Silicon Valley Watcher - conversations and observations at the intersection of technology and media

The lack of IPOs is harming the cycle of innovation in Silicon Valley but if you look beyond our region, it's effect is much larger.

Grant Thornton, a large accounting firm, has published a study that shows the connection between IPOs and the health of the US economy.

And it shows how new listings in Asia are helping to shift wealth and competitiveness outside of the US.

Here are some of the findings:

The scale of the decline in IPOs:
- Just 12 companies went public in the US in the first half of 2009 - 4 were non-US.
- 1997 was a peak year for IPOs, since then it has declined 39% (55% decline if adjusted for GDP growth.)

Asian IPOs:
- Asian growth in new listings is far higher than its GDP growth.
- Hong Kong new listings have doubled since 1997, tripled since 1991.

The US is losing the number of listed companies:
- Just to maintain US listings at the current level would require 360 new listings a year - a level not reached since 2000. There were only 54 in 2008 and an average of 166 a year since 2001.

- The US would require 520 new listings a year to keep pace with GDP growth of 3%.

The study claims the US has lost 22 million jobs because of the lack of new listings.

Pascal Levensohn, Board Member of the National Venture Capital Association (NVCA):

“The inability for emerging growth companies to access U.S. public equity capital by completing IPOs below $50 million inhibits job creation and hurts American entrepreneurs more than any other group. Starved for long-term risk capital in the U.S., the next generation of innovative private enterprises will continue to move to non-U.S. emerging innovation hotspots, where startups are nurtured through attractive capital incentives, if we can’t repair the bridge into public markets.”

The study offers a long list of possible solutions. Here are some:

- Create an alternative public market segment
A public market solution that provides an economic model that supports the “value components” (research, sales and capital commitment) in the marketplace. It requires a parallel market segment that leverages a fixed spread and commission structure.

- Make enhancements to the private market
A private market solution that enables the creation of a qualified investor marketplace – consisting of both institutional investors and large accredited investors.

- Free companies to market their securities more broadly
Eliminate SEC or statutory restrictions on “general solicitation” or “general advertising,” provided the ultimate purchasers are “qualified” investors. Permit companies and analysts to have media discussions of company performance and news...allow investment companies and ERISA accounts to invest a larger portion of their assets in unregistered securities.

- Overhaul verification of QIBs and accredited investors
Rather than requiring the company or private placement agent to verify, shift the burden to the investor to self-qualify (subject to liability for misstatements) for the new private placement market.

- Exempt companies from SEC registration
Permit holding of companies’ shares by an unlimited number of qualified shareholders (eliminating the 500-shareholder and the 100-accredited-investor limitations).

- Self-regulate trading spreads
To attract capital and promote liquidity, this new market must create and preserve economic incentive for its constituents. Allow the market to set minimum quoted spreads and commissions.

- Exempt market participants from holding period
Exempt new market participants from holding period restrictions, and remove the obstacle requiring market participants to purchase unregistered securities with “investment intent.” The “investment intent” requirement hinders the development of private markets, and is unclear and at odds with the very notion of what a market participant is supposed to do.

- Encourage centralized information, control and custody systems Companies should seek out marketplaces that provide systems to support the management and delivery of appropriate disclosure information, and that facilitate the tracking and delivery of shares.

-Research permitted to work with banking
As a market for “qualified investors,” research analysts would be permitted to work with investment banking and be compensated on investment banking business, rather than be barred by FINRA Rule 2711 and the Global Research Settlement.

Foremski's Take:
There is no doubt that the lack of IPOs is harming the economy. However, this study appears to be an excuse to drive large changes in regulations governing the stock market and investments.

This will be difficult to do given the current lack of trust in Wall Street and its enthusiasm to exploit any arbitrage opportunity no matter the cost to society.

There would be plenty of new loopholes for Wall Street to discover with such a large number of new rules.

Also, there is nothing said about changing Sarbanes-Oxley. This is a huge burden on young companies and it is one of the largest obstacles to an IPO.

It would be far better to leave the stock market and investor regulations in place and to focus on reforming Sarbanes-Oxley.

This would be a much faster strategy in opening the door to new IPOs than persuading Congress to pass the many changes in stock market regulations that the study's sponsors have requested. There's little chance of that happening.

You can see the whole study here.

I recently blogged about an article focused on Silicon Valley's workforce and how the author, Tamara Carleton, believes that Boomers, Gen Xers, and Millennials can form a potent team.

In the innovation lifecycle, if Boomers serve as advisors and Gen Xers as the entrepreneurs, then the Millennials could provide potent networkers.

A reader writes:

As a member of the Boomer Generation and a longtime Silicon Valley worker, I can only hope that it happens that Boomers become trusted and knowledgeable advisers to Gen X'ers while Millennials do the work. My suspicion is that many, if not the majority, of those laid off in the last 2 years here in SV are actually Boomers who became "too expensive" for the tech companies here and thus were sacrificed.

I am one of them and I have been to many interviews but not offered jobs that I am very well-qualified to do. I guarantee you that age discrimination is running rampant in this so-called Valley of Heart's Delight.

Only when this ceases will companies be available to consider the vast storehouse of knowledge that Boomers could provide.

Is he right? I certainly know many people in that same situation, people with masses of experience and talent yet they are in their 40s and 50s and unable to find work.

Is there discrimination against older people? If Silicon Valley cannot tap into all of its resources it won't stand a chance in the global marketplace.

- - -

Please see: Can Silicon Valley Attract the Right Workforce for its Next Turnaround? | Newgeography.com

Plato said necessity is the mother of invention. Robert Goldman, a successful software engineer, didn't need to know anything about Plato, he knew that he needed to help his sister, diagnosed with terminal cancer.

In the process, he invented a breakthrough medical device that has the potential of saving the lives of tens of thousands of people. It's an inspirational story that movies are made from and Oscars awarded.

But that's far from Mr Goldman's mind. He's just happy that after more than 7 years, the FDA has given approval for a medical device that has the potential to shrink or kill tumors in people diagnosed with terminal cancer.

But let's start at the beginning. Let's start with Mr Goldman, who was happily retired.

Mr Goldman had made a fortune through his company GetMedia, which had developed a number of breakthrough technologies in the 1990s, that made possible things like the digital download. He sold his intellectual property to Nathan Myhrvold, the former Microsoft CTO, founder of Intellectual Ventures, an IP licensing company.

He now had plenty of money and no longer needed to work. But early retirement was marred by news that his sister had been diagnosed with cancer and the prognosis was terminal.

Here are some notes from our conversation:

- I wanted to help my sister as much as I could. I went to Medline, where there are hundreds of thousands of documents describing clinical studies, to see what I could find.

- There are billions of dollars spent every year on clinical studies. I was surprised to discover that there were sometimes clinical studies of treatments for which there were no clinical applications. The trials would show successful results but no clinical applications.

- I found a 1987 Italian funded set of clinical studies that showed successful treatment of tumors by the application of chemotherapy directly into the tumors. But I could find nothing since then.

