Business plan competitions are the air guitar championships of the startup world. 

This is the case when the requirements of these events don’t actually include building a real business or product.  I mean, you don’t have to build an actual business—you can just mimic the movements and demonstrate something that looks like a startup on paper, without any of the necessary risk taking, lessons learned or even a fraction of the effort—all the stuff that investors like to see.  Not only that, there’s a hugely disproportionate amount of time spent on pitching for money for these paper ideas.

Sramana Mitra said not to long ago in Forbes:

“I have come to observe that most business school programs have an extensive emphasis on fundraising, especially from venture capitalists, and very little pragmatic understanding of what it really takes to get a venture off the ground. As a result, business schools launch students into the real world with completely unrealistic expectations, set up to fail.”

It’s true.  We spend way too much time, particularly in and around the New York area, teaching fundraising versus company or product building.  It’s as if the plan for creating a startup is:

Step #1: Come up with an idea.

Step #2: Pitch investors.

What ever happened to “build it”?   When Marc Cenedella first started TheLadders, he build the first version himself after investing $350 in MySQL and PHP books to teach himself to code. Undoubtedly the code sucked, but at least he got something up and running. 

The fact of the matter is, most startups, particularly ones built by young professionals with no network and no track record, aren’t going to get funded.  So then, why are we teaching our students to trust fall without any revenues of their own to catch them?  It’s a recipe for failure.

The local tech community is figuring this out, not surprisingly, way before the academic institutions are—and where it is being discovered by academia, it’s being done on a one-off basis by educational revolutionaries in the innovation space who aren’t stopping to ask their schools for permission or to change curricula.  They’re just doing it.

HackNY is a terrific example of how academics should be inspiring innovation.  Three academic types—Evan Korth, Hilary Mason, and Chris Wiggins, got together with a student, Trevor Owens, and decided that more students should be hacking on real projects, and be better connected to the innovation community at large.  They didn’t wait for a curriculum change or some government grant money to come through (although they just got Kaufmann money for it).  They didn’t wait until their universities hired a director of this new program.  They just booked some space at NYU, threw up a fundraising page on Kickstarter, and started talking it up in the community.  The end result was dozens of kids across universities all around the city writing real, workable code on their own projects—more entrepreneurial than any of the textbook projects they were probably stuck doing in class. 

At the same time, in an effort to build up the base of “bench talent” in New York City, I’ve been running Product Manager School through nextNY.  I always here that there aren’t enough good tech product managers in the city, so I figured why not just go and try to make more—or make the up and coming ones better.  It took me all of 45 minutes to setup the program—I wrote up a syllabus for 5 sessions, solicited feedback from a dozen or so product managers I knew (most of whom volunteered to speak), and called up Micah at the NYU/Poly Incubator to get the space.  No revenues, no costs.  Bo from RoseTech even volunteered to videotape the sessions.  I’ll be doing the same thing with Online Marketing school, CTO school, and there’s even been some rumblings about UX school.  I’ve been working with a handful of people that will be taking the lead on those other classes, because I don’t scale.  Hopefully, we can cycle through all of these twice a year. 

Contrast that with the fact that when I wanted to change the name of my course at Fordham from Innovation & the Entrepreneurial Mindset to Innovative Entrepreneurship, I was told that I had to go through a curriculum committee and it would take several semesters to make that happen after the course was reviewed again.  A name change—that’s all I wanted… to make the name more reflective of what was actually being taught.  With overhead like that, it’s going to be impossible for the local schools to educate good startup talent at the rate that the community can educate itself.  It’s not just Fordham—it’s generally like that at most places. 

So what role, then, should local schools be playing in the innovation ecosystem?  For years and years, New York City area colleges made a great business out of teaching kids to work for big businesses.  It was easy peasy.  Teach ‘em Finance and Chase or Accenture will come and pick ‘em up 30 at a time.  Now, those big company jobs aren’t there, and the schools are turning with a renewed focus to entrepreneurship (somewhat similarly to the way NYC govt recently noticed the startup community when Wall St threw up on itself). 

