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The latest news on Startups from Business Insider

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    ouya limited edition

    OUYA just finished up its Kickstarter crowd-funding campaign, raising about $8.6 million.

    It's not stopping there — you can still pre-order the console on its website, and the site has already logged more than $20,000 in sales, OUYA CEO Julie Uhrman tells us.

    OUYA is a $99 Android-powered box open to any developer for hacking. That means you can crack it open, play with the hardware, and develop any kind of Android application for a television.

    It's the second-largest Kickstarter project so far and has raised more money than many startups raise through traditional fundraising.

    In addition to running Android applications, OUYA is going to carry a ton of games you can play for free. Developers, by default, have to make part of their games free to play, and can make money by charging for in-game items or features.

    We caught up with Uhrman for a quick update on the final hours of the Kickstarter process. Here's what we learned:

    • Now that the Kickstarter process is over, OUYA is still selling a lot of consoles. The pre-orders on the website have already picked up around $20,000.
    • OUYA is going to ship around 62,000 consoles. Those consoles are expected to be ready around March next year.
    • At one point, OUYA was raising $1,000 a minute. It was a crazy rally in the final hours of the Kickstarter campaign.

    Here's a lightly-edited transcript of the interview:

    BUSINESS INSIDER: It's over! How was the whole funding process?

    Julie Uhrman: It was exciting, at one point we were tracking $1,000 a minute. It was at around 6 in the morning, when we put out our first update. It varied throughout the day. 

    It was invaluable, it allowed us to take OUYA to market, it allowed us to open up a conversation with gamers and developers. You know gamers are the most vocal and educated audience out there, to have more than 60,000 backers telling us what they want, that's incredibly rewarding.

    BI: What happens now?

    JU: Everything just continues. In addition to running the Kickstarter campaign we were running a business. We are finalizing the industrial design, the manufacturing partnerships. We are continuing to talk to content developers. We have a lot of great things in the works, we'll share them when they are complete and ready.

    The extra money are going to go into games and features to make the platform better and to deliver more units. We're shipping around 62,000 units, it's unclear since some of the rewards didn't have an option for an OUYA. I woke up this morning and we already had orders for more OUYAs on the website, we're at about $20,000 from our website alone. Our website will be a place to get more information and to pre-order your devices.

    We're incredibly grateful and thankful to our backers, without them, OUYA would not be coming to the market. They have proved there is a designer and a need for an open, accessible console.

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    kevin rose

    One of the most interesting trends in startup land is the rise of the "acqui-hire," which is when a big company buys a smaller company just to get its employees.

    For instance, Facebook acquired New York-startups Hot Potato and just for the companies' founders. It pretty much killed the product they developed. Or, more recently, Google bought Milk, the app development company from Kevin Rose. It killed all of Milk's projects and put the team to work on Google+.

    Why are Google and Facebook buying the companies instead of just poaching the employees? UNC law professors John Coyle and Gregg Polsky explored the acqui-hire trend and published a paper on it.

    Dan Primack at Fortune read the paper and talked to the professors. The results are fascinating.

    The key takeaways:

    • It saves face for the entrepreneur to say, "I sold my company to Google." The professors found that the majority of acqui-hired companies couldn't have raised another round of funding. Taking a "buy out" offer sounds a lot better than having the company go out of business.
    • It eases the tension of offering people huge salaries to come work at your company. If Facebook tried to hire some of the people at Hot Potato, it would have to make a generous offer. If it led to the new Hot Potato employee making more money than the current Facebook employees, the office culture could be poisoned. But, if Facebook brings in employees through an acqui-hire, and essentially gives them a huge bonus to join, what can it do? It has to tell its people, "We had to buy their equity."
    • That equity bonus is better for tax purposes. Engineers can treat their bonuses as capital gains, which is more tax-friendly. Though, the UNC professors believe this might not last if the IRS starts paying attention.
    • Acqui-hiring is good for big companies because it keeps VCs happy. If Google had the choice between poaching a startups employees, and robbing a VC of the ability to say it had an exit, or just doing the acqui-hire, the acqui-hire is better in the long run. It might end up costing a little more, but it keeps VCs happy, and down the road the VCs might be able to help out Google.

    For more, head over to Fortune >

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    Shannon Callahan

    If you work in the tech industry, you ought to know Shannon Callahan.

    The Andreessen Horowitz partner has the power to change your career—not just once, but repeatedly.

    And as Business Insider found out from talking to Callahan, if you are a talented engineer, even one still in college, chances are she wants to meet you, too.

    Callahan runs the talent network for Andreessen Horowitz, a venture-capital firm. Those who are in the talent network get first dibs at jobs at some of the Valley's hottest startups.

    The network was a novel idea when it was started some 2.5 years ago, when Callahan joined Andreessen Horowitz, or A16z. (That's the geeky shorthand for the number of characters between "A" and "z".)

    She knew cofounder Marc Andreessen because she lead HR at his previous company, Opsware, which HP bought for $1.6 billion in 2007. 

    Venture-capital firms have long played a matchmaking role between the startups they back and top talent. But they've typically focused on placing executives in top-level roles.

