The Good NET Guide

Posts Tagged ‘companies’

As I’ve made abundantly clear over the past several days, just about every service that has anything to do with location is launching something at the SXSW festival which starts tomorrow in Austin, Texas. Don’t believe me, here’s a small sampling (Foursquare, Gowalla, Loopt, Whrrl, Plancast, Brizzly, Twitter). So, how are you going to wrap your head around all this location data? SimpleGeo has an awesome way.

Vicarious.ly is a real-time location-based stream of information presented in a nice visual way. While the plan is to eventually launch one for many different cities around the U.S. and eventually the world, the first one is based around Austin, for SXSW. To make it, SimpleGeo partnered with BlockChalk, Brightkite, Bump Technologies, Flickr, Fwix, Foursquare, Gowalla, and Twitter to pull all of their location data and place it both in a constantly-updating stream, and put data points on a Google Map at the top of the page. These data points are represented by the logos of the various companies, so it’s easy to follow visually.

Those concerned about the privacy implications of this need not worry, Vicarious.ly doesn’t pull actual user names from the companies mentioned above. Instead, they simply note that “someone” checked-in at a venue. They do, however, give the venue name, which is a hyperlink. So if someone just checked into Stubb’s Bar-B-Q in Austin on Gowalla, you’ll see a link back to the Gowalla page for that venue. Likewise, if someone uploads a geotagged picture to Flickr, you’ll see a thumbnail of the picture in Vicarious.ly’s stream, and clicking on it will take you to that picture’s Flickr page.

It’s fairly amazing to see just how much activity there is even today, the day before the conference starts. Tomorrow and the weekend should be insane. “The amount of real-time, location-based information we’re indexing is staggering.  We wanted a powerful way to showcase that, so we built Vicarious.ly and targeted the launch to coincide with a massive gathering of geeks,” co-founder Matt Galligan says about the project.

You’ll note just how much of the activity are check-ins from either Foursquare or Gowalla. Those two are likely to be the two main competitors in the location war that will take place this weekend. (If you’re surprised not to see tweets in the stream, it’s a bug that SimpleGeo hopes to squash tonight).

For more on SimpleGeo, which has a powerful set of tools to easily provide geolocation infrastructure for other companies (such as the new hot startup, StickyBits), check out this and this.

Last November, MSNBC acquired the Twitter account @breakingnews, which was started as a basic newswire by Michael van Poppel and gradually grew to 1.4 million followers (it’s now up to over 1.6 million). A month later, MSNBC announced that it had acquired BreakingNews.com, which has become a web portal for the online newswire. And today, it’s managed to complete the trifecta: MSNBC has just launched a Facebook Page at Facebook.com/BreakingNews.

MSNBC spokesperson Gina Stikes says that the new Facebook account will only send updates for the biggest stories to break (you can still use its other feeds if you want to receive every story to come from the service). The page is obviously still quite new (it only has 645 fans right now), but you can expect that the grow quickly.

Just how quickly is the big question, though: we’ll have to wait to see if MSNBC will be able to leverage its large community on Twitter to establish its Facebook page.  In any case, it’s managed to take ownership of the term “breaking news” across a large swath of the web, which is no small feat.

Today during a panel on disruptive game platforms at GDC’s GamesBeat, a panel of gaming execs took the stage to talk about the current situation in gaming. The standout speaker so far has been hi5 President and CTO Alex St. John, who has not pulled any punches in his criticisms of Facebook and other companies. Moments ago, he just attacked Zynga, calling its games mediocre and saying that its success stemmed from spamming users.

Here’s what he said (paraphrased): “Zynga makes mediocre games. What Zynga discovered is that Facebook had left an opening for spam. They acquired a lot of audience from a security loophole that Facebook has since closed. And they aren’t social. Their only social game is Poker — it’s the only one that you can chat in. All subsquent games are turn based and spread over days.”

The audience’s response? A round of clapping.

Earlier in the panel, St. John said that Facebook was somewhat schizophrenic, offering users both more professional features and gaming. Of course, hi5 is now a dedicated gaming platform, so he isn’t exactly an unbiased observer.

Omniture, acquired by Adobe for $1.8 billion last year, has expanded its partnership with Facebook. Together, the companies aim to provide marketers with solutions to optimize the enormously popular social network as an effective online marketing channel.

