Chris Poole created the insanely popular and infamous message board site 4chan way back when he was only 15. 

Since then, he's launched a company called Canvas, which he pivoted into a drawing-based art community called DrawQuest.

Unfortunately, he officially announced today that DrawQuest has failed. 

Despite more than 1.4 million downloads and about 25,000 daily active users, DrawQuest couldn't figure out monetization and the company ran out of money.  

Poole writes that he isn't itching to start a new company anytime soon and that we can expect to see more posts about his rollercoaster-ride of a startup experience on his blog. 

Meanwhile, DrawQuest users are being emailed about how to download and save all their artwork, as it's only a matter of time before the app stops working: 

"I’m terribly saddened that this may spell the end for our wonderful community, but it’s my goal to use what little money we’ll have left after the wind-down to keep the service alive for another few months. However as of today the team has gone their separate ways, and our doors are effectively closed."

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Twitter cofounder Biz Stone has created a lot of buzz with his latest startup, Jelly. Jelly is an app that lets you post photos of stuff you see around you so you can ask your Twitter and Facebook friends questions about it.

But the app was an accident, Stone told Bloomberg's Emily Chang:

"First of all, I did it by accident. I didn't mean to do this. My friend Ben Finkel and I were going on a walk and we accidentally asked ourselves the question, what would build if we had to build something that can answer any question -- and that led us to mobile, that led us to social, and all of sudden we had this idea on our hands that we thought we had to do."

After he built it, he started to think of it as an extension of his own personality:

"Once I realized what it was, I realized that Jelly was really kind of a productization of my own personality. Because I really enjoy helping people. And this just lets people help each other. It was something I couldn't get out of my head."

Jelly is an interesting concept but we'll see how well it does in the long haul because you can already post a photo of something to Facebook and/or Twitter and ask your peeps about it.  Jelly has been rated 2.5 stars from 330 ratings in iTunes so far.

Here's the video:

SEE ALSO: 'Why Is A Tennis Ball Fuzzy?' The Craziest, Hardest Job Interview Questions Tech Companies Are Asking Right Now

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I like to tell people I've made so many mistakes as an entrepreneur that I can't help but succeed from this point on. Unfortunately, that isn't true.

No matter how many mistakes one makes as an entrepreneur, there are more ways to fail than can fit into a lifetime. As Jason Fried has pointed out, failure is overrated.

While failure may be overrated, that doesn't mean you shouldn't learn from it when it happens. You're that much better off if you can learn from the mistakes someone else has made, rather than having to make them yourself. As the proverb goes, "A wise man learns by the experience of others; a fool, by his own." In that sense I may be a fool, but if I am, I'm offering you the chance to be wise and learn from my mistakes rather than repeating them.

In my years as an entrepreneur I've made enough mistakes to fill a book (which I'm working on), but here are five of the larger ones:

Ignoring wise advice. I've had some great mentors over the years. It's a pity that when I most needed to heed their advice, I ignored it. I'm sure it pained them to see me make mistakes they had told me how to avoid. But I was stubborn and thought I knew better. If you don't have a mentor who tells you when you're wrong — get one, and listen to him or her.

Choosing the wrong partner. I started a business and brought on two partners. They were both good guys, but they weren't the right guys. One of them I brought on after only knowing him for 10 minutes. By the time we parted ways I figured the mistake I had made was having partners, and I spent the next 10 years with no partner. Two years ago I decided I needed a partner again. After a year-long search and a test period, I found the right one and it has made an amazing difference in my business. When I say "amazing," I mean our monthly revenues have doubled in the past four months and we're on track to double again in the next four.

Being too easily satisfied. For years my business would grow, plateau, retreat, and then the process would start over again. I never got past a certain point. It was because I was too easily satisfied, and felt like I could take a break. I learned firsthand the truth in the saying that if you're not growing, you're dying. If you ever become satisfied with where you are, you either need to set loftier goals or change your line of work.

Borrowing from the IRS. About 10 years ago I reached a point in my business where money would come in from a client, and I had the choice to give employees their paychecks on time, or pay the IRS. If I paid the IRS, the employees would quit, I wouldn't be able to continue providing services and I would go out of business. If I paid the employees, the IRS would eventually come after me, but perhaps by that time things would have turned around and I could pay them off.

Let me make myself clear — if you find yourself in this situation, pay the IRS first. You've heard of a loan shark breaking a borrower's kneecaps when a loan wasn't paid on time? Based on my experience "borrowing" from the IRS, I'd rather borrow from a loan shark. At least you can reason with a loan shark.

Getting in debt. Better yet, follow Dave Ramsey's advice and don't borrow from anyone. You can get in debt as fast as you can spend money, but you only get out as fast as you have profits. Even with a small-service business, it's easy to rack up $500,000 in debt and have nothing to show for it, and a very long horizon for paying it all off. Trust me, I was there, and it's not a fun place. Debt allowed me to cover up a lot of mistakes, and it wasn't until the well dried up that I had to fix those problems and make my business successful. Looking back, I wish I never would have taken on any debt at all, because it would have forced me to be wiser from day one.

These days I make fewer mistakes than I used to, but much of my ability to dodge bad situations comes from painful experiences. Take my advice — it's better to learn by watching someone else make the mistakes.

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Microsoft on Friday apologized for promoting its cloud-computing service, Windows Azure, with a marketing campaign that implied: "So easy, even an older woman can do it."

An earlier tweet on its @WindowsAzure Twitter account showed a picture of a woman with the words: "What do you do when your 68-year-old secretary needs Active Directory Multi-Factor Authentication? Ask Dear Azure."

By the way, despite the geeky term, "Multi-Factor Authentication" isn't all that complicated. It simply means using two kinds of passwords to log in, like typing in a password and also swiping a keycard.

The tweet caused backlash, as people pointed out the wrongness of the so-simple-your-mother-can-do-it concept.

And that prompted Microsoft to apologize.

The happy ending is that people liked Microsoft's apology. As James Arlen, who goes by the handle ‏@myrcurial, noted in a reply tweet:

Saying "I screwed up" is much > than saying "It is unfortunate that you were offended"

It's fair to note, however, that as far as corporate culture goes, Microsoft is about average in the tech industry; about 24% of Microsoft employees are women, or about 23,800 people, the company says. The Census Bureau says that nationwide, women make up about 27% of the science and technology workforce.

