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- 09/16/14--15:29: _7 New Startups San ...
- 09/17/14--07:17: _When On-Demand Is A...
- 09/17/14--21:01: _Two Friends Were St...
- 09/18/14--08:00: _A Hilarious New Tum...
- 09/18/14--08:12: _There’s A Looming T...
- 09/19/14--08:40: _This Rabbi Quit His...
- 09/20/14--18:22: _BILLION-DOLLAR STAR...
- 09/22/14--07:05: _This Guy Used Cupca...
- 09/22/14--12:49: _9 Incredibly Succes...
- 09/22/14--14:17: _This Startup Sounds...
- 09/24/14--07:40: _This Stat About Dig...
- 09/24/14--08:24: _Here's How To Get A...
- 09/24/14--08:42: _NYC IS HEATING UP: ...
- 09/25/14--10:25: _Every Entrepreneur ...
- 09/25/14--12:58: _ANOTHER TOP INVESTO...
- 09/27/14--11:39: _Recruiter: Startups...
- 09/30/14--07:12: _Silicon Valley Heav...
- 10/01/14--11:30: _How To Tell If Your...
- 10/02/14--13:16: _Startup God Paul Gr...
- 10/08/14--09:04: _After Google Bought...
- 09/16/14--15:29: 7 New Startups San Francisco Can't Stop Talking About
- 09/17/14--07:17: When On-Demand Is And Isn't Appropriate
- 09/20/14--18:22: BILLION-DOLLAR STARTUPS: Are We In Another Tech Bubble?
- 09/22/14--12:49: 9 Incredibly Successful Startups That Were Born At Stanford
- Flatiron Health— Founded by Invite Media's Nat Turner and Zach Weinberg, Flatiron Health is two years old. It started as a passion project for Turner and Weinberg who both had family members who had been diagnosed with cancer. Then they started looking into clinical trials. Now the company's mission is to organize the world's oncology data and it's working with a number of cancer clinics in beta. Google Ventures led a $130 million round in Flatiron Health in May 2014 at a valuation that exceeds $500 million.
- Oscar— Joshua Kushner's Oscar is a health insurance company that launched in July 2013. It's goal is to make healthcare affordable and medical bills easy for everyone to understand. Khosla Ventures and other investors have poured $150 million into it at a valuation of about $800 million.
- Blue Apron— Blue Apron, a Brooklyn-based startup, sends recipes and perfect ingredient portions to your doorstep so you can learn to cook new meals at home relatively quickly without any waste or store visits required. It's rumored to be doing more than $80 million in annual revenue and its latest valuation was about $500 million on the nose.
- 09/25/14--10:25: Every Entrepreneur Should Read This Guide From A Facebook Co-Founder
- High burn prevents a company from being able to adapt quickly if the market changes.
- Excessive amounts of capital allow companies to hire like crazy rather than operate efficiently. Hiring is an easy-sounding solution to many problems startups face. But once a startup stops being lean, it can become slow to execute and mismanaged.
- Raising a lot of money gives the illusion that a startup has made it: salaries can be high, offices can be glamorous, and it can make employees feel a false sense of relief, like all its hard work is done.
- When you're a bloated company, raising money to support that size operation can be hard to do. "High cash burn startups almost never survive down rounds. VAPORIZE," Andreessen reiterates.
- When the market turns, big companies stop buying startups. And if you have a high burn rate, no one will buy you.
- While you shouldn't always trust your instincts about how to run a startup, you should trust your instincts when it comes to hiring people."One of the most common mistakes young founders make is not to do that enough," Graham says. If you feel someone is a jerk or your gut says something with someone is off, listen.
- Don't be an expert on startups, be an expert on users. Graham thinks learning too much about how startups are typically run can be dangerous, because it can make it tempting to "play house" and go through the motions of running a company (raising money, getting a big office, hiring lots of people) before you actually have a viable business. Graham points out that Mark Zuckerberg was not a startup expert when he started Facebook, he just knew the user base really well.
- You can't gamify a startup. While you may be able to get ahead in school or at a corporation by "gaming" the system or sucking up to a teacher or boss, there are no corners you can cut with a startup. "There is no boss to trick, only users," says Graham. He warns that sometimes, investors can be tricked or gamed and they'll give questionable startups cash. But this only wastes the founder's time because if a business idea isn't strong, it will fail anyway.
- Startups take over your life more than you can possibly imagine."Startups are all-consuming," Graham writes. Startups are even difficult to run once they become big companies, like Google and Facebook. Graham notes that Page has been running Google since he was 25 and probably still feels like he hasn't had a chance to rest.
- More on that same thought:"Starting a successful startup is similar to having kids in that it's like a button you push that changes your life irrevocably," Graham says.
- It's almost impossible to tell if you're the type of person who's up for a startup before you try."Starting a startup will change you a lot," says Graham. "Ehat you're trying to estimate is not just what type of person you are, but what you could grow into, and who can do that?"
- Don't try to think up a startup idea."It's how Apple, Yahoo, Google, and Facebook all got started," Graham says. "None of these companies were even meant to be companies at first. They were all just side projects. The best startups almost have to start as side projects, because great ideas tend to be such outliers that your conscious mind would reject them as ideas for companies."
- His ultimate startup advice: learn everything you possibly can."At its best, starting a startup is merely an ulterior motive for curiosity," says Graham. "So here is the ultimate advice for young would-be startup founders, boiled down to two words: just learn."
What's the San Francisco startup world chattering about right now?
We met with a bunch of investors and entrepreneurs over the past few weeks and grabbed their phones. Here's what's on them:
Gametime: We first saw this on an investor's phone who was looking into a funding deal. Then we saw it on the phone of another investor, HotelTonight CEO Sam Shank. Shank is invested in about 20 startups, including Gametime. Gametime is a quick way to pay for last-minute sports tickets on your phone. There's no paper printing involved. All tickets become mobile QR codes that can be scanned upon entering the stadium.
Hinge: A lot of single San Franciscans are beginning to ditch Tinder or use it in tandem with another dating app, Hinge. Hinge is a New York-based startup that brings together friends of friends. Like Tinder, it's tied to your location and it also matches you up with people who went to the same college, if that's of interest. One San Franciscan who is using both Tinder and Hinge says he's matched up with the same people on both networks, so there seems to be cross pollination. One suitor even told him, "You're so much nicer on Hinge!" because he was more responsive to messages on the new platform, rather than Tinder's subtle notifications.