Initially, Omniture and Facebook will focus on the ability to automate Facebook media buying and access analytics that measure customer engagement on the social networking service, although the two companies indicated that the partnership will expand even more in the future.

The closer tie builds on the Facebook (and FB apps) analytics capabilities Omniture announced in May 2009.

With the new solution, Omniture customers can now utilize the company’s new SearchCenter Plus product, essentially an enhancement of its search engine marketing management application with new functionality for purchasing Facebook Ads. Omniture customers will thus be able to compare Facebook ad campaign metrics alongside other media channels and increase their ad spend on the social network using tools they’re already familiar with.

In addition, Omniture customers can now generate reports specifically designed to understand ad effectiveness for things like Facebook Pages and applications.

Just yesterday, Eric Eldon from InsideFacebook posted a great, detailed article estimating Facebook’s current and future revenue run rate, projecting that the company could be on track to surpass $1.1 billion in 2010 (and could already have topped $700 million last year).

Partnerships like the one with Omniture are a great way for Facebook to appease marketers who have to date been hesitant to make a substantial investment in marketing on the social network as long as they have to learn new ways of setting up campaigns and can’t effectively track the success of those initiatives.

Editor’s note: Earlier this month, BrightRoll raised a $10 million Series B for its video ad network. In this guest post, CEO Tod Sacerdoti shares some of the lessons he learned trying to raise that money in the current environment.

As Peter Drucker once wrote, “The entrepreneur always searches for change, responds to it and exploits it as an opportunity.” Put more simply, change is good . . . of course, that’s unless you’re trying to raise capital in these trying times.

After my company BrightRoll recently closed its Series B round of financing, we took a step back to digest the lessons we learned from pitching and negotiating with a handful of VCs over our 6-week fundraising effort.

To say raising money in the current economic environment has been different than it was two years ago is a massive understatement. Saying it’s night and day would be more accurate. As a year that was touched off by Sequoia’s now famous “RIP Good Times” presentation, 2009 was highlighted by massive layoffs, significant cost cutting and many well publicized company failures. As a result, many VC firms, and their portfolios, are now fraught with uncertainty—walking a fine line between licking their wounds thanks to poor fund returns and looking for new opportunities to improve their fortunes as the market recovers.

Perhaps the most important lesson gleaned from our financing is that over the last two years, the fundraising environment has become more complex. A still dormant IPO and comparatively sluggish M&A markets offer little hope for the future in terms of exits, while a handful of well-publicized scandals have led to more bureaucratic layers in the due diligence process and a new series of metrics are being used to gauge long-term prospects.

It’s a market in flux, with a whole new set of best—or worst—practices, depending on how you look at them. What follow are some highlights from BrightRoll’s most recent trip down Sand Hill Road.

1. The Mint.com Acquisition Left Anything But a Minty Aftertaste in the Mouths of Many on Sandhill Road

If you read TechCrunch, you undoubtedly know the story of Mint.com. The winner of the inaugural TechCrunch40, Mint.com’s personal finance application lets users track and monitor their financials. The company grew by leaps and bounds following its debut and just three years after its founding was acquired by Intuit for $170M.

By most accounts Mint.com’s rapid rise to prominence and ultimate acquisition is the quintessential Silicon Valley success story. Yet, the Mint.com acquisition brought to light an interesting phenomenon, one I’ve coined the “Patzer Problem.” Prior to submitting offers to invest, three separate VCs wanted to confirm that we had no intention of “Pulling a Patzer,” modern-day Sandhill Road parlance for selling too early.

Here’s why: with large funds being raised on Sand Hill Road and returns from previous funds underperforming, investors are becoming increasingly desperate for that single homerun investment that returns $1B or greater. Even though Mint.com was a huge success for the founder and team, generating $60 million in equity value per year, many VCs believe they sold too early and left too much potential value on the table.

2. Fraud and Its Impact on the Due Diligence Process

In addition to the challenge of getting a term sheet signed, new barriers have emerged that make closing transactions harder than ever. Chief among them is completing due diligence, which has gone from a relatively efficient and painless series of “check-the-box” financial and legal processes, to a full-blown corporate and financial audit.

