Monday, July 4, 2011

The Latest from TechCrunch

The Latest from TechCrunch

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U.S. Vice President Joe Biden (@VP) Joins Twitter

Posted: 04 Jul 2011 09:26 AM PDT

Following President Barack Obama’s announcement that he will actually start Tweeting from @BarackObama, U.S. Vice President Joe Biden has also joined Twitter, under the account @VP.

This seems to be the Vice President’s first official active Twitter account. The White House Blog reports that Biden's staff will be providing updates on the latest news and announcements coming out of the Office of the Vice President, “as well as a behind the scenes look at Veep-life.”

In the first Tweet from VP Biden’s account, his staff wrote “VP & Dr. B hope you take time to think about our troops & military families this Independence Day, Happy 4th from OVP! @JoiningForces.”

The White House and the 2012 Obama campaign is on a Twitter rampage. As we reported a few weeks ago, as the 2012 campaign heats up, Twitter has become a centralized platform for communications between candidates and the general public. President's 2012 campaign took over managing Obama’s Twitter (@barackobama) and Facebook accounts (which were previously managed by the DNC). And Obama himself will begin posting updates on both Facebook and Twitter.

And last week, the White House announced its first ever town hall on Twitter, which will take place this Wednesday. Citizens will be able to participate by Tweeting questions with the hashtag #AskObama, and can follow @Townhall for updates. Via a Twitter-hosted site, you can also watch President Obama respond live via webcast, with Twitter co-founder Jack Dorsey moderating the meeting.

It’s unclear if VP Biden will be participating in this forum but it definitely makes sense for the VP to have his own formal Twitter account ahead of the campaign.



Google Offers Versus Groupon: The Portland Throwdown

Posted: 04 Jul 2011 08:30 AM PDT

Google Offers just finished its first month. Google has been testing its Groupon compete in Portland and I’ve been closely tracking the results.

Doing a head-to-head comparison like this is a bit difficult because the two companies run deals differently. Groupon runs multiple deals each day. Many Groupon deals span multiple days, with some running for three days. Google Offers on weekends ran for two days. For each run, I picked a representative deal from Groupon and compared it with the deal from Google.

I looked at 24 deals from each company. For these deals, the median deal value for Google was $1,987 compared with $8,900 for Groupon. In its first month, Google grossed $129,000 compared with $331,000 for Groupon.  Five of the Google Offers grossed less than $1,000; all of the Groupon offers exceeded this.  This is to be expected given Groupon’s longstanding presence in the market; Google hasn’t had the time to build a large subscriber base. Actual Groupon revenue (across all deals) would be significantly higher.

“Our Portland trial is going very well for us,” said Eric Rosenblum, director for Google Offers. “Our intention was to start learning how to source great deals, provide excellent merchant and customer service (including phone and email support), and deliver value to our customers, and we are certainly doing that. In terms of our commercial results, the majority of our deals in month one either outperformed or were in-line with our expectations while around a quarter underperformed. Our total units are above where we had projected, but we still need to get better about predicting performance.”

One significant difference was the median sale price. Google’s median sale price was $10; Groupon’s was 4 times that at $40. This was the result of Groupon having a higher percentage of services and activities such as rock climbing and screenprinting classes.

Cash sells best

An area of concern for deal companies is that the deals that generate the most revenue are the ones that are least sustainable for businesses.

The most popular deal in the month for Google Offers was an offer for $20 worth of merchandise at Powell’s Books for $10. 5,000 Powell’s vouchers sold out in a matter of hours. Powell’s is a Portland institution and the deal was the equivalent of selling cash for half off; there’s no reason not to buy one.

The next day, Google ran an offer for personal training and fitness classes. That deal sold 9 units. The worst performing deal over the course of the month was an acupuncture deal that sold 5 units over 2 days. Google grossed $300 on that deal.

Although Google would not comment on specific deals, I expect that the Powell’s deal was heavily subsidized by Google in order to build its mailing list. Rosenblum did say deal subsidies are something they would consider for appropriate merchants. I can’t think of a more appropriate merchant.

The worst performing Groupon that I tracked grossed $1,440 and the best performing deal grossed $44,000. Excluding the Powell’s deal, which grossed $50,000, the best Google Offer grossed a bit more than $23,000.

The closer a deal is to a cash equivalent for an everyday need, the more it will sell. 3 of the top 5 grossing Google deals were for restaurants; another was for 62% off GoKart racing. (That was the one deal that outperformed my expectations.)

Deals like dentists, guitar lessons and medical services (one Groupon offer for a breast exam sold 12 units) are more sustainable for businesses but are low frequency activities. Groupon has a large enough mailing list that it can still generate significant revenue off deals that are sustainable for businesses. But it also means that they will have to keep growing their list rapidly as people tire of such deals.

Offer restrictions

Google Offers generally had more restrictions than offers on Groupon. While this may sound like a bad thing, I believe it’s better for the ecosystem long term. An offer for Le Bistro Montage restricted the deal to weekend brunch. This is a new product offering for the restaurant, so it serves to expand awareness versus potentially displacing existing business. An offer for a Mediterranean cafe wasn’t valid for lunch.

A deal for a barber shop was “valid only for barbers Brian or Jennifer.”

In at least one case, I thought the restrictions went overboard. Here are some of the restrictions for a deal at an Italian restaurant:

Reservations required and subject to availability. 24-hour cancellation policy applies or you'll forfeit your voucher. Not valid during holidays, on happy hour prices or at the Jade Lounge. Must mention Google Offers when making reservations.

Although the intent is to smooth demand, these are unusual restrictions and I worry they could create a bad customer-service dynamic as consumers who purchase the deals and don’t read the fine print try to redeem them.

The final deal of the month didn’t get a lot of traction because of its low value. It offered $6 worth of Vietnamese food for $3. The description noted that a small bowl of pho is $6.50, large is $7.50. For a deal seeker, that’s an unattractive deal because they would have to pay additional cash out of pocket. For many consumers, prepurchasing a voucher to save $3 hardly seems worth it.

Sales process

A common complaint about Groupon from merchants is that they weren’t made aware that they could cap a deal or that a cap was ignored. We published an email from a former Groupon employee who stated that some salespeople low-balled volume estimates to get merchants to run deals uncapped.

