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The latest news on Startups from Business Insider

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    Hello Alfred founders

    Marcela Sapone and Jessica Beck met at Harvard Business School, fresh out of stints in the finance world.

    "I was working really long hours and coming back to an apartment that was a total mess," Sapone tells Business Insider.

    Beck and Sapone knew how grueling working crazy hours could be, and what kind of toll it could take.

    "Jess is a super, super messy person, and would never invite me over to her apartment, and when I finally went over there I had known her for 8 months, she had a laundry pile the size of her kitchen table," Sapone says. "I was like, this is nuts. It was really hard to live our lifestyles without help."

    Beck and Sapone hired someone off of Craigslist to come do their laundry and buy their groceries weekly, and the two split the cost. The woman they hired, Jenny, came to their apartments to take care of errands that would otherwise pile up. This was the earliest iteration of what would eventually become their company, Alfred.

    "It was a little bit  of an accident: we built the product for ourselves and over time people in our apartment building said 'Hey, can I get in on that?'" Sapone says.

    Today, Alfred is a startup that hires employees — Alfred Client Managers, or just "Alfreds"— to run weekly errands: things like buying your groceries, sorting your mail, dropping off packages, and taking care of your laundry for you. You pay $99 a month for the service, plus the cost of things like your groceries. Alfred has raised $12.5 million from investors including Spark Capital, New Enterprise Associates, SherpaCapital, and CrunchFund.

    But when Beck and Sapone were still in Boston, they weren't sure Alfred was a company that even needed venture capital funding. "We really thought about it as a smaller business," Sapone, who is CEO of Alfred, said. "We created a bunch of postcards with different prices and different bundles of services and we put them under the doors in all these different neighborhoods in Boston and we got our first 10 customers that way."

    Hello Alfred

    Alfred's speciality early on — and what made it different from delivery services and other courier systems — was that it was optimized for standard routes. "It's kind of like a milkman run where you have one person who's going to do the errands for everyone at the same time and go on these standard routes, just like a milkman would visit a neighborhood and would pick up and take away the milk bottles from every door," Sapone says. 

    Sapone and Beck were still in business school while they built their company, and it wasn't easy. But any time the founders went to their customers and told them they were considering pumping the brakes on the company to focus on school, their customers would freak out and offer to pay more and more money to keep Alfred's services afloat.

    "This happened from the point where people were paying $25 a week all the way up to $90 a week for the service that we have today," Sapone says. "People were paying $400 for Alfred's service in Boston when we first started."

    "The entire world reaches out to you when you win"

    Alfred launched in Boston in May 2013. In September 2014, Sapone and Beck left Harvard and Boston and flew out to San Francisco to take part in TechCrunch Disrupt's Startup Battlefield competition. 

    "Getting into Disrupt was kind of a surprise. The only thing we were trying to optimize for was not to look silly. We had kind of applied on a lark. We did a lot of our prep work the weekend before," Sapone says. "But you have to remember, we had a year's worth of data running the business, so the one thing we had going for us was we had a ton of conviction. The entire Disrupt speech was written on Post-it notes and I practiced it over and over and over again until I could do it until it didn't matter how many people were in the room."

    At the end of the competition, Alfred won Disrupt. 

    "I've been to the New York Disrupt, and it's small. San Fran's Disrupt is pretty intimidating. I've honestly never received more emails or text messages — the entire world reaches out to you when you win," Sapone says. "And it allowed us to get a ton of customers. We went from being a really small operation in Boston to, suddenly, we had 10,000 signups."

    Hello Alfred

    Immediately after Disrupt, Sapone and Beck decided to launch Alfred in New York, and to move their company there.

    In November 2014, armed with $2 million in seed funding from CrunchFund, SV Angel, and Spark Capital, Alfred launched in New York.

    "When I spent time with Jessica and Marcela, I was immediately taken by a few things. First of all, they're an amazing team. Individually, they're great. Together, they're unstoppable. They're super passionate about what they're doing," Bijan Sabet, a general partner at Spark Capital, told Business Insider. "Even before they raised any money from VCs — our round was before they won Disrupt — they had bootstrapped the company themselves, they had put flyers out. They had really made it happen. Basically, they were profitable even before they had raised any venture capital. Not only had they shown great metrics — like customers loved it and all that stuff — but their obsession to detail was extraordinary."

    The founders avoided initially launching in San Francisco because "New York has a higher population density and a higher availability and accessibility of the kind of vendors we want to use," Sapone says. "SF is an anomaly — it has the most on-demand services out there. And if our desire was to link all of those together, we'd want to first learn how to do that in a place where people are not used to on-demand services. The value proposition is higher when you're like, no, I can't get on-demand groceries." 

    Ditching the 1099 model

    The Alfreds — named for the butler of Bruce Wayne/Batman — are all employees of the company and not 1099 contractors. The 1099 contractor model is favored by on-demand companies like Uber, Lyft, and Postmates. However, on Wednesday, a judge in California ruled that Uber's drivers were actually employees and had been misclassified as independent contractors — a move that could have serious implications for its business model and for other companies relying on the same independent contractor model.


    "We believe that if we treat the Alfred as a primary customer and give them all the tools to make good decisions on behalf of our customers, then our end users are going to be happy," Sapone says. "They're literally inside people's homes. We're trusting them at a very high and deep level. As a result, we wanted to make sure we trained them and that we were able to do background and credit check them on a repetitive basis, that we were giving them instructions on how to do their jobs well."

    Most of the 86 Alfreds — Sapone estimates about 70% of them — are stay-at-home moms, though Sapone tells us that a bunch of creatives — artists, writers, and actors — also work for the company. 


    Alfred's first acquisition

    Last month, Alfred purchased parts of on-demand courier service WunWun — including the company's technology and parts of the team — in a fire sale. 

    "We looked at WunWun for a couple reasons: they were one of the first on-demand companies in New York, and they have a very strong userbase in New York, a userbase that has a very high demographic and discretionary spend. They have a high level of frequency and repeats," Sapone told us. "And their technology is really interesting to us. It's basically a dispatching system, which is very similar to ours. While they do on demand, they group orders and optimize routes, which is what we do. We just happen to not do things on demand — we create standardized routes."


    WunWun also handles really complex orders well, Sapone says. For instance, you could say, "I'd like you to pick up a frame for a painting I have, and then put the painting inside of it, and then drop it off over here."

    "That's not a 'Hey, can you pick me up some Indian food' type request," Sapone says.

    Heading west

    Today, Alfred has 19 employees and is growing. Sapone tells us that the company has its sights set on launching in San Francisco, Los Angeles, and Washington, DC next. Right now, though, Alfred is focused on New York and on finding new channels for acquiring more customers.

    Sapone says that Alfred customers' average monthly spend in 2014 was roughly $350 per member, or about $4200 a year, and has been growing rapidly. In comparison, Amazon Prime subscribers spend about $1500 a year. 

    SEE ALSO: How a 10-month-old startup's founders convinced investors to give them millions of dollars to buy a 93-year-old German razor factory

    Join the conversation about this story »

    NOW WATCH: 5 clever iPhone tricks only power users know about

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    Unicorn alma maters1Last weekend a new class of Stanford graduates received their diplomas, and it’s a safe bet that some who just earned undergraduate degrees will soon be at the helm of startups with “unicorn” valuations of over $1 billion.

    Looking at the current list of the 20 most highly valued startups validates this belief. Among the 48 founders of these companies, seven have attended Stanford. B

    But perhaps more surprising is the fact that eight of the founders have attended public colleges and universities.

    In fact, founders of the world’s largest tech startups have CVs filled with schools better known for pigskin success than startups.

    Look at a company like Xiaomi, the Chinese consumer electronics company that tops the list with a $50 billion valuation. The founders earned degrees at prominent Chinese universities, as well as places like Georgia Tech and Purdue. Both are great schools but have had more success in the Big 10 and ACC than the NASDAQ.

    The most surprising finding in this list is that MIT has produced fewer mega-unicorns than two tiny art schools — the Rhode Island School of Design and The Art Center School of Design.

