As smartphone cameras improve, more and more people are able to take quality photos that could, in effect, threaten a service like Shutterstock.
However, Shutterstock founder and CEO Jon Oringer doesn't see it that way.
"It's less of a threat." Oringer told us. "It's more of an opportunity."
Watch below to find out why Oringer thinks mobile and video spell the future of Shutterstock:
Produced by Business Insider Video
Startups that go through TechStars seem to be bound for success.
TechStars is a three-month accelerator program that gives entrepreneurs access to mentors, and invests $118,000 in each company: $18,000 in seed funding and an optional $100,000 convertible note.
TechStars, which has offices in New York, Boston, Boulder, London, Chicago, and Seattle, has funded companies like SendGrid, Condition One, Kinvey, and Timehop, to name a few.
Out of the 175 startups that have gone through TechStars, 90% of them are still up-and-running or have been acquired.
That's not a much higher rate than some other accelerators.
Silicon Valley's prestigious Y Combinator accelerator has a just slightly lower success rate. 88% are active or have made an exit, according to YC list, an unofficial database of all YC companies.
Still, 88% is good – especially in startups, where most fail.
So why does TechStars have such an impressive success rate?
Well, it comes down to a few things, but here's the main reason why.
TechStars Boston Manging Director Katie Rae recently schooled us on why most of the startups that come out of TechStars end up being so successful.
"A huge part of TechStars and why we have space is because we think if you put them together, they form a much tighter bond with each other," Rae says. "All of the classes remain incredibly good friends [and] allies in the joy and dark moments of entrepreneurship."
In light of the recent suicides in the startup industry, those allies may be more important than anyone could possibly imagine.
"People talk about (allies), but it’s real and it’s so important," Rae says. "I think that’s one of the reasons so few of our companies die. People have each other’s backs. I try to drop people into trusting relationships very very quickly. And you know, people always laugh about it, but it’s real and it’s real to me, and it’s one of the things that I think is my primary job is to kind of create space where people can put it all out there and get to an honest assessment where they are, where their team is and what they need to get done."
If entrepreneurs can work in an open and honest space, Rae says, they can make a lot more progress.
"You can take your cloak off and be real with other entrepreneurs who are going through the same stuff," Rae says.
SEE ALSO: Behind Closed Doors Of Ultra-Exclusive Startup Accelerator, Techstars NYC
A startup CEO recently asked for some advice on Quora.
The anonymous CEO runs "a small successful" software startup that has recently seen "explosive growth" thanks to its new scalable solution.
Now, the biggest player in the space is telling the company that unless it sells, it will simply copy the product and sell it for less.
The offer: 7 - 12x the run rate on this month's revenue, the CEO writes on Quora.
Here's what the CEO should do, according to the Quora community:
For starters, the CEO needs to think about how credible the threat actually is, Marc Bodnick, co-founder and former managing director at Elevation Partners, wrote in response.
"In other words, startups often face the threat of a bigger company entering their markets, and they need to have the self-confidence to keep going," Bodnick writes. "Many companies have built great products that have successfully competed with Oracle, Microsoft, Google, and others."
The advantages of a startup are its focus, product and team, Bodnick writes. But larger companies typically have tons of capital, a bevy of customers and relationships, and more resources. That's why it's important for a startup to assess its situation and competitive position.
He points to the example of Diapers.com selling to Amazon. In that case, the threat was very credible, as Amazon already had the means to distribute products at a speedy rate.
"In other situations... even if a big company is determined to enter a market (i.e., it will build if it can't buy), it's still likely that they will fail because they won't be able to match the product capabilities of the best startup in the market," Bodnick writes.
But Bodnick notes how there's a lot of uncertainty the CEO will have to deal with if he or she walks away from the deal.
Another Quora user, Jason M. Lemkin, wrote that he went through a very similar situation.
Lemkin's advice:
"Know your BATNA (best alternative to negotiated agreement), plain and simple." It's also important not to get too caught up in the language, Lemkin writes.