    That focus on the C-suite ignored the chronic shortage of engineers and product managers in the Valley. Andreessen Horowitz believed that if you could find out a person's passions and match it with a startup working in that area, its startups would win the talent war.

    But that meant getting to know thousands of Valley stars and college students.

    The idea "actually works very well," Callahan reports.

    "I wasn't sure that it would," she laughs.

    But as a result of careful groundwork—not just casual interviews, but diligent research like scrutinizing engineers' code—the network is in full effect. A person in the network will call her team first when they start looking around, she says.

    BI caught up with Callahan to talk about the Talent Network. Here's the upshot of what she told us.

    • The talent wars are hotter than ever. Today, a good engineer with a track record can nab between 6 and 12 job offers within 21 days of poking around.
    • Callahan now has 10 people reporting to her. These include someone who validates a person's technical skills by checking code and "talent agents" that specialize in certain fields. (For example, Eric Thomas specializes in designers while Marilyn Martin specializes in mobile.)
    • This isn't recruiting. Callahan's team handles introductions between people and startups. The startups make the job offers.
    • Once employees are working at a portfolio company, it can be delicate to move to another one. Callahan will make those introductions, but only if the employer knows the employee is leaving.

    Here's a lightly edited transcript of the conversation:

    BI: Why did A16z get involved in the talent search for their portfolio companies in the first place?

    There's always been a shortage of engineers and access to engineers in Silicon Valley. We had this theory, let's build a network of engineers, at all levels, product managers and designers. Those are always the top roles when people are building a company and always the hardest to find. We wanted to build a long-term relationship with these individuals ... from college grad up to a senior architect.

    What do you mean by "build a relationship?

    Having a conversation with the engineers and really understanding what they are passionate about, what they want to do with their future, where they see their career going and also making sure that they are technically qualified. Those folks all get technically qualified through a gentlemen on my team who goes through coding exercises with them. The second piece is building out a network of college talent. The folks who will be starting the next companies.

    How is this different from what other VC companies are doing?

    Up until recently, most VC firms focused only on executive talent. There was never really any focus on the technical talent and engineers. But we do not recruit for our companies. There's no way we can scale to do that for 150 portfolio companies. We're building relationships with engineers. We're not trying to do a transaction. We're trying to understand what's important to them.

    How many people do you have in your database?

    We have over 5,000 people in our system.

    How do they get into your database?

    Different ways. The big volume is college networks. We also have talent agents on our team, like Eric Thomas. He has built incredible relationships with different design communities. I have someone who focuses just in mobile, doing mentorship, meetups, helping get connected to our build team. I have someone focused on back-end system engineers, core technologies. We hosts meetups and pep talks to get people into our networks.

    In doing this for a couple of years now, what most surprised you?

    It actually works very well. I wasn't sure that it would. We'll talk to someone 2.5 years ago and they aren't moving. And we are the first person that they call. Maybe they've read about something we've invested in.
    They are part of the network. If they want to go into a portfolio company, we'll help them.

    Don't miss: 10 Tech Skills That Will Instantly Net You A $100,000+ Salary

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    pay with square tour 1

    We finally got an opportunity to try out Pay With Square, a new app that lets you pay for things without taking out a credit card.

    Or your wallet. Or your phone. Or anything.

    It's a new app from Square, a $3.2 billion startup in San Francisco led by Twitter co-founder Jack Dorsey that's redesigning the way we pay for things.

    Here's how it works: you link a credit card or debit card to your Square account and open "tabs" at places you'd like to buy things. Your phone automatically detects when you're close to that shop, and will show your name up at the register, along with your picture.

    When you're ready to buy something, just tell the cashier your name. They'll double check your name with the photo you have on file with Square, and then it's tap, tap, and you're done. You don't even have to take out your phone, or your wallet.

    It's the most seamless paying process we've ever experienced — and it's going to make you want to leave your wallet in your pocket from here on out.

    Lunch time! Let's see what's open.

    Senor Sisig is one of the best food trucks in San Francisco...

    ...and it looks like they're close! Second and Minna is right around the block from Business Insider West.

    See the rest of the story at Business Insider

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    andy grignon

    Andy Grignon is always looking for the next big thing. Sometimes it works out, sometimes it doesn't.

    He was part of the Apple engineering team that worked on the original iPhone. Then, he moved to Palm to lead the development of its ill-fated webOS.

    Grignon has spent much of this year working on a new startup called Quake Labs that hopes to change the way we create content on our iPhones, iPads, computers and even televisions.

    "We're building a product that enables a whole new kind of content creator," Grignon told Business Insider. The goal, he says, is to provide users with a simple set of tools that lets them create rich media projects on their mobile devices and PCs, which would otherwise require lots of design and engineering know how. "I want to enable someone with zero programming ability to build something amazingly cool that would be difficult today even with an experienced staff of designers and engineers," he says.

    Grignon admits that it's an ambitious goal - and he is still vague on some of the details - but he has already recruited a small but impressive team of former Apple employees to help, including Jeremy Wyld, a former software engineer at Apple and William Bull, the man responsible for redesigning the iPod in 2007.