If schools are going to participate in the growth of NYC’s innovation ecology, they’re going to have to change the way they operate, or they’re going to get lapped and left behind.  You can tell me all you want about how many patents were filed at Columbia or wherever, or what they do in revenues—the future of the innovation in NYC is not in hard technology.  Most problems these days are business and design problems—technology is rarely the gating factor on innovation these days.  Here are a few things that I think local schools need to do if they’re going to seriously play ball in the startup world…

1) Recognize that you’re playing catch up.  If there’s anything that hackers and founders hate, it’s an ivory tower attitude.  These are the Davids of the world and they don’t care how big Goliath is—nor do they think you have much to offer them that they can’t do themselves better, faster, cheaper.  So, instead of trying to wow the community with how smart your professors are or the IP you have in house, start position yourselves to ask questions, learn, and participate as peers in a changing world.

2) Eliminate the friction by empowering your people.  If it takes eight meetings to get something going with a university, a startup could run out of cash in the meantime.  Encourage faculty and administrators to try new things, take some risks, and apologize later.

3) Open source your real estate.  There is one thing that schools have that brings together the community in an unparalleled way—one that is tough to replicate.  Event and meeting space is tough to come by, but it definitely exists in universities.  We’ve had BarCamp NYC at PolyTechnic in Brooklyn, and the NY Tech Meetup is moving to NYU, but those are all based off high level relationships.  How does the average Lean Startup Meetup get event space at a school?  Schools should want them there—and even promote it among their students.  They’re essentially teaching for free!  Schools need to become more physical hubs for collaboration—I’d love to see more schools contribute event space to the community.  How about getting each school to pledge 5 hours of space per month to local innovation related meetups?

4) Get your faculty and your students off your campus and out into the community.  David Lerner and Calvin Chu are the only innovation related university administrators that I ever see participating in the local tech community.  Where are all the heads of entrepreneurship education and why aren’t they out there participating both online and offline in things that startups are going to?  They’re front and center within their own walled gardens, but I’ve yet to meet faculty or deans anywhere that entrepreneurs are after hours.  If you don’t build a network of entrepreneurs around you—how are you ever going to figure out how to better educate them?  How will you know who the investors are when one of your school-grown startups need capital?  Same with students.  It’s like pulling teeth to get my students to reach out and meet entrepreneurs they don’t know—and I’m absolutely sure that’s because I’m swimming up against the tide of what they see from the top down.  Unless the people running your entrepreneurship program have committed to embracing and participating in the local community, your students will never follow.

5)  Get business and tech working together—i.e. break the silos!  Most B-school pitches I see involve “Step 1, hire a tech guy to build it.”  That would be nice, if what they were pitching was the least bit buildable—or either that or what they have is already freely available via open source but they don’t realize it.  There is a huge gap within schools between the average tech savvy of a B-school student and where the CS & Engineering programs are—and there’s very little cross collaboration going on to fix that.  I’m not saying teach all the MBAs to code—but at least getting them basic product management courses or some insight into what’s actually easy or hard to build—or now to turn an idea into a product… that would be a start.  It’s interesting to me that so many of the entrepreneurship activities at local universities are run out of the business schools, while the people in the best position to actually build real products are in your comp sci area.  At the same time, these CS folks are often unaware of the business world’s interest in how what they’re learning can solve real problems.  God forbid a school should get a little departmental cross collaboration going! 

Ok, I think I’ve said enough.  If you’re at a school and you want to seriously commit to encouraging innovation—as a faculty member, a dean, an admin—come talk to me.

“If you boat a lot, you're known as a boating enthusiast. I like to boat, but I just don't want to ever be referred to as a 'boating enthusiast'. I hope they call me 'a guy who likes to boat'.”- Mitch Hedberg

I read that Microsoft's new KIN Windows 7 phones, are "aimed at 15- to 30-year-olds who are social-networking enthusiasts."  Ew.  Never mind targeting teen interests in Glee, Justin Beiber, WWE, college, funny videos, or body spray - who describes a product this way even in a press junket?  Presumably they left the research out, or they'd have realized that 31% of their target demographic already plans to buy an iPhone.

