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The latest news on Startups from Business Insider

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    mark suster interview 2

    Previously, I wrote a post about “the politics of startups” in which I asserted that all companies have politics, which in its purest sense is just about understanding human psychology.

    I think as a tech industry we have bred a culture that places more emphasis on product excellence than managing human behavior. Of course it makes no sense to have great people management and a crappy product. But I would posit that in order to sustainably build great products in an intensely competitive industry with skills shortages – people management is one of the most critical soft skills organizations need.

    I think it’s what Sheryl brought to Facebook when the young Mark Zuckerberg lacked in terms of his age, maturity and probably his lack of inherent people management skills by that phase of his life. The lack of team cohesion and respect for individuals has probably been one of the biggest weaknesses of Zynga – at least from nearly EVERY employee I’ve ever talked to who worked there.

    Yet talk with people at Twitter these days and many seem to feel like they are part of a movement – and that doesn’t just come due to product success.

    Nowhere is the politics more difficult than with co-founders, which is why for years I’ve spoken publicly about “the co-founder mythology.”

    Of course we all go into businesses expecting to be aligned with our co-founders but over time life changes. One founder has more risk tolerance and the other wants to be conservative. One wants to build a company that will be around in 10 years – financial outcome be damned! – while the other might want a quick sale and pocket some bucks while the tech market is hot.

    Those are the easy cases.

    I have observed from close range many more difficult factors:

    • A co-founder who go through long periods of drinking excessive alcohol
    • A co-founder who started by working hard but gets sucked into the tech party circuit and has more interest in socialize than building cool shit
    • One who wants to commercialize his product and start charging while the other prefers to not charge
    • One founder who gets more attention from a company’s success while one feels slighted and becomes jealous and resentful

    At the risk of sounding like a broken record, it’s why I believe executive coaches are so important for startups who have the financial resources to afford them.

    Zynga FarmVille Employee Headquarters

    I learned these lessons at a very young age and they etched permanently into my psyche. Anybody who follows this blog knows that my mom was the most influential person on my entrepreneurial career. At a young age I watched her open a bakery, which in the early 80’s was ahead of its time in serving croissants, gourmet coffee and high-end, homemade cakes, cheesecakes and french pastries for our small town of Sacramento, California (Carmichael, if you know the area).

    She started it with a partner, 50-50. They were close friends, lived down the road and members of our synagogue. We were roughly the same age as their kids and hung out a bit.

    And then for whatever reason they had different outlooks about the future of the business and with a 50-50 partnership had very limited ability to deal with the issues you all face:

    • Who should stay and who should go?
    • What should the financial settlement be for the founder leaves be? Cash now? Equity for the future?
    • What mechanisms exist for mediating if you can’t come to a consensus on these issues?
    • If you are the person staying how resentful will you become working your arse off for equity that your co-founder who leaves will get value from
    • etc.

    And it is all the harder because if you’ve invested 3-5 years in a business already and can’t agree how to separate you could literally throw out years of hard work on venture where the future is insolvable. I see it all the time.

    In my mom’s case she lost a friend permanently that made it awkward in our social interactions in the small Jewish community in Sacramento. I really never pried into the details of why they had a falling out, how they solved it and what the consequences were but as a kid my observation was that it wasn’t pleasant.

    I have seen it first-hand in my VC career many, many times.

    And, yes, it is politics at its purest.

    I worked with two co-founders years ago who knew each other well. When they started their company of course they had to pick one to be CEO and the other to have a different title. In this case it was Chief Product Officer. But they were “the two amigos” and agreed to kind of run everything together.

    That worked for two years but then the tensions began. The company hadn’t performed well financially and need to make changes. It either needed to get more aggressive in pricing, pivot to a new business or business model or raise more capital (and take the dilution) in order to have more time to figure things out.

    The pressure and the years mounted and I could see strain in the relationship. We sat down the three of us.

    It came out in our group discussions that the CPO resented the CEO. He felt that any time there were tech events, tech conferences or press it was always the CEO who got to attend and got his name in the press when it was supposed to a partnership. He felt the CEO was willing to “sell his soul” for revenue and wanted things to be more pure.

    The CEO felt that the CPO had gotten lazy and unconfident. He wanted more ability to push the product & engineering teams harder – he was, after all, the CEO. But their co-founder status didn’t really allow it. He felt he was on the hook for company performance without the control he needed to deliver it.

    We discussed it as a group. Sort of “marriage counseling for founders” and agreed remedies. I was very impressed with their maturity in being able to talk out loud and openly about their feelings and why they felt they weren’t working well together.

    One founder wanted to keep their salaries very low to show solidarity with investors knowing that the business wasn’t working – the other fight financially strapped and didn’t want to make the sacrifice. There were cultural challenges across the board.

    They created a new product idea that they thought could get them out of their economic funk. The idea came from the CPO and they both agreed that it would be good for the company and for their relationship. The CPO could be more of the “visible success” of the company if it worked and could feel like he made more of a difference.

    They launched. Like most launches they had some success but it wasn’t conclusive.

    sheryl sandberg

    It’s the norm and why I tell people, “Stop Trying to Catch Lightning in a Bottle.

    CPO gave up on the product and wanted to shut it down. CEO thought, “This is just the first hurdle! If you give up after this you’re not an entrepreneur. It was a good idea – we should see it through!”

    This set up the straw that broke the camel’s back.

    We sat down for the third or fourth time for resolution. It was clear that this was irreconcilable – someone had do go. They both were willing to leave or willing to stay. We hashed out a compromise agreement economically and the CPO left. Again, I was blown away with their maturity in dealing with this and separated as peacefully as c0-founders can.

