Posts
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Facebook
I told a friend today that I really only use Facebook because I feel obligated for work. It’s true, I don’t read the feed and I don’t spend a ton of time there. I post links to stuff I write and respond to messages and chats, but I am not into the rest of the site at all anymore. I hate the feed, it is overwhelming and takes forever to process. I’ve friended too many people who I barely know and it’s too much work to purge. I just don’t care that much about my Facebook account.
I went to community college briefly and then went straight into the workforce, so when Facebook was sweeping through colleges I wasn’t able to get an account (no college email address). I remember the first time I saw it I was visiting a friend at UC Davis and it had recently come to her campus. I had used Friendster and was really into Livejournal, not that big on Myspace, and Facebook seemed pretty simple. She said everyone was obsessed with it, and I signed up when they made it available to everyone. After I signed up I just kind of ignored my account for 6 months (I would later do this with Twitter too) until one day I got an email saying someone had tagged me in a picture. I came back to see what the picture was, and then I stayed.
Shortly after I got onto Facebook I stopped posting on my Livejournal, eventually deleting it for real (not that I hadn’t deleted it tons of times to “make a statement” as Livejournalers used to do). The Livejournal community had kind of died, it had been bought by some Russian company and lost its soul. I was ready to move on and Facebook was ready to let me in. My Xanga account also lost my interest, and my AngelFire site. I had spent countless hours customizing those websites with my meagre web design skills to be a reflection of my own personality but Facebook offered a simple design centered around what I found most interesting – other people.
Fast forward to today and I use Facebook like everyone else. I share pictures, notes, new stories, participate in groups and try to present myself and express myself in that blue and white world. But I know how much I’ve lost – I have a blog I still update regularly and design myself with open source WordPress.org as the backbone. Everything meaningful goes here, not on Facebook. I know my long term social presence on the web, and in the world, won’t be on Facebook and I house my writing somewhere that I control completely. The server, the code, the design, the word… it’s the real expression of me. And while Facebook has evolved in one way I’ve evolved in another direction, and I don’t want to be inside that box.
I know that the motivation to use Facebook is broken for me because when I put out some new information like a status or a picture and no one comments I’m kind of sad, and then I feel ashamed of the fact I’m even considering filtering what I post based on whether I think it will get a “like”. How shallow!
When I put up a new post on my blog, even if I get no comments, few tweets, few pageviews, I feel good. Writing something and publishing it here feels like making a small creation, revealing a small bit of myself, offering up a tiny sliver of something new that I made today. So I think the next Facebook, at least for me, won’t be Facebook at all. It will be a place where I can control the experience of my visitors and express myself as an individual. It is more like to be Wix, Tumblr, Svtble, Strikingly, Medium, etc than anything dubbed as a “social network”.
Hat tip to Scott Hanselman, who has influenced my thinking on this for awhile and who I can finally relate to first hand. If this post resonates with you please check out his post “Your Words Are Wasted”.
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HZO Raises $3.6M to Waterproof Pretty Much Anything
It seems the day I take the protective case off my phone is the same day I spill a cup of coffee on it, and adding a case to my beautiful iPhone 5 ruins the beautiful aesthetic.While these complaints are definitely first world problem, waterproofing electronics is a big business and according to a regulatory filing HZO has just raised $3.6M more to continue its development of nano-coating technology to waterproof devices.
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Quincy Jones Raises $682K More For His “Rosetta Stone of Piano” Startup
As someone who loves (and misses) playing the piano, I was excited to see a regulatory filing showing that Playground Sessions has raised $682,275 to continue building the piano lessons software startup.The company is founded by Chris Vance and co-created by Quincy Jones, a living legend in the entertainment industry and recipient of 27 Grammy Awards. The service was launched in February and Jones calls it “the Rosetta Stone of piano”.
