The “state of cleantech VC” series

Good read from Matthew Nordan.

the-state-of-cleantech-venture-capital-2011.pdf
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Software Is Eating Nonprofits Too — A Conversation With Austin’s Affinity IG

When you hear someone talk about disruption in technology, it almost sounds passé. But if you ever want a simple cheat sheet to impress your friends,read this piece by Netscape Founder and Venture Capitalist Marc Andreessen.

It’s basically a series of case studies in disruption, each showing how software-driven services are invading companies large and small.

Recently, I caught up with two tech execs that want to accelerate the way nonprofits are being eaten by software.

lizgreen“There’s all these tools out there, whether they’re free or in-house, and clients are having a hard time pulling anything cohesive together,” said Liz Moise, Managing Partner at Affinity IG, an Austin-based interactive agency. And Moise should know. She’s held a number of positions in the non-profit sector, most recently as head of marketing at Goodwill Industries here in Austin.

If what Moise describes sounds familiar, it’s by design. Affinity IG is taking its years of experience in corporate and startup environments and applying that to advocacy and nonprofit groups. And even though her experience played a big part in Affinity IG’s roadmap, it was the agency’s Founder, Mark Courtney, that refocused its efforts about a year ago.

“We wanted to attack things a little bit differently”, explained Courtney. “We knew we had the DNA of a social enterprise, and with Liz coming on board, working with nonprofit and advocacy organizations just made sense,” said Courtney.

mark_courtneyCourtney started the company almost three years ago, mostly helping organizations build online communities. With more than a decade of managing large-scale websites before that, he realized Affinity’s new direction was the perfect fit for Moise’s marketing and branding expertise. The culmination of that can be seen in a recent white paper, “Think Like A Startup, Execute Like a Social Enterprise.” It targets nonprofit marketing and development teams and does a good job blending digital strategy and old-fashioned execution.

“What we wanted to do was provide the strategy and creative on a technical level, without sacrificing our domain expertise in the advocacy area,” Moise said.

Affinity’s heavy digital focus is warranted. Some projections peg the online giving market as high as $30 billion in the United States, according to a 2010 report from Giving USA Foundation. But having solid digital chops is only part of the battle when trying to raise money and recruit new members. You better know the ins-and-outs of the nonprofit world.

Courtney says one of Affinity’s advantages is its growing roster of alliance partners.

“We have some great alliances already”,said Courtney. “Our content and collaboration partners love our model because we’re so agnostic, we’re focused on the business first,” added Courtney.

As basic as it sounds, that’s a hard thing for some of Affinity’s clients to digest with all the tools and technologies available. “For us it’s easy, we put Advocacy at the forefront, then refine it with the right tools and support,” added Moise.

Apparently that strategy is attracting attention from some big names.

fox_trail_finder
In early 2012, Affinity is launching an International version of Fox Trial Finder for the Michael J Fox Foundation, a leader in providing support for Parkinson’s Disease (PD). Affinity says the platform will match clinical trials around the world with PD patients, caregivers and healthy volunteers touched by the disease.

Moise says the development work included matching algorithms and custom analytics, a welcome boost for the foundation as it gears up for Parkinson’s Awareness month in April.

Affinity’s work with the Fox Foundation also shows how client expectations are changing in the nonprofit space. Service providers and agencies aren’t just user interface (UI) and branding practitioners, they’re system integrators and business strategists.

In the past, organizations would look to incumbent software providers for solutions that worked on top of their platforms, often succumbing to the proprietary nature of their systems. These days, in the spirit of open data, those same applications are giving way to more open and expandable systems. Yes, the nonprofit sector is finally experiencing the same consumerization that’s been gripping corporate enterprises for several years.

That should signal opportunity for Affinity IG and others. Not only are there plenty of silos in advocacy organizations, (think integration, collaboration) but it also has its share of clunky, monolithic software vendors.

Addressing those challenges and already having some of the right pieces in place, should make it an interesting year for the agency. Budgets aren’t back to pre-crash levels, but there’s plenty of demand for firms providing turnkey services to an underserved market.

Let’s hope Affinity IG is the harbinger for not only the rise of the social enterprise, but its staying power.

 

“Another Website Isn’t Going To Solve The World’s Problems”

That’s not a catchy headline. That’s what Ethernet inventor and current UT innovation czar Bob Metcalfe told me at a recent Dell Entrepreneur event. And if you caught Metcalfe’s keynote at this year’s Clean Energy Venture Summit, you know he’d likely tell you to invest in a handful companies in the so-called “enertech” sector.

“I’m waiting for all those tech and social networking investors and VCs to come over to energy,” he said. Jokingly taking it a step further he added, “If I were a clean energy or green tech company, I’d add ‘social’ in front of my product or service.”While it’s hard to argue that energy is the next frontier, part of what Mr. Metcalfe touches on is something that should be a broader shift in the startup community: looking beyond the sizzle and focusing on the non-sexy stuff.

In a recent Washington Post column, Vivek Wadhwa writes about what he calls innovation black holes, describing antiquated industries and their inability to quickly address opportunities. Wadwha says entrepreneurs should be looking in the “nooks and crannies” to see opportunities, dismissing most current industry efforts at disruption.

“Outside of computers, software and a select group of sexy technologies, innovation is almost entirely absent.” 

At September’s Clean Energy Venture Summit in Austin, attendees got a glimpse of several companies attacking the seemingly ordinary.Yan Engines is a prime example. Their focus is to reconfigure five parts in existing 4-stroke engines to achieve more torque and provide up to 80% more fuel efficiency. It’s one of those things where you think, surely there can’t be that much innovation left in engine design after decades of development, right? Wrong. Yan is nearing its prototyping stage in Q4’ 2011 and has its sights set on some pilot projects with the U.S. Military.

Noel Davis, CEO of Vela Gear Systems, isn’t bashful about what his company brings to the table. “We’re like a Chinese company in North America,” Davis told me, referring to the way its customers outsource the design and development of large-scale industrial gearboxes to VGS. In addition to becoming a one-stop shop, the company is locating its facilities close to manufacturing hubs and even some larger technical and vocational centers.

Davis says that allowed VGS to improve outsourcing efficiency, fill the staffing pipeline, and ease logistical constraints.
Those pieces put together look impressive and well-timed, especially when you account for a changing workforce and growth in other sectors.

Joel Kotkin explains in a recent piece from NewGeography.

“Driving the skilled-labor shortage is a remarkable resurgence in American manufacturing. Since 2009, the number of job openings in manufacturing has been rising, with average annual earnings of $73,000, well above the average earnings in education, health services, and many other fields, according to Bureau of Labor Statistics data.”

Now this isn’t a pep rally for manufacturing, though. If anything, it’s a wake-up call for the opportunities that lie outside the world of shiny new tech apps and services.
The tech isn’t going anywhere, it’s permeating every industry. What’s different is the breadth of penetration in different industries.That should be an impetus to startups everywhere, reminding them that high-growth business aren’t only born in the cloud or delve out digital deals on connected smartphones. And by the way, all those software engineers might be a little easier to hire over the next half-decade. From that same Kotkin column, he cites an eye-opening prediction.

“A recent study by the economic forecasting firm EMSI found that fewer computer programmers have jobs now than in 2008. Through 2016, EMSI estimates, the number of new graduates in the information field will be three times the number of job openings.”
 

But don’t worry, even though entrepreneurs everywhere (even the Valley) are removing the tech goggles, your software skills are still marketable. They just might be put to use building something outside of your tech comfort zone.

recent NYT piece showed a diverse set of startupsattacking all sorts of vertical applications outside of local, social and mobile. Really.

“The trend reflects the steady march of that most protean of technologies — computing — as it makes further inroads into every scientific discipline and industry. Clean technology, bioengineering, medical diagnostics, preventive health care, transportation and even agriculture are part of the mix these days for the Valley’s technologists and entrepreneurs.”

So whether or not you think we’ve overdosed on the coolness factor, what’s clear is that it’s never been easier to provision tech horsepower to get a startup off the ground. What’s more challenging is coming up with bigger ideas and leaving the herd behind. Blazing a trail has always been a lonely gig.

But alas, Mr. Whadwha summed up it up best.

“Eliminating these innovation black holes could do more to improve our lives and the economic future of our country than the latest Web-based social-networking applications.”

 

Start-Up Job Creation Stalled

Moving Past Social Apps For Innovation

Eliminating these innovation black holes could do more to improve our lives and the economic future of our country than the latest Web-based social-networking applications.