But the incident showed how hard it is to shake this stereotype. There's even a website dedicated to outing the times tech companies use it, called Geek Feminism. It explains:

Female computer users (particularly middle-aged or elderly ones) are often used as a hypothetical or even actual test of ease of use, on the assumption that if such a person can use a program, anyone can. No phrase expresses the meme of female technical ineptitude more neatly than "So simple, even your [grand]mother could do it." This is a very commonly encountered form of condescension.

On top of that, this is the second time this week we noticed Microsoft tweeting something that could be interpreted as sexist. Earlier this week, its BizSpark Twitter account promoted a new Russian online beauty contest called "MissWeb."

MissWeb is a part of Microsoft's BizSpark program for startups. Some impressive companies got their start as BizSpark members, like Yammer and Huddle.

In this case, MissWeb is a site that asks men to vote for women based on their looks.

But as  Microsoft spokesperson explained:

With more than 75,000 startups participating in the BizSpark program, we are here to support the entrepreneurial community. We have a robust review process to ensure that startups accepted into the program meet our requirements. We do not judge business plans of applicants and instead let the market decide the viability of their company. If a startup is involved in unlawful activities, we revoke their membership. 

Are you a woman over 40 working in the tech industry with a story to tell about what that's like? We want to hear it. We are discreet. jbort@businessinsider.com or @Julie188 on Twitter.

SEE ALSO: 'Why Is A Tennis Ball Fuzzy?' The Craziest, Hardest Job Interview Questions Tech Companies Are Asking Right Now

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How do some struggling startups get bought for millions of dollars by Facebook or Yahoo, while others are left to die?

Networking is an important part of building a business. For first-time founders, who you know is arguably more important than what you build. At least it is if you're looking to get acquired for a few million dollars by a larger company — or "acqui-hired."

Josh Miller, 22, dropped out of Princeton to found Branch. He built a network of seasoned startup advisors, such as Twitter co-founders Evan Williams and Biz Stone. Facebook recently bought his startup for $15 million after multiple product pivots. Stamped, an app founded by former Googlers, was acquired by another former Googler, Marissa Mayer, when she became CEO of Yahoo. That app also pivoted before it was acquired.

Would either of those startups have sold for millions if the founders hadn't built strong personal networks? It's hard to say, but who they know certainly didn't hurt them. 

Business Insider asked a number of startup executives which was more important for first-time founders: building a network or building a strong product?

Everyone felt both were important. But for smaller acquisitions or "soft landings," many felt personal networks trumped products.  Who your investors know can also be a big factor in whether or not your startup gets acquired. 

James Rainert is a first-time founder. He created a company, ThredUp, which lets you sell gently worn clothes on its marketplace. "I think there's a misconception that exits 'just happen,'" he said when asked about the importance of networking. "I'm learning that it's a long game and you need to get to know everyone." He also says product matters more when you're gunning for a larger exit.

I think there's a misconception that exits 'just happen.' 

Dan Porter, who advises startups and sold his former company to Zynga for more than $200 million, has mixed feelings.

"I think it's a combination of who you know and who knows you for any acquisition under a certain threshold," he says. "In [lower threshold] acquisitions, someone is trying to either add a team, a technology, or eliminate a competitive risk. When acquirers know you, and in a smaller deal you are a critical part of the deal, that makes it a lot easier. It de-risks the deal."

Who you know within a larger company can also determine whether or not your startup gets acquired. "The smartest thing I heard someone say was, 'Our best acquisitions come to us from product managers who work with or know companies than from corporate development guys,'" said Porter. "Not just being known — but who in the company knows you — is key."

Others think product is always the most important factor, even for smaller startups. Josh Abramson created BustedTees, College Humor, and Vimeo. He sold a majority stake in them to Barry Diller's IAC. "I actually think that building something great is the most important thing, but knowing the right people is also hugely important," he says.

"I think it's pretty rare that entrepreneurs end up with a lucrative exit for no other reason than because they know the right person, just as it would be rare for an entrepreneur who has built an incredible company to fly completely under the radar of potential acquirers ... You might have a harder time getting a deal done if you live in the middle of nowhere and have very few connections outside of your organization, but you will have an even harder time if you have a piece of crap company and know everyone in town."

Bryan Goldberg also feels what you build is more important than who you know. But his experience was with a larger-size exit. He sold the startup he co-founded, Bleacher Report, for $213 million to Turner. 

"We knew that our startup would ultimately be acquired by a media heavyweight, and so we partnered with several big media companies along the way," said Goldberg. "As it turned out, the company who purchased us was one of the few big media companies with whom we didn't have any previous relationship.

As it turned out, the company who purchased us was one of the few big media companies with whom we didn't have any previous relationship.

"It doesn't matter who you know, nobody is going to buy you without a strategic reason for doing so. At least not for a large acquisition."

When asked if his investors' personal networks helped him land a sizeable exit, Goldberg replied, "The investors and board members were all central to the company's success, But none of them were close to our acquirers in a way that would have pushed through a deal."

One founder who knows a lot about acqui-hires is Jacob Mullins. He's CEO of Exit Round, a platform that connects large companies with startups so the two can discuss potential talent acquisitions. He's a firm believer that who you know is more important than what you build for three reasons: 

1. Getting acquired requires internal champions. "The most effective way to get serious interest with a potential acquirer is to have someone from within their product or engineering group who can speak on your behalf and give you exposure to the right internal champion," says Mullins. "To execute a transaction you need a C-level or GM of a business unit to be your internal champion to build a business case about why you are indispensable and must be had."

2. Networking helps you meet buyers early. "Like fundraising, achieving an exit is a relationship building process," says Mullins. "If you're in a sticky situation where things are rushed, there's less of an opportunity to build mutual trust. If you connect early, over time the potential acquirer will see how you execute, build trust with the quality of your product, and build a stronger relationship with you, the founder."

3. Networking helps you figure out if a larger company will be the right fit before it's too late. "Nearly all acquisitions have a time-based component that incentivizes the acquired team to stay at the new company for as long as possible; typically this is where the bulk of the payout lies for the team and individuals," Mullins says. "If a founder commits a transaction where there isn't a great fit, unhappiness may ensure and people may start leaving early, thus leaving a lot of opportunity and money on the table. Know who you're going to be working with, and what exactly you're going to be doing for the next few years."

