Splunk IPOs, The Need For Data Scientists Remains

Big data may be the next big thing in business and innovation, but is the United States developing systems and training the experts needed to tackle the opportunities presented by the growing collection of unstructured data?

Big data can be amazingly powerful. If properly harnessed, big data processing can deliver cutting edge business intelligence or be used in developing cures for diseases. Decoding the first human genome -- that’s analyzing 3 billion base pairs -- took 10 years the first time it was done in 2003. Now we can do it in a week. So, there are ways of managing these vast amounts of digital data. But there are relatively few solutions for management of big data right now.

Companies like Splunk provide end to end tools for big data management, and their initial public offering proved that the market for these tools is wide open. A Wall Street Journal article identified the biggest detriment to our ability to use and understand big data as a lack of data scientists who are trained specifically in managing and understanding the unique workings of big data.

It’s an emerging field, and that means we have to play catch up with education, and in the meantime, harvest talent from wherever we can get it to ensure that we harness the capabilities of big data.

FCC Sets in Motion First Phase of Rural Broadband Reform

More americans may receive access to high-speed broadband in underserved rural communities as the result of telephone subsidy reforms launched yesterday by the Federal Communications Commission. The commission’s national broadband plan highlights the importance of rural connectivity to telemedicine, employment, and economic opportunity across the country.

The commission announced the official launch of the “Connect America Fund,” created in October 2011 to reform the Universal Service Fund -- a subsidy supporting rural telephone companies. The first phase of funding aims to boost rural broadband deployments and increase the efficiency of subsidies supporting the most rural communities.

Widespread access to broadband is vital to innovation. It not only democratizes the internet -- one of the most fertile platforms for discovery and invention -- it casts the net wider in the search for America’s emerging innovators and consumers. With access to high-speed broadband comes the ability for connection across the nation and for the use of the internet as a transformative tool for innovation and economic growth.

The FCC has said that about 18 million people lack access to broadband that meets its basic benchmarks for speed and that more than 83 percent of these Americans live in areas serviced by companies impacted by adjustments to existing rules. These individuals represent potential startups, entrepreneurs, and customers cut off from the economic opportunity offered by the internet.

Efforts by private companies such as Google’s fiber project in Kansas have demonstrated the ability of companies to reach communities with technology other entities may not provide. The FCC plan represents the beginning of a process to achieve much needed penetration in the most unconnected segments of the U.S. broadband landscape.

CEA Launches Immigration Virtual Lobby Day

The Consumer Electronics Association is holding a virtual lobby day today to ask Members of Congress to take action on strategic immigration reform.

We’ve written a lot about the importance of skilled immigration reform to allow high skilled workers and entrepreneurs to come to and remain in the United States to create jobs for U.S. workers.

Today’s effort focuses on two bills in particular, H.R. 2161, and H.R. 43, which propose significant reforms to the current immigration regime, such as easing the path for foreign students to obtain visas and creating a visa for foreign-born entrepreneurs to start their businesses here subject to specific requirements, as well as provisions to protect U.S. workers and grow the U.S. STEM workforce. The bills are two great first steps in advancing this vital conversation, crucial to the strength and vibrancy of our economy.

It’s encouraging to see increased discussion of this important issue and we urge you to use the CEA’s online tools to speak up. Now is your opportunity to start the dialogue with your representatives on skilled immigration. So stand up, virtually, and make your voice heard on an issue of great importance to our country, and our economy.

CISPA Amendments Submitted, Concern Remains

Members of the House of Representatives submitted a slew of amendments to CISPA this afternoon in an effort to address the concerns of many in the digital activist community, including the Electronic Frontier Foundation and Center for Democracy and Technology. The amendments aim to protect consumer privacy, restrict the amount of time that information may be retained by the government, and prevent data mining of information generated by the private sector for cybersecurity purposes, among other changes submitted by lawmakers.

The proposed amendments haven’t satisfied all concerns -- CDT released a statement following rumors that they had dropped their opposition to the bill, saying that although the potential changes are promising, the issues of flow of internet data directly to the NSA, as well as the use of information for purposes unrelated to cybersecurity still need to be addressed.

Engine dropped its formal opposition to CISPA after working with the House Permanent Select Committee to remove provisions dealing with intellectual property, which, as written, left open the potential for innovation-crippling abuses.