- Tumors develop a feeder vessel that provides them with blood. I came up with an idea that if you could make a catheter small enough, you could thread it through a patient's blood vessels and directly into the tumor's feeder. You would then be able to direct chemotherapy straight into the tumor.

- I decided to design and make the device. I founded Vascular Designs in 2001.

- Medical device startup companies generally take a lot of money, around $25 million is a fairly typical first round capital requirement.

- I had absolutely no idea what I was doing, or what it would take. But I wanted to make sure I wasn't completely delusional. I thought I would start at Stanford and met with Dr. Michael Dake, professor of cardiothoracic surgery at Stanford University School of Medicine. He told that me if I could produce the device it might very well work.

- But there were many people who told me it couldn't be done, or that the materials wouldn't work, or that I would never get it through the FDA process. I would ask them if this is because they had done the research? They said no, they hadn't, but it wouldn't work anyway.

- I ignored their advice. I was determined to go ahead with it because I wanted to help my sister as much as possible, even though I had absolutely no idea what I was doing.

- I managed to outsource a lot of the work. I found a company in Santa Cruz, through the Internet, that could help me with the design.

- The first catheter we produced we were told it was too big. There was no easy way to scale it down. We had to start again.

- It took us two years to do the engineering. And it has taken the FDA seven years and two months to approve the product for sale. We were able to shorten the FDA process a little by saying that it was similar to other devices that had already been approved.

-Because the FDA is so strict it will be very easy to get approval in other countries.

- We are now just 2 months away from using it in cancer treatments.

- It cost just $1.8 million to develop. I did raise some funding only because some good people I knew wanted to be a part of this and this was how they could participate. They will make a lot of money from this, which is good because they can put it towards the development of other life saving products.

- I'm hoping that if people read about this device they will bring it to the attention of their doctors despite some medical practitioners not believing that it can be done. When you have terminal cancer and you have exhausted all other treatments why wouldn't you want to try this?

- There was no prior intellectual property around this device, we own the IP. The market for this runs into the billions of dollars.

- I'm not interested in the money, I already have enough money. I just want to help people. We want to make sure that this is available to people who can't afford the treatment. Why should this be only for the rich?

- It's too late for my sister. She died and suffered terribly. I can't wait to meet the first person and their family that will benefit from this. I've found my agenda in life and it's about helping people.

- - -

Mr Goldman showed me the catheter, a long very thin teal colored tube that is attached to three plungers. When Inserted into a blood vessel (a clear plastic tube for the demo) the plungers inflate two balloons that produce a tight fit. This blocks blood flow to the tumor. A separate plunger can then deliver chemotherapy directly into the tumor. The device can be used to treat any solid tumor, breast cancer, brain cancer, pancreatic, etc.

Here is a video of how it works:

Here is today's announcement of FDA approval:

Potential Breakthrough Cancer Treatment Now Available from Vascular Designs - The Company Announces FDA 510(k) Marketing Clearance for IsoFlow™ Infusion Catheter, Making Possible the Direct Delivery of Chemotherapy to Cancerous Tumors

It's always interesting to meet with outsiders and to hear their view of Silicon Valley, just as it is to leave the valley and notice that there's a whole world outside of our echo chamber (that doesn't care about our little world and its spats and spittle.)

Last week I was on a panel with Carolyn Pritchard, from GigaOm, speaking about the future of journalism. As always, it's the people that turn up to such events that interest me the most.

One of the people I met was Jose A. Del Moral, A Spanish entrepreneur. He was visiting for a few weeks and popping into various events around Silicon Valley. He said he was shocked about how positive everyone is in Silicon Valley.

Mr Del Moral wrote a blog post: There is a lot of bullshit in Silicon Valley.

Everybody is so nice! You have to be really careful, as people are not so honest with how they really feel. There is a lot of bullshit in Silicon Valley! If you come here with white shoes, they will get brown so fast...

Jim Clark, co-founder of Silicon Graphics and Netscape was one of four winners of the SDForum 2009 Visionary Awards. He spoke about his earlier life and how he was thrown out of school, then trying to get out of Texas, then trying to get out of the navy. It seems his instincts for an exit strategy have served him well as a Silicon Valley entrepreneur...

He also spoke about the importance of Stanford university and its encouragement of entrepreneurs. Other universities look down upon business people.

Judy Estrin: Silicon Valley Unwilling To Fix Structural Problems Around Innovation, Blame Others

Kay Koplovitz: We Need More Women Entrepreneurs

Vinod Khosla: How To Succeed In Silicon Valley By Bumbling And Failing...

Judy Estrin, one of Silicon Valley's top entrepreneurs, continues to sound warnings that innovation is in danger because of fundamental structural problems.

Ms Estrin again voiced her concerns during her speech at the SDForum Visionary Awards 2009. She was one of four recepients of the annual awards.

She said that Silicon Valley has been living off the innovative work that has been created over the past 30 years but that there needs to be new work done to support future startups.

"What I've been struck by, and concerned by, is that although everybody seems to understand that we have significant structural problems, few are willing to acknowledge their role in the solution. Each group tends to point to someone else that needs to change. The VCs need to take more risk, Wall Street needs to be less short-term focused, government is too involved, government is not involved enough... This is natural because change is hard. But isn't innovation and change what this valley is all about?"

She said that there is a need for "sustainable innovation" so that our future generations, our children, can experience a quality of life at least as good as we have had.

Here is her speech:

The SDForum Visionary Awards are my favorite event of the year because there are tons of great stories and contacts to make. It was good to see BusinessWeek's bureau chief Rob Hof, and also Rebecca Buckman from Forbes, but apart from them, there was very little media there -- which was great for me because it gives me more chance to get exclusive stories, which I did. I'll be publishing more stories and video over the next few days.

Here is a taste of what's to come and also some notes from the evening:

[SDForum visionary awards are later this week. Here is a series SVW is plublishing this week on Silicon Valley stories from previous SDForum awards events.]

From 2005:

Scott McNealy, Sun's CEO, introduced Carol Bartz, CEO of Autodesk.

Mr McNealy was in classic form, dressed in his signature jeans, white shirt ,and navy blue blazer, and he shared a couple of anecdotes about Ms. Bartz, who used to work at Sun.

He recalls that Ms Bartz stomped into his office and resigned because of a generous job offer from a rival firm. Mr McNealy acted swiftly: He walked down the corridor and into the office of his VP of Marketing and said "You're fired."

He walked back over to Ms Bartz and said "You can't resign, you're VP of Marketing." What happened to Lloyd? Ms Bartz asked.

"Lloyd is no longer with us," deadpanned Mr McNealy. Lots of laughter.

Later this week SDForum hosts its 2009 Visionary Awards and it will honor two women business leaders, Judith Estrin and Kay Koplovitz, also Vinod Kohsla and James Clark.

The event is held in Woodside, in the back yard of Heidi Rozen, herself an accomplished entrepreneur. It's one of my favorite Silicon Valley events because it is relaxed and full of the many personalities, and stories, that have made this region into a global powerhouse of innovation.

To celebrate the Visionary Awards I'll be publishing some videos and stories from past events.

