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The latest news on Startups from Business Insider

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    Kevin Colleran Slow Ventures

    Kevin Colleran was one of Facebook's first 10 employees. But when Sean Parker offered him the job as Facebook's first ad salesman in 2004, Colleran turned him down.

    Colleran graduated from Babson College, an entrepreneurial school in Boston, and he wanted to work for himself. Parker had gotten Colleran's name from James Hong, the creator of Hot or Not, who connected them over email. Colleran had been selling ads part time for Hong's company and was looking to add more clients.

    During the first phone call between the two, Parker asked Colleran whether he wanted to join and receive a "substantial share of equity" and, Colleran recalled, work for a "then-unknown genius named Mark Zuckerberg."

    Colleran said "no," a decision he says seemed obvious.

    He explained his rationale to the 2015 graduates of Babson on Saturday during a commencement speech. Colleran gave the 13-page transcription to Business Insider on Saturday afternoon and has since published it on Facebook.

    "Why WOULD I say yes? I was an entrepreneur!" Colleran said. "That meant being my own boss. There was no way an entrepreneur could be anything other than his or her own boss, and I was convinced of it."

    Colleran suggested Parker hire his company, Kevin Colleran Inc., to do contract work for Facebook, selling ads for it and numerous other clients. He would take only commission, not a salary or any equity.

    Luckily for Colleran, Parker pushed back.

    Parker "explained that eventually, this small company, called Facebook, would grow large enough to where it would need to build its own sales team internally," Colleran said. "And as a third-party reseller like I had proposed, the better I did the sooner I would be obsolete — which means my new 'company' would quickly grow itself out of business."

    Parker's logic persuaded Colleran to join Facebook. But he had to give up his other clients, Hot or Not and College Humor, to do so. (Colleran tells Business Insider that College Humor's founder, Ricky van Veen, still jokes that he was ditched for Facebook.)

    The decision made Colleran extraordinarily wealthy. It's not clear how much stock Colleran had by the time he left Facebook in 2011. But judging by other early Facebook employees' outcomes, it was probably a lot. For example, Facebook's 30th employee, Noah Kagan, would have made more than $150 million from his early Facebook stock options had he not been fired before they vested.

    Working for Facebook taught Colleran that you could still be an entrepreneur even if you don't own the business you're employed by.

    "I controlled my own schedule, I owned my client relationships, I built my own sales materials, and my level of effort directly impacted the amount of commission I received," Colleran told the Babson students. "I was my own boss."

    Now he's the cofounder of a $65 million startup investment firm, Slow Ventures, whose early-stage investments include Yik Yak, Meerkat, Hinge, Product Hunt, and Slack.

    Here's Colleran delivering the commencement speech on Saturday:

    Join the conversation about this story »

    NOW WATCH: We did the math: Is Uber really cheaper than a taxi?


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    bitcoin

    The super-secretive bitcoin startup 21 finally has a product plan to announce, and it may change your phone forever.

    21 announced today that it is working on an embeddable chip for your phone or other consumer devices that would allow you to "mine" bitcoin in the background.

    Mining is the process used by computers to "generate" bitcoin as a reward for continuously verifying transactions. By installing 21's embeddable chip on a phone, the post explains that it can generate a "continuous stream of digital currency."

    This isn't going to be a get-rich-quick scheme, but it could instead have applications for industries like micropayments or the internet of things.

    21's BitShare chip, as they have named it, would generate bitcoins on your phone, which could then pay for small services you use. "Rather than paying a number of different subscription bills, by including the right-sized 21 BitShare with the device one can under many scenarios wholly or partially defray the expense of the cloud service," the blog post explained.

    So if your connected light bulb needed to have a subscription fee, the bitcoins mined from the chip in your phone could in theory pay for it along the way. The company even suggested that it could be used as a future way to subsidize phone costs in the developing world.

    That is an ambitious plan, though, since battery life and data costs are two big concerns already when it comes to phones. It takes a lot of power to mine a bitcoin, and these chips will be competing with giant data centers whose sole purpose is to funnel electricity and energy towards generating bitcoins. Even then, the rewards are often small, and for a phone chip, will likely be cents. (We've reached out to 21 for comment and will update if we hear back.)

    As part of 21's product announcement, the company also shuffled some titles. Co-founder Balaji Srinivasan, who is also a partner at Andreessen Horowitz, is taking over as CEO. Matthew Pauker, the current CEO, is replacing Srinivasan as chairman.

    Former Cisco and ARM chief strategy officer Mark Templeton is also now an investor of the company. The company is already the most well-funded bitcoin startup, having raised $116 million in March when it came out of stealth. The new investment amount was not disclosed.

    SEE ALSO: Edward Snowden: 'I work a lot more now than I did at the NSA'

    Join the conversation about this story »

    NOW WATCH: How Every Square Foot Of An Apple Store Is Designed To Make You Spend More Money


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    Silicon Roundabout building

    A local councillor has said a multi-million-pound plan to build a giant office in the centre of London's Old Street roundabout never got off the ground because it was impossible from an engineering standpoint, Techworld reports.

    In 2012, the UK government announced a £50 million plan to build a giant office in the centre of Old Street roundabout — also known as "Silicon Roundabout" due to the close proximity of many London technology companies — to house a group of tech startups. The "civic centre" would also contain classrooms for students, 3D printers, and have exterior walls used as a giant advertising screen, Wired reported in 2012.

    But funding for the project was pulled in 2014, seemingly without explanation. 

    Now, local councillor Guy Nicholson, who looks after regeneration for Hackney Council, has revealed to Techworld that the project was doomed from the start due to engineering obstacles.

    “The ambition was in effect to put a building on top of a roundabout, quite literally, which proved to be, engineering wise, totally impossible because of what’s going on underground with railway lines and an all manner of things,” Nicholson told the publication. 

    “It was one of these ideas that I’m sure was developed with the best of intentions initially but it was done in isolation of the community," he added.

    Old Street London Underground station is located right beneath Old Street roundabout. Therefore, the proposed site of the new building wasn't feasible because it was placed on top of a "big electricity substation,"the Mayor of London's office told TechCrunch in 2014, when the investment was initially axed. 

    The money that was originally set aside for the project was ultimately reallocated to general government spending, TechCrunch reports. 

