Flying smelly clusters, originally uploaded by fabbio

One of the articles in the series mentioned yesterday, “The fading lustre of clusters,” stood out for its analysis of the challenges of entrepreneurship, innovation and specifically its criticism of the role governments have played. It focusses on the government’s enthusiastic adoption of Michael Porter’s strategy of “Industry Clusters.”

Clusters are supposed to improve competition in three ways:

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Is Canada ready to leapfrog?

For those who missed it, last month The Economist ran a special report on capital “I” Innovation.

All of the usual innovation stars and pundits are cited – Silicon Valley, China, India, Google, P&G, Toyota, Christensen, Drucker, OECD’s John Dryden, etc etc. Though the information in these articles isn’t exactly news, it is a reminder yet again of how Canada’s perspective on innovation compares to the rest of the world.

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Most start-ups require an infusion of cash to successfully launch – capital that will have to come from sources other than the entrepreneurs starting the company. These entrepreneurs are faced with the choice of borrowing (debt) or accepting investment (equity). Debt requires an asset backing the loan – perhaps the inventor’s house? Equity, while it doesn’t have to be repaid, implies taking on a partner who may not be a silent one!

Question of the week:
I’m interested in the experience of entrepreneurs out there: which route would you recommend — debt or equity — and why?

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Knowledge@Wharton had an interesting report posted October 31: “In Global Entrepreneurship, One Small Initiative Can Make One Huge Difference.”

In it, they write:

“Entrepreneurs love to grumble about the roadblocks and delays created by bureaucrats. Government officials, they say, are slow, bumbling and concerned only about hewing to their rules and clocking out at 4:55 p.m.

But in a study of global entrepreneurship, Raffi Amit and Mauro Guillen, both Wharton management professors, have found that a simple, if smart, bureaucratic initiative mattered critically in determining a country’s level of entrepreneurship. Specifically, countries that created electronic business registries saw far higher levels of new business formation than those with traditional paper ones. Even the announcement that a country planned to establish an online log led to a jump in business registrations…â€?

More information:

• Read the rest of the article
• Download the research paper
• Listen to the audio file

Sometimes it’s easy to forget how long it takes to build a great software company. Case in point – Cognos. It’s hard to believe that while Neil Armstrong was doing his moonwalk, Ottawa-based Cognos was starting up in 1969. At the same time, the first wave of mainframe computers were hitting the market. And while Cognos had a 38-year run, it is now officially moving over to “Big Blue.” Yes, this week IBM announced that it is spending $4.9 billion to acquire Cognos. The deal follows a spree of acquisitions by both Oracle (Hyperion Solutions); SAP (Business Objects) and Microsoft (ProClarity).

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Click to read the report

The results of the largest study on the financial returns of angel investors in North America were released earlier this week by the Ewing Marion Kauffman Foundation and the Angel Capital Foundation.

The study showed that angels affiliated with organized angel groups achieved an average of 27% internal rate of return on their investments. Overall, “…. [these] groups experienced exits that generated 2.6 times their invested capital in 3.5 years from investment to exit. This return compares favorably to that of other private equity investments, including those of early-stage venture capital.â€?

In addition to the study’s findings on angel investment outcomes, best practices in angel investing were also identified. Areas linked to investment performance were:

• due diligence time
• industry expertise among investors
• active participation by angels in the funded venture
• follow-on investing (interestingly, the study found that “ … [i]n ventures where follow-on investments were made, nearly 70 per cent of the exits occurred at a loss.â€?)

More information:

• Read the study’s press release
• Download the full report: Returns of Angel Investors in Groups (PDF)

Centen and Patel demonstrate their winning technology.

Things are looking good for the inventors of the CPRGlove, a portable device that guides the wearer in performing CPR correctly. Corey Centen and Nilesh Patel, the two young Canadians behind the glove, were recently awarded US$15,000 in the Collegiate Inventors Competition in Pasadena, CA. Centen and Patel invented the glove as undergrads at McMaster and launched Atreo Medical Inc., now a MaRS client, to commercialize their idea. Over the past year, the CPRGlove has won awards and attracted media attention on both sides of the border. According to Gizmodo, a popular gadget blog, the glove is “badass…like a Nintendo Power Glove.”

Badass and life-saving - what more could you want in an invention?

The Return of BioEntrepreneurship

We have had many ask whether MaRS BioEntrepreneurship event series will be running this year again. The answer is a resounding “YES!” but in a slightly different “study sessionâ€? format compared to its inaugural year last year.

Entrepreneurship 101 was always intended to be MaRS’ core course on how to start a business, with BioEntrepreneurship bringing some of the industry-specific knowledge that an entrepreneur in the life sciences sector would need.

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Ibuprofen 400 mg’ used with permission from Daisy

Just in time for the holidays, Fortune magazine has a disheartening look (from the industry’s perspective) at the FDA, showing that new drug approvals are down (only 15 New Molecular Entities this year - likely to match a 10-year low). The reason: “…the FDA has raised the bar, demanding that the new drugs aren’t just safe and effective, but more effective than currently-available treatments.”

In the age of “personalized medicine,” it seems odd to limit a doctor’s choices for treatment. Certain subpopulations will always respond better to an alternative treatment than the standard of care. As a regulatory body, the downside of another scandal may be a greater motivating factor than the interest of providing patient options. Or, as the CEO of Schering-Plough put it, “When bureaucrats come under pressure, they tend to choose the path of asking for more data, as opposed to approving the drug.” Or the tech adage, “Nobody ever got fired for buying IBM.”

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GE day 2007

Business and industry, government and individuals — we all face the same eco-challenge: how to achieve more with less.

For the 450 participants who took in the GE Ecomagination event at the MaRS Centre last week, what they heard and saw should be a welcome shot of inspiration.

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