BloomThat: BloomThat is like Uber for flowers. Pick a bouquet, put in the recipient's address, and boom, flowers will be delivered within the hour. It's available only in San Francisco right now. Before you roll your eyes at the next "Uber for X" startup, here's why investors say they are excited about it:
The average person sends two to three bouquets of flowers per year. Apparently, BloomThat has been able to dramatically increase that number to about 11 times per year. Its annual revenue run rate is already in the multiple millions, too.
Investors get excited about on-demand markets that grow the size of the user pie, not just chip away at it. In other words, before Uber, a very small number of people used black car services. Now, the average person can hail a ride on Uber, Lyft, Sidecar, or another competitor, increasing the number of customers available to the car service industry. Early data shows BloomThat is positioned to turn non-flower buyers into regular customers, too.
Pay By Phone: San Franciscans can avoid parking tickets by downloading PayByPhone, which allows them to pay parking meters remotely, straight from their mobile devices.
Reserve: Garrett Camp's latest app, Reserve, is getting ready to launch with a bunch of funding. It's still in stealth mode, but it will be Open Table meets Yelp, with a forced rating feature like Uber has. You'll have to rate every place you eat before you can reserve a new restaurant outing.
Reserve is run by True[X] CEO Joe Marchese, and it will be an Expa company. Camp cofounded Uber and is running Expa, a startup incubator that is rumored to have raised about $50 million. Each startup it launches will be seeded by Expa and raise its own funding as well.
TD4W: It took SV Angel associate Abram Dawson and his app developer buddy Matt Baker 45 minutes to create the "stupidest thing they could think of,"Turn Down For What. Shortened to "TD4W," the app doesn't require the user to take any action. Upon opening the app, the hook for Lil Jon and DJ Snake's hit song "Turn Down for What" begins playing. That's all the app does. It had about 1,000 installs after being live for four days.
Justin Shaffer and Aaron Sittig's new startup: Justin Shaffer, founder of a Facebook-acquired location startup HotPotato, left Mark Zuckerberg's company last year. He hasn't announced what's next, but whatever it is, he's working on it with early Facebook designer Aaron Sittig. It may be a Garrett Camp-like Expa model, where the pair create a bunch of new startups at once.
Anyone covering the tech and startup space can attest to the endless amount of pitches for different on-demand services.
After receiving these emails on a daily basis, I figured it was worth giving some of the apps and services a try. I wanted to experience them first-hand to see what all the craze was about.
I started small with Uber and Lyft. That was pretty basic. It was like a cab, but I could order it on-demand to wherever I was, at anytime. Oh, and it cost less than your average cab. Great.
But then I moved on to some other, less mainstream on-demand services, and the experiences became a bit more complex.
I decided to give WunWun a shot. Their deal is that they'll deliver anything to you for free. They're a Postmates competitor servicing all those places that aren't on Seamless so that you never have to leave your apartment again.
Not sure what the app would be like, I decided to simply order a bag of salt and vinegar potato chips. Three hours later, after dozens of texts back and forth with my WunWun deliveryman, I got that coveted bag of chips.
To be fair, they were offering a promotion the same day, so they were probably especially busy. And they're also still a fairly new startup, just figuring out the Manhattan scene. My deliveryman had to come all the way from lower Manhattan to the Upper West Side to bring me my bag of chips.
Was it really worth it? I probably could have mustered up the strength to walk the two minutes to the nearby Associated supermarket.
My coworker Caroline Moss had a similarly frustrating situation with an on-demand delivery service.
She decided to order some groceries — including frozen food — from Trader Joe's using Postmates.
It happened to be a very hot day, and Moss's deliveryman just happened to get in a car accident on the way. The deliveryman was fine. The frozen food was not.
Lesson learned. On-demand delivery is not for anything that will melt.
But the on-demand craze goes far beyond getting a car or some food. Some startups will send over salon specialists to your apartment or office for a pedicure, manicure, or even a haircut.
That same coworker of mine, Caroline Moss, is a staunch supporter of GlamSquad, an app that lets you order a salon specialist to come do your hair and/or makeup. She uses it all the time.
I decided to give it a shot with a similar app called PRIV, which goes beyond hair and makeup to offer actual haircuts, manicures, pedicures, and massages.
Not quite yet ready to try anything more daring, I started with a pedicure. A very nice woman came to my apartment, with all of her pedicure tools in hand.
Sitting down at my dining room table, I got a 30 minute pedicure with a 10 minute foot massage.
The massage was incredible, and the polish was great. It was also super convenient that I didn't have to leave my apartment, nor did I have to check to see which salons nearby were open.
But there were definitely some tradeoffs. For one, the very nice pedicurist did not come with a massage chair or a tub of water filled with pretty rocks. And there was no relaxing salon music (though I guess I could have supplied that myself).
Nonetheless, I decided to take things to the next level, and made another appointment with PRIV. This time for a haircut.
My hair specialist was friendly and nice, and even taught me the "proper way" to shampoo my hair. He gave me a great haircut (at least that's what my mom told me), and best thing of all, I was able to schedule it after work, despite most hair salons already being closed.
It was incredibly convenient for a working woman.
But again, there were some tradeoffs. The main one being that I had to clean up my hair myself. I had sort of assumed that the hair specialist would have taken care of that, but I wound up sweeping up the floor myself.
It was also a little more difficult sitting for a long time in my less-than-comfortable dining room chair.
I can definitely understand the appeal of having someone come to your apartment to do your hair and makeup before a wedding, but I'm not so sure how frequently I'd want to order some of the other salon services.
That said, I'm still very much an entry-level on-demander, but I think I've learned that there is a time and place for on-demand. Despite the fact that VCs may be eating up every new on-demand pitch, maybe not everything needs to delivered immediately and to any location. Maybe sometimes it just makes more sense to get off your couch and buy a bag of chips.
Not going to lie, though, I'm pretty excited for Washio to come to New York so I can avoid the basement laundry room...
Lane Gerson and Ariel Nelson were trying to find shoes for Nelson to wear to an upcoming wedding, but they were striking out.
"We were like this is nuts," Gerson told Business Insider. "I can’t afford anything out there. And even the stuff that’s almost in my price range, it’s like four, five, six hundred dollars, which shouldn’t be in my price range and I’m telling myself that it is, is very overstylized, very designed. Where did the simple men's dress shoe go?"
Gerson says companies offering shoes from $500-$1,000 tend to latch on to the latest design craze and over do it. Only the brands in the $1,000 plus price range have the confidence to offer simple design.
Gerson and Nelson were confident that there had to be a way to create a good, simple shoe for $100 and sell it at $200. So they left their jobs — Gerson was in accounting and Nelson in beverage distribution — and started Jack Erwin, an online brand that sells classic men's shoes in the $95-$210 price range.
