Category Archives: Entrepreneurialism

Virginia Small Business Rating: Fair to Middling

Ranking out of top 177 metros. For an explanation of metrics, see Reward Expert’s methodology here.

Yesterday I opined on the critical importance of tax rates in influencing the flow of corporate and human capital between the states (“Supply Siders Like Virginia’s Economic Outlook“). But I made the point that taxes are hardly the only factor driving economic growth. Another important variable is entrepreneurial vitality — the ability of states and metros to grow their own businesses. Strong entrepreneurial ecosystems have kept states like California and New York in the game despite atrocious tax policies that push businesses and high-income households out of their states.

Now comes a new of “Best and Worst Places to Start a Small Business,” published by Reward Expert, a company that creates reward packages for credit cards. Researchers used a bundle of 30 metrics including office space, demographics and diversity, education, income, transit, housing costs, and venture capital activity, among others for 177 metropolitan areas with populations greater than 250,000.

Under this methodology, the Denver, Colo., and Boston, Mass., metros scored No. 1 and No. 2, while Charleston, S.C., and the Tallahassee, Fla., regions scored the worst.

And Virginia metros? Overall, they put in a fair-to-middling performance. The Washington and Richmond metros ranked 21st and 22nd respectively, both respectable scores but not enough to blow anyone’s socks off. Roanoke was a pleasant surprise at 29th. Lynchburg scored in the top half. Virginia Beach-Norfolk was the only laggard, falling into the bottom half — but nowhere near the bottom.

Metropolitan rankings have become a dime a dozen now, and I haven’t analyzed Reward Expert’s methodology to see if it is better or worse than the others. (I do question how valuable the five-year startup survival rate is as a metric, for instance, for it seems to vary within such a narrow range. And Washington’s low score for educational attainment looks plain wrong.) Just consider the report as one more colorful fragment in the kaleidoscope of data we scrutinize to track our performance.

Combine this report on small business prospects with the “Rich States, Poor States,” which focuses more on factors influencing corporate investment and human capital flows between states, and the outlook is cautiously positive for Virginia. By no means can we consider ourselves an economic development powerhouse, as we were during the glory days of the 1980s and 1990s. And we’re still too dependent upon the vagaries of federal government spending. But our economic fundamentals look better that those of most states.

Update: WalletHub has come out with its own ranking of best cities for business startups. Bottom line: Virginia sucks. Out of 180 cities:

Richmond — 79th
Virginia Beach — 131st
Norfolk — 150th
Newport News — 160th
Chesapeake — 170th

Important difference between the two rankings: Reward Experts looks at Virginia metropolitan regions, WalletHub looks at Virginia “cities.”

21st Century Wealth Creation:

Dan Larimer. Photo credit: Roanoke Times

Nine years ago Dan Larimer was broke, living with his parents, driving a 2001 Nissan Altima, and recovering from a messy divorce. Today Forbes magazine estimates his net worth at $600 million. The source of the 35-year-old Virginia Tech graduate’s fortune? Crypto-currency.

As the Roanoke Times‘ Jacob Dimmit tells the story, when Larimer was down and out, he managed to scrape up $20 to purchase 400 bitcoins. Today, those coins are worth about $4 million.

But a fortuitous purchase of bitcoin isn’t what made him one of Virginia’s wealthiest people. Fascinated by crypto-currencies, Larimer began creating his own. He launched his first crypto-currency, BitShares, in 2014. The value of all BitShares now exceeds $400 million. Then he launched Steemit, the first social network to operate on a blockchain. That currency now has a market cap of $600 million.

Now Larimer is working on his latest and greatest project,, which he hopes will outdo bitcoin.’s coin, EOS, already ranks as the ninth largest cryptocurrency by market value, worth $4 billion. And he’s barely gotten started. is headquartered in the Cayman Islands to avoid government taxes and oversight, but the engineering office is in Blacksburg. The company is self-funding, selling a digital token that operates similarly to bitcoin. The plan is to develop software and applications on top of the blockchain technology upon which bitcoin and other crypto-currencies are based.

As the Roanoke Times describes it: “ will create software that it releases into the public for free. Developers will use those tools to create their own applications that run on their own blockchains, much like the way Bill Gates and Microsoft created the Windows operating system for all sorts of personal computers.” It’s not clear from the article how is supposed to make a profit, but, hey, there’s a lot I don’t get about the technology.