    Join the conversation about this story »

    NOW WATCH: 5 cool tricks your iPhone can do with the latest iOS update


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    the league amanda bradford

    So far, 2015 has been a great year for consumer tech. So we decided to take a look at the best startups that have launched so far this year.

    To determine the best startups, we took into account factors like funding, revenue, growth, and investor interest.

    Did we miss a great startup that launched this year? Let us know in the comments!

    Hungryroot turns vegetables into bright and delicious pasta dishes.

    What it is: Former Groupon exec Ben McKean launched Hungryroot to turn veggies into amazing pasta dishes. When you order from Hungryroot, you get a packaged meal the next day that consists of 70 to 80% vegetables and 20% protein. The base ingredient is vegetable noodles — made from sweet potatoes, radishes, beets, zucchinis, and more — paired with a creative sauce, and served with an optional protein side. In its first month, Hungryroot sold 10,000 meals.

    Funding: $2 million from Lerer Hippeau Ventures, Crosslink Capital, Brooklyn Bridge Ventures, and KarpReilly

    Website: https://www.hungryroot.com/



    Periscope is the video livestreaming app Twitter bought before it even launched.

    What it is: In March, Twitter launched Periscope, a livestreaming app it acquired back in February before Periscope even launched. Periscope lets users easily stream footage from their devices to followers. Viewers can comment and send "hearts" to the streamer. The footage can be then replayed later, which sets it apart from rival app Meerkat, where the footage is gone once the stream is over.

    Funding: None announced.

    Website: http://periscopeapp.tv/



    The League is a dating app for the elite.

    What it is: The League — a selective dating app for elite, successful individuals — launched in San Francisco earlier this year, and it just launched in New York City. Stanford graduate Amanda Bradford founded The League to match up highly motivated and interesting single professionals. Its users often have advanced degrees.

    Funding: $2.1 million seed round from Jon Vlassopulos, IDG Ventures USA, Roman Feola, Naomi Gleit, Cowboy Ventures, XSeed Capital, Peter Kelly, Russ Siegelman, Mark Leslie, Allen DeBevoise, SherpaVentures, Structure Capital

    Website: http://www.theleague.com/



    See the rest of the story at Business Insider

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    Payal Kadakia Class PassClassPass is one of the hottest startups in the world right now. The New York company is less than two years old and it's worth about $400 million, according to CEO Payal Kadakia. 

    ClassPass sells a membership program lets users pay a $99 monthly fee to take fitness classes at different gyms and studios nearby. ClassPass is in 31 US cities, and it is expanding internationally with 4,000 partnering studios around the world.

    As a ClassPass member, you can take classes from a diverse group of studios and gyms, from widely known ones like Barry's Bootcamp and Flywheel to boutique shops offering barre, yoga, pilates, and more. Users love it because the price point is a steal when you consider that a single spin class at Flywheel costs $30 a pop. Take three or four classes per month and your membership pays for itself. 

    To date, ClassPass says it's paid out $30 million in revenue to studios. In 2015, the company plans to pay out $100 million. ClassPass has booked 4.5 million gym studio reservations since its June 2013 relaunch. 

    The company doesn't disclose its revenue split with studio partners, and reports suggest it varies.

    "Sometimes ClassPass pays half of what a studio normally charges per customer; other times, it’s far less than that," Fast Company reported back in January.

    Many of the 4,000 studio owners love ClassPass; the service brings in new clients who otherwise would never visit their gyms. It also fills seats in classes that would be empty otherwise. 

    Others, however, are dissatisfied by their experiences with ClassPass and have begun to churn. 

    "I found myself more annoyed than joyful about the potential business"

    "As a business owner, the proposition from ClassPass is they are introducing you to clients who might never have tried you," says Jill Harris, who owns a San Francisco-based pilates studio called Informed Body.

    Harris' studio used ClassPass until January, but she decided to stop. She says she was getting a wide range of customers, but many weren't the same profile as her full-paying customers. She wasn't seeing ClassPass customers convert over into full-time, full-paying studio members. 

    "Spaces in classes are held hostage by this company. We have to set aside the agreed upon number and changing spots wasn't an efficient process," Harris says. (ClassPass does allow studios to limit the number of seats they reserve for ClassPass users.)

    In addition, some studio owners say that ClassPass is great for bringing in a wide variety of customers, but that's not necessarily what owners are looking for. In some cases, studio owners don't have the capacity to take on every new ClassPass member who doesn't have experience and needs assistance from an instructor in ways that full-time studio members don't.

    "Customers who came through often would show up completely sore and messed up from classes they took that same day and were not easy to teach," one studio owner told us. "Engaging this group was often like pulling teeth because they have zero investment into our expertise and how we can help them."

    In addition, this same studio owner says ClassPass's staff was "slow to respond and not at all helpful."

    "I found myself more annoyed than joyful about the potential business," this person said.

    ClassPass isn't right for every gym

    Some smaller boutique studios just aren't the right fit for ClassPass. Sydney James is the owner of a boutique physical therapy and wellness studio in San Francisco called Therapydia. She told us that when ClassPass first launched in San Francisco, the company approached her to pitch its services.

    "I knew that it didn’t make sense — when we have a cap of six to eight people in our class and they are already full, there’s no need to take discounted rates for their members," she said. 

    classpass payal

    Most of James' experience with ClassPass is as a customer rather than a business owner.

    "I was a ClassPass fan when they first started," James said. "I liked it because I could try out classes that my patients were taking and let them know if I thought the classes were okay for them, considering whatever injury they had. I do sometimes recommend it to patients who are searching for a new form of exercise."

    But James is unsure that ClassPass really leads to new customers for small businesses.

    "I think the people who generally do ClassPass are looking for a deal (I don’t blame them!)," James said. "For large fitness studios with lots of spaces to fill, maybe it does make sense. But for smaller classes like Jill [Harris]’s Informed Technique and mine, it doesn’t. I really do think it’s the Groupon of exercise studios, and we all know how that turned out."

    Does ClassPass have a Groupon problem?

    Groupon's daily-deals business was, like ClassPass, intended to be a way for small, local businesses to sell excess deals and inventory. Even though Groupon provided strong marketing for businesses and often served as a means for new customers to discover them, many users didn't convert into loyal, repeat shoppers.