The best friends spent the entire summer of 2012 networking and trying to learn more about the shoe industry.
Their first big break came when Nelson decided he was going to shave all his hair off. It was last August, 2012, and it was sweltering out. Nelson ducked into a small two seater shop on 26th street between 7th and 8th Ave.
The man sitting next to him was talking about how he'd been in the shoe industry for 20 years and built lines for billion-dollar brands but never felt ownership over anything. The man was Bertrand Guillaume, who had been one of the head shoe buyers for Ralph Lauren before moving onto to be a senior director at Saks Fifth Avenue.
Nelson introduced himself to Guillaume. The two spoke more and more, and eventually Guillaume joined Jack Erwin.
In May of 2013, Guillame, Nelson, and Gerson flew to Portugal. They need to fix some problems with samples of the Jack Erwin shoes.
The plan was to fix the problems, then put in an order for a 3,000 pair run, their first run of shoes. But there was a problem. They didn't have any money. And the Guillame warned they would have to put down a deposit for the shoes.
They got lucky though. The bank they were working with wasn't affiliated with their factory's bank. The factory asked them to switch banks, a process that would take weeks. While they switched banks, the factory started making the shoes.
This allowed the Jack Erwin team two weeks to scramble together some funds, "and that's literally how we were able to make our first production run," Nelson said.
On October 4, 2013, Jack Erwin set its website live with 3,000 pairs of shoes in stock. And within two months the shoes had sold out and there were nearly 4,000 people on a waiting list. All with no marketing or advertising. Gerson and Nelson had simply sent out an email to friends and family, and word spread fast.
As buzz grew around the company, investment firm Crosslink Capital offered to help it get funding. Crosslink, which normally invests in later-stage companies, wanted to connect Gerson and Nelson with some Silicon Valley VCs.
But Crosslink changed its mind. It wanted to lead their seed-round of funding. Shasta Ventures and Menlo Ventures also wanted in. And $2 million later, Jack Erwin was closing a round of funding.
Early Thursday morning, Jack Erwin announced a new slug of cash — a $9 million in Series B funding round led by Brown Shoe, with additional investments from CrossLink Capital, Shasta Ventures, and FundersGuild.
Brown Shoe already owns Famous Footwear, Naturalizer, and Dr. Scholls, but this is its first investment in a startup.
Gerson and Nelson are thrilled to add Brown Shoe to their team of investors.
"Having that operational expertise, someone who sources ships millions of pairs of shoes a year, [it's great to] have access to that," Gerson said. "We definitely want to have someone like them involved because they get the shoe world. It's nice to have both of that at the table."
Despite their success, Gerson and Nelson opt to live in their Soho office.
They often find themselves folding laundry or ironing shirts while holding a meeting with their six employees at the same time. But they think this adds a nice homey and comfortable atmosphere to the office.
As opposed to rushing out the door at 5 p.m., employees tend to stick around, grab a beer, and unwind. That may be because they feel uncomfortable leaving, when the two cofounders never leave the office, Nelson admits. But it also just demonstrates that they've created a home for the Jack Erwin team moreso than an office.
Now Jack Erwin is focused on becoming a long-term, sustainable brand.
"It’s this balance always," Gerson said. "How do we become a brand with some real heritage and history and meaning behind it, and how do you also take advantage of some of the benefits of being online and being able to scale quickly."
The team has been working on perfecting their product, worrying about their supply chain, figuring out logistics, and improving customer service. They know what they want to offer, and they want maintain consistency and trustworthiness for their customers.
"Some people are like 'we found a void here and at this price point we’re beating x, y, and z's price point and that’s what makes us a company,'" Nelson said. "I don’t think that’s what makes you a company. I think you have to a brand first."
The startup world isn't exactly known for its fashion. And with a gender ratio that undoubtedly tilts toward males, there's a real sense of a "brogrammer" culture in Silicon Valley.
A new Tumblr called "Dudes in Startup Shirts" calls out brogrammers in a hilarious way, posting pictures of guys wearing the t-shirts they probably got from their employers for free.
The Tumblr's creator is Cory Sklar, a San Francisco native who told Business Insider that he's currently working on a startup that makes t-shirts for startups.
"I wanted an online presence where men could be admired for their keen fashion sense as well as their top-notch business skills," he said when we asked why he started the blog.
Here are some of the brotastic looks you can find on the blog.
Some big-time startups got called out on the blog, including Uber.
Yelp also makes an appearance.
Obviously, a beach day requires uniforms.
As do house parties and press events.
Startup shirts are apparently a good option for any night out on the town.
No matter how questionable the slogan is, startup guys sure do love their startup shirts.
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New York Magazine's Kevin Roose just wrote a story exposing a big threat to a whole host of successful startups.
Lately, there's been a rise in a new type of startup: "on demand" startups.
Basically they are like Uber, but instead of summoning taxi drivers, they summon other service providers — food deliverers, people who do laundry, people who clean homes, flower deliverers, and so on.
Like Uber, many of these startups do not actually employee the people who provide those "on demand" services. The startups hire contractors.
Roose even says there is a term for this trend. It's the "1099 economy" named after the tax form companies fill out when they hire contractors — 1099 MISCs, not the W2s companies have to fill out for full time employees.
The reason Uber, Homejoy, Instacart, Washio, SpoonRocket, and other startups are hiring contractors is simple: contractors are a lot cheaper than employees. For example, the companies don't have to worry about withholding taxes or paying into social security.
New York-based "on demand" housekeeper company MyClean used to use contractors. When it switched to full time cleaners, its labor costs went up 40%.
MyClean chose to switch to full time employees because it felt the quality of its product went up.
Some startups may not get to make the choice. They may be forced to hire their contractors on full time.
It turns out its against the law to treat contractors the same way you would treat employees.
In June, a group of Uber drivers joined a class-action lawsuit against the company in California and Massachusetts. The drivers, represented by Boston attorney Shannon Liss-Riordan, alleged that Uber misclassified them as independent contractors, thereby requiring them to bear upkeep and maintenance costs that normal employees wouldn't be liable for. (Uber, in a statement to the Boston Globe, said it would "vigorously defend the rights of riders to enjoy competition and choice, and for drivers to build their own small business.”)
Start-ups aren't the only companies being targeted for worker Misclassification. But they are the most vulnerable to a change in the law. Require a 1099 start-up to reclassify its workers as W-2 employees, and you radically change its ability to lower prices and undercut the competition — which was, in many cases, a key reason investors were interested in the first place.
“If their drivers are classified as employees then that suddenly makes their business model untenable,” Denise Cheng, a research assistant at the MIT Center for Civic Media, told the Globe.
