Groupon Turns Into Nimble

Groupon wasn't exactly the same, but now it's becoming Nimble.

Oie. If only.

Many of my friends who know about my former startup Nimble and are aware of the massive growth of Groupon give me a conciliatory pat on the back when they see me.

Nimble, that I founded in 2004 allowed any local business to sell it's inventory at a discount in real time. And it worked.

(Of course we were tiny compared to Groupon and I made many typical startup mistakes. Mainly, that I didn't have the right team in place.)

Now, Groupon is actually starting to copy Nimble: CNN Article

...a new mobile application that the company hopes will change when and how society chooses to eat, shop and play.

The application, known as Groupon Now, is remarkably and elegantly simple, yet it's a radical departure from Groupon's current deal-a-day business model. When a user opens up the smartphone app, he or she will be presented with just two buttons: "I'm hungry" and "I'm bored."

Clicking either button will open up a list of time-specific daily deals, based on his or her location.

The familiar $10 coupons for $20 worth of food are still there, but they're not one-time offers. Instead, businesses can choose when they want these deals to be available.

Say a restaurant is incredibly busy on Saturdays but could use more business on Wednesdays. With Groupon Now, that business can fill its seats during slow business days using time-specific deals.

That's the beauty of Groupon Now: local businesses have never really had a simple way to manage their perishable inventory, especially labor and food. Why waste those resources during slow periods when you can bring savings-savvy consumers through the doors with a highly targeted Groupon deal?

"For merchants, the daily deal is like teeth whitening, and Groupon Now is like brushing your teeth. It can be an everyday thing to keep your business going," Groupon founder and CEO Andrew Mason told Bloomberg Businessweek in an extensive interview on the new product.

The daily deals company has been on a tear recently -- in fact it is the fastest growing company in history -- but it faces stiff competition from companies with increasing muscle.

Oh, this kills me.

If only...

Read this post on: Medical Spas & Groupon

HireVue: Video interviewing SaaS that rocks!

HireVue's been on a roll lately. Every time I have dinner with Mark it seems that HireVue's rolling in additional customers, and it's no wonder. HireVue's offering real value to HR departments looking for efficiencies in their hiring process.

It's great to see another technology startup here in UT making the grade and building value.

I've used HireVue to interview. HireVue made the preliminary interviewing incredibly easy, and I was able to review and share the interviews I liked best. I ended up with a perfect fit for the position which would have been very hard to do just over the phone.

If you're looking to hire anyone, HireVue's the place to do it.

And, of course, HireVue uses Sendside.

HireVue is the worlds leading video interviewing service doing business in more than 70 countries. HireVue came to Sendside looking for way to accelerate their sales cycles and provide mind-blowing relationship marketing to their existing clients that include Google, Oracle, and Africa World Bank. Within months, Sendside increased helped increase their sales by more than 35% while cutting their sales cycle in half.
Read the HireVue success story

James Hongs Hungy Balls.

A good post on motivation and entrepreneurship: On Having Balls Part 2: Staying Hungry.

And that is the natural, first-instinct way to address the problem. "Well, maybe we can pay them more to make them happy."

It never works. At least not here in Silicon Valley. Engineers at HOTorNOT last year were making 2-3x normal salaries, yet they were not happy... and we really couldn't expect them to be. After all, the only people we trusted with our baby were people like us.. and god knows I wouldn't have stayed here for a high salary. At their age (23), I wanted risk and potential reward, not a steady job. I make a big deal of telling people that when I finished my MBA at 25, I turned down a job that was gonna pay me about $180k in the first year.. despite the fact that I was $50k in debt.. to instead earn no paycheck and give entrepreneurship a go. These are the type of people you trust to continue running your site in "high profit margin" mode. Big company types won't do.

Founders At Work: Y Combinators new book.

Jessica Livingston from Y Combinator who's been primarily know for organizing Startup School, has put together a book of interviews with tech startup founders. I've already ordered it and eagerly await its arrival. Buy the book from Amazon here.

Founders at Work is a collection of interviews with founders of famous technology companies about what happened in the very earliest days. These people are celebrities now. What was it like when they were just a couple friends with an idea? Founders like Steve Wozniak (Apple), Caterina Fake (Flickr), Mitch Kapor (Lotus), Max Levchin (PayPal), and Sabeer Bhatia (Hotmail) tell you in their own words about their surprising and often very funny discoveries as they learned how to build a company.

Interviews in Founders at Work include:

David Heinemeier Hansson
Partner, 37signals and creator of Ruby on Rails

Charles Geschke
Founder of Adobe

Ron Gruner
Founder of Alliant Computer and Shareholder.com

Steve Wozniak
Founder of Apple

Click to read more ...

