- Stock Photography Service Shutterstock Files For IPO, Plans To Raise Up To $115 Million
- Refer.ly Lets Regular Folks Earn Affiliate Revenue For Recommending Products They Love
- Exec Goes Out To The Ball Game, Will Deliver Hot Dogs And Stuff To Lazy Giants Fans
- Doccaster Debuts A Platform For Location-Based File Sharing And Discussion
- Techies: Got Questions For SF Mayor Ed Lee? Join Him (And Me) On Google+
- Former Best Buy CEO’s “Extremely Close” Relationship With Employee Leads To Boardroom Shakeup
- With Smartphone-Assisted Shopping, How You Shop Depends On Where You Shop
- Apple Poised To Keep The “Pro” In MacBook Pro, Says Rumor
- One Year Post-Launch, E La Carte Has Put 20,000 Of Its Tablets In 600 Restaurants Worldwide
- Goodbye, Exynos: Benchmark Points To Dual-Core Processor For Verizon’s Galaxy S III
- SaaS For SMBs: InsightSquared Picks Up $4.5M From Atlas, Bessemer, Salesforce and NextView
- How To Appeal To Investors: Top VCs Reveal The Anatomy Of A Successful Entrepreneur
- Kickstarter Exposes 70,000 Unlaunched Projects
- ITU: There Are Now Over 1 Billion Users Of Social Media Worldwide, Most On Mobile
- NTT Docomo Will Pay Up To $300M To Buy Italian Mobile Content Company Buongiorno
- Zynga Picks Up Mobile Gaming Startup Wild Needle In A Talent Deal
- Qmerce Brings Brand-Customizable Social Games to Facebook
- Europe’s ‘OpenTable’, Livebookings Eats Up Another $24M From Balderton, Wellington, Ekstranda
- Companion Is The New Assistant
- How To Raise A $1M Seed Round
Posted: 14 May 2012 09:25 AM PDT
The online stock photography service Shutterstock filed its plans for an initial public offering today. The company plans to list its stock on the New York Stock Exchange. The number of shares to be offered and the price range for the offering haven’t been decided yet, but the company’s S-1 filing with the Securities and Exchange Commission (SEC) notes that it plans to raise around $115 million through this IPO. That’s the number Shutterstock used to estimate its filing fees with the SEC, though, so the actual size of the IPO could still turn out to be different.
Shutterstock reported revenue of $120 million in 2011 and a profit of just under $21.9 million. Shutterstock was founded in 2003 by Jonathan Oringer, who is still the company’s CEO. The company has received venture backing from Insight Venture Partners and Oringer’s own Pixel Holdings Inc.
According to its S-1 filing, Shutterstock currently offers one of the largest content libraries in the commercial digital imagery industry with over 19 million photographs and illustrations and about 500,000 videos from more than 35,000 contributors. In 2011, the company delivered more than 58 million paid downloads. The average cost per image on the site in 2011 was around $3. Shutterstock says that it had more than 550,000 paying customers in 2011.
Shutterstock competes directly with other online stock photography services like iStockphoto and Fotalia, as well as more traditional services like Corbis and Getty Images. The company offers both subscriptions plans that give its users access to a set amount of images per day, as well as the ability to buy rights to individual images and videos in its collection.
You can read the company’s complete S-1 filing here.
Posted: 14 May 2012 09:03 AM PDT
Danielle Morrill’s been thinking about this idea for at least three years. I know this because it was almost all she could talk for an hour straight at a dinner party several years ago.
If you’re an entrepreneur and you get bit with an idea, you just can’t shake it. And so, after several years of apprenticing at building companies like Twilio, Morrill is finally striking out on her own with Refer.ly, a concept that’s been admitted to the next Y Combinator class.
What’s the idea? On the web, there’s a whole secret $3 billion world of affiliate commerce where large online stores like Amazon reward other companies or people for referring them customers. Regular people don’t really have a part in this, so Morrill’s company Refer.ly gives them access.
At Refer.ly, you can go and create special links that track whether you’re driving sales to other sites. If a recommendation does end up with a friend or family member making a purchase, you’ll earn a small commission (which usually ranges from a few percent to 10 percent depending on the product). If you make more than $10, you can take it out, donate it charity or share it with friends.
“The entire internet is monetized this way and people are often getting monetized without them even knowing it,” Morrill said. “Any site that has a ‘Buy’ button has an affiliate program. But it’s hard to become an affiliate. The process for signing up is pretty long.”
She’s calling Refer.ly an ‘affiliate-for-everyone’ concept. It’s a basic product for now. Only the direct referrer earns the affiliate fee. So if you share a link and a friend of a friend of a friend ends up buying the product, you’ll be the only one earning the commission. She’s also giving up the entire affiliate fee to Refer.ly’s users for now. So the company’s not taking a cut.
Morrill built a lot of the initial prototype herself. What’s impressive is her determination. She didn’t go to college and didn’t really see a need for it. But she knew that she wanted to be an entrepreneur. I guess you could say that she’s spent several years studying the art of building companies. She worked at one startup that was just too early for its time. Pelago made an early location-sharing app called Whrrl, but it didn’t have a ton of traction competing against media darling Foursquare. It went to Groupon in a talent acquisition.
But a solid hit followed soon after. Morrill was the first non-founding employee to join Twilio, the company that lets developers hack and build applications using voice-over-IP, SMS and regular phone numbers. The company supports more than 30,000 developers and has raised more than $33 million in several venture rounds from Union Square Ventures and Bessemer Venture Partners.
While leading marketing there, she taught herself how to code. “I’ve been surrounded by marketers and technical product managers for years,” she said. “I had to learn how to build things myself.”
With Twilio CEO Jeff Lawson’s blessing, she stepped down to pursue her own idea. She recruited her husband Kevin Morrill, another co-founder Al Abut along with an engineer and a marketing specialist. Lawson’s an angel in the company and so is 500 Startups’ Dave McClure.
There are, of course, a lot of questions. Will a few dollars in affiliate revenue motivate people enough to use Refer.ly? Don’t we just share products with friends and family because we genuinely love to help other people out?
Morrill said she doesn’t expect Refer.ly users to make a living off the product. She’s just launching today to see how the market responds.
“We’re at the beginning of YC, so I want to find out what people want now. It’s really risky to wait a couple weeks,” she said.
Indeed. Move fast, and break things early.
Posted: 14 May 2012 09:00 AM PDT
If you’re like me, the worst part about going to a baseball game — other than watching your team lose — is having to deal with lines at the concession stands. You end up missing at least half an inning wandering throughout the ballpark trying to find the stand you want. And once you do, you inevitably find yourself behind the one person who somehow doesn’t know whether he wants a hot dog or popcorn, and has waited until he gets to the very front of the line before beginning to contemplate this oh-so-important decision.
Anyway, no more of that — at least for this week, if you happen to be in San Francisco and plan to attend one of the many games that the homefield Giants will play against the Colorado Rockies, the St. Louis Cardinals, or the Oakland A’s. Starting Monday, May 14 and extending through Sunday, “Uber for odd jobs” startup Exec will have some of its people in the stands of AT&T Park, ready and waiting to pick up and deliver food goods for fans too lazy or too enthralled with the game to do it themselves. All those users have to do is open up the Exec app, tell it what they want and where they’re sitting, and an exec assistant will be dispatched to fetch that food for them.
But before you start placing orders, be sure to read the fine print: deliveries in the ballpark will have the same usual $25/hour fare as other Exec tasks, and there’s a minimum 45-minute charge. In other words, you’ll be spending a minimum of $18.75 no matter what you order, so you better make it worth it. Order yourself some Orlando’s BBQ, maybe a Crazy Crab sandwich, and make sure to get some Gilroy’s garlic fries. Oh, and stock up on beer.
The AT&T Park campaign is the latest stunt by the Exec team to test out different scenarios and use cases, and to get users more familiar with the app. According to founder Justin Kan, the biggest hurdle isn’t getting downloads and installs of the new app — it’s getting those who have downloaded to use Exec for the first time. So educating users on practical applications of the app, and showing them how easy it is to use, will be tantamount to the future success of the service.
