Is ‘Occupy Silicon Valley’ next?
– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. The views expressed are her own. –
There it was on Craigslist – an ad for “young, successful professionals living in America’s most emerging area, Silicon Valley,” ostensibly posted by a “major cable network” that’s looking to cast a Silicon Valley reality show.
No wonder. While many Americans are suffering through an abysmal economy, Internet startups seem impervious to bad news of any kind. Valuations have been rising for several years straight; companies like Zynga, Facebook, and Twitter are minting millionaires left and right; and many young outfits can’t hire skilled, highly paid software engineers or salespeople fast enough.
To get the picture, one only need look to the invitation-only, tequila-fueled industry party that entrepreneur-investor Sean Parker hosted two weeks ago. Split-roasted pigs, Dungeness crabs, and sashimi bars were a mere warm-up to nationally known musical acts like The Killers.
Silicon Valley has much to celebrate. It has the most highly educated workforce in the nation and boasts the highest economic productivity – almost twice the U.S. average, according to the Bay Area Council Economic Institute (BACEI). It also deserves kudos for creating the social media tools that have been empowering revolutions around the world.
But Silicon Valley sometimes seems as tone-deaf as Wall Street to the economic straits that most Americans face, and it’s in for a “shock,” says renowned Silicon Valley futurist Paul Saffo. He likens the Valley’s view of economic protests like Occupy Wall Street as “storms in other men’s worlds.”
“Because (Silicon Valley) has such a monomaniacal obsession to innovate, people tend to overlook things,” observes Saffo. It’s even easier to lose perspective, given that many in Silicon Valley are a part of the top 1 percent that accounts for 24 percent of the nation’s income and 40 percent of its wealth.
Making a case for more candor at startups
– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –
In an age where seemingly everyone in the startup community now blogs, tweets and leaks his or her news, stretching the truth has become de rigueur. But I’d argue that it’s creating distrust; it’s also distorting the way that founders, the real engine of Silicon Valley, see the world.
What can be done about it, if anything? Recently, I asked neuroscientist and best-selling author Sam Harris, whose new Kindle essay, “Lying,” explores our fundamental inclination to lie and self-promote. Our conversation has been edited for length.
Q: In your essay, you say your interest in lying was piqued as a Stanford freshman in a popular ethics course. What was so life-changing about it?
A: The course is surprisingly simple in its format and content. Basically, 10 people sit around giving (professor) Ron Howard — a pioneer in management science — examples of lies they think worth telling, and he just shoots them down. You learn the really poisonous role that lying plays, and that the lies you think people are justified in telling have hidden costs that most people find quite unacceptable at the end of the day. He teaches the course every year and I know many Stanford graduates in tech have been influenced by it.
Q: That’s interesting to hear, given that so many startups continue to operate in shrouded secrecy, or else they exaggerate some aspect of their business.
A: Well, secrecy on its own is a phenomenon that can be maintained without deception. You can ask, ‘How much money do you have in your bank account?’ And I can truthfully tell you that I don’t want to say. What’s deceptive is when a company pretends not to have secrets, or it withholds important information. That’s a problem.
If PE hub is going to feature luminaries like Prof. Sam Harris giving business insights then it would be much more interesting to ask him about which business practices and ideas he thinks leave no alternatives but killing the executives.
VC firm to form “Jedi Council” of entrepreneurs
– Joanna Glasner is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Menlo Ventures’ newest managing director, Shervin Pishevar, is getting off to a fast start.
The serial entrepreneur turned Internet VC announced that his firm has formed a new early stage investment vehicle, the Menlo Talent Fund, which will fund rounds up to $250,000 in promising startups. As part of the effort, Pishevar told attendees at San Francisco’s TechCrunch Disrupt conference this week, the firm will be forming a “Jedi Council of incredible entrepreneurs,” known as the Menlo Founders Council, to work with startups.
The $20 million fund is all about quick action. Menlo said it will make investment decisions on startups within 72 hours. However, Menlo partners will not take board seats on any companies funded by Menlo Talent Fund.
The fund was financed last October with the closing of Menlo Ventures XI. It has already invested in eight companies, including: The Backplane, CakeHealth, Comprehend, LeanLaunchLab, Parse and Tracksby. Two companies are yet to be announced.