"Just try to determine if they are serious about entering the space if you say No," Lemkin writes. "Will they enter directly? Or buy your #2 competitor? The second scenario probably is one to fret about more if you are post-Initial Scale or even post-Initial Traction. And will they sustain the interest past 6-12 months?"
Other users suggested selling, and joining the acquiring company as a vice president. But another user recommended speaking with some of the other big players in the space and getting them to bid on the company.
Head on over to Quora to read more.
SEE ALSO: Pinterest Just Made Its First Acquisition
A mere ten months after releasing a product into the market, LineRate was acquired by F5 Networks.
Business Insider has just learned that the tiny startup, with less than a dozen employees, walked away with "way more" than $10 million, according to a source close to the company.
We're not sure how much more but our best guess: $50-$100 million. That's because another SDN startup, Contrail Systems, was bought in December by Juniper for $176 million, just two days after it launched. It had raised $48 million in VC funds.
Neither F5 nor LineRate officially revealed the terms of the sale but our source told us it was in line with other acquisitions in this hot "software defined networking" market. We were also told that it was one of the biggest tech acquisitions in Colorado since HP bought a company called LeftHand Networks in 2008 for $360 million.
Whether $10 million or $100 million, that's still a pretty good haul for the LineRate crew. Cofounders John Giacomoni and Manish Vachharajani invented the tech during their post-grad work at Colorado University. They hired CEO Steve Georgis and raised $4.75 million in a seed round led by Boulder Ventures.
The feeding frenzy on SDN startups began when VMware bought Nicira, the market leader, for $1.26 billion in July. Nicira had raised about $50 million and had come out of stealth five months earlier.
Since then, SDN startups have been the darling of the enterprise tech world. In October, Nicira's biggest competitor, Big Switch, landed $25 million in financing. Plexxi came out of stealth in December backed by $48 million. In August, SDN startup Plumgrid landed $10.7 million.
SDN is a new technology that disrupts the $50 billion networking equipment market. Instead of buying expensive routers and switches with a lot of fancy features from the likes of Cisco or HP, companies can buy simpler, cheaper hardware—and less of it. All the fancy control stuff is handled by software. This makes networks more flexible and less expensive than they are today.
SEE ALSO: 8 Enterprise Startups Creating A Brand-New, $4 Billion Market
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The Bill & Melinda Gates Foundation recently led a $100 million investment into a controversial project that will collect and sell student information.
Startups and educators are excited. Parents, on the other hand, aren't so happy.
The foundation teamed up with the Carnegie Corp. and school officials from various states to create the new database, Stephanie Simon of Reuters reports.
The database, which is now operated by a non-profit organization called inBloom, went live about three months ago. It includes information like learning disabilities, test scores, attendance, student hobbies, social and career goals. It ties that information to individual students.
Local education officials will have all legal control over their students' information, and will be able to share that information with private companies selling educational products and services.
It's "a godsend for us," Jason Lange, CEO of education startup BloomBoard, told Reuters. "It allows us to collect more data faster, quicker and cheaper."
The goal of the project is to make it easier for other K-12 tech startups to launch, too. This is an area that's attracting a lot of startups and money, more than $425 million in venture capital, according to the NewSchools Venture Fund.
Until now, all of these startups had to reinvent the wheel, each creating their own student databases.
But while startups are very excited, many parents are concerned, Reuters reports. They fear that the database, which sometimes includes students' social security numbers, will be misused.
SEE ALSO: How Robots Could Make Their Way Into The Classroom
Greylock Partners' David Sze has made some very good investment decisions. He wrote early checks to Facebook, Pandora and LinkedIn.
But he just wrote his biggest startup check yet. Sze gave Nextdoor, a social network for neighborhoods, $15 million on behalf of Greylock, which led the startup's $21.6 million round of financing.
Sze tells Bloomberg that Nextdoors' membership growth reminds him of the early LinkedIn days.
Nextdoor has yet to generate revenue, but it plans to go after local advertising dollars, which many entrepreneurs have tried and failed to capture. It's up and running in 8,000 US neighborhoods, more than double its reach in July. Bloomberg says 500,000 messages are exchanged daily over Nextdoor.