    The CPO went on to found his own company and the CEO went on to grow this business into a success that is now doing North of $25 million in annualized sales.

    Of course I’m sure they both look at the past and wish they would have made different choices. The CEO worked his arse off for years created value that would be captured by the now-elsewhere CPO. The CPO probably wished he could have stayed and run the original company which was more successful than his new company.

    Regardless, the situation worked out for both in the end. This is the exception, not the rule.

    If you struggle through similar issues – which means nearly all of you – please consider how and when to bring in help, to embrace mediation. It’s hard to be open with your co-founders without somebody helping to broker the conversation. In many cases it’s easier if this person isn’t a board member or VC unless you have an extremely close or trusting relationship with them. You want to be able to be open without your board members losing confidence in your future.

    Sweeping the issues under the rug and they will fester and pop out down the road when you have invested even more time, money and energy in your businesses.

    Elie Seidman wrote in the comments section of my blog post on politics at startups

    My father said to me early in life: “definition of politics – two people in a room”

    That really resonated with me. Meaning – politics starts with your co-founder. Make sure you continually pay attention to this most important of human relationships in your business. Nurture it. Challenge it. And mediate when you must.

    SEE ALSO: Mark Suster talks raising VC money

    Join the conversation about this story »

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    uber travis kalanick

    There used to be a time when a $1 billion valuation was considered a massive success for tech startups.

    Then that threshold rose to $5 billion, and then $10 billion.

    Looking at recent media reports and The Wall Street Journal's "The Billion-Dollar Startup Club" list, there are now over 100 "unicorn companies"— companies with $1 billion+ valuations. There's a growing number of "decacorn" companies, or startups with $10 billion valuations.

    Now, there's a group of startups worth $20 billion or more. Here are the relatively new, private tech companies that are worth tens of billions of dollars — or that will be very soon.

    No. 5: Snapchat

    Valuation: $16-20 billion

    CEO: Evan Spiegel

    Founded: 2012

    What it does: Its photo-messaging app allows users to send photos and videos that automatically disappear after a set period of time. 

    Total funding: $1.2 billion

    Notable investors: Yahoo, Kleiner Perkins, Benchmark Capital, Lightspeed Venture Partners, Coatue Management, SV Angel



    No. 4: Palantir

    Valuation: $15 billion, but $500 million in new funding could bump up its valuation to $20 billion

    CEO: Alexander Karp

    Founded: 2004

    What it does: Palantir is a software and services company that specializes in data analysis. Some of its biggest clients are government agencies like the CIA and the FBI.

    Total funding: ~$1.5 billion 

    Notable investors: Founders Fund, Tiger Global Management, Glynn Capital Management, Jeremy Stoppelman



    No. 3: Airbnb

    Valuation: $24 billion

    CEO: Brian Chesky

    Founded: 2008

    What it does: Through its app and website, Airbnb provides a marketplace for people to rent out rooms or their entire homes to other people. 

    Total funding: ~$1.8 billion, pending a fresh $1 billion round of funding

    Notable investors: SherpaCapital, T. Rowe Price, Founders Fund, CrunchFund, Sequoia Capital, Andreessen Horowitz, DST Global, General Catalyst Partners, SV Angel, Greylock Partners



    See the rest of the story at Business Insider

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    wework foundersWeWork, a four-year-old startup that divides up big, rented office spaces, subletting them to startups and other businesses, is raising a new round of funding that could value the company at $10 billion, Bloomberg reports.

    WeWork's December 2014 Series D round of funding valued the company at $5 billion, making it among the most valuable private tech companies in the world.

    In total, the company has raised $568.9 million in funding from T. Rowe Price, Benchmark Capital, and Wellington Management.

    Sources familiar with the matter told Bloomberg that WeWork's new round of funding could be announced as soon as this week.

    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.

    SEE ALSO: THE SILICON VALLEY 100: The most amazing and inspiring people in tech right now

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    kid swing mom daughter

    Long hours, hackathons on the weekends and staying up all night "crushing it" have become baked into the parts of startup culture.

    Even some of the perks, like free dinner in the office or beer after work, double as team-building tools and way to keep employees in the office later.

    A free burrito isn't great though if you want to pick up your child from school then hear about their day at the dinner table.

    Bryce Roberts, a venture capitalist for O'Reilly AlphaTech Ventures, sparked the debate when he asked on Twitter last night: "what message does early stage startup culture send to parents with kids? honest question for those wearing both hats."

    What followed was a great debate, from both male and female tech workers, investors and executives, about what startups are doing to family life — and whether it's driving away some parents from that stage of company.  (The conversation is still ongoing, so I recommend tuning into the whole thing here.)

    Some entrepreneurs immediately came forward to explain how they are valuing parenting in their culture. Anil Dash, the  co-founder and CEO of ThinkUp, showed how it's listed on the company website as a core value: 

    Dad debate TwitterDad debate Twitter

    Tristan Walker, of Walker & Co, also said his company made it a priority and then follows through on it so it's more than just words.

    Dad debate Twitter

    While Dash and Walker might be good examples, many participants bashed companies that touted being family-friendly, only to ask employees to come in on weekends or stay late. 

