- Radio and Records: Can’t We All Just Get Along?
- Father’s Day Weekend Giveaway: An All-In-One PC From Asus Plus Other Gifts For Poppa
- Talking The Talk: Verbally Lets The Speech Disabled Communicate Using The iPad (For Free)
- Earbits Snags $605K From Y Combinator, Charles River Ventures And Others
- U.S. Trade Commission Gives The Green Light To Microsoft’s $8.5 Billion Cash Takeover Of Skype
- AOL Makes Fun Of Yahoo. And It’s Actually Hilarious.
- As The 2012 Campaign Heats Up, President Obama To Start Tweeting From @BarackObama
- Sequoia Capital To Double Down On Evernote With Big New Investment
- Square to Investors: $1 Billion Valuation? That’s So Last Week. Make It $2 Billion.
- Surveillant Society
- Bill And Melinda Gates Foundation Grants $1.5M To Turn Human Waste Into Biofuel
- Charting Twilio’s Growth Over The Last Year (And The Price Drops That Helped)
- 11 Great Last Minute Geeky Father’s Day Gifts
- Facebook PR: Tonight We Dine In Hell!
- The New Silicon Valley Douchebag
- (Founder Stories) Eventbrite’s Julia Hartz: “Facebook Is The No. 1 Driver Of Traffic To Our Site” (TCTV)
- TechCrunch Giveaway: Ticket To Disrupt SF, Plus Universal iPhone Remote #TCDisrupt
- LulzSec: We Are NOT Attacking Anonymous
- Brand-To-Fan Connector, Crowdtap, Hits $1 Million Revenue With 115,000 Members
- BeachMint Raises $23.5M at a Rumored $150M Valuation
- Who Is In The New Billion Dollar Valuation Club?
Posted: 18 Jun 2011 06:32 AM PDT
Mike Agovino is the Chief Operating Office with Triton Media Group, a leading provider of applications, services and content to the media industry, specifically radio, with more than 6,000 station affiliations.
Not long ago the music Industry was raking in $40 billion a year in sales. Today it sits at around $15 billion. Radio, once a $20 billion industry, is hanging on at a respectable $17 billion but faces significant challenges from a combination of new competitors pursuing its audience and advertising revenue while the overall trend toward digital advertising continues to divert budgets away from traditional media.
No matter what you believe, one thing is for certain; radio faces more competition for audience than ever before. Just the number of phone conversations occurring in the car each day would logically have to put a dent in time spent with radio.
As we move forward the challenges will only intensify as marketplace disruptors make their presence felt. Personalized music services like Slacker and Pandora have been aggressively building audiences online over the past eighteen months. With Pandora’s IPO this week, it now has a fresh influx of cash to keep investing in expanding its service. In just the past few weeks Amazon, Apple and Google have entered the equation announcing cloud based music services. They join a crowd that already includes the likes of Rhapsody, Rdio and Spotify, which is rumored to be announcing a big deal with Facebook. Business plans for these companies clearly identify the battlefield as the mobile device and automobile. For years those of us in radio have referred to the car as a "radio with wheels".
Some in the radio business don't see these "pure" players as competition because they are based upon computer algorithms rather than professional curators. However, seeing these companies as anything other than competition is short sighted. Over time these companies will add more sports and talk programming and probably use some of these same technologies to build recommendations and playlists of spoken word content. Slacker recently announced deals with ESPN and ABC News while Pandora launched a new comedy service. Online companies are building audience and a portion of that audience is coming from terrestrial stations. Soon, if not already, the online players will reach scale where they can sell the value of their audience to the same local advertisers to which radio sells ad inventory—that's a competitor in my book!
So, what next for these two long time allies, radio and record labels?
The record industry's solution has been to re-think free access to music performances by radio stations and lobby congress to institute a first ever over-the-air royalty. Over the air radio has been exempt from a performance royalty by a decades old understanding, but its online offerings are not. Terrestrial stations must pay a hefty royalty for performances that are streamed over the Internet. Pure plays, or internet-only stations, pay lower royalties than over the air broadcasters do—in some cases the difference is very large.
I’ll skip the history lesson and just tell you that broadcasters who stream music content pay nearly $2.00 for every thousand listeners who hear a song. Those fees are scheduled to increase over the next few years to around $2.40 for the same thousand listeners. The average music station that streams is playing around 13 songs an hour. Those same stations are selling about six ads per hour and filling the rest of their break with PSAs and filler music (In the long term radio will come to find that they can't serve more than 6 or 8 ads an hour online so today's sellout rate is not the issue). With twice as many songs played as ads sold the impact of the royalty is a double-whammy, costing the broadcaster about $4.00 per thousand exposures to an ad.
There are other costs to streaming as well. You’ve got to pay ad agency fees and sales commissions as well as hosting, ad serving and measurement fees. All of this has an additional $2.00-$3.00 impact. Depending on the size of the broadcaster, total costs are somewhere around $7.00 CPM. My firm provides services to both pure plays and broadcasters, so we have some visibility into the current advertising economics in the space and present day monetization levels are around $5.00 CPM. In other words, broadcasters who stream their content are not turning a profit doing it.
The audience will continue to migrate online and radio brands need to make sure they exist where and how the audience wants them. Radio and record labels need to find business models that build value for both industries in this new world. Negotiations between the two have been on and off for years now with no resolution in sight. The music industry, broadcasters, artists and consumers are going to continue to take it on the chin if we can't get these problems resolved. The future for both is better together than apart.
There's an old saying that "you can't stand in the way of technology" and it's true. As much as many in radio and records would love to turn the clock back and protect their existing way of life . . . it's not going to happen.
Here's my suggestion, institute an over the air royalty that starts at one percent of revenue and escalates to five percent of revenue over the next 10 years, then remains at that number in perpetuity. At the same time, institute a new set of streaming fees that start at twenty five percent of revenue and decline to five percent over the next 10 years and remain there. An all-in, five percent revenue share across the board in 2021 would allow broadcasters to anticipate and structure accordingly while also allowing the labels to bring in hundreds of millions of dollars today and billions in revenue over time. On the flip side it would let the labels participate in a meaningful way while not preventing broadcasters from building a profitable online business.
I believe in radio's future but only if radio makes an aggressive online play and that play can not be made without the music industry helping to build that future instead of holding onto the past.
Photo credit: Kirsten Geyer
Posted: 18 Jun 2011 05:37 AM PDT
Poor dad. He’s always getting shafted when it comes to Father’s Day. Usually he gets a tie or a chess set or a fancy prize-winning goat (it was a weird year that year at the Biggs house, let me tell you). But does he ever get a full home gaming/3D video/Blu-Ray playing All-In-One gaming center? With speakers? And fancy lights?
Well now you can send Dad what he really wants. I’m going to run this contest until next Wednesday since it’s a pretty nice prize and so if you win you can pretend that you meant to send pops his present all along and you can just say you weren’t sure if you could afford it or whatever and then, suddenly, you were like “I love my dad. Dammit: he gets this gear.” He will totally love you forever.
Posted: 17 Jun 2011 09:45 PM PDT
Intuary, a mobile app startup, recently launched its first app, called Verbally, which is designed to bring speech to those without. Verbally is an augmentative and alternative communication (AAC) solution built for the more than six million people in the U.S. suffering from speech disabilities — caused by Lou Gherig’s Disease, stroke, brain injury, Parkinson’s, cerebral palsy, autism, and more. The app allows users to tap the words they wish to communicate onto the app’s keyboard, or choose from pre-prepared words or phrases, which are then in turn transmitted into audio phrases.
