Come join your fellow technology enthusiasts at Austin Tech Happy Hour tonight from 6-8pm at Hi-Lo downtown. Your first drink is free courtesy of Technology Navigators!
If you’d like to be notified of the happy hours, you can sign up at the website or text "athh" to msgme (67463) on your mobile phone.
James Hong, co-founder of www.hotornot.com has written a great blog entry about a somewhat new twist to the Entrepreneur’s Dilemma. Michael Arrington gives his story a good setup on his post over at TechCrunch. So what is the entrepreneur’s dilemma?
Well, the classic story says that people startup new businesses because they have exciting new ideas, and want to test them and try to make this new business a success. In the beginning you have to wear many hats. You’ve created the concept, you’re out interfacing with potential customers directly, and it’s a very exciting time. If you’re successful you have to hire more people, create layers of management, and generate processes for repeatable quality in your organization. Before you know it you’ve built the company that you were trying to get away from! That’s the dilemma. You’re a victim of your own success.
James and his partner Jim had a slightly different dilemma. Lets call it the Rapid-Wealth-Preservation dilemma. With no venture investment their HOTorNOT website was throwing off gobs of cash. Business decisions were dictated by preserving that cash flow, not by innovation. See his post to read his story about how they transformed the business to have a risk-taking mentality once again, and how letting go has paid off handsomly.
After a pretty brief beta test, Thoof is now live. I was able to secure a beta test account and used it a bit during the test. I even submitted a story, which was actually a link to the blog entry where I wrote about Thoof. Through my website tracking I was even able to see that some people read the blog entry after clicking on the link on Thoof. I went back to my story submission to see if it showed me how popular it was, or how many people read it. But I couldn’t find a way to get that information. But then again that’s more Digg-like thinking and this is a recommendation engine. So it’s not about quantity but quality, right?
You can click on this tumbnail image to see a screenshot of my main Thoof page. One thing I find interesting is that when you click on a story link it opens up the story in a new window that is underneath the Thoof window. Kind of helpful I think, but you have to go click on that new popunder window to read the story you are interested in. This could be useful if you are clicking on several stories, and then want to go read them. It just makes me wonder what the use case is behind this interface decision. Usually popunders are only for advertisements.
Regular readers of the blog will know that I am a big proponent of all technology development in Austin, not just chips, software, and infrastructure plays. So that’s why I really enjoy seeing news such as that announced today from the Medical Carbon Research Institute (MCRI).
Here is a full report from dBusinessNews.
MCRI is changing it’s name to On-X LIfe Technologies, Inc. in conjunction with a $32M financing of equity, debt conversion, and revenue interest. The company is involved with carbon technology and cadiovascular surgery products. It’s good to see some life sciences in Austin.
Some financing came from PTV Sciences, which just announced two weeks ago the closing of their second fund at $190M. PTV has offices in Austin and Houston, and invests in "hard science" companies in biotechnology, medical devices, bio-materials, and nanotechnology. Other Austin investments include Alereon and LDR Spine.
It was announced that ClearOrbit was sold to TAKE Solutions, based in Chennai India, for $20.6M in cash. Reports say the company had taken in $15M in venture capital from various sources over the years, and sales were approximately $15M annually. I assume that includes the combined results of eBoomering by now, which they acquired in early 2006. By all measures this is a pretty underwhelming result, but lets keep some other things in mind.
It’s hard to spin this thing as a growth story after all these years, and if they were in need of capital for any reason there would not have been much of a market. So a sale like this is just about the best thing to do if you’re going to be in the top 100 of a market, rather than the market leader.
Last year they reported a development partnership with MSU (the CEO is an alum). Most likely that thinking will be done in Chennai pretty soon. It will save some costs, increase margins, and generate synergies with TAKE’s other business units. Best of luck to the team over there as they work through the integration of this deal.
NetEffect (formerly Banderacom) is a company that has been around since 1999, and manufactures (get ready for the technical jargon) full iWARP 10 Gigabit Ethernet adapters. Lets just suffice it to say that everything in the data center runs on ethernet, 10 Gigabits is really really fast throughput between computers (or computers and storage), and iWARP is a protocol standard that enables RDMA to run over Ethernet.*
These guys have taken down tons of venture money. Not quite HomeAway money, but still lots.
