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 BLOG >> February 2019

Silicon Valley Accelerators [Entrepreneurship
Posted on February 22, 2019 @ 10:50:00 AM by Paul Meagher

I am a couple of chapters into the book Accelerators in Silicon Valley. Building Successful Startups (2017) by Peter Ester. Peter also wrote a book with Arnes Maas called Silicon Valley: Planet Startup. Disruptive Innovation, Passionate Entrepreneurship & Hightech Startups (2016). Peter Ester is from the Netherlands and the main reason for writing these books is to help policy makers in the Netherlands and the EU to identity best practices from the most successful startup culture in the world.

Accelerators in Silicon Valley is based upon CEO interviews, tours and startup meetings with 23 accelerators from Silicon Valley (which also includes accelerators based in San Francisco and one from Oakland). It is the author's belief that in order to replicate the Silicon Valley success story in the Netherlands and the EU, they will need to embrace a central feature of Silicon Valley, namely, the large number of accelerators located there. The 23 accelerators studied are a fraction of the accelerators one might find there. The author's access to accelerator CEO's was facilitated by his relationship with an influential VC who helped introduce him. His non-probability sample attempted to capture the range of accelerators one might encounter:

The sample I ended up with is a fair representation of the following six accelerator features: profit vs. not-for-profit, general vs. specific focus, taking equity vs. not-taking equity, large vs. small accelerators, offering workspace vs. virtual program, short vs. longer programs. ~ p. 33

This far into the book, I have three main takeaways.

Accelerator Diversity

The diversity of types of accelerators in Silicon Valley is really quite amazing. When I thought about accelerators in the past, I imagined them to be mostly similar. Perhaps if you are looking down from a high enough vantage point you mostly see the similarities, but as you get closer you start to see the large variety of accelerator types which are hinted at by the six features mentioned above. If you are looking to apply to a Silicon Valley accelerator, you would have to do your research to find the type of accelerator that would be the best fit for what you are doing. The book is a good resource for simply navigating the accelerator landscape in Silicon Valley.

The Data Is Not Yet In

Silicon Valley is the birthplace the largest internet companies around today. While that might be viewed as evidence that accelerators are having a big impact, Peter argues that the data is not yet fully in. What he know is that a huge number of startups are enrolled in accelerator programs and that some of them are successful. The accelerator industry is the most mature in the Silicon Valley industry but still is a relatively young industry and there is not alot of studies tracking how these accelerated startups are doing over the long term. Perhaps we need a cohort of non-accelerated startups to compare them against to see how many are surviving and thriving. For policy makers wondering if they need to help foster more accelerators similar to Silicon Valley accelerators the issue of tracking survivorship and success are critical to have answers to. I don't claim to be an expert on accelerators so there may be data out there since this book was published. My sense, however, is that we might see a third book from Peter in which he revisits some of the startups he encountered during his study. Given the diversity of types of accelerators, it may be a complex picture of what is considered a "success" and what types of accelerators might be producing the best results.

Accelerator Evolution

The essential difference between incubators and accelerators is difficult to identify. For some, they are two different ways of referring to the same thing. For others, they are different beasts altogether. Peter thinks the difference may be more evolutionary with the first generation incubators being more like shared work spaces, second generation adding some additional services to the mix, third generation adding some networking with funders, and the forth generation being accelerators that involve more mentoring, facilitating deals, cohort groups, and larger funding networks. One of the accelerators interviewed stopped accepting new startups and simply became an Angel startup fund. Life is not necessarily all roses for accelerators. They have problems that require them to adapt and evolve to survive.

So far, Accelerators in Silicon Valley has proven to be quite interesting and hopefully it will generate one or more blogs in the future as I get further into it.

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Radical Action [Trends
Posted on February 13, 2019 @ 09:47:00 AM by Paul Meagher

The proposal for a Green New Deal is getting alot of discussion lately in part because it may become a centerpiece of the U.S. Democratic Party's 2020 election platform. According to Wikipedia, the original New Deal was "a series of programs, public work projects, financial reforms and regulations enacted by President Franklin D. Roosevelt in the United States between 1933 and 1936. It responded to needs for relief, reform and recovery from the Great Depression". The radical measures that were taken as part of the New Deal are often credited with helping the U.S. recover from the Great Depression. Many of those concerned with rising CO2 levels believe we need to enact a similar set of radical measures to avoid a climate catastrophe. The Green New Deal refers to the required set of radical measures that will help avoid that scenario.

The NY congresswoman Alexandria Ocasio-Cortez has posted a proposal on her 2018 campaign website called the Green New Deal that proposes setting up a working group to evaluate some specific technical measures such as:

  1. Dramatically expand existing renewable power sources and deploy new production capacity with the goal of meeting 100% of national power demand through renewable sources;
  2. Building a national, energy-efficient, “smart” grid;
  3. Upgrading every residential and industrial building for state-of-the-art energy efficiency, comfort and safety;
  4. Eliminating greenhouse gas emissions from the manufacturing, agricultural and other industries, including by investing in local-scale agriculture in communities across the country;
  5. Eliminating greenhouse gas emissions from, repairing and improving transportation and other infrastructure, and upgrading water infrastructure to ensure universal access to clean water;
  6. Funding massive investment in the drawdown of greenhouse gases;
  7. Making “green” technology, industry, expertise, products and services a major export of the United States, with the aim of becoming the undisputed international leader in helping other countries transition to completely greenhouse gas neutral economies and bringing about a global Green New Deal.

