What started as a hobby for lawyer Michael Arrington, TechCrunch, a Web 2.0 blog, is now so profitable he's taking time away to think about what the future might hold (Gagglescape aspires to such a fate). The San Francisco Gate has the story.

In the 18 months since he started the blog, Arrington has emerged as a major player in a tech scene that is quickly changing the media landscape. Bloggers, using inside information and posting at all hours of the day and night, are often beating traditional media to big stories and are setting the news agenda from Silicon Valley to Washington.

Are you interested in what the new Liberal leader's environmental policies might be? Here is a draft that is right off the press.

Toby Heaps, Editor of Corporate Knights magazine, was at the Liberal leadership convention and has an environmentalist's view of the proceedings. Go to Gagglescape's sister site, http://www.corporateknightsforum.com for the story.

The surprise election of Stephane Dion to the leadership of the Canadian Liberal party represents a sea-change in our political and business landscape. Recent surveys -- both pre and post this weekend's conference -- show that Canadians want a change in the environmental status quo of this country. The Canadian public is not alone in their view. Europeans have long committed to investment in their environmental sector. Japan and other Asian countries are embracing industry initiatives like ISO14001 to reduce their environmental footprint.

Canadian companies are also embracing these changes. In the building sector, Canadians are world-leaders in sustainable, energy-efficient building technologies. Dion's election reflects that our political mandarins may be getting serious as well.

What does that mean for our VC investment sector? Don't be surprised to see some economic incentives that encourage investment in this sector. We probably will not have to wait for a change in government for that to happen. The Tories will be looking for ways to firm up their green credentials and one way would be through tax incentives in that area.

Get ready for the greening of Canada's VC sector. We don't have to wait for government to offer incentives. The Economist says that the green sector will grow 30% year-over-year for at least the next ten years and represents the greatest wealth-creation opportunity of the 21st Century. Do we need more encouragement than that?

The City of Santa Monica is offering motorists real-time information on something useful: available parking spaces. While the service is somewhat of an oddity, it does suggest that the mobile Internet and related services are just around the corner for many day-to-day activities. We keep hearing that shopping related data will become available but there are far bigger, environmentally related issues that communities can tackle with the new technology. Reducing traffic jams are one potential option. If traffic congestion in U.S. cities could be reduced by even 5%, the amount of fuel savings and reduced air pollution would be worth billions of dollars.

Are Canadians the business world's biggest slackers?

Last Wednesday, the Rotman School of Business hosted the Canadian Business Magazine's Outlook 2007 conference. What were the topics discussed? How to become a high performance business by Accenture Managing Director, Bill Morris; Finding opportunity when the business game you are in changes by John Shackelton, CEO of Open Text; Predictions for Canada's economy in 2007 which brought together economists and a business writer; and, Canada's prosperity gap by Dean Roger Martin.

While all four presentations offered insight into Canadian business, it was Dean Roger Martin's presentation on Canada's prosperity gap that I found most compelling. As many of Gagglescape's readers know, Martin is a leading authority on the value added benefits design thinking brings to business. His research suggests that design is the next big business paradigm. Martin uses his insight into the global business environment along with some strict quantitative analysis to help us understand Ontario's prosperity gap.

What is the prosperity gap? Simply put, it is the difference in GDP per Capita between a group of 16 otherwise comparable jurisdictions. Ontario is 12.4% below the median in this group. Why care? Well, that difference means that we have about $8,000 less per year in disposable income that could go to paying off mortgages or funding an offspring's education, for example. That hurts.

What are the causes of this gap? Some have to do with our business leader's propensity for taking time off. Well-to-do Canadians, it seems, take significantly more time off than do their U.S. counterparts. Taxes also play a part in the disparity. According to Martin - and he pulled no punches - Ontario could not go out of its way to devise a more business unfriendly, non-competitive taxation system. "Taxing businesses at high rates is just counterproductive," says Martin. (...read more...)