Last month, Exec allowed users to rent time and chat with various startup founders, with the proceeds going to charity. And it began a program in March through which companies can buy credits for their employees to use the service.
Posted: 14 May 2012 08:59 AM PDT
Doccaster wants to disrupt document-sharing, but it’s attacking the space from a new angle: it’s not just about storing files in the “cloud,” it’s about tying files to a location. The company is launching a beta version of its web-based utility today that lets users upload then broadcast any number of files. Those files immediately become available to anyone within a 15-mile radius and can be searched for either by proximity or by a Doccaster ID (similar to a Twitter ID).
The bootstrapped, Orlando-based startup spun out of a previous effort called Gotootie, which was an early player in the location-based chat scene launched back in 2010. Still convinced of the potential in the location-based space, co-founders Kyle Steele (CEO) and Himanshu Pagey (CTO), who met while at the University of Central Florida, have now narrowed their focus to document sharing and discussion, with a specific emphasis on the convention space.
After having spent time talking to participants and organizers, the team wanted to find a solution to many of the problems with printed literature, including not just the cost of printing documents, but the chaotic and messy nature of their distribution, the environmental impact, and the lack of analytics for documents around things like views, shares, and comments. Doccaster tracks all those metrics, enabling companies to see the views, demographics and conversations around their files uploaded to the platform.
Interestingly, the document discussion aspect is tied to the location, too. Only those in or near the venue can join in, which makes the product different than an online office suite or cloud storage company. For now, Doccaster supports viewing, downloading, and bookmarking files, but Steele tells me the plan is to add integrations with other online storage services, so you could push the files shared in Doccaster to your Dropbox, Google Drive, Amazon Cloud Drive, or Box, for example.
The introduction of the Doccaster ID is another element that conference participants can use to make their files more easily available. Instead of having to search through all the files at that location, you can put in a company’s ID to pull up just their shared files.
During its beta, Doccaster will remain free, but at some point in the future, the plan is to transition to a freemium model built around document activity. Also in the works are mobile apps for iPhone, iPad and Android.
Interested users can sign up now, here, from web or mobile.
Posted: 14 May 2012 08:05 AM PDT
Over the past few months, San Francisco Mayor Ed Lee has become a familiar face at local startup events — whether it’s at the Crunchie Awards, the opening of Dropbox’s new office, or the NewMe Accelerator Demo Day, where he was interviewed by Colleen Taylor (to name a few). Now he’s offering the tech community a chance to weigh in on the city budget.
Mayor Lee has already held a number of town hall meetings to discuss the budget, but if you’re working startup hours, those can be hard to get to. So following the lead of President Obama, Mayor Lee is jumping on Google+ to get your perspective.
You may be thinking that a city budget meeting sounds yawn-worthy. Here’s the thing: If you live and work in San Francisco, as I do, then budget decisions can have a big impact on the services that you rely on. So this is your chance to be heard.
The Google+ Hangout will begin at noon Pacific today. You can watch a livestream of the Hangout on Google+ or YouTube. We’ll have live questions from members of The Hub, but I’ll also be taking questions and comments via Twitter. You can weigh in about the budget, about how the city works with the tech community, and anything else. Just use the hashtag #ASKMEL.
Posted: 14 May 2012 07:52 AM PDT
When former Best Buy CEO Brian Dunn resigned after announcing a dramatic restructuring of the company’s retail operations, it looked like a reaction to the company’s recent financial woes.
The timing of Dunn’s resignation provided him with ample cover — his announcement coming just days after Best Buy posted disappointing earnings, and revealed plans to shutter 50 of their big-box locations.
Still, that didn’t stop the press from digging around, and it wasn’t long before Best Buy revealed that Dunn left just prior to the completion of an independent investigation of his “extremely close personal relationship” with a female employee. The results of that investigation were revealed today, and they have prompted company founder Richard Schulze to give up his role as company chairman.
The company’s internal investigation found that Schulze had acted inappropriately for not bringing the allegations of Dunn’s relationship to the board’s Audit Committee. For that, Schulze will be relinquishing his role as chairman on June 21, which will soon be filled by longstanding director (and Audit Committee head) Hatim Tyabji.
And what of Mr. Dunn?
Shortly after the news broke, the company was concerned that Dunn had misused Best Buy’s resources during the course of his extra-marital fling. WilmerHale, the law firm that conducted the investigation by poring though emails between Dunn and the female employee, expense reports, personnel records, and company phone records, could find no evidence that misuse of resources (including company aircraft) had taken place. Despite that, Dunn still violated company policy by engaging in said relationship, demonstrating “extremely poor judgment” in the process.
He still managed to walk away with quite a bit though — take a peek at his severance package:
It’s not quite as much as the $10 million he earned in 2010, but methinks he won’t be hurting too much for the time being.
Posted: 14 May 2012 07:47 AM PDT
This morning, Nielsen is putting hard numbers to how consumers like to shop with their smartphones, backing up trends we already suspected to be the case. In particular, the new report examines how consumers use their phones when shopping out there in the real world (what’s that?) – using phones to compare prices, scan barcodes and even redeem coupons. Not surprisingly, how you use your phone has a lot to do with where you’re shopping and what you’re shopping for, says Nielsen.
The trends are sort of obvious, but there are some interesting bits to be pulled out of the data.
For starters, mobile coupons are most popular at grocery stores, (41% of mobile shoppers said they used coupons there), department stores (41%), and clothing stores (39%). At electronics stores, the majority (73%) read reviews, compare prices (71%), and scan QR codes (57%).
It seems the higher the purchase price, the more likely it is that users will whip out their phone to shop around. Or perhaps electronics buyers are just a bit more smartphone-savvy than the rest, happily scanning QR codes and the like? Something notable here, perhaps – assuming that, for many of these shoppers, price is the reason for the extra research, it initially seems somewhat odd that furniture shoppers don’t do the same. Only 19% read reviews, and a paltry 5% scan a QR code. And yet, their big-ticket purchases often cost more than a new HDTV. Why is that?
Well, besides the fact that furniture is a more personal purchase, like clothing, it’s mainly because the exact same Ethan Allen sofa isn’t going to be found at a Ashley store for less. But it would be interesting if there were apps that could scan a furniture barcode or “see” a photo you snap then show you similar sofas at nearby stores or online as well as their prices. (Is someone building that? Because I’d use it today. I hate my sofa.) Unless you’re not in the income bracket where cost is not a concern, this seems to be an unfilled niche. One of the top reasons why people don’t buy furniture they fall in love with is because they feel the need to shop around.
Back to the report. It’s not surprising to see minimal usage of the various smartphone technologies at fast-service or low-ticket item stores like convenience stores, dollar stores and office supplies stores, but it’s somewhat interesting to see moderate use at mass merchandisers (Walmart, Costo, etc.). Even though those stores appeal to users because of their low prices, it’s apparent that not all shoppers are convinced that they’re getting the best deal: 34% read reviews and 31% scan QR codes at these outlets. Given the right pricing on the right products, it seems department stores, electronics retailers and online shops can woo customers from the Walmart-sized chains, when it comes to higher priced goods. With brick-and-mortar stores turning into Amazon’s showroom, it’s more important than ever that merchants offer in-store shoppers some other advantage besides low prices. Expect the new crop of customer loyalty startups to have a big role in framing what that advantage might be.
Posted: 14 May 2012 07:25 AM PDT
If the rumors pan out, Apple’s next MacBook Pro line will set the notebook world ablaze with a thinner chassis, USB 3.0 and a 15-inch high-resolution, so-called retina display. Of course it would pack the latest Intel silicon with rumors and logic pointing to an Ivy Bridge chipset. Sounding a different from the long-rumored 15-inch MacBook Air, this model, if it really exists, seems appropriately equipped with impressive hardware to retain the Pro designation and lead Apple’s charge against the onslaught of so-called Ultrabooks.