Howard Lerman is the CEO and co-founder of Yext, a company that updates local listings in real-time and is worth hundreds of millions. He sums up the importance of product versus network nicely.

"For sub-hundred-million-dollar acquisitions, it definitely matters who you know. Those are usually tech or team acquisitions," he says. "For larger exits, you have to have a real business in a market that another business is excited about. Knowing people doesn't really help that. A good rule of thumb: the bigger the acquisition, the less who you know matters."

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Zander Adell is founder of Doorman, a logistics startup that aims to solve the famous "last mile" problem for mail and package delivery. By receiving your deliveries for you remotely and delivering them to your door by appointment, Doorman aims to make getting your Amazon packages as easy of a process you could hope for.

Apartment dwellers without doormen in an urban area will readily tell you that to be home at the right time to receive a package from UPS and others is nearly impossible. You almost always have to make an in-person visit to the post office or to UPS to pick it up later.

Doorman aims to turn this asynchronous experience into one that's much more synchronous and takes place on your own terms. All it takes is the use of the Doorman iOS or Android app and a new custom address it provides so Doorman can receive your parcels.

Currently serving San Francisco, the company partners with mailbox rental facilities to receive your mail nearby, then hires background-checked drivers to deliver your stuff to your home by appointment as late as midnight.

Each time they come to your place, regardless of the number of packages, it's a $7 charge but there's an aggressive promotional system at work where you can tweet about the company and receive your delivery for free.

Learn more about Doorman here »

SEE ALSO: Marc Andreessen Has A Great Answer For Why Bitcoin Matters

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I founded Phatbits, which made XML desktop applications, in 2004. A year later, Google offered to acquire the business. We closed the deal after quick and collegial negotiations, and our group integrated into the Google Gadgets division easily.

My one regret was agreeing to stay on for four years. I wound up leaving after a year. I underestimated what it would feel like to be a salaryman, no longer in control of my own destiny. But overall, the integration was a success.

When I sold Picnik, a photo-sharing site, to Google five years later, I assumed everything would be about the same. That wasn't the case. This time, negotiations were complex, lasting almost six months. We faced a dizzying amount of changes in the first three months after the acquisition, being shuttled from one part of the company to the next.

One-third of our 25-person team, including my two business partners, quit right off the bat. I stayed for two years to offer some sense of continuity. By 2012, Google shut down Picnik entirely. I felt like I let a bunch of great people down.

Looking back, I should have insisted that Google's crystal ball for Picnik was clearer. I sometimes wonder whether I should have sold the company at all.

Now, as an angel investor in six startups, I advise entrepreneurs who are thinking about selling to think carefully about the return on investment, including the effect on team culture, not just the bottom line.

SEE ALSO: This Is A Brilliant Approach To Making Better Decisions

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If you’re using accounting software, it’s easy to run financial reports. But what then? There are so many numbers to look at; it can be overwhelming. Which ones are the most important to monitor the health of your business? Which numbers should you track to ensure that your business grows?

Most of my clients started their business because they’re amazing at what they do, but they’re not business people by training. So while they know exactly how to make their clients happy, they’re winging it on the business side of things. Unfortunately, this is a risky practice. A massage therapist I know recently had to close up shop and go back to working for a big spa. She is incredibly talented, and her clients loved her. But she was so focused on serving her clients that she never looked at the big picture of her business. Suddenly she didn’t have enough cash to pay the bills, and she didn’t know how to salvage the situation.

I believe that she could have avoided this worst-case scenario if she had paid attention to the financial side of her business. In fact, to show you how she might have avoided the outcome, we’ll look at how others businesses stay profitable and growing by tracking five key business numbers. A quick disclaimer — every business is different. Here I’ll focus on a typical service business, but feel free to consult your business advisor or accountant for more customized suggestions.

1. The bottom line is profit

Okay, so there’s tons of numbers you could look at. “What’s the bottom line?” Well, that expression comes from the fact that profit is the line at the bottom of the most important financial report — the Profit & Loss Statement. Profit (also called “net income”) tells you how much money you have earned after expenses are paid out. This is a great place to start to see how your business is doing.

I recommend that you look back at your profit over each of the past 12 months. Is it a big number? A negative number?

The next step is to look at the trend. Is profit trending upward over the past year? Is it flat? Or is it trending downward? This trend helps you predict your future profit.

One of my clients, a boutique law firm, noticed that their profits for the current year were half what they were the year before. This didn’t make sense, since they were as busy as ever. Upon closer examination, we found that their case load had shifted towards a type of work that paid less but still required a lot of time. The lawyers enjoyed this new work, and they didn’t want to return to the old work. So in order to restore profitability, they renegotiated their fees for the new projects.

Ultimately, if your business isn’t profitable, or isn’t profitable enough for you to pay yourself what you want, it’s not sustainable. As a business owner, stay focused on this “bottom line” to make sure you’re earning the money you want.

2. Trend in expenses

A marketing consultant hired me recently with a very confusing problem. His business was growing rapidly, but he was taking home less and less money. I’ve seen this pattern in a lot of businesses, so I guessed correctly what was happening: expenses were growing faster than revenue. The consultant was landing more and bigger clients, and he was flush with cash. So he started spending more money on the business. What he didn’t realize was that his expenses were increasing faster than his revenue was growing. So he ended up with less and less to take home.

To avoid this common trap, keep an eye on the trend in your expenses. “Total Expenses” is a line in the Profit & Loss Statement. Look at this total and its trend over the last 12 months. Compare the expenses trend to the trend in “Total Revenue.”

Make sure your expenses are not growing faster than your revenue. The exception would be if you are making an intentional long-term investment, such as a new employee or new equipment.

3. Accounts receivable

Ever wish you could shake the trees and have money come out? Well your accounts receivable is as close as you’ll ever get to this opportunity.

Accounts receivable (sometimes abbreviated “A/R”) is the fancy way to say “money I’m owed.” This is the sum of your unpaid invoices, and it appears as a line in your Balance Sheet (another basic financial report). If A/R is a big number, you have a lot of money in the treetops.

