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March 16
By Jennifer Cabala
The Obama administration is trying to make the federal government more tech friendly, especially in the consumer facing arena. When Vivek Kundra, the U.S. Chief Information Officer visited with us a few weeks ago he discussed the push to offer government agencies more technology options from the private sector. Probably the most startup friendly spot is the apps.gov website, a marketplace where companies can offer their tech solutions to government agencies.
Well here is one more opportunity for developers to create an application for the government, and this one is expected to generate good publicity for the winner, not to mention a cash prize.
The U.S. Department of Agriculture and First Lady Michell Obama are launching the Apps for Healthy Kids competition to challenge software developers, game designers and other innovators to develop fun and engaging tools and games that will help kids eat better and be more active.
The thought behind it is that kids already average seven plus hours of screen time a day so why not make it fun and educational? The competition is offering prizes for the most creative means of using the USDA's recently released MyPyramid 1,000 Database to teach kids about the importance of good nutrition and health.
"Maybe you've seen those dance video games or exercise games that families are playing together at home -- or ones kids play using their mobile phones or home computers -- those are the kinds of games we're talking about," said the First Lady in a written statement. "We're challenging software and game designers -- professionals and amateurs alike -- to come up with games that incorporate nutritional information and make healthy living fun."
There are top prizes of $10,000 each in the best tool and best game categories with lesser cash prizes for second and third place. Developers also maintain intellectual property rights, but agree to license the app to the government for a year. Although the cash itself isn't a jaw-dropper the competition's judges are well known including Steve Wozniak, Mark Pincus, and others. Full rules and details can be found at the appsforhealthykids.com website. The entry deadline is June 30th, 2010.
March 16
By Alyssa Royse
The Seattle Startup Scene is a small and somewhat incestuous
thing. Not unlike high-school, after you’ve been here for a while you know
pretty much everyone, or at least know someone who knows everyone else. Between
Burning Man, Beer Pong and the steady churn of opening and closing companies,
most of us know someone who has burned with, drunk with, slept with, worked
with and maybe even had kids with everyone else. There are far fewer secrets
than one would like to think. And that’s ok, we’re a pretty accepting bunch. We
drink, we chat - it’s all good. (And it’s never boring!)
However, being business geeks, the sad truth is that most of
us – even when drunk – still talk about business. And that’s actually where my
current queries settle. Personal gossip is personal gossip, no one pays much
mind. But business, that’s a different thing altogether, and I’m wondering
about where the boundaries are when it comes to discussing what everyone else
is up to. I have a couple scenarios in my head. Pipe Dreams With Potential As we hang out with our peeps at various social functions,
or just have drinks with friends, we often talk about businesses that we would
love to start, if only…… It’s only
chatter, but it’s deeply held and personal chatter, that can often linger for
years before we either do it or let it die. An example. I have had an idea for a site that I’ve wanted
to do for about 3 years now. My good friends have heard me talk about it, I
love the idea, it’s truly unique and has great legs, but I am not about to
start something alone again, and….
Well, for lots of reasons, I haven’t moved on it. I mentioned it to a
friend a few months ago, a new friend who hadn’t heard it before, (there was
alcohol involved, of course) and he immediately said, “you have to talk to my
friend, he has total expertise in this field and would be all over this.” The
next week, we were all having drinks and brainstorming, and now it’s a communal
pipe dream with potential. May or may not happen…. The questions: - With
a casual idea like this, is it cool to chatter to people?
- Can
you tell other people someone else’s ideas that they told you at a party?
- Should
you introduce two people who have a similar idea and would like each other?
- Are
you “owed” anything – money or a role or…. – as a result?
Serious Startups In Stealth Mode Most of our friends are in varying stages of startup. Some
of them are very serious – people who know what they’re doing, have a track
record, funding, team and are madly developing. It is almost impossible for
there not to be overlap. A few years ago everyone had an online social
networking startup, then social advertising, now it’s mobile everything. You have two friends who are doing something that is either
very competitive or very compatible. But you’ve been sworn to secrecy – doesn’t
matter to me whether it’s an NDA or a “simple” matter of trust. You should not
be discussing either one of their companies with anyone else, period. However, you know enough to know that they are possibly
direct competitors with each other. Or that what they are doing would be so
much better if they did it together rather than separately. Or that together,
they have the makings of an idea / company that is far greater than the sum of
its parts. Or you are good friends with both, know both, and one of them wants
to hire you. (This is kind
of the business equivalent of sleeping with your best friends ex, I think.) The Questions: - If
you are sworn to secrecy and know they should know each other, what do you do?
- If
you have very specific info about why something that one of them is going to do
is good or bad for them, but it’s because of something you know about the
other, what do you do?