After 3 years of hard work, I’m announcing the launch of my new product @playgroundpiano, the Rosetta Stone of Piano. bit.ly/mRPO3R
— Quincy Jones (@QuincyDJones) February 19, 2013
Michale Carney of PandoDaily covered the company in April and I enjoyed his recounting of Jones listening to a David Sides performance intently. As he described it:
“I had the privilege of sitting next to Jones during the performance. For a man who has collaborated with Sinatra, the Beatles, Michael Jackson, and other luminaries, it was inspiring to watch him become engulfed in the music. While he started off quietly, a few turns in Jones was feverishly tapping his foot along with the beat and humming the melody while swaying in his seat. It was the picture of a man squarely in his element.”
Here is a video of that performance:
According to Carney, Sides scored a 99% in the app for the rendition of One Republic’s “Apologize”.
Investors in this round include two agency execs: Andrew Howlett – CDO of Rain and Neil Munn – CEO of Zag at Bartle Bogle Hegarty of London. The company previously raised $160K in October 2012 from these same investors.
Aspiring recording engineers – it’s important to know how to read music – Quincy Jones has a learning tool for that ow.ly/jI9WX
— Womens Audio Mission (@womensaudio) April 3, 2013
Becoming a member of the service costs $9.99/month to access the community and bootcamp materials. From there members received discounts on tutorials and sheet music, which can also be purchased by non-members at a higher price. Members also get access to badging, leaderboards, scoring of their practice and many other social features to encourage them to practice and play.
Not sure who Quincy Jones is? Listen to this barbershop quartet style tribute to The Dude featuring Ludacris, Naturally 7 and Rudy Currency doing “Soul Bossa Nostra”:
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3D Printing Startup Shapeways Raises Massive $30M Series C
In a regulatory filing Shapeways, the marketplace for 3D printing, revealed the company has raised $30M in a new round of venture funding from Andreessen Horowitz, Union Square Ventures, Index Ventures and Lux Capital. The round was lead by a16z and Chris Dixon has joined the Shapeways board of directors.The company enables anyone to design and produce one-of-a-kind bespoke products using 3D printing.
Turns out this was already covered by TechCrunch back in April — oh well! — Shapeways is such a cool company why not write it up again? I personally can’t wait to see what comes next from the New York based company who, according to LinkedIn, now have 70-80 employees. In fact, I’m buying this incredible iPhone 5 “Sweater” case right now.
I still remember the first time I saw one of the products made by them a few years back at SXSW when they were just getting started, and I thought it was a cool thing for hobbyists but didn’t completely understand how it would get big. Turns out things that hobbyists love (ahem Twilio, computers, etc.) can be embraced by a much larger audience, and it looks like Shapeways has figured out how to crack the code and now boasts a marketplace of more than 10,000 stores on their site.
Cool Things Made with Shapeways
Image Credit: Fragatory
Image Credit: Adafruit
Image Credit: http://www.markflorquin.be
Image Credit: retrocactus on Flickr
Image Credit: Shapeways
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HealthFleet Raising $3M Series B for SaaS Interactive Healthcare Management
According to a regulatory filing HealthFleet, a Boston-based health technology startup, is raising up to $3M in venture capital. The company previously raised a $1.1M Series A in August 2012.HealthFleet’s platform connects patients with counselors (nurses, nutritionists and other caregivers) and health management content to help manage their health beyond the hospital or doctor’s office.
Founder and CEO Bill Van Wyck has quite a track record for founding companies and taking the public. According to the HealthFleeet about page:
Prior to founding HealthFleet, Mr. Van Wyck founded RedRoller, the ‘Travelocity for shipping packages’ where in 2007 he grew it to a public company (OTCBB:RROL) with over 10,000 users. Prior to RedRoller, Mr. Van Wyck successfully built, operated and sold CSI, a technology integrator, to Elcom International, one of the first ecommerce solution companies. Mr. Van Wyck grew Elcom’s same-region sales from $13MM to $110MM in two years, during which time Elcom completed its IPO (Nasdaq:ELCO). An experienced entrepreneur, Mr. Van Wyck has both public and private company operating experience.
Investors in this and the previous round were not revealed in the funding documents.