It's shocking, really.  After so many years of getting it wrong you'd think someone could just do the opposite of all that and make a serious score!  Microsoft has been making mobile products longer than Apple has been making the iMac- it just so happens that few of Microsoft's products were very good.  When aQuantive was bought by Microsoft in 2007, my Razorfish colleagues and I collectively worried that we'd lose our Blackberry devices in favor of Windows Mobile "smartphones."  The worry was well-deserved; those who received them were usually miserable.

Microsoft proved unable to create the kind of extensible platform on its mobile devices that has made Windows dominant in the corporation and in the home.  While Windows may be too entrenched to be dislodged from either, it's stunning what Steve Jobs has been able to do in his return to Apple. 

And now, with the prominence of the iPod/iPhone/iPad as a platform, Apple's role as a "gatekeeper" to the platform is drawing a wave of anti-Jobs sentiment, centered around the perception that Apple is a draconian gatekeeper of its own platform.

Maybe so.  Is that so bad? Isn't it better than the sludge that Windows Mobile is? (I have not tried out Windows 7 Mobile so I reserve judgement for now). I believe that the power Steve Jobs wields most effectively is the power of No.  And what Microsoft, by trying to pack everything into every product it ships, has always been shackled to Yes, And... (well, their version of Yes, anyway).

No, that is too hard to use

No, that looks like crap

No, that feature sucks

No, that app doesn't belong in the app store

No, we don't talk to the press

No, I don't answer emails (actually I think Steve Jobs responding to email of late is like the ultimate blog/twitter account)

After all that NO, it's clear that the most important thing to Apple is to make awesome products that people love.  It's not ego, or even greed (except by association- great products cost $$$).  But Apple has transformed itself from a manufacturer of niche PCs that a few people love, to a mass-market CE company that makes products for millions more.  The masses expect Apple to stand behind every product decision and to contuniue to uphold exacting quality and usability standards.

Is that democratic?  Surely not- Steve Jobs is an admired autocrat. He's a sort of a benign autocrat, which  isn't all that bad  (see also the original Thirteen Colonies and "Salutary Neglect")  Strong, determined leaders in the autocratic model don't much care for input from you, or me, or anyone else.  If they stopped to ask what we wanted, we might choose the wrong thing.

As in the 1700s, this was all more or less OK until the colonists got wind of the the autocrat's real priorities- the intolerable acts were ones that benefited the sovereign else at the expense of the colonists.  Enter the rebellion.

Are we net beneficiaries of Steve Jobs' power of No or are we on the brink of Apple's decisions benefitting the company more than the base of users, developers, and accessory manufacturers?

Apple's power comes from protecting the user experience.  Whether you see that experience as stifled by an evil dictator or shaped by divine will is really about YOU not about Apple.  With the user at the center, the design decisions of an otherwise evil monarch are altruistic.  Right vs. left, republican vs. democrat- this is an interpretive exercise rather than a factual one.

Apple is facing an onslaught of ad-driven solutions, particularly if it releases always-on wifi and allows multiple apps to run simultaneously.  A successful ad model could be important to keeping developers afloat.  But the key to that monetization of the audience is the data about the audience, and strategically Apple needs this piece- to be the sole provider of such data and kill AdMob.

So Apple 's development process might be reduced to:

1. Protect the experience of the user
2. Protect the interests of the developer ecosystem except to the extent that it woulf harm 1
3. Serve the interests of shareholders/The Street except to the extent that there would be conflict with 1 or 2

No matter how many applications Steve Jobs or his employees arbitrarily deny from the app store, if people just love the damn thing, they'll think he's Jesus.