"Startups the Engine of Job Creation" -- White House Announces EIR

The White House formally announced its Entrepreneurs in Residence program yesterday; a 90-day sprint for a fifteen-strong committee of startup experts(many of whom are foreign-born entrepreneurs themselves) and immigration experts from the USCIS to examine existing visas and ease the immigration process for foreign-born entrepreneurs in the U.S.

The EIR program is calling this team its "Tactical Team", and the approach they are taking to solving difficulties in the existing structure of skilled immigration is necessarily strategic: despite receiving widespread bipartisan support in theory, changing any policies regarding immigration has proved to be difficult in the current political landscape. What the EIR program aims to do is find ways to streamline the process without facing the hurdle of Congress. This means working within the existing laws to optimize the process for the high skilled workers and entrepreneurs who want to come to the U.S. to start a business.

Hattery's Luis Arbulu is one of the fifteen on the "Tactical Team" -- read his post about being an EIR here.

Something you might not know about skilled immigration: high skilled immigrants create jobs for Americans born here, both indirectly and directly through businesses they start. 40% of Fortune 500 companies in 2010 were founded by an immigrant or an immigrant's child. For other interesting stats about the impact of high skilled immigration on the American economy, view our infographic.

Twitter's Innovative Patent Agreement

Twitter posted this morning to announce a new arrangement the company has with its developers regarding the patents they have received for their work. It's called the Innovators Patent Agreement and it is an effort to reward their talented people for creating industry-leading products. This also -- in theory -- helps stem the tide of attacks from patent trolls by leaving control of the ultimate use of the patent in the hands of the creator.

Techdirt's Mike Masnick summarizes it:

"The method by which this works is pretty creative. Basically, if the actual patent holder tries to use the patent offensively without first obtaining the permission of the inventor, the agreement allows the inventor to issue a license to the entity being sued."

Read more from Mike at Techdirt, read the full agreement posted by Twitter on Github here. It's great to see Twitter doing something like this, but how about other patent holders? We think it's an innovative idea that could change the wider landscape with increased adoption and we're curious to see how it rolls out. Would it be a good strategy for your company? Let us know what you think over in the comments.

How the Internet Beat SOPA and PIPA: Advocacy in a Networked World (Part 1)

From our friend, Tina Lee, at ZeroDivide. Read more here.

Pride and Purpose

This morning, Senate Majority Leader Harry Reid posted a statement to his website announcing he would not be holding a cloture vote on the PROTECT-IP Act (PIPA) this coming Tuesday as previously planned. Less than an hour later, House Judiciary Committee Chairman Lamar Smith announced he would postpone markup of the controversial Stop Online Piracy Act in the House until “wider agreement can be reached.” 

This constitutes a stunning and major victory for Internet voices from all across America that came together in the last few weeks and months in opposition to this bill. Across the internet more than 13 million people stood up and took action against SOPA and PIPA and were able to achieve substantial change on the movement of these bills.

But the fight has only just begun. As Senator Reid said, the Senate Leadership is hoping to achieve compromise from all parties over the next several weeks. Stay tuned at EngineAdvocacy.org for more details on how to continue the fight as we’ll be posting new tools very shortly.

Above all, thank you all so much for your hard work, for your phone calls, for taking action online and offline. Make no mistake, today is a truly inspiring victory for the power of activism and engagement. But to find a better way forward, we’ll need more victories over the next several weeks and months. And together, we can achieve that victory.

Thank you for all that you do.

A Bipartisan Plan for Job Creation

Senators Jerry Moran (R-KS) and Mark Warner (D-VA) tout their new bill S. 1965 STARTUP Act in today's Wall Street Journal.

Artists against SOPA/PIPA

We’re excited to be part of a letter put together by a handful of individuals within the creative community to highlight the harms of PIPA and SOPA, and their belief in continued openness of the Internet. These are musicians, actors, and authors that the vast majority of Americans have welcomed into their lives and by virtue, into their homes.

Like all of us, these artists are keenly aware of the harms posed by copyright infringement, but wish to highlight for lawmakers that this legislation -- which is being moved through Congress at an alarming pace -- goes too far, threatening an ecosystem they rely on to reach their current fans and find new ones.

At a time when music sales are at an all time high due to distribution methods that rely on the Internet, and entertainment spending across the board is up 15% over the last decade, it is important to remember that the web continues to open up new markets and new possibilities every day. And that our favorite content creators have been able to harness that power in ways that would never have been imaginable 20 years ago.

We all must urge the Senate and House to carefully consider the ramifications of their actions and engage everyone impacted by this legislation to ensure we are protecting rightsholders’ creations
and
the platforms they (and we) rely on.

