Tag Archives: communities

Tesla, Local Regulations, and the New Normal for Innovators

14 Mar

Tesla’s latest spat on its direct-sales model with the state of New Jersey is dumb, but it’s nothing new for the company or other rising start-ups. The case is another piece in a growing trend of local regulations stifling innovative companies. As the sharing economy has grown and technological innovation has made products electric cars affordable and reliable, local governments and regulators have found ways to impede their ability to reach consumers. Some research has discounted the impact of local regulations on start-up companies and entrepreneurs, while others havehighlighted significant regulatory burdens facing small businesses.

You cannot discount the real world examples of cases where state and local governments issued regulations that impair business operations of growing companies. There are Uber’s feuds with city governments and taxicab monopolists in Chicago, DC, Denver, Miami, Nashville, and San Francisco. Airbnb is facing its share of problems in New York City. California’s Bureau for Private Postsecondary Education is leading a crack down on ‘learn to code’ bootcamps. Let’s not forget the culinary innovators in local food truck scenes that are constantly hopping over regulatory hurdles.

In the case of Tesla, auto dealers are worried that this case will set a strong precedent for automakers circumventing dealers to directly sell to consumers. This despite the fact that buying a car is one of the least enjoyable consumer experiences. Tesla has faced similar issues in Arizona, North Carolina, Texas, and other states. In fact, Cornell University’s Journal of Law and Public Policy notes, “the franchise laws of at least 48 states ban or limit Tesla sales—get this—to prevent unfair competition. Franchise lawsrequire automakers to sell their cars exclusively through dealership networks.” There will be plenty of more battles down the line. Overall, these restrictions will hurt Tesla’s long-term viability to offer an automobile that will be more affordable in the coming years due to economies of scale and product innovation.

The surprising nature of these regulatory battles is that the come at a time when state and local governments are devoting significant energy and resources to streamline regulations and promote technological advancements to aid the local permitting process. What’s even more startling is that nearly every major city is supporting entrepreneurial incubators and vying to attract important venture capital funding to foster vibrant start-up environments. Yet local governments are doing all they can to limit the ability of start-up companies to grow and provide citizens with access to new services. Isn’t that a pity?

Why Is Funding the Future So Hard?

9 Feb

Funding the future has been a difficult task in Washington. Historically, the Federal government spends resources on important things like education, basic research, and infrastructure. These investments, in some form or the other, serve as conduits for economic growth. Miles Kimball from the University of Michigan and Noah Smith from Stony Brook University have put-forth a not-so-radical idea that would help solve this problem: treat government investments differently from other kinds of government spending through a separate capital budget. Expenditures in the capital budget would be marked as “investment in the future” along with an established set of criteria:

1) If experts agree that an expenditure will raise future tax revenue by increasing GDP, then it belongs in the capital budget. If it can pay for itself out of extra tax revenue in the future then it should be 100% on the capital budget.

2) Even if an expenditure will not raise future tax revenue, it can count as a capital expenditure if it is a one-time expenditure—that is, if it makes sense to have a surge in spending followed by a much lower maintenance level of spending in that area.

Government funding brought a network of interstates, expansion of ports, and rail lines that improved the flow of commerce throughout the United States. Funding of basic research allowed for the discovery of the Internet, GPS, and basic compounds that served as the foundation for important medical breakthroughs. Kimball and Smith’s policy proposal could be accompanied by test cases of how government contracts can be improved and streamlined, establish requirements for hiring the long-term unemployed, and develop a data-driven analysis that can better assess outcomes of government spending.

There is a more important reason why Kimball and Smith’s policy proposal matters: the reality that Congress has cut non-defense discretionary spending by $1.5 trillion over the past 10 years. Check out a chart from the Center on Budget and Policy Priorities:

Screen Shot 2014-02-07 at 1.05.17 PM

The concept of capital investment for public goods is an important discussion to have. Government plays an important role in the private sector economy to supply these basic investments. In the past decade, there has a been a major squeeze on these resources. This comes as America’s infrastructure receives dismal ratings and the capital investment necessary to overcome this shortfall is sizable. The reality is that, as a nation, we are spending much more on the present than the future.

The New York Times’ David Leonhardt, in his Kindle bookHere’s the Deal, probes this important topic:

“Does the country have the right balance of spending on the present and spending on the future? It’s hard to argue that the future is faring particularly well right now. Not only are we leaving future generations, in all likelihood, with large debts to pay. We also don’t seem to be bequeathing them the maximum means to pay those debts.”

And New York Times’ columnist David Brooks has echoed similar thoughts:

“The future has no lobby, so there are inexorable pressures favoring present consumption over future investment. The crucial point is not whether a dollar is spent publicly or privately; it’s whether it is spent on the present or future.”