The current MacBook Pro has undergone very little cosmetic change since its introduction in 2006. And for good reason, too. It’s a good-looking machine and try as they might, other notebook manufacturers have yet been able to replicate its sex appeal. In fact, according to 9to5mac’s report, the next version would not be drastically different either. Reportedly, the next model will incorporate many familiar design cues albeit in a thinner chassis. The most notable changes seem to be the elimination of an optical drive and the power button moved to the top right of the keyboard.
Intel is in the early stages of rolling out its next generation of mobile chips, which Apple will likely use for the next version of the MacBook Pro. Codenamed Ivy Bridge, these chips boost improved performance, better battery performance, and come with native support for both USB 3.0 and Thunderbolt connectivity. Interestingly enough, 9to5mac states that the next MBP will use several of both interconnects although in the past Apple has seemingly ignored USB 3.0, instead championing Thunderbolt’s faster speeds and multi-protocol support. Still, USB 3.0 offers dramatically faster speeds than USB 2.0 and it’s completely backwards compatible to the older spec.
While a thinner chassis and improved computing performance are impressive enough, the next MBP is rumored to launch with a so-called retina display. 9to5mac doesn’t detail the screen’s resolution, but in order to fall into Apple’s own definition of a retina display — that is, a display that boost the maximum amount of detail the human eye can perceive at a somewhat arbitrary distance — the resolution would have to be insane by today’s standard. For example it would have to exceed (possibly by a factor of two) the new iPad’s 9.7-inch screen with a resolution of 2048 x 1536.
Today’s rumor peg the new model with a summer release. Best Buy is already slashing prices on its MacBook Pro inventory, somewhat signalling that new models are incoming. Pricing would likely be inline with current models although it wouldn’t be surprising to see the retina display positioned as a premium upgrade with lofty price.
The current MacBook Pro is in a desperate need of a weight loss regimen. As PC makers are utilizing Ultrabook design elements in full-size notebooks, Apple’s professional line is looking a little bloated in comparison. As an owner of a Core i7 15-inch model myself, I’ll admit to look longingly at coworkers rocking a featherlight MacBook Air. However, I love the larger screen and more I/O connections of the Pro line and am willing to put up with sub-two hour battery life and enough heat to fry an egg. Even if today’s rumors don’t pan out exactly to the letter, it’s a safe bet that Apple’s next MacBook Pro refresh will be something special in its own right — at least that’s what I’m telling myself as my 15-inch MBP is currently cooking my thighs.
[image via applemacbook.com]
Posted: 14 May 2012 07:05 AM PDT
It’s been a year since E la Carte launched its customized tablet for restaurants, which brings menus, wine lists, nutritional info, play-while-you-wait games, and payment options tableside, and now the company has new numbers to reveal. This time last year, there were around 20 restaurants using the tablet; today there are now over 600, including national chains Pizzeria Venti and Umami Burger, as well as Faz Restaurant Group in the San Francisco Bay Area and Classic Restaurant Concepts in Boston. In total, there are around 20,000 tablets in 20 U.S. states, and seven countries worldwide.
The company, if you’re unfamiliar, makes a 7-inch tablet they call “Presto,” which includes a digital touchscreen menu with photos and detailed descriptions, plus games and a built-in credit card reader. The tablet is also ruggedized for heavy use, offers a 20-hour battery life, and whose usage is provided on a subscription basis.
According to founder Rajat Suri, the average usage is at 150,000 users (annually), and its adoption is increasing by 50% month-over-month. And the El la Carte team has grown, too, from 5 to 35 people over the past year.
“People sometimes think that restaurants are slow to move, but it turns out that once a few start to move, everyone else sees them and there’s a huge herd mentality,” says Suri. “If you’re a restaurant, how do differentiate yourself from the guy next door?, he asks. “People are looking at this and thinking ‘this is how I could improve the guest experience.’”
But it’s not just the guest experience that’s being improved, Suri says. The company also reports its restaurants are seeing a 10% higher check average, which, with restaurant’s tight margins, is a huge boost. Plus, table turn time is reduced by 7 minutes, as it takes 55 seconds to pay with the company’s “Presto” tablet compared with 8 minutes through the traditional process.
You would think that with tablets doing much of the wait staff’s job for them, there would be a decrease in tips – after all, the waiter is no longer taking the order, bringing you your check or, in the case of fine dining establishments, even suggesting the wine pairing for the meal. But, paradoxically, the opposite has proved true so far. Tips are up. This is mainly because restaurant owners can customize the tablet with suggested tip options which can be selected at the touch of a button. And it’s easier to push a button than figure out how to stiff your waiter.
In the near future (Q3), the Presto tablet platform, which is built on top of Linux, will include new ways to see nutritional information, so users can filter menus by diet (e.g. low calorie, low-carb, etc.) or by allergies (e.g. gluten-free). By the end of the year or early next year, E la Carte will introduce ways for bars and other more casual restaurants to incorporate social, restaurant-wide games like trivia which will work with in-house TVs to display the questions and leaderboards.
At the end of the day, Suri says his company’s goal is to put the Presto tablet on every restaurant table. “‘It’s not going to be trivial,” he says. “We’ll need to grow significantly, luckily we have great revenues to support that, and great demand from the marketplace.”
E la Carte has $5 million in funding, with a $4 million Series A led by Lightbank, as well as around $1 million from other angel investors.
Posted: 14 May 2012 06:48 AM PDT
Samsung confirmed well in advance of the Galaxy S III’s official announcement that their new flagship Android handset would sport the company’s new Exynos 4 Quad chipset, but it seems even clearer now that we Stateside phone geeks may have to live without it.
Droid-Life reported over the weekend that a benchmark entry for the Verizon-bound Samsung SCH-i535 appeared on Nenamark, and it seems to confirm rumors that Big Red’s Galaxy S III will indeed sport a dual-core Snapdragon S4 processor.
Nenamark’s site doesn’t specifically call out the Snapdragon S4 as the processor in question, but the evidence is nothing to sneeze at — the entry makes reference to the chipset’s 1.5GHz clock speed and the inclusion of the Adreno 225 GPU.
That means for all the nature-inspired polish that Samsung has poured into the device’s industrial design and UI, the Verizon-bound Galaxy S III could end up sharing the same brain as the similarly-modified HTC One X on AT&T. It’s not a bad thing, per se — I’d gladly give up a bit of horsepower if it meant that I got super-fast download speeds in exchange, but not everyone will be a fan of that trade-off.
Samsung Mobile head JK Shin noted onstage in London that a LTE-friendly version of the Galaxy S III would make its debut in the United States this summer, so there’s little doubt that more of these minor appearances will be discovered shortly.
One also has to wonder if this same hardware change is in the works for the rest of the carrier variants coming down the pipeline. Barring any peculiar last minute decisions, AT&T’s GSIII will almost certainly feature the same chipset given their history with One X, but T-Mobile remains a bit of a mystery. Their LTE network is nowhere near completion (CEO Philipp Humm continually pointed at 2013 during the carrier’s most recent earnings call), and their version of the Galaxy S II ended up sporting a different chipset than its cousins in order to play nice with T-Mobile’s 42Mbps HSPA+ signal.
Posted: 14 May 2012 06:36 AM PDT
As the software-as-a-service market continues to mature, there are companies emerging that are targeting specific sectors within the enterprise with solutions especially tailored and priced for them: the latest of these is InsightSquared, which has announced a Series A round of $4.5 million for its a business intelligence platform aimed specifically at small and medium-sized businesses.
The round was led by Atlas Venture, with participation also from NextView Ventures and new investors Bessemer Venture Partners and Salesforce.com. This brings total funding in the company since February 2011 to $5.5 million.
As part of the news, InsightSquared is also announcing that it is integrating with Salesforce for the latter company’s visualization services to be integrated into the service.
Other services included in InsightSquared fall firmly in the category of data analysis — typically the kind used by large enterprises and now becoming more affordable and accessible to smaller businesses, by way of the SaaS business model. They include activity tracking (dashboards to track activity from employees and clients in real-time, with trending options); sales forecasts; data quality monitoring (identifying, ranking and fixing data errors); ratios and KPIs; nightly emails; employee scorecards ranking each worker against his peers; tagging and filtering and integration with other data sources (eg voice tracking with M5 Networks); financial tracking and web tracking (with Google Analytics).
