Entries tagged “startups”

I'm here at the Web 2.0 Expo in NYC today, my first big tech industry conference in a long time, where I'm also excitedly getting ready for my keynote tomorrow.

But one of the things I'm most proud of is that has something of a valedictory feel to it, as we note that many of the best, most interesting, most subversive and disruptive startups in the world are based here. From Foursquare to Hunch, Kickstarter to Square, Etsy to the newly-funded 20×200 (they're hiring!). That's not counting the dozens of tech-based media businesses that have spring up in the wake of Gawker and Huffington Post. And best of all, I think many of them have been influenced by the seminal NYC Web 2.0 startup, Meetup, which not only helps knit our startup community together, but introduced many of the elements of social responsibility and an old-fashioned We Make Money business model that distinguish New York startups from those in Silicon Valley and elsewhere.

(Update: To my chagrin, I forgot Outside.in, another great NYC startup that I've found inspiring. I'm sure there are more omissions, too, but I'll add 'em as they come to me.)

New York City startups are as likely to be focused on the arts and crafts as on the bits and bytes, to be influenced by our unparalleled culture as by the latest browser features, and informed by the dynamic interaction of different social groups and classes that's unavoidable in our city, but uncommon in Silicon Valley. Best of all, the support for these efforts can come from investors and supporters that are outside of the groupthink that many West Coast VC firms suffer from. When I lived in San Francisco, it was easy to spend days at a time only interacting with other web geeks; In New York, fortunately, that's impossible.

Am I biased? Sure. But are there half a dozen startups anywhere in the world as interesting and full of potential as these new NYC efforts? Isn't it exciting that these are all built around the full potential of the open web, instead of merely trying to be land grabs within the walled gardens of closed platforms? I'm more optimistic about the environment and opportunity for starting new ventures than I've been in ages, and for me the fundamental reasons why are demonstrated best by startups that could only happen in New York City.

Plus, we have bagels. Delicious bagels.

Here are some interesting recent blog posts and articles, mostly by friends or acquaintances of mine, all of which add up to an interesting narrative.

• Spencer Ante in BusinessWeek documents Mint's sale to Intuit:

Mint.com owes much of its success to one such investor, First Round Capital, which opted to back the fledgling company at a time when other VCs demurred. Indeed, the Mint.com acquisition is First Round Capital's largest exit, beating out the $100 million sale of portfolio company Powerset to Microsoft (MSFT). And although First Round Capital would not quantify the return on its investment, co-founder Josh Kopelman says the Mint.com deal generated the highest return of any deal the firm has done. Previously its best return came when eBay (EBAY) acquired StumbleUpon for $75 million, which generated more than 14 times First Round Capital's original investment. "I don't think this changes our strategy," Kopelman says. "It is continued validation for our approach."

• Sarah Lacy of TechCrunch reminds startups that they're supposed to be changing the world:

I did interviews with most of the TechCrunch50 experts backstage and there was a common gripe about the companies launching there: Not enough passion, not enough swinging for the fences, not enough trying to change the world. There were too many people building safe businesses, too many companies just trying to make existing things slightly better, and too many people wanting to be the next Mint.com, not the next Google. Nothing against Mint, but Silicon Valley wasn’t built on $170 million exits.

Web visionaries like Reid Hoffman and Sean Parker struggled to come up with positive feedback on stage. Robert “I-get-excited-by-nearly-any-start-up” Scoble was so bored he was playing Hangman via Twitter with Paul Carr. Marc Andreessen praised Udorse—a company that he joked would make the world a worse place if it succeeded—because at least it was a new idea. Tim O’Reilly said he didn’t care whether Cocodot, one of the companies he judged, succeeded or failed because it was so meaningless in the world. And Tony Hsieh just said it blatantly: “I didn’t see anything that was trying to change the world.”

In some ways, I feel like Sarah's post is a direct corollary to my own earlier post where I'd suggested that the U.S. Government is the most interesting tech startup of 2009.

The ever-diplomatic Jason Fried of 37Signals riffs on a topic that he and I were just talking about last night, a lamentation of modest ambitions:

Mint’s sale to Intuit really pissed me off.

Why should I care? Because I think it’s indicative of a VC-induced cancer that’s infecting our industry and killing off the next generation. I don’t know the full backstory, but I’d bet this sale was encouraged by a Mint investor.

