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For the past decade the book industry has been pretty sheltered from the disruption the music and the film verticals have seen. But this is about to change dramatically. The distribution of books is rapidly moving digital as eReaders have gone mainstream. And now we can see for the first time how social is impacting the way books are created and consumed. Writing a book has traditionally been a relatively lonely affair for a writer – your partner, close friends, or your editor might have provided comments and input to your drafts but it was never immediate or from a large group of people that really cared about what you were creating. And social interaction around reading was mostly limited to discussing books with your groups of friends and potentially your book club.

In the past few years crowdfunding platforms have transformed the way many projects are being financed – instead of just relying on family & friends to support them and their idea, musicians, film makers, entrepreneurs or simply anybody with a passion or a business idea can seek funding from Internet users on platforms like Indiegogo or Kickstarter. It opens up exciting new opportunities for creativity and entrepreneurship by connecting those with ideas and a passion to others with money and the same passion.

One thing that we investors always look for in entrepreneurs is deep domain knowledge paired with an extreme passion for the product. And it is hard to find somebody more knowledgeable and passionate about fashion jewelry than Chantel Waterbury, the CEO and founder of Chloe & Isabel. Chantel has worked more than a decade for brands like Cartier, Tiffany and Co., and Van Cleef and Arpels and has developed jewelry for almost every major retailer in the United States – talk about deep, deep domain knowledge. Her start-up, Chloe & Isabel, is set to revamp the direct sales industry in the fashion jewelry space (and $100+ billion industry worldwide) through a direct sales platform that provides sellers with personalized store fronts and the ability to make data driven recommendations.

At a mentoring session at GROW I was asked about advisors and what entrepreneurs had to keep in mind when forming an advisory board. Here are a few quick tips:

I am very happy to announce a new investment today: RewardLoop is a mobile loyalty platform that enables a merchant of any size to launch and manage a card-less loyalty program for the mobile era. There are a few things that got me very excited about Vancouver-based RewardLoop. First and most importantly, the company founders Nigel Malkin and Jeff LaPorte are two outstanding entrepreneurs that have shown in the past how to successfully start and build companies. Secondly. it is my firm belief that many categories will be completely “remade” by the mobile revolution and loyalty programs are very high on that list (as are payments). Last but not least, RewardLoop has come up with a very smart solution to quickly get into legacy POS systems by developing RewardLoop Connect, a patent-pending plug & play device that supports both QR code-based and NFC–based transactions, and is universally compatible with the world’s leading POS platforms.

One of the most impressive pieces on innovation I recently read was Jeff Bezos‘ answer to a shareholder question at the last annual meeting. The question was:

Keeping your investors in the loop about how things are going is one of the most important tasks for a start-up CEO. You want not only avoid surprises but also engage them as much as possible so they can provide timely advice and input into strategic decisions. Here is what I usually recommend as best practices:

It is not uncommon for start-ups to pivot their product and / or business model a few times and the right pivot at the right time can determine success or failure of an early-stage company. The Startup Genome project found that “startups that pivot once or twice times raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all”. So how do you approach a pivot? Here are a few tips from pivots I have experienced in the past:

With the growing success of YCombinator and Techstars in the past couple of years, accelerators have become a crucial piece of developing a vibrant start-up ecosystem – a crucial piece that was unfortunately missing in Vancouver after Bootup Labs stopped taking in new companies in fall last year. So I am extremely excited that we announced today a new accelerator in Vancouver: GrowLab is a “startup boot camp” for entrepreneurs whose companies will receive up to $25,000 in seed funding, four months of mentorship, free office space and the opportunity to pitch investors at the end of the program for follow-on funding. The program is accepting applications from entrepreneurs globally and will be based in Vancouver for the first three months, with the fourth month in San Francisco.

I just finished reading “In The Plex”, Steven Levy‘s book on Google, and can highly recommend it to anybody who wants to better understand Google’s success. While many things are not completely new if you have followed the company for a while, the systematic recount of Google’s history and the decisions they have taken along the way offers some really unique insight.

As social has become integral part of how web product are built these days, every new start-up pitch contains some social angle. While this is great to see, a few approaches seem to treat social as an afterthought and not the foundation of the business. A social commerce site will mostly likely not be successful if you first build a straightforward e-commerce store and then put social features on it. In the same way, it is extremely hard to build a community around an existing content site (independent of how good the content actually is) – users usually come to the site to look for information and not to hang out and share their experiences with other members of the community. So if you truly want to leverage social for your product, you need think about it as the first layer you have to build, not the last.

