Tech workers marching at Gay Pride San Francisco 2019

Guest post by Luciana Carvalho, VP of People and Performance at Movile

Surviving in the post-lockdown economy is going to be the most important test that many business leaders have ever faced. It is during such extraordinary times that we will find out if our management best practices are indeed the right practices for these novel circumstances and what needs to be adjusted.

A widely accepted tenet of management teachings is that building a strong company culture is very important because it acts as a strong foundation for the entire organization.

Companies with a strong culture have a competitive advantage. Daniel Coyle in his best-selling book “The Culture Code” makes the case that the secret behind highly successful teams is due to company culture. Coyle offers the example of Overture, which invented pay-per-click advertising. Google ended up acquiring Overture because its company culture allowed its teams to move faster and grow bigger.

We are about to discover if company cultures can keep businesses afloat during times of extreme crisis. Is a company’s culture sufficient to weather the storms? What are the factors for keeping teams motivated during extraordinary times with unpredictable outcomes? What can be done to strengthen company culture? These have become common questions within every type of organization.

I’d like to share some insights from my career, which I think can help strengthen company culture and improve the odds of survival during these harsh times.

Leaders are the example

It may seem obvious that leadership is important in times of crisis but it is doubly important because that’s when people notice it the most.

Gianpiero Petriglieri, a researcher in leadership, recently wrote an article about “toxicity of leaderism and … the harm it causes.” He argues for elevating the role of managers to leaders. It is “what we need most of all and yet continues to elude us. That is, competent managers who are entrusted to lead.”

Whoever does the job of leading will need to do it for the entire organization. They need to set the tone, the energy, and be able to communicate a strategy of moving forward to every part of the organization.

For example, among the CEO’s many leadership duties is being a “Chief Excitement Officer” because motivation cascades down from the top. And the CEO needs to be in touch with everyone: internally with staff and suppliers and externally with customers and investors.

As in wartime, employees instinctively look to their leaders for information, like should they be scared about their jobs or should they be vigilant about competitors? They need real information. It needs to be brutally honest because anything else damages trust.

I’ve seen this type of transparency in information become an important strategy in strengthening company culture during tough times ― and Brazil has had plenty of downturns and political instabilities; many more than in western countries.

Communication with staff can be done through open dialogues with the entire organization, or by adopting new practices that then become a future habit.

The easy accessibility of leaders during critical times is very important because it helps everyone in the organization stay on the same page and it shows we trust our people, which in turn makes them feel more secure.

Here at Movile, we make videos where our leadership openly explains our positions on key matters and is able to preempt certain questions. We share stories of both success and failure because we believe there is as much, if not more, to learn from failures compared to success stories. This transparency strengthens our culture.

Which brings me to my next insight.

Transparency as a strategy

Transparency brings to mind something that is “crystal clear,” but this is rare because in reality, we are always in situations where nothing is very clear. So you must equip your teams with as much information as is possible. Tell them about the strategies, the next steps, and the immediate short-term actions needed.

Transparency in information is an extremely strategic practice especially when it is able to spread out the decision-making within the organization; when it gives team members the confidence that they have the best information to make the right decisions.

Otherwise, during times of crisis and fast-changing events, teams can become paralyzed with indecision. Transparency in information empowers teams because they understand how to move the business ahead.

Management updates should be communicated in an open forum with easy access for employees who are offsite or in overseas offices. This brings me to my next insight about work.

From systems of control to systems of results

The global COVID-19 lockdowns have forced every company to adopt and adapt to remote work because most team members need to remain at home. Not everyone was happy with this new normal because few organizations had the company culture that was comfortable managing remote teams.

A new fact of life is the potential return of lockdowns as future infectious waves emerge. This means every company needs to be super comfortable managing remote teams in their homes, and having work processes in place that support their productivity.

Management needs to recognize the additional pressures faced by their staff who are working from home; especially in households with young children.

Our regular systems of control based on hours does not take full advantage of the flexibility of remote workers. It is best to let them decide on how to organize their work and shift a company’s management priorities towards a system of results.

Jim Ludema and Amber Johnson at the Center for Values-Driven Leadership at Benedictine University, wrote that it is important for leaders to “trust their team members and validate that trust by watching organizational productivity, not hours. This allows them to celebrate their team’s performance without micromanaging the time clock.”

And a system of results helps build a culture of meritocracy where results and not favoritism are rewarded.

Preserve the core and build out the base

These harsh times are the best times to examine your company culture and decide what is core to it. And, how it can be strengthened through new practices.

Here at Movile, we are helping our people adapt to the crisis and deal with the pressures of working from home. This includes advice and warnings about medical issues and recognizing the mental health issues around loneliness and anxiety.

We are also experimenting with various tools and processes because we’ve been forced to move all our office interactions into virtual worlds. We are still trying to figure out how to celebrate our successes with virtual champagne, and how we can virtually recreate those interactions during coffee breaks when we are not in the same building.

Adopt and adapt

The best company culture for these times is one that is highly adaptive and readily able to adopt new ways of working. During times of crisis, every company responds differently. There will be new rites and rituals and new habits established. New ways of winning will be found. And new practices such as transparency in information will bond teams together in spirit and purpose so they can successfully tackle hard challenges.

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Luciana Carvalho is VP of People and Performance at Movile, an investor in an ecosystem of leading technology companies it operates globally from its headquarters in Sao Paulo, Brazil. Carvalho is one of the chief architects of The Movile Way, a methodology taught at Harvard and Stanford universities for building high-performance teams and a culture that is encouraged to take risks, be fearless, and dream big.

Photo: Paulista Avenue, São Paulo, Brazil.

Guest post By Eduardo Henriques, Movile Group co-founder and Wavy CEO

In the rainforests of Brazil, the incredible diversity of competing life forms includes the fire ant — a species that has learned to survive the most catastrophic floods by creating waterproof rafts of living ant bodies hooked together to trap air bubbles and keep their queen and larvae dry until a new site for the colony is found. A lone ant would quickly drown, but a community of ants helps each other survive.

This example of fire ants at work in Brazil’s natural ecosystem provides insights into a new model for startups that has worked well around the globe: a tech innovation and VC ecosystem composed of compatible and synergistic startups that are able to help each other survive downturns and setbacks of all kinds - and grow even faster as a collective during boom times.

It’s an approach to investing and new founder services that are being offered by smart VC funds on the ground in Brazil from around the world. It works well during good and bad times. This new approach is helping to establish Brazil as the red-hot forge of Latin America’s booming innovation economy with a dozen Brazilian startups out of 17 in Latin America today. Together, they represent the region’s most valuable companies. And, there are more of them on the way.

Even Mary Meeker, in her annual Internet Trends report, has started to include data on Latin America’s startups and the many market opportunities from a young and very tech-savvy population with a growing middle class that largely lives in massive urban areas such as the Brazilian cities of Florianópolis, São Paulo – or Sampa, as it’s often called, and Rio de Janeiro.

Advice for building fast-growth startups

Back in the early 2000s, Brazil was “unfriendly to technology entrepreneurs,” as my longtime friend and Movile co-founder Fabricio Bloisi describes it: 

“There was an incredible amount of bureaucracy that made starting and operating a business difficult in Brazil. The World Bank ranked Brazil 120 out of 187 countries for ease of doing business and 167 out of 187 for ease of starting a business. It was very difficult to grant stock options to employees and in the early 2000s, there was very little venture funding available for young organizations.” 

Times have improved, despite very tough economic conditions. Brazil’s startups know how to grow during tough downturns, far tougher than in North American and European economies. 

However, startups around the globe - from China to Silicon Valley to Europe - have had little experience with economic downturns; the most recent being about 12 years ago in 2008.

Economic downturns for Brazil's startups have come around more often and they are much deeper. In 2015, a savage, two-year recession cut Brazil’s GDP by a massive seven percent. And signs of an improving economy in 2020 could now be delayed or even completely derailed by the fallout from the coronavirus pandemic and the recent oil crisis.

This type of harsh investing environment requires Brazilian entrepreneurs to be frugal and smart about how to best use their investment capital. 

[Brazil's now vigorous startup sector has produced 12 unicorns out of 17 for the whole of Latin America at end of 2019.]

I remember in the 2008 crisis reading the infamous Sequoia Capital "R.I.P. Good Times" letter. We made a huge restructuring in the company and laid off about 30 percent of our people. It was a tough decision but we learned an important lesson about how to survive in tough times. 

Recently, Sequoia issued a warning to its portfolio startups that the coronavirus is “The Black Swan of 2020”. It looks like tough times for entrepreneurs are ahead but we know what to do. 

Here are some valuable lessons that we “fire ants” have learned from surviving downturns, recessions and other setbacks: 

Success Doesn’t Follow a Straight Path 

Over two decades, we have learned that success does not follow a straight line. Instead, it’s a messy squiggle, with ups and downs, sleepless nights, and a constant rethinking of strategy and planning in order to grow into a unicorn or a global company.

Silicon Valley founders are well versed in the concepts of fast failing and the lean startup methodology. That’s because the culture in Silicon Valley allows a quick recovery from failure.

Culturally, Brazilians are not wired for failure. We hate it. But in Silicon Valley, starting a business is generally a badge of honor -- even if it does not succeed in the end. 

When you’re not afraid to fail fast, you learn important entrepreneurial lessons more quickly, and you can move on to your next venture and apply what you’ve learned. You become successful by using the lessons of your failures. This is what we’ve tried to apply internally in terms of developing new ideas within organizations.

When startups mature and teams become much larger, we call them "cruise ships” or “transatlantic ships.” They are cash cows that demand perfectionism and greater efficiency. The lean startup approach is a smart way to continuously test out a vision, and market test products and services based on whether a sustainable business can be built around them, or not.

We have integrated this approach into a development program called “Jet Skis” - wherein we, as a company, vote on the most important initiatives, and then unleash a small team with cross-functional expertise to focus on that, fully, with a high degree of autonomy. 

If a Jet Ski project shows early success, we turn it into a “Speed Boat” and add more people and resources. If a Jet Ski fails, we lose little money and a little time, and we always learn something from the failure.

Invest In Culture, Dream Big, Control Costs and Be Ready to M&A

We have learned a lot from Anheuser-Busch InBev (AB InBev) the world’s largest brewing company. It was created by Jorge Paulo Lemann, a Swiss Brazilian businessman who now ranks as Forbes’ 35th richest person in the world and is the richest man in Brazil. Lemann merged two Brazilian breweries and added further companies through savvy mergers and acquisitions managed by his private equity firm GP Investimentos.

The lessons from AB InBev are in the disciplined management and control of costs, and the management process it uses to pursue very aggressive goals.

AB InBev invested heavily in building a strong culture described in an AB InBev case study, as “the establishment of an intense meritocracy, and a radical informality and openness symbolized by the smashing down of executives’ office walls to have them work side-by-side at large tables, their metrics posted publicly for all to see.” 

Merging two companies together successfully is very hard to do. Harvard Business Review discovered that most corporate mergers and acquisitions fail (between 70 and 90 percent). 

After making more than 40 acquisitions in 12 years, one of the most important lessons on making a success out of corporate mergers is to focus on the cultural fit between the two companies. It’s important to perform a deep analysis of company cultures as part of due diligence. The ones that have the most alignment are always the ones that work out the best.

-- It’s essential to be very critical and realistic about any synergies and how long it will take. At Movile Group, we call it “facing the brutal facts,” and it’s better to do this early in the evaluation of the merger. 

-- We spend a lot of time on cultural integration and building new traditions and processes together. We always create a detailed 100-day plan for those integrations which helps ensure that everyone is on the same page with that plan. 

-- An ambitious culture is not just about commercial gains — it’s fundamentally about improving the world. The most impactful way to attract the best talent is to have hard problems to solve and ones that could make a positive impact on a massive scale. The startups with the best cultures will always have less trouble recruiting top talent and will have far less staff turnover.

-- Also, we found that we do not need to consider competitors as enemies because they can become important partners allowing faster growth strategies. 

Hopefully, such lessons can help startup founders prepare for, and survive any setbacks during this time of global economic uncertainty in the weeks and months ahead. 

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Eduardo Henrique is CEO of Wavy and co-founder of Movile Group, a leading ecosystem of technology companies in Latin America with a big dream to make life better for more than one billion people through its apps.

The number of deals edged up to 4.4%, a record number of 368 compared with 5,588 for all-male startup teams.

Valentina Zarya reports,

The size of the gap is staggering, but there is a sliver of a silver lining: It's smaller than last year's. In 2016, female founders raised just $1.4 billion--or 1.9% of total VC funding. In fact, with the exception of 2014, 2017 marks the largest percentage of total venture dollars that has gone to female founders since PitchBook started tracking the data in 2006.

Mixed gender teams represented 12% of total funds and the remaining 7% of startups were undefined. The average deal size for all-female teams was about $5 million compared to $12 million for men.

What was not calculated was how many female-led startups applied for funding and were rejected.

While the largest round invested in a woman-led startup was $165 million (Moda Operandi's Series G), the largest that went to a male-led company (WeWork, also a Series G) was $3 billion. And the co-working space is not an outlier. Even the tenth-largest deal on the list comes in at half a billion dollars, or more than four times larger than the largest round raised by a women-led company.

http://fortune.com/2018/01/31/female-founders-venture-capital-2017/

Fortune reported on the gender funding difference a year ago. In that story female founders pointed to the lack of women VCs, which represent about 8% of VC partners.

