Posts Tagged ‘Joe Procopio’
Friday, November 11th, 2011
By Joe Procopio
What could possibly go wrong?
You can no longer joke about the robot uprising. The entire concept used to be good for a chuckle or a catch-phrase-heavy Schwarzenegger summer blockbuster. Computers were plugged into the wall, for God’s sake. They couldn’t move, and even if they could, they were pretty much restrained by the length of the extension cord.
Now, not only can they move, but they know where you are, they’ve got your credit card number, and apparently they can drunk text your wife. Look, I’m just saying that they’re already intricately tied into things that can kill you. How long before Joshua figures out that Tic Tac Toe is just a horrible plot device and he launches the nukes out of spite?
The good news is, right now they’re just waking us up and finding us questionable Thai food.
But that’s about to change.
Siri, Phone In My Column
So it took about five minutes for Siri to stop being about voice recognition. But Siri as personal digital assistant, for all its commercial-friendly wow factor, is actually only scratching the surface of what’s possible. What it comes down to is not how well Siri listens, but how well she understands.
In other words, the power of artificial intelligence, or at least this brand of it, is not in the regurgitation of facts, but the collection of data points needed to come to an actual decision.
“Siri, do I need an umbrella?”
Or is it?
Siri just checks the current weather conditions, right? But wait. Not to give her a headache, but let’s make sure I’m actually going somewhere. So she checks the calendar and the current weather conditions.
Well, am I leaving right away? Better have her check the calendar, the current weather conditions, and the forecast for the time of the event.
And while we’re at it, how far am I actually going? Will it be raining there? Just to be safe, she should check the calendar, the current weather conditions, and the forecast for the time of the event at the location of the event.
So now we’ve happily pieced together all the potential contextual options.
But you know what? Turns out I’m just standing in an umbrella store trying to remember whether or not I have an umbrella.
Seriously. It’s always the one stupid “who could possibly be thinking that” scenario that trips up the logic of artificial intelligence. Well, that and the paradoxical nature of Asimov’s laws when it’s basic robot nature to kill everything that isn’t metal.
It’s time-consuming to pull out my phone, open up the umbrella app, have it check the umbrella database for my umbrella inventory, and then I have to make the decision on my own as to how many umbrellas are enough.
But at least I know I’ll get the right answer. Automating all those actions with a single voice command and interpreting that command correctly is what makes Siri, or the potential of Siri, so powerful.
But what about the context?
The Droid RAZR and Smart Actions
On your store shelves today, the Droid RAZR features the debut of Motorola’s attempt at AI from another angle with Smart Actions. And again, you’ll note how they use words like “smart” to keep the lid on the fact that these are really just death merchants in a little plastic boxes. I mean, the RAZR is encased in Kevlar. Why? Maybe so you can’t shoot it when it goes for your jugular.
Smart Actions are designed to give you push-button access to rules that are based on context the phone already has, like where you are, what time it is, etc. There are apps that do this kind of thing already, like auto-reply when you’re driving and you get a text.
But this is more universal, as in you tell it to set itself to vibrate at the movies and then every time you’re in a movie theater it sets itself to vibrate and then resets itself when you leave, and here’s the important part, without you having to think about it.
Imagine what the world would be like if everyone had this. Now imagine what it would be like if someone stopped Adam Sandler before he made Jack and Jill.
Beyond that, the RAZR is ridiculously thin. And yeah, while this kind of plays into marketing, based on the popularity of the original RAZR, it’s kind of crazy how much power they got into the package.
You’ll note that we seem to have settled on a handset size, one that I’ve lovingly referred in these very pages as the “clown phone,” but the RAZR got the depth down to about half. That means there’s another half of the acceptable size of the device that could easily hold things like umbrella databases.
AI is the next big play in mobile. As the processing power, bandwidth, and features like the camera and GPS get more powerful, it only makes sense that the phone will soon start living up to it’s “smart” designation.
Then it can check my workout app, count my calories for the week, and alert me that I can top them off with a special Wednesday-only meal deal at the Taco Bell I’m about to pass. And when I respond “Siri, let’s do this,” she’ll make sure it’s paid for and waiting for me when I walk in.
Right before they wipe us all out.
Joe Procopio heads up product engineering for tech media startup Automated Insights (formerly StatSheet). He also owns consulting firm Intrepid Company and creative network Intrepid Media and runs the startup social ExitEvent. Joe can be reached via Twitter @jproco (http://www.twitter.com/jproco) and read at http://joeprocopio.com.
Thursday, September 15th, 2011
After being fired from TechCrunch, founder Michael Arrington says he will start a new personal blog in the next few days. Arrington announced the personal blog via Twitter.
Speculation is that it will be more like the popular blogs of venture capitalists Fred Wilson and Paul Graham rather than a more journalistic enterprise such as TechCrunch. That might dampen the hail of criticism over Arrington’s alleged conflicts of interest.
Controversy isn’t likely to disappear from Arrington’s life, though. Already some have pointed out that Shaker, which won top honors at the TechCrunch Disrupt conference, counts the Crunchfund as an investor. Is that a conflict of interest?
We’re in a brave new world of journalism when questions like this can even come up.Here’s the Guardian’s take on the Shaker shakeout.
Union Square Ventures, investors in Zynga & Twitter, raising new fund
The Wall Street Journal reports that New York City-based Union Square Ventures is raising a fourth fund pegged at $150 million to $200 million.
In addtion to Zynga and Twitter, Union Square also invested in Foursquare, the social music startup Turntable.fm, and Tumblr, which seems to be the latest social media hot space.
YouTube rolling out new editing features
YouTube is introducing new editing features that people who upload videos to the site can use.
The new editing tools allow users to make simple changes sucha s trimming the beginning or end of a clip, adjusting contrast, color and brightness, and adding stablization to jittery video.
It also includes 14 style effects.
Netflix lowers number of subscribers expected, stock falls
Netflix (NFLX: NASDAQ) says it’s still confident it made the right longterm choice in effectively doubling what it costs to have both unlimited streaming movies and DVD subscriptions to $15.88 a month.
It dropped its projections of DVD only subscribers to 2.2 million from the previously expected 3 million and said it would have 9.8 million streaming only customers rather than 10 million.
The Los Gatos, CA-based company saw its stock price tumble the most in three years, dropping $31.50 or 15 percent by 9:30 am Thursday morning (Sept. 15) and was slightly lower by noon.
Our columnist Joe Procopio had this to say: Why I broke up with Netflix
Tuesday, September 6th, 2011
By Joe Procopio
So I dumped Netflix a couple days ago. It wasn’t much of a big deal. The woman on the other end of the line was very understanding, somewhat apologetic, and even a little cheerful throughout the entire ordeal, which lasted maybe 90 seconds.
Although I like to imagine she slammed the phone down and then went on her break to hatch an elaborate plan to stalk me and eventually win me back.
But it didn’t go down like that at all. There were no histrionics. And conversely, I didn’t go out in a blaze of rage. Deep in my heart-of-hearts, I still love Netflix, and I’m already going through withdrawal.
Maybe, once all this blows over, we’ll end up together again when I realize I can’t live without the comfort of having movies to come home to every night.
Sure, We Had Our Problems
Look, I’m not going to sit here and act like it wasn’t the price increase. It was definitely the price increase. But it wasn’t just that. I didn’t break up with Netflix to make a statement.
I did it because I realized that, ultimately, we’re doomed.
Well, Netflix is doomed. I’ll be fine.
Jumping the Shark
The price increase that went into effect on September 1 is a huge problem for Netflix, but not in the way you might think. Ultimately, the service is still worth the price, but a 50 prcent hike for people of my account status couldn’t have come at a worse time.
If the price bump was the cart, the selection of movies available for streaming was the horse. Netflix has always spoiled us by consistently delivering more than what we felt we deserved. So when they announced the price increase, and then the selection of movies available for streaming somehow got even worse, , including Starz announcing last week that they’re pulling their content in 2012, they ultimately triggered their own commoditization, thus opening up the door for whatever is next.
It doesn’t take a rocket scientist or much research to realize exactly how fickle consumers of entertainment media are. Furthermore, nowhere is the tale more cautionary than that of home movie and television delivery.
This has all happened before…
I go all the way back to the 1980s on this. My Dad had the foresight to buy a VCR when they first hit the broad consumer market, so by the time the first Mom and Pop video rental store opened up a town away, I had already been waiting for something like it.
And much like the moment after a first date, suddenly all my behavior changed. The primary purpose of our VCR instantly went from recording television shows to watching rented movies. Thanks to our local video store, I could select from hundreds of titles, take them to the comfort of my own home, and eat and drink whatever I wanted while I watched.
I was in love. And with all that in hand, what more could I possibly want?
The Dating Game
Eventually, you could pretty much rent movies anywhere. The convenience store down the street from my apartment had shelves full of rentals. Grocery stores had them. Pharmacies had them. Bait and tackle shops had them. Everyone wanted my attention.