These changes can be primarily attributed to the alleged fraud and ultimate failure of Canopy Financial, a company that raised more than $85 million from FTP and Spectrum. Canopy is alleged to have falsified financial reports and auditing statements and its investors were left holding the bag, which means that other entrepreneurs seeking funding are now paying the price. To prepare for these changes, companies should make sure to negotiate a cap on legal expenses ($25,000 max) in all term sheets because there is no end to what can be attributed to due diligence under this new model.

3. Perception is Reality, So Prepare Your Third-Party Data

As Mark Twain once said, “Facts are stubborn, but statistics are more pliable.” While both companies and venture capitalists often argue that internal logs are both factual and the most accurate source of online traffic data, this data carries little weight when there are millions of dollars at stake. At BrightRoll, we were amazed how many investor decisions relied on metrics provided by comScore and Quantcast, even when the same investors would simultaneously mock the validity of those reports.

The lesson here? VCs act like public market investors and perceived leadership may be as valuable as actual leadership—don’t forget to put apples-to-apples measurement in place before making your pitch and understand how to explain any discrepancies that may exist between your logs and those of third-party providers.

4. New Metric: Revenue vs. Money Raised (RoR)

We all know that Rome wasn’t built in a day and that venture investing is by nature one of the most risky investment classes. History has shown that companies pursuing billion dollar exits that VCs covet are often required to spend significant amounts of time and capital in their formative years to build out their product and gain market share.

Yet, in what may be a harbinger of things to come, in multiple meetings I was asked to compare BrightRoll’s annual revenue to the amount of money it had raised in previous years. This is what I now call the Revenue on Raised (RoR) Ratio. If your RoR is greater than one, meaning you generate more revenue every year than your total capital raised, then you are in good health and outperforming most later-stage startups.

Just a few years ago, the “Patzer Problem” and the “RoR” ratio would have seemed paradoxical. After all, how can a company be expected to pursue a multi-billion dollar opportunity, bring a product to market and generate revenues in excess of the funds they’ve raised fast enough? As difficult as it is, that is what companies must do. Savvy investors now realize that fast time-to-market, and massive market opportunities and significant revenue generation are all possible in today’s online environment.

5. Revenue Growth or Profitability, Pick One

There is a perception that in 2009 companies were either reducing head count to get profitable or gaining market share to grow revenue. Yet, in most of our conversations the concept of doing both—doubling revenue and getting profitable in a down year—was regarded as the gold standard.

Is this thinking the fatal flaw in the venture model? Looking back to early 2009, it would have been a smart move to invest in companies at low valuations to enable them to deliver either revenue growth or profitability, not both. These results would have been achievable through a disciplined approach, focused on several factors, including:

• Resisting raising too much money before the business was scaling so that achieving a desirable RoR was possible in the short term
• Only hiring where desperately needed, to preserve capital to hire through the recession;

Together, these small steps can pay dividends when it comes to raising follow-on rounds, particularly during tough economic times.

I hope the above lessons help other companies looking to dive into today’s VC environment, as a little knowledge from the companies that have come before you can go a long way.

Photo credit: Flickr/ Steven Damron

The coverage of the Winter Olympics on NBC has been painful to watch. In addition to the tape delays which ruined the outcomes for anyone paying attention to any other news, sports or social media outlet other than NBC, there are a lot of other complaints. In between the hard-hitting reports of polar bears in the Canadian North and life among the lumberjacks, NBC did manage to squeeze in some actual Winter games, which were matched in quantity by the constant loop of the same handful of commercials on heavy rotation for McDonald’s, Visa, AT&T, Diet Coke, and NBC’s upcoming shows Parenthood and the Marriage Ref. (Thank goodness for DVRs).

We already know that NBC’s handling of its Olympics coverage sucks, if only because everyone on Twitter says so. Right now, Twitter Sentiment shows that 73 percent of Tweets about “NBC Olympics” are negative. But what are they complaining about exactly, and is it just Twitter? Some new data from Crimson Hexagon, another sentiment analysis service for brands, shows the breakdown of hate:

Tape Delay Horrible: 19%
NBC Is Awful In General: 13%
Commentators Are Lacking: 9%
Not Enough Sports: 20%
Mobile/Web Lousy: 12%
Other Complaints: 12%
Happily Watching: 15%

These numbers come from an analysis of nearly 20,000 Tweets and 5,700 blog posts and forum comments. On Twitter alone, the biggest complaint by far (25 percent) is the tape delay. But that’s what you’d expect from a bunch of realtime addicts. Overall when you count blogs and forums that complaint ranked second, barely nudged out by the lack of enough actual sports coverage. Notably, only 15 of people on the Web were happy with NBC’s coverage.