"It has all the hallmarks of being the next great massively valued social network,” Sze said. “I see every social network that comes out. I’ve sorted through all of them and passed on most of them.”
Nextdoor hasn't disclosed membership numbers but ComScore data shows 140,000 people visited the site last month. The company's internal analytics are likely higher, but it still seems like a small amount of users to snag so much money. The two-year-old company has nearly 40 employees and it was co-founded by Nirav Tolia.
Andreessen Horowitz partner Ben Horowitz is always coming out with useful blog posts about how to operate a company.
(His bona fides: He was the CEO of Opsware when it sold to HP for $1.7 billion.)
His latest is about things a CEO can do to keep star executives performing like star executives.
The whole post is worth reading, but the surprise ending is great.
Horowitz says that sometimes, you have to let a star executives go – even if he or she was one of the key people who helped you grow your startup into a successful company.
When I used to review executives, I would tell them: “You are doing a great job at your current job, but the plan says that we will have twice as many employees next year as we have right now. Therefore, you will have a new and very different job and I will have to re-evaluate you on that job. If it makes you feel better, that rule goes for everyone on the team including me.”
In giving this kind of direction, it’s important to point out to the executive that when the company doubles in size, she has a new job. This means that doing things that made her successful in her old job will not necessarily translate to success in the new job. In fact, the No. 1 way that executives fail is by continuing to do their old job rather than moving on to their new job.
Finally, what about being loyal to the team that got you here? If your current executive team helped you 10X your company, how can you dismiss them when they fall behind in running the behemoth they created? The answer is that your loyalty must go to your employees—the people who report to your executives. Your engineers, marketing people, sales people, finance and HR people who are doing the work. You owe them a world-class management team. That’s the priority.
Bleacher Report co-founder Bryan Goldberg isn't done with startups, even though he just sold his sports company to Turner for ~ $200 million.
Goldberg says he's going to get back into the content game and create another media company. And he says he's going to make an even bigger fortune doing it.
Media companies, Goldberg says, are the best kind of startups to create, even though venture capitalists are typically scared to fund them.
"There are the three [digital media companies] have sold for nine-figure exits — DailyCandy, Bleacher Report, and Huffington Post. Then there are the many that are almost certain to sell for nine-figures one day — BuzzFeed, PopSugar, Vox Media, Refinery29, Curbed, Mashable, Gawker, BusinessInsider, Thrillist, etc," he writes on PandoDaily. "And what else do you notice about the dozen companies that I just mentioned above? They are all experiencing record traffic and revenue. Every single one. Not one of those sites has ever seen better days."
In addition to yielding big returns often, Goldberg says the business model is simple. Content companies can make money via e-commerce and advertising alone without having to reinvent the wheel.
(That said, we suspect Goldberg will find times have changed since he started Bleacher Report. CPMs aren't what they used to be, especially for new startups without brand names that are trying to monetize on crummy Google ads.)
But Goldberg is confident. "I am thrilled to be in this space, and I can’t wait to launch my next site. It’s going to make me rich(er)."
Jacob Mullins is a Senior Associate at Shasta Ventures, a venture capital firm that has invested in startups like Nest and Path.
Lately, he's had a lot of tough conversations with entrepreneurs. Founders are running out of cash because investors have gotten tighter with their money in recent months. Now entrepreneurs are facing the tough realization that their startups probably won't survive.
After hearing numerous stories from troubled founders and observing the brutal war for talent in Silicon Valley, Mullins saw an opportunity.
He created ExitRound, a place where struggling startups and large corporations can meet each other to discuss potential acquisitions. It's the opposite of AngelList, a database where startup founders can meet potential investors. ExitRound is where startups can quietly raise the white flag and explore exit options.
It has the potential to be a powerful tool for entrepreneurs and help less connected founders land softly at companies where they don't currently have contacts.
When startups get acquired by companies like Google or Yahoo, it's usually because the founder and the company were already in touch. But if a founder doesn't have many contacts, its exit options are limited. On ExitRound, the playing field can be leveled.
Founders have to apply to create an ExitRound profile and all listings are completely anonymous. Those who come highly recommended, are financially backed by VCs, or have gone through notable accelerator programs such as Y Combinator are favored.
