Commentary

Entrepreneurial Spirits Rise Again

It's unquestionably good news for marketing types when times are such that people are dreaming of hitting it big instead of scheming to just stay afloat. It portends a certain optimism in the air -- a welcome antidote this morning to Standard & Poor's warning yesterday that the government's credit rating would degrade if it doesn't get its deficit under control.

Monica Langley opens a piece in the Wall Street Journal today with an entrepreneur in the offices of Benchmark Capital in Menlo Park excusing himself to phone three other potential investors. When he returns, a partner at the venture capital firm essentially tells him, "fuggedabout dose other guys, let's do a deal right here, right now." And, over the course of a couple of days, they do just that. The founder gets $12 million for a 20% stake in his company, Uber, which "lets people order up a car service from a cellphone." (Huh?!? This is what separates VCs from you and me.)

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But if all this sounds vaguely familiar, as the headline suggests ("In Silicon Valley, Investors Are Jockeying Like It's 1999,") we're assured it's not an isolated incident:

"That is just one scene in the latest gold rush to sweep Silicon Valley, where prospectors are now fighting over buzzy start-ups and companies are getting their pick of deep-pocketed backers," Langley writes. "The momentum is driving a wave of deal envy and trash talking -- complete with power plays, personal feuds and turf wars among Wall Street bankers, billionaire speculators and venture-capital veterans."

The numbers back the assertion up. Investments in the first quarter are up 76% over last year, which itself saw a boost for the first time in three years. Wouldn't you know that some people think it's all another balloon that will burst and others see it lifting off forever into the cash-cow stratosphere and beyond?

Then there's the intrigue between old-line angels and nouveau billionaires and Wall Street types that makes it all sound like the Wild West. Which, of course, it is. But back in Madison Avenueland, Stuart Elliott reports that the venerable street, where aspirational campaigns are woven and time and space is bought and sold as if it were mere chattel, the entrepreneurial spirit is also catching hold, even among the big boys such as Horizon Media.

"Some agencies are opening units aimed at selling products to consumers, Elliott writes. "Others are acting like venture capital firms, offering seed money to start-ups in fields like technology. Still other agencies are taking stakes in client companies and sharing in the revenue of merchandise sales.

Horizon, for example, is forming a subsidiary to invest in consumer-product companies such as Frederique's Choice, an online flower business. "I'm an entrepreneur," Horizon president, CEO and founder Bill Koenigsberg tells Elliott, "and the entrepreneur in me is always thinking about how to use the assets of the company."

Of course, it's important to prime the pump. In order to encourage a continuing wave of innovative products, such as Dyson bagless vacuum cleaners with Root Cyclone technology, the 2011 James Dyson Award "'celebrates ingenuity and creativity' with the winner receiving £10,000 to develop their invention and £10,000 for their university," BrandChannel reports.

And Penn State is conducting a five-day summer camp for high school sophomores and juniors interested in creating and designing a business. Called Young Entrepreneurs Camp, it is located on the university's Beaver campus. www.beaver.psu.edu It is to be hoped that the youngsters will be infused with the same sort of enthusiasm that drives Kate Latham, who recently moved from the marketing to the corporate responsibility department at Ernst & Young to mentor social entrepreneurs in the UK.

She writes in The Guardian this morning that the company has a long tradition of working with entrepreneurs.

"There can be cynicism when it comes to big business and corporate responsibility; critics see it as a way for corporates to boost their brand, while only papering over the cracks of society's problems," Latham says. "However, at Ernst & Young we recognize that it is essential to reconnect business with society, so that we are making products which are valuable to both businesses and communities, creating shared value."

And so we shall leave you on that upbeat note, even as the markets struggle to overcome yesterday's disheartening news.

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