The Venture Edge

For those of you who have been hanging around the Internet for more than a few years, the name America Online should be familiar to you. Way back in the '90s -- before the emergence of Google, Facebook, YouTube, and the rest of the current crop of high-performing websites -- America Online was the cat's meow. That's all in the past now, but the company's founder -- Steve Case -- has become a vocal cheerleader for the virtues of entrepreneurship. Oh. And the company is no longer called America Online. It's just AOL.

 I have the good fortune to work with very talented engineers who have lots of cool ideas and the ability to solve really tough problems.  My job is to help them turn those terrific solutions into products that have commercial value, and that’s not easy.  Why?  Because a lot of these highly trained engineers are better at solutions than they are at problems, which is a problem in itself because entrepreneurship and new product development are all about having a deep understanding of problems.

Yesterday the University of Michigan announced that alumnus J. Robert Beyster and his wife Betty donated $15 million to the school's College of Engineering. Specifically, $9 million will be dedicated to endowing a fellowship program designed to fund up to 10 engineering doctoral students each year, $5 million will go towards the renovation of the Ford Nuclear Reactor Building on the University of Michigan Campus, and $1 million will be allocated to the Center for Entrepreneurship and the development of a curriculum to teach students about employee ownership. After earning bachelor degrees in engineering physics and engineering math in 1945, he earned his master's and doctoral degrees in physics at U-M in 1947 and 1950, respectively. Dr. Beyster went on to found SAIC in 1969 -- an employee-owned company (now public, and on the NYSE) that today has annual revenues in the neighborhood of $11 billion. 

 Recently I wrote about how tired I was of everyone bashing private equity firms. The bashing was accelerated by the fact that Republican presidential candidate Mitt Romney had been a principal in Bain Capital, a private equity firm.  Now that the media and Mr. Romney’s opponents have moved on to greener pastures, for the moment, I’m reading about states that are removing the tax credits for angel investors in qualified investments because startups don’t create enough jobs.  Is there anyone out there in government who understands how startups work?

It really is a small world. As I was getting ready to post a link to the Business Association of Stanford Entrepreneurial Students (BASES) 150k Challenge -- which will award a total of $150,000 to winners of three different entrepreneurship competitions -- I ran across an interesting article in the Wall Street Journal. According to the article, the age-old tradition of business plan competitions is increasingly being seen by the business schools that sponsor them as an ineffective way to spark the entrepreneurial spirit. Instead of resulting in new businesses, these competitions are in most cases simply resulting in some very well-written business plans. And that's not the outcome that the schools that sponsor business plan competitions are hoping for. 

Last week I saw one of the best pitches for funding I’ve ever seen.  Irene Rhodes is the founder/CEO of Consumer Fire Products, which provides proprietary wildfire protection systems that are, quite simply, amazing.  I’ve known her for some time.  She’s a USC alum, and I’ve had the pleasure of giving her advice along the way as she developed the business.  So what did she do last week to hit it out of the park?