Please see:

Rent the Runway CEO: Gender discrimination is larger workplace issue than sexual harassment

Solving Silicon Valley's diversity problem

Europe’s Brexit problem could be to blame…

There's a big slowdown in dealmaking in the global Technology, Media &Telecommunications (TTM) sector with the value dropping by $92 billion or nearly a quarter during the first nine months of this year reports Mergermarket.

There have been $299.5bn of deals compared with $391.1bn during the year ago period. The number of deals: 2,370 held steady.

The US has the largest market share at 43% of global deal value with 892 transactions worth $127.9bn including the largest deal of the year so far: The $14.4bn acquisition of Scripps By Discovery Communications.

Europe reported 813 deals valued at $47bn and is likely to end the year at a record low market share due to uncertainty from Brexit.

Elizabeth Lim, senior analyst at Mergermarket singled out Japanese giant Softbank in a "buying frenzy" acquiring a wide range of companies in AI, chips, and robotics. Softbank has acquired 26 companies so far this year — three times last year's investments.

She included a quote from Masayoshi Son, CEO of SoftBank:

"Every industry that mankind created will be redefined. The medical industry, automobile industry, the information industry of course. Every industry that mankind ever defined and created, even agriculture, will be redefined."

The top three deals in the global TTM sector for the first nine months of 2017:

1. $14.4bn Discovery Communications acquiring Scripps Networks Interactive.


2. $12.7bn Idea Cellular acquiring Vodafone India


3. $10.6bn Bain Capital consortium acquiring Toshiba Memory stake.


 

Mergermarket report.

Foremski’s Take: Fewer big deals means bad news for Wall Street bankers but small deals are good news for Silicon Valley’s startups because it means exits for the investors. And capital comes back to go around again.  

Fewer big deals could signify something else: there are few large target companies left that are worth acquiring. And will there be others to take their place? Startups are rarely able to grow larger than 100 people before being acquired.

Digital vulnerability…

There’s another trend at work with a longer horizon: The tech industry is becoming the media industry as an example of how the transformation of all business into digital businesses means every industry is vulnerable to high tech large scale business platforms such as Google, Facebook, Amazon and maybe Apple. 

If you are a top competitor in the bricks and mortar world,  you would have to build stores and warehouses and expand into new geographies — scaling takes years. In the digital world — if you are the better competitor — business scaling takes just days. And scale always wins. 

The global digital transformation that is underway — of all businesses across all industries — leaves every company vulnerable to disruption from highly efficient business tech platforms. Take a look at the digitization of the media industry. It will be repeated in other industries.  Deal flow value will shrink again.

Jennifer Hyman, CEO of Rent the Runway clothing service said that she was the victim of sexual harassment but that gender discrimination is the larger issue and it’s not being addressed.

Hyman was speaking to 200 female startup CEOs at the Project Entrepreneur Summit in San Francisco.  The conference had to turn away more than 500 applicants.  

Project Entrepreneur is a joint venture between Rent the Runway and financial services giant UBS with the goal of creating a pipeline of highly effective female startup CEOs with the skills to build fast growing companies. 

Sexual harassment can happen at anytime, she said. “It happened once when I had already raised $8m and I had revenues. He then went to my board and tried to get me fired. He tried to destroy me and my business.”

She had immediately reported the incident to her board. “I was lucky in that I had great relations with my board and they supported me completely.”

She advised female CEOs to speak about such incidents from the very beginning. They should not feel trapped or alone. She said that gender discrimination is the larger issue and urged her audience to pay attention to gender diversity within their companies.

The gender pay gap is substantial and discrimination is found in the latest tech jobs. A report in 2016 from Glassdoor found that many tech jobs have wider gender pay discrimination than other professions. 

She said that male CEOs are treated with more respect by investors and by their own staff.  And male CEOs have a greater margin to make mistakes. She also criticized the lack of female visionaries quoted in the media. 

Some organizations such as Silicon Valley Forum do name female visionaries in their annual awards which honor four recipients. Over the 20 year history of the SVForum Visionary Awards the majority have been male but in 2017 the majority were female.

Three women were named a 2017 Visionary: Linda Rottenberg – CEO and Founder of Endeavor; Neri Oxman professor at MIT’s Media Lab; Megan Smith U.S. CTO. The fourth is Steve Jurvetson partner at venture firm DFJ. 

Hyman co-founded Rent the Runway with Jennifer Fleiss and launched in November 2009. The company has funding of more than $176 million — the latest Series E raised $60 million in December 2016 followed $60 million in December 2014.

Project Entrepreneur organizes half-day conferences for female founders of very early startups. They are taught many skills such as: how to pitch their ideas; the metrics that investors want to see; how to recruit a board of directors. Most of the teaching is done by female executives. 

The organization also hosts a startup competition with 200 applicants and five winners offered $10,000 each and a five-week intensive accelerator program in New York City in April.  Application deadline is November 27 and the startups must have one woman founder, be at least 50% female-owned with less than $100,000 in funding.

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Please see: Big jump in women on tech company boards

Crunchies Awards for Silicon Valley startups focus on diversity

Large gender bias in US tech salaries reports Glassdoor

We are in an era of “Hyperscale companies” such as Amazon, Facebook, Google, Microsoft and Apple that limit opportunities for startups warns Sam Altman, head of Y Combinator,  Silicon Valley’s influential investment group, accelerator and educator. 

The warning was part of a long 2017 YC Annual Letter:

Altman wrote: “We’re now in the era of hyperscale technology companies…
Companies like Amazon, Facebook, Google, Apple, and Microsoft have powerful advantages.”

“I expect that they will continue to do a lot of things well, have significant data and computation advantages, be able to attract a large percentage of the most talented engineers, and aggressively buy companies that get off to promising starts."

This situation “is unlikely to reverse without antitrust action.” 

His warning is carefully worded because Altman knows that advocating for government intervention is unpopular in Silicon Valley. He points to opportunities for startups where these hyperscale companies “are naturally weaker.”

The majority of startup founders and investors he says,  do not fully understand hyperscale’s “powerful advantage.”

Foremski’s Take: [I’m a big fan of Sam Altman, the 31-year old head of Y Combinator group after moderating his presentation at the excellent Startup Voodoo conference in St Louis.]

It’s good to see someone as influential as Sam Altman raising this issue because it is a topic I’ve been writing about for nearly three years:  Scale versus innovation: The peril to Silicon Valley’s future | ZDNet.

We see massive late stage VC deals where the race to scale fastest and become the largest is the primary goal over any consideration of other values.  

It’s because in digital economies the first company to scale has the potential to push nearly everyone else into the margins very quickly.

In traditional markets a company would expand by establishing offices or stores in new regions and countries — a slow multi-year process that gives competitors time to respond. But in digital markets a well-funded competitor can quickly scale to a dominant global position in weeks. 

Hyperscale AI wins…

Scale matters in the very hot world of AI and machine learning. Hyperscale companies have access to massive amounts of computation and massive data sets to educate their AI. 

David Galbraith, a systems architect notes the disparity in a recent piece: AI tl;dr – Medium

Given the hardware, employee and data costs, the forefront of AI is in large corporations rather than startups and universities.

He expects opportunities for startups in the form of agile partnerships between large corporations but the timeframe is narrow. Galbraith notes that the large Internet platforms

“have been earlier to open up software tools and labs, largely in order to acquire scarce talent and insights into use cases that could indicate where to build or acquire data assets."

Innovation derailed or delayed?

Fewer AI startups will mean less innovation in a very important area that Y Combinator has identified as revolutionary.  Altman said Y Combinator’s OpenAI project will reveal significant progress in 2017 “for the benefit of humanity.”  

Scale is not a very interesting story but it’s how you win in digital markets. Silicon Valley is where startups from elsewhere will come to scale their companies — it won’t be the birthplace of original ideas as it was in the past. 

Scale is not illegal and that also applies to “hyperscale” companies. Altman’s chosen remedy of antitrust action implies these giant tech companies have all crossed some legal lines. Government action of any kind especially with the Trump administration is highly unlikely and would be incredibly lengthy in execution.

Startups will have to learn to live in this new era of hyperscale technology companies. They will have to rein in their ambitions and investors will need to understand why and keep funding. 

There’s still a lot of opportunities ahead. Sam Altman reminds us we are in the early years of “the most significant technology revolution in human history.”  And there are massive benefits to humanity ahead of us.

“It’s an exciting time to do what we do.”  

2017 YC Annual Letter

Scale versus innovation: The peril to Silicon Valley's future | ZDNet

 AI tl;dr – Medium

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Chelsea Peretti (above) a comedic actress, introduced the 10th Annual Crunchies — awards celebrating startups and VCs in Silicon Valley — and managed some decent jokes poking fun at the techie audience and coming up with some great app ideas. (The final one is a killer app — people will need full-cycle tracking of nutrients to create total body datasets. See my video here.)

Diversity was once again the bold theme of the event as seen in the careful selections of the nominees for the awards. Time and again the stage was filled with winners: startup teams of mixed color and gender. 

People viewing from outside Silicon Valley would be tremendously impressed that our young startups are so progressive and clearly want to build the future the right way.

But the staged diversity of the Crunchies is far removed from actual reality — the audience of young techies and VCs looks nothing like them. Startup teams continue to be predominately: male, white/Asian; from privileged backgrounds.

The Crunchies are clearly trying to push things forward in the right direction and it takes time. The message needs to be repeated many times.

Soon the startups will get a clue: if you want to be nominated to win a Crunchie you’d better show significant diversity in your teams.

The TJ Miller effect...

The Crunchies has changed a lot since 2015 following a stunning performance from TJ Miller, a standup comedian and one of the actors in HBO's Silicon Valley sitcom. During a long evening of superb improv with the audience he called someone a "bitch." It was scandalous. It was disruptive. It shocked an audience more comfortable with unspoken workplace misogyny.

The organizers apologized and since then they bend over backwards, and they would bend even further if they could, to present an awards show that is all about diversity in capital letters and in bold typeface but without spelling it out because that would be tedious.

The Crunchies show highly diverse startup teams being successful. Success at winning awards equates with likely future success in business.

Monkey see monkey do. The Crunchies award consists of a black monkey holding a stick. The message will eventually get through.

It was a dark and stormy night...

I've been to nearly every Crunchies but these last two have attracted smaller numbers of key people. I would normally run into a lot of high level contacts, a lot of top Silicon Valley CEOs would show up -- but now they don't -- with the exception of Marissa Mayer, Yahoo CEO, who was presenting an award.

Lots of no-shows: Michael Arrington, the co-founder of the Crunchies, always presents an award with sidekick GigaOM founder Om Malik, also absent.

There were a hundred or so empty seats in the front rows reserved for extra important people who didn't turn up.

It might have been the weather. Or it might be that the new format of the Crunchies is not compelling enough for Silicon Valley’s A-list; or maybe the Crunchies are running out of steam.

Ten years ago the Crunchies held an electric energy and celebrated scrappy startups and unique thinkers. The Crunchies will have a much brighter future if it can recapture some its past.

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And the winners of the 10th Annual Crunchies are... | TechCrunch

The Crunchies' Bitchgate: High Horses With Fake Unicorn Horns Ignore Decades Of Silicon Valley Misogyny -SVW

 Chelsea Peretti introduction: https://youtu.be/jpSH6HS45EI

And the winners of the 10th Annual Crunchies are… | TechCrunch

If Twitter were to falter much further, it would create a big problem for the city of San Francisco and its mayor Ed Lee. The city granted Twitter a controversial tax break on payroll taxes and sales of shares in return for it agreeing to stay in San Francisco and move its headquarters to the Tenderloin -- one of the city's poorest districts.

Ed Lee is running for re-election this year and Twitter's financial problems could become a problem for his political campaign. His deal with Twitter has been criticized for helping millionaires while doing very little to help its underprivileged neighbors, and for being a burden on the city through lost taxes and lost services. 

San Francisco tax officials have said that the deal appears to be working and the mid-market area where Twitter is located has helped to attract businesses and additional taxes, with the total exceeding that lost to Twitter. However, those estimates don't include the tax savings on Twitter stock sales, which will likely be much higher than the payroll tax savings, estimated at around $55m over the eight-year deal. 

The lost Twitter money and the loss of future Twitter taxes,  if the company were to shrink and falter, could create a backlash in the city government and affect many other tech companies. The pro-tech Ed Lee administration has been favorable towards startups such as Uber and Airbnb despite local laws that ban such activities, giving those companies a much needed early break. 

If Twitter loses its competitive battles the city's many other tech companies will likely face a less friendly city administration. 

San Francisco is already battling a rising resentment of tech firms as rents continue to rise and giant buses distort neighborhoods as they ferry their workers to distant business campuses. 

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Tax-break Tech Hiring a Bust in San Francisco's Tenderloin - New America Media

I'll be at the Startup Voodoo conference in St. Louis on June 18. Here is an interview by conference co-founder Aaron Perlut, with one of the keynote speakers: Maxine Clark, who pioneered crowd-sourcing in 1997 to build a very successful business. 

