Nesta última segunda-feira, recebemos uma ótima notícia, mas ótima mesmo, lá do pessoal da Amazon! Isso mesmo, a gigante  empresa americana.

A partir de agora, todo o conteúdo do site da Papaya será armazenado pela Amazon!! Legal né?! Mas tem mais!! A Amazon está muito animada em ajudar nossas startups, assim todas as startups aceleradas pela Papaya Ventures, também terão os conteúdos de seus sites armazenados pela Amazon S3 hosting service. Nada mal para que só está começando!

Estamos muito entusiasmados de ter a Amazon a bordo do time Papaya Ventures!

Papaya Ventures Partnership with Amazon

This past Monday we had an awesome feedback from the guys in Amazon.

Amazon will be enthusiastically helping our startups. Any startup accelerated by Papaya Ventures will have their web sites hosted by their S3 hosting solution. What a nice way to start a successful program.

We’re excited to have Amazon on board with Papaya Ventures!

Acesse nosso site para informações de nosso processo seletivo: http://papayaventures.com/

“Stick a Fork in Klout – They Are Done”     – Frustrated User, November 2011

One of the reasons that Google and Facebook and Twitter continue to march forward and upward is that they simply work and don’t exploit people very much. Maybe Facebook exploits more than others, but they overcompensate by giving more than they get – balancing their needs (your eyeballs and time on their ads) with providing amazing amount of previously unrealized value to your life – information, sharing, bite sized things that make you feel good or laugh, in Google’s case great tools to run your life or business. In the end they win revenue-wise, your clicks get them revenue, but I can say I’ve gotten so many benefits from these companies (yes, even Facebook). Their value went far beyond even their imagination.

Then you have companies like Klout and a few others. I know, Klout has raised $40 million, has gotten several of the social-rati to testify to it’s greatness, it will soon have more accuracy, more SM metrics, etc. But I’ve “played Klout” twice – about a year ago and then again over the past 2 weeks, and the up/down experience is pretty unsatisfying. Maybe it was a good idea, but in the end a bad product with too many missteps to recover.

Here are some of the problems:

1) It doesn’t work – If you look at the”most influential” in any category it’s pretty far from the actual truth.

2) It is very incomplete. It misses over 50% of my actual Internet/Social activity.

3) It can be easily gamed- I’ve easily manipulated it.

4) People change their behavior  - from their real priorities to Klouts priorities to improve their score.

5) The Perks are mostly non-existent -

They fool you into believing that your coolness, i.e. ability to develop your business rep, is controlled by them. Shame.

So don’t waste your time, it’s all over there. It was barely worth my time to write this except maybe it will help others not waste theirs.   @tomnora

“I didn’t really take a traditional educational route in regards to starting a business.”

Like so many successful entrepreneurs before him, Jason Mascari came up with his big idea while brainstorming with a friend. “We were constantly throwing ideas around for years,” says Jason of his friend and co-founder, Ryan Golden. The two young entrepreneurs first thought of Moasis Global in 2008. In three years, the business has developed from idea to fully patented prototype.

Moasis Global is a web-based advertising platform that allows businesses to target specific geographic areas of interest. The company’s technology enables Moasis to outline an entire city with its patented grid technology and distinguish specific markets. Businesses can then choose to target sections of the grid more heavily with their advertising dollars or decrease spending in others. Users see where competing businesses spend their money and where the greatest market opportunity lies. “Businesses currently overspend in markets that they shouldn’t be targeting,” Mascari explains. Moasis is designed to help change that.

Moasis Global has been operating in stealth mode, developing its intellectual property and validating the assumptions behind the new technology. “The product has morphed drastically from where we began,” Mascari says. In true lean-startup fashion, the team has bootstrapped to get where it is today and is currently seeking seed-round funding.

Mascari points to his team’s mentorship as its biggest asset. “Ryan’s father is an entrepreneur himself and began by asking us the right questions, which helped frame a strategy for us,” he says. As budding entrepreneurs, Mascari and Golding have also taken advantage of discussions with venture capital fund managers, who have encouraged them to continually critique their model and product.

“There is a good energy in West Michigan,” Mascari says. “The startup community has a lot going for it, and I encourage people to jump into the network.” As Moasis Global continues to move forward, he advises entrepreneurs to go for it. “You will get the door shut in your face, but continue to seek validation and trust your vision.”

How has GVSU played a role in your business development?

I learned the tools on how to visualize ideas–to take a concept and be able to clearly and visually communicate so others could understand and get excited
about it.

Were there any particular classes, subjects or professors that made a positive influence along your entrepreneurial trek?

The Film and Video program was much more flexible than most other majors at GVSU. A project was assigned and there was no clear path on how it should be done. It allowed the opportunity to explore many options, and if the resources weren’t available, you had to get creative in how you could accomplish bringing your vision to life. Memorable professors, Dianna Morse and Kim Roberts, provided the environment for creative development and encouraged you to pursue your ideas.

