Family Learning Center

Posts Tagged ‘Jason Calacanis’

Backupify’s CEO On Wooing Investors: "It’s Like Dating"

Here at ReadWriteStart, we’ve been following the Open Angel Forum closely as Jason Calacanis’ project moves from city to city bringing angel investors and worthy startups together in one room. The first event in Los Angeles was of particular success to Backupify, which provides backup for your online social network data, including Facebook, Twitter, Delicious, Wordpress, Gmail, Basecamp and many other services. Following the event, the company raised a Series A round of $900,000 from Calacanis, Chris Sacca, First Round Capital and a few others.

Sponsor

Earlier this week, CEO Rob May posted his take on the process of raising funding from VCs, which he likens to dating. According to May, pitching to VCs is not about forcing your idea down their throat and convincing them why they should invest in it; if a startup and a VC are meant to be, it will be more like love at first sight.

“They either like you and your idea, or they don’t. It’s like dating because your goal in dating is not to convince someone who is a bad match for you that somehow you are really a good match. That’s a recipe for divorce,” says May. “It’s really about finding the person that is naturally a good match. Same way with investors.”

One thing that May did much differently than other entrepreneurs seeking funding is that he approached investors without a business plan. While he doesn’t recommend this as a solution for every startup, he does find that in his case, not having a business plan did not really hinder his efforts.

“I sat in front of VCs who thought I was crazy for not having a business plan. I was asked ‘how can you run your business if you don’t have a written plan?’,” says May. “I also sat in front of VCs who said ‘glad you didn’t waste time writing a plan, because we wouldn’t read it anyway.’ It’s really more of an art, not a science.”

Another less standard practice May chose to include in his presentation at the Open Angel Forum was not a special slide on his pitch deck or a certain phrase; May drank a beer while presenting. Again, he doesn’t suggest this is a solution for everyone, but he uses it as an example of how to relax and “be yourself” when pitching to VCs. They are very experienced at talking to startups and any good VC knows how to spot when you are full of hot air, and they will call you on it.

“It’s never easy, not even when you have a good idea. That’s the point. That’s why so few people ever do it,” says May. “If you want to learn to raise money, the best thing to do is go try to raise money.”

Photo by Flickr user apol3.

Discuss

Read the whole story…

Can Entrepreneurs Be Made?

Silicon Valley investors often have a picture in their heads of the type of person who is worthy of funding: young, brash, stubborn, and arrogant. They believe that successful entrepreneurs come from entrepreneurial families and that they start their entrepreneurial journey by selling lemonade while in grade school. Angel investor and entrepreneur, Jason Calacanis said as much in his recent talk to Penn State students. And after meeting Wharton students, VC Fred Wilson expressed shock when a professor told him that you could teach people to be entrepreneurs. Wilson wrote, “I’ve been working with entrepreneurs for almost 25 years now and it is ingrained in my mind that someone is either born an entrepreneur or is not.”

Jason, Fred, and Silicon Valley VCs, I’ve got news for you: you’ve got it all wrong. Entrepreneurs aren’t born, they’re made. And they aren’t anything like you think they are. My team surveyed 549 successful entrepreneurs. We found that the majority didn’t have entrepreneurial parents. They didn’t even have entrepreneurial aspirations while going to school. They simply got tired of working for others, had a great idea they wanted to commercialize, or woke up one day with an urgent desire to build wealth before they retired. So they took the big leap.

We found that 52% of the successful entrepreneurs were the first in their immediate families to start a business — just like Bill Gates, Jeff Bezos, Larry Page, Sergei Brin, and Russell Simons (Def Jam founder). Their parents were academics, lawyers, factory workers, priests, bureaucrats, etc. About 39% had an entrepreneurial father, and 7% had an entrepreneurial mother. (Some had both.)

Only a quarter caught the entrepreneurial bug when in college. Half didn’t even think about entrepreneurship, and they had little interest in it when in school.