    Jessie Burke, the owner of a Portland bakery called Posies, wrote a blog post explaining what happened when her restaurant partnered with Groupon. Eventually, her Yelp ratings tanked because Groupon customers — not organic customers — complained about the Groupon deals. And so many shoppers bought discounted products that a surge in her sales actually resulted in a big financial loss.

    "After three months of Groupons coming through the door, I started to see the results really hurting us financially," Burke wrote. 

    Groupon went public in 2011, raising $700 million at a $12.5 billion market cap. The company missed Wall Street expectations several times, and shareholders forced CEO Andrew Mason to step down. Today, cofounder Eric Lefkofsky is the company's CEO. Its current market cap is $4.4 billion.

    Could ClassPass be the next Groupon?

    One thing ClassPass has going for it is that its business partners don't sell physical products. They sell room in classes, which means many of them don't have the same tight margins a bakery like Posies has. Also, exercising is typically part of a daily or weekly routine which encourages repeat buying; buying a pastry is a one-off expense.

    ClassPass CEO Payal Kadakia admits that an earlier version of her company more closely resembled Groupon. Kadakia launched the initial concept, Classtivity, at the 2012 TechStars NYC startup demo day. Classtivity was a SaaS solution for gym studios to use for customer registration. When the idea didn't pan out, Kadakia changed directions and started testing one-off studio discounts, a product that users loved but hurt gyms. 

    revolve classpass"It was like a month-long, 'hey, go and try all these studios,' and then people could kinda stick if they wanted," Kadakia recalls. "It was a great business but [ClassPass cofounder] Mary Biggins and I were both like, no, this is not okay. What we realized is that 75% to 80% of the market would never even walk into these studios because they were dabblers."

    Today, ClassPass has a subscription model, which retains users and gets them to try new studios routinely. On average, the company says, a ClassPass user will go to 10 new studios that they’ve within three months while using the platform. Kadakia says it has a 95% studio retention rate, despite the disgruntled owners who have begun to speak out against ClassPass.

    General Catalyst partner Adam Valkin led ClassPass' latest $40 million round of financing and joined the company's board. He agrees that churn in a two-sided marketplace like ClassPass is a challenge, but he thinks Kadakia's team is well positioned to survive and thrive.

    "Subscription business models appear very attractive on the surface — committed customers, recurring revenue, top-line velocity, high lifetime values — why not?" Valkin told Business Insider in an email. 

    "But in reality, building a subscription commerce model for a two-sided marketplace is challenging. Churn can spoil the party, on either the supply or the demand side. Those that get it right may find a large prize, but I believe there are high barriers to success. I think it requires, as ClassPass has proven, a very compelling product offering with an authentic entrepreneur like Payal who lives her product, has the flexibility to turn on a dime, and strives to deliver unequivocal value to both sides of the marketplace." 

    How ClassPass wants to help studios

    ClassPass has grown so quickly, it's had to both iterate on the product side and invest in its studios to keep up with demand.

    Kadakia says her company has launched a slew of new initiatives to keep gym owners happy. "We always think of this as a partnership, and a partnership over time," Kadakia told Business Insider. "As our product has evolved, we've grown tremendously on the consumer side. We're committed to continue investing in our supply side, and making sure these partners are growing."

    ClassPass is launching several new features that it hopes will empower the studio owners who use it.

    ClassPass is pilot-testing a feature that pre-pays studios, which allows them to buy new equipment, make studio improvements, and open new locations.  And they're using data to help its studios optimize their class schedules and figure out where to open new locations.

    In addition, ClassPass launched a B2B blog called After Class, which has content to help studios make better business decisions, and a monthly webinar series with the same goal. For its first webinar, ClassPass had over 200 studio owner attendees. In addition, ClassPass wants to help studios hire fitness instructors, and to that end, they're creating a database of fitness instructors who are looking for jobs.

    "This is really about making sure we're sharing all the knowledge we're learning across the industry with each of the studio owners," Kadakia said. "There are owners who are like, 'How do I do social media?  How do I use Instagram? What are best policies for the front desk?'" ClassPass is also adding data analytics for studio owners so they can see how they rank compared to the other studios around them.  

    "There's always going to be a healthy balance of people becoming loyal to studios, and this is why we're doing all the studio empowerment stuff — we want people to get even more excited about joining these studios," Kadakia said. "As we keep growing, we're going to be having more sophisticated pricing on both sides that makes the product work. We want to use that engagement to help studios more and more."

    SEE ALSO: ClassPass, a startup that gym rats and investors love, is now a $400 million company

    Join the conversation about this story »

    NOW WATCH: Peter Thiel's 3 Keys For Building A Successful Startup


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    Luxe valet

    Today, I drove into downtown San Francisco for a work event and took advantage of the on-demand valet service offered there.

    All of a sudden, I felt like I was in the middle of a war — to park my car.

    The valet service being used by the conference was called Luxe Valet.

    First, I pointed out all my car's flaws (yes, that giant dent in the door was already there). I asked my valet Christopher to please remember to turn it off before he whisked it away to an unknown lot. Then I handed over my baby and its janitor-sized keyring.

    As I turned, suddenly a man in a bright pink blazer ran up and shoved a Caarbon flyer in my hand.

    "Next time, park with Caarbon," he said.

    Here I was, using an on-demand valet parking for the first time ever, and I was caught in the middle of San Francico's startup parking wars: blue jackets versus pink blazers. Razor scooters versus black umbrellas. Guerrilla marketing tactics.

    Luxe valets have become an increasingly common sight in San Francisco. They wear bright blue jackets and zip around on matching blue scooters, although some choose to run and get in their cardio workout.

    Joining their fray is the new kid on the block: Caarbon (soon to become Carbon with just one "a." The company is only in limited testing now.)

    Their agents, as they call them, wear pink blazers and stand with one arm behind their back. They open the door for women first and escort everyone to and from their car with a black umbrella.

    Carbon valet

    Inside the conference, which was all about the "on-demand" economy, the founder of another valet service, Zirx, spoke about how he didn't need to compete outside. 

    "There’s blue shirts outside and pink shirts outside. We probably think the least about competition," said Shmulik Fishman. "I would hate to be in a space where nobody is trying anything remotely connected."