Here is Kara Swisher (All Things D) from last year, introducing her colleague Walt Mossberg, telling stories about Walt's enjoyment of drugs, and that as a journalist she would never let the facts stand in the way of a good story. All tongue-in-cheek of course...

http://video.google.com/videoplay?docid=6812621760915098674&hl=en

Check back later today and this week for more video and Silicon Valley stories from past SDForum awards events.

Silicon Valley's startup world operates in its own future bubble of possible exits but it does depend on today's financial markets for drawing investments. Over the six months there has been a lot of concern about inflation but inflation can be good because it encourages investments today. Today's assets are worth more tomorrow.

With deflation, it is wiser to hold-off investments because tomorrow brings a lower price.

The massive injection of money into economies by the US government, and other governments, has brought the fear of hyper-inflation. But it now looks like the problem is hyper-deflation.

The Chinese government is blocking access to various services and web sites such as Twitter, Flickr, Bing because of the anniversary of the Tiananmen Square protests. This peaceful demonstration, which would have been allowed by our democracies, turned into a massacre as the Chinese government ordered the army to crush it.

The most powerful image of that time, if not the century, is the lone protestor, calmly walking out in front of a column of tanks and stopping them with a shopping bag in each hand. The column tried to go around him, each time he moved to step in front.

Please take 1.12 minutes to view this:

The phenomenal courage of this unknown protestor is incredible. Contrast it to the gutless behavior of Silicon Valley companies towards the Chinese government.

The BBC's Maggie Shiels finds one source: Tom Siebel, the retired founder of Siebel Systems, to come up with a long story and an eye catching headline: Silicon Valley crown up for grabs

"I think Silicon Valley has been toppled from its pedestal," he told BBC News. "I think information technology is much less important in the global picture today than it was even 10-20 years ago."

We've heard this one many times before, that innovation can now be done anywhere, and that Silicon Valley is going to be far less important. It's an old argument that has been used each time Silicon Valley goes through a downturn.

Yet each time Silicon Valley goes through a bust cycle it comes back stronger than before. I've seen several boom and bust cycles since 1984, such as the PC bubble bust; the CD-ROM multimedia bust, the dotcom bust, and the four-year bust cycles of the entire chip industry, plus periodic busts in IT, data storage, and biotech. Each time Silicon Valley rebuilds and becomes larger and more important.

Silicon Valley's success as a global engine of innovation takes nothing away from growth in other regional centers of innovation. It is not a win/lose equation, all centers can grow -- yet journalists continue to poke for holes in Silicon Valley's prospects.

Silicon Valley has its challenges but there's no place that comes close to rivaling this region. I'm constantly hearing of companies moving their HQs to Silicon Valley from all over the world. For example, at a recent SF New Tech event I met the CEO of French firm blueKiwi Software, Carlos Diaz. He was in the middle of moving himself and family to Silicon Valley.

Loic Le Meur, founder of Seesmic did the same thing about eighteen months ago, moved his company and family to Silicon Valley.

Here is an excellent view on Silicon Valley from Bill Coleman, a Silicon Valley veteran. He recently sold BEA Systems, which he co-founded, to Oracle for $8.5 billion. We met earlier this year, here is part of our conversation:

"I have a basic theory that Silicon Valley reinvents itself by inventing a new platform layer every 10 years." Bill Coleman says that Silicon Valley was lucky to develop information technology (IT), a technology that is now becoming cloud computing, a new platform. Information technology is also vital in driving the development of two additional disruptive technologies: nanotech and biotech. And fortunately, Silicon Valley leads in all three industries.

Silicon Valley also leads in green technology, a large and growing market. But green technology is different -- it isn't a disruptive technology. He says that a disruptive technology has to have a characteristic of the Peter Drucker rule in that it provides ten times the value of what it's displacing.

Cloud computing doesn't need government incentives because it is a disruptive technology, says Mr Coleman, especially the next stage, beyond what he terms "Cloud 1.0." As the cloud computing platform becomes more sophisticated, he predicts that there will be an acceleration in the use of the cloud driven by a "quadruple conversion." Video, audio, and IT data all become IP based, and productivity applications become integrated with social networks.

About 18 months ago I met with a large Russian delegation on a trip to Silicon Valley to learn some of its lessons. They have plans to establish multi-billion VC funds around several innovation centers across Russia.

They asked lots of questions about how things worked around here but they told me that they didn't want to copy Silicon Valley.

"We don't want to build a clone of Silicon Valley, we know that wouldn't work. But we believe we can learn how to avoid some of Silicon Valley's problems and eliminate its bottlenecks," said Yuri Ammosov, a senior policy officer in the Russian Ministry of Economic Development and Trade.

They also didn't want any regulations such as Sarbanes-Oxely, which they clearly saw as a very heavy load on startups.

I told them I would tell them Silicon Valley's biggest secret. I paused for dramatic effect. As if on a cue, they all leaned in a little closer.

I I told them that Silicon Valley's biggest secret is: "Failure. Silicon Valley tolerates massive amounts of failure." Less than one in ten startups succeeds.

I felt at ease sharing this vital secret because it's something that can't be stolen. Who would want to steal the idea of tolerating massive amounts of failure?!

Yet it is this tolerance of failure is what allows Silicon Valley entrepreneurs a second and seventh chance to fail again and again and eventually succeed. In other cultures, failure is often punished, you rarely get another chance. Here, failure is an important part of our culture of entrepreneurism.

Innovation centers can be built anywhere there are good universities; and small amounts of seed investment can startup a lot of companies these days because capital costs are very low. But a culture of entrepreneurism is something that can't be bought -- and it's not easily developed or transplanted.

For example, the Russian delegates said that they have a big problem: Russian startups won't disclose their business ideas because they don't trust the Russian VC funds and think the officials will run off with their ideas.

The Russians have a lot of work to do in building up their local culture of entrepreneurism. And that's also true everyplace else that's not Silicon Valley.

Silicon Valley's crown is not up for grabs. No one comes close.

- - -

Please see:

Thought Leader: A Conversation With Valley Veteran Bill Coleman About The Economy And The Business Of Disruption . . .

Turning Oil Into Innovation: Russian Delegation Seeks Silicon Valley's Lessons

The disruptive tectonic forces at the intersection of technology and media

The panel is part of a pilot program called "Fridays with Foremski" that follows me around Silicon Valley as I speak with local entrepreneurs, thought leaders, report on conferences, etc. Silicon Valley is an unique place and we want to produce a professional program that captures some of the essence of this amazing community.

We'd like to attract a couple of large underwriters for the series, we're talking with one large company, if you know of another, let me know. That way you might see a second episode . . . coming to a Friday near you :)

Produced by SF Media Collective. Recorded at the Horn Group.

Please see a Silicon Valley sampler:

Sramana Mitra sent me an email:

As our industry works to reinvent itself, here are some thoughts on the Future of Innovation. I am fully aware of the issues around the need to conserve cash and limiting capital calls for the venture business for the moment.

However, there are also other issues that need to be addressed. Companies that ought to be funded are struggling. Where are the big ideas?

As always, I am happy to you hear your thoughts.

Here is an excerpt from her latest Forbes column, which less about the Future of Innovation, and more about describing the current state of innovation: barriers.

