Created in 2005 by Michael Arrington, Techcrunch captures the pulse of Web 2.0. With over 85,000 subscribers (all through FeedBurner :)), it is the largest blog in its space. Michael reviews an amazingly broad array of new technologies and services before anyone else and overlays insightful commentary on top. For those of you new to the blogosphere or just looking to expand your blogroll, this is a must. I personally don’t know how Michael covers as much as he does. He is amazingly prolific. Enough said…subscribe away.

Created in 2005 by Michael Arrington, Techcrunch captures the pulse of Web 2.0. With over 85,000 subscribers (all through FeedBurner :)), it is the largest blog in its space. Michael reviews an amazingly broad array of new technologies and services before anyone else and overlays insightful commentary on top. For those of you new to the blogosphere or just looking to expand your blogroll, this is a must. I personally don’t know how Michael covers as much as he does. He is amazingly prolific. Enough said…subscribe away.

A friend gave me one of those condensed subject books (about 4"x4") that you see at checkout at Borders. It is mental candy they hope, like at the grocery store, you will impulsively buy. This once had a series of "Eastern Wisdom" quotes. One I liked in particular, which should be as much a VC mantra as an entrepreneur’s is:

    In thinking, keep to the simple,
    In conflict, be fair and generous.
    In governing, don’t try to control.
    In work, do what you enjoy.
    In family life, be completely present.
                        — Lao Tzu

The last one resonated the most. In the crazy 24/7 world of entrepreneurship, it is way to easy to be fully engaged and pre-occupied about something…closing a sale, signing a strategic partnership, employee issues, etc. As a result, you never hear what your spouse or your kids are truly saying. You go through the motions of listening to play your family role, but your mind is else where. Remember, this is your safe harbor. Invest in it before the kids have grown up or your spouse grows weary. The others relate to Karma and Simplicity…favorite subjects of mine.

Lot of great comments on my Incubator post. Too late tonight to consolidate, but will definitely do so and respond this weekend. I am coming back late from the Tech Cocktails event tonight which was a roaring success. Great job to Eric Olson (of FeedBurner fame) and Frank Gruber. I think many of us expected 25-50 people to show up at this first tech outing. There had to have been over 200 people from every possible kind of tech firm ranging from Fortune 1000 to start-up.

One of the things that people going to the Valley always comment about is the number of spontaneous but applicable networking events and dinners that go on out there. This has been missing in the Midwest and other regions. There was a lot of discussion and energy at this event. However, most of these events fall flat. So why?…what makes for a useful and sustainable networking event (or series). Here are Matt’s Three Laws for Networking Events:

1) Symmetrical Benefits: the event needs to provide symmetrical benefits for everyone attending. People like to attend events where they get as much out of it as they give. Too often, events are set up to attract a couple of Lobsters (key influencers/players) and a large number of aspiring attendees. The Lobsters get little out of the event other than a lot of email the next day requesting favors. Whether it is an event for CEO’s, managers or Indians, people attending should generally be at the same station in life and able to give as well as take.

2) Common Foundation: people need to be coming from a common experience base and have common issues and interests. Putting people focused on Nanotechnology in the same room as software programmers may make for interesting conversation, but there will be limited takeaway gained by either party. It is also easier for people to talk to others who are interested or dealing with the same matters. Service providers, though I love them and need them dearly on our deals, do not qualify usually.

3) No Dilution: no, I am not talking about the drinks! The people at the event need to be active participants in the common arena. Looking at the % of lawyers or service providers at an event is one quick way to assess how likely an event is succeed. Lot of lawyers, little chance. Also, the more people at the event who are playing at the national level and dealing with key players, the higher the level of interaction will be. Having an event with a number of entrepreneurs will be better than a mixer with a lot of recently graduated MBA’s.

These events can take many forms including small dinners, hackathons, cocktail mixers or sponsored events. Dinners work well for the uber-Lobsters; hackathons and events work well for the rank & file. The key is to let a thousand networking flowers bloom. We need more informal events like this for different levels. The next big event will be the Bar Camp next weekend run by Jason Rexilius. It is a Hackathon imported from out west, targeted at hard core techies from the Perl, Python, PHP, and Ruby communities. It kicks off the morning of the 15th and continues through the evening of the 16th. They have 60 attendees and 25 maybes already.

Start planting those flowers early and often. Let’s see more informal dinner get togethers and ad hoc cocktails (bring a techie friend).

What do you all think makes for a useful, value-added networking event?

Tomorrow night is Tech Cocktail. It is the first in what will be a series of tech networking events in Chicago. Eric Olson from Feedburner and friends are pulling this together. I will be there as will a number of our local entrepreneurial and tech scene. You can register above. Hope to see as many of you as possible there!

I owe Camilo Telles a post on incubators. I have been promising him and others this post for over two months. The key question is do incubators work?

About every 10 years, incubators come into vogue. We see a flurry of them, not much comes of it and they fade into the background. While there may be several out there, I have not seen a successful incubator model yet.