    The startup is still in stealth mode, so details are scarce, but Grignon offered us a few hints about features the company might offer eventually. As one example, he said that Quake Labs could help users turn a presentation into a standalone mobile app that is displayed in the cloud rather than in the App Store, but which can be shared with others.

    Grignon's plan is to start out by releasing an app for the iPad by the end of the year, with apps for other devices to follow. Ultimately, the company's goal is to power a suite of mobile and web applications that work on tablets, smartphones, computers and even televisions and address a range of use cases.

    Quake LabsBusiness Insider chatted with Grignon by phone about the new startup as well as the biggest lesson he learned from his time at Apple. Here is a lightly edited transcript of that conversation:

    BUSINESS INSIDER: So what can you tell us about your startup? What's the goal?

    ANDY GRIGNON: We're looking to address the problem of when normal people want to create something really rich with their phones and tablets that require more than just words and pictures, but something that doesn't require them to be a programmer. It just requires you to be a creative thinker. We want to help people create things that take advantage of what has traditionally been the realm of designers and engineers. And we are not going to limit it to tablets or phones. It works well on TVs, computers, all of the devices that we have.

    BI: Can you give us an example of how this might work in practice?

    AG: Let's say you want to make an infographic that reflects live data and you want to design a particular kind of experience, but you don't know how to program it. I think we could do a pretty good job of that. We could produce a standalone app, not one that goes into Apple's App Store, but something that is a cloud-visible app so that people who want to find it can find it.

    BI: When can we expect to see something?

    AG: I want to have something in the app catalogue by the end of the year. After that, there will be a fairly regularly occurrence of new stuff.

    BI: You've spent most of your career working at big companies like Apple and Palm. Why did you decide to start your own company now?

    AG: I wanted the experience of starting a company. I've always worked in big organization where lots of things like marketing and HR are done for you. I wanted to see what it was like. I've always been interested in the startup space and eventually, I'd like to get into the realm of advising startups and getting onto the other side of the table and helping new startups succeed. I don't think I can do that if I haven't started a couple myself.

    BI: There are lots of startups founded by former Google employees, but it's not everyday that we see former Apple employees start companies. Why do you think that is?

    AG: When you are at Apple, you are not really given exposure outside of Apple. Unless you are high up in the organization, you don't get to meet with the money guys and venture capitalists. You really don't meet with a ton of outside people because of the need to protect secrets, whereas at other companies, you meet people all the time. So I think that there is a fear of the unknown. What's it like to raise money? Who do I even talk to? And if you do approach a venture firm, they will probably steer you to one of the other companies in their portfolio. That process of raising money is daunting to a lot of people.

    BI: What is the biggest lesson that you learned from your time at Apple?

    AG: The biggest one has always been never settle. That manifested itself in many ways. When you work with Steve Jobs or anyone at Apple day to day, you would do something that you thought was really great and someone would look at it and say, 'It's not good enough,' or ,'That looks like garbage.' Don't go with the first thing you thought was right, that was the big lesson. Writing software shouldn't comfortable, it shouldn't be banging something out. It should be frustrating. It should never be good enough.

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    Madera Restaurant

    A very successful entrepreneur who sold his company to an Internet giant just dropped a bit of local lore on us over lunch in Palo Alto.

    The exact location of the coffee shop in Palo Alto you choose says whether the entrepreneur or the investor has the upper hand in a negotiation.

    The closer you are to Caltrain, basically, the more eager the venture capitalist is.

    Coupa Café? Ask for a higher valuation.

    University Cafe? You might be able to lower the rate on the cumulative dividends.

    Cafe Venetia, the former Caffe del Doge? This is a venture-capitalist haven. Get ready for some serious liquidation preferences.

    Oh, and if someone offers to meet you in Madera, a fancy restaurant in the Rosewood Hotel across the street from the cluster of venture-capital firms on Sand Hill Road?

    You might as well kiss your ownership stake goodbye.

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    Ravi Mhatre Lightspeed Ventures

    When it comes to big data, "size doesn't matter," Ravi Mhatre, managing director of venture firm Lightspeed Venture Partners just told Business Insider.

    "It's not just big data. It's got to be fast data and it's got to be meaningful data" he says.

    There's a new wave of startups trying to make it easier to use big data systems. If they succeed, they will really hurt the multibillion-dollar market for business-intelligence software and threaten products like SAP's Business Objects, IBM Cognos and Oracle Hyperion.

    "We're talking an industry today that's probably $20 [billion] to $30 billion that I think, overnight, is going to be replaced by a completely new set of platforms," he predicts.

    Big data apps like Hadoop allow companies to store humongous amounts of data on inexpensive servers and storage. As they store more data, it leads to two problems: 1) you can't easily turn all that data into charts 2) it can take a long time—minutes—to get results when you ask a question, run a query.

    For instance, your Hadoop system could store info on every item ever sold by your company. If you wanted to find out what time of day, each month, you sold the most items, you couldn't output all that into a spreadsheet and start running charts. It could be 10 million rows of stuff.