One warning shot for 1099-dependent start-ups came in an August rulingby a federal appeals court, which found that 2,300 FedEx delivery drivers in California were being misclassified as independent contractors, since FedEx exercised broad control over their schedules and methods. "The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx's appearance standards," Judge William Fletcher said. The three-judge panel ultimately ruled that since the contractors were being treated like employees, they were entitled to employee benefits such as overtime pay and reimbursement of expenses.
The implicit threat to start-ups like Homejoy, Spoonrocket, and Uber couldn't have been clearer. If you want to use independent contractors, the judges told FedEx, you've got to give them real independence.
The threat to lots of rich startups is this: if they lean on cheap contractors too much, and require them to act like full time employees too much, they may have to start paying them like full time employees.
That could seriously spike costs for many startups — at a time when prominent VCs are already worried about how much money startups are spending.
Jonathan Frankel is not your average startup founder. He doesn't live in Silicon Valley, or even Silicon Alley. He hasn't worked in the technology industry before.
Oh, and he's an ordained rabbi.
Frankel never planned on starting his own company, let alone develop a new device, but he just sort of stumbled into it. After becoming a rabbi, Frankel went to Harvard Law and then worked at Boston Consulting Group and flew around the country working with different clients.
At the time he was living in the suburbs of Philadelphia with his wife and three sons in a three-story house.
"I have three little boys, and I was trying to keep track of them," Frankel told Business Insider.
He'd hear screaming coming from somewhere and run around the house trying to figure out what was wrong. Or if it was time for dinner, he'd have to scream at the top of his lungs for them to come downstairs.
Frankel decided that it would make his life infinitely easier if he could install an intercom in the house so that he could communicate with his family wherever they were. But when he started googling, he was astonished by the price range.
The traditional intercom systems his parents had used 20 years ago when he was a kid were going for $3,000. And it would require them to wire the whole house and break through walls. It seemed pretty ridiculous.
So he thought to himself, this is the 21st century, there must be some sort of wireless solution at a cheaper price point. But he couldn't find anything.
After dozens of hours of futile searching, Frankel decided to go ahead and create a wireless intercom himself.
A year and a half later, he's launching Nucleus, a WiFi home intercom that makes it easy to communicate with other people in your house (and it's less expensive, too).
With Nucleus, parents can buy tablet-like devices to hang on the walls around their house. Each device can record video and audio and share the information with the other devices in the house.
"The ability to just tap and see takes out a lot of the running up and down," Frankel said. "It’s a lot more calm way to communicate."
You can preorder as many devices as you want at $150 per Nucleus, and Frankel is hoping to ship by the second quarter of 2015.
While Frankel studied computer science undergrad, he didn't really have too much technical background, so he brought along Isaac Levy to be Nucleus' CTO. Levy came with tons of background in video technology and put together the working prototype in about a month.
And while Levy is working on all the coding, Frankel is bringing his own flair to the company.
"Talmud and computers and law, they’re all very demanding and logical professions," he said. "When we were designing this, working with designers, I told them 'I don’t even have the vocabulary to discuss design.' You want to give me a logical puzzle, I’ll solve a logical puzzle. I’m not a designer. But I think all those three different careers, they seem very disparate, but they’re kind of very connected in terms of the hard logic required."
You can watch this video to learn more about Nucleus:
Among the things that lead normal, well-balanced people to conclude that the IT industry is crazy are the valuations at which internet companies are launched on the stock market and the prices these companies pay to acquire apparently minuscule start-ups.
One thinks, for example, of the $104bn valuation of Facebook when it launched in May 2012. Or of the $19bn that Facebook then paid to acquire WhatsApp last February. And then there’s last Thursday’s flotation of the Chinese internet firm Alibaba in New York, which valued the company at $168bn. (The really big news here is the flotation’s confirmation of the shrewdness of the 2005 deal in which Yahoo acquired a 40% stake in Alibaba for $1bn; Yahoo still owns 22.4% of the company and is expected to sell off some of that after the IPO.)
These are not just telephone-book numbers, but astronomical ones. And not surprisingly they are leading some people to wonder if we’re in the middle of another tech bubble like the one that spectacularly popped in 2000. These fears were given an extra boost by a report published last month by PricewaterhouseCoopers that showed that venture capitalists in the US are pouring increasing amounts of money into tech companies.
In the second quarter of this year, for example, venture capital investments in seed stage, early stage and expansion stage companies were up 55% over the corresponding quarter last year, which apparently is the largest quarter-over-quarter growth since the last quarter of 1999 – the last gasp of the first internet boom.
This raises two questions. First, is history repeating itself? The answer is no, because history never really repeats itself. All booms have some generic features in common – outbreaks of irrational exuberance, for example, and availability of cheap money.
But the specific circumstances of each boom are different. In the first internet bubble, for example, much of the money was blown on buying servers, renting offices and trying to buy market share in improbable or nonexistent markets (think of Pets.com and Petopia.com). In the current boom, instead of buying servers, startups rent computing time on Amazon’s Elastic Compute cloud service; their “offices” are often virtual (at least at first) and they’re not spending fortunes on advertising. In fact, they’re not paying for advertising full stop. So even if things were to go belly-up there’s less at stake.
A more interesting question is: does it matter if we’re in another bubble? For individual investors, obviously the answer is yes. But for society as a whole, perhaps not. As William Janeway pointed out in his splendid book on innovation, the irrational exuberance that characterises bubbles may also be beneficial in that they generate technologies that will prove significant in the longer term.
If one wanted to be critical, the most annoying thing about the current bubble is the way the visions and ambitions of startup founders seem to have narrowed. Many of them claim, of course, that what they want to build is a company that in the long term will transform the world or disrupt a particular market.
But in actual fact their strategy is to create a product or a service that is sufficiently interesting or annoying to induce Google, Amazon, Facebook, Yahoo or Microsoft to buy the upstart venture. The poster child for this is WhatsApp, a fine company with a viable business model that did not depend on monitoring users and which was run by a chap who fervently declared his resolve to build a great, sustainable enterprise that treated its users well. And he doubtless believed that right up to the moment that Facebook offered him $19bn. And who can blame him: you only live once, after all.
At the end of the day, though, what’s much more worrying than the spectacle of venture capitalists blowing investors’ money is the fact that everywhere state funding for the kind of long-term, fundamental research that is needed to produce the technologies of tomorrow has been shrinking. The current wave of innovation and economic development enabled by the internet has only come about because 60 years ago the US government funded the project that produced first the arpanet and then the internet.
Private enterprise would undoubtedly have produced computer networks, but it would not have created the free and open platform for “permissionless innovation” that we got as a result of public investment. And we would have all been poorer as a result.
