Thursday, December 16, 2010

Seasoned Entrepreneur Holds Nothing Back: Business Advice & Technology Landscape Overview from a Pro

I always find it stimulating to hear entrepreneurship advice from the pros, those serial founders, who seem to have perfected the science (or art) of startup building from the ground up.

Tonight, it was my pleasure to attend a presentation by Ben Galbraith, a very skillful public orator, serial entrepreneur, and the speaker at tonight's Startup Grind Meetup, organized by Vaporware Labs founder Derek Andersen. I doubt it is possible to give the presentation justice in written form--to capture that personal charm and charisma of the speaker--but I will do my best to recap the highlights.

Ben Galbraith on Entrepreneurship

The more successful entrepreneurs that you talk to, the more contradictory advice you are bound to receive. What worked for one, did not work for another, and vice versa. There is no panacea to running a successful startup. Acknowledging this paradigm, Ben Galbraith nonetheless shared with us a few bits of wisdom from his well (wealth) of experience.

1. Business partners. The road to building a business can be a long one, so it is fantastic to have someone to share it with, both the laughs and the sorrows, as they come. And the amplification of skill sets is also amazing when you have a partner. But, it is imperative to have trust with your partner. And it is absolutely critical to understand from the outset what everyone brings to the table. For the business to work, the commitment and skill level of the partners has to be commensurate with one another.

2. CEO Role. Whatever the skill set of the CEO, he must come out from the trenches early, and resist the temptation to stay in and be part of the... fill in the blank... technical, business, sales, etc. ... team. The choice is, to become a coach or to become a bottleneck. Why so? If the CEO is not leading the business (because he is busy in the trenches), no one is!

Photo courtesy of Alexandre Ferreira
Take a Leap3. Take the Leap. As someone who's done it and lived to tell the story, Ben Galbraith says that working for yourself is amazing! If you are working for someone else, you are not the owner of your fate, nor do you know all the cards. You may get "misled" (to put it softly) about the state of affairs at the corporate level and left out to dry.

To step out of my recap mode for a moment, I must say that unfortunately I know about this first-hand. The last several months at Heller Ehrman, before the ship sank, were not pretty. "Heller Ehrman is strong because it does not have any debt," we were told throughout. "Nothing can take us down." It was effectively the end of Heller Ehrman, a San Francisco law firm that was founded in the late 1800s, when its bank pulled the purse strings shut. Oops, turns out there was debt after all.

So when Ben Galbraith told us "Take the leap of faith" and venture out on your own, I said (in my head), "Hear, hear!" It's a choice that I made and that you may have already made or are on the verge of making, if you are reading my blog.

Photo courtesy of AMagillMoney
4. Money, money, money. "Don't make money your goal," was Ben Galbraith's last point. (Easier said than done, if you've looked at real estate prices in the Bay Area.) But it is true--you have to find an idea that resonates with you and that you believe in and run with it. You can't predict where lightning will strike, and you can't choose to found or join a startup to get rich.

Ben Galbraith on the Technology Landscape

In this second part of his presentation, Ben Galbraith set out to answer the question of why Microsoft, traditionally known for its protectionist policies, has now embraced HTML5. There is a profound transformation afoot that is forcing Microsoft to evaluate their position. So what is it?

1998 Yahoo PageLet's review some history first. Who remembers the time when the Yahoo homepage used to look like the image on the right? I know I do. This screenshot is only twelve years old. Many websites from those days might look a tad outdated to today's consumer and Ajax is to blame.

Ajax revolutionized the way we think about the web--it was about making the web user experience attractive and more interactive, blurring the line between desktop and web applications, and causing a resurgence of technology companies focusing on web applications.

In the world of desktop applications, Microsoft was king. It may not have had the best operating system, but it had a suite of applications. When focus shifted to platform-neutral web applications, other players were able to move up in the game. It was this shift towards running applications on the web that allowed Mac to reemerge as a major player (and even break away from the pack).