Do you feel that GVSU fosters entrepreneurship?

It’s exciting to see the new programs allowing students to learn more about being an entrepreneur. These types of programs are on the forefront of education. It’s nice to be in this new wave, where entrepreneurship is fostered, rather than focusing on the more traditional employment route.

What improvements could be made to help students who want to start a business?

The biggest improvement is furthering the startup community outside the campus. The more that like-minded people in the area can connect and establish a hub for ideas, talent, and investors, the more opportunity will be available to us all, including access to the resources needed to start and maintain a business. It’s a problem when people think they have to be in Silicon Valley, New York, or even Chicago if they want to start something big.

|Early Stage| The term “early-stage” is broadly defined as pre-revenue business development. Often, it means a company possesses a working prototype or defined service model, and has a detailed sales and marketing plan.

Check Moasis Global out online at moasisglobal.com

Like  facebook.com/MoasisGlobal and follow @moasisglobal

Find the full PDF of NEU on our website http://gvsu.edu/cei/neu-magazine-22.htm

Tweet us your thoughts on this article @gvsu_cei with the hashtags #neu4 #moasis

Preqin’s deal flow data shows that there were 1,249 venture capital financings announced during Q2 2012, representing an aggregate value of $10.9bn. This is a 16% increase in both the number and value of VC deals in comparison to Q1 2012, and is the largest amount of aggregate capital committed by VC firms since Q3 2011.

Other Key Facts:

•  67% of the number and 75% of the aggregate capital of VC deals announced in Q2 2012 occurred in North America, with 839 VC financings in the region valued at $8.2bn during the quarter. This is a 14% increase in comparison to the previous quarter, when 734 VC financings valued at $7.2bn were announced.
• European VC activity experienced a 23% rise in the number and a 25% increase in the value of VC deals in comparison to the previous quarter. A total of 252 European deals took place during Q2 2012, valued at $1.4bn.
• The number of Chinese VC deals continued its slide in Q2 2012, with 27 VC deals announced in the country during Q2 2012. This represents a 20% drop from Q1 2011 levels and a 42% decrease from Q4 2011, largely due to investor worries regarding the Chinese exit market.
• However, while the number of VC deals in China dipped in Q2 2012, deal value almost doubled in comparison to the previous quarter, with $545mn invested in the region. This is up from $280mn in Q1 2011, but still lower than the $798mn worth of VC deals completed in Q4 2011, and is in large part due to the $216mn Series C financing of Xiaomi.
• 75 VC deals were announced in India during Q2 2012, a 32% increase from the previous quarter, representing the most active quarter for Indian deal flow during the 2010 – H1 2012 period in terms of number of deals.
• 17 VC deals were reported in Israel during the period, matching activity in the region witnessed in recent quarters, representing an aggregate value of $200mn.
• A third of all deals globally during Q2 2012 were Angel, Seed or Series A deals, displaying investors’ attraction towards very early stage investments. Additionally, Series B, C, D and later investments accounted for less than 20% of the number of all deals.
• Venture capital-backed add-on deals made up 7% of all VC transactions in Q2 2012.
• The average VC deal value in 2012 YTD has been $14.1mn per deal. This is down on 2011, when the average VC investment totalled $17.9mn per round, but very similar to deal values witnessed during 2010. In Q2 2012, more than a quarter of the total number and aggregate value of financings globally was invested in the internet sector, which includes social networking and e-commerce deals.
• The healthcare and software sectors each accounted for around 16% of the total number of VC deals, while clean technology companies accounted for 13% of the aggregate value of investments.

Q2_2012_Venture_Capital_Deals

Since everything in life is becoming an app and MVP is good enough to actually attract revenue and/or funding, you can actually try something and throw it away within a few weeks. The cost for this is from $0 to $5,ooo.

The problem is when someone tries this over and over with the same result – junking it. I see a lot of this in my circles There is a price for doing this; you wer yourself out, lose credibility, waste peoples money and time, lose friends, etc.

A better option is to vastly improve your odds each time by getting smarter, refining, capitalizing on mistakes, getting help in the areas where you’re weak, have less ego and more focus on not accepting failure.

If you add up all the attempts to launch startups over the past 2-3 years by all participants, there are probably at least a million failures. Many of these were stepping stones to better things and/or a quite valuable learning process, maturity, personal growth. But over half were probably unnecessary ego bursts and fleeting ideas where deep down inside the founder knows it ain’t gonna happen but keeps going for many reasons.

Most people are very good at one thing at a time, not five so pick ONE and try that role and let as many others as possible help prevent failure number one million and one. @tomnora

Sales Driven company – finally!

How LinkedIn Has Turned Your Resume Into A Cash Machine – Forbes.

via How LinkedIn Has Turned Your Resume Into A Cash Machine – Forbes.