It looks like they burned through the first $44M figuring out that Infiniband was not going to be the wave of the future. Then somewhere in the dark years of 2003 and 2004 they booted the management team, changed the name, raised more money and bet it on Ethernet and iWARP instead. Now some of the stuff I read said they are a fabless semiconductor company. Fab plants cost tons of course, but without a fab plant spending $100M seems wild.
So what’s wrong with this picture? We have a long history of brand name companies and venture investors pouring money into this thing for 8 year now, and all of a sudden an off-brand VC offers venture debt. Hmmmm… If things were going swimmingly, current investors would be happy to throw more cash into this deal.
I have no inside knowledge of this deal at all, but my best guestimate is that either they are close to breaking even and making a go of this business, or they will be in the Austin deadpool soon.
*For those who care, you can find a definition of RDMA on Wikipedia here.
Revver co-founder Ian Clarke launched a new startup about six months ago called Thoof. The website will deliver personalized news to you based upon a recommendation engine. As a user of Netflix and Amazon I’m really not big on their recommendation engines, as I think they are simplistic. If I order some romantic comedies on Netflix, it seems like they just recommend more romantic comedies usually with the same actors if possible. On Amazon if I order a business book on marketing, it just recommends other marketing books that are highly rated by others. All this is fine, but it seems to miss the threads of personal interests that seem logical to me, but random to others.
You can read the opinions of Michael Arrington at his post on TechCrunch. There is also a reply to some readers comments from Ian, so you might want to scroll down the page to read the debate. Michael has seen the beta and includes some screenshots. I don’t have an invite, but I’m working on it. (hint to anybody reading this)
Reports say that Austin Ventures has invested $1M in Thoof, but the company is not listed on the AV website as being part of the portfolio. So apparently this is a stealth investment at this point.
I’m happy to see an entrepreneur like Ian starting up a Web 2.0 company in Austin. I don’t know what the Austin connection is, or if he’s lived here for a while, but I’m glad to see this 5-person startup striking out and doing something different.
ReachForce CEO Suaad Sait says that traditional marketing is happy with 3% response rates to marketing and advertising. You would think people who are 97% wrong would be fired!
True enough. ReachForce provides services to help target potential buyers with an organization based upon their role in the organization, not just their title. They can provide lists of more qualified buyers (which are 100% guaranteed), but they are really more than that. They’ve integrated their software services with salesforce.com, and provide a much more consultative approach to demand generation strategies.
The company recently announced a $1M debt facility with Silicon Valley Bank as a bridge to a future financing round. With over 100 customers and their current momentum, you would think that todays cheap money environment would enable them to land some financing. Hopefully they will have their pick of venture partners for their next round.
At some point I hope to start a list of my top startup picks. When I do, these guys will definitely be on it.
Friction Kills Websites
If I have to fill out a long sign-up form, answer a questionnaire, wait for a return email to validate my logon, etc, the chances of me completing that process go down by the second. It’s called friction, and friction kills.
Flickr has a sign up process which is not too bad, but after sign up there is very little friction. There is almost nothing there; upload a picture, view some pictures, add information if you like. Even though there are several thousand person-hours of programming, it seems like it does almost nothing yet at the same time it does everything you need.
Check out this cool website from GE. It’s an interactive whiteboard that is simple, fun, and intuitive. Start a whiteboard session, invite friends, email the results. In order to start playing with your own whiteboard session just go to the link and boom you’re working. No signup, no instructions to read, just go. This is a great example of low friction in a website. I think every internet application developer should strive for this level of friction, and Google simplicity (one text box, 2 buttons).
In a June 6th job posting, Google says it is looking for a highly technical engineering director who can drive technical projects and provide leadership for a group of 100+ engineers in an innovative and fast-paced environment.
No this is not my April 1 posting.
Google spokeswoman Sunny Gettinger confirms that Austin offers an incredible lifestyle merging Texas and technology. There’s no question that Google could probably have their pick of talented engineers in Austin. There is a definite lack of high profile web players in Austin (leaders like Google, eBay, Yahoo, Microsoft, etc just don’t seem to get founded in lil’ ole Austin Texas). If I were a technology manager I’d be worried about retention if Google opens up a 100 person office here.
The burning question is what area of technology would such a group focus on? Could it be the next Google Docs and Spreadsheets development team? Is there an acquisition in the making somewhere in town that they would like to expand with rapid hiring? Or is this ad just a technique to lure a handful of Austin engineers to the silicon valley?
Only time will tell.