The feedback I’ve received from merchants about Google Offers in Portland indicates that Google sales tries to ensure that the deal structure is suitable to the business’s needs. (But then again, this was the launch of the service, so you’d expect Google to be extra vigilant).  One merchant mentioned that Google asked if she wanted to restrict the deal to new customers only. (She opted not to.) Another merchant told me that while she wouldn’t consider running a Groupon, she was considering a run with Google Offers.  She liked having the flexibility to restrict the offer to just breakfast, a time when most people aren’t aware that they’re open.

One complaint about Google Offers that was reported by Business Insider is that Google sales reps have implied that running an offer would make them #1 in Google search results. Google spokeswoman Jeannie Hornung said, “We have a training process in place for sales people that has made and continues to make it very clear that Offers has nothing to do with search. As we said before there was clearly a misunderstanding.”

I believe that Google won’t let Offers influence search results. I’m equally certain that when you build a large sales organization, some people will try to close deals by implying things that aren’t true. Google’s reputation in search is too important to damage. Any perception of such tying would also raise antitrust concerns. Google would be well served to make it very clear in its merchant help center and its merchant agreement that search results are not helped by running an offer. If it were my product, I would have merchants specifically acknowledge that they understand that Offers doesn’t generate an SEO benefit.

Conclusion

It’s still the early days of the daily deal business and Google has put out a very credible beta in Portland. Thirty days in, I stand by my claim that there’s not much that is original here.

I believe that they’re striking a better balance between merchant and consumer value than Groupon. The additional restrictions mean that merchants aren’t just selling cash at a substantial discount. Another key differentiator for merchants is more generous payment terms. Google pays out 80% of the merchant’s share in about 4 days and the remainder (subject to chargebacks) in about 90 days. Groupon pays out 1/3 in 5 days, 1/3 in 30 days and 1/3 in 90 days.

That should make for some interesting competition as Google’s product matures and it rolls out in more cities. Up next: New York and San Francisco.

Clarification: In an earlier post I noted that Google held consumers responsible if a merchant went out of business. This was based on Google’s posted terms of service. Google has since told me that the wording was unclear and meant the opposite of what they intended. “Google’s intention is to refund money to all consumers who purchased a voucher from a merchant that has gone out of business,” Hornung said. “We are redrafting clearer language now which we can share when it’s published.”

Share your daily deal experiences — dailydeals@agrawals.org.

Photo credit: Flickr/Oliver Hammond



South Korea Promises Paperless Schools By 2015

Posted: 04 Jul 2011 08:10 AM PDT

The death of print has long been on the minds of journalists, writers, bloggers, etc. For those of us who grew up reading our books on paper, asking for magazine subscriptions, and watching our dads read the paper (on paper) at the breakfast table, it's hard to imagine a world without a book case, and the handful of novels we never got around to picking up yet.

In South Korea, there seems to be much less fear over a paperless world, as the country has promised to replace all the paper in its schools by 2015.

Read more…



Declaration of Insurance Independence (Part II): Unleash The Health IT Startups

Posted: 04 Jul 2011 07:12 AM PDT

Dave Chase is the founder and CEO of Avado, a TechCrunch Disrupt NYC finalist. Previously he was a management consultant for Accenture's healthcare practice and was the founder of Microsoft's Health business. This is Part II of a two-part post. You can follow him on Twitter @chasedave.

In Part 1, I outlined the drivers of the Declaration of Insurance Independence including the following:

  • Protesting Healthcare Taxation with Bureaucratization
  • New Care & Payment Models Spurring New Health IT Categories
  • Cautionary Tales For Healthcare Companies from Telco and Newspaper Industry

Convergence of Factors Driving Industry Disruption

Consider the following convergence of factors to comprehend the scale of the need for innovation in healthcare:

  • Over 1/3 of the workforce is expected to be permanent freelancers, contractors, consultants and entrepreneurs with zero expectation of employer provider insurance. They have high motivation to become literate on health economics when paying directly for their own health plan. Health plans are still designed and sold to groups rather than individuals even though nearly half the population will be buying health plans directly rather than receiving them via their employer.
  • 110MM Americans are covered under what are called Self-funded Plans. What that means is a large employer directly pays for their employees healthcare versus having an insurance company manage the risk. They are aggressively pursing their own DIY Health Reform and aren’t waiting around for DC.
  • As has been seen in Massachusetts with their health reform, a massive new wave of people will be brought officially into the healthcare system when insurance mandates kick in 2014. This particularly strains the pre-existing shortage of primary care physicians.
  • It’s well understood that aging Baby Boomers will strain the system like nothing before it.
  • Nearly half of all Americans have a chronic disease. This consumes 75% of all healthcare spending for a total of $1.8 Trillion (yes, with a “T”).
  • Over half of people don’t follow their doctor’s care plan. While some are explicitly ignoring their doctor’s advice, most simply forget or misunderstand the directions they were given.

The only hope to address this convergence of factors is to reshape how care is delivered and paid for. Among other things, it’s imperative that there’s greater efficiency — an area where technology has demonstrated it can play a role time and again. Whereas technology has brought incremental efficiency in healthcare, organizations such as Qliance and OneMedical have utilized technology for radical transformation.

It’s no coincidence that they are backed by the founders of Amazon, aQuantive, Dell, Expedia, and venture firms such as Benchmark — all organizations that dramatically altered their sectors using technology to disrupt their industries. The graphic below shows how Qliance has earned a Net Promoter score higher than Google or Apple in a sector that has the lowest average Net Promoter Score of any industry. You can also see Yelp reviews for Qliance and MedLion to get further anecdotes.

More Time Spent with Patients Translates to Better Health Outcomes and Less Time &
Money Wasted

Interestingly, in the transformative models described earlier, doctors consistently tell me that half to two-thirds of their patient interaction time doesn't need to be face-to-face (the legacy insurance reimbursement model requires face-to-face appointments for the doctor to get paid). They can deliver high quality medicine without being in the same room as them. By spending less time on insurance bureaucracy, they are able to spend 2 to 8 times more time with patients and still make a reasonable living. These longer appointments aren’t simply a luxury. They’ve demonstrated they can save money and improve outcomes. In the legacy model, a typical 7-minute appointment only allows the doctor enough time to address one symptom with limited time to address the underlying issue.

