if you’re particularly outgoing you might know some other folks in the industry–but about the last place you’d be is networking and hob nobbing with capital providers at conferences. In fact, the technical folks are often fairly introverted (A large number of the CTOs and vice presidents of engineering I know are) — making it all that harder to connect the dots.

So what to do? There’s lots of potential success stories in folks who — like Jerry Greenfield describes, know nothing about their version of making ice cream or business.  In some part, I think fairly democratic events — like Andrew Warner’s efforts at organizing Lunch 2.0 efforts here in Los Angeles — help to mix up the crowd. The Lunch 2.0 crowd tends to attract a lot more of the “rank and file” folks who wouldn’t normally be out evenings networking with folks, plus the location at major companies is a huge incentive for otherwise sheltered employees to mix with the high tech community at large. Also, I think the efforts of technical organizations to bring some of that knowledge to engineers and others is very useful. There’s also an enormous effort by local nonprofits — CONNECT, OCTANe, Entretech, the Los Angeles Business Technology Center, and the Tritech SBDC are among some of the many organizations here — to try to impart some of those knowledge and connections to entrepreneurs.

Although Tesla Motors–which launched its electric sports car Friday in Santa Monica–may get the attention of Silicon Valley, there seem to be a lot more, Southern California companies at the forefront of the green automobile industry. We have more than a handful of companies looking to tackle the auto industry. We had Tom Taulli look into the industry with his piece: Southern California: The New Detroit? this morning.

Among Southern California electric/hybrid car firms here: Miles Electric Vehicles; Phoenix Motorcars; Venture Vehicles; and Aptera Motors. Add to that a few auto technology firms — Fallbrook Technologies for transmissions and Transonic Combustion for fuel injection — plus many others, and it looks like there’s a substantial amount of automotive innovation going on in the region.

Part of the reason for this is a long involvement by Southern California in the automotive industry. Not too may people are aware that the Art Center College of Design in Pasadena is one of the leading schools for automotive designers in the word. The major auto firms all have design houses out here — BMW Group/Designworks USA, California Advanced Product Creation (Ford), Calty Design Research (Toyota), 5350 Industrial Concepts (General Motors), Mercedes Benz, DaimlerChrysler, and Volkswagen/Audi all have design operations in Southern California.

As Tom writes:

Of course, it’s all good news for a variety of companies in southern California, which are developing next generation car technologies. “Southern California is the home to a myriad of design studios for all the major car companies,” said Andre Peschong, who is a principal at Bridgewater Capital. “There is a talent pool of engineers, CAD design specialists and let’s face it, a car culture.”

There appears to be no shortage of technology related and events this week across Southern California, as it seems like conferences, meetings, meetups, and networking is reaching a new fevered peak. In fact–if you’re so inclined–you can spend breakfast, lunch, dinner, and late into the night at events these days. You almost never need to go home…

If you’re in Los Angeles, Digital Hollywood kicks off today at Hollywood & Highland; among the many evening events is Dealmaker’s LA networking event.

On Tuesday, you can start your day off with OCTANe’s Meet the VC event before driving up to another day of Digital Hollywood.

On Wednesday, a good portion of Southern California’s indigenous venture capitalists, investment bankers, and other capital providers with be at LAVA’s Investment Capital Conference where you can hear Jerry (of Ben & Jerry’s) talk about Ben & Jerry’s social mission; if you’re into cleantech, you might instead be in San Diego at CONNECT’s Clean Technology Venture Roundtable. In any case, West LA will be the place for (more) Digital Hollywood private parties and get togethers.

Thursday appears to be intellectual property day — with both an event in Los Angeles from TCVN, and one in San Diego from CONNECT.

Then, round out your week with either hanging out at Lunch 2.0 at Yahoo! in Pasadena, or go to the big entrepreneurship conference from UCLA Anderson, its 2008 Entrepreneurs Conference where you can hear from a ton of entrepreneurs, venture capitalists, startup CEOs, and more. If that’s not your kind of event, then sit back and relax at the opera with the San Diego MIT Enterprise Forum and their High-Tech Night At The Opera.

We’ve recently been chasing down a local company which has raised a Series D round of funding, but so far has refused to directly respond to questions about the round, who is included, and details of the funding (even after being presented with a complete list of facts and asking for a “yes” or “no”). In fact, it’s all too common now to be rebuffed by companies beyond their Series C funding rounds.

Why the hesitance of the firm? Quite simply, in today’s investment climate, it appears that a Series D can often be a black mark on a company. While early rounds (A, B, C) are almost always a very good thing, the Series D is much more ambivalent.  Sometimes–but not always–a company which has raised a Series D may have just had to recap the firm; may have had to take a serious down round, if it has raised a lot of capital in the past; usually, but not always, is looking for a buyer.  On the other hand, sometimes a Series D can indicate a company is doing very well — in particular, if that Series D was actually used to provide some liquidity to founders ahead of an IPO; if a company has pulled in a significant strategic and/or private equity firm; or if it’s honestly expanding so rapidly it just needs some additional capital.

How should potential employees, partners, and others view these? Some things we look at:

1. Did the company raise more in its Series D than earlier round, or was it a single digit round?
2. Has the company had significant executive turnover in recent months?
3. Did all of the prior investors re-up in the new round, or did some mysteriously disappear? And was there a new, high profile lead?
4. Was the round announced, or found out — ie, did they want the world to know or did it just leak out by accident?
5. How much has the company raised — i.e. has the company just raised so much as to preclude a decent return on the firm?

If a company which just raised a Series D just got a new CEO, lost a slew of VPs, only got a few of its prior investors to participate, and is now heading to around $100M in funding — watch out. If, on the other hand, the founder is still in charge, the firm has added some high profile execs (and in particular, a CFO with public experience), and signed up a brand new, high profile investor or investment bank — that’s good.