Once they're granted access to ExitRound, founders can create anonymous profiles describing their executive teams and their business models.
Corporations can peruse the information for potential fits for their companies. If the corporation sees a startup it likes, it can message the founder, much like a LinkedIn InMail message.
The founder can either ignore the message or respond, which opens up the discussion.
Like a typical recruiter, Mullins will charge a fee for introducing the two if an acquisition occurs over ExitRound. The cost will be $10-20,000 per person acqui-hired.
Mullins will remain employed by Shasta Ventures while he works on ExitRound, although the two companies aren't connected.
Mullins wants to avoid taking any venture capital for his startup, because he wouldn't want to feel in any way like he had to push entrepreneurs to sell their companies.
But for the many startups who will inevitably need to figure out next steps, Mullins will be there to help them softly land.
Boulder, Colorado, home of startup incubator TechStars, is known as a great place to live and establish a tech company.
But the state has one big problem: There aren't enough venture funds there.
Governor Hickenlooper is trying to change that with a unique plan. He's gathered the state's richest tech leaders and asked them to create a new venture fund, which will be used only for startups in Colorado, he said a private press conference today at the VCIR venture capital show in Beaver Creek, Colo.
They'll be asked to become limited partners, kicking in their own cash, and/or making investments with funds from their companies. The state will be a limited partner, kicking in money from its retirement program.
The fund will be run by this consortium of business leaders, such as Ken Tuchman, founder of call center company TeleTech and "a billionaire before he was 40," Hickenlooper describes.
Hickenlooper expects the initial fund to be small $100 million to $150 million but hopes it will accomplish two goals: encourage more VCs to fund Colorado tech companies, and act as a role model for other states looking for public/private government initiatives.
Instagram has over 100 million users, but it doesn't generate any revenue for Facebook. On the flip side, Shutterstock has over 22 million photos in its database and is a publicly traded company generating tons of revenue.
So, what's Shutterstock doing differently than Facebook?
For starters, Shutterstock is a subscription service that relies on a secure approval process for its photos.
Shutterstock founder and CEO Jon Oringer talks to us about Shutterstock's comprehensive approval process and what life is like as the leader of a publicly traded company:
Produced by Business Insider Video
SEE ALSO: Our Favorite Instagram Photos From The Last Year >
Many startups are having a difficult time convincing investors to give them money right now.
But as any investor will tell you, the best startups are having no problem getting funding.
So, which new companies are attracting VC dollars in droves?
"Tinder and Wanelo are the most sought after deals right now," one says.
Tinder is a mobile app for single people that is highly addictive. It allows users to create quick profiles by logging into Facebook. It pulls in their five most recent profile pictures as well as their age and "about me" section. Then, it shows other users who live within a five-mile radius of that user the person's profile. They can either "heart" or "X" the person with the press of a button, and the next user's picture pops up. It's a lot like Hot or Not with the goal of matching people who find each other attractive.
So far, Tinder profiles have been rated 1.5 billion times. If you live in New York or Silicon Valley, you won't have to peruse Tinder for long before an investor's face pops up. We ran into angel investor David Tisch while doing a walk-through of the app. (He's newly married, so it's pretty clear he was doing research).
The founders recently told The New York Times that 20 million matches have been made on its app, and it's downloaded 20,000 times per day. With numbers like that, it's not surprising investors are trying to get a piece of the Los Angeles-based company, although one tells us they think it could be a fad, like video startup Chat Roulette.
Unfortunately, investors will have to deal with IAC if they want a piece of Tinder. Tinder was incubated in Hatch Labs, a startup accelerator backed by IAC, which owns Match.com.
[See also: Tinder, The Judgmental And Addictive Dating App That's Sweeping College Campuses]
Another startup that's getting a lot of attention is Wanelo. It's Pinterest for shoppers. Unlike Pinterest, every item on the site can be purchased. The items are displayed as a series of beautiful photos of clothing, shoes and more. The pictures can be sorted into detailed searches, such as "glitter""feathers" and "turquoise."
