Category: Investments
It was the second week of TechStars and I was doing office hours with each of the 11 teams going through the Boulder 2010 program. I was sitting across the table from Adam Wilson and Ian Bernstein who each looked tired and dejected. In front of them were three slides.
I asked them what was wrong. They said they were having trouble deciding which of three different products to pursue. They’d had a dozen meetings with different mentors and were getting wildly conflicting data, which we refer to in TechStars as “mentor whiplash” and is a normal part of the first 30 days of TechStars for every team.
A few weeks earlier, Adam and Ian had their company Gearbox accepted into TechStars. They were hardware / software / robotics nerds and loved to tinker around. Their TechStars application and video had something to do with robots and their crazy desire to stay up all night hacking on them. When I’d last seen them a few weeks earlier, they were full of energy and life. Now they just looked defeated.
“Tell me about each of the ideas.” I asked. Adam started with the first one. “It’s a door lock controlled by your smartphone. The door lock market is really big.” said Adam in the most deadpan monotone voice I’ve ever heard.
“Ok – what’s the next one?” I asked. Ian mumbled something about the second slide on the table. I don’t even remember what he said.
“What about the third one?” Adam chimed in again, a little more animated this time. “It’s a robotic ball controlled by your smartphone.”
“Why are you having trouble deciding?” I asked. Adam kept going. “Some of the mentors like the door lock market but it seems like a really easy product to create and there are lots of door lock companies. And some don’t like it because it’s not defensible. No one really understands the second idea. And then there’s the ball – some mentors love it and others hate it.”
“Well,” I asked, “Is there one you love a lot more than the other two?” Adam and Ian looked at me quizzically, the same way my golden retrievers do when I ask them if they want to go for a walk. “Really, you just want to know which one we love the best?” asked Ian.
Adam jumped in, “Are you kidding. The ball. It’s a robotic ball you control with your smartphone.” Adam stood up with a gleam in his eye. “Brad, IT’S A ROBOTIC BALL YOU CONTROL WITH YOUR SMARTPHONE! HOW COOL IS THAT.”
At that moment, Sphero was born. And I knew that if Adam and Ian could make any progress over the next 10 weeks creating a robotic ball controlled by a smartphone, I wanted to invest in these two amazing guys. Their passion and obsession around the idea of a robotic ball you control with a smartphone was awesome.
Over the ensuing weeks they were regularly asked “what’s the market”, “who is the customer”, “how big is the market”, “isn’t it just a toy?”, and a bunch of other skeptical questions. As the weeks went by, they kept answering these sames questions with some variant of “we don’t really know but here are some ideas.” They kept working on the prototype and once they could drive something in a sort of a straight line, more eyes started lighting up and the “how big is the market questions” started to diminish.
Fundamentally, they didn’t know the answer, nor was it important at this stage. There are a zillion balls in the world and an endless set of applications for them; at this point Adam and Ian were pursuing the vision of a product that they were obsessed about. While some mentors and investors wanted to understand all the market and customer dynamics, others were able to see, or dream about, the enormous potential opportunities if the product could ever be created.
Three months later Foundry Group led the seed investment in Orbotix. And we are just as passionate about it today as Adam and Ian were way back when.
This morning we announced that we have just led a $3m investment in Modular Robotics. I’ve joined the board and am psyched to now be an investor in two Boulder-based robotics companies – ModRobotics and Orbotix. In the spirit of “show” vs. “tell” (which everyone in TechStars has driven into their brains over and over again) here’s a short three minute video that shows how ModRobotics first product – Cubelets – works.
Dan Primack at Fortune has a nice article up about ModRobotics titled ‘Robotics for kids’ start-up raises $3 million. For a little history of the rapid progression of the robotics movement in Boulder, take a look at my post titled Boulder is for Robots. And – if you are in Boulder and interested in robots, join the Boulder is for Robots Meetup Group.
My partners at Foundry Group and I are psyched to be working with Eric and team on creating the next generation robot construction platform. I believe the machines have already taken over and are just patiently waiting for us to catch up with them. As part of this, every kid should learn how to program, create things, and work with robots. ModRobotics plans to be an integral part of that.
Oblong is one of the most amazing companies I’ve ever had the honor to be involved with. We invested in them in 2007 when they were four people building on the incredible research and ideas of John Underkoffler. Today they are almost 100 people strong, have shipped an awesome set of products, and are on a path to fundamentally change the way we interact with computers.
If you are in the Washington DC area and want to see a live demo, email me.
Today one of our portfolio companies, LinkSmart, has come out of stealth mode and unveiled its product, Total Link Management and $4.7M in financing led by Foundry Group. My partner Seth Levine sits on the board and wrote about his view of LinkSmart. The investment was an obvious one for us as it fits squarely in our Adhesive theme given the deep relationships LinkSmart has with big media and web platforms as a provider of analytics and traffic management software.
