Entrepreneurial

Why do customers shop at local small businesses?

– Stephanie Rabiner is a contributor to FindLaw’s Free Enterprise blog. FindLaw is a Thomson Reuters publication. This article originally appeared here. –

Despite hard times and shrinking profits, Americans still shop at locally owned, independent retailers.

A new small business survey from American Express polled 1,000 consumers aged 18 and older. Ninety-three percent of respondents believe that it’s important to support local small businesses. And on average, they spend about one third of their monthly discretionary income at these stores.

How can you capitalize on this information?

Survey respondents primarily shop at small businesses because of friendly employees and product knowledge.

Additionally, 87 percent of respondents share favorable opinions about a business, while only 69 percent share negative feedback. The majority use word of mouth and social media. Only 13 percent use sites like Yelp! and Citysearch.

Do you already have the right employees with the right knowledge? If so, the small business survey seems to suggest that you should work on peer-to-peer advertising. Yelp! receives a significant amount of attention these days, but social networking appears to be a better use of resources.

from MediaFile:

What’s cooler than a Facebook conference? A Sean Parker after-party.

Alexei Oreskovic

Sep 23, 2011 16:32 EDT

When somebody who was played by Justin Timberlake in a Hollywood movie decides to throw a party, the expectations are pretty high.

And Sean Parker, the man behind free music-sharing service Napster and an early Facebook advisor, clearly likes to give people what they want.

Parker, who is an investor in the music service Spotify, pulled out all the stops in a post-Facebook developers conference party on Thursday that was a cross between a backstage concert pass and Trimalchio’s feast.

The party was reminiscent of the dot-com boom era in the late 1990s, when extravagant blowouts thrown by well-funded startups were practically a weekly event.  A decade later, Web company valuations are on the rise again, led by companies like Facebook, Groupon and Zynga, and talk of another tech bubble is in the air again.

This time around of course, the broader economy is sputtering and unemployment is stuck at 9.1 percent. But Parker’s party, which took place in San Francisco’s Potrero Hill neighborhood, underscored the euphoric atmosphere among the engineers, executives and venture capitalists in the Internet industry.

Those lucky enough to score an invite were ferried in private buses to a graffiti covered warehouse that Parker had converted into a lavish den of decadence, with spit-roasted pigs, sashimi bars, ice-chilled Dungeness crab and multiple, free-flowing cocktail bars.

Parker, who was famously portrayed by Timberlake as the hard-partying Internet entrepreneur in the Social Network film, gave a short talk on stage alongside Spotify CEO Daniel Ek* to kick things off.

Stanford entrepreneur: If you’re 20 and you haven’t started a $1 million company, “you’re kind of a failure”

– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –

Recently, New York magazine featured Feross Aboukhadijeh in a piece titled “Bubble Boys”. Aboukhadijeh is a Sacramento-born, 20-year-old computer science student at Stanford who has been characterized as among the school’s most heavily recruited students by a course adviser. The piece suggested he may ultimately be among those geeks to succeed the Mark Zuckerbergs of the world.

While perhaps a stretch, it’s easy to see Aboukhadijeh’s appeal. A year ago, Aboukhadijeh created a small media sensation with YouTube Instant, a site that invites visitors to scan YouTube videos in real time, and which Google was at one point interested in acquiring – along with Aboukhadijeh.

“They were talking about adding (the code) to YouTube and having me come on, but it never really worked out,” said Aboukhadijeh, who speaks quickly and breathlessly, like someone needing to get to wherever he’s next expected. “I’d only been in school for two years at that point. It seemed silly to stop and take a job. Then they said, ‘You can do an internship while you’re in school.’ But I wasn’t really interested in doing that. I knew that to do well (at Google), I’d need more than 15 hours a week. Also, when you join a new company, it takes three or four months before you’re even up to speed.”

Aboukhadijeh has some idea about what happens inside companies. Two summers ago, he scored an internship at Facebook, and it took “two months before I was going all out, doing stuff.” This past summer, Aboukhadijeh snagged another enviable internship, at the question-and-answer site Quora.

Still, Aboukhadijeh said he’d rather start his own company than work for someone else’s. At least, he thinks he knows that’s what he wants. Aboukhadijeh, who is starting his senior year, told me he’s applying for Stanford’s computer science master’s program and that he’ll “then possibly complete it or do something else, like put it on hold to go start a company.” A lot of his friends are making the same choice. “They’re saying, ‘I’d like to take a leave for a year or two and try something risky.’ And if it doesn’t work out, they can come back and finish their master’s degree. It’s kind of nice. Stanford is pretty flexible compared to most schools.”

The school has little choice, evidently. In fact, “probably half” of Aboukhadijeh’s friends are already working on projects that they think could become viable companies, he said.

Flickr founder looks to strike lightning again

– Connie Loizos is a contributor to PE Hub, a Thomson Reuters publication. This article originally appeared here. –

Stewart Butterfield has it made. He’s famous for co-founding the popular photo-sharing service Flickr in 2004. He lives comfortably in Vancouver, having sold Flickr to Yahoo for a reported $35 million in 2005. And investors including Accel Partners and Andreessen Horowitz have thrown $17.2 million behind his two-year-old game company, Tiny Speck, even though the Flash-based multiplayer game it’s been developing, Glitch, hasn’t launched publicly yet.