Here’s a fresh new company that was gunning for an aging incumbent. And not only gunning, but gaining. They had a great product, great design, and great potential. They were growing rapidly and figured out the revenue game. They were on their way to redefining an industry — one that was left for dead by the current custodians.

They were everything their main competitor, Intuit, was not. While Mint was inventing, Intuit was out of it. People used Quickbooks/Quicken out of habit and legacy. People used Mint because they loved it. Intuit was disgruntled, Mint was disruptive.

But here’s what happened: Intuit, last decade’s leader in personal finance, just became the next decade’s leader in personal finance. Mint had their number, but they sold it for $170 million. A big payday for sure, and if that was their two-year goal then they nailed it, but I can’t believe that was the point behind Mint. It had too much potential.

Mint was a key leader of the next generation of game changers. And now it’s property of Intuit — the poster-child for the last generation. What a loss. Is that the best the next generation can do? Become part of the old generation? How about kicking the shit out of the old guys? What ever happened to that?

• Chris Dixon, co-founder of Hunch, talks about the impending era of interesting new NYC tech startups:

There are a bunch of veteran entrepreneurs actively investing in and mentoring seed stage startups. Google has a big office here and many people seem to be leaving to go start companies.

...

New York City has many of the same strengths as Silicon Valley - merit-driven capitalism, the embrace of newcomers and particularly immigrants, and a consistent willingness to reinvent itself. Silicon Valley will always be the mecca of technology, but now that people here are getting back to, as Obama says, making things, New York City has a shot at becoming relevant again in the tech world.

• And Caterina Fake talks about how the connections in our city will fuel this tech renaissance:

Yes. As someone who goes back and forth between New York and Silicon Valley, I see more companies being started in the Valley. But I am seeing some great consumer internet companies being started out here too. Etsy is a great example. Hunch has to be on this list. And Kickstarter, which just recently launched, and is changing the way that creative projects themselves are funded. A promising beginning. There need to be more startups, naturally, and more seed capital, and a hometown newspaper, as Chris also notes. And the CS grads moving into startups rather than financial services companies. I'm optimistic.

Though Caterina is still optimistic about startups in Silicon Valley, I'll offer up that one of the biggest changes in her perspective since saying three years ago that it was a bad time for a startup is that she's spending a lot more time in New York City these days. Finally, my friend Jen Bekman exemplifies the diversity of NYC's nominal "tech" community, in that her startup and company are squarely focused on the world of fine art. As Jen says:

[T]here’s so much else going on aside from technology — the valley might hold the title of the best place for start-ups in technology, but NYC is the best place for many things.

The diversity of experience on the 20×200 team is incredible and inspiring. Everyone I work with has done a bunch of other things aside from technology, and not one of them set out for a tech career to begin with. Among us are photographers, musicians, artists, writers, lawyers, teachers and wine experts. We all love the internet (a lot! too much?) but what drives us most is our love of art and the people who make it.

Does this happen in Silicon Valley? Perhaps, but my time spent there — which I loved, for the record — was about an immersion in technology. Here in NYC it’s about the thing itself.

...

Then again, if you live too long inside the echo-chamber, it’s easy to forget who’s going to be using all this technology in the end. The reality check is important, almost as important as being able to hail a cab whenever I damn well please.

The thread that ties all of these things together for me is that technology adoption happens now because of culture and media, not simply for its own sake or because certain types of capital are available. It happens because a vision is ambitious enough to capture the attention of artist and writers and creators of all sorts, not just other technologists or people within the bubble of the existing tech community. And cities like Chicago, Boston, Washington D.C. and, particularly, New York City, have a decided advantage when it comes to connecting to those in the tech community to the rest of the world. We also have an unparalleled history of ambition (and, yes, ego) to match that potential.

I hope entrepreneurs learn a lesson from the few underwhelming startups that are out there, and realize that the model of making incremental improvements on companies that already exist is a recipe where, even if you achieve your goals, you may not have achieved much of a success. And if everyone around you has similarly unambitious goals, then maybe you need to be in a place where that's not true.

Note: I use, and like Mint.com, and I'm happy for their success and am hopeful that they have a positive impact on Intuit. I am not arguing that their definition of success should be the same as mine, but rather that they may have defined a different set of goals if they had been part of a different community.

I've been putting a lot of speculative ideas out lately; It's nice to see some healthy (and respectful) criticism from people who are skeptical about what I'm saying.