. . .While scientists are experiencing strong support, the entrepreneurs trying to work at the cusp of different industries seem to still be having a difficult time. It is worth exploring why.

. . .Yes, you do find some technologists who grasp the cusp. But then you also need business people and investors to play their parts for an innovation to successfully make it to the market.

But many more entrepreneurs and venture capitalists get excited about Web 2.0 than about the cusp of design and manufacturing of semiconductors. Why? Because these two fields are extremely complex, requiring a level of technical depth, intellectual horsepower, business savvy and appetite for risk that is rare in today's technology industry. Spreadsheet jockeying by some MBAs with little real instinct for innovation is not enough.

I totally agree.

Please read the entire column here: Barriers To Innovation - Forbes.com

This is a great time to invest in innovation:

- The next big thing always comes out of downturns.

- It is easier to find great people.

- Salaries are lower.

- Office space and other resources are more plentiful and less expensive.

- Capital startup costs are lower.

- IT costs are lower thanks to cloud computing and web services.

- Programming languages and development tools of various kinds are simpler and more powerful.

- Marketing costs are lower (if done right).

- Work can be virtualized across time zones and regions.

- Most importantly: As bad as this recession will get, the upturn that follows will be even larger.

The next upturn will be led by what I call New Rules Enterprises, these are organizations that are highly efficient and have made the most of the economies of Internet 2.0. More on this in future posts.

The global economic crisis doesn't seem to be showing any rays of light, which is quite worrying. But at least there is some good green news from the economic slowdown:

- Factories around the world have scaled back production and are not polluting air and groundwater as much as before.

- We have fewer trucks and ships polluting the atmosphere.

- We have a much smaller carbon footprint worldwide because there is far less use of fossil fuels in manufacture and transportation.

- We are buying fewer replacements for goods we own and making them last longer, lightening the load on landfills.

- We are using less of the earth's limited resources in manufacturing goods and providing various services.

- Fewer of us are traveling to jobs which reduces carbon footprint and pollution.

- Less pollution improves people's health and saves lives.

- More importantly: We are more likely to develop and adopt technologies that are more cost efficient, which means saving resources and energy. And this is where Silicon Valley's companies have a key role, developing disruptive technologies that replace the more wasteful processes that are currently used in many industries. It will lead to the creation of new rules enterprises--businesses that are greener and more profitable.

- - -

Please see: As the economy slumps, so does trash - Los Angeles Times

Tough times call for tough measures and we can see that in the increasing numbers of layoffs among large tech companies.

It must be particularly tough on staff being cut from companies with large amounts of cash in the bank. They worked hard to help their companies create large cash reserves during the good times but they aren't able to benefit from those nest eggs when times turn bad. Too bad.

Here is a look at the cash (and debt) of some top tech companies:

Microsoft (MSFT) $19.71 billion ($1.98 billion debt)

Microsoft Layoffs - 5000 Jobs To Be Eliminated

Google (GOOG) $14.41 billion (no debt)

Google Layoffs: 6000 Cut - Details Kept Off Web

Intel (INTC) $11.84 billion ($1.99 billion debt)

Intel restructuring operations in Asia and US, up to 6,000 jobs affected

Cisco Systems (CSCO) $26.7 billion ($6.87 billion debt)

Cisco Schedules Conference Call for Q2 Fiscal Year 2009 Financial Results - Yahoo! Finance

Adobe (ADBE) $2.02 billion ($350 million debt)

600 job cuts at Adobe > News > Flash Magazine

Yahoo! (YHOO) $3.2 billion ($63 million debt)

Latest rumor has Yahoo firing 3,000 workers - BloggingStocks

eBay (EBAY) $3.64 billion (no debt)

EBay cuts 1000 - MarketWatch

Apple (AAPL) $24.49 billion (no debt)

Here is an excerpt from an editorial by John Dalziel at Flash Magazine on Adobe's recent 600 job cuts:

. . . It is interesting to see a company that makes almost a billion quarterly, thinking that a possible loss in revenue of 2-4% is a great reason to fire more than 8% of their staff?

. . . Let's hope that the Adobe executives remember that they're primarily in the knowledge business. It's really their employees that makes a difference, not layoffs that are staged to impress shareholders. After all - a company that earns $130.000 per employee per quarter (!) shouldn't really be considered so unprofitable it has to fire people? In our books, that's a decent profit so the layoffs seems more like a play for the shareholders than actually making a difference. Eventually this will hurt Adobe's innovation as employees feel it's an unsafe place to work.

600 job cuts at Adobe > News > Flash Magazine

The same argument could be easily applied to almost any large tech company.

Sarah Lacy over at Business Week writes:

Big companies could lose valuable employees to rival startups if they abandon their traditional lure: job security

In December, IAC Interactive (IACI) CEO Barry Diller said the unthinkable—at least for a corporate executive amid a recession. "The idea of a company that's earning money…to have cutbacks just so they can earn another $12 million or $20 million or $40 million in a year when no one's counting is really a horrible act when you think about it on every level," Diller told the crowd at the Reuters Media Summit. In other words, if you're making money, you shouldn't be laying off huge numbers of employees to please an investor base that's unlikely to be appeased in any case.

Corporate America, Swing Your Ax Wisely - BusinessWeek

President Barack Obama has promised to appoint a Chief Technology Officer for the US. I've heard some great suggestions from readers and I'm sure they would do a great job. My top choice would be Judy Estrin because of these qualities:

- she is a successful serial Silicon Valley entrepreneur.

- she is a former CTO of Cisco Systems.

- she has studied the subject of innovation in great detail with the recent publication of her book: Closing the Innovation Gap: Reigniting the Spark of Creativity in a Global Economy

- she is one our top thought leaders.

- she sits on the boards of some of the world's largest companies: The Walt Disney Company, Federal Express, and is a former director at Sun Microsystems.

Here is my interview with Ms Estrin from last year in which we talk about her recently published book:

- - -

Please see:

Judy Estrin on the Gender Gap in Silicon Valley

http://www.theinnovationgap.com/

I think President Obama's CTO should be from Silicon Valley because we have some very capable people here, but more importantly, it would serve as a fantastic recognition that we have a national treasure here: an incredible engine of innovation that continues to produce in good times and not.

In fact, Silicon Valley produces its best work during its down times. It is during its periodic recessions that "next big thing" always gets developed. So this is a great time for Silicon Valley and it would be great if President Obama chose someone that comes from this area and understands the dynamics of innovation, imho.

- - -

Please see:

- What Should Be Top Of President Obama's Tech Initiatives?

- Intel Wants Nationwide WiMAX To Top President Obama's Tech Initiatives

Google Exec Says No To Obama's CTO Post - The Channel Wire

President Barack Obama's administration comes to power with a large number of expectations from many sectors of society and industries. It is a testament to his victory that he has been able to become a beacon of change to so many.

One key industry expecting change is Silicon Valley and the business of technology and innovation. There is a lot that President Obama's administration could do to for this sector and it is a sector that could potentially help lift this economy out of the doldrums: innovation has always been an engine of change.