“Chronicling wealth is a big part of what we do,” Jeff Kauflin, co-author of the Forbes Richest People in Crypto-Currency list, told the Roanoke Times. “Crypto is a legitimate asset class now. There’s a lot of wealth that’s been created based on it, hundreds of billions. We at Forbes think it should be treated as a legitimate asset class.”

Clearly, Larimer is a genius. With the encouragement of his father, a defense contractor, he began writing software on a Macintosh II as a fifth-grader. When he exhausted all of the Advance Placement computer science classes during his junior year in high school, he just taught himself. When he started at Virginia Tech, he tested out of three semesters of coursework.

A turn towards libertarian thinking. In Blacksburg, Larimer got married, had children, and then got divorced. He and his ex crafted a deal under arbitration. The courts overturned parts of the deal, leaving him feel cheated. “That was my first experience with the government not respecting arbitration,” he said said. “I view violence as a shortcut to governance. So I made it my mission in life to find free market solutions to securing life, liberty, property and justice for all.”

Larimer said he believes cryptocurrencies, and the blockchain technology that power them, can provide fairer solutions to all sorts of societal woes. Currency is the beginning, but Larimer said the technology has the potential to reach much further.

No one company or government controls the software, so authority is decentralized. It’s based on computer algorithms, so the subjectivity is removed from the equation. A contract agreed to by two parties, whether it’s the transfer of a bitcoin or a separation agreement, is set in stone and cannot be relitigated.

“Right now in the current system, I have no way to know if that’s your car,” Larimer said. “I have to go ask the government. And if there’s a dispute between us, I have to go ask the government. The government will decide and they may or may not honor our contract.”

In the future, Larimer imagines, vehicle registrations will be stored in a blockchain, or a public ledger containing the information on every vehicle transaction to ever occur.

A block will be created when a vehicle rolls off the assembly line, then another when it’s sold at a dealership. When that owner decides to sell the car on Craigslist, they accept payment and in exchange add another block transferring ownership yet again.

If there’s an argument years later about who owns the vehicle, anyone can look back at the public ledger, called the blockchain, track the chain of blocks back to the manufacturer and determine the rightful owner.

This would be a vehicle registration system that would give unprecedented transparency, where deals could never be undone and the government would be completely uninvolved.

Bacon’s bottom line: We live in strange and unsettled times. I cannot begin to fathom how information-age alchemists can conjure up billions of dollars from the ether through the creation of crypto-currencies. Such digital prestidigitation seems to nullify all the axioms and maxims for slow-and-steady wealth accumulation that I grew up with. I can’t begin to imagine the creative destruction that crypto-currencies and blockchain will unleash, and I have no ability to augur who the winners and losers will be, much less how to preserve the modest wealth that I have accumulated. If you’re on the wealth-creating end, it must be an exhilarating time. If you’re on the sidelines, it’s most disconcerting.

I will say this: If crypto-currencies and blockchains are going to transform the world, I’d like to see one of the epicenters of change arising in Blacksburg. If turns out to be the next Microsoft, Apple, Google, or Amazon, I’m glad that Virginians will see some benefit from it.

This Bitcoin Mania Is out of Control

If you don’t understand how to mine bitcoin, try reading this Wall Street Journal graphic. You still won’t understand, but at least you’ll have tried. (Click for larger image.)

If people want to invest in bitcoin, or invent competing cryptocurrencies, or dedicate their computers to “mining” bitcoin by solving computationally difficult puzzles, well, it’s a free country and they can do what they want. As a political-policy commentator, I would never advocate banning such endeavors. As a social commentator, I am moved to ask, are these people out of their minds? What a socially useless activity.

As a economic-development commentator,  however, I must cheer the initiative of Frederick Grede, Michael Adolphe, and other principals of Bcause, a company that aspires to become the largest bitcoin mining operation in North America. The Virginia Beach-based company has raised $5 million in funding led by Japanese financial-services firm SBI Holdings and plans to raise more.

A Wall Street Journal article today describes how Michael Poteat, an engineering student at Old Dominion University, started mining bitcoin four months ago. He purchased 20 “mining rigs,” computers that solve complex equations to generate new coins. The 20-year-old kept tripping the circuit breaker in his house, and he struggled to find a place to accommodate his operations. “It’s just difficult as an individual to handle all the logistics,” he says.