- If
you want to work for or with one but have lots of info about the other, what do
you do?
- Is
it possible to pretend that you don’t know something, if you really do?
Again, I’m not talking about NDA’s necessarily. I’m talking
about something more nebulous. A moral compass, internal integrity that may or
may not jibe with legal or conventional wisdom. Back to high school. Obviously, if you have one friend dying
to go to Cabo and another who’s parents have a place in Cabo, you hook them up.
But what if the info you have is of a much deeper and private nature, given to
you in trust, but you know it will impact other people in a major way, do you
tell? What are your questions and answers? ____________
Alyssa Royse is the founder of JUST CAUSE Magazine, sucks at
beer pong, loves her friends, thinks of talking about business ideas as
foreplay and blogs very openly about whatever she’s thinking about – for better
or worse.
March 15
By Seattle 2.0 Sponsors
We'd like to thank our sponsors who support the Seattle 2.0 and, like us, are passionate about tech startups and want to make Seattle an even better place for them.  The Seattle 140tc is a full-day conference featuring sessions and topic tables designed to help startups and established businesses become Twitter-savvy. The conference includes keynotes from Ben Parr, co-editor at the social media news site Mashable, and Dom Sagolla, co-creator of Twitter. A host of other local luminaries such as Shauna Causey, Damon Cortesi, Chris Pirillo, and Monica Guzman,will join panels to talk about tools and applications, data mining strategies, and branding.  Emerging technology companies partner with Fenwick & West for a broad range of services, through all stages of growth. We represent venture-backed private companies from formation and initial funding through IPOs and mergers. Through 30 years of partnering with leading technology start-up companies, we have obtained a deep understanding of how companies are formed, financed, grown and taken public or merged and earned the role of key trusted advisor. Fenwick is ranked by Dow Jones as the fourth most active U.S. law firm in helping IT clients raise venture capital and by MergerMarket and as one of the top five technology M&A practices in the U.S.  nPost.com is a site devoted to entrepreneurship and startups. The nPost.com Tech Startup Job Board features opportunities with Internet and Software startups. By focusing on the tech startup space, nPost brings together startups with people that are specifically interested in and familiar with the dynamic and high growth nature of startups. Want to become a sponsor of Seattle 2.0? Learn more
March 12
By Seattle 2.0 Follow Friday
Follow Friday (known as #FollowFriday) is a Twitter meme where a Twitter user recommends other Twitter users for his friends to follow. The Seattle 2.0 automatically generates suggestions from our Twitter Directory every Friday based on the number of entrepreneurs and startup people following that person. Today we recommend: Find more Entrepreneurs, CEOs and Investors of Technology Startups on our Twitter Directory.
March 12
By Seattle 2.0
List of interesting blog posts from the Seattle Startup community on the last week: William Carleton/William Carleton, Counsellor @ Law The National Venture Capital Ass'n, together with the Angel Capital Ass'n, follows the lead of Washington State entrepreneurs, angel investors &... Marcelo Calbucci/Marcelo Calbucci [Read part 1 here] I’ve learned how to do PR on my previous startup, Sampa. We had a few PR hits, a few PR misses, but the more PR we did, the better we... Kevin/Kevin OKeefe (LexBlog) 96, or 48%, of the 2009 AmLaw 200 law firms are now blogging. This number is up from 39 firms, or a 149% increase, since August 2007 when LexBlog released... TechFlash Has Paul Allen's Evri been sold? That's the word from ReadWriteWeb, which cites a "reliable source" this morning who says the Seattle startup has... Luke Timmerman/Xconomy Seattle by Gregory Huang Joe Eichinger, one of the Northwest’s best-known medical device entrepreneurs of the past three decades, died yesterday at his home in Everett, WA, from... Matthew Casperson/ProgrammableWeb Search Engine Optimization, or SEO, is vital to any successful website. The team at SEOmoz are experts in this field and now offer a number of premium SEO... Glenn Kelman/Redfin A startup can be its own strange little place, which is good if you’re a little lonely or intense or if you need a sense of purpose and belonging. But... jheitzeb/Currently Obsessed I’m heading up to Vancouver tomorrow for the inaugural board meeting of a startup I recently invested in. It will be the entrepreneur’s first ever board... Tony Wright/Tony Wright (RescueTime) I don’t know a ton of important people. But as a founder of a venture-backed startup with some amazing investors and advisors, I do know a few. With Nivi... Brent Frei/Smartsheet.com Blog Kudos to the Google Apps team for an elegant design that puts customers first, and treats ISV solutions like peers rather than an entourage. Google’s...