These services are offered in packages that begin at $99 per month, says the company.
The basic premise of InsightSquared is that data intelligence requirements for SMBs are different to those from larger enterprises — not just in terms of the kind of data that is covered, but in how the service is priced — because, as those who work with the SMB sector know, it is one of the most price-sensitive segments of all in the enterprise market.
"The requirements for making data intelligence useful to small and mid-sized businesses are much different than that of large enterprises," Fred Shilmover, co-founder and CEO of InsightSquared, said in a statement. "Our product is built with usability, data integrity and simple workflow as the central focuses. Consequently, our cost-benefit proposition for the SMB market is compelling."
Like its investor and partner Salesforce, InsightSquared is geared mainly at productivity and services around sales teams and those that are customer-facing in their businesses. Up to now, judging from the company’s publicly-disclosed customer list, it has made some inroads, through an integration with Bullhorn, into working with companies in the recruitment sector, with companies like Hireminds, Vertek, I-Technology and Hiregy among their customers.
Posted: 14 May 2012 06:10 AM PDT
There’s a lot of money floating around Silicon Valley right now, and it’s becoming easier and easier for entrepreneurs to get access to the capital they need to get their companies off the ground. Resources like AngelList are trying to level the playing field, and facilitate conversations between founder and investor, and the passage of the JOBS Act will alter the landscape for early-stage companies by giving them access to crowdfunding from the masses. There are even charity initiatives like the ones launched by Exec and Motion To Dismiss Cancer that give a select few access to top entrepreneurs and VCs.
At a very fundamental level, the venture capital business is being reshaped. As the Kauffman report points out, most VC funds aren’t generating more than the three to five percent return one finds in the public markets — the yield investors expect, the report finds. In fact, the report states "VC returns haven’t significantly outperformed the public market since the late '90s".
Speaking to a crowd at the Grind work space in New York last week, Fred Wilson addressed this ongoing shift, saying, “there's two times as much capital in the venture capital business today than we, the professional investors who make up the venture business, can actually put to work intelligently.”
This isn’t so good for VCs, Wilson says, but it is for entrepreneurs. Of course, the fact of the matter is that the top VC firms, super angels, and angel investors have unparalleled deal flow, they see hundreds, sometimes thousands of pitches, are privy to information few outside very small circles ever get to see. They are custodians of that equally valuable currency — information. As hard as the media and others work to reveal the goings-on behind the scenes, as Chris Dixon points out, most coverage doesn’t reveal 90 percent of the relevant information. This is true not just of funding announcements in tech publications, it’s true of panels at conferences, interviews, video, and more.
Sure, there are plenty of resources where entrepreneurs can go to learn more about VCs and top entrepreneurs, where they share their inside knowledge in order to enlighten and educate. And, in terms of funding, there are incubators, company builders, accelerators, VCs, crowdfunding, and more. But, in terms of how one should build a founding team, or how one should pursue business ideas to best serve innovation — change, inspiration, product-focus — all these just become buzzwords without context. Illuminating this stuff was part of the motivation that led Mike Arrington to start TechCrunch.
In this landscape, capital is readily available, and the noise is growing — and will continue to grow. Thus, it’s becoming even more essential to understand what it is about the anatomy of startups that makes them appealing to top investors, or, what is almost more valuable, why they fail.
If Dixon is right that incumbents fail because of ineptitude or irrelevance, is the same true for startups? Questions like this have led to the overwhelming interest in the Startup Genome Project, because a group of entrepreneurs eager set out to leverage the ever-growing piles of available data produced on/by early-stage companies in an effort to answer the most relevant questions to founders: What works, and why?
They are question that every entrepreneur, investor, and member of the media are (or should be) asking. “Why?” remains the most important question, or mantra, for founders, but it’s not always asked in the proper context.
This is the reason I became fascinated with a new book, called Venture Capitalists at Work, co-written by Tarang and Sheetal Shah. Rather than present anecdotal stories, gossip, or allowing vapid buzzwords win the day, the two set out to provide entrepreneurs with real insight into how some of the top investors in the game evaluate, invest in, and mentor their startups — information that can be extremely powerful if put to use correctly.
Tarang Shah is a former VC himself, having spent 4.5 years at SoftBank Capital, and he tells us that he wanted to leverage his connections in the VC world to offer a peek into knowledge that he says has thus far really remained in a “black box.”
The book is presented in an interview format, which makes it easy to digest, and starts with a foreword from Charles River Venture Partner George Zachary before going onto pick the brains of Sequoia Capital Partner Roelof Botha, FLOODGATE Managing Partner Mike Maples, Highland Capital Partners’ Sean Dalton, Rich Wong of Accel, Tim Draper, Howard Morgan, Gus Tai, David Lee, Steve Dietz, Ann Winblad, Eric Hippeau, and many others.
These interviews set out to answer three basic questions: Why do most start-ups fail, and what you can learn from these failures? Of those that do succeed, what is their secret sauce? And what are the main ingredients that VCs identify when funding startups?
Before jumping into the characteristics that were identified most consistently among the VCs he spoke to, Shah says that it’s important to address a few common misconceptions or “myths” that one hears a lot these days. First and foremost, there’s a perception that the top reason startups fail is because they fail to raise funding, or don’t raise enough. Startup Genome holds that, in fact, the main culprit is premature (or dysfunctional) scaling — in other words, a startup’s core operational categories (product, consumer team, finances, business model) are out of sync.
Shah agrees with this, but puts it a different way: Lack of (or insufficient) funding is not the cause of failure, but a byproduct. The real root of the problem is when startups fail to hit their key performance metrics, largely because one or multiple of the categories the Startup Genome team identifies are out of sync, are mismanaged, or are not developed properly.
Secondly, Shah points out that many believe that the best entrepreneurs look for funding when they need it, and only raise the amount they need. This, he says, is a myth. In truth, the best entrepreneurs are always fundraising, and always look to raise more than they need so that they aren’t forced to raise money at inopportune times.
The third venture funding myth Tarang sets forth in the book, which is especially relevant given the popularity of the lean startup psychology, is that it’s always better to, whenever possible, build a business without raising venture capital — or to raise as little as possible. Shah says that, on a whole, there are very few high tech models that lend themselves to successful (long-term) bootstrapping in today’s highly competitive market. “The best companies use funding to scale rapidly and own the market,” he says, “it’s not a tradeoff.”
Big, Bold Ideas
So these are important to keep in mind, but, in the end, what is it that VCs are looking for? Well, perhaps unsurprisingly for how much the word “disruptive” is thrown around and overused, Shah says that VCs love big, bold, and beautiful ideas. Consensus is your enemy, and entrepreneurs shouldn’t be afraid of being contrarian. Often, it ends up being those risky ideas that people end up believing in the most, becoming passionate about, and with big ideas, there can be room to maneuver to overcome short-term failures.
While some VCs are market-focused and others are entrepreneur-first, obviously if you want to build a billion-dollar company, you’re going to need both. But, when it comes to the entrepreneur, the common perception is that you need to be hyper intelligent, have a big ego, be a visionary, experimental, focused, and passionate. While these are all essential to the equation, Shah says the the traits that really matter most are authenticity, integrity, and motivation.
So, take “ego,” for example. While an entrepreneur has to have enough confidence and ego to be stalwart in the belief that the current products on the market aren’t good enough, and to be confident enough to pursue unconventional ideas and solutions, it’s all about balance. One’s ego has to be in-check enough to admit weaknesses, and be able to surround one’s self with a team of people that are smarter than they are, and can leverage their strengths where you can’t.
It’s not about whether or not you’ve started eight companies: “We do not look at serial entrepreneurship as a positive trait,” says Mike Maples. “We look at authenticity and unconventional, proprietary insight as the key difference.”