Then Poteat came across Bcause, which provides the infrastructure, security, and electricity to enable large-scale bitcoin mining.  The WSJ elaborates:

Bitcoin miners are rewarded with new coins and transaction fees for performing the calculations that make the bitcoin network tick. The more valuable a bitcoin is, the greater the incentive to start mining. But the more miners who participate, the more computations are needed to earn rewards.

The process can be expensive and cumbersome, requiring specialized hardware and large amounts of power. Such challenges have long prompted miners to share space and resources. Now, companies that harbor mining equipment are fielding more requests than ever. …

Bcause is one of the firms that have sprung up to cater to aspiring bitcoin miners. In an old beverage warehouse in Virginia Beach, the start up is running thousands of rigs for clients from the U.S. to Asia. … Bcause has contracts with clients to house about 60,000 mining rigs and will serve retail clients by renting out spare machines, a process known as “cloud mining.” It has about 5,000 machines up and running, and plans to outfit another site in eastern Pennsylvania.

The profitability of mining bitcoin hinges on the cost of buying the mining rigs — the Antminer S9 is the most popular — electricity, and, of course, the price of bitcoin. Right now, despite a recent slide, the price is still high by historical standards, and bitcoin mining is said to be “insanely profitable.”

As a hosting service, Bcause says it is insulated from price volatility because it doesn’t invest in the mining equipment or the cryptocurrency itself. However, it does plan to build out a one-stop shop for trading bitcoin, including a clearinghouse, and derivatives exchanges.

I confess: I don’t get it. I don’t understand what bitcoin is good for, other than as a vehicle for maniacal speculation. I don’t understand how bitcoin mining works. Maybe there is some social utility from all this fevered activity, but maybe we’re just bystanders to the 21st tech-economy answer to the 17th-century Dutch tulip bulb mania. Will bitcoin become the Next Big Thing, like the Internet, that will revolutionize commercial transactions and transform our lives? I don’t know. Will it crash and burn? I don’t know.

Peter Diamandis, serial tech entrepreneur and founder of the X Prize Foundation, spoke at the Richmond Forum earlier this month. He made the case that technological change is accelerating, driven by the geometric increase in computational power and the growing capabilities of Artificial Intelligence. A colleague of Ray Kurzweil, the author who coined the phrase, “The Singularity,” Diamandis said that technology is rapidly approaching escape velocity in which change will no longer be in human hands. So, yeah, it won’t be long before the robots take over.

Curse you, bitcoin!

In a world in which all the rules are changing, how do we know what to do? Will our skills and knowledge be worth anything a decade or two? What will happen to our pension funds and personal investments as half the companies in any given portfolio is disrupted and rendered worthless? Will there be any work to do, or will robots do it all for us? Will there be any purpose or meaning to human existence?

The Promise of Personalized Medicine

If all you want is a doctor who will prescribe you pills, Dr. Neal Carl is not the man for you. If you want to understand the metabolic pathways of your medication, he’ll take the time to explain.

Personalized medicine is the new frontier of healthcare. DNA testing has become so inexpensive that it is now practical to develop wellness regimes tailored to peoples’ individual genomes. Virginia’s biggest endeavor in this field is taking place in Northern Virginia under the auspices of Inova Health System’s Center for Personalized Health. But another approach to health care delivery is taking place here in Richmond. My friend Linda Nash has launched a next-generation concierge medicine business, WellcomeMD, whose physicians treat their patients based on an in-depth analysis of their DNA, gut biome, and a full-battery blood test.

To get a feel for how personalized medicine works, I took up Linda on an offer to have my DNA tested and then meet with WellcomeMD’s Dr. Neal Carl for a consultation. Except in rare instances, genes are not medical destiny. But they do influence our health in many ways, and knowing our genetic proclivities is helpful in crafting an approach to fitness and nutrition.

The testing process is absurdly easy. Visit the WellcomeMD office, take a cheek swab, send it off, and wait ten days for the results. Interpreting the findings, however, requires a background in genetics, proteomics, and metabolic pathways — subjects that few primary care physicians studied closely in medical school. But Carl has immersed himself in these disciplines and how they relate to wellness. After poring through the data on some 20 to 30 “actionable” genes — that is, genes that provide information that can inform us about individual fitness and nutrition — he sat down with me to go through the findings.

