The marketing challenge for startups

Watch this video with Indinero’s founder, Jessica Mah. She’s 20 years old. I’ve known her since she was 16 and she’s always been an aspiring entrepreneur.

But look around the house that the co-founders all share. Five geeks sharing rent in Silicon Valley. Keeping expenses down. It’s messy, clothes are around. It’s not a showcase office that you can bring press or potential customers over to.

Why not stay in the small house?

Well, the marketing challenge for a startup is to appear big. Jessica even admitted that in her interview, saying their investors are pushing them to get an office. Why? To appear bigger!

So, look at the other ways that Indinero appeared big in the past few weeks.

1. They hooked up with YCombinator, the Silicon Valley startup accelerator. How did that make them appear big? Well, they got to present to hundreds of press and investor types at the end of the program and were joined into an alumni network bigger than anything they could do on their own.
2. They were on CNN Money. Big.
3. She was on Techcrunch TV. Big.
4. They have a great website, with a growing list of customers. Big.
5. I met Jessica Mah at TED. She paid for that out of her own pocket ($6,000 expense), which puts her in touch with big name investors and influentials. Big.
6. They integrated with FreshBooks. Big.
7. They got funded by many of Silicon Valley’s biggest investors, which landed them on influential Vator News. Big.

All this is covered on CrunchBase, too. Big.

How else can a small, scrappy, startup appear big?

On the other hand, I love startups when they are small. There’s nothing like the smell of a real startup that hasn’t shed its scrappy roots yet. Or maybe that’s the pile of clothes over in the corner that needs to be washed. 🙂

The secret hell of tech industry angel investors

Damn, the secret hell of angel investors in San Francisco has come to all of our attention over at Techcrunch. Mike Arrington started out the week reporting that there was a secret meeting of 10 angel investors who met over dinner. All well and good. I go to lots of private dinners of industry insiders. So does Mike. For the past two years Mike has gone to The Lobby, a conference of industry insiders. I haven’t gotten to go yet. Boo hoo.

Heh. So, when the story broke, I thought it was just Mike being bombastic and trying to make something out of a dinner that he wasn’t invited to. I know lots of the people involved and consider them friends too and talk with them often. The tech world is actually a pretty small place and you bang into these folks all over the place because they are hustling to get deals done, etc.

But I was wrong about this one. I tweeted earlier that I owe Mike an apology for taking too flippant a stance on this story at first.

Mike stumbled into a story that has a ton of undercurrents.

Some of those are:

1. The angel investor world is getting HYPER competitive. I attended the recent YCombinator and Techstars demo days. YCombinator had 36 companies. But hundreds of investors in the audience. Techstars, had 10 companies, with more than 100 investors in attendance.
2. That’s pushing valuations up up up. Listen to angel investor Thomas Korte. He made his money at Google and now has funded more than a dozen companies and is one of those behind AngelPad, an incubator that currently houses eight companies that will launch soon.
3. There are different philosophies and personal styles that cause friction. Up to now that friction has been kept under bitten tongues, but Ron Conway blasted Dave McClure and now those frictions are on Techmeme for everyone to see. They are very different people, even to how they dress. Ron is a careful, buttoned up, guy, while Dave is a bombastic, t-shirt-wearing, hustler.

Take away the high school drama, though, and there’s some really interesting stuff going on here.

Entrepreneurs are seeing access to lots of capital. Angels are having to hustle to be included on deals. Valuations are going so high that many investors who’ve been around the block are saying “too high for me.” Like Bob Ackerman told me.

What’s the truth? Were those 10 VCs colluding against entrepreneurs? I honestly don’t think it matters. Why? I know more than 500 VCs around the world, many of whom are angel investors. A good percentage live within 60 miles of San Francisco. Heck, just see my Twitter list of tech industry investors (I can’t add any more people to this list because Twitter only lets me put 500 people on a list). 10 people just are not going to have enough market power to do anything really naughty although it’s good to nip this problem in the bud, which is why I now support Arrington’s stance.

This is an appearance thing and it appears that San Francisco angel investors got caught doing something naughty. That alone is enough to get everyone talking.

The truth is, though, that if you are an angel investor this world is pretty damn difficult to navigate due to competitive pressures.