    Dad debate Twitter

    Former Foursquare executive Alex Reinert believes the situation for parents employed by startups is "generally not good" and that there is often an "unspoken disapproval" against them in their organizations. alex reinert parenting startups

    It's not just bad for the working parent either. Former Googler Marc Hemeon says startups are also "brutal" for spouses and children.

    family startup debate

    Some recommended looking closely at health insurance policies, and whether they extend to dependents or not, as a good indicator when you're choosing a startup. Many parents responded that they just set strict work schedules, and then log back on for a "3rd shift" after the kids go to bed.

    Thomas Goetz, co-founder and CEO of Iodine and formerly of Wired, said he thinks a startup's attitude towards parents likely depends on whether founders have kids or not, and even then admitted it was still hard to make time. Part of it, he said, was the notion of moving fast and "going for the kill."

    Dad debate TwitterDad debate Twitter

    In the end, there are some who have found the balance to be tipped for their kids before anything else.

    Screen Shot 2015 06 24 at 2.04.18 PMScreen Shot 2015 06 24 at 2.04.28 PM

     Do you have stories to share about being a parent and managing your time at a startup? E-mail Biz Carson at bcarson AT businessinsider.com.

    SEE ALSO:  9 over-the-top perks that will make you want to work at these tech companies

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    Lost My Name

    Google Ventures has announced that it is investing in London-based startup Lost My Name, TechCrunch reports.

    Lost My Name creates personalised books based around a child's name. The books are created and ordered online, then sent out to printing partners around the world. The high-tech approach makes it cheap to product and deliver the books.

    TechCrunch reports that Lost My Name is raising a $9 million Series A valuation lead by Google Ventures, with Greycroft, The Chernin Group, Allen & Co, and Cris Conde also participating.

    Lost My Name says it's going to use the money to expand to the US, bringing its personalised books to an American audience.

    The investment in Lost My Name is the second Google Ventures announcement today. It has also invested in another London startup: Yieldify.

    Join the conversation about this story »

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    Screen Shot 2015 06 24 at 2.45.00 PM

    The US is leading the world in fintech investing.

    Again.

    Have a look at the chart, provided to Business Insider by Accenture and the Partnership Fund for New York City.

    The rate of the value of startup financings rose nearly 200% from 2013 to 2014, substantially outpacing growth elsewhere in the VC market.

    This might not come as a surprise. From Bank of America to Wells Fargo to Capital One, big Wall Street firms are out to defend themselves from an army of startups looking to capture their business.

    The largest percentage of the investments being made by big banks are going into the payments portion of the fintech sector.

    Big rounds were closed for payments startups including Stripe and Square last year, the report notes. But there are plenty other of deals in the payments space that captured both banks' investment dollars, as well as top venture firms.

    There are plenty of lending startups getting funding, as well. Banks aren't able to lend as much as they were pre-crisis and in recent years startups have emerged to take on student loans and other types of financing. 

    The graphic below illustrates what kinds of companies in the US received how much in 2014.

    Screen Shot 2015 06 24 at 4.16.22 PM

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    Bastian Lehmann, Postmates CEODelivery and logistics startup Postmates has raised $80 million at a valuation north of $400 million, the company announced Thursday.

    The new round of funding, led by Tiger Global Management, will be used to expand into deliveries beyond just food, and to introduce a new service that charges customers $1 each for deliveries at peak hours, CEO Bastian Lehmann tells The Wall Street Journal.

    Previously, the company raised $58 million from investors including Spark Capital, AngelPad, and SoftTech VC.

    Postmates is part of a competitive group of on-demand delivery services. One of its New York-based competitors, WunWun, sold to startup Alfred earlier this month. But one thing that makes Postmates stand out is its dedication to delivering goods in under an hour. Another is its partnerships with high-profile companies.

    Earlier this year, Postmates signed a partnership with Chipotle, which would allow it to deliver Chipotle food in the 67 markets where it operates. Starbucks is another Postmates partner— starting in Seattle, the company will deliver your coffee for you, on-demand.

    Postmates is growing like crazy: it took 116 weeks for the startup to reach 500,000 cumulative deliveries in the US, but it only took 20 weeks to achieve the next 500,000 deliveries, and just 10 more weeks for the next 500,000. Some of its markets are individually profitable, Lehmann told the Journal, but the company as a whole is not.

    With the news of the new infusion of capital, Postmates also revealed some new stats: the company has completed 2.8 million deliveries across 28 markets; its gross profit is on track to grow by more than 10x in 2015, compared to last year; and the company now has 13,000 Postmates doing deliveries.

    SEE ALSO: The hottest delivery startup out of San Francisco is growing like crazy

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    bob kocher

    There's a lot of money sloshing around Silicon Valley for new startups, but founders are apparently lying to compete for a larger chunk of it.

    Dr. Bob Kocher, a partner at Venrock Capital who specializes in healthcare IT companies, told The Information's Reed Albergotti that "a third of the presentations he sees include a 'complete mistruth.'"

    Kocher used the example of a startup claiming to work with healthcare giant Kaiser Permanente, but when Kocher performed his due diligence, he found out the startup had only talked with one player in the group.

    He says that this is a result of the easy funding available now — startups are getting a lot more interest from investors, so they don't have to be quite as forthcoming.

    At the same time, venture capitalists are finding new ways to perform due diligence beyond looking at spreadsheets and slide decks. James Cham from Bloomberg Beta said he was recently invited into a startup's internal chat room to check out the company:

    SEE ALSO: Some start-ups are brutal to employees with families

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    Lars Rasmussen

    Aside from his infectious enthusiasm, the first thing you notice about Lars Rasmussen is his hair.

    His self-described "merman" look was all part of his grand send-off from Facebook.

    Rasmussen worked there for more than four and a half years, before deciding to leave in April.

