• Posts

    First Week Using the Jawbone UP Wristband

    I received a Jawbone UP wristband last week as a gift, and it is the first quantified self device I’ve used.

    Before the UP I would sporadically track my exercise and food with the My Fitness Pal iPhone app, but the UP wristband has taken it to another level with mostly passive monitoring of my activity. The only things I can optionally add in myself are my food and my mood.

    As a woman in her late twenties and a startup person I’m generally more focused on my career and spending time with my friends and family than on my health, and so it comes as no surprise I have gained about 20 pounds in the past 18 months since setting out as a founder. In the past 2 months I have finally started taking steps to turn that trend around, and one of the unfun things I knew needed to start doing was stepping on the scale more regularly to see whether I was making progress.

    I think most women (and many men) can relate to the years of emotions tied up around stepping on a scale, and as much I am a confident person overall I had the sinking feeling when the number read out on the screen doesn’t reflect how good you feel about the better decisions or the challenging activities you’ve been embarking on. Weighing yourself isn’t about confirming progress, it’s about conceding that what you did just might not have been enough to move the needle yet. Very rarely do I feel elated or anywhere near happy after stepping on the scale.

    The UP band on the other hand has a completely different emotional connection. It shows me how many steps I’ve taken, how many minutes active and inactive, and how many calories I’ve burned for the day. It also tracks my sleep, showing me how much deep and light Zzz’s I got and also how many times I woke up during the night. When I plug in my UP to sync with my phone I am always excited to see what new progress I’ve made, and I know it’s within my control whether I will hit my goal of 10,000 steps a day or not.

    Another really cool thing about the UP is that my husband has one too, so we can compare our sleep and notice patterns about each other. We speculate on how we might be negatively impacting each other’s patterns, which has made me a lot more conscientious about things like making sure the blinds are draw, lights off, door closed, etc. in the early morning hours when I’m up and about and he’s still sleeping (he tends to go to bed 3 hours later than me and wake up 3 hours later). With steps it’s more of a playful competition, and turns a walk to a meeting for me into a nudge to get up and walk to Starbucks or go to the gym for him.

    Overall it has been a really cool experience so far, and I’m looking forward to seeing some weight loss progress eventually… but for now I am happy to just have a better understanding of what’s going on with my body, and I feel in control of where to go from here.

    What a great product.

  • Posts

    We never meant to stay here

    We never meant to stay here
    We were here for the gold

    We got stuck here for the winter
    Blinded by golden dollar signs
    We built some simple structures
    Temporary, not permanent
    But each year we dug much deeper
    And each year things got more serious
    Each year our hearts grew weaker
    Blinded by golden dollar signs

    We never meant to stay here
    We were here for the gold

    Put a lump of coal in my hand
    Squeeze just as tight as I can
    Hope for a brand new diamond
    I know it’s slight but it’s all I can
    I promise honey that when we get paid
    We’ll pack our things and we’ll move away
    A thousand miles from this frozen lake
    We’ll find a place where we both can stay

    We’ll find a city with a million people
    Find an apartment where the rent is real low
    We’ll disappear and no one will notice
    How about it Darling?
    We could both live downtown

    We never meant to stay here
    We were here for the gold
    We never meant to stay here
    But we’re just dumb animals with our paws in the hole, grasping gold

    Now we’re stuck in a small town
    Out on the shield
    But it lost its appeal long ago
    We wake up at dawn and kiss our wives on the forehead
    And we slowly make our way into the caves
    Where we will forget the faces of our children and our small regrets
    Like, I should have kept that lucky penny while I had the chance

  • Posts

    Dave McClure is Raising $10M for Asia-Focused 500 Durians LP

    I don’t think I’ve ever laughed out loud reading SEC filings until today, when I saw a filing from 500 Durians. What’s Dave up to now, naming a fund after a smelly fruit? The filings confirmed my suspicions, yes this is another fund run by 500 Startups founder Dave McClure, and it will be focused on investments in Asia.

    dave mcclure 500 durians

    This play on words is apt, comparing the challenges and rewards of investing in Asian startups with the challenges (the smell! the spiky hard skin!) to the rewards (the fruit, which is an acquired taste). Despite the inherent difficulties in making small investments in early stage companies overseas McClure is one of the most active angels when it comes to international startups, and the most recent accelerator batch boasted the highest ratio of international to U.S. companies yet.