By Aaron Perlut

Veteran retail entrepreneur Maxine Clark is one of our keynote speakers at the 2nd annual Startup Voodoo innovation, entrepreneurship and startups conference in St. Louis June 18.

Not familiar with her name? Well, you should be. Because while crowdsourcing is today all the rage as a means of corporate engagement with customers, Clark’s Build-A-Bear Workshop – with more than 400 locations worldwide — has been at the forefront of the concept since 1997.

Since stepping down as Build-A-Bear CEO in June 2013, Clark’s been sharing her knowledge with other female entrepreneurs, as an investor, and as an advisor with Prosper Women Entrepreneurs, a program aimed at identifying, coaching and advancing women-led companies with a  $50,000 investment in each venture, and an accelerator program that gives them access to world-renowned mentors, resources, introductions and a custom curriculum.

I caught up with Clark to ask her about entrepreneurship and her career:

Q: Do you miss running the company you built from the ground up? 

A: I am heavily engaged in my (non-Prosper) personal investments such as Goldie Blox, myEDmatch.com, St. Frank and as an informal advisor to other entrepreneurs — especially in the not-for profit space. Plus my work in public education where I use my critical thinking skills, experience and my networks on a daily basis.

Build-A-Bear is in great hands and allows me to spend time in our community in other important areas.

What was the biggest challenge you faced as a female entrepreneur?

I faced few of the normal challenges entrepreneurs have when creating a startup. I have over 20 years of business experience so fundraising, and networks were much easier for me to navigate. I was going into retail and I knew retail and how it operates.

Did you have a mentor? 

I have had many mentors — teachers, bosses, fellow business professionals. All of them have supported me in different ways.

What is the advantage in having a mentor?

It can be lonely at the top, especially the first time you’re in the driver’s seat. Second opinions, sounding boards and support are priceless. Mentors share their experience, encourage, and help connect with others. Mentors are more than advisors; they are willing to “spend some of their capital” to further the success of their mentee.

What is Prosper and why should women entrepreneurs apply for funding?

Prosper Women Entrepreneurs is a program which identifies, coaches and advances women-led companies. The Prosper Capital Startup Accelerator invests $50,000 in each women-led startup, as well as business coaching for each entrepreneur accepted into the accelerator program.

The program offers a unique experience developed by experts in entrepreneurship, negotiation, branding, business development and sales. Entrepreneurs should apply to the program to help raise capital, gain access to world-renowned mentors, resources and introductions, and complete a curriculum designed specifically for their unique business.

What sort of startups is Prosper looking to fund?

We’re looking for women-led startups with a focus on technology, health care and consumer products. We define a women-led business as a company with at least one woman in a position of leadership and significant and meaningful equity.

What one piece of advice would you give a woman entrepreneur?

I would give the same advice to any entrepreneur — know your market really well, the potential size of the business, your competition, where you fit in. And have a five-year plan. A plan is a work in progress so it always ebbs and flows but having a plan is critical to success.

You don’t need to have all the money at once but when will you need it? What milestones are you willing to commit to?

- - -

Here is my coverage of Startup Voodoo from last year:

The Startup Spirit Of St. Louis - Building A Sustainable And Socially Conscious Tech Community

Alan Boehme, CIO and Chief Innovation Officer at Coca-Cola Company, spoke at IDG's CIO Perspectives conference in San Francisco. Maryfran Johnson, Editor-in-Chief of CIO Magazine, introduced him by saying he had "cracked the code" on startups.

I was skeptical there would be much from Coca-Cola after the fallout from the innovation of "New Coke" in 1985 but I was wrong. It was a surprisingly interesting presentation and refreshingly frank in places.

Boehme spoke about his company's recent quest for innovation in Israel, where it planned to launch an incubator, then changed its mind and decided to set up an accelerator, but pivoted once more to become a "Bridge" that connects startups with US markets, and with top US execs such as John Cambers, CEO of Cisco Systems; plus 200 of Coca-Cola's top marketing experts.

Startups are as terrible at marketing as large companies are at innovation but, "Coca-Cola is great at storytelling. We've been doing it for a long time," said Boehme."Startups are terrible at marketing. Coca-Cola is great at storytelling, we've been doing it for a long time," said Boehme. Coca-Cola is 129 years old and its iconic bottle is 100.  [Helping startups tell their stories sounds like Coca-Cola is moving into the PR business!]

Here's some of my notes from his talk:

- Corporations are terrible at innovation because they have so many processes in place and those processes are designed to protect against any changes to the business.

- As CIO he is always looking for enterprise technologies that can provide his company with a competitive advantage. It won't come from traditional enterprise IT vendors. 

- There's no competitive advantage from IT such as ERP systems. 

- CIOs are like lemmings, they follow each other, there's no advantage in doing the same as everyone.

- Software is changing everything inside the corporation, it is a competitive differentiator. Being the first to find innovative software is key.

- Boehme wants to find key innovations first, so that Coca-Cola can have at least a six-month advantage. [Why not buy the startup? and keep the advantage for longer?]

- He looks for very small teams, less than a dozen or so, maybe just a year or so old but with a reasonably well developed product, so that Coca-Cola can become the exclusive launch customer. [It's a very narrow window of qualifying startups and with barely tested technologies— it'll require a lot of patience from his IT teams in deployment.]

- Coca-Cola looked at more than 130 startups and whittled them down to several dozen for its training programs, which involved flying the startup teams to Paris, and Atlanta, and meetings with top US execs, Coca-Cola marketing experts, etc.

- Its goal with the Bridge program is to end up with at least one startup that becomes hugely successful, just as VC firms make many investments but just expect one to be big. 

-He spoke about some innovative ideas such as the use of high frequency sounds to transmit payments between a soft drinks vending machine and a smartphone. "Only your dog will be able to run off with your credit card info." 

- Every smartphone, even if it is in airplane mode, is listening and can be turned on by the right frequencies. Sound could be used instead of Wi-Fi radios to transmit Internet data. Coca-Cola isn't using this technology, yet.

- Coca-Cola came up with a self-disposing bottle after seeing the trash that people left on beaches in Rio de Janeiro. The bottle was made from ice.

- When Dennis Rodman visited N. Korea he was seen on TV drinking a Coke. The State Department wanted to know how he got it. "There's many ways to get a Coke."

The top 20:

1. AngelPad


2. MuckerLab


3. Techstars


4. University of Chicago New Venture Challenge


5. Alchemist


6. StartX


7. Amplify.LA


8. 500 Startups


9. Capital Innovators


10. Dreamit


11. Surge


12. MassChallenge


13. The Brandery


14. Gener8tor


15. ZeroTo510


16. AlphaLab


17. Blue Startups


18. ERA


19. Betaspring


20. The Iron Yard

About the Seed Accelerator Rankings Project

The Seed Accelerator Rankings Project aims to begin a larger conversation about what makes seed accelerators successful and to provide entrepreneurs with a tool to help them decide which seed accelerators are a good match for their startup. Confidential data provided by accelerator programs and accelerator alumni are incorporated into the evaluation process.

For more information about the project, go to www.seedrankings.com.

The strong showing confounded some skeptics who pointed to Box's very high marketing costs, which eclipse revenues by a huge margin resulting in a net loss of $121.5 million on $153.8 million in revenues for the nine months ending October 31, 2014.

Investors are betting that Box will bring its marketing costs down and under control while increasing its revenue growth.

Cloud-based data storage services have become widely accepted in the corporate IT largely due to staff using consumer data storage services such as Dropbox. Box says it offers enterprise security and audit capabilities that corporations need to maintain privacy and meet regulatory compliance.

The strong "pop" on Box's first day of trading will be encouraging news to enterprise IT startups waiting in the wings to file their S-1 and raise capital from public markets.

Tanya Agrawal at Reuters reports:

The stock's enthusiastic reception also underscored healthy investor appetite for technology stocks after the blockbuster debut of Chinese e-commerce giant Alibaba Group Holding Ltd in September.

U.S. IPOs, which have been on a tear since 2013, raised more than $93 billion last year, the most since 2000.

Photo credit: Chris Knight.

Rainy weather didn't dampen the enthusiasm shown by young Brazilian entrepreneurs at "Start-up Brasil Demo Day," reports Chris Knight.

Guest post by Chris Knight

It was a packed house earlier this week, for San Francisco's first showcase of top startup talent being accelerated in by Start-Up Brasil and its government partners. The passion and elation in the air reminded me of Silicon Valley startups in the 1990s.

And judging by more than 100 VCs, bankers and corporate fund managers from the likes of Accel Partners, American Express, GE, Intel, Redpoint, Samsung and Silicon Valley Bank - many industry watchers had interest in hearing more from eleven of Brazil's top startup founders. 

Before the first round of startup presentations Felipe Matos, a serial entrepreneur starting at the age of 16 and founder of Start-Up Brasil, gave an update on how the new startup acceleration program had paid off since its launch in 2013.

The report card was impressive. Private funding outpaced public funding by near 2X, and average monthly revenue growth had more than doubled between February and August.

Final growth rates for the collective startups is projected to come in at more than 135 percent, which places class one in fifth place of the 250 fastest-growing SME's in Brazil, the world's seventh-largest economy.

What's the secret sauce for such impressive growth? Startup founders in the program said they needed to generate revenue as quickly as possible.

"There's less funding and less investor patience in Brazil compared to Silicon Valley - and we know we're under the gun to perform well from the start," said one founder.

Most of the class-one startup leaders at the event praised the attention, support and counsel they received from the program's 15 accelerators -- including 21 212, Acelera Partners, TECHmall and Wayra. 

Matos described it as an "alliance for startups," which is supported by government, private and public entities including Apex-Brasil, CNPq, Brazil's Ministry of Science, Technology and Innovation (MCTI) and Softex.

So far, here have been about 3,000 applications and nearly 200 startups funded. The Start-Up Brasil program provides up to $80 million in grants, access to top Brazilian accelerators and international hubs in New York, San Francisco and Singapore.  

Opportunities abound...

The biggest opportunities in Brazil center on the Internet, e-commerce and mobile sectors. For example, online insurance is behind that in the US. Other hot sectors include education, healthcare and infrastructure. 

"There are 100 million Brazilians online, and another 100 million people still to go online," said Anderson Thees, co-founder at Redpoint e.ventures. "There are critical gaps to fill in Brazil that create opportunities for investors and startups." 

As Virgilio Almeida, MCTI secretary, noted during the event's kickoff: "We launched this acceleration program last year to identify and promote some of the most promising entrepreneurial talent in Brazil and beyond. We're proud of their success and progress so far, and look forward to watching them bloom." 

Some of the standout startups: 

Bovcontrol - Danilo Leao, founder and CEO of Bovcontrol, provides cattle ranchers with vital online data about the more than 200 million head of cattle on Brazil's plains, and more than 40 billion animals worldwide. Bovcontrol has been referred as the "Google analytics of cattle." Retailers McDonald's and Wal-Mart are interested in Bovcontrol so they can be better understand the origins of food from suppliers. 

VTX - Its PRP e-commerce platform is accessible from any mobile app and uses image recognition of products. It directs users to sites or stores selling the products. VTX customers report an increase in mobile sales from two percent to 12 percent in less than a year

Evobooks -  Its platform that brings digital content to life through interactive 3D books and is being used in more than 1,100 schools in Brazil. Most of its content is focused on S.T.E.M. Education. Students using Evobooks increased their performance by nearly 30 percent over a control group, and nearly 75 percent of teachers use the BooksApp to prepare their lessons. 

Sensorbox - in Brazil and other emerging markets, electricity blackouts happen frequently. Sensorbox is helping curb business losses such as food and medicines going bad through hardware and software tools that monitor power lines to report problems and help solve them before they become too serious. The technology also works with solar power  and it can be used to monitor meteorological stations for earthquakes and tsunamis. 

- - -

Chris Knight has worked as a brand-marketing consultant for startups and global corporations in Silicon Valley for nearly 20 years.

Huddle, the UK founded enterprise collaboration service, has raised $51 million to finance a large expansion.

Headquartered in San Francisco, Huddle is experiencing a boom in business and says the capital will help it grow at a faster rate. In 2014 it won seven of its top ten customers and business tripled from 2013.

Alastair Mitchell (above), CEO and co-founder, said, "Enterprises are frustrated with endless rounds of emails,  and are discovering how Huddle lets them collaborate internally, and with external partners, and to do it inside a secure environment."

The $51m adds to a total of nearly $90 million raised since its founding in November 2006.  It is one of the more successful businesses to emerge from London's "Silicon Roundabout" district, home to many European startups.

Techcrunch reporter Ingrid Lunden writes that the latest funding values Huddle at between $250m to $300m. This is a very humble valuation compared to the sky high valuations of many much younger Silicon Valley startups, some with no revenues or customers. 

From Alastair Mitchell's blog:

As we start on the next phase of Huddle's journey, it's also given me a chance to reflect and look back at how far we've come. From a bedroom-based start-up back in 2007 with a very small team - Andy [McLoughlin] and me - Huddle has grown exponentially. Today, we have 170 Huddlers based in four offices around the world - San Francisco, London, New York and Washington D.C.