Yesterday, we formally announced that Lightspeed and Sequoia invested in OneAssist, a company that creates and markets assistance and protection-oriented membership plans for consumers.  OneAssist was incubated and founded in the Lightspeed offices during 2011 by Gagan Maini and Subrat Pani.  We’ve known Gagan for almost five years and frequently traded views on business ideas and opportunities in the payments, loyalty and concierge space.  Gagan and Subrat have known each other since the late-90s, when they worked together at the SBI-GE cards joint venture.  They have each built new businesses from scratch inside larger companies – Gagan most recently started the Indian operations for CPP and Subrat built the credit cards business at Kotak – and we’re excited to back them in building a new company in this white space.

The thesis behind OneAssist is that consumers increasingly value peace of mind, convenience and assistance with respect to certain events that can disrupt or interrupt our everyday lives (such as the loss of a phone or wallet, health emergencies etc.).  This is driven by: (i) increasing time scarcity – especially in double income households, (ii) a cultural preference for ‘assistance’ (witness services such as Naukri’s ‘assisted’ online job postings, where sales reps hand-hold employers through the job posting process, JustDial’s assisted directory service, IRCTC’s agent channel for booking online tickets etc), and (iii) an emerging orientation towards protecting oneself from unforeseen future events (health insurance didn’t meaningfully exist 10 years ago and is a 13,000 Cr industry now).  And perhaps more anecdotally, a growing sense of taking responsibility for oneself and one’s family.

We believe there is a large opportunity to create a branded, consumer-oriented assistance and protection platform across multiple segments.  The initial use cases OneAssist will support are the loss (or theft) of a wallet (including cards, driving license, PAN card etc) and the loss (or theft) of a mobile phone.  In each case, the company takes on the chore of cancelling credit/debit cards (or remotely wiping and locking a phone), protecting against misuse of cards and/or data, providing emergency assistance (such as providing a replacement handset with data fully backed-up), and replacing essential identity documents such as a driving license or PAN card.  Each product also offers certain group insurance benefits to protect against financial loss.  Plans are priced at Rs 1,000 to 2000 per annum depending on the chosen package plan, which equates to just about Rupees 3-5 a day.

In addition to marketing directly to consumers, the company would also market their products through affinity partners (such as banks, telcos, retail, etc) and corporates who have large customer or employee bases and can offer such products as very relevant value added service or benefits for a fee.

This business model is notoriously difficult to execute against given the importance of delivering against the promise in ‘moments of truth’, the myriad of supply-chain partnerships and capabilities that must be developed and coordinated, the direct and partner-driven sales and marketing capabilities that must be built to achieve scale and the customer engagement strategies that must be deployed to ensure high customer satisfaction and loyalty. We believe that Gagan and Subrat are the best entrepreneurs to take on this challenge and wish them and their team the very best as they embark upon this adventure.

The opening panel was moderated by Marty Waters, Partner at WSGR and focused on where the medtech investment is happening. Despite over $2.8 billion invested in medtech venture deals in 2011, clearly the major common agreement among panelists was that medtech funding is significantly down. Mike Carusi, General Partner with Advanced Technology Ventures explained, “we have investors too” and they are not investing significantly in medtech funds. When they do invest, Carusi elaborated, they look for opportunities addressing a drug market and his advice was that entrepreneurs figure out ways in leveraging the ecosystem. Yuval Binur, Managing Parnter at Orchestra Medical Ventures, advised that entrepreneurs focus not only on unmet clinical areas but also focus on unmet strategic needs. As VCs, he elaborated, “we need to fund strategic partners who can help with commercialization” and he advised that entrepreneurs pay attention to and build relationships with strategic partners. Using anecdotes, analogies, and terminology from Hollywood, John Friedman, Managing Partner & Founder with Easton Capital, said, “we need to go back to the future”, and if VCs see many companies being funded in the same area, they need to move away from it. Voicing a slightly different opinion from Binur, Friedman said, VCs should invest in companies that focus on fundamentally unmet needs or are developing standard of care at 10-20% of the cost. He said VCs are moving away from early stage and are looking at deals which are capital efficient. Strategically, it is much more important to dominate the region locally, which is also easier and more effective, said Friedman. Opining on emergence of wireless technology, he advised that in more of a serviceable model, the leaner the IP, more protectable it is.

Bill Harrington, Managing Partner with Osage University Partners, agreed, the age of incrementalism and me-too’s is gone. Basic, hypothesis based research is happening in Universities and their fund focuses on capturing that. They have an increasing database of university partners with access to participating companies. Harrington added, that while device companies mostly have one formidable asset, with pharma companies, there is more of a possibility to do licensing deals or license assets. There is greater interest in late stage deals because with market traction, there is some indication if it is strategically advantageous and how it is doing, said Harrington. A lot of companies highly underestimate the risks and costs of commercialization. Speaking on emergence of wireless technology, Harrington said that outside the medical field, technology is rapidly moving ahead but they still lack intelligent ways to use the data and there are opportunities in that area. Dirk Kersten, Partner with Gilde Healthcare Partners, said, they are looking at companies with reasonably good products serving real market needs. With wireless technology, there are huge opportunities in home health care, to provide better care, cheaper and for longer duration, said Kersten.