It’s good for entrepreneurs and good for users to have angel investors caught in hell. When they feel they have to spend more money to stay in the game, that’s good for all of the rest of us (press, users, entrepreneurs).

I think Arrington did the rest of us a big favor for trying to keep the angels in hell.

First new fab in decades opens; CEO challenges us to "keep jobs in USA"

Tom Friedman, in the New York Times over the weekend says that China is kicking our ass in ability to create jobs in the new clean-tech field. To see whether he’s right or not I visited the opening of Bridgelux, a new company that is making solid state lighting. The real story here isn’t the technology, even though that’s pretty cool and has already won awards.

No, the big deal here is that this is the first manufacturing plant I’ve seen the tech industry open here in the US in quite some time. CEO Bill Watkins claims it’s the first new fab that’s opened in the San Francisco Bay Area in 25 years.


I get right to the point in my conversation with Bill “why do this here rather than go to China?”

He answers “the problem in America is that we have a hard time demanding jobs for America.” He challenged us to change our public stance toward the creation of jobs and echoed Friedman’s column this weekend.

So how will he get more jobs in America? He says that we need to learn from China. He explained that China takes an “industry building” approach. So what would he do?

1. Get each community to see the importance of upgrading its lights to LED, which saves a lot of power and pays for themselves within three to seven years, he says.
2. Create state bonds, that gets paid back with energy savings.
3. Make sure that at least 60% of the lights are “made in America.”

“The only question is, ‘can we do it here?’ It’s an economic war out there.”

My feedback for Bill?

He’s both nuts and right.

How is he nuts?

1. Politicians aren’t able to get their acts together to build real jobs. Why? Because politicians are too focused on their local areas and won’t vote to benefit some plant in some other state.
2. States are trying to keep basic services going, and voting on some new-fangled lights just won’t be as big an issue as keeping the fire department open or books in schools, etc.
3. The TEA party is going to keep public debate focused on government spending. Anyone who tries to suggest that spending be increased, even on something that saves energy, will get drown out.

How is he right?

1. If we want to really create the millions of jobs that we need in this country we need to take an industry-building approach.
2. Green tech is a HUGE opportunity. In lighting alone every single light we use will be replaced in the next decade or so (I’m already seeing the trend, both of my cars have LED lights now and I’m seeing more and more every day). That’s billions of lights. Someone will make those, but who?
3. The investment in industries, rather than just temporary stimulus or short-term jobs, causes a whole passalong effect in the economy. For every job inside the fab that’s created entire other companies are created to serve these fabs with materials and tools (and this fab is very small compared to the ones that have been built in China to serve other industries).

So, America, do we have what it takes or are we going to let yet another industry move to China?

GreenTech Enterprise is reporting that Philllips, Osram, and General Electric, not to mention other Asian brands coming along, have already built LED fabs in China and other “lower cost” places than America. You should read their report, which quotes US Congressional Representative John Garamendi. He says Republicans keep voting down provisions that when cities buy equipment they must buy at least some of them from US manufacturing plants.

It’s there in black and white.

Does this country have what it takes to invest in high-tech American manufacturing jobs?

So far the answer is a big fat “no.”

Tech press is full of it. Facebook doesn't need a device, this is what they need to do in mobile:

By now you’ve seen the “Facebook is doing a phone” and “No we’re not” headlines. Just check out this grouping on Techmeme if you haven’t. Techcrunch started it, with a post by Mike Arrington, that said that Facebook was secretly working on a phone.

Arrington was right that Facebook is working on mobile with some very smart folks, but the headline overreached and MG Siegler’s followup assumes that a smart team is working on a device. Well, I think that’s horsepucky until Facebook actually ships an innovative mobile app that works on all the modern platforms. Truth is, while a Facebook-branded device would be popular it won’t get most of us to switch off of the phones we already have. Even Google demonstrated the difficulty of doing that as it launched its Nexus One and then killed that effort within a few months.

I’ve been talking with folks high up in Facebook and they deny it. But one did say “our strategy is to integrate and make all phones social, not build any specific device or integration.” Also said that the only public statement they are making on the record is the one they made in Mashable, which is why I can’t use the exec’s name.