Now I didn’t have to bother making a special trip to the video store, and if I couldn’t find the movie I wanted in one place, there was a good chance they had it at the other. Competition drove rental prices down even further. Loyalty went out the window. Goodbye local video store, hello whatever happened to by close by.
I had options. So with all that in hand, what more could I possibly want?
The One That Got Away
I started going to Blockbuster because they guaranteed I could go home with a new release that night. Since it was also expensive, at first I only went to Blockbuster for said new releases.
But soon, everyone else became an afterthought. Blockbuster was the clear winner in the ensuing video rental wars, either out-pricing, out-selecting, or out-location-ing their competition. And make no mistake, Blockbuster, in its heyday, was ultra sexy.
So what if I now had to go back to making that special trip to the video store? This was the perfect video store. Blockbuster’s selection was broad and diverse, they almost always had the movie I wanted in stock (or I got it free), it was easy and painless, and they were everywhere.
It was perfection. So with all that in hand…
Long Term Commitment
Netflix had been around for a while, always trying to get me to just give it a second look, but it took 24 long hours to get the movie I wanted. So at first, much like how I started with Blockbuster, I only went to Netflix for new releases.
But you know what happened? Blockbuster started getting all weird on me. The words “return it anytime” went straight to the heart of Blockbuster’s bottom line, and in a foolish attempt to try to replicate that ability, Blockbuster kept changing their rental periods, rental rates, and late fees several times over.
All of a sudden, 24 hours wasn’t such a long wait. When streaming was offered as part of the Netflix service, it just made Blockbuster’s attempts to be like Netflix look sad and pathetic.
Now I don’t even rent movies, I Netflix them, a branded term that means both receiving a DVD in the mail and viewing via the streaming service. Genius. Just about any movie I want at my door in 24 hours, and a whole bunch of second rate stuff I can check out right now. Why didn’t I notice all this before?
It was a partnership. So with all that…
Look, Redbox is not the answer. It is, to use another branded term, a Band-Aid. The same goes for Hulu, Amazon, iTunes, Walmart, and all of the other competitors springing up Netflix-like around Netflix.
Once Redbox started popping up everywhere and then launched a mobile app, I started trying them out. However, in the exact same way I started with both Blockbuster and Netflix, I’m only using them for new releases. Now I no longer have to wait 24 hours to see the movie I want to see.
Just like old times!
On Demand service has gotten more broad and a little less expensive. Unlike Netflix (and Redbox), On Demand movies are available the same day the DVD hits the stores. Now if there’s a movie I really want to see immediately, I no longer have to consider the long term commitment of buying it.
All the web-based services have different options for television shows and second rate movies. It’s not near as deep as Netflix, but …
What Am I Really Missing?
The only types of movies and television shows remaining are those I would watch out of nostalgia, curiosity, or discovery. In any of those cases, this is not stuff I would seek out. This is stuff I might queue up if I happen by it.
But I wouldn’t say I’m missing it, Bob.
I know what you’re thinking. That’s just me and my romantic tale, right? Your story is different. You can’t even dream of a world where you don’t have Netflix.
But look at Blockbuster. Before they created the market for watching exactly the movie I wanted to watch exactly when I wanted it for three bucks for two nights, that market didn’t exist. Once it went away, I didn’t miss it, thanks to a fledgling service that allowed me to use the Internets to send DVDs directly to my mailbox.
Even though I’ve had to change my habits a bit, I’m not missing Netflix. If that continues for, say, a couple weeks, then it’s safe to say that I just don’t need it anymore.
So why drag it out?
For the kids?
Yeah. Maybe. They’ve been screaming at me since I cancelled.
Joe Procopio heads up product engineering for tech media startup StatSheet. He also owns consulting firm Intrepid Company and creative network Intrepid Media and runs the startup social ExitEvent. Joe can be reached via Twitter @jproco (www.twitter.com/jproco) and read at joeprocopio.com.
Wednesday, August 24th, 2011
A few months ago, I was sitting in John Austin’s office at gaming incubator Joystick Labs with Austin and John O’Neill, president of Spark Plug Games). I was mostly there trying to score free games, or at least cheat codes, and I also wound up accidentally writing about the North Carolina Gaming Roundtable they were about to take part in.
As we were killing time playing Dr. Mario, I nonchalantly asked if either of them had an exact figure on the number of gaming startups in the RTP.
While Austin reached into his desk and pulled out a stack of spreadsheets, lists, and what looked like a Simon, O’Neill whipped our his smartphone and started going through his contacts.
I give them huge credit for taking that random question so seriously, but the truth is no one really knows how many there are.
But we’re going to find out. Or at least Ben Moore is going to give us our best guess.
Moore does marketing and PR for Mighty Rabbit Studios , an independent game development shop in Raleigh, currently working on the Saturday Morning RPG series, which is exactly what it sounds like and better have a Harlem Globetrotters mystery level. I sat down with Moore and Matte Wagner, founder of Pangolin as well as an audio engineer at Red Storm.
Moore is one of the drivers, along with Mighty Rabbit co-founder Alan Youngblood, of Raleigh Game On, a first-ever get together of local independent developers to show off their wares, celebrate independent gaming, and hopefully cement a community that has a lot of members, a lot of camaraderie, a lot of promise, but very little cohesion.
Game On is Monday, August 29th at 7:00 p.m. at the Hive in downtown Raleigh. It’s free to attend, and I suggest you do. I’m telling you this because I know a little something about this kind of event.
They Stole My Idea!
About six months ago, I was at a reception that followed some kind of investor or tech startup conference, and I was half-joking that the reception, that’s the part at the end with beer and no Powerpoint, was what I most looked forward to.
Hey, I know a brewery owner, I thought. I should start an event and have it just be that part at the end where everyone is having fun. I made that joke in a column, someone read it and relayed it at a dinner a week later, whereupon someone else immediately said I should do it for real.
Fast forward to September 12th, which will be the fifth iteration of this event, now called ExitEvent, a free beer, loud music, no-nametags monthly social exclusive to RTP entrepreneurs and their employees. Within six months, it’s grown from a bad joke to 200 people from 85 startups.
Shameless Plug Over
Did you know there were 85 startups in the RTP?
Yeah, me neither, and I definitely should have. My point is the reason why ExitEvent blew up so quickly had nothing to do with me or the free beer. I just lit the match. It exploded because the entrepreneurs were out there and they wanted something like this.
So back to the question: How many gaming startups are there in the RTP?
The question is probably unanswerable, at least for now. A good guess is: Tons.
Thanks to mobile and social, there are lots of opportunities for smaller games, smaller budgets and smaller companies to be successful right out of the gate. Wagner says that these companies didn’t have the option of the mass mobile market until very recently, not 5 years ago, not really even two years ago.
Yes. In the world of mobile gaming, 2009 was like the dark ages.
Developers have also been taking notice of success stories like Rovio and the amount of reward achieved for the pittance of resources spent. Today, hobbyists are getting serious. Cogs at big companies are jumping ship to helm their own. It’s almost stupid that it’s not more of a gold rush than it already is.
But a lot of these little companies are working in a vacuum. When they get to a certain point, they all tend to run into the same obstacle: They can’t find the right person to join the team. They need a network, at least a central cortex, to bring about what Moore calls the “I know a guy” syndrome.
So, You Know, Game On
This is the purpose of Game On. Moore says that for the smaller developers, there really isn’t a central get together beyond the once-a-year East Coast Game Conference. I’ve been to that conference since its inaugural, and I’m always surprised by two things.
One. There is literally almost no connection between the RTP tech startup ecosystem and the RTP gaming ecosystem. It’s there, but it’s thin. I can count on one hand the number of people I run into at both the startup events and the gaming events. This should not be and I’ve sort of made it my goal to try to build that bridge.
Out of Legos, of course.
Two. The RTP startup ecosystem, as open and helpful as it is, could probably learn a few things from the RTP gaming ecosystem. These folks are tight, always helpful to each other and to outsiders like me. In this sense, the gaming ecosystem is a lot like the music ecosystem, where they’re willing to introduce, cross-promote, and even sit in on a project just because they love doing what they do.
They Want to Reach Your Grandmother
And it isn’t like the community has no structure at all. Alex Macris’ awesome Escapist magazine and Triangle Gaming Initiative (which also has a monthly social), is a very good start.
But the ECGC and the TGI are by developers for developers. In order to get the local gaming community to grow, they not only need to connect and reconnect with the developers, but also reach out to the developer wanna-bes and, ultimately, the gamers themselves.
This is more difficult than it was two years ago. Wagner points out that with that same mass mobile market as the distribution method, all sorts of people are now exposed to games and have an idea of how a game should play, casual vs. hardcore is dying down, if not almost irrelevant.
Plus smart phone penetration is still relatively small, compared to other delivery media – televisions, for example, or even PCs/Laptops. In other words, gamers are everywhere, they’re everyone. They’re pretty much you’re grandmother.
Well, they don’t want to reach your grandmother, but the point is the universe is expanding.
Here’s Your SETI
Moore hopes to at least diagram that expansion with Game On as a first attempt. He wants to grow Game On to be a central hub for the independent community of local developers to collaborate and trade ideas. If it works, they bring more people in, and the result is more ideas and more collaboration.