The blogs that follow will focus on other discussions.

Everywhere I turn there is a new incubator or accelerator being created to support  impact investment.  Although many social and environmental companies are newer, more innovative and potentially riskier than most investors would hope for, the rush to incubate is a one-off approach to a complex problem. Addressing the oft lamented “early stage gap” by focusing on the life-cycle start point will change the shape of the gap, but won’t eliminate it.

The companies that graduate from incubators, accelerators, technical assistance facilities and business development programs are still going to face the same funding gaps, except the gap will have a different name. Angel, seed, early stage, growth – four different types of capital, all in scarce supply.  The uninitiated argue that lack of pipeline is a key factor in capital scarcity. They insist that if we could help small businesses organize their finances and professionalize their operating practices, investors would be drawn to this expanded pool of “investment ready” enterprises.  Maybe they will be, maybe they won’t.

I’ve been wondering how incubators and accelerators will get to sustainability when the financial life-cycle has so many holes in it. Who gets the hand off? Even if all of the graduating businesses are financed, how is the incubator rewarded or repaid? Where does the money come from to support the incubator’s next class, much less collection and analysis of outcome data on the first class?

My bah humbug problem with the incubator/accelerator model is this: if we push to create new types of intermediaries that provide capital at specific life-cycle stages, we increase the number of investor entries and exits required to get from ground zero to lift off. I don’t think most sustainable social enterprises can support four or five different exits, each of which aims for a higher multiple than the lost. Following this kind of model will mean higher prices for the folks at the base of the pyramid (BOP) and middle of the pyramid (MOP) whose lives we’re trying to improve. In other words, despite our do-good intentions, we may be encouraging unsustainable programs and enterprises because of how we structure and regulate financing for these activities.

We need to redesign the models and the instruments we use to finance social and environmental enterprise. You’ll see some thoughts on flipping the incubation model in an upcoming post. Until we upgrade our financing practices, making constructive use of both philanthropic and investment capital , I suspect that many incubators and accelerators won’t survive beyond one or two graduating classes.

Now, I have no idea what was going on behind the scenes at Churn Labs, but I think these guys may have just launched a new trend:  http://techcrunch.com/2012/05/31/churn-lab-shut-down/

Incubators and accelerators often have sharp, energetic, start-up savvy young founders. Spinning the management team off to the graduating stars of an incubator and then shutting down the incubator itself  isn’t a half bad idea. It may not create permanent solutions to funding gaps, but it does address the need most start-ups have to build management teams and human capital.

If you know of other cases where an incubator has spun-off its own management team to one or more graduating businesses, please let me know! I’m curious to see if this will really become a trend, or if this particular experience just happens to have coincided with my own ruminations on sustainability and early stage investing.

So breast cancer can be ‘cured’… if caught at an ‘early stage?’ Right? Er, no, wrong.

There is no cure for breast cancer. Ever.

Doesn’t really make me feel any better that ‘many people can live for years with metastatic breast cancer’. How many years are we talking here? One? Two? Five? I’m not liking that at all.

Are you a southern California angel (or do you know one) who’d like to be on our list?

Click here to add an angel.

Jason Calacanis (Los Angeles)
http://www.twitter.com/jason
http://www.facebook.com/jcalacanis

Sample Investments:
http://www.twitter.com/backupify
http://www.twitter.com/gdgt
http://www.twitter.com/blippy

http://www.twitter.com/rapportive

http://www.twitter.com/gowalla
http://www.twitter.com/challengepost
http://www.twitter.com/chartbeat

Matt Coffin (Los Angeles)
http://www.twitter.com/mattcoffin

Sample Investments:

http://www.twitter.com/demandmedia

http://www.twitter.com/rubiconproject
http://www.twitter.com/docstoc
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Paige Craig (Los Angeles)
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Sample Investments:
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John Greathouse (Santa Barbara)
http://twitter.com/johngreathouse

Sample Investments:
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Sean Jacobsohn (Santa Monica)
http://twitter.com/sjacobsohn

Sample Investments:
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Paul Kedrosky (La Jolla)
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Sample Investments:
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Clark Landry (Los Angeles)
http://twitter.com/clandry
http://www.facebook.com/clarkwlandry

Sample Investments:
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Beau Laskey (Los Angeles)
http://twitter.com/beaulaskey
http://www.facebook.com/profile.php?id=1039099299

Sample Investments:
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Peter Lee (Los Angeles)
(Baroda Ventures)
http://twitter.com/ptlee
http://www.facebook.com/ptlee

Sample Investments:
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http://twitter.com/gamecrush

Howard Lindzon (Coronado)
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http://www.facebook.com/howardlindzon

Sample Investments:
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http://twitter.com/betaworks
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http://twitter.com/buddymedia