The Menlo Founders Council, meanwhile, will include a group of mentors, advisors and investors to support entrepreneurs at Menlo-sponsored retreats and events. One member is Troy Carter, founder and chairman of Atom Factory, a music management brand, who manages artists such as Lady Gaga.
While it’s not a newcomer to seed investing, Menlo Park, California-based Menlo Ventures’ core focus has been early stage and growth rounds for technology companies. Founded in 1976, the firm has $4 billion under management and is currently investing Menlo Ventures XI, a $400 million fund.
Startups run the gamut from the sublime to the mundane
– Mark Boslet is a contributor to PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Investors navigated the halls. Luminaries such as LinkedIn’s Reid Hoffman and SoftTech’s Jeff Clavier took the stage.
Demo Fall 2011 was in full swing yesterday. What stood out at the tech conference was an eclectic assortment of startups that varied from the sublime to the silly. Several of the most appealing enterprise-focused companies seemed poised to attract considerable interest. Several developing consumer technologies did not.
Here are some from both sides of the aisle:
FLUXX
Among those destined to draw attention was Fluxx of San Francisco. The company hopes to develop an online dashboard where businesses can integrate information from key internal systems and better manage their operations.
Fluxx argues the product’s value is its ability to put the data in one, easily accessible place. Already the company sells a cloud-based dashboard product to half a dozen non-profit foundations, for which it expects $1 million in revenue this year.
Vodafone opens Silicon Valley startup accelerator
– Mark Boslet is a contributor to PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Everyone these days seems to be getting into the startup accelerator business. Why not an international mobile phone giant?
Why not, indeed. Vodafone is the latest institution to open a Silicon Valley accelerator with the aim of sparking innovation, and, according to a press release, providing “potential financial assistance.”
In an interview, Fay Arjomandi, a head of U.S. R&D, played down the equity side of the center. “We may choose to invest,” she said, referring to Vodafone’s venture capital arm.
The real target of the Vodafone Xone is to offer a fast track for new products to conduct user trials in as little as nine months. The idea is to “identify and qualify innovative technologies from startups, R&D labs, universities and venture capital portfolios,” according to the release.
Change is afoot, said Arjomandi. It used to take years to bring products to market. Now the cycle has shrunk to six to nine months.
The Redwood City center has room for 24 startups and will provide technical expertise and logistical support.
Sittercity founder to launch “social recommendation engine”
– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Genevieve Thiers is not a household name in Silicon Valley, but many Chicagoans know her as the founder of Chicago-based Sittercity, a 10-year-old online subscription-service that marries families to caregivers around the country for help with their children, pets, and aging parents.
Thiers is also among a small, but growing number of second-time entrepreneurs beginning to emerge from Chicago’s young, but maturing tech scene. Next month, Thiers officially launches her newest startup, Contact Karma, with co-founder Maureen Wozniak (no relation to Apple co-founder Steve).
Her timing looks ideal. Sittercity appears to be on solid footing. It lists more than 2 million caregivers; its corporate customers include the Department of Defense, which uses the service to assist military families; and in April, it raised $22.6 million led by New World Ventures, bringing its total funding to date to $30 million. According to Thiers, Sittercity, along with the well-financed restaurant discovery and ordering service GrubHub, may not be far behind their local peer Groupon in filing for a public offering.
“There are a number of (Chicago-based) companies that could very well IPO if they wanted in future years,” she said.
Now, Thiers — who is expecting twins in November and passed along Sittercity’s CEO role to the company’s COO last year –- is hoping to create a second, long-standing Chicago company with Contact Karma, which Thiers and Wozniak characterize as a “social recommendation engine.”
For the last few months, the two have been creating a database of recommended service providers that businesses can find both by surfing Contact Karma’s platform, as well as through daily deals that Contact Karma sends out via email. Want a marketing pro for a particular project? You can visit Contact Karma and see who comes recommended and by whom. Meanwhile, you can probably land a cheap company lunch through an emailed coupon for group takeout.