    Mhatre says he's funded a startup, still in stealth mode, working on tech that will take those 10 million rows and turn them into pictures. "Not so much charts, but other ways a human can visually look at large amounts of data," he explains.

    He didn't name his stealth startup but another example of a big-data startup is Platfora, funded by Andreessen Horowitz, Sutter Hill Ventures, and the CIA's investment arm, In-Q-Tel.

    Mhatre's funding other startups that will speed up Hadoop and other big-data technologies. This includes a company called Qubole with a product in beta. Qubole was cofounded by two guys who used to run Facebook's infrastructure, Ashish Thusoo and Joydeep Sen Sarma.

    Don't miss: Big Data Is The Hottest Thing To Hit The Web In Years: Here's Why

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    Flipboard founders Mike McCue and Evan Doll

    Given all the talented people who work at Apple, we're sometimes surprised that we don't see more companies started by former Apple employees.

    Sure, there have been some prominent startups from ex-Apple insiders over the years, but it's nothing compared to the dozens and dozens of startups that have been founded by Google employees.

    Now, we have one possible explanation why from Andy Grignon, a former Apple engineer who worked on the original iPhone and started his own company this year called Quake Labs.

    He says employees have a hard time of building up the industry contacts they need to launch a company while at Apple.

    "When you are at Apple, you are not really given exposure outside of Apple," Grignon told us. "You really don't meet with a ton of outside people because of the need to protect secrets, whereas at other companies, you meet people all the time."

    This makes the idea of starting a company that much more daunting.

    Here's what Grignon told Business Insider

    When you are at Apple, you are not really given exposure outside of Apple. Unless you are high up in the organization, you don't get to meet with the money guys and venture capitalists. You really don't meet with a ton of outside people because of the need to protect secrets, whereas at other companies, you meet people all the time. So I think that there is a fear of the unknown. What's it like to raise money? Who do I even talk to? And if you do approach a venture firm, they will probably steer you to one of the other companies in their portfolio. That process of raising money is daunting to a lot of people.

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    nils johnson beautylish

    Nils Johnson isn't your typical beauty editor.

    For starters, he's a guy.

    But he founded Beautylish with two other men. It's a beauty and makeup content site that has raised just over $2 million from investors like Ron Conway, Max Levchin, Steve Chen, Keith Rabois and Jeremy Stoppelman.

    "As a guy people say, 'What do you know about makeup?' What you recognize is that nobody really 'knows,'" Johnson says.

    "All of it, beauty, is learned. It starts with aspiration and a look. People think, 'I want to look like Kim Kardashian, teach me how to do a smokey eye.'"

    Johnson began his career in New York. He worked for Bergdorff Goodman in its buying and merchandising department. Four years ago he moved to Silicon Valley to pursue a telecom startup. Since then he has angel invested in startups like Everlane, Minted and Warby Parker.

    Beautylish launched in October 2010 and has grown to 1 million monthly unique visitors. It is a picture-heavy site that gives readers tricks and tips about beauty and makeup. Johnson's team of 15 has pumped out tens of thousands of product reviews and how-to articles. Its social media following has been steadily growing too. It has nearly 500,000 Twitter followers. That's almost as many as Sephora and nearly 10 times as many as Birchbox.

    Content is a good way to build a trusted brand but e-commerce is the next, revenue-generating step for Beautylish. Today it is launching an online store so users can buy products and bring their desired looks to life.

    Johnson says he won't sell sample products like Birchbox. It's too expensive. Instead, featured  products will range from designer brands and limited exclusives to staple items that can be found in drug stores.

    "We're going for brands the community wants, not just the brands we can get," he says. New brands will be onboarded every few weeks.

    "In the beginning we focused on creating a great experience for users and getting quality right," says Johnson. "Buying products is natural after that."

    Here's what the new e-commerce arm looks like:


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    alexia tsotsis

    Just a few years ago, Alexia Tsotsis got her dream job — a reporter at TechCrunch, one of the top technology sites in Silicon Valley.

    Now she's running the show with co-editor Eric Eldon, and they've staffed it up with a ton of new writers.

    The tech reporting scene is cutthroat and takes some of the best talent to stay ahead of the curve. But it's often pretty easy to forget that there are still personalities behind those dozens of posts that flood the Internet every day.

    So we caught up with Tsotsis to find out what it is exactly like in the life of a Silicon Valley blogger at TechCrunch.

    My day usually starts at 8:30am, when I wake up and immediately open my laptop to check email, our company Yammer, Skype, Techmeme and of course TechCrunch (I'm actually wearing a commemorative shirt from the TechCrunch Disrupt where we announced the Aol sale in this pic). My Skype lights up like a Christmas tree the moment I log on.

    "One of the most exciting parts of my morning is tracking the tech news our and other East Coast and European tech writers have broken overnight. Sometimes the spin of the tech news hamster wheel is so engrossing that I'm stuck to my computer until noon coordinating the day's plan with TechCrunch co-editor Eric Eldon and our badass team of writers. "

    "When I finally get unglued from my laptop, I head to the office. Lots of other startups are infamously housed in our San Francisco office building at 410 Townsend Street, including TC Disrupt winner and recent billion dollar Microsoft acquisition Yammer."