The app’s founders, Anil, Gautam Godhwani, along with their cousin Ajay, lost their mother (and aunt) to Lou Gehrig's Disease in February of this year. She had been a music teacher and singer for 40 years, but in late 2009, her voice began to fail. Seeing the tremendous impact the lack of communication had her, they began investigating solutions on the market. While there are a number of solutions currently available, the touchscreen solutions from large corporations, like Dynavox-Mayer Johnson, cost a minimum of $8K and require at least one month of waiting. Obviously, for those suffering from aggressive illnesses, that wait time is unacceptable.
While iPad apps like that made by Proloquo2Go, for example, offer full feature sets and are more reasonably priced at $190, Verbally hopes to offer a user experience that will appeal to literate adults with high cognition — as well as to those without, and thus reach a larger audience. (MyVoice also makes a nifty communication tool that the speech-disabled can use on the iPhone, which is definitely worth checking out.)
As such, the app offers a full keyboard in which to type the speech the user wishes to communicate, as well as a “Core Words Grid”, which offers over 50 essential words, designed to save users with less mobility 50 percent of the taps required to input sentences. There’s also a “Core Phrases Grid, smart text prediction, customizable keyboard layouts, and choices of various male and female voices — all designed to minimize keystrokes and maximize ease, speed, and choice.
Ajay Godhwani, Intuary’s CEO, was previously part of the Senior Management Team at Tallan, a professional services firm, where he was responsible for technology projects of clients like
Verbally has been downloaded 20K+ times since its iTunes launch in March. It’s a great cause, and it’s nice to see entrepreneurs innovating and trying to bring cheap, easy-to-use technology to the disabled.
Posted: 17 Jun 2011 08:41 PM PDT
Online radio startup Earbits (YC Winter 2011) is announcing a seed round of funding today, having snatched up $605K from Y Combinator, Charles River Ventures, Start Fund and former Lala CEO Geoff Ralston.
Earbits is unique in that its closest competitor is the newly IPOd Pandora from the listener’s side but from the musician’s side the model is completely different. Founder Joey Flores likens the site to payola 2.0. Come July Earbits plans on taking bids from musicians in order to offer streaming time (a practice that is illegal on normal radio, as well as opportunities to market themselves through the site.
Also unlike Pandora Earbits will not offer ads, instead banking on the fact that bands will pay for a a platform to promote themselves. Right now Earbits is working with 140 record labels and Grammy award winning artists across 80 channels, with 1700 artists total.
Traffic has been up 185% in May with record listener engagement according to Flores, who plans on using the new cash for hiring, ” Our audience is starting to grow but we're just looking to accelerate the pace of how we acquire more content and more listeners,” he said.
Posted: 17 Jun 2011 07:21 PM PDT
The U.S. Federal Trade Commission said today that it has approved Microsoft’s $8.5 billion cash takeover of voice and video-over-IP provider Skype. Microsoft officially announced its intent to acquire Skype back on May 10 and, since then, users have been taking to Twitter to blame Microsoft for Skype’s intermittent service. The criticism, at least in that sense, has been a bit preemptive. At least, it seems, until today. Now, with Reuters report that there has been antitrust approval of the deal, users shall soon be able to turn to Microsoft when asking questions of Skype’s sometimes-spotty service.
According to what TechCrunch had been hearing at the time, Microsoft outbid Skype’s next competitor by almost two-to-one — and may even have been bidding against itself. Regardless, the tech giant is placing a serious bet on the European VOIP provider and clearly has its sights set on competing with Google in this area. That notion seemed to be telegraphed when Microsoft paid $8.5 knowing that it’s second closest competitor was Google. What’s more, this is Microsoft’s biggest acquisition to date — and certainly one of the largest (at least in publicity) in the tech industry in recent years.
Now, as for full disclosure, I can’t go a day without using Skype, and I know there are a lot out there who share my addiction. But Skype has never been a particularly profitable business, so the real question for Microsoft is going to be how to make real money off the service. Clearly, a big part of the deal is that Microsoft is paying for Skype’s some 700 million users as part of a push to get more users to Windows and Office.
Microsoft has said that it is going to integrate Skype across the board — Xbox, Outlook, you name it, though the business itself will remain in a separate division under the Microsoft umbrella. In practice, though, it’s a big win for Windows users. Though I have to say, it will be strange saying “Microsoft Skype”. If I say it at all.
Posted: 17 Jun 2011 05:28 PM PDT
Yes, Yahoo and AOL now both have music apps with the same name. And instead of laughing it off internally, AOL responded to the launch with this “Yapoo!” parody video. In a rare moment of badassery AOL is basically calling out the Yahoo Mobile Team for not being very creative.
Yeah, I know, “pot calling the kettle black” you say … But the most surprising part about this video is that it will make you laugh genuinely at its spot on depiction of copy/paste innovation, multiple times.
My favorite “we’re phoning it in” line: "What we need to do is find an app that we like and just reskin it, just put some purple in it. Boom."
Side note: I’m beginning to think that AOL Senior Director of Mobile Projects Sol Lipman, who made this video and also came up with the ‘Editions’ tagline (“The app for when you crap”), is the single funniest person in our parent company.
Posted: 17 Jun 2011 04:39 PM PDT
You’re about to see whole lot more Tweets from the President. President Obama’s Twitter account, @BarackObama, has been around for sometime, accumulated 8.6 million followers but he was rarely sending any Tweets himself-his staff did. Today, the President’s campaign posted a message notifying the public that his 2012 presidential campaign staff (Obama for America) will start managing his Twitter and Facebook accounts (as opposed to the White House staff).
And Obama will be Tweeting regularly from @BarackObama, with the signature
Now that the campaign has taken over the Twitter account, staff sent out this message in a Tweet a few minutes ago: Welcome to a new @BarackObama. From now on, #Obama2012 staff will manage this account; tweets from the President will be signed “-BO.”
In the past few years, the President’s Twitter account has posted about one update per day on average, so I’m assuming we’re about to see way more Tweets and activity coming from the account.
In the post on BarackObama.com, a staff member writes this of the reasoning behind the change in social media strategy:
If the 2008 election was about Facebook, the 2012 election may also centralize around Twitter, which has more mass appeal than four years ago. Obama and his campaign are wise to start engaging constituents and citizens personally. In fact, Republican candidates are already starting to throw punches and jabs over Twitter. The fact that Obama will now be actually Tweeting from the account will add a ton of value to his stream.
Posted: 17 Jun 2011 04:21 PM PDT
Evernote is as hot as any startup in Silicon Valley, even if they don’t get quite as much press. Last year they raised $20 million from Sequoia Capital, on top of the $25 million they’d already raised.
The company is profitable with 70 employees, and has revenue of more than $1 million per month. Profitable enough, in fact, that it’s rumored they haven’t spent a penny of that $20 million venture round.
Even so, they’re close to raising a new round, we’ve heard from multiple sources. It’ll likely be in the $50 million range, and Sequoia Capital will once again lead. Our guess (and this is only a guess) is that at least some of this new round will be secondary, allowing the founders to take money off the table.
One source pegged the valuation at a billion dollars or more, which would put Evernote in the billion dollar valuation club. But a different source said it would be “substantially lower” than $1 billion.
