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.

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!

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.

In recent conversations over the last few weeks about investment activity here in Southern California, I’m finding more and more entrepreneurs are looking to technology angels — that is, high profile folks from the technology industry with recent exits — rather than venture capitalists. In particular, in the consumer Internet and web space, the capital requirements that these entrepreneurs think they have — usually, in the $250K to $500K range — are fairly modest, versus traditional larger VC investments.

Although there are a number of very high profile, non-Southern California “super angels” that it seems everyone I talk to wants to get to — Jeff Bezos of Amazon.com, Ron Conway, Marc Cuban, and Elon Musk (plus, about everyone else from Paypal) come up in my conversations with entrepreneurs all the time — it seems Southern California individual angels get less attention. However, there seem to be a few people here — Michael Jones of Userplane/AOL comes to mind, as do Matt Coffin of LowerMyBills.com, Richard Wolpert of Realnetworks/Disney Online (now a VC), and Kamran Pourzanjani of PriceGrabber — who entrepreneurs are adding to their list as “go to” angels. It will be interesting to see how the trend towards looking to these “super angels” first goes here in Southern California.

Some of the latest positions posted to socalTECH’s Job Board:

• VP International, eHarmony.com (Pasadena)
  
• VP, Internet Content and Community, eHarmony.com (Pasadena)
• Marketing Director, Paragon Software (Irvine)
• E-Commerce Account Executive, New Age Electronics (Long Beach)
• Product Manager, Ixia (Calabasas)
• Senior User Interface Designer, Fandango (Los Angeles)
• Content Curator/Editor, LOUD3R (Anywhere)
• Linux System Administrator (Irvine)
• SEO Project Manager, Search Engine Optimization Inc. (Carlsbad)
• SQL Server DBA (San Diego)

I’ve heard quite a few people tell me in the last few weeks that “it feels like 1999″ to me — referring to the peak of the Dot Com bubble. Having been around through the last bubble, a few personal opinions on why this is–and what it means for the startup and technology industry in general.

At the peak of the Dot Com bubble, I recall the same kind of frenzy I’ve seen this year, notably:

• Parties, parties, and more parties — During the Dot Com bubble, the center of the party scene was VIC — the Venice Interactive Community. VIC, at its heydey, was holding enormously popular events (VIC @ The Victorian, etc.) where literally thousands of people showed up to just hang out with the “hip and happening” technology/new media crowd. The recent Techcrunch/Popsugar event  in Hollywood (2000 people at the oh-so-fashionable Vanguard) feels exactly like a VIC event. If I get an invite to a company launch at the Playboy mansion (I got a few of those during the bubble) then the feeling will be complete.
• Focus on style and glamor, not business — Again, during the bubble, at some point the attention became on status — how stylish or fashionable were you — “Hey, we just filed for an IPO” “We raised $100M last week!” “Look at our cool new Aeron chairs”. Any question about revenues, profits, or sustainable business were lost in “cool.” The same thing might be said today: “Hey, we’ve got a cool Facebook widget” “We’ve got (insert) Hollywood star producing content for us!” “Look at our video podcast!”
• Traffic, not revenues, rules the valuation discussion — During the dot com boom, companies were benchmarked based on their Internet traffic numbers; instead of talking multiples of revenue, valuation was focused on price based on pageviews. Today, what I am asked all the time is — “how much are my XX million unique users worth”? I’ve been asked that question — seriously — by at least a few investment bankers, for companies which were burning a enormous hole in someone’s pocket. (Credit to the investment bankers: they’ve all acknowledged that they’ve shopped it companies based on uniques, because people have been willing to buy based on uniques and not revenue.)
• Everyone wants a piece of the game. During the Dot Com boom, there was an enormous surge of people — from all walks of life — who wanted to be a piece of the revolution. Instead of the mainstay folks of the technology industry — ie the tech industry executives, marketers, product managers, engineers, software developers, venture capitalists, etc. — you had people from a lot of very non-tech areas getting involved. A huge number of these folks left when the easy money dried up, but again I’m seeing people who aren’t at all “tech” (here’s it’s film and TV producers, actors, and others) starting up “technology” companies.
• Aiming at the quick flip, versus sustainable companies — All too many startups are looking — not to create a useful business, built to eventually be a healthy, standalone company — but instead are looking to create something “cool” for a quick flip. These are often”feature” companies developing some Web 2.0 widget might be helpful to some other site, but not a business in itself.  The problem is, there are a hundred “widget” companies hoping that Yahoo, Google, or Microsoft will buy them and make them fabulously wealthy. But, if they don’t, they’re basically non-viable entities. This is the same symptom that occurred during the Dot Com boom — the major notable exception being that during the Dot Com boom, companies quick flipped through an IPO, rather than trying to get bought. (Or, put in another way–the investors got left holding the bag, instead of some other company).