Flipboard founder on venture capitalists: “Take their money”
– Connie Loizos is a contributor to PE Hub, a Thomson Reuters publication. This story originally appeared here. The views expressed are her own. –
Many entrepreneurs privately disparage venture capitalists as egoistic, autocratic, and increasingly unnecessary. Not serial entrepreneur Mike McCue. He believes in VC.
Case in point: McCue’s newest startup, Flipboard, a 20-month-old iPad application that transforms social media feeds into an elegant, print-like magazine. Though the Palo Alto, California-based company has yet to develop a business model — McCue is contemplating running full-page ads and allowing publishers to charge subscriptions to their Flipboard-rendered content — Flipboard has already raised $60 million in venture capital from Kleiner Perkins, Index Ventures, and others.
One can certainly see what some of the excitement is about. Thanks to the work of company’s 40-odd employees, Flipboard is a slick product. Nevertheless, when I asked McCue earlier this week if he knows how many people use the application on a daily basis, he answered, “Yes, I do,” laughed politely, then offered some metrics that Flipboard prefers disclosing, including that the app has been downloaded 2.8 million times, and that every month, people “flip” between 400 million and 500 million pages.
The numbers suggest some meaningful engagement, but McCue’s confidence in his ability to turn Flipboard into a billion-dollar company seems closely bound to his track record with his investors.
McCue and Index Ventures’ Danny Rimer speak each other’s unspoken language fluently. Two times in the past, Rimer has pulled out his pen and written McCue his first check with nary more than a cursory description of McCue’s plans for the money. “It’s great to have people who believe in you,” said McCue.
Meanwhile, McCue is so tight with Kleiner Perkins that when he was appointed to Twitter’s board last December, many assumed his role was to serve as Kleiner’s inside man. (Late last year, Kleiner led a $200 million Twitter round but couldn’t take a seat on the company’s board because of conflicting investments.)
Is Airbnb growing too fast?
– Connie Loizos is a contributor to PE Hub, a Thomson Reuters publication. This story originally appeared here. The views expressed are her own. –
Airbnb is on a tear. Three years after the San Francisco-based company began inviting real people to list for rent their homes and apartments, castles and houseboats, users have booked 1.9 million nights in more than 184 countries; bookings are growing an astonishing 40 percent month over month; and roughly 1,000 new properties are entered into its system each day.
The company is growing so fast, in fact, that it’s reportedly raising $100 million at a whopping $1 billion valuation — a mighty addition to the $8 million in capital it has previously raised from Sequoia Capital, Greylock Partners, and numerous individuals.
Unfortunately for Airbnb, all the hype has captured the attention of the Samwer brothers, who’ve famously created a number of successful clones. Indeed, just two weeks after rumors of Airbnb’s massive fund-raise surfaced, the Samwers’ months-old European clone, Wimdu, announced it raised $90 million.
Considering that the majority of Airbnb’s business comes from Europe, one might consider the development troubling. But Brian Chesky, Airbnb’s 28-year-old CEO and co-founder, said he doesn’t think that it “changes things much. We were always expecting some competition. We just have to grow as quickly as possible.”
The question is: how fast is too fast? For example, Chesky talks about the challenges of building what he anticipates will fast become a thousand-person organization. Airbnb has already absorbed employees through one startup, Accoleo, for which it paid an undisclosed amount. And while Chesky said he “can’t confirm (Airbnb’s) rumored ($100 million) financing,” he added that “we’re open to other acquisitions.”
Yet hiring the right people is “inherently very complex,” said Chesky — even before folding entire companies into Airbnb, which now employs 130 people in San Francisco and Hamburg and has begun training people in “batches” of 15. “The product, the Web platform – you develop a playbook that allows (the business) to scale itself,” he said. “But when you’re hiring two or three people a day, keeping the culture and ensuring that people are aligned is complicated.”
10 marketing lessons for early stage tech startups
– Mark Suster is a former serial entrepreneur and a partner at Los Angeles-based venture capital firm GRP Partners. This article originally appeared on Suster’s blog “Both Sides of the Table”. The views expressed are his own. –
I made every textbook mistake at my first startup, which is why I believe I was much more effective at my second one. I have adopted the motto “good judgment comes from experience, but experience comes from bad judgment.” We need to learn from doing, by trial and error.