The Internet was founded on our ability to link between things. We all distinctly remember the days of the primitive HTML pages we’d surf in our early browsers — gray page backgrounds and purple links. We clicked. And the Internet grew. This blog, your site, and how search engines like Google and Bing rank you and your relevance were all dependent upon links.
Even though the Internet and web has evolved since the mid-1990s, the most prolific web properties on the Internet all generally follow the same process: advertiser relationships are created with a publisher. This publisher then runs a never-ending fire drill with their sales, SEO and yield management teams to fulfill those obligations with their advertisers. More ad units are inserted on pages, marginally better eCPMs negotiated for, but yet the profit margins continually come under pressure as publishers scramble to generate even more traffic to support the advertising expectations.
LinkSmart has built a system that fixes part of this challenge. The technology LinkSmart’s founder Pete Sheinbaum and his team have assembled is analogous to many of the solutions we’ve seen and invested in for search engine optimization (SEO) such as SEOMoz. However, while SEO directs visitors from the open web — via search engine results — to a publisher’s site, LinkSmart takes those same readers and provides the publisher team with the means to use hyperlinks to more deeply engage the visitors, keep them on site longer, or send them to the properties the publisher wants them to visit.
If it costs a dollar to bring a reader to a site and they bail after the first page, that’s a dollar not optimized or even wasted. If that same dollar is spent and LinkSmart moves the reader three pages deeper on the site, triggering more revenue or visits to affiliate or partner site, the cost per acquisition has dropped dramatically and in many cases will improve the RPM geometrically.
Beyond the link optimization, there’s an enormous amount of valuable data generated by LinkSmart’s system. The data answers questions such as what are readers clicking on? What is their path while on site? What is the optimal number of links 100 words of written content should have to guarantee highest click-engagement? How many readers are leaving your site in a single click and where are they going? LinkSmart helps a publisher look deeply at that data to surface many things including the real-time intent of a reader when on-site.
We are psyched about what LinkSmart is launching today. If you are a publisher, check it out — it’s just the tip of the iceberg.
Yesware just announced a $4 million financing. I’ve joined the board. If you are a salesperson who uses Gmail, go download and try it now.
I’ve been using Yesware since the first alpha release. While I’m theoretically not a salesperson, I believe every CEO and professional plays the role of a salesperson. And many people, especially in young, fast growing companies, are salespeople even if that’s not their title. As far as I’m concerned salespeople are the unsung heros of most US companies.
The brilliance of Yesware is that it was conceived and built by salespeople, for salespeople, from the perspective of living in email. Most salespeople I know live in email, hate their CRM system, and are constantly switching between the two while bemoaning the idiocy of the whole thing. The whole CRM thing is for sales managers who want to actually track what the salespeople are doing. But it’s all about email for the salespeople. And that’s what Yesware is focused on.
As a seed investor in Yesware, it has been pretty awesome to watch the product evolve and and the user growth spread to over 40,000 users through word of mouth only. As a result of our word of mouth approach, the product has to be great and responsive to the users.
As an investor, I’ve encouraged the team to push a new release once a week, focus on both registrations and daily active users, and instrument every aspect of the product so we can see what’s happening at a very granular level. While Yesware is only available for Gmail, it’s been an outstanding platform to iterate aggressively on and get this kind of feedback. Now that Yesware has nailed the use case with the seed financing and has a serious user ramp happening, it’s time to go after Outlook.
I’m psyched for the Yesware team and proud to be involved with them.
This is a post by Dave Jilk, a long time friend, business partner, and CEO of Standing Cloud. While the words are his, I agree 100% with everything he is saying here. I continue to be stunned and amazed by both the behavior of our government around this and the behavior of “us” (companies and individuals) around their data given our government’s behavior. But Dave’s point is not only around the actions of government, but the broader risks that exist in the context of multi-tenant services that I don’t think we are spending enough time thinking or talking about.
While I was in Iceland a few weeks ago, there was a set of discussions driven by Brad Burnham of Union Square Ventures about trying to make Iceland and “Internet Neutrality Zone” similar to Switzerland and banking. While I have no idea if this is feasible, the need for it seems to be increasing on a regular basis.
I encourage you to read Dave’s post below carefully. While neither of us are endorsing or defending Megaupload, it’s pretty clear that the second order impact and unintended consequences around situations like the government takedown of it have wide ranging consequences for all of us. And – it’s not just the government, but mother nature and humans.
Suppose you live in an apartment building, and one day the federal government swoops in and takes control over the building, preventing you from entering or retrieving any of your belongings. They allege that the landlord was guilty of running a child prostitution ring in the building and, while you are not accused of any crime, they will not give you access to your property. They suggest that you sue the landlord to get your property back, even though the landlord no longer controls the property.