So, given the disconnect between the overall economy and technology, what can tech companies do to avoid the hangover that the Dot Com boom gave us? My humble personal opinion:

• Focus on substance, not style. Focus your business on stuff that makes business sense, and isn’t just there for the “cool” factor. If a video podcast will drive more business to you, that’s great.  If hosting a party will sign you up more paying customers, that’s great, too. But if the party is just so you can be the next “cool” startup on the block (or, where you are raising venture capital to be able to even AFFORD your party), you might want to rethink it.
• Think revenues, not traffic.  Your number of uniques a month might be great as a status symbol, but if you’re about to go under because you can’t make your monthly payroll, who cares? Revenues are what are important, not pure traffic numbers. If that traffic helps drive revenue, that is great. But if not, I wonder what the point is?
• Make your company sustainable, even without an exit. If everyone was focused on creating a company that was sustainable — ie it grows and pays for itself, without frequent VC injections — instead of focused on getting purchased (which has a very small probability even in the best of times) — then even if the venture funding climate changes, companies will continue to live and prosper. Then, it won’t feel to me like it’s 1999 again.

There’s a great quote (of Drew Lipsher of Greycroft Partners) which Scott Kirschner–a New England blogger and writer–recently posted from AlwaysOn Venture Summit East, about “entrepreneurs moving west to find money”

…if the entrepreneur doesn’t believe in his company enough to believe it can succeed here — they need to move it to Silicon Valley — then we don’t need to invest.

Although Lipsher is clearly referring to deals in New England, it’s worth noting–in my humble opinion–that for any technology startup, if you’ve got a sufficiently large opportunity and truly revolutionary technology or business, you will be successful anywhere. Whether that is Los Angeles, San Diego, Palo Alto, Boston, or Des Moines, if you are plugged into your market, have better technology/people/execution/etc. and the opportunity is right, it shouldn’t matter where you are located, physically.

(btw, It happens that Greycroft has an office in Los Angeles, headed by Dana Settle: the firm has invested in Irvine’s K2 Network, and Santa Monica-based ContextNext).

We’ve made some changes to the front page of socalTECH, to improve usability of the site: I’d love to hear feedback on what you think.

First, we’ve moved summaries (and pictures) from the stories to the lefthand news column, instead of just featuring the titles and requiring a click into stories.

Second, we’ve added a number of “Channels” on the second column with the top headlines of stories broken down by topic - Venture Capital, Mergers & Acquisitions, Executive Moves, Media & Content, etc. We’ll be expanding these over the next few weeks.

Finally, we’ve renamed our “Startup” section for articles from the community to “Insights & Opinions” and will be adding regular contributions from folks here in Southern California’s high tech industry.

Let us know what you think!

As always, we’d like to publicly thank the many sponsors of socalTECH.com for their support of our efforts.

First, thanks to Clearstone Ventures, which is the VC sponsor for this blog.

We’d also like to thank our site sponsors: PricewaterhouseCoopers, Redpoint Ventures, SVB Silicon Valley Bank, Costello and Sons, CBRE, Stubbs Alderton & Markiles, Safire Partners, Binary Pulse Technology Marketing, Stradling Yocca Carlson & Rauth, and Fonality. Without these sponsors, we wouldn’t be able to provide the services we do.

I’d like to welcome Tom Taulli, author of The Complete M&A Handbook, and a frequent writer for Forbes and AOL Bloggingstocks, as a occasional contributor to socalTECH. Tom’s first article for us is The Gold Rush of Digital Media Funds, which we posted this morning. We’re planning on publishing regular contributions from Tom, who’s known for his insights and commentary on the market and high tech industry.