Either way, things are looking good for Evernote. The company declined to comment on this post.
Posted: 17 Jun 2011 04:00 PM PDT
Square is still working on raising its $50 million-or-so next round of venture capital, and we’ve heard from several sources why it’s taking so long. It seems Square is no longer content to be in the $1 billion valuation club, which is admittedly getting a little crowded. I mean, once they’ve let Spotify in, they’ll let any hot app in, right?
Square is now angling for a whopping $2 billion valuation. That’s caused some well-heeled investors to balk, while others are still listening.
Momentum aside, Square is trying to do something that’s incredibly hard and expensive. Everyone agrees that payments need to be disrupted again (except maybe eBay and the credit card companies), and given the general antipathy towards to financial sector, the time is right. And Square seems to have the best shot of anyone out there.
In addition to a sexy device and UI, Square CEO/Twitter founder Jack Dorsey has a major edge in promoting a brand, because he’s reached that rarified level of status where he could be interviewed by Charlie Rose, Oprah or Howard Stern on any given week. That’s important because Square needs mass market promotion, and that can get expensive if you have to pay for it.
But Square is still a long way from pulling off the necessary network effects for the business model to work. And Dorsey also represents one thing that worries potential investors: A CEO who is splitting his time between two companies, in Dorsey’s case Twitter and Square.
Posted: 17 Jun 2011 03:22 PM PDT
It’s not new, of course: “citizen journalism” has a long history before mobiles were prevalent, and the growing trend of “you report”-style news and things like Twitter streams in live reporting are as plain as the lens on your phone. And while I regularly deride the quality of camera phones, the truth is that improvements have been made that are now promoting phone-cams from joke cameras to true documentary devices.
The reason I bring this up today is because of a video I watched a few weeks back that documented some aggressive behavior by a few NYPD officers. You may have seen it — it’s up to around 400,000 views now. Not that this particular incident is of particular import (compared to the countless enormities being perpetrated every day around the world), but its trajectory (essentially viral) is signal. And, importantly, the quality of the video is good enough to prove identities in court, and arguably too difficult to fake. A few years ago this level of definition would only be available on a thousand-dollar camcorder. Today it’s on phones that are literally being given away. Malcom Gladwell may be out of vogue presently, but nevertheless this has all the appearances of one of those tipping points.
What happens, exactly, when every individual is not only a node connected to a worldwide network, but is also able to take anything they see and cause it to be made public and (efforts are made in this direction) unable to be taken down?
The consequences are, in an institutional way, the same loss of deniability that has affected citizens in cities like London, where CCTV cameras have squelched crime on the street, and around the world, where the loss of privileged privacy is now affecting everyone tagged in an embarrassing photo on Facebook. The assumption that one is not being recorded in any real way, a standard in civilization for more or less all of history, is being overturned. (I’ll be writing more about this in a longer series of posts on privacy, but the societal effect of widespread documentary devices is distinct enough to consider on its own.)
Places where this effect is already visible include some parts of government: official Congressional discussions, for instance, are frequently broadcast and have been recorded in their entirety for decades. You can’t take back something you say on the Senate floor. CEOs of major companies, too, have felt the sting of the ever-vigilant ears and eyes of the internet. Steve Jobs’ infamous response to a user regarding the iPhone 4 antenna issue is a good example, but similar things happen every day, and now that there’s no plausible deniability (since as head of the company almost all their public speech is on the record), CEOs have become slaves to the PR department in a bizarre inversion of internal corporate checks and balances.
And there is, of course, the more obvious example of things like police brutality. Rodney King was an early indicator of the directions things will take. But imagine if catching police when they acted illegally were to be the rule rather than the exception. That’s what the NYPD cops who hassled that passerby are finding out, and I suspect many more in positions where abuse of authority is a risk will find out soon as well. Too late for them to save themselves, but just in time for victims (not just of police brutality, but of any kind of unexpected or undocumentable trauma or danger – a hit and run, for example), who for centuries have lacked a way to strike back, for want of evidence. “Your word against mine” can be a serious and drawn-out dispute, subject to all kinds of subjective judgments, loyalties, rights, and arguments; “Your word against my high-definition video” gives citizens and the vulnerable a bit more leverage.
Things aren’t so simple, though. As anyone who has worked in visual media can tell you, deception and fakery are not only incredibly easy, but very common as well. Hoaxes, fakes, set-ups, staged scenarios, creative editing, post-production, photoshopping, and every other tool of the trade, all show something other than the raw, original product. I’m not familiar with forensic digital media evaluation tools in use today, but I get the feeling that if they’re not inadequate now, they will be so in a few years.
It matters because as “citizen journalism” becomes more commonplace, distinguishing between verified and unverified media will become a serious problem (and, I would hazard, a serious business). Indeed, where unverified reports are the rule and anecdote prevails over skepticism (cryptozoology, UFOs, faith healing, etc.), fakes are demonstrably much more common than in, say, day-to-day news reporting. As the volume of self-reported news (and implicit trust thereof) increases, the tools to vet it become that much more important.
And where better to search for proof of authenticity than in a courtroom? I think that we will find that, as we produce more and more images and video, less and less of it will be considered “admissible” (since “publishable” and the like are valueless now), a standard for which we will need to come to some kind of agreement about the definition of a “digital original.” Imaging companies have attempted to do this, but as I posted a short while ago, their method is inadequate.
The ability to determine whether something has been digitally tampered with may be a new and frustrating mire of red tape and legislative dysfunction, but it’s essential to a society that is capable of producing and tampering with documentary evidence. Timestamp incorrect? Inadmissible. Cropped? Inadmissible. EXIF blank? Inadmissible. Restrictions like these, and more sophisticated things like investigating sub-pixel metadata and so on, will be tools of legal protection the way, say, a public notary has been for paper documents.
Worth noting separately is the difference between what I am describing and the more familiar “surveillance society,” which is not related to decentralized documentational powers but centralized monitoring powers. I borrowed the idiom, and in some places these ideas overlap, but for the most part they are distinct (and it is upon the distinctions that I am focused).
A change that will need to occur along with this huge increase in citizen surveillance (because really, that’s what having cameras in the hand of every person amounts to) is finding out what is acceptable behavior on camera. This is, again, a topic I’ll discuss in later articles covering different aspects of privacy, but the relevant portions here are two in number: first, that what is acceptable for, say, an employer to see in your Facebook profile will change, and second, that control over your own data will be a sticking point one way or another.
These days it’s not uncommon for someone to lose a job or not be hired because of something seen and deemed irresponsible on their Facebook or Flickr page. I get the feeling that as a generation accustomed to the social net grows up and ascends the ranks, this kind of judgment will decrease in intensity, while at the same time such social checks will become more common. A more troublesome point is the fact that if you show everything, you’re likely to show something you should have hidden, and if you hide everything, everyone will assume you did so for a reason. Employers might require you to be Facebook friends with them so they can monitor you. Make no mistake, this is certainly a breach of privacy, but it’s going to happen (in all likelihood is happening already – do you do this?). Refusal to, or having pictures hidden, untagged, and so on, may for a time be considered withholding information. It’s going to be rough for a while.
But the end result is a society that is more at home with itself in public, and less concerned about what may or may not make it into the hands of our parents or employers — not necessarily because we have more control, but because the threat is known.