Perhaps people just go to the Web to complain, and happy viewers had no reason to log on because they were enthralled by those polar bears. But something tells me the Web’s view reflects the general one. How do you rate NBC’s coverage?

A total of 19 Japanese startups were given the chance to show their services at TokyoCamp, a demo event held by TechCrunch Japan (one of the country’s biggest blogs) this Friday. The event, which was co-organized by hosting company KDDI Web Communications, was a blast and attracted over 200 people this time.

This was the third TokyoCamp (see here and here for my previous reports), and here are short profiles of all the startups that presented there. (Please note not all of the services offer English homepages.)

Demo 1:
AQUSH by Exchange Corporation
Launched by Tokyo-based Exchange Corporation in December last year, AQUSH is a peer-to-peer lending service that is similar to ZOPA in the UK. AQUSH aims to unlock some of the more than US$7 trillion of retail cash and bank deposits (that are earning nearly 0% interest) by offering individual investors access to the US$300 billion Japanese consumer loan market.

Lenders set their desired investment amount and interest rates from 4% to 15% for 5 classes of borrower credit risk, as denoted by AQUSH itself. AQUSH loan applicants are screened based on their credit histories, financial situation and FICO scores.

The service has been in operation for 2 months and so far the average annualized ROI for investors is 10.58% after fees. AQUSH says for borrowers, interest rates range between 25% to 50% cheaper than available from specialized consumer lending companies.

If you can read Japanese, there’s an in-depth (and fairly recent) article on AQUSH on TechCrunch Japan.

Demo 2:
Maysee by Mogura
Japan is business card country, which means that your average salary man collects hundreds of these cards in any given year. Maysee is a service that scans business cards for clients, corrects OCR errors manually and makes the data accessible via PCs or mobile phones through a web app (for $20 per month per user/$0.35 per business card). The company is currently looking for business partners overseas.

Demo 3:
Sketch Piston by Team Lab
Sketch Piston is the name of a “new game genre” created by Tokyo-based Team Lab. There are two “Sketch Action” games available at the moment, Sketch Piston 3 and 4 (both of which were made for Team Lab clients). Players can interact with characters in the Flash games by “sketching” various objects with a virtual pen, stamp and eraser. The games have no goal per se, but users can make and share creative gameplay videos on a dedicated platform.

Demo 4:
Cacoo by Nulab
Cacoo is a what appears to be a powerful online drawing tool that allows multiple users to create designs collaboratively and in real-time. The designs can be shared with certain users or published on the web, for example on blogs or wiki sites. If you make changes to the designs in Cacoo, the blog or wiki the designs were pasted into gets updated automatically and in real-time, meaning there is no need for another upload.

Mainly made for technical illustrations (wireframes, software design diagrams, network diagrams, UMLs etc.), Cacoo is completely browser-based, free and available in English.

Demo 5:
Link Knowledge by SAN SAN
Link Knowledge is an SaaS solution with a focus on CRM and SFA (sales force automation). Much like Maysee (profiled above), Link Knowledge digitizes information found on printed business cards, puts the data into context and stores it in the cloud for customers who can then access their data from anywhere they want.

Demo 6:
Wishcovery
Wishcovery aims at matching people who have the right skills with those who have uploaded requests or project proposals on the site. The service is scheduled to launch in alpha in April. TechCrunch Japan covered Wishcovery just last month after it won the “TechCrunch Japan Award” at the first Startup Weekend Tokyo event.

Demo 7:
Conyac by anydooR
Dubbed “social translation service”, Conyac is actally based on a virtual currency called “Conyac Points”. The way it works is that “requesters” need to pay a certain fee upfront, upload a text and indicate which languages the text should be translated into. Registered translators (who don’t need to get screened or examined) translate texts they think they can handle to earn Conyac points. Those points can then be converted into real money via Paypal, with the service itself getting a 20% cut.

Demo 8:
LIFEmee
TechCrunch50 demopit company LIFEmee presented a revamped version of their eponymous life management service that will go live early next month. Expect less clutter, a simplified UI, fresh features (i.e. a scheduler) and a new mobile version (scheduled for release next month).