One doctor operating in a non-insurance primary care model gave me the example of a female patient describing symptoms of terrible headaches. He said that in the old model, he would have ordered an expensive CT scan to understand if there was something going on. Instead, over the course of a longer discussion, he found that the lady’s mother-in-law had recently moved into her house. Instead, he “prescribed” setting boundaries, going for walks and other stress-relieving measures.

Implications of Government-driven Health Reform

Of course, the reshaping of healthcare isn’t limited to the DIY Health Reform movement. McKinsey just released a study of employer reaction to the new health law as reported in an article entitled, “Is Employer Sponsored Health Care the Next Jurassic Park?”

If employers have been looking for an exit to employer-sponsored health benefits, they may have found one in the new health reform law. According to the just released employer survey by McKinsey and Company, upwards of 30% of the 1,300 employers surveyed "definitely or probably" will drop health coverage altogether and instead pay the $2,000 per employee government mandated fine. The flee rate gets even higher when focused on those employers with a high awareness of the new law – more than half (50%+) employers indicating plans to exit health benefits.

Putting aside the political issues, the implication is that even more people will become healthcare consumers where they'd previously had that decision handled for them. While I’d expect that the impact of the DIY Health Reformers will be more immediate, the opportunity only increases with government-driven health reform. The CTO of the U.S. recently laid out just how big the opportunity is in the video below.

Time for Health IT Entrepreneurs/Investors to Jump Back in the Water

Due to the scorched earth in Health IT for startups, it’s understandable why mainstream venture investors have been reluctant to invest. Despite my own heavy background in Health IT, I intentionally stayed away as I’ve stated to many people “health IT is where startups go to die” as the pace of decision making and go-to-market challenges have been epic. Many people’s reaction to healthcare in the U.S. is similar to MidEast Peace. That is, they know it’s a severe issue but it seems almost hopeless. Let me leave you with a final thought of how this country solved another seemingly intractable problem starting about 100 years ago.

At the start of the twentieth century, another indispensable but unmanageably costly sector was strangling the country: agriculture. In 1900, more than forty per cent of a family's income went to paying for food. At the same time, farming was hugely labor-intensive, tying up almost half the American workforce. We were, partly as a result, still a poor nation.

As Atul Gawande’s Testing, Testing article goes on to describe, the U.S. addressed that massive issue to the point where we now spend 8% on food and only 2% of the workforce.

TechCrunch contributor and venture capitalist Mark Suster has repeatedly stated that entrepreneurs should be solving the truly big challenges in our society — health, education and energy — instead of creating yet another social tool, location-based service or trivial application. As economist Laura Tyson so eloquently put it, “We do not have a debt problem in the US economy, we have a healthcare problem.” Sticking with the legacy fee-for-service insurance model for day-to-day healthcare threatens individual, business, and government budgets. The lowest hanging fruit is removing the 40% “insurance bureaucrat tax” which is why the Declaration of Insurance Independence will unleash the wave of innovative new care and payment models that will be powered by innovation of the technology industry. Get busy!



WordPress 3.1 Downloaded Over 15 Million Times In Under 5 Months

Posted: 04 Jul 2011 06:08 AM PDT

The latest stable version of WordPress, 3.1, was first released on 23 February 2011.

Now, less than 5 months later, the blogging software has been downloaded over 15 million times according to a tweet posted mere minutes ago (and the download counter).

Joomla just recently announced that its software has been downloaded 23 million times (note that this is the total number, not for any specific versions of the software solution).

For your information: WordPress 3.1 is what TechCrunch uses to power most of its sites.

The latest version of the popular blogging software product is actually WordPress 3.1.4, which is a maintenance and security update for all previous versions.

Just yesterday, a blog post about the next version, WordPress 3.2, was published, revealing that it will be released ‘very soon’ (release candidate here).

WordPress 3.2 will finally drop support for Internet Explorer 6.

Related: Automattic Hits 300 Million Unique Visitors, Roughly $10M In Revenue



Amazon Acquires UK-Based Online Book Retailer The Book Depository For International Expansion

Posted: 04 Jul 2011 06:00 AM PDT

Amazon is acquiring one of its competitors today, announcing that the e-commerce giant has bought The Book Depository International. The Book Depository is a UK-based online bookseller offering over six million books for delivery worldwide. Financial terms of the deal are not disclosed.

So why buy this company? The Book Depository, is one of the fastest growing booksellers in Europe. The retailer has over a million customers and also comes with a Dodo Press imprint and a fulfillment centre in Gloucester, UK. The company ships its books free of charge, worldwide, to over 100 countries.

Amazon currently offers international sites in Germany, Japan, Austria, Canada, China, France, the UK and also has a Spanish-site for Spanish-speaking countries. But the company no doubt wants to expand beyond these countries and The Book Depository expands its reach with an established customer base in Europe and a fulfillment center.

It’s unclear from the release if The Book Depository will become an Amazon-owned but independent site or if will be folded into the Amazon platform.

I wouldn’t be surprised if we see Amazon making similar moves in other countries. We know that the company is looking to expand to India, and an acquisition of Flipkart, the current Amazon of India, would make sense.



SHAPE Services Acquires Developer Of ‘fone’, To Release IM+ Video App

Posted: 04 Jul 2011 05:08 AM PDT

Exclusive - SHAPE Services, the company behind the immensely popular, cross-platform IM+ messaging applications (and then some), has agreed to acquire CrispApp, the Hong Kong based developer of the fone app for iOS (iTunes link). Financial terms of the deal were not disclosed, but we’ve poked around and learned that the purchase price was approximately $200,000.

As a result of the acquisition (and the partnership agreement between SHAPE and CrisApp, which was forged prior to this deal), SHAPE says it will soon launch a stand-alone iPhone application called IM+ Video – expect it to hit the App Store within the next 10 days.

IM+ Video will be a mobile video chat application for Facebook, enabling users to chat from mobile to mobile, mobile to desktop and the other way around, free of charge.

