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Jessica Chesher

Managing Editor

Innovation eReview

December 2005 Edition

In This Issue:

Editor's Welcome

How far along you are in your holiday shopping determines, we reckon, just how full you are of the old holiday spirit.  We’re kind of lukewarm on shopping, and we positively loathe paying full price for anything, so holiday shopping in our family consists of periodic trips to the TJ Maxx type of retail establishments (read: discount chains) all year round, and we’re able to score some excellent, albeit at times out of season, bargains by employing this strategy.  But, regardless of your holiday shopping strategy, or lack thereof, we hope that you are at least not too stressed over the impending celebrations.

And speaking of celebrations, if your personal spiritual celebrations don’t require purchasing gifts for family and friends at this time of the year, you have our most sincere sympathies, because even those of us who *must* shop for celebrations held at this time of the year cannot help but be, well, affronted, by the relentless and flagrant consumerism invoked in the name of sacred Judeo-Christian traditions.  The mind positively reels at what our fellow Americans who are not of Judeo-Christian heritage must think of a “holiday season” that stretches from mid-October until the end of the year (or what we’ve heard referred to as our national “season of insanity”).  Not that we don’t feel downright insane sometimes ourselves, but we try not to get caught up in it, and enjoy the holiday season in our own small and peaceful way.  We hope you can too.  

So, besides a quick trip to the mall to procure a last minute request from our daughter for a book, (and a Trixie Beldon book at that, does she know how to pull at Mama’s heartstrings or what?), we are free to indulge in holiday rituals that we enjoy, like cooking, baking and, umm, eating what we’ve cooked and baked.  Which brings up our “Don’t Know Much About” feature, which for this month is about New Year’s Resolutions, and – could you guess? – one of the most popular New Year’s Resolutions is losing weight.  Really, after a nationwide bacchanalia that begins with Halloween candy and ends with New Year’s Day brunch, can you imagine just how losing weight ends up on those resolution lists?  We also have an article from Jeong Oh on financing a start up, Marian Berda on Tech Talk 2006 Trends, A timely December Means article, a human resources article and our usual blurbs of news and views you can use.  

Finally, it has been a pleasure to put together this newsletter for all of you, our esteemed readers.  We thank each and every one of you for reading it, and a special thanks to those who have emailed or called us with suggestions, requests for more info, praise and, especially, constructive criticism.  Feedback is a gift, and we sincerely appreciate yours, so keep it coming.

We will leave you with our sincere best wishes for a magical holiday season, a happy, healthy and fun-filled 2006 and, most of all, peace and harmony on this beautiful Earth that we share.



December Means

December Means....New Year's Eve!

How many of us have warbled the lyrics to this venerable New Year’s Eve fav (with or without the ingestion of adult beverages) without knowing anything more than the first verse and without really understanding the meaning of the title?  Unless we have some post-doc scholars of Scotland or of Mr. Rabbie Burns himself (Rabbie being the traditional Scot spelling of Robert) amidst our readers, we bet none of you.  Yet we also bet that the rendition of this tune can bring a tear to your eye even without the aid of an orchestra, Times Square, adult beverages, the stroke of midnight and the impending birth of a new year, for somewhere, deep down inside of you, you “get” the meaning.  

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Feature Article

by Jeong Oh

So, you want to finance your business start up or expansion, but you’re not sure where to start?  Well, consider this a primer on funding sources for start up businesses, and look for follow up articles on financing in the coming months.  

Sources of Financing for Entrepreneurs

Securing financing for a new venture is probably the most common concern for entrepreneurs and is often a major challenge during the early stages of a business.  This article addresses some of the sources of capital and how they are usually leveraged.

