Reality Check

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I’m at the Innovation Journalism conference at Stanford University, listening to a presentation by Erik M. on how journalists can avoid getting caught up in the wave of exuberance that often accompanies the startup culture that they report on. He says that, in Sweden at the publication where he works, journalists must include at least three reality checks within each article. Disruptive new technologies should be new. He Googled “world’s first robotic vacuum cleaner” only to find several examples that all claimed to be the first. He’s now talking about patents: are they granted or pending? And now, burnrate vs. cash? When will they need more money? And do they have real customers? The one most important factor for a startup is having real customers. How do you define that? Easy, real customers pay real money. And finally, does it make sense? If a company can’t explain their business model and how they make money, there’s a fair bet that the customers won’t get it either. Now, on to a panel. Michael Kanellos, formerly of of CNET, was supposed to sit on this panel, but it looks like he’s stuck in traffic. Frederick Voss, freelance journalist and blogger from Sweden. He writes about startups in Sweden. 

If you want to criticize and analyze a company, you have to put them in the context of other startups and people in the industry. He bounces this new idea off of people and other companies in the space. The history behind — if you treat people fairly, you can be critical and put out the negative factors, if you treat them fairly, you will be able to phone them at a later date and get their opinions at a later date, says Eric. Now John Joss is asking audience members to share their own “horror stories” about reporting on startups against the criteria that Eric was discussing. 

No volunteers, so he decided to tell his own. Next, funded by Ross Perot and Cannon…

Criteria for successful coverage of an innovation. Pitfalls and traps if you don’t do the due diligence.

MK: as a journalist you should be incredibly gullible. There’s a lot of good ideas out there — he was interviewing a CEO about online video, he said, if you think blogs are bad, you’d be surprised by how bad online video would be for consumers. Electric cars, great idea, it’s going to happen some day, but there’s a lot of uphill. He says you have to be able to go with ideas. 

Promises and claims being made by hydrogen cars: he says he’s driven one, drives well, nice. Each costs $1 million now. (John says, there’s also no infrastructure that would provide you fuel.) Wind power…But it’s unpredictable. It’s more efficient at night when people don’t need as much power. 

We have to put things a bit in perspective and see these negative factors as well. Betting your name on a negative assertion. 

News angles — reader doesn’t want a balanced view, wants good or bad. 

Harper’s Magazine predicted that clean tech will be the next bubble: should this bother us? Should we do something to prevent the next bubble? 

Erik: You can’t do these kind of general assertions — the devil is in the details. You have to look at what cleantech, what bubble, what economy.

MK: Is it going to be a bubble over the next 10 years? What is the timeline for the bubble?

FV: You have to think like a VC…

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