Thomas McInerney (Los Angeles & San Francisco)
http://twitter.com/tgmtgm
http://www.facebook.com/tgmtgm

Sample Investments:

http://twitter.com/mochimedia
http://twitter.com/blockchalk
http://twitter.com/gamesalad
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http://twitter.com/flingotv

Farhad Mohit (Los Angeles)
http://twitter.com/farhad667
http://www.facebook.com/farhad667

Sample Investments:
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Brian Norgard (Los Angeles)
http://twitter.com/briannorgard

Sample Investments:
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Talmadge O’Neill (Prague & Los Angeles)
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Sample Investments:
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Michael Parekh (NYC & Los Angeles)
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Sample Investments:
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Mark Suster (Los Angeles)
http://twitter.com/msuster
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Sample Investments:
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http://twitter.com/laughstub

“College is the perfect time to start a business. You have access to tons of resources, and it never gets easier to try something new.”

Ryan Vaughn (@RyanHVaughn) is the Co-Founder of Varsity News Network (VNN), an online high school sports media network, empowering high school journalists to gain relevant experience while ensuring that athletes from every sport receive the coverage they deserve. He earned his Master of Communication from Grand Valley State University in 2010.

Vaughn was accepted into the 12-week Momentum-MI seed accelerator program in 2010, providing him with $20,000 seed money to work on launching his new company and access to seasoned entrepreneurial mentors to help guide him throughout the process. While juggling his work with VNN and graduate courses, he also worked as an outreach consultant for the GVSU Center for Entrepreneurship & Innovation (CEI). In that role, he worked on promoting and marketing CEI’s community initiatives, coaching and mentoring GVSU student entrepreneurs, and fostering connections between CEI and the young entrepreneurial community in West Michigan.

All that hard work and determination paid off in just two years. Since the launch of VNN, Vaughn and his partner have secured 24 customers and generated over $70,000 in sales. In March 2012, Vaughn closed on a seed round of $500,000 from West Michigan investors and the State of Michigan to grow across the state.

Vaughn’s determination, intellect, and perseverance have played a major role in his success. At the same time, GVSU’s commitment, through CEI, to foster, impact, and provide a foundation to help budding entrepreneurs, has been crucial in helping students like Vaughn start and succeed at their own ventures.

How has GVSU played a role in your business development?

CEI gave me the opportunity to connect with people around the community and to get accepted into Momentum Michigan, which gave me seed funding to launch. The School of Communication was flexible enough to allow me to write VNN’s initial business plan as the capstone project for my master’s program.

Were there any particular classes, subjects or professors that made a positive influence along your entrepreneurial trek?

Pete Haines, an adjunct professor at GVSU in the School of Communication, was the advisor for my independent study classes that pushed my business forward with business-plan writing, feasibility analysis, and more. He still serves as an informal advisor.

Do you feel that GVSU fosters entrepreneurship?

I feel that GVSU does a lot to foster entrepreneurship, but there is still a long way to go. West Michigan still feels like, to some extent, if you’re not getting a job at a big company after college, you’re somehow doing it wrong. That’s an uphill battle for CEI to fight.

What improvements could be made to help students who want to start a business?

Allowing students an opportunity to intern with startup companies in West Michigan would go a long way toward giving them the information they need to know if they really do want to start their own business.

The tough thing here is that the best students want a paycheck, but the startups with the most valuable internships most often don’t have the resources to pay interns. Establishing a program in which GVSU compensated interns for their work at local startups would be valuable.

|Early Stage| The term “early-stage” is broadly defined as pre-revenue business development. Often, it means a company possesses a working prototype or defined service model, and has a detailed sales and marketing plan.

Check VNN out online at varsitynewsnetwork.com

Like VNN at facebook.com/VarsityNewsNetwork and follow VNN @varsitynewsnet

Find the full PDF of NEU on our website http://gvsu.edu/cei/neu-magazine-22.htm

Tweet us your thoughts on this article @gvsu_cei with the hashtags #neu4 #vnn

I know, it’s a very expensive place to live and do business, lots of traffic, etc. I’ve done it before. But if a Tipping Point could be created there it could over come the costs. Here are some of the factors:

(1) Amazing Engineering Skills – Let’s just start with the big one. There is a highly under-known fact in the software engineering world – many of the best developers and architects are not in Silicon Valley, but in the New York metro area. Between AT&T, the Financial houses and all the great local engineering schools they’re not only the best but there are a lot of them. C++ and Object Oriented design were invented at AT&T, and there are many more examples. New York developers have less attitude, more performance. They’re expensive , but a very large and strong group.

(2) Long Term Scalability – See #4 below – Over time, s a comapny tries to get into a rhythm of continuous growth, they need to develop a reliable growth model. To do this you need human resources beyond techo-nerds – sales, marketing, strategy, bus dev. These people abound in New York. You also need infrastructure and friendly government. Again, New York blows California away here.

(3) Mentor Network – Retired Fortune 500 executives, Harvard/Princeton/Yale scholars, Financial Industry experts, many successful entrepreneurs.