Fast forward to today, where the new frontier is mobile. With its $3 billion eco-system, there's money to be made in mobile and it is drawing away some of the best talent from web development. "It's a zero sum game," said Ben Galbraith, "not parallel universes." In fact, there is so much money going towards mobile app development, some companies' mobile applications today are already far superior in user experience to their web equivalents. While certainly some applications are not well-suited to the mobile space with its inherent screen size limitations (think Adobe Photoshop), there are others that have reinvented themselves in this medium.

Apple, historically known for being an expensive brand, is changing strategy to keep their market share. With their new, aggressive pricing on mobile devices, they are not leaving a price umbrella for competitors to use as an opportunity.

Microsoft is changing with the changing technology landscape. The world of desktop applications is giving way to web and mobile applications, where proprietary technologies just don't cut it. And so, out comes the beta launch of Internet Explorer 9, with Microsoft showing off some great looking applications running on HTML5 at the launch party. Of course, if HTML5 has as great an impact on the web as Ajax had in its day, which it may well have, we should look forward to a very exciting new web experience in a few years (as adoption of HTML5 becomes pervasive).

Other Interesting Takeaways

1. Startup Idea. This idea is not new. But it has not found a successful implementation. On the web today there is no application marketplace, equivalent in usability and user experience to Apple's App store. Those of you looking to solve a problem, go at it!

2. Getting Funded. So many startups today are looking to be funded, exploring ways to get investment capital. As we well know, only a small fraction of the startups will get VC funding. For mobile app companies, Ben Galbraith threw out what I think is an exciting and novel idea to consider--why not get money from the second tier mobile platforms. While Apple and Android platforms are oversaturated with apps, for better or for worse, there are other players (think Samsung) who may be willing to pay for you to produce an app for them. When the app is done, you can redesign it for other platforms, but you won't be bootstrapping the whole operation.

I'd love to hear from anyone who has tried this to see what their experience has been, and whether the theory holds water. :)

Thank you, Derek, for organizing yet another very interesting presentation, and thank you, Ben, for taking on the speaking role--you were great!

Inna Efimchik

Emergence Law Group
  Emergence Law Group, specializing in assisting emerging technology companies in Silicon Valley and beyond, provides incorporation, financing, and licensing services as well as general corporate counseling.

Friday, December 10, 2010

LBS Goes Indoors

Photo courtesy of 'smil
PresentsAs we're flying headfirst into the holiday season, what's on everyone's mind? Skiing? Vacation? Family?

I know what's on my mind - presents!

Getting them sure is a lot of fun, but what about shopping for them? Are you checking off items from your list lounging at home with a laptop? Or are you doing the legwork, quite literally, at the mall?

I, for one, was at the mall today, and while my feet were dutifully performing the familiar holiday shopping waltz, my mind was drifting to yesterday's discussion entitled "LBS Goes Indoors: Maps, Apps & Positioning, organized by the Wireless Communications Alliance. LBS (or location-based services) are entering the indoor space--think being able to seamlessly navigate (using your mobile device) from your garage, to parking at a mall, museum, airport, hospital, even a university campus, to, most staggeringly, within that mall, museum, airport, hospital or university campus! The technology is not there yet today, but there are companies working away on making this our reality in maybe just a few years.

Micello Indoor MapsOn the speaker panel were indoor LBS and mapping industry experts Ankit Agarwal of Micello, Jeremy Agulnek of NAVTEQ, Kiyo Kubo of Spotlight Mobile, Josh Marti of PointInside, Jerry Luk of Presdo, Michael Doherty of Polaris Wireless, Tristian Lacroix of IndoorLBS and Andy Birshaw of RetaiLigence. Moderating the discussion was Raj Singh of YumYum Labs.