    He had been the engineering director of the team that created Facebook for Work, the company's nascent enterprise product that's currently being tested by a handful of outside companies. 

    "I loved working at Facebook and it was an incredibly difficult decision to leave because we had just announced Facebook for Work back in January and it was starting to pick up steam," he says. 

    WeavBut, Ramussen couldn't resist the pull of an interactive music idea that he'd been working on as a side-project with his partner, Elomida Visviki, for months. 

    So, he hatched a clever plan for a proper goodbye.

    For his last day, he died his hair "Facebook blue" and took over for the normal office barista, serving drinks to his coworkers in the London office for the day. 

    "By making the coffee, I got to make sure that I would have a chance to say goodbye to everyone," he says. "Plus, now, if the startup thing doesn't work out, I have one more marketable skill."

    His last day was near the end of May.

    Nearly a month out, his startup Weav is in closed beta, and Rasmussen says he expect that to continue for the next several months. The idea is to create an app where music can be sped up or slowed down to reach any desired tempo.

    The team created both mixing software for musicians and a player that can be embedded in third-party apps. He envisions it being used in a lot of different ways, but most obviously by anyone doing a workout who wants their music to feel like it's moving with them.    

    Lars RasmussenWhen we talked to him today, his hair was a much lighter and brighter shade, but still very vividly blue. 

    When we asked about it, he made a confession.

    "I had so much fun with it, I re-did it two weeks later," he says with a laugh. "It's the beginning of the 'Blue Period' I think." 

    (Also, he clearly learned something from his Facebook barista experience — on LinkedIn, he lists himself as the cofound and "chief espresso officer" at Cute Little Apps, the name of the parent company that launched Weav.) 

    Weav isn't Rasmussen's first startup experience. Before Facebook, he spent more than six years at Google, after it bought the company Where2 Technologies that he had started with his brother. Where2 became the basis for Google Maps.

    SEE ALSO: Meet the former Apple engineer who designed two apps every iPhone owner has probably used

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    KrisHagermanNEW

    Oxfordshire-based cyber security company Sophos has announced that it will go public at a valuation of £1 billion ($1.6 billion,) making it the UK's newest tech "unicorn,"The Financial Times reports.

    Sophos is a cyber security company that develops and sells software and hardware designed to keep businesses and their information safe from hackers.

    Products sold by Sophos include encryption tools for businesses, as well as anti-virus tools and remote support programs.

    Giant publicly listed tech companies are rare in the UK. The Financial Times points out two examples, though: Chip maker ARM, and accounting software company Sage. 

    Sophos says that it plans to raise $125 million when it floats on the London Stock Exchange on July 1.

    The company told TechCrunch that it's going to use the money "to reduce overall indebtedness and provide the company with greater financial flexibility to drive the future growth of the business.”

    Join the conversation about this story »

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    Malika Watler

    On Thursday night in San Francisco, Cory Levy, co-founder of the One app, held a crazy event for 3,000 20-somethings called "Internapalooza."

    The fourth floor of the Parc55 hotel was filled with backpacks, body odor, and tech t-shirts, both being worn and being handed out.

    While some were interns there to catch up with college friends, others ambitiously piled into the middle of the room and spent their networking time circulating résumés, hoping to impress the recruiters on hand from the biggest companies in the Bay Area. (Google being the notable exception).

    We decided to check out the scene and talked to more than two dozen attendees. 

    Here's what they were talking about:

    Their dream internships: Mostly Google

    When we asked people what company they would choose as their "dream" tech internship, we got a whole bunch of different answers, including Apple, Facebook, Adobe, VMWare, Uber, and (its rival) Lyft.

    "It's not about a company name, but where you can do something you're passionate about," one rising junior business major said.

    "Palantir, Uber, Airbnb — any of the unicorns," a 21-year-old college dropout who had interned at Apple and Wattpad told us.  

    One ecstatic Carnegie Mellon student told us that he was down to the final round of interviews for Google, when he got the good news: "I have an internship at Apple this summer — it's been my dream since the fourth grade." 

    However, the one company that got more votes than any other: Google. "They just have the best combination of everything," one rising junior said. "For a technical, computer science person like me, they have such diverse options."

    "I want to work with big data," one PhD student said, "And they have so much data that you can get your hands dirty with."

    That same student, who currently has an internship at Genentech, told us he was disappointed that Google hadn't shown up to the intern fair. But he also had a theory as to why: "They have so many candidates, they probably don't feel like they need to come," he said with a wry smile. 

    Perks: "Dropbox has the best catering"

    You can't talk to a bunch of tech interns without asking about the perks.

    While people raved about product discounts, free food and Uber credits, the most unique story came from a rising senior who had spent a summer at a cloud-based health records company in Boston, Athenahealth. The company let Top Chef film an episode on its campus, and managers brought their interns to taste all the food and be part of the show. "You definitely don't expect your tech internship to get you on TV," he said.  

    "Ask anyone who's been there: Dropbox has the best catering," one intern said. "If you don't work there, you have to get your friends to bring you over for dinner at least once. It's amazing."

    A former eBay intern said that last summer the company flew everyone in the program from across North America to downtown San Francisco for an "intern conference" where they got to meet the CEO and have a late-night party on the roof of their hotel. Outside that event, the summer was filled with bowling nights, catered lunches, and Q-and-A sessions with execs. This summer, he's working at the eBay subsidiary StubHub. 

    The crazy-expensive cost of living

    We talked to several interns who had either moved to Silicon Valley for the summer or were trying to get settled here permanently. One German masters student said, "Of course, I wanted to move here. It's like Hollywood for tech people." 