Silicon Valley and the Bay Area has an incredibly diverse economy and it has a major role to play in the future of this country and beyond. It has a unique combination of two great universities, a massive venture capital pool, and a workforce drawn from the world's best. And SIlicon Valley does its best work during times of downturn, all of its "next big things" emerge from its bust cycles.

Silicon Valley and its industries of technology and innovation haven't asked for a bailout, but they could benefit from the right policies and initiatives.

President Obama has promised to appoint the nation's first CTO. What should be top of their agenda?

Promoting WiMAX would please Intel and a few others. Or should tech policies focus on educating a 21st century entrerpreneurial workforce?

What do you think?

I'm going to be asking this question as I go around the valley and I will continue writing about this subject. If you have suggestions please tell me. I'd love to hear them.

- - -

Please see:

- Intel Wants Nationwide WiMAX To Top President Obama's Tech Initiatives

An Agenda for Obama's CTO - BusinessWeek

Google Exec Says No To Obama's CTO Post - The Channel Wire - IT Channel News And Views by CRN and VARBusiness

Obama's CTO: It's Not About The Money - Forbes.com

Obama CTO - Help set the priorities for the Obama administration

I come across a lot of travel sites or travel related startups. Here is an interesting one: Offbeat Guides from serial entrepreneur David Sifry.

I'm a big fan of Mr Sifry (Technorati founder, etc...) and very interested in his ventures because he tends to be on the leading edge on many trends.

Here is a 9 minute video of Mr Sifry describing his latest venture at the recent monthly meeting of SF New Tech. (I had to shoot in night-mode because it was very dark.)

http://www.youtube.com/watch?v=6rj1qo1hITI

I just came across this video of Morten Lund, a Danish VC speaking at the recent Le Web conference. In this brief presentation Mr Lund talks about how these tough economic times are great for being an entrepreneur, and he gives some great advice for startups.

Mr Lund's advice is all the more interesting because he recently lost all his money, some 30 million Euros, on a media venture in Denmark.

Foremski's Take:

I love Morten Lund's attitude. His advice is spot on. And like Loic Le Meur says, this is rare in an European VC/entreprenuer. But that goes to show that some of Silicon Valley's culture is escaping beyond Northern California.

Despite being penniless (Euro-less) you and I know that Mr Lund will be back in the lolly. Because it's not about the money - that's the secret (...that everyone knows but few have the courage to grasp).

Please see:

As raw as it gets - Skype legend Morten Lund bankrupt

Here is one of the best scenarios I've seen for what to expect in 2009. This essay, for the ATCA Open, is written by journalist and author Niall Ferguson who is also a contributor to the Financial Times.

I was especially struck by this passage:

Obama had set out to construct an administration in which his rivals and allies were equally represented. But his rivals were a good deal more experienced than his allies. The result was an administration that talked like Barack Obama but thought like Bill Clinton. The Clinton-era veterans, not least Secretary of State Hillary Clinton, had vivid memories of the bond-market volatility that had plagued them in 1993 (prompting campaign manager James Carville to say that, if there was such a thing as reincarnation, he wanted to come back as the bond market). Terrified at the swelling size of the deficit, they urged Obama to defer any expenditure that was not specifically targeted on ending the financial crisis.

After a whirlwind trip to New York and a visit with the Wall Street Journal I popped back to San Francisco for a couple of days before heading back out again to London.

Party season . . .

I came back so I could catch a couple of key events such as Vivek Ranadive's Christmas party at his newly built Atherton home. This is a phenomenal bachelor mansion for the CEO of Tibco, and it took about four years to build. I had fun checking it out its vastness in the company of Forbes reporter Kym McNicholas [Please see Kym's excellent "How to Obamafy your business."] It was also great to see reporter Carolyne Zinko from the San Francisco Chronicle.

I was thinking that the mansion might make for a great reality TV show if it were filled with five Silicon Valley CEOs!

The next day M.R. Rangaswami was hosting the annual Sandhill.com Christmas party. M.R. told me that he was considering canceling the party because of the poor economy but decided against it because he'd had a good year and it was creating jobs for waiters, kitchen staff, and hotel employees at the Intercontinental Hotel in San Francisco. Part of the evening entertainment was a marvelous performance by Mrs Rangaswami and her colleague Sarah Holzman performing a classical piece. They are both members of the very talented The Laurel Ensemble.

The trouble with compelling content . . .

The next day I was off to London. My 21 year old son Matt was over and gave me a ride to the airport. There was a little bit of drama because his BMW's radiator cracked wide open just before we got to the airport. When we stopped at the passenger drop-off clouds of coolant were billowing out from under the hood. Fortunately AAA was soon on the scene, and two airport employees, both BMW aficionados, stopped by and gave Matt recommendations to an excellent BMW mechanic nearby in San Bruno.

The Virgin flight was quite packed and my hopes for empty seats beside me were dashed. Never mind, the in-flight entertainment was very good. Unfortunately, it was so good that I neglected trying to take a nap, and before I knew it we were landing. That's the problem with compelling content it distracts you from what you should be doing.

Cheshire Cheese lesson for the media . . .

My trip to London is to catch up with my family and friends. It's also a chance to catch up with some of my journalist colleagues. One of the best opportunities is the annual Christmas party at Ye Olde Cheshire Cheese, a pub in Fleet Street. The party is organized by PR firm SourceWire and it usually pulls in a lot of journalists. But this year, although there were many familiar faces, there many more that didn't turn up. I don't know if this was because of the continued problems that the UK media industry.

Fleet Street is where much of the UK newspaper industry was once collected, but many of the newspaper companies moved to less expensive quarters in London's docklands.

There might be a lesson to be learned from Ye Olde Cheshire Cheese. The pub's structure dates back to 1667, rebuilt after the massive fire of London in 1666. If the pub can be restored from its ashes, then the UK newspaper industry can probably do the same.

I heard that The Independent, one of the large national UK newspapers, is considering moving to an Internet only edition. That must mean that the financial pressures on the other newspapers must also be heavy. I wish The Independent good luck with the move, it is going to be very challenging to build a business from online revenues. Figuring out a way to support quality media through online revenues is one of the most important challenges on the Internet. If The Independent, or for that matter, any other newspaper can figure it out then we all benefit.

High Street casualty . . .

The economy in Britain is very bad even though the London bars and restaurants are heaving with people. It is difficult to see the effects of a recent massive jump in job losses and predictions for more job losses in 2009.

There are many business bankruptcies but none more shocking than the closure of Woolworths. These are the original "dollar" stores, selling everything from household goods, to toys, to birthday cards, and more, and they hold a special place in most people's memories.

As a child I was always thrilled to visit these emporiums of many things at prices that my pocket money could afford. There is/was a "Woolies" in the middle of nearly every high street in Britain. For my family and friends, the demise of Woolies has brought home the meaning of the economic crisis far more than the closure of banks and financial institutions.

The cure for excessive spend and borrow is . . .

As in the US, there are many attempts to boost the UK economy with bail outs, cuts in sales taxes, etc. But there is also plenty of irony that abounds as economists berate the British for borrowing too much, and spending too much, yet the government policy is to borrow and spend its way out of the recession.