This article originally appeared on guardian.co.uk
Looking to get your foot in the door with your dream employer? Try showing up to the office with a box of cupcakes.
At least that's what worked for Jon Ebner, now the East Coast sales manager at catering startup Cater2.me.
He shared with Business Insider the extraordinary steps he took to get his start at the company — a journey that included hand-delivered baked goods, a late-night letter writing session, and more than a month of working almost for free.
Here's the full story:
In late 2012, Ebner was living on Long Island running his family's Apple computer resale business, a responsibility he shared with his brother after his father passed away in 2010.
Deciding that the business was stable enough to pursue his intended career path in sales, Ebner started looking for a startup job in New York City.
He became smitten almost immediately with Cater2.me, a company that caters gourmet office lunches and at the time had only 18 employees.
A self-described foodie who is "super into lunch," Ebner was excited not only by the free food he'd get to eat but by the opportunity to work for Cater2.me's Wharton-educated founders, Zach Yungst and Alex Lorton.
"There was just something about this company," Ebner says, admitting that he also half-heartedly applied to other companies as a back-up plan. "I really believed in the company and I wanted to do whatever I could to be successful with this company — not just to be successful, but to be successful with this company."
And so, he went through with the process of applying for an operations job via email.
He followed up with a phone call, and when that went un-returned, he sent a second email to Lorton about one of his favorite New York sandwich shops, Bite. At the end, of course, he mentioned that he had previously applied to the operations role and would love to meet up for an interview.
"I just said, 'If I were the founder, what would actually make me want to read this email? Why do I care about this person writing to me?'" Ebner tells Business Insider.
The food-lover's appeal was successful in getting him a phone interview, but alas, there was one small hiccup: by the time Ebner got his interview, Cater2.me was already in the process of hiring someone else for the role.
Ebner never heard back, even after sending an email saying that he would be happy to take a position as a salesperson, instead.
"I kind of hit a wall there," Ebner says. "I just remember I was up at night, I was watching TV and I was like 'Man, what do I have to do to get in here?'"
He got up from watching TV and began typing a deeply personal letter to Lorton, the Cater2.me cofounder, about a teenager who went door to door handing out his resume to everyone in Ebner's hometown.
Ebner's late father ultimately took a chance on him, and the man today operates a successful business of his own.
"I signed off the letter saying, 'I just want a shot,'" Ebner says.
Armed with his letter and a box of cupcakes from Buttercup Bake Shop, Ebner went into Manhattan in search of a face-to-face meeting with Lorton.
The cofounder wasn't there when Ebner first arrived, but the other employees said he would be back in two hours. Ebner left a cupcake for each of them (he'd previously found out exactly how many people worked in the office) and came back later.
"I don't want to take anything away from the fact that this was terrifying," Ebner says. "It's almost like when you're in a bar and you see a girl at the other end of the bar and you have no idea, but you're like, 'I've gotta go.'"
Ebner took the elevator up to Cater2.me's office and almost immediately ran into Lorton, who granted him the impromptu interview he desperately wanted. Ultimately, Ebner didn't even have to give him the letter he'd composed.
In the meeting, Ebner laid out his plans for what he would do if given a job as a salesperson, stating which companies he would target and how he would grow Cater2.me's New York business.
Lorton agreed that Ebner would be a good fit for a sales role, but said the company wasn't hiring for such a position. Instead, he suggested Ebner work on a three-month trial period during which he would have no base salary and be paid only in commission.
Despite the fact that he would be paid next to nothing, Ebner left the meeting elated.
"At the end, he shook my hand and said, 'By the way, nice move on the cupcakes,'" Ebner says.
Ebner's paycheck for his first month of work was just $100, and he was forced to live off his savings from the family business as he developed contacts to sell Cater2.me's services. After a month and a half, he asked the company if it would be willing to give him an advance on his next commission to help him make it through the month.
Instead, Cater2.me offered to hire him full-time, noting that he had impressed with his willingness to work long nights and weekends.
Though the starting salary wasn't much — he didn't break even at the job until about three months in — Ebner has received incremental raises and equity with the company since joining. A few months ago, he was tapped to be Cater2.me's East Coast sales manager, overseeing a team of salespeople in a company that now has 65 employees.
And Buttercup Bake Shop, which provided the cupcakes on his fateful cold call at the office, is now one of Cater2.me's vendors.
"In my mind, I was going to do whatever it takes," Ebner says. "I really just wanted to get involved with the company, so I would have mopped the floors if they had asked me."
Thanks in part to its proximity to nearly every major tech company you could think of, Stanford University has become a sort of incubator for Silicon Valley itself.
Some of tech's most important figures have attended classes here, from Bill Hewlett and Dave Packard to Marissa Mayer and Peter Thiel.
But Stanford's campus is also known for being a great place to launch a new company, with top-notch engineering and business programs, an extensive alumni network, and even university-affiliated accelerator programs. Most of the Valley's most successful companies have some roots here, including Google, Sun Microsystems, Cisco, and Yahoo.
It makes sense that the California school was named the Best College In America.
We've highlighted some of the most successful startups to be born on Stanford's campus in the last two decades.
Instagram cofounders Kevin Systrom and Mike Krieger met through the Stanford alumni network.
After graduating in 2006 with a degree in management science and engineering, Kevin Systrom started developing a location-based photo-sharing app. When he realized he needed a cofounder, he turned to the Stanford network and found Mike Krieger, a Brazilian native who graduated with a degree in symbolic systems two years after Systrom.
"When people say that college isn’t worthwhile and paying all this money isn’t worthwhile, I really disagree," Systrom said to Forbes. "I think those experiences and those classes that may not necessarily seem applicable in the moment end up coming back to you time and time again."
Systrom and Krieger sold Instagram to Facebook for $1 billion in April of 2012.
Trulia cofounders Pete Flint and Sami Inkinen met during class at the Graduate School of Business.
Flint and Inkinen were inspired to create Trulia when they saw how difficult it was to find a place to live in Palo Alto. They developed their real estate aggregation site during two semesters in Stanford's competitive "Startup Garage" class.
The Monday after graduation, they had lined up meetings with several VCs interested in funding their company.
The idea for StubHub came out of a business plan competition at Stanford.
Eric Baker and Jeff Fluhr met in a class at Stanford's Graduate School of Business. After sharing stories of the problems they had had selling event tickets online, they entered a competition with the business plan for a company they called needaticket.com. After the plan made the final round, they pulled out of the competition, and in 2000, Fluhr dropped out of school to work on the company full-time.
