Marc's Voice

Why do I love Lynn-Anne Gries?

I am so blown away by the welcome I am receiving in the NEO (North East Ohio) area - and today it went even further with this amazing blog post from Lynn-Anne Gries.

Though Lynn-Anne focuses on WHY venture capital is a good thing, I’ll ignore the many holes in the VC model and focus on the good news - outside of Silicon Valley, LA, NYC, Boston and D.C. Lynn-Anne’s argument holds water.  Startups DO need an influx of capital - and venture money is the primary way to do that.

But the problem is that so many of the high profile VC deals, firms and funds are so insular that all they talk about is Twitter, Twitter, Twitter.  Their singular focus on finding the next Twitter causes them to ignore the companies ‘down the pyramid’, those companies which WON’T go public or be acquired.

Yes I know venture capitalists have to make their profit, but we’re talking about the entire economic model of our world here - and it CAN’T just be based upon funding the next Twitter!  High growth is good, but so is medium level or slow growth as well.  And why can’t THOSE companies get funding - as well?

My main argument with VCs is their insider games, crap-shooting logic and singular focus on money.  What Lynn-Anne understands is that founding companies, creating new kinds of jobs and raising the public awareness of innovation in NEO is a lot more important than just one IPO or acquisition.

Positive exit strategies are great for the founders, employees and investors - but what we’re doing in NEO is helping out the entire region.  JumpStart, OneCommunity, NorTech and the Fund for the Economic Future are all organizations put into place to help out NEO.  And I want Digital City Mechanics to join that list!

The power of technology being fed by money and driven by a 25+ year visionary means that we can generate jobs and revenues out of thin air.  By the sheer will of the people participating in our project the HAVES of NEO will help out the HAVE NOTS and we’ll all credit the software as enabling it to happen.

Then that software will be available in download form and the virus spreads.  And it can’t be stopped.

As long as we can get partners involved and work with local government and foundations - we can put out some amazing stuff - good things will happen.

The fact that one of these key players in NEO is a VC firm and can invest cash - makes the whole idea even BETTER!  This is where Lynn-Anne and JumpStart come in.

But we’re also starting a non-profit and VC money won’t do us any good.  We need government and foundation money to fuel our workforce development engine.  So finding inside connects is paramount to our challenge.

I’ve never met Lynn-Anne before, but I TOTALLY owe her a virtual kiss and hug.

So here goes “MWAH!”

In her post “How do I love thee venture capital: let me count the ways”- Lynn-Ann Gries takes the side of venture capitalist against those who warn against taking VC money.

Lynn-Anne argues for the practical sides of venture capital, not really bringing up the negative side of things - like having to get rid of founders or making stupid decisions which tube companies.   Its a hard game to play and Lynn-Anne coats a sugar veneer of optimism in a world where 99.98% of the time the answer is no.

To make things worse lots of value and wealth was recently lost.  The foundations (in general) have all lost about 40% of their net worth. It’s a hella time to be asking foundations for money.  But the good news is that the one group that IS spending (the Feds) happen to be the same people we’ll be approaching for cash.  So things even out.

So lets look at my project. Simply by being so audacious, I stand out from the rest.  By being formerly famous, I attract attention.  By being a trained Opera singer - I’m gonna make myself heard. And by focusing on some real problems, like workforce development - there are 100 opportunities that can fall out of this to make failure not an option.  Spinoffs in medical digitizing, multimedia production or Digital City Cafes are already being discussed.  I myself really want to build a ‘the history of the computer industry’ digital cafe!

That’s what increases the odds of success in this business - the people.  The idea.  The possibility that the software could change someone’s life.  And if - yes - you can make some money along the way - that’s great.  But do we REALLY think that the most important thing about software is making money?

I don’t think so.

Software is about changing people’s lives.  It’s the new R&R!

Lynn-Anne’s post would be considered parochial at Friday Real-time Stream conf and August Capital TechCrunch shindig. They’re ONLY interested in big topics and they would NEVER invest in anything that was focused on local issues or attempt to do business with government and foundations.

But you know what? I’d MUCH rather be hanging with folks like Lynn-Anne than David Hornik, Ann Winblad, Michael Arrington or Jason Calacanis.

At least Lynn-Anne is honest, truthful and easy to read.  Where I come from (after 21 years) I miss that attribute in people.  Certainly in venture capitalists. I’ve been kicked around, ripped off, repulsed, misunderstood, run away from (out of fear and loathing) and ignored so many times by Silicon Valley and Blue Chip VCs that I gotta admit - I’m looking forward to working with JumpStart.

When I talked about ‘zigging while others zag’ - folks like Lynn-Anne hear “I’m not afraid to be different.” But if Lynn-Anne had known me in the 80’s or when I was pouring my own money into my own ideas (in the 90’s) than she’d know that I’ve been saying  the same thing - for years. Only this time folks are starting to listen.

Credit some of that to Facebook, OpenID or Wikipedia.  Ideas that are too far out ahead of the curve eventually happen - it’s just a matter of who and when.  Google, YouTube, Twitter and Flickr were all destined to happen.

So this is not about me being different, but about me being first and right.

A huge reason MacroMind was a success was because we were first.  Twitter was also first.  And YouTube.  And Skype.

I’m a pure idealist who’s time has come.  I’ve been working on digital cities for 18 years and NEO is where it’s all gonna come together!

Here are some juicy excerpts from Lynn-Anne’s excellent post…..

…. but will not be accomplished overnight nor by just wishing it so. It will take a city of people with the same vision and motivation all pulling in the same direction, so I hope he has the stick-to-itiveness to deal with the day-to-day blocking and tackling that it takes to change a culture.

Amen sister.  Once you meet me you’ll see the fire in my eyes, the velocity rate of my body leaping out of my seat and hopefully you’ll give me a shot at some of this culture change!

We’re gonna need to throw some parties, but parties out in those vacant lots - with a wagon train of abandoned RVs circling us as we listen to Marvin Gaye, Muddy Waters and Bob Marley.  We’re gonna need to build some mockups and demos - so people can see what the hell it is I’m talking about. We’re gonna need to inspire some students, programmers and entrepreneurs to take advantage of this ’software infrastructure’ we’re gonna build for them.

‘Cause with every participating vendor, platform or content source - we become stronger.

….these type of businesses can rarely get where they need to be, as fast as they need to be, without an infusion of capital from someone else.

Again Amen. I love your simple, clean message - without money you can’t make money. Thats how capitalism works.  Now the trick is - “how much goes into equity of the for-profit versus how much is the funding for the non-profit?”

So, while we’re often accused of “pushing” our companies toward raising venture capital, we’re really just focused on encouraging our entrepreneurs to pursue high growth business models that lead them to a logical exit (sale of company, IPO or recap).

I wonder if I should tell Lynn-Anne about our bylaws and voting shares?  I hope that once she meets me any notion of ‘pushing me around’ will be dispensed.  Why else do you think I keep my girth at over 300 lbs.  I’m the Hulk Hogan of software dudes.  I physically CAN’T be pushed around…..

And OH BTW - my megalomania doesn’t stop at high growth.  I don’t do anything that can’t grow to at least $1B+

So I hope Lynn-Anne appreciates my comments in the spirit of TOTAL honesty, transparency and a new beginning.  I’m moving my family, walking away from 21 years in California and this is about as real as it gets.   I won’t go over or point out the differences between NEO and Silicon Valley VCs - but let’s just say that I’m a catalyst for change and Silicon Valley doesn’t want change. They like business as usual.

So I hope that Lynn-Anne sees me as a catalyst for NEO. It may be about changing the culture, but it’s also about inspiring, leading and giving away as much as possible so that OTHERS can prosper as well.  Its the new way of doing things, the open way.

I am an outsider, who moves much quicker than folks in NEO and I’m impatient. So I’m bound to ruffle feathers, be mis-understood, piss people off and in other ways - scare them. I sure hope I do, cause if not than I’m not doing my job.  Change takes ripping your heart out and starting over.  That’s what I’m doing.

I’m gonna hit the ground runing, teach a class (which I wrote a book for), start both a non-profit and for-profit and start recruiting bodies immediately while securing funding.  A key part of our model is partnerships so I’m already talking to Optiem, JumpStart, OneCommunity, the Lakewood Observer, the Beachland, ArtsCollinwood, the City of East Cleveland and we’re a portfolio company of the Youngstown Business Incubator.

I did all that in three trips to NEO.  Imagine what I can accomplish once I move there?

On the negative side - if I can’t raise funds in NEO what am I gonna do?

Go elsewhere.

It’s obvious and everyone there knows that.  So they’re all welcoming me with open arms and pitching in to a) first help get us some funding, b) making introductions and connections, c) offering to volunteer and help and d) providing me viral energy which is going to go logarithmic once results start appearing.

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Lynn works for a venture capital, startup resource center called JumpStart.  They’ve got their hands in almost every fire in NEO and their boss Ray Leach is one of those guys who just oooozes confidence and who orchestrates the NEO investment community like a fine conductor.  I’ve also met an EIR who works at JumpStart as an EIR named Mark Smith. Mark totally groks the challenges and mountain we have to climb and he brings to JumpStart sophistication and experience.

As I continue my introductions to NEO and get the lay of the land, I’m amazed at how many people (who clearly don’t understand what I’m talking about) nod their head and say: “well whatever dude, just as long as you do it HERE!”

“And BTW - WHY are you doing it here?”

I’ve never met so many people so down on where they live. I guess it’s the survivor’s mentality, given that so many people LEAVE NEO, through brain drain. This constant reminder of the diaspora that has devastated NEO reminds me of why I’m there.  When I was going to Oberlin the 70’s the layoffs began.  This recent downturn has just made matters worse for NEO, while all the rest of the country at least has a chance of coming back - but what does NEO have?

The Cleveland Clinic and the Cleveland Symphony, the R&R Hall of Fame, amazing museums, 1,000’s of rich foundations, local government who are waking up to what’s needed, a distributed power base of medium sized cities, which united map directly into the kind of ‘distributed architecture’ I want to build.  An academic community which understands the potential of on-line knowledge.  And the right insider’s to get me into the right people, which then translates into getting things done.

That’s who George Nemeth is.  He’s the guy who’s been getting me into the right people.  Thank you George. George works at Optiem and we’re gonna do some coolio things together.  Cause Broadband Mechanics continues!  I’m thinking radical new kinds of platforms, which drag newspapers kicking and screaming into the present.

PeopleAggregator is now four years old and our project with the U.S. Army ROTC is taking off.  Oooops - sorry I’m not supposed to tell you about that - yet.  But our source code is available to all and we’re adding more and more functionality - everyday.

The Underground Railroad, local foods, world class bio-tech, NEO a region rich in history - from the invention of synthetic rubber and polymers, to burning rivers, the Western Reserve and a transportation hub which led to steel mills and auto factories.  Cleveland is considered the western most eastern city, while I always thought of it as the place to go see Salvador Dali paintings, hear Pere Ubu at the Agora and eat Chinese food (there was NO Chinese food at Oberlin - so we had to drive into Cleveland to find it.)

My rose colored glasses of Cleveland ignore the changes that have happened over the past 35 years.  I still see a mid-western town with all sorts of problems, lots of different kinds of people and cold winters.  I wasn’t here as everything went to shit.  I wasn’t led on by ‘the flats’, University Circle, the empty promises and many vanquished dreams.

All I see in NEO is vast opportunities, incredible people and upside.  There’s fiber everywhere, there are all these HAVES who want to help out the HAVE NOTS.  There are urban gardens and greenhouses popping up all over the place. Lots of strong tradition and community.  And lots of empty lots and abandoned homes.

Why not Cleveland and NEO?   That’s what I say!

It is a petrie dish to all of our country’s problems, which is exactly why we want to build the pilot of our project there - to show the  world what’s possible utilizing social media to create a virtuous circle of volunteerism, internships, training and live events.  We’ll produce interactive on-line multimedia, and mentor and train folks in the job skills necessary to produce this content along the way.  We’ll also create new kinds of shared servers which will make up an open ‘digital city’ platform software infrastructure.  But most of all - we’ll get people to feel comfortable using computers.

‘Cause once they can feel comfortable they can ‘learn by doing‘.

And then they’ll be equipped for ANY job in the future!