There was no significant difference between the success factors or hurdles faced by entrepreneurs who were extremely interested in entrepreneurship in school (and who likely set up the lemonade stands) and the ones who lacked interest. But entrepreneurs with extreme interest started more companies and did it sooner. Of the 24.5% who indicated that they were “extremely interested” in becoming entrepreneurs during college, 47.1% went on to start more than two companies (as compared with 32.9% of the overall sample). Sixty-nine percent started their companies within 10 years of working for someone else (as compared to 46.8% of the rest of the sample population).

What did affect their successes?  Education — but not the college they graduate from. In a different study of the 652 CEOs and CTOs of 502 tech companies, we researched the correlation between education and the sales and headcount of companies founded. We learned that the there was a significant difference between companies started by founders with just high-school diplomas and the rest. Education provided a huge advantage. But there wasn’t a big difference between firms founded by Ivy-league graduates and the graduates of other universities.

The education and training of entrepreneurs is something that the Kauffman Foundation has been researching extensively. Over the last six years, it has invested around $50 million on academic research to understand what makes entrepreneurs tick and what policies are most conducive to entrepreneurship and to construct data bases to permit analyses of these subjects. (Kauffman has also funded some of my research at Duke, UC-Berkeley, and Harvard.) Its VP of Research, Bob Litan, says that Kauffman has learnt conclusively that entrepreneurship can be taught. The key is to provide education at “teachable moments” — when the entrepreneur is thinking about starting a venture or ready to scale it. What entrepreneurs need isn’t the type of abstract course they teach in business schools, but practical, relevant knowledge.  That’s why Kauffman created a program called Fast Trac, which has trained 300,000 entrepreneurs so far.

One of the findings of Kauffman research is that of the appx. 600,000 businesses that are started every year, less than a fraction of 1% become high-growth “scale” businesses. These new firms, especially the “scale” firms, have added all of the net incremental jobs to U.S. economy since 1980 (about 40 million), and probably account for about 1/3 of GDP growth since then. So the key to boosting economic growth is to increase the number of successful high-growth startups.  After all, the growth rate of our economy is nothing more than the aggregation of the growth of our firms.

That is why Kauffman (which has a $2 billion endowment) is investing heavily in an ambitious new program called Kauffman Labs.  This aims to dramatically increase the ability of small businesses to become big businesses. The Labs program is built around a novel idea: that highly motivated individuals with “scalable ideas” can be recruited to be entrepreneurs and to be made successful, by surrounding them with a network of other experienced entrepreneurs; sources of money; and mentors. The goal is to educate entrepreneurs and surround them with a powerful network. This is like a Y Combinator on steroids.

Anecdotal evidence also shows that there are many more factors at play than that of genes. Note this BusinessWeek article about waves of spinoffs from Google. I doubt that all of these Google employees who are starting successful businesses were born with entrepreneurial genes. VC and former entrepreneur Brad Feld also blogged about how many of his frat buddies at MIT had become successful entrepreneurs. Were all of these people born to be entrepreneurs as well? I don’t think so. It is probably education, exposure to entrepreneurship, and networks that led these people to pursue the entrepreneurial path — which means that Kauffman Foundation may have hit on the right idea with Kauffman Labs.

The reason this topic is really important is that, as Wilson writes, “Venture Capital is a lot about pattern recognition”. The reality is that VCs like him make quick judgments about people based on the stereotypes in their minds. So, like the women that I wrote about in my previous posts, we may be disadvantaging another important segment of our population – a segment that is older, more humble, more sensible, and more realistic than the population that is getting all the attention (and the money).

Editor’s note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. Follow him on Twitter at @vwadhwa.

Read the whole story…

How Does Compete Get Its Web Traffic Data? At Least One Way Sounds Very Sketchy.

A month ago, Jason Calacanis went on a rant about why everyone should boycott comScore. He felt they were using sketchy tactics to bully people into their pay-to-play model for measuring web analytics. He also noted that their free competitors like Quantcast, Google, and Compete would soon eat their lunch. Both Quantcast and Google (Analytics) offer direct counting of pageviews (but even these methods can be abused). But you may wonder how exactly Compete gets its numbers? It appears, that some sketchy tactics are (or at least were) employed, as well.