    Two of Xiaomi’s founders were design majors. RISD, an art school that isn’t even included in the U.S. News & World Reports rankings, educated two of Airbnb’s founders.

    If you want to start a world-changing company, forget computer science and consider industrial design — between Airbnb and Xiaomi, four potential billionaires studied the subject.

    A pair of outliers do not a trend make, but it should make founders and investors consider whether we’re beginning to see a shift to what Scott Belsky calls the “Interface Layer” of technology.

    Going forward, will unicorns be defined less by the core technical innovations that MIT produces in favor of companies that merge tech and liberal arts?

    Asia on the rise, Europe in decline?

    Since Aileen Lee first assembled her magisterial accounting of unicorns, the startup world has changed dramatically. In 2013, there were 39 companies with billion dollar valuations, now there are more than 100. All of the top 20 startups in her original list were American. The top 20 today include seven companies whose base of operations are in Asia.

    Eleven founders received degrees from schools in Asia. Only three founders, the creators of Spotify and a cofounder at Palantir, studied in Europe

    That said, education it not a zero-sum proposition. The founder of Asian peer-to-peer lending giant Lufax is an American with a degree from Middlebury. Many of the founding team members at Xiaomi studied extensively in the U.S. Spotify was created by Swedes but is beloved by American teeny-boppers.

    And in a welcome, if still slow, sign of progress, there is now a woman, Theranos founder Elizabeth Holmes, leading one of the top 20 unicorns.Elizabeth Holmes

    Whither the Ivy League?

    Harvard and Stanford dominate this sample. Yale and Penn made the list. But Princeton didn’t make the cut, nor did Cornell, Columbia, Brown, or the other Ivies. World class institutions like Northwestern and CalTech are also absent from the tally, while less august regional schools like Baruch College and the University of Calgary made the cut.

    The median U.S. News & World Report ranking among the nationally ranked schools on this list is 27.5, impressive, but not unattainable. Harvard and Stanford may admit fewer than 6 percent of applicants, but The University of Oregon admits 73.9 percent. The University of Illinois has a world class computer science program but admits 62.4 percent of applicants.

    It’s also heartening to see unicorns coming out of places with relatively affordable tuition like the University of Oregon ($9,918/year) or Georgia Tech ($11,394/year), which offer degrees for the price of a single year on campus at Stanford ($44,757/year).

    One other thought: Is the need for a cofounder BS?

    The conventional wisdom is that great tech companies are formed by a team of cofounders, ideally ones who met in school. Filo and Yang, Larry and Sergey, and so on. The study-buddies turned startup cofounders story holds true in the case of Airbnb and Snapchat, but this top-20 sample also calls that advice into question.

    Six of the 20 most valuable companies in tech have just a single founder. Paul Graham put the lack of a cofounder on the top of his list of Mistakes that Kill Startups. Two of the teams have more than five cofounders, which is another practice thought leaders usually warn against. But the performance of companies at the mega-unicorn scale make Mark Suster’s blog post The Cofounder Mythology required reading for anyone contemplating the creation of a new company.

    Happy unicorn hunting

    While these numbers are interesting, remember, founding a startup, especially a unicorn, isn’t a probability game. There are over 100 companies with valuations over $1 billion dollars. Choosing the top 20 isn’t a scientific sample, and there are bound to be oddities among outliers.

    This sample is completely arbitrary in terms of timeframe. These companies are evaluated on highly subjective private market valuations that could change rapidly. Every acquisition or IPO shakes up the sample dramatically.

    But one thing that’s unmistakable looking at this list is that the education required to launch a world-changing company is more accessible than you might think. Don’t assume that because you didn’t go to college in Palo Alto you’re doomed to small dreams. To crib a line from a great critic — “Not everyone can create a great startup, but a great startup can come from anywhere.” 

    SEE ALSO: The best tech startups in Germany 2015

    Join the conversation about this story »

    NOW WATCH: Here's exactly when you should 'cc' someone on email

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    ssh secret

    Threema, a secure messaging service that has grown to become one of the most popular apps in Germany, is officially launching in the US.

    Created in 2012, Threema prides itself on its end-to-end encryption and security features. It's a minnow next to big messaging apps like WhatsApp and Facebook Messenger. WhatsApp has 800 million monthly active users; in contrast, Threema has just 3.5 million.

    But Threema's userbase has skyrocketed by almost 900% in the last year, and has never marketed itself on a global level. Plus, other apps are free — while Threema costs $1.99 to download.

    And it's seen success in its own right. The app has sat at the top of the German paid download charts for the last two years; according to analytics company App Annie, it's outranking Minecraft and WeatherPro (it's also currently second in the Google Play charts). Threema is significantly bigger than its rival, popular chat app Wickr, which according to Google Play Store metrics has only seen between 100,000 and 500,000 downloads.

    Encryption is a hot topic right now. Strong encryption refers to scrambling data and messages in such a way that it cannot be understood without the correct "key," even if the authorities have a court order. Over the last year or so, there has been a concerted effort by some of the biggest tech companies around to implement strong encryption into their products, brought on by whistleblower Edward Snowden's leaks about NSA mass surveillance.

    snowdenBrought out just prior to the Snowden news, the leaks caused an initial flurry of interest, boosting the user numbers to the hundreds of thousands. "But our real transformation into a business happened 9 months later," CEO Martin Blatter told Business Insider via email. "That was when Facebook purchased WhatsApp ... That deal created huge privacy concerns with people here in Europe. And hundreds of thousands of people came to us and downloaded Threema. Our user base literally doubled over night ... It was pretty wild."

    It's understandable why Germany has taken so warmly to Threema. The country has had a particularly strong response to Snowden's revelations, which included a claim that the NSA bugged chancellor Angela Merkel's phone. German intelligence agency BND recent "drastically reduced its cooperation with the US National Security Agency in response to a growing fallout over their alleged joint surveillance of European officials and companies,"the Guardian reported in May.

    Threema is based in Switzerland — Blatter says the country has "some of the most user friendly privacy laws in the world"— and has 12 full-time staff. Following its German success, the company is now keen to push into new markets, and sees America, with its ongoing debates about surveillance and privacy, as the natural target. (Though previously available to download in the US, the company has never actively targeted the country before.) Part of this push involves a price cut — from $1.99 to $0.99 for a limited time.

    Users don't need to provide a phone number or any other identifying details to use the app, and encryption keys are stored only on phones — making it impossible for Threema to read the contents of messages.

    ISISAs well as being Germany's most popular app, Threema has another, more dubious honour: It is recommended by ISIS. Documents put together by ISIS-affiliated internet users recommend using the app as a way to avoid detection by authorities. When I asked Blatter about this, he said it "plays into an utterly misleading narrative," pointing out that the app is also "used by investigative journalists in Germany who want to protect their sources and by the LGBT community in Lebanon and Iran, whose privacy we are helping to protect in order to protect their lives."

    And in a way, it's testament to the success of Threema. Security experts have long acknowledged that encryption products will be misused by a minority — but the alternative, backdoors and weak protections, are ultimately far worse for users.

    As security researcher the Grugq puts it: "If your secure communications platform isn't be used by terrorists and pedophiles, you're probably doing it wrong."

    Join the conversation about this story »

    NOW WATCH: These Surveillance Balloons Are The Hot New Way To Spy On People

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    LendInvest founders

    Chinese technology company Beijing Kunlun just invested £22 million ($34.2 million) in peer-to-peer mortgage lender LendInvest in the biggest Series A round so far in British fintech. 

    LendInvest's mortgage marketplace matches people looking for quick, short-term mortgage funding with people hoping to get a better return on the money they lend. Because online lenders let savers lend money directly, borrowers pay less interest, and lenders get a better return. 

    The company was officially launched in May 2013, when it was spun out of short-term mortgage lending business Montello. Since then, it has financed over £300 million worth of mortgages.  

    Cutting out the middleman lets LendInvest give both sides a better rate, CEO Christopher Faes told Business Insider, and means that they can get applicants their money in just two weeks, compared to the three months banks usually take. 

