Silicon Valley’s elite startup accelerator is getting more selective. Paul Graham recently announced that the number of companies accepted to Y Combinator, the Mountain View (Calif.) program called the “Harvard of entrepreneurship,” will likely shrink to fewer than 50, from 84, over the summer because “more things than usual broke” with the larger batch. Looking for signs indicating which applicants would run into trouble led Graham to an unusual admission of bias: The entrepreneurs that Y Combinator interviewed in the afternoon were more likely to fail than those accepted in the morning. Graham’s conclusion: “It turned out that, like judges, we were more tolerant after lunch.”
Graham’s discovery is just one example of how decisions can be influenced by unexpected factors. Hidden bias is a risk in all sorts of systems that aspire to be objective: Pharma-funded drug research finds more favorable outcomes than government-backed trials. Hiring managers are less likely to call back job applicants named Lakisha and Jamal than Emily and Brendan. University tech transfer officers reviewing the same invention are less likely to recommend commercializing it if they think the inventor was a woman. And even middle-aged white guys in Silicon Valley feel they have to dress down and shave their gray hair to compete with younger, hoodie-clad candidates for top jobs at startups.
SEVEN foreign companies are bidding for a spot in a three-month course designed to boost start-up success.
Program director Jana Matthews (pictured) says the immaturity of the Australian start-up scene shows up in the lack of returnees – the same people whose experience can smooth the way for new ventures.
“We don’t have the business people, the lawyers or accountants who have taken companies public over and over and over again,” she says. “The whole infrastructure is immature.”
Sydney start-up incubator Pollenizer last month teamed with Deloitte to measure Australia’s start-up ecology and found only 4.8 per cent of new businesses scaled up to sustainable profitable businesses.
The report also found the global capital of start-ups, Silicon Valley, was 6.7 times larger than Sydney, while Australia’s other recognised hubs – Melbourne, Brisbane and Perth – had 65 per cent to 13 per cent of Sydney’s pulling power.
Matthews, who has been closely connected with the US’s second-largest start-up space in Boulder, Colorado, says the Innovyz START program will take its second round in January with a firm eye on global candidates.
How poor but sexy Berlin has tapped talent to be Europe’s startup capital | Technology | The Guardian
Berlin is poor, but sexy – Mayor Klaus Wowereit‘s decade-old slogan still describes Germany’s capital very well. Unemployment is high compared with other German cities and businessmen in proper suits and ties are a rare sight. But something in Berlin’s attitude towards business is changing. Startups are sprouting all over the capital.
Some people are already speaking of Berlin as the Silicon Valley of Europe.
Most of the firms are just in their infancy. Others, such as the music platform SoundCloud or the social game developer Wooga are well-known even in California or London. “Berlin is punk meeting tech,” says Swedish-born Eric Wahlforss, one of the founders of SoundCloud. According to Wahlforss, Berlin is creative, cheap and full of talented people. And the talents are starting to cluster.
SoundCloud is already in the buzzing and expanding tech hub called Factory, based in the fashionable district of Prenzlauer Berg. Others include 6Wunderkinder, wish-list website Toast and Firefox developer Mozilla, and there is space for more. Google wants a hand in the growing startup market and plans to subsidise entrepreneurs with about €1m (£808,000) in the next three years and is offering seminars and mentors.
“It is all about creating a network,” says Factory co-founder Simon Schaefer. He wants to offer a campus, to be ready next summer, based on the one that Google and Facebook have in the real Silicon Valley. Another model is Silicon Roundabout, on the outskirts of the City in London, home to last.fm, TweetDeck and Livemusic.
The world’s biggest social network is expected to seek a $75 billion to $100 billion valuation in its IPO, the most anticipated stock offering from Silicon Valley since Google Inc went public in 2004.
“We had some clients call and once we step them through the numbers, they sober up,” he said. “The valuation is 100 times earnings in a stock market that is trading at 12.”
“At the end of the day, if you have a small amount of money that you are in a position to lose a chunk of it and you want to speculate on Facebook, go ahead,” he added. “But don’t use money that you really need to save to do it. I would put it in Microsoft, which is dirt cheap right now.”
To be sure, most technology analysts would argue that Facebook’s growth potential far exceeds that of Microsoft Corp, whose stock has largely traded between $20 and $30 in the past decade. It is taking its first steps toward content streaming for instance, and has yet to make a serious overseas thrust.
And a $100 billion valuation for Facebook at the top end – while huge in absolute terms – is not that out of whack in Silicon Valley IPO tradition. Facebook is seeking a multiple of up to 27 times annual revenue, or up to 100 times earnings.
Strange Random Investment Quote:
Money is like manure. You have to spread it around or it smells. – J. Paul Getty
- Facebook’s Potential Bubble. (wadingnewsblotter.wordpress.com)
- Why Facebook stock may be wrong for you (canada.com)
- Commentary: Face(book) the Music (wired.com)
To understand the cultural significance of Steve Jobs, you have to go back in time: to before the iPad or iPhone or iTunes, before Apple Inc.’s comeback products made candy-colored plastics and iAnything cool, before Jobs got kicked out of Apple, even before the Macintosh hurled a sledgehammer at Big Brother.
It’s 1981. Most people have never heard of Silicon Valley. The country’s most famous businessman is Lee Iacocca, the head of Chrysler Corp. He’s famous because in 1979 he engineered a government bailout — loan guarantees — that saved the company. He’s also famous because, unlike his peers, Iacocca is colorful. He seems to believe in what he’s doing.
In 1981, business executives aren’t known for either personality or passion. The general public sees business as a boring, impersonal, possibly suspect activity. Its significance seems purely financial.
“Businessmen,” Tom Wolfe tells the Wall Street Journal, “no longer have the conviction that what they’re doing is exciting and glamorous, which is, I guess, another way of saying intrinsically worthwhile.”
That was all about to change.
In the 1980s, entrepreneurs became heroes, celebrities and role models. The Apple whiz kids, Steve Jobs and Steve Wozniak, were the new face of business.
Strange Random Steve Jobs Quote:
That’s been one of my mantras – focus and simplicity. Simple can be harder than complex: you have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains. – Interview with Business Week, 1998
- Thank you, Steve Jobs (sunbeltblog.blogspot.com)
- Steve Jobs dead: Celebrity Twitter tributes paid to Apple genius (mirror.co.uk)
- Steve Jobs Is Dead: Share Your Thoughts (huffingtonpost.com)
- Remembering Steve Jobs (forbes.com)
- Steve Jobs’ Stanford Commencement Address [Video] (aboutcolonblank.com)
- Steve Jobs’s Accomplishments In His Final Years (huffingtonpost.com)
- The Question Apple Execs Will Always Be Asking: WWSJD? (forbes.com)