Generation Why: Scion Redeems Itself Via Incubator

Bullshit pandering is more like Romney and the evermore biased attempt at journalism on this site. And, no, you did not build that, dbag!

@forraymond "And, no, you did not build that, dbag!" Have you actually heard what Obama said? This is one of those quotes where the context actually does matter. The "that" which Obama was referring to is roads, bridges, and technology, which make it at lot easier to run a business -- not the business itself. I grew up in a small-business family and I know how you put your heart and soul in to building a business. But, no, *you* did not build the bridge that you use to get to work - and, yes, it does make it easier to run a business and makes everyone wealthier -- including you, including me, and including people who don't live anywhere near you and me. That is the point that Obama was trying to make. If you don't believe him, I invite you to read the middle chapters in any economics textbook to explore the argument. Obama was trying to make a point that both private business and government are necessary for a civilized society with a high standard of living. In a post Tea Party political climate, that's a pretty liberal thing to say. But, if you're going to beat up on the guy for being a liberal (which is totally fair), could you at least beat up on what he *meant*, rather than on how he said it? Just repeating the comment the way you did only tells me which column you're in. Since I don't know you, I don't have any reason to trust your opinion -- like me, you're just some guy spouting off on the Internet. But, if you tell me something I don't know about the issue, or thoughtfully tell me about why your vision of the world might be better, your words will carry much more weight. On the other hand, if your only goal to let everyone know which team you're batting for, then you're doing just fine. If you want to hit a home run, though, you've got to actually put ideas onto the page and make your case!

@forraymond Why was this a reply to my post? I was talking about the nature of the "industries" i.e. music, art, and fashion, that they were incubating, dbag.

@Detroit Iron: "Why aren’t they incubating ideas for things that people actually need? They could at least include application developers" I have some pretty good guesses about why Scion's incubator would avoid software developers and biotech. Those are sectors that are already served by a lot venture capitalists. Despite the drawbacks of using VC, these folks have a lot of cash, they have a lot of expertise, and they compete to fund the "best" ventures. Scion would be a distraction here, or maybe an also-ran. On the other hand, I have four very smart and very talented friends who started an engineering-literate design studio, and who are building a real business and need capital for CNC machines and other tools. The VCs aren't interested in my friends business, because they're just hoping to make a good living running a solid business by serving customers -- rather than changing the world and reap the profits. But their venture is also nebulous enough (100% customer-driven) that it's hard for them to convince a bank to lend them $200k or so for a room full of CNC machines, too. In other words, my friends are building a real business but, since they're doing something that doesn't match the profiles that either banks or VCs are looking for, they're falling through the cracks and have to build their business the hard way. It sounds like Scion is funding these kind of ventures for the PR attention. If that's their goal, then breaking even on funding a venture like my friend's business would be a win for all involved. Anyway, I think that's the reason they'e funding artists rather than Android App Developers, or whatever: brutal competition from VCs, and that whole scene really wrecks the feel-good factor. Help a starving starving designer buy a CNC machine so that they can make a solid living, though, and they get their money back and get a really awesome feel-good story. Win! Did I answer your question this time?

@luke I was replying to forraymond, hence the otherwise uncalled for ad hominem attack. As far as the businesses that Toyota is supporting, I still say that it is better to make something that people actually need, like cattle cars to take people to the camps once Obama gets reelected.

@Detroit Iron: LOL. Dude, you need to meet some real Democrats one day. Calm down. We actually have two competent candidates running this time. I disagree pretty with Romney on both social, economic and family issues, but the guy actually seems to have done his homework while he was governor of Massachusetts. Obama's done a fine job as a moderate-left pragmatist. We've had much worse candidates in very recent memory. No cattle cars required. I have no idea where you got that idea, unless you're going to voluntarily withdraw from society after an Obama victory - which is entirely up to you!

" Frankly, I’d rather they opened up the competition to other kinds of startups" Indeed, there is a lot wrong with the way the venture capital system works today. It's a patronage system, and you give up a lot of control of the company (in exchange for being coached by a bunch of MBAs and some capital). Avoiding VC seems like an excellent business decision, if you have the option. Another problem with the VC business is that it's fad-ish. In order to get VC funding (if you need it), you need to be in the right industry and be doing something that might be a home run. Solid businesses that are going to make a 5% return on capital doing something useful-but-not-sexy need not apply. Given what Toyota/Scion trying to achieve here, there's a real chance to play the VC game in a less pathological way, and start some good useful/profitable/productive businesses that wouldn't be funded by regular VCs and wouldn't be funded by a regular bank. Scion's goal here is presumably to break even and get some good press -- rather than to try to make a 1000% returns on 10% of the ventures they fund. That could make some jobs (making customers), make some honestly positive press, and all for way less than the cost of a regular advertising campaign. This seems like a pretty good way to adapt to the post-TV media world, too.

@Luke42 Luke, I was just reading about how a lot of non-financial companies are starting to replace commercial banks as a source of credit for small businesses. Business to business credit has always been the bulk of commercial credit (e.g. 30 days net), but now the idea is expanding into areas formerly serviced by traditional banks, now a bit tightfisted with money when it comes to small businesses. Walmart's Sam's Club is now extending its customers up to $25,000 in credit and Amazon has its Amazon Capital Services that loans money to small companies that market through amazon.com.