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Tableau Software Ups IPO Amount from $150M to $215M
In April we reported that the Tableau Software IPO would be for $150M, but the latest regulatory filings show the company could raise quite a bit more, with the top of the range set at $215M.The Seattle-based company is profitable, earning a net income of $1.4 million in 2012 on revenues of $127.7 million.Check out this visualization of post-IPO success (created using Tableau of course) depending on whether or not the company was profitable going into the public market:
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Clustrix – #5 on YC Startup Index – Raises $16.5M Series C
This morning Clustrix announced they have raised $16.5M in a Series C round from Sequoia Capital, U.S. Venture Partners, ATA Ventures and Don Listwin. They are one of the earliest Y Combinator companies, founded in 2005 with nearly $47 million raised to date. Clustrix was ranked #5 on our Y Combinator Index for April.The Benefits of MySQL Without the Scaling Limitations
Clustrix scales MySQL databases as engineering operations needs increase, simply by adding more nodes on Amazon Web Services. The company solves parallel processing challenges associated with applications that have a large quantity of data transactions, and is also used by dev ops to get realtime reporting on database performance an automatically scale up our down the number of nodes in use.Before Clustrix an entirely different kind of datastore, such as MongoDB, would be used. This requires developers to split up their data across multiple servers and use a map reduce algorithm in order to query across all the data. However, developers using Clustrix save time because they can use their existing application code and MySQL connectors and don’t have to deal with sharding.
Possible IPO In Sight?
A PEHub article covering the announcement says:
CEO Robin Purohit told peHUB that the company will likely raise more funding in the next year to bring it to cash-flow positive. “And then we’ll see where the public markets are,†he said.
We’ll certainly keep an eye out for the next REG D to cross the SEC wire from Clustrix, and keep you posted on their monthly momentum and overall progress in the Startup Index.
Photo Credit: Clustrix Facebook page
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New Fund Formed to Hunt Zombie VCs & Private Equity Funds
These zombie stories just won’t die.
Last week Kirchner Group and Crestline Partners announced a joint effort to give limited partners (LPs) liquidity:
There is an estimated $100 billion in private equity assets managed by funds past their investment periods, according to industry estimates. Many of these so-called “zombie funds†have serious issues of alignment between the general partner and limited partners. As a result, an increasing number of institutional investors are looking for creative and effective ways to restructure these funds and rationalize their private equity portfolios.
Meet the Bobs of Private Equity
The announcement goes on to explain its areas of focus, which include supporting or replacing general partners, managing or even restructuring troubled funds, providing portfolio follow-on capital and even company level follow-on investment, and finding other opportunities for exits to give LPs liquidity and maximize value.
According to PEhub Kirchner Group has already has some success with this model:
Kirchner Group has made a name for itself as a specialist in zombie deals. It took over management of the Brantley Partners V LP from Brantley Partners and renamed it Emerald Partners V LP fund, which it continues to run.
What’s In Store for Venture Capital?
VC investing is a subcategory of private equity, accounting for $30B invested by venture capitalists in portfolio companies in 2012, according to the North American Venture Capital Association. This is roughly 10% of the private equity industry’s annual global investment, so I suspect the lowest hanging fruit for this kind of restructuring are among huge private equity firms but I certainly wouldn’t rule out some restructuring of larger zombie VC funds.
We are at the beginning of an industry transformation for traditional venture capital that has been a long time coming, and the chronicling of this shift began with the May 2012 report from the Kauffman Foundation, one of the largest investors in venture capital firms and an entrepreneurship think tank, on venture capital as an asset class. According to their findings:
Venture capital (VC) has delivered poor returns for more than a decade. VC returns haven’t significantly outperformed the public market since the late 1990s, and, since 1997, less cash has been returned to investors than has been invested in VC. Speculation among industry insiders is that the VC model is broken, despite occasional high-profile successes like Groupon, Zynga, LinkedIn, and Facebook in recent years.
You can read the full report here.
We will be watching to see which LPs take this route to liquidity for their venture capital portfolio, and looking to determine what those restructuring deals and partnership changes could mean for the entrepreneurs within their portfolio companies.
