With plans to be in New York City yesterday, I ended my day in Manhattan a little later by attending a two-hour pitch-fest at NYU’s Stern School of Business.
CrowdPitch’s concept is simple enough: an audience (students, would-be entrepreneurs, startup groupies, bloggers) act as angel investors with pretend dollars in which to fund startup ventures. The companies are real, though, and have four minutes to make their case for getting the make-believe moolah.
A panel of Stern professors and other industry experts are there to critique the presentations, crunch the numbers on the business models, and then offer advice for when these companies face real angels and VCs.
While the overall quality of the pitches was high, you quickly learn that to attract investors, startups should strive to be scalable, frictionless, and vertically integrated—biz speak for nice fat margins with minuscule marginal costs and no competition.Continue reading
There were all the signs of a long weekend of coding at the Converge Coworking space on the Kean University campus (Union, NJ). Stacks of empty pizza boxes, coffee cups, wireframe sketches scattered on desks, and developers staring at screen emulators on their MacBooks.
New Jersey Mobile Meetup was concluding its first hackathon, and I had arrived just as the iPhone and Android warriors were chowing down on one last hot meal before the final presentations.
The winners of this contest would gain serious boasting rights, and some Twilio and Odesk credits to be used on future projects.Continue reading
I recently received a gentle reminder that Kikin, a browser plugin that brings additional relevant content to Google search results has been updated and is accomplishing more than, as some blogger put it, filling in feature holes.
That blogger would be me, and the Kikin version I was reviewing at the time was duplicating the functions of Google’s left navigation column—the one that, um, brings you more relevant content.
In February, Kikin revamped their Firefox plugin, it’s now called the Kikin Edge.
I had a lot of fun listening to Craig Kanarick, the co-founder of Razorfish, the proto-interactive agency, at last night’s Hoboken Tech Meetup.
I could definitely envision him pitching Fortune 500 companies during the dot-com years and explaining the Web to the “suits”. Did he really do a presentation once-upon-a-time with his hair dyed blue?
No matter. He’s still at it, and yesterday he radiated lots of thought beams on the current digital technology environment. As part of his talk, Kanarick delivered a completely entertaining and spot-on summary of our post-WW II consumer economy—rise of marketing, power of brands, and now the preeminence of real-time on-demand media.
One idea of his that most resonated with me, considering the context of speaking at a tech meetup and having just followed a few demos, is the challenge of being a tech entrepreneur when there is so much open and available IT.
I found them last Friday just off the Garden State Parkway, exit 131-A. The Woodbridge Hilton to be exact.
At the New Jersey Innovates Conference 2011 organized by NJ Entrepreneur, a group of Jersey-centric angels shared their business experiences and their current investing approaches with an audience spread out across the startup curve.
Based on the David S. Rose investment course I completed last month, these private investors fit the angel profile and their advice followed familiar angelic principles but with exceptions—this is Jersey after all.Continue reading
Mission Fifty, the new Hoboken co-working space, is well on the way to opening its door to NJ coworkers.
The principals involved— Michael Pierce, Gregg Dell’Aquila, and HTM’s Aaron Price—already have the space lined up, at 50 Harrison Street. It’s now just a matter of working out the details of what the coworking community is interested in, office-wise
Are you phone- or IM-centric, prefer meetings behind doors or at the nearest cluttered desk? Continue reading
My reportage of last night’s New York Tech Meetup is based on listening to the Livestream while I was in the kitchen preparing dinner, but making quick visits between sautes to my MacBook to take a peek.
Yup, another quirky, short Technoverse review of NYTM demos at Skirball.Continue reading
Hearing angel investor David S. Rose (@davidsrose) speak last night at Hoboken Tech Meetup was the equivalent to speed reading a course in startup financing, marketing, and management in under an hour.
Rose has a lot to say, and he communicates in complete sentences, leading to fully-developed paragraphs with footnotes. In other words, the 100 or so entrepreneurs gathered at Stevens Institute of Technology’s Howe Center absorbed incredibly practical information (with just basic analog voice technology and a few slides).
Rose focused on the finer points of raising private money. He should know. Through his various incarnations—as founder of New York Angels, CEO of AngelSoft, and through his own super angel firm, Rose Tech Ventures—he’s been involved with funding over 80 companies.
Did I mention that he also has a reality TV show on the MSN website, called Second Chance, in which he works with entrepreneurs whose first ventures failed, guiding them to startup redemption?
At HTM yesterday, Rose filled in more than a few gaps in my understanding of the startup money race.