Yet the question of control is problematic as well. If a friend takes a picture of you, uploads a cropped version to Flickr and Facebook, and “keeps” the original in a folder somewhere, what is the rights situation with that picture? You’ve surrendered some of your claim by putting it on Facebook, where it is immediately catalogued, resized, copied, and so on. What if you retain the “original”? What if it’s your camera, or you took the picture, and they uploaded it? If the servers are in Iceland, the company is in the US, and the user is in Germany, what then? The issue of ownership is being muddied by the same process that has upended media industries – the transition of recordable data from physical to virtual property, infinitely copyable but still subject to many of the necessities of more traditionally-held items. Who owns what, who is legally bound to act in which way, which licenses supercede others? A team of lawyers and scholars might spend months putting together a cohesive argument for any number of possibilities. What chance does an end user have to figure out whether or not they have the right to print, distribute, delete, and so on?
Ownership of the data we create is a complicated and subtle thing, and right now the content is piling up, but understanding of how that data is stored, licensed, accessed, and so on is no better than it was. We’ll need to take charge of our own data, but do we even have the tools to do so? Have we already given up our rights to EULAs and obscure default settings? I doubt I could delete myself from the net without breaking a dozen “contracts” and as many loosely-interpreted laws.
But these are all bridges that are better crossed when we reach them. It’s fun to play pretend in a future of gigapixel phone cams and Blade Runner-style “enhance,” but there are changes other than technical and legal ones that are perhaps better worth our considering. (Why I didn’t put them at the beginning of this article, the better to get my point across, is, as usual, a mystery. But hopefully your eye was drawn here, dear reader, by the bold text above.) I’m speaking of our responsibilities as a society to use these new tools judiciously and responsibly.
A few days ago, I was at a local coffee shop, writing as usual. A girl sat her things down on the table in front of me, then went outside to smoke. When she got back a few minutes later, her bag was gone. Someone had stolen it, in front of my eyes (and, in my defense, the eyes of the baristas and everyone else). There were, by a conservative estimate, some 40 cameras in the place, counting webcams, phone cams, and point and shoots, though unfortunately no security cameras. All of those cameras were either in pockets or pointing at nothing. Does anyone else sense a missed opportunity here?
Don’t you think it’s our responsibility as members of society to back each other up however we can? The guys on that balcony in New York knew the biker being cited, so they recorded it, and happened to catch questionable behavior on the part of the cops. Would they have recorded it if they hadn’t known the guy? Perhaps only if they saw the other man being hassled? What if they were recording, and nothing of serious consequence occurred — did they violate anyone’s privacy? Maybe, maybe not. But I think that increasingly, the answers to these questions are tending towards the “record first” mentality.
In a situation of medium importance (we’ll call it) like that one, the constant presence of cameras and smartphones is, at the very least, potentially welcome. But consider a situation like the ongoing revolutions in the middle east, where cameras have also become pervasive. No government is vigilant enough (though some are brutal enough) to prevent a hundred thousand massed citizens from taking pictures of the force suppressing them, or of the crowd itself, or of atrocities finished in seconds that would otherwise have only been hinted at in second-hand reports in newspapers. Again: the camera, combined with the will and means to use it and spread the resultant images, gives the underdog leverage, as with the lesser case of police aggression in New York, and makes quaint the traditional obfuscatory tactics of oppressive regimes. The policy of shutting down cellular networks and internet is a desperate move and will only be effective as long as we don’t have the means of circumventing it. Ad-hoc networks will emerge as a serious force to be reckoned with, and represent a true democratization of data distribution.
Not that we should all be constantly suspicious of each other at all times and in all places (though I admit I at least should have been vigilant enough to notice such a brazen theft as that in the coffee shop), but it seems a little strange to me, that a crime should be suffered to be committed in the presence of some three dozen cameras. The logical next step, after assuming one is being recorded at all times when in public (potentially true) is ensuring one is being recorded at all times when in public. Theoretically, you won’t act any differently, since you’re already operating under that assumption.
Yes, I’m suggesting that, when it’s technically feasible, our cameras should be recording at all times, unless instructed otherwise. Our personal imaging devices have become more and more accessible over the years, and this is really the vanishing point for that trend, which we may approach asymptotically (or Zenoistically, if you will) Many cameras do this on command, especially high-speed models made to catch events too brief for the camera operator to react. The limitations are technical only — and philosophical, of course. If your phone recorded the voice of an attacker, or the gunshot of a policeman preceding a warning rather than following it, would you regret that functionality? If you could be sure that this information could not be obtained except by your requesting it, however idealistic that notion is, would you submit to it? And how long before it’s considered negligent to have not recorded an accident or criminal act?
The notion of privacy in public is being demolished anyway. Every inch of your city has been mapped by Google; you cross the paths of dozens of cameras every day. In cities like New York and LA, where filming on the street is common, you can sign away your appearance rights by walking past a “recording in progress” sign. A large number of people voluntarily (or unknowingly, but that’s another story) let themselves be tracked by their phones or cameras. Your home address, place of work, and general likeness are public information. Your shopping habits, brand preferences, and shoe size are on record and being sold to the highest bidder. Forensic audio analysts in London tracked the location of sounds in the city based on variations detected in the power grid. You have no privacy in public, haven’t had any for a long time, and what little you have you tend to give away. But the sword is double-edged; shouldn’t we benefit from that as well as suffer? A surveillance society is watched. A surveillant society is watching.
It’s not an idea that’s easy to get used to, but neither was the idea of widespread instantaneous photography in the late 19th century. The fact is it’s happening, and to pretend otherwise only retards progress. In 10 years, the idea that you’re not being recorded at all times when outside your home (in any populated area, anyway) will be as quaint as the idea now that you can maintain any kind of meaningful anonymity while availing yourself of modern banking, social internet, and mobile phones. A world where fear of persecution, accident, and injustice are unfounded is a fine dream, but that’s not the world we live in, nor the world we’re approaching. Our society will be a surveillant society; it’s up to us to make that a virtue, and not just another fear.
Posted: 17 Jun 2011 03:06 PM PDT
The grant, for a “Next-Generation Urban Sanitation Facility” in the country’s capital of Accra, will turn human waste from sewage into biodiesel and methane that can be used as fuel.
The project not only produces energy from waste, but tackles a major sanitation problem common in cities that are unable to pipe sewage to treatment plants. Bacteria in sewage can easily make its way into water sources used for cooking, drinking and irrigation, leaving locals, especially children, susceptible to dying of diarrhea-related diseases such as cholera.
Columbia University’s Dr. Kartick Chandran will lead the project. In collaboration with Moses Mensah, a Chemical Engineering professor at Kwame Nkrumah University of Science and Technology, and Ashley Murray founder and director of Waste Enterprisers, the team will build a biorefinery to recover energy from fecal matter, turning it into a useful resource instead of something to be inconveniently discarded. When completed, the project will reduce fecal sludge in Accra’s water supply and offer an affordable energy source to its residents.
The Gates Foundation estimates that 2.5 million people, or half of the world’s developing world population, doesn’t have access to safe sanitation. Chandran is familiar with Ghana, having worked for two years as faculty advisor to the an Engineers without Borders team there.
This isn’t the first time fecal matter has been used to create energy, but it could be a step towards a brighter future for areas struggling with wastewater sanitation and high fuel costs.
Here is video of Chandran discussing some of his wastewater treatment research.