A quick glance at Wanelo's ComScore numbers show it's about half the size of Fab.com (which has more than 10 million users and raised $170 million). It's larger than The Fancy, a site that is backed by Jack Dorsey and recently partnered with Google +.
While it's still unclear what valuation Tinder will receive, Wanelo is raising a round at a valuation higher than $100 million (TechCrunch first reported it, our sources confirmed it). Sequoia was one of the firms circling the startup.
A third startup that's getting big money and attention right now is Nike Fuelband alternative, Fitbit. Fitbit is a sleep and activity tracker that displays how many steps a person takes in a day, how many flights of stairs they climb and more. It displays the data both online and in a mobile app. Fitbit is reportedly raising $30 million at a $300 million+ valuation.
SEE ALSO: A Startup Called Wanelo Is Every Shopaholic's Nightmare And It Is Already Half The Size Of Fab
SEE ALSO: Normal, Non-Geeky People Are Running Rampant On A New Dating App, Tinder
Venture capitalists and Colorado startups swarmed the mountain ski resort of Beaver Creek this week looking for a hook up at the Venture Capital in the Rockies conference.
We were on hand to help judge the presentations of 22 startups as they tried to convince the crowd to invest. (We were joined by the enterprise editors from AllThingsD, Arik Hesseldahl, TechCrunch's Leena Rao and VentureBeat's Christina Farr.)
Denver/Boulder has become nationally known for its tech startup scene. It appeals entrepreneurs looking for a great lifestyle at a lower cost of living than the Valley.
So we weren't surprised that nearly all of the 22 startups presented were interesting. Here's a few that particularly stood out:
CypherPoint: A cloud service that adds military-grade security to file sharing and collaboration tools. It won the show's "most likely to succeed" award.
Cloud Elements: A tool that helps various clouds connect to one another. This is an increasing problem as companies use more and more cloud services. Their data gets stored in silos in each cloud and its a big technical challenge to get the clouds to share.
Geostrut: A super secret manufacturing process that turns carbon fiber into lightweight cell phone towers. Carbon fiber is a popular material for things like expensive bicycles, but it's notoriously hard to work with. Geostrut has built manufacturing facilities in Utah.
Lagrange Systems: A super hot "software-defined-networking" startup. SDN startups are being bought almost as soon as they push their products out the door. These guys offer software that creates software networks (SDN) out of software servers (virtual servers). It's a great example of Marc Andreessen's concept of "software eating the world."
Mobile Pulse: A SaaS product that helps enterprise companies choose a wireless carrier and then verify that the carrier is meeting its contractually guaranteed uptime.
RoundPegg: A social SaaS platform, developed by psychologist Dr. Natalie Baumgartner. It helps a company define and measure its corporate culture and verify that employees fit in. It's good when a company reorganizes, has a merger or other such change.
SEE ALSO: It Only Took 10 Months For These Guys To Make More Than $10 Million
Smartphones have become so popular, they are overloading carrier networks with too much data.
Carriers are trying to fix it in all sorts of ways: making their networks faster, spending $53 billion on new 4G technology. buying more wireless airwaves (called spectrum) that can handle ever more smartphone traffic.
They've got it all wrong, according to a new Denver-based startup, Giiidget. Instead of making cell phone networks faster and bigger, carriers needs to make the data smaller, explains cofounder and CEO Megan Haines.
Giiidget has invented a new technology that compresses smartphone data 30:1. In other words, it makes your photos, Facetime chats, texts and apps 30 times smaller than they are today.
It's a smart idea, even though the company's tech is months away from landing on our smartphones. Giiidget is in the process of testing its tech and hopes to lure its first big carrier into a trial. The company is seeking $1.5 million in seed/Series A funds to get started.
It's also got some interesting smartphone apps in the works, but the company isn't out of stealth yet and we promised not to reveal too much about that.
There's some good reasons to believe Giiidget could succeed. Among the company's advisors is a Denver VC with deep roots in the wireless industry: Peter Mannetti. He's the former CEO of US West Wireless, a carrier that was acquired by Qwest.
