Had a great time at the Bend Venture Conference last week. Congratulations to Precision Plant Systems who won the day and received the prize of $125k in venture funding. My personal favorite company presenting was Second Porch, located right here in Portland, OR and who is busy connecting second home owners to their personal connections who might like to rent their property.

I met a lot of great people at the conference and will definitely plan on attending next year. If you are in the northwest and are involved at all with startups, this conference is a great value and worth your time.

Keynote speaker Paul Kedrosky (Twitter @pkedrosky) was great. He spoke to the reasons for optimism in the venture community and for entrepreneurs in general. His reasons for optimism focused first on the shift away from the FIRE (Finance, Insurance, and Real Estate) industry of our greatest minds. One stat he used was that 40% of MIT grads in 2003 (I’m not sure of the year, but think that was it) went to wall street instead of new business creation.

Following his illustration of the shift away from the FIRE industry he outlined that 3.5 other reasons for optimism:

• Democratization of credit – With the decrease in costs required to start a new business, the universal access to credit will allow more people than ever to start new businesses. He used Google as an example and a quote from Sergey Brin that they started Google with $15,000 spread across three credit cards. Here’s the quote from the encyclopedia.com site:

‘During this time Page and Brin were running the project out of their dorm rooms at Stanford. Page’s room served as the data hub, while Brin’s was the business office. But they were reluctant entrepreneurs, not wanting to shelve their Ph.D. studies and join the dot-com rush of the era. In mid-1998 they finally relented. “Pretty soon, we had 10,000 searches a day,” Page told Newsweek ‘s Steven Levy. “And we figured, maybe this is really real.” They initially set out just to defray their costs. “We spent about $15,000 on a terabyte [one million megabytes] of disks,” Brin explained to McGarvey. “We spread that across three credit cards. Once we did that, we wrote up a business plan.”‘

• Peak science – Unfortunately I can’t remember the exact number, but I believe that it was something like 50% of the scientists who have ever been alive are alive today. He contrasted this with the false stat that 90% of the lawyers who have ever been alive are alive today. That’s not true, it’s something more like 5-10%. At any rate, we have more scientists applying their considerable knowledge to solving the worlds problems and Paul feels this will translate into new, profitable and useful businesses.
• Idea transmissibility – Paul use the spread of forest fires to illustrate the spread of ideas. It turns out that if you only have a 50% tree density in a forest that the forest fire will stay fairly constrained and won’t spread severly. Take that number to 53% and the results are devastating in contrast. He feels that we have passed a threshold of connectedness such that ideas will likewise spread to solve important problems. Scientists rapidly work off the advancements and information from their peers resulting in rapid innovation.
• Biotech contrarinaism – Currently he feels that the venture industry is much more pragmatic about biotech, an industry that he claims has had negative returns in its combined history. He refers to this as an “attractive nuisance” and says that attitudes toward these companies has changed and that is worth half a point of optimism in his scoring mechanism.

All in all he made some compelling points. My main take away from his talk was that the obstacles to business creation have never been lower and our best and brightest minds ought to apply themselves with haste to solving the worlds biggest problems and creating wealth, jobs and success in the process.

There is certainly a lot of momentum for this type of thinking. It has never been easier to start a business, create a product, and reach your ideal customers than today. I share Paul’s optimism and hope to see better days ahead for the startup community in the near future.