“If you boat a lot, you're known as a boating enthusiast. I like to boat, but I just don't want to ever be referred to as a 'boating enthusiast'. I hope they call me 'a guy who likes to boat'.”- Mitch Hedberg

I read that Microsoft's new KIN Windows 7 phones, the are "aimed at 15- to 30-year-olds who are social-networking enthusiasts."  Ew.  Never mind targeting teen interests in Glee, Justin Beiber, WWE, college, funny videos, or body spray - who describes a product this way even in a press junket?  Presumably they left the research out, or they'd have realized that 31% of their target demographic already plans to buy an iPhone.

It's shocking, really.  After so many years of getting it wrong you'd think someone could just do the opposite of all that and make a serious score!  Microsoft has been making mobile products longer than Apple has been making the iMac- it just so happens that few of Microsoft's products were very good.  When aQuantive was bought by Microsoft in 2007, my Razorfish colleagues and I collectively worried that we'd lose our Blackberry devices in favor of Windows Mobile "smartphones."  The worry was well-deserved; those who received them were usually miserable.

Microsoft proved unable to create the kind of extensible platform on its mobile devices that has made Windows dominant in the corporation and in the home.  While Windows may be too entrenched to be dislodged from either, it's stunning what Steve Jobs has been able to do in his return to Apple. 

And now, with the prominence of the iPod/iPhone/iPad as a platform, Apple's role as a "gatekeeper" to the platform is drawing a wave of anti-Jobs sentiment, centered around the perception that Apple is a draconian gatekeeper of its own platform.

Maybe so.  Is that so bad? Isn't it better than the sludge that Windows Mobile is? (I have not tried out Windows 7 Mobile so I reserve judgement for now). I believe that the power Steve Jobs wields most effectively is the power of No.  And what Microsoft, by trying to pack everything into every product it ships, has always been shackled to Yes, And... (well, their version of Yes, anyway).

No, that is too hard to use

No, that looks like crap

No, that feature sucks

No, that app doesn't belong in the app store

No, we don't talk to the press

No, I don't answer emails (actually I think Steve Jobs responding to email of late is like the ultimate blog/twitter account)

After all that NO, it's clear that the most important thing to Apple is to make awesome products that people love.  It's not ego, or even greed (except by association- great products cost $$$).  But Apple has transformed itself from a manufacturer of niche PCs that a few people love, to a mass-market CE company that makes products for millions more.  The masses expect Apple to stand behind every product decision and to contuniue to uphold exacting quality and usability standards.

Is that democratic?  Surely not- Steve Jobs is an admired autocrat. He's a sort of a benign autocrat, which  isn't all that bad  (see also the original Thirteen Colonies and "Salutary Neglect")  Strong, determined leaders in the autocratic model don't much care for input from you, or me, or anyone else.  If they stopped to ask what we wanted, we might choose the wrong thing.

As in the 1700s, this was all more or less OK until the colonists got wind of the the autocrat's real priorities- the intolerable acts were ones that benefited the sovereign else at the expense of the colonists.  Enter the rebellion.

Are we net beneficiaries of Steve Jobs' power of No or are we on the brink of Apple's decisions benefitting the company more than the base of users, developers, and accessory manufacturers?

Apple's power comes from protecting the user experience.  Whether you see that experience as stifled by an evil dictator or shaped by divine will is really about YOU not about Apple.  With the user at the center, the design decisions of an otherwise evil monarch are altruistic.  Right vs. left, republican vs. democrat- this is an interpretive exercise rather than a factual one.

Apple is facing an onslaught of ad-driven solutions, particularly if it releases always-on wifi and allows multiple apps to run simultaneously.  A successful ad model could be important to keeping developers afloat.  But the key to that monetization of the audience is the data about the audience, and strategically Apple needs this piece- to be the sole provider of such data and kill AdMob.

So Apple 's development process might be reduced to:

1. Protect the experience of the user
2. Protect the interests of the developer ecosystem except to the extent that it woulf harm 1
3. Serve the interests of shareholders/The Street except to the extent that there would be conflict with 1 or 2

No matter how many applications Steve Jobs or his employees arbitrarily deny from the app store, if people just love the damn thing, they'll think he's Jesus.