Read their letter. Call your Senator.

The Candidates and the Innovation Agenda

The Iowa Caucuses kick off this evening and the Republican candidates have been pulling out all the stops to woo the voters, including (and this is of particular interest to us) championing an innovation agenda.  We took a minute to investigate who is really prioritizing innovation, and who is just paying lip service.  In no particular order:

Fmr. Rep. Newt Gingrich (R-GA)

The former House speaker is a self-described “conservative futurist”.  Way back in the mid-90’s, when the internet was still fairly new and vaguely ominous,
he came out against a bill

that no other Republican would touch with a 10-foot pole: the Communications Decency Act, which basically criminalized smut on the internet.  He said that the bill amounted to censorship and was therefore unconstitutional, and supported an alternative bill that didn’t compromise the openness of our internet.  Score one for Newt.

Gingrich also led the pack a few weeks ago in the November 22nd debate when he
advocated for skilled-worker immigration reform

, saying that
“we ought to have an H-1 visa that goes with every graduate degree in math, science and engineering so that people stay here.”

Gingrich’s
economic plan

is pure Reaganomics – with a proposed 12.5% Corporate Income Tax (cut from the current 35%) and the complete abolition of the Capital Gains Tax.

Cutting the capital gains tax makes small businesses a
more attractive option

for investors, because their returns become tax-free.  Gingrich also wants to repeal
Sarbanes-Oxley

, a set of regulations that make it difficult for startups to go public because compliance is both very costly and fraught with difficulties for smaller, less established businesses.

Fmr. Gov. Mitt Romney (R-MA)

Romney, who knows a little something about starting a business, having founded a private equity company,
Bain Capital

,
has also focused his economic plan on tax cuts and reduced governmental regulation.  Like Gingrich, he wants to cut the Capital Gains Tax, but without favoring the wealthy too much – his economic plan eliminates the tax for anyone earning up to $200,000.  He also will repeal
Sarbanes-Oxley.

In the November 22nd debate, Romney
heartily agreed

that high-tech graduates should be encouraged to stay in the country with an H1 visa upon graduation “to make sure we’re able to bring in the best and the brightest”.

Romney’s dedication to innovation isn’t new, and it’s a core part of his agenda.  In 2009, in the midst of the worst of the recession, he told the
Salt Lake Tribune

that "The best thing the country can do is unleash the power of entrepreneurs and get of the way
”.  
He is in favor of less regulation, and more enticement for potential investment in startups. 
His education policy includes an emphasis on
high tech education

,
so American can grow some more of its own entrepreneurs.

Fmr. Sen. Rick Santorum (R-PA)

Santorum likes the internet as much as anyone –
when asked

what he thinks the greatest benefits of broadband access are, he fumbled for just a few seconds and then said that e-commerce helped his busy wife and himself keep their lives running smoothly.

 Hopefully he has since been schooled on the innovative and economic potential of a comprehensive and fast broadband network.

Santorum’s
“Made in America”

economic plan promises to “spur innovation” by increasing the Research and Development tax credit from 14% to 20% and making it permanent.  The R&D credit is little used by startups but it
should be

– it’s available to pretty much any business with an engineer on staff. The plan includes lowering the Capital Gains Tax to 12% and cutting the Corporate Income Tax in half.  Santorum also advocates for deregulation to “unleash innovation in telecommunications and Internet consumer options”, but doesn’t go into detail on how he plans to do so.  As far as skilled immigration goes,
Santorum said

he believes in legal immigration and that it is “a great wellspring of strength for our country”.

The Rest of the Field

Rep. Michelle Bachmann (R-MN), who says government overregulation is the single biggest jobs killer, is in strong support of skilled-worker immigration.  She said of Steve Jobs’ moving his business operations to China to be able to take advantage of high-tech workers there, “If we can utilize these workers, like Steve jobs wanted to, then we need to offer those visas. That will help the United States.”

Gov. Jon Huntsman (R-UT), who isn’t competing in Iowa but rather staking his campaign in New Hampshire, wants to make America more business and investor friendly and create opportunities for
what he calls the “creator class”

– the newest generation of college graduates who he sees as innovators.

Rep. Ron Paul (R-TX),
in his succinct way

, when questioned on how he would feel about federal regulation or taxing internet use, replied “Not very good, I’ll tell you that”.

Us too, Ron.  Paul also opposed the
SAFE act

in 2007, a piece of legislation that would potentially have led to internet censorship and privacy concerns.
 As far as
Research and Development subsidies

?  Paul says they are “bound and determined to always misdirect money to political cronies”.