    He is constantly on the road visiting with founders around the globe, and this strategy rumor has has gotten him into wildly successful international companies like 9GAG and IconFinder while their valuations were still low.

    In an interview with Entrepreneur India McClure was asked why he chose to enter India, and said:

    “I have had an affinity for Asia and particularly India, for a long time now. I had also started a company along with some Indians 20 years ago. I have generally felt very comfortable with Asia and South East Asia because of its demographics and growth. Most of Europe has not seen any growth while Asia is growing very well. I also have a number of friends from India. This makes it natural and easier for me to invest here. India is one of the biggest markets for us primarily because of the advantages: it is English-speaking, has a lot of connections with the US, and is backed by strong talent and cooperation between the two countries. I came here first in 2011, but I feel I have been here for over a decade. Since I came to India, we have made about eight investments in the country.”

    Asia is a big place, and it will be interesting to see if Dave can make 500 investments on that continent alone in the coming years.

    Don’t knock the hustle.

  • Posts,  Startups

    SpotRight Raises $2.8M for Social Customer Intelligence

    According to a regulatory filing Boulder-based startup SpotRight has raised $2,870,889. The company previously raised $1M in funding in July 2012 from Grotech Ventures, Access Venture Partners and FFP Holdings, and also raised a $1.4M Series A from the same investors under its original name Giveo in January 2011.

    SpotRight was originally launched as part of TechStars Boulder in the Summer of 2010 and merged with Spot Influence in July 2012. According to the announcement of the merger:

    “As a combined company, SpotRight unveils an unparalleled platform that helps direct response marketers access social data on their customers and act on it to create real business value.”

  • Posts

    Wiggles of Hope: Yahoo Stock on the Rise, At Highest Point Since May 2008

    If you invested in Yahoo the day before Marissa Mayer was announced as the new CEO you’re probably pretty happy right now. The price has climbed from $15.36 per share on July 15, 2012 to close at $26.58 today – a 73% gain. For long suffering employees with underwater stock options and shareholders waiting for the price to move this undoubtedly comes as a welcome change.

    Yahoo’s stock price is now at it’s highest since May 2008 thanks to a steady stream of acquisitions including the purchase of the Tumblr blogging service for $1.1B today, policy changes and other positive PR for the company. While this is still a far cry from the 10 year high in late 2005, or peak price of over $100/share in 2000 prior to the dot-com crash, Mayer has done more to move the needle in her 10 month tenure than the 4 predecessors who came after Jerry Yang’s departure in 2009.

    Scroll down to see Yahoo vs. Google stock price growth comparison for the past year.

    Google vs. Yahoo Stock Price Growth – 1 Year Comparison

    HT: Hacker News, Images via Google Finance

  • Posts,  Startups

    Project Decor Raises $5M for Social Home Decorating

    In a regulatory filing Project Decor revealed they have raised $5M in venture capital, which includes investment from Launch Capital. The company was founded in September 2011, and previously raised $1.6M in March 2012.

    Project Decor is cofounded by Andy Appelbaum, Cliff Sirlin, and Aaron Wallace. CEO Appelbaum is a well-known New York angel investor and cofounder of online food delivery service Seamless Web, and previously founded several companies alongside Sirlin. Project Decor aims to help people decorate their homes, and is part of a hot space lead by Houzz and Tastemaker. AngelList currently lists 88 home decor startups on their site.

    For their part Project Decor seems to be amassing a following, with more than 1,300 likes on their Facebook page and over 2,000 followers on Twitter. For a social shopping service building visibility and a community will be crucial, and we’ve added them to the Startup Index as one to watch.