    But it's expensive. Several interns received only housing stipends, rather than corporate housing, which can be hard in the tough bay area market.

    Malika Watler, a rising junior at Spelman College and an intern at EA Games, said she she was surprised at how expensive it was and ended up using her housing stipend towards renting out an Airbnb for the summer. 

    Trushitha Narla, an intern at Uber, first tried living in Berkeley to save on an apartment, but opted to eventually move into the city despite the higher cost of living.Trushitha Narla

    One Canadian intern wasn't quite as excited about living in Silicon Valley.

    "I always dreamt of living and working here until I actually started working here," he said. "Or maybe just because I'm in Cupertino. Without a car, it kind of sucks. And you realize we're in an area with a pretty limited world-view."

    Diversity: "San Jose is called Man Jose"

    A lot of interns said they wished Silicon Valley had a more diverse culture.

    Elias Ramirez, an intern at Panafold, said there was a lack of "clear lack of culture and diversity" in Silicon Valley tech. Trushitha Narlas, an intern at Uber, mentioned wanting to talk to more non-tech people in her every day life. "They just want to talk about programming," she said.

    They also want to see diversity outside of the big Ivy League schools. Daniel Diaz, an intern at Uber and a rising senior at Cal State Monterey Bay with Ramirez, said he hopes tech companies start exposing more of these opportunities to smaller schools. (He got hired because Uber came to campus to recruit.)

    There's also the gender-thing. Gautam Das, an Apple intern, said there's very few girls around and the culture is much more-tech centric compared to Madison, Wisconsin, where he goes to school.

    "San Jose is called Man Jose," he said.

    Gautam Das

    They had to send out LOTS of applications

    Although everyone agreed that tech internships are incredibly competitive, we heard a very wide range for how many applications the hopefuls had sent out. One graduate student sent he sent out 100, while another only completed 5. They were currently working at Salesforce and Apple respectively. The average seemed to be between 20 and 30.

    Although some of the kids we talked to were still desperately searching for something to do for the summer, two students said they'd had their spots locked down since late last year. 

    One thing interns don't want to talk much about: how much money they are making. Salaries varied between $6,000 and $7,500 a month, but many stayed tight-lipped on how much they're pocketing.

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    Sam Altman

    Y Combinator President Sam Altman looked onto the room of 3,000 interns at Internapalooza in San Francisco on Thursday night, and delivered good news — to only one person.

    "Someone in this room I am very confident is going to found a multi-billion dollar company that will change the world in a very big way," Altman said.

    "And 90 percent of the people in this room will end up with a career they somehow regret," Altman continued.

    He said many of the high-achieving students in the audience repeat the same steps: go to Stanford, get a fancy internship from Uber, graduate and work at Facebook, then become a venture capitalist at Andreessen Horowitz.

    "Here's the mistake: It looks like it's the same thing and you're just on this train stopping at these prestigious stations," Altman said. "And you've done that and it's worked for you so far, so you keep doing it."

    The 90 percent of attendees will end up regretting their careers because they don't take the few years it takes to figure out what they like. Instead, people are stuck chasing names of companies or job titles rather than realizing what they want to do or or the problems they want to solve.

    "Try a lot of different things. You only have to be right once, but you have to be really right that once," Altman said. "I don't think people spend nearly enough time thinking about what they like and what they're good at."

    As Y Combinator's president, Altman does have a bias towards people starting their own companies. 95 percent of Internapalooza attendees said they wanted to start their own companies, but Altman cautioned them against setting themselves up for failure by rushing into it.

    "Startups are really hard and you should wait until you get yourself a reasonable chance," Altman said. "You want a really good idea, and really good co-founders that you know really well and you should hold yourself to those."

    He's told plenty of people to go work at Uber and Facebook instead, he said. It's about not hitching yourself to the prestigious train because you haven't found a way off of it, but setting yourself on a trajectory that leads to no regrets.

    "If you have the opportunity to go be an early employee at a company that's just going crazy and you believe it's the next Facebook or Google, you should go join that company," Altman said. "If you have a startup that's keeping it up at night because you think it's so great, then you should do that."

    SEE ALSO: Silicon Valley interns get paid up to $7,500 per month — here's what they gossip about

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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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    stock traders panicWhether you want to call it a bubble or not, the tech industry is booming. At last count there were 114 privately held companies with valuations of $1 billion or more — often called unicorns. Some, such as Uber and Airbnb, are worth tens of billions of dollars. 

    For the tech industry, these are heady times. But economies and industries usually move in cycles. At some point the party has to end. 

    We polled several tech industry insiders and investors to find out the biggest risks that they see out on the horizon.

    Here’s what they said:

    1. Something happens that “breaks” the sharing-economy business model

    A ruling from a little-known California labor agency sent shockwaves through the tech sector earlier this month. The agency said a former Uber driver should have been classified as an employee, not an independent contractor, and that Uber owes her $4,000 for expenses.

    The ruling applied only to one woman and Uber is appealing, but it underscored a potential vulnerability in the foundation of so-called “sharing economy” startups. Many of these companies are expected to overtake entire industries, premised on a business model that doesn’t involve the costs borne by incumbent players, such as hiring full-time employees and paying for worker’s compensation and social security. 

    But if they're forced to treat their workers as employees, their cost structure could totally change. That could potentially “break the model” for sharing economy startups, the thinking goes.

    “If you have to make these people employees, those businesses are less valuable than before,” says one hedge fund manager. 