Demo 9:
Mangaroo by Mobakids
Mangaroo is a free, social manga service that allows comic artists (amateurs and professionals alike) to upload and share self-created works with other users. Readers can just read the comics, leave comments, bookmark their favorite manga or rate them.

Here’s how a typical “e-comic”, submitted by a Mangaroo member, looks like (click to enlarge):

Each manga is based on Flash and can be embedded in other websites.

Demo 10:
meme memo by meme design
meme memo is a free, Flash-based “pin board” that can be covered with “virtual Post-its”. Each user can set up to ten pin boards (folders) and embed up to 1,000 Post-its (“cards”) to scrape, organize and share various information. Some cards require work by the users themselves (i.e. the ToDo card or the address book), but others get updated automatically once you add them to your folder (i.e. the Twitter card or the RSS card). Apart from pure text, it’s also possible to add videos (YouTube card), images or audio files to the pin board.

Demo 11:
TwitCasting Live by sidefeed
As one of the few iPhone apps that were shown at TokyoCamp, Twitcasting Live (iTunes link) is a free Twitter client that lets you broadcast (video and audio) live through your Twitter account. The app splits the iPhone screen in half: You can see what you currently broadcast on the top and access your Twitter timeline on the bottom. When you start the recording, Twitcasting tweets a link to your followers who can watch the live broadcast on their PCs or iPhones. The app works with both 3G and Wi-Fi and supports the 3G as well as the 3GS (click here for a demo video).

Demo 12:
Bang Me! by DigitalNomad
Let me explain the name first: Bang Me! is a wordplay of sorts on the Japanese word for “program” or “show”, which is pronounced “ban-gu-mi” (seriously). Provider DigitalNomad is marketing the downloadable software as a dead-simple video editing tool for beginners or online businesses that don’t have the budget to produce flashy promo videos.

Bang Me! was featured on TechCrunch Japan last month and appeared to be much better than the name suggests (I was told they will change it when the software goes on sale internationally).

Demo 13:
Hanashirabe by Knowledge System
In case you ever stumbled upon a flower whose name you either forgot or were interested to know, Hanashirabe is the solution for you. Just upload a picture of the flower in question, crop it, specify when you took it and the “flower recognition engine” will reveal the name of the flower in a heartbeat (demo video).

Demo 14:
Talknote
Pitched as “Yammer for private use”, Talknote is a micro social communication service that has yet to launch. The main selling point of the service is that it enables multiple users to text-chat across a number of different devices – virtually in real-time. Talknote will be the first service that allows iPhone users to communicate with owners of regular Japanese handsets this way (PCs, Symbian, Blackberry, Android etc. will eventually be supported as well). The conversations are stored as “talknotes” and can be accessed again anytime later. I was able to play around with the iPhone version, which looked pretty nifty already.

Demo 15:
Qlippy by SpinningWorks
Presented for the first time at TokyoCamp, Qlippy is an iPad application that extends to the web in the form of a social network for book lovers. The app will let users download EPUB-based ebooks off the web to read on the iPad. Provider SpinningWorks says readers will also be able to clip pictures or texts on the iPad to create their own scrapbooks. The clipped elements and scrapbooks can be shared with other people on the Qlippy website (demo video).

Here is an early screenshot (click to enlarge):

Demo 16:
waarp by Waaotn
Korean transplant Dong Yol Lee has presented a very early version of waarp, his 3D audio augmented, “eyes-free” social network system that eliminates the need for a visual UI.

Demo 17:
Video Analytics by sus4
Video Analytics is a freemium-based “Google Analytics for video” that’s especially geared towards e-commerce and education sites. The tool helps to analyze how visitors view videos by breaking down which keywords from search engines are the most effective, how many times a certain video was accessed, how many users watched it from beginning to end, at which points users pushed the stop button etc. All data is visualized online through a Google Analytics-like dashboard.

Demo 18:
mindia
mindia wants to be the online “encyclopedia of your mind”. The main idea behind the service is to provide a platform for people to share their viewpoints on any given keyword with the world (in Japanese, at least). Unlike Wikipedia, mindia encourages users to post what they personally think and makes all discussions public, with every member having a specific profile page (example). In other words, mindia is like Wikipedia with a social network built on top of it. The platform is free to use, but there’s also a solution for enterprises.