Basically, it will be the fone voice chat app combined with CrispApp’s video technology. The fone app will, however, not be removed from the App Store, though, SHAPE Services CEO Igor Berezovsky tells me.

I spoke to Berezovsky earlier this morning, and asked him how things are going for SHAPE. Very well, apparently: the bootstrapped company has been profitable since 2002 – Berezovsky jokes that that was 5 years before Steve Jobs made the word “app” popular.

There are currently roughly 12.5 million registered IM+ users, and SHAPE’s system process about 1.7 billion messages and 750 million ad impressions per month.

This isn’t the first acquisition by SHAPE Services. Back in 2008, the company acquired mobile app developer Warelex for $2.4 million.



GammaRebels Aims To Be The YCombinator For Central Europe

Posted: 04 Jul 2011 04:18 AM PDT

As we've said before, there is a veritable explosion of private tech accelerator programmes springing up all over Europe. The latest to join the wave is GammaRebels, a new program based in Warsaw, but aiming to attract international startups, with the focus on Central and Eastern Europe.


Gadget Week On Fly Or Die (TCTV)

Posted: 04 Jul 2011 03:26 AM PDT

In this episode of Fly Or Die we go through a few popular gadgets including the MacBook-alike HP Probook 5330m, the EFun Nextbook, and the Nokia N9.

We found most of the devices to be acceptable but we were in agreement about the crablet EFun Nextbook which is about the worst piece of garbage imaginable (based on our extensive test that involved us looking at the thing as it crashed constantly.)

We’ll try to have more Fly or Dies over the summer as Erick and I go our separate ways to various vacation hotspots including, in my case, Warsaw and potentially Yonkers.



A Nice Refreshing Glass Of Crisp Beer: Pintley Brings Social Tools To Beer Reviews

Posted: 04 Jul 2011 02:24 AM PDT

On this day of mirth, merriment, and almost constant inebriation, don’t you owe it to yourself to pollute your body with only the finest amalgamation of rye, barley, hops, and water? As a beer connoisseur, I’ve slowly grown and improved my own massive girth with the regular ingestion of high-calorie, high-hop beer over the past few years and until now there was no source of beer information – besides word of mouth and the prettiness of the labels arrayed before me at the corner shop – to suggest which beer is far superior to its brothers and sisters.

Until now.

Enter Pintley (not, I will note, pint.ly which goes to bit.ly). This website has been around since 2008 but is still apparently in Beta. It was launched when founder Tim Noetzel learned of the majesty of European beers after getting blitzed night after night on Alts in Baden-W├╝rttemberg, Germany.

Desperate to bring the thing that made Europe great – namely the regular and total obliteration of the spirit through constant alcohol consumption – to the U.S., he and a dedicated team of tipplers built Pintley to rate and comment upon various kinds of beer.


The network is fairly basic: you log in and rate beers. Found a new one? Stick it in. Discovered one you want to share with your friends? Tweet a link. However, it does open up the world of craft beer to a whole other audience as, I suspect, the average beer drinker will use the site to find out the Bell’s Oberon is pretty darn great while bottle snobs will discover that Porkslap Ale in a can is just about heaven.

The site is a bit barren right now but Noetzel et al have created a sort of directory of fine beers and they’re working directly with brewers to grow the database. They have also created an iPhone app for the drunk on the go and there is also a mobile version of the site.


In a world where everything is characterized with Otaku-like obsession, it’s good to go to a place that says “This, according to a lot of people, tastes good.” Instead of detailed blar-de-blar about citrus notes and napalm overtones on the back of the tongue we get a simple, numerical description. And, most important, you can use the site to discover more things to drink.

So sling it back, suck it down, and stare into space as you get up the nerve to talk to that guy or girl someone brought to the barbecue today and seems to be from out of town and may or may not have smiled at you at some point during the past three hours while grabbing a hamburger. After all, as a great man once said, beer is proof that God loves us and wants us to be happy.

Bonus #1 and Bonus #2



Fox News Twitter Account Hijacked, President Obama Declared Dead

Posted: 04 Jul 2011 02:13 AM PDT


Neil Gaiman
And I guess if you're going to hack @ you might as well announce the assassination of President Obama. Why think small?

There’s nothing even remotely amusing about this: some stupid kids – actual age unknown – have taken over the (verified) @FoxNewsPolitics Twitter account and posted a series of messages declaring U.S. President Barack Obama dead on the eve of the Fourth of July, the national day of the United States.

The ‘hackers’ appear to have taken over the account around 2 AM Eastern time, and went on to claim President Obama was shot twice at an Iowa restaurant, that he passed away soon thereafter, and that the shooter’s identity was unknown.

By the time this post was published, the account had seen no tweets for a couple of hours, but neither was it suspended or were any of the fake reports deleted, so whoever gained access to the Twitter account may still have it.

Update: the Fox News website now shows a message saying:

FoxNews.com’s Twitter feed for political news, FoxNewspolitics, was hacked early Monday morning.

Hackers sent out several malicious and false tweets claiming that President Obama had been assassinated. Those reports are incorrect, of course, and the president is spending the July 4 holiday with his family.

The hacking is being investigated, and FoxNews.com regrets any distress the false tweets may have created.

Read more: http://www.foxnews.com/politics/2011/07/04/foxnewspolitics-twitter-feed-hacked/#ixzz1R8mMaQhw

@FoxNewsPolitics has around 33,000 followers, but evidently many of the tweets have been retweeted and spread rapidly across the network.

Multiple reports claim there were more tweets, some declaring the successful hacking of the account, which have since been deleted. One of them reportedly read:

“Fox news politics hacked by the scrip tkiddies! http://t.co/6yZDcTS more embarrassment for FoxNews is imitate”

The link in the tweet led to another Twitter account, which has since been suspended.

THINK claims to have spoken to a ‘representative’ of The Script Kiddies, who said:

"I would consider us to be close in relation to Anonymous, 2 of the members of our group were members of Anonymous. I was a member of Anonymous.

We hope to be working with them soon."

He or she also said this was only the beginning, and explained why Fox News was singled out:

"We are looking to find information about corporations to assist with antisec.

Fox News was selected because we figured their security would be just as much of a joke as their reporting."