Britain is under the same deflationary pressures in assets that are affecting the US. One way to counter deflation is to print money and to create inflation. That's because deflation is incredibly damaging to an economy. Things costs less tomorrow so why buy today? With inflation it is potentially an economic stimulus because it is better to buy today than tomorrow. Here is a quick explanation from 1933 (Hat tip DK Matai and ACTA Open.)

Avoiding this tipping point . . .

The problem with trying to head off deflation by printing money, also known as quantitive easing, is that inflation can quickly get out of control and create a situation known as hyperinflation. There are accounts of hyperinflation during the German Weimar republic in the 1930s when people used wheelbarrows full of money to go shopping for groceries. A current example is Zimbabwe, which has an incredible 2.4 billion per cent per month hyperinflation. The tipping point into hyperinflation can happen very quickly.

Happy holidays!

- - -

Please see:

   Ye Olde Cheshire Cheese is one of the few pubs in London that can justify the 'Ye Olde' in its name. It was well known in the 17th century and many pubs have previously occupied this site, one of them, the Horn Tavern is recorded in 1538. The earliest incarnation was a guest house belonging to a 13th century Carmelite Monastery, the pub's vaulted cellars are thought to belong to that building. The pub was destroyed in the Great Fire of 1666 and rebuilt the following year.

Olde Cheshire Cheese Pub, City of London, - Traditional and Historic London Pub Guide @ Pubs.com

The original American F.W. Woolworth Company and related businesses:

F. W. Woolworth Company was the original USA-based chain of five and dime stores.

Foot Locker, the current name of the company after its change in focus to athletic clothing.

Woolworths Group PLC is the owner of the Woolworths chain of high street shops in the UK (originally part of the F.W. Woolworth company, but separate since 1982).The UK stores went into administration in November 2008.

Woolworth's - Wikipedia, the free encyclopedia

Central banks may soon resort to their most powerful weapons against deflation: the printing press and the “helicopter drop” of money. It is a time for which Ben Bernanke, chairman of the Federal Reserve, has long prepared. Will this weaponry work? Unquestionably, yes: used ruthlessly, it will eliminate deflation. But returning to normality thereafter will prove far more elusive.

FT.com / Columnists / Martin Wolf - ‘Helicopter Ben’ confronts the challenge of a lifetime

How to avoid the horrors of 'stag- deflation' By Nouriel Roubini

World to Face Super Oil Price Shock That Will Scuttle Any Economic Recovery

As inflation soars, the state keeps issuing bigger notes -- Z$10 quintillion, anyone? -- but even then, with bizarre exchange rules, it's hard to figure out what, if anything, they're actually worth. By Robyn Dixon December 20, 2008

Zimbabwe can't paper over its money woes - Los Angeles Times

The Home of the ZimEye » Blog Archive » Zimbabwe in top 10 crisis ridden countries - MSF

You might have heard of Doug Engelbart, and you might know him as the inventor of the computer mouse. But you probably don't know that he is one of the most influential computer visionaries of all time.

In the 1960s he and his colleagues were playing with concepts and designing systems that today we take for granted: visual interfaces, spreadsheets, email, and much, much more.

I had the great privilege of interviewing Mr Engelbart more than 3 years ago. I was at an event at Xerox PARC, a promotion for a book by New York Times journalist John Markoff "What the Dormouse Said: How the Sixties Counterculture Shaped the Personal Computer Industry."

The event featured a lot of early computer pioneers and many of them spoke about how they got inspired to work on computer design and systems development. Each one spoke about seeing a seminal demo by Doug Engelbart and how it changed their lives!

Some hadn't been at the demo but heard about it from others, and it still changed their lives! I was amazed at these stories, amazed that a demo could change people's lives, and amazed at the man behind the stories.

I didn't realize at the time that Doug Engelbart is still alive and was sitting just behind me.

After the event I was invited to a local restaurant where there were a few dozen people celebrating the publication of Mr Markoff's book. I was a little late in arriving and most people were crowded around Mr Markoff's table. Amazingly, the table with Mr Engelbart was half empty. I couldn't believe my luck and soon was sitting right next to him, and had an amazing conversation.

You can read the rest here...

A tribute to one of Silicon Valley's most influential and forgotten researchers

On Monday and Tuesday there is a celebration of Mr Engelbart's ground breaking "mother of all demos" at the Program for the Future Conference

It will feature:

• Professor Thomas Malone, Founding Director, MIT Center for Collective Intelligence
  
• Professor Hiroshi Ishii, Associate Director, MIT Media Laboratory
• Peter Norvig, Director of Research, Google
• Andries van Dam, Professor, Brown University
• Alan Kay, President, Viewpoints Research Institute
• Steve Wozniak, co-founder, Apple Computer, Inc.
  

December 8
- Speakers and Workshops on collective intelligence at The Tech Museum of Innovation,
201 South Market Street, San José (map). In keeping with Engelbart's vision of mass collaboration, this event brings together many communities -- education, business, nonprofit, social, political and technology. The day will end with a special tour, led by Peter Friess, President of The Tech Museum, through Leonardo: 500 Years into the Future, the largest exhibition of da Vinci's engineering, anatomical studies and art ever to visit the United States.

December 9- The morning program at Stanford University's Wallenberg Hall (map) is a Call to Action to organize ourselves to move forward to harness the collective intelligence of our community.

In the afternoon, SRI is celebrating the 40th anniversary of Engelbart's legendary "mother of all demos" at Stanford's Memorial Auditorium (map). We hope you will join us for that event as well.

Here is the demo!

We will be focusing on the big issue of 'collective intelligence'. This is a core issue for Doug Engelbart. He believes that humanity needs to develop its collective intelligence in order to solve the increasingly complex threats against it, such as environmental catastrophes, nuclear wars and pandemics. The combination of information technology and human society can bootstrap the collective IQ we need to encounter these threats.

Ramu Yalamanchi, CEO of Hi5 isn't worried about the recession. "We started in a recession so we know what to do. Plus, recessions make available some great resources."

Hi5, headquartered in San Francisco, is much better known outside of the region, and the US. It is larger than MySpace or Facebook, in 30 countries especially Spanish-speaking such as Mexico, and in developing countries--and it is growing faster than both.

"When we started in 2003, we saw that the US market was getting crowded so we looked at emerging markets, that's how we got popular outside of the US," says Mr Yalamanchi.

Hi5 has great momentum and it is looking for new markets. It thinks that virtual worlds is a potentially large opportunity. Earlier this year Hi5 acquired Pixverse, a small company that makes virtual products for virtual worlds. Gaia Online, for example, makes a lot of money from its virtual world economy.

"Our users like to express themselves creatively and we think that virtual worlds will allow them to do more of that. Also, mobile is very important for us, because in a lot of countries people have mobile phones but they don't have PCs."

Hi5 hopes that virtual worlds and mobile will help it continue growing at a very fast pace. In the first six months of this year comScore reported Hi5 visitors increased 79 per cent to 56.4 million per month from 31.4 million per month.