What the Obama Administration has been doing:

The current administration has been focused on these issues too.  Pres. Obama promised to eliminate

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the capital gains tax on investments made by small and startup businesses in 2008, which he has done – although there are

some restrictions

which make it more difficult for all startups to take advantage of the tax credit.

The administration also has a
set of visas

its pushing for skilled immigration, including the H1-B and the EB-2, specifically designed to attract high-tech workers from overseas and spur innovation.  There’s also the EB-5, designed to reward a green card to foreign nationals who invest hefty sums in American businesses.

Probably Obama’s biggest commitment to innovation, though, is his alliance with the
Startup America Partnership

.  Obama committed $1 billion in funds to be put towards early-stage investment, promising to match the investments of venture capital firms in small business startups.  You can read what we said about this
here

.

The good news is, no matter who you support, most of the candidates seem to be wise to the fact that innovation and entrepreneurship are a big deal to American voters right now – it just remains to be seen how their final policies will shape up and what will result from Iowa and beyond.  And it’s up to us to hold their feet to the fire to make sure whoever comes out of the rugby scrum that is our electoral process is faithful to their commitments to champion an industry that drives the Engine of our economy.

Public Parks for the Airwaves

H.R.3630

just cleared House-Senate negotiations, and a consensus has been reached regarding the spectrum related provisions of the jobs bill. The bill contains provisions to take away the FCC’s ability to set eligibility rules for the auctions, and to re-allocate unused TV frequencies -- these so-called “white spaces” -- as unlicensed spectrum. The deal that’s been made retains some of the FCC’s ability to preserve unlicensed spectrum, although not as much as we might have hoped.

All of this legislative language revolves around spectrum auctions, which are part of H.R.3630 in order to offset the cost of the extension of unemployment benefits. Spectrum auctions also have the keen attention of telecom companies and of tech companies, both of which are fearing the effects of a looming “spectrum crunch”. The white spaces between licensed TV frequencies are considered especially valuable “beachfront” spectrum, because of their ability to penetrate buildings, carry data traffic, and extend to rural areas. They are hotly contested; telecom companies want them for their mobile broadband services, but supporters of innovation want them to remain unlicensed so that new technologies can be developed over them as has been done in the past with services like WiFi and Bluetooth.

Let’s break this down.

The problem is, we have a limited amount of airwaves through which to conduct many different and competing services. Mobile broadband operators need to have spectrum licenses to use with an ever-growing demand for data use associated with smartphones -- Apple’s Siri alone causes the iPhone 4S to
require unprecedented amounts of data

, even compared to other data intensive smartphones. And consumer demand for mobile broadband services isn’t likely to wane -- according to AT&T,
mobile data use on their network has risen by 5,000 percent in the last few years

. Then there are  more traditional uses of spectrum, like cable TV networks, radio, text messaging, and cell phone lines. Then on top of that, there’s unlicensed spectrum -- the “public” areas of our airwaves where innovations like  Wi-Fi, Bluetooth, and baby monitors operate. The unused TV frequencies, or white spaces, come under this unlicensed spectrum umbrella.

It might not come as a surprise that AT&T is for provisions that would take away the FCC’s ability to set limits on who can participate in spectrum auctions, at least on the surface. They are one of the largest carriers and stand to lose the most if they are blocked out or limited in the auctions. Smaller mobile carriers, including Sprint and T-Mobile,
sent a letter to Congress

voicing their opposition to the provision, which they said would limit the FCC’s ability to promote competition. AT&T immediately hit back with a
statement

saying the smaller carriers want the FCC to “stack the deck in its favor” and that the auction should be “fair and open”. Several commentators
have noted

that AT&T’s vehemence on the issue is slightly puzzling, given they have managed to do pretty well under the FCC’s rules so far.

Far more pressing to us, though, is what happens to those innovation-friendly white space frequencies. The unused television frequencies are more than just empty white spaces. They are the public parks of spectrum. What happens in these “public parks” is vital to innovation and long term economic growth -- not to mention that everyone benefits from these spaces, including companies like AT&T that regularly use unlicensed spectrum to ease the burden on their own spectrum.