The Globe's Gordon Pitts has a good article on what we can learn from the success of Ktichener - Waterloo's tech cluster.

lesson 1: Be Entrepreneurial
Develop a deep pool of technical expertise and innovation, fostered by post-secondary education powerhouses that churn out spinoff companies.

lesson 2: Innovate
Build networks of visionary business and government leaders who collaborate on big community changing projects.

lesson 3: Network
Recognize the area's strengths in industry and education - and build on them to create a distinctive regional brand.

lesson 4: Build on Strength
Waterloo supports and provides networks for business, which keeps drawing people back to the community.

lesson 5: Diversity
The Mennonites' sharing culture helped breed Waterloo's mutual insurance companies in the 19th and early 20th centuries, providing a steady balance to cyclical manufacturing.

lesson 6: Attract Smart People
"People who live here really like it," says financial author and guru David Chilton, who has lived in Waterloo for 44 years. "They don't move."

lesson 7: Build an Outsider Mentality
Historian John English says the economic prosperity of K-W was built on people operating outside the mainstream of Canadian business and society.

lesson 8: Get on with It
When companies are under pressure, there is a Waterloo tradition of just adapting and surviving.

lesson 9: Generate Venture Capital
Proximity to Toronto has historically given Waterloo good access to capital sources, but it is far enough away from Toronto to avoid being unduly influenced by Bay Street's short-term thinking.

At the highly promoted but generally panned Web 2.0 Summit in San Francisco, there was a strong showing from companies in the "instruction" marketplace. Two stand out: Instructables.com and inthechair.com

While "In The Chair" uses the Net to help aspiring musicians improve their chops, it really seems more Web 1.0 than 2.0 - still an interesting and no doubt useful Web App. Instructable, on the other hand, uses a social-networking / user generated content model. The result is a site that encourages people to show how they create things. For example, do you know how to etch a custom image onto the surface of your Mac PowerBook? That is one of the thousands of "instructions" available on the site. Or how about making one of those geometric lamp shades that are so popular. Have a motorcycle and want to know where you are going? Try installing a GPS on your bike. You get the idea.

I'm encouraged by this site because it begins to enter into a territory the Internet was originally premised on: ubiquitous knowledge sharing.

One of my favourite references in the VC/blog world is India's http://www.emergic.org. Here is what the blog's author, Rajesh Jain, quoted the Economist on yesterday:

Analysts confidently predict the clean-energy business will grow by 20-30% a year for a decade. Jefferies, an investment bank that organised a recent conference on the industry in London, asked participants how soon solar power would become competitive with old-fashioned generation technologies: in 2010, 2015 or 2020. More distant dates - let alone never - were not even discussed. About three-quarters of those present, one visitor gleefully observed, were "cheque-writers". This "megatrend", the keynote speaker gushed, "may be the biggest job - and wealth-creation opportunity of the 21st century."

For more news on Canada's emerging "green" sector, go to Gagglescape's sister site, http://www.corporateknightsforum.com

editor

Business 2.0 magazine offers up a story today that should send a cold shiver down the backs of McKinsey and Bain consulting executives. Called "Crowdcasting" the service brings together 3,000 eager MBA students to generate insights into complex business problems. The company behind the service is "Idea Crossing," of Los Angeles. They put together targeted innovation "challenges" offering winners an incentive to engage in a rave-like brainstorming session.

What's the principal behind the initiative? Think "The Wisdom Of Crowds," on steroids and you have something of the idea.

Ontario's first 100% green electricity retailer commissioned two new wind turbines at the Sky Generation wind farm in Ferndale on the Bruce Peninsula. The new turbines, developed to meet the demand for clean, green electricity from Bullfrog Power customers, are now in operation, producing new clean power. Together, the two state-of-the-art Vestas V82 1.65 MW turbines are expected to produce almost 9 million kWh of emission-free electricity each year. This new capacity is additional to the various Ministry of Energy programs that are increasing the amount of new renewable power in the overall supply mix.

Since its launch in September 2005, Bullfrog Power has grown rapidly, signing up homeowners from across the province as well as more than 100 organizations. Residential customers include Margaret Atwood, Graeme Gibson, Gord Downie, Mark Cullen, Edward Burtynsky and Jamie Kennedy. Bullfrog's commercial customers include Wal-Mart Canada, Cadbury Adams, RBC Financial Group, Credit Union Central of Ontario, WWF-Canada, and many other businesses and not-for-profit groups. Additionally, conference planners have turned to Bullfrog Power to "green" the electricity usage of events such as the Cottage Life Shows and the Royal Agricultural Winter Fair.

Do you want to know the real reason for the Internet's recent surge? Advertising. Here are the third-quarter numbers courtesy Paul Kedrosky.

The Globe and Mail reported Monday that VC investments dropped in the third quarter. Thompson Financial and the Canadian Venture Capital and Private Equity Association claim that VC investment was down over 32 percent from the second quarter.