    Back outside, though, the competition was visible based on just the flashy jackets. (Zirx agents, according to their site, wear yellow).

    The Luxe valets hung inside their parking lot, while Carbon agents stood on the outside by the entrance.

    "We embrace it. Pink versus blue," said Bill Bonhorst, an operations manager at Carbon. "We will escort you to the curb with an umbrella. We're not going to roll up to the curb with a scooter or a skateboard." He compared it to the Four Seasons level of service rather than a Holiday Inn.

    Luxe valets, though, didn't back down.

    "We're pretty much the only true on demand," said Michael Skillman, who has been a valet since October. He said Zirx operates only around their garages, while Luxe has a whole umbrella over the city. 

    And while Carbon's operations managers said they shared the parking lot, the Luxe valets countered that the startup only had a few spaces, while Luxe controls the entire bottom floor. Zirx wasn't there at all.

    Meanwhile, outside a bicycle was parked with a sign advertising Upshift — a company that delivers rental cars on demand. In case you don't already have a car to park.

    Bootstrapped marketing at its best.

    upshift bike.JPG

    Join the conversation about this story »

    NOW WATCH: A lawyer in Florida has come up with an ingenious way for drivers to evade drunken-driving checkpoints


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    caviar_courier_1

    Caviar CEO Jason Wang can laugh about having $10 in the bank now, but during his food delivery startup's bootstrapping days, it was a day-to-day call whether the company he co-founded was going to make it. 

    The company only had five employees, but their office had room for 10, Wang said onstage at the On Demand conference. So, like any creative entrepreneur, Wang decided to sublet the other half of the office — for the entire price of the rent.

    It was a cheap office by San Francisco standards, since rent was only $600 a month, but it was enough for the company to get by.

    Don't worry about its bank account balance now though. Square bought the food delivery startup in August 2014 for a rumored $90 million, and now Caviar has an entire floor in the headquarters to call its own.

    SEE ALSO: Here's Some Of The Great Food You Can Order From Caviar, The Delivery Startup Just Bought By Square

    Join the conversation about this story »

    NOW WATCH: Peter Thiel's 3 Keys For Building A Successful Startup


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    Stripe Cofounder John Collison

    Stripe is is rumoured to be in talks to raise a new funding round that could see the payments firm reach a valuation of $5 billion (£3.2 billion). 

    There is no single consensus on how much Stripe is looking to raise. Re/Code reported that Stripe is in talks to raise new funding at a valuation of around $5 billion (£3.2 billion). A TechCrunch source noted that the round could be as big as $500 million (£320 million), adding that Russian billionaire Yuri Milner's DST Global is thought to be one of the leading investors in the deal. 

    Milner has also invested in Facebook and Twitter, and more recently Indian companies FlipKart and Ola Cabs. 

    A Stripe spokesperson declined to comment on the funding rumours. 

    Stripe's software makes it really easy for website owners and app developers to take almost any kind of payment method, including credit cards, bitcoin, and Apple Pay.

    Back in December the company was valued at $3.5 billion (£2.2 billion) and has raised $190 million (£120 million) in funding so far from the likes of PayPal founders Elon Musk and Peter Thiel, Andreessen Horowitz, and Sequoia Capital.

    Join the conversation about this story »

    NOW WATCH: Kids settle the debate and tell us which is better: an Apple or Samsung phone


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    Stripe Brothers

    Payments company Stripe is Silicon Valley's latest startup success story: The company is in discussions to raise a new round of venture funding that would value it at $5 billion, according to a Re/code report.

    While Stripe appears to be having no trouble attracting financing, a key effort for the company going forward is likely to focus on boosting the amount of transactions on its platform. 

    Stripe's technology serves as a "gateway," letting websites and online businesses accept payments from anybody, whether they're using a credit card, Bitcoin, or even Apple Pay. This is super critical as more and more consumers do their shopping online.

    PayPal is still the biggest player in the room, with a whopping $61.4 billion in transaction volume in the first three months of the year, according to this chart.

    Stripe was doing about $1.5 billion in annualized transaction volume about a year ago, according to a report in PandoDaily that cited anonymous sources.  

     A Stripe spokesperson declined to provide a current transaction volume figure, but said that Stripe processes "billions of dollars a year for thousands of businesses" that range from start-ups to Fortune 500 companies.

    Stripe's partnership with Apple for its new mobile payment service is sure to help. And Stripe also counts Facebook and Twitter as partners. 

    Transaction volume is critical in this business. Being a payment processing "gateway" is a low-margin business (banks, credit processing services, and all the other middlemen have to get paid somewhere), meaning that you have to have a high transaction volume to make money. 

    While Stripe doesn't have the tremendous market share of PayPal, it has two things going for it, says Business Insider Research Analyst John Heggestuen:

    First, it's really simple for a business to get started using Stripe, and second, it's easy for developers to customize Stripe's technology for their own needs — which is super important because not all online businesses have the same needs. And PayPal has long been notorious for not working well with outside developers, Heggestuen says.

    PayPal has been using its BrainTree mobile payments service, obtained via acquisition, to move faster and compete more directly with Stripe.

    But Heggestuen describes PayPal's pace of product improvements in the years before that Braintree acquisition as "lackadaisical," betting on the fact that they're already so big. That leaves PayPal playing a little bit of catch-up, and it gives Stripe a fighting chance.

    Join the conversation about this story »

    NOW WATCH: Peter Thiel's 3 Keys For Building A Successful Startup


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    Don Harrison

    Time Magazine recently wrote that Google has "perfected" the Silicon Valley acquisition, in part because it has become so good at retaining talent.

    Time found that two-thirds of the 221 startup founders that accepted jobs at Google between 2006 and 2014 are still with the company today. 

    That's partially because Google puts a big emphasis on vetting entrepreneurs beforehand.

    The first thing Google thinks about when considering an acquisition is whether a company fits into its product strategy and if it passes "The Toothbrush Test," but it strongly considers a startup's talent, too. 

    "We’re very focused on leadership and team," vice president of corporate development Don Harrison told Business Insider in a recent interview. "We interview deeply into the company — we try to create as many interconnections as we can during the discussion process, between senior leaders at Google and senior leaders at the company we’re trying to acquire. Nearly every deal of size that I can think of, Larry had spent time, Sergey had spent time, Sundar Pichai had spent time with the leaders that we’re bringing in to make sure that it’s a good fit."