I never made it past Introductory Biology in college, so a lot of it was over my head. But here’s what I gleaned from the consultation: Like most people, my genes confer both strengths and weaknesses in the 21st-century struggle for health and wellness.

My genetic profile indicated that my power/endurance response is weighted in favor of endurance. I was never destined to develop a weight-lifter’s physique. I wasn’t genetically predisposed to become the fabled 90-pound weakling, but I was never going to become a Charles Atlas either. Lifting weights could increase my strength, but I’d never develop bulky muscles. Conversely, my body is genetically suited to moving oxygen to body tissues and metabolizing it efficiently. Practically speaking, I’m far better suited to fitness regimes that emphasize endurance over strength.

The genetic test also measures for the body’s ability to detoxify muscles after exertion. I fall in the middle range, suggesting that I needed a day’s break between intense workouts. I also have a proclivity for injury of tendons and ligaments, with special concern for the Achilles tendon.

All this rang true. While I was never a great athlete, I devoted 14 years of my life to serious study of Tae Kwon Do, the Korean martial art. On the side, I ran, lifted weights, and did aerobics. I was never the strongest, certainly not the fastest (Carl confirmed that I lack the fast-twitch genes), nor the most flexible, but I did have the capacity to finish grueling hour-and-a-half workouts while others were hugging the floor. If I could survive the first 45 minutes of a fight, I could definitely kick the other guy’s ass!

Without the benefit of medical coaching, I have fallen into a fitness regime consistent with what my body was telling me. These days, I sporadically lift light weights and do one or two bouts a week of intense half-hour cardio. My efforts at consistency are bedeviled on and off by minor problems with rotator cuffs, pulled muscles and once, in an ill-fated fling with barefoot running, a pulled tendon in my foot that left me limping for weeks. All of these traits were consistent with my genetic profile.

As for nutrition, my genes don’t put me at risk for obesity, but just gaining 10 to 12 pounds over my ideal weight does put me at risk for pre-diabetes. I have a metabolism that makes me gain weight more readily by consuming carbs than fat. I’m salt sensitive (which may help explain my hypertension), and I have a heightened cancer risk from eating charred meat — which is a major bummer, because half the meals I eat consist of grilled beef or chicken. This information is useful because, evidently, I have not naturally gravitated in life to a nutritional regime consistent with my genetic endowment. Things must change. There will be more broccoli and brussel sprouts in my future.

The body is an incredibly complex organism, and a handful of genes don’t tell the whole story. To get a full, rounded picture of my health, Carl also would test my gut biome. Intestines are a “second brain” loaded with neurotransmitters, he says. When your intestinal bacteria aren’t happy, you aren’t happy. If I were a patient, he also would get an in-depth blood panel looking at dozens of markers — far more than the normal primary care physicians would track. And he would integrate all that data into a holistic understanding of my health that encompasses exercise, nutrition, stress and sleep.

New medical model. Managing a patient’s wellness at this level of understanding is time-consuming, and primary care physicians, who typically have a roster of 3,000 patients, cannot do it. The business model of WellcomeMD calls for Carl to oversee only 300 patients.

Nash founded PartnerMD, a successful concierge medicine practice, before leaving the company selling out her interest several years ago. As soon as her non-compete clause expired, she was ready to roll out what she calls “concierge 2.0.” The old model allows doctors to spend more time with patients and give them more holistic care. But WellcomeMD pushes the envelope of medical practice.

“Genetics testing has to be part of concierge medicine going forward,” says Nash. “It really is a different model. For people who want to delve deeper into their genetics, their stress, their sleep, we’ll have more time and more advanced tools. Under the traditional model of medicine, there is no possible way to do this.”

Carl, who practiced general medicine at Chippenham Hospital, found the traditional medical model frustrating and unsatisfying. He saw on average about 25 to 30 patients a day, whom he had to move through in an assembly-line process. He focused on getting their “numbers” to look good — numbers for blood pressure, cholesterol, blood sugar, and the like.