Greg Ballard of Glu Mobile: Disagree & Commit

I love that Stanford University Entrepreneurial Thought Leaders Podcast. Listen to just one and you'll quickly see why it's the most popular iTunes podcast on technology startups and entrepreneurship.

Greg Ballard, CEO of Glu Mobile, was one I've listened to more than once in the last month. Interestingly, he was CEO of MyFamily for a while. While Greg touched on a number of topics of interest, there was this gem on 'disagree and commit'.

Disagree & Commit

Startups, almost by definition, are a stressful place for interpersonal relationships. Low pay and long hours are hopefully made up for by your ability to have input and make a difference. Arguments and disagreements are just part of the deal. Hopefully there is a process where a decision is finally made and everyone gets on board. (It's been referred to as totalitarianism with input.)

There is an important element in any management situation, the ability to disagree but commit. 

The failure to be able to disagree and commit is possibly the most corrosive and common situation that any business faces internally. Someone who can not commit to a course he doesn't agree with becomes a leper, infecting your business and management team. Greg describes what he sees as the highest quality as anyone in business can have as the ability to 'disagree but commit'.

I've been in any number of situations where I've seen this failure to disagree and commit in action. Advertising agency's are rife with creatives who love to gripe about account reps and clients. Doctors staffs discuss stupid patients, but are just as likely to criticize the physician they're working for. It's a lot easier to give lip service to agreement or get overruled and stand your ground. Hey, when it doesn't work out you can give them the old 'I know that wasn't going to work'.

If you can build a team in which disagreements can be frank, even harsh, but where once a decision is made the team can get behind it and implement without reservation, then you actually have a team.

Barenakedapp.com: DropSend is selling itself on it's own blog.

DropSend posts it's own sell.

 
I've actually been using dropsend for most of a year not knowing they were just a tiny web app out of a basement. It'll be interesting to see who might buy them.

Dropsend is one of the apps that allow you to send huge (up to 1 gig) files through your email. It's worked for me.

Why Barenaked App?

Barenaked App is the online diary of the building of our second web app, Amigo.

Well, we’re not Porsche, or Microsoft but we figured that size shouldn’t matter when it comes to letting everyone in on the hows and whys of product creation. And so Barenaked App was born - a place to document the planning, design, coding and marketing of our second web app.

So how bare will we get? The answer is, down to the pants (or underpants if you’re not English). We will be revealing all of our costings, the reasons behind our decisions, why we chose to work with the people we did and of course the embarrassing mistakes we made along the way.

Here's a shot of their growing income:

 

The discussion in the comments is particularly interesting. If anyone needs a new company you'd better jump on the train.

Startup Funding: The CRV QuickStart Seed Funding Program

From Charles River Funding: QuickStart Seed Funding

Charles River Funding (Boston & Silicon Valley) is launching a new program looking to move them down the food chain and get into companies while the gettin's good. Read the NY Times article: Venture Firm Is Giving Loans A Try. (registration required)

Here is how the loan works:

• A standard interest bearing loan will be made to a corporation, which we will help you establish if you do not already have one in place. This arrangement eliminates any personal liability for the loan.
  
  
• It is our intention to convert our debt into equity if and when your company closes its Series A round. If the company successfully raises its Series A, in exchange for sharing the risk with the entrepreneur, CRV receives a discount on the conversion price when the loan is rolled into the Series A. The discount will be a maximum of 25% (determined ratably at five percent per month, depending on how long it takes to create a Series A financing, up to the maximum).
  
  A simple example: if CRV loans your company $100,000 with a six percent interest rate, and six months later the company closed a Series A round, at that point the loan balance (with interest) would convert at a 25% discount (value = loan dollar amount plus interest / .75) into $137,333.33 worth of Series A stock. Given that seed funding amounts are typically very small compared to the amounts one might expect to raise in a Series A round, as the example illustrates, the aggregate discount amount, in this case $37K, is a tiny fraction of what is likely to be a multimillion dollar Series A financing.
  
  
• In addition, CRV would like the opportunity to support the Series A financing and thus retains an option to contribute up to 50 percent of your Series A funding. For example, if you raise a $3M Series A round, we can contribute up to $1.5M of the round.

Redeye VC thinks the move is to address exit trouble:

It also is a recognition of some of the challenges that larger venture funds face.  Take a hypothetical traditional $400M VC firm.  In order to achieve a 20% IRR, the fund must return 3x their initial capital over a 6 year term -- or $1.2B.  Now say this hypothetical VC firm typically owns 20% of their portfolio companies at exit (an industry average).  That means that at exit their portfolio needs to create $6 Billion dollars worth of market value (ie, $1.2B / 20%).  Assuming that their average investment size is $20M, that means that they invest in 20 companies -- this assumes an average exit valuation of $300M PER COMPANY.  Given the tight IPO Market and an average M&A exit value of less approximately $150M, this math creates some real challenges.

