Benjamin Kuo’s Blog

If you haven’t already heard about the Digital Family Reunion holiday party, a long list of local organizations has gathered together to put together a holiday party at the Skirball Cultural Center on December 11th. There are more details on the Digital Family Reunion web site.

On Thursday, December 11th from 5:00pm to 10:00pm, the Digital Family Reunion (DFR) is bringing the Southern California technology and business communities together for the holidays at the Skirball Cultural Center. In association with some of the region’s top trade associations and social networking groups, the DFR is throwing the holiday party of the millennium… so far! The DFR will reignite old relationships, spark new ones, and set the stage to kick off 2009 with a bright new start.

Inviting early adopters and legacy participants of the Internet 1.0 and today’s digitally apt Internet 2.0 tube dwellers, the DFR will create the optimum conditions for these generations to synergize with one another and inspire opportunities that will serve our industries, our region, and our society at large. Attendees will include leaders from all the major industry sectors such as media, entertainment, finance, publishing, venture funding, software, commerce, education, and many more.

The holiday shindig is the brainchild of Kurt Daradics (of MOTM), with notable collaboration from Brad Nye and Tony Winders (VIC anyone?), along with a host of others. It looks to be a fun event.

Tired of the constant stream of bad news as high tech startups have been cutting back staff as the markets and economy continue to spook investors and executives? Don’t worry–it’s No-Layoff Week! That is–unless somebody in your HR staff, executive staff, or investors are absolutely stupid–it’s extremely rare to have companies fire or conduct layoffs in the few days before Thanksgiving.

It’s a PR and marketing nightmare (“yeah, that’s the company that fired off 20% of their employees before they got off for Thanksgiving–maybe we shouldn’t be buying their products…”). So, if you’re unsure about your job, worried that you’re on the chopping block — you should see a measure of relief, at least temporarily. The other No-Layoff Week is the week before Christmas. However, come November 1st, I suspect any companies making moves in the employment area to act fast before the Christmas holiday comes too close.

ps. To employees/investors/others of companies who DO cut during the No Layoff Weeks: run, run away fast.

Jason Nazar, CEO of local Santa Monica startup Docstoc — and relentless promoter of his company–has weighed in on the “Silicon Valley versus Los Angeles” debate with a blog post last night, saying:

Bay area founders are amazing technologists. They build obsessively user focused products, do a fantastic job at virally driving a ton of traffic, but usually have their head up their ass when it comes to making money.

Los Angeles founders are hustlers and deal makers. They are more focused on the bottom line and care more about their P&L than their products, which tend to be messy.

In my opinion, a measure of the differences in the two areas is the tilt in how businesses are start in the areas. There’s a tendency for startups in the Bay Area to be created by engineers/computer scientists/other technologists — who naturally are much more focused on products than business plan. Whereas, there tends to be more business folks/MBAs/etc. starting companies in Los Angeles.  Sure, there’s plenty of good technologists here, but it does seem the balance leans toward the business folks here versus technologists.

As the high tech industry continues to react to the overall economic slowdown I’m finding that recently — on the whole — entrepreneurs are fairly upbeat about their prospects, but venture capitalists, attorneys, and other service providers seem to have hit a “recession depression” and are taking a very negative outlook towards the prospects for companies in the coming year. Aside from commentary on the overall economy, the interesting point which comes up is that there is a valuation mismatch in the market at the moment–where entrepreneurs are positive on what they are worth, capital providers are negative, and the two do not meet in the middle. I’ve heard this more than a few times — entrepeneurs looking to raise money currently have unrealistic expectations of what they are worth, and the sources of capital have much different ideas on valuation. I’ve also heard the same thing from people in the mergers and acquisition business, where multiples for private companies have plunged, but entrepreneurs are still demanding last year’s valuations.

Of course, this situation usually corrects itself fairly quickly (entrepreneurs, after beating through the bushes and trying to find capital at a few companies soon see they’re off the mark), but it’s interesting to see the lag between the impressions of entrepreneurs and the market. The lesson here: entrepreneurs, if you’re looking for money, you’re going to have to give up a lot more ownership for that capital–if you get it at all. Good luck!

In the cycle of grief over the current state of the markets (public and private), where is Southern California’s high tech community right now?

Denial? Anger? Depression?

I think we’re still early in the cycle–in the denial stage–where, based on many entrepreneurs I’ve talked to, people are in denial that the economy is going to affect their business. This is manifested — particularly by those entrepreneurs trying to raise capital, and those who didn’t go through the dot com bust — as denial that their valuations have gone off a cliff, denial that lots of investors have suddenly disappeared, and denial that they will have to rethink their plans when they realize venture money is hard to come by right now, and angel investment capital has disappeared. I suspect this will soon turn to anger “VCs just don’t understand our company!” “Those angel investors can’t see a good deal when it hits them in the face!” etc.

Eventually, folks will work their way to acceptance, and figure out — well, if my build-it-quick-with-lots-of-venture-money idea isn’t going to work, what is? I think the smart entrepreneurs are already at this point — figuring out, if it’s going to be too difficult to raise money, how do they build a business which makes money out the gate? How can they extend their runway? Who can they tap for friends/family to get them over the hump? Or any number of other things to move their business forward, despite the funding environment. I think the companies that are fastest to adapt (and move past the denial stage) will be the best prepared for whatever heads our way…

Hi everyone–we’ve been doing some server upgrades for the last week or so, and we had inadvertently disabled part of our calendar pages. They’re back up, in case you’re wondering. btw, if we’re not listing any Southern California (Santa Barbara to San Diego) technology events you think ought to be listed, let us know. You can get to our calendar here.

Interesting article in the Wall Street Journal today about how younger startups/workers are dressing down, and how NOT wearing a suit/etc. seems to be a badge of pride for startups.

Of course, this has always been the case in technology/Silicon Valley (ie think golf shirt + khakis for marketing folks, T-shirt + jeans + birkenstocks for engineers), but it appears we’re headed towards T-shirts and scuffed jeans for CEOs…

(our interviews with two of the young CEOs quoted in the article — Roman Tsunder of Access360 Media, and Derek Johnson, CEO of Tatango via our Pacific Northwest site.)

The launch this morning of Oblong Industries — a venture-backed company developing gesture-based user interfaces ala The Minority Report — is the latest in what appears to be a string of 3D and virtual interaction-related companies showing up here in Southern California.

Other companies in the area include Total Immersion, which develops technology which allows users to literally interact with virtual objects on screen — which recently relocated its headquarters to Los Angeles– and Irvine-based Eon Reality, which develops 3D software for allowing users to interact with 3D objects and models ala the Star Trek holodeck — including technology it has licensed from Microsoft (Microsoft’s TouchLight”). Eon Reality also has 3D avatar creation technology, which is the focus of Pasadena’s Big Stage Entertainment.

Think that’s it? There’s also RealD, which owns the market for 3D theater projection systems — i.e. Chicken Little, Journey to the Center of the Earth, etc.,Fix8 — which inserts graphics real-time into video camera sessions — and DDD which makes displays and technology related to 3D displays.

Greentechmedia, an online media site focused on the clean technology industry, has a good profile of a very, very stealthy Southern California venture capital firm, The Quercus Trust.

Apparently, The Quercus Trust is the most active clean technology investor in the nation–more active than Khosla Ventures. Greentech reports that they have 34 clean technology firms in their portfolio, more than any other venture capital firm in the nation.