I've said for a while that people learn so much more from failure than they do from success.  This post from Keith Nowak is definitely worth a read.

"I once read a characterization of startups by Dick Costolo, co-founder of FeedBurner, as going down many dark alleys only to find they are dead ends. In my opinion, dark alleys need to be navigated anywhere there are unknowns and a large possibility of making mistakes. This can include the overall business strategy, the product roadmap, coding decisions, and the marketing plan. The key is to realize which ones are dead ends quickly so you can try something else. Exploring each dark alley takes time and money so the number of mistakes that can be made is more or less fixed. There comes a point when you have run out of the time and money for more attempts. Getting through the dark alleys before it is too late requires concerted dedication to going through the process of attempting, learning, and correcting as quickly as possible. This may seem rather obvious but in the middle of running the company it always felt like we were moving a million miles per hour. There was always a feeling of energy and urgency. The last thing we needed to worry about was moving quickly. However, looking back we moved too slowly when it came to a few very important things.

For one, we stuck with the wrong strategy for too long. I think this was partly because it was hard to admit the idea wasn’t as good as I originally thought or that we couldn’t make it work. If we had been honest with ourselves earlier on we may have been able to pivot sooner and have enough capital left to properly execute the new strategy. I believe the biggest mistake I made as CEO of imercive was failing to pivot sooner. "

“Experience has shown that the next generation of startups will be born in the previous-generation startups. So by concentrating inteligence here, the network can develop and new ideas can develop, around the realities of a changing media business, which is a very different perspective from that of Silicon Valley.

That's why it's important that New York not think of itself as an outpost of the tech industry. It is something unto itself. The goal of the new media industry is to create the news system of the future. Not to exist as an appendage to Silicon Valley's vision of that.

I have chosen to move back to New York because this is where I want to be. The people I want to work with are here. The mission of New York is closer to my mission than Silicon Valley's.  “ 

From Dave Winer, a native and now present New Yorker.  In the last few months, I’ve met a lot of native New Yorkers who moved out to the valley years ago when that was the only place to be to build a startup.  Now, a lot of them are thinking that it’s finally safe to come home.

I’ll be presenting on April 26 to the Founder Institute Singapore on "Earning Revenue and Internet Business Models".  I give a lot of credit to Munjal Shah, some of whose slides I incorporated directly into this deck. 

My draft slide deck is below; I would welcome feedback.

Last week, I got a chance to be the guy on the ground for Open Angel Forum NYC.  First off, I have to thank those who made it possible—namely our sponsors and our host.  Six companies and twenty angels were able to connect up without the friction and artificial scarcity created by the “pay to play” model and it was all made possible by the good folks at Joyent, Cooley, and Winter Wyman.  Kudos to Joyent for just being generally aware of what was going on in the startup scene—they came through on the self-serve sponsorship page without even being pitched.  We were like, “What…  We have a sponsor already?  Really… oh, look at that!”

The team at Cooley is really ramping up their NYC presence.  Already a strong venture law firm in the Valley, they just recently picked up Bo Yaghmaie to help lead their Big Apple venture practice, so when I asked Bo for Cooley’s support, they were all over it.

Winter Wyman, a top local recruiting firm, has been a continual supporter of the tech community and their participation was much appreciated.  You can follow Mike Fitzgerald on Twitter.

We also owe much gratitude to the Jon Steinberg at Polaris Ventures, who hosted us in the Dogpatch space—and did the legwork for the catering. 

Once we got started with the pitches, one thing was immediately obvious—and pleasantly surprising.  Three of the six companies were led by female entrepreneurs.  That wasn’t done on purpose—we just sought to pick the best of the bunch—but it was encouraging to see.  Hopefully, it’s a trend!

The business models were equally diverse.  We had some seriously hardcore technology up and running, as well as some innovative business models where  the tech wasn’t the value at all.  In order to give the angels who where there an opportunity to talk with these companies before things get frothy, I’ll refrain from naming all the companies here, but it was a really solid offering.