So why does Butterfield confess to living in “perpetual fear” these days? The truth is Butterfield is under enormous pressure. Expectations for Glitch, which Butterfield describes as a “shared, perpetual game with its own ecology,” are exceedingly high, both because of Butterfield’s personal brand and its ephemeral launch date. (Even after two years of alpha and beta testing by roughly 20,000 gamers, Butterfield declines to disclose when he plans to release the game. “We haven’t finalized (the release date) yet, though the end of September is likely,” he says.)

More significantly, Glitch is hard to categorize. Butterfield credits Zynga — the online gaming company behind the Facebook hits — as “the best thing that could have happened to us, pre-launch. Now there is something like 150 million people who previously didn’t think they’d play a game online and now do.” But Glitch aims to deliver a much higher level of engagement than Cityville or Farmville, two of Zynga’s most popular titles on Facebook. Butterfield says that it’s hard to play Glitch satisfyingly for less than 15 minutes at a time, and that Glitch’s beta testers play an hour on average — with some playing for up to six hours at a time.

At times, what Butterfield seems to be describing is a massively multiplayer online game (MMO) that Facebook gamers can play. The game of Glitch — which involves traveling billions of years back in time in order to re-create the future, by creating and collecting resources, gaining skills, and completing quests in increasingly challenging environments – will invite users to customize their virtual homes or to buy clothing items for their avatars. (Subscribers will receive more customization options, and be able to purchase more a la carte.)

Butterfield will also allow “third party developers to use your avatar and have it show up on other games that people can play in different environments.” The idea is for Tiny Speck to act more or less like a publisher, where developers create games, and Tiny Speck strikes deals with them. Butterfield isn’t sure what those deals will look like yet, however.

What Glitch won’t do, he insists, is allow users to pay to advance in the game. According to Butterfield, “the perception is that it’s unfair, but also, because (games that invite users to spend to get ahead) basically present stop signs with dollar signs,” such games can quickly alienate users.

Entrepreneur Peter Yared: Social is “so over”

– Connie Loizos is a contributor to PE Hub, a Thomson Reuters publication. This story originally appeared here. –

Entrepreneur Peter Yared doesn’t mince words. In April, after TechCrunch misreported some of the circumstances around a Facebook employee’s termination, Yared wrote a widely read post titled “Why TechCrunch is Over” in which he called its founder, Michael Arrington, “insane,” adding that it “must be hard to live amidst a rapidly declining site.”

In more recent posts, Yared has called Twitter “primarily a broadcasting platform with very few active users” and unusable for “normal people.” He has also suggested that if he were to start a company today with either entrepreneurs Mark Pincus, Evan Williams, or Mark Zuckerberg, he’d go with Pincus “given what we now know” about Williams and Zuckerberg. (Both have been accused of elbowing their early co-founders out of the picture.)

It’s no surprise then that Yared — who has founded and sold four companies, including to Sun Microsystems, VMWare, and Webtrends — is very fun to chat up. I caught up with Yared recently. Our conversation has been edited for length.

You recently wrote at length about how Twitter could improve the customer experience, as well as make money. The company seemed to only half-kiddingly offer you a job afterward.

(Laughs.) Yeah, they were (very nice to me) for a while there.

Your advice was fairly comprehensive. What did you leave out, if anything?

Banjo mobile app keeps travelers in touch

Deborah L. Cohen

Jun 24, 2011 11:22 EDT

A missed opportunity to connect with friends at an airport was the impetus behind a new social discovery service targeted at smartphone users.

The free service, Banjo, is the brainchild of 38-year-old tech entrepreneur Damien Patton. It launched this week and is available for iPhone and Android owners.

“It was started because I missed out on a personal connection,” Patton said. “It brings all the social information together into one convenient place on the mobile device.”

Banjo aggregates information from a variety of sources, including popular social networks like Facebook and Foursquare. It keeps users apprised of social activity in a particular spot, whether that’s where they’re currently standing or some 1,000 miles away, Patton explained.

Users decide whether to connect with others or just browse what’s going on at the chosen location, he added, describing his overlay app as having a “ripple effect.”

“It’s like a pebble dropped into a pool of water,” he said. “It brings it back to you.”

Palo Alto, California-based Banjo received an undisclosed round of venture backing late last year led by BlueRun Ventures. For now, Patton said Banjo’s full-time team of five is focused on increasing its user base. Whether the future business model will be revenue or advertising based is yet to be determined, he said.

Note to entrepreneurs: Your idea is not special

– Brad Feld is a managing director at the Boulder, Colorado-based venture capital firm Foundry Group. He also co-founded TechStars and writes the popular blog, Feld Thoughts. The views expressed are his own. –

Every day I get numerous emails from software and Internet entrepreneurs describing their newest ideas.

Often these entrepreneurs think their idea is brand new – that no one has ever thought of it before. Other times they ask me to sign a non-disclosure agreement to protect their idea. Occasionally the emails mysteriously allude to the idea without really saying what it is.

