TiEcon 2011, Day 2: New capital markets for startups

Entrepreneurs were given a crash course in social media marketing, accessing new capital markets, and the latest mobility trends on Saturday, the second and final day of TiE Con 2011 .

The annual Silicon Valley conference, which attracted about 3,500 attendees, is sponsored by Talent, Ideas and Enterprise (TiE), formerly The Indus Entrepreneurs.

Saturday’s “Breakout Thinker” speech was given by Salman Khan (no, not the one you’re thinking of). Khan is the founder of the Khan Academy , a Google and Gates Foundation-backed nonprofit that is re-envisioning education by combining online instructional videos and technology tracking student performance with classroom teaching.

Khan said that in using online videos and software to enhance the educational experience, he is seeking to “re-humanize the classroom.” “Whether they are at school or at home, kids can work at their own pace,” said Khan, an accidental entrepreneur who started out by making videos about algebra to help his younger cousins with their homework. “The teacher’s role is no longer to lecture or grade papers; they can spend every moment interacting with their students. Students are no longer being passive; they’re spending every moment interacting or tutoring each other.”

“Teachers who have experienced this say that this is why they became teachers in the first place,” he added.

To start the nonprofit education organization, Khan quit his day job at a hedge fund, and he jokes that when he was first starting out, he’d go to desi parties and people would ask him what he did. When he told them that he “makes videos for YouTube,” people would respond by saying, “Well, at least your wife is a doctor.”

But Khan said his passion for the project propelled him to take the leap. “My story, as you can tell, is me trying to reach a need,” he said. “It was exciting for me when a handful of my cousins benefited from it. … The lesson is that whatever you do, hopefully there’s some small subset of people who find it life-changing or compelling. If you have that, it makes it compelling to do it.”

Listen to Salman Khan on how the Khan Academy could impact India:

Lessons learned, Day 2

Saturday’s educational sessions addressed entrepreneurial opportunities created by cloud computing and in the medical space with a “connected and informed patient.” Some takeaways:

Capital markets: Secondary markets and NASDAQ’s BX Venture Market

• The “Silicon Valley model,” where the traditional trajectory for startups is to gain venture capital (VC) funding as a way to build a company toward an initial public offering (IPO) is no longer playing out the same way.In 2000, this process took about three years; in 2009, it took more than nine years. Due to this lack of liquidity for VC investors, “what bubbled up in response is the private market place, which has shown tremendous growth in past few years,“said Mike Moe, co-founder of NeXtAdvisors .

• This new trajectory for startups is not simply due to the economic downturn. Jeff Thomas of SecondMarket said that the trend toward short-term investing by hedge funds and other investors makes it “less advantageous for a company to become a public company.” CEOs must now operate on a short-term horizon and they often decide to stay private until they know their business model is proven, he noted. (In the 1970s, the average holding time for a stock was 7 years; now it’s about two months). In contrast, secondary markets can require buyers to hold onto a stock for a longer period of time.

• In addition to secondary markets, the NASDAQ received approval from the U.S. Securities and Exchange Commission (SEC) on Thursdayto launch the BX Venture Market , which Joseph Brantuk of NASDAQ OMX Group said was aimed to provide liquidity for the venture market. “We see the BX Venture Market as filling a void for companies that have great growth potential but don’t qualify for the national markets yet, and it’s a nice landing platform for those that are about to be de-listed and don’t want to go to the illiquid, wild, wild West of the pink sheets,” he said. Companies planning to join the venture market must be Sarbanes-Oxley compliant, and meet other corporate governance standards. The market is expected to launch later this year.

Mobility: Enterprise is ‘definitely hot’

• Neeraj Choubey, Dell’s general manager of tablets said that “mobility in enterprise is definitely hot.” “Many enterprises are trying to figure out how to incorporate [a tablet> into their business,” he said. Enterprise apps are currently being imported to tablets in a rudimentary form, he added, but the industry will start to see more creative and relevant uses once tablet and mobile touch screens become easier to use.

• So what’s going to be the next killer mobile device? The industrial designers out there are still tinkering away, but Dan Hays, the director of mobility practice at management consulting firm PRTM said that he’s looking forward to something that merges all of his devices into one. “What we have today is redundant,” he said. “I don’t want to carry a tablet, laptop, phone-all of which have connectivity and that are draining a battery. At some point in the future, and I don’t know what form it will take, but we’ll see something that consolidates those shared functionalities.”

Listen to Day Hays on mobile trends in India:

Social media marketing: An opportunity to push a promotion

• Amy Millard, chief marketing office of Wildfire Interactive said that the primary reason consumers “like” a brand on Facebook is to gain access to promotions, deals, and discounts. Monetizing on social media marketing, then, is about realizing that “people come for deals, and [social media> fans are an opportunity for a deal or a promotion.”

• For GAP’s Nick Sheth, advertising via social gaming is “driving a lot of sales,” and providing the clothing retailer with exposure to new customers.

• Sumant Sridharan of CafPress said that to be successful in social media marketing, companies have to be “authentic” and the effort must genuinely reflect the brand. Having executive-level buy-in for social media marketing is important, too, he said.

In closing, wisdom from Google

Marissa Mayer , Google’s vice president of product management, closed the conference with lessons on starting, scaling, and structuring a company.

Mayer told the audience of more than 800 that starting a new enterprise should be fueled by an idea that addresses a “problem that matters” and an “everyday problem.” “The nice thing about an everyday problem is that it gives you an opportunity to have a really big, positive impact on your users lives,” she said. “And because they’re using it everyday, you get all kinds of usage and all kinds of feedback, and it helps you get that much better that much faster.”

These “problems that matter” are also naturally scalable, she said, because they “offer all kind of opportunities for innovation, for add-ons, for features. You want to work on really big ideas.”

But one of the most important components to starting and sustaining a thriving enterprise, she said, is to build a team of people who will challenge each other to do better and keep each other motivated. “A lot of people say to me, ‘Why stay at Google for 12 years, and for me, it’s all about the team,” she said. “It’s all about the team and the people I get to work with everyday.”