Risk/Return Model

Simply, any lender or investor will use a risk/return model to evaluate a proposal.  One of the cardinal rules of entrepreneurship financing is for the entrepreneur to leverage capital at the lowest possible cost to the entrepreneur.  Another cardinal rule is for the investor to receive the highest rate of return on their investment.  The two seem mutually exclusive, but really aren’t; it’s just a matter of getting both parties to talk in the right language and listen to each other, and it’s the responsibility of the entrepreneur (after all, they are the ones asking for money) to ensure that she or he is speaking the “right language” when interacting with the potential investor(s).  It’s also important for the entrepreneur to be honest and objective with themselves when planning an investment strategy, for there is nothing to be gained by donning your rose colored glasses when you’re discussing the green. 

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Don't Know Much About...

So, given that the calendar has been whittled down to one slim page, we’ve been thinking about New Year’s Resolutions, to make them or not to make them is, of course, the question one must ask oneself.  So while you’re pondering whether or not to take on the resolution burden, we’ll give you a bit of New Year’s Resolution history and tradition.

To get the full essence of resolution history, we must journey back to 2000 B.C., when the ancient Babylonians feted the New Year for 11 days, with each day having a distinctive manner and method of merriment.  The Babylonians also had New Year’s Resolutions, the most popular of which was, fittingly for an agrarian culture, the return of borrowed farm equipment.  The Babylonians celebrated their New Year on what is now March 23, or the Vernal Equinox, which, when you ponder it a bit, is logical.  Spring is the time of new beginnings, crop plantings, lengthening days, rising temperatures and the general end of “hibernation mode” for the Earth and her inhabitants. 

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Tech Talk

by Marian Berda

This month Tech Talk begins another great tradition with our First Annual Tech Talk Trends column.  Yes, we pull out the old Ouija Board, consult the Magic 8 Ball, dust off the Tarot Deck and have at it.  Just kidding.  Actually, we read a bunch of techie trade journals and Web sites, talk to our fellow geeks and browse the web sites of some of the large tech companies to glean the latest techie news, and we hope you find it interesting.
In 2006, look for great technological advancements, especially in the gaming and graphical markets.  And lest you think those improvements are, well, all fun and games, they are definitely not.  Most of the new and improved products stemming from the gaming industry find their way into practical applications rather quickly, driving product innovations and improvements in many areas outside the Playstation and Xbox realms.  Microsoft has certainly embraced this notion in the development and evolution of its products and led industry to continuously improve the supporting technologies.  Here are a few examples.

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News You Can Use!

New York ranks 6th on School Science Standards

appraised the quality of statewide K-12 science standards required to be in place this school year by the federal No Child Left Behind (NCLB) law. Adopting new science standards is the first step leading to NCLB science testing required in every state by 2007.
Nearly half the states flunked an examination of statewide science standards for elementary and high schools. The 19 states most populous states, which educate just over half of U.S. students, earned grades of "A" or "B", with California, Virginia, Massachusetts, South Carolina and Indiana in the top five. Idaho, Texas, Wisconsin, Alaska and Kansas received the lowest marks.  New York placed sixth with a grade of 88 out of 100.


Supreme Court Will Review Patent Injunction Issue in eBay Case 
Taking many by surprise, the Supreme Court has granted certiorari to review the MercExchange v. eBay case.  MercExchange was granted a permanent injunction at the District Court level in 2003, and that decision was affirmed by the Appeals Court who also awarded $25 million in damages. The courts agreed that eBay’s “Buy it Now” feature infringed on at least one of MercExchange’s patents.  The primary issue that is being challenged in this case is the common practice of judges to issue injunctions against companies that are found guilty of infringement while their cases are on appeal.  


Berkeley’s Socially Responsible Patent  Licensing
The current issue of the Berkeleyan, UC Berkeley's newsweekly, has an article about Berkeley's socially responsible patent policies in the area of medicines for the developing world.  The article can be seen at:

Colorado Invests in Biotech Firm with ties to University of Colorado

Colorado State Venture Capital makes its first investment in Taligen, an Aurora biotech that’s trying to commercialize technology developed at the University of Colorado.  Taligan was incorporated in March 2004 by Woody Emlen, a former University of Colorado rheumatologist.  Emlen explained that the company has received about $1 million up front of the $3.5 million commitment the company has coming if it reaches certain milestones which were not disclosed.