These entrepreneurs think their idea is special and magic. And they are wrong.

The great entrepreneurs are already focused on the implementation of their idea. They send me links to their website or software. They describe the business they are in the process of creating (or have already created). They point me to what they’ve done to implement their idea and show real users who validate that the idea is important. And they quickly move past the idea to the execution of the idea.

Google? Not the first search engine. Facebook? Not the first social network. Groupon? Not the first deal site. Pandora? Not the first music site. The list goes on. Even when you go back in time to the origins of the software industry: MS-DOS – not the first operating system. Lotus 1-2-3 – not the first spreadsheet.

The products and their subsequent companies became great because of execution. First, they had to execute on building a great product. Next, they had to execute on building a great business. Finally, they had to execute on scaling, sustaining, and evolving a great business.

Bebo founder working on a “little social network”

– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –

“I don’t think Facebook has peaked,” said Michael Birch, absently piling his trademark curtain of brown hair atop his head. “The point of saturation is often a lot further out” than many people assume, he added. “But what goes up must come down.”

We are sitting in his San Francisco offices and Birch, best known for selling his three-year-old social networking startup Bebo to America Online for a stunning $850 million in cash, is sharing some thoughts about the current crop of social networking darlings — and whether we’re in a bubble.

Birch has certainly had time to form some opinions. Months after Bebo’s 2008 sale, he found himself on the operating table, undergoing open-heart surgery for a leaky heart valve. The experience rattled Birch and afterward, he committed to permanently change his work-life balance, sticking mostly to angel investing to maintain his ties and perspective. He has since helped to seed fund 30 startups, including Mixpanel in San Francisco and London-based Onalytica, both of which offer their customers analytics tools to improve their market research.

Still, Birch tells me he “ducked out” out of angel investing at the end of last year. “I do think there’s a bit of a bubble – though I don’t like that word.” Soaring valuations simply made investing in very early-stage startups “a bit pointless,” he says.

Birch also concluded that investing isn’t scalable unless “your chosen path is to be an amazing investor” and Birch is more interested in bringing his own ideas to life. Toward that end, a year ago, Birch bought a former envelope factory south of San Francisco’s financial district, and he has turned it into an incubator called Monkey Inferno. It operates on his money; the ideas it is developing are his own.

Clearly, Birch is taking the endeavor seriously, despite his riches. (Birch netted roughly $600 million from Bebo’s sale. The rest mostly went to Balderton Capital, which had funded Bebo with $15 million.)

An entrepreneur takes on LinkedIn – and Facebook

– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –

Entrepreneur Rick Marini has a lot to be thankful for, including smart, connected friends who’ve supported him in the launch of two of his businesses. The most recent of these is BranchOut, which leverages Facebook to help people find business connections and that has an enviable list of backers and advisers.

Marini may soon need them more than ever.

The 38-year-old entrepreneur first benefited from close ties when he and his best friend from Harvard Business School, James Currier, created Tickle back in 1999. The company — which raised $9 million, mostly from August Capital — leveraged viral marketing to become an immensely popular purveyor of intelligence, matchmaking, and personality quizzes. It sold to the jobs colossus Monster in 2004 for roughly $100 million.

Marini’s friends have more recently come to his aid with BranchOut, a 20-person, San Francisco-based company that started life as a social entertainment site called SuperFan in 2008. The bootstrapped service struggled until last summer, when a friend of Marini asked for an introduction for a sales lead to a company. As Marini recalls now: “I couldn’t remember who in my Facebook graph worked for that company and typing in the company name took me to its Facebook fan page.”

Marini asked one of SuperFan’s six engineers to create a widget to solve the problem. Four weeks later, BranchOut was born. Accel quickly lined up to lead its $6 million Series A, along with Norwest Ventures and Floodgate. Marini also assembled more than a dozen angel investors, including Ben Ling, a Googler who leads the monetization efforts of YouTube; Twitter product manager Josh Elman; Path founders Shawn Fanning and Dave Morin; and Matt Mullenweg, the founder of WordPress.

from Tales from the Trail:

Former “start-up” Obama wouldn’t mind being as popular as…SpongeBob

Jeff Mason

Apr 21, 2011 00:37 EDT

He's been president of the United States for about two-and-a-half  years, but Barack Obama still remembers being a "start-up" -- and he wouldn't mind being as popular as SpongeBob SquarePants.

The Democratic president, who is in the middle of a road show to sell his ideas for cutting the deficit, spent the evening in San Francisco on Wednesday raising money for his campaign, and he targeted tech-savvy donors who had started successful companies of their own.

"Some of you are involved in start-ups, well I was a start-up just not so long ago," Obama told a dinner fundraiser at the home of Marc Benioff, the chief executive of salesforce.com.

There's big money in California. Donors paid as much as $35,800  a piece to dine with the president or hear him speak.

Earlier in the day the president held a townhall meeting at the social networking giant Facebook. At a second fundraiser later in the evening, he said he was pleased that his own Facebook page was so popular.

"I've got 19 million friends," he marveled, noting, however, that he was less loved than the cartoon character SpongeBob.

Something to aspire to, he said.