A group of 42 members of Congress, led by Rep. Anna Eshoo (D-CA) and Rep. Darrell Issa (R-CA), drafted and sent a l
etter urging the preservation of unlicensed spectrum

, arguing that “
exploring the use of beachfront spectrum, specifically in the television band, is vital given its ability to penetrate buildings, enhance rural coverage, and carry more data traffic than traditional Wi-Fi”.  The letter also noted that in the band best suited for mobile broadband, there is currently 5 times more licensed than unlicensed spectrum.
Senator Jerry Moran (R-KS), a major proponent for innovation policy and who along with Sen. Mark Warner (D-VA) co-authored the
Startup Act

, signed the letter and
reiterated the sentiment at a Wireless Innovation Alliance and White Space Alliance event

, saying “
America would miss an incredible opportunity to enable innovation on unlicensed bands.”

Negotiations, then, have until now been stalled by a lot of competing interests.  It looks as if Congress is opting for a middle of the road approach that hopes to satisfy all sides of the debate.  We’ll be watching to see what the the actual allocations of unlicensed spectrum will be and how this plays out for the innovation agenda.

Verizon, Google Wallet and the LTE Network Agreement

Verizon Wireless has come under fire for blocking the mobile payment app, Google Wallet, from the keystone of its newly-released product line. Samsung’s Galaxy Nexus, which was developed in partnership with Google,
was released last week after delays and speculation

over whether or not Verizon would ship the phone with Google Wallet functionality.  Ship it did, absent the app - and it seems that in doing so Verizon may have violated its open-devices and open-applications conditions in its legal licenses for the 700MHz spectrum - the spectrum that operates its LTE network.  An open

letter to the FCC was promptly dispatched by Barbara van Schewick, a professor at Stanford Law School and Director of the Center for Internet & Society.

The letter urges the FCC to investigate Verizon’s blocking of the app, as it appears to contravene FCC Service Rules which prohibit standards that block specific devices or applications or “
other services that compete with wireless service providers’ own offerings”.  For example, Verizon and AT&T’s new mobile payment application slated for launch next year, ISIS, which will be in direct competition with Google Wallet.  

Van Schewick’s letter added that such a violation will have serious ramifications for all innovation in mobile technology -- not just mobile payment technology -- because investors will shy away from a business that is entirely at the mercy of wireless providers; companies that may have a stake in stifling competitive technologies.

Verizon already has a big piece of C-Block Spectrum-
they recently signed a deal with Comcast and Time Warner to acquire 122 Advanced Wireless Spectrum licenses from SpectrumCo, which means they control a pretty significant chunk of the bandwidth -- a pretty hot commodity in the toll-road style spectrum system we currently have, and the very same type of license AT&T will now transfer to T-Mobile in the wake of their failed merger attempt.  So if the wireless companies can claim this much control over spectrum, do we really want to give them a monopoly over which companies and products they allow to use it?  The FCC still has to approve the Comcast/Time Warner deal. Only time will tell if Verizon’s move will play into their decision - and how similar deals are structured going forward.

Obama’s $2 Billion Early Innovation Fund - And What it Really Means for Startups

The Obama Administration recently
committed $2 billion

for small business growth as part of Startup America, a new initiative to encourage investment in startups.  The funding includes $1 billion in public funds to be put towards early stage investment by matching the investments of VC firms into small business startups.  The
Startup America Partnership

, led by Steve Case,
also announced over $1 billion in the form of services and resources for startups coming from private companies, including free legal and consulting services.  

On paper, this appears to be a positive boon for startups - but what are the real implications for the innovation economy? We’ve taken a closer look at some of the commitments:

• Regulation A “miniofferings:”  
  Regulation A currently stipulates that offerings

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  of investment capital can be made under an SEC simplified registration process if they are $5 million or less – a number that was arrived at in 1992.  This legislation would change the dollar threshold for exempt offerings to $50 million.  The Administration is touting this as a way to assist small companies in raising capital at a crucial stage in their growth.
  A
  Kauffman study
  
  revealed that new companies are responsible for
  all
  the job growth in the US since 1977, so it makes sense to make it easier for startups to raise funds early on to go public – the point in a company’s life span during which Case says 90% of new jobs are added.  There are those in the tech community that say
  government regulation and the startup community are always going to be at odds
  
  but given that this provision simply updates the existing regulation, it seems the least controversial way of moving the needle on this issue.
  

• Crowdfunding:
  The most controversial of the Partnership’s provisions is the bill to legalize Crowdfunding –
  small-dollar investments that use online fundraising and social media platforms to solicit investors.  The point of giving startups access to crowdfunding as a fundraising tool is to provide them with more opportunities to raise capital and thus create jobs.  This one comes with its own set of regulations to protect investors, including limits on contributions and
  measures against fraudulent companies
  
  soliciting capital.  Crowdfunding sites for startups, like
  IndieGoGo
  
  and
  Kickstarter
  
  , already exist, but until this bill is signed into law, companies that raise funds from investors that are not registered broker dealers are
  at risk of being in violation of federal and state securities laws
  
  .