And although Hi5 is big elsewhere, it is not giving up on the US, it hopes to capitalize on its large Spanish speaking user base. "We think we can do very well among Hispanic users in the US," says Mr Yalamanchi.

Hi5 has also cultivated the application developer community by being a big supporter of the OpenSocial standard. This helps developers easily port their applications across different social network platforms.

Hi5 is a privately held company and has about $20m in cash. Mr Yalamanchi notes that economic downturns make resources less expensive such as office space, and also make it easier to find great software engineers, which will help Hi5 in this next phase of its expansion.

Foremski's Take:

Monetization of social networks continues to be a challenge for all social networks because the environment is different to search advertising. It is especially challenging for Hi5 because of its diverse geographic spread. Advertisers continue buy space on a regional basis rather than on a global scale and that won't change for a good while.

Also, ads on social networks are considered very low quality and they don't have the same conversion rates as on other sites. However, that means that there is an excellent arbitrage opportunity for those advertising agencies that can craft the right type of commercial message. Hi5 is working with various agencies to create interactive ads that engage users. And Hi5 has done well with partners in various local markets.

Hi5 is well positioned for growth. We are still in the early stages of social networks, and this is even truer in developing countries where many people are getting online for the first time, and that's where Hi5 has brand leadership. On the Internet being number 1 means being far ahead of number two, or three, and that's a great advantage for Hi5. Especially in markets that are growing far faster than the US.

Recessions might slow spending, but they don't slow Moore's Law, which means the Internet becomes more accessible every day to millions more people overseas, and that's where Hi5 is strong.

I'm not washing my right hand for a while because I used it to shake the hand of Muhammad Yunus, 2006 Nobel Peace Prize recipient and a person that I've held in the highest regard for many years.

Mr Yunus gave the keynote speech at the Tech Museum's Tech Awards 2008 which gives five $50K cash prizes to people and organizations using technology to make a difference in the world. Applied Materials has been the founding sponsor for these excellent awards for the past eight years through good times and not.

I got the chance to thank Mike Splinter, the CEO of Applied Materials, for the company's stalwart support of The Tech Museum of Innovation and the Tech Awards for Humanity.

"It's really great to see the support here tonight, this event gets larger every year," said Mr Splinter.

Microsoft, Accenture, Intel, and other companies sponsored the five $50k cash awards. And the turnout was huge this year which is why the event had to be moved to the cavernous trade show space of the San Jose Convention Center.

A challenge to Silicon Valley . . .

The Tech Awards was the place to be Wednesday evening as Silicon Valley's elite gathered in black-tie and glamorous gowns to show their support.

Mr Yunus gave an inspiring speech and issued a challenge to Silicon Valley and the world, to erase poverty. "Let's put poverty into a museum so that we can take our children and show them how billions of people used to live."

Mr Yunus is one of the world's top innovators. He founded the Grameen Bank with a $27 investment. It was the first micro-loan, a novel approach to banking that has helped to pull millions of people out of poverty.

His actions and those of his organizations have helped to create a tremendous amount of value in the world. It is a story that resonates in Silicon Valley where thousands of startups hope to make a big difference in the world.

A triple A rating for the poorest of the poor

Grameen Bank has made billions of dollars in loans and 97 per cent of all loans have been repaid with interest. Grameen Bank has also made home loans averaging $300 with similar repayment rates. "We haven't had to worry about the sub prime crisis," said Mr Yunus.

The Grameen loans are made to the poorest of the poor largely in Bangladesh, one of the poorest countries in the world. It is a fitting tribute to Mr Yunus and his organizations that they recognized that poorest of the poor are a better credit risk than borrowers in the developing world where mortgage defaults have far exceed the Grameen Bank's default rate by several degrees of magnitude.

Unlocking unlimited potential

Mr Yunus believes that every person has unlimited potential. "Our work has clearly shown that the poor do not create poverty, it is the system that creates poverty."

He invited Silicon Valley to join him in erasing poverty forever and making it a part of history, putting it into a museum. He said that he was honored to be in SIlicon Valley because the technologies produced here can make a big difference in the world.

He received two standing ovations from the audience.

- - -

Here is more info:

Global Humanitarian Recipient 2008

Dr. Muhammad Yunus For more information Global Humanitarian View 2008 Global Humanitarian Press Release

Professor Muhammad Yunus, pioneer of microcredit and founder of Grameen Bank, is the recipient of the 2008 James C. Morgan Global Humanitarian Award. Dr. Yunus will accept this distinguished honor during The Tech Awards Gala on November 12, 2008 where he and 25 innovators from around the world will be celebrated for applying technology to solve the most urgent issues facing humanity.

"For more than three decades, Muhammad Yunus' broad vision, creativity and leadership have improved the lives of millions through innovative, micro-financing practices," said Mike Splinter, president and chief executive officer of Applied Materials. "We are pleased to honor Muhammad Yunus, whose selfless mission and ability to inspire others to take action exemplifies the spirit of The Tech Awards."

Often referred to as "the world's banker to the poor," Yunus developed a benchmark microcredit application through his Grameen Bank which allows the rural poor access to micro-loans for entrepreneurial enterprises such as purchasing livestock and procuring weaving materials. Yunus' vision of a world without poverty has been the inspiration for his life's work. Yunus and Grameen Bank were awarded the 2006 Nobel Peace Prize for their significant contributions in the field of microcredit.

In 1976, Yunus determined that a mere $27 loan could transform the lives of many of the poorest villagers in Chittagong, Bangladesh. Since then, under Yunus' leadership his bank has provided more than $6.8 billion in small loans to would-be entrepreneurs who conventionally would not qualify for such loans from traditional banks, the majority of whom are women in businesses such as street vending and farming. Today, Grameen Bank operates 2,499 branches in more than 81,000 villages throughout rural Bangladesh.

2008 Prize Laureates

Intel Environment Award Cheetah Conservation Fund Namibia Learn more about this laureate

Accenture Economic Development Award DESI Power: Decentralised Energy Systems India India Learn more about this laureate

Microsoft Education Award Digital StudyHall Bangladesh, India Learn more about this laureate

Katherine M. Swanson Equality Award Build Change United States Learn more about this laureate

Fogarty Institute for Innovation Health Award Marc Koska, Star Syringe 41 countries including Angola, Bangladesh, Cambodia, China, Denmark, Myanmar, Nicaragua, and Sri Lanka Learn more about this laureate

Laureates 2008

Intel Environment Award Laureates

• Arcadia Biosciences United States
• Cheetah Conservation Fund Namibia
• Practical Action Peru
• Sunlabob Renewable Energy Laos
• Vereinigte Werkstätten für Pflanzenöltechnologie (VWP) Germany

Accenture Economic Development Award Laureates

• DESI Power: Decentralised Energy Systems India India
• NComputing United States
• Solar Electric Light Fund United States
• The Full Belly Project United States
• The Portable Light Project United States

Microsoft Education Award Laureates

• Aaron Doering, Go North! Adventure Learning Series, University of Minnesota United States
• Center for Puppetry Arts United States
• Curriki United States
• Dániel Rátai, 3D for All Hungary
• Digital StudyHall India

Katherine M. Swanson Award Laureates

• Build Change United States
• DAISY Consortium United States
• Hany El Miniawy, Appropriate Development, Architecture & Planning Technologies Egypt
• OneWorld South Asia India
• SKG Sangha India

The Health Award Laureates

• DataDyne.org United States
• Marc Koska, Star Syringe United Kingdom
• MedMira Canada
• Pesticide Action Network North America United States
• Sanoussi Diakité Senegal

I'm looking forward to tonight's 2008 Tech Awards: Technology Benefiting Humanity in San Jose. The event is organized by The Tech Museum and it is one of my favorite events of the year.