They also appear to have talked to The Hacker News, if you’re interested.



The HP ProBook 5330m: Where Have I Seen This Thing Before?

Posted: 04 Jul 2011 01:02 AM PDT

Does this thing look familiar to you? Granted, there are plenty of little differences, but at a first glance, what does this remind you of? If you said MacBook Pro, congratulations, we're on the same wave length. The brushed metal finish, the keyboard, the black bezel around the screen… it all screams Apple. That's all I'll say on the matter, but I maintain that it had to be said. Starting at $799 configurations, how will it stack up against competition from Lenovo, Toshiba, and others? Let's see.

I spent a week with the 13.3-inch ProBook and found that overall, it's a very well-made little beast. Under the hood, you'll find a 2.5 GHz Core i5 processor, 4GB of RAM, integrated Intel HD 3000 graphics, a 500GB 7,200-rpm drive, and Windows 7 Professional.

Read more…



The Google/Slide Quiet Launches Continue With Prizes — Social Contests For Money

Posted: 03 Jul 2011 11:38 PM PDT

The Slide group within Google has been busy. Disco, the group messaging app, quietly launched back in March. Then last week, Pool Party, a group mobile photo service entered into private beta. And today the team is back again with Prizes, a service that apparently aims to link up people with a problem to those with a solution — for money.

Found at Prizes.org (which DotWeekly reported that Google secured back in April for Slide), Prizes is still in beta testing. But it is available for the public to use right now — though contest creation is still invite-only. You simply sign up with Facebook or Twitter (no Google options) and you’re ready to go.

Once you sign up, you’ll be presented with a stream of activities you can do — such as creating a soul mixtape — for money. You can follow any of these contests, or drill down into them for more information. And you can submit entries (solutions) for each contest.

Each contest has a time limit for completion. And they can get votes from other users. Users of Prizes can also get messages from other users, and get notifications for the contests they’re following.

The money aspect is currently only open to users with a “credit history”, meaning users have participated in contests in the past or created their own. The transactions are handled through PayPal (again, not a Google service — Checkout).

The idea is fairly compelling, though as usual, you’ll be hard-pressed to find any mention of Slide or Google anywhere on the site. You have to drill into the TOS to find that Slide, by way of Google, is behind the service. Given the lack of Google integration, it seems that this is yet another example of Google giving the Slide team free reign to do as they wish within the company. I mean, they’re really pushing the Facebook Connect integration. Interesting.



Will Our Grandchildren Be Asking What The Heck Facebook Was Someday?

Posted: 03 Jul 2011 10:02 PM PDT

Despite Facebook’s relative lag in its embracing of the music industry, music videos and Facebook seem to be like a thing. The latest and most mainstream of examples is the treacly sweet “Unfriend You” by Greyson Chance, a Bieber-a-like who was fittingly discovered on YouTube.

The most jarring thing about the song? Chance’s normalized and emotional use of the coined term “Unfriend” as a verb.

Seriously through, teenage angst is different now; When I was thirteen I would stay at home, glued by my pink and purple plastic phone (I had coveted second line IN MY ROOM) waiting for a boy to call. In the age of the iPhone, kids can just update their whereabouts on Twitter or Facebook, keeping track of relationships through who’s been Followed and Unfollowed, Friended and yes Unfriended. And don’t even get me started on the can of worms that is Facebook Relationship Status.

But, just as the iPhone has replaced second landlines (which were a big deal way back when), will something eventually replace Mr.Zuckerberg’s opus as the go to conduit for teen feelings? Popdust puts it best, “JT is already bringing MySpace back, so—gasp—will our eventual grandchildren be asking us what the heck something called Facebook was one day? That is not a world we want to think about.”

And I heard, as it were, the noise of thunder …



Social Studies

Posted: 03 Jul 2011 09:21 PM PDT

Opinions about Google’s new social initiative seem to be slowing down. The overall consensus is that Google has done some good work in avoiding where they have dropped the ball in previous efforts. Also some good work in creating a way to rapidly navigate through a series of people views. And a wonderful video tool that recalls the early days when we all gathered around campfires to shoot the breeze.

The early threads are predictably self-referential, just as they have been for each new startup service at this point in the cycle. With Twitter, I lurked for months until the realtime communications bus provided an opening for Friendfeed. Still in that phase with Foursquare, which joins other iOS apps on the push notification bus as what effectively is one service to me. Facebook is mostly an email notification service

Tracking the Google rollout has been surprisingly easy with Twitter. I keep thinking there are some hidden wells of information in the Circles comment stream, but for the most part the value remains at the post or share level. Techmeme absorbed the punch by Saturday night of the holiday weekend. Some conclusions based on this early data:

  1. Hangouts will be successful but immediately cloned by Facebook + Skype this week. This will drive the price close to zero, with advertising and gamification providing the revenue support for consumer services.
  2. Google will have to bite the bullet and open up to iOS. Blaming the AppStore will work only until the service expands beyond the first wave; after that an HTML 5 version will have to suffice for all but push notifications. With iOS 5 shipping in two months, no time to play Android marketing games.
  3. Google has ironically put themselves in the position of being a giant beta test for Microsoft to ponder as they try and finesse the collapse of Office. Much to be gleaned from Google’s tip-toeing around Gmail and its failure to integrate social, but Microsoft won’t listen.
  4. Twitter retains control of the @mention cloud, which has no parallel implementation in Circles besides its use of the syntax. As Ray Wang asks, where’s the Venn diagram tool?
  5. Where is the developer incentive to build on top of this? Android, of course, but if so much of the API strategy is yet to be obvious then why did they ship this now instead of waiting?
  6. To answer the last question, because apparently Google sees some competitive reason, or to put it another way, weakness in its roadmap. No response to iTunes Match, Apple TV/AirPlay, Turntable, iPad, no-Flash momentum, FaceTime in Hangouts, etc. Meanwhile cross-mobile video chat is showing up in the AppStore.
  7. Why cut out the lion’s share of the tablet market when it’s the single biggest reason people are perceiving any kind of jump ball in social? If Larry Page is all over Circles et al then who’s minding the ChromeOS store? If 25% of bonuses are tied to social, how do the other 75% break down?
  8. Maybe 25% Android, 25% search, 15% Apps, and 10% Chrome. Probably sustainable while riding the social wave, but where is the disruptive energy flowing? Don’t forget that Gmail came out of an off-search pool of talent and resources. Soon we’ll be able to calculate the opportunity cost of this effort.
  9. Facebook and Twitter wouldn’t mind email going away, but Microsoft and Google would. Not good to have these teammates.
  10. I never used Twitter lists. I haven’t segmented Facebook into friend lists either. But even less do I want to microcast to segmented Circles. I enjoy testing the boundaries of what people will tolerate in a single stream, as you can certainly see on Techcrunch comments here. Something drove the adoption on Twitter not just in spite of 140 characters and a public stream but because of what kinds of streams it rewarded.