Notably, non-Canadian VC investment in our markets grew by 67 percent over a year ago. That's not surprising. Given that Canadian technology investments provide some of the best returns anywhere, outperforming their U.S. counterparts, what smart investor wouldn't want to pick up the opportunities local VC firms are all too willing to ignore.

Are we moving towards 1996 levels of VC investment? Will pulling the plug on Income Trusts result in more early stage investment in Canadian companies? We can only hope.

Percent of funds raised by Israeli Tech companies in Q1-3, 2005

We are looking a little further afield today than is our norm but headlines from Israel caught our attention. It turns out that when one U.S. VC firm, Sevin Rosin, cancelled its 10th fund recently because management said they no longer believed that venture capital had a future, it had a ripple effect in the Israeli marketplace. Many are questioning VC first-principles.

Chemi Peres says that at Pitango too, they have been asking themselves the tough question - does the venture capital model work? “My answer is that it does. I do not believe that we can predict what will happen in the long-term future, but I do believe that venture capital is the only answer for innovation and entrepreneurship. I cannot see how new innovative technology companies will manage to function otherwise. There will be a place for venture capital as long as we have innovation and entrepreneurship.”

Vertex managing partner Yoram Oron says:

“It’s true that these investments have yielded a low return due to the small number of IPOs, as a result of the more stringent market regulation, but 9 out of 10 exits in the US last year were through acquisition deals in which the return on investment is very high. The return on these deals is exceptionally high because the buyers are technology companies which prefer, for financial and organizational reasons, to acquire an off-balance sheet R&D activity which will not be seen in the company’s financial statements, and which will not affect the organizational character of a mature, publicly-traded company. These companies are willing to pay five times the R&D costs of start-up companies, and this is very worthwhile for investors.”

The final judgment on VC markets remains as elusive in Israel as it (...read more...)

If you haven't had the opportunity to attend the MIT Enterprise Forum yet, then this Wednesday's scheduled topic is a good reason to come. Event coordinator Mark Lawrence of North Crest Partners writes this update today:

Look at Today's National Post - Financial Post for Cover Story on
Evertz Technologies - IPO Success of 2006 - The Story of How This Company Achieved A Successful IPO without ever needing outside VC funding - A Business Case Presentation and Panel Discussion

Back by popular demand is our Business Case Study with Brian Campbell EVP Business Development of Evertz talking about the trials and tribulations of how Evertz, now with a $1 billion market cap, became a world leading provider of equipment to the broadcasting industry. Join Brian and our three leading industry panelists to hear them talk about and critique, question and examine the path that Evertz has taken. The event is interactive with participation and questions from the audience most welcome.

We also have a guest mini presentation by the Ontario Centres of Excellence about the resources it provides entrepreneurs.

The Toronto Chapter of the MIT Enterprise Forum is one of 24 worldwide. We invite participation from alumni of any institution. You do not need to be an MIT Grad or be invited by one. We are a not-for-profit organization designed to be a forum and networking event for technology entrepreneurs, investors and service providers.




Register today at: https://alum.mit.edu/smarTrans/user/Register.dyn?eventID=7737&groupID=921

NewsAsia reports that Global Entrepolis SIngapore launched something with the catchy title of "HOTFunds" (Hub of Technopreneurs Funds).

Of course, gagglescape.com loves to look at regions of the world where they actually believe their future economic well-being depends on stimulating and supporting young companies. In Ontario's fat, Income Trust inspired financial climate, we don't believe in the future - only the past.

Singapore, on the other hand, started the whole "Asian Tiger" movement back in the eighties and nineties and knows how important it is to have an economic vision. In this case they created a new venture capital fund worth S$530 million. Here is a quote that will make local entrepreneurs weep:

"We see large pockets of innovation developing particularly in Singapore, China, India and across Asia because of the increase in research & development and the government's focus on encouraging innovation," says Pierre Hennes, partner at Upstream Ventures.

"So for us, the venture capital and angel investors play a fundamental role in fostering that and helping the young entrepreneur take that risk to start a business in the global and regional market."

Venture capital investors at HOTFunds say Singapore, with its small market size, is ideal for start-ups to establish itself [sic] and make early mistakes before venturing out to the regional and global market.

Amen. Now that the Income Trust pork barrel is done can you guys in the financial community get back to fundamentals. It is fundamental to our economy that we compete with the Singapore's of the world. If we don't we will be a 3rd-class nation selling water and oil - for as long as it lasts - to other countries who invested in their economic future.