Posted: 17 Jun 2011 03:00 PM PDT
I was curious how much of an impact the pricing change could have on the service (after all, there may be some great ideas out there for which Twilio wasn’t previously a viable option), so I got in touch with the company. CEO Jeff Lawson says that Twilio isn’t sharing absolute numbers around the number of text message and voice minutes it’s dealing with, but he did provide the graph above the shows how each of the service’s previous price drops have spurred growth.
Overall, each drop looks like it contributed to a marked increase, though there is one apparent outlier (it looks like usage went down in late November). As it turns out, the bump in November is from applications built during the 2010 midterm election. Lawson says that campaigns on both sides of the fence used Twilio to build applications, and that the Democratic National Committee did especially well using it, with “order of magnitude cost savings” on an app that was built in a day (you can see the case study here). Obviously these apps were only seeing heavy usage for a limited amount of time, which is why usage peaked and then dropped a bit.
I also asked about the major inflection point you see around January 2011. Lawson says this is due to “boring stuff” — growth in new customers, and growth seen by existing customers. Though given how steep the change is, I’m guessing at least one of the customers really started to take off.
Lawson also provided some other stats: he says that despite the fact that SMS shortcodes have been around for a decade, there are only around 2,000 of them currently active. In contrast, he says that 10,000 developers are currently using Twilio SMS (which launched a year ago).
So what exactly allows Twilio to drop the prices in the first place? The company says that it can work out better deals as it handles more volume, and that it passes along those reduced prices to customers.
Posted: 17 Jun 2011 02:15 PM PDT
I’m a dad and have no problem stating that Father’s Day is farce. It’s a waste of money, mainly. I believe the same goes for Mother’s Day, but I clearly don’t have the same sort of authority to state as much.
That said, I don’t mind receiving a little something for my hard work. Everyone likes gifts, but there’s no reason to spend a good deal of time or money on us dads. Most national brick and mortar retailers sell great items that clearly fit within the Father’s Day gift parameters. Don’t stress over paying huge shipping fees from online retailers because you waited until the last minute. Toys-R-Us, Barnes & Noble and outdoorsy shops all sell gadgets and items your sort of nerdy Dad will love.
Posted: 17 Jun 2011 01:58 PM PDT
There’s currently something going on in the outskirts of the tech world that’s a bit sensitive, so no one really likes to talk about it: we (journalists, bloggers, etc) are at war with the PR industry.
That sentence alone will throw the PR flacks into a tizzy. “Hyperbole!” “Sexy statement, no substance!” “Don’t believe everything you read!” And all the other bullshit they typically spew to blunt interesting concepts into dull, gray PR-friendly dribble. We are at war.
And no, this isn’t about dumbass embargoes (though that remains a huge problem that the PR industry doesn’t seem to have any real interest in solving). This goes deeper.
The fact of the matter is that the entire PR industry is like a weed growing out of control. Current estimates have PR people now outnumbering journalists 3 to 1. Think about that for a second. And one of the industries in which this infectious growth is most apparent is the tech industry, where it’s boom time. My email inbox is a testament to this. As is my voicemail inbox. I’d bet that at least 75 percent of the messages I get in the day are from PR people. Their campaign strategy in this war is shock and awe.
Now, I don’t mean to suggest that all PR people are evil or have the wrong intentions. Many are very nice people. And some are even very good at what they do. But increasingly what they do is nothing more than attempt to spin or grossly misrepresent what it is we do. For many of them, helping journalists/bloggers/writers get access to accurate information is secondary. It’s all about controlling a narrative — by any means necessary. And that has to stop.
Case in point: Facebook.
While I like many of Facebook’s PR team on an individual basis, as a whole, they are probably the worst in the industry when it comes to manipulation, double-speak, and all around slimeballishness. And while the Burson-Marsteller debacle (you know, the failed smear campaign against Google) showcased this fact to the world, things had been bad long before that. And they’re still bad.
A couple days ago, I wrote a story about a secret Facebook project called “Project Spartan“. I gave Facebook PR the heads up over a day before I published, to see if they wanted to comment, and they declined. So I wrote the story, and immediately the PR machine goes into action.
The basis for my story was that Spartan, as seen from the perspective of developers actually working on the project and from myself (I saw everything), is clearly aimed to be step one in a maneuver against the companies currently controlling the mobile ecosystem, namely Apple and Google. Facebook has been making it very clear over the past two months to these developers that mobile Safari in iOS was the initial target. So yes, as I see it, and as the developers working on the project see it, Facebook is in the beginning phases of going after Apple. But they’re doing so as a wolf in sheep’s clothing.
Obviously, Facebook did not like this angle.
Facebook PR began emailing journalists almost immediately, trying to pitch them stories countering my story. What Facebook PR failed to realize is that the people they’re emailing are far more loyal to their own kind than to some flack. I was immediately alerted to these messages from multiple friends in the industry.
“You guys should remind people that there’s not much new in tonight’s TC story,” began one message. “You guys should” — three words that should never come out of a PR person’s mouth. Ever.
The narrative they tried to spin (all on background, naturally) was basically that Facebook CTO Bret Taylor has long been talking about the importance of HTML5 to the company. No shit. I’ve sat down and spoken with Taylor about this before. And I linked to that interview in my Spartan story. What Facebook PR conveniently did not address at all in their emails to journalists was Project Spartan or the larger ramifications — their own mobile app distribution mechanism and mobile Credits payments scheme. Those are the big elements. And both are very new.
Facebook’s email was trying to make journalists believe this was a total non-story. And yet, at the exact same time, Facebook’s developer relations team began a hunt to find out how this information got to me. How do I know? I have those emails too.
Facebook sent developers working on Spartan (“Team Spartan”) a blunt reminder that all the information about the project was confidential and not to be shared with anyone outside of the project. They also demanded that developers add a new “security feature” to their apps. In other words, a way to track who is seeing what about the project.
So my “non-story” caused Facebook to lock down Project Spartan? Makes total sense.
Meanwhile, Facebook PR shot another email out to journalists. “There’s a bunch of confusion out there right now from the TechCrunch story yesterday, especially in how this is wrongly positioning us against other companies,” is the opening line in this one. Again, the meat of the info sent is all on background — in other words, the journalists can use it, but can’t say it came from Facebook. In other words, Facebook PR are manipulative cowards.
This type of manipulation is nothing new in the industry; companies do this all the time. But that doesn’t make it any less shady. And guess what, it works!
Exhibit A: This GigaOm article from yesterday: Project Spartan isn't anti-Apple — it's pro-Facebook. There were four main bullet points in Facebook’s background information from their email, and that article conveniently hits on all of them.
Next, Facebook PR dispatched Bret Taylor to talk to the WSJ to once again counter the Project Spartan notion. To their credit, WSJ did not eat up the company line word-for-word. Instead, it appears they too talked to developers working on Spartan (which they erroneously call “Titan” — Facebook’s old codename for what became Messages) and got the same reaction we did, “Facebook’s underlying motivation is to position itself as an alternative development platform for programmers that now tailor mobile apps specifically for Apple’s iOS operating system or Google Inc.’s Android,” they wrote.
At least one more major publication was ready to publish similar findings about Spartan, but were dissuaded by Facebook PR at the last minute, we’re also told.
Let’s take a step back for a moment. Amid the flurry of bullshit Facebook PR is spewing, let’s just think about this from a common sense perspective.