Raj Singh opened the discussion, asking what it takes to build an indoor map. Speaking for Micello, an indoor mapping company that, according to its website, has the world's largest collection of indoor maps, Ankit Agarwal explained that the data for indoor maps already exists. By law, an image layout of the floor plan of a building must be available. The challenge is, organizing these disparate maps in a consistent manner. Jeremy Agulnet of NAVTEQ, the company that has mapped and owns the majority of the outdoor maps in use today, added that there is a fundamental difference in presentation for indoor maps, where people are walking in unconstrained areas. Josh Marti added that his company, PointInside, in addition to coordinating with venue owners, uses crowdsourcing and hires someone to actually walk the premises and confirm all the data. And if you're wondering, yes, there have been run-ins with security (and TSA at airports). :)

What about visual representation, was the next question from the moderator. Should indoor maps be drawn the same ways as roadway maps? Ankit Agarwal didn't think there should be a big difference, since what's important is usable geometric representation. Jerry Luk disagreed. In his opinion, there is a conceptual difference which influences how the maps should look, but the trick is going to be providing an integrated and seamless user experience from outdoor to indoor maps. One of the tricky issues that comes up with indoor mapping, for example, is representation of multiple floors. Josh Marti thought that over time a uniform cross-platform should evolve, to avoid each application using their own standard, which would make it less intuitive for users.

Next on the agenda: how important is accurate positioning to indoor mapping? Unlike street mapping, where accuracy would be great, but if your GPS tells you you've arrived a few houses too soon, you'll figure it out, with indoor mapping location accuracy is imperative. Imagine using an application that is trying to point you to your favorite lotion on a shelf with a hundred other lotions. If you are five feet off, your chances of finding it efficiently (which is the idea behind the application in the first place) are nil.

In all fairness, the level of accuracy in mobile devices (like the iPhone) has increased dramatically over their evolution. But it is still not where it needs to be. Case in point, as I was at the shopping mall, an indoor map application running on my Android phone in my hand, the pointer on the map had me floating over the shops instead of the hallway. Admittedly, not a big deal. Location technology still has room for improvement, that's all.

According to Robert Schoenfield, next year will be the year of the sensors that sensor technology would improve navigation accuracy. There may also be a shift from a "where am I" approach to navigation to a "where are they" approach, suggested Tristian Lacroix. Instead of trying to track the exact whereabouts of the user and the device, this approach will determine the location of the user in relation to the mapped things around her.

Photo courtesy of Giampaolo Macorig
On the road This leads to the next question: how does indoor positioning work indoors? Outside, there is the GPS, which is a network of satellites placed into orbit by the U.S. government, and which is completely free to use. But indoors, signal blockage from buildings and foliage prevents consistent and reliable GPS coverage.

There is no real solution to this problem, yet. Josh Marti considered that WiFi networks may be utilized to provide positioning indoors. Inertial sensors are very popular, which can track movement from a known location. Ultimately, thought Josh Marti, it will be what the market adopts. Ankit Agarwal added that this area is very popular and there are tracking companies working away on indoor positioning. He anticipates that there will be a breakaway soon.

So what are the potential uses for indoor mapping data? We've touched on some of them already: shopping malls, museums, airports. It turns out that hospitals have a huge return on investment if they can commission an app that gets patients to come to their appointments and to do so on time.

Universities, too, like to have apps for their campuses. It makes them look better to prospective students, more polished, more "shiny," in the words of Jeremy Geiger. Perception is everything and who is to say that having an easy-to-navigate map of the campus isn't going to bring a university's position up a point or two in the rankings.

So far, it seems, that indoor map applications tend to stay vertical. There is a different approach to malls than there is to hospitals, and a different approach to universities than airports. In the long-term, however, Josh Marti predicted, there would be integration and consolidation among the different vertical apps.

While agreeing that at the data level there would need to be consistency, Jerry Luk argued that visual presentation would continue to differ. But how many mapping apps is it practical for someone to have on their phone, countered Jeremy Agulnek?

Perhaps the kind of consolidation that will happen in mobile indoor apps is what we have seen in web with Facebook, suggested Jeremy Geiger. These days, although most businesses have a website, it is common practice to have a Facebook page and to direct traffic there.

This brings us to the final point: where is the money? What's the business model for capitalizing on indoor mapping services?