This seems like a fairly obvious violation of your rights, and it is unlikely that the government would be able to maintain this position for long. Yet this is exactly what it is doing in the Megaupload case, and in relation to the rather lesser crime of copyright infringement. Somehow – perhaps because of the pernicious influence of large media companies on the government’s activities – rights to your digital data are taking a backseat to any and all attempts to enforce the copyright laws. This is what the online community was trying to prevent with its opposition to SOPA/PIPA, and the government seems to have elected to implement a de facto SOPA by simply trampling on the Constitution.
While I could rant further about the government’s egregious behavior, let’s talk about the practical implications of this situation. The primary implication is that there is a new risk to your data and your operations when you use multi-tenant online services. Such risks have always existed: if you do not have both an offsite backup of your data and a way to use that backup then any number of black swan events could disrupt your operations in dramatic ways. Earthquakes, wars, power brownouts, asteroids, human errors, cascading network failures – yes, it reads like the local evening news, and though any one situation is unlikely, the aggregate likelihood that something can go wrong is high enough that you need to consider it and deal with it.
What this particular case illustrates is that a company that provides your online service is a single point of failure. In other words, simply offering multiple data centers, or replicating data in multiple locations, does not mitigate all the risks, because there are risks that affect entire companies. I have never believed that “availability zones” or other such intra-provider approaches completely mitigate risk, and the infamous Amazon Web Services outage of Spring 2011 demonstrated that quite clearly (i.e., cascading effects crossed their availability zones). The Megaupload situation is an example of a non-technical company-wide effect. Other non-technical company-wide effects might be illiquidity, acquisition by one of your competitors, or changes in strategy that do not include the service you use.
So again, while this is a striking and unfortunate illustration, the risk it poses is not fundamentally new. You need to have an offsite backup of your data and a way to use that backup. The situation where the failure to do this is most prevalent is in multi-tenant, shared-everything SaaS, such as Salesforce.com and NetSuite. While these are honorable companies unlikely to be involved in federal data confiscations, they are still subject to all the other risks, including company-wide risks. With these services, off-site backups are awkward at best, and more importantly, there is no software available to which you could restore the backup and run it. In essence, you would have to engage in a data conversion project to move to a new provider, and this could take weeks or more. Can you afford to be without your CRM or ERP system for weeks? By the way, I think there are steps these companies could take to mitigate this risk for you, but they will only do it if they get enough pressure from customers. Alternatively, you could build (or an entrepreneurial company could provide) conversion routines that bring your data up and running in another provider or software system fairly quickly. This would have to be tested in advance.
Another approach – the one Standing Cloud enables – is to use software that is automatically deployed and managed in the infrastructure cloud, but is separate for each customer; and further, it is backed up on another cloud provider or other location. In this scenario, there is no single point of failure or company failure. If the provider of the software has a problem, it doesn’t matter because you are running it yourself. If the cloud provider has a problem, Standing Cloud has your backups and can re-deploy the application in another location. If Standing Cloud has a problem, you can have the cloud provider reset the password for your virtual server and access it that way.
As long as governments violate rights, mother nature wreaks havoc, and humans make errors, you need to deal with these issues. Make sure you have an offsite backup of your data and a way to use that backup.
Each day I do at least two, and sometimes as many as a half dozen, audio conference calls. I make almost all of them from my iPhone when I’m walking somewhere or driving in my car. I find the process of dialing into a conference totally insane, maddening, and archaic. Here’s how it usually goes when I’m in the car.
- I go to my calendar on my iPhone at the appointed conference time.
- I try to memorize the conference call id. If I’m lucky, the phone number is underlined so I don’t have to remember that.
- I dial the number (or it dials automatically). Once the conference bridge answers, I press the keypad (#) icon on the phone.
- As I’m driving, I try not to crash into something as I type the conference code.
- By this point, I’ve often forgotten the code, press the home button on my iPhone, go back to my calendar, read the code again, press the home button, go back to the phone icon, and try to finish entering the number before it times out. If it times out I get a second chance (usually) and go back to step #4.
- Usually I’ll get into the conference. But if I don’t, I go back to step #1, but only after screaming “fuck” at the top of my lungs at my phone.
- Once I’m in the conference, I once again go back to concentrating on driving. I usually realize that I’ve paid no attention to the road for the last 30 seconds.
- If I’m driving to the Denver airport, I can guarantee that at least one time during the call I will drop and have to start over at step #1.
All I really want is a notification to pop up on my phone when it’s time for a conference call that allows me to have one touch access into any conference call automagically.
This is what MobileDay does. And it’s available now on iPhone and Android. Go try it and give me feedback.
