What Would Google Do_ - Jeff Jarvis [103]
So investors need to use a wider network of trusted people to help find and then manage new companies. Taking investment capital from these trusted agents and giving them a share of the profits if their finds pay off could form a network of miniVCs backed by the bigger VC. A variant of this model is New York Angels, a group of 65 successful investors who judge early-stage companies together. Incubators take a more active role in getting companies off the ground. Holtzbrinck, a publishing conglomerate based in Germany, runs a lab that starts some companies and invests in others, then decides whether to buy them. Idealab, founded by nonstop entrepreneur Bill Gross, has launched a large number of companies as an incubator, including Overture (which became the basis for Yahoo’s—and, indirectly, Google’s—search-ad industry), PetSmart, Picasa (now Google’s photo software), Citysearch, and the electric-car company Aptera Motors. Both incubators provide space, office services, advice, and money. Then there is a series of next-generation incubators built to advise and invest in new web 2.0 enterprises. These include Y Combinator, which funds small entrepreneurs and helps them get from idea to company; Seed Camp, which runs regular competitions for start-up help in Europe; and Betaworks, which funds and advises early start-ups.
Investors still need to reach into the dorms at MIT and Stanford—or farther back into my son’s high school—where ideas are hatching. I decided to teach because I was no longer able to effect enough change in a media company and figured I could do more in the cause of innovation helping students as inventors. At the City University of New York, I started a class in entrepreneurial journalism to prove that’s not an oxymoron and to teach journalists business. My students create business plans for sustainable journalistic enterprises and, thanks to a grant from the McCormick Foundation, the class funds the best of them with seed money. Underlining Wilson’s observation about age, my students do best when they think like young people. They fail when they try to think like graybeards. It is sometimes the graybeards who point this out to them. Jim Kennedy, head of strategy for the Associated Press, heard all my students’ presentations and then told them he was disappointed that they had all proposed web sites. He said “web site” practically with disdain, as one would say “disco.” He inspired one student, who wanted to start an online magazine for teen girls, to shift from the web to Facebook. She had to think differently.
Entrepreneurship is spreading among youth. There’s a blog for young capitalists called College-Startup.com (tagline: “Get rich from your dorm room”). A 2007 Harris Interactive survey on entrepreneurship commissioned by the Ewing Marion Kauffman Foundation found that 63 percent of youths between 8 and 21 years old said they had the ability and desire to launch businesses, and 40 percent planned to do it. Thank goodness for the arrogance of youth.
Perhaps venture capitalism should start to look like a classroom: VCs could provide not just funding but also education (which some do in their blogs). If I were a VC, I’d reach out to colleges and offer to help talented entrepreneurs, dangling seed money for those with great ideas. I might open my doors as an incubator and offer free help to great business ideas so I could invest in some of them. (We will discuss other ways to nurture innovation in colleges in the chapter, “Google U.”)
Or perhaps venture capital could look more like an open marketplace. When I asked mega-entrepreneur Gross how he’d make his field Googlier, he said: “I’ve always thought there should be a better start-up marketplace, almost like a mini stock exchange for start-ups, open only to qualified investors. But open up all the information and make it more even and transparent.” The problem for founders and employees is that they can’t take money off the