• Investment in an Innovation Economy:
  Obama’s Early Stage Innovation Fund, coupled with the Startup America Partnership’s commitments from private-sector companies, are both steps on the road to an economy that is predicated on entrepreneurship and production rather than consumption.  
  The provisions basically make it easier for individual investors to fund startups and to offer more capital.  While this arguably increases inherent risk for investors, no one is forcing any individual to invest.  It’s an

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  individual decision, and one that happens to have the added bonus of growing our economy and job market. It’s not just monetary investment, though.  The Department of Education, as part of Obama’s commitment to the innovation economy, will launch a
  National Education Startup Challenge
  
  , for which students will create a business plan for a new company - encouraging entrepreneurship by getting them in at the ground floor, so to speak.

Critics on Capitol Hill
dismiss
the announcement as little more than a White House PR stunt

, and while the immediate and tangible impact for startups is not completely apparent, it is at least a nod of support from the government and a commitment to the promotion of innovation and entrepreneurship.  Bottom line?  It’s more than a nice gesture, it could be a significant resource for startups. To truly create an economy based on innovation, education and growing government support are key.  These measures are, if nothing else, a positive indication of a turning tide of governmental support for entrepreneurship and the creation of a solid production based economy.

House Intelligence Committee Releases Discussion Draft of CISPA

This afternoon, the House Permanent Select Committee on Intelligence released a revised discussion draft version (text here) of the Cyber Intelligence Sharing and Protection Act, or CISPA — a piece of important cybersecurity legislation. We in the startup community raised concerns about the bill’s broadly defined terms, which posed a potential threat to innovation. Others even drew comparisons with SOPA and PIPA. In this draft, substantive changes have been made which, in our eyes, have significantly improved the bill.

We raised concerns — specifically around the inclusion of intellectual property, definitions around private and government information, and regulatory burdens for small business — directly with the Committee and with the office of Chairman Mike Rogers (R-MI). The Committee has taken into consideration our concerns as well as others from the community and has released a revised version of the bill. The new version preserves CISPA’s stated purpose of protecting networks and systems and preventing theft of information from these networks, while enhancing clarity around the focus of the bill.

The willingness of the Committee to work with those in our community was heartening. We were able to craft legislation that protects sensitive data — such as Research and Development and financial records — without including provisions that are harmful to technology startups.

Engine is committed to acting in the best interests of our community, and that includes protection of the critical infrastructure and networks upon which our companies are built. With these changes in place, Engine no longer opposes the legislation. We will continue to monitor CISPA through the amendment process to ensure that these changes stick so that our community is protected and innovation can thrive.

Changing Immigration, One Step at a Time

I am a foreign-born entrepreneur. Originally from Peru, I studied engineering in Lima and was awarded a Fulbright scholarship to study in the US: first engineering at the University of Kansas and then business at the Wharton School at UPenn. I followed the immigration process - from J-1 student visa to OPT to H1B to F-1 to green card and finally in 2008 I was naturalized and became a U.S. citizen. I worked at Google as finance lead, head of investments, and manager, working on advertising products, energy, and data platforms. Now, I am co-founder of a seed stage venture fund and consultancy,

Hattery. Our team is growing by the day, and I have the extremely rewarding task of helping new startups grow and thrive.

Recently I was contacted by the U.S. Citizen and Immigration Services (USCIS)  and asked to be part of their Entrepreneur in Residence Program -- a really great initiative to get entrepreneurs, USCIS staff, and other experts together to collaborate on issues surrounding skilled immigration and entrepreneurship. The program embeds a small group of investors and entrepreneurs into the USCIS for 90 days, with clear objectives and deliverables. [Read our post about EIR here - Engine].

As an Entrepreneur in Residence, I’m invited to share my own knowledge based on my experience as a foreign-born entrepreneur in order to better pave the way for future innovation and economic growth spurred by immigrant entrepreneurship. This country’s success is largely based on the hard work and determination of immigrants throughout its history -- a legacy I’m very much proud to be part of. Startups are almost the sole driver of new job growth in this country, and foreign born entrepreneurs are responsible for starting some of the country’s most successful and job-creating companies, like Google. This is something that hits close to home for me -- since it was only after eleven years in the US that I was able to start my first company.