Uber CEO Travis Kalanick Photo: JD Lasicka

Uber senior executive Emil Michael's comments that journalists who criticize Uber should have their personal lives investigated and publicized has created yet another controversy for the ride hailing app startup.

Ben Smith at Buzzfeed reported:

Over dinner, [Emil Michael] outlined the notion of spending "a million dollars" to hire four top opposition researchers and four journalists. That team could, he said, help Uber fight back against the press -- they'd look into "your personal lives, your families," and give the media a taste of its own medicine.

Buoyed by a stratospheric valuation of more than $18 billion and more than $1.2 billion raised from leading VCs, and led by a CEO determined to win at all costs -- the Uber culture lacks a single molecule of humility in an ocean of hubris. 

Michael's comments might be acceptable among his work colleagues but they wont work in civil society. The naked ambition exemplified by Uber CEO Travis Kalanick is ugly. Clothing Michaels' remarks as off-the-record comments is BS. Off-the-record comments are allowed when related to a company and its plans.

This was a pre-meditated and a clearly worded threat designed to intimidate Uber's critics and silence them.

The news is not free. Journalists regularly risk their lives and now risk rich companies targeting their private lives as a regular part of their day. 

Yet their work is often considered to be worth very little by startup news aggregators and news apps that scrape, copy, steal and bury back links. No wonder there are fewer journalists working today then ever before.

Uber's senior executive believes it is Ok to threaten journalists into silence. It's outrageous and it's clearly a result of the ugly internal corporate culture at the company.

Uber is backed by top VCs whose reputation is bound to be tarnished by the association. They sit on Uber's board, let's see some action. 

Please see:

 Uber Sleazy Tactics: Should Investors Teach Startups Ethics? -SVW

The 25 winners of a startup competition that attracted 2,000 entrants, were announced this week at the Tibco Now conference in San Francisco.

(Tibco Software is a former sponsor of SVW.)

Ten of the winning 25 startups chosen by the judges in the Extreme Tech Challenge competition will head for the Consumer Electronics Show in Las Vegas in early January to demo live on stage.

A final winner will be chosen at a February event on the 74 acre Necker Island (above) owned by Sir Richard, in the British Virgin Islands.

The 25 semi-finalists will all receive "infrastructure" support consisting of:

- Access to funding 

- Free infrastructure (web services and hosting) 

- Distribution support 

- Donated office space

-  Free investment banking consultation 

- Donated legal and tax advice 

Gabe Lozano, CEO of Lockerdome.

Over the course of my career as a journalist I've met with many thousands of CEOs of large and small companies and I know quality when I see it. On my recent trip to St. Louis and my brief few days with the city's startup community, I was very impressed by the quality of the startups and also by the success of some. 

In Silicon Valley the VCs want startups to come to them and are famously averse to driving beyond a 20 mile radius of Sand Hill Road. Their belief is that the best deal flow always comes through Silicon Valley so all they need to do is sit tight.

But that's not true, there are fantastic startup teams in St. Louis, and many other innovation centers I've visited over the past ten years. There are many excellent startups that will never come to Silicon Valley for one or many reasons.

And that means Silicon Valley VCs are missing out on having access to all the best deals. The VCs know that their biggest bottleneck is a lack of great startup teams, it's not a lack of ideas. St. Louis is just four hours away from SFO.

St. Louis has a great work culture combined with a very strong sense of social responsibility. And it is one of the only cities in the US that is actively encouraging immigration because it knows that diversity is important for its economy. 

Many large businesses have been built in St. Louis: Ralston-Purina, Anheuser-Busch, McDonnell Douglas, Mastercard. It has nine Fortune 500 companies and 19 in the Fortune 1000. It is very strong in financial services and healthcare is growing very fast. Enterprise car rental is another home town success story. 

Twitter's Jack Dorsey is a native, and San Francisco Bay Area has many alumni of the city and its two excellent universities: Washington and St. Louis.

Standouts...

St. Louis is now building the base for some great tech startup businesses. Some of the ones that stood out:

- ClickWithMeNow - headed by Bud Albers has a great technology for dealing with both sides of the screen;

- Aisle411 with its indoor mapping technologies for use in warehouses and retail locations is in a sweet spot with many current trends criss-crossing its domain.

Lockerdome...

But the standout St. Louis startup is Lockerdome, founded by Gabe Lozano (above). Lozano is a local legend and greatly admired in the St. Louis startup community for his grit, tough determination, and his entrepreneurial smarts. (Everyone dreams to be a little (to a lot) like Gabe Lozano.)

Lockerdome is a media site that organizes and collects news content based on a reader's interests --  a commonly heard description about many other sites, too. But Lockerdome is making it work. Following a repositioning of the company late last year, traffic is rocketing. I'm not allowed to mention the actual traffic figures I was shown but Lockerdome is heading into Buzzfeed territory with a momentum best described as "with a bullet."

Lockerdome is set to become a massive St. Louis success story. 

Please see:  LockerDome 3.0 Breaks the Field Wide Open

- - -

On my way back to San Francisco I was happy to see that Maheesh Jain (below) a St. Louis native, was waiting for the same flight. He has a great but as yet unfinished story:  he and co-founder Fred Durham recently returned to lead Cafe Press [$PRSS], a NASDAQ public company that they founded in 1999. 

Can the two founders revitalize the venerable Cafe Press Steve Jobs style? It's a good story and worth watching.

Please see: 

St. Louis Spirit: Bud Albers Is Chief Angel And Mentor -SVW

St. Louis Spirit: Pixel Press - Draw A Video Game -SVW

St. Louis Spirit: Arch Grants Equity-Free $50K For Startups Moving To St Louis -SVW

St. Louis Spirit: Social Media Club - Can You Compete With Silicon Valley? -SVW

St. Louis Spirit: Startup Voodoo - The Black Magic Of Building A Tech Business -SVW

St. Louis Spirit: Cortex Urban Research Park Bucks Tech Campus Trend -SVW

 Dennis Lower, President of the Cortex Innovation District among blueprints and maps. (CortexSTL.com)

Dennis Lower has spent nearly three decades building research parks around the US and he's at the peak of his talents and at the forefront of a very important trend: building research parks in urban settings. The goal is to build resilient communities that generate jobs from a highly skilled workforce and the spinoffs of startups.

He's responsible for the Cortex Innovation District founded in 2002, a huge area most of which is a building site with half-finished and nearly finished buildings sprouting up between buildings already staffed with researchers.

Urban districts are incredibly inventive and creative -- it's a result of the cross-pollination of experiences and cultures found in areas with high population densities.

Integration versus segregation...

 The move into urban communities by research parks is in stark contrast to that of US tech giants such as Google, Facebook, IBM, Microsoft and Oracle. They prefer to keep the majority of their engineers isolated rather than integrated into any other communities.  

Their engineers are bussed to remote business parks far from urban districts, entrapped all day with free gourmet food, gyms, haircuts, dentists and massage therapists. There's no need for anyone to leave the company campus which is probably why many tech companies are having trouble coming up with original ideas -- because their engineers lack original experiences.

 Above, a factory from 1942 that has been refurbished as a work space for research groups from large corporations such as Boeing.

The many building projects bear testament that Cortex has developed great momentum and is firmly into its next big expansion phase attracting some heavy hitters such as Boeing and Dupont, which is attracting attention from others.

It's not just research labs and offices, Lower is also responsible for building houses and apartments, shops, bars and restaurants, public gathering spaces, and a large park. All connected up to a fast moving public transportation system of buses and light railway by the end of next year -- all in the middle of St. Louis near its fabulous zoo.  I'd love to live in or near such a community. 

 Internet pipes about to be laid -- the researchers need super-fast connectivity.

Dupont has a research facility.

Just finished, co-working spaces at the Cambridge Innovation Center (CIC) at Cortex (above and below).

Aeron chairs waiting for their desks at CIC. These Herman Miller designed chairs were an iconic symbol of the dotcom era, every startup had them. These days it is the ubiquitous motorized stand up desk that symbolizes Silicon Valley startups.

Dougan Sherwood of CIC (Cambridge Innovation Center), Marc Dangerfield of CIC, and Aaron Perlut of Elasticity.

The Startup Spirit Of St. Louis - Building A Sustainable And Socially Conscious Tech Community -SVW

St. Louis Spirit: Bud Albers Is Chief Angel And Mentor -SVW

St. Louis Spirit: Pixel Press - Draw A Video Game -SVW

St. Louis Spirit: Arch Grants Equity-Free $50K For Startups Moving To St Louis -SVW

St. Louis Spirit: Social Media Club - Can You Compete With Silicon Valley? -SVW

St. Louis Spirit: Startup Voodoo - The Black Magic Of Building A Tech Business -SVW

St. Louis Spirit: Lockerdome And Other Standouts -SVW

The central goal of my St. Louis trip was to help with Startup Voodoo, the launch of a new conference focused on helping to grow the local startup community by bringing together investors, mentors, and startups to share their lessons and encourage each other to succeed.

Startup Voodoo was founded by Ed Domain of tech news site Techli.com and Aaron Perlut of digital marketing firm Elasticity. Here are some scenes and my notes from the event:

Left to right: David Levine of Geostellar, Joni Cobb of the Pipeline Entrepreneurs program, Gabe Lozano CEO of Lockerdome.com.

Lots of great questions...

My job was to ask questions following the speaker sessions,  Delon Dotson of Delotek, (above) was one of my favorites. The former Netscape executive and had recently suffered a small stroke, which is why he is in a wheelchair, but his enthusiasm for helping startups find funding couldn't keep him away. 

He had some great advice about securing millions of dollars of capital from European and Dubai-based investors who take no equity. The trick is to know how much is available, for example, Dubai investors have $5m packages and they look for a $6m repayment with no equity demanded. 

 Ed Domain publisher of tech news site Techli.com

Left to right: David Kidder of Bionic; attorney Brian Salmo of Polsinelli; Laura Frerichs of the Research Park at the University of Illinois Champaign-Urbana; Kane Sarhan of Enstitute. 

Most Promising Startup winners announced: From left: Aaron Perlut with Elasticity; Vishal Shah of Learncore; Ron Daugherty of Daugherty Solutions; Ethan Linker with Leancore; Ed Domain of Techli.com.

My favorite part of the conference was the closing session in which I interviewed on stage Fang Cheng, (above) a remarkable serial entrepreneur.

She arrived in New York more than ten years ago from China to finish her Ph.D in Bioinformatics from New York University before joining a brokerage where she was the only female among 300 male brokers. She quickly rose to the top of the pack and then co-founded Touchco, which was sold to Amazon in 2010. She now heads Silicon Valley startup Linc.

She is a very successful female entrepreneur. She was asked how she managed in a man's world, as in the brokerage. She said she never thought about herself as being female and disadvantaged in any way.

I loved her story about her first day in New York, someone came up to her and asked for directions. She said she felt instantly that she belonged.

- - -

I really enjoyed the conference and all the people I met. Everyone had excellent feedback and the quality of the startups, the entrepreneurs, and the local investors was very impressive. 

More St. Louis stories:

The Startup Spirit Of St. Louis - Building A Sustainable And Socially Conscious Tech Community -SVW

St. Louis Spirit: Bud Albers Is Chief Angel And Mentor -SVW

St. Louis Spirit: Pixel Press - Draw A Video Game -SVW

St. Louis Spirit: Arch Grants Equity-Free $50K For Startups Moving To St Louis -SVW

St. Louis Spirit: Social Media Club - Can You Compete With Silicon Valley? -SVW

St. Louis Spirit: Cortex Urban Research Park Bucks Tech Campus Trend -SVW

St. Louis Spirit: Lockerdome And Other Standouts -SVW

(From my series on St. Louis startups.)

On my first day in St. Louis I was part of a panel at a meeting of the local chapter of the Social Media Club at The Wheelhouse: "The Integration of Social Technology and the Startup Mindset."

Aaron Perlut (above) from Elasticity introduced the panel, which included Maheesh Jain, Founder and CMO of CafePress, a St. Louis success story (below, right); Brendan Lewis, PR and Communications Director at Swarm/Foursquare (below, beard); and Jason Falls, (below with microphone) well known speaker and local personality, who recently joined Elasticity.

It was a lively discussion and I agreed with a lot of my fellow panelists about the opportunities for startups.

A question that came up that evening and continued to come up at other events  during my trip was along the lines of "Can St. Louis rival Silicon Valley in the future?"

My answer was "No" but I made the point that there is no need to feel in competition with Silicon Valley because Silicon Valley's success doesn't take away anything from the success of innovation centers around the world. We live in an "and" world, Silicon Valley and New York, Silicon Valley and St. Louis. 

With the new direct flights to San Francisco by Southwest, Silicon Valley is just 4 hours away, you can fly over for a meeting and be back by dinner time the same day. St. Louis startups can use Silicon Valley as a resource.

 Coming soon! "Happywork" by local communications specialist Chris Reimer, well worth reading and meeting!