NetworkingIt depends on the business, of course. For Spotlight Mobile the answer is simple. The company is developing an application for a more efficient networking experience at conferences, allowing attendees to easily locate other members of the conference that they are interested in meeting. As someone who attends a lot of networking events, I, for one, am loving the idea! Conference organizers, thinks Spotlight Mobile's CEO, Kiyo Kubo, would be happy to pay for the service which would make the event more desirable in the eyes of those who come to network, and the cost can be passed down to the attendees by slightly increasing ticket price.

Other companies, like PointInside, think the monetization can come in several forms: (1) the legacy model of licensing the IP, and (2) advertising. Advertising appears to be the most obvious solution for a company like RetaiLigence. There is a lot of statistical data that is gathered and one monetization model could be in selling this data to those interested in smarter, more targeted advertising. Moving from search-based to push-based advertising would make this data extremely valuable.

Anyone who's watched Dora the Explorer knows there's yet a better map to be made (indoor or out)--one that can just as easily plot the course to a hiccuping bull as to the island where pirates have taken a stolen treasure chest, singing and dancing all the while. Today LBS is only going indoors. It's not there yet. But I can't wait to see what my shopping experience will be like in another year or two. And if only someone could add a feature that would make any trip fit into under 30-minutes, like every Dora adventure, wouldn't that be priceless!

Inna Efimchik

Emergence Law Group
  Emergence Law Group, specializing in assisting emerging technology companies in Silicon Valley and beyond, provides incorporation, financing, and licensing services as well as general corporate counseling.

Tuesday, December 7, 2010

Mobile Apps: 2010 Year in Review

Mobile is what's hot now. It seems just about everyone I know is writing an app, irrespective of whether they are engineers in their "real" lives. If my dad tells me tomorrow he is coming out with an iPhone app, I don't think I will even be surprised. It's the new frontier offering vast opportunities, with a reasonably low barrier to entry. In short, everyone is doing it.

Mobile MondayAs if to prove the point, roughly 400 participants showed up to Mobile Monday 2010 Year in Review event this Monday held in downtown San Francisco at the (stunning) Hyatt Regency. The panelists, comprised of Om Malik of GigaOm, Rich Wong of Accel Partners, Joe Jasin of SDForum, John Malloy of Blue Run Ventures, and Matt Fix or Vodafone Ventures, had a lot to say about the latest trends in mobile, and, sure enough, did not always agree.

Organizer Mario Tapia opened the evening, inviting the panelists to discuss the trends in Social apps.

Facebook MobileSocial apps, according to Om Malik, are about personalizing your mobile experience, and the real story in mobile this year is ... Facebook. (The graphic kind of gave it away, but you should still be surprised.) Notice that Facebook is a web application, adapted for mobile, and not an original mobile application. Though classified as a Social app, Facebook is the blending of different technologies such as Games and Locations, as Rich Wong pointed out, which accounts for its success in the mobile space. With Facebook in the lead and Twitter, another web application, a second place contender, Om Malik admitted that he didn't think there has been a killer mobile app that has come out in 2010. There was unusual uniformity of opinion among the panelists on the Social apps front, with Matt Fix adding that what is really impressive is the transcendence of social media to the government, which is now starting to accept it.

Discussion then moved on to Augmented Reality apps. John Malloy expressed a frustration that there is still a large gap between what he is seeing in presentations and an actual device that's useful. "The vision is well-intentioned but off," was Rich Wong's verdict. Augmented reality is still in its infancy, and the processing power to really use augmented reality may not be there yet, said Malik Om. According to Matt Fix, all that Augmented Reality app companies can do is identify their communities, focus on finding data sets that matter, and build those data wells.

The next topic, advertising apps, or advertising on the mobile platform, raised the temperature in the room by a few degrees. "People are looking back to predict the future," started the discussion Om Malik. He pointed out that the 12 key keypad approach to devices that are equipped with every sensor imaginable is obsolete and just plain wrong. "The game has just started," said Rich, which is why it's such an opportunity.