But there’s an added competition element to Game On. Companies will give a two minute intro on who they are and what they’re working on, and there will be stations set up for attendees to give the game a try. At the end of the evening, a Best in Show will be chosen and a trophy awarded, which the winner keeps until the next Game On (TBD).
Battle of the Bands!
The trophy is named the Ben G. Russell Cup, after a friend within the gaming community who passed away before he had the chance to take off. Again, this shows that the community is there, it just needs cohesion.
And this initial Game On is only the first step. Moore and Wagner don’t yet know what they don’t know, in terms of what’s out there that they’re not taking advantage of.
But while they’re counting new companies at the first Game On, they’ll figure this out too
Joe Procopio heads up product engineering for tech media startup StatSheet. He also owns consulting firm Intrepid Company and creative network Intrepid Media and runs the startup social ExitEvent. Joe can be reached via Twitter @jproco (http://www.twitter.com/jproco) and read at joeprocopio.com.
Friday, July 22nd, 2011
By Joe Procopio
Seriously? Wait, how many bands?
When deja Mi founder Justin Miller first dropped hints to me back in May about what would become deja Fest, it sounded intriguing. He painted a picture of an old-school launch party, complete with bands, beverages, and big-shots.
Of course I was in. That’s sort of my thing.
And his strategy made perfect sense. See, deja Mi is a venue-based media sharing application, fancy-speak for an app that takes your pictures, video, audio, any kind of digital content from an event, and uploads and categorizes it in a single album for that venue. All real time.
Local. Music. Tonight.
So you go to a show, and immediately after — hell, even during, you can relive (or immerse yourself in) said show, minute by minute, snapshot by snapshot – or, if you can’t make the show, you can watch or hear the whole thing as it’s streamed to you.
Better yet, if you happen to be out in downtown Raleigh after dinner at any one of the awesome restaurants that have sprung up, deja Mi can give you a full audio/visual menu of what’s happening around you.
No friends, no followers, no privacy concerns.
Cool app. Good reason to throw a party.
But Wait, There’s More
Things got out of hand, in a good way.
It hasn’t gone unnoticed by Miller and his gang that there’s been a veritable boom in media-sharing apps, especially those launched in the last six months. deja Mi is unique in the sense that it uses location and media sharing in a very efficient manner and marries the two through individual events.
The app stands out, but in order to stand out in the marketing shuffle, they realized they needed to create a major footprint right out of the gate. They talked about it and, going back to the roots of how the company was conceived, decided to tie the launch to the music scene.
A planned one-off concert-style launch party quickly grew into a couple bands at a couple different venues and then evolved into a monster two-day festival bringing in big names while including local bands in the mix.
Thus, deja Fest
That means you’ll see locals The Hell No and The Static Mind as well as Baltimore’s Wye Oak (, fresh off a stint on Jimmy Fallon, and Warner Bros.’ Surfer Blood.
All in all, it’s 26 acts at six different venues over two days plus an all-ages portion on a closed-off Cabarrus Street.
And it’s free.
So drop whatever it is you’re doing tonight and tomorrow (that’s Friday July 22nd and Saturday the 23rd if you ignored my tweets), and get to downtown Raleigh, because we haven’t seen anything like this in ten years, and probably won’t see anything like it again for a while.
The Return of the Lavish Launch?
I’m old enough to remember the bubble parties circa 1998-2001. And let’s get one thing straight. They were awesome.
Back in the day, technology was my ticket to front row seats at the Brian Setzer Orchestra (Thanks, Microsoft!), backstage badges at SXSW (Thanks, Vignette!), and all kinds of ridiculous, superfluous excuses for not having a revenue model.
Personally, I’m trying to revive that sense of fun in the technology world, especially in the startup ecosystem and deliberately in the RTP. Fun is healthy, and it can go a long way towards turning triples into home runs. Fun is necessary.
I’m also the first one to step up and say enough is enough when a Dave & Buster’s gets rented out and a Flock of Seagulls gets flown in for every point release. I’m just as wary of Groupon’s numbers as you are and right now, I’ll be honest, my portfolio is safely invested in mattress lint and Rosetta Stone for Mandarin.
This Is Not a Bubble Party
Miller came up with the idea for deja Mi, sensibly enough, at a show in October 2010. By November, he not only had the company underway but also, and this is key, the revenue model. The app was then built around that.
Going back to the glut of media sharing apps hitting the market between then and now, Miller took stock of the means to get his app to the top of the pile. He quickly realized there was one mean: The traditional way of breaking an app is the holy grail of TechCrunch, combined with several good write-ups and, of course, great reviews in the App Store and Android Market.
It wasn’t until April that the launch party idea was born. deja Mi is the official app of September’s Hopscotch Festival, so they have a partnership as well as a sponsorship with Hopscotch.
Miller realized that this roaming music festival could not only serve as a launch party, but also as the ultimate first impression and test-bed for the app. It would provide the backdrop not only for exposure, but also education and adoption.
If deja Mi is going to become ubiquitous with venue-based media capture, then festivals, even music shows, are just the first step. You might as well just jump right in. So deja Fest is not just a party, it’s a Petri dish where the app can quickly grow and evolve.
A Launch Party With a Purpose.
Certainly it’s going to be fun – but that’s just gravy.
It’s a risky move from a financial standpoint – as they’re putting most (not all) of their eggs in one basket in terms of marketing. It’s either going to work and work extremely well or it’s not, and then they go back to the drawing board.
What I like about it is that they’ve figured out there has to be more than one way to get your name out there. We can all complain about how the RTP is stuck in this plain, vanilla, boring rut, but in order for it to change, we have to make waves, take risks, and, well, bring the sexy back
Joe Procopio heads up product engineering for tech media startup StatSheet. He also owns consulting firm Intrepid Company and creative network Intrepid Media and runs the startup social ExitEvent (http://ExitEvent.com). Joe can be reached via Twitter @jproco and read at joeprocopio.com.
Monday, July 18th, 2011
Adzerk Founder and CEO James Avery is the kind of guy you just sort of immediately feel a kinship with. It’s not because he’s filthy rich, although he is, or because he’s quick to give you a sticker, he’s got tons of them, it’s the fact that he’s a straight talker who always happens to know exactly what he’s talking about.
Example: At the recent Tech Jobs Under the Big Top job fair, when a dozen RTP startups got up on stage to present to roughly 250 job seekers, Avery showed a minute or two of the Startup Guys video, which then faded to black with the caption:
“Not all startups are full of ****.”
What Did He Just Say?
Huge laugh from the crowd, but this is exactly what Avery is about. It’s a joke, right? Or is it? I dig that. Plus he hired someone from that event, so obviously at least one other person dug it as well.
I feel a kinship with Avery because we took a similar path. We both got out of the corporate technology world and started one-person consulting practices that grew over time into larger and more successful consulting practices. Neither of us were ultimately happy, no wait, neither of us were fulfilled. Something was missing.
It was the startup thing.
So while I started shifting the focus of my practice to the startup world, Avery went out and started another company.
More specifically, he bought an ad network in 2007 which was bare bones, and he replaced it and built on top of it. In the beginning, he was only using it for himself, but then he started another vertical ad network and modified the software to run both of them, The Lounge and Ruby Row.
When he tried to start a third ad network, he realized that the software itself was a more compelling play than creating and running ad networks.
Now, there’s a long history of companies in the ad-tech industry trying to run networks and sell software at the same time, and usually the software part ends up becoming the ugly stepchild. You just can’t do both and have both be successful. So in December 2010, he sold off one of the ad networks and focused on the stepchild.
The RTP Startup Playbook
An office in American Underground came first. And when the Underground announced via Twitter that Adzerk was moving in, Avery got a tweet asking if he was hiring.
Now he had space, an engineer, and a little bit of runway. So when he saw how much of an impact those dollars made, he knew he needed more.
He ran the gamut of the RTP support structure, including the aforementioned job fair, the CED Venture Conference (although he knew everyone there), TechMedia’s Internet Summit (where he met the guys from Argyle, Spring Metrics, and JobKatch), Launch Durham (although he launched at Calacanis’ LAUNCH Conference), and even though he was too far along for Startup Stampede or Launchbox, he eventually hired three former Launchboxers.
Most every ad server has two fundamental problems. It’s likely built on 90s technology and it’s probably run by a big media company.
Adzerk is independent and based on current generation technology. And they innovate. Right now they have what Avery calls an “incrementally better ad server.” It’s faster, the ads get served asynchronously, stats are real time, all cloud based, scales quickly.
Some publishers care a lot about this, others don’t. So Adzerk has carved out a market where those features are differentiators. But Avery knows that having an “incrementally better” mousetrap is not enough.
So Adzerk is going after bigger game. They’re bucking the traditional model – enterprise software, contracts, etc. Thus, the pitch becomes “let’s change the way ad-serving works.”
Eight months go by. $650K seed round.
This is where the story gets a little funny, because out of that $650K Avery finished raising this month, exactly $25,000, or just a little under 4%, came from in-state.