Gautham Nagesh followed up on my earlier post and fairly criticized the recent government websites I praised as being too tentative and unproven to merit the praise I'd given them. Interestingly, I had a throwaway half-sentence saying "I think Gautham and I just disagree about government's role in general", and Gautham interpreted this as a bit of an attack on his journalistic integrity, by implying that he wasn't being impartial about the story. That certainly wasn't my intention, but more importantly I think I just forgot (being a blogger myself) that Serious Journalists still care a whole lot about that idea. For what it's worth, I think it's great when journalists have a clearly disclosed partiality about a story.

Similarly, Mitch Wagner talked about my post a bit on InformationWeek's Government Blog, saying I'm "being excessively optimistic, because the Obama White House's record on transparency is decidedly mixed at best, as noted by the Washington Post in a May editorial." A fair criticism, though I think I was highlighting these recent efforts by the government as signals of intent to use the web well, rather than declaring Mission Accomplished. Hence, most interesting startup of 2009, not most successful. I went into this a bit further in this interview I did with Maggie Shiels for the BBC's tech blog:

"I am not a Polyanna about this, " Mr Dash told me.

"I don't think necessarily everything that comes out of this will be immediately great. It will take people some time to understand the potential there is for something great to happen.

On a less critical note, I did like that Inc's take on my post mentioned the success that private companies have had with similar API and data efforts; That was an analogy I should have made more explicitly and prominently in my own post.

Phew! Seems like there are a ton of people talking about the topics we've all been discussing here lately. Here's some highlights:

Startup.gov

After I posited that the U.S. executive branch is the most interesting startup of 2009, there have been some amazing responses. Craig Newmark (you love his list!) very kindly gave a nod towards my post, adding "In some results, it's run like a really good Silicon Valley startup", and spreading the word on The Huffington Post as well. Mike Masnick at Techdirt chiimed in as well:

For plenty of reasons that you can guess, I'm pretty jaded by people in government, and it's rare to come across people who seem to be doing things for anything other than "political" purposes. But I have to admit that the amazing thing that came through in both [Federal CTO Aneesh] Chopra's talks was that they were both entirely about actually getting stuff done, with a focus on openness and data sharing. Chopra talked, repeatedly, about figuring out what could be done both short- and long-term, and never once struck me as someone looking to hoard power or focus on a partisan or political reason for doing things. It was never about positioning things to figure out how to increase his budget. In fact, many of the ideas he was discussing was looking at ways to just get stuff done now without any need for extra budget. Needless to say, this is not the sort of thing you hear regularly from folks involved in the government.

Towards the end of my essay, I'd pointed out one particular challenge that faces this new startup-minded government effort: "Acquiring and retaining talent is hard, especially in a city that doesn't have as deep a well of people with tech startup experience." Amazingly, the latest perfect example of the type of talent that are heading to D.C. these days just popped up, with Christopher Soghoian's announcement that he is joining the FTC. I only know Christopher's work by reputation at Harvard's Berkman Center, but I think the fact that the government is looking for talented people in academia (a talent pool that typical tech startups often overlook) is a great sign.

Of course, there are skeptics. Gautham Nagesh covers the government for Nextgov and Atlantic Media, and he thinks I'm believing the hype". Of course, I think Gautham and I just disagree about government's role in general, and that I'll take small signs of progress as successes, even if there is a lot of work left to do yet.

In fact, I'll be talking about this a bit later today on Federal News Radio's Daily Debrief show. If you're in D.C., tune in to 1500 AM at 4:05 EDT and one idea I'll be discussing is how the recent web achievements by the executive branch are a lot like Microsoft's recent success with Bing; It doesn't mean that the whole giant organization is on the right track, it just means that it's still possible for these behemoths to do the right thing.

The potential is also hinted at in Brady Forrest's post about EveryBlock's acquisition over on O'Reilly Radar. I'm ecstatic to see Adrian and his team at EveryBlock get even more resources for their work, but just as pleased to see the government's work being discussed as a peer to even the most cutting-edge startups in the private sector.

Google's Wave Moment

After my recent posts about The Wave Way and Google's Microsoft Moment, I was very graciously invited to join Leo Laporte, Gina Trapani and Jeff Jarvis on their awesome podcast about Google and cloud computing, This Week in Google. If you have an hour or so to spare for listening to a podcast, I am very proud of how it came out, and especially that I got to participate with such pros on a show like this. TWiG is available on iTunes and Boxee and all of those usual services as well.