    He added: "LendInvest are re-thinking the whole mortgage process, and using technology to provide an unrivalled experience for borrowers, and a superior return for investors. Peer-to-peer is a relatively broad church, and it has made significant inroads in the consumer and SME lending space already, and now we're using it to disrupt the mortgage market in the UK."

    Financial Times report hinted that an IPO might be on the cards in the next year. Faes told us that he can confirm the company would like to move towards one, but an IPO is not something that's imminent. 

    Chinese technology company Beijing Kunlun was listed on the Shenzen Stock Exchange earlier this year, and was originally backed by Sequoia Capital. The company's self-made billionaire CEO, Yahui Zhou, will also join LendInvest’s board of directors.  

    Beijing Kunlun's investment in LendInvest, however, is still subject to regulatory approval by the Chinese government.

    Join the conversation about this story »

    NOW WATCH: Two models in Russia just posed with a 1,400-pound bear

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    unicorns business table

    Great entrepreneurs do not try to create unicorns. They try to solve a nagging problem or turn an industry upside down to improve it.

    When we overuse a special object we admire, it becomes trite. Worse, it can lose its meaning. If you wore a wedding dress every day instead of once in your life, it would lose its uniqueness and value. Worse yet, it – and perhaps marriage with which it is associated – would become trite. If I have special dishes I use only on the Sabbath, the dishes and the Sabbath are enhanced by that sui generisusage and bond between object and subject. The Sabbath and the wedding are the special part. The object is merely a reflection of it. Therefore, it is even more troubling when the object – the wedding dress or dishes – becomes the goal and the marriage or Sabbath becomes secondary.

    The same is now true of Aileen Lee’s unicorns. When Aileen introduced the Unicorn to journalists’ and VCs’ lexicons she had a point: In order for VCs to generate returns, you need to build billion dollar plus exits but billion dollar exits are rare. I assume she used the term “Unicorn” because it has one horn representing the One Billion dollar mark and it is mythological and, hence, rare.

    Quite unintentionally I believe, the now ubiquitous “unicorn” term is ripping the soul out of entrepreneurship. The billion dollar unicorn club is fast becoming the object of the pursuit and not the outcome of passionate innovation. This is doubly troubling. First, no great companies are born trying to become billion dollar companies. They are born to solve a core need, usually uniquely recognized or personally felt by the founders.  Great companies are born from passion and desire to fix the world and not from financial pursuit. Second, by talking about unicorns incessantly, it trivializes the challenges and the uniqueness of character that both the startup and its entrepreneurs necessarily possess.

    Aileen Lee

    I was piqued this the other day by the following Inc. article entitled “How a New Wave of Tech Unicorns is Rising out of Israel,” that is proudly (yet dubiously in my mind) making the rounds on the Facebook page of many Israelis. The article goes on to say, “Fresh off the success of some of Israel’s first ever tech unicorns — Waze, Wix and ironSource among others–‘the startup nation’s‘ thriving tech-industry might be home to a new set of high-valued startups very soon.”

    The article continues to lay out two companies and some investors in pursuit of unicorn status. This is not different from the now daily reports in the WSJ and Fortune of these formerly mythological unicorns becoming daily sightings globally as well as the objective of entrepreneurial pursuit.

    The great entrepreneurs do not try to create unicorns. Wix, which I know intimately, did not start out asking how it could be a unicorn. It started out because Avishai and Gig could not build a good website for a startup they had in mind. Most recently, we backed Nexar because Eran and Bruno wanted to save lives by preventing car accidents. Uber launched because Travis needed a car service, and taxis and car ownership is currently a broken model for societies. WeWork started because Adam Neumann dreamt of a community of creators and entrepreneurs helping each other succeed. In fact, I am not sure that Adam even knew what a billion dollars was when he started WeWork.

    Now, I am not pollyannaish. We too are a venture capital fund that needs big outsized exits to create meaningful returns for our investors and we deeply believe that all of our passionate founders will reach commercial success. However, this is not what we are looking to fund nor is it unicorn seekers we are looking to partner with. We are not looking to invest in unicorns. We are looking to fund fanatical entrepreneurs who want to make a dent in the world by solving a problem they care about deeply.  We are looking to fund innovators who, like Tony Fadell said in a recent TED Talk, will solve a nagging problem, turn an industry or market upside down and fix it to make it better for people.

    The pursuit of the unicorn status is cheapening entrepreneurship.  It is also creating bizarre funding rounds where the target is a $1 billion valuation so you can be called a unicorn and then later vaporized by quixotic preference structures in a “calcified cap table.” More troubling is that the attempt to become a “unicorn” confuses the goal with the potential outcome.

    When we find out that the industry will revert to a mean of between only 3-6 billion dollar companies started a year as Aileen empirically showed, I hope that despite the obsessive association of start ups with unicorns, it will not dampen the pursuit of innovation. When that wedding dress becomes old and tattered (like the term Unicorn has grown long in the tooth) the wedding should still be magical. When my Sabbath dishes crack, the Sabbath is still inspiring. The same should be true for entrepreneurship. When many of the unicorns disappear back into Neverland because private late-stage valuations prove to be a myth as well, and when the term becomes a cheap, overused reminder of a flawed target, I want to invest the next day in the great entrepreneur who is just trying to fix a really nagging problem in this world.

    SEE ALSO: 13 European 'unicorn' startups that were valued over $1 billion in the last year

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    NOW WATCH: Google opens up a 21,000-square-foot campus in South Korea for startups

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    Devialet CEO Quentin Sannie

    Devialet, the high-end audio hardware company from France, has raised $20 million (£12.6 million) in new funding and will use the money to bring its fancy spherical speakers to the US, Forbes reports.

    The company creates products that aren't designed for normal consumers. Its most well-known product, the Phantom speaker, is a spherical speaker that starts at £1,390 ($2,203) in the UK. 

    Devialet says that it delivers superior sound quality by combining analogue and digital sound in one device, with the result that there's no background noise.

    Devialet Phantom speakerThe French company is keen to promote its growth in America, referring to its launch — perhaps incorrectly — as a "US implosion" on its website. Forbes reports that Phantom speakers will begin shipping in the US in the summer, and will start at $2,000. Devialet also told Forbes that it plans to introduce cheaper models of its products soon.

    Join the conversation about this story »

    NOW WATCH: 5 clever iPhone tricks only power users know about

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    Silicon Valley is no stranger to weird behavior.

    So it comes as no surprise that the home of numerous tech giants would produce some of the strangest interview questions out there.

    To find these odd queries, we sifted through hundreds of reviews on Glassdoor submitted by people who interviewed in Silicon Valley in the past year.

    Below are some of the weirdest ones we found.

    "Why is the earth round?"

    Asked by Twitter for a software engineer position.

    Source: Glassdoor

    "You're wearing a nametag, tell me what you think about it."

    Asked by Yahoo for an associate product manager position.

    Source: Glassdoor

    "Choose a city and estimate how many piano tuners operate a business there."

    Asked by Google for a project manager position.

    Source: Glassdoor

    See the rest of the story at Business Insider

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    Cleaners working at WeWork's New York locations say the co-working space startup threatened to fire them if they unionized, BuzzFeed reports.

    A branch of the Service Employees International Union, representing more than 100 of WeWork's contracted janitors, filed a charge to the National Labor Relations Board Thursday.

    Earlier this week, WeWork's janitors organized and protested outside of WeWork's New York headquarters. They want to make as much as their unionized colleagues do.

    WeWork's cleaners come from a non-union contractor and make about $11 an hour. Unionized janitors can make $23 an hour in addition to receiving benefits, the local SEIU chapter told BuzzFeed.

    WeWork is a four-year-old startup that divides up big, rented office spaces, subletting them to startups and other businesses. Right now, the company has 15 office spaces in New York City. WeWork also has office spaces in cities like San Francisco and Washington DC.

    Valued at $5 billion with $568.9 million in funding from T. Rowe Price, Benchmark Capital, and Wellington Management, WeWork is among the most valuable private tech companies in the world.

