Explaining Southern California's economy

Venture capital isn't over — it's trifurcating!

TechCrunch Disrupt SF 2011 - Day 3

Araya Diaz/Getty Images for TechCrunch

Venture capitalists and founders at a recent TechCrunch Disrupt conference. Are the those who disrupt about to get disrupted?

Scott Anthony, who runs venture investing for Innosight — a consulting firm founded by the founder of "disruptive innovation," Clayton Christensen — has applied the master's lessons to the venture capital space at Harvard Business Review's blog. Like a lot of folks, myself included, he takes a recent Kauffman Foundation report as his starting point. 

And then he effectively deploys Christensen's best-known concept to explain why venture capital — and particularly big VC funds — isn't performing as well as an investment class as it has in the past. The way disruptive innovation works is that in an established industry, a new player will enter at the low end and wind up disrupting the major players.

A good example might be Japanese carmakers attacking first small motorcycles and later small cars, then moving up the food chain to make plenty of trouble for Ford and General Motors. More recently, you could argue that Instagram did this to Facebook by creating a lightweight mobile photo-sharing app that was so easy to use that it acquired 50 million users practically overnight. 

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Better Brands: 3 Reasons why Facebook has changed brands forever

Justin Sullivan/Getty Images

If you're interested in your company's brand, Facebook is now impossible to avoid.

I'll be talking about branding with Innovation Protocol's Managing Director, Sasha Strauss, at the Crawford Family Forum tonight. It will be the first installment of DeBord Report live at KPCC's community space, and I believe there's still time to RSVP!

Leading up to the discussion, I doing a micro-series on branding. I already talked about the Apple Genius Bar as a customer-service concept that really put the Apple brand over the top. Now I'm going to look at another fairly well-know Silicon Valley company and the impact it's had on branding.

Facebook isn't even ten years old, but it's already on the runway to be one of the biggest tech IPOs of all time. It claims hundreds of millions of users. And it's become an essential place for companies to make a case for their brands.

But this isn't your father's branding. The concept of "branding" is relatively young — no one talked about brands 50 years ago, as Sasha Strauss will point out. But for most of the history of brands, companies controlled the core message. Apple was what Apple said it was, Nike was what Nike said it was, Ford was what Ford said it was.

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GM posts record 2011 profit, with most coming from toughest auto market

Matthew DeBord

Don't think cool cars can some in small packages? No so. The new Chevy Sonic is proof that General Motors can finally do a tiny ride that commands attention.

Good news today for General Motors: it generated its highest annual profit ever in 2011. That's $7.6 billion. And yes, you read that first sentence right: highest annual profit ever. Higher than when GM owned half the U.S. market. Higher than when it was the largest industrial concern on the planet.

This is remarkable for two reasons, one obvious, one not. First the obvious: three years ago, GM had to be bailed out by the taxpayer before entering bankruptcy. It was under fierce attack in North America from Toyota and others. The future looked, if not completely dim, then not exactly luminous.

Now the not-obvious. Most of GM's 2011 profit came from North America. Some analysts have pointed to this as a problem and highlighted GM's struggles with its main European division, Opel, which it decided to hold on to rather than sell, post-Chapter 11. (Other observers, notably Slate's Matt Yglesias, have complained that all the rah-rah around GM suggests that America is still too close to the auto-industrial business model that built the country in the 20th century.)

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LA Auto Show: The future of Lincoln

So let me throw this one open to the audience. Lincoln: luxury yes or luxury no? And does Ford have any business keeping its luxury brand alive, when many people think that it just isn't as...luxurious as brands like BMW, Audi, Mercedes, Lexus, and even Cadillac, its historic rival?

I've argued elsewhere that Ford should let Lincoln go. But maybe I'm wrong...

Follow Matthew DeBord and the DeBord Report on Twitter.

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Live-blogging the LA Auto Show

BMW Offers Previews Two New Electric Concept Vehicles

Spencer Platt/Getty Images

Update: I spent a some time talking about the show with Larry Mantle on Airtalk this morning, with Eddie Alterman of Car and Driver and Ed Hellwig of Edmunds Inside Line. Check it out.

I'll be roaming the floor of the Los Angeles Auto Show for the next two days, checking out new cars, green cars, concept cars, and the business of cars in Southern California. I'll also be tweeting, so if you want to follow me, check out my Twitter feeds, below.

Look for photos, insights, and even some video. The LA Auto Show is the first big car show for the global industry, kicking off a season that runs for months and travels around the world.

The industry has taken its share of lumps over the past few years. The financial crisis nearly killed both Chrysler and General Motors — and seriously threatned Ford — but the Big Three are back, racking up profits quarter after quarter. 

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