Alexandria's proposed Green New Deal also includes a set of additional social justice measures which I'm a bit leery of because solving the CO2 problem is hard enough without trying to solve a host of socio-economic issues at the same time. Perhaps this is why Nancy Pelosi made this comment on Alexandria's latest Green New Deal resolution "The green dream or whatever they call it, nobody knows what it is, but they’re for it right?". It is difficult, however, to avoid the conclusion that climate change and social justice are linked problems so you might want to read the latest Green New Deal resolution for suggested social justice measures that might be included in a Green New Deal.

There is no widespread agreement yet on what measures the Green New Deal should include. Alexandria Ocasio-Cortez has offered up some suggestions but there are other suggestions and the discussion is just getting started.

Part of the reason why the original New Deal worked was because people were traumatized by the great depression and were ready to do something radical to get out of it. I doubt that people feel the same urgency for a Green New Deal. That sense of urgency, however, could change as CO2 levels continue to rise and exert their obvious and not-so-obvious consequences. I think it is important to start talking about what a Green New Deal might look like irrespective of what government is in power so that we at least have an emergency plan that might help us avoid or mitigate the potentially dire consequences of increasing CO2 levels.

Most of the suggested technical measures above are not radically new ideas. Most of us have probably heard something like them before. What is radical is the timeframe needed to agree on the New Green Deal measures and to get them done (less than 10 years). We need to make up for lost time so there is not alot of time available to debate a perfect set of measures. Radical action is needed more than radical ideas if a Green New Deal is going to happen. City councils in the coastal cities of Vancouver and Halifax have declared a climate emergency as a means of getting their own versions of the Green New Deal rolling at the city level.

The issue of how economic growth figures into a Green New Deal is the most perplexing and contested issue of them all. If the New Green Deal is sold on the basis of increasing GDP growth then it will have avoided the root cause of why a New Green Deal is needed (i.e., increases in CO2 levels are tightly linked to GDP growth so cannot be part of the solution). A growth oriented Green New Deal will not be radical enough to truly address root causes.

At the end of the day it is not the government alone that is going to solve this problem. There will be a major role for the entrepreneurs who devise new ways of solving problems that are less resource intensive. There will also be a major role for investors who help finance these new ways, who are anticipating the opportunities that a Green New Deal might offer. There will also be a major role for new ways of organizing ourselves for collective action. In some cases, such as the REKO Circles discussed in my last blog, you don't need investors or government to take the radical step of enabling a local food system. You just need to get organized.

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Food Retail Innovation [Agriculture
Posted on February 4, 2019 @ 08:16:00 AM by Paul Meagher

Most people in North America have never heard of a food retail innovation called REKO Circles (REKO is a Swedish abbreviation for "Fair Consumption"). Judging by its uptake in Finland and Sweden, expect to hear more about REKO Circles coming to a place near you.

Basically, members of a REKO Circle join a closed Facebook group (or similar social networking platform). Producers post what they have to sell and consumers add comments saying how much they would like to buy. A time and place is set where producers and consumers will congregate and exchange goods. Usually it is a parking lot. There are no booths or advertising, goods are simply provided to the customers in the amounts requested from the back of their vehicle to the consumers. Everybody leaves on their merry way within an hour of the first arrival.

There are many advantages for local producers and consumers in this arrangement. Local producers who are not big enough to sell to the local grocery store now have a market. There are no monetary costs for producers or consumers to network online to buy and sell agricultural products. The producer gets more of the money from selling their product than they would if they sold to the grocery store, even at prices competitive with the grocery store. The consumer knows where their food comes from. Consumers can get a significant portion of their weekly food needs met in one place. Producers only bring what is necessary and don't have to transport unsold items back to their home.

REKO Circles may be acknowledged and promoted by municipalities and governments, but REKO Circles to date have generally been organized in a bottom up fashion though people organizing on social media for the purposes of setting up a local food network.

Below are a few resources that I would recommend to learn more about REKO.

REKO Circles were initiated in Finland in 2013 by a farmer Thomas Snellman. Since then they have grown to become a significant component of the food retail network in Finland (5% or more). Thomas Snellman gave a TED talk that is worth watching to get the concept from the originator.

I originally learned about REKO on Richard Perkin's Youtube Channel where he has been an enthusiastic supporter of this particular method of selling his goods. Richard gives you a good nut-and-bolts view on how REKO works on Richard and Yohanna's farm:

Even though I was familiar with the REKO concept from Richard's channel, I didn't fully appreciate its history or its disruptive potential until I read the paper Farm Fresh in the City: Urban Grassroots Food Distribution Networks in Finland (S.E. Hagolani-Albov and S.J. Halvorson) which can be found in the Global Urban Agriculture (2017) collection of papers edited by A. WinklerPrins. This chapter is one of the few academic treatments of the REKO concept and does an excellent job in explaining what is different about REKO and why it works in the Finnish context.

Will REKO Circles work in the North American context? That awaits to be seen. You don't need startup capital or the blessing of government to launch a REKO Circle near you.

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