Rose started out his career at the receiving end of the financing relationship, founding eight companies, including AirMedia, one of the first wireless data networks, as well as helping to boot up the NYC tech scene.
And then as he put it, he moved over to the dark side, as a private tech investor.
According to an Angel Capital Association survey that Rose presented, most angels, which is really shorthand for individuals with high net worth who invest in private companies (or in SEC terms, “accredited investors”), are much like him: former successful serial entrepreneurs (2.7 ventures ), well educated, older (mid-50s), running at a 100 GHz, and typically investing 10% of their net worth for up to nine years in ten ventures (for a total portfolio of between $100,000 to $1 million) with younger versions of themselves.
Their motivation is profit and fun and contributing to the pool of startup karma.
Though you begin to wonder about what Rose and other angels’ idea of fun is. And there are less hair-raising ways to get a positive return on investment.
It’s not an easy life, and you sense that Rose has heard many, many pitches: I imagine him having listened to every possible permutation of social networking out there.
So what does it take to get funding from Rose or other seraphs?
If a startup decides to seek outside investors—it is possible to bootstrap a company based on, um, selling something and getting revenue or, surprisingly, applying for government grant money—it will have to first pique an angel investor’s wandering interest with a written description of the venture.
While all startups should have a detailed business plan, angels don’t read them since they’re too busy. A shorter executive summary may be glanced at and a one page precis could in theory capture the attention of an angel but something even shorter, say a well-written two-paragraph email, has a better chance 0f gaining an audience with an angel.
If the email or some other method does get you that rare in-person angel meeting, then a tight 30-second pitch that is completely on message about what it is the company does and why you’re the one to do it, may lead—there are no guarantees in any of this—to a formal date.
For that, you’ll need to prepare “the presentation”—i.e., generally slides but other media can be used. As with dating, there are rules to this.
According to Rose, presentations should have in the following order: name and company logo, opening hook (a surprising fact or two), what your company actually does for a living, your management team (why they’re indispensable), a clear overview of the market (as in dollar size), the market pain points (what the startup is trying to solve), the product that relieves the pain (some images of the app, website, or physical product should be inserted), the business model, current or potential customers, marketing strategy, competitive challenges (be honest), barriers to entry (intellectual property or domain expertise or something else that makes this venture unique), and financial projections (sales charts). Additionally, a “pre-money” valuation (see below) can be included but this only makes sense if the startup has a deal in progress with another group of angels who have independently blessed the founders’ estimate of the worth of their business.
On that last point, there are brutal economic facts that determine what investors want for their return on investment. If a typical angel has say 10 investments locked up for a few years, he or she knows that half will fail, a few will return their capital, leaving just one with the burden to bring home the bacon.
If you do the business school calculations (assuming a 25% internal rate of return over 6 years), it mean that the one successful company will have to pay off 20 to 30 times on the initial investment.
On the assumption that a startup convinces two or three investors to fork over a total of $1 million, a startup should have a planned exit valuation of about $30 million for just the investors. The founders and their management will have their own payday of course but that depends on the pre-money worth of the company: in other words, the dollar value of what they brought to the table.
If a startup and these celestial beings can come to terms on an appropriate pre-money valuation—$1 million to $3 million is the range of most of the pre-revenue tech deals these days—then the startup can enter a serious long-term relationship with the angels.
Bantam Live just announced that they had been acquired by Constant Contact, the e-mail marketing company.
We reviewed Bantam Live’s cloud-based social CRM product in October. We thought it was a solid solution for small businesses looking to centralize their Excel-based (and perhaps napkin-based) sales contacts and task lists.
Constant Contact also had positive feelings about the product, paying $15 million for the company (read: its Ruby on Rails platform). Continue reading
Mobile World Congress is happening now in Barcelona. As much as we’d like to buy our paella salads at the La Boqueria before a day on the trade show floor, the editorial team is instead stuck here in NJ.
To help with my remote coverage, which involves monitoring tweets, decrypting media releases, and studying the keynote videos, I decided to take another look at Xydo. It’s the crowd-based recommendation service I wrote about a few months ago. Plus I’ve been informed it’s been re-designed.
As with other sites in this genre, the crowd votes on content, which is pulled in from a number of different sources and categorized into various topic areas.
Topics encompass this whole wide world—pasta and grains, business news, mobile, movies, and on and on
So I entered “mobile world congress” into Xydo’s global search box.Continue reading
Last night at New York Tech Meetup there were clear signs that the local tech ecosystem is growing and evolving.