The Startup Spirit Of St. Louis - Building A Sustainable And Socially Conscious Tech Community -SVW

St. Louis Spirit: Bud Albers Is Chief Angel And Mentor -SVW

St. Louis Spirit: Pixel Press - Draw A Video Game -SVW

St. Louis Spirit: Arch Grants Equity-Free $50K For Startups Moving To St Louis -SVW

St. Louis Spirit: Startup Voodoo - The Black Magic Of Building A Tech Business -SVW

St. Louis Spirit: Cortex Urban Research Park Bucks Tech Campus Trend -SVW

St. Louis Spirit: Lockerdome And Other Standouts -SVW

Ginger Imster (above) is Executive Director of Arch Grants, funded by four St. Louis philanthropists with the aim of encouraging innovative ventures that boost the diversity of tech jobs and the diversity of the population, in the St. Louis metro area. 

An annual competition selects winners and in 2014, 20 startups received $50,000 each and did not have to give up any equity. But they do have to meet rules that at least one founder relocates to St. Louis for at least one year. Arch has succeeded in relocating two startups from abroad, helping them with visas.

"St. Louis has a long history of community service and thats what the funders of Arch Grants are trying to do, to ensure the city has a healthy future.  We need diversity in jobs and people. We need immigrants because the city recognizes that a lack of diversity is holding back our economy," said Imster. 

Arch has rented the entire fourth floor of a large co-working space in downtown called T.Rex that houses more than 100 startups and 35 alumni companies and offers incubator services. Both organizations are very focused on building a self-sustaining tech community that won't brain-drain away. And building that community in an urban setting is very important because it also helps instill a philanthropic spirit of St. Louis that is very community oriented and very loyal.

She says that $50,000 is not a lot of money but it's enough to relocate a couple of founders and support their living costs in  St. Louis for a year.  Winning the Arch Grants startup competition often brings additional benefits. Several startups told me that they had managed to raise large seed rounds because of the backing from Arch. Plus there's no equity to give up.

Edward Domain, CEO of the Techli news site for St. Louis startups, said he relocated from the Bay Area after winning an Arch Grant two years ago. 

So far so good: Arch has granted more than $3.5 million since 2011 to 55 companies, and those companies have raised nearly $18m in funding, with nearly $7 million in revenues and created about 200 jobs. As 2014 grows to a close and Arch totals up the year's success stories those numbers will undoubtably improve.

Arch Grants 

2014 Startups « Arch Grants

Local startups need some high-profile exits...

The Startup Spirit Of St. Louis - Building A Sustainable And Socially Conscious Tech Community -SVW

St. Louis Spirit: Bud Albers Is Chief Angel And Mentor -SVW

St. Louis Spirit: Pixel Press - Draw A Video Game -SVW

St. Louis Spirit: Social Media Club - Can You Compete With Silicon Valley? -SVW

St. Louis Spirit: Startup Voodoo - The Black Magic Of Building A Tech Business -SVW

St. Louis Spirit: Cortex Urban Research Park Bucks Tech Campus Trend -SVW

St. Louis Spirit: Lockerdome And Other Standouts -SVW

Robin Rath Co-founder of Pixel Press demonstrates the iPad app.

Pixel Press is a local star startup because it's raised $750,000 and has a very cool technology that converts simple drawings into video games simply by using square-lined drawing paper. It has a joint project with Cartoon Network.

The nine person team is expanding and it is working with large brands on unique projects.

Robin Rath, co-founder Pixel Press says he has spent 12 years working in St. Louis and the location is important because of the talent available and the creative culture.

St. Louis Spirit: Bud Albers Is Chief Angel And Mentor -SVW

St. Louis Spirit: Arch Grants Equity-Free $50K For Startups Moving To St Louis -SVW

St. Louis Spirit: Social Media Club - Can You Compete With Silicon Valley? -SVW

St. Louis Spirit: Startup Voodoo - The Black Magic Of Building A Tech Business -SVW

St. Louis Spirit: Cortex Urban Research Park Bucks Tech Campus Trend -SVW

St. Louis Spirit: Lockerdome And Other Standouts -SVW

Bud Albers, former Disney CTO, angel investor and CEO of ClickWithMeNow.

My first meeting in St. Louis also turned out to be one of my favorite interviews,  with Bud Albers, a veteran of many large corporations and mentor to many local startups.

Albers was CTO at Walt Disney and was responsible for many innovative implementations of technologies across nearly all of Disney's brands, pioneering online, mobile and gaming applications. He also held senior positions at Drugstore.com and Getty Images.

We spoke about the challenges that large organizations face, mostly internal obstacles, to implementing the latest technologies and automating complex business processes. 

Albers has spent several years advising local startups and making investments. He recently took on the CEO role at Click With Me Now, and helped raise $2.25m from private investors. The startup has a unique technology that allows users to share a web session with others. It has many enterprise uses, such as in service call centers, healthcare, and more. 

"I couldn't resist the opportunity to build another company. Click Me Now has a great technology and I know how to make it successful." 

Click With Me Now, Inc. | The Easiest & Safest Way to Share the Web!

The Startup Spirit Of St. Louis - Building A Sustainable And Socially Conscious Tech Community -SVW

St. Louis Spirit: Pixel Press - Draw A Video Game -SVW

St. Louis Spirit: Arch Grants Equity-Free $50K For Startups Moving To St Louis -SVW

St. Louis Spirit: Social Media Club - Can You Compete With Silicon Valley? -SVW

St. Louis Spirit: Startup Voodoo - The Black Magic Of Building A Tech Business -SVW

St. Louis Spirit: Cortex Urban Research Park Bucks Tech Campus Trend -SVW

St. Louis Spirit: Lockerdome And Other Standouts -SVW

With it's famous arch in the background, St. Louis celebrates 250 years in 2014.

I recently returned from 4 days in St. Louis, meeting the local startup community and contributing to a new conference, Startup Voodoo organized by local tech news site Techli and Elasticity, an innovative digital marketing agency.

These next few posts offer a whirlwind introduction to some of the events,  people and companies of St. Louis. I was impressed with the quality of the tech community.

I was more than impressed with the strong sense of social responsibility everyone seemed to have from young business students, entrepreneurs, to philanthropists. Even newly transplanted residents with just a few months residency talked about S. Louis as "we" and exhibited a strong loyalty to their new community.

It is worth remembering that Silicon Valley used to have a strong sense of social responsibility, too. It once was very important in recruiting software engineers, they cared about it more than free lunches and free haircuts.

When Google registered for its IPO in 2004 the first pages of its SEC filing was a letter from the founders, in which they spelled out their goal of building an enterprise for greater good:

Don't be evil. We believe strongly that in the long term, we will be better served-as shareholders and in all other ways-by a company that does good things for the world even if we forgo some short term gains....

We aspire to make Google an institution that makes the world a better place. . . We are in the process of establishing the Google Foundation. We intend to contribute significant resources to the foundation, including employee time and approximately 1% of Google's equity and profits in some form.

We hope someday this institution may eclipse Google itself in terms of overall world impact by ambitiously applying innovation and significant resources to the largest of the world's problems. 

Here are some of my St. Louis startup stories:

St. Louis Spirit: Bud Albers Is Chief Angel And Mentor -SVW

St. Louis Spirit: Pixel Press - Draw A Video Game -SVW

St. Louis Spirit: Arch Grants Equity-Free $50K For Startups Moving To St Louis -SVW

St. Louis Spirit: Social Media Club - Can You Compete With Silicon Valley? -SVW

St. Louis Spirit: Startup Voodoo - The Black Magic Of Building A Tech Business -SVW

St. Louis Spirit: Cortex Urban Research Park Bucks Tech Campus Trend -SVW

St. Louis Spirit: Lockerdome And Other Standouts -SVW

A shimmery future comes into view for St. Louis...

David Ulevitch, CEO of San Francisco based OpenDNS is an alumni of Washington University in St. Louis.

Next week I'll be speaking at "Startup Voodoo" a new conference in St. Louis organized by Aaron Perlut and his team at Elasticity, a digital marketing and PR firm. I experienced some of the energy and the spirit of St. Louis at a recent dinner in San Francisco organized by Washington University, which featured CEOs of 21 startups, and attended by alumni now living in the San Francisco/Silicon Valley area.

I was impressed with what I heard: about the excellence of Washington University, the great business-friendly climate of the city, the number of successful startup CEOs and venture capitalists that are here from St. Louis; and the support and mentorship programs available to entrepreneurs. All the city needs now is some local VCs and some great exits to really spark things off.

The mid-west is often over-looked, and over-flown by most people yet it has a superb academic and business environment. And there's no reason to over-fly St. Louis because Southwest last week said it added a new flight service to San Francisco beginning September 30. [The airline promoted the new route by flying the 21 startup CEOs for free.]

There's probably no better sign of improving startup activity in a city than a new daily non-stop flight to San Francisco International.  "Airlines aren't philanthropists," said Dedric Carter, the associate vice chancellor for innovation and entrepreneurship at Washington University. 

St. Louis used to be America's fourth largest city in the early twentieth century (now 58th). The city has been the startup home of many impressive companies: Ralston-Purina, Anheuser-Busch, McDonnell Douglas, Mastercard. It has nine Fortune 500 companies and 19 in the Fortune 1000. It is very strong in financial services, and healthcare is growing very fast.

I'm looking forward to finding out more about St. Louis firsthand. 

- - -

Please see: St. Louis Entrepreneurs, Wash U. Alumni Bond in Bay Area | Techli

Skandalaris Center

Washington University

Accelerate STL,

I recently met Jeffrey Shaw (above) , CEO of Underground Cellar, a startup focused on helping wineries sell wine online. He and his team has developed a great technology platform to allow wineries to market themselves and sell their wines but it is also using its own platform to sell wine on behalf of many wineries -- using a clever business model.

Shaw explained that when wineries want their help to shift certain wines, Underground Cellar will taste the wines first and then agree to sell a set number of cases and take a sales commission. It always asks the winery to give it additional cases of some of its other lines, often high-end expensive vintages, and those are used to reward its customers.

When customers order wine, they have a chance to win additional bottles for free, equivalent to what they have ordered, or better. The probability of winning extra bottles is shown each time in real time.

[All it needs (below) is some revolving cherries to create a virtual one-armed bandit.]

Customers used to have to wait until their order arrived to see if they had won but Shaw says telling them immediately if they have lost gave them a ready opportunity to place another order and try again, and many do. 

Additional services include storage of customer's wine in its "Cloud Cellar" with courier shipping for same day delivery.

Shaw says that his startup is a technology platform and he thinks it could be used for many other types of products and services. But it clearly is more than that. The startup also represents wineries online with sharp marketing and page designs, and it is becoming an important e-commerce partner for many wineries.

Underground Cellar is really a new hybrid, a high-tech enabled marketing and e-commerce agency. I'm sure we'll see more of this type of company because it combines three essential business services in one package.

Google images of Marcin Kleczynski, CEO of Malwarebytes.

Life is good for Marcin Kleczynski, from Chicago. At 24 years old, he recently raised $30 million for his anti-virus startup Malwarebytes, and he won Ernst & Young's Entrepreneur of the Year 2014 Northern California region award  for emerging sector companies.

He has also spent nearly a decade in business making him one of Silicon Valley's veteran startup entrepreneurs and one of its youngest. He's has several decades ahead of him to achieve even more. Here's my notes from a recent conversation with Marcin.

- He started at 14 years old because his family PC became badly infected with malware and adware of all kinds. In teaching himself how to clean up the mess he started collaborating with others online, to provide a commercial service.

- He operated out of his home and dorm room for years and didn't meet his business partner, Bruce Harrison, until they had made their first $500,000. 

- He recently moved from Chicago to San Jose after finishing college studying computer science. But he doesn't want to code but to be a good CEO.

- Silicon Valley is a terrible place to try and recruit engineers, he says there are great engineers elsewhere. But you have to be here because of the VC firms and the networking. 

- Malwarebytes recently raised $30 million. It was very profitable and didn't need the money but it needed the money and the expertise to move into enterprise markets. The new capital will be used to expand the staff from about 150 to 200, mostly in sales.

- Kleczynski says that up till now Malwarebytes was focused on consumer markets where it is installed on about 60 million PCs. But people have been installing the software on their work computers, too. This has generated demand from corporations and an opportunity to build an enterprise security business, with help from its experienced VC investors.

- He says the culture of his company is important and cultural fit of each employee is very important. But culture is difficult to create and maintain when staff are distributed around the world. Malwarebytes has developers in Estonia and New York. He has hired a cultural ambassador to help plan staff events, trips, and to help create a happy and productive workplace. 

- He tries to spend a lot of time with new hires to help them fit in and to understand the long term goals of the company. There is also an annual three-day summit for all staff to help everyone bond. Office rules are relaxed, especially after 4pm when beer is allowed.

- He said that the Ernst & Young competition was a great experience and he hopes to keep the company successful as he deals with the considerable challenges of rapid expansion into new markets.

- - -

Here is a great interview with Marcin in The San Jose Mercury News with additional information, such as: He is Polish-born, he came to the US when three years old, he speaks fluent Polish, and he has a pilot's license. 

Q&A: Marcin Kleczynski, CEO of Malwarebytes, on cybersecurity and startups - San Jose Mercury News

NamePlace, founded by Lisa Padilla (above) CTO/CMO, and co-founder Ron Brown CEO, has come out of stealth mode with an interesting service aimed at helping thousands of cities in the US gather ad revenues from assets that they have in abundance: parks, community buildings, civic programs, Little League clubs, etc.