“As it played out, a percentage of the patients didn’t feel that well. Many were on several. Even with good numbers, they still had bad events,” he says. By way of comparison, he notes that television broadcaster Tim Russert had a “normal” cholesterol panel, but he had an underlying cardiovascular disease that his doctors didn’t catch until he had a fatal heart attack.

“We were putting Band-Aids on things and not getting root causes,” Carl says of his former practice. “There had to be a better way to practice medicine.” Continue reading

The Airbnb Dilemma: Regulate or Not?

Revenue growth in the rental of dwellings in Virginia through Airbnb has outstripped the rental of single rooms. Source: “2017 State of the Commonwealth Report”

Airbnb, the website that allows homeowners to rent rooms and houses for short periods, no longer occupies an obscure niche in the Virginia lodging marketplace. The company is capturing a disproportionate share of growth in lodging industry rooms and revenues, and it depresses the ability of hotels to raise rates during periods of peak demand, concludes the “2017 State of the Commonwealth Report.”

The number of Virginia listings has surged from just over 2,000 in October 2014 to 10,400 in October 2017. Total revenue has increased over the same period from $1.52 million to $17.4 million. Airbnb share of the lodging market rose from less than a half percent to nearly 4.7%.

“While the Airbnb rental sector may be smaller than the traditional lodging sector, Airbnb is a rising competitor,” write Robert M. McNabb and James V. Koch, the lead authors of the report.

The image most people have of Airbnb participants is of homeowners renting out a spare room for pin money. But the data suggest that it’s becoming an increasingly big business in which property owners are renting entire dwellings. While private room revenues increased sixfold over the three-year period studied, the rental of entire places increased thirteenfold, as seen in the chart above.

That reality has implications for how Airbnb should be regulated. Whole-house oceanfront rentals in Virginia Beach have generated numerous complaints regarding unruly behavior, illegal parking, and trash. The lodging industry has argued that Airbnb rentals should be taxed on the same basis and should meet the same regulatory standards as hotels and motels are.

McNabb and Koch are sympathetic to Airbnb to a degree.

It is not the job of government to protect existing firms and industries from new, more efficient or more attractive competitors that would serve consumers better and do so at lower prices. … Enabling citizen consumers to spend their dollars where they wish is a welfare-maximizing stance for government to adopt. … As a rule, challenging competing firms to meet “the market test” — that is offer goods and services at prices and levels of quality that are attractive consumers… — not only is an equitable approach that treats all citizens and firms the same, but also generates the best overall results for the citizenry.

However, they add an important caveat: Government should not intervene as long as the use of Airbnb “does not generate undesirable side effects such as pollution, noise, traffic congestion, crime, unsanitary conditions that impact the public health, and the like.”

While some Airbnb hosts have consciously evaded city regulations and taxes, it does not necessarily follow that localities should devote substantial resources to cracking down on them. Single-room hosts account for a small percentage of rooms, revenues and taxes, and they are rarely the source of behavioral problems. They go in and out of the market, and they’re difficult to identify and force to comply. The payoff for local governments is low.

Cities would do better to devote scarce enforcement sources going after Airbnb hosts offering their entire place for rent. “Plainly speaking, this is where the revenue is and evidence suggests that any behavioral problems that Airbnb generates are concentrated among these properties as well.”

Meanwhile, the authors advise hotels operators to re-evaluate their pricing and quality strategies. “Airbnb and similar rental hosting firms are not going to go away.”

Celebrating Creativity at the Makerfest

After watching too much cable TV news, I get really depressed about America. But I’ve found a tonic: Attend an art show, craft fair or a makerfest to connect with real people doing real things. The creativity, imagination and craftsmanship on display are a delight to behold. Yesterday I spent a half day at the RVA Makerfest 2017 at the Science Museum of Virginia. By the end of the day, I felt much better. Here are some of the people I met.

Andrew Sink shows a plastic replica of his brain made with a 3-D printer.

Andrew Sink and his business partner Chris Caswell met in Florida. Caswell moved to Boston where he purchased a 3-D printer, and they brainstormed the idea of retailing 3-D printers and supplies. Choosing to meet halfway, geographically speaking, they launched their business in Richmond two years ago. They believe 3D Central to be the first 3-D printing retailer in the country. While similar ventures have popped up in other cities, they think they’ve got the best business model.