With some 700 million users, Facebook is one of the biggest forces in the tech world today. But their glaring weakness is that they do not ultimately control their own destiny. They have flourished on the desktop-based web, which is mainly open, but mobile is the key to the future. Facebook has been doing pretty well here so far, but because they do not control the platforms they are on, things are likely to get hard for them going forward as rivalries intensify. They already have a robust rivalry with Google, the ones in control of Android. And by all accounts, the relationship with Apple is complicated to say the least. You think it’s an accident Apple went with Twitter for iOS 5 single sign-on? Please.
It’s ridiculous to argue that Facebook should not be making moves to put themselves in control of their own destiny. In other words, of course they should be working on their own mobile app distribution and payments model! They’d be stupid not to. Yet that’s the story Facebook PR is trying to spin. It’s ridiculous.
The explosion of mobile apps as controlled by Apple, Google, and the like is absolutely a threat to Facebook. Facebook is not a non-profit, they need to make money. And they know one of the key ways forward are the apps on their platform and the use of Facebook Credits in those apps. Apple, obviously has other ideas. They want users on their apps, using their in-app payment system. While Facebook having a unified app directory for mobile and the web sounds peachy keen, payments are very much on a collision course. And I’m hardly the first person to bring this up. This is a very real issue for Facebook.
So why not just admit what is painfully obvious? Why go to all this trouble to spin this elaborate tale of peace and harmony in the mobile ecosystem? “Facebook and all of our developers will choose both [HTML5 and native apps]. You want to reach as many people in as many places as possible,” Taylor tells WSJ. Ha. Okay. Tell that to the team of two that barely has the resources to create an app on one platform, let alone two or three or ten. Facebook absolutely wants HTML5 to win here because they want to be the platform that controls the mobile space. Who wouldn’t want to be in that position? It’s totally disingenuous for them to say otherwise.
So again, why not just say it? Because they’re scared shitless of Apple. That’s what this song and dance is really all about. One source familiar with the relationship between both sides compares Apple’s treatment of Facebook to an “abusive spouse”. Facebook has pissed off Apple in the past, and it has had ramifications. They have to tread lightly here.
Here’s where things get more interesting. Apple knows about Project Spartan, and is believed to even be lending some minor support to the project. Why do that for a project that ultimately hopes to usurp the native App Store and Apple payment model? Because Apple is not afraid of it at all, we’ve heard. And based on some of the HTML5-based Spartan apps I’ve seen, I have to agree. The likelihood users would choose these over a native iPhone app right now, is laughable.
So in mildly supporting Facebook’s efforts here, Apple looks benevolent and smart (while shaking their head and laughing). But I also believe Apple doesn’t know the full extent of the project. The Facebook Credits aspect, for example. Again, that’s really the key here, and I believe the main reason Facebook is pissed off about our Spartan story is this part in particular. Apple may not view Spartan as a threat at all right now — and in fact, it sort of helps them because it is moving popular games, like the ones by Zynga, off of Flash and onto HTML5 — but down the road, that is absolutely what Facebook intends it to be.
Still, perhaps Apple is that bearish on HTML5 app development. But others certainly aren’t. Not just Facebook, but many developers, including all the ones working on Spartan. They believe that HTML5 will eventually take down the native model. But perhaps Apple just has the mentality that they’ll deal with that issue when it actually becomes a problem.
We also know that Apple has been working with Facebook on their iPad app, which should finally be available in the next few weeks. Apple has wanted this app since the initial iPad launch just over a year ago. After all, the Facebook iPhone app is the most downloaded app of all time. Like it or not, it’s a selling point for the device. At first, Facebook made it sound as if they weren’t going to do one at all. But they have been working on it for months. And there’s no reason it should have taken that long, unless they were holding it back as some sort of leverage over Apple.
Leverage for what? That we’re not clear about. But recent code changes in Spartan suggest that the project could work inside of Facebook’s iPad app as well. All of this could very well be related.
That story will evolve over the coming weeks. And hopefully we’ll be the ones to bring it to you, and not Facebook PR feeding up bullshit from a cloaked hand.
The moral of the story is that Facebook PR can talk until they’re blue in the face about how their secret project now on lockdown is neither new nor interesting, but consider who is talking. I’m not going to go so far as to say they’re outright lying, but they are being extremely disingenuous and manipulative. (How do I know when Facebook PR is full of shit? Their mouths are moving.) From now on, that’s to be expected. We are at war, after all.
Posted: 17 Jun 2011 01:43 PM PDT
Anyone who was in the Valley during the late 1990s knows exactly the guy I’m about to describe. He wore blue shirts and khakis. He was a regular at the Bubble Lounge. He always insisted on grabbing the check, throwing down the dot com AmEx for everyone’s drinks, making sure everyone knew he did and later bragging about dropping “several C notes last night.”
He was a business school drop out, who thought that gave him enough cool points to negate the fact that he was lame enough to enroll in business school in the first place.
He hogged the Razor scooter at your cavernous loft-like office, was way too loud when he won at foosball, took up all the restaurant reservations and cabs in the city, drove up the rents to unsustainable levels and generally made everyone else’s life miserable. Worse: He was frequently seen as the most important person in the startup.
Thank God he left in droves once the bubble burst. Even better: He never came back.
But as happens with hot markets, there’s a new douchebag in town. We’ve written several times about how easy it is now to start a company in the Valley, and this new gold seeker isn’t the biz dev guy. He’s the knock-off wunderkind.
Paul Carr has described him as the Mark Zuckerberg tribute band: The kid who wears a hoody and tells people his company will be worth $1 billion dollars, but won’t give you any details on what they do. I’ve described him as the tribute band for the Aaron-Sorkin-fictionalized-version of Mark Zuckerberg: The kid who tries to talk fast, sound witty, but say absolutely nothing. The guy who thinks it’s fine to screw people over, because the startup journey is all about you, the almighty founder. The kid who shows up at 10:30 am for work and plays video games until late at the office, forgetting he was supposed to be building a company all day. He elevates cliched millennial entitlement to an art form.
Fashion-wise, he’s a hipster, frequently with floppy hair ala Kevin Rose and Dennis Crowley. The BMW the biz dev guy drove around has become a bike. (At least that’s a win for the environment.) And if my morning coffee run is any indication, he’s always at the Creamery talking just a bit too loudly about his company. Once I overheard two of them in a heated debate over whether or not Farmville was the most important development we’d seen in our lifetimes.
But here’s the real problem with him: Like all gold-rushing douchebags of any era, he’s not starting a company because he believes in it. You can tell because there’s no great idea there, rather it’s a collection of buzzwords and phrases like “We’re the (fill in the blank) of (fill in the blank). With badges.” And he’s happy to abandon his company if something shinier comes along. Like a wet Gremlin, he’s multiplying like crazy right now. And like all gold-rushing douchebags of any era, there are plenty of people who can’t wait until he leaves. Don’t worry, he will. They always do, and the great entrepreneurs stay and continue to build awesome stuff.
In case you don’t know the guy I’m talking about, the good people at College Humor have done a pretty good job of capturing him in this video. Embedding is disabled on it, which is — appropriately– kinda douchey.
Posted: 17 Jun 2011 01:19 PM PDT
Chris Dixon resumes his Founder Stories conversation with Eventbrite's Kevin and Julia Hartz by asking questions about their strategy for attracting customers. Not surprisingly Facebook, Twitter and LinkedIn all factor in to the mix.