Avery says he was naïve as every other first-time fundraiser, figuring he’d go to the people he knew, find the right ones at the right time, and get just what he needed to get to the next level. It took about a month before he realized he needed to talk to anyone and everyone who would pick up the phone. So he did.
That says two things. But neither of them is a soap-boxy “Local investors need to invest in more local companies!”
Santa Claus. What?
I’ve got a great analogy for this. This is like asking Santa Claus to quit bringing a bunch of presents every Christmas and instead just show up with one present on the 25th of each month.
I know. That one came to me in a traffic jam.
The frustrating thing about the RTP investment region is that we’ve got a bunch of investors and a bunch of startups but 95% of the time the goals of one do not match the intentions of the other, and vice versa.
When Avery and I discussed this, the lament wasn’t “Man, it would be cool if the local VCs would start investing their big bucks in early stage companies,” it was more like “Man, it would be cool if we had some apparatus here by which several early-stage companies could raise $100K on a standard term sheet.”
That’s the first thing. The second thing is a lot more hopeful.
Startup Investing Enters the 2000s
Adzerk’s path to funding is not unique. There have been a number of investments here lately that have involved money from the west coast, New York, pretty much everywhere, and it’s getting easier. During his fundraise, Avery left the area twice, and one of those trips was to shake hands with the lead before they signed the term sheet.
It’s a good tale, a no-BS founder product company with customers and revenue operates within a robustly-evolving support system to land seed-stage money and swing for the fences
Rinse and repeat, people.
Joe Procopio heads up product engineering for sports media startup StatSheet . He also owns consulting firm Intrepid Company (http://IntrepidCompany.com) and creative network Intrepid Media and runs the startup social ExitEvent (http://ExitEvent.com). Joe can be reached via Twitter @jproco and read at joeprocopio.com.
Friday, June 3rd, 2011
By Joe Procopio
Starting a startup is easy.
In fact, it’s so easy you could do it in a weekend. And I’m not talking about some sort of fly-by-night or franchise opportunity — I’m talking actual technology-oriented product company, off the ground and running, from incorporation paperwork to website to actual idea with enough game-changing potential to get you at least a dozen meetings.
It’s actually gotten much easier lately, what with the ubiquity of the web and mobile and the ability to swap technology between the two. Don’t have the right idea? Social is a veritable bottle full of bubbles waiting for you to latch on to some new trend before it becomes Rickrolling.
By the way, you can monetize Rickrolling, and without having to resort to ads… but I’ve said too much already.
So Why Isn’t Everyone Doing It?
Because it’s damn hard, that’s why.
Starting a startup is cake. The hard part is keeping the startup above water through the proof of concept, getting the right people in place, making sure they stay motivated through the dark early hours, and working your ass off all while risking what little capital you have and at the same time not amassing any additional funds for things like food and shelter.
Wow, that’s fun.
And that will only get you about 10% of the way there. Then comes the inevitable rejection. A big fat stinking ton of rejection, from potential customers, potential investors, not to mention friends, family, and advisors – all of whom really have your best interests at heart, but let’s face it — if they had your vision they’d have stolen your idea and started their own company.
You struggle through criticism after constant “no” after unfortunate company-sinking circumstance just to get to those all-too-rare highs.
But let me tell you something. Those highs will keep you in the game.
This is what Mital Patel must have felt when, during his last year of law school in 2009 and being curious but not being able to attend that year’s Triangle Startup Weekend, he wound up watching the Sunday presentations online. Curiosity turned into passion which became an addiction, and he’s been working with startups ever since.
This past winter, he jumped at the chance to be an organizer for Triangle Startup Weekend, which kicks off today at 6:00 p.m. in Bay 7, and he took the job coordinating the mentors, volunteers, and judges. He’s also done quite a bit of work socializing the event and building interest.
From our conversation, I got the impression that Triangle Startup Weekend is just like starting a startup, only in an insanely short amount of time with no real risk.
The First One is Free
There’s something deceptively cool about the concept of Triangle Startup Weekend in the sense that it’s a total try-before-you-buy approach to creating entrepreneurs.
Everyone gets a chance to pitch, and most will feel that real sting of rejection when a handful of the best ideas are voted on and chosen, with the attendees divided up among the winners. The process is pretty organic from there.
The teams form and are allowed to survive or fail on their own. Hopefully they get the right mix of technology, business, marketing, and leadership. They can work up to 24 hours both days, thus providing the opportunity to test-drive the startup work ethic.
There’s also beer there, which will test the threshold of each team’s “corporate culture.”
The crowd tends to thin out by Sunday, at which point many will have gotten that firsthand taste of startup abandonment.
Judging takes place on Sunday, and those judges will include names like Jason Caplain, Joe Colopy, Brian Handly, David Spitz, and Joe Velk.
That’s the beauty of it. Who knows? Just like with a real startup, creating a viable product and a business model and a marketing plan is Step 1. Where it goes from there is anybody’s guess.
But I’ll tell you one thing. It’s going to take more people and more time. Decisions will need to be made, the decisions that have killed off so many startup companies before they see the light of day.
And that’s the point where it all comes together. Do you have a folly on your hands? A giant timesuck? Or do you have something like Zaarly, which came out of Startup Weekend LA and three weeks later landed $1 million in funding.
See What I Mean About Those Highs?
That’s the draw. Once you get a whiff, a taste, a glimpse of what the possibilities might be – and it’s not relegated to money, it’s that feeling of changing the game, of working on something meaningful, of creating a company from nothing with your own two hands – it’s hard not to try to do it again.
One of the myths about working at a startup, of which there are, I don’t know, three, is that it takes some kind of computer-hugging genius to get in on the ground floor and become employee number X, and even then success is pretty much a crap shoot and even then you need to be in the Valley anyhow.
This is patently untrue.
But the only way to find out if you can get from point A to point B is to give it a shot, and Triangle Startup Weekend is a risk-free way to do just that. If you’re not already involved, drop by the presentations on Sunday, if just to get that first taste.
Triangle Startup Weekend
Joe Procopio heads up product engineering for sports media startup StatSheet. He also owns consulting firm Intrepid Company and creative network Intrepid Media and runs the startup social ExitEvent. Joe can be reached via Twitter @jproco or via joeprocopio.com.
Friday, April 29th, 2011
By Joe Procopio
Congratulations Research Triangle Park area of North Carolina! You’ve done it. You’re now an entrepreneurial hub rivaling that of any city in the nation, attracting talent and investment from all over the country while cranking out exit after ridiculously-valuated exit. You’ve got your heart in Downtown Durham, your brains in the Universities, your backbone in the infrastructure, a calcium-fortified support system, and a very big mouth of a media touting every kid who walks out of UNC or IBM and purports to start the next next next Twitter.
None of what you just read is true.
But it could be. It’s truish.
What If It Were True?
That’s a damn good question. And it’s what I had on my mind while walking the wide-aisled halls of the Raleigh Convention Center for this Year’s CED Venture. This year, the conference returned to Raleigh (good move) from Pinehurst (too far to commute and everything closes at 9:00 p.m.), and took on a new look to match CED’s recent re-imagining in September.
This is also a good thing. The move into the American Underground along with fellow anchors Launchbox and Joystick meant there was a lot of new energy. There were hordes of entrepreneurs walking the halls when they weren’t manning demo booths.
Companies as young as Argyle, Adzerk, DejaMi, CityPockets, Jaargon, Appuware (which had been live for 12 hours) were all showing off. And when they weren’t, they were mingling, and when they weren’t, they were drinking.
I’m for that.
Four out of Four
Over the last 58 days, I’ve been to four major events involving startups from or related to the RTP, each completely different and each totally valuable.
In early March, there was the Southeast Venture Conference in Atlanta. Yes, this wasn’t in RTP, but that only goes to show you the regional strength we’ve created. In late March, Startup Madness provided a look at some of the earlier stage companies making their mark in the Triangle.
A few weeks back, the newly-expanded East Coast Game Conference highlighted the sheer awesomeness (is there a better word for a video game conference? I think not) of the local gaming ecosystem. And my tour was capped with CED Venture, which did a fine job of proving that after 28 years, it could still run with the youngsters (so to speak). I know this because it’s what I do every day.
Ouch. My back.
So I’m calling it. RTP, and Durham especially, has made its mark, established itself, slapped on a new coat of paint and done some amazing things to get that spark going that’s been eluding this area for years.
Let’s imagine that we’ve taken that next step, and the RTP has moved beyond New York and Boston and is rivaling the Valley for the best talent, the most activity, prominent deal flow, and copious successful exits.
What would that next conference look like?
I walked around CED Venture and asked this question, and the answers from the attendees not only proved out my theory that we’re on the right track, but also confirmed some of the advancements we’ve made in the conferences themselves from slight innovations, tweaks in each.
In all of this pestering, there was one question asked of me, and that question kind of brought it all together. A particularly insightful out-of-town investor, while going over the pros and cons of the companies gathered in the demo room, asked me if there was another wave or two of upcoming entrepreneurs beyond these. Without hesitation, my answer was “Hell yeah.”