    France taxi protest uber flipped Other richly valued sharing-economy companies such as Airbnb, TaskRabbit, and Lyft could also face these kinds of sweeping regulatory or legal risks.

    That said, regulatory changes often turn out not to be as severe as expected.

    In the early days of ecommerce many people worried that the internet startups would be toast if they had to make consumers pay a sales tax, as their brick-and-mortar competitors did. But years after Amazon began making consumers pay a sales tax in many US states, people are still buying stuff on the web.

    Similarly, the benefits of some of the new sharing-economy services are so great, consumer demand will continue to be high even if prices go up as these companies have to pass new costs along to customers.

    Of course, if a sharing-economy service is banned outright, as French President Francois Hollande recently said Uber should be, that presents a bigger problem. 

    2. Public market investors get spooked

    The proliferation of “unicorn” tech companies has to a large degree been fed by the money pouring in from new types of investors.

    These are not the venture capitalists that typically invest in tech startups in early stages. They are hedge funds and mutual funds hunting for big returns in a zero-interest-rate market.

    But those investors could easily get spooked by a major shock in the broader macroeconomic or geopolitical scene — say the eruption of a major conflict, or a sudden downturn in a major economy. 

    Goodwater Capital cofounder Chi-Hua Chien lays out one possible scenario: “My guess is that some macro shock outside of our ecosystem will be the driver of a change — geopolitical conflict, Greece, China, ISIS, something we can't even anticipate. When the public markets have a correction, the hedge funds and mutual funds will see their overall portfolios decline causing their illiquid investments in tech companies to instantly become a larger percentage of their overall portfolio than originally targeted. At that point, I expect to see many of them pull back from this market, focus on shoring up their public positions, and perhaps even seek liquidity for their illiquid private company investments.”

    The flight of public market investors would not only put an end to the big billion-dollar late-stage funding rounds, but could also have a ripple effect on earlier funding rounds that are critical to smaller tech startups, says Jeff Clavier, the managing partner of VC firm SofTech VC. Those at greatest risk would be the “high-burn companies that assume that there is a lot of cash available for top-line focused high growth.”

    3. Unicorns faceplant

    DigitasLBi unicorn OfficeWhen a high-flyer gets into trouble, people notice.

    And few companies have a higher profile right now than the tech-industry’s unicorns, particularly the companies with $10-billion-plus valuations like Uber, Palantir, AirBnb, Snapchat, Pinterest, and Dropbox.

    If one or two of these beasts stumble  — say, a new competitor enters the market and undercuts them on price or they suffer a big regulatory change — the enthusiasm for similar companies could darken.

    A big IPO flop could also cause problems.

    Many tech IPOs are priced low to ensure that the stock pops on the first day of trading. But investor sentiment can be a fickle thing. If a high-profile tech company were to actually trade down on its Wall Street debut, whether because of a sudden change in investor sentiment on the company or a shifting IPO market, investors might rethink their other tech bets.

    The public markets have proven to be harsher judges of web companies than private markets. Yelp, Twitter, and LinkedIn have all seen their stocks get punished in recent months as financial results and user-growth metrics have not satisfied public market investors.

    So many of the current unicorns are thriving in a world where performance and valuations are determined and measured differently than they would be in the public markets.

    “Right now it seems like anything related to the sharing economy gets these huge valuations. But then you look at the real world of companies that have actually had to get valued by the market … and it gets rocky,” says the hedge fund manager. 

    SEE ALSO: The tech industry is so insane, the comedy writers on 'Silicon Valley' can't keep up

    AND HERE'S ANOTHER ANGLE: The antitrust ruling against Microsoft was the top of the dot-com boom. History could repeat itself with Google

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    Lars Rasmussen

    Lars Rasmussen decided to leave his comfortable, fulfilling job at Facebook to dive head-first into a new startup for the same reason that a lot of founders do: Because he had an idea that he just couldn't get out of his head. 

    Rasmussen had been the engineering director of the team that created Facebook for Work, the company's nascent enterprise product that's currently being tested by a handful of outside companies. 

    But as he and his team hustled away on that, he and his fiance Elomida Visviki spent much of their time together working on a platform that could allow users to speed up or slow down music to reach any desired tempo. 

    "I found myself doing my day job and thinking about interactive music," he told Business Insider. "That's when you know that it's time to get out."

    So, Rasmussen bid Facebook farewell in April and threw himself into the startup, called Weav, full-time. 

    The company has created both mixing software for musicians and a player that can be embedded in third-party apps. Right now, the products are in closed beta, and Rasmussen says he expects that to continue for the next several months. 

    He envisions Weav being used in a lot of different ways, but most obviously by anyone doing a workout who wants their music to feel like it's moving with them. Similarly, a dance instructor could teach her students a new routine more easily with the same song, starting with a slower tempo and then moving up to faster speeds. 

    That idea might sound familiar: In May, Spotify announced "Running," a new feature that will play users songs based on how fast they're moving.

    Rasmussen doesn't to see this as a threat, but rather an indication of Spotify as a potential partner. Because Weav wants to integrate its technology into other apps, he envisions Spotify Running being filled with songs created by artists who used its music mixing software.

    The key right now is getting musicians to experiment with it. Dean Gillard and Matt Ward, two well-respected producers who have worked for Rihanna, Usher, and OutKast, among others, have already made new music through Weav. You can check out their track as well as several others made by  different composers on the company's Vimeo page.

    Rasmussen says the feedback so far has been good.