    WeWork isn't the only startup coming into conflict with contracted laborers. Earlier this week, the California Labor Commission ruled that an Uber driver who brought a lawsuit against the company was an employee, not an independent contractor.

    A WeWork company spokesperson provided us with the following statement: "This story is wrong. 1. We do not employ any cleaners at our various locations in New York.  These individuals are all employees of our cleaning services contractor.  2. We absolutely did not and would not threaten the employment of any one who works at one of our locations because of any union activity.  Moreover, since all of these individuals are employees of our contractor, we do not even have the right to terminate their employment. 3. We have not received any charge from the NLRB.”

    SEE ALSO: The California Labor Commission just ruled that an Uber driver is an employee — here's why it could dramatically change Uber's business model

    Join the conversation about this story »

    NOW WATCH: This photographer got 100,000 Instagram followers by arranging food in a very particular way

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    Amazon Jeff Bezos

    The e-commerce powerhouse Amazon has spawned a wide range of startups, with its former employees working on everything from cute robots to recruiting software. 

    If you want proof that Amazon recruits some seriously talented people, just look at what they're doing now. 

    Flipkart actually competes head-to-head with Amazon in India.

    Flipkart founders Sachin Bansal and Binny Bansal both worked at Amazon before ditching in 2007 to start their own new company with a very similar business model.

    The startup took off and Flipkart is now India's largest online marketplace in terms of sales.

    Amazon, meanwhile, didn't enter India until 2012 with the price-comparison site Junglee (which it had acquired way back in the late 90s). It opened its official India website in June 2013. A year later, Flipkart raised a mammoth $1 billion funding round. Exactly one day later, Amazon said it was planning to pour $2 billion into its Indian operations. Flipkart currently employees 33,000 people and attracts more than 10 million daily visits.

    Hointer founder Nadia Shouraboura brings the principles she learned at Amazon to brick-and-mortar retail.

    Nadia Shouraboura worked at Amazon for 8 years, during which she scaled all the way up the corporate ladder into CEO Jeff Bezos’ elite “S-Team” of direct reports.

    She eventually left in 2012 to launch Hointer, a futuristic retail store that wants to make the shopping experience as convenient as possible by integrating in-store apps and automating the process as much as possible. In its Seattle store, Hointer whisks clothing in and out of dressing rooms with robots. 

    Matt Williams founded to make every home improvement project a breeze.

    Former Digg CEO, Andreessen Horowitz entrepreneur in residence, and long-time Amazon employee Matt Williams put together an ex-Amazon dream-team to take the pain out of home projects. gives people looking to tackle a home improvement project a price estimate for both materials and labor and then recommends professionals to get the job done.  

    During his 12 years at Amazon, Williams did a stint as Jeff Bezos' shadow, an incredibly elite position. Williams has raised upwards of $17 million for Pro and a bunch of his coworkers are ex-Amazoners as well. 

    After working at Amazon but before starting Pro, Williams served as Digg's CEO and an Andreessen Horowitz entrepreneur in residence. 


    See the rest of the story at Business Insider

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    chubbies founders

    Men's short-shorts may seem like an unlikely product for an ecommerce startup.

    But for Chubbies cofounders Kyle Hency, Rainer Castillo, Preston Rutherford, and Tom Montgomery, it was the most natural thing in the world to start a company based around retro-inspired shorts.

    After graduating from Stanford, where they all met, the four guys pursued jobs in different fields ranging from traditional finance to the startup world to corporate retail.

    Back in college, the four guys would wear retro short-shorts they found in thrift stories and had handed down from their dads and uncles. "If you had a really cool pair of shorts, people would talk about it," Chubbies cofounder Tom Montgomery tells Business Insider.

    So in 2011, a few years after graduating, they decided they'd had enough of their own jobs — they wanted to start their own company together, and they wanted to sell the short-shorts they loved wearing themselves. "We all had the mindset of wanting to run something ourselves and wanting to do something that was a little more meaningful and a little more fun," Montgomery says. "It was such an extension of our personalities to start this company."

    It all started at a Fourth of July beach party

    To test out the idea of mass-producing and selling men's short-shorts, the cofounders made a few pairs of shorts and brought them to an annual Fourth of July celebration at Lake Tahoe. Along with 20 friends all clad in red, white, and blue, the cofounders hit the beaches at Lake Tahoe in their Chubbies.

    chubbies shorts

    "That was immediately where we saw how impactful the shorts were and also how polarizing the shorts were," Montgomery says. Reactions ranged from "'Good lord, those shorts are the greatest things I've ever seen,' to 'Get off of my beach, men's legs belong under layers of fabric,'" Montgomery says.

    The cofounders immediately sold out of the few pairs of shorts they had brought with them right there on the beach.

    "That's where we really understood that the product was fantastic in terms of the resonance that it had," Montgomery says. "The shorts struck the same emotional chord with other people that it struck with us. It reminded us of our dads; it reminded us of the weekend."

    When they got home from the beach, the founders built out a website and made a couple hundred more pairs of shorts. And in September 2011, Chubbies launched its website. From the beginning, the founders were inundated, selling out of their early merchandise immediately. "From day one we saw there was a very talkable, very shareable notion around our brand," Montgomery says. "We saw complete strangers who we hadn't told about the brand purchasing from us."

    Recruiting college fraternity brothers

    Montgomery and his cofounders launched their company in September, just before winter. They started gearing up for March, which would be the company's first big inflection point. To make sure they started spring and summer sales strong, the founders sent emails to fraternity presidents and the heads of other social groups on college campuses, letting them know about the shorts.

    "Invariably, the guys who responded to us were the fraternity presidents and heads of these groups saying 'Hey, I know a guy who's interested, and it happens to be me,' and immediately they were on board," Montgomery says. Today, Chubbies has an ambassadors program, and has plucked more than a hundred college guys to help it continue to spread the word on college campuses. If you walk around any big college campus when it's nice out, you're bound to see at least a few guys rocking Chubbies shorts.

    chubbiesThe founders spent all their cash to buy as many pairs of shorts as they could before the March push. "We thought it would last through the summer, and we sold out in a couple days," Montgomery says.

    So far, Chubbies has taken very little venture capital funding. In October 2012, Chubbies raised an undisclosed amount of cash from Rothenberg Ventures. Two years later, in April 2014, the company raised a $4.4 million round from Thrillist CEO Ben Lerer, Rothenberg Ventures, Trunk Club's Brian Spaly, IDG Ventures USA, and other investors.

    Beyond shorts

    Since then, Chubbies has had a steady growth curve, Montgomery says. As the years have gone on, the company has expanded beyond their signature shorts, which have a 5.5-inch inseam. They've launched swim trunks and even a Hawaiian-style T-shirt, called the Nutter. They're also experimenting with producing long-sleeve shirts and heavier-weight warmer items to let Chubbies customers wear shorts year-round.

    "We're constantly building this brand around the weekend and the feeling you get around Friday at 5 p.m.," Montgomery says. "When a guy throws them on, the stress and rigors of the work week can be put on hold for a bit."

    Rainer Castillo, who leads the merchandising, product design, and development teams for Chubbies, says the company always wants to innovate on shorts, and one way the it does that is through riffs on nostalgic items. "When we were growing up, a big thing was tear-away basketball pants," he says. "So we made a tear-away short that guys could rip away and there was a Speedo underneath. We take items of clothing that people are familiar with and turn them into shorts."

    chubbiesSome of the company's products also border on the absurd. For example, Castillo says the company is working on an entire outerwear collection, including items like a rain-jacket short, a puffer short, and a sherpa short. "These items are outrageous, but our customer knows they're going to find them nowhere else," he says.

    Chubbies also tries to innovate on the customer experience side of the company too. Kyle Hency, who heads up the business development and finance teams at Chubbies, says that one of Chubbies' high-school customers wrote to the company to let them know that he had his pair of Chubbies stolen from his locker at school by bullies. The Chubbies team, in return, sent him karate lessons. "We do a lot of those types of things to go above and beyond for our guys," Hency said.