We were recently pointed to this post from last month by Ben Edelman, a Harvard privacy advocate. In it, he details the data the Upromise toolbar collects and sends out. This toolbar is used by college students looking for savings on various items across the web, and can be quite useful. But until a few weeks ago, it appears they were also sending web browsing (and more personal) data to Compete without anyone’s knowledge. Writes Edelman:

As shown in the “host:” header of each of the preceding communications, transmissions flow to the consumerinput.com domain. Whois reports that this domain is registered to Boston, MA traffic-monitoring service Compete, Inc. Compete’s site promises clients access to “detailed behavioral data,” and Compete says more than 2 million U.S. Internet users “have given [Compete] permission to analyze the web pages they visit.”

He continues:

Upromise’s installation sequence does not obtain users’ permission for this detailed and intrusive tracking. Quite the contrary: Numerous Upromise screens discuss privacy, and they all fail to mention the detailed information Upromise actually transmits.

The Upromise toolbar installation page touts the toolbar’s purported benefits at length, but mentions no privacy implications whatsoever.

If a user clicks the prominent button to begin the toolbar installation, the next screen presents a 1,354-word license agreement that fills 22 on-screen pages and offers no mechanism to enlarge, maximize, print, save, or search the lengthy text. But even if a user did read the license, the user would receive no notice of detailed tracking. Meanwhile, the lower on-screen box describes a “Personalized Offers” feature, which is labeled as causing “information about [a user's] online activity [to be] collected and used to provide college savings opportunities” But that screen nowhere admits collecting users’ email addresses or credit card numbers. Nor would a user rightly expect that “information about … online activity” means a full log of every search and every page-view across the entire web.

Shortly after Edelman’s post (and a follow-up PCMag.com post), Upromise changed their privacy policy to alert their users that this data is being sent out. But the company declined to state how long the issue had been going on.

Privacy implications aside, it’s interesting that this is one of the ways Compete was gathering data. And it would be good to know where else they get it from. On their site, they only vaguely note that they have “developed a unique methodology created by experts in the fields of mathematics, statistics and the data sciences to aggregate, transform, enhance and normalize data in order to estimate U.S. Internet traffic.” They also claim to have over two million members — but apparently, at least some of them (such as the Upromise toolbar users), don’t know they’re members.

I’ve sent a message to Compete asking them what other means (other toolbars, etc) they use to gather their data. In light of this Upromise fiasco, it seems wise that they should disclose that kind of information. I’ll update if and when I hear back.

Read the whole story…

First Round, Betaworks, And Angels Back Up Backupify With $900K

You backup the data on your computer. Why not backup your data on the Web? That’s the basic premise of Backupify, a startup based in Louisville, Kentucky that backs up all your data on services like Twitter, Facebook, Gmail, Flickr, WordPress, Blogger, and YouTube.

Backupify, which was launched last June, just closed a $900,000 seed round of funding led by First Round Capital. Other investors included General Catalyst, Betaworks, as well as angel investors Chris Sacca, Jason Calacanis, Andy Swan, and Bob Saunders. (Disclosure: Calacanis is our partner in putting together TechCrunch50). Prior to this round, the company raised $125,000 in seed capital last summer from HubSpot co-founder Darmesh Shah (who is also a co-founder of Backupify) and other angels.

The service itself all runs on Amazon Web services and is free for up to one gigabyte of data. In other words, Backupify is a cloud computing service that backs up other cloud computing services. About 60,000 consumers have signed up so far through word of mouth.  Twitter, Facebook, and Gmail are the three most popular services customers choose to backup. It keeps all the raw data for you and creates a downloadable PDF with, for instance, all your Tweets, direct messages, followers, people you follow, and profile info.