(4) Respect for BUSINESS – Sales, Marketing, Advertising, Strategy were all practically invented in NYC.

(5) Diversified Portfolio of Industries – The best startups draw from several disparate industries around them to be able to grow and learn and diversify. New York is the Fashion, Financial, Art, … (fill in the blank) capital of the world.

(6) Spirit – Nobody has has the same type of spirit as New Yorkers; you know this if you’ve ever been there, especially if you’ve done business there. It has some kind of magic in the air.

(7) Night Life – Many budding high technology centers aren’t the best in terms of top cultural options and the best restaurants. Well, New York… no need to explain.

I could go on, but the combination above is plenty for a startup tipping point. Just watch the Disrupt videos, they’ll give you a glimpse. I’vealways loved New York and doing business there, even though I’m a born and bred Californian. Now they’re heading toward my niche, very exciting. Maybe Zuckerberg should’ve put Facebook there instead of Silicon Valley. Maybe FB stock would be going up instead of down right now.

[Facebook Stock Could Fall Twice as Far Before It Hits Bottom]

@tomnora

The Bubble Begins To Pop

Today it was announced that Betterworks is shutting down after $10.5 million in investment and 18 months of operation. Incredible but not. Around town people have been saying that BetterWorks is one of the strongest startups in L.A. They actually threw a party a month ago “The Silicon Beach 500″, celebrating the amazing growth of local startups.

Betterworks is one of many companies these days that aren’t really companies, they’re an idea, good hype, the ability to trick the public while they’re trying to work it out (We’re doing Great, We’re killing it. We’re hiring.) and the arrogance to say we don’t need any help. I could name another 20 startup in L.A. alone that are in the same boat – they are failing and will shut down eventually, but right now are promoting the facade of success and growth when they’re not either. I won’t names names, but I see their ads on the web. “we’re growing”, “dog friendly workplace”” We Love Startups!”. What about REVENUE and GROWTH and PROFIT and PREDICTABILITY? These are the definitions of Scalability.

Currently early stage startups all want the Facebook model – L U C K. Mark Zuckerberg invented something by accident that grew so far beyond his wildest dreams that it could cover a thousand mistakes. He got funded while wearing jeans and a hoodie. But eventually Facebook had to make Revenue and Profit. Be Scalable.

Most companies aren’t like that. They require good decisions and actions DAILY for YEARS.

Betterworks actually has/had a great idea, they just didn’t quite know how to properly build a business for the long term, and refused to listen to advice. I know that’s harsh, but another few hundred companies are doing the same right now. These companies stifle innovation, not promote it and teach the wrong skils – they need to be called out.

The result will be thousands of pissed off, unemployed people sitting on the beach in Santa Monica wondering what the hell happened. After the 2000 crash Profit and Revenue came back into style, spawning and reinforcing real companies like Google and Salesforce.com which are Profitable and Grow. 2013 will repeat the cycle, so let’s all change our thinking, get back to basics, put the egos aside and respect the expertise available to us.  Contact me if you’re in this camp. @tomnora

Message to group 5/14/2012:

This group now has over 100 members, with minimal exposure – pretty cool.

I never had a goal of maximizing overall # of members, just to provide tools that can be used immediately as well as a network where members actually help each other to start and grow startups. So far, so good – we have some pretty amazing people in the group and we’ve (almost) started a startup.

HAPPY HOUR – looking forward to this, 16 rsvps so far plus a few more I know of. The goal of this is to make connections and hear about the startup we launched together in April. There’s a lot of frustration in trying to get a business going, especially when it relies on technology to succeed, so please come if you can and bring a friend who is interested in the startup thing.

STARTUP #1 “LAUNCHED” – WE’RE STILL EARLY EARLY STAGE – Last week we had our second meeting, this week we’ll have our third, with home work assignments, so it looks we may be actually doing something here. It’s an experiment so stay tuned. We have a strong team, but we’re still looking for more development skills.

NEXT GENERAL MEETINGS – I’m getting ready to announce this, leaning toward Funding The Startup as a topic. I’m trying to finalize sponsors and the venue. Not sure if we should try to launch another startup after this one, what does everybody think? Starting to look like an incubator here. Also working on an Orange County meeting for late June, details coming. Also looking at Palo Alto, Scottsdale, Boulder, Austin from inquiries there.

Hopefully I’ll see/meet you Thursday night or soon after.    @tomnora

And we’re not in a bubble?

Original startups are so Unoriginal that of course they’re getting ripped off…

http://j.mp/KRdQMK

But one of the problems with the new would be all-functions entrepreneur is lack of training in some of the key areas of entrepreneurship – SALES skills. The technology has changed, but the art of selling and closing sales has not. Humans make decisions by being convinced by other humans, even if the convincing is implemented by automation, data mining, and semantics. Respect the human sales skills.