AmobeeIn 2008 Accel Partners and Vodafone Ventures invested in Amobee Media Systems, a startup that provides "a unified, telco-grade system for funding mobile content and communications through advertising revenues" according to its website. Now the investors are waiting to see if advertising app companies find a way to monetize their users. Advertising could be one of the few monetization models accessible to an early-stage startup, allowing a startup to build a medium business on an ad-supported basis. So, for those of you out there looking to solve a big problem, get your thinking caps on. Great rewards lie in store for the company that finds an elegant solution to mobile advertising, a way to convert mobile downloads into sales.

Zynga's Farmville Mobile Gaming was the next app category on the agenda. Games have traditionally been a crowded space, where it's hard to make money anywhere in the world, said Joe Jasin. While new and sometimes very successful games are entering the marketplace everyday, Matt Fix did not think we should expect another gaming company to become as large a player in the space as Zynga.

Angry BirdsThe panel unanimously praised Rovio Mobile's ultra popular game Angry Birds, conceding, however, that despite the success of Angry Birds, Rovio was still not Zynga, but more of a one-hit wonder. That said, there are still hundreds of mobile gaming companies who would love to be where Rovio is today, so if you're in gaming, there are still broad horizons ahead. Speaking for Accel Partners, Rich Wong said they were quite optimistic about games and that gaming was an area they were hoping to discover.

A review of Location apps, like foursquare and Facebook Places was the next order of business. The key enabling technology for social Location apps is here, GPS. It was generally accepted that Location or check-in apps are not stand-alone applications, and that they are inextricably tied to social networking and Social apps. That said, it is extremely powerful if all of your friends are on it. Rich Wong predicted that check-in is going to be used in a lot of other apps. Matt Fix seconded that prediction, adding that we are just at the beginning of innovation in this area.

Concluding the overview discussion, Om Malik asked when does a mobile app company go from a couple of founders building mobile experience from their perspective to being a venture-backed company. Not surprisingly, there was no easy answer. All that could be said, according to Rich Wong, was that the chances of "getting lucky" are a lot higher now than what they used to be just a few years ago because of "how good the ingredients are." Think of that, next time you are on your mobile phone, talking to a friend on a blue-tooth headset, while looking up the closest sushi restaurant to your current location. :)

Inna Efimchik

Emergence Law Group
  Emergence Law Group, specializing in assisting emerging technology companies in Silicon Valley and beyond, provides incorporation, financing, and licensing services as well as general corporate counseling.

Friday, December 3, 2010

Virsto Software & August Capital Talk About Their Courtship & Marriage

Silicon Valley is still the startup epicenter, or at least so we like to think here. And what does every entrepreneur hunched over in his proverbial garage working on the next big thing hope for and dream of? Well, that it really is the next big thing, that investors will recognize its potential, and that money will come in to allow the product (or service) to be brought to market.

The Entrepreneurs' ClubLast night I attended a very interesting and informative event organized by The Entrepreneurs' Club--Founding & Funding - Entrepreneur & Investor Perspectives. It focused on a Silicon Valley startup, Virsto Software, that is on the right track to achieving the dream and on how they got to where they are today.

The speaker panel was well-balanced, featuring early stage investor Vivek Mehra of August Capital and co-founders Alex Miroshnichenko and Mark Davis of Virsto.

In their search for capital, Virsto had a hard-to-beat advantage. The co-founders are serial entrepreneurs, with connections to the venture capital community. That helps. But, according to Vivek Mehra, August Capital invests in first-time entrepreneurs just as often as they do in seasoned entrepreneurs, if not more often. So if you're a newbie, don't hang up your hat just yet. :)

The beginnings of Virsto are quite interesting. The co-founders weren't lifelong friends when they embarked on this venture. In fact, though for years they were within a degree of separation (as they later found out), they did not actually meet until an introduction was made by a mutual friend for the express purpose of starting a company. Vivek Mehra explained that investors are very cautious of companies with one founder. After all, if the founder wasn't able to convince even one other person to take the plunge with him (or her), it can seem a bit suspicious. In fact, while there is no magic formula for getting funding, Vivek Mehra says that a good founding team might consist of two technical people and one business expert. It so happened, that Virsto fit the bill exactly--Virsto's third co-founder, Serge Pashenkov, a friend of Alex's since graduate school, completes the deck as another technical expert.