    See the rest of the story at Business Insider

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    Plenty of tech startups rely on third-party platforms to get off the ground. But how do you scale up operations once the company is running full force?

    To get an idea, we spoke with fashion startup Quincy Apparel, which launched in March and is using e-commerce platform Shopify to sell its clothes online. 

    Quincy manufactures, designs, and sells custom-style work clothing for women and has already seen a tremendous growth in its business. Now the startup is strategizing how to scale up, says Quincy co-founder and COO Alex Nelson, who told us that she's working on managing customer analytics and preventing service disruptions to its site.

    To help Quincy troubleshoot these operations, we brought in tech coach Manny Ruiz of Intelligent IT, a company that helps startups launch and prepare for explosive growth.

    Watch the video below to see how a booming startup like Quincy Apparel can scale up its tech operations:

    Produced by Kamelia Angelova, William Wei, & Robert Libetti

    See Also:

    How This Tech Startup Expanded Its Operations From Paris To New York City

    How To Avoid The Most Common Startup Tech Mistakes

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    Tony Hsieh is trying to get sports fans out of the stands and into the action.

    The Zappos founder has joined forces with several other Zappos alumni for a sporty new Las Vegas start-up, Fandeavor.

    The new site, co-founded by ex-Zappos employees Tom Ellingson and Dean Curtis, launched Wednesday; it has raised $525,000 in seed funding from Hsieh's VegasTechFund and from Erik Moore, an early Zappos investor, reports TechCrunch.

    Branding itself as the “gameday experience company,” Fandeavor claims it will “turn bleacher bums into ballers by providing access that used to only be reserved for the rich.”

    The company plans to sell such experiences as VIP tent access, stadium tours and locker-room access, with packages offered both auction-style, to high bidders, and at preset prices, according to TechCrunch:

    The startup currently has partnerships with college football, basketball or baseball teams at TCU, Arizona State, UNLV, USC, Wisconsin and a few more, and will be using its funding to not only go after more college sports teams but branch out into professional sports.

    "There is no stronger loyalty than the rabid sports fan," Zach Ware, a partner at VegasTechFund, told TechCrunch. “Building an experience-based business by turning fans’ dreams into reality is a win-win—both for franchises and fans."

    NOW READ: Zappos CEO Reveals His Radical Plans To Change Las Vegas [Presentation] >

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    Startup 2012

    Candace Klein is an impressive individual.

    That much was clear when she walked on stage at Business Insider's startup competition in May and took home the $75,000 cash and other prizes.

    Klein was witty and composed during her presentation for SoMoLend, a social donation site. She fielded questions effortlessly during the Q&A that followed.

    Klein's easy confidence probably stemmed from the fact that it was hardly the first time she was in a startup competition.

    In the past few years, the 31-year-old founder has entered 27 startup competitions and won 25 of them. The other two she entered aren't finished yet.

    She recently spoke to a group in Salt Lake City about how to master a 5 minute presentation. Forbes contributor Cheryl Conner sums up Klein's advice:

    • Passion
    • Projection
    • Sell the problem before the solution
    • Have a credible team in place
    • Connect with the judges before engaging the audience
    • Be confident
    • Know what you're talking about
    • Be enthusiastic
    • Make eye contact

    Things to avoid in a pitch per Conner:

    • Saying you have no exit plan
    • Or competition
    • Using too many words per slide or insidery jargon
    • Not having a clear business model/ path to revenue
    • Making unrealistic projections or promises
    • Typos

    Klein also recommends having a master copy of the presentation deck at your disposal, eating breath mints, and reading the audience's reaction. She also recommends sharing personal stories to get the crowd on your side.

    And Klein has a crazy story to tell. Her mother had her at a very young age and she grew up in a trailer park. She paid her way through graduate school and has four degrees.

    She's also a cancer survivor. Klein was diagnosed with Ovarian caner and has been in remission twice.

    Entering 27 startup competitions sounds like more work (and more of a distraction) than simply running a startup. But it's led Klein to her next entrepreneurial endeavor: SoMoLaunch, an online business plan competition of her own.

    Here's Klein's presentation from Startup 2012 so you can see her presenting skills in action:

    Produced by Kamelia Angelova, Robert Libetti, William Wei

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    Plane Landing

    Most startups don't have wildly successful exits.

    Lately, SVAngel's David Lee says his firm has spent a good chunk of time helping entrepreneurs with soft landings and acquihires.

    Yesterday he wrote about the two kinds of startup exits. They sound similar, but Lee says investors view the two differently.

    A soft landing is only "soft" for entrepreneurs; investors tend to get no money back.

    "The goal is to 'softly land' the employees and possibly, the assets," Lee writes.

    When a startup is acquihired, investors fair a little better. They get their initial investment back and sometimes more. Acquihired founders have negotiating leverage, Lee writes. Softly landed founders do not.

    In both situations, its possible for an entrepreneur to get funded by the same investors in his or her next venture, says Lee. It depends how they behave during the exit.