If I can help you avoid some of my first-time mistakes it would be a victory. The following are some lessons I learned about early-stage startup marketing. Because market is such a broad topic, I’m restricting these lessons to PR marketing (as opposed SEO, SEM, product marketing, etc.).
1. Where Stealth is Good – There’s a lot of discussions on the Web about whether startups should be stealthy before they launch or not. The truth is there isn’t a “right” answer for your company. You need some guidelines to make decisions. My general rule is that it’s good to be stealth in the early days while you’re building your product and testing your market. Stealth does not mean constipated, paranoid and totally untrusting of others. It does mean not telling more people your future plans than is necessary. It means avoiding drinking too much at cocktail parties with other tech people and bragging about your plans. It means not over-sharing your deal with VCs or other investors.
The truth is that we work in a very small, tight-knit industry and news and plans spread fast. In the early days you don’t really want three extra teams hearing your ideas and gearing up to compete before you feel you’ve got a solid head start. Most people totally advise against stealth. They think that only by being open and testing your ideas in an open marketplace can you be successful. Be careful about this advice.
Also be careful about VCs. Most ones that I know have very high ethical standards, so I’m not concerned about that. But once a VC has heard your idea he can’t “un-think” it. And these ideas have ways of seeping into board discussions with portfolio companies as in, “have you ever thought about trying A, B or C?” It’s mostly unintentional, but tacit knowledge about ideas spreads quickly amongst the chattering elite.
I actually like finding entrepreneurs who are more circumspect, less braggadocios and generally more planned about their actions.
Great article; the only thing I would add is the luck – or lack thereof – in finding the right funders when the time is right. When my company was in need of funding (still early-stage) we found a facilitator (eSolve Capital; http://esocap.com) that were able to provide us with excellent conditions
Silicon Valley recruiter on tech hiring frenzy: “Everyone’s desperate”
Robert Greene, the founder and CEO of Silicon Valley-based GreeneSearch Inc, specializes in recruiting hands-on talent for technology-focused companies, primarily startups. He provided his perspective on the current boom in technology hiring.
Q: How would you characterize the tech hiring market now? A: It’s very competitive right now. It’s been like that for a while; it’s probably heated up even more of late. You have the bigger companies – Groupon, Zynga, Google, LinkedIn, companies that have been proven and successful – and then you have all these startups. The supply doesn’t meet the demand.
Q: Is there an advantage to being a small company? A: The advantage they have over those (big) companies is that they can move really quickly. They’ll do everything in a day and make an offer and hope that person will accept right away before they get into the bigger companies. Those are their selling points. They have to move quickly, they have to be agile, have to have the compelling story, have to give equity, along with competitive salaries.
Q: Do you think we’re heading toward another tech bubble like we saw in 2000? A: I’ve been recruiting for seven years. I know back in the boom companies were offering cars and huge bonuses and stuff to attract engineers, and that’s not happening. I’m seeing real money – I’ve heard that Google is making huge counter offers, real money.
Q: How many offers are your top engineers getting? A: I had a guy out of Amazon in Seattle who had three offers. We’re seeing multiple offers. I had one instance where an offer was signed and Google countered and made him a huge offer back and he stayed at Google.
Q: Are you seeing companies looking less at top-tier schools? A: No, I’m not seeing them sacrifice the quality. Everyone’s desperate, trying to figure it out. I don’t know if there’s any simple solution other than move quickly, have a compelling story.
Q: How long do you think this boom will last? A: I hope it lasts for a while. Usually it goes in cycles. It’s been reported on more recently – but it’s been happening for a while. The news is on this now because of the LinkedIn IPO. Now there’s some real exits and big exits. We’re not going to have a time like we had in 2000 where companies didn’t have business plans or revenues and were going public. I’ve been hearing the B (bubble) word a lot – but I think it’s more realistic.
Exactly what are they looking for? More MBAs? Salesmen? Certainly not engineers.
Even OccupySiliconValley materializes, it would seem more important to recognize that this is one sector of the economy that is creating jobs, and even more important to figure out how to extend the opportunities beyond the Bay Area. Articles like this just divide people further by making doomsday scenarios seem inevitable in the face of actual bright spots in the economy.