What’s more, there are way too many entrepreneurs today who get caught up in the drive to make money, to become the next Instagram, lusting after that billion-dollar valuation. But that’s not what turns on venture capitalists. “The key characteristic is the desire to solve a problem for the customer. That is the driving passion, not ‘I think this is going to be a billion-dollar company and I want to hop in because I can get rich,’” says Roelof Botha. “We're looking for people whose ideas get floated around. People who fight over the chance to work on solving a problem rather than passing the buck.”
Authenticity, Integrity, and Motivation
Money is not a sufficient motivator to overcome the ups-and-downs of the startup journey, Shah continues, instead entrepreneurs have to search for their true motivation and pursue problems that they feel genuinely passionate about. But, again, passion alone is not enough. Something that many entrepreneurs suffer from today is letting their ego take control — because they believe in their vision and their idea, they assume that the market is theirs and theirs alone.
In the media, although often guilty of revving the hype machine ourselves, we see this a lot, and it’s always a mark against. You’re never alone, unless, as Peter Thiel would say, you can adequately (and subtly) describe how you’ve created your own market. And there are few that have the brains, cojones, and creativity to do it — Stanford/Harvard MBA or not.
Part of the “authenticity,” which admittedly sounds like a buzzword, comes from experience and market analysis. But this is hard-won. Successful entrepreneurs aren’t just passionate about their idea, they have a product view that’s informed by Malcolm Gladwell’s 10K Hour Rule — they have deep experience that provides insights into the finer nuances of both the market and their target customer.
When we asked the co-founders of Lynda.com (which has made it to $70M in annual revenue without taking a dime from outside investors) what was the secret to their success, they kept coming back to the fact that it’s not about finding an exploitable, untapped niche (market opportunity), but being experts — and passionate ones at that. Putting in the time and effort required to really understand the market is what can separate the big successes from those that find themselves floundering into the deadpool.
In the rush to get funded, to scale, and ship, a lot of entrepreneurs lose sight of this, Shah says. And I am in full agreement. When Shah asked Mike Maples what made Twitter appealing for him early on — while many in the media were busy writing Twitter off — was the fact that Evan Williams had gained his “authenticity,” his experience and understanding of the market, from Blogger, informed his vision what micro-blogging could become.
Of course, the “authenticity” of one entrepreneur can’t do the job alone. The other key, as mentioned before, is a passionate disinterest (or an objectivity) that leads one to be able to surround them with the best people — to admit weaknesses and build the right team accordingly.
Shah found time and time again that one of the most overlooked parts of the process in building a company is those first 10 to 12 hires. The first handful of employees determine the “cultural DNA” of a company. While young companies without much capital may look to hire people that they can train on the job and can be molded into the right fit, Shah says that early employees need to hit the ground running, and make a difference right away.
That doesn’t mean that their functional skills have to be out-of-this world, as the key is to hire people that are right for your culture — people that have the same passion. And this is where that “integrity” is so important. Because, let’s be honest, the early stages of building a business are really tough. When no one knows your name, or your startup’s name, what convinces the best people to join and stay with you while things are tough is your character, your belief, and those you surround yourself with.
Solo co-founders just aren’t as successful as founding teams, Shah says, and those who hire co-founders that can hit the ground running tend to be the most successful. If you can reduce the dissonance inherent to a founding team by finding others that believe in the vision, personal chemistry can be worked on thereafter, if their personality and mindset is a good fit.
“I think what matters most is team culture and unit cohesion. I almost always in some ways recruit the personality type as much as functional skill,” says Rich Wong of Accel Partners in Venture Capitalists At Work. “I have a triangle in my head — functional skill, raw intelligence, personal turning radius. Smart, hard-working, and paranoid together kind of radiates raw horse power.”
Just last week, we talked about the war for top talent that’s currently being waged in the industry. It’s tough for young startups that haven’t yet closed those mega-million funding rounds to compete with the Facebooks of the world, which will always be able to offer more money, and more perks. But, if founders are willing to employ unconventional means to pursue top talent, sell the big idea for their business in an appealing and convincing way, they can win the battle for talent with creativity and by effectively wielding their integrity.
“One of the things about ‘A’ people is that they hire people smarter than themselves, and they are actively searching for people with other knowledge that they do not have,” says Howard Morgan of First Round Capital. “They are also passionate and persistent. They are willing to suffer through the setbacks which will come, and not see them as the end of the world.”
Objectivity & Adaptability
That’s why “Objectivity and adaptability” are part of those fundamental traits commonly identified in Venture Capitalists at Work as leading to success. It’s tough, but being passionately disinterested and brutally honest about everything that matters is key. In the book, Gus Tai talks about how it is essential for entrepreneurs to seek the truth, but not to be predisposed towards what they might find out. If it requires having to change direction quickly, throwing untold hours that have been spent on that one route, so be it.
This is where the final traits of the successful entrepreneur come in: Rapid iteration and pivoting. It’s essential for founding teams to operate at high RPMs, iterating on product ideas and pivoting until they find the right product-market fit. The key is always to have the big goal, the big problem in mind, and be laser focused on it, but to be flexible and willing to pivot from idea to idea until one finds the right solution. Those that fail are more often than not unwilling to let go of the original solution. The companies that have iterated and pivoted from earlier, less successful versions are too many to name, but Facebook, Chegg, Groupon, and Instagram have all done pretty well.
In talking to Shah about his experience speaking to countless founders and top investors across the U.S., that’s what struck me most. It’s that so many entrepreneurs think that when pitching VCs it’s all about the business model. That’s not to say that VCs don’t care about your business model or how you’re going to make money — far from it — it’s that they’re just as interested in how they tell the story.
For VCs, whomever is behind the business plan tells the real story. During partner meetings, when investors sit around that boardroom table, hearing entrepreneurs pitch their business, they’re just as interested in how the founder who’s responsible about the business plan demonstrates the knowledge of their customer. Investors, Shah says, want to hear about the whole bullpen — or pipeline of ideas — that founders can turn to should that original business plan fail to make the grade. They want to know that entrepreneurs have put the time and thought necessary into understanding the core problem from 5 miles up and magnified 5 times under a microscope — well enough so that they have viable alternatives.
If you sit in that pitch meeting and don’t demonstrate both a subtle and deep understanding of what your customers really need, if you can’t present a workable structure under which the business can iterate and pivot until the right solution materializes — you’re doomed. So, it’s not just about a willingness to be flexible six months from now, it’s being able to demonstrate a level of preparedness and a fullness of understanding that makes maneuverability a given from to get-go that will make you and your team appealing to investors.
Venture Capitalists at work is full of tremendous insight like this, and with analysis of more than 70 success stories of billion-dollar companies like AdMob, Bebo, Chegg, Facebook, LinkedIn, PayPal, Twitter, YouTube, etc., there are plenty of opportunities to find material that’s applicable to your business. And if that doesn’t convince you, the gushing review that sits prominently on the back cover of the book comes from Ron Conway — the Chuck Norris of venture capital.
For readers looking for more on this subject, you may also want to check out this recent guest post by Onswipe CEO Jason L. Baptiste, in which he shares an excerpt from his latest book The Ultralight Startup: Launching a Business Without Clout or Capital.
You can find Venture Capitalists at Work both in print and in eBook form here. More in the slideshow below:
Posted: 14 May 2012 06:07 AM PDT
According to the Kickstarter API blog, a bug caused 70,000 unlaunched projects to be publicly visible over the weekend, allowing folks to see goals, funding plans, and descriptions on projects that haven’t yet appeared on the site. Of the 70,000, visitors only viewed 48.
The bug exposed no financial information.
Kickstarter fixed the problem on Friday, May 11 at about 2pm. It had been introduced into site code on April 24.
The best thing? A reporter for the WSJ made his own story by discovering and exploiting the bug after sending Kickstarter a note about the problem.
From the blog post:
Posted: 14 May 2012 05:41 AM PDT
What does it mean when Facebook says it has 901 million monthly active users on its network? According to figures out from the International Telecommunication Union, it effectively signifies that Facebook is the world’s largest social network by a very long shot. The ITU says in a new report that that the number of people using all social media services have passed the 1 billion mark. That is just 100 million shy of Facebook’s usage figure, giving Facebook a 90 percent share of all social networkers.