    For more of Lee's thoughts on soft landings versus acquihires, head over to Daslee >

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    jamie wong vayable

    Vayable, a startup that makes it much easier to organize a vacation experience, is now seeing revenue growth of 30 percent every week.

    That's 30 percent week-over-week, every week, since May.

    That's pretty impressive for a startup that's only been around for a year and a half and which began life as a blog.

    But there's a good reason why—it's ridiculously easy to book a hotel or a flight, but it's still very hard to book a good experience.

    Here's how it works: a person willing to, say, take a group on a walking tour of Paris offers up the experience on Vayable at a certain price.

    Then people who want to sign up order the experience, sort out the final details, and meet the host at the appointed time. The whole process takes about five minutes.

    That's much different than the current way of doing things—which can take up to 30 hours, cofounder Jamie Wong tells us.

    And it's going after a huge market: Tours and other guided travel experiences amount to a $27 billion in the U.S. 

    We caught up with Wong to find out what makes Vayable tick. Here's what we learned:

    • It all started with a blog. Wong herself had spent a lot of time traveling and had developed a network of people to share her experiences with, including her family.
    • Now the site's revenue grows 30 percent every week. The wide array of unique experiences turned out to be a huge draw. The company is wrapping up a stint at Y Combinator, one of the top incubators in Silicon Valley.
    • The average Vayable tour guide makes about $130 for a three-hour trip. That means working as a tour guide through Vayable is becoming a plausible way to earn a living.

    Here's a lightly edited transcript of the conversation:

    BUSINESS INSIDER: First, tell me a little bit about yourself. 

    JAMIE WONG: My background is in journalism and marketing. I got my masters from Columbia, worked at the Daily Show. I consulted for various tech companies on marketing and design. I worked for clients like Juniper Networks and a bunch of other brands. My cofounder Tim Robertson was a senior engineer at Yelp [working on] search and data mining. Prior to that he was one of the first engineers at

    BI: What's the story behind Vayable?

    JW: I put up a WordPress site about a year and a half ago. The idea sprang from me traveling to more than 35 countries and also living in New York and San Francisco. I was acting as an impromptu tour guide to friends and family. I was planning vacations, honeymoons, connecting them with people I met on the ground in destinations all over the world. I also speak several languages so I've been able to serve as a translator.

    So we really wanted to make that process easier, started a blog and put the people and experiences on that blog. I started doing that while I was at The Daily Show because we had nine weeks off a year. I was able to do some traveling and I really started seeing the opportunity to create a global platform for what I was doing. Millions of people like myself are passionate about traveling and want off the beaten path experiences, and want ways to monetize their experience. We released a prototype and got some early traction. Since then we've been growing our revenue 30 percent week over week and got accepted to Y Combinator.

    vayableBI: How big is the target audience? Why do we need Vayable?

    JW: The market research shows that people spend on average months and more than 30 hours visiting dozens of websites, reading reviews, purchasing guidebooks to plan a single vacation. What's at the heart of the vacation is the experience. The model, the way people have been planning their travels is a little bit backwards, but that's due to the way the technology has evolved. The problem of finding a flight and booking that online has been solved. Finding and accommodation has been solved. The third and largest chunk, as far as annual revenue has yet to be solved, which is experiences.

    Now we really follow through and make that as easy as booking a flight or finding a hotel. You have a free hour in Paris and want an art student to take you to the Louvre or you book a three-week trip in Nepal. Not only is this easier and many instances more economical, but it's the kind of travel most people want to do—getting off the double-decker bus and into the lives of individuals—with the peace of mind that the money is going directly to a local rather than a franchise. In the US, it is a $27 billion addressable market. The global numbers are an estimate, but travel is around $220 billion. We're a small part of that.

    BI: How's your experience with Y Combinator been? 

    JW: It's been great. It's really provided us with a very strong network as well as advice from people who have pretty much seen it all. The structure, I think, is really beneficial to getting early traction and getting things off the ground. Seeing the progress everyone has made, that's what's most important right now.

    BI: What are some of the most fun experiences you've seen so far? 

    JW: You can fish with someone on their own private island. You can fly-fish with the mayor of Kanai, Alaska. Those are two of people's favorites. There's a homeless man in the Tenderloin [a neighborhood in San Francisco]. A member from our team met him at a soup kitchen. He told him about Vayable, and he started offering homeless tours of the Tenderloin.

    "There's a homeless man in the Tenderloin. A member from our team met him at a soup kitchen. He told him about Vayable, and he started offering homeless tours of the Tenderloin."

    Several local journalists have gone on it. The deputy mayor of Atlanta has gone on it. For a while it was one of our most popular tours. He was able to make enough money to buy a cell phone and for a period of time moved out of the shelter.

    BI: What about the providers? Is it possible to turn this into a full-on profession?

    JW: We have people who are full-time professional tour guides. We have people who will offer one event a month, and others who just do the hobby. We have some people who have a day job that they aren't crazy about and want to transition into something they're passionate about. They are starting to grow their business on Vayable and they are transitioning their tours. An average tour guide makes $130 for a three-hour tour. Their hourly rate is pretty good. Of course, it's on their own schedule and it's doing exactly what they love. We have some guys that make thousands of dollars a week.