Well, OK, now that we’re clear on that, let’s talk about what I hope Facebook is doing by looking at what’s missing from Facebook’s mobile strategy:

1. Great contact support is missing. Most people don’t even know there is ANY contact support on the iPhone app. There is. Click on “Friends” on the Facebook app’s home page and then you’ll see a button named “Sync.” But does it do much useful? Not really. It puts your friend’s photo into your phone’s contacts and it also adds a link to their Facebook profile. Does it add their phone numbers? No. Email addresses? No. Other things? No. Really lame.

2. Great photo support is missing. It’s still too hard to upload a group of photos. Heck, go to the UI in the iPhone app and figure out how to upload a photo to Facebook. It’s not that intuitive. First you have to click on “Profile” and then notice the little camera icon to do it. But what if you were thinking of uploading photos that you’ve already taken? Then clicking on a camera icon doesn’t make sense, but that’s what you need to do. Plus, I need to upload my photos to other services like SmugMug and YouTube too. Why doesn’t Facebook’s app do all of those at the same time?

2. Great video support is missing. I’d love to upload a video to Facebook AND YouTube at the same time. I can’t, at least not with the Facebook app. I don’t even think Tubemogul does that yet.

3. Location support is severely lacking. Why doesn’t Facebook’s Places hook up with other location-based services in a good way yet? They announced it but I still don’t see much integration between Facebook, Foursquare, Yelp, or Gowalla. Plus, Facebook’s main platform is still very poor when compared with other services. The one thing it does have is a TON of people on it.

4. It’s still hard to figure out how to granularly route messages to the right place. Why is it easier to post to a Facebook Page from Seesmic than it is from Facebook’s own mobile app? Why can you use to send a status message just to your family, but I can’t figure out how to do that with Facebook’s own app? If I post something from a press conference that message needs to go to a different group of friends than my baby photos, yet Facebook treats them all the same.

5. Facebook’s own app doesn’t do anything with phone sensors. Why can we use RedLaser to point our phone at a barcode and learn where to buy that product but we can’t do anything like that on Facebook? Why can we “bump” our phones and exchange contact info on the Bump app, but not on Facebook? Why can we exchange payments on PayPal’s app by bumping phones, but not on Facebook’s app? Why can we find a new restaurant by shaking our phone on some apps, but not on Facebook? Why can we see how to walk to the bar we’re seeking on Yelp’s augmented reality feature but not on Facebook? Why can I use Runkeeper to keep track of my bike rides, but I can’t do that with Facebook’s mobile app?

6. Facebook doesn’t do anything with location proximity. At Arrington’s own conference next week DeHood will show off some new proximity-based features for you to keep in touch with your neighborhood but Facebook can’t show you who else is at the party you’re at, or who is within walking distance of you.

7. Facebook doesn’t do anything with geofences or, really, anything innovative with location that Foursquare didn’t show us two years ago. Yet just last week Footprint Feed announced support for geofencing your friends. Why doesn’t Facebook do this yet? Geofences would let you do cool location and proximity-based alerts. Imagine getting an alert anytime you got within 1,000 feet of Arrington, for instance! Or, anytime you’re close to an In-n-Out.

8. Absent on casual game mobile platform war. Facebook let Apple and Google get into the casual games market. Hell, they are even letting Microsoft and Nokia get back into that game! Why? Because Facebook doesn’t have a trusted payments system yet, and doesn’t have an app store on mobile phones. I bet that’s driving Mark Pincus over at Zynga nuts because now he has to hire three times the number of business development folks to cut deals with all these companies. Facebook could outstrip all of the other company’s efforts. Where did I learn about Angry Birds from? Not Facebook, and that should really be troubling to Facebook’s execs.

9. Lame real-time search and filtering features. Facebook is letting DataSift come into the market, which brings real-time filtering that is much more advanced than anything Facebook has done yet. Really surprising since Facebook bought FriendFeed more than a year ago (FriendFeed had great real-time search and filtering). Those kinds of features will really be important on mobile phones, due to the smaller screen available there.

10. No innovation in feed design/layout for quite some time. Facebook let Flipboard demonstrate that there’s a way to lay out Facebook feeds in a new, and more productive, way. Yet Facebook doesn’t even have an iPad app out yet. And I won’t even go into the other innovative apps and services that have hit Twitter or RSS lately like Flud, Twitter Times,, etc.