    Harrison says that if it seems like a leader or team really doesn't mesh with Google, that could be a deal breaker as he's less likely to advocate for that acquisition.

    So, what sort of traits does Google look for in an entrepreneur? 

    It wants people who can "reason from first principals," and who are intellectually curious. 

    Via Harrison:

    One of the first things I look for is whether they reason from first principles. Sometimes you talk to people, especially industry veterans, and they talk like, ‘This is the way we’ve always done it. This is the way we keep doing it.’

    And then sometimes you meet entrepreneurs who, when you ask them a question, they really do think about it from the bedrock. Like, ‘Okay, we need to build a connected home experience: What should a good connected home experience be?’ And then they reason up from there.

    Larry thinks that way, Sergey thinks that way. We like entrepreneurs who think from first principles and are intellectually curious.

    Once a decision has been reached and an acquisition occurs, Google then holds regular 90-day follow-ups on all of its deals to ask questions like, "How are we doing against our original goals?""How are we doing on metrics of attention?" or "How are we doing on getting you the resources you need to succeed?"

    "Those meetings have been fantastic," Harrison says. "And are a huge part of — I think — why we’re succeeding."

    SEE ALSO: Read the full interview with Don Harrison here

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    NOW WATCH: Kids settle the debate and tell us which is better: an Apple or Samsung phone


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    brit morin

    Brit Media, best known for its lifestyle site Brit + Co., has raised $23 million, according to a form filed Thursday with the SEC. 

    A spokesperson for founder and CEO Brit Morin confirmed the round with Business Insider. 

    Brit + Co. features articles, recipes, and tutorials for skills like knitting, hand-lettering, and 3D printing.

    The site also has an ecommerce component, selling DIY boxes called "Brit Kits" and other home decor.

    According to the SEC filing, Lisa Lambert of Intel Capital has joined the company's board. 

    Morin has been dubbed the "Martha Stewart of Silicon Valley" due to her unique combination of tech savvy and craftiness.

    Morin is a former employee of Apple and Google. Her husband, Dave Morin, is a former Facebook employee and the founder of social networking app Path. 

    Brit + Co. previously raised  $7.6 million in funding from Index Ventures, Cowboy Ventures, Lerer Ventures, Marissa Mayer, and Oak Investment Partners. 

    SEE ALSO: Brit Morin, the Martha Stewart of Silicon Valley, explains what it means to be a homemaker in the digital age

    Join the conversation about this story »

    NOW WATCH: Kids settle the debate and tell us which is better: an Apple or Samsung phone


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    Clue CEO Ida Tin

    Germany's thriving startup scene is one of the most unique in Europe.

    The capital Berlin is home to a mixture of hackers, privacy experts, scientists, and video companies that are making waves in the tech scene.

    Here are some underground companies as well as more established names that are worth watching. 

    17. Foundd

    Foundd is a site that recommends movies based on what you like, as well as what your group of friends likes. That's different to services like Netflix, which just look at your own viewing history.

    The company earns money when people click through to buy movies on iTunes — so it want to make the recommendations as good as possible.

    Mashable reports that Foundd raised a $350,000 (£223,000 round) of funding in 2013 from investors including JMES Investments, Lars Dittrich, and Tao Tao (a cofounder of GetYourGuide). 



    16. Crate

    Crate offers an impressive technology that lets startups and companies easily set up distributed data centres. Why's that important? Well, startups don't want to put all their data in one place. With Crate, companies can spread their data around, and Crate handles all the hard work. 

    Crate raised $1.5 million (£957,000) from investors, including Sunstone And DFJ Esprit, in 2014. It also beat out other companies to wn a £30,000 prize at TechCrunch Disrupt Europe in 2014.



    15. Plinga

    Plinga is a Berlin-based video game developer that creates social games for a wide audience. Founded in 2009, the company has launched a series of games, including Family Barn (27 million players) and Dragons of Atlantis (13 million players). 

    Unlike its competitors, Plinga makes it games available to embed around the web, so they're not just playable on its own sites. That's different to how rivals like Zynga and King work.

    Plinga began as a direct competitor to Zynga, featuring a game called FunCards ("Like UNO, just better!"). It received investment from Rocket Internet, the investment firm run by German entrepreneurs the Samwer brothers.



    See the rest of the story at Business Insider

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    indikitchI'm a 33-year old who has been an investor in McDonald’s for more than 20 years.

    A few years after I bought McDonald's stock, the company became a major investor in a little-known Colorado burrito chain called Chipotle. The fast-casual Mexican-food restaurant has grown far beyond anyone's wildest dreams, and now has more than 1,700 restaurants worldwide and a market cap of $40 billion.

    Unfortunately, McDonald's fully divested the company in 2006, and missed out on its tremendous growth, choosing instead to pocket $1.5 billion. 

    But now McDonald's has a chance to redeem itself: It should do whatever it takes to acquire Chipotle-style New York City-based Indikitch.

    Business Insider reached out to both Indikitch and McDonald's CEO Steve Easterbrook for comment, but neither responded.

    Admittedly, Indian food is scary for the unsophisticated eater, and is still gaining traction here in the US.

    Another issue, according to The Washington Post, is that "The cuisine is among the most labor intensive in the world. And yet Americans are unwilling to pay beyond a certain, and decidedly low, price point."

    Let's address these two issues.

    Before moving to New York in February, I had attempted to eat Indian food twice in my life. The first time I was terrified and psyched myself out before I even sat down at the table. The second time, I went in with an open mind and found myself intrigued by the combination of flavors and spices.

    Then I began working at Business Insider and listened to my coworkers rave about this Chipotle-style Indian place, so I decided to give it a try. Now, I eat Indikitch twice a week. Each time I go back to the restaurant I find myself worried more people are catching on, and that the line will be as long as the Chipotle down the street. 

    When I eat at the restaurant I always sit by the window. What do I observe? The countless number of people who walk past the restaurant and stare at this sign:

    indikitch signAdmittedly, not everyone who stops to look comes in, but people are tempted. Several people stop and look only to walk away and come back a few minutes later to look at it again. 

    As for the price, the sign says it all.

    Indikitch has a similar price tag to Chipotle, making it affordable for almost everyone. For $12.75, I got a Feast with chicken, rice, chickpea, extra chickpea (I replaced the salad), garlic naan and a small fountain soda. This is what my delicious meal looked like.

    Indikitch meal

    Currently, there are only two locations and both are in Manhattan.

    However, Indikitch has the potential to go global. Sitting at the window allows me to see every person who enters the restaurant. What I have found is the patrons are a mix of families, tourists, and New Yorkers of all ages. 

    indikitchA look at the 2013 US census shows there are 3,189,485 Indians living in America, which works out to 1.0% of population. This makes for a 37.5% increase from the 2005 census, and a compounded annual growth rate of 4.1%.

    While I am by no means suggesting that only Indians would eat at Indikitch, metropolitan areas with a large Indian population would be logical areas for Indikitch to open its next set of restaurants. 

    Indian PopulationSince the early 1990s, McDonald's has seen tremendous growth, making the iconic golden arches recognized by virtually everyone in faraway lands like China, India, Saudi Arabia, and South Africa.

    However, the world is only so big, and the company  is struggling to find ways to grow. This is evidenced by the performance of McDonald's stock, which has been going sideways for the past four years.

    McDonald's Here’s Deutsche Bank's May 8 note suggesting McDonald's needs to buy stuff in order to grow:

    Franchises will increase from 80 to 90 percent of total stores freeing up balance sheet, possibly for acquisitions. There are plenty of potential targets. For example, if McDonald's paid a 20 percent premium and used two-fifths equity funding to buy Wendy's it could boost earnings per share by four percent by 2018 before synergies. The same parameters applied to Darden Restaurants or Starbucks could double that accretion while net debt would lie comfortably under three times EBITDA. The synonymy of the golden arches with the words "junk food" may force McDonald's hand. If eaters' preferences have changed for good, buying new brands may be the only option.

    While Deutsche Bank suggests a couple of options, none of them are particularly interesting.

    McDonald’s is already the most recognizable burger chain on the planet, and it probably doesn’t want to buy Wendy’s and risk turning it into another McDonald’s.

    Darden Restaurants is an interesting option, but that would require entering the sit-down restaurant business as opposed to staying in the fast-food arena. And Starbucks has a market cap of $76 billion, making it more than 80% the size of McDonald’s, and an expensive takeover.

    If McDonald's CEO Steve Easterbrook is serious about his turnaround plan, he should think outside the box and consider acquiring Indikitch.  

    Business Insider's Andy Kiersz contributed to this article.

    Join the conversation about this story »

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    HomeSwipe Jason Marmon

    Jason Marmon just turned 18 a few days ago. That's a real milestone in anyone's life. But his 17th year was so spectacular, it's going to be hard to beat.

    When he was 17, he dropped out of high-school (with his parents' blessing) after he co-founded a New York startup called HomeSwipe with two other co-founders. His business partners are Michael Lisovetsky, now 22 (whose tech career started in middle school) and Dean Soukeras, 43, an experienced entrepreneur.

    Last year, they launched an app of the same name, HomeSwipe, which they dubbed the "Tinder for apartment hunting" because you swipe through listings to find the apartment you want.

    The team raised a $500,000 seed round in the most unusual fashion, too, with the backing of A-list VC Tim Draper and tech billionaire Marc Benioff. Benioff was himself a wiz-kid teen coder and does his fair share of angel investing.

    And all of it happened because Marmon saw a post from Lisovetsky on Facebook asking for help with a "great idea."

    Draper University

    Their story actually begins in 2014 when Lisovetsky attended Draper University.

    HomeSwipe Michael Lisovetsky, Jason MarmonIt's a 7-week Silicon Valley live-in entrepreneurship program for promising young people.

    Lisovetsky took part in the program in the summer of 2014, when he was in college.

    He already had one success in the tech world. When he was in middle school, he created a web hosting site called FazeWire that was acquired for a small but undisclosed sum.

    He was clearly Draper University material, and after he completed it, he got to work on a couple of other ideas. But they didn't work out and the "team fell apart," he said.

    He was not discouraged. He had been through this before. He had taken a course at the Founders Institute in 2013, an entrepreneur training and startup launch program. That's where he met Soukeras. "We were working on different companies separately that failed," he said.

    "At Draper, there were a lot of people working on 'Tinder for X' companies and for a long time, I couldn’t understand it," he said.

    He stayed in touch with Soukeras and one day asked him what swipe could be used for besides dating.

    Soukeras, who worked in real estate for years and is a broker in New York, didn't miss a beat. "Real estate," he answered.

    And "that's how the idea was born," Lisovetsky said. Lisovetsky then realized the "value of the [swipe] interface is to take a large amount of data and make it simple to interact with it."

    He then reached out to Marmon by posting a message on a Facebook group for young coders where they both belonged. Marmon saw the message and signed up to help.

    They went straight to Draper looking for seed financing.

    Instead, Draper issued them a challenge. He said he was traveling to New York in two weeks and would meet with them and take a look at their app. "Show me some progress by then," Draper told them.

    They got busy

    In two weeks, Marmon and Lisovetsky not only finished a prototype, but finished the whole app and submitted it to Apple's App Store, where it was accepted. They even secured a few users. Both of them knew how to code quickly. They had cut their teeth on hackathons.

    Dean Soukeras, Jason MarmonDraper was so impressed, he agreed to fund them, but first, he issued another challenge.

    He told them to get more investors that would add to the sum he was willing to contribute. He wanted them to bring the total seed round to $500,000.

    They got busy and managed to secure $400,000 (including Draper's promised money), they told us. Then they stalled out.

    Instead of giving up, they went back to Draper and asked for ideas.

    He introduced them via email to Benioff. Seven minutes later Benioff replied: "I'm in," his email said. (Naturally, they've kept that email.)

    They had their $500,000.

    Dropping out

    With all this going on, Marmon was spread thin. A senior in high school, he was going to class in the morning, commuting to the office, working late, sleeping a few hours, and doing it over again.

    Jason Marmon He started talking to his parents about dropping out.

    "It wasn't just one conversation, but an extended dialog," he tells us.

    They balked at first, but then started to believe him, that this company was "a great opportunity" and worth suspending his high school education. In the end, he left high school, and "they were very supportive," he told us.