Julia Hartz says initially Eventbrite positioned itself to be “highly optimized for search engines and discovery.” However, search eventually gave way to sharing in the form of Facebook, and now according to Julia, “Facebook is the number one driver of traffic to our site.” (It has been for a while). She notes “It’s extremely easy to get people to share what events they are going to because events are inherently social” and continues by saying with the “ticket buyer sharing where they’re going” it drives “real traffic back to the site as well as ticket sales.”
Recognizing the importance of not being “reliant on a single source” Kevin tells Chris that Twitter is also a player in their digital strategy as is LinkedIn because “conferences/professional events is still the largest, single largest percentage of events on our system.”
In the below clip, Dixon asks about competition—specifically Ticketmaster. Kevin responds by talking about the challenges of getting into the music market with some of the contracts that it requires and then lists events Ticketmaster does not necessarily service, such as “a small show, a club … attending a wine tasting event.“
Julia notes “there’s always a little bit of friction when you’re trying to democratize an industry” and speaking to “traditional ways of doing ticketing … in music and live entertainment” Julia says it requires “exorbitant fees and that is just not what we stand for.”
Make sure to check it all out in these two videos—and in case you missed episode I with Kevin and Julia Hartz you can find it here.
Past episodes of Founder Stories are here.
Posted: 17 Jun 2011 12:29 PM PDT
We had a blast at Disrupt this year in New York City. Now that we have disrupted the startup scene in New York, we are taking it back to our home turf, San Francisco. We will have new special speakers and guests, amazing new startups, fun after parties, and much more we will start revealing soon. Want to come with us? Here’s your chance.
To enter for a chance to win, just follow the steps below.
1) Become a fan of our TechCrunch Facebook Page:
2) Then do one of the following:
- Retweet this post (making sure to include the #TCDisrupt hashtag)
The contest starts now and ends June 19th at 7:30pm PT.
Please only tweet the message once or you will be disqualified. We will choose at random and contact the winner this weekend. Anyone in the world is eligible!
Also, as a little surprise, Ryz Media, maker of the popular My TV Remote app that turns the iPhone into a super powerful remote control, introduced a new colorful orb hardware design that plugs into the iPhone headset jack, allowing control of almost every entertainment device in the house. These four colorful new options improve function, as well as form, with an updated IR transceiver. The app includes a complete program guide for every zip code in the U.S., displays the most popular shows on TV, and also connects TV fans with others who are watching. Our own MobileCrunch raved about it last year.
They have offered to give 250 of these away for free. The first 250 people who email here will win. A picture of the new design is below.
Posted: 17 Jun 2011 10:54 AM PDT
Hacker group LulzSec, which only communicates through its own Twitter account, LulzSecurity.com and random messages on Pastebin, has been on a Public Relations tear this morning. For the uninitiated, LulzSec is the loosely conglomerated internet griefer group behind the relentless hacker war on Sony, attacks on PBS, the US Senate, the CIA, and a slew of gaming sites popular with 4Chan users including EVE Online, Minecraft and League of Legends.
But despite the group’s eagerness to get in confrontations for the “lulz” and the numerous mass media headlines to the contrary yesterday, LulzSec is NOT at war with Anonymous, another hacker group — Anonymous, before the appearance of LulzSec, was held to be the preeminent Internet troublemaker. As the @LulzSec Twitter account makes clear this morning …
The group then emphasized this by retweeting a statement by @YourAnonNews, “We are NOT at war with @LulzSec #MediaFags.”
Okay, for those of you still confused, /b/ or http://boards.4chan.org/b/is a subsector of 4chan which is used by some Anonymous members , and while LulzSec did claim to have infected /b/ and 4Chan.org was down for awhile on Wednesday, it is unclear what, if anything, was caused by an organized LulzSec DDoS. In any case, what the @LulzSec tweets are saying is that an attack against /b/ does not equal an attack against the entire Anonymous organization which hangs out primarily on its own IRC channel and not necessarily 4Chan.org. The main mistake people seem to be making is assuming that the two organizations, Anonymous and 4Chan, are interchangeable.
Explains internet griefing expert Adrian Chen, “If Anonymous and Lulzsec were warring, Lulzsec would have DDoS’d the Anonops servers or something. And instead of just circulating posters on 4Chan and Reddit, there would have been a big campaign by Anonymous to take on Lulzsec.”
All this leaves one wondering where exactly the “friend vs. foe” line is drawn. Despite all its gaming related mischief, apparently LulzSec is a fan of SEGA DreamCast and not involved at all in the SEGA Pass hacking this morning, and indeed wants to “help.” Or that could just be a joke. I for one have no idea.
For more on the (i)rrationale behind their efforts, read their press release, posted in honor of their 10,000 tweet today.
Posted: 17 Jun 2011 10:37 AM PDT
A New York City startup that helps brands connect with and reward their fans via Facebook, Crowdtap, recently crossed the $1 million revenue mark for 2011, with 115,000 active members and about 50 major brand clients, chief executive officer Brandon Evans reported today.
Crowdtap members earn redeemable points for taking “brand actions” like: completing “quick hit” surveys, voting in a poll, participating in a live-online discussions or sharing brand-related content with a few friends via social media and the Crowdtap platform. The points that Crowdtap gives its members can be redeemed for an array of real world incentives, among them: an Amazon.com gift card, or a cash donation to a charity chosen from the company’s list of approved organizations. These range from environmental non-profits like the World Wildlife Fund (WWF) and The Nature Conservancy to The American Red Cross, Autism Speaks and Invisible Children.
Crowdtap requires that users donate five percent of their points to a charity of their choice. They can give more if they choose. Since launch, users have racked up $20,000 worth of points in donations to these charities (not all of that has been paid out, yet). Evans said his company aims to give users more and more choices over time; he is constantly adding causes and charities to the list.
To prevent Crowdtap members, who are brand fanatics, from turning into spammers the site only rewards points to users for sharing brand-related content that they “like” with up to four friends online. The points are doled out to the sharer once the recipient rates the content they’ve received.
Users who agree to either create content about a brand — like a video they made about their latest shopping trip to Old Navy— or who volunteer to host a party where they’ll pass around sample products provided by the brand, can gain a stronger reputation (and badges) within Crowdtap. Users with a higher reputation score become eligible for product freebies and other incentives that new or lighter users won’t get.
Marketers and media planners are embracing Crowdtap, Evans explained, because:
[Ed's note: See the screenshot below for a look at the marketer-side of Crowdtap.]
More than 75,000 of Crowdtap’s users signed up after the company launched its site in March at SxSWi, Evans said. The company charges its clients per interaction— if a user agrees to share a brand’s content, or take other actions, that generates a fee for Crowdtap. The number of brand-sponsored actions that Crowdtap members have completed in May 2011 totaled 385,000 Evans said. About 50 major brands and agencies are currently using Crowdtap, ranging from AOL (which owns TechCrunch) to Diesel, GolinHarris public relations, Pinkberry, Entenmanns and the ad agency Mullen.
Crowdtap ran a poll in May 2011— of the type it would run on behalf of an automotive brand or environmental group— for TechCrunch Greentech. We asked the site’s users who are parents: when would you buy an electric vehicle (if ever)?
Posted: 17 Jun 2011 10:03 AM PDT
Up until now, ecommerce valuations have been relatively reasonable compared to social media valuations. As Aileen Lee of Kleiner Perkins and Kevin Ryan of Gilt Group discussed on stage at Disrupt, there’s resistance for these companies’ prices to get too out of control because frequently the margins are tight and scaling up takes time and investment.