    Chubbies' American-made shorts come in a number of patterns: there are the company's patriotic Americans shorts, as well as shorts in any number of patterns and colors. They cost between $49.50 and $59.50 a pair.


    What's next for Chubbies?

    Chubbies has also dipped into brick-and-mortar, with a physical retail store on Union Street in San Francisco. Hency says the company's been "pleasantly surprised and excited by the traction we've had in that store to date, and the other thing that's really interesting is that us owning that 'Friday at 5' time period. We're getting lots of people flying into the store from Thursday end of day through Friday who are going on trips over the weekend."

    In the casual shorts market, Chubbies faces tons of competition. Everyone from huge brick-and-mortar retailers like Gap and Abercrombie cater to the 18-to-35-year-old guys that Chubbies also hopes to sell to. But few other companies — aside from the preppy Martha's Vineyard-inspired Vineyard Vines brand and similar niche competitors — are going after the "Friday at 5 p.m." mindshare like Chubbies.

    Today, Chubbies has roughly 40 employees. Between its followings on social media and its mailing list, Chubbies' community has grown to a "couple million people," Montgomery says. In a couple weeks, Chubbies will have its annual "Fourth of Julyber Monday ” — basically a summertime version of Cyber Monday — and the company expects to do $1 million in sales on that day alone.

    "Last year on this same day, we got close, but didn't break it, but this year, we think we'll eclipse it," Montgomery says.

    SEE ALSO: 2 Harvard students were sick of their dirty apartments, so they built a company that will do your chores for you

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    NOW WATCH: These are the only types of jewelry men can get away with at the office

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    Working at a startup and taking it to the next level can be a rewarding job.

    With some luck, you might even be able to build the next Facebook or Google.

    But startups are hard — and it could be a brutal experience if you're not prepared for the grind.

    We went through some Quora threads to find out all the worst things about working at a startup.

    There's so much work but only few people to do it.

    "One thing I learnt very early on is that there's a lot of work to go around and very few people to do it. From something as menial as fixing (lots of) peoples' computers and printers to rushing off to make a corporate presentation (with no background whatsoever) because some sales executive got stuck up somewhere and the entire technical team of the client is waiting. One more thing, no matter how much work you take up, there's always more to follow. At times, it gets really tiring and distracting but then that's what you signed up for. No boundaries, no job descriptions."— Arnab Mitra, Director & Partner at

    You won't have the time to dive deep into something you're really interested in.

    "Startups will have a faster learning pace in terms of setting up stuff and getting things done quick and dirty. But, you will not be able to spend too much time on research or trying to develop your own ideas. There is too much work on the plate, always...Big tech companies, on the other hand, can afford to spare time for research and you will generally be able to find time to experiment with your own ideas."— Anonymous

    You're wrong 99% of the time.

    "What's it like? Well, 99% of the time you're wrong. Your product is harder to build than you think, fewer people like it - even fewer want to pay for it. That is a big blow to your ego. Most people have an inflated opinion of themselves and their ideas. Reality hurts."— Peter Johnston, runs Develop Oxford, Developer Startups and DataScience Oxford

    See the rest of the story at Business Insider

    0 0

    tech bubble

    Benedict Evans, the respected tech analyst at the big Silicon Valley venture capital firm Andreessen Horowitz, just published a fascinating dissection of the current state of tech investing which concludes that tech is not in a bubble because "it's different this time."

    Basically, Evans says, while some measures of tech investing clearly show a boom, a whole bunch of important indicators are nowhere near their 1999 dot com bubble peaks. You can read his slideshow here.

    The in-joke in Evans' presentation is that one of the most infamous anecdotal indicators that you're in a bubble is when people start rationalising the bubble by saying "it's different this time" or "this time it's different." Evans isn't literally saying "it's different this time." Rather, as his deck says, "it's always different!" 

    Nonetheless, for those of us on tech bubble watch, you can argue that Evan's presentation provides as much evidence for the bubble as it does against. I have three issues with the deck:

    • Whenever someone says "it's different this time" during a massive boom, it's scary (even if they're doing it in a sly, knowing way).
    • Evans' data shows that the run-up in tech valuations is concentrated in a much smaller number of hands than it was in 1999. Back then, it was IPOs on the public markets, and anyone could buy the stock. Now, it is privately traded equity — which is much less liquid than regular stock, and concentrated in the hands of VC firms and their bank partners. So we're looking at huge valuations in a largely illiquid market, where the underlying assets are companies that haven't quite figured out whether they can actually turn a profit. What could possibly go wrong?
    • Evans doesn't address the low interest rate environment, which most people agree is the underlying cause of the tech boom. Those rates are about to get reversed when central banks start raising rates to stave off inflation.

    Benedict Evans

    First, as a note from Credit Suisse said last week, one of the signs of a bubble is when serious people start arguing that there has been some sort of paradigm shift that makes it different this time. The Barron's contra-indicator is flashing the same way, too.

    At a facile level, that is literally what Evans' presentation says: Tech IPOs are at a much smaller level than they were in the 1999 bubble because companies are staying private, taking longer, later rounds of investment, and the returns on those investments are staying private, too. (Uber is the ur-example of this — it has a $41 billion valuation after taking 10 rounds of investment totalling $5.9 billion.) This is the new funding paradigm for tech startups, although Evans does not use that term.

    To be clear, this is not Evans' argument. It is my interpretation of his argument, and I suspect he will disagree with the way I have restated it. But still, a cynic can now say that we have a noted analyst in the field saying there is no bubble because the economics of tech are in a new paradigm and "this time it's different."

    Those are mere optics, but not they're not good optics.

    The interest rate question is much more serious. Central banks currently have interest rates set at zero percent. That means any investment that returns more than zero looks good right now. For investors, cash in the bank at 0% interest has been a waste of money. So money has poured into tech startups via venture capital firms like Andreessen Horowitz. Any startup that can return greater than zero looks valuable in this environment. When the US Federal reserve, the ECB and the Bank of England raise those rates, all the marginal business ideas that return just a few percent in profits will be wiped off the map — because no one will fund them.

    That big incoming tidal wave of tech investment money, which started in 2002, may suddenly disappear. It looks like this, according to PwC:

    tech bubble

    After all, why take risks in tech if the bank suddenly starts paying interest on cash, and governments and corporations start offering even more interest on bonds as a result?

    The corollary of this is what happens to tech valuations if the funding environment moderates downward. This is what Evans says the funding environment looks like now at the high-end of deals, where investments are largest:

    tech bubble

    Clearly, a funding peak for larger deals was reached in 2014 that was bigger than the 2000 dot com crash.

    However, for all deals in total, Evans says it looks like this:

    tech bubble

    The 2014 peak for total deals is more "modest," as Evans says, but it's still third highest to 1999 and 2000.  

    Evans argues the money in larger deals has shifted from IPOs to private equity investments:

    tech bubble

    Again, note the 2014 peak is bigger than the one before the 2000 crash.

    The thing with private equity is that it is difficult to sell. You can't just call up a broker like Fidelity or Hargreaves Lansdown and yell "sell!" down the phone. You have to know someone else who wants to buy it from you in a private transaction. It involves lawyers. It is usually easier to sell a house than to sell private equity privately.

    So that big wave of money, that big runup since 2000, has gone into a largely illiquid set of investments.

    As the world found out in 2007, when mortgage-backed securities suddenly became illiquid because no one wanted to buy them, that is a pretty good way to structure a market so that it will be more likely to crash.

    And that's why I worry that the insiders who think tech is in a bubble are actually the ones who are right. 

    There is a big caveat to all this: The 2000 crash was caused by companies going public when they had no revenues whatsoever — it was a literal bubble, like Dutch tulips or South Sea Company shares. Today, we're looking at companies that do have revenue or ways to turn on their revenues, so that factor suggests it's a strong boom not a bubble. But those same companies are often not-so-great at creating the profits that are supposed to ultimately deliver value to their shareholders. Seventy-one percent of companies that IPO-ed in 2014 had negative earnings — a level we last saw back in 2000.