CEO Rob May, who is a former blogger (he started the Business Pundit before selling it in 2008), plans to charge consumers $5/month or $50/year for up to 10 GB of data backup. He also wants to get into backups for businesses, and will charge them different rates. Corporations that need email backups for compliance reasons now also need backups of Twitter and Facebook accounts if they are used for marketing, recruiting or other business purposes. He is also going to add more business-oriented services such as online accounting apps to Backupify’s menu of options. It offers Google Docs and Gmail today.

The company probably will be moving soon from Kentucky, says May.

Read the whole story…

Amazon Says No To Blippy

Blippy, the Twitter-like service that lets users publish the details of all their purchases, is just a couple of months old. But it already got Stephen Colbert’s attention (thumbs up). And now it has Amazon’s too (thumbs down).

Cofounder Philip Kaplan first mentioned that Amazon had turned off Blippy’s access to the service on an episode of TWiST with Jason Calacanis. I spoke to Kaplan tonight about Amazon’s reaction to Blippy.

He says they didn’t block Blippy, but simply insisted that the service stop pulling user purchase data, and erase all historical data they had already collected. They were also summoned to Seattle to speak with a “high ranking executive” of the company. Blippy complied (with both the summons and the demand to stop accessing user data).

Kaplan is soft stepping around the Amazon issue, and is hoping to come to some agreement with the company to allow them to access data in the future. He says “We believe our users feel strongly, as we do, that it is their right to access and use their data however they want. We’re optimistic that Amazon will come to the same conclusion.”

None of the other thirteen companies Blippy takes data from have complained, Kaplan says. And he notes that users must actually request data to be collected before Blippy begins to do that.

There is certainly an issue with how Blippy collects data – by storing user credentials on their own servers. But Blippy says they use APIs to log users in when available. And that may be the issue Amazon has with Blippy.

But it doesn’t explain why they’re insisting Blippy delete historical data that’s already been collected. The users have given their permission, and in fact have indicated that they want this data to be moved to Blippy. And it is the users’ data, after all. Amazon would be smart to remember that.

Perhaps, and I’m speculating here, there’s a reason Amazon doesn’t want all this data published. They’ve engaged in variable pricing in the past to test the demand curve, for example. They certainly may be using it again.

Read the whole story…

NYC’s BigApps Winners Announced: WayFinder, NYC Way Lead the Pack

Last fall, we told you about an exciting and innovative competition to find – and fun – civic-focused web abd mobile apps in New York City.

Tonight, after an all-star panel of judges had reviewed more than 80 apps over a month-long period, a handful of winning applications were announced.

These apps include WayFinder, a resource for navigating around the city; Taxihack, a live-feed commentary on New York City taxis; Big Apple Ed, a guide to New York City schools; and seven others.

Sponsor

Judges for the competition included such media and technology luminaries as NY Tech Meetup co-founder Dawn Barber, Betaworks CEO John Borthwick, Mahalo co-founder Jason Calacanis, EDVentures Founder Esther Dyson, FirstMark Capital CEO Lawrence Lenihan, AlleyCorp co-founder Kevin Ryan, DFJ Gotham Ventures managing partner Danny Schultz, and Union Square Ventures managing general partner Fred Wilson.

The BigApps prizes also included a Popular Choice Award, which was decided by an online public vote from people around the world.

The grand prize winner for the competition, Wayfinder, is actually an Andoird app that allows users to find the nearest and best directions to New York City subway and New Jersey PATH stations. It was also selected as the Grand Prize winner for the Data Visualization Award. That team received a total of $7,500 for both prizes.

Other winning applications include:

• Actuatr, a platform that simplifies opening up data to developers;
• NYC Way, an iPhone application that bundles a variety of NYC resources for tourists and locals (also the Investor’s Choice for monetization potential and Popular Choice winner, a $5,000 prize altogether);
• PushpinWeb, a platform for public data;
• Trees Near You, an iPhone app that shows data about trees around New York City;
• UpNext 3D NYC, an interactive 3D map for exploring and discovering the city;
• Overview New York City Parks and Recreation Online, a web app for finding New York City parks; and
• Bookzee, a location-based library book search.