One of my clients, a corporate trainer, had over $50,000 in accounts receivable. These were past clients who had been tough to collect from, and for the most part she had given up trying. It’s not a fun job, and she was busy with her current clients. When she realized how much money was at stake, we came up with a new strategy. She hired a part-time virtual assistant to follow up on her unpaid invoices. After a month, she had collected over $20,000 and spent only hundreds on the virtual assistant! If your accounts receivable is high, go shake the trees.

4. Profit per customer

Not all clients are created equal. Financially speaking, some are much more lucrative than others. However, don’t make the common mistake of thinking that the best clients are the ones who pay the biggest fees. The best clients are the ones who generate the most profit.

A client of mine is a celebrity stylist, and he was really excited because he was booking bigger and bigger gigs. But he was confused because he didn’t seem to be making much more money. When we dug into his numbers, it turned out that he was making less profit on the big gigs than he was on the smaller ones. The big gigs carried a lot of extra expenses for things he didn’t need in the smaller gigs. So even though he was charging more money, he wasn’t taking home as much at the end of the day. Knowing this, he increased his rates for future big projects, so they would be more profitable. And he also started enjoying the smaller gigs more, because he knew they were actually very lucrative.

It’s extremely important that you look at your profit per customer (or per project). This number is typically not in your accounting software, so you have to do a quick calculation at the end of the project. Take the total fees you received, and subtract out all of the expenses. That’s you gross profit for the project. Next, divide that profit by the approximate number of hours you spent on the project. That’s your “hourly wage” for this project.

Example:

$10,000 fee – $3,500 in subcontractor expenses = $6,500 gross profit

$6,500 gross profit / 60 hours = $108 hourly wage

Compare this wage between projects to see which are most lucrative for you. Focus your marketing on getting more of the most lucrative projects, even if they are not the “biggest” projects. This way you’ll earn the most money with the least time spent.

5. Number of client prospects

Ever feel like your business goes through a boom and bust cycle? It’s very common. One of my clients, a web design agency, would have huge months where they billed big fees, and then months they called “cricket months.”

The reason this happens is that we get so focused on our client work that we slow down on our marketing efforts. To avoid this trap, always keep an eye on the number of prospects you have in your client pipeline.

How many people are you talking to about potential projects? Make a list, and count them. Is it a small number? Better get out there and do some marketing! Don’t let a “cricket month” sneak up on you.

Keep your prospect list current, and post it on a whiteboard near your desk. This will help you stay focused on marketing, even when things get busy, so you can create the growth you want.

Set a Schedule to Track Your Numbers

In order to stay on top of your business, so it will grow as fast as possible, I suggest looking at your key numbers on a monthly basis. Many of my clients check theirs on the first day of every month, and adjust their business strategy appropriately.

SEE ALSO: What I Wish I'd Known Before Selling My Startup To Google

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Lyrics annotation site Rap Genius has launched a new iPhone app today that lets users browse the site's content directly through their smartphones.

The app will allow the company to become less dependent on Google search traffic, which is important because a recent falling out with Google over a SEO-scamming scandal temporarily slashed the site's visitors by 85%. 

Genius app users can find the annotations of songs, poetry, or news items using traditional search, but the app can also use a Shazam-like audio recognition software and your phone's microphone to automatically pull up lyrics on the spot when you play a song. You can also browse the music library on your phone to simultaneously listen to a song and read its annotation (no integration with streaming services like Spotify, yet).   

Here's what the inside of the app looks like:

SEE ALSO: See inside the awesome, penthouse offices of Rap Genius

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This morning, serial entrepreneur and startup investor Jason Calacanis launched a mobile news app, Inside.

He's been wanting to launch the company for a long time. Earlier, he launched a minimum viable product, Launch Ticker. He's also wanted the domain name Inside.com for 10 years. He tried to buy it four times from three different owners when he finally obtained it.

While discussing Inside with Calacanis, I asked about his involvement with Circa, another mobile news app. Calacanis has been an investor in it since last year, and yet he just launched a similar-sounding competitor.

Circa writes bits of news that are easy to digest on mobile devices. They're often very short. Calacanis' Inside is a mobile news curator that links out to high-quality content. It re-writes story summaries in 300 characters or less.

Calacanis said he invested in Circa through an AngelList syndicate when the company was first getting off the ground and that he's friendly with the founders. Calacanis formerly founded Weblogs and sold it to AOL for ~ $30 million. He's invested in a bunch of startups, including Uber.

I asked Calacanis if he had spoken with Circa's co-founders Matt Galligan and Ben Huh about Inside before its launch. He said he hadn't because he was trying to keep the startup under wraps. When asked if he thought Circa's founders would be mad about Inside, Calacanis said he didn't think so. He feels they're different products.

"With us you follow a topic, with them you follow a story," says Calacanis of Circa. "I see them as a competitor to Business Insider, Huffington Post and New York Times. They say they're the mobile version of The New York Times. So we look at them as a source, we're not  in competition to them. We're a curator and we point people to the best journalism. To the extent that they're the best, we will point to them. They are doing some original reporting. Their stuff is beautiful."

So, how did Circa really feel when Calacanis launched his similar-sounding news reader this morning? I asked CEO Matt Galligan via email. Here's what he said. 

Business Insider: I'm curious how it feels? Are you mad, surprised, indifferent?

MG: I'm pretty indifferent, somewhat flattered, and even more energized. Frankly, we knew it was on the way for some time and had prepared for it. We did as much as we could to learn about what it was going to be, eventually understanding that it was primarily an extension of Jason's previous efforts with Launch Ticker. Thus, we understood it to have a focus on brevity, but that's where the similarities would end.

Calacanis didn't tell you about Circa beforehand. He believes Circa and Inside are different but it's difficult not to see them as competitors.

MG: Indeed. We didn't have any sort of real transparency as to what it would be but I felt confident it was going to be something differentiated. We both believe they're different. They serve two different audiences as well...now...not dramatically different audiences as there will be some overlap, but we're trying to accomplish different things here.

Was Calacanis an initial investor in Circa?

MG: He was an investor in an angel round that we put together early last year. No grandfathering here. Just a straight-up investor after we did a This Week in Startups episode about Circa.