    One final note. Just to give Evans the proper level of credit — and to demonstrate that his analysis isn't unreasonable — here is that PwC data on tech funding deals with a longer timeframe than the one I showed above. You can see that, in fact, we aren't yet at the height we reached in 2000. But we're getting there ...

    tech bubble

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

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    In the typical interview process, you have an initial meeting. You may have a second meeting, and maybe a third. You talk the decision over with your family, but those conversations happen behind closed doors.

    As far as your future boss is concerned, you operate in a vacuum. And when you receive the offer, it comes to you alone. 

    At ThoughtSpot, a company that provides search-based analytics for enterprisesthings work a little differently.

    Founder and CEO Ajeet Singh isn't just interested in meeting with you as part of the interview process. He also wants to meet your family.  

    To Singh, it's only logical. "In my family, making career choices is a joint decision between my wife and me," he tells Business Insider. "And I believe all spouses and children will play a part in ThoughtSpot's long-term plan."

    So when a candidate is in the final rounds of interviews, Singh makes the offer: would the candidate's partner like to meet him?

    That's because on a fundamental level, Singh believes supportive families are what makes ThoughtSpot possible. 

    "I started my first company the same week my son was born," he recalls. "People said we were crazy." He was leaving a secure job at Aster Data. He was about to be a dad. He didn't yet have a green card."You can't do crazy things like that without a supportive family," he says.

    Starting that company — the enterprise virtualization and storage company Nutanix —  required "a leap of faith," and Singh is well aware he wasn't the only one jumping.

    When you join a startup, everybody in your family has to be willing to "see past the ambiguity" that's inherent to the process, he explains: What will it take? What if it fails? Why can't you just get a job at Google? 

    It should be a joint decision, he says. And accordingly, families are "just as important to the company's future as the employees themselves." 

    By that logic, meeting with a potential hires' spouse only makes sense.

    "I want [spouses] to know that we’re not a company full of mercenaries that are going to bleed their families dry and not care about their life outside of work," he says. No one sleeps under their desks, he says. You're allowed to go home on weekends. "There are so many myths," Singh says, and he's out to dispel them. 

    Silicon Valley HBOBut he also wants to verify that families are on board. The spouse meeting isn't a formal part of the interview process — and certainly, it's not required — but it's not not part of the interview process, either. 

    "As much as I want to make sure the candidate is a good fit for our company, I also want to be sure that ThoughtSpot can support their goals outside of work," Singh explains.

    Worries come up organically, he says — he's not interrogating anyone. And usually, he's found, a spouse's concerns can be resolved. But if and when they can't, Singh is willing to call it a deal breaker. 

    "If a spouse is worried about an issue that I don’t think we can solve, then it’s likely a sign that we’re not a good fit," he explains. "For instance, if in our conversations I discover that working at ThoughtSpot is going to be too disruptive to their home and relationships, I’m comfortable sharing that — even if it means ending the hiring process with an awesome candidate." 

    There's something unsettling about the idea that your partner could play such a role in your professional life. Even if you accept the Sandbergian wisdom that who you marry is the most important career decision you make, the idea of your CEO meeting your husband before the paperwork is signed takes the blurring of the personal and the professional to the next level.

    But in Singh's experience, the meetings have been nothing but a positive.

    "In every case where [the spouse] agreed to the meeting, afterward they were glad they did," he says. "I know because they've told me." They feel more comfortable with the company after the meeting, Singh finds. So far, it's never prevented him from making an offer, though he acknowledges it could.

    Paternity Leave

    According to Singh, the process isn't a clever innovation; it's a "no-brainer," he says. "My career choices, highs, and lows are all experiences that affect my spouse and children deeply." The weird thing isn't that he involves families; the weird thing is that other places don't.

    "[S]startups can be pretty brutal about not having other priorities," one anonymous tech executive told the New York Times. But Singh says it doesn't have to be that way — and his interview process is one way of putting his money, quite literally, where his mouth is. 

    SEE ALSO: The surprising danger of being good at your job

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    NOW WATCH: How Elon Musk can tell if job applicants are lying about their experience

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    me largeNot a lot of people get to work at Google, much less before entering college.

    But for Larry Gadea, founder of visitor-registration software Envoy, a job at Google just kind of came naturally right after high school, at the age of 18.

    Gadea started programming when he was 8 years old. He loved computers and was already writing games by high school.

    But it was a plug-in he developed for Google Desktop Search that put him on Google’s radar. It would allow the users to find and index files in their computers that Google Desktop Search couldn’t. It made the search feature a lot more useful, and immediately became super popular.

    “Google Desktop Search didn’t allow plug-ins at the time. Mine was a hack that made Google allow plug-ins,” Gadea told Business Insider.

    One day, in his high school senior year, Gadea received a random email from Google. Terrified that he might have done something illegal, Gadea nervously opened the email. It read, “Why are you doing this stuff on your own? Why don’t you do this with us?”

    “They wanted me there full-time. I was super excited, an 18 year old getting a Google offer,” Gadea recalls.

    But there was one big problem: Google didn’t know Gadea was that young. Being Canadian, Gadea needed a visa to work full-time in the US, but not having a college degree essentially made it impossible to get the visa approval.

    So instead of working full-time, Gadea interned at Google’s Mountain View office during the summer before going to college. After his three-month internship was over, Google wanted him back so they gave him another offer: they hired him as one of the first few engineers at Google Canada, and allowed him to work there part-time during the full four years of college.

    After college, Gadea wanted to try something new. Twitter was an up-and-coming startup, so he asked his boss at Google if she could connect him with the company.

    “She introduced me to [Twitter’s cofounder] Ev Williams. I did an interview and they were the first to give me an offer,” Gadea said.

    For the next three years, Gadea worked as a back end engineer at Twitter. There, he created “Murder,” a data center optimization technology that played a big role in reducing "Fail Whales,” the term used to describe Twitter’s frequent crashes in its early years.

    But by 2012, Gadea wanted to try something new again. This time, he wanted to start his own company.

    Screen Shot 2015 06 22 at 4.38.27 PMGadea took nearly a year off, meeting people to find a startup idea. That idea came while visiting friends at Apple and Google.

    “It was weird that Google and Apple had you type in your information in a computer at the front desk, but smaller companies didn’t have that technology,” he tells us. “Either the receptionist would leave the desk and find the person, or there’d be no one at all.”

    He later realized the big companies had their engineers develop its own visitor check-in software. Smaller companies didn’t have the resources to do that, leaving them open to greater security risk at their office.

    So in 2013, Gadea built a software called Envoy that could be used at offices to check-in people and keep track of visitors. It would basically allow visitors to sign-in through an iPad app, and print out a name tag with their photos on it. Its latest app can send push notifications to the iPhone and even show the person’s photo on the Apple Watch.

    Soon, Envoy took off, signing up over 1,000 offices, including companies like Airbnb, Pandora, GoPro, and Tesla — all on word-of-mouth.

    That kind of success explains why on Tuesday, Envoy announced a $15 million Series A investment by Andreessen Horowitz, with its general partner Chris Dixon joining the board. The new financing comes after raising $1.5 million from Silicon Valley bigwigs, including Salesforce CEO Marc Benioff, Quora’s Adam D’Angelo, and Yelp’s Jeremy Stoppelman in November 2014.

    "If you go around Silicon Valley today, almost every startup you go to has Envoy at the front desk. It’s sort of become a hit viral app," Dixon told us. "Larry's a prodigy. He's just a classic scrappy, super brilliant Silicon Valley entrepreneur."

    SEE ALSO: Derek Jeter has a startup that just raised $9.5 million in funding

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    crosscut ventures

    CrossCut Ventures, a Los Angeles-based, early-stage venture capital firm, has closed its $75 million third fund.

    Now, CrossCut Ventures is one of the largest seed-stage funds in Los Angeles, a city that's home to successful startups like Snapchat, Whisper, and Dollar Shave Club.