In contrast to the very biggest players of all — Facebook (900m+ users), Twitter (200m+ users) and LinkedIn (120m+ users) — the rest of the playing field is heavily localized, with services like QQ in China, Vkontakte in Russia, Mixi in Japan, and Google’s Orkut in Brazil, India, and Paraguay among those competing in the space, the ITU notes.
The ITU, which is focused on telecoms regulation, flags social media in its report as an area of growing scrutiny for telecoms regulators: not only are social networks becoming more ubiquitous, but services like Facebook are becoming communications mediums in their own right, with voice and text offerings that go head-to-head against similar services from carriers.
The 2012 “Trends In Telecommunication Reform” report also confirmed something else that Facebook has been telling us: mobile is fast becoming the main way that the vast majority of people are using its service.
That’s partly due to the fact that, although broadband usage continues to grow, the number of fixed broadband subscribers is still nowhere near the majority of households in most countries.
ITU notes in the last five years, the number of fixed broadband users has nearly doubled, and by early 2012 they stood at 591 million — in other words, equivalent to just over half of the number of all social media users.
But broadband growth remains very uneven. Within that 591 million figure, the ITU notes that developing countries have penetration of as low as 4.8 percent of users. Industrialized countries, it says, have average penetration of 26 percent. Part of the problem remains the affordability of broadband services: in Africa, for example, the average monthly price for broadband is still more than three times that of the average household income. Overall, there are still 5 billion people worldwide that have “never experienced even low-speed Internet, or have only experienced it through public or shared access,” the ITU says. And there are some very much on the other side of the digital divide not using broadband, either. (Hello, Steve Wozniak.)
On the mobile side of the equation, Facebook and outside analysts have noted that mobile usage is now outpacing usage from fixed connections on Facebook’s network.
But in developing countries, it looks like Facebook and other social networks will also hit a wall when it comes to picking up mobile users who fully engage with the site.
The ITU notes that only 8.5 percent of the population in developing countries had access to mobile broadband in 2011, with only five percent of global use coming from low-income countries. Effectively, this could mean that the users Facebook is picking up in emerging markets may have people using the site on smartphones, but will probably, more likely, be using something much more pared-down on a feature phone, such as Facebook Zero or something even more basic.
This includes the service launched by Orange in Africa that uses USSD technology — available on even the most basic GSM device — to let people search for friends, invite friends, accept or deny friend requests, write status updates and comment/like/unlike friends' status updates.
That also suggests that until technology catches up with Facebook, as it continues to get bigger, it may also start to see a growth of less sophisticated usage and engagement on the site as well.
Posted: 14 May 2012 02:39 AM PDT
Mobile carrier NTT Docomo today announced a move in its strategy to grow its content business outside of its traditional base of Japan: it issued a tender offer to acquire Buongiorno, a mobile content company based in Italy, paying up to ¥24 billion ($300 million) for the assets.
Docomo notes in a statement that the acquisition would be made by its Germany-based subsidiary, Docomo Deutschland, and that Maruo del Rio, Buongiorno’s majority shareholder and chairman with 20 percent of Buongiorno’s stock, has already agreed to sell his stake to the carrier. The deal would see Buongiorno become a subsidiary of NTT Docomo.
This is not the first time that Docomo has made moves to build up its European/rest-of-world business in mobile content, but it is an area that has been lying somewhat dormant for a while. A decade ago, well before the mobile world was hit with the revolution that became the iPhone and then Android following closely behind, Docomo made a foray to bring its popular i-mode mobile content service to the Continent, starting out first with a partnership with France’s Bouygues Telecom with plans to extend that to other markets.
That never really followed through as a successful business, though, when the game for mobile content changed from walled gardens run by operators to app stores run by the handset makers. Since then, Docomo has also been involved in an LTE chip joint venture (with Samsung) that ended last month, as well as other European initiatives. For example, it inked a partnership with France Telecom’s Orange to co-sell a Sharp 3D handset, the Aquos SH80F. And it also owns, in Germany, a mobile payments business net mobile, which in September 2011 got an investment from Docomo of €28.4 million so that it could in turn take a controlling stake in Bankverein Werther, a private German bank with e-commerce and payment service operations. “Utilizing Bankverein Werther's existing banking license and credit card licenses, as well as the bank's main systems, net mobile will be able to greatly enhance its mobile payment platform,” Docomo said at the time.
This time around it looks like Docomo, which has 60 million customers in its home market, wants another local/international partner to help export its business model more effectively.
Buongiorno is one of the oldest mobile content companies around, first being established back in 1999 and currently employing 848 people. And it is profitable: in 2011 it reported revenues of €228.6 million (¥24.52 billion; $295 million) and operating profit of €7 million (¥7.5 billion; $9 million).
Its services — which include a sprawling list of direct-to-consumer offerings and those it creates in partnership with carriers and others — cover gaming, music, casual content like wallpapers and ringtones, and mobile payments. Its services are used by some 2 billion customers in 57 countries across four continents, the company says, and you can see how this distribution channel could get used by Docomo for the services that it has created itself, in addition to those from Buongiorno.
“The acquisition will combine Docomo’s innovative mobile business and services know-how in Japan and other countries with Buongiorno's advanced mobile technologies and extensive global customer base,” Docomo notes in its statement. “As part of expanding the businesses of both companies, Docomo expects to strengthen the foundation of its mobile platform businesses overseas.”
This is also part of the ongoing trend that we are seeing from the likes of other carriers, like Telefonica, to create new lines of revenue that take operators beyond their traditional business of mobile voice and data sales in their traditional geographic footprints. Telefonica last week launched TU-Me new app that offers an all-in-one free voice, text, photosharing offering to all iPhone owners that it hopes can help it snag a new base of users.
Pending regulatory approval, Docomo says that it will officially begin its tender offer at €2 per share, which will last 25 days. Del Rio’s 20 percent holding is equivalent to 111,888,895 shares in Buongiorno.
Posted: 14 May 2012 01:06 AM PDT
Zynga has picked up the team behind Wild Needle, a female-focused casual games company that was backed by Playdom co-founder Rick Thompson.
Wild Needle was raising funding back in late 2010 to build casual, mobile games for women and closed a round with Thompson and Shasta Ventures. They didn’t release their first title until more than a year later in March (which is a pretty long time to be building a casual, freemium game). It was called Shoptown Hero and it looks like it lasted in the store for about a month before they pulled it two weeks ago.
On the surface, Shoptown Hero looks like many of the casual sim games that were popular in early 2011 on iOS. In the game, players have to save a small town from a tycoon named Fat Ralph. They have to fill their stores with virtual goods and sell them. The twist is that they have to negotiate prices with customers to earn profits. After launching, the game didn’t manage to break into the top free apps category in the U.S. and remained ranked in the smaller ‘Kids’ and ‘Education’ categories in the app store (see the App Annie chart below).
We hear this was a talent-sized deal, which is in line with most Zynga acquisitions. Zynga usually does smaller deals in the $5 to 20 million range for teams of game developers. But it has bumped up spending over the last year and a half, as the value of Zynga’s equity has become priced in and even declined over the last year. OMGPOP, for example, took all cash in its $180 million acquisition. Another small developer Zynga picked up recently was GameDoctors, which makes Zombie Smash.
Also worth noting: Wild Needle is Thompson’s second exit in the past month after another company he backed, Funzio, got picked up by GREE for $210 million. We reached out to Zynga for comment. A few employees have already changed their LinkedIn profiles. One of Wild Needle’s investors Rob Coneybeer, also talked about the deal to The Wall Street Journal (although we heard about it separately).
Posted: 13 May 2012 11:33 PM PDT
With $450K behind it in funding, Israeli-based Qmerce is helping business large and small add social games to their communities, particularly on Facebook.
The premise behind Qmerce’s value proposition isn’t new. That is, branded social games aimed at driving user engagement via rewards, achievements and consequently, loyalty.
With over 40 customers to date, including Crocs and Pizza Hut (the Israeli franchises), and 300,000 games played, it looks like this upstart might be going somewhere.