“We opened up the 170 datasets of City information to unleash the creativity and ingenuity of New Yorkers, and we were not disappointed,” said Mayor Bloomberg, who announced the awards at a dinner tonight. “The apps submitted offer a range of unique capabilities, many of which use the data in ways we hadn’t considered. We want New York City to stay ahead of the innovation and technology curve, and we’ll continue to capitalize on our greatest asset – New Yorkers – to make sure we do. Thank you to all of those who submitted apps, and congratulations to the winners.”

The New York City Economic Development Corporation and the Department of Information Technology and Telecommunications worked with around 30 agencies to provide more than 170 datasets for the competition. The data included geographic locations of all sidewalk cafés, laundry facilities, playgrounds, dog runs, city landmarks, as well as census data, extensive property valuation and assessments, the results of restaurant inspections, lists of permitted citywide events and even side parking and traffic updates.

Discuss

Read the whole story…

On eBay, Twitter Followers Are Worth Less Than A Penny Each

It used to be that Twitter followers were worth something, or at least people thought they were worth something, which is the same thing. It was only about a year ago when Jason Calacanis was offering $250,000 to buy a spot on Twitter’s Suggested User List, which would have guaranteed him perhaps a million followers before Twitter ended up revamping the SUL to be less monolithic. He never got on the list, but if his offer would have come to roughly $0.25 per follower.

Today, you can “buy” followers on eBay for less than a penny each. Some of the Buy-It-Now listings include 5,000 followers for $20 (which comes to 0.4 penny/follower), $5,500 for $40 (0.7 penny/follower), $1,100 for $10 (0.9 penny/follower). You are not actually buying followers outright (Twitter doesn’t allow people to transfer their followers), but rather services which “guarantee” getting your account up to the promised number of followers through “proven and safe methods.” Some even only count reciprocal followers (followers who follow back).

How do they do this? Well, there are automated bots, of course. But another method we’ve heard about anecdotally uses cheap labor in China to create Twitter Follower farms (similar to the gold farms that grew around online games like World of Warcraft). Online laborers in China essentially create thousands of Twitter accounts which can then follow other accounts. Yes, people are actually paying for this worthless service. The sellers on eBay may very well use different methods. But the fact that these types of followers are worthless shows in the plummeting rate for Twitter followers from a quarter each a year ago to less than a penny now.

So are Twitter followers simply worthless as many people have suspected all along? I think you have to distinguish between real followers and fake followers (maybe Twitter could start a Verified Follower service), and how engaged those followers are. Do they retweet a lot and engage in conversation, or never tune in at all? Follower counts don’t tell you that. Just as all Website visitors are not worth the same, neither are all Twitter followers. But you can’t buy real followers. They come to you.

Read the whole story…

NYC Seed Launches Summer Incubator for Startups

Early-stage New York City startups are about to get some tender loving care and it’s got nothing to do with Valentine’s Day. As highlighted in Jason Calacanis’ blog seed-stage investment group NYC Seed just launched an eight week incubator program where ten lucky companies will gain from startup mentorship, much-needed space and modest funding.

Sponsor

Led by NYC Seed’s Managing Director Owen Davis, NYC Seedstart is a joint effort between NYC Seed, Contour Venture Partners, IA Ventures, Polaris Ventures and RR Ventures.

When asked why he’d start an incubator in New York, Davis replied, “We see the same [gap for smaller investment opportunities] in New York as they do in Boulder or the Valley. It’s hard for seed stage companies to raise the amounts they need. We’re trying to solve that and make them more fundable in the process.”

Similar to the TechStars and YCombinator models, in exchange for 5% equity incubator program participants receive $20,000 dollars in funding as well as free office space and mentorship. Some of the program’s mentors include Peekfounder Amol Sarva and Ogilvy Entertainment president Doug Scott. The program will only accept teams of two or more who live in New York or are willing to move to New York. Applications are due by February 28, 2010 and those interested can apply here for a spot in the program.

Photo Credit: Jorge Gobbi

Discuss

Read the whole story…