Kimball and Smith’s proposal of the separate capital budget is directly aligned with both the perspectives of Leonhardt and Brooks (hardly ideological soulmates). Otherwise, these investments in future stock require more creativity. And that’s why the Obama Administration’s plans for ConnectED is such a huge deal. ConnectED will have funding commitments totaling nearly $3 billion in investments in the future. First, the Federal Communications Commission (FCC) announced a $2 billion commitment over the next two years to provide high-speed broadband Internet access to 15,000 schools and 20 million students. These efforts will connect 99 percent of students to high-speed Internet. Beyond the funding through the FCC, the Obama administration worked with major technology and telecommunications companies including Apple, AT&T, Autodesk, Microsoft, O’Reilly Media, Sprint, and Verizon have committed more than $750 million in direct funds and in-kind product contributions directly to classrooms.

These efforts are a welcome step in making broadband a public good, much in the same way that highways and runways are. We have a seriously flawed and short-sighted approach to funding basic programs that the government invested in throughout history. There are absolutely viable policy alternatives that can appease both Democrats and Republicans to make these efforts work.

Is Cavs Owner Dan Gilbert The Next Sports Tech Visionary?

20 Jun

DG

Dan Gilbert is the entrepreneurship messiah for the Rust Belt. His latest endeavor through the start-up accelerator, Bizdom, could become a game-changer for the future of sports technology. Gilbert, majority owner of the Cleveland Cavaliers and lover of comic sans, launched Bizdom, a non-profit start-up accelerator for tech firms, in Detroit in 2007 and opened doors on a Cleveland office in 2011. His venture capital firm, Detroit Venture Partners, has investments in 50 companies. Capping it all off, he is also leading Detroit’s effort to attract the 2014 X-Games. Gilbert’s energies and investments aim to reinvigorate the city centers of both cities and transform each into high-tech hubs.

The Bizdom program requires applicants propose an idea for a technology-based start-up with the goal of a prototype or sales to a first customer within 90 days. Bizdom provides an initial investment of up to $25,000 in seed funding in exchange for an 8% equity stake in the venture. Since Bizdom is a non-profit, the returns on seed funding are used to fund future businesses in the cities of Detroit and Cleveland. As part of the Bizdom program, the start-up is provided with office space, mentors, and introductions to outside investors for further funding down the road.

Of course, Gilbert is as qualified as any for this venture. Before he bought the Cavaliers, he founded Quicken Loans. The accelerator has acquired a portfolio of 35 companies between the two offices, including 15 in Cleveland. One company, MascotSecret, who joined Bizdom in August 2012, blends Gilbert’s two passions–entrepreneurship and sports. The company is yet another player in the very competitive field of seat upgrade apps such as ExpApp and LetsMoveDown.

MSMascotSecret has partnerships with Gilbert’s Cleveland Cavaliers, Lake Erie Monsters (Colorado Avalanche’s AHL affiliate), and the Cleveland Gladiators of the Arena Football League. MascotSecret’s spokesman, Jake Goodman, talked about working through the Bizdom program: “At Bizdom, we have an open workspace where it is amazing to work with other entrepreneurs, share ideas, while all working towards the same goal.” The company has plans to rollout some new partnerships towards the end of the summer.

In addition to the great mentors at Bizdom, Gilbert himself frequently offers direct advice, feedback over social media, and consults the start-ups in the accelerator. Goodman says, “Dan Gilbert has been a really fantastic advocate and an amazing mentor for us, he knows how important it is for fans to have a good time in his arena and is very excited about the ability for fans to pick the best seats.  He is a great resource for us.  When fans give him suggestions via Twitter, he loves forwarding the feedback to us; we are very fortunate to have him.”

MascotSecret and their fan-facing experience platform is just the beginning for what we hope will be a full-scale effort to develop sports tech start-ups through the Bizdom accelerator. Athlete performance seems to exceed our expectations yearly at combines, on the field, and the new crop of phenoms that emerge each year. The way we experience live sporting events and cheer on the teams we love is ripe for disruption. Innovative ways to enhance fan engagement, new payment platforms, digital ticketing, improved customer service efforts, and data analytics are all making their way into the marketplace. The market is still emerging and visionaries like Dan Gilbert can help shape that future.

LetsMoveDown: The App That Gets Fans Closer to the Action

24 Apr

We have all been there before. Heading to the game and then making a move towards more promising vacancies in the lower level shortly after tip-off or first pitch. Squatting in empty seats closer to the court or playing field will usually get you thrown out by an usher or embarrassed by the actual ticketholder. Well, now there’s an app for that.

Launched in November 2012, LetsMoveDown revolutionizes the fan experience by providing in-game seating upgrades and exclusive rewards such as concessions coupons and merchandise discounts directly to iOS- or Android-supported mobile devices. LetsMoveDown generates a new revenue stream back to the home team, helps offset the costs associated with “no-show seats” (seats left empty by ticketholders that don’t show up to the game), and gives the fans at the game an unrivaled experience. LetsMoveDown also allows season ticket holders to sell unusable tickets to fans at the game by simply scanning the barcodes of the tickets through the platform.

Based in Washington, D.C., LetsMoveDown made its debut during the 2012-2013 University of Maryland’s men’s basketball season and has launched with the Memphis Grizzlies and Brooklyn Nets in the NBA this season. LetsMoveDown is focused on creating a unique fan experience during the game, and believes that in-game upgrades are just the beginning. LetsMoveDown also offers fans instant rewards during the game, and is constantly looking for new ways to make the fan experience as enjoyable as possible—even if fans don’t necessarily want to upgrade their seats during the game.