I’ve tried to avoid the use of the project’s name until now as an exercise in how to think about its elements. I’ve added people to just one Circle, Friends, in order to prepare for the moment when the signal to noise crosses the threshold where Twitter required new filter structures. With little incentive to post Sparks searches and fragmentation of sharing internal threads, I’m somewhat at the mercy of those who like the idea of explicitly controlling who reads what.

Yet I come out of the Plus underbrush with a good feeling about what Google has done for itself and its users. We’re a long way from the passion of the early days, the Fail Whale and the privacy rollbacks of Facebook, even the idea of winners and losers. Google + seems to understand in its DNA that it will thrive based on value, not on destruction of competitors’ perceived weakness. While some short term advantage may be gained from favoring the Google platform, the broader challenge is to expand the value of the entire realtime platform. I’m optimistic this will happen as driven by our adoption of the broader disruption.



Zuckerberg Surprised That People Are Surprised He’s On Google+

Posted: 03 Jul 2011 04:44 PM PDT

Facebook CEO Mark Zuckerberg joining Google+ was a major media event, with everyone from Forbes to The Daily Mail covering the fact that the founder established a Google+ profile, building Circles that include former Facebooker Dustin Moskovitz and current Facebook CTO Bret Taylor.

While many were doubtful that the real Zuckerberg would join a competing social service, tech blogger Robert Scoble texted Zuckerberg himself to confirm, tweeting out “Name drop moment. Zuckerberg just texted me back. Says “Why are people so surprised that I’d have a Google account?”

In case anyone is still doubting that it is the real Zuck on there, Scoble tells me that Zuckerberg indeed meant Google+ account when he referred to Google account. But the real question is, why are people so surprised that Zuckerberg would chose to be on Google+?

Perhaps the answer lies in the precedent set by Google founders Larry Page and Sergey Brin, who seem to have shied away from interacting on Facebook as themselves. (According to Steven Levy, Brin is actually on Facebook as a pseudonym. Google Chairman Eric Schmidt is also rumored to be on the service, independently of when Mike impersonated him).

Page’s and Brin’s behavior aside, plenty of other founders (Myspace Tom for example) have shown that it’s perfectly normal to partake and enjoy competitive services, and that it shouldn’t necessarily be considered an act of espionage. I for one just hope Zuckerberg is more prolific on Google+ than he is on Twitter.


Robert Scoble
Name drop moment. Zuckerberg just texted me back. Says "Why are people so surprised that I'd have a Google account?"


(Founder Stories) MakerBot’s Bre Pettis: “We Started With 3 Guys, A Laser Cutter, And A Dream”

Posted: 03 Jul 2011 10:19 AM PDT

So let's talk a little bit about running this business.

Right.

This is your first startup.

Yeah.

You know, what I guess. Just generally what kind of what have you found to be the key challenges? Is it edging? You're one of the few companies we talked to here that is a hardware start-up. I think the particular challenge is there like don't like you to do stuff in China. That kind of things.

Yeah.

So first, what surprise you the most? Has it been difficult? Has it been easy?

I mean, the thing that surprised me the most in the beginning was that everything isn't online especially in manufacturing. Like most of the manufacturing is still a catalogue and phone call and fax machine infrastructure.
So in order to get things, we place a purchase order. But that doesn't mean they're coming when they say they're coming.

You have to call them, and check up on them, and the whole like when we ran out of motors, we bought all of them in the world, we went to buy more and you like get them all. And so you have to figure out how do I get motors manufactured and custom made for us. In terms of hardware that's kind of been, a bunch the challenges.

That's just sort of when you're used to the internet world and everything that is accessible and everything you just endlessly create new stuff and just surprisingly, you know, old fashioned in that way.

It's nice when, you know, I mean we have a website startup with Thingiverse as well. And if we need more room, we just roll out more servers, that's great.

When you scale in hardware, you cannot just roll out more.

Ya Its a different game.

Ya.

My friend who, i think you know Eric Palin, who did, he wasmy partner, kind of collected. He started with the dental technology company. I remember when it was like, nerve wracking for him because it with software you do a build, and your next day you try it out, and if it's broken, you fix it.

Yeah.

And the next day it's fixed. Whereas, he would send off these cameras to be built and would have to wait six months. And if there was a mistake, you know, meanwhile you're spending money, and paying employees, and all the pressures of a start up. But, to have a six-month turnaround time, and then one little thing is off, you know, it's just a whole different game, is what I understand.

Yeah.

And, I think its sometimes hard for us software people to fully grok how different it is.

It's like, one of the things we're facing right now is we have a four week lead time on make. If you order it will take up to four weeks to ship. And it kind of vacillates between being same day shipping and four week shipping depending on the supply chain, and how the stars are aligned, getting all the parts at the same time.

Because you need every single part and so if just one part is missing then it takes four weeks and OK, so.

Yeah, so this, it's in the world of atoms and things. obstacles, like shipping, and like right now Canada, the postal service shut down. You cannot ship anything in Canada right now.

You didn't ship anything. They're on strike.

They're on strike, yeah. And so like, okay, nothing we can do about that. But we have boxes in the air going there, and there's people who can't order from us.

And what about dealing with like DC who has everything you source from Asia and things, right?

So we have a bunch right now in laser part actually are done in Philly with American plywood and then we have all the dry system components, the rods, and the pullies, and the belts are all of the Long Island, STPSI. And then electronics in the motor are of China because that's where we get those things today in the world.