Then I thought about these four events, and figured out how to bring it all together.
The Lite Ticket
At these conferences, every once in a while I have a booth or I’m doing a pitch or I’m helping a company demo, but mostly I’m a stalkerpreneur, walking around the conference, sitting in on sessions, trying to learn and network. Stealing stressballs.
And the thing about the RTP entrepreneurs is they’re getting younger, they’re starting sooner, they’re more agile, lean and, well, hungry.
This year’s East Coast Game Conference had three levels of admission, including a $99 rate that got you in the Convention Center and some of the sessions. No frills, no free lunch, no fancy bag. I know these things need to make money, but your everyday unfunded entrepreneur has moxie, has get-up-and-go, has drive, and has passion.
You know what they don’t have?
Straight cash homey.
What the lite ticket does though is it fuels that next group, gets them involved, on the radar, and sets them up for bigger things. Almost every company from Startup Madness, including this year’s winner Rippple, had a presence at CED Venture. Beautiful. With a lite ticket, that math gets exponential.
The Pitch Thing
I’m starting to turn against the elevator-pitch-as-entertainment concept. Don’t get me wrong, I do believe everyone needs to get their story out, but it has to be handled with care. Having done it, I can tell you it’s hard enough condensing your life’s work and all your hopes and dreams down into two minutes. It’s harder still to do that on a stage trying to figure out which folks in the audience are taking notes and which ones are tweeting about where the happy hour might be.
For the record, I do both.
One of the highlights from CED Venture was the use of panels to showcase some of the startup talent, sometimes side-by-side with the investors. Sure, we need to hear about the state of the industry and trends and opportunities from the expert side, but putting the founders on a panel is a great way to get their story outside of the canned two-minute spiel.
But my answer to the out-of-town investor came from this concept: There was a just-as-large contingent of talent exuding a just-as-fever-pitched intensity at the very same location a few weeks back during the East Coast Game Conference.
In my blog, lamented the fact that there weren’t enough of us startup hacks at that conference, and the reverse is also true, but not to such a degree. I also noted that the camaraderie that exists in the gaming industry is top-notch, and that we could learn even more from them about helping each other and boosting the local image.
Talk about a best-kept secret. RTP is probably number two in the country in gaming. Who knew?
OK yeah, you probably knew.
Again, having Joystick as a co-anchor in the Underground with Launchbox and CED is a very good idea, and there were some gaming companies stalkerpreneuring and even demoing at Venture. Plus the first keynote at CED Venture was the incredible (I’m an unabashed fan) Dr. Michael Capps from Epic.
The first thing he said was there would be no talk of debt-to-equity ratios or anything of that nature because that wasn’t his area of expertise. He then proceeded to hold everyone’s attention for the next 60 minutes talking about video games, mistakes, and alternative ways of creating a multi-million dollar company.
In my mind, this is where that next wave is coming from, something I alluded to the first time I wrote about the inaugural Game Conference two years ago. That one also had Michael Capps as the keynote. I know. I just blew your mind.
So if CED Venture taught me anything, it was that the area has done the up-and-comer thing. We’ve started playing like we’re number two, even though we aren’t. Yet. And that’s the exact right move.
Joe Procopio heads up product engineering for sports media startup StatSheet . He also owns startup consulting firm Intrepid Company (and creative network Intrepid Media (IntrepidMedia.com). Did you see where he hinted that he was the big mouth of media? Kind of pathetic, no? Joe can be reached via Twitter @jproco.
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Monday, April 4th, 2011
By Joe Procopio
Ian Meyer is an iOS architect and consultant. He is an expert in all things Apple and a former genius (currently just “clever”). Ian be reached on Twitter @frijole
JP: First of all, why don’t you tell the readers a little bit about yourself, and how you came to be a religious zealot at the altar of Microsoft. Sorry, I mean Apple, I’ve been getting them confused lately.
IM: I’ve been having fun with Apple gadgets since Android was just a Blackberry-killer. Since then, the iPad came out and Android morphed into a fullscreen platform, but still can’t get over those button-loving roots.
JP: So we’re looking at the iPad2 and the Xoom today, side by side. I’ll let you go first. What’s the main reason the iPad won’t lose as much market share to the Android tablet as the iPhone has lost to the Android phone?
IM: Nobody who wants to get an iPhone is happy with an Android, and nobody who wants to get an iPad is going to be happy with anything else. I mean, have you noticed how all the iPad competitors look like iPads? What does the Xoom look like?
JP: An iPad.
JP: But that’s on purpose.
IM: Right. Motorola knows people want the iPad, they’re just hoping they won’t notice they got something else instead.
JP: So you’re saying that when people notice that the Xoom outspecs the iPad2 in every entertainment aspect, including screen size, resolution, audio, and camera, they’ll weep with tears of sadness?
IM: Ultimately, what’s all that good for? How does it improve my life? I believe that if they spent less time worrying about hardware and more time worrying about software, the experience wouldn’t suck so much.
JP: So you’re saying it’s all about the apps. The device is immaterial? I guess the iPad could have just been the Newton 2 in that case.
IM: There are still things I can do on my Newton that you can’t do on your Xoom.
JP: You’re right. I didn’t get the model with the stylus. However, that kind of illustrates my point, if I have to have one. And that’s that Apple pretty much reinvented and thus saved the concept of the tablet by educating the user on what it was supposed to be used for.
IM: You’re welcome.
JP: But that’s done. Now the race is on to make the better product. And here it is. The Xoom is more than a warning shot, it blew a big hole in the boat. Is Apple going to re-do the 90s and keep everything closed to the point where they lose market share and have to fire Steve Jobs again?
IM: You mean it blew a hole like the holes those Android Market apps created in your personal information when they were stealing it? I saw a post for an Android app that will fight back against apps that steal your data. That’s awesome for you guys. I like not having to worry about that.
JP: I like being able install what I want, not what Steve tells me to.
IM: In that sense, the Android model just emulates the PC model. Anyone can create and upload apps for the Xoom. Great. Where’s the pressure to make a great piece of software? That approval process is a black cloud, yeah, but if developers create something that gets past that process, the chances are better that it will succeed.
JP: I’ve got three responses to that. 1) Yes. I totally agree that there’s never been a terrible app released to iTunes. 2) I’ve got firsthand experience that the almighty process is just slightly more than arbitrary. 3) I was actually going to say that the process is “capricious,” but that sounds like something an Apple guy would say.
IM: In that, Android is doomed to be the NC State to Apple’s UNC.
JP: Step back, Ian.
IM: Android’s customers aren’t users. Their customers are the carriers, the manufacturers and most of all, the advertisers. That’s what Google optimizes for. Let’s face it. Your phone comes from the world’s biggest advertising company.
JP: And my coffee comes from Starbucks. In the end, it comes down to the viability of the product and the experience. What happens when all these developers are creating perfect apps for a device that got left behind like Kirk Cameron?
IM: Kirk who?
JP: The 1980s. Growing Pains. Bad movies. It doesn’t matter.
IM: There’s no question that the Xoom is competition, and probably the first serious competition. But there was competition with the iPhone and the Android phone too. And ultimately it was a good thing. I mean, you guys try so hard. It’s hard to root against you. But what are you competing for? Is it the user or is it the ad dollars?
JP: Why can’t it be both? And also, are iAds just little friendly reminders for those things you might need but aren’t thinking about right now?
IM: Well, we’re not morons, there’s a whole industry being built around these apps and advertising, and the ad side came out of the competition with Android.
JP: So wait, you know I’m not a huge fan of the term “iPhone/iPad killer.”
IM: And I actually went to NC State!
JP: Yeah. Android is the underdog in this fight in an odd Goliath versus Goliath way. The Xoom, more specifically the Xoom as the first successful instantiation of Android’s Honeycomb on the market, is the alternative. The battle lines are drawn, but maybe this kind of bullheaded pigfighting could actually be good for both platforms?
IM: No! Wait. Maybe. It might just be a mirror of the battle around the Mac. The PC was never intended to be a Mac killer, but it was supposed to be more useful.
JP: But… you can’t deny that the Mac was set up to be a PC killer. 1984. Superbowl. Hammers. Lemmings.
JP: Yeah, and ultimately Apple lost that battle. But… it was lose/lose because the user also lost that battle some 15 or so years later. Exhibit A: Windows ME.
IM: (uncontrollable laughter)
JP: I’m not going to lie to you. That’s when I got off the bus. But the first battle didn’t force one company to innovate against the other, they wound up innovating in two totally different directions and were marketed to two totally segmented and opposite groups.
IM: I’m Justin Long. You’re John Hodgman.
JP: Step back, Ian! But couldn’t we learn from those mistakes?
IM: Yeah. I’ve been messing with the Xoom while we’ve been talking and there are a lot of things I like. Notifications are awesome. Search integration with the web. But it still feels like a 1.0 release. Honeycomb has some cool stuff, but it doesn’t feel… finished.