    He might go back to school one day, he tells us, possibly through alternatives such as online school.

    'Embarrassing'

    There was one problem with the launch of their company. The first version of the app, built in less than two weeks, was a mess.

    "I'm going to admit it it, the first version of the app was embarrassing. The app looked ugly.  It was broken. It was bleh," Lisovetsky told us.

    HomeSwipe Michael Lisovetsky, Jason MarmonMeanwhile, Soukeras was doing his part and signing up New York realtors like mad. HomeSwipe doesn't go out and scrape other real estate sites. Realtors submit their listings directly to HomeSwipe.

    With the $500,000 seed money, they hired two people, classmates of Lisovetsky's from NYU. (After Draper University, Lisovetsky finished his business degree.)

    And they got busy on an new-and-improved app, launched earlier this month.

    "Now, with the new version launched earlier this month, I feel pride in what we've done," Lisovetsky says.

    These young co-founders laugh that all of the seed money has gone to pay their employees and they can barely "afford food and transportation."

    Next up: A business model

    HomeSwipe isn't generating income yet, but they've got an interesting plan to get there.

    They will charge realtors a small transaction fee every time a user requests information on a property.

    Dean Soukeras They are working on an in-app chat function that lets users talk to realtors about a property right from the app.

    When conversation takes place, the realtor will be charged a fee, and will be happy to pay it.

    They're adding more cities, too. They just launched Chicago and are planning for more.

    Clearly, $500,000 isn't enough to get them there. So they're hitting Sand Hill road this week, with a ton of pitch meetings lined up, Lisovetsky tells us.

    And they're full of confidence that they'll get their funding.

    That's because, in the six months since the app has been live, it has had over 47,000 downloads, is supported by 2,200 New York real estate agents and is showcasing 85% of NY rental inventory market, Lisovetsky tells us.

    Join the conversation about this story »

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    Clue CEO Ida Tin

    Germany's thriving startup scene is one of the most unique in Europe.

    The capital Berlin is home to a mixture of hackers, privacy experts, scientists, and video companies that are making waves in the tech scene.

    Here are some underground companies as well as more established names that are worth watching. 

    17. Foundd

    Foundd is a site that recommends movies based on what you like, as well as what your group of friends likes. That's different to services like Netflix, which just look at your own viewing history.

    The company earns money when people click through to buy movies on iTunes — so it want to make the recommendations as good as possible.

    Mashable reports that Foundd raised a $350,000 (£223,000 round) of funding in 2013 from investors including JMES Investments, Lars Dittrich, and Tao Tao (a cofounder of GetYourGuide). 



    16. Crate

    Crate offers an impressive technology that lets startups and companies easily set up distributed data centres. Why's that important? Well, startups don't want to put all their data in one place. With Crate, companies can spread their data around, and Crate handles all the hard work. 

    Crate raised $1.5 million (£957,000) from investors, including Sunstone And DFJ Esprit, in 2014. It also beat out other companies to wn a £30,000 prize at TechCrunch Disrupt Europe in 2014.



    15. Plinga

    Plinga is a Berlin-based video game developer that creates social games for a wide audience. Founded in 2009, the company has launched a series of games, including Family Barn (27 million players) and Dragons of Atlantis (13 million players). 

    Unlike its competitors, Plinga makes it games available to embed around the web, so they're not just playable on its own sites. That's different to how rivals like Zynga and King work.

    Plinga began as a direct competitor to Zynga, featuring a game called FunCards ("Like UNO, just better!"). It received investment from Rocket Internet, the investment firm run by German entrepreneurs the Samwer brothers.



    See the rest of the story at Business Insider

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    Napster founder Shawn Fanning

    The tech bubble of the late '90s produced a number of flash-in-the-pan internet companies that raised millions — often in public offerings — only to flame out a year or two later.

    There are surprising similarities between some of today's hottest tech companies and those dot-com predecessors.

    Was the first generation too early? Or are today's companies heading for a similar fate?

    MyLackey.com sent someone to do your chores for you — like TaskRabbit.

    If you want some help cleaning your apartment, getting groceries delivered, or if you're in need of a handyman, you can hire a helper from TaskRabbit to help you get it done. 

    Founded in 1999 and funded by VC firms including WaldenVC, MyLackey.com was similar to the present-day iteration of TaskRabbit: you could hire someone to run your errands for you. Mylackey.com signed deals with local businesses to carry out the tasks. Sixteen months after launching, MyLackey.com shut down in October 2000. 



    Before you listened to music on Spotify, you downloaded it on Napster.

    Napster was a peer-to-peer file sharing service that let users exchange MP3 files. However, since it hosted copyrighted music, Napster ran into legal troubles and eventually shut down and sold to software company Roxio in 2001. It seems companies like Spotify have learned from Napster — they work with record labels and artists to allow for legal music streaming.



    Webvan and Kozmo offered instant delivery, similar to Amazon Fresh, Instacart, and other on-demand services today.

    Both Webvan and Kozmo were dot-com era delivery startups. Webvan promised 30-minute grocery delivery, while Kozmo delivered Starbucks coffee, magazines, music, and more. Webvan was founded in 1999, raised $400 million from Softbank, Sequoia Capital, and Goldman Sachs, and went bankrupt two years later. Similarly, Kozmo launched in 1998, raising $280 million from Softbank, Flatiron Partners, Amazon, and Starbucks before eventually going out of business in 2001. Although Kozmo filed an IPO, it never went public. In a postmortem in April 2011, Forbes referred to Kozmo as "a bellwether for lunacy."

    Instacart is 2015's answer to Webvan. You can use the service to get groceries delivered on-demand. Instacart has raised $275 million and is valued at $2 billion. Fresh Direct, another grocery delivery service, has raised $91 million. Both Amazon and Google have their own same-day grocery delivery services, too: Google Express and Amazon Prime Pantry.

     



    See the rest of the story at Business Insider

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    tomorrowland bob iger george clooney amal.JPG

    The Walt Disney Company is all about the future. 

    Back in 1937, Disney released the first-ever animated feature film: Snow White and The Seven Dwarfs. In 1995, Disney-Pixar released Toy Story, the first-ever computer animated movie. 

