Making Money Without

We don't have enough public market acquirers to sustain the start-up ecosystem.
That was the real back story that explains why Google failed to close a deal to buy
Groupon. Groupon wanted to
sell to Google for $6 billion. Of course they did, that is a huge amount of money – real cold hard cash – for a 2 year old
venture. Do you really think they turned that down for the vague possibility of
making more from an IPO in the distant future? Yes we all hear the stories of
visionary entrepreneurs who are such bold risk-takers and some of that is true but
most entrepreneurs don’t love risk, they love eliminating risk on the way to
building a venture.  The real story is that Groupon only backed off due to worries that the deal
would fall into AntiTrust
hurdles.

If we only have a handful of acquiring companies (basically today it is Google,
Amazon and Microsoft, now that eBay and Yahoo are wounded), the AntiTrust hurdle becomes more real. Even
if there is no AntiTrust
issue, Google, Amazon and Microsoft simply cannot buy all those venture-backed
companies.

So we need Groupon to go public and use their public
currency to buy other ventures working on local advertising/ecommerce. That will be
good news for lots of ventures. And a Groupon IPO success
will spur on other ventures that are getting ready for IPO.

I don’t know if Groupon really have the solid
financials to go public. We won’t know until they issue their prospectus to the
SEC. Until then we only have rumor and speculation. But if I were a betting man, I
would bet on Groupon being able to go public before
Twitter. And, this will be more controversial, before Facebook. But that as they say is another story. I am not trying here
to compile an actual list of ventures that could IPO in 2011. This is more about the
general environment for IPOs.

This has been what Steve Blank calls the “lost
decade” for tech IPOs. So why do I think that 2011 will be the year this
changes? There are 5 reasons:

1. Private
   markets are under SEC scrutiny. This takes away the easy option of getting
   liquidity without either selling or going public. If you have more than 500
   shareholders you have to make your financials public, it is the law.



2. There is a
   backlog of great companies that have the financial strength to IPO. The IPO market
   has been pretty well closed for a couple of years (some notable exceptions prove the
   rule). So the companies that have the potential to IPO have had more time to grow and
   get their act together.



3. Investors
   are hungry for growth outside emerging markets. GDP in America and Europe seems to
   have a ceiling at 3% and the Chindia and BRIC stories of
   emerging markets growing at 8-10% has created too much capital flowing to those
   markets (generating fears of a bubble). So investors want companies in the developed
   markets that can grow at really fast pace (at least 30%, ideally 60% plus) from a
   base of at least $100m revenue for a long time to come. That has to come primarily
   from tech/media ventures.



4. The
   macroeconomic picture is improving. Yes, there are always worries and another
   crash is always possible, but "markets always climb a wall of worry" and the general
   trends seem positive. But cycles don't last forever, so the people making these
   decisions (Boards and their Investment Bankers) will look at 2011 as a good window of
   opportunity.



5. The bean
   counters have figured out how to live with Sarbox. For a long time, Sarbanes Oxley ("Sarbox") regulatory overhead has been seen as a reason why you cannot
   run a public company. Baloney, as they say in Brooklyn. It is a simple bit of
   operational overhead, a rounding error for a great company.

IPO is still the golden ticket. Real entrepreneurs want to IPO. Getting acquired
is a great way to build capital, but it is not the dream of the really driven,
talented entrepreneurs. There are logical reasons for this. The valuation at IPO is
usually (not always, plenty of exceptions to this rule) higher than you can get from
an M&A exit. And more importantly for the
entrepreneur, it is actually often easier to manage public market investors than a
bunch of VC with different agendas. But logical reasons be damned, an IPO is simply
the big badge of honor for the entrepreneur and the investors who back him/her.

It is not clear what we will call the decade that starts in a few days time
– the “teens” maybe – but it will possibly be one where we
get a sustainable IPO market for tech ventures. By “sustainable” I mean
that it cannot be a return to the Dot Com bubble years. Only great companies with
really solid financials will get through the IPO gate. And the valuations will have
to remain grounded in reality (short sellers will ensure that is the case).

Here’s hoping. Happy New Year folks.

Show me a modern political candidate who doesn’t understand television, and I’ll show you a loser.

When TV became the dominant medium for Americans to consume news and entertainment, political candidates could no longer be successful without looking polished in televised debates, appearing on talk shows and spending big on commercials.

Like the television boom of the 1960s, we are standing on the precipice of a big shift in how public figures are perceived and how campaigns are conducted. Our frontier is social media, and its impact on mainstream political culture is coming on fast.