A difficulty with hawking with 3-D printers is that they take considerable effort to learn to operate. Often, people give up and return the product to the retailer. Sink is proud that they’ve never had a return. The key to growing the market, he says, is education and training. 3D Central holds classes, provides individual training, and even teaches summer camps. “You can’t just sell printers,” he says. “You need a holistic solution. I feel that’s what we’ve accomplished.” The company now employs six, and the partners are looking for expanded office space.

As for what these printers can do… In the photo above, Sink shows a print-out of his brain. After taking an MRI to help diagnose his migraines, the hospital gave him a CD image. He fed the data from the CD into the 3-D printer. Voila, a pink plastic brain.

Heidi Rugg and her puppets

Fourteen-year-old Winter Peace says she has been making puppets since she was seven.

It takes a wide range of skills to become a puppeteer, says Heidi Rugg, lead puppeteer of the Barefoot Puppet Theater in Richmond and founder of Puppets off Broad Street, an alliance of four local puppet troupes. Typically, puppeteers make their own puppets. Animating puppets requires mastery over an array of springs, levers, pivots, fulcrums and wheels — in a word, machine mechanics and physics. And, of course, puppeteers must compose entertaining skits and perform them.

Jim Henson and his muppets catapulted puppeteering to national fame in the United States, but the art form is not widely practiced outside of a few big cities. Atlanta, Boston and New York are the big players on the East Coast, Rugg says, but Richmond has a respectable puppeteering community, which has grown to the point where it supports a “performance series” — RVA Winter Puppetfest.

Keith M. Ramsey with his steam-punk inspired art.

After studying at Virginia Commonwealth University (VCU), Keith M. Ramsey landed a job in a graphic design firm in Richmond. One day he passed a co-worker’s computer displaying some steam punk art. “It stopped me in my tracks,” he says. He immediately fell in love with the genre, and began fabricating things made from castaway metal materials, which he refers to as “found” materials. Adding welding to his repertoire of skills led to an explosion of artistic creativity and innovation.

As it turned out, it was a good thing that Ramsey developed a serious hobby. The design firm laid him off. After that, he plunged into his artwork full time and never looked back. Among the creations on display yesterday were steam punk-inspired lamps and pen holders. Trust me, you cannot buy these office supplies at Staples! See more of his artwork here.

Ballard “Viking” Midyette explains how he made a knife.

Ballard Midyette lovingly produces custom hand-made knives, spending many hours fashioning the blades and wood handles. Other artisans make custom knives, too. But Midyette goes two or three extra steps. He finds the personality in each knife and finds a name to fit. “The Wild Card,” “The Minimalist,” “The Cynewulf,” and the “Conjurer” were the names of some of the knives on display yesterday. He also photographs each step of the production process and writes a narrative, which he posts on the Web for his customers to see.

After studying music at VCU — he plays the trombone — he nearly went to law school. But he bailed at the last minute to pursue his craftsmanship, which he supports through a full-time job. Making a quality product can take hours of polishing blades and sanding wooden handles. Some might find the work tedious, but Midyette, whom his friends call “the Viking” for his mane of red hair, says there is zen to the process. “It’s like taking away the parts that don’t look like the knife.”

He and his partner James Bernard aren’t in it for the money — “I started this without any attachment to income,” Midyette says — but they have found that, if they do good work, it will sell.

Mike Harrell hammering an iron rod into a hook.

Mike Harrell discovered blacksmithing on the Internet. For a long time, he followed a number of blacksmith blogs. With a burly build, bushy beard, and gleaming pate, Harrell could have been called from central casting for the village smithy role. When he finally sought out the company of Richmond-area smithies through the Central Virginia Blacksmith Guild, he discovered other bearded men like himself. “I have found my people!” he says.

The guild has about 110 members. While many members are hirsute and hefty, says Harrell, there are female smithies, too. Working a day job at what he will describe only as a “Richmond-area credit card company” (wink, wink, nod, nod), he pursues smithing as a serious hobby. He works mainly on functional items — at the show he was forging a hook that could be used to hang a bird house — but relies upon others for artistic vision. There’s nothing wrong with being practical, he says. As he asks the kids who watch what he does, when the zombie apocalypse comes, would they rather be good at video games or iron-smithing?