In most of the pitches I get from early stagers these days, they start talking and demoing and don’t know when to quit. They keep “selling” me. This one one of the most fundamental mistakes of selling. It’s much better to say as little as possible, then shut up and listen as much as possible. Pretend you’re interviewing the other person and you want them to talk. You’ll be amazed.

When I hear a pitch, I want to ask questions, probe, dig deeper into specific subjects. If someone talks too much I often forget or lose interest in my original questions. I also feel like they must be a bit desperate. The other night someone was trying to show me a demo of their mobile app in a loud bar. Since we couldn’t hear the audio, they were trying to scream the features to me. Very sad demo.

So don’t talk so much, listen more, you’ll close more sales.  @tomnora

The Art of Sales by Alec Baldwin :

http://j.mp/ILFWw3

http://j.mp/KzXAgR

I think MVP is usually MVBS. There are so many things wrong with the current climate. I’ve written about this many times in my blog, often being called a spoil-sport. Many “mentors” are teaching young entrepreneurs the wrong things, in order to cherry pick them for their own projects. They’re being taught to recite stupid sayings like “Killing It” and “Pivot” and “Seed Round” when they’re doing none of those.

A $50K seed round? $25K?

As someone in the startup world for over 20 years it’s sad to watch what the word startup has become, sunk to. A startup is inventing, it’s UNIQUE technology, UNIQUE idea, UNIQUE deployment. A shoe store is not a startup. A startup is something to be nurtured, built, caressed, enhanced.

For the L.A. vs. Silicon Valley comparison, these mini-launches aren’t helping L.A.s reputation. There are some incredible companies growing in L.A., but way too many fake startups.

The other crazy thing going on? Now everyone says “I’m gonna learn to code”. Ridiculous.

@tomnora

The dirty secret behind the incubator boom

It was great to go along to the Are You Following Me? – How Technology Is Influencing Fashion Trends (#ayfm) event last night – and to have the opportunity to sponsor it alongside Forward Internet.

Held in Forward’s offices in Camden Town, the event was hailed as ‘London’s best tech startups meet Fashion Week’.  With over 120 people attending from fashion, technology, social media and publishing, it proved to be an eclectic group of panellists and audience participants with some very specific and forthright views.

For me, it was doubly great having been to a social-media-meets-fashion event (Fashion 140) in New York last summer.  There is no doubt in my mind that social media is going to make a big impact on the fashion industry, just as digital distribution is fundamentally changing music, TV and games.  What irked me about last year’s event was that it was taking place in New York and not in London.  We may not have come up with Facebook or Twitter (or Google, Amazon, eBay for that matter).  But, surely London can do fashion?  After all, we have Net-a-Porter and ASOS.   Vivienne Westwood, Alice Temperley and Stella McCartney.  And, yes, TopShop and Burberry.  Surely, we are not going to leave all the exciting new tech developments in fashion to the Americans?

So it was reassuring to see a group of international entrepreneurs present and debate some truly interesting opinions and insights on this subject during London Fashion Week (#lfw).  The first panel (Christine de Leon from VeryNiceThreads, James Joseph from Stylenoir, Ryan Barkataki from Closetswap and Katie Smith from EDITD) focused on curation, discovery and user generated content.   Previously, the heartland of the Elles and Vogues of the world, this was all about real time feedback (no need to wait until the next issue), having an opinion, crowdsourcing, the ‘power of pull’ and data empowering better decision making.

Christine had some interesting comments on the power of street fashion in trend setting.  There was a bit of a tussle in the audience when James commented that too many software engineers didn’t make for a great user experience.  But no one was hurt.  I always thought that rule #1 of development effectiveness was cut the tech team in half!

Another interesting comment was on the use of data to make better decisions (led by EDITD).  This prompted a discussion around the concept that ‘fashion is art’ and that data didn’t have a place.  It struck me that, for the truly creative 0.1% of people in the industry, this is probably true.  However, for the rest of us trying to make money from their creative genius, data is pretty essential.

The second panel was a little grittier and was called Platforms, which, being a bit thick, took me a little while to realise meant ecommerce.  Here, Dean Fankhouser from Nuji, Felix Leuschner from Stylistpick, Andreas Klinger from Lookk (one of Eden’s portfolio companies) and Nicola McClafferty from Covetique explained how their businesses aim to monetise social media activity around likes, sharing, following and recommending.  The topics were around traffic acquisition, conversion and KPIs – how to make money from all the likes, followers, nudges, etc.

This discussion struck me as being a little more informed than what I had heard in New York last year.  Maybe the eight months has made a difference (we now have Fab and Pinterest to point to, for example).  Or maybe it’s that, given the relative scarcity of investment in European tech, the startups here have to worry about revenue just that little bit sooner.   For good or bad?

That said, a good number of the participants (both panellists and in the audience) had already raised some funding and a number of VCs were in the audience, notably Balderton and Venrex.  It was good to see many Seedcamp companies present – EDITD, Lookk and Nuji (Eden is an investor in Seedcamp).