  • Posts

    In Race to Be First on Tumblr Acquisition by Yahoo, Wall Street Journal Publishes Questionable Headline

    Update, Sunday May 19, 2013 @ 6:21pm: Some readers mentioned that they thought they’d read somewhere that Tumblr’s board had already approved the sale, but with hundreds of Tumblr news stories over the past few days we were struggling to track down a link where that was actually published. Now we have that post. Jeff Bercovici wrote at Forbes yesterday that he independently confirmed “Tumblr’s board, which includes representatives from Union Square Ventures, Spark Capital and Sequoia Capital, has already voted to approve Yahoo’s offer.”

    The Wall Street Journal headline this morning reads href=”http://online.wsj.com/article/SB10001424127887324787004578493130789235150.html”>”Yahoo to Buy Tumblr for $1.1 Billion”, but last I checked the purchase of a company requires the consent of both sides. The same story reads:

    “It wasn’t immediately clear whether Tumblr’s board had also approved the deal.”

    I realize that it is highly likely at this point that Tumblr intended to do this deal (and readers point out they probably already have a letter of intent to be sold), but how can publishing this headline be considered legit without confirmation from a source? Couldn’t this even have a material impact on $YHOO stock price in the morning? Reporting the deal as fact when it is unconfirmed seems wrong… but now even the New Yorks Times is running with the story, so it must be true right?

    I’ll take this to mean they have sources speaking on background but can’t confirm anything. AllThingsD is widely known to always have the inside scoop on what’s going on at Yahoo

    Why This Matters

    The biggest issue here is that WSJ is a massively reputable news source, and this headline has lead to lazy journalism on the part of many other outlets who appear to have mostly copy/pasted the existing story and conveniently missed the part where Tumblr hasn’t confirmed. The public who aren’t watching closely will simply take these headlines at face value, after all they’re busy and this is all entertainment anyway so who cares if we bend the truth right?

    Geekwire changed their headline to “buying”, but this tweet captures the original headline:

  • Posts,  Startups

    The $3B+ Exit Tumblr Could Have Had

    It’s all over the news, Yahoo! is in talks to acquire Tumblr. The popular blogging platform, which was founded in New York in 2007, has just a few months of cash left and hasn’t successfully monetized their platform fast enough to cover costs.

    To date investors have put $125M into the company, most recently infusing it with $85M more in September 2011 at a valuation of over $800M.

    According to Forbes Tumblr is targeting $100M revenue in 2013 but, according to sources I spoke to who are familiar with the company, actual Q1 revenue growth was flat and Tumblr is on track to do only $15M in revenue this year.

    The company started selling ads in May 2012 and revenue was reported at $13M for the year. Tumblr’s source of advertising revenue is the logged in user “dashboard” where sponsored posts are displayed in the sidebar via Tumblr Radar, while recommended posts are injected directly into the feed by Tumblr Spotlight..

    Tumblr claims 120M+ daily impressions on Tumblr Radar, which equals 3.6B+ monthly impressions. Assuming $10 – 20 RPM (revenue per thousand impressions), which is within the normal range for premium brand advertising, the total revenue opportunity for Q1 was $108 – 216M. Based on this calculation, at an annual run rate of $15M ($3.75M quarterly revenue) Tumblr is selling 1-4% of its total monthly inventory. If you think about this operationally it sounds reasonable, as the company is just beginning to ramp its ad sales.

    This analysis rests on the assumption that Tumblr advertising will command premium brand advertising prices. If not, RPMs in the $3 – $9 would be more realistic and you could reduce all the values in these calculations accordingly.

    Tumblr may also be enticing early advertisers by selling inventory for a fraction of the price it eventually hopes to charge. At $1 RPM $3.75M in revenue would have paid for 30% of the available impressions, and in order to sell 100% of its inventory in Q1 Tumblr’s average RPM would have had to drop to $0.35. Compared to Reddit advertising, which offers $0.75 CPM, and sub-$1 rates for Tumblr CPMs sound plausible.

    Red Flags

    There were signals of a possible revenue ramp miss in the first quarter of 2013 with the resignation of Rick Webb, who was brought on board just 10 months earlier to focus on revenue growth and work closely with Tumblr CEO David Karp. He is the latest in a string of senior executive departures characterized by Beta Beat as a “leadership vaccuum”.