It's an online marketplace for offline civic marketing: a huge catalog of municipal naming rights.  And it offers large brands and local businesses, a rare opportunity to be seen doing good, and seen to be involved in supporting the vitality of local communities. Here are some notes from my recent meeting with Lisa Padilla:

- Municipal naming rights is a potentially huge, untapped market that cities have done a poor job in monetizing. One of our clients Oakland (across from San Francisco) has a list of more than 130 available naming opportunities.

- Some cities such as San Diego have done reasonably well in selling naming rights but it is rare.

- The founders of NamePlace have a strong background in the advertising business so we know the language of the brands and ad agencies.

- Civic spending relies on local taxes and state and federal grants, which come from taxes.  But here's an opportunity to raise money for local government without raising taxes. 

- We examine each naming opportunity and we make estimates of how many people use those facilities, or are involved in a civic program, and we use that as an audience to measure up against similar metrics for advertising. It's a great deal for brands and one that they haven't had a chance to tap into but will be familiar to them in terms of evaluating ROI and for comparisons with other campaigns. 

- We recognize that brands need to operate at scale. We provide a way for brands to make large buys across many cities with tools to manage and administer their budgets.  

- This is also affordable marketing for local businesses. Most of their customers are within a mile or so of their location, so why pay Google, thousands of miles away, or pay for expensive advertising billboards, when you can buy naming rights and be seen to be involved in your community, on a consistent and long-term basis. And the money goes to the city and not to billboard owners or Google shareholders.

- Most cities have very confusing programs for naming rights, mostly managed on Excel spreadsheets with dozens of different marketing brochures.  Part of our challenge, and service, is to hep unify those efforts within our platform to make them easy to discover, compare, and aggregate for larger buys.

- Lots of businesses want to be involved in corporate social responsibility programs but don't know how to proceed. NamePlace gives them an easy way to get started. 

- Local cities will make the new signs for parks, etc according to their local specifications. And cities will be allowed to reject companies based on their own criteria. "Welcome to Clorox Beach" might not be the right message for a community [ED: Maybe in Louisiana and cleaning up from BP!]

- NamePlace will help market and sell each city's naming rights, and there's also a self-service option to buy direct.

- - -

NamePlace

NamePlace | CrunchBase

Uber CEO Travis Kalanick Photo: JD Lasicka

Casey Newton in The Verge has a great story about how Uber, the San Francisco ride app startup, is trying to sabotage its rival Lyft by hiring people to call and cancel thousands of rides.

So much for the top innovator wins in Silicon Valley. These are very unethical and sleazy tactics:

Using contractors it calls "brand ambassadors," Uber requests rides from Lyft and other competitors, recruits their drivers, and takes multiple precautions to avoid detection. The effort, which Uber appears to be rolling out nationally, has already resulted in thousands of canceled Lyft rides and made it more difficult for its rival to gain a foothold in new markets. Uber calls the program "SLOG," and it’s a previously unreported aspect of the company’s ruthless efforts to undermine its competitors.

This is Uber's playbook for sabotaging Lyft | The Verge

Uber's management claims to have never ordered ride cancellations by its brand ambassadors but The Verge has several interviews and has seen internal documents that show that Uber is lying.

With Lyft’s arrival in New York imminent, Uber said it was creating a "street team" charged with gathering intelligence about Lyft’s launch plans and recruiting their drivers to Uber. Contractors were then handed two Uber-branded iPhones and a series of valid credit card numbers to be used for creating dummy Lyft accounts. Uber assumed every contractor would be caught by Lyft eventually; the second phone, according to a contractor interviewed by The Verge, was issued so "you would have a backup phone if and when that happened so you wouldn’t have to go back."

Uber's CEO and co-founder Travis Kalanick is 38 years old so he's not a twenty-something entrepreneur unsure of what's right or wrong in business. Would companies want to partner with Uber knowing that the startup plays by different rules and will lie and cheat? It doesn't build trust in management and it won't build a corporate culture that's honest and truthful. 

Uber raised a D Series in June of $1.2 billion. Investors were Google Ventures, Kleiner Perkins Caufield & Byers, Menlo Ventures, Summit Partners, Fidelity Investments, BlackRock and Wellington Management. Do such august and respected investment firms want to be associated with such uber-unethical practices? 

VC firms should make sure that their portfolio companies agree to adhere to the same codes of ethics that they themselves subscribe to. I assume they all have codes of ethics. 

Marc Canter on stage and screen at a panel moderated by Dan Farber at the Mac 30 Anniversary event in January 2014.

Marc Canter, a leading pioneer of multimedia technologies with his work at Macromedia 25 years ago, has launched Interface, a startup focused on authoring mobile apps across all major platforms.

Canter says he hopes to emulate the power and popularity of authoring tools he helped develop at Macromedia, which led to an explosion of creativity in producing interactive media. At the time, CR-ROM based media titles were the only way rich interactive media could be distributed and presented on a computer. San Francisco in the late 1980s and early 1990s was at the epicenter of CDROM multimedia development and Canter was its leading figure.

Canter is founder and CEO of Interface, He's recruited an impressive team of industry veterans and former colleagues, plus advisors such as top tech editor and journalist Dan Farber, and popular blogger Robert Scoble. 

Canter says that his inspiration for the venture came from a project he was considering based on the "Internet of Things." He realized that this future world of massive interconnectivity would require a great user interface otherwise it would be hard to make use of its potential. Authoring tools that "mere mortals" can use would be the key to success of for the Internet of Things. The easier those tools are to use the more apps will be developed, and more users of those apps will be enabled. 

"We're starting with an application framework for smartphones aimed at quickly developing apps for five different use cases based on people's daily activities, such as a personal trainer." If personal trainers, and others such as a life coach, home assistant, or a tour guide can use the authoring tools to create customized mobile apps for their clients, Canter believes this will prove that Interface has a great user interface. 

Canter says the choice of name is designed "to make you hate it. We're looking to standout and be seen."

Interface is developing a series of frameworks for each user archetype so for example, the Personal Trainer app development tool is preconfigured to easily integrate Fitbit, and other digital sensors, into an exercise regime that can trigger music or words of encouragement at key points in the user's activity stream. 

Interface will be free for creating up to five mobile apps per user -- a generous allowance. Interface will also act as "the player" of the apps allowing it to hide the complexity of backend functions. The startup is starting to talk with investors and set its development schedule. 

Plans include a marketplace for Interface apps and additional tools for Internet of Things platforms.

Sol Tzvi is CEO and co-founder of Genieo

Genieo, an Israeli startup developing AI software for consumers, has been acquired by Somoto, a publicly traded software company specializing in toolbars for monetizing users' web browsing.

The deal is worth $34.12 million — $20m in cash and the rest in shares. Aviv Levy, reporting on Globes,

Genieo's founders, CEO Sol Tzvi and chairman Jacob Tenenboem, who own 53% of the company's capital in equal shares, will receive most of the acquisition proceeds. A long list of shareholders own the rest, including foreign company Teltora, Comsec Assets, ProSeed Venture Capital Fund (TASE:PRSD), Matrix CEO Moti Gutman, Zvika Barinboim, and Adv. Roni Berkman.

Somoto has already been using some of Genieo's software and the deal is expected to help it acheive a doubling of sales in the coming year.

Founded in 2008, Genieo's operating profit totaled $1.4 million last year on $5.2 million in revenue from advertising, distribution, and searching. Somoto says that Genieo made a $1.6 million operating profit on $3.5 million in the first quarter of 2014.

The proceeds received by the sellers will be paid in two stages: $12.1 million in cash and $6 million in Somoto shares when the deal is completed (scheduled for August 31 this year), and $16 million nine months after the completion date, composed in equal amounts of cash and Somoto shares.

Globes English - Somoto acquires Genieo Innovation for $34m

- - -

Please see:

Women In Tech: Sol Tzvi On Starting A Startup... -SVW

Women In Tech: Sol Tzvi On Starting A Startup . . . Part II -SVW

In 2009 I attended The Europas Awards in London (above), celebrating the best European tech startups. It was a very boozy, rowdy, and fun event presented by Mike Butcher, Editor of Techcrunch Europe.

I couldn't make it this year but I'm sure that the 2014 awards very much the same in tone and booze. Mike Butcher was the MC, and even one of the winners was the same: Soundcloud. The other 2014 Europas winners included: FoodPanda, Babbel, Startup Bootcamp, Brainient, Supercell, EyeEm, GoCardless, DataSift, Petcube, BlaBlaCar, BigHealth, ZenMate, Bitstamp, Hailo, Evrythng, Swiftkey, FarFetch, CodeClub, Index Ventures, and Telegram.

[At the time of writing I found no US coverage of today's Europas Awards, not even at Techcrunch. I scooped the US press. It shows how little interest there is in European startups.]

The above video captures some of the boisterous nature of the Europas, it's nothing like the sedate US "Crunchies" startup awards. I shot it during a week-long Traveling Geeks trip to London and Cambridge in July 2009.

It's a little pixelated at first but settles down quickly. You'll see plenty of familiar faces, such as Craigslist's Craig Newmark, Robert Scoble, Rocky Barbanica, Sarah Lacy, Paul Carr. You'll see a young(er) Hermione Way interviewing me, and also European entrepreneurs Alexander Ljung, founder of Soundcloud; and Mathys von Abbe, founder of Dutch startup Moby Picture.

- - -

Traveling Geeks: A Guardian Newspaper Media Panel, Twitter, From Back to Front And Beyond... -SVW

Innovation And Culture - Reflections On My UK Trip -SVW

It's good to see the French bringing back "entrepreneur" -- a word that the rest of the world has embraced more readily than the French themselves. It's not "très cool" to be an entrepreneur in France because the social norms frown on too much personal ambition, and corporate jobs have a higher social status.

Monday evening at San Francisco's Le Bastille restaurant I met some French founders and spoke with a couple of French business students about their impressions of Silicon Valley.

PriceMatch has US investors attracted to its room pricing service, which it claims uses scientific algorithms to boost room revenues by 5 to 15%. It is aimed at hotel managers. I spoke with Charles Falanga, the manager for the US operations. I was more impressed with the ability of PriceMatch to interface with the multitude of travel sites and update room pricing and scan competitor's pricing.

A 5% to 15% improvement won't get much urgent attention, it might be better to charge for the management services and throw in the pricing algorithm for free.

Pixowl is a game developer with about 1 million users of its Sandbox game, which lets kids create their own game worlds and share them. Sebastien Borget, co-founder,  says that the company decided from the beginning to focus on the US market because France and the rest of Europe are too small and fragmented. 

Twelve Monkey Company's  Rémy Koné (above) has a great Kickstarter project: a unique battery for iPhones. It's only $49 and it has several nice features, including a multi-colored glowing surface.

Please see:

Paris Diary: Putting "French" Back Into Entrepreneur -SVW

Paris Diary: Cultural Barriers To French Startups... -SVW

Paris Diary: The Joie de Vivre of French Entrepreneurs... -SVW 

I recently met with Vineet Jain, (above) CEO and co-founder of Egnyte, which offers file sharing for enterprises, with a hybrid cloud and data center model.

My recent post about startups having to sell because they can't get to scale, caught the attention of Jain's team and we met to discuss the company's strategy. It is competing against some extremely well funded companies such as Box and Dropbox.  Here are some notes from our conversation:

- Egnyte has raised total funding of $61.5 million. This compares with Dropbox, total $607 million; and Box with $414 million and it has plans for an IPO valued at $250 million.

- Jain recognizes that his rivals are very well funded but he says he can build Egnyte by concentrating on the enterprise and offering a highly secure service focused on the needs of large companies. By building for long term value he believes Egnyte can survive and prosper.

- His competitors are is well funded but their freemium business models cost a lot of money to maintain and they are burning through cash, which is why they've had to raise large amounts of capital. Egnyte's business model doesn;t have the same freemium costs as Box or Dropbox and it is close to profitability.

- He says that by offering enterprise IT a hybrid file sharing model, where companies can either use Egnyte's cloud storage or run the software in their own data centers, is exactly what IT management wants. The cloud alone is not enough. 

- He says the timing is good because enterprises recognize the value of cloud computing and storage. The company's software lets the IT managers control file access and security across internal enterprise systems and external cloud storage.

- The company makes its money from software and not by charging for data storage, which has rapidly become a commodity business. It charges per seat.

- Finding engineers is hard but the company has about 32 developers in Poland and it is very pleased with the quality of Polish programmers. 

- Google Ventures, the venture capital arm of Google is an investor and the company's offices are right next to the Google campus in Mountain View. 

- Jain has more than 20 years of business experience at KPMG, and Bechtel, and prior to co-founding Egnyte in 2006, he founded Valdero, a supply chain software company.

- He has had several offers to sell Egnyte but says he turned them down because he wants to build a large and independent company. It's rare to find a CEO with a determination to stay independent and prosper despite extremely well funded competition.

Egnyte - Management

Egnyte provides deployment models to solve any use case including cloud file sharing, private file sharing, cross-office collaboration, and fast local file access. Users can have a single view of all the files they have permission to access, regardless of where files are stored -- on the user's computer, in local storage in their office, on storage devices in remote offices or in any cloud.