Baker and Fluhr used Stanford computer labs and classrooms to build their site, now a major player in secondary ticket sales for sports and entertainment events.
The company was bought by eBay for $300 million in 2007.
See the rest of the story at Business Insider
The latest craze in Silicon Valley is to create an Uber-like startup for everything. There's Uber for delivery (Postmates), Uber for food (Sprig and Munchery), and now there is BloomThat, an Uber for flowers.
BloomThat launched 1.5 years ago as a "ridiculously fast" flower service that will deliver a reasonably priced bouqet anywhere in San Francisco in 90 minutes or less. It's a mobile app that only requires three actions to make a purchase: Choose a pre-bundled bouquet (about $35 each), type in the recipient's information, pay with your pre-uploaded credit card.
One Twitter employee told Business Insider her fiance use the flower service to help him propose. An eBay employee, who had BloomThat on her iPhone homescreen, told Business Insider it was the easiest way to send a thoughtful gift. A Facebook employee (who initially rolled her eyes when Business Insider told her about the startup) later chimed in, "Oh wait! I just received a bouquet of those yesterday."
As more proof of the startup's early traction, a source tells Business Insider the company is on track to generate a couple million dollars in annual revenue. It's not clear how much money — if any — the company is making per delivery though. BloomThat went through startup accelerator program Y Combinator and raised $2.4 million from big names like SV Angel, Ashton Kutcher, Gary Vaynerchuk and Joe Montana.
Although "Uber for Everything" is a tired concept, investors say companies like BloomThat could actually become giant businesses. The key is to find a category in the on-demand space that grows the size of the user pie and doesn't just chip away at it.
For instance: Before Uber, a very small number of people used black car services. Now, tons of people hail rides on Uber and competing services like Lyft, Sidecar, Gett and Hailo. These services are luring people from other industries to become their drivers, and they're encouraging people who never bothered to hail a car — either because it was too difficult or too expensive — to repeatedly use their services.
Early data shows BloomThat is positioned to turn non-flower buyers into regular customers, too. One investor tells Business Insider that the average flower-buyer sends 2.5 bouquet per year; BloomThat's customers are sending 11.
Seed investors Hunter Walk and Dave Ambrose stress: "Removing friction, changing behaviors and growing the market is the ultimate trifecta" for an on-demand startup.
Vox's Timothy B. Lee has a great story on Digg's comeback. In it, he reveals a super interesting stat.
It's a stat that explains why starting a tech company today is so different than starting a tech company when Digg was founded, ten years ago.
First some quick backstory.
Digg was founded in November 2004. By 2009, it had 30 million monthly visitors.
Google wanted to buy it for a couple hundred million dollars.
But by 2012, Digg's traffic was down to 1.5 million visitors a month.
That year, Digg sold for $500,000 to a New York holding firm called Betaworks.
Now Digg is back up to 8 million visitors a month. It's not profitable for Betaworks yet, but executives say there is a "realistic plan" to get there.
Anyway, here's the stat: Back in 2012, when Betaworks bought Digg, it cost $250,000 per month to keep the site running, even with its tiny amount of traffic. Today, it only costs Betaworks tens of thousands of dollars per month, with 5x as much traffic.
The reason for the cost disparity: Back in 2012, Digg was run off of servers owned by the company. Today, Betaworks rents server capacity from another company. Digg is hosted in the cloud.
Running a company from the cloud is standard practice these days. Netflix is still running from Amazon servers. Before it was acquired by Yahoo, so did Tumblr. Probably all the startups you can think of run this way. Only the really gigantic companies out there now own their own servers.
So whenever you see a list of a bunch of silly startups and worry that there's another bubble going on, remember that all those companies cost a lot less to run than all the dotcoms or even early Web 2.0 companies did.
Sam Altman is president of Y Combinator, a prestigious startup accelerator program that incubated companies like Airbnb, valued this year at $10 billion, and Dropbox.
Altman and Facebook cofounder Dustin Moskovitz gave a 45-minute presentation to Stanford students about how to build great companies. It's part one of a two-part lecture.
It starts with an idea ...
See the rest of the story at Business Insider
New York may not have Snapchat. It may not have Google, Twitter or Facebook. But in the past 365 days, a lot of value has been created by a few New York City-based startups.
In the past year or two, three companies have gone from being worth $0 to $500 million+ valuations. Those companies are:
Another startup that created a lot of value in New York over the past year is Ori Allon's Urban Compass. Urban Compass helps people find homes to buy or rent on a mobile-friendly interface. It earned a $350 million valuation one year after its launch.
An older company that's finally beginning to take off is Pond5, a marketplace for royalty-free videos, sounds and stock images. It raised $500,000 from a group of NYC angels back in 2008. Accel recently bought out all of the angels in a new $61 million round of financing. A similar NYC company, Shutterstock, went public a few years ago and turned its founder Jon Oringer into a billionaire.
Vice and BuzzFeed are also older but massively valuable ~$1 billion businesses being built in New York.
Dustin Moskovitz co-founded Facebook with Mark Zuckerberg and it made him a billionaire. Now he's working on another company, Asana.
Moskovitz created a startup deck that's full of advice about how to launch a successful company and explains what it takes to be an entrepreneur. It's not as glamorous as Hollywood and the media make it look.
"It's important to know [why you want to start a company]," Moskovitz explained to a Stanford class. "You may have been mislead by the way that Hollywood or the press likes to romanticize entrepreneurship."
"The 4 common reasons people want to start companies are: It's glamorous, you'll get to be the boss, you'll have flexibility, especially over your schedule, and you'll have the chance to have bigger impact and make more money."
"The reality is just not quite so glamorous, there's an ugly side to being an entrepreneur, and more importantly, what you're actually spending your time on is just a lot of hard work."
See the rest of the story at Business Insider
Netscape founder and Andreessen Horowitz partner Marc Andreessen just joined the startup burn rate conversation and expressed his point of view in a series of tweets.
The burn rate conversation was sparked by Benchmark's Bill Gurley, who recently told Wall Street Journal that "Silicon Valley as a whole...is taking on an excessive amount of risk right now." He believes startups are burning a dangerous amount of cash — an amount that resembles 1999 just before the dotcom bubble burst.
Over the past few years, it's been relatively easy for startups to raise money from venture capitalists. In some cases, they're raising hundreds of millions of dollars to keep their companies afloat. But behind the scenes, they're plowing through that money either on marketing, overhead, or some other expense, which results in high burn rates. These bloated companies are using their millions to hide serious flaws in their business models.
Union Square Ventures' Fred Wilson agreed with Gurley, stating: "We have multiple portfolio companies burning multiple millions of dollars a month. Thankfully its not our entire portfolio. But it is more than I’d like and more than I’m personally comfortable with."