Giiidget won the "most disruptive startup" award at the Venture Capital in the Rockies conference held this week in Beaver Creek, Colo.
SEE ALSO: AT&T, Verizon, T-Mobile Signed An Unprecedented Deal To Make Smartphones Work Better Read more:
After sorting through thousands of applicants for its three-month accelerator program, TechStars Boston recently announced the 14 startups in its spring 2013 class.
Now in its sixth class, TechStars Boston, has mentored companies like Localytics, Kinvey, and Memrise.
We recently got a chance to learn more about some of the startups in TechStars Boston's current class. Here a few that really stood out.
CheckiO is a web-based game world in which you code in Python to advance your expertise in computer programming. In order to get to the next level, you need to write code and complete certain tasks.
The game is designed to teach you how to actually make programs, not just the basics, through problem solving. Since it's geared toward more advanced programmers, you need to have some basic understanding of coding in order to play.
For example, you might be asked to build a program that runs Tetris.
The programming space is bustling with startups, given the likes of Codecademy, Treehouse, and Code School. That's why CheckiO aims to complement, rather than compete against a site like Codecademy.
CheckiO is still in its early days, but more than 18,000 people have already registered for the service.
Constrvct essentially lets anyone become a fashion designer. The company is all about designing clothing for the digital age.
"Fashion, I think, is becoming more personal," Constrvct co-founder Jenna Fizel tells Business Insider. "Not just our products, but eventually nearly anything you buy will be custom made to your preferences and shape. I think digital tools will become more and more common, and the experience of shopping will turn into one of co-creation."
Constrvct works by letting people upload images to create a fabric design. It then creates an interactive, 3D model of the garment specific to your shape and size. Next, Constrvct custom prints the article of clothing, then cuts and sews each design. Eventually, they plan to let people sell their designs, created out of their own artwork, to the public.
Prices range from $125 for a t-shirt to $350 for a sheath dress.
"I think there’s lots of interesting stuff around hardware and software mixes and the fact that we can create and print things are fabulous and fun," TechStars Managing Director Katie Rae told Business Insider in a recent interview. "One of our companies here, Constrvct, they’re right at the center of fashion design, CAD (computer aided design), 3d printing, this whole messy, awesome world."
Another startup working in this "messy, awesome world" is Freight Farms, which is literally a farm in a box.
It transforms shipping containers into portable farms, and can be installed anywhere — parking lots, school playgrounds, rooftops, you name it.
The containers are insulated, water-tight, weatherproof, and aims to be more versatile and cost-effective than a traditional greenhouse. It makes fresh food accessible in places where the climate doesn't support traditional farming methods. Freight Farms' units can grow crops like lettuce, herbs, and fresh fungi. Users can remotely monitor and control the farming unit from a smartphone.
"We all think of communities and agriculture as being outside of the city, but maybe they're inside the city now. How can that change how we eat? How accessible healthy food is? Could you lower the cost structure of healthy food?" Rae says. "And [Freight Farms is] all driven by software. It’s a hardware design driven by software. I love those messy edges that essentially change everything."
SEE ALSO: TechStars Says This Is Why Hardly Any Of Its Companies Fail
Last year, I wrote an article in Business Insider about how the NYU Poly Incubator was one of the best coworking options in the city.
Since that time, several startups in NYU Poly have had sizeable exits —such as nRelate (sold to IAC).
NYU Poly is a program run by the City of New York and NYU. They give affordable office space (subsided by the city) to startups for six months and ask for no equity or consideration in return. Their only goal is help startups get off the ground that will create jobs in NYC.
While NYU Poly has been a success for the city, I have talked with dozens of startups who are located at the 20+ other for-profit co-working spaces in NYC that have popped up in the past few years. Surprisingly, more than a few startups are now complaining about the real benefits of these locations and some are actually making a decision to leave them all together. When I dug deeper, I found some interesting reasons for startups leaving coworking and incubator locations.
1. No privacy. The biggest complaint against coworking locations is that startups are usually in an open area with dozens of other startups. While at first this setup looks great from a collaboration and networking point of view, it gets old really fast. Several founders have said they don’t like how much poking other companies do (asking questions about their product, talking to their engineers when they are trying to work, asking for an intro to a contact, trying to socialize during working hours, etc.). In fact, some founders now ask other startups not to disturb them during core working hours.