Continue reading

A Patch in Time Saves Nine

The WannaCry and Petya cyber-assaults on banks, airports and other businesses in Europe in May used a vulnerability in Microsoft software to infect machines and spread around the world. Microsoft had issued a patch to close the back door months earlier, but many users never installed the update. Ironically, when Microsoft creates a software patch, it tips off bad guys to a previously unrecognized vulnerability. Cyber-criminals can create a virus to exploit that vulnerability sure in the knowledge that many corporations will fail to update the all of the thousands of computers and devices in their system.

The single-most effective thing that any IT manager can do to maintain security is to promptly install software patches. The task sounds pretty basic. But it’s easier said than done.

Christiansburg-based FoxGuard Solutions helps clients keep software up to date on critical infrastructure such as power grids, wind turbines and nuclear power plants. Founded in 1981, the company has seen its cyber-security business expand at a compounded growth rate of 42% over the past five years.

As far as FoxGuard CEO Marty Muscatello is aware, none of its customers were affected by the WannaCry and Petya attacks, reports Jacob Demmit with the Roanoke Times, after accompanying U.S. Rep. Morgan Griffith, R-Salem, on a tour of the FoxGuard facility. The company’s software is used in 40 different states and 35 countries. Reports Demmit:

FoxGuard has been using a $4.3 million cooperative agreement from the U.S. Department of Energy since 2013 to develop tools to track software updates and patches for 128 companies in the critical infrastructure industry.

It’s pretty easy to keep a single home computer up to date, but that becomes increasingly difficult when an IT department is trying to protect a power plant that could have 100,000 different machines across a power grid. A company might not even be aware of some computers on its network that could let hackers in, like an air conditioning system.

FoxGuard, it would seem, has a bright future, for its market will expand exponentially. As the Internet of Things takes off, embedding microchips and wireless in billions of devices, corporations will be hard-pressed to keep track of them all. Patching them all will be almost impossible, for Original Equipment Manufacturers typically stop updating software for devices they no longer manufacture. The challenge is particularly acute for electric utilities, which have cobbled together multiple generations of technology to operate their systems. As they move increasingly toward flexible “smart grids” to accommodate solar and wind power, they will install thousands of sensors and actuators across their systems, potentially making them even more vulnerable to cyber-attacks.

For a monthly fee, says the Roanoke Times, FoxGuard tracks all those machines and makes sure the client knows of every update on a timely basis. The company can even download and test the update in its own lab to check for compatibility issues before installing it in the field.

Bacon’s bottom line: The news brings daily remembers of how vulnerable the global Internet-connected economy is, and how anyone with a good cyber-security technology or service can tap into a global market. Governor Terry McAuliffe is right about this: Cyber-security is one of the biggest economic-development opportunities to come along in Virginia in a long time.

Entrepreneurial Monks Peddle Natural Burials, Monastic Immersion

Monks at lunch. Photo credit; National Geographic

The order of Trappist monks living in Holy Cross Abbey in Clarke County has dwindled from 68 to 10, and those ten are aging — the youngest is 59 years old. The remaining monks know they must change to survive. And for a group that traces it origins back to 1098 France, committing themselves to cloistered lives of celibacy, poverty and obedience, they have been pretty darned adaptive.

In a new one-hour documentary and accompanying article, The National Geographic highlights the order’s moves to become environmental sustainability. Organic farming and low-flow toilets are all fine and good, but what impresses me most is the monks’ spirit of entrepreneurial innovation — making the best of what they’ve got in their 1,200-acre property located about an hour’s drive west of Washington, D.C.

The monks have set aside 80 acres set aside for a “natural cemetery.” People  can choose to be buried there in a shroud, as the monks are, or in a biodegradable coffin. Alternatively, they can choose cremation and have their ashes scattered in a separate section of the cemetery. Natural burial ranges from $4,000 to $8,000, depending on the spot. Since the cemetery opened in 2012, there have been 97 interments and 12 people who have had ashes scattered.

But this is the best:

In the last five years, Holy Cross has introduced “monastic immersion weekends” in addition to regular silent retreats, so that men and women can get a fuller taste of monastic life. Those weekends always sell out, says Kurt Aschermann, a companion to the abbey. Even the guests for the regular silent retreats are leaving larger donations than in years past, says Father James, which means that the retreats have become more profitable.