Incubators usually have their genesis in one of there ways: one, a university tries to launch one near the campus to encourage commercialization of its technology; two, a government entity (city) or community group (consortia of entrpreneurs, gov, univ, etc) launches an initiative to create a "tech hub"; or three, an serial entrepreneur creates a vehicle to commercialize his/her ideas.

In the end , most of these digress into real estate plays with poor credit risk technology companies as tenants. This makes for a poor real estate play and a poor venture effort. Why is this the case?

Technology companies are successful because of a couple of factors. First, they have targetted a significant problem or issue. Second, they have a product or service that the customer/consumer is ready to buy at that point in time. Third, the management team is able to effectively execute and out manuveur the competition while pleasing the customer. Fourth, various environment factors (macro trends, etc) go their way and luck is on their side.

Real estate does not play a key factor in any of these. The notion of co-locating start-ups together makes sense at a high level, but fails to work on the ground. Networking, mentoring, sharing, etc all work when the entities/companies involved are of similiar caliber, have similiar issues and are playing in the big leagues. However, often, you have a building full of inexperienced or small entrepreneurs attacking niche issues in a broad array of industries. There is not a lot that they can teach each other. If there is a breakout company, it is  so focused on building its business, that it doesn’t have the time or interest to pull up the other inhabitants with it. In fact, it will often move out for bigger space. It also experiences asymetrical benefits…it gives a lot of advice but gets limited value in return. Also, the companies in an incubator are often so diverse that they are each facing fairly unique issues.

Companies need to have global visibility in order to see what is going on  in their industry…best practices, competitor challenges, etc. A local incubator can not give them this visibility or connectivity. By definition, the incubator is local and somewhat isolated.

Shared services and reduced rent are two potential benefits, but they don’t make or break the success of a company. Many firms start up virtually or in low rent areas. They can provision internet, telephones, etc as needed.

One could argue that Idealabs is an incubator. I would comment that it is more of a holding company for Bill Gross’s commercialization efforts. He has had several big hits like Overture (now Yahoo). However, few incubators have the vision, experience or connections that Bill does. Another model that possibly works is an incubator tied to a successful venture group.The VC acts as the screening agent and can bring resources and visibility to the company. Our breathren at DFJ New England are involved with an incubator near the MIT campus.

As stated earlier, incubators are often just real estate plays cloaked in a greater cause. There is little  inherent in an incubator that increases a start-up’s chance for success. Efforts would be much better spent finding ways to hook up entrepreneurs together through informal events like dinners. You should try to indentify the rising stars and pull them together. Help to create critical mass that way.

If anyone has seen a successful incubator model, I am all ears!

I’d like to think that this blog is more of a community vehicle and less of a platform for Matt to drone on with random thoughts. As a result, it’s key to hear back from the reader base. It would be great to hear from as many of you as possible via comments or email.

1) Let me hear from you on topics of interest or need.
Are there topics that you want to hear about? Some of the ideas that are upcoming from you are:
— do incubators work…why or why not?
— what makes an effective fundraising pitch?
— direct or channel for sales?

2) Are there features you like, dislike or want to see added?
Of the "features" included, are some more valuable or interesting than others or some you’d prefer not to see:
— bootcamp: topics for entrepreneurs
— VC 101: topics on VC
— Buzz: news and thoughts on trends
— Blog of the Week
— Philanthropy
— Resilience
— other…

3) Any other suggestions on how to make this blog more useful

LOOKING FORWARD TO HEARING FROM YOU…

Many thanks to Andrew Fife for including me on his list of top 10 VC bloggers on the net. Below are the other bloggers on the list. All of them (including Andrew’s) are worth a read and have great insights into the venture and entrepreneurial worlds.

Brad Feld – Mobius Ventures
Jeff Nolan – formerly of SAP Ventures
Will Price – Hummer Winblad
Peter Rip – Leapfrog Ventures
David Cowan – Bessemer Venture Partners
Tom Sheilds – Woodside Fund
Jeff Clavier – Angel Investor / SoftTech VC
Tim Oren – Pacifica Fund
Guy Kawasaki – Garage Technology Ventures

From time to time (maybe even weekly…), I’ll try to list a blog of the week. These will of bloggers in the entrepreneurial or venture world. One of Chicago’s finest is Signal vs Noise which is created by the founders of 37Signal. It is very entertaining and often has great suggestions for entrepreneurs. One of Jason Fried’s recent posts "Getting in too-much touch" has a counter-intuitive but common sense framework around collaboration and productivity within companies. Check it out and join their over 20,000 subscribers!

From time to time (maybe even weekly…), I’ll try to list a blog of the week. These will of bloggers in the entrepreneurial or venture world. One of Chicago’s finest is Signal vs Noise which is created by the founders of 37Signal. It is very entertaining and often has great suggestions for entrepreneurs. One of Jason Fried’s recent posts "Getting in too-much touch" has a counter-intuitive but common sense framework around collaboration and productivity within companies. Check it out and join their over 20,000 subscribers!