- - -

Please see: 

It’s taken a while to do it but finally NASDAQ Private Market has launched  as a “new capital marketplace for private companies.”

I had the scoop on this back in late 2012. Robert McCooey (above), NASDAQ’s senior vice president of capital markets and new listings, told Silicon Valley Watcher about the plans. Exclusive: NASDAQ Plans To Unify Private Shares Markets.

http://www.siliconvalleywatcher.com/mt/archives/2012/10/exclusive_nasda.php

Kim-Mai Cutler at Techcrunch reports: 

Greg Brogger, who started an early platform called SharesPost for buying shares of pre-IPO companies and is now managing the new program, says that NASDAQ’s new market is tailored to let companies have more control over the process.

They can use the platform to let early employees sell their shares while managing who can buy and sell shares, how many shares can be sold at any time, and the timing of transactions and the depth of financial disclosures to prospective investors.

NASDAQ Finally Launches Its Market For Privately-Held Companies | TechCrunch

Please see: 

Secondary Markets: Much Needed Liquidity For Silicon Valley Startups Or A Private Stock Market For The Rich?

http://techcrunch.com/2014/03/05/nasdaq-finally-launches-its-market-for-privately-held-companies/

AlertID, based in Las Vegas, is expanding its services. It acts as a crime alert service for about 1 million users and covers about 85% of US zip codes. It's also a messaging platform for neighborhood watch groups and local residents.

However, the 3-year old company faces competition from a younger startup Nextdoor, which raised $60m five months ago, from top Silicon Valley VC companies. I recently met with AlertID CEO Ken Wiles (above), here are some notes from our conversation:

 - AlertID claims it is the largest neighborhood crime reporting services in the US. It has information on 85% of US zip codes. It currently covers about 90 million US residents.

- It has about 1 million regular users.

- It's trying to become a communications platform for neighbors to organize as neighborhood watch groups and also communicate with each other. 

- The company has to interface with local city IT systems, which can be difficult and time consuming to set up because of the myriad types of computer systems and databases.

- The US has about 9,000 municipalities and crime reporting systems.

- When people sign up, the system picks a geographic border for each user, which can be ten or more miles in rural areas.

- AlertID wants to improve the quality of life for people by helping to keep them safe, teaching them about safeguards, and acting as a communications channel between neighbors.

- It sends out the notification by email, there is no SMS or plans to offer other messaging channels. 

- It offers a tornado alert feature.

- Local law enforcement are big supporters of AlertID.

- Its revenue model has three legs: web site advertising; licensing enterprise apps to use its data; selling data services. 

Foremski's Take: The name AlertID is confusing, it implies a medical emergency. Using email as the only messaging channel limits the usefulness of the service.

A neighborhood based service needs to offer more than just crime data and a messaging platform between neighbors. It should have other information such as schools, clubs, restaurants, and local news sites. 

The company is unaware of Topix, which is focused on thousands of neighborhoods, offering local news and information, and local forums where neighbors interact. Some of these communities however, are toxic and the gossip can be harsh, forcing people to leave the area in some cases. (New York Tmes: Small-Town Gossip Moves to the Web, Anonymous and Vicious.) AlertID needs to make sure this doesn't happen on its service.

There is also an open source project funded by Knight Ridder Foundation called OpenBlock that automatically collects and publishes neighborhood information. Any site can use this software for free. 

By only offering crime data, there's not many reasons for people to revisit the site. And crime maps are available on other sites too, such as local newspapers, and real estate sites such a Trulia and Zillow.

But a much larger issue for AlertID is Nextdoor, which not only has a substantial amount of expansion capital but its focus is broader than just local crime information.

AlertID's best bet is to become the best source of local crime data and sell that as a real-time service to local newspapers, large real estate sites, and any other buyers.  

Or, change its name to something that doesn't confuse people with medical emergencies; and broaden its services to include local news and classifieds.

 Marshall Kirkpatrick, CEO of Little Bird. 

Little Bird, an Oregon based startup that identifies experts on Twitter, has raised $1.7m in new funding, reports Lora Kolodny at Venture Capital Dispatch on WSJ.com:

The new funding was led by the Oregon Angel Fund (OAF) and joined by the company's earlier angel backers including StockTwits co-founder Howard Lindzon's Social Leverage Fund, according to Little Bird Chief Executive Marshall Kirkpatrick.

In 2012, Little Bird raised $1 million from angel investors including serial entrepreneur and investor Mark Cuban (the Dallas Mavericks owner, Shark Tank investor and founder of Broadcast.com) and Mr. Lindzon. The company also took part in Wieden + Kennedy's PIE incubator program in Portland.

I ran into Marshall, a former editor of ReadWriteWeb, in San Francisco (above) in October when he was meeting with San Francisco area VCs. He said the money would be used to scale the business and add sales people.

Little Bird allows journalists, PR, or marketing to quickly identify experts in specific fields and discover nascent trends.

- - -

Marshall Kirkpatrick: Little Bird On Market Street -SVW

Marshall Kirkpatrick's Blog

Startup Grind 2014 Conference is coming up next week February 3-5. It was sold out last year as 1,200 founders took part in an intense, and highly participatory educational program on how to run a startup. 

This year the speaker list is even better. And the networking is better, too.

We've been promised some of the last tickets, along with a 15% discount.

The best value is the $600 co-founder ticket deal - bring your business partner. Don't dally. I'll see you at the Computer History Museum next week.

In less than two years, Startup Grind CEO Derek Anderson has built a chain of worldwide events and local chapters, focused on teaching entrepreneurism, as taught by entrepreneurs.

Startup Grind 2014 kicks off Monday evening at 6pm with my favorite SoCal VC Mark Suster interviewing Ben Horowitz.

I hope Suster asks him about the value of aggressive PR for VC firms. Shouldn't they promote their startups instead of themselves?

[See: Meet Silicon Valley's Top VC Publicist...]

Tuesday morning Jeff Clavier, one of my favorite Silicon Valley Super-Angels, talks with Fitbit founder James Park.

I hope Clavier tells him about my hot idea: fitbit walkers. They are like dog walkers but they walk your fitbit around town -- so at least you look good on paper. Your insurance company will love you.

Here's a small selection of what's on offer at Startup Grind 2014.

- Fireside Chat
George Zachary, Charles River Ventures
Derek Andersen, Founder & CEO, Startup Grind

Getting From Angel to Series A and Beyond: How Startups Are Getting Funded
Kirsten Green, founder, Forerunner Ventures
Lee Blaylock, Startup Grind Dallas; Joy Randels, Startup Grind Tampa

30-Company: How Intuit Began, Survived, And Thrives 30-Years Later
Scott Cook, Intuit
Harry McCraken, Time Magazine

Acquisitions & Valuations from a CEO perspective
The man behind a mega cloud-based HR company shares first hand experience with startup valuation and the complex acquisition process.
Burton Goldfield, President & CEO, TriNet
Perri Gorman, founder & CEO, Archively

Shooting for the Moon: How Google [x] Sees The World
Megan Smith, Google [x]

The Evolving Entrepreneurial Journey
Mary Grove, Director of Global Entrepreneurship Outreach, Google for Entrepreneurs
MC Hammer
Reid Hoffman, Partner, Greylock; Co-founder, LinkedIn
Greg Tseng, Co-founder & CEO, Tagged

Wednesday:

Growth Hacking and Analytical Marketing
Dave McClure, founding partner, 500 Startups

Reinventing the Enterprise Software Business Model
Jay Simons, President, Atlassian

Crowd Funding The Future: How Your Product Can Win The Crowd's Wallets
Danae Ringelmann, Co-founder, Indiegogo

Incubating Startups: What TechStars Has Learned In The Past Eight Years
David Cohen, Founder, CEO and Managing Partner, Techstars
Derek Andersen, founder & CEO, Startup Grind

Ecommerce Unplugged: Build A Business Way Beyond Flash Sales
Alison Pincus, Co-founder, One King's Lane
Colleen Taylor, TechCrunch

Twitter: From 4 Employees to IPO
Jason Goldman & Anamitra Banerji; Foundation Capital

Fireside Chat
David Eun, Samsung Open Innovation Center
Jason Calacanis

The Ideal Y-Combinator Applicant (cir 2014)
Jessica Livingston, Co-founder, Y Combinator

Some of the last tickets are here:  The $600 co-founder deal is the best.

Heather Knight’s report on SFGate.com highlights the plight of local people forced off Mid-Market Street by police. 

Swept off Mid-Market, S.F.'s homeless cluster nearby - SFGate

Police Chief Greg Suhr said the influx of homeless people into neighborhoods around Market Street is to be expected - if they're moved off the main drag, they have to go somewhere.

"I get my marching orders from the mayor that Mid-Market is a priority," he said, noting that Lee stresses that point every time the two men talk. Suhr said he plans to double the number of beat officers patrolling Mid-Market in the next few months at the mayor's request.

Foremski’s Take: This looks like segregation to me and not gentrification. 

There are good lessons in gentrification to be had from San Francisco’s Gay population, which led the gentrification of the Castro and Haight Street neighborhoods.

Much of Haight Street area and parts of the Castro became very run-down and very dangerous in the 1970s, following the Summer of Love era in the late 1960s.

Gentrification took a long time but it worked because it put the community to work. People were hired for manual and skilled work. The gentrifiers went out to the local restaurants and bars, they made use of local small businesses  such as dry cleaning and hardware stores.

The Gay way is best…

I saw the  gentrification in progress when I arrived in SF in the mid-1980s and moved into an apartment on the corner of Haight-Ashbury.

Gradually, a whole community was built back up, and many new jobs were created. It was done through a process of integration and not segregation. 

That’s not what’s happening here in Mid-Market where Twitter keeps its people inside all day and competes against local businesses by providing thousands of its workers with free food, and a rainbow of free services such as laundry and apartment cleaning.

On the streets outside the golden doors of Twitter’s HQ,  hundreds of local residents line up for their free food and free services from the many charities operating in the Tenderloin, one of the poorest areas of the City.

Brisbane or bust…

Twitter won its demand for city tax relief, now valued at more than $56m, after it threatened to move its HQ to a strip mall in Brisbane.  

The city should have called its bluff – Twitter knew it would have struggled in its recruitment of top talent if it were in Brisbane, and it would have stayed in San Francisco and accepted less. Now it gets extra city services for free as police double up on their sweeps. 

Segregation should not be the new gentrification. The city should help integrate Twitter and the other tech companies. Sweep the homeless towards mid-Market Street and not away.

The tech startups are innovative, they’ll come up with an app for helping the helpless, and they’ll come up with other bright ideas.

But if the problems of the neighborhood are segregated away — they won’t see a problem that needs solving.

Integrate San Francisco’s startups and they’ll be part of the solution.

- - -

Please see: Segregation Of Tech Workers Leads To Mistrust And Conflict

Caleb Garling at SFgate.com is on the trail of stealth startup Zee.Aero, which is building a personal flying aircraft (above), that can park in a normal car parking space. He thinks it's probably linked with Google:

It would be battery powered. But in addition, it is designed to lift straight up like a helicopter -- so no need for a runway. Then, as the patent notes, the collection of rotors on top work with two facing backward to allow it to hover for a bit before cruising off to that grocery store.

We are also hearing from sources that Google is involved, but in what capacity is unclear. However, Zee.Aero's offices are near Shoreline Lake in Mountain View,... Shoreline Lake is also where you'll find the sprawling Googleplex -- and not far from there, Google X, the super-secret facility that gave rise to self driving cars, Internet balloons and Google Glass. Sebastian Thrun, who helped start Google X and led the driverless car effort, has said he sees the majority of people using flying cars by 2040.

This stealth company nestled against (inside?) Google is building flying cars - The Technology Chronicles 

Ilan Kroo, Zee.Aero founder, replied to an email in which he stated that it is not affiliated with Google or other nearby tech companies. However, Garling still has a semantic hope of Google's involvement. 

I followed up by asking, since the wording wasn't quite clear "Does that mean Zee.Aero is not affiliated with Google or you yourself are not affiliated with Google, or neither you nor Zee.Aero have an affiliation with Google?"

I'm sure that with the Google founders' penchant for exotic projects such as asteroid mining and life extension technologies, a flying personal car makes a nice addition. If not now then in the near future. And Google's self-driving car technologies would be perfect for a crowded airspace -- especially around the Googleplex with its close proximity to San Francisco and San Jose airports, not to mention the Google execs private hangar at NASA's Moffett Field. 

However, I'm still waiting for my jetpack. They promised us jetpacks when I was growing up. 

Kara Swisher reports on a rumor of a deal that could value SnapChat at $3.5 billion compared with $800m just a few months ago:

Snapchat has been in talks for another funding that values it at up to $3.6 billion, according to sources close to the situation. Sources also added that the funding itself would be in the hundreds of millions of dollars and that the lead investor might be a strategic party from Asia. Such a deal could still fall apart, of course...

Snapchat Is Mulling Another Huge Round at a $3.5 Billion Valuation - Kara Swisher and Mike Isaac - Media - AllThingsD

Foremski's Take: For SnapChat's valuation to almost quadruple in such a very short time  eflects some insider information shared with prospective investors about traffic and monetization plans (o current monetization) that must be truly extraordinary.