JP: I get that. And that’s what I want. I want openness and access, and frankly, that’s not hard to do and it was evident even with the first of the Samsung tablets. But I also want it to deliver the finished experience that Apple puts so much detail into. The Xoom feels like that.
JP: Morewhat. Look, as Android embraces the reinvention of the tablet, polishes it, adds sheer processing power, specs, app integration, and the open nature of the Android market, it raises the bar for Apple to innovate…
IM: And if that causes the iPad 3 to blow the doors off …
JP: The bar is RE-raised for Android. We, you and me, Apple and Android, Justin Long and… who could be the Google guy?
IM: Zach Galifianakis! He went to NC State!
JP: Long and Zach could be friends.
IM: We could stop all this mindless Android vs. iOS garbage.
JP: Everyone wins!
IM: We’re going to Disneyworld!
JP: Yes! Can I borrow your iPad?
Joe Procopio heads up product engineering for sports media startup StatSheet . He also owns startup consulting firm Intrepid Company and creative network Intrepid Media . Joe and Ian just proved that any, ANY disagreement can be solved over good IPA. Joe can be reached via Twitter @jproco.
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Monday, March 28th, 2011
By Joe Procopio
You might know about the Startup Madness event coming up Thursday, 3/31, at Bay 7 in American Tobacco. You may have even attended the event in its former incarnations, Launch Days I and Launch Days II: The Launchening. You probably aren’t aware of the Launch Days Organization, or that it’s bootstrapped, but if you are, you’ve possibly heard of or may even have met its one-man-band, Scott Kelly.
If you’re familiar with any of this, you likely have questions.
Who is this guy?
What is Startup Madness?
What is his company and what does it do?
What’s the plan?
What’s the endgame?
Does Joe still have a beard?
I’ve Got Answers
I’ve known Kelly for about a year, back when I was doing ExitEvent and he was trying to get his mind around the concept of what Launch Days should be. I’ve never worked with him directly, but I’ve been impressed with his sheer relentlessness if confused about the why.
He successfully pulled off Launch Days I in May 2010, getting over 100 people to pay admission for a networking event that celebrated early stage companies. The first batch of companies included Ruzuku, NeoBudget, BuzzBox, and Argyle Social.
Getting people to pay for anything, especially startup related, especially early-stage startup, is a Rubik’s Cube. And the admission fee also raised the question of Launch Day’s mission. Some light sponsoring of the event, including that from Kelly’s employer, KeySource Bank, added another question mark.
But look, you can’t put on an event without recouping the costs. It’s a for-profit organization and decidedly and unabashedly so.
Launch Days II had more of an agenda, including a voting portion for a prize package consisting mostly of advice and introductions from known entities and experts, and this raised a few more questions. Was Launch Days trying to be an accelerator like LaunchBox? And the similarity between the names of the two orgs caused even more confusion.
The answer to the first question is maybe then, but not now. Launch Days had been churning on its focus and reason for being. It could have been an accelerator of sorts, or a network, but has since settled to focus solely on the event.
As for the second item, no, the two organizations have no relationship at all, thus the name change to Startup Madness (which, unluckily enough, is also being used by Brad Feld and TechStars).
Kelly has a list of new names under consideration. I suggested LaunchJournal South.
The companies presenting at the second event were Group Story, JobKatch, Loyalese, SpotPulse, School House, 31 Projects, and WeGeo. School House won the vote handily, and they’re currently rocking along.
Method to the Madness
This time the point of the program is to open up the startup community to the early-stage entrepreneurs and vice versa. The prize is the open rolodex, introductions to various parties, but mostly it’s the opportunity to demo a product or idea to a room full of people who might be able to help.
And that answers a couple more questions
The goal of the Startup Madness event and Kelly’s soon-to-be-renamed company is to create a valuable experience for the entrepreneurial community, and that includes the early-stage companies who present, the audience who wants to help – that could be talent, investment, connections, customers, as well as those invested in the RTP startup ecosystem at large.
Kelly has no intentions of competing with TechMedia’s Southeast Venture, CED’s Venture, or any other investor event. In fact, the point of Startup Madness isn’t to raise money. It’s more to raise awareness.
It’s his hope that these companies eventually graduate to the larger investor events, and overall the ecosystem here grows larger, receives more recognition, and ultimately deal flow is improved.
Kelly seems to be settled on the events, and also settled on the connection and networking principles of those events. You won’t get a monster windfall from winning Startup Madness, but it will open some doors.
And in the spirit of networking and connection, this time around there’s an afternoon session that includes a spot for students from UNC, Duke, and NC State to compete and receive feedback from a panel with Preation’s Aaron Houghton, Palmer Labs’ Miles Palmer, and EvoApp’s Joe Davy. There’s also an entrepreneur-only lunch and Q&A with Appia’s Jud Bowman.
On the other end of the spectrum, there’s time dedicated to public introductions and updates from LaunchBox, NC Idea, and Bandwidth’s Henry Kaestner.
The companies are broken down into two groups this time, Windsor Circle, gokit, and Rippple (with three Ps) are ready to release a product while Adzerk, Obsidian Solutions, Fitsistant (obviously my favorite name), and Motive Logic are existing early-stagers looking to add customers.
What’s the Endgame?
That’s the final question. Beyond pulling off a successful third event in Durham, next on Kelly’s to-do list is to change the name and then replicate what he’s done here in Raleigh, Charlotte, and Greensboro, tweaking and expanding as he goes.
So you see, it’s not crazy.
Well, no more so than any other early stage venture.
Joe Procopio heads up product engineering for sports media startup StatSheet (StatSheet.com). He also owns startup consulting firm Intrepid Company and creative network Intrepid Media. Joe also suggested InterLaunch Partners, LaunchStick, and C-E-Launch before realizing it had stopped being funny. Joe can be reached via Twitter @jproco.
Friday, March 11th, 2011
By Joe Procopio
I’m sorry this took so long to write. Atlanta is kind of far away.
But I left behind the palatial confines of the Ritz Carlton Atlanta, an ironically trashed hotel room, and the remnants of Southeast Venture Conference 2011 with two key pieces of information.
The good news is, the long tail effects of the Great Recession are finally starting to wane, meaning venture investment is undergoing its first spring-like thaw. The bad news is there’s a bubble forming.
The clouds have parted, and now the sky is falling.
Coincidentally enough, it appears that the two days over which SEVC11 was held (March 2nd and 3rd) were the total sum of the post-recession-pre-bubble era. I hope that you enjoyed them as much as I did, although I’ll probably forever regret the fact that I spent close to 50% of the new-new-new-Internet-boom kind of drunk and/or asleep.
At least I was in the right place at the right time.
Before anyone panics and sells all their tech stocks, again, let me tell you a little something about the physics of bubbles. Wait. Stay with me. I’m not going to get into actual physics, and I can already see your eyes glazing over and I’m only thinking about typing the words “dot com.”
(Which, by the way, is the only context in which you hear that term used anymore. Have you noticed? Nobody ever says, “I’m going to work for a dot com,” and phrases like “dot com opportunity” and “dot com play” have pretty much vanished, even though the industry is still growing and you can’t say the name of most web addresses without saying the words “dot com.” It literally went Hasselhoff.)
It’s a common misconception that bubbles occur when too many people start doing too many things in whatever industry the bubble is in. For example, the conventional wisdom is that the dot com bubble formed when too many websites went up and the real estate bubble formed when too many people bought houses.
This is not true.
The truth is, bubbles form when too many people start doing stupid things in whatever industry the bubble is in.
The dot com bubble formed when too many websites with no discernable way to make money started raising astronomical amounts of capital at batshit crazy valuations.
The real estate bubble formed when too many people bought houses using loans with interest rates that were set to explode like a pipe bomb.
They’re called “balloon payments” and nobody put two and two together?
The Salad Days of Bubble
I was too young to attend any sort of venture conference between 1996 and 1999, but I can imagine what those presentations were like. A bunch of former Fortune 500 executives mid-life-crisising by pimping the magic attributes of cyberspace and its uncanny and totally provable ability to turn web pages into dollar bills.
“And in conclusion, we’re asking for $1,000,000 to $300,000,000 in order to discombobulate our paradigms and timeshift our synergies. If you take another look at our hockey stick, I’m sure you’ll agree that our estimate of $600 per eyeball is actually quite conservative. And now, enjoy the comedy stylings of Andrew Dice Clay.”
Did I nail it?
That Was So Then
At SEVC this year, the early-stage companies looked nothing like those early stage companies. In fact, they didn’t even resemble the companies we were talking about two years ago. Back in 2009, it was all guts. And by “guts,” I mean tons of bio and medical on one end and energy and telecom on the other.
Tell me that doesn’t feel unsexy like 1995.
And that might be part of the problem. The period from 1996 to 1999, thanks to mass acceptance of the Interwebs, was marked by unprecedented acceleration from solid consumer ideas built on a new technology (search engines) to entire industries built to look like they were built on new technology but really could have been mail-order companies.
So since 2009 looked so much like 1995, it’s sort of natural to expect that 2011 might play out like 2000, and that we’re on the verge of sprouting our next jillion-dollar dot com play from these promising early stage seeds.