That’s what you call inventing a new business model!

Tech, Carilion Launch VTC Innovation Fund

The VTC Innovation Fund will build the innovation ecosystem centered on the Jefferson College of Health Science.

The VTC Innovation Fund will build the innovation ecosystem centered on the Jefferson College of Health Science.

Virginia Tech and Carilion Clinic have teamed up to form a $15 million venture capital fund in the hope of accelerating the growth of biotech companies taking root around Blacksburg and Roanoke, reports the Roanoke Times.

The VTC Innovation Fund aims to close seven to 10 deals over the next 10 years. By leveraging its money from other financial sources, managers hope the average startup will be able to raise between $2 million and $10 million. About 60% of the deals will be in life sciences. Although the main focus will be the Roanoke-Blacksburg area, the fund will consider investments elsewhere in Virginia or enterprises with strong ties to Tech or Carilion.

“When we looked at our grand vision going forward, we see that the innovation ecosystem has a few holes in it,” Virginia Tech President Timothy Sands said. “One is in the venture capital area. It’s not the only one, but it’s one we identified that we could do something about.”

Virginia Tech and Carilion are partnering to build a medical school and research institute in Roanoke, the Jefferson College of Medical Sciences, which stands at the center of what they hope will evolve into a biomedical industry cluster. Tech also is building a cutting-edge interdisciplinary program in neuroscience.

The Tech/Carilion duo is following a parallel path to Inova Health System in Northern Virginia, which is collaborating with George Mason University and the University of Virginia to build an biomedical cluster at the Center for Personalized Medicine. Inova has pledged to put $100 million in to venture capital in support of the innovation ecosystem there.

A third partner in the VTC Innovation Fund is Middleland Capital, a Washington, D.C.-based investment firm, which will manage the Roanoke fund and invest $500,000 to $1.5 million of its own capital, reports the Washington Business Journal. Connections with experienced Washington-area venture investors likely will provide a depth of expertise and access to outside capital that entrepreneurs in the Roanoke-Blacksburg area previously lacked.

“We want to focus on the absolute best and the absolute brightest and the shining stars of the region,” said Scott Horner, managing director of Middleland. “We want groups from outside the region to be able to look here and say, ‘Yes there is good stuff in the region.’”

Scary Thought of the Day: Our Landfills Are Mountains of Dog Poop

Jacob Paarlberg demonstrates how his flushable dog-waste bags dissolve in water. Photo credit: Southside Daily.

Here’s a clever business idea that, astonishingly, does not require downloading an app: Jacob Paarlberg spotted a pressing need in American society — how to clean up the poop of the nation’s 70 to 80 million dogs. Each day untold tons of doggie waste ends up in landfills — comprising an unbelievable 4% of total volume!

“We hear about the impact of diapers on the environment, and families often opt for reusable diapers to reduce their impact, but this is is something no one thinks about,” said Paarlberg in an entrepreneurial event hosted by One Million Cups as reported by the Southside Daily. “A child uses diapers for two to four years, but dog waste bags are used for a dog’s entire life.”

The solution? Flushable dog-poop bags made from the same water-soluble plastic used in dishwasher pods. Other entrepreneurs have devised similar solutions but they suffer from a common problem. Tying off the bag to seal in the smell creates an air pocket, and the air pocket can cause the bag to get stuck in pipes.

Paarlberg has patented a tear-away strip that allows the pet owner to release the air pocket so the bag flushes cleanly. Said he: “We’re the bag that won’t clog your pipes.”

A member of the U.S. Coast Guard stationed in Yorktown, Paarlberg has chosen Hampton Roads as one of two initial markets. The other is Boston where his business partner runs a private-patent law firm. The start-up is looking for a manufacturer and hopes to have BagIt Flushables available at pet stores this summer.

Bacon’s bottom line: I love a great entrepreneurial story as much as the next guy. But this is the 21st century, not the 19th. Paarlberg’s business model is so old-fashioned. A successful businessman doesn’t just come up with a better idea these days, he gets a law enacted to put his competitors out of business. Paarlberg should have no trouble getting a local legislator willing to submit a bill that bans flushable dog-poop bags with air pockets. If he owns the market, he can scoop up millions in profits. That’s the new American way.