Also, ecommerce companies have a pretty clear business model. That sounds like it should be a good thing for whetting investor attention, but the unfortunate truth is nothing ruins a wildly speculative valuation like real revenue numbers. Real revenue numbers usually get multiples off existing revenues, not multiples off the promise of what they could be.
Someone should tell all that to BeachMint, because its new funding round seems to break all of those preconceived notions. The company has confirmed exclusively to TechCrunch that it has raised $23.5 million, just six months after its last $10 million venture round. The company wouldn’t comment on the valuation, but according to our sources it was at a rich $150 million pre-money valuation.
This brings BeachMint’s total invested to date to $38.5 million. This round was lead by Scale Venture Partners with Chicago-based LightBank coming in as a new investor as well. Also participating in this round were all the existing investors including Valley firms Trinity Ventures and NEA. Scale general partner Sharon Wienbar had been tracking the company for a while and was impressed by the combo of a strong curation model, an experienced team mixed together with “a little of that Southern California celebrity magic.”
BeachMint, started by MySpace cofounder Josh Berman and Diego Berdakin, primarily operates a site called JewelMint, which is almost the exact same model as ShoeDazzle. People join a monthly club, fill out a fun survey to asses their personal style, and they’re shown a selection of jewelry each month they might like for about $30 each.
Unlike the old CD clubs of my childhood, there’s no obligation to buy something every month. Like ShoeDazzle is cofounded by Kim Kardashian, JewelMint has some celebrity backing too, from Kate Bosworth and her stylist Cher Coulter. (In case it’s not clear, they did not design the jewelry used to illustrate this post.) Its second site, StyleMint is opening in June and will feature T-shirts designed by the Mary Kate and Ashley Olsen for $29.99 per month. The plan is to expand to multiple verticals, not just in women’s apparel. Things like food, wine, beauty products are all on the table. “We have 100 ‘Mints’ we’ve thought of,” Berman says.
The company seems to be doing well roughly nine months after the launch of JewelMint, but the rich valuation caught several Valley VCs by surprise. ShoeDazzle also recently raised a round of venture money at impressive terms: Andreessen Horowitz invested $40 million at a valuation we originally reported to be north of $200 million. We’ve since learned the post-money price was $280 million. Also not bad.
But a source with knowledge of both companies tell us there is one big difference between the two companies: Their revenues. ShoeDazzle is doing roughly $5 million in monthly revenues, while JewelMint is doing just $500,000 a month– literally ten times less. What made Andreessen Horowitz so hot and bothered to get in ShoeDazzle was the model in part, but it was also the revenues, the growth, and the company’s rabidly engaged Facebook fan page, which has more than 1 million users. JewelMint’s fan page attendance is about half that; then again it’s a younger brand. It also didn’t hurt that ShoeDazzle founder Brian Lee’s other company LegalZoom just raised a round from Kleiner Perkins and is expected to go public this year.
Either Shoedazzle’s investors got a steal, Berman is an ace negotiator, or investors really believe the vertical strategy is going to catch hold in a big way. BeachMint wouldn’t comment on revenues or the valuation, but said they had multiple bids at that price. “We talked to very quantitatively driven investment firms, and they got very excited when they saw the numbers,” Berman says.
A couple VCs we spoke with say they passed on the BeachMint deal because of concerns over whether this model works broadly across all a myriad of verticals. After all, sprawling shoe collections have made Imelda Marcos and Carrie Bradshaw aspirational figures for many women– it’s hard to think of many cult figures with obscene collections of $30 earrings. And other verticals may make less sense. How many categories are there where you want to pay $40 to have a new item every month? How many sunglasses, hair accessories, bath products or handbags does one woman need? When it comes to clothes, H&M and Zara are formidable low-cost, real-world incumbents.
Indeed, ShoeDazzle and JewelMint’s success is theoretically at odds with the philosophy behind another hot ecommerce company, Rent the Runway, which tries to solve the problem of a having a closet-full-of-nothing-to-wear by allowing women to rent a couture piece for the price they’d spend on something new at H&M.
Weinbar and BeachMint’s founders agree that jewelry is a far less intuitive category, and say the fact that JewelMint is going so well is evidence that there are others out there that might surprise us all. The risk is overload, particularly now that two companies have scored rounds at such impressive valuations. No doubt even more copy cats are on the way. Getting into the too-siloed “It’s a Facebook for people who like fish!” territory rarely ends well.
Posted: 17 Jun 2011 09:56 AM PDT
Recently I sat down with a well-connected Silicon Valley CEO who just raised a ton of money, and who knew of other startups raising even more. There is a new startup club of younger companies raising money right now at $1 billion valuations. I already knew a couple of them, but I started asking a few venture capitalists and now I have a pretty good list of who is in that club and who is trying to get in (see below).
As we all watch the established Web companies go public (LinkedIn, Pandora) or prepare for an IPO (Groupon, Zynga, Facebook), there is this new class of younger, but fast-growing, startups rising up right behind them. A lot of them are out raising money right now at $1 billion valuations. These are $50 to $100 million rounds, and they are generally going to companies showing incredible growth rates in both users and revenues, at least according to investors who have looked at these deals.
So who is in the new billion dollar valuation club?
Airbnb is definitely in the club. The crowdsourced marketplace for turning your apartment into a hotel for a night grew 800 percent last year in nights booked to 800,000. There are currently 60,000 listings, and bookings keep growing by 40 to 50 percent a month. Sublets are next. This is going to be one of the biggest companies to come out of Y Combinator.
Square is also in the club. It is raising at least $50 million. Square passed 500,000 card readers and 1 million transactions in May, and is processing more than $3 million a day in mobile payments. COO Keith Rabois told us at Disrupt NYC that Square will do $1 billion in transactions this year, and he thinks it could ultimately do better financially than Paypal (where he was an early executive). Vinod Khosla recently joined the board.
Spotify is finally closing its $1 billion round that’s been in the works since at least February, with DST, Kleiner, and Accel participating. The $100 million or so it is expected to raise will help the music streaming service enter the U.S. market. Finally. Maybe. We’ve been waiting for you.
Dropbox, the Y Combinator file-sharing startup that only ever raised $7.2 million might end up with the largest valuation in the club, perhaps as high as $1.5 billion or $2 billion. It’s just growing like crazy, with 25 million users saving 200 million files daily. That’s up from 4 million users 18 months ago. But this deal is the one that keeps getting pushed out (it is growing so fast that the longer it waits to take money, the higher the valuation).
Gilt Groupe is already in the club. It closed a $138 million round at about a $1 billion valuation last May. One of the first companies to introduce online flash sales in the U.S., Gilt is on track to do $500 million in revenues this year and has expanded from fashion to food, travel, local deals, and more.
FourSquare is also rumored to be out raising another round, but it might not quite make it into the $1 billion club because its revenues don’t justify that kind of valuation. Unless, that is, it pulls a Twitter.
Just above this group, is Pandora (which just went public with a $2 billion market cap), LivingSocial (with a $3 billion valuation), LinkedIn (already public, with a $6.3 billion market cap), Twitter (which is worth anywhere from $3.7 billion to $10 billion), Zynga (which will be worth north of $10 billion when it goes public), Groupon (which could be worth more than $25 billion) and Facebook (which is already worth $50 billion and could go as high as $100 billion by the time it IPOs).
Image credit: John Talbot
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