I gave a talk yesterday at Bootup about the “Art of the Investor Pitch” – Maura Rodgers did a great job summarizing it and here is the full slide deck. Being good at pitching investors is one of the key success factors for entrepreneurs so have a look at the presentation to see if there are any tips / techniques in there that you are not yet using.

One of the key innovations in social media was Facebook’s newsfeed and it transformed the site from a social network built around profiles to a truly engaging communication platform. But as every site with a focus on social has adopted a feed, the noise seem to have reached an unproductive level. No viral marketing strategy is complete without a site encouraging their users to push updates to their social networks, tools help to cross-post easily (e.g. Twitter stream into Facebook) or re-post several times (apparently between 2-4 times is ideal) and breaking news situations clock the social stream with duplicates. No wonder that even the time of the day matters if your social signal is being heard or not.

In an increasingly globalized world the economic success of a city, a region or a whole country depends increasingly on their ability to attract the best and brightest from all around the world. This has been the driving force behind the rise of Silicon Valley as the technology hub and whole countries like the US and Canada. But often we make it too hard for (technology) entrepreneurs to come to our country and build great companies that can create thousand of new jobs. Entrepreneurs and Venture Capitalists in Silicon Valley have recognized this first and have lobbied the US government in the past months to encourage immigration on the valuation of their business ideas and legislation is now pending in Congress.

Yesterday’s news that Amazon is opening an engineering office in Vancouver is a really good one for the city. While development offices can never replace having “real” anchor companies in a community, they can help attract and train talented developers that at some stage leave the company and start new companies. It is this typical cycle that has long fueled innovation in Silicon Valley – and the Google engineering office in New York City has shown what impact an engineering office of a large web company can make for a community. So let’s hope that Amazon will quickly expand their operations in Vancouver and BC (my former company AbeBooks – now an Amazon subsidiary – still has their 100+ people HQ in Victoria) and that many other web companies will follow suit – Facebook? Google? Twitter? Continuously ranking as one of the most livable cities in the world Vancouver should be one of the top locations for North-American tech companies to build a presence in.

Communities get built from the ground up, by passionate people that dedicate their time and energy to organize events, mentor young entrepreneurs or blog about what is going on. And I am really proud about what I am seeing in Vancouver right now – some highlights from the past year? Debbie Landa from Dealmaker Media putting on the GROW conference that attracted hundreds of entrepreneurs from Silicon Valley and all over Canada to Vancouver; BootUp launching the Garage, an innovative hackspace that gives members access to great mentors; Startup Digest starting to bring more awareness to the many events that are going on in town on a weekly basis; VEF resurrecting and putting on some really amazing events since the summer. And this is on top of what has already been going on like LaunchParty, Barcamp, Democamp, the Bootup workshops, the media coverage by Techvibes, etc. You guy rock – thanks to everybody who is helping to build the Vancouver community! Hoping to see even more people stepping up in 2011, we still have along way to go and need every hand to help get there. (Full disclosure: I am an investor in Techvibes and the Chairman of the Bootup Entrepreneurial Society)

I didn’t do too badly predicting what would happen in the consumer Internet space in 2010 so I am giving it another try for 2011:

The year is slowly coming to an end and it is time to look back at my 2010 predictions for the consumer internet space – overall, I would give myself a 3.5 out of 5:

In the same way that e-commerce has not innovated for almost a decade until the recent flood of innovation (flash sales, group buying, mass customization, social commerce), price comparison engines still work very similarly to how they were originally designed during the days of the web 1.0. So it is time to shake things up a bit in this vertical. In comes Sparkbuy, a shopping engine that wants to be a “Kayak for consumer electronics”. The site makes it really easy for consumers to compare laptops based on the criteria which are important to you. The secret sauce: a simple UI and the most complete and comprehensive database of laptops. Sparkbuy is currently in private beta but will open up to the public early in the New Year and plans to soon add televisions as well.

In the past couple of months many people started claiming that Social Media Marketing is becoming more important than search engine optimization. While there is no doubt about the fact that Twitter, Facebook et al. are driving an increasing amount of traffic to websites, it is also not as simple as saying that only social media marketing counts and you should forget about all the rest – the reality is: it depends!