It’s an early release so there will be plenty of rough spots, conference call numbers that don’t have the right sequence in their database, and funny iPhone glitches (since Apple locks down a lot of the phone dialing stuff), but I’ve been using it for all scheduled phone calls for the last 30 days and it’s rapidly improving with each release, especially based on user feedback as we learn all the different cases we need to solve for.
The MobileDay team has been quickly adding features like being able to – within the app – send email and SMS messages to meeting participants (for example to tell people I’m running five minutes late) and automatically map locations of meetings from the address block.
I was involved in the creation of reservationless audioconferencing, which was pioneered by Raindance (I was a seed investor) in 1997. Today, reservationless audioconferencing is ubiquitous (and I view it as a platform for communication), but the UX has been relatively unchanged and is still optimized for phones with keypads that don’t have integrated calendars and scraps of papers with numbers scribbled on them. It’s time for a completely new way to interact with this platform and MobileDay is obsessively focused on this. Play around and help us focus on the key things that are needed to make this a completely flawless experience.
Over the weekend, Kwin Kramer, the CEO of Oblong, wrote a great essay on TechCrunch titled Hey Kids, Get Off My Lawn: The Once And Future Visual Programming Environment. He starts off with a great Mark Twain quote.
“When I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around. But when I got to be 21, I was astonished at how much the old man had learned in seven years.”
Mark Twain, ”Old Times on the Mississippi”
Atlantic Monthly, 1874
This describes my continuous interaction with the computer industry. I was 14 once, then 21, and now 46. It’s remarkable to me to reflect on how far things have come since I wrote my first program on APL on an IBM mainframe (no idea what kind) in the basement of a Frito-Lay datacenter in Dallas at age 12. Then there are moments where I can’t believe that we are just now discovering things – again – that were figured out 30 years ago. And last night, while laying in bed in a hotel in Iceland and reading the wikipedia page on Iceland on my iPad, I kept thinking “what’s old is new again.”
Kwin nails it in his essay. Oblong, which is one of the most amazing and unique companies I’ve ever been involved in, is constantly dealing with the constraints of today while working a decade into the future. A year ago the present caught up with the future and their first product, Mezzanine, came to life.
I love working with companies where the CEO still writes code and uses his perspective on the past to inform the product, but isn’t afraid to completely leap over the current constraints to create something entirely new, amazing, and delightful.
Sphero is now available in some Brookstone stores around the US. There’s a handy map on the Sphero site and I’ll include a list at the bottom of this post.
Occasionally one of you, dear blog reader, will ask if you can do anything for me. I usually say something like “just do awesome things” but this time I have a request. If you live near one of the Brookstone stores with a Sphero, go check it out. Play with it. Have your kids play with it (if you have kids). And if you like it, buy one.
Cats are cute, right? What could be more cute than a cat playing with a Sphero?
How about the President of the United States playing with a Sphero. Ok – that’s not cute, it’s cool.
Now, how about you playing with a Sphero? At a Brookstone store. And then buying one? That would be mega awesome cool.
If you travel through any of the following airports on Memorial Day, go check out our little robot friend
- Chicago (O’Hare)
- Dallas/Fort Worth,
- JFK
- Los Angeles
- Miami
- Newark
- Orlando
Following are the addresses for the stores in alpha order by city.
- Atlanta, GA – 4400 Ashford Dunwoody Road, Suite 1360
- Braintree, MA – 250 Granite St # 12
- Columbia, MD – 10300 Little Patuxent Parkway
- Concord, CA – 424 Sun Valley Mall # 1
- Costa Mesa, CA – 3333 Bristol Street, Suite 1870
- Dallas, TX – 214 North Park Center
- Danbury, CT – 7 Backus Avenue
- Denver, CO – 3000 East 1st Avenue
- Freehold, NJ – 3710 Route 9
- Houston, TX – 5085 Westheimer Rd
- Louisville, KY – 5000 Shelbyville Rd # 1380
- Lynnwood, WA – 3000 184th Street SW
- Marlborough, MA – 601 Donald Lynch Boulevard
- McLean, VA – 1961 Chain Bridge
- Miami, FL – 8888 SW 136 Street
- Minneapolis, MN – 162 Market Street
- Nashua, NH – 310 Daniel Webster Hwy
- Orland Park, IL – 736 Orland Square Dr
- Orlando, FL – 4200 Conroy Road
- Palm Beach Gardens, FL – 3101 Pga Boulevard
- Raleigh, NC – 4325 Glenwood Ave
- San Diego, CA – 7007 Friars Road
- San Francisco, CA – 3251 20th Ave
- Santa Monica, CA – 1311 Third Street Promenade
- Schaumburg, IL – 60173 Woodfield Mall
- South Portland, ME – 364 Maine Mall Road
- Troy, MI – 2801 West Big Beaver Road
- Waterford, CT – 850 Hartford Tpke # P207