Wilson's firm has invested in companies such as MongoDB, Twitter, Foursquare, Zynga and Tumblr. Gurley's has invested in Snapchat, Uber, OpenTable and Yelp. Now Andreessen, who's an investor in Pinterest, Foursquare and Fab, also says the tech world should be worried.
"When the market turns, and it will turn, we will find out who has been swimming without trunks on," Andreessen wrote on Twitter. "Many high burn rate companies will VAPORIZE."
High burn rates are dangerous for a few reasons. Andreessen explains:
Andreessen's final message to the tech industry:
Here's the complete 18-Tweet tweetstorm, below.
Brad Stadler has been a tech recruiter at the executive search firm he founded, True, for more than 10 years. He tells TechCrunch's Danny Crichton that he's seeing some crazy startup recruitment strategies that resemble 1999.
One particularly over-the-top story Stadler relayed to TechCrunch was about a near-IPO company that was willing to pay an executive-level candidate a $1 million signing bonus — and got turned down.
This year, a startup with revenues of $10 million wanted to find a new chief executive following its Series B raise and offered $450,000 in compensation (5% of revenues). Another startup, quickly growing and approaching an IPO, did a search for a CEO to lead it onto the public markets. In addition to a hefty compensation package, the board of the company is willing to put up a signing bonus of $1 million, to be delivered in two tranches over a year, for a vetted candidate willing to step up and sign the paperwork. Their offer is turned down.
Stadler says massive signing bonuses used to be rare, but they're becoming a more common recruitment tactic among startups. Another stat he and TechCrunch dug up: "In the time period between 2013 and July 2014, salaries for CEOs increased by 11%, with chief financial officers and VP of Sales receiving a 14% and 13% increase in compensation respectively," TechCrunch writes. "Notably, the salaries of VPs of Engineering have been flat over the same period."
Large companies have seen some eye-popping payment packages while recruiting executives. Henrique de Castro, for example, was lured to Yahoo for a fleeting period by Marissa Mayer, who offered him a $62 million package over four years. The package was comprised of a $600,000 salary, $540,000 bonus, $36 million in stock awards, $1 million in cash, and $20 million more in stock. But two years later when de Castro left Yahoo, he walked away with about $109 million instead.
At a startup or pre-public company, a $1 million signing bonus may be another example of irresponsible cash-burning that has a number of investors concerned about the state of the industry.
SV Angel founder and San Francisco city advocate Ron Conway got together with a bunch of tech heavy hitters to launch One City, a new initiative supported by Mayor Ed Lee, that aims to make positive changes in the Bay area. It's part of a larger organization Conway founded in 2012, sf.citi.
One City launched Tuesday with a video Conway hopes will go viral, "MyBook." The video pokes fun at over-hyped startups. In the video, which stars Biz Stone, Joe Montana, MC Hammer, Warriors player Harrison Barnes and San Francisco Police Chief Greg Suhr, the tech rumor mill starts churning over a mystery startup called "MyBook."
"MyBook is beyond trending — I think it broke the hashtag," a line in the video states.
MyBook ends up being an education movement, not a tablet, smart phone app, or something that can be publicly-traded.
"What if schools were the next big thing in tech?" the video concludes, promoting a One City initiative, "Circle the Schools." Circle the Schools connects more than 20 technology companies with public schools in San Francisco, which they can provide either supplies or mentorship to.
"One City will harness this same passion to find solutions to the biggest problems facing San Francisco," Conway states in a press release. "One City is the new home for [Circle the City] and so many other projects like it."
Improving San Francisco is a project Conway feels strongly about. At a recent Bloomberg conference, he got into a heated argument with early Facebook executive and venture capitalist, Chamath Palihapitiya over the city's housing crisis.
Here's the MyBook video that's promoting One City's launch, below:
While Bill Gurley's comments about burn rates (tl;dr he’s concerned they are getting dangerously high) are geared toward later stage startups, the article has kicked off conversations about responsible spending throughout the startup ecosystem.
Scroll to the bottom to see a list of self-reported startup burn rates.
In a post last week I mentioned that my company is burning $150 — 200K a month and sent some Twitter DMs to a founder I deeply respect, Katelyn Gleason of Eligible to explain our reasoning after she raised some questions.
“that’s a f---ing bubbly burn”
Ouch! OUCH! Talk about burn. I was stuck on this comment for days. Were we really out of control with spending? Hadn’t I read everything I could, asked tons of questions, shared numbers and projections and models and plans with smart people with a vested interest in us not fucking this up?
Running The Numbers
First, re-read Fred Wilson’s post from 2011 “Burn Rates: How Much?”:
“A good rule of thumb is multiply the number of people on the team by $10k to get the monthly burn. That is not the number you pay an employee. That is the “fully burdened” cost of a person including rent and other costs.”
Fred’s post is from 2011, and many believe startup costs have risen a lot since then due to higher cost of living fueled by low interest rates. I asked “what is the average fully burdened cost per employee at Series A startups over time?” and Marc Andreessen guessed:
That’s $16,666 per month — a 67% increase from Fred’s rule of thumb!
At first I felt a bit superior for burning only $6,800 per fully burdened employee per month (which annualizes to $82K), but if I remove our revenue I can see that over the past 6 months we are spending on average $16,970 per employee per month (annualizes to $204K). The lesson here for other founders is definitely don’t try to scale your team the way we have if you don’t have the kind of revenue growth we have. We’ve been ringing the freaking cash register all along the way so we can offer market rate salaries and really good healthcare, and without it this hiring would be impossible.
Ask Yourself: Do we truly have product/market fit? Without it there is no sense in increasing burn aggressively to drive future growth. For my particular business model (SaaS) there are several indicators to monitor: MRR growth, churn rate, cost of customer acquisition and payback period. For consumer startups it could be usage/engagement, each model is unique.
Ask Yourself: Is more than 5% of my budget going to things outside of payroll, payroll tax, benefits and rent? If so you are probably overspending on things like servers (get AWS!), advertising, meals and travel.
Getting to Break Even
We’ve had two break even months. The first was by accident in October 2013 because we had an unexpected revenue spike. For a moment we felt what it would be like to completely control our own destiny. The second time was in February 2014, because low growth in December scared the living shit out of us and it didn’t look like our Series A was going to come together. My cofounders and I cut our salaries when we hit 3 months of remaining runway. There was no way in hell we would lose the incredible team we had meticulously built over the past six months.