First, the NYTM organization itself is looking for a managing director to essentially oversee the affairs of the organization—events, outreach, special programs, marketing. The jobs starts at $65k per year (see below).
The second data point was NYTM board member, Evan Korth, announcing that hackNY.org, which he helped co-found, is doubling the size of its summer intern program. Last year, hackNY, placed 12 students in NYC startups, including etsy, 10gen, and others. Note to startups: you have till February 18 to submit an application for interns.
The third data point was that the demos last night were really good.Continue reading
I first learned about Megaphone Labs’ DialPlay TV product last month at HTM. This startup turns a boring DTMF keypad from your cell phone into a remote control for TV games, surveys, and trivia contests.
The same idea of reading a massive number of dialtones in real-time also works at sports venues with giant LED displays standing in for the family-room TV.
If you were at New York City’s Times Square to watch the ball drop, you would have witnessed MegaPhone’s software in action on a building-size screen.Continue reading
I’ve read many, many tech white papers sprinkled with the conventional bizspeak phrase, return on investment. But at Hoboken Tech Meetup last night, I came across a new metric, social return on investment or, in acronymese, SROI while listening to founder Malcolm Arnold discuss his company RubyNuby.
RubyNuby is a social good company that teaches Ruby on Rails programming to at-risk and disadvantaged youth. The startup matches teens with professional mentors, sponsors start-up competitions, and gets its youthful members high-paying jobs.
There were other startups with big dreams and compelling demos. You should’ve been there!Continue reading
With a case of post-holiday ennui setting in, I decided to forgo a visit to Skirball and instead tuned into last night’s NYTM video stream from my couch.
It was great entertainment and far more edifying than what’s transmitted over my archaic bronze-age remote vision box. I may go so far as to claim that it was the most interesting and, in a way, uplifting set of demos I’ve seen since I started attending NYTM nine or so months ago.
Before I run down my list of favorites, something that Nate Westheimer said captured the spirit of tech in New York and, I think, just about any other town where there’s a startup scene:
“If you’re working on a startup, you’re gonna fail. Seriously, if you don’t think that’s true, you’re delusional.”
Nate’s larger point was that we’re all part of a community who want to change the world, and while our own efforts may not achieve success in a narrowly defined way, we may just inspire someone who will.
It’s the most wonderful time of the year. And there is no other place I’d rather be than New York City in December— chestnuts roasting, falafels cooking, and Food52 giving a demo at New York Tech Meetup.
Of course, this is also the season of NJ Transit delays, so thanks to mechanical problems at Sunnyside Yards yesterday, I missed most of 52’s presentation. As I walked into NYTM’s temporary digs at New World Stages on 50th street, I heard some questions being asked about “FoodPickle.” FoodPickle? More on that later.
My favorites from the evening: WanderFly, Food52, and Marco. In the interesting, but problematic category: ClearGears.Continue reading
Xydo is a recommendation startup I first discovered at Hoboken Tech Meetup. Since then I’ve partially trained GetGlue and Hunch to respond to my tastes (not successfully), perused Parse.ly’s recommendation app for filtering feeds, and gauged Google’s own Prediction APIs and Set suggestion tools (pretty good stuff).
So when I received the beta invite from Xydo, I was almost at the beginnings of an existential crisis: do I really need a web site to show me other URLs to look at? After all, I was heavily reliant on Google Reader to bring the feeds I like to my attention. I wasn’t sure whether I required additional content advice.
I would want Xydo and other such sites to be my web magazine 2.0, bringing both content that I absolutely need yet also uncannily anticipate what I may want.Continue reading
I was finally able to spend quality time with the Parse.ly Reader, an app designed to show some of the capabilities of the underlying Parse.ly platform, called P3, which is currently in beta. To be clear, unlike many other players in the recommendation patch (GetGlue, Xydo, Hunch, etc.), this NYC-based startup is not in the business of providing a direct service to users.
Instead they give access to their cloud-based recommendation server through a set of RESTful APIs. The Reader app is just a demonstration of what can be done with their technology.
So what can be done?
After reading through the P3 reference documents and interacting with the Parse.ly Reader, you quickly see that P3’s aim is to reproduce formerly expensive, proprietary technology mastered by a few players (Netflix, Amazon) for businesses in general— most likely, those in the small-to-medium bins.
It’s another Nick Carr moment for me, in which technology has turned a previously mysterious application, recommendation algorithms in this case, into something closer to an appliance meant for wider usage. Continue reading