    Cofounder and managing director Brian Garrett says the new fund is relatively oversubscribed in comparison to its initial $50 million target.

    This is in part because it's the first time CrossCut has tapped into institutional investors — Top Tier Capital Partners and The James Irvine Foundation both invested in CrossCut's new fund.

    Founded in 2008 by Garrett, Rick Smith, and Brett Brewer, CrossCut was among the first seed-stage funds to appear in Los Angeles. Its portfolio companies include suit rental service The Black Tux, SaaS company Conversion Logic, adtech company GumGum, and mobile streaming and gaming startup Mobcrush. 

    Garrett tells Business Insider that the fund plans to continue focusing on Los Angeles-based early stage tech companies, particularly in SaaS, e-commerce, adtech, and gaming. To that end, CrossCut has hired gaming veteran Clinton Foy as the firm's fourth managing director. 

    CrossCut has made 45 investments and its portfolio company has had 10 exits to date. Garrett tells Business Insider CrossCut will continue funding 8 to 10 years annually.

    SEE ALSO: 2 Harvard students were sick of their dirty apartments, so they built a company that will do your chores for you

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    mark suster

    We are experiencing a frenetic time. I rarely talk to any startup entrepreneur or VC who doesn’t feel it and somehow long for simpler times despite the benefits we all enjoy from increased enthusiasm for our sector.

    For entrepreneurs there’s too much money sloshing around. One would think entrepreneurs would never want less available cash – until such time as their competitors ridiculously and unnecessarily all raise $50 million in the name of a “land grab” thus making it much harder for your totally reasonable company to attract investors.

    There’s too much PR and too many tech blogs and too many newsletters and aggregators and Twitter summarizers to even try to catch everything that’s going on and equally there’s so much noise that it becomes harder to be heard.

    There are so many events to attend that one could become a full time conference attendee and you could easily feel like you’re missing out with each event that happens without you and of course there is Twitter and Instagram and Snapchat to remind you just how fun it was for everybody else. We always look like it’s only fun in our Instagram photos, don’t we?

    It’s impossible to get offices so you pay too much or pile in too many people and have too few bathroom stalls or you're located in a crappy neighborhood. Of course your friend’s company raised $50 million and offers its employees free kombucha and desk massages. And even this can’t stop their employees from fleeing after two years of vesting to move on to the next hot startup.


    For investors life is no different. There are too many deals to look at, too many seed funds or angels asking you to look at deals and weekly “demo days” with manicured and monocultural presentations crafted by experienced story tellers to help even the mundane idea sound like it will. Blow. Your. Mind. Everyone is a rock star developer, every company is crushing it, and when they’re not crushing it they’re killing it.

    There are too many pulls & tugs at our elbows for time, for coffee meetings, for advice or speaking engagements or cocktail parties or dinners.

    The best of the best in our industry are feeling it, too. I promise it’s not just you and I hear it from nearly everybody I know. The world seems to be spinning just a bit too fast these days.

    What is one to do?

    I often tell people that in some ways it’s easier to build great companies in down markets. Greatness in execution stands out more and doesn’t get drowned out by the inevitable over-funding of one’s competitors. And as I like to say, “In a strong wind even turkeys can fly.” But as entrepreneurs you don’t get to sit these years out and as investors we don’t get just let a few years pass and return back to the market. One needs to be in during bull markets and bear markets.

    In some ways having seen these trends before and being a bit more mature (code for I’m 47) I think I feel just a little bit less pressure than I did when I was younger. I feel more comfortable in my skin and accept that I can’t return every email, I can’t take every startup pitch, I can’t attend ANY demo days (did I mention I don’t like demo days?), I can’t be at every great out-of-town meetup and I certainly can’t “chuck in money to every party round.”

    Yet through all of these I meet teams that are just hard-wired to be a little bit more focused and insular than the rest of the field and it shows. The other day I was with the founders of Vidme – Warren Shaeffer and Alex Benzer – who are two of my most favorite founders to work with almost precisely because their behavior is antithetical to the frenzied market behavior. vidme

    We were discussing whether they were going to attend one of the biggest conferences in the video sector this year where many of our industry’s startups spend tens of thousands in attendance fees, sponsorships, parties and transportation. They simply said, with shrugged shoulders and without trying to make a big deal about it

    Yeah, we think about going every year. But honestly 10 extra hours in the office each day we would be there is way more productive. Right now we’re shipping code at such a frequent rate and our organic growth has been so strong that we don’t think it would be a good use of our time to attend.

    I know that sounds kind of obvious and many readers would say, “duh” but I promise you it’s much harder to live by these principles when everybody else is doing the opposite. I really don’t understand why so many first-time entrepreneurs are becoming “mentors” or “advisers” to other startups when that is a distraction to your own success.

    Do less

    My general advice is to do less.

    Easier said than done. Do less. And do the things that you ARE doing better and with higher quality. Have a shorter to-do list with more things that are in the “done” category. Do fewer business development deals but make the ones you do have more impact. Hire fewer employees until you’re bursting at the seems with work for the ones you have. Score a beautiful and functional office but rightsize it for today not 2 years from now.

    You don’t need to be hot. You need to be successful and those are two different things. Success often comes from doing a few things extraordinarily well and noticeably better than the competition and is measured in customer feedback, product engagement, growth in usage and ultimately in revenue growth.

    I offer the same advice for many of my friends who are newer VCs.

    I see many rush to have one’s name on TechCrunch alongside other famous investor names so some do more deals of less consequence. They are more deals to spread their bets but less consequence because your $250k alongside 10 other investors in which you have limited influence or ability to increase ownership or set direction is almost zero. Buying logos for your website will only work in the short term.

    Suster slide The yardstick you’ll ultimately be measured by is cash-on-cash returns and it turns out that’s a much harder thing to produce.

    The best investors do less.

    They take fewer bets, they don’t mind being counter-conventional and investing in things that make others scratch their heads. They don’t feel the need to do a deal in NYC today, India next week, SF the following. Markups do not equal success and sometimes equal zeroes for early investors.

    My best deals took a few years to mature to a point where people started telling me, “Wow, that’s an amazing story. They’re doing how much in SaaS revenue? You own how much?” Overnight successes, all. If by overnight you mean 2-3 years of people second-guessing the category followed by 2-3 years of steady growth, followed by large numbers categorized as overnight success and 9-10 years later a chance at an IPO.

    I know that I had things easier as a new VC because I came into the business in 2007 when the market was frenzied like today but an order-of-magnitude less so and the world wasn’t living in public. And with the crash of Sept 2009 – March 2009 the market cleared out created an open field in which to invest, go slowly, learn and let companies mature before they felt the need to be “hyped.” So I had a great apprenticeship period between 2007-2009 followed by a set of concentrated investments in 2009-2012 of which some already didn’t succeed and others have really blossomed into market leaders now reaping the benefits of product-market fit.

    snailThese days I find myself doing less. Not less work but fewer “things.” I have been spending a lot more time with existing portfolio companies as they all are trying to “level up.” I spend more time helping manage Upfront Ventures so that we as a firm are better prepared as a team to succeed vs. just any individual. I spend more time an executive recruiting of key talent for portfolio companies in which I’ve invested and more time in product reviews.

    I still plan to keep more normal pace of investment which is 1-2 deals per year. Year in, year out. But one could easily feel the need to do 3-4 deals per year given the sheer magnitude of what is out there these days but for a focused VC (*some funds do many more investments / partner but invest more in syndicates with strong leads and that model works, too) that number is just not manageable. Across our partnership we will do 10-12 deals per year and with 5.5 partners and now principals making investments that number is the right-sized fit for our firm.

    It’s true that my job requires more travel than I’d like. And it’s true that I still take a whole lot of first meetings with entrepreneurs. It’s also true that many companies I meet raise big rounds of capital within months of our meeting and I could easily feel like I’m “missing out.” A startup company’s success that is funded by other VCs isn’t missing out. I can’t do every deal. I can’t add value in each situation. And there comes a point where taking on too many new deals comes at the expense of the quality of my time with existing portfolio companies.