BI: It's a bit of an unusual situation to have an investor in a startup launch a competitor.

I can't disagree here, but that's also working under the assumption that Inside is a true-to-form competitor of Circa. While they'll compete for attention and eyeballs both Jason and I believe the audiences to be different. We also see the usefulness of the products to be different. Both focus on brief news, but that's where the similarities end.

Here are some tweets between Calacanis and Circa's Editor-in-Chief, Anthony De Rosa:

@AntDeRosa@mg@gabrielsnyder perhaps we should turn this into a war rather than a love fest to drive more downloads?!?! :-p

— jason (@Jason) January 28, 2014

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VCs Go Mobile: Funding from Venture Capital (VC) firms to startups and companies in the mobile industry has never been higher, according to a new report from CB Insights. In the third quarter of 2013, VC investment in mobile topped $1 billion for the first time ever in a single quarter. Also, more investment deals were struck in the third quarter than in any other quarter before with about 150 deals. Fourth quarter 2013 mobile VC funding also topped $1 billion, and total 2013 VC funding to mobile reached over $3.5 billion for the year. Most funding deals are struck early on in the Angel/Seed round (37% share of deals) and in the Series A round of funding (34%), likely to help these companies get on their feet. But the value of funding increases substantially as mobile companies separate themselves and move on to Series B, C, and D funding rounds. VCs handed out 55% of the $3.5 billion they invested in mobile in 2013 during these rounds. 

The appeal of the mobile industry for VCs is that a multitude of subsidiary industries are beginning to emerge. Companies that engage in well-known mobile applications like gaming and photography are still thriving. But less ubiquitous application categories like mobile payments, location-based services, and travel have all caught the eyes of investors. With so many mobile devices in consumer hands, mobile security company investment also soared in 2013. This category took the largest single share of VC funding, but that share was only 10%, meaning mobile investment was highly fragmented among a variety of mobile sub-industries. CB Insights quotes Benedict Evans, a mobile analyst who recently joined prominent tech investment firm Andreessen Horowitz, to explain this mobile VC funding phenomenon: "The whole mobile space is in flux – Apple and Android have won the platform wars, more or less, but all the dynamics on top of that are changing all the time." (CB Insights) 

GOOGLE GLASS GAMING: Mobile gaming on smartphones and tablets is a massive industry. Now, the Google Developers blog posted a video showcasing the potential for games on Google Glass. Given the success of gaming on mobile, gaming could be the application that will popularize smart eyewear for mainstream users. (Re/code)

APPLE TV: Mark Gurman of 9 To 5 Mac points out that Apple TV has now received its own product line slot on Apple's website, rather than being lumped into the iPod product category page. Apple already acknowledged they were working on a new version of the set-top box, and this may be the first, small step toward an increased focus on TV from Apple. (9 To 5 Mac)

LENOVO RESTRUCTURING: Lenovo will officially diversify into four distinct product categories, instead of its original two. The categories will be PCs, mobile, enterprise, and content and services. Lenovo is already the top PC maker in the world, and had massive success with its mobile devices in 2013. Now, it may capitalize on its growing hardware divisions by pumping out its own ecosystem of content and services. (Wall Street Journal)

MOBILE AD COMPANIES ARE THRIVING: It's a great time to be in the mobile advertising industry. AdColony, a company that specializes in mobile video ads, more than quadrupled its 2013 revenue over 2012 to hit a $100 million gross revenue run rate in less than three years of existence. (Market Wired) Millennial Media, one of the largest mobile-first digital advertising firms, likely hit $341 million in annual revenue for 2013, according to Morgan Stanley. That's 41% growth over 2012. (Morgan Stanley)

HTML5 APPS FOR SALE: Amazon, in another attempt to lure developers of all platforms to its ecosystem, will now let developers charge for HTML5 web apps within the Amazon App Store. All HTML5 web apps used to be free, which dampened developer interest in them. (TechCrunch)

TVTAG: TV check-in services GetGlue and i.TV have merged to form tvtag, a mobile-centric, ad-supported social network that will center on TV watching. The app will have several broadcast partners but will also utilize app users as curators to provide real-time TV information. GetGlue's old check-in features will still be there, but the new app will focus on curated TV info and discussion. It's a new take on the second-screen. (Engadget)

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The Wall Street Journal released a report of 30 startups from the U.S., China and Europe that are valued at $1 billion or more. 

These companies range from familiar firms like Pinterest and Uber which occupy the top ten with valuations at $3.8 billion to film financiers like Legendary Entertainment who is responsible for the recent success of the The Dark Knight trilogy.

However, the rest of the entrants on this list have incredible valuations but little recognition. We compiled 11 startups that are worth billions but you've never heard of.

11. Coupons.com: Valued At $1.0 Billion

Location: Mountain View, California

Founded: 1998

What is it: Coupons.com recently filed for an IPO so expect that valuation to go up. The company lets users fnd a bunch of offerings and print them out before shopping. This simple concept caused Coupons.com to make $115 million during the first nine months of 2013.

10. Sogou: Valued At $1.2 Billion

Location: Beijing, China

Founded: 2004

What is it: Sogou is a search engine that can find text, images, music and maps. According to Crunchbase, people in China have searched over 10 billion pages and has a daily update of 500 million pages. One cool aspect of the service is that it can identify malicious software on websites and provide users with the cleanest results on search pages. 

9. Jawbone: Valued At $1.5 Billion

Location: San Francisco, California

Founded: 1999

What is it: Originally, Jawbones were intended as noise-canceling headphones for the military. Now, these wireless speakers and Bluetooth headsets that sync with mobile devices are used by music lovers and exercise enthusiasts all over the world.

Tim Draper, the founder of global venture capital firm Draper Fisher Jurvetson and an investor in companies such as Skype, Tesla, Down and Hotmail, talks about his plan to split California into six separate states.

Produced by Matt Johnston

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Since I launched my first venture in 2009, I’ve advised numerous college entrepreneurs on how to start a business, many of which are still thriving today. Starting a company is a learned skill, and success is an available option. But like any trade, you must approach your market with the right set of tools and mindset in order to win. 