Getting to break even in February was subtly powerful. We demonstrated that we did have control, even if it felt a lot like drowning. After our failed Series A attempt we would go on to raise an unconventional second seed round that included 4 institutional investors and dozens of angels.
Ask Yourself: Am I willing to do what is required to get to break even? This could mean reducing/eliminating salaries, firing people, moving to a cheaper city or moving out of your office into an apartment, and selling your stuff.
Market Opportunity vs. Growth Rate
If you’re setting out on the venture-backed path you need to do things that normal businesses don’t. You are expected to tackle a $1 Billion opportunity and achieve hyper-growth (100% year-over-year or more).
To do this, you must put incredible stress on your fledgling business. It is generally believed that Internet startups need to grow fast because there is a perceived threat that if you don’t take the market quickly, someone else will. You need a market that is sufficiently large not because you need to take all of it, at least not initially, but because your company is going to be so bad at taking any of it at first you want a simply enormous and undeniable target.
When Mattermark was just a tool for VC deal sourcing our total annual revenue opportunity could be measured in the tens of millions. For six months from October 2013 to March 2014 we held headcount steady at 9 people, even as MRR tripled, because it wasn’t time to pour on the gas.
It was frustrating getting push-back on market size from investors, and somehow we knew if we suspended disbelief just a little longer we’d have a breakthrough… it just took time to see past the initial thrill of making money to the even bigger opportunity. Conversations from the fundraising process clarified our next vertical, which gave us the confidence to triple the team size over the last 6 months. MRR tripled once again.
Ask Yourself: Am I spending like we’re chasing a big market, when it’s actually a small one? If you’re getting a lot of feedback that the market seems small and you don’t agree, you might need to re-frame your vision.(old vision: Bloomberg for startup investors, new vision: Google for B2B)
Ask Yourself: Is the kind of growth we’re seeing sustainable beyond the first six months? It’s awesome to build something a small group of people love and are willing to pay a lot for, but don’t forget to go find the next group.
Each founder’s job is to use investors’ money to increase the enterprise value of the business. If growing slowly and safely was what they were looking for, they would have been better off putting their money in a mutual fund. They’re expecting founders to figure out some secret hiding in plain sight and exploit it for massive economic gain, against all odds.
It is scary to contemplate economic downturn, especially for those young founders who were in elementary school in 2000 and college in 2008. But the thing we’re scared of is the fear and uncertainty, not the actual pain. The pain sucks but you don’t die, and it does stop hurting. Those who struggled through 2008 are still here… just with a little more muscle memory.
There are many things founders can’t control. Fortunately, we do control how we spend money and whether we make something people want. Investors are looking to us to make the right choices, to lead, to develop and protect a vision, and to be tough enough to weather these storms without getting demoralized. As Paul Graham says in “How Not to Die”:
"When startups die, the official cause of death is always either running out of money or a critical founder bailing. Often the two occur simultaneously. But I think the underlying cause is usually that they’ve become demoralized. You rarely hear of a startup that’s working around the clock doing deals and pumping out new features, and dies because they can’t pay their bills and their ISP unplugs their server. Startups rarely die in mid keystroke. So keep typing!"
After all this analysis I’m feeling a little bit better, still slightly uneasy and as vigilant as always, but for now I’m going to keep moving forward with this course of action. I’m looking forward to reactions to this post, and generally a more open conversation around startup spending at the early stages.
I asked people on Twitter if they’d be comfortable sharing their burn rates. I’ll update this as I receive more (tweet to @DanielleMorrill with yours).
Dunwello — Total Seed Funding: $1,650,000
Buffer — Total Seed Funding: $400K + Not Disclosed
Buffer provides social media scheduling and management tools across multiple channels. They publish revenue and other metrics monthly and recently reached $4M ARR. They are profitable. More details from Joel:
Eligible— Total Seed Funding: Not Disclosed (YC S12)
Eligible provides an API network that retrieves healthcare financial transactions to over 2,000 insurance companies including eligibility, policy, coverage, demographics, authorizations, coordination of benefits, claims, and payments.
Happy Inspector — Total Seed Funding: $895K
Happy Inspector helps property managers handle their inspections. Its founder confirmed the negative numbers are cash flow positive months, andsays: “All our accounts have (finally) moved to GAAP standards as well. Lumpiness is due to commissions/ramp up marketing spend/new employee. Still not quite out of the woods yet. But close #sigh”
Blended Labs — Total Seed Funding: $300K
Sourceeasy — Total Seed Funding: $887K
AdEspresso— Total Seed Funding: $1,000,000
codeSpark — Total Seed Funding: Undisclosed
TattooHero— Total Seed Funding: $200K
Need a little more inspiration?
Read “If” by Rudyard Kipling — and then get back to work!
P.S. Still think this is bubbly burn? Willing to share your startup’s burn rate? Have other thoughts on this post? Tweet to me at @DanielleMorrill and let’s talk!
Danielle Morrill is the founder and CEO of Mattermark.
Y Combinator co-founder Paul Graham gave a 45 minute presentation to a class full of Stanford students, which he summed up in 4,000 words on his blog.
His main point: Startups are counterintuitive. If you want to start one, there are six unusual things you should realize about running a company.
"Startups are so weird that if you trust your instincts, you'll make a lot of mistakes," Graham writes.
Here are the main points he makes:
Anish Acharya and Jeson Patel became friends in college, at the University of Waterloo.
After graduating, they worked at Amazon and Microsoft, respectively, but eventually decided to ditch their comfortable jobs to try to make something on their own, landing on the idea for a games platform for smartphones.
Google ended up acquiring their company, SocialDeck, for $10-25 million in 2010.
Both men soon found their niche at Google — Acharya with Google+ and then Google Ventures, and Patel with Google Play Games — but, four years later, the itch was back.
When Acharya became entrepreneur in residence at Google Ventures, his old partner rejoined him to try to make something new. And so Snowball was born.
The idea is that Snowball brings together all of your conversations into one place. By pulling in the information from all the messaging apps on your phone, Snowball makes sure you'll never lose track of a convo.
"We're not trying to replace any of these messaging apps, we're trying to give you faster access to them," Acharya told Business Insider. "In our early beta, we're actually seeing that engagement with each one increases by about 20%. We're complimentary."
When you download Snowball, it automatically pulls in messages from all your apps, without you having to enter login information for each one. When you get a message, the Snowball icon will pop up like the Facebook "chat heads" notifications do.
At launch, Snowball integrates with Facebook Messenger, Whatsapp, Snapchat messages, Google Hangouts, Twitter DMs, WeChat, Line, Slack, and regular text messages.
The company has raised $2.3 million from First Round Capital, Google Ventures, and more.
Here's a demo of how it works: