Explaining Southern California's economy

Big Bird doesn't need PBS — he has Kickstarter!

Waves of support and concern for the large iconic yellow Muppet have washed toward Sesame Street since Wednesday night's first Presidential debate, when Mitt Romney told moderator Jim Lehrer that although he loves both him and Big Bird, if he were in the Oval Office, they'd be...

Fired!

So let's say Romney wins and gets his way. Big Bird is out of a job, along with the rest of the Muppets. They might do okay, because as we learned earlier this year, the Muppets are clients of Goldman Sachs, the very investment bank that has been accused of using the term "muppets" to refer derisively to clients.

Meanwhile, Big Bird might not really have anything to worry about. 

Why?

Crowdfunding.

As it turns out, "I Am Big Bird," a proposed feature-length documentary about the life and times of Carroll Spinney, the man behind the feathers — actually, inside the feathers — since 1969 successfully raised $124,114 on Kickstarter. An outfit called Copper Pot Pictures is behind the project.

Read More...

Do venture capitalists care about more than money?

Getty Images

I don't really want to do this $10 billion IPO. Really, I don't.

I'm officially arguing with Felix Salmon about venture capitalists. You can read the previous installments here and here. We've got even more fodder for debate now, based on Felix's excellent piece in the latest issue of Wired.

First off, I think he's talking about two things at the same time: 

1. Why IPOs suck for tech companies (Duh, it's the title of the piece!) — and why the IPO model, once so useful, is now broken

2. Why venture capitalists are doing all kinds of things that are borderline despicable when it comes to funding companies and maximizing their greed

I don't entirely disagree with point number one. It's taking companies longer to get to the IPO stage, and it's debatable whether companies that are already quite successful really need to go public. Also, as William Cohan has argued, investment banking has become a Wall Street cartel, with the same big firms — Goldman Sachs, Morgan Stanley, JPMorgan et al. — getting to run all the IPOs. The model that Bill Hambrecht developed — the so-called "OpenIPO" model — and used to take Google public in 2004 has fallen by the wayside.

Read More...

For Matter, Kickstarter is advertising plus money

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.

Read More...