Here’s what entrepreneurship 3.0 looks like

binoculars

[Full disclosure: A startup profiled in this story, SignupSumo, was built on my company’s platform, Assembly.]

In 1945, at age 21, my grandmother started a photography company.

She’d just graduated from Northwestern University, and in order to pursue this dream she had to put off getting a job. She invested everything – both financial and social capital – in this endeavor.

Over time, she was making enough money to rent a storefront in Evanston, IL. Later, she was able to hire a staff. Eventually, she purchased a historic firehouse that became the headquarters of Stuart Rodgers Photography. Seventy years later, that company is the only job she’s ever had, and she’s still at it.

She had to go out on so many limbs, so many times. At every stage, she reinvested back into the business and risked her credