Tech experts encourage innovators to persevere

Business technology experts told a large audience of entrepreneurs Tuesday that tech innovation and development is neither dead nor dying in this stumbling economy – just starved for cash.

By Dan Luzadder
Special to The Denver Post

Guy Kawasaki of Garage Technology Ventures says days of easy money for innovation are gone, but ideas abound.
But the good news, they said, is that the time may still be right for ventures that are in seed-stage development, if they can convince investors to partner in opportunities and find grant money until the economy improves.

"There are still a lot of good ideas out there," said Guy Kawasaki, founder of Garage Technology Ventures and moderator of a panel that gave innovators a largely positive economic forecast for the hard-hit technology sector.

"I hope you will fight the good fight and continue to start companies," Kawasaki told participants in the annual CTEK Forecast Fair, "because that is what will get us out of this funk."

CTEK, a Boulder-based, nonprofit technology incubator, hosted the fair at Westminster’s Technology Park on Tuesday morning to share views on technology issues facing those trying to start new enterprises.

The panel, which included Stephanie Keller-Bottom of Nokia’s Innovent division, Michael Englund, chief economist for MMS International and Randy Swenson of Bathgate Capital, acknowledged that venture capital has all but dried up for early-stage ventures since the recession.

"Most Silicon Valley venture capitalists now want a proven enterprise, with proven technology and proven traction," Kawasaki said. "But to truly be a seed innovator, you have to rely on unproven technology. Any yo-yo can do a layup. It takes real courage to do the unproven stuff."

He said investors must be willing to share some risk with technology innovators, and CTEK panelists advised innovators not to lose heart.

Englund said people in Colorado, especially because of its early strength in the technology sector, "are experiencing more of the economic woes than most of the rest of the country.

"Overall the country is looking at about 3 percent growth," Englund said, "which … before the new economy, was a pretty good rate of growth."

He said optimistic economists suggest double-digit growth could return early next year.

Swenson noted that vast opportunities are developing in biotech fields.

He advised early-stage entrepreneurs to rework contracts with customers to get help in funding development activities and to look for small business grants and loans.

"(Capital) is a very significant problem in Colorado," Swenson said, "and there is not much local seed stage innovation right now. But you have to step back … 15 to 20 years ago, when there was not much seed activity at all. We still developed new companies."

Another panelist, Trip Carter, Gov. Bill Owens’ aerospace advocate, said there are pockets of opportunities for aerospace innovators as "exploiting data on the ground" takes a priority over new data collection in space.

"There are lots of opportunities in remote sensing data that, for instance, can tell a farmer where his crops are becoming invested, or where they need more water, or telling mining companies where to look," he said.

Kawasaki’s well-known Palo Alto company focuses on funding for startups because higher rates of return are possible there. The days of easy money may be gone but ideas are not, he said.

"We’re just getting back to the old days before the only requisite skill was the ability to do a Power- Point presentation," he quipped.

"We used to be in the private placement business, but it’s hard to get people to fall in love with the companies we fall in love with," he said. "So we are taking a different tack."

Kawasaki acknowledged that he was surprised at the optimism expressed by panelists. "But I am optimistic, too," he said. "It is a great time to be looking at new innovations, and there is actually a lot going on here."

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