Two Things Wrong With That
First of all, most of the people involved with the original bubble, the ones who in 1999 were jumping up and down screaming about how stupid all this was, we’re still here. And we aren’t jumping up and down yet.
The most egregious offense so far is Groupon, but it doesn’t take a degree in astro-physics or a the ability to suspend a massive amount of disbelief to understand how they make money.
So There’s Time
And second, these early stage companies not only don’t look anything like those bubble companies, they don’t act like them either.
At SEVC11, I overheard more than one investor make the assessment that these early-stage companies were solid, impressive, and ahead of the curve. The vast majority were already generating revenue, in some cases in the tens of millions per year.
The asks were also low, usually in the $3 to $4 million dollar range, and the reasoning was sound. Buy equipment. Hire sales staff. Expand into X vertical.
Nobody was up on stage presenting a deck full of dreams and rainbows. Nobody was wearing an expensive suit and waving around a business plan. Nobody had that look in their eyes, you know that one, the Easy Money look.
Maybe I’m Half-Browser
We know what mobile and social are, there’s no funky magic this time around. And we’re treating them for what they are: technical tools, not destinations. That’s the main difference
But be diligent. If I report back from SEVC12 yammering on about one-stop mobile apps for all your pool-cleaning-supply needs or building the world’s premiere social snorkeling network, then it might be time to back up and get out of the way.
Joe Procopio heads up product engineering for sports media startup StatSheet. He also owns startup consulting firm Intrepid Company and creative network Intrepid Media (Intrepid Media.com). Yeah, he just referenced Rodney Dangerfield’s worst movie from the 80s. What? Joe can be reached via Twitter: twitter.com/jproco.
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Wednesday, January 19th, 2011
By Joe Procopio
I’m an entrepreneur and I also consult to entrepreneurs. This kind of consulting is so much fun that I can’t even put it into words. It’s inspiramindblowingtastic. And although the questions I purport to answer are mostly along the lines of “how do I build this?”, I also get a lot of “how do I fund this?”
I like those questions, but the answer I give usually isn’t the smile-producing kind. This is because the answer isn’t what people want to hear. What people want to hear is: “Call this guy. Give him the secret handshake. Sign the term sheet.”
How to Get Rich in Two Easy Steps
What I usually tell them is: “Build something everybody has to have then prove to everyone you know who has money how they can invest that money in your thing and make a substantial return on their money.”
“Also hard work.”
Rich Uncle Moneybags
Most entrepreneurs are ready for hard work, and the ones that aren’t usually abandon the fancy business cards and the WordPress site and return to the cubicle from whence they came. The problem is that most entrepreneurs don’t know a whole lot of people with a whole lot of money.
If you are indeed that fortunate breed of entrepreneur, then Godspeed – go build that airline to the moon.
As for the rest of you, you’re going to have to hustle.
In working with what is now dozens of startups, I’ve attempted to beat down so many doors that I’m like a thief on a safe with a stethoscope and those cool fingerless gloves.
“Oh, what’s that? A Protex-A-Lot 5000? Give me 30 seconds.”
People like me are described as, for lack of a more professional label, hustlers. Keep in mind though, this is not the kind of hustler like the kids talk about today with their Iced-T and their OGs. I’m talking more along the lines of, say, Pete “Charlie Hustle” Rose.
Oddly enough, I too like to bet on sports.
My Lock of the Week
Jason Caplain doesn’t hesitate to talk to those who hustle. He’s a General Partner with Southern Capitol Ventures, a just-turned-ten-years-old VC firm behind companies like Motricity, ChannelAdvisor, ReverbNation, eTix, Zift Solutions, Artus Labs, and so on and so on.
Jason talks to me not because of my awesome haircut or penchant to buy the first round, it’s because he’ll talk to anyone who will bust down any door in order to get to someone who will listen or help or point them in the right direction.
However, a lot of entrepreneurs aren’t the door-busting type. They’re the brilliant artist geniuses who are too busy coding and working to get their story out.
Calling All Entrepreneurs
So it became good business for Jason to reach out to them. Southern Capitol started doing this years ago with Calling All Entrepreneurs, an open-to-all, one-on-one ten-minute quick pitch and Q&A that they held in Raleigh as well as in Charlotte, Greensboro, Atlanta, Northern VA, and Baltimore.
They’d hear up to 30 companies in a single day and more than once held sessions until midnight in a hotel lobby.
It was tough for the entrepreneur to get their idea compacted into those 10 minutes, so they added coffee and expanded the blocks to 30 minutes. But they soon discovered that, beyond the initial relationship with the entrepreneur, the overall effectiveness of the sessions began to wane after a while.
So why not have an entire meal, skip the pitch, and turn it into a group discussion?
This became the Entrepreneur’s Breakfast which Southern Capitol has now held in all of their target markets. The structured pitch is gone, replaced by a group discussion of whatever the entrepreneurs are interested in. It’s not always about the money – there’s prospects, customers, product, other employees, other relationships that need to be built.
Plus, now the entrepreneurs build relationships not just with Southern Capitol, but also with the other entrepreneurs in the room, who sometimes have best advice. There have even been a couple of occasions where people have met at the breakfast and gone on to found new companies together.
The breakfasts serve to make Southern Capitol more accessible, and also help to clear up a lot of the myths and misunderstandings about VCs. They don’t all wear top hats and monocles, for instance. This in turn sends a lot of entrepreneurs into second gear.
See, once you know the water isn’t full of sharks, it’s a hell of a lot easier to jump in.
So why is this creation of doorbusters a necessary thing? Because the VCs aren’t exactly flocking to the RTP in search of the next Twitter. Yet. Jason says that he and his partner David Jones have never been to a board meeting where they haven’t booked additional meetings with entrepreneurs in the same location. That isn’t being reciprocated here.
Coffee is for Closers
That’s because the investors are customers, and they don’t know what kind of product is here. And that’s because the salespeople here aren’t out there selling – building and managing those key relationships.
Look. I’m not a salesguy, but I know when I need to be. The same is true for any startup. You’re not only selling a product, but if you’re raising money, you’re selling equity in the company. This isn’t even a metaphor, so I won’t extend it.
Except to say that smart entrepreneurs know that they’re selling $5 bills for a dollar.
VC Secrets Revealed
So why would Jason want this out there for his VC kindred to replicate, and potentially steal all those golden opportunities out from under him?
It doesn’t work like that.
Again, it’s about relationships. The more successful investors and therefore the more successful startups that are coming here, or better yet, located here, the higher the exponential on the overall return. Novak Biddle, Valhalla, Noro-Moseley and others are stopping by regularly for board meetings.
They should be on your list of VCs.
Bust a Door
Jason suggests the Price Waterhouse-Coopers Money Tree report as a starting point. Build a list of VCs whose criteria matches your startup (this is crucial, don’t get a reputation for wasting people’s time).
But don’t be afraid to check in with the ones that come here for board meetings, let them know who you are and what your company does, and offer to maybe meet them at the airport. The VCs aren’t flocking, but they are actively looking, a lot of entrepreneurs don’t understand the difference.
The difference is you’ve got to be visible.
Coffee, Bagel, Million-Dollar Advice
And that starts with building your network. Upcoming Entrepreneur’s Breakfasts will be held in Raleigh on January 31st and February 28th. Remember, they’re strictly for entrepreneurs (no service providers), but are indeed open to everyone.
Make sure you give Jason the secret handshake when you get there.
Jason and Southern Capitol will also be hosting the Venture Outlook 2011 with panelists Tom McMurray, formerly of Sequoia (current angel), Hooks Johnston from Valhalla, John Burke from True Ventures, and Matthew Witheiler from Flybridge on February 9th.
Joe Procopio heads up product engineering for sports media startup StatSheet (statsheet.com). He also retains ownership in consulting firm Intrepid Company (intrepidcompany.com) and creative network Intrepid Media (intrepidmedia.com). He can be reached via twitter @jproco.
Wednesday, January 12th, 2011
By Joe Procopio
- Joe Procopio
RTP was a dark place for startups in the late 2000s.
When Chris Heivly first told me about his ideas for an accelerator program in the RTP, it sounded like an impossible task, but his passion was evident. At the time, I was just beginning to toy with the idea of ExitEvent, my own take on a digital startup community with accelerator style tools, and Chris and I shared the same frustrations.
But I knew if anyone had the skills to pull off an actual real-live incubator here, it was Chris.
RTP is #1 on the “Places Where We’re Headquartered” List
RTP is an awesome place to live, with so much quality of life that you can actually wake up to the sound of chirping birds and the distinct scent of vanilla wafting into your bedroom.
The area has more talent than you can shake a geek at, and it has most of the foundational tools in place for entrepreneurial success: A fair number of startups, helpful organizations like CED, NC IDEA, etc., and enough behemoth techie companies to bring in even more new talent and also invariably barf out decent crops of early-stage entrepreneurs.
So where were all the big success stories?