Qmerce is targeting online media, marketing and community managers, to use their platform to create customized/branded games for their audiences. Usually a high-cost endeavor, with Qmerce social games can be created minutes.
Pizza Hut, for example, used Qmerce to create a campaign that featured a time-race game tilted ‘Keep It Hot.’ The in-game ‘Car’ was changed to a pizza delivery motorcycle, with the Pizza Hut logo on the delivery box. In-game achievements had real-life counterparts in the form of free pizza and coupons.
I was a bit skeptical that wizard-built games can generate compelling engagement, but Qmerce CEO, Moti Cohen, claims that average user play is 50-minutes. I’ve already gone ahead and filed this under: ‘Eat hat.’
Creating social games on Qmerce is free for the time being. The company does however plan on providing a premium service with a higher degree of customization than available directly through the current interface.
For those of you that want to meet the Qmerce team, they will be taking part in the Israeli Pavilion at TechCrunch Disrupt NYC.
Posted: 13 May 2012 10:54 PM PDT
Livebookings, the restaurant booking and marketing service that competes with services like OpenTable, is announcing today that it has picked up another $24 million (£15 million) in funding to continue growing its business in Europe and beyond. The news highlights two trends we’ve seen emerging recently around here: companies dedicated to eating out are not going hungry in the current economic climate; and the more local, European counterparts to U.S.-based tech companies are getting a lot of attention from investors and consumers.
Today’s round of funding, Livebookings’ fourth, is being led by existing investors Balderton Capital, Wellington Partners and Ekstranda and takes the total amount raised by the company to about $62 million.
Colin Tenwick, CEO of Livebookings, has said that the funding will be used to fuel further growth. Existing business areas include online reservations and other restaurant services such as customer database management, email marketing campaigns, and the creation of special offers, and that menu of services may be getting longer:
"Over the last 18 months we have put in place the engines that drive growth by investing in the development of new products, building a larger sales force and implementing new customer support systems to facilitate the growing customer base,” Tenwick said in a statement. “The market-leading increase in dined covers, customers and revenue is testament to this strategy and the new funds will help us to increase our market leading position, deliver the most innovative products to the marketplace and drive even more incremental revenue for our customers."
The company, headquartered in London, has operations in 23 countries including the U.S. and across Europe. Livebookings offers booking services directly to consumers, as well as through 300 distribution partners, including tastecard, Afternoon Tea and Eniro.se. In all there are 9,000 restaurants and chains powering online booking and other services through Livebookings.
Livebookings does not disclose current revenues, nor whether it is yet profitable, but it notes that in Q1 it saw record sales numbers, with revenues up 34 percent compared to the same quarter a year before. At the same time, the number of seated diners booked through the site went up 65 percent to 3.8 million; and Bookatable, its consumer-facing website, exceeded one million visits for the first time in the quarter for its service that operates in nine languages across 19 countries.
While it almost seems counter-intuitive for a businesses dedicated to eating out and spending more money to be thriving in the current economic climate in Europe, this isn’t the first time this has been noted. Just-Eat, a service that aggregates take-out/food delivery services from different restaurants, picked up $64 million in a third round of funding in April. Just-Eat said at the time that it was generating $750 million in sales generation annually.
And while U.S. companies are also taking a big bite out of European business, they are not taking it all. Just as Qype is claiming that it is actually doing significantly better than Yelp in Europe, Livebookings is also giving OpenTable a run for its money and claims to be the European leader in the field.
Still it should be noted that while growth is still coming for Livebookings, it looks like it may be slowing down somewhat: when the company announced its last round of funding, $10 million in April 2011, it noted that restaurant reservations went up by 92 percent over the year, compared to 65 percent growth this year.
Posted: 13 May 2012 08:00 PM PDT
Editor’s note: Andy Hickl is the co-founder and CEO of A.R.O., a stealth mode Seattle startup. He previously served as CEO and chief scientist of Language Computer Corporation and as co-founder and CEO of Swingly. Follow him on Twitter @andyhickl.
Today, assistants can perform a small set of tasks, each saving me a few precious steps (or clicks) along the way. That's not the way it's always going to be. In the future, assistants will be capable of doing more and more non-trivial things. And Norm Winarsky is right — Siri isn't one assistant to rule them all. We're soon going to have a whole posse of specialized software agents on our side.
Even so, the assistant conversations here on TechCrunch have focused for the most part on pretty cut-and-dried vertical uses, such as e-commerce.
I'd argue that the ultimate use case for assistants, however, is a much more basic one: it's helping me make the most of my life before I run out of time.
One school of thought says that assistants should be all about delegation. I pass tasks downstream, and in doing so, I reclaim my time and energy. I think that several companies will achieve big things doing just that.
But it doesn't have to be this way. What about an assistant that doesn't take things off my plate — but rather, wants to put things on it? What about an assistant that guides me down paths less traveled? What about an assistant that aspires to help me be a better version of myself? What about having a colleague instead of a secretary? A mentor instead of a student?
What would it mean to have a rewarding, mutual relationship with a computer — not in a GTD sense, per se — but rather in my private life? A relationship that was based on mutual admiration, a high level of trust, and a secret handshake? We need a corollary to the notion of an assistant. I like having an assistant. But I want a companion too.
A companion is more intimate. That's the allure. It's more personal, more…me. It's additive, bringing new data and new considerations, looking around corners and recognizing patterns I can't yet see.
With a companion, you'll have to give more to get more, too. It's more of a partnership, and a true love. A companion is an emotionally evolved species. Better put, a companion actually aspires to help me be a better human, and lead a better human life. A companion is about more than just finding me an ATM, conducting a web search, or deleting a calendar entry. It's about achieving goals, and revealing truths.
At a time when Siri clones are sprouting up left and right, users are wondering what's next. Their eyes have been opened to the possibilities. We're ready to let software assistants into our lives into a new way. We're ready for a companion.
Technologically, we're at the confluence of three major trends right now that make the notion of building a software companion a realistic endeavor, each of which points to what makes a companion special, and differentiated.
Here they are.
The Transparent Self
The first challenge is figuring out how companion apps are going to acquire all the personal data that they'll need to transform our lives.
If trends hold, most of us will be happy to give it away.
Apps like Highlight — and more recently, Placeme — are perfect examples of exactly how much personal data we're willing to fork over if we're promised enough value. We're all playing a semi-risky game: we expect that if we give some piece of ourselves away, we'll ultimately get something in return that makes all that disclosure worth it.
The real question remains, however: do apps today give us a fair return on our personal data?
That was one of the knocks on Highlight coming out of SXSW. We quickly found that the tool that made it easy to spot the Facebook recruiter at the Foursquare party wasn't all that fun (or valuable) when we were sitting in the airport lounge, hungover and ready to go home. Wasn't anything wrong with the app; it was just that it was no longer the assistant we needed at the time. We uninstalled.
And there's a real race to find the killer value proposition that will unlock the mother lode of data from users. Will it be automatic checkins? Real-time friend tracking? Or something deeper and inherently more valuable? We've only seen the opening acts so far.
Location-based apps may have the inside track. We're already seeing location services being used in a variety of clever ways. There are apps that can automatically check me in, apps that tell me who's nearby, apps that can recommend new BFFs, based on where I've been and what I happen to like on Facebook.
Whether we find them personally valuable or not, these apps aren't going away. In fact, I believe they're going to be an integral part of the companion apps that I'm so fond of.
Here's why. If you know where I go on a daily basis, you can infer a lot about both who I am and where I'm likely to go next. See me at a bar (or a tech startup) at 1:30 am three nights a week? You can start predicting whether or not I'm married, have kids, or will need a pick-me-up on the way into work the next morning. Pair that with some estimate of how likely I am to stop at McDonald's on my morning commute, and you're on your way to pegging me as a hard-working, junk food junkie who probably needs to find time for a run.
From examples like these, it's easy to see how location data – of the type that many of us give up freely now – can be used to build a personalization layer that could power a pretty invaluable companion app.
The Aspirational Self
This brings us to our second challenge. Once they've got the data they need, how are companion apps going to be able to keep us using them?