What I and the other participants of the program have found is that the current immigration system for skilled foreign-born workers does not encourage harnessing the talent and drive of foreign-born entrepreneurs to grow the U.S. economy.

Immigration is an issue at a legislative stand-still. While there are some measures on the agenda, the issue of undocumented workers easily gets conflated with skilled immigration and stalls proposed legislation. While it’s important to pursue legislative change, another avenue to explore is optimizing the current system: making it as user friendly as possible, and giving foreign-born skilled workers the tools and resources to use the visas that are currently available. This includes working with the USCIS to train adjudicators on how startups and tech companies have evolved (funding levels, SaaS, incubators and accelerators, etc.), in order to clarify and potentially innovate in the processes for foreign-born entrepreneurs starting companies across the US.

Another way to optimize the current system is to work with the USCIS to change the rules and policies on the current visas -- a measure that doesn’t require going through any legislative branch -- in order to help foreign born entrepreneurs to start their own companies. At the moment, workers here under an H1B visa can’t fulfill the requirements of the visa unless there is an employer-employee relationship, and that’s something we will be looking into in the program.

This country was built on immigration, and I am proud to be here continuing that tradition, with partners like Engine and others in the space who understand the importance of entrepreneurship to growing the US economy. And I’m looking forward to working with the USCIS to find new pathways to success for immigrant entrepreneurs. Read more about the program here.

Luis Arbulu is a Founder and Partner at Hattery, and an Entrepreneur in Residence with USCIS.

Rebuild America: Halt the Brain Drain

We’ve been looking into skilled immigration and its benefits to the American economy. See I through our eyes with this infographic.

Joining the Conversation

Marci Harris is cofounder and CEO of PopVox.

As a former Congressional staffer-turned-startup-entrepreneur, I am excited to see the discussion on the Engine blog address what it means to join the policymaking "conversation" in Washington.

That conversation doesn't have a very good reputation right now.  Congressional Job Approval (according to Gallup ) is at a flat 12%.  In an April 2011 poll, Americans said 71% of lobbyists had "too much power", ranking them on this scale above "major corporations" (67%), "banks and financial institutions" (67%), and "the federal government in Washington" (58%). The legacy networks of grassroots  organizations have been examining their own "Tragedy of Political Advocacy". This was the case even before "The Internet" pulled off the epic blackout of January 18 in opposition to the SOPA.

The Silicon Valley culture, which until recently served as a proxy for all "startups", historically has been happy to be detached from the conversation. Nigel Cameron describes (as only he can) the Silicon Valley/DC divide as "the Continental Divide," in which it can seem that the two most distant points in the universe are the Rayburn cafeteria and the Starbucks on Sand Hill Road.

Civic engagement, powered by game-changing technology, provides a vehicle for increasing trust and broadening the Conversation. Here are some things to keep in mind for all groups — including those in the startup community — that wish to engage and participate:

1. Relationships. Bridging the Continental coffee shop divide is an important first step. Invite a staffer for coffee and get to know them. (They will have to pay for their own coffee.) Which leads to the next point:
2. Staff are people too. A meeting with a staffer is frequently just as good (and sometimes better) than a meeting with a Member. You will probably get more time and speak with someone who can dig into the minutiae with you in a way that a busy Member of Congress just can’t.  Yes, that is still true if they look eighteen, happen to be answering the office phone, and even sometimes if their title is “intern.”
3. Congress really wants to hear from constituents (but not everyone else). Unless a Member of Congress represents your district, they don’t technically work for you. If you want to convince them of something, convince their constituents.
4. Big change (usually) takes a while. There is no hard and fast rule - BUT, you will usually have better luck with incremental steps over several years than attempting to push through a large proposal.
5. Small things matter. There is value in baby legislative steps to demonstrate support — Naming a “day”, commissioning a study, “recognizing the goals of..." are all opportunities to explain your position and have a legitimate “ask” (i.e.“co-sponsor this bill”), to produce a list of allies on the record for your cause.
6. Capitol Hill is the ultimate "Just In Time" fulfillment. Staff are busy and issues come quickly; if information is not available when needed, they will probably not go looking for you. It's helpful to keep tabs on the agenda, and (shameless plug) make sure your positions on bills are easy to find on a platform like POPVOX, which is designed to answer a staffer’s “need information about this bill NOW” need.
7. Don't assume they know the details. Your letter or one-pager should summarize and re-explain the issue, even if you think that EVERYONE should know the background and what the acronyms mean. (Really, a ONE-pager is important.)
8. Seasons change, people change. While your relationship building might seem best focused on leadership and committee chairs, keep in mind that the pieces are rearranged after every election.