Before we get into startup details, let’s first provide a little context. While certain pockets of the economy show signs of improvement, the job market is still a tough nut to crack — especially for young professionals: the unemployment rate for American 16- to 24-year-olds is over 16%. Regardless of whether you want to work in the corporate world or be your own boss, having an understanding of how to start your own venture will most likely be a useful skill as we trend towards an increasingly robust freelance workforce (projected at 70 million by 2020.) And for college students who can use school networks and resources to jumpstart their entrepreneurial initiatives, it may be the best option and use of time. 

Here are six steps to launching and growing a profitable business before you graduate college:

Step 1: Create a customer base.

Starting a business is actually pretty simple; it takes a lot of work, but most things worthy of pursuit require toil. Beyond having an idea, the first thing to think about when starting a business is who is my customer? If you have a customer, then you have a business. That’s not to say it will be a big business, but the nature of building a business is to create customers. How does one find customers? You need a product to sell and test.

One of the biggest mistakes young entrepreneurs make when first starting out is spending too much time building a product before they try to sell it. UNDERSTAND THIS: as a small company, if you don’t have sales, you don’t have a business. Therefore, it makes a lot more sense to FIND sales before investing a lot of time and money into developing a product that someone may or may not want. Sell first, build later. 

Step 2: Build an inexpensive prototype.

The simplest way of testing a product is to develop an inexpensive prototype. Most people think of a prototype as the actual product itself that you need to have manufactured by a factory — or in the case of software, coded by a developer. While having the actual product in hand that you are looking to sell certainly helps communicate the look and feel of a product, it’s not always necessary or feasible. 

As a general rule, most people can understand the basics of a product through a simple brochure, which can act as your first product. A tear sheet containing a product photo, a tagline, and some key sales attributes that differentiate your product from others is a great way to cost-effectively communicate what it is that you’re trying to sell. The next step is to get it in front of a constituency of relevant buyers.  

Let’s take socks as an example (a type of company that I have experience starting). If you have an idea for a cool athletic sock, find a graphic designer (reach out to friends on campus or through sites such as elance.com or 99designs.com) who can digitally create the sock that you want to make. Then design a PDF that shows a few images of the sock highlighting its unique features. Make sure to include three to five key sales points about the sock that you think will differentiate it from what currently exists in the market. Lastly, include your company website and a method of contact, such as your email address and phone number. If you create a compelling brochure, people will want to follow up with you to find out more.

Step 3: Create a simple one-page website.

Create a simple website on Wix.com or shopify.com that follows the same outline as the brochure. (I did a similar one-page site for my safe business that cost me only a few hundred dollars.) The only additions you’ll want to make is to include a founders’ video that explains more about the product and your vision for the company, and a space on the site that gets people to take an action, which mimics buying behavior — either having customers submit their email address through a form (use woofoo.com for email collection) or by clicking a “buy” button that leads customers to a note about where you are in the product development process. As long as you don’t actually charge people money for a product for which you don’t currently have inventory, there’s no harm in testing someone’s appetite for consumption. 

Pro tip: Install Google Analytics or crazyegg.com on your site to track pageviews, clicks, and other useful data that will give you information about how consumers are interacting with your product online.

Step 4: Find your audience and get in front of it.

Once you have your product — your website and brochure — you need to get it in front of people. I always suggest that aspiring entrepreneurs go to a local tradeshow. If you live in or close to a big city, chances are there will be some kind of tradeshow or group that you can interact with to pitch your product. And speaking with customers is a great way to gain experience selling.

Once there, politely approach prospective buyers (i.e. EVERYONE) and interact with them. Ask them to take a look at your product. Ask them if they like it, and if the brochure selling points relate to them. Ask them if the problem you are solving is a problem that they have. If they answer YES to any of these questions, then you have a customer. But don’t stop there. Remember what we said about how the nature of business is creating customers? One of the most expensive parts of business can be creating (or finding customers) — so don’t walk away. 

Step 5: Keep your audience engaged.

Ask your customer for a means of keeping in touch with them (an email address will typically suffice.) As you’ll see, your cost of customer acquisition (known as COCA), which is how much a company literally has to pay in dollars to get a new customer, is one of the most important metrics in business — and directly affects your margins. 

If your customer could possibly buy $60 worth of socks from you over the life of your relationship, then the cost of the show and transportation is pretty low for $40 to $60 of potential business, multiplied by all the people you meet. Collect your email addresses and notes about each customer, and then follow up with each contact after the show — either through personal email or by using an email-marketing site such as mailchimp.com. Stay in front of them once a month through the production cycle.

The second method of getting your product in front of a lot of people is online. But instead of paying for expensive cost-per-click marketing campaigns, it’s best to use various forms of social media such as Facebook, Instagram, and Twitter to get your message out. Engaging content with photos and videos sent one to two times a day is generally a good way to build a following. And the best form of promoting a product cost effectively is through a blog. Go onto Google and search for relevant blogs that relate to your product. Find three or four that you want to reach out to and email the senior blog editors about your company and why you think it will be of interest to their readers. 

REMEMBER: Everyone who has a blog needs content — without it, they can’t exist. The best case scenario is they do a story or post about you, driving traffic to your website that you can analyze and for which you can extrapolate sales data. You may also make a connection with the bloggers for a future feature about your product once it goes live.

Step 6: Build it until you get it right.

Using these tactics over the course of two to three months should go a long way in building consumer data about your product. If you get enough positive sales and customer engagement data points, then you can begin to approach manufacturers about creating small batches of product samples for little to no cost so you can see the product live. 

With the right connections and sales data about why your product will be successful, many manufacturers will take a chance at producing some samples for you so you can build a bigger market for your product — and perhaps you’ll even gain interest from investors. Alumni networks are great for finding relationships that can help you with manufacturing and other processes that could typically be time-consuming and capital-intensive.

If you’re committed to entrepreneurship and working diligently, then this whole process might take you two to three months and cost a few hundred dollars — a pretty low cost to start a company. Continue testing out your ideas in this way until you find something that hits. If the typical college experience is four years, with a total of 32 months in school, then that would allow for about 10 potential businesses that you could test before you graduate for a few thousand dollars — just a fraction of tuition cost. One of them is sure to work. Trust the math and trust your own ability to succeed!