Demo 19:
Fastweet/Fastweet Live by Glucose
Tokyo-based startup Glucose presented three Twitter apps for the iPhone. Fastweet is one of the many, many Twitter clients out there and is available in the App Store as a free version (which stores just the latest 200 tweets) or as Fastweet 2K (for $1.99), which keeps the latest 2,000 tweets. Fastweet Live (iTunes link) is a good solution if you search for specific keywords or hashtags. The app then displays just the relevant tweets dynamically, which makes sense during an event or if you want to stay informed continuously on a current hot topic or a specific news item (demo video).

The next TokyoCamp will probably take place in April. Thanks to all attendees, startups and co-organizer KDDI Web Communications, and a sorry to the many people who couldn’t make it on the guest list this time!

Go to TechCrunch Japan’s Flickr account to see more pictures of the event.

If you’re a frequent TechCrunch reader, there’s a good chance you’re familiar with Groupon, a rapidly growing startup that offers steep discounts on local goods and services. It’s a great idea: the deals are only activated once a certain number of people sign up for them, which makes the service viral and allows businesses to quickly gain lots of new customers and move inventory (and consumers obviously save money in the process). What you may not realize, though, is that there are quite a few other companies that offer very similar deals. Now sites like 8coupons a Yipit are letting you find all of these deals in one place.

8coupons is a pretty straightforward site: it uses your IP address to figure out where you are, and then serves up both national and local deals — the same kind you’d find in your local newspaper. Now, it also features a section for Groupon-like “Deals of the Day”. The feed for San Francisco currently includes a handful of deals from Groupon, including 50% off a sightseeing tour, and there are also some deals from competitors including Townhog, Group Swoop, and Bloomspot.  8coupons says that there are actually around 30 different companies across the United States offering similar kinds of deals (Groupon is the largest), and they’re new aggregating them for 10 markets in the US, including New York, Los Angeles, and San Francisco.

Yipit is very similar, and it also allows you to get daily Email digests showcasing deals from these Groupon-like services. I actually like the UI for Yipit better (it’s much more polished), but the service is currently only serving five cities, compared to 8coupons’s ten. Yipit has some other services too, including Spotter, which is a deal-finder that learns about your interests and habits to suggest deals that will best match you. But that’s NYC only for now.

8coupons has been around for much longer than Yipit: it launched in August 2007 as a mobile coupon service.  After signing up with your phone number, you can receive regular coupons and offers from local businesses via SMS. The company has since branched beyond just SMS (though it’s still offered) to include a website full of aggregated deals. 8coupons has 150,000 users and sees around 1 million uniques a month.

We wrote about the power of brand buzz on social media sites yesterday, and one contributing aspect to buzz are individuals who are “influencers,” similar in some ways to the trend that Malcolm Gladwell highlighted in The Tipping Point. But how do companies find and then leverage the power of these influencers on the web? Israeli startup Pursway (formerly known as Datanetis), aims to help companies identify the influencers and followers for each product or offer within their customer database.

The startup has just raised $6 million in Series A funding from Battery Ventures. Pursway will use the funding to expand its operations in Europe and North America and hire more engineers to contribute to product development.

Pursway’s technology helps companies not only identify “everyday influencers” on Twitter and Facebook, but also searches blogs and other web portals to find social influencers who are writing about particular brands or products. The technology then identifies, measures, and shows exactly how opinion leaders shape their followers’ purchasing decisions, giving clients marketing intelligence.

And Pursway has several big-name clients who are using the startup’s technology. Vodafone Group, Orange and other companies are employing Pursway’s offerings to find the social influencers for products. Pursway faces competition from Media6.

IVT, a company that produces enterprise-friendly webcasting software, has raised $5.5 million in Series B funding from Syncom Venture Partners with Barshop Ventures, Monitor Ventures and Tudor Ventures participating in the investment round. IVT raised $3 million in Series A funding in 2006.

IVT’s SaaS offering not only helps power webcasts, but also converts multimedia files, such as slideshows, into viewable videos for the web. IVT also offers a YouTube-like hosting and social media site for companies to disseminate videos and webcasts. And the startup has a number of prominent companies that use its webcasting software including Oracle, Dow Chemical, IBM and NEC.