LetsMoveDown co-founder Derek Shewmon explains how LetsMoveDown works: “LetsMoveDown’s mobile app allows teams to sell leftover primary inventory and helps fans sell unusable tickets as in-game upgrades to other fans at the event after the game has started. The platform is incredibly simple, fast and fun to use so that the fan can enjoy the game in a completely new way.”

For fans, prices are set at the beginning of the game by the team, usually around face value or at a slight discount. After the game starts, ticket prices decline based on an algorithm that factors in variables such as seat location, time remaining in the game, day of the week, home team record, away team, and supply and demand of tickets to the game. LetsMoveDown partners with each team to uniquely set the parameters of algorithm. Fans also have the option of entering an “auto-pilot” bid through the app, which sets a maximum price that fans are willing to pay for an upgrade seat in a specific location. If the fan’s bid matches the price being offered for a better seat, the fan is automatically upgraded and receives his or her new tickets directly through the app.

Shewmon says that fans have enthusiastically embraced the product and love how it gives every fan the opportunity to experience a game from a vantage point that they haven’t had before. Likewise, the teams are happy with LetsMoveDown because it generates additional revenue, fills empty premium seats and gives the fans a completely new experience that will hopefully get them hooked on sitting closer to the action.

While there has been lots of positive feedback for LetsMoveDown, like any start-up company, there are still challenges. Shewmon says, “Educating the fan base on the in-game marketplace is a short-term challenge. This is a new concept and a new product, and it takes some time to get the fans familiar with the process of upgrading a seat during the game. There is a lot of joint marketing between LetsMoveDown and the teams to educate the fan on the process, assure them that ushers recognize upgrade tickets and that the team supports this initiative.” Additionally, signal strength with mobile devices is an on-going short-term challenge that teams are working to address.

Matt Monroe, Assistant Athletic Director for Ticket Services at the University of Maryland was emphatic about the partnership with the start-up: “Terp fans enthusiastically embraced the concept of LetsMoveDown after we rolled it out this past season. It’s a huge benefit to our fans and season ticket holders who don’t often have access to seats in the lower bowl without buying them on the secondary market. Now, the diehard fans have the chance to move down to the lower level for big games at cheaper prices. It really maximizes the experience for the fans. The company worked closely with the university and was very flexible in implementing the product for the university. I wouldn’t be surprised to see LetsMoveDown used on college campuses across the country.”

LetsMoveDown is a simple yet revolutionary product that increases the fan experience and allows teams to directly reach their fan base at a more personal level. The company is one of the first to market in a growing space with a very strong product that has been tested and validated by its users. Shewmon and his co-founders are constantly tweaking the LMD platform to give the fans at the game an unrivaled experience and hope that this is just the beginning of new ways to enhance the fan experience at sporting events.

This article was first published on SportTechie.

Can We Stop the ‘Trolling’ of the American Innovation System?

12 Apr

This American Life ran a provocative program in 2011, ‘When Patents Attack!’, that brought the parasitic practice of ‘non-practicing entities’ (NPEs) or patent trolls into mainstream awareness. These activities have become a scourge on innovative companies, particularly in the technology sector. Newegg and Twitter have fought successfully against the trolls, and Rackspace is fighting back. But the problem of “patent privateering” is a serious threat to the livelihood of tech companies and the future of start-up community in America. Continue reading

Sharrows Do The Body Good

2 Apr

After roughly 6-years of dealing with WMATA metro delays, broken escalators, and sweating profusely in the dog days of DC summer, I became a bike commuter. Before I rode my self-propelled chariot to work, good days on WMATA saw a door-to-door commuting time from home to work was 25-30 minutes. On bad days, it was 35-40 minutes. Unfortunately, I only lived 3 miles from work. Biking to work just made sense. Of course, I first had to realize that you don’t need to be a super hero to commute by bicycle in a major metro area. After coming to grips with that, I shaved roughly 30-40 minutes off my total daily commute, got the heart rate up, and usually make it to the office in 10-12 minutes.

Just over one year later (and in much better shape), I can say that bike commuting has truly changed my life and how I approach each day. This has also fueled a fanatical cycling addiction, but that’s another story. Bike commuting has allowed me to be more focused, thoughtful, and productive at my job. It’s a helpful practice (daily exercise routines) for those of us who sometimes get distracted away from our daily job duties. I’m no modern medical miracle, researchers have been studying the link between physical activity and attention deficit since the 1970s. Clipping in for the morning commute and taking off is a zen-like experience for me to start the day. Continue reading

The Innovation-quester

27 Mar

When Congress and the President failed to agree on a plan to avert $85.4 billion in automatic spending cuts, more affectionately known as the sequester, everyone pretty much agreed that this was a terrible idea. In total, The Budget Control Act, its official name, cuts defense and non-defense discretionary spending by $1.2 trillion from 2013-2021. Continue reading