    So I choose to do less, more.

    SEE ALSO: Y Combinator has filed to raise a venture capital fund

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    Dropel Fabrics

    Staining a new shirt the first time you wear it can ruin your whole day. 

    One startup, Dropel Fabrics, wants to eliminate that feeling forever. 

    Using nanotechnology, the company has created a completely unstainable fabric that can be used in shirts, jackets, or anything else in danger of discoloration.

    Though it may seem like magic, it's not — it's science!

    The shirt is treated with a hydrophobic coating that prevents the liquid from absorbing into the shirt. That coating is made of a hydrophobic polymer that repels moisture of all types and causes it to bead up on the surface of the fabric.  

    dropel fabric

    Dropel ScienceWhile there are other startups with similarly unstainable fabrics, Dropel claims its product is different, because it actually feels like regular cotton, as opposed to a starchy piece cardboard.

    Bloomberg's , who tested a Dropel shirt, remarked on how the shirt felt "almost exactly like plain-Jane cotton."

    The shirt's potential for disaster-prevention is endless. Aside from keeping white dress shirts pure white, the stain-free nature of the fabric means you can get more wear out of your clothes. That's good news for business travelers with small carry-on luggage.  

    Along those same lines, the fabric could even be touted as sustainable, as the shirts require less washing, Dropel co-founder and president Bradley Feinstein told Time

    Bloomberg posits that the shirt may be a great summer staple, as it wouldn't absorb smells and sweat stains.

    But then, as Esquire pointed out, if the sweat isn't absorbed by your clothing, it will just stay on your skin, which makes for an uncomfortable experience and is antithetical to the philosophy behind most athletic sportswear, which include moisture-wicking proprieties to absorb the sweat from your skin.


    Dropel is using the fabric in its own men's clothing line, Kelby & Co, which has products available for pre-order. Shirts start at $80, a T-shirt goes for $55, and they sell a French terry jacket for $145.

    Time reports that, according to one client study, the fabric increases production costs by 5% but has the potential to spike sales by 40%. Seeing as Dropel is offering the fabric to other designers and clothing companies, this new fabric could become a business dress standard. 

    SEE ALSO: How to pick the perfect pair of shoes for every color suit

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    Casper_Bike MessengerBuying a new mattress is often an expensive, annoying experience.

    Casper, a New York-based mattress startup, wants to make buying a new bed as easy as possible.

    Instead of strapping a new, pricey mattress on to the top of your car or in a moving van, Casper has created a latex-memory foam bed.

    It folds up into a box the size of a set of golf clubs and fits in the back of your average car trunk. Casper's beds can also be shipped directly to your door nationally. For orders in New York City, Casper says it can deliver a mattress in under two hours.

    Casper CEO Philip Krim met his cofounders Gabriel Flateman, T. Luke Sherwin, Jeff Chapin, and Neil Parikh in a coworking space in 2013. "We starting talking about this idea of selling direct to customers with mattresses that we designed," Krim tells Business Insider. "Our goal was to see, one, if we could build the world's most comfortable bed, and then two, if we could sell it directly through our own site and efforts."

    Fourteen months ago, Casper launched its website. In its first 28 days of business, the mattress startup generated $1 million in sales. Casper sells one proprietary type of mattress in six sizes — twin through California king — ranging in price from $500 to $950.

    And on Tuesday, the company announced a $55 million Series B round of funding led by Institutional Venture Partners, with participation from Leonardo DiCaprio, Tobey Maguire, Adam Levine, Scooter Braun, and Pritzker Group Venture Capital. Existing investors, including New Enterprise Associates (NEA), Lerer Hippeau Ventures, Norwest Venture Partners, Vaizra Investments, SV Angel, Slow Ventures, and Queensbridge Ventures, also participated in the round.

    In total, Casper has raised $70 million in venture capital funding.


    The new round of funding will be used to allow Casper to expand into other "sleep products," Krim tells Business Insider — think pillows and blankets. It will also let Casper expand internationally.

    In addition, Casper has recently dipped into editorial, too. The startup launched a magazine called Van Winkle's, built around the topic of sleep. Gawker founding editor Elizabeth Spiers is the publication's editorial director.

    Since launching 14 months ago, Casper has sold $30 million of mattresses in the US and Canada. The company pegs its current run rate at around $100 million. Its team numbers 75 people (and growing, Krim says), and the majority of its employee growth has happened over the past 6 months.

    "Demand has wildly exceeded our expectations. Yesterday was our 14th month anniversary in business, and it's just been amazing," Krim tells Business Insider. "In our original presentation around our seed round, I think our goal was to have 2,000 customers in our first year. As of this month, 14 months in, we're over 50,000 customers."

    SEE ALSO: This startup is getting frat guys across America to wear short shorts — and they love it

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    Screen Shot 2015 06 23 at 5.22.41 PM

    Palantir is raising $500 million at a valuation of $20 billion, according to a report by Buzzfeed on Tuesday.

    The new funding would make the secretive data analytics company the third highest-valued startup in the US, after Uber (around $50 billion) and Airbnb ($24 billion). Palantir has raised $1 billion so far, according to Crunchbase.

    Founded in 2004, Palantir has the US government and Wall Street financial firms as its clients. Its cofounders include billionaire investor Peter Thiel and Joe Lonsdale, who's now leading the venture capital firm Formation 8.

    Despite its high-profile brand, Palantir has remained largely low key with regards with its business. But according to Buzzfeed, its business is growing at a strong pace, and it has more than $1 billion in cash on its balance sheet.

    Palantir's technology makes it easy for non-engineers to sift through massive amounts of data and get meaningful results. According to a report by TechCrunch in January, users can query data with natural language and get results in real-time. For example, LAPD detectives have used it for their investigations, while financial investigators used it to track Bernie Madoff's Ponzi scheme.

    Other use cases include the Pentagon tracking bomb deployment patterns, and the Marines going through fingerprint data to find DNA samples. At least 12 government agencies, including the CIA, NSA, and FBI were Palantir clients as of 2013, the report said.

    SEE ALSO: Hot VC firm led by Palantir cofounder plans to spend $100 million in an area long-neglected by investors

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    NOW WATCH: Forget the Apple Watch — here's the new watch everyone on Wall Street wants

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    Musixmatch CEO Massimo Ciociola

    Italy isn't traditionally thought of as part of Europe's tech cluster, but it has a growing collection of startups creating products and services that are used around the world.

    Here's a list of some of the hottest startups on the scene right now. 

    11. BeMyEye — lets you earn money as a mystery shopper

    BeMyEye is a crowdsourcing site that lets retailers pay people to check stores and act as mystery shoppers. The company operates in Italy, Germany, France, and the UK. Retailers can publish a job on BeMyEye, and then local users can fulfil the role of mystery shopper and check out what's going on in the store.

    The company was started by former Motorola employee Gian Luca Petrelli in 2011, and has raised over $2.8 million in funding from Capital Bancorp, RedSeed Ventures, Pietro De Nardis and 360 Capital Partners.

    • Total amount raised: $2.8 million
    • Headcount: 38

    10. Circle Garage — the touchless smart watch

    Circle Garage is an Italian startup that produces hardware products. Its current product is the Hiris, a wearable device that sits on your wrist that you don't actually need to touch. Instead, you just have to wave your hand over the watch screen in a certain way for it to understand what function you want it to do, which makes it useful for people like snowboarders who have to wear gloves. The Hiris has raised over $87,000 on crowdfunding site Indiegogo, which is over its target amount.

    • Total amount raised: Unknown
    • Headcount: Eight

    9. MoneyFarm — tailor-made financial advice

    MoneyFarm is a Milan-based startup that can provide tailor-made financial advice. It helps customers create a portfolio of funds, and lets users track investments over time.

    The company has received $5.6 million in investment from investors including United Ventures, Jupiter Ventures, Principia SGR, and Vittorio Terzi.

    • Total amount raised: $5.6 million
    • Headcount: 28

    See the rest of the story at Business Insider

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