That question was the basis of several coffees (well, coffee for me, Chris doesn’t touch it, which is mind-boggling considering the demands of his chosen occupation), to discuss not so much the why, but the why not. Something was going to happen, that was inevitable. It was just a matter of when, how, and, of course, could it be sustainable.
When LaunchBox decided to move here a little more than a year ago, the stars aligned, mountains got moved, and everything started happening at breakneck speed.
That culminated at the first LaunchBox RTP Demo Day. It’s the third overall, if you’re keeping score, with the first two taking place in DC and producing, out of 17 companies accelerated, a ridiculous nine follow-on rounds and three exits.
People, those are good odds.
The funny thing is it almost wasn’t. A freak wave of ice (well, if you’ve lived here long enough, it less “freak” and more “twice yearly”) put the Demo Day show in serious jeopardy. In fact, as I write this from the safety of my palatial offices (or “rumpus room”), I am NOT currently at this evening’s follow-on reception. But that’s cool. I’m all about the information, I’m not in it for the free drinks.
I’m sorry. I stopped for a minute to laugh.
Anyway, as I was on my way to American Tobacco for the show with the radio blaring warnings like “ZOMG! DO NOT GO OUT OF THE HOUSE! IT’S CHAOS! STAY AT HOME AND EAT YOUR FRENCH TOAST!” I expected the worst. Turns out, it was very well attended. And when I thought about it, I realized that I shouldn’t have been surprised. LaunchBox isn’t the only force behind the event, or even their own program. Far from it.
More Important Than Money
The biggest strength of LaunchBox is, without a doubt, the 100+ investors, mentors, and advisors on board to help the program and the companies within. Chris told me this. The startups themselves told me this. “More important than the money,” echoed one of the founders.
The second biggest strength is the outpouring from the community, mostly local, but even from folks like David Cohen from Boulder’s TechStars, who, along with TechStars co-founder Brad Feld, held an event here back in November that included spending a day with the LaunchBox startups.
Ice? That problem already has a solution. It’s called “gloves.”
So the investors, mentors, advisors, supporters, various community members, and I think I saw the Solid Gold dancers, all gathered in Bay 7 along with a covetous roster of investors from here as well as Boston, NY, even the West Coast, to watch these seven startups compress 90 days of sheer labor into eight minutes.
So Who Won?
Speaking of David Cohen, he gave Chris some advice early on – every week someone will ask you which company is the winner and every week you’ll have a different answer. Turns out this was indeed the case. Each company had and has its own strengths and shortcomings.
I’ve had several chances to drop by LaunchBox and talk to some of the startups, including one final visit last week before all the commotion. Here’s a take, as English as I can make it, on each one.
HealtheMe tackles obesity via a personalized learning “behavioral DNA” algorithm delivered via web and mobile. Before LaunchBox, they’d already been operating for three months with 40-50 subscribers.
Leaguescape allows for legal online betting on the data around fantasy sports. Yes. Legal online betting around fantasy sports. Aaron Houghton wondered aloud to me why they would need money in the first place. I answered: “Full page ads that say ‘Yes. This is legal.” Then degenerate sports and numbers freaks like me will knock their doors down.
Slipstream produces a Twitter plugin that reduces noise in the timeline by selectively hiding tweets based on information you give it.
Keona Health started life as a product development and research company but now they have software with a decision engine that optimizes primary care physician admissions, suggesting whether to come in and how to triage. UNC’s Campus Health is on board, and that’s their target market.
Fiscal Pie is online personalized financial planning and advice using social networking and peer group comparisons. They thrashed quite a bit during the semester, probably the most of any of the companies.
CityPockets converts daily deal (think Groupon) customers into return customers with CRM & targeted follow-up deals. Think retail hacking with a loyalty program.
Spring Metrics came away with the most buzz, which is odd when you consider they came to LaunchBox with “an idea on a napkin” but not at all odd when you consider the team, which is fantastic. Their software collects web analytics data and provides intelligence that connects directly to sales and customers.
Yeah, But Who Won?
We did. Was the event successful? I’d say hell yes. There were more people in Bay 7 on an icy, ugly, frozen morning than there probably were in all the schools and most of the hospitals.
And back to the lack of success stories and the why not? This is a great start. The when is obviously NOW (think big flashing neon letters) and as for the sustainability, well, that remains to be seen. After all, LaunchBox didn’t get that track record overnight.
But they’ll do it all over again with the application process in April.
Joe Procopio heads up product engineering for sports media startup StatSheet (statsheet.com). He also retains ownership in consulting firm Intrepid Company (intrepidcompany.com) and creative network Intrepid Media (intrepidmedia.com). Maybe his problem is all the coffee. He can be reached via twitter @jproco.
Thursday, January 6th, 2011
By Joe Procopio
RESEARCH TRIANGLE, NC – In a lot of the first impressions I create, I’d say too many, I get pegged as a writer. This is OK, I suppose, but I’m more techie than writer, as anyone who has read me can attest to. As a writer, I’m just a guy who can crack jokes and use spellcheck. As a techie, I go way back. Powerbuilder back. Compuserve back. Sony Walkman back.
But you know what? That’s OK. I’ll take the underestimation (or overestimation, depending on which circles you travel in), as long as it gets me in the door. Or gets me a free laptop.
See, as a writer, I kinda sorta write reviews of technical things like gadgets, conferences, and cargo style khaki pants. But these are not your typical reviews with stars and grades and pros and cons and suggested retail prices. There’s a whole industry for that and they do it well.
I like to be a bit more immersive.
Free Nerd Toys!
I used to get stuff sent to me all the time – cameras, GPS systems, interns – and I’ve even done a couple of half-hearted “real” reviews that you can probably find if you search for them (don’t search for them).
But honestly. What am I going to tell you that doesn’t sound like advertising copy?
“The HP XR451 Dual Reverse Osmosis Touchscreen Bluetooth Device will change the way the world thinks about the stylus!”
The only other avenue, especially if I’m going to, you know, do the writing part of the writing, is to smack the product around and squeeze out jokes at the expense of the manufacturer.
“Smooth move, Xerox!”
But that gets old real quick.
Anyway, a while back I decided if I was going to review something, I’d have to do three things. 1) Make the thing a part of my day-to-day life 2) Use it for a while and 3) Write a piece that puts the thing in context either culturally or in business.
So far, so good. Sure, not everybody (APPLE) wants to play along. And because of the economy, manufacturers don’t send as many devices out, but they invite you to webinars where you can watch someone else play with the whatever-it-is and take notes. I’ve never done this, but it seems incredibly lame, like reviewing a movie by listening to one of your drunk friends describe the plot in a loud bar.
I feel like the ones who get the point get a return in the form of a public, real-world use of their product, documented for their target demographic.
And if the product can’t stand up to that, then they should probably just list the suggested retail price and put out a press release with a bunch of good advertising copy.
The Death of Insert Technology Here
I’ve got two PCs at home that are dying, and as I debated Lenovo vs. Dell and Windows vs. Mac and hard drive space and RAM and eyeball scanners, I had an epiphany.
Can’t I just do that cloud deal?
Which, in geek speak, is: Can I shift from the traditional PC/OS/Local Application structure of personal computing to the Cloud/Device/Web App paradigm?
I know. I know. If it’s any consolation, in the same week, I was also thinking about football, muscle cars, and I invented a new way to party.
And also, I know some of you are doing this already. You’re cooler than me, OK?
To clarify, the question isn’t “Will I shift” to the cloud and web apps, because that’s just plain going to happen. I want to know “can I shift” as in now, before the hard drives on these PCs spin themselves into dust.
One is a Pentium III. The other one isn’t as new.
A Hard Drive Free Household
As I’ve mentioned before, the laptop got us away from the PCs on our desks, the smartphone allowed us to leave the laptop in the office for brief stints, and the tablet turns those brief stints into larger stints, even whole days.
So the next obvious questions is: How long before we don’t need hard drives at all?
This is a question with a long tail, one that would take some serious investigation and trial and error.
And then, like a visit from Santa Geek, Google shipped me the Chrome Cr-48 laptop, which arrived on Christmas Eve.
The Longest Review Ever
The Cr-48 is a laptop with the Google Chrome OS, which boots directly into the web. If you can’t reach the Internet, the thing is nearly useless. But the beta program under which I received the laptop also offers discounted Verizon access. So you can essentially be on all the time.
After that, it’s all browser. You do everything through the web – Gmail, Docs, Apps, everything. And all the data stays in the cloud.
So that became the impetus for what will be a year-long look (or until it becomes ridiculously boring) at the personal move to the cloud.
In my next column on the subject (I’ve got other things to write about in between, like Launchbox’s Demo Day, Southern Capitol Ventures’ Entrepreneur Breakfasts, and why they still can’t get TRON toys right), we’ll start with the Cr-48. Is it the next step, or is it just a head fake, an unnecessary device caught between tablet and laptop?
Joe Procopio owns consulting firm Intrepid Company (intrepidcompany.com), creative network Intrepid Media (intrepidmedia.com), and heads up product engineering for startup StatSheet (statsheet.com). He’d like to point out that he’ll still pretty much accept a free anything. He can be reached via twitter @jproco.