    The shutdown of Tumblr Storyboard in early April was another worrying signal. The project was touted as a “journalism experiment” but was more likely an experiment in figuring out how to work with brands to create effective content marketing on Tumblr’s advertising platform. The production value of the content and high profile editorial team likely cost the company millions but ultimately it “didn’t work” according to Karp.

    The Initial Offer

    The initial offer from Yahoo! is $1.1B in cash, but according to TechCrunch it may not be accepted:

    “Tumblr employees feel that Yahoo’s $1.1 billion offer is “too low” and view it as “only a first offer,” according to sources close to acquisition talks.” – TechCrunch

    Employees’ opinions aside, the lack of cash on hand and lack of trust in leadership to hit revenue milestones are likely having a negative impact on Tumblr’s negotiating position, which is probably contributing to what some consider a “lowball” offer.

    When it comes to setting the price, rumors that and Facebook and Microsoft are waiting in the wings to make an offer could produce a competitive bidding situation that will make up for the valuation gap left behind by questionable business results.

    Setting the Purchase Price

    In an acquisition the purchase the price is usually set as a multiple of existing revenue or expected near-term revenue. For media companies a 10x multiple on revenue is quite steep Edit: but does happen (AOL paid $315M for Huffington Post, which exited with $30M in revenue), and with only $15M of revenue in 2013 that would put a Tumblr acquisition price tag at just $150M.

    My first reaction was that Yahoo! or whoever else was involved in the acquisition talks was about to massively over pay. But Yahoo! isn’t stupid, so what’s going on here? Clearly this is about expected value, not actual revenue. If Tumblr were to hit their own stated $100M revenue target a 10x outcome would be $1B – but employees are saying this is a lowball offer. Why?

    Looking at our numbers from earlier, at $10 – 20 RPM and 3.6B dashboard impressions a month (and growing) the annual revenue potential for Tumblr ranges $432M – $1.44B.

    Viewing the $1.1B offer from Yahoo! through this lense, it is 2.5 multiple of the low end of the expected revenue range. An acquisition at the high end of the range with a 2.5x multiplier would be $3.6B, and realistically if the company was crushing it on ad sales the multiple could be even higher.

    Why sell a company with such a substantial revenue opportunity on the low end of the range?

    Pencils Down, Time’s Up

    While employees hold onto the hope that the company will be valued on it’s ability to drive billions in revenue, the reality is that Tumblr didn’t pull it off in time. The vast majority of that potential was not realized in time.

    It wouldn’t be a problem that Tumblr is lagging in revenue production if the board felt the odds of the company capturing this expected value were good, and that was probably the thinking when they invested $85M in 2011.

    Two years later it looks like the CEO who famously quipped to the L.A. Times “we’re pretty opposed to advertising, it really turns our stomachs” may have hesitated to monetize too long, and investor patience seems to have run out.

    The path to keep the company independent would probably involve finding a replacement CEO, or at the very least hiring a COO to be Tumblr’s own version of Sheryl Sandberg and drive the company aggressively toward revenue. It would also mean raising a boatload more cash at significant dilution to everyone involved, cutting expenses, and buckling down to operate like a serious business generating meaningful ad sales revenues in the next 18 months.

    Outcomes

    In choosing to sell the company and hand Tumblr over to a professional management team with a track record for monetization through media properties, the board is implying that they do not feel putting more money into the company would enable the management team to achieve a better outcome in a reasonable amount of time. Investors who participated at the $800M valuation are probably welcoming the prospect of a $1.1B exit in cash – assuming some liquidation preferences were put in place they’ll get their customary 2x-3x late stage return, and the deal won’t negatively impact their respective fund’s overall IRR.

    Selling now may also allow David Karp to remain in a leadership position at Yahoo! where he can continue his work to revolutionize advertising – maybe even leading Yahoo! to a more competitive position vs. Google for brand advertising and giving them a reason to drop the underperforming partnership with Microsoft in the long term. And if things don’t work out with Karp Yahoo! doesn’t seem to have any problem firing acquired founders who no longer fit with the company’s plans.

    In the end Tumblr won’t see a bigger exit because they didn’t prove they could monetize their massive traffic before time (and money) ran out.

    This article was quoted in: New York Post, Valleywag, and Mashable