SEE ALSO: Why Some Struggling Startups Get Bought For Millions Of Dollars While Others Are Left To Die

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Steve Schlafman has been a member of the New York City tech community for years, as both an entrepreneur and an investor. He created StickyBits which turned into fleeting viral sensation, Turntable.fm. He then joined Lerer Ventures and now works for RRE, an investor in startups like BuzzFeed and Business Insider.

Schlafman puts together an annual presentation about how to raise venture capital.

His latest presentation explains how to land a first round of financing, which is often called a "seed" round. Schlafman agreed to let Business Insider publish the slides.

A French-hosting company called OVH just updated the rates for its Dropbox-competitor site HubiC, and is now offering a jaw-dropping 10 TB for only about $13.50 per month (€10).

That is a ridiculous amount of space for a super-low price, especially when you compare the offer to Dropbox's most popular plan, which gives you 100 GB for $10 per month. (1 TB is 1,000 GB).

Essentially, if you used new-comer HubiC instead of the more-established Dropbox, you'd be getting 102 times more space for only $3.50 more. Like Dropbox, HubiC provides desktop syncing and mobile apps.

TechCrunch points out that because HubiC, through OVH, has its own server infrastructure and data centers (it doesn't rely on Amazon's cloud computing service like Dropbox does), the service probably has low operating costs, which allows it to offer such great deals.  

SEE ALSO: These Twins Were Separated At Birth And Amazingly Reunited Through Social Media

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A few weeks back we profiled a woman who has made getting a free MBA education a mission by taking MOOCs. Laurie Pickard, a former Peace Corps volunteer, is a smart and thoughtful consumer of these free Internet courses. She already has completed five of them and plans to take at least 16 or more over the next two or three years. So we asked her to occasionally review the classes she takes.

It turns out she's also a gifted writer. Here's her first MOOC review on what she believes is the best free course on entrepreneurship you will find on the net. It's taught by serial entrepreneur Steve Blank, who also teaches at Berkeley's Haas School of Business and Columbia Business School.

As someone who is attempting to take enough free courses to add up to a complete MBA, I know as well as anyone that not all MOOCs are created equal. Some courses are so good you can’t believe they’re giving this stuff away for free; with others, your time would be better spent watching a good TED talk.

Time is valuable. MOOCs may not come with the B-school price tag, but as an economist friend has pointed out, there’s really no such thing as a free course. In the hours you spend watching video lectures, answering multiple choice questions, and posting on discussion forums, you could be running a lemonade stand or reading Dostoyevsky. Not every nominally free course is worth the time it takes to complete.

If you plan to start a business, one course that is worth every minute is “How to Build a Startup” from Udacity.

As its name suggests, “How to Build a Startup” walks you through your business model, using a tool called the Business Model Canvas. Each lesson covers a different facet of your business, from customer relationships to partnerships to cost structure to sales channels. At the end of the course you, the budding entrepreneur, will end up with a solid structure upon which to base your business plan. The course is taught by Steve Blank, a Silicon Valley entrepreneur who has spent his career building startup companies, including a few with major IPOs.

I have a few basic criteria — three to be exact — for what makes a good course, and “How to Build a Startup” nails them all.

Am I checking email during the video lectures?

Udacity courses are composed of short videos of around two to three minutes, grouped into lessons. Each video in “How to Build a Startup” is packed with information. I’m rarely tempted to surf the internet during the videos — I’m too worried I’ll miss something. Steve Blank is an engaging lecturer, and the videos are supplemented with helpful drawings. This course passes the email test with flying colors.

Do the assignments require serious thinking?

Call me a masochist, but when I take an online course, I want to work. I respect rigor, and I would happily take a difficult problem set over a fluffy forum assignment any day. Unlike courses such as finance, accounting, or economics, the material in “How to Build a Startup” doesn’t lend itself easily to problem sets. Nonetheless, the instructor has found ways to design assignments that require the student to really engage with the material, primarily through testing hypotheses by speaking with potential customers. If you manage to do all the assignments, you will have given some serious thought to your business plan, and you can’t help but learn a thing or two in the process.

Is there a practical application for what I’ve learned?

I like to take courses with an obvious real-world application. I’ll admit, I’m biased toward courses with the words “How To” in the title. For my purposes, a good course should do at least one of the following:

• Impart skills and knowledge that allow me to do work I couldn’t have done before
• Teach me to more effectively do work I’m already doing
• Allow me to avoid hiring or paying someone
• Help me to avoid making costly mistakes

This course has prepared me to do the work of taking a business idea from concept to reality. I may have had some clue about how to do this work before taking the course, but I now have a systematic approach. This approach could not only help me identify and develop a good business idea but also could keep me from investing time and energy in an idea that doesn’t have great potential.

The downsides:

I don’t want to make it seem as though this class is perfect. It’s not. For one thing, it is a self-paced class. This may be a plus for some people, but I find it harder to stay motivated when there isn’t any imposed schedule to conform to. Even though there are places to post comments on the lessons, the course lacks the student energy of classes in which everyone is doing the same work at the same time. For another thing, the quizzes embedded in the lectures aren’t great — sometimes they cover material that hasn’t been discussed yet, and sometimes they’re too easy. The real assignments, the ones that require you to “get out of the building” (a phrase Steve Blank uses about a thousand times during the course), aren’t graded. In fact, the course as a whole is not graded and offers no certificate or verification option.

The bottom line:

If you’re considering launching a startup — now or ever — and you only take one course, this should be it. In fact, you should probably take it twice — once before a big idea strikes and a second time when you’re ready to turn that idea into the next big thing.

More from LinkedIn:

How To Get A Job That You Absolutely Love

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Building A Team For Long-Term Growth

SEE ALSO: 15 Free Online Courses That Are Actually Worth Your Time

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If you're an entrepreneur, you will fail. I don't mean your business is going to fail and you'll go bankrupt. I mean that sometime, somewhere, to some degree, you will fall short. You will forget to follow through on a commitment to an employee, partner or customer. You'll be late to a meeting. You'll make a bad choice. You'll exercise poor judgment. You will make a mistake.

How you react when you fail will say a lot about who you are as a person, and will be a critical factor in determining how successful you are in business in ways that go beyond financial. But many of us make a mistake and then compound it with further mistakes, not because we have bad intentions, but because we simply do not know what to do. Assuming your heart is in the right place, here are four steps to increase your odds of winning when you fail.