The idea that Google is facing a reckoning as it grows in size and influence seems to have caught on, and comparing the company to Microsoft has gone from seeming a bit radical at the time I posted to becoming much more popular when Wired covered the idea to finally having become something approaching conventional wisdom in just a few weeks. Take, for example, New Google is the old Microsoft, by Galen Ward, which lists the ways that Google ties its nascent (or even unsuccessful) efforts to the results of its dominant search engine.

Apple Blinks on Secrecy?

Less than three weeks ago, I was arguing that Apple's culture of secrecy can't scale. Fortunately, we may never know if I'm right. Astoundingly, Apple has opened up to some degree, most notably via VP Phil Schiller reaching out personally to bloggers John Gruber and Steven Frank. Of course, that's not a complete course change for Apple, but it is still significantly more human, personal and open than any recent communications they've made about their efforts.

Meanwhile, the idea that Apple's traditional secrecy is untenable has gotten an even larger audience with The Times' lengthy look at Steve Jobs and Apple:

[A]long with computers, iPhones and iPods, secrecy is one of Apple’s signature products. A cult of corporate omerta — the mafia code of silence — is ruthlessly enforced, with employees sacked for leaks and careless talk. Executives feed deliberate misinformation into one part of the company so that any leak can be traced back to its source. Workers on sensitive projects have to pass through many layers of security. Once at their desks or benches, they are monitored by cameras and they must cover up devices with black cloaks and turn on red warning lights when they are uncovered. “The secrecy is beyond fastidious and is in fact insultingly petty and political,” says one employee on the anonymous corporate reporting site Glassdoor.com, “and often is an impediment to actually getting one’s work done.”

But employees are one thing; shareholders are another. Should Jobs (who, as far as the world is concerned, is Apple) have been allowed to conceal the seriousness of his illness? Warren Buffett, the greatest investor alive, doesn’t think so. “Whether [Steve Jobs] is facing serious surgery or not is a material fact.”

Some say another sign that Apple omerta has gone too far was the death of Sun Danyong, a 25-year-old employee of Foxconn, a Chinese manufacturer of Apple machines. He was given 16 prototypes of new iPhones. One disappeared. Facts beyond that get hazy, but it is clear that Sun committed suicide by jumping from a 12th-storey apartment. Internet babble says he killed himself because of the vanished prototype and, therefore, because of Apple’s obsessive secrecy.

Pushing the Right Buttons

Finally, the idea of the Pushbutton Web seems to be gaining steam. I am delighted to point out Om Malik's The Evolution of Blogging, which Om uses as an example of a longer-form blog post he's enjoyed recently, but which I also hope will be a catalyst for the evolution of blogging that he's calling for in the post overall.

That point is taken even further with Farhad Manjoo's ruminations in Slate, which reference my Pushbutton post:

[A]s technologies like PubSubHubbub proliferate around the Web, with companies like Google, Facebook, and others embracing them, real-time Web updates will become the norm. It won't be hard to build competitors to Twitter—systems that do as much as it does but whose decentralized design ensures that they're not a single point of failure. Winer envisions these systems coming up alongside Twitter—when you post a status update, it could get sent to both Twitter and whatever decentralized, next-gen Twitter gets created. If these new systems take off, Twitter would be just one of many status-updating hubs—and if it went down, there'd be other servers to take its place.

Seeing so many great conversations pop up recently around the topics I've been obsessing over has been very inspiring; Right after I made offhand mention of one of my Big Think interviews being about the Philology of LOLcats, my original piece on LOLcat language, Cats Can Has Grammar, was indirectly cited in Time's profile of "I Can Has Cheeseburger", through a reference to "kitty pidgin". It might seem like a minor mention, but the idea that a random dude like me can write a post that results in a phrase showing up in Time or The New York Times is still very exciting to me, after all of these years.

Best of all, there have been a spate of amazing comments on all of these posts lately, both on this site and in some of the responses I've linked to above. I'm having more fun than ever in watching the conversation across the blogosphere.

In the meantime, two to consider:

• Slow Web: "There's a web that well-considered and worth savoring. We'll show you where."
• Every Friday, Rain or Shine: "When you see an interesting idea expressed in 140 chars that you think could use elaboration, ask them to do a longer-form post to explain. Especially on Fridays."

Sometimes if you do something very difficult, and you do it really well, the end result is that your achievement becomes completely invisible.