From VentureBeat

The advantage of a seed round is that it done as a “convertible” loan, which means the $250,000 is essentially a no-strings-attached loan to an entrepreneur. There is no equity stake claim by the investor at the time, which is good for the entrepreneur, who can see how good his idea is first. If the idea gains traction, he can raise money in the series A and negotiate a high valuation for his company. If he can command a $5 million valuation, for example, the investor’s $250,000 seed money converts into only 5 percent of the company.

Zachary  says he sees too many entrepreneurs giving away between 10 to 20 percent of their company in the seed round. They have fewer shares to give to employees, and they’re less attractive to venture capitalists.

There is almost no liability for the entrepreneurs, because the loan is made to a corporation formed around the entrepreneur. If the company fails, the company goes away, and the founders aren’t liable. “We’re all big boys,” says Tai, explaining that CRV doesn’t mind when this happens. “We go into this with eyes wide open.”

Fred Wilson of Union Square shares his analysis

I think that's a very fair deal. The loan is structured very similarly to what some angels are doing these days (loans that convert at a discount) and Charles River gets to take up to half of the round on the same terms as the other new investor.

Read the first bullet: There's also no personal liability. Something that Utah investors could take note of. 

Startups, venture, hiring, tech, geeks, & other smarts.

Paul Graham writes insightful essays on... 

• How to Start a Startup.
  Build something users love, and spend less than you make.
• Hiring is Obsolete.
  The market is a lot more discerning than any employer.
• How to Make Wealth.
  To get rich you need to get yourself in a situation with two things, measurement and leverage.
• Ideas for Startups.
  The initial idea is not a blueprint, but a question.
• Why Smart People Have Bad Ideas.
  A hacker who has learned what to make, and not just how to make, is extraordinarily powerful.
• The Hardest Lessons for Startups to Learn
  Some things about startups are kind of counterintuitive.
• How to Fund a Startup.
  Venture funding works like gears.
• How to Present to Investors.
  Explain what you're doing and why users will want it.
• The Venture Capital Squeeze.
  Why not let the founders have that first million, or at least half million?
• The Other Road Ahead.
  You may not believe it, but I promise you, Microsoft is scared of you.
• What Business Can Learn from Open Source.
  There may be more pain in your own company, but it won't hurt as much.
• What the Bubble Got Right.
  Even a small increase in the rate at which good ideas win would be a momentous change.
• A Unified Theory of VC Suckage.
  If you're not one of the very top funds, you're condemned to be the bad guys.
  

Silicon Valley: It's location that makes you visible & viable.

Why will Silicon Valley rule the start-up universe? Because they're already there.

From the New York Times comes an article on location awareness in VC backed startups. 

Los Angeles area also has a pool of talented engineers (working at aerospace companies like Lockheed, Northrop and Hughes) and great universities (notably Caltech and U.C.L.A.) and plenty of money to invest. “But in Los Angeles,” he said, “people are scattered across a wide area; everything is more spread out.”

It’s harder for entrepreneurs to meet with one another and with investors, he added. And that means connections take longer, deals move slowly, fewer companies are formed. “Like a gas, entrepreneurship is hotter when compressed.” he said.

Sequoia makes its preference for the 20-minute rule almost explicit, telling applicants whose companies are at the “seed stage” (receiving less than $1 million) or “early stage” ($1 million to $10 million) that “it is helpful if the company is close to our offices” because they “require very frequent contact.”

And more on startups as a priority:

“In New York, it would be extremely difficult to find a law firm willing to defer the first $20,000 of your legal fees,” Mr. Sternberg said. “Here, we got that. It’s a pretty standard thing in Silicon Valley.”

... He did end up needing Silicon Valley for something else: technical talent that would be willing to accept equity in place of any salary. Six weeks ago, he moved to Silicon Valley to recruit more people like his chief technical officer, who has been working full time since Jan. 1 for equity only.

“Elsewhere, if people in a large organization think you have potential, they offer you a job, trying to save you from the uncertainties of a start-up,” said Mr. Sengupta, who himself has worked at Oracle, Microsoft and General Motors. “In Silicon Valley, they say, ‘Can I join you?’ ”

Mr. Sengupta now has six “employees” working for BeyondCore without salaries. Only in Silicon Valley, he said, do “people have confidence that if you act on great ideas, the money will come.”