Matt DeBord talks with Idealab founder Bill Gross.
I've written about Idealab, a well-known incubator in Pasadena, before. I've even visited the place and taken pictures! But I hadn't ever had the opportunity to sit down with founder and CEO Bill Gross. KPCC's crack video crew and I recently rectified that.
Gross is a compulsive inventor and entrepreneur — and one of Southern California's true business leaders. He started his first company in high school, selling solar energy kits. He then created a few more companies before founding Idealab in 1996.
Idealab has gestated numerous companies, including Citysearch, Picasa, and Shop.com. It's kind of tucked away on the northern edge of Old Town Pasadena, but it has an influence far beyond the Southland. Both because the incubator concept has become increasingly important for the startup ecosystem, as investors become much more discriminating about the maturity and potential of companies they want to invest in; and because Idealab is working on some projects that could have a significant impact on well-being in the developing world.
There's been a lot of discussion recently about Matter and its swift fundraising on Kickstarter, bringing in over $100,000 in just over a week (I've embedded the pitch video above). Felix Salmon thinks Matter has merit. Stephen Morse thinks it doesn't. You can watch them debate their positions here.
During the course of their he-said/he-said, the question of whether it's a good or bad thing for Matter to be avoiding venture capital funding came up. Felix summarizes:
In our debate, Morse snarked that no one down below us, in Times Square, had heard of Jim Giles or Bobbie Johnson, the co-founders of Matter. And in saying that he revealed his broader mindset: that of a would-be internet entrepreneur who raises venture funding by using the words “platform” and “scale” a lot while promising things like “explosive growth”. It’s no great secret that Giles and Johnson have talked to VCs, many of whom have been very supportive. But what they’re building doesn’t lend itself to the VC business model, where you either have monster, multi-million-dollar success, or else you die trying.
Morse uses the fact that Matter doesn’t have VC funding as a count against them, when in fact it’s a great count in their favor. VCs provide two things: money and advice. And Matter’s getting the advice; it’s just doing so without having to sell its soul to people wanting a monster return on their investment. All it needs to do, at least in the first instance, is pay for itself. And at the end of our debate, Morse finally came up with a number: if Matter can get 20,000 paying customers each week, he said, then he sees a sustainable model there.
Oli Scarff/Getty Images
People work at computers in TechHub, an office space for technology start-up entrepreneurs in London, England.
This is one of the best ideas I've seen in a while: following on its establishment of an early-stage venture fund at the beginning of the year, the Knight Foundation has announced that it's going to fund a Public Media Accelerator, to the the tune of $2.5 million. It's clear what Knight is up to here: it's putting together a fully functioning venture capital metabolism for the non-profit space, with a focus on media.
It used to be that you could think of VC in terms of early and later-stage funding. But the emergence of incubators, like Pasdena's own Idealab, and accelerators with a somewhat different funding model — they seek to identify, nurture, and develop startups at an extremely early stage, sometimes before an actual company even exists — has made it necessary for any entity that wants to mimic Silicon Valley to think more broadly.
Today, I dropped by Idealab, the business incubator in Pasadena, to learn a bit more about the startup scene in Southern California. They were kind enough to show me around their unique space and briefly chat about what they do, why they do it, and how they do it.
Here's a timeline of the operation, which was founded in 1996 by Bill Gross and has moved through a number of iterations. They are to a certain extent building the future here, and that's always a good energy to be around. Idealab is also fostering new businessers and new technologies right here in SoCal, establishing an interesting alternative to the Bay Area (although certainly not acting as if NoCal doesn't exist). They're even beginning to explore so-called "angel" investing, with a new in-house ventures group.
Have a look around! And, if you want to get a sense of how entrepeneurship is affecting working life in Los Angeles during an economic downturn, check out KPCC's Shereen Marisol Meraji and her visit to NextSpace, a co-working business in Culver City.