I mentioned a year and a half ago that I like Twitter. That was a little bit less common a position to take back then, but in the months since, tons of people have taken to the little messaging service, so clearly this was no great insight on my part -- it's just a useful, fun service.

But of course, that popularity has not been without its problems. Twitter's gotten a reputation for being unreliable, as a result of its rapid growth. In fact, in many ways, the Fail Whale and its related frustrations has come to define Twitter's brand more than almost anything else.

I'm no expert at these things, but there are a lot of reasons startups fail, and the reasons almost never include the fact that thousands of users clamoring for a service. Indeed, it seems to me that most companies (whether they're tech startups or anything else) fail because of being poorly managed. Put another way, execution is everything.

With that in mind, it's worth pointing out how particularly well-executed Twitter's recent acquisition of Summize has been. I don't know any of the deals of the financial or business arrangements, except that I'm a little disappointed that Twitter isn't maintaining a presence in New York City, instead moving all of the employees to San Francisco. That nitpick aside, the public face of this transition was extremely well executed.

Ev Williams, co-founder and the most public face of Twitter, speaks about the deal at some length in this excellent, candid interview with Techcrunch. (Which site, by the way, may rank as my "most improved" blog of 2008.)

Rumors of the Summize acquisition leaked a few weeks ago, but both companies kept discipline around communications and didn't acknowledge or respond to the conversation. And then, when it came time to announce the deal, the sites had been fully integrated, a lengthy and personable blog post complete with a sketch of some future ideas for integration was posted, consistent branding was in place on the acquired site, and the roadmap for what was going on with employees affected by the acquisition was clearly communicated.

In all, that's a formidable amount of coordination to happen across the country, while business deals are being worked out, and while maintaining secrecy about the fact that it's taking place. And, all of that was done with an eye towards providing a good user experience to their shared customer base.

There are a lot of things to criticize in such deals most of the time, though it seems likely that this will be a successful acquisition, from an outsider's point of view. But what's striking to me is that, as quick as so many are to criticize Twitter (fairly) for technological problems, people haven't been as eager to acknowledge a remarkable discipline and execution on the business side of the company. Frankly, all of those who'd suggested that Twitter should be sold to a larger company seem to have forgotten that almost none of the big companies suggested as acquirers have a history of consistently pulling off this kind of execution. And that's even more true for the smaller innovative companies that they've acquired.

One of the nice things about independent web entrepreneurs is that they (we?) can draw contrasts against those who are giant publicly-traded faceless corporations, either pointedly or with tongue in cheek. Some of the best recent items in this vein:

• The Truth About Evite

This one's from Jonathan Abrams of Socializr (except everyone still wants to credit him for Friendster). The article recites the "Top Ten Reasons Why It's Time For You To Switch To Socializr", including "Barry Diller doesn't care about Evite", "Evite doesn't offer technologies from this decade", and "Evite is a mess of invasive graphical ads".

I don't know Jonathan, but I've heard fairly positive things from the people we know in common and his criticisms ring true; The fact that Evite's emails don't include the bare facts about the event you're being invited to speaks to their contempt for their users. I'm sure they had elaborate meetings years ago to justify this, but the right answer got lost along the way.

• Working at Google vs. Working at Meetup

Scott Heiferman, CEO of Meetup (and a friend of mine), offers some good-natured ribbing at the expense of the Googlers, highlighting the strengths of the nimble and independent with his typical sense of humor. "At Meetup, you take the NYC subway to work. You're part of the greatest melting pot on Earth. WARNING: Some of your fellow riders aren't naturally excited about Google Apps." and "At Google, a few Googlers wish they were at a fast-growing company where they can personally still make a huge difference. At Meetup, some Meetuppers wish we had a toilet like the Googleplex."

Not too many cheap shots, just the confidence of knowing you're doing something good. I had the privilege to find out about Meetup a while before it was public, back when Scott was first launching the idea. I told him then that I wanted his company to succeed, because we needed it to, and was proud to see him being just as passionate when speaking to a room full of politicos last week. Half a decade later, I'm also especially glad he helped me understand just how smart Brad Fitzpatrick was, well before I got to work with Brad. There's some kind of kindred spirit between people who make technologies that help others.

And since Scott uses TypePad for his blog, I was going to remind him he could use TypePad's pages feature to publish his comparison. Then I realized, by using Google Docs, Scott was actually having Google pay for the resources to host his recruiting manifesto. Them entrepreneurs are a clever bunch.