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    Dileep George Vicarious

    Startup Vicarious is trying to build a computer with the human ability to see and perceive.

    It's a really hard artificial-intelligence problem that once solved, has immense potential to change the world.

    And this particular startup just got an immense boost from some big-names in the tech industry. Its backers include Facebook and Asana cofounder Dustin Moskovitz. His venture-capital firm, Good Ventures, has led a $15 million round; it's joined by Peter Thiel's Founders Fund and Open Field Capital, as well as some angel investors.

    Moskovitz and Founders Fund were also seed investors (among others) when the company launched two years ago.

    Getting a computer (or robot) to capture an image is obviously easy. But getting the computer to truly see that image—to intelligently understand what that image means, as a human does, is insanely problematic, Vicarious cofounders Dileep George and Scott Phoenix told BI.

    "The biggest problem in robotics is perception," George said. "They can make things that walk but they can't make things that see and understand what is in front of them. So we are solving the perception part."

    George and Phoenix want to replicate the part of the brain called the neocortex, which commands higher functions such as sensory perception, spatial reasoning, conscious thought and language. In other words, they are trying to create "intelligence."

    They are making progress, too. They've got a technology they call the Recursive Cortical Network, or RCN.

    "Anything humans do right now with their eyes would be something that we could do in an automated way," says Phoenix. "Is this cancer or not? Is this heart disease or not? Is there a manufacturing defect in any of these things? Take a picture of your dinner plate—how many calories are in it?"

    Eventually RCN will lead to commercial products and services. Products based on the tech are "five years out, at least," says Phoenix, adding that the plan is to release some kind of software platform "upon which an enormous number of things we haven't even thought of can be built."

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    soundcloud hovercraft hackathon

    Hackathons are a tradition at Silicon Valley startups. Some of the best technology companies in the world—like Facebook, for example—rely on them to surface up the next top projects for the company.

    These marathon coding and hacking sessions aim to build new working products within the designated timeframe—typically 24 to 72 hours.

    Sometimes you get fantastic new products. Sometimes you get some weird pieces of technology.

    Like a hovercraft—built at a hackathon which happened over the past weekend hosted by SoundCloud, a startup that helps you store and share clips of sound and music online.

    Jump straight to photos of SoundCloud's Hackathon weekend 

    Surprisingly, the hovercraft wasn't the project that won the 48-hour-long contest—it was an actual service that could be useful to SoundCloud in the future called Never Ending Story.

    Here are some of the other neat projects built during the hack weekend:

    • Toybox: A toddler’s toy built on Arduino, an open hardware platform, and Raspberry Pi, a $25 computer, able to play back custom SoundCloud sounds in reaction to the physical world.
    • Never Ending Story (We Hack 2012 winner): The age-old kid’s game: start a story and pass it on. The narrative begins with a SoundCloud file; you create a never-ending playlist of new people who tell new parts of a story.
    • Soundifyificationizer: Turns text into music by mapping groups of characters to MIDI notes for melody and drums.
    • HOVA: The hovercraft mentioned above.
    • StreadCloud: A meme-ifying tool to turn a photo of SoundCloud's chief architect into a joke. Includes voting.
    • Ruly: "R U Lost Yet" gives your friends a map with audio-powered step-by-step directions.
    • Deutsch Dienstag: An English-German phrasebook. Click an English sentence to hear the German translation
    • SoundCal: Allows users to add SoundCloud tracks to a calendar via the artwork widget.
    • Foodbaby: A website for collecting favorite recipes via an “Eat Later” bookmarklet. Once you cook the meal, you can connect the recipe to an Instagram photo of the dish.
    • Desmond: A port of the Android SoundCloud app to Google’s new experimental media streaming device, the Nexus Q.
    • Day In Sound: A day in the life of a SoundClouder in 2012.
    • SoundChain: Record a sound and send it to someone to continue and eventually make into a chain of sounds.
    • TweetSpeak: Allows you to speak your own tweets. Pick your best tweet, record it, and post it to Twitter.
    • Wedoc: A documentation of the weekend from audio interviews and montages.
    • Lunchbox: A mobile app enabling SoundCloud staffers to meet for lunch.
    • Message In A Bottle: Short message broadcasting with anonymous replies. Think of anonymous twitter.
    • The Passion Project: Stories of individuals sharing their passion with the world, arranged in a sensible way—kind of like Pinterest.

    Here's the schedule! Two days of crazy hacking. Side note: 13:37 (or 1:37 p.m.) is a morphism of "leet," or "elite," into numbers.

    There was a huge turnout for the weekend, as was well-documented by its employees.

    One of the projects was screen-printing t-shirts for the events, with the help of Etsy.

    See the rest of the story at Business Insider

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    A Y Combinator startup, Double Robotics, wants to take video conferencing to the next level.