This is something I was excited to be a part of, and I look forward to iterating on it throughout this year.  I certainly do have some concerns about the model—like scale.  We had a ton of great companies that we couldn’t invite.  What do we do with those?  Even more problematic was the number of angel investors who wanted in that I had to say no to.  That was really difficult, as many of them I had good relationships with—but others I didn’t know and wanted to meet.  We’ll have to figure that issue out, because NYC has a lot of experienced angels that aren’t well known that I want to get out in front of more startups.

Looking forward to doing at least two more of these in 2010!

I’m getting a little bit tired of running my events list and seeing some of the best folks sitting behind the paywalls of people profiting off of the community’s attempt to talk to itself.  Each week there are so many great events, blog posts, videos, etc. produced by community members that there’s hardly any reason to pay other than a token amount for in person innovation and startup related content.  Expensive venues?  Pricey box lunches?  Not necessary!  Let’s bring our $5 footlongs to one of the many open spaces that companies and institutions like Sun, Aol, CRESA, NYU/Poly, and Microsoft have been donating to the community for free.

It’s fine if you’re in the event business—but it’s frustrating to me that the media focuses a lot more attention on big conferences and paid series of sessions, and less on Barcamps, smaller Meetups and open public discussions.  Four years, several dozen events and 3,000 people later, and we’ve still never gotten a nextNY feature in a media publication. 

People ask me all the time how to get a job in venture capital or at a startup, and the one thing that I can point to that has enabled me to get the jobs I’ve gotten has been my contributions to the innovation community.  That investment has driven a huge return for me both professionally and personally—and there’s no shortage of leadership opportunities that are just dying to be taken advantage of in NYC.  Just the other day, I suggested to an ambitious young biz dev guy at a startup that he should band all the startup biz dev folks together in a professional group.

Similarly, as I did with Product Manager School, I’ll soon be working on Online Marketing school and CTO school and would love for someone to run with those programs.  Got an idea for a program?  Let me know and I’ll help you get it off the ground.  NYC could use some more people leading the community from the inside, instead of profiting from it.

Here’s a job post:

Title: Community Leader

Company: New York Innovation Community

Job Location: New York, NY

Positions available: Dozens

Company Description: New York City has always been a center for business innovation.  In the last five years, more and more of that innovation has come from the startup technology community—a thriving crowd that has gained a critical mass of both viable companies and accumulated wisdom.  Startup success has also diversified across sectors.  Not only is the Big Apple the advertising technology capital of the world, with huge successes like Doubleclick, Right Media, Tacoda, Linkshare and Quigo—but consumer facing startups like Meetup, Tumblr, and Foursquare are also key players as well.  Not surprisingly, commerce is also central to NYC’s startup surge, with Gilt Groupe leading the way.

The community seeks ambitious individuals to enable NYC’s continued growth and development as a place to build successful companies.  Critical to that development is helping the community help itself—to foster programs, events, and collaboration driven by the sole purpose to build a better and smarter community. 

Responsibilities:

- Work towards showcasing the most knowledgeable and enlightening leaders as far and wide as possible, for little to no cost. 

- Work hard to expose inspiring new voices that have yet to gain recognition—especially those who have achieved high levels of success in under the radar businesses, especially in B2B and niche sectors.

- Lead to build community, not direct profit.

- Contribute high quality dialogue and encourage intelligent voices to join more public conversation—interviews, podcast, video blogs, etc. are all viable channels for increased dissemination of innovation best practices

- Become a thoughtful voice and a beacon for likeminded individuals through blogging and Twitter

- Participate across many groups and Meetups—cross pollinating people and ideas.  Don’t just attend your own stuff.

- Be a leader among people just like you and bring others along for your professional development

No prior leadership experience necessary. 

I’ll be presenting on April 27 to the Founder Institute Singapore on "Hiring and Firing for Entrepreneurs".  My draft slide deck is below; I would welcome feedback.