European Telecommunication Companies Demand Royalty Cap 
Several of Europe’s major telecommunications companies, have joined forces to dispute Europe’s current intellectual property rules. Together, they are demanding that the European Telecommunications Standards Institute, the body responsible for standardization of information and communication technologies in Europe, reviews rules that the companies claim permit excessive demands for royalties.  The companies are complaining that the current Intellectual Property Rights rules leave companies exposed to “unsustainable” and “excessive” royalty demands.   


Agitating for a 10-State Regional Revolution 
Although the region has failed to spark any critical mass of emerging technology at this point, a group made up of the Chicago Fed, the Economic Development Council of Chicago, corporations, business executives and academics from several states, is working to change that by igniting a regional, high-tech revolution.  There seems to be real potential in the region, which includes Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Ohio and Wisconsin; last year, the states received nearly $3.7 billion in research money from the biggest federal funding agency for scientific research, the National Institute of Health. 


High-Tech Work Is Going Abroad 
Millions of low-technology jobs, from textile production to corporate call centers, have migrated to Asian countries like India and China in recent years. More and more companies of all sizes are beginning to consider this option to cut costs and increase production.  Another attractive feature that Asian countries have to offer is the “huge pool of talent.”   There are a number of technology institutes and engineering schools in India, but as a result of 9/11, visas for these talented young engineers are hard to come by.   American businesses are bringing the jobs to the engineers at a fraction of the cost and hassle of bringing the engineers to the jobs.  Washington, are you listening?

Compromise Puts $575M for Stem Cell Research on New Jersey Agenda

Acting Governor Richard Codey has reached a compromise with a key Democratic lawmaker on a plan to pump $575 million into stem cell research in laboratories throughout the state. Codey first proposed more modest investments in his “State of the State” address nearly a year ago:


Small Business: What investors look for in a plan
From venture capitalists to angel investors, your business plan has to have more than just a plan in order to be successful.  To attract venture capitalists, you will want to have a good management team, a defensible product with a competitive advantage, a reasonable valuation of your company, and a clear statement of what you are offering as the investment, just to name a few.  When it comes to angel investors (wealthy individuals or small groups looking to invest) predictions are harder to make, although angel investors tend to consider the same factors outlined above.


 Rochester Researchers Seek New Ways to Fund, Market Discoveries

Though enactment of the Bayh-Dole Act was a watershed moment for research universities, the practice of technology transfer and the commercialization of university research continues to evolve as markets change. Patent activity at universities continues to rise but doesn't always translate into more licenses and revenue:

Dr. Robert Rose of the University of Rochester Medical Center is one of many scientists who have seen the impact of the Bayh-Dole Act, the landmark federal legislation passed 25 years ago this month that allows universities the option to patent and commercialize inventions produced out of research funded by the federal government:


Banglore: Innovation hub

Bangalore, the tech center of India, is booming as the Bay Area once did, becoming a world-class hub for tech jobs, economic activity, and, increasingly, innovation:



Is Money *Really* a Motivator?

Because it’s the holidays, because not much hiring happens over the next several weeks, and because (blush) we had several emails about last month’s “Celebration Week” article (and none of them were from Bill O’Reilly, accusing us of turning the traditional “Christmas” Party into Employee Celebration Week), we thought we would again suspend our regularly scheduled programming in favor of a holiday special (hey, at least we’re not running re-runs!).

Now we don’t cruise the Internet a great deal, but we do get around a little, albeit mostly on cooking, gardening and “home” sites, and at this time of the year there are a lot of questions about tipping people, holiday gifts, etc.  Call us cheap (many have), but all that talk about tipping at the holidays got us thinking about employee motivation, money and managers.  

It’s a common perception that money motivates people, and it does, to a certain extent.  Many studies on Americans have show that up until the point where most people reach the infamous “middle class” (which can mean many things, depending on which part of the U.S. of A. you reside, but for our purposes we will define it as owning a home, a car or three, ample food in the pantry, clothing, some recreational opportunities, etc., etc.) they are extremely motivated by money. 

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