I'm particularly looking forward to meeting Muhammad Yunus. I'm a huge fan of Mr Yunus, the 2006 Nobel Peace Prize winner and the founder of the Grameen Bank. The efforts of his organization through micro-loans have pulled millions of people out of poverty and inspired many other similar lending programs. He is also an excellent speaker.

You can watch the awards live here:

Tech Awards Gala 2008 | NBC Bay Area

Here is additional info:

The Tech Awards: Technology Benefiting Humanity, presented by Applied Materials, Inc., is one of the premier annual humanitarian awards programs in the world, recognizing technical solutions that benefit humanity and address the most critical issues facing our planet and its people. Each year, the program honors 25 global innovators (Laureates) who are applying technology to benefit humanity in five universal categories: Education, Equality, Environment, Economic Development, and Health. Although The Tech Awards program is year-round, it culminates each November in a black-tie Gala event, where five of the 25 Laureates—one in each category—will receive a $50,000 cash prize. The 2008 Gala is on November 12 at San Jose’s McEnery Convention Center.

In addition to the 25 Laureates, The Tech Awards also honors one individual each year with the James C. Morgan Global Humanitarian Award, sponsored by Applied Materials. This individual must be someone whose broad vision and leadership are helping to address humanity’s greatest challenges. The 2008 recipient of this award is 2006 Nobel Peace Prize winner and micro-lending pioneer, Muhammad Yunus.

For more information on the Gala or The Tech Awards program, or to nominate someone for the 2009 program, visit www.techawards.org.

Earlier this year Intel (an SVW sponsor) launched a joint venture with the Grameen Trust:

Intel, Grameen Announce Joint Business Venture to Fuel Social and Economic Development Opportunities Empowered by Technology

Citing Public-Private Collaborations as Crucial to Achieving Scalable Impact in Developing Countries, Intel Chairman Unveils Collaboration with NetHope during WCIT 2008 Keynote

KUALA LUMPUR, Malaysia, May 19, 2008 Addressing the World Congress on Information Technology (WCIT) 2008, Intel Corporation Chairman Craig Barrett announced that Intel Capital and Grameen Trust will form a business venture dedicated to social and economic development. Also during his opening-day keynote, Barrett announced collaboration with NetHope and demonstrated a new Aid Station device designed to support non-governmental organizations (NGOs) in their health care, disaster relief and economic growth efforts.

You can read more here:Intel, Grameen Announce Joint Business Venture to Fuel Social and Economic Development Opportunities Empowered by Technology

It's lonely at the top and that's why ExpertCEO was created, a place where CEOs can help each other succeed.

Founded in late 2007 by Ken Ross, a former venture capitalist, it recently emerged from private beta in October with 600 members and growth of 30 per cent per month.

"It is tough at the top. CEOs want to be able to interact with their peers," says Ken Ross. "That's why we vet every applicant to make sure that they are who they say they are."

About 50 percent of applicants don't get in. The rejects are primarily people trying to join so that they can market their services to the CEOs--keeping the site spam-free is very important, says Mr Ross.

While ExpertCEO was inspired by Facebook don't call it a social network. You cannot become someone's "friend" and there are many features of Facebook and other social networks that won't ever be a part of ExpertCEO. The goal is to become an important resource for CEOs and to build up a large repository of knowledge.

Members tend to check in about once or twice per week and most subscribe to a weekly digest email that keeps them current on topics such as the future of SAAS; and effective communication with offshore development teams.

A question about creative ways to hire software developers yielded answers such as partnering with local universities:

At any given time we have 4 to 6 college students here for 3 months on 3 months off (at school). They become productive amazingly fast. It is a great way to:

- find talent before competitors do

- really "try before you buy"

- lower the cost of recruiting

- lower the average overall salary

- get good developers before they develop bad habits elsewhere.

If you can get to the profs, that is preferable over just the career office. The career office will try to limit your access.

"Some questions get a lot more attention than you would think," says Mr Ross. "For example, one CEO asked about taking business cards with him and that brought up a lot of issues around intellectual property."

Many of the questions and answers are placed anonymously in order to encourage discussion and to make sure a potentially embarrassing question won't come back to haunt the member.

The only persons that aren't CEOs are members of panels of experts, which include venture capitalists, accountants, lawyers, and academics. "We've found that is good to have many different points of view," says Mr Ross. "And those experts have to use their real names."

The only place where members have to use their names is in comments in the resource directory. "We'd like this to become a Yelp-type resource where members can evaluate professional services. If you have something bad to say it is only fair that you should use your real name. And if it is a really horrible experience then you should pick up the phone."

About 60 percent of members are in tech and 50 percent are in Northern California. And so far, everyone has been well behaved. "We haven't had to bar anyone."

What's next? Mr Ross says that his team might launch similar sites for CFOs and other C-level executives. And also host offline events. "We have a long list of things we'd like to do."

- - -

Please see Ken Ross blog: The Expert CEO

Recent post: What Keeps CEOs Awake at Night? « The Expert CEO

I've been covering the venture capital community for many years and I'm always mystified why they all act like sheep yet think they are wolves.

Why is the VC community running around like Chicken Little saying the sky is falling when their horizons aren't in the now, they are in the future?

If I'm a startup, what do I care about what the economy is like today? I care about what the economy is going to be two to five years out.

If the sky is falling today it likely isn't falling one or two years out, paradoxically these are good times.

As a startup you should be investing for that future and working to line your ducks up instead of cutting valuable people and cutting back on outside services such as PR and social media relations.

The savviest Silicon Valley companies know that you double up your investments in down times because business cycles are cycles: you want to be ready when the upturn comes.

Since you can't time market swings you are better off building a company in down economic cycles because you know there is going to be an upside.

That's why the Sequoia RIP presentation is puzzling. Why are these VC veterans reacting to what has been happening now rather than positioning for what's coming next?

Could it be a that Sequoia is hoping that it can scare competitors to its portfolio companies into cutting back, pull their foot off the pedal? And that that would give their companies a fighting chance? Is it a setup? That's what I would do, but I don't think Sequoia is quite so Machiavellian.

Sequoia has been a huge influence on the VC community. I've come across many people telling me that their VCs are all the same, telling their startups to cut, cut, and cut some more. One of my contacts says: "It's interesting, all the VCs are using exactly the same language." These are the Stepford Wives of Sand Hill Road.

But there are VCs and plenty of others, prepared to call BS when they see BS, and they don't act like sheep, and they are continuing to fund.

This is a good time to invest, this is a good time to startup, imho.