Fred Wilson Talks Yahoo, Tumblr, NSA Spying and the Secret to Twitter’s Success.

Click here to see a video of my interview with venture capitalist and Twitter investor Fred Wilson from Flurry’s SourceDigital13 conference.

Or watch it here:

A Comeback in the IPO Market

Could we see a comeback in the IPO market this year or next year? Here’s the bull’s case in a BusinessWeek story written by Steve Hamm and I, including reporting on a recent Goldman Sachs conference calling for a coming wave of IPOs.

A Comeback in the IPO Market
Recent activity has ended a drought of venture-backed initial public offerings, and some experts foresee a rebound to about 40 a year

Entrepreneurs and venture capitalists took notice just before the Memorial Day weekend when two technology companies had their initial public offerings in a matter of 24 hours. OpenTable (OPEN), a Web site for making restaurant reservations, went public one day after SolarWinds (SWI), a networking software company. The activity ended a drought of venture-backed IPOs that began last August. “It signals that investors are looking for growth stories,” says Robert R. Ackerman, managing partner of Allegis Capital, a venture firm.

Even before the two IPOs, Goldman Sachs (GS) organized an invite-only conference on May 12 in Silicon Valley, called “The Next Wave IPO Forum,” in anticipation of an IPO rebound. Rather than organize multiple meetings around the country, Goldman Sachs invited dozens of venture capitalists and entrepreneurs to a gathering on Sand Hill Road so the bank could explain why it expects an upturn in public offerings later this year. Goldman said it sees 10 to 15 venture-backed companies that have already registered with the Securities & Exchange Commission and that could be ready to go public in fairly short order.

One example: Medidata Solutions Worldwide, a provider of electronic data management software for the health-care industry. “It feels to us like the IPO market is opening up,” says David B. Ludwig, a managing director of Goldman Sachs’ technology, media, and telecom sector in the firm’s Equity Capital Markets Group. “We expect to see an acceleration of filings in the next few months.”

NOT THE BOOM DAYS
No one is predicting a return to the boom-era days when more than 200 companies went public a year, but some financiers and bankers say the market could soon recover to the level of 40 or so venture-backed IPOs a year. To get there, market conditions must continue to improve, more high-quality companies need to file, and their stocks need to perform well after they go public. “Two IPOs don’t make a trend but it’s very hopeful,” says Fred Wilson, managing partner with the venture capital firm Union Square Ventures. “I think we will see the end of the IPO drought for venture-backed companies within the next year, possibly by the end of this year.”

Read the rest of the story here.

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The Great Skills Mismatch: Wall Street Quants Thumb Their Nose at Tech Startups

There’s an emerging structural shift in the U.S. economy that has created a serious mismatch between employers and employees in today’s economy. That’s the provocative thesis of this week’s cover story in BusinessWeek, “Help Wanted.”

This is a big deal that could have major repercussions. Among them, says my colleague Peter Coy, are:

The unemployment rate is likely to remain distressingly high because many people who want jobs will lack the appropriate qualifications. Second, inflation could pick up sooner than expected if employers are forced into bidding wars to recruit the few people who are qualified for the work. Third, if unemployment stays high it will put additional political pressure on Congress and the Obama Administration to push through fixes that could make matters worse in the long run, such as insulating workers from the cost of long-term unemployment to the point where they lose their appetite for work.

I was one of several reporters and editors who helped Peter write this cover. I learned a few interesting things while reporting the story, which led me to believe that this shift was having a real impact. One thing I learned is that the thousands of laid off workers from Wall Street, many of whom have high-level math and computing skills, are so far not that interested in leaving finance and going to work for a tech startup.

Consider this one story from venture capitalist Fred Wilson. Last fall after Lehman Brothers fell, Wilson, cofounder of the New York venture capital firm Union Square Ventures, backed an experimental Web site called www.leavewallstreetjoinastartup.com. (The other venture capital firm that backed the site was First Round Capital.)

The idea was to try to lure some of the talented software engineers who had been laid off on Wall Street to technical jobs at the two dozen New York-area companies that his venture capital firm was financing. Wilson was fishing for quants.

But it wasn’t the game-changer the VCs were hoping for. Wilson only filled a handful of jobs. “It wasn’t the panacea I thought it would be,” says Wilson.

It turns out that the learning curve was too steep for many financial engineers who were not well versed in the ins and outs of online advertising and analytics. Plus, many Wall Street refugees are not prepared to accept a massive reduction in their salary.

“For a lot of people who used to work on Wall Street they have a large personal burn rate,” says Wilson. “For them to take a job that pays a lot less they have to make a meaningful change in their lifestyle. And that is an issue.”

What does this mean for tech companies? I think it means that it will most likely be hard to poach seasoned talent from the financial world for the next few years. Most of the Wall Street folks I know who have been laid off are still looking for jobs with financial firms, though they are more likely of the smaller, boutique variety. Some of them are finding jobs. Not all of them will, though. Wall Street just won’t be big enough to absorb all the people who have been laid off or fired. That restructuring process is probably going to take a few years to play out.

Meanwhile, if I was a tech company, I would focus on trying to poach talent from other tech companies, or I would look for recent graduates or younger employees with tech skills that can be retrained much more easily.

This is the hope of President Obama. In a lengthy interview in the New York Times magazine with David Leonhardt, President Obama says that one healthy consequence of the financial crisis will be that college grads with math skills won’t automatically want to become derivatives traders. “We want some of them to go into engineering, and we want some of them to be going into computer design,” said Obama.

The President also is aware of the skills shift. In the interview, he said one of the biggest constraints holding back his plans for building electricity smart grid is a lack of “trained electricians to lay down those lines. . . Somehow we have not done a good job of matching up the training with the need out there. And that’s one of things where government can help, help to guide and steer our education process in a way that meets future needs and not just the needs of the past.”

So I would expect to see more talk and action from the Obama Admin. on this skills mismatch and retraining issue. He clearly sees it as a economic problem and priority.

Brilliant! Fred Wilson Launches Doriot Quote of the Day

Yesterday, Fred Wilson, co-founder of New York venture capital firm Union Square Ventures, began a new feature on his blog called Doriot quote of the day.

Why didn’t I think of this idea!?!?

It’s brilliant because Doriot had a Nietzschian knack for penning catchy and wise aphorisms. Fred also adds my book would “interest most VCs and probably many entrepreneurs too.”

Says Fred:

Doriot Quote Of The Day
I’ve been reading Creative Capital, Spencer Ante’s biography of General Georges Doriot, the father of the modern venture capital business. It’s a book that would interest most VCs and probably many entrepreneurs too. The highlight of the book are Doriot’s colorful quotes. I posted one to my tumblog earlier and I just decided that I am going to post a Doriot quote everyday on this blog until I run out of them. Here’s the first:

A team made up of the younger generation, with courage and inventiveness, together with older men of wisdom and experience, should bring success.

— General Georges Doriot, in the American Research and Development 1949 Annual Report. ARD was the first institutional venture capital firm.