I see and do you have to go over and have someone over there like, sourcing these things or or do you just look up in a catalog, and.

We didn't.
And I wish we had done that earlier.

You'd go over, and just go over to sort things out. 'Cause in dealing with the electronics, it's all about, in dealing with Asia in general, it's about relationship. And so, going over there and getting to know folks and, you know, I send my co-founder Zach over there and he goes over there. He can get so much more done in just a day of being there than like six weeks of back and forth over e-mail and phone, you know.

Yeah, interesting.

And he can solve problems just by going out and drinking with somebody and try that for an evening that we can't do here.

I see. Interesting. So what else they can in terms of, you know. How many people do you have now?

We are 33 now.

So, have you found like, just you know, growing and managing 33 people to be a challenge. I mean, this is all you know coming from being a puppeteer and a teacher, I guess you're managing.

There's actually just as many students as I have in the classroom and we're, it's interesting I think at about 20 people, we started really needing more infrastructure to kind of like organize. It wasn't, not everybody could interface with everybody and now.

Yeah.

Now at 33 we need to.

You talk to middle management that essentially like...

I mean yeah.

...you need layers.

We need layers so that we can make things happen. And, it's a, it's a shift what kind of start you go through.

Has that been.... so has that been interesting for you or...?

Yeah, I mean part of this is also just like space, like getting space for people because we're like... a productionist, we have a, we have a 5,000 square foot space in Brooklyn and it's production and people. And then like production keeps growing and people keep growing and so. Actually just got a space around the corner which I thought was just going to be like a workshop space for us to have, like a showroom.

But, now it's like, everybody's asking, "Can I have a desk over there?"

Yeah.

As Bre Pettis continues his conversation with Founder Stories host, Chris Dixon, the two discuss the challenges of running a business that literally requires nuts and bolts assembly. In this situation, scaling brings a whole new set of challenges unfamiliar to many software start-ups.

Hardware is just a different game.  For example, as Pettis tells it, “we ran out of motors, we bought all of them in the world, we went to buy more and they were like you’ve got them all. And so we had to figure out how to like get motors manufactured and custom made for us. So in terms of hardware that’s kind of been a bunch of the challenges.”

Dixon admits, sometimes it is “hard for us software people to grok how different it is.”  (Disclosure: Dixon is an investor in Makerbot through Founder Collective).

And when the times get tough, the tough go to China.  Make sure to listen to the entire exchange as Pettis also talks about the importance of face-to-face interaction as a greaser for getting stuff done.

Below, Pettis talks about how Makerbot got off the ground.  ”We started with 3 guys, a laser cutter, and a dream,” he says.

Dixon inquires about copycats who might take on the MakerBot concept and in doing so turn MakerBot into a shadow of its former self.  Pettis seems anything but concerned and partially responds by saying, “we’ve got a brand, I don’t know exactly how to quantify that, but you know, when you think about 3D printing, you’re makerbotting, and that’s powerful.”

The two go on and discuss Makerbot’s open source platform, hacking on the site and the flow of cash coming into the company.

Make sure to watch Part I here and past Founder Stories episodes here.

So, like one of the things that, if you talk to like, venture capitalists about hardware companies like yours, is one, they worry that if you're successful that people in Asia, for example, will just copy you and make it a lot cheaper and that will, you know, obviously hurt your business. Do you worry about that?

You know, it's one of those things where, that will actually happens in every business. If you're doing something awesome people will try and copy it and make it happen. And...

But in some businesses,
you know like Facebook has network effects, right? So like, you know, there's you know, the fact that their social graph is so hard to replicate gives them protection from people copying. And like...

Yes.

There's different things that give companies defensibility, right? And in hardware, what we've got is, we've got an awesome support team that's...We've got like, we just made that 4 people who are just dedicated to helping people print, and make their machines work, and make them happy. And then we've got an awesome community of 5000 people who are just awesome and actually get together, like locally to do stuff.

And then, we've got a brand, I don't know exactly how to quantify that, but you know, when you think about 3D printing, you're makerbotting, and that's powerful. So somebody could come out with - we're actually open source so you could actually come out with an exact replica. Not without our name.

Our name is trademarked.

So the hardware is open source?

The hardware is open source too, so. And the way you stay ahead of that is by innovating.

Does that mean you actually just publish all of the hardware specs?

Yep. All the design files, the board schematics.

Interesting, OK.

And that makes it easy. That gives our users this amazing power to know what they've got.

Do people hack on it?

Absolutely. It's like, somebody just this week made a whole contraption that has a robotic arm and he like runs - the whole machine is automatic. Like normally you have to reach in and take the part out. This thing like, he literally can remotely go into his computer, choose something that print the robotic arm, takes the SD card out of the makerbot, sticks in the computer Then when it's done putting on the SD card, it takes it out, sticks it back in the maker bot, clicks Go - and, like, you can only do that because it's open.

I see, and if you actually had people do things, hack things on the open thing that you've then incorporated that into the main product?

Yes, our software is probably the best place where that happens. There's like eight people right now who are hacking on the software, making it do what they want. And when they improve something, it improves it for everybody.

Do you have to supervise or you just let them do whatever they want? In other words, you need to make sure what they're doing is improving the core product, right? Or do you just know them well enough to trust them. Anybody can branch it and do whatever they want. Actually, Adam, my co-founder, who's in charge of the software, one of the things he shifted mainly most from is like he used to be the one writing all the software.

A lot of what he does now is, like, incorporating all these new parts to the software including community support. And so what...? And like these people hacking on the software, like, what kind of stuff are they hacking on? Like these, the algorithm we were talking before, about the...

Yes.

...what's it called skining? Which is how the path, the tool path, is that right, or...?

Yes. Somebody made it so that the bot would Twitter when its done, and would say like, "I just finished making this."

I see.

It's funny, when they started that they had actually Twittered it every single layer, so it actually spammed the hashtag for like 500 layers.

OK.

But, you know.

That's funny. Is this thing, so this thing's internet-connected? But you have to use SD cards?

It's not connected to the internet. You can...Well, that's one of the things we're looking forward to do, is networking, that'll be fun.

What do you think about, I mean, are guys, can you...? I don't if you think you can talk about it, do you like, make money, is it a good business?