One founder told me that he is constantly worried that other startups who are pivoting away from their failed model are trying to find ideas by cloning or seeing what other startups in the incubator are doing. Worse yet, this founder said that some companies in the coworking space who raised money or were making traction are openly trying to hire away people from other companies in the coworking location. This founder said that as soon as he raises his next round of funding, he will get a private office. He does not like having to deal with people trying to copy his ideas or steel his employees.
Another founder openly complained that he wish he never joined a particular incubator. Just because he was accepted into the program, he says that his team was disrupted nearly every single day by the incubator management. Usually, the management wanted an update on progress, or to introduce the startup to some visitor (angel VC, reporter, etc.), or just show off the company to a potential investor in the incubator itself. This founder told me that he decided to move out early because of management’s constant distractions.
2. Inability to establish company culture. At some coworking locations, management is trying to set the culture of not only the incubator, but the companies themselves. Founders are pushing back, saying that they want to develop their own unique culture. For example, some places want startups to participate in certain social and non-profit events. Yet these programs might be something that the startup is not fully on-board with, or simply does not have the time to participate or the money to commit.
One startup founder told me that his co-working space looked more like a lounge rather than a working location:
“There are way too many people here who like to dress cool and walk around with their MacBook pretending to want to build a company. In reality, these folks just want a place to hang-out. They do no serious work. Yet, you have companies like ours, where we sit and code for 12 hours a day and work weekends. These two cultures cannot mix in the same location.”
At one particular incubator, more than one startup complained that the head of the incubator acts like an “overlord” and seemingly wants everyone to answer to him in one way or another. As one founder said:
“I’m a professional with an Ivy league MBA. I just wanted an affordable office space for the first several months of my startup. What I ended up with is being treated like a kid in a day care center. The manager of this space goes as far as wanting to interview my new hires! Like really, I’m just paying you rent and you want to make sure that people I hire into my company fit into your culture at a coworking space! Get over yourself. You’re just a landlord.”
3. Over-croweded and dirty. A common complaint starting to rise up is that coworking locations are accepting too many people in order to maximize rent revenue, and that makes the place louder and dirtier. One startup employee told me that that the bathrooms were always occupied, and that by 4 p.m., they were so dirty that some people preferred to go outside of the incubator and into a Starbucks to use the restroom.
The overcrowding has also become an issue in that while some startups like to work in quiet, other companies have situations where they need to be on the phone constantly. At one coworking location, a conflict developed between two start-ups over the noise one was making throughout the day. The situation grew intense enough that management had to ask one company to leave.
One startup founder told me, “I wish I could rent a cheap house like Facebook did in the early days, or work out of a garage like Google did in the beginning—where we can have privacy to focus on building the company the way we want. In NYC, you just don’t have those options. There are no garages or basements you can get for cheap here. You need to shell out a lot of money to get a private space, which makes it hard to really build the company you want, the way you want it.”
Given all these issues, I asked startup founders why they continue using the coworking setup. The number one reason cited by all of them for using a coworking location was not the collaboration or the networking, it was cost. It’s expensive to get long-term office space in New York City. When a startup gets off the ground, it does not know if it will survive even a year. This makes the need for an affordable, yet flexible office arrangement highly important.
So, many founders are willing to put up with all of these issues, as long as they can get something affordable on a month to month basis. Most coworking locations in NYC rent our seats at $300 to $600 per seat / month.
With the growing startup eco-system in New York City, it’s great to see that many coworking and incubator spaces are popping up to meet this demand. However, it looks like they all have some work to do in order to make themselves the ideal first office for a startup.
If Yuri Milner, a notable tech investor, could give aspiring entrepreneurs one piece of advice, he'd tell them this:
Be prepared to deal with a lot of BS for your startup.
At annual tech conference South by Southwest he told the audience:
"Think about the sacrifice, and think about all the [crap] that you will have to go through. Think about the very low probability of success, and think about the toll it will take on your family and everyone around you.