Where We Are On Skilled Immigration

Despite being championed by President Obama in this year’s State of the Union and quickly seconded by all candidates in the Republican primary debates — we wrote about it here — proposed reforms of the immigration process for skilled individuals have been stalled in the lawmaking process. Skilled immigration is touted as a no-brainer: it has — supposed — bipartisan support, and there is plenty of evidence to show that bringing in skilled workers from other countries actually creates American jobs by complementing our existing skill-sets and creating more opportunities in fields like computer science and high-tech engineering. Growing demand for visas only highlights the inefficiency of the current system, with H1B applications in the first week of the visa round more than double last year’s. Sadly, for all the rousing rhetoric of bringing in the best and brightest to keep this country great and at the front of the pack, there has been limited advancement on the legislative front.

There are a couple of different avenues being discussed right now with regard to high skilled immigration:

1. Awarding a green card to advanced graduates in STEM fields (science, technology, engineering, mathematics) from US universities — straight from the mouths of Republican presidential hopefuls Newt Gingrich and Mitt Romney. STAPLE Act and Startup Act are the relevant bills for this one, and BRAIN Act follows the same principle but grants a five-year stay in the US to work in a STEM field instead of permanent residency.
2. Creating a new visa for foreign-born entrepreneurs who want to start businesses in the U.S. Startup Visa would allow foreign-born entrepreneurs who receive funding for their businesses and employ non-family members to be granted an employment based visa.
3. Eliminating the per-country cap on H1B visas; maintaining the same number of total visas but changing the distribution to solve the problem of excessively long wait times for high-skilled workers from countries like India and China. The Fairness for High Skilled Immigrants Act and AGREE Act deal with per-country caps.

So where are these bills? Let’s take a look at one of them — The Fairness for High Skilled Immigrants Act. Sponsored by Rep. Jason Chaffetz (R-UT), the bill received overwhelming bipartisan support and passed the House 389-15. Then Sen. Chuck Grassley (R-IA) effectively killed the bill in the Senate, citing a greater need for protections for American workers. Grassley is already critical of H1B, saying in 2009; “Employers need to be held accountable so that foreign workers are not flooding the market, depressing wages, and taking jobs from qualified Americans.”

Grassley’s statement is representative of the commonly cited misconceptions about skilled immigration, so let’s examine them in more detail. First off, with regard to the Chaffetz bill, changing the country caps wouldn’t increase the numbers of H1B visas, it would simply change the distribution process. So, under Grassley’s logic, the new legislation wouldn’t harm Americans any more than they are now. Furthermore, when the current mode of visa distribution was conceived, it was likely optimizing for a diversity of immigrants rather than for a specific skill set need. Altering this model just changes the optimization for our current needs — more skilled high-tech workers from STEM fields.

Then there’s STEM visas, which, according to Grassley, carry with them the danger of flooding the employment market and depressing wages. Actually, it’s pretty unlikely that the amount of visas granted through a program like this would have a big impact on the employment market or wages. The unfortunate truth is, extremely few Americans choose to pursue an advanced degree in STEM, and even fewer — only 8% of all STEM Bachelor’s graduates 10 years after receiving their degree — use that degree for occupations like programming or computer science. Studies show that most Americans currently prefer to pursue other, more creative or prominent fields that use STEM competencies, like healthcare. This is where skilled immigration can be a complement to the existing workforce; filling the unmet demand for workers in the jobs for which most workers born here are not trained. In order to stay competitive globally, we need to remain at the forefront of technological innovation, and that means encouraging those who are educated in the U.S. to stay here after receiving their degrees.

Skilled immigration should be the beginning of a larger conversation about education. In the long term, an increased focus on entrepreneurship and STEM education at a younger age for all American students will help to ensure we remain at the forefront of innovation and growth. Investment in K-12 will iterate in massive gains to American society in a few generations, and will help us grow a high-tech workforce alongside our continued ability to draw and keep overseas talent. In the meantime, we can’t afford to fall behind.

Skilled, foreign-born workers were how this country was made great in the first place, and can continue to drive the engine of economic growth, all while creating American jobs. We need to pay attention to the legislation being proposed, and when we see a bill like the one proposed by Rep. Chaffetz, we need to bypass the hornet’s nest of misconceptions and competing political interests to get it passed.