Venture capitalist Tim Chang may have just hit the nail on the head with his piece on the Aspirational Self, which he defines as the rich intersection of gamification and the Quantified Self.
If you're not familiar with it already, the Quantified Self movement is a trend that Kevin Kelly and others have been blogging about for years, but that has only recently become a mainstream concept. Nicholas Felton's annual Feltron Report is the defining example of the category. Wearable technologies like Nike's Fuel Band, the FitBit, as well as apps ranging from Runkeeper to Xobni are good examples. The Quantified Self is about charting my progress and "interactive personal infographics" – the idea of looking backwards at one's activity and habits as a delightful new kind of science.
Tim argues that games are powerful motivators simply because they let us have fun along while we're on the path to self-improvement.
But what if we didn't have to play games? What if we could just cut to the chase? When my wife insists that I go to the doctor, or suggests that I try a new taco joint she knows I'll love, I (often) just go. She doesn't have to "game" me because we're long past playing games at this point. And that's the way we like it.
A great companion (human, software, canine, or other) knows me well enough that I trust it implicitly. It's that kind of trust (such as those between intimates or between a boy and his app) that could make companion apps so valuable – and so hard to put down.
Just like gamification, companionship brings levity and fun back into the equation – while introducing a sense of mutuality, and "otherness" that we don't normally get from games. It's all so much eating your vegetables and "self help" – right up until it's suddenly and delightfully living life the way you want to, and making the most of every opportunity, collaboratively. It's a fine line, but if you crack the code, you've got something grand.
The Quantified Self has always been a mostly solitary endeavor. Yes, I might share my victories or shortcomings to Twitter and Facebook as a victory cry, or some kind of outsourced motivation, but who really cares that I ran 6.3 miles today or that I've dropped 10 pounds this year? Your followers might tolerate it. Your friends might be marginally interested. But you can always count on your companion.
Let's just put it this way. What's the biggest pain point available to us entrepreneurs? It's got to be death and dying. The elixir of life? That's the ultimate killer app, and the foundation of the entire pharmaceutical industry, among other things.
But what's next in line? What's just below a fountain of youth? Well, it's making the most out of the time you do have here on earth.
This is precisely why both assistants and companions are so compelling. But assistants just work on the outside world, whereas companions work on…me.
The Clued-In Self
So far, we've talked about how companions need to understand both the past and the future in order to be effective. They document where I've been and what I've done – all in the service of helping me better understand where I might go, whom I might go with, and what the ramifications of my choices might be.
So, what about the present? Here's where companions face some of the biggest hurdles – and where they could also really shine. Why?
First, companions are proactive. While it's in an assistant's very nature to be reactive, companions have to work on your behalf, unbidden, behind the scenes.
An assistant like Siri, again, takes orders – and with a little conversational poking and prodding — fulfills them. Companions on the other hand jump up, grab you in the moment, forcing you to pay attention to the stuff you might have missed otherwise.
They're the capricious, know-it-all little brother (or sister) that Siri never had.
Second, companions are infinitely adaptable in the present, on the fly. As humans, our interests, needs, and desires are constantly changing. We need software companions that keep can keep up and understand exactly what we need in the moment. A great companion is with me all of the time, it's always on. And because of that fact, it's better able to mold itself in my image.
A true companion can accommodate the self that I am always becoming – it's adaptable to the core.
Is this all going to come true overnight? Absolutely not.
What I'm trying to evoke here is a notion of advanced, personal software that aspires well beyond the apps and services that catch our eye today. We're seeing little hints and signals of the future – that's exciting.
But I'm worried we're also instigating a kind of modern clone war – a fast-follower culture that prizes mimicry over true risk.
It ain't going to be easy. And yet, at the end of the day I still feel that longing – not for an assistant that does my bidding, but for a more evolved species that provides…great company.
Posted: 13 May 2012 06:01 PM PDT
When I talk to my friends who are not currently at startups, or the Silicon Valley, the perception is that VCs and individual investors are throwing around investment dollars like drunken sailors. Outsiders think that there is a bubble, and that any company with two engineers and an idea will get funded (though there is some truth to that in certain cases).
The reality is, competition has never been fiercer for startups, especially at the seed stage, to close a round. The pendulum may have swung for Y Combinator companies, but not everyone else.
I am a non-technical co-founder of Scripted.com – a marketplace for businesses to hire freelance writers. We recently closed a $1M seed round led by an institution (Crosslink Capital) – I wanted to highlight some of the lessons I learned along the way, and pass along a few tidbits for those of you who may be in the same situation.
Get Ready for an Uphill Battle
Both my co-founder and I are non-technical (even worse, we are MBAs). We both hail from highly quantitative backgrounds, and I worked for one startup previously, but nothing of note. If you are in the same boat as us, get ready for a long, uphill battle. We had a VP of Engineering lined up at the start of our raise, but he was not full-time when we were going around and making our pitches. If you aren't ready for your raise to take a full 6 months, you should find a plan B ASAP.
Looking back at my inbox, it looks like we received a total of around 120 intros to individual angels and institutions – a little over 10 folks invested in our round. Remember that batting average does not matter when it regards to funding, just results.
Lose Your Pride With Regard to Valuation
Everyone talks about the crazy valuations that YC companies are getting these days, the uncapped notes, and other miscellaneous things we have not seen in previous years. I have unfortunate news for you if you aren't in YC, or another reputed incubator – you are not going to get those kinds of terms, so check your ego at the door.
Referrals Work, but only if the Right People Refer You In
It goes without saying that the best VCs will not take your meetings unless you get a referral from a strong source. We learned early on that entrepreneurs who have successfully raised or exited companies are the best way to get in the door. We were fortunate enough to put together a really strong advisory board before we went out for our raise, and it helped quite a bit.
We tried a more scattershot approach with regard to referrals very early on in the process, and it did not work. Stay away from people who want equity, or compensation in return for intros. We had one guy who had the audacity to ask us for equity in exchange for an audience with an angel group. I recorded my conversation with him and play it back for my own amusement on occasion.
Traction Matters Much More For You
You need to have traction, and paying customers if you want to complete a seed raise. YC entrepreneurs have a great reputation, rightfully, for being product visionaries. The use case for their seed funding is much different than yours – they receive a lot of seed funding to build product – you will need a lot of seed funding to grow a business. By the time we completed our raise, we were already doing tens of thousands in revenue a month, and it was still an uphill battle.
You Need a Business Model You Can Explain in One Sentence
For us the pitch was: "We sell content to businesses for a flat rate, and take a percentage of each transaction." Whatever the equivalent is for you, you need to be able to explain it clearly and concisely.
You Are Going to Get Your Market Size Numbers Ripped to Shreds
No matter how you size the market, be ready to get ripped to shreds. It goes without saying that VCs want to see a multi-billion dollar market, but how a VC reacts to your numbers could depend on what they ate for breakfast that morning. The way we started pitching our market, was very similar to the way we explained our revenue model: "our market is any business that needs written content". We found that worked better than trying to walk through a bottoms-up analysis of each segment within the market for writing.
Play to Your Strengths, Have a Great Story
I realize that I am not a product visionary, nor will I ever be. I am good with numbers, and so is my co-founder – we are also hard-working and successfully pivoted the company from a previous product. Our story was compelling, we figured out how to acquire customers, and it was very clear to the folks that decided to invest in us that we are not going to give up. Whatever the story is for you, figure it out what it is, and back it up with facts. Our story was about execution – we had a decent (not great) product at the time, but we were raking in cash. Now that we have a full-time engineering team, the product has gotten better, which has made the sales cycle easier.
Besides, being a product visionary doesn't sound all that fun to me…I don't want to have to take a bunch of glamour shots and play the role of tortured artist.
The Slide that Made the Difference Between Getting Funding/Not Getting Funding
Riffing off the theme from above, my co-founder and I gradually got better at focusing on the actual numbers during our pitch. It was the moment we put together the below slide that things started taking a turn for the better with our pitches:
If you can convey to VCs that you have a repeatable business model, and understand the microeconomics of your business, then you are golden.
[image via flickr/epSos.de]
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