Yes. I mean, we started with, yes, it was three guys, a laser cutter and a dream when we started. And we went to Jake Ladwick, who started Connect Ventures, Busted T's and Vimeo and all that. And we were like we're going to do this thing, and we need a little bit of money. And he gave us fifty k and actually Andrian Boyer of the rap rap project gave us twenty five k and we took that seventy five k and we like bought.

And bought enough for twenty maker bots and stuff that we can get and then its just been like selling that and flipping that over, flipping at over and making them go. So it's kind of unfair to call us profitable but we're basically profitable from day 42 and we keep trying to make more money than we spend and we make that line up pretty close so that if we make a little bit more money one month, the next month we'll hire another person because we just want to keep growing.


Yes, this hardware you have to have inventory cost, something like, that's capital intensive.

Yes, that's, it's interesting, like, you know we have to buy like, now we buy bolts by million. And it's not as much as you would think, it's only like this many bolts, to buy a million bolts, but.

Yeah.

Then we have that many million bolts, until we get down to, a few hundred, and then we order another million.

Mm-hm.

So that's one of the tricks of the hardware startup is scaling and getting things going. A lot of hardware companies started like in three years in warranty and development and we just did that all in three months and then just released what we had.

So it got a minimum viable product for hardware or something like that? The lean startup for hardware or something?

Yes.

<div><div><script src=”http://www.crunchbase.com/javascripts/widget.js” type=”text/javascript”></script><div><a href=”http://www.crunchbase.com/” rel=”nofollow”>CrunchBase Information</a></div></div><div><div><a href=”http://www.crunchbase.com/company/makerbot”>MakerBot</a></div><div><script src=”http://www.crunchbase.com/cbw/company/makerbot.js” type=”text/javascript”></script></div><div><a href=”http://www.crunchbase.com/person/bre-pettis”>Bre Pettis</a></div><div><script src=”http://www.crunchbase.com/cbw/person/bre-pettis.js” type=”text/javascript”></script></div><div><a href=”http://www.crunchbase.com/person/chris-dixon”>Chris Dixon</a></div><div><script src=”http://www.crunchbase.com/cbw/person/chris-dixon.js” type=”text/javascript”></script></div><div>Information provided by <a href=”http://www.crunchbase.com/” rel=”nofollow”>CrunchBase</a></div></div></div>



The Power Of Pull

Posted: 03 Jul 2011 09:08 AM PDT

Editor's note: This post was written by Alex Rampell, the CEO of TrialPay. Rampell is a regular contributor to TechCrunch – see his previous guest posts here.

What makes email, Facebook, and Google so valuable? Answer: Visiting them is largely unprompted, notwithstanding the synapses that fire in your brain that make you check your email, your Facebook feed, or decide to research something on Google. In other words, people pull content themselves, rather than having that content be pushed — or foisted — upon them.

The best way of looking at consumer web applications is as a complex stack of "pulls" and "pushes." Lest these terms be confused with an earlier generation of push: a "pull" is an unsolicited action by a consumer, whereas a "push" is a solicitation by a seller/producer.  The consumer ultimately "pulls" from a mobile phone or computer. Everything else is "pushed" to the consumer, through ads, e-mails or other marketing efforts from companies eager to get business and traffic.

The greatest trick that Facebook ever "pulled" was transforming itself from a push platform (dependent on email to woo users back) into a de facto pull platform.  Facebook touts that 50%+ of its users log-in every day, and my guess is that the vast majority do so with no prompting. Push is still valuable but simply complements the massive pull that Facebook has developed.

Why is Pull so essential for a web company? The intersecting forces of human psychology and economics.

First, psychology: consider how most people hate being “sold” to. “Being sold to” is a form of push. Consumers get hundreds of unsolicited offers and emails pushed to them every week. They learn to tune these solicitations out, especially if they are not in a buying mindset. Relevance is a function of offer-consumer fit paramaterized by time.

Second, economics: A pull platform doesn’t need to spend any money to reach or acquire customers; a push platform does. Facebook’s marketing spend per user has to be the lowest of any company known to man. Granted, Facebook is intrinsically viral and laden with network effects, but the unprompted pull phenomenon has been crucial to Facebook’s dominance.

The value of pull is not just for consumer companies. Any Business-to-Business company knows the value of “demand generation”: catalyzing a “pull” by customers. The quickest and cheapest sales cycles start with a pull by the prospective customer.

For any web company, fostering Pull is essential to creating value and engagement.  There is no shortage of great applications and amazing technologies which stagnate due to a lack of pull.  But the greatest economic achievement of being a "pull" platform is in becoming the mechanism by which "push" companies must engage with audiences, paying handsomely to do so. This expectation is why a company like Twitter can be valued in the billions with minimal revenue.

Here are some ways of thinking about fostering pull:

Plan Around Events

Groupon Now is Groupon’s attempt to add Pull to its traditionally Push service. I want to eat, where do I go? Groupon. Every human desire has a natural pull tendency. Being the "first responder" to a human desire is incredibly valuable.

Find Offline Analogies

Most forms of pull fit a predefined social pattern, per the comment on "human desire" above. Before Google, people used phone books (unprompted) to find services. Before email, people would check their postal mailbox, generally at a given time (after the mail was delivered).

Answer Recurring Questions

There are certain types of content that consumers will invariably pull (or want pushed to them). These types of content generally answer recurring questions of a consumer. How much did I spend Receipts, bank websites)?  Where am I going (Google Maps)?  How do I get there (Kayak)? What's wrong with me (webMD)?

Build Brand and Familiarity

Once one of the above is satisfied, brand and credential storage foster pull. A frictionless and "known" experience catalyze pull for transactional activities. While Amazon, as the largest spender on Google, does a fair amount of push, they also benefit from a tremendous amount of pull when consumers decide to shop. This is a combination of the brand but also their accumulation of user/payment credentials.

There is no substitute for pull in establishing success for a web company; the key is producing something sufficiently valuable in repeat interactions. Reid Hoffman has noted that "social networks do best when they tap into one of the seven deadly sins." It's no coincidence that people have, unprompted, "pulled" those sins since the dawn of humanity.

Image: thisisboss



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