March 11
By Gerry Langeler
When is a lemming not a "lemming?" When it's bath time!
I'm not even sure where I was going with that, but there is a point to be made. Many folks criticize VCs for acting like lemmings, all blindly jumping off the same cliff into the sea, investing in the same sectors, while ignoring interesting projects outside those currently hot spaces. There is a lot of truth to that complaint. But there is a rationale for it, too.
As I've said in other posts, often the hardest check to get is not the first one but the second (or third!). When reality interjects itself into the financing process, the sparkle and promise of a Series A investment gives way to hard questions when initial targets have been missed. It is in times like this that financing risk can become the most important risk facing a start-up. And this is when being in a "hot space" can help overcome an otherwise cold start.
Most entrepreneurs believe in at least one of two fallacies:
- Their business plan is correct, or better yet, conservative.
- If they need more cash, investors will automatically pony up, regardless of how they've performed on the initial tranche.
The reality is that those business plans are not correct, much less conservative. As I've stated many times, we're now at over 120 companies backed, and NOT ONE has made their initial business plan metrics. And we've seen many, many examples of companies that, having missed their initial plan, struggled or failed to raise follow-on capital. Not only do the entrepreneurs pay in that circumstance, we do too.
So, when we look at a new start-up opportunity, we are asking ourselves about the financing risk in that deal. That risk comes in at least three forms:
- What is the capital intensity of the business? The more money needed to take the company to the promised land, the more chances there are for a stumble to turn into a problem financing, which turns into a down round, or a fire sale. In addition, the more money needed, the more VCs will be needed to share the load. And the more VCs you have, the greater the chance of one or more turning negative on the deal and upsetting the syndicate dynamics. (bad syndicate dynamics kill more deals than ever gets reported)
- What is the investment popularity of the business? Here, lemmings rule. I'd much rather be looking for the Series B round for a company in a hot space than a cold one. The same holds true for the Series A. We've gone "off popularity" enough to know how hard it can be to get another VC firm to co-invest with us when we are "out-of-step" with current market psychology. (That said, we often like to be temporarily out-of-step, as that is where the big rewards can be found.) In addition, there is nothing quite as frustrating than to have an investment in a company that is succeeding where others have failed, but be told by our friends in VC-land that they won't look at our firm for the Series B because they lost money in a similar deal years ago.
- What is the time predictability of the business? This is actually a part of capital intensity, but in an unsuspecting way. You may have a business that is not capital intense on its face. But, if it is one where no one can tell exactly when the market will engage (or if appropriate when regulatory hurdles can be jumped), then it may be more capital intense than it appears. We saw this years ago in wireless location-based services. We got in early (too early in retrospect) and so those start-ups that really were not very capital intensive by nature became more so as we had to wait around for the market to develop.
So, what can you do about these issues? First, recognize they exist and they are just as important as the previous three risks in this series (People, Product, Market). Be ready to discuss the financing risks with us. Next, find ways to mitigate them. For example, while most software companies don't have to worry about capital intensity, even they can find creative ways to use fewer dollars (cloud computing, etc.). If your start-up is in a currently unpopular sector, find a strategic partner who would benefit greatly from your success and get them into the first round. Or find a customer who is desperate for your product and get paid 50% up front as a deposit. If you are in a "cold space" either find a way to morph the plan to get closer to warmer climes, or belly up to the fact that you are looking at a long, tough slog to raise capital.
Next, value your investment syndicate the same way you value your most critical employees. When it comes time for the next check, you absolutely need all your VCs to be telling their partners, "Yes, the company is behind plan, but our investment thesis still holds. This group deserves another check." rather than, "There is still an opportunity here, but I'm less confident in this team than I was initially." You'd be amazed how many start-ups take their VCs for granted once that first check is in the bank.
Never say, "I can't wait to be done fund raising so I can get back to running the business." Fund raising IS part of running a business! In fact, you are always (or should always be) fund raising. So, be looking for opportunities to expose your firm to investors beyond your initial set. Those are the ones who might lead your Series B or C round. Jump on any chance to present in the private company portions of the investment banker beauty shows in your sector.
If you treat Financing risk with the same attention that you treat the other three, you'll positively stand out from 90% of the entrepreneurs who go looking for venture capital.
While this concludes the initial intent of a 4-part series, I'm going to add one more in the coming weeks. It will be titled, "Part 5 - Potpourri" and deal with a number of irritants and mistakes entrepreneurs make, that while not conclusively leading to a "no," get us leaning in the wrong direction.
March 10
By David Aronchick
The enemy of my enemy of their enemy is still (probably) my enemy, but boy they sure have a chance to turn everyone on their collective heads.