    Just this past weekend, Disney released Tomorrowland, a love letter to classic science fiction that urged viewers to look forward, based on the futuristic themed "land" in its Disneyland and Disneyworld theme parks

    Disney is always looking for the next big thing. 

    That's why the company is gearing up for the second annual Disney Accelerator program, a startup farm to connect founders with Disney money, Disney intellectual property, and perhaps best of all, access to Disney's team as executive as mentors, up to and including Disney CEO Bob Iger.

    "[Disney Accelerator] is a graduate-level class in media and entertainment," says Disney SVP of Innovation and Disney Accelerator head Michael Abrams.

    For the startups, the chance to collaborate with Disney — on properties from Marvel superheroes to Star Wars to ESPN to ABC Family to Disneyland to Mickey Mouse — is a major selling point. If nothing else, at least they get a major first customer.

    Looking for founders with the "Disney mindset"

    In the program, which will begin its 2014 class on July 6th, 10 startups per cohort are invited to work at Disney's Glendale campus in Southern California for 13 weeks and offered $120,000 in funding — $100,000 of which comes in a convertible note that can be changed into equity, at the startup's choice — to build something new and cool.

    The administrative and logistical end of the Disney Accelerator is run by Techstars, a Colorado company that specializes in holding these kinds of programs, which it's done for clients like Nike and Barclays. Disney's part in the program is to provide its own expertise in media, interactive entertainment, and all of those others things Disney does well, as it works to support these startups in growing their business.

    Disney MagicBandTo be clear, Disney doesn't think it needs the help of startups to come up with cool new technology. 

    Abrams describes Disney's "huge labs" where new ideas are conceived, hammered out, and released unto consumers all the time. For instance, Disney came up with the super-cool Magic Band wearable wristlet for the Walt Disney World resort all on its own — even if development came with a pricetag of $1 billion.

    But startups are a major source of new ideas that might not have emerged from people working within Disney's giant corporate machine. The Disney Accelerator looks for founders with a "Disney mindset" and a willingness to experiment until they find the right idea.

    disney michael abrams

    Disney executives, Iger very much included, love meeting with these startups because they find it "energizing" to deal with people with a more entrepreneurial spirit, working on radical new ideas and  "opportunities that weren't obvious at Disney," Abrams says. 

    In fact, Iger personally advised Sphero, a robotics company that graduated from the Disney Accelerator in the first class and went on to help Lucasfilm design BB-8, the rolling droid from the forthcoming "Star Wars: The Force Awakens." 

    From that first cohort, ChoreMonster, an app that encourages kids to do their chores by making it a game, is including characters from the upcoming Disney-Pixar movie Inside Out, including the voice talents of star Bill Hader.

    Another startup, Naritiv, which makes software to track social media campaigns, helped ABC Family's TV series Pretty Little Liars get a million Snapchat followers. Tyffon developed Show Your Disney Side, an app for Disney's theme parks that lets you morph a selfie into a Disney character. 

    BB8 R2D2

    That approach has been very successful. Most of the 10 companies in the Disney Accelerator program are raising venture capital rounds, he says. 

    In fact, one startup, SnowShoe, which makes physical stamps that can unlock digital content on a smartphone, raised $2 million in early-stage funding while still in the Disney Accelerator, and then another $1 million almost immediately after demoing their technology at the conclusion of the program.

    "The future of media and entertainment is a magnificent thing," Abrams says. 

    SEE ALSO: Why Coca Cola is in the business of bottling startups

    Join the conversation about this story »

    NOW WATCH: Forget Apple and Google, Disney has already mastered wearable tech


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    OculusPCtether

    Facebook-owned virtual reality company Oculus has acquired a company that scans real-world environments and turns them into interactive virtual reality spaces, The Verge reports.

    Surreal Vision is a UK company that reconstructs physical spaces as virtual worlds. That's an attractive technology for Oculus, which is working on virtual reality.

    Combine Oculus and Surreal Vision and you have the potential to scan your living room into a game and then wander around a virtual version of it. Sure, that sounds boring, but it could also populate the virtual version with characters and objects. 

    Here's a video from Surreal Vision showing how the technology can be used to turn a normal space into an augmented reality "Gangnam Style" dance party:

    This kind of augmented reality is pretty similar to something that Microsoft has been working on. The Microsoft HoloLens lets customers scan real environments, and then interact with them digitally. Now, Oculus has the same capability.

    Surreal Vision is going to be integrated into the Oculus VR team in the US, and so its UK team will be relocating to Redmond in Washington, where Oculus is based.

    Join the conversation about this story »

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    Apple MacBook In Trashcan

    Hate taking the garbage to the curb? Apparently, and assuming this isn't some kind of joke, there's an app for that. 

    TrashDay, a service that says it's launching soon in San Francisco, promsises to take your garbage to the curb for the low, low price of $8 a week (more if you have a lot of trash cans). 

    The company promises that after a short "onboarding appointment," its background-checked "helpers" will come to your home every week, take your garbage out, and return your cans "1-4 hours after trash pickup."

    TrashDay says that even if you have a gate or a garage door, it uses "advances in mobile technology to make sure your keyed entrences [sic] remain secure."

    If you're interested, you can put yourself on the waiting list.

    At press time, TrashDay did not respond to a call to the number on its website — its only means of contact. With no other information on the company or who's behind it, we can't rule out the possibility that it's a big joke.

    And whether it's intentional or not, TrashDay seems to have come at the right moment to tap into the growing belief that the top Silicon Valley startups focused around doing what your mom no longer does for you.

    There's even already a parody, Here Comes the Airplane: "Tired of having to put the food in your own mouth? Let us do it for you," says the site. If you click the link for "Questions?", it takes you to a Business Insider article entitled "Silicon Valley startups are obsessed with developing tech to replace their moms."

    Twitter has come out in arms against TrashDay, with lots of posts like this:

    While no less than widely-reputed venture capitalist Marc Andreessen of prominent firm Andreessen Horowitz seems at least amused by TrashDay's existence, as evidenced by his Twitter:

     But he was even more impressed with Here Comes The Airplane:

    SEE ALSO: Silicon Valley startups are obsessed with developing tech to replace their moms

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    NOW WATCH: These children play instruments made out of garbage — and they sound unbelievably fantastic


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