Creating a successful business is about the people, whether you are a founder looking for other entrepreneurs to join your team, or an investor, making the call on which of the 100 ventures that come across your desk in a year to invest in. Vivek Mehra said of August Capital's philosophy, "We invest in people." Unlike some other funds that either look for a market for which they can create a team or find a team and create a market, August Capital tries not to predict markets. They want the ideas to be owned by the entrepreneurs. And they want the entrepreneurs to know more than they do. There seems to be good ideological alignment between August Capital and Virsto founders. "If you want an investor to tell you how to run your business," said Mark Davis, "you shouldn't be funded."

Just as there is no formula to tell you whether your dinner date is "the one," there are no hard and fast rules with getting funded. But there are also warning signs, in the personal and business spheres alike, that influence the outcome of the courtship. "A lot of unsaid things are very important," said Vivek Mehra. As an example, if a team of four founders comes to a meeting with the VCs, but only one does all the talking, it's a bad sign. If the founders talk for a half an hour during their pitch before they introduce the team and explain who is involved in the venture, investors are turned off. Investors also look at a company's setup. If the entrepreneurs are 3/4th vested going into a meeting, there is a misalignment of interests, and you can't build a marriage on that. Some VCs might renegotiate vesting when they agree to fund, but others might not bother and pass on the opportunity altogether.

The best group of collaborators, a large underserved market, and the cleverest solution, may still not get you funded. But if you stack your deck right, you are in a better position to make it happen. Of course, Emergence Law Group is here to help with corporate setup and make you look familiar and attractive to investors. The rest is up to you!

Inna Efimchik

Emergence Law Group
  Emergence Law Group, specializing in assisting emerging technology companies in Silicon Valley and beyond, provides incorporation, financing, and licensing services as well as general corporate counseling.

Sunday, November 28, 2010

Startup Voice Pipes Up, Or Let's Make Some Noise!

I like blogs. I don't read them fanatically like some, nor do I even read them daily. But being the child of the Internet revolution that I am, I have my trusty Google reader set up to gather all the latest from all my favorite bloggers, and when I have a few minutes (hours) to kill, I allow myself this small guilty pleasure.

On my reading list is a blog that I really enjoy--Seth Godin's BLOG. The posts are characterized by being short and to the point, something I very much admire, having quite the opposite writing style myself (which falls more into the long and winded category, I am afraid). I think I saw a reference to Seth's Blog in Jeffrey Bussgang's book Mastering the VC Game, and got hooked!

Long story short, Seth posted a great little snippet yesterday, that has really stuck with me. It is so short, I will repost it in full:
    I was talking to a colleague about all the noise out there in the world, all the messages, ads, announcements, pitches and friend requests.

    "And you're sending even more every day into that maelstrom."

    "No we're not," she said. "Ours isn't noise."

    Yes it is.

I've been replaying the short dialogue in my mind and it is SOOO right on. But here's my take on it. We already live in an overabundant, oversaturated and oversated society. There is too much of everything, if you think about it (except maybe the stuff that you really want). There are too many TV shows, too many friends on Facebook (am I right?), too many mobile apps, too many wedding photographers, too many lawyers,... and too much noise.

Does that mean we should have less? Of course not! We, as a society, are an adaptive bunch. We just learn to navigate, to tune out the stuff that overwhelms us and then our world suddenly shrinks down to just the information that we can process, to the services we can consume, and to the friends we really care about.

If you aren't making noise, I would posit, you're as good as dead in this noisy time. And so Startup Voice is born, and we're planning on making some noise!

Subscribe to our RSS feed, add us to your reader, or just check in every so often. Or if it's just noise, ignore it altogether. We think there's enough audience for every noise-maker out there. :)

Inna Efimchik

Emergence Law Group
  Emergence Law Group, specializing in assisting emerging technology companies in Silicon Valley and beyond, provides incorporation, financing, and licensing services as well as general corporate counseling.