I have an Android phone – the only reason I didn’t go for an iPhone was that (foolish me) I thought the
140+ year old technology
of an actual keyboard might still be useful. I knew I was wrong when I hit the G and the H keys at the same time and my phone crashed. What an idiot!
(Image courtesy of
http://en.wikipedia.org/wiki/QWERTY_keyboard
)
Anyhow, for the most part, it’s been more than solid – the app store is really filling in nicely, and with
TouchDown
, I’m almost to where I was 3 years ago with Outlook on Windows Mobile 6. But I am constantly on the lookout for anything that will make me more productive on the road. As a former Microsoft Employee, I was both surprised and amazed that they appear to have rebooted the entire franchise so successfully with WM 7. We’ll see when the devices hit the market (later this year?!?!), but it certainly looks like they’re back in the game. It’s almost like they got so far back in the race that people started to lap them and the lap counter lost count and thought they were all battling together.
There has been a lot of buzz in the mobile space lately, and I suspect there will be even more around
Windows Phone 7
at next week’s
Microsoft Mix conference
. One thing I wanted to clarify as it may have been lost in some of the other news is that Adobe and Microsoft are working together to bring Flash Player 10.1 to Internet Explorer Mobile on Windows Phone 7 Series.
I dont have an eta or other specifics right now, but it is something that both Adobe and Microsoft are working closely together on.
Holy crap. The ONE thing that both Android and the iPhone lack and MS is nailing it. I can’t remember the last time that anyone (let alone Microsoft) went right to the heart of what was missing in a market and delivered, when the other major players had skipped over the requirement (for myriad reasons).
Apple doesn’t like Adobe/Flash
, and refuses to let them run on the iPhone. This despite the fact that Photoshop/Illustrator on Mac is one of the top reasons for ANYONE ANYWHERE to buy a Mac – apparently Apple forgot that when they decided to become “a device company” (READ: Sony).
Google doesn’t like Adobe/Flash
because it makes the Web hard to crawl, and they both want control of
all those pretty Power Point presentations
. Along comes Microsoft, who is frenemies with EVERYBODY, and they figured out how to deliver what people actually want – FARMVILLE ON YOUR PHONE.
Without Flash, Zynga (and the millions of other casual gamers) will have to rewrite every app they have for every new platform. With Flash, a billion new devices became their playground. What platform would you choose? The fact is, entertainment (usually video games and porn) drive everything, and, amazingly, Microsoft put aside their desire to offer a unique stack end to end and drive for what customers actually want. This doesn’t mean there aren’t six million ways for MS to not succeed here, but they’ve taken a huge first step. So what does this have to do with you?
A problem that many businesses face is that they get so focused on competitors, rather than their customers, that a lot of times they will miss a huge opportunity to change the conversation (or watch in horror as someone they were not paying attention changes the conversation for them). Here are some questions you should be asking yourselves every day:
· Who are my competitors? (I almost skipped this question, but, trust me, lots and lots of business people don’t even have a good sense of this)
o What customer scenarios are they targeting?
o Do I have any chance to displace them with a “better” product? (Extra credit for a truly honest assessment)
o Where are they going next?
· What do our customers want? Think about this with no baggage whatsoever.
· How ACCURATELY are my competitors getting at what the customers want to do?
o Where do they get their money from? Where do I?
o If I was starting fresh in this business, would I build the company I have today?
Competition is almost never about someone delivering an incremental new product that slowly sucks away your market. It’s the
unknown unknowns
that you have to be worried about.
March 9
By Marcelo Calbucci
We’ll be taking over the Hops & Chops -- a weekly
gathering of entrepreneurs, investors and friends of startups – and have a meet
& greet for Jennifer Cabala, the new Seattle 2.0 President &
Editor-in-Chief.
This is the perfect opportunity for you to come tell
Jennifer what you want from the Seattle 2.0 blog and events. We expect lot of
Seattle’s most interesting entrepreneurs, investors and startupers attending,
so you should be there too.
If you never been to Hops & Chops, this is the
opportunity to experiment it for the first time. It’s a no-stress,
beer-irrigated, startup-geekiness dream.
Confirm your presence on the event Facebook page – March 25
at 6:30 PM at the Spitfire in Belltown.
March 5
By Seattle 2.0 Follow Friday
Follow Friday (known as #FollowFriday) is a Twitter meme where a Twitter user recommends other Twitter users for his friends to follow. The Seattle 2.0 automatically generates suggestions from our Twitter Directory every Friday based on the number of entrepreneurs and startup people following that person. Today we recommend: Find more Entrepreneurs, CEOs and Investors of Technology Startups on our Twitter Directory.
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