    "They've told us that we've added an extra dimension. We like the analogy that if they were painters, it's as if we've invented a three-dimensional canvas," he says. "The quality of the art is still up to the artist — we're not manipulating anyone's existing work — but we're providing a new way to deliver music to fans. And that's an exciting challenge."

    This isn't Rasmussen's first startup. Back in 2003, he and his brother founded a mapping company called Where2 Technologies that Google acquired a year later. The technology became the basis for Google Maps, and Rasmussen continued to work at Google for the next 6+ years before moving to Facebook. He's happy to be back in startup land. 

    "I had missed the different kind of intensity of that 'started-in-our-living-room' type of project," he says. "I kept myself a little in the startup world by doing some advising, and I felt myself a little bit envious when I talked to those guys. So, it was a tough decision to leave Facebook, but it was definitely the right decision. I haven't regretted it at all."

    SEE ALSO: Meet the former Apple engineer who designed two apps every iPhone owner has probably used

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    Greg Marsh onefinestay CEO.

    onefinestay — the London startup that lets people stay in expensive, serviced houses in cities around the world — just raised $40 million (£25.4 million) to expand to more cities across Europe.

    The platform lets people rent out upmarket homes to tourists, a bit like a posh Airbnb. The average rate is around $600 (£382) a night, all the houses and apartments are in trendy, expensive neighbourhoods, and onefinestay provides cleaning and linen services.

    But CEO Greg Marsh doesn't see the company as just an upmarket Airbnb — in fact he doesn't think onefinestay is even in competition with the US platform.

    He told Business Insider: "What we do is so much broader and deeper than just an internet site. You wouldn’t say Selfridges is an upmarket eBay. We’re taking responsibility for the entire experience of the customer."

    Marsh sees Airbnb and onefinestay as operating in totally different parts of the market, with Airbnb eating into the lower level of the hotel market while onefinestay targets high-end consumers. He adds: "Look at the traditional luxury hotel market — there’s not one hotel in every city, there’s lots of hotels. Some are really well run, others less so."

    One of onefinestay's rental properties on Bay Street, Los Angeles.But what if Airbnb decides to go upmarket and offer a similar serviced-home rental programme to high end travellers? Marsh shrugs this off, saying: "We were terrified at the beginning that there would be other people who would come in and crack this but the reality is I think it’s relatively hard to do this well, consistently and at scale.

    "You shouldn’t run your business looking over your shoulder and worrying about what someone else might do. What we look at is what our customers tell us. They come back in increasing volumes and they tell us they want to come back."

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    nest tony fadell

    If you need any more proof that Apple is full of insanely talented people, just consider some of the companies that its employees went on to start after leaving the company.

    Ex-Apple employees have launched companies that are innovating everything from cloud computing to connected home devices and shopping. 

    This is an update of a post originally written by Seth Fiegerman.

    SEE ALSO: Everything we know about the iPhone 7 so far

    Nest Labs, the company behind The Learning Thermostat, was started by the guy who created the iPod.

    While at Apple, Tony Fadell helped redefine the concept of a portable music player by developing the iPod. Fadell left the company in 2008 and later founded Nest Labs in 2010, a company that is redefining another product: the thermostat. Google bought Nest in January 2014 for $3.2 billion. 



    Andy Rubin, the founder of Android, originally started out at Apple.

    Andy Rubin started his career in the early 90s as an engineer at Apple. He later founded Android, an open source mobile software company, which was eventually bought up by Google. Apple later accused Rubin of drawing a little too much inspiration for Android from his time at Apple. Rubin left Google in October 2014 and is now working on his own startup incubator and venture capital fund. 



    Enjoy, a startup that wants to bring the Apple Store Genius Bar to you, was created by Apple's former retail chief Ron Johnson.

    Enjoy is a shopping platform that sells high-end electronic devices. But the real crux of the company that makes it stand out is its team of experts, which delivers products to you after you purchase them and sets them up for you. You can also book a session with an expert if you're having an issue with a device or simply need help learning how to use it. Ron Johnson, Apple's former vice president of retail, recently launched Enjoy in New York and San Francisco. 



    See the rest of the story at Business Insider

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    first round capital rob hayes

    On Monday, First Round Capital published a letter it sent to its limited partners about the state of startup investing. It was uncovered by Fortune's Dan Primack.

    According to New York's top startup investing firm, things are looking a bit unstable in the private markets. Specifically, First Round Capital notes that every nine days last year, a new startup received a $1 billion+ valuation, and that some of these so-called "unicorn" companies will be exposed as frauds.

    "We believe that some of them will be exposed as nothing more than horses with sticks taped to their heads," the firm's lead partner, Josh Kopelman, wrote.

    Early stage startups have gotten eye-popping valuations lately too. Kopelman says seed-stage valuations have increased 20% year over year over the course of the past decade. And with seed valuations soaring higher and higher, what would have been a 3X return for funds in 2007 is about a 1X return today.

    He likens the current startup market to a Black Jack table. Normally, odds are you have a 52% chance of losing if you play your cards right. But lately, the startup world feels like the odds are really stacked against investors and that 52% is more like 80%.

    First Round Capital isn't the first firm to sound the alarm. Benchmark's Bill Gurley has also said we're headed for a bubble and startup accelerator leader Sam Altman says startups are burning scary amounts of money right now.

    But this LP letter offers particularly good insight into the current frothy market, so it's worth reading every line. Buckle up!

    First Round Q1 LP Letter by First Round Capital

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    wework founders

    WeWork, a company that leases office space to startups, is now worth $10 billion, twice as much as it was worth 9 months ago. Is this a sign that the tech boom is turning into a tech bubble?