"It's almost a heroic effort, and it goes against the set ways of doing things. Think about losing friends, and think about a lot of things that will happen. Losing friends for sure, because you will have to be fiercely competitive, maybe with some of your friends. You have to start not liking people you have to compete with because you have to really motivate your team to be tough in this environment.
"I think it is slightly un-human to do that sort of venture, and I think all that should go into consideration."
Two years ago, GroupMe gained significant traction at one of the world's most popular tech conferences, South by Southwest.
South by Southwest (SXSW) is a gathering of technology, music, and film professionals who fly to Austin, Texas to attend panels, network, and party. It's where Foursquare and Twitter got off the ground.
In 2011, GroupMe won over the conference's 40,000+ attendees by offering free beer, free grilled cheese, and an app that helped people coordinate better with each other during the interactive portion of SXSW. Over the course of the week, 2 million text messages were sent via GroupMe.
GroupMe is a group texting service that was acquired by Skype one year after it was founded for about $80 million.
We met up with co-founder Jared Hecht, who is back with his free grilled cheese stand at SXSW.
Here's his advice on launching an app and getting traction in just a few days, in a sea of early adopters.
The company that brought the world one of the most popular March Madness games on Facebook last year wants to expand into a whole new set of fantasy sports games.
The startup, Prediculous, is not trying to grab away loyal Fantasy Football or Fantasy Basketball fans, said CEO Taylor McLenore. Instead it wants to turn all the rest of us into screaming, cheering sports-app fanatics.
It will do that by making social, fantasy sports apps that are easy to use.
So far, the two-year old company has built a handful of short-lived, custom fantasy Facebook games and has scored some big advertising sponsorships from names like Subway, UPS and Allstate.
These include the 2011 Aikman Fantasy QB, where players created leagues of up to 100 teams, and let people join midseason, and the 2012 BracketInsanity game for March Madness. It also built the UPS Football Logistics app which was part game, part sweepstakes.
It's flagship game is, not surprisingly, called Prediculous. It lets people predict the future of anything in the worlds of sports, news, entertainment.
But next up is a big expansion into all sorts of other fantasy games. These will be for fans of sports like football, basketball, hockey, soccer, McLenore told attendees at the Venture Capital in the Rockies (VCIR) conference held this week in Beaver Creek, Colo.
Like its previous games, the new fantasy games will be easy to use and will let people participate mid-season.
SEE ALSO: Startup Giiidget Has Figured Out How Phones Can Use 30X Less Data
No matter what else he does in his career, Terry West will always be known as RIM/BlackBerry's first employee.
He's long since been gone from the company, leaving after five years in 1993, when RIM was still in the business of making radio devices, not smartphones.
He's got a boatload of great stories about RIM in its early startup days. When he joined the company, its offices were in a little strip mall above a Kentucky Fried Chicken. He says that working for founder Mike Lazaridis was exciting but challenging. Lazaridis was a dramatic, demanding boss, taking on projects, making West work long hours on them, and then suddenly shifting gears to something new.
For instance, West got the job interview by answering an ad on the job recruitment board at his college. It was a tiny, hand-written note that said, "Game developers wanted. Call Mike." West called and Lazaridis hired him on the spot. When West asked what games they would be developing Lazaridis told him, "Oh, we're not doing games anymore."
Eventually West moved on. He spent a decade at Intel where he stayed in touch with Lazaridis, turning RIM into Intel's customer. West's team at Intel helped design some of the chips used for the BlackBerry smartphone.
West surfaced again this week as CEO of an interesting startup in Phoenix, Ariz. called Serious Integrated. Serious sells affordable off-the-shelf touchscreens for all sorts of electronics gear like medical equipment, fitness gadgets, or commercial equipment. It's claim to fame is the software that customizes the touchscreen, which is as easy to use as building a blog on Wordpress.
Serious was a presenter at the Venture Capital in the Rockies show held in Beaver Creek, Colo. this week. It won the award for the best presentation.
SEE ALSO: These Are The 6 Hottest Startups In Colorado Right Now
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