    Instead of calling or Skyping an absent coworker into a meeting, the coworker can follow you around with an iPad mounted on a Segway-like roller. The iPad's camera is used to display the remote person's face, and the absent person can see what the robot is looking at and control its movement from his or her iPad.

    Double's height can be adjusted to sit at eye level and ranges from 47 inches up to 60 inches.

    The founders say Double can last 8 hours without being charged. It charges in about two hours and weighs 15 pounds.

    The robot is retailing for $2,499 but it can be pre-ordered for $1,999. The iPad isn't included, but the price isn't horrible when you consider that Segways retail for more than $5,000.

    Johnson and Johnson and Coca Cola are already testing out Double. The founders say seven Fortune 500 companies have already pre-ordered. Preorders have amounted to $500,000+ (so about 250 robots).

    Here are some pictures of Double in action:

    double robotics 

    double robotics




    double robotics

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    crowd surfing

    Entrepreneurs considering raising capital using crowdfunding should be prepared to abide by the Pee Wee Herman rule: if you like it, you might have to marry it. 

    Alarms have already been raised about potential risks to retail investors posed by the wildly popular new process to raise capital.

    However, most entrepreneurs are unaware of the fact that the real danger in crowdfunding is that it might prevent start-ups from ever being able to raise private funds from any other source.

    While raising money online for charitable and artistic causes has been around for years, the concept of selling equity online burst into the headlines with the passage of the JOBS Act last April. The legislation, intended to goose the lagging economy by making it easier for companies to raise capital, permits companies to solicit investments from retail individuals through online “portals” without complying with SEC share registration requirements.  

    The legislation comes with some significant limitations, however: companies are restricted to raising less than  $1 million a year by this means, and individual investors can invest no more than $10,000 per year in crowdfunding companies—or even less if their incomes are modest. 

    Moreover, entities selling shares via crowd funding portals must perform a mandatory background check on company management and large investors. These requirements mean that crowdfunding will be an expensive and inefficient proposition for most startups. 

    Crowdfunding entrepreneurs may also face substantial legal risk. Under the legislation, purchasers in crowdfunding offerings may bring suit against issuing companies and their directors and officers in the event of material misstatements or omissions in connection with the offering.

    The real problem, however, is that crowdfunding entrepreneurs may be stuck with this unwanted baggage permanently. Crowdfunding creates a capital structure that tends to scare off other sources of start-up cash, like venture capital and angel investors.  These big-ticket investors have little interest in competing with mom-and-pop investors for profits in new companies and in corralling their agreements to  key corporate actions. 

    There is another reason why large investors may shy away from later-round investing in crowdfunded startups.  Given the expense and danger associated with crowdfunding, companies that were forced to resort to it are likely to be limited to those that were too risky or badly managed to attract larger early investors.  Selling equity through crowdfunding may become a mark of Cain on the foreheads of new startups, denoting that the venture is exceptionally high risk in the already dangerous world of startup investment.

    It is this risk factor that makes crowdfunding such a dangerous mismatch with retail investors: the process introduces only the riskiest of startup ventures to the investors least able financially to absorb loss.  These risks are compounded by the fact that there exists no secondary market for equity purchased via crowdfunding: investors who have second thoughts after their purchases have no easy way to unload their shares.  

    While crowdfunding may result in some start-ups reaping cash from unsophisticated retail investors in the short run, the long-term consequences are troubling for all businesses.  When crowdfunding investors get burned, they are likely to become wary not only of startups,  but of equity investing in general.  With the broad financial markets still nervous in the wake of the last financial crisis, further blows to investor and consumer confidence are not likely promote economic growth for anyone. 

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    first paycheck, check, woman, girl

    If you're running a venture-backed startup, don't expect to be able to set a high salary for yourself. 

    One founder who's getting ready to quit his job and raise a $500,000 seed round asked on Quora"Is a $100K salary too much for an angel/VC-backed startup co-founder?"

    He says his co-founder, who's a software engineer with a great resume, "won't accept less than a $100K salary."

    Most responders including Foundry Group's Brad Feld thought that salary was too high, especially when it's one-fifth of the total amount raised. Others wondered if the founder was cut out to be an entrepreneur with such a high salary request.

    "$100K is below market for a good engineer, but is certainly above market for a seed-funded startup," one person responded. "Salary should be sufficient to not create hardship -- no sense in losing productivity because you can barely eat."

    So what should the founders pay themselves and when is it ok to go for six-figures?

    A $50-75,000 salary seems to be acceptable when an entrepreneur is first starting out. "$50K/year is plenty. Some families live on that," says VC Sean Owen.

    David Rose agrees. "On my experience, that fact pattern (a pair of founders, $500K seed round) would typically see them each taking $50-$75K, at least until they either start generating revenue, or raise a larger round."

    When you're profitable, you can start paying yourself a more impressive salary.

    "An adviser once told me to keep the total annual figure (including taxes and bene's) under $100k per year until you're profitable, and VCs have seemed to accept this," another says.

    Here's the most voted up response by Michael Wolfe, a four-time entrepreneur:

    Read Quote of Michael Wolfe's answer to Is a $100k salary too much for an angel/VC-backed startup co-founder? on Quora

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