Perhaps the most interesting element was the audience participation, and the lack of it. The whole ‘fishbowl panel’ concept was a bit difficult for most of us to grasp.  Nobody wanted to ‘get in the fishbowl’ but this did not hold back the questions.  Notable input came from Metail, Brandid (‘we are clothes, not fashion’, an important distinction) and WishWantWear.  My own personal favourite was having my VC investor ignorance corrected – yes, apparently even Vivienne Westwood uses excess channels to dispose of her remnant stock!

The’ lack of audience participation’ prize goes to some well-known brands – including publishers and online retailers – who kept quiet for the most part, clearly not wanting to take the startups’ thunder (or too busy writing notes?).

Hats off to organiser Janita Han (@oomoo).  Looking forward to the next one.

Watch out New York!  The Europeans are coming.

Related articles

• LOOKK Launches Social Fashion Platform to Connect Up-and-Coming Designers With Consumers (prweb.com)
• Le New Blah Blah Blah #5: EDITD (talldarkroast.com)
• Lookk Presents: Fashion Bytes (filepmotwary.com)

Then last week there was a Venice Town Hall where you could see that locals are in awe of the influx of startups in their (my) little town by the beach. They’re calling it a Venissaince.

Orange County is growing some amazing companies like @signnow who is attracting Tier 1 VC funding @vkhosla.

Coworking spaces, Incubators, etc. Santa Barbara, Ventura, San Diego, Downtown L.A., on and on. C++ meetups where 100 people show up. Jason Nazar @jasonnazar meetings where 400 people show up! Jason Calacanis @jason Startup interview show @TWIstartups with some of the top startup people in the world, who seem to visit L.A. a lot these days. Google has 500 people here now and is building bike paths in Venice. Startup USC. Startup UCLA. Factual! SpaceX.

I love it. I guess it could happen, So Cal could surpass Silicon Valley some day. Never thought I’d say that. My home town.

Oh well….  5000 could easily happen.   @tomnora

Here was a team of two co-founders, Kevin Systrom and Mike Krieger with a vision, ambition and a dream. Both are young, recent college graduates, much like many entrepreneurs running the hundreds, if not thousands, of start-ups that receive outside funding every year. In March 2010, Instagram received $500,000 in seed financing, a rather modest amount from Baseline Ventures and Andreessen Horowitz.  The Company launched their product in October 2010 with 80 initial users, announced Foursquare integration  two months later, then reach 1 million users shortly after. Now, 1 million users is quite impressive by most measurements and by that time, most people in tech have heard of Instagram (including their larger $7 million financing round). Still, with only a handful of employees, Instagram kept appropriately lean while scaling out features, dealing with their 50k+ daily new users and releases real-time APIs that allow universal sharing on any service. Meanwhile, Facebook had been repeatedly rumored to have made acquisition attempts for Instagram. These are the stories that inspire entrepreneurs – both current and future/aspiring ones. The Company closed $50 million of funding at a $500 million valuation just days before announcing the $1 billion Facebook acquisition.

So what does the Instagram acquisition mean for aspiring entrepreneurs and what lessons can we take away? First – growth does not necessarily mean headcount. When Instagram raised $7 million in early 2011, they certainly could have hired more than 10-12 employees (their supposed headcount is “about 13″ employees). Instead, they stayed laser focused on the product and business with the user experience in mind. Second – always have a number. Instagram probably had many interested buyers including Facebook. But when Facebook finally came with a “real offer”, Instagram acted quickly. For many start-up “wantentrepreneurs” – Instagram is a classic example of the bet-big, get-big mentality that is pervasive within start-up culture. Perhaps the $1 billion exit will lead to more wanabe-entrepreneurs to make the leap and start something. Or perhaps, it will simply lead to jealousy and bear-talk about another pending bubble. If there’s one thing I’ve learned since starting ChoicePass, it’s that success takes discipline, hard work, belief, passion and [calculated] risk. For most people on a paycheck, seeing Instagram sold for a large sum of money is the equivalent of winning the lottery for them. But for those aspiring entrepreneurs with a great idea, this might be the push that gets them to start. Maybe they too can create the next Instagram. I’m happy for Instagram because the founders stayed true to their vision and executed beautifully in a space that they were passionate about. We can probably all agree that a photo-sharing app with filters isn’t going to be on the top of our list of “most innovative” new products. But Instagram’s zero-to-one billion story resonates with entrepreneurs because of this simplicity. Try to do one thing very well instead of a dozen not-so-well. Focus on reaching your milestones. Stay lean. And most of all, remember to have fun.

Zero to 1 Billion - Infographic

see page 5 of 35 page April report

Downturn Raises Profile of Government and Foundations as Sources of Early-Stage Funding

The deep recession that began in 2008 and the significant fall-off in early-stage venture deals and investments have helped to change this. The venture capital world has still not returned to the levels of funding of early-stage life sciences companies of the past years and may never return to those levels given the changes the venture capital industry is undergoing today.