    Analyst Ben Thompson lays out the bear and bull cases for the company in his newsletter today.

    It's easy to see WeWork as a risky real-estate arbitrage play — it finds office space in hot markets while it's still relatively cheap, mainly by being an anchor tenant in new developments, then sells it at a markup to venture-funded startups. 

    When the flow of venture capital and other startup financing slows down or dries up, as it must eventually, that could put WeWork in a very tough spot. 

    More generally, commercial real estate is a boom and bust business. When the economy stumbles, landlords who were faced with waiting lists a few months ago suddenly struggle to find tenants and have to accept lower prices.

    But Thompson argues that WeWork may be a new kind of business because:

    • It's creating a community with a particular identity, not just renting space. 
    • It appeals to the "on-demand" mindset that a lot of startups and their employees enjoy with services like Uber and Airbnb (and even in cloud-based technology like Amazon Web Services and Salesforce). Instead of locking yourself into a long-term contract for space you may not need, WeWork lets the company retain a lot of flexibility to grow and shrink as your needs change.
    • It may seem expensive, but it lets you outsource the kinds of services that used to require a dedicated office manager. 

    business insider west san francisco wework new office 5268Business Insider is now a two-time customer of WeWork in San Francisco, and while the community aspect is nice — it's fun to work in a pleasant well-appointed office with a lot of other similar-minded startup employees and amenities like free beer on tap — it's Thompson's last two points that really resonate.

    Earlier this year, our previous landlord, TechSpace, couldn't guarantee any new space in time for the new employees who were starting soon. The fact that WeWork is expanding so fast — the space we moved to opened in June, and it's planning two more facilities in San Francisco — meant that they could accommodate us right when we needed it.

    The office management benefits are a little overstated — for instance, this WeWork facility did not include telephone land lines, so we had to come up with our own solution — but even so, we don't really need a full-time office or facilities manager for our 20-person office. I'm not sure that would be the case with a traditional lease.

    There are a couple other things I've noticed that make me positive on the company:

    • They pre-lease spaces before they're finished. Maybe this is standard practice, but both times we've rented WeWork spaces, we took hardhat tours before the space was complete. The final amenities — like desks — weren't added until a day or two before move in. Right now in this space, a couple floors are done, but the remaining floors are still being built out. This is great for WeWork's cash flow — it can use the first tenants to help fund the rest of this space's expansion.
    • Space is used extremely efficiently, with glass walls to make it feel bigger. Our current space covers significantly fewer square feet than our last one — and it's cheaper — but it holds more people. WeWork is able to do this thanks to extremely efficient use of space — there's no square footage wasted in alcoves or entryways, and nearly every wall and window has a desk in front of it. This could feel crowded, except every single wall throughout the facility is mostly glass. That light goes a long way.
    • Not just office space, but coworking space. In the last WeWork space we rented, there was a large common space reserved for on-demand coworking — customers could buy packages starting at $45 and rent a desk for a day. WeWork gives them a mailing address, Internet connection, and so on. This doesn't make sense for a fast-growing company that's already funded, but it's perfect for entrepreneurs working on an idea, contractors, or freelancers. Not every WeWork facility has this option, but many do.

    business insider west san francisco wework new office 5147

    Yes, real estate is risky business. And WeWork is dependent on the current tech boom.

    But if you believe that the startup landscape has changed forever — it's so much cheaper to start a tech company now than it was 15 years ago, thanks to Amazon Web Services and dozens of similar on-demand services — maybe WeWork is at the vanguard of a 21st century way of working, not just an arbitrage play.

    SEE ALSO: WeWork, which rents space to startups, is reportedly worth $10 billion — step inside and find out why

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    travis kalanick, ceo uber

    Uber is acquiring part of Microsoft Bing's mapping technology, including 100 of its engineers, TechCrunch's Alex Wilhelm reports.

    It looks like the main focus of the deal is Microsoft technology for collecting images.

    We've known for a while now that Uber is interested in building out its own mapping product, or otherwise acquiring talent to strengthen its mapping system.

    Currently, Uber relies on Google Maps technology for its mapping. But Bing's technology would help the company develop its own mapping software and data, which would help Uber's central driving business, but also its other logistics-related endeavors, including UberFresh, its food delivery service, and UberPool, its carpooling service. 

    In addition to losing roughly 100 data-collection engineers, Microsoft has also sold other assets to Uber, which includes a data site near Boulder, Colorado, plus intellectual property, cameras, and software.

    Last month, Uber reportedly submitted a $3 billion bid to buy Nokia's mapping product, Here.

    Uber making a bid for Here was an unusual move for the company, which hasn't made a lot of acquisitions. Even more fascinating, Wilhelm notes for TechCrunch, is the fact that Microsoft has said for years that it wouldn't sell Bing, although this isn't core search technology, but rather mapping technology that's under the Bing brand.

    Here's Microsoft's statement on the acquisition: "Over the past year, we have taken many actions to focus the company’s efforts around our core business strategy. In keeping with these efforts, we will no longer collect mapping imagery ourselves, and instead will continue to partner with premium content and imagery providers for underlying data while concentrating our resources on the core user experience. With this decision, we will transfer many of our imagery acquisition operations to Uber."

    And here's Uber's statement: "We’re excited about the talent and technology this acquisition brings. Mapping is at the heart of what makes Uber great. So we’ll continue to work with partners, as well as invest in our own technology, to build the best possible experience for riders and drivers."

    SEE ALSO: How a tweet turned Uber's first hire into a billionaire

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