Or, the VC investors found a chump.

Ms. Swisher speculates that the investor is China's "Internet giant Tencent, which makes money from in-app transactions."

The massive jump in valuation might signal a new period of irrational exuberance by investors in Silicon Valley startups and define yet another bubble. It could result in crazy valuations for other startups as investors pile into deals.

Given the performance of past boom and bust cycles, this period of exuberance could last for at least another two years.

Last year a 21 year old man is shot and killed in a drug-related case near my home in San Francisco.

The FBI's shutdown of web site Silk Road is a hollow victory in the hugely expensive war on drugs, which has consistently failed to stop the drug trade, or stop criminals from amassing huge amounts of wealth and ordering more than 60,000 murders in Mexico alone.

Silk Road had some positive aspects. The FBI admitted that Silk Road vendors provided high quality drugs. And the prices were far below the street, reducing the money fueling the trade.

Based on advanced Internet technologies, it was able to create a protected market that kept money out of the hands of violent street gangs and international criminal syndicates. It also protected buyers (lots of US citizens) from the poisons that adulterate street drugs.

If it had grown large enough, Silk Road, or a collection of similar online services, would have begun to seriously challenge the revenues of local and international mobsters on a scale that the war on drugs has consistently failed to do.

It's much better to have drug distributors such as Silk Road and competitors fight over Google keywords in online auctions than murder and behead each other in the tens of thousands. 

The beneficiaries of this FBI takedown are the international criminal syndicates, hit men, and the corrupt networks that enable the drug trade to cross borders in staggering quantities.

The FBI has unwittingly done them all a big favor and kept the Internet from disrupting a truly evil international industry.

But this story is not done yet. It's just the beginning. The next generation of Silk Roads is on the way and they'll be smarter, stealthier, and even more efficient at disrupting the drugs business.

[The Walter Whites of the future can remain mild-mannered, middle class artisans rather than having to learn the murderous ways of the drug world. Lost mail, Internet outages, and changes in Google's algorithm will be the most dramatic events in a future sequel to "Breaking Bad."]

Bitcoin's future…

Bitcoin is a key technology in this tale of potential business disruption. Its ability to enable a large market with relatively friction-less payments has attracted the attention of a legion of entrepreneurs with ideas for other applications. Bitcoin has benefited greatly from its nefarious affiliations.

Businessweek's Joshua Brustein reports that the Silk Road bust is good thing for the virtual currency. He quotes several entrepreneurs saying it removes a negative perception.

However, Bitcoin's future has nothing to do with drugs. It's as if the future of cash was in doubt because its anonymity allowed people to buy drugs, and worse. Bitcoin's value dipped after the bust but it recovered quickly showing that most Bitcoin backers knew that the drug connection is a red herring and were happy to buy them at a discount from dumb sellers.

The burgeoning interest in the currency is due to its unique properties, especially its property of scarcity.

Abundance destroys monetary value but scarcity attracts it and retains it.

That's why De Beers warehouses huge quantities of diamonds so that they remain scarce and maintain their market value despite the fact that diamonds really aren't all that scarce, thanks to new sources and new mining techniques.

There isn't a warehouse full of Bitcoins being kept out of the market to maintain a high value because it would be impossible. But De Beers could decimate the value of all diamonds at any time, by having a 50%-off warehouse sale.

A government couldn't use Bitcoins for quantitative easing, for example. "Printing money" is impossible with Bitcoins.

In the digital world of the Internet everything is easy to copy. But not Bitcoins.

It's these qualities that make it interesting.... and valuable.

Jeff Elder at the "The Tech Chronicles" on SFGate.com reported: Twitter posts inaccurately high metrics about its ads, changes them after questions

Twitter claimed that 

…the brand Burberry was mentioned in tweets during London Fashion Week 245,762 times. According to Twitter’s blog, this was achieved with the help of Twitter’s advertising products Promoted Tweets and Promoted Accounts.

The real number was just 10,000 tweets.

Twitter also claimed more than 4 billion "potential" impressions for the hash tag #LFW (London Fashion Week) but the real number was about 3.3 billion.

Twitter changed its numbers but did not say anything about the initial claims or apologize for the mistake.

The Twitter ads blog faked tweets by real users to promote its ads platform in a mockup in July. The company later said “We deeply apologize” for the issue, which was also uncovered by SFGate.

As interest rises in Twitter's IPO, its in the company's interest to claim a robust advertising market. 

Max Levchin, the co-founder of PayPal and a serial entrepreneur, spoke about his ambitions at Techcrunch Disrupt conference.

Rebecca Grant reported: PayPal cofounder Max Levchin aims to ‘move the needle on big challenges’ using data | VentureBeat

“I am most proud of the legacy I haven’t built yet,” Levchin said. “Data is what its all about for me. I want to build things that significantly improves the lives of a large fraction of the population and can move the needle on big challenges.”

Foremski's Take: It's good to see Max Levchin talking about solving big challenges rather than the hodgepodge of startup founders who lack imagination beyond making another To Do list, or e-mail app, or just want to be sold to a big corporation and work in a cubicle.

Hopefully, he'll be a good role model for other entrepreneurs.

Two years ago at a Commonwealth Club event (above) Max Levchin, and former PayPal colleague Peter Thiel, spoke about the lack of innovation in Silicon Valley:

Max Levchin: There is no insane abandon. When I was growing up, the space race galvanized an entire generation, my parents' generation. There is nothing similar. Today, the news was dominated by reports of an iPad 2 screen, it's not that radical. 

Peter Thiel: Everything is short-term focused no one is looking into the future, 15 to 20 years like they used to in our parents' generation. A lot of what our parents generation did: building interstate highways, Manhattan Project, etc, could not be done today.

 Others, such as computer pioneer Alan Kay have also warned of a lack of innovation that will curtail the growth of startups because they are all using 30-year old technologies that are reaching their limits.

Computer Pioneer Alan Kay Says Silicon Valley Is Running Out Of Innovation -SVW

Here's more details and a plea to help fund the project:

Traditional one-liter IV bags used to combat cholera weigh about 2.3 lbs, or just under 38 oz. A new IV bag called Mali weighs about 2 oz. The difference? No water in the Mali bag, saving more than $500 on a shipment of 14 units to an African country. Once there, the Mali bag can be mixed with any kind of water, even urine, to create a sterile solution. Without water, it can also be shipped and transported more economically and benefit from a longer shelf life. This could save 100,000+ lives annually.

 The technology behind the bag is called Forward Osmosis (FO). Here's how it works: If you put a membrane between water and any type of salt, the salt will create a draw that will move water through the membrane. This process requires no power, as opposed to Reverse Osmosis (RO), which uses power to push water containing salt and other solids to produce clean water.

The FO process leaves the water with salt in its content. The salt in this case could be sodium chloride, sugar, potassium chloride, magnesium and others. This lends itself beautifully to IV solutions since most of these solutions require salt of some type to be injected into veins.

The manufacturer is trying to get some funding under a Philips Innovation Fellowship run on Indiegogo.

Here's more about the Indiegogo campaign and how Mali works:

http://www.indiegogo.com/projects/save-120-000-lives-from-cholera-deaths-around-the-world

When did it become the dream of young people to run off to Silicon Valley and found a startup? What happened to make kids' dreams so mundane? 

Paul Graham has been working with hundreds of young business teams for many years and he has lots of interesting things to say in this interview. Here's a few extracts from: Paul Graham on Building Companies for Fast Growth | Inc.com:

- You recently brought on Groupon founder Andrew Mason as a part-time partner. How come?

He is great, that's why. He is brilliant and hilariously funny. One thing I know about start-ups is that, internally, they're all train wrecks. You read about some train wrecks in the press and other train wrecks stay out of the press. I would certainly never hold it against Andrew that his particular train wrecks ended up being reported.

. . .

Are there any bad habits that many Y Combinator founders share?

They don't realize how independent they can be. When you're a child, your parents tell you what you're supposed to do. Then, you're in school, and you're part of this institution that tells you what to do. Then, you go work for some company, and the company tells you what to do. So people come in like baby birds in the nest and open their mouths, as if they're expecting us to drop food in. We have to tell them, "We're not your bosses. You're in charge now."

. . .

How do you know when a small idea has big potential?

We thought Airbnb was a bad idea. We funded it because we really liked the founders. They seemed so determined and so imaginative. Focusing on them saved us from our own stupidity.

The very best ideas usually seem like bad ideas at first. Google seemed like a bad idea. There were already several other search engines, some of which were operated by public companies. Who needed another? And Facebook? When I first heard about Facebook, it was for college students, who don't have any money. And what do they do there? Waste time looking at one another's profiles. That seemed like the stupidest company ever.

. . .

Do you ever miss the excitement of building a start-up yourself?

My God! I would never do that again. It's much easier to be an investor than it is to start a company. I mean, I sort of have started a company, because Y Combinator has become so big, but at least we're not serving data to paying customers or dealing with issues that blow up in the middle of the night. Even though it's more of a company now than I meant to start, it's not as bad as running a start-up.

Lots more here:  Paul Graham on Building Companies for Fast Growth | Inc.com

Among the 49 startups at the recent Demo Day, there were four that had unique services solving "real world" problems: Beyond apps: These startups are tackling real-world problems

Take for instance SoundFocus. Cofounder Alex Seig, who took the stage to give his startup's pitch, has suffered from hearing loss all his life and decided to channel his disability toward helping others overcome the enormous financial burdens of standard hearing aids that are typically not covered by insurance. Using an app that adjusts to a user's particular hearing deficiencies, SoundFocus tunes music from your library or Spotify for the best result.

Also Regalii: 

"Ever since coming to this country, 20 years ago, I've been sending money home every single month," cofounder Edrizio De La Cruz said during his pitch. Started in 2011, his company allows immigrants to send financial support to families living in Latin America... directly via SMS for a flat transfer fee of $3, which family members can then use at partner establishments.

There were two startups focused on the elderly:

Amulyte was plugged as the modern day Life Alert, and provides a high-tech pendant equipped with GPS, Wi-Fi, and an accelerometer to make the destructive element of falling for fragile senior citizens more quickly addressable.

And True Link pitched its credit card for the elderly, which allows one's parent or grandparent to maintain financial independence while also having all transactions routed through the company's servers. Once the data is there, True Link analyzes it for known scams or manipulative tactics.

It's good to see young developers focused on apps beyond the many me-too apps that are flooding the market as the low hanging fruit of prior graduating classes is exhausted, and as their lack of real-world experiences limits the number of ideas they can transform into useful business ideas.

The rest of the Y Combinator Demo Day included a large number of me-too apps. And making sure Papa Paul Graham heard the right words on the billions of dollars in market viability, no matter the limited potential of some of the business ideas, was a key part of all the presentations. However, the ridiculous nature of such claims sometimes drew much  laughter. 

For example, take one of the stars of the show, SpoonRocket, an organic food delivery service that charges only $6 a meal and was described exuberantly as "fast food 2.0" and the "the Uber of food." ...
"We are a money-making machine," cofounder Anson Tsui said with slow pauses on the words that were eventually met with jubilant laughs from the crowd...Tsui ended his pitch with, "Remember, the rocket ship is taking off," receiving the most receptive applause of the day. 

Thursday evening Amsterdam based Twibfy launched what it calls an "inspirational" platform that allows its users to easily collect and share collections of their own images, and images they find online.

David Robustelli (above), co-founder and CEO demonstrated the service at Impress Labs in San Francisco.

He said that the service just came out of beta and that lots more additional features will be added. "Our small team has been working all hours over the past five months to get this part of the project finished. We have lots more to add but we are very happy with this version. We also have a good business model."

The young startup says its collections are edited by a human editorial board to make sure that the quality is consistently high. Here is the iPhone app.

Twibfy is spending about a week in San Francisco meeting with investors.

Enigma launched today, with an intriguing service: the New York based startup offers an easy way to search through more than 100,000 public databases. 

Chris Velazco at TC reports:

Founded by Hicham Oudghiri and Marc Dacosta and helmed by CEO Jeremy Bronfmann, Enigma taps into over 100,000 public data sources from state and federal records to SEC filings to lists of frozen assets in the United Kingdom all the way to Crunchbase. The end result is an incredibly simple, incredibly smart way to sift through and find connections in publicly available data.

Foremski's Take: Within a single public database there's likely little of interest to society at large but if there's links across tens of thousands of databases then we will see many skeletons coming out of many people's closets, and probably on a scale larger than Wikileaks. It's a fabulous bonanza for investigative reporters, the ones that are still around.

However, you don't have to be elite and famous to feel concerned about the Big Data engines of Enigma. All 100k plus databases will be picked over by multitudes of research companies aggregating data on individual consumers.  

You and I are enigmas to most of the outside world, only we know the sum total of our lives and its crevices. But services from companies such as Enigma will make us less mysterious, more ordinary, more able to be dumped into a demographic bucket of one type, possibly two. I'm very much in favor of preserving individual enigmas because the possibilities, and the potential mythologies, are far more interesting stories than judgements about the past. [This doesn't apply to corporations and the elites.]

Big Brother technologies are on the rise and are being used to divine your intent. Fortunately, they aren't looking for mind-crimes but for the mundane -- where you'll spend your next dollar.