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Startup Index: Y Combinator Companies Have More Than 2x the Momentum of 500 Startups, 3x Techstars
How to Read the Startup Momentum Index
Momentum measures a quantity of motion, measured as a product of its mass and velocity. In case we want to measure the momentum of a startup (the “bodyâ€) where mass is the company’s share of web traffic (as measured by Alexa rank) and velocity is the growth trajectory of several different signals (social, inbound links, page rank, etc). It is weighted toward sustained growth, versus small spurts of growth from press coverage or a burst of paid traffic or Twitter/Facebook followers. Larger companies (by traffic) who see a decline in growth across these signals will be the hardest hit, so the worst place to be on this list is in the approaching 0 momentum points.Earlier this week we released the April 2013 Startup Index, which tracks over 1,000 companies in the investor portfolios we’ve indexed with at least 4 weeks of data. Now let’s take a look at the 3 most talked about early stage investment programs and compare the momentum of their portfolio companies.
While the percentage of active companies in each portfolios differs by just a few percentage points, the total momentum points vary widely. For example the top 500 Startups company Virool (which is was also part of YC S12) has 27.69 momentum points in April, but in the YC portfolio there are 10 companies which have more momentum than this. Similarly the top TechStars company Digital Ocean has 18 momentum points, but 500 startups has 5 companies with more momentum in this and Y Combinator has 17 that rank higher.
On average Y Combinator companies had 2.4x greater momentum than 500 Startups and 3.1x greater momentum than Techstars companies in April.These differences seem to line up with differing investment philosophies. While Paul Graham of Y Combinator is focused on “Black Swan Farming” for the one home run company in each batch, Dave McClure of 500 Startups is building a portfolio around companies hitting solid singles and doubles, while Techstars takes a geographically diversified approach. As we continue to collect data it will be interesting to see if greater momentum results in more exits.
April Startup Moment Index: Y Combinator, 500 Startups & Tech Stars
Full Disclosure: both Y Combinator and 500 Startups are investors in Referly, where I am founder and CEO.
Photo credit: New York Daily News
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Judge and Prepare to Be Judged
Much of the feel good media coverage of startups today is so superficial and manufactured it can hardly be called news. Investigative journalism covering tech startups is extremely rare, and when it does happen it’s written in a snarky fashion full of speculation, rather than research and data.
That’s why for the past month I’ve been indexing startups and tracking their momentum using dozen of signals from public data sets. The analysis reveals up-and-coming companies who deserve more attention, and also highlights companies that are not growing or have headed into decline.
Go to any bar, any coffee shop, any coworking space. They’re talking about which startups are going to make it and which are going to die. Investors, employees, friends, family… if you’re working at or running a startup you know people are already piecing together an impression of how your company is doing based on what you say, don’t say, do, tweet, blog, etc. As incomplete as the picture may be, people pick up the signals you and your company are sending out into the world no matter how good you are at putting on The Show.
Delay is the Deadliest Form of Denial
Think your B2B startup shouldn’t be expected to ever have meaningful web traffic? Twilio is #13,158 in global web traffic and Zendesk is #650, so don’t even try that line on me. Companies that build brand awareness, regardless of their industry, are the ones who win. The success of your company is a function of your unit economics multiplied by your ability to get someone to pay you. Before they can pay you they have to know you exist. This is why the most successful B2B tech companies invest heavily in doing world class online marketing, and if you are competing with them you will eventually have to as well.
There are very few B2B SaaS startups that have business models enabling them to succeed with less than 100 customers (e.g. Palantir). Startups in the consumer space will need *at least* TENS OF MILLIONS of people to be aware of your products for you to ultimately succeed. Consumer startups need to achieve massive scale in order to monetize through advertising, or sell themselves to another company who will handle monetization for them (like Facebook).
Unsung Heroes
What excites me most is uncovering companies that are doing really well but flying under the radar. So keep reading, and be among the first to know.Let’s give them something to talk about.