11. Startups are kicking Facebook’s ass on info filtering. Look at the video I filmed last week with My6Sense (Part I, Part II) that shows just how far that company has come in bringing you interesting information from your Facebook and Twitter streams. Why hasn’t Facebook done that?

So, MG or Mike, tell me again why Facebook would do a device, or even an OS, BEFORE they’d fix all these things on their iPhone, Android, iPad, Blackberry, Nokia, and Windows Phone 7 apps?

It just doesn’t make sense.

Venture Capital's "Mr. No" tells why he turned down Foursquare

When I interviewed Bob Ackerman (co-founder of Allegis Capital) a couple of years ago I called him “Mr. No” because he turns down so many deals but he and Allegis, which he co-founded, are one of the most highly regarded (he funded Ribbit, which got sold to BT, for instance).

Because he’s outspoken, it’s always fun to visit and hear his view on the market. We talked a long time in an interview I filmed this week, but one of the stories he told me is why he turned down Foursquare, among other things. You’ll also hear about why he thinks innovation is very much alive and that he hasn’t yet seen a venture bubble, other than valuations on a few companies, like Foursquare, gets too high for his tastes, but is always keeping his eye out for a broader, troubling, VC bubble.

I start the interview talking about the “angel bubble” and the problems that the VC field are going through right now. “It is parrots talking to each other,” he says, demonstrating how outspoken he is, but also how positive he is that he’s able to turn away from overhyped deals that get too expensive and that he is still able to find companies to invest in that show a good return.

Around minute 25 he talks about Foursquare. “It just beyond where we’re comfortable playing today.”

This Indian startup makes Gmail search "instant" fast!

When Rohit Nadhani contacted me on Skype a while back he told me he had something that made Gmail’s search much faster. I almost hung up on him. Why?

I thought Gmail’s search was fast enough. I’d used it hundreds, if not thousands of times and it always found me the emails I was looking for. In other words, I didn’t think it was slow, so Rohit’s pitch seemed to solve non-existant pain.

But he was a persistent person and said “please, just try it.”

I’m glad I did because my first reaction was “damn” after trying CloudMagic. What is it? It is software you load on your Mac, Windows, and soon Linux machines that indexes your Gmail. Makes it wicked fast to search Gmail.

Keep in mind this was more than a month before Google announced its “instant” search result feature. I have been using it ever since and it’s really great. You’ve gotta watch the video demo I filmed today to see just how much faster it is than Gmail.

Even better, he told me today that soon he’ll add Salesforce, Google Docs, and LinkedIn support. Can’t wait.

After the cameras were off we started talking about things he’s seeing happen in the tech world of India and he told me stories of how geeks were getting brave enough to start their own companies because of the anti-offshoring stance of American policy makers and corporate leaders. He told me that we’ll see a ton of companies, like his, who’ll do something innovative and try to build world-wide brands. I turned back on my iPhone and recorded an audio CinchCast, you can listen here, where we talk about that and other startup and trends in India.

Shopkick shows innovation in location-based services is not over

I love seeing innovations. Especially ones that are so easy to understand you slap your head and say “why didn’t I think of that?”

Shopkick showed me one of those. What does it do?

It is a mobile app that can tell when you’ve actually walked in a store. How did it do that?

Use Wifi? Nope.
Use near-field communications? Nope.
Use GPS? Nope.
Use RFID? Nope.

All of those had some significant disadvantages, co-founder Cyriac Roeding told me. So, what did his team come up with?



Every cell phone has a microphone, and they found a way to put an audio signal into the air that humans can’t hear, but the microphone in your cell phone can.

So, at the front of a store there’ll be a little speaker that Shopkick designed. When you walk into the store (you must have the Shopkick app running for this to work) it’ll know you are there and can reward you for doing that.

There’s a lot more on the video and article over on Building43, but it’s great meeting innovative companies like Shopkick.

It also shows that innovation in the location-based space is not over. In the video I wonder why Shopkick only focused on shopping. Imagine they put this system into Disneyland. Now a customized Disneyland app could do a LOT of things when it senses you are in a new area or waiting in line for a ride.

Do you have an innovative solution to a problem like this? Would love to hear about it: