Funny enough, the CEIM which helps startups in very specific domains by provinding an incubator-style environment, is complaining about the lack of startup financing. I knew about CEIM but what I didn’t know is that it’s been around since 1996. I find it a little sad that they do not promote their services actively by attending social events. Then again, maybe they do and I just never had the chance to talk to anyone working there.

My feeling is that VC’s tend to wait for the deal of the century in order to throw in as much money as possible in order to get a large part of the pie. While this might work for some industries (Pharmaceutics for example), it no longer works with the Internet industry. A few months ago, the BlitzWeekend project proved that a great concept/prototype could be designed and created in less than 48h. Many people were skeptic but in the end, very interesting prototypes were indeed demoed to the attendees and a judge team.

The facts are plain simple:

• We don’t need expensive Sun servers
• We don’t need expensive bandwidth
• We don’t need expensive Oracle databases
• We don’t need expensive phone systems (PBX)
• We don’t need expensive Aeron chairs either

• We only need money to pay salaries.

Of course, that’s exaggerating of course but that’s how cheap it is to start a business nowadays.

Guy Kawasaki spent 20k on Truemors (one of his startup) and I think he paid too much for it. A big chuck of it was on legal fees actually. Being a VC himself, we can’t blame him for not covering that area. He’s probably used to deal with lawyers.

Everything is in the cloud these days. You can host your web servers and your database online. You don’t even need a physical office anymore. Everything is becoming virtual, even assistants! My prediction is that there will soon be toolkits (like Yahoo Pipes but more advanced) to develop your own online business for a low monthly fee. Everything from code to design to marketing will come out of the box. The worse thing? I’m pretty sure someone is working on this as we speak..!

It’s becoming that easy!

Will we see a change in the way VC’s work with Internet companies? Will we see them leave the Internet industry to focus on other larger industries? It remains to be seen but I believe they must adapt or die.

The way I see it, VC’s must become startup centers where you bring your ideas. If you are accepted, then they will match you with other people so you can use their skills (to fulfill your lacks). You will be able to use their network and office space (if needed) for a few months until your product is ready. A super incubator in some way. That would be nice and we would see way more great companies. Maybe not all rock stars like Google, but a lot of damn good companies for sure. If I were a VC, I’d be working on this right now.

The problem is how to form a team when most people have a day job and are very busy? It’s not easy.

Programmers are good at programming but might lack marketing or business skills. True programmers like to code. They often code after work. They contribute to open source projects.

Business guys are good at business but they are rarely good coders or designers. Business guys always think about ideas. They come up with a new idea every time nature calls, whenever they see someone frustrated at something and so on.

Designers are awesome at creating something neat and fun to use but might not be able to code a large application or find out if a market is profitable or not. Designers can transform any ordinary web page in a work of art.

It’s very hard to find a multi-disciplinary individual (ex: someone who’s both a great coder and a great business man). I always believed in working as a group instead of working for yourself. Being in a team, it’s much easier to talk about a project, to do research, to design and code it. The reason is you have access to other excellent resources. When you do it on your own, you must be very focused and dedicated otherwise you will quit or fail. Being solo doesn’t work very well.

So you might be wondering where all this is heading? Well I had this idea where people contribute to startups in various ways. I call it “coop entrepreneurship”. People join startups like they join open source projects. They contribute what they can: they code, they design, they write business plans, they do marketing, they invest money, etc. Basically, they contribute their skills (or money if they are investors). Their participation is evaluated and shares are given depending on their participation. Once the project is completed, they look for funding and launch.

I’d really like to “test run” this idea with a few people before brining the concept further. So if you’re a programmer, a designer/user interface expert, a business man, a network engineer, a sysadmin, an investor, a mentor, a coach, a lawyer, an accountant, a secretary, an idea guy or if you think you could be part of a startup then please let me know.

I would really like to hear your thoughts about the model itself. On my side, I think the model is viable as the coop model has been around for ages. It is just being applied in a different way and actually, I know that Cambrian House is doing something similar. In the medium term, the goal would be to create a hub where people could meet, find partners and start a business. Some sort of business catalyst or perhaps a very informal incubator.

So… who’s in? Just email me.

So who can come? You! All you need to do is setup a team before the actual day. If you have no team, fear not my friend as we’ll help you team up with other fellow developers, designers or business people who are “team-less” just like you.

You can come up with an idea beforehand however; working on it in advanced would be considered very un-cool. It’s ok to think about it a little bit but please be considerate of others who will truly start working on Saturday morning. It’s a friendly competition after all..!

We expect a business panel who will vote on the best idea. You will be invited to vote as well on the technical, design and business side of each project.

This will be an intense but very fun event and I invite you to join and talk to everyone you know about it. Attendance will be limited (due to room size restrictions) so please apply ASAP in order to confirm your spot! Come one, come all

Traditional business centers already exist, but they are mostly equipped with basic amenities such as conference rooms, copiers, faxes and so on. Basic stuff and nothing very impressive. A geek-ish business center could have much more such as a shared small scale data center where you could “borrow” space on an existing server until your project is ready for prime time. Having a limited number of businesses could result in decent performances compared to an overcrowded shared hosting provider.

Having multiple of those geek-ish business centers would also allow redundancy and geographical load balance thus allowing users to benefit from a heavy duty data center at a very low cost. Try getting this from your current hosting company…

On the HR side, there could be many beneficial services such as accountants, lawyers, marketing gurus, programmers, designers and other freelance people. These resources could be available on a contract basis or be included as part of the regular package. Of course, VC folks would be very interested in following those new start-ups and I believe that high quality start-ups would come out of this machine.

Basically incubator meets business centers. This could allow people with ideas to come in, “add some water” and voila!

There are some incubators and similar services around here but none of them offer the equivalent of what TechShop offers.

I guess this is something WE do all the time in a way. In order words, why bother putting a little bit of money in many bank accounts when we can put all our money in a few accounts that have different risk levels as long as our overall risk level is acceptable..? I don’t think anyone would feel very excited about having to deal with a dozen of so bank accounts. That would be way too much work. In that way, same goes with VC’s.

With that in mind, I also agree with Heri on the fact that some people don’t need a lot of money. I, for instance, am working on a project where I don’t need a full scale datacenter to support my project. Of course, if you give me $2M then I might re-think my wish-list but I don’t need that much money, at least not for the first year or so. But on the other side, I could use a few $10K’s to pay for a full time programmer, an artist, etc.

So what to do? Garage’s idea about a seed fund is nice. Put some money in a high risk, high reward fund. Let a college graduate (tech-savvy and low paid) manage it. A one or two million dollar fund could go quite far especially if there is a $100K investment limit. I don’t know about you but I could do a LOT of things with that much money and I’m not talking about buying Aeron chairs.

Other than “micro-financing”, I believe that an incubator would be welcomed as long as they don’t get too much participation in return of a small investment. Y Combinator, for example, received bad critics for getting a too big participation while bringing-in little value. While I don’t want to bring the eternal issue of participation and % of shares, it’s often better to have a little piece of something big than a big piece of nothing. Small companies often have the same needs as larger ones do. No one is an Internet marketing, accounting, HR guru and getting some help/coaching through an incubator is a nice thing.