While my colleagues have been making their predictions about what’s on the tech and social media horizon in 2011, there will be no major U.S. elections next year. Here, we’ll be postulating about social media’s impact on the more long-term future of American civics.

1. There Will Be a Tipping Point

While campaigning and marketing share many similarities, the differences mean everything when you’re talking about democracy’s big picture. Brands can sell by hitting a tech savvy demographic of influencers. Elections involve everyone, whether they’re online or not.

If a large bloc of your constituency is made up of 65+ year-old retirees, chances are a Facebookclass="blippr-nobr">Facebook strategy won’t be time well spent. Despite the enthusiasm of the tech crowd and blogosphere, Twitterclass="blippr-nobr">Twitter is exceedingly far from the mainstream, with only 6% of Americans using the service. And while the world consumes YouTubeclass="blippr-nobr">YouTube videos at a mind-bending rate, viral success is still transient and elusive.

While these tools have certainly proven to be effective in rallying support and contributions, we don’t yet live in a world where social media can make or break a political candidate by itself.

That will change, perhaps even by the next major election cycle.

The future of the social media politician is not about wild speculation and technological uncertainties. It has everything to do with when and how deeply social media can be absorbed into mainstream culture. We are on track for a tipping point — a JFK/Nixon TV debate moment — when everyone on the political scene will acknowledge that we can never go back to campaigns without social.

2. New Media Strategists Will Just Be Strategists

I’ve had the opportunity to talk with the new media strategists for a number of senators, congresspeople and political causes. Despite their differences, they all agree that their own jobs will soon be folded into the larger campaign strategy. As many have already foreseen, social media will not require experts for much longer. As we head toward true mainstream adoption, social will be a default and well-understood tool in the belt of any public-facing professional.

We’ve already seen this happening in the private sector with marketing and PR professionals. As many corporate entities lumber to catch up with those on the cutting edge, so too will government officials and the campaigners who seek their offices.

3. We’ll See the Devaluation of Old Media in Politics/>

Print and radio ads are not as valuable as TV. TV will no longer be as valuable as interactive media. For politics, this is especially so, as the arena (at its best, anyway) warrants engagement and discussion.

As media appetites shift, this is an inevitability. In the U.S., we’re already seeing web use catch up with television in terms of weekly hours spent. Political money will simply go where the eyeballs are, and we’re likely to see a big payoff on social creativity when it comes to future campaigns.

4. Whistle Blowing Gets More Efficient, But That’s It

The WikiLeaksclass="blippr-nobr">Wikileaks saga has ignited plenty of discussion about journalism and whistle blowing in the Internet age. But at the end of the day, the mechanics of an information leak are about the same as they’ve always been: Someone from within an organization leaks damaging information, and the media (in whatever form) disseminates it to the public. Generally speaking, WikiLeaks has only acted as a “middle man” for raw information. It’s journalists who are making sense of it and transmitting it to the public with context.

The web only speeds up this process through digitization and universal access. Governments and politicians will feel the impact of leaks sooner, but it’s unlikely the methods of protecting sensitive information will be much changed.

Your Thoughts?

What do you think will be social media’s biggest impact on the political process? How long until we see a winning campaign strategy that is purely social? Let us know your thoughts in the comments.

More Political Resources from Mashable

- How WikiLeaks Became the Story of the Year in 2010 [VIDEO]/> - The Future of Social Media and Politics/> - How Political Campaigns Are Using Social Media for Real Results/> - How the “Rally to Restore Sanity and/or Fear” Nailed Social Media/> - 17 Web Resources to Help You Decide on Election Day

For more Social Media coverage:

class="f-el">class="cov-twit">Follow Mashable Social Mediaclass="s-el">class="cov-rss">Subscribe to the Social Media channelclass="f-el">class="cov-fb">Become a Fan on Facebookclass="s-el">class="cov-apple">Download our free apps for Android, iPhone and iPad

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Warren Buffett boosts Iowa wind | Green Tech - CNET <b>News</b>

Berkshire Hathaway-owned subsidiary goes big for wind in Iowa, inks deal with Siemens as turbine provider. Read this blog post by Candace Lombardi on Green Tech.

Windows Phone Marketplace hits 5000 Apps and is Cracked

There's been good news and bad for Microsoft this week. The good news is that the number of apps available in the new Windows Phone marketplace has been growing steadily since October and has now passed the 5000 mark. ...

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Law enforcement officials says Fox News' report of a probe into a Indiana grandmother for alleged terrorist ties was taken out of context and that the reporter based her report of an investigation off her own tip.

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