Take full responsibility for the failure. Don't dodge. Recently a subsidiary of my online marketing firm that targets small self-storage companies signed up a new client for a $200 per month website and marketing package. We set up the website, but forgot to get the marketing services in the queue. Last week the customer contacted us and in effect said, "Hey, I'm happy with the website, but I think I was supposed to be getting online marketing services too, and I haven't seen any reports. What's going on?"

I could have dodged. I could have told the client we were waiting for something from him, or I could have blamed the problem on an employee. But I simply told him, "There's no excuse, we dropped the ball." The problem with dodging responsibility, apart from it simply being unethical or downright dishonest in most situations, is that what you are telling your customer is "I do not have the power to provide the level of service you expect." Is that the message you want to send your customers?

Unfairly compensate your customer. In 2006 I heard NPR's Scott Simon tell the story of how his father, upon complaining to his favorite shaving cream company that they weren't delivering the 90 shaves per can they promised, received a crate full of cans of shaving cream. "I think my father may have been buried with the last few cans," Simon says. If you unfairly compensate your customer to their benefit, your company's actions may one day become the stuff of legend.

Explain why the failure will not happen again. Your customers are looking for an excuse to stick with you. They've made an investment. Switching to another company is time consuming, bothersome, expensive and potentially risky, since the customer has no guarantee that things won't be worse with a new vendor. The customer wants to continue working with your company, but needs to know that the problem won't happen again. It's not enough to merely ensure the problem won't happen again, you also need to make sure the customer understands this.

Never do it again. Let me down once, shame on you. Let me down twice, shame on me. Everyone fails now and then. Most customers are reasonable people who understand this. When a vendor fails two or more times in the same way, the customer begins to realize this is not a one-time occurrence, but a rather inconvenient pattern. At some point, the time, cost, and risk of finding a new vendor eclipses the time, cost, and risk of staying with you, and then the customer is gone.

After 14 years of running a service firm I've come to understand that most customers have fairly simple expectations. They want what they paid for in the form promised, within the time frame committed to.

In the case of my firm's client, we followed these steps and the client was not only thrilled with the way we treated him, but then asked us to take on more of his business. We failed, but by taking the right steps to clean up the failure, we won in the end.

SEE ALSO: 6 Authentic Ways To Stand Out And Be Remembered

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Klout, a site that measures your influence on social media, is about to be sold for at least $100 million to Lithium technologies, according to Recode. The deal isn't closed, but papers have been signed, according to the report.

Lithium Technologies makes tools that brands can use to provide customer service on social networks.

The acquisition makes sense. It would be very helpful to brands to know how influential people tweeting about their products and services are. Klout gives social media users a score on a 100-point scale that measures their influence based on a secret algorithm.

Klout denied to comment.

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It's no secret that working at a startup can come with enviable perks, including some really cool work environments. 

A startup called Homepolish aims to take work spaces to the next level, and it's starting to grab the attention of other startups, thanks to their unique vibe and unconventional pricing.

Interior designer Noa Santos and former Buzzfeed coder Will Nathan founded Homepolish in January 2013, hoping to make interior design more accessible and transparent. Unlike traditional designers, Homepolish doesn't charge commission, which means that their services go at about a third of the industry rate. 

"The industry standard is to take almost every client over budget," Santos said to Business Insider. "The whole idea is that when you're not working on commission, your incentive is to get the best deal for your client."

Initial consultations with senior Homepolish designers cost $80, or $50 to consult with junior designers. After that initial meeting, hourly rates run at $130 and $100, respectively. 

Though they also work with individuals, Homepolish has designed offices for 80 startups in just a year of business, including GILT, NewsCred, Bark & Co., and Venmo.

"I think the reason it's caught on is that startups, like savvy clients in general, don't mind paying, but they want to know what they're paying for," Santos said. "We've had startups come to us saying, 'We move in in three weeks. Will you help us?'" 

According to Santos, designing for a startup requires a completely different approach. 

"I think the biggest factor is that the startup work environment can be somewhat unstructured in the sense that startups want their employees to work as much as possible, but be productive and happy," Santos said. "That might not mean sitting in a desk chair." 

For many startup offices, it means mimicking home environments so that employees will want to spend more time there. At Venmo, for example, couches, stadium seating, and private music rooms are so comfortable that employees sometimes go there over the weekend just to hang out.

When envisioning a space, the designers usually start out by gathering information about the company's style preferences, asking employees if they work in groups, and of what size.

Groups of two or three tend to benefit from having smaller meeting rooms and individual breakout areas. For companies that work in groups of five or 10 (or more), the team tries to add large living areas with couches or even a bar where they can get a round of drinks.  

The competition for cool office space can get a little heated among startups. 

"I think most startups want a little bit of crazy in their office," Santos said. "One thing I think is really interesting that's happening in the startup community is that offices are a recruiting tool. Ultimately they want to have certain things that other startups don't have."

Hidden rooms accessible through secret entry points like armoires or bookcases have become especially popular. At Codecademy, coders who need a break can rest in a nap room revealed behind a bookcase that swings inward from a brick wall.

They can also grab a drink at the 25-foot bar, which Homepolish was able to install for less than $5,000 thanks to discounts they get from using local vendors. 

That left the budget wide open for installing other features, like a snack wall and 20 feet of window seating. 

"We get some pretty interesting ideas, but I think since we're able to do them affordably, startups can trust us," Santos said. 

And it seems no startup office is truly complete without a ping-pong table, though Santos has an explanation for why that is. 

"The only method behind this madness is that when startups start to get too crowded, ping pong tables can be used as work tables, unlike other gaming tables," Santos said. Homepolish started in Manhattan before spreading to Brooklyn, Long Island, and Westchester. Now they're expanding to Los Angeles, Boston, Philadelphia, Washington, D.C., and San Francisco, where they hope the prevalence of startups and an early adopter culture will make them even more successful. 

"Since Homepolish is really new, some people find that frightening, but San Francisco has a different mentality when it comes to newness," Santos said. "There's a certain social clout to getting on board with a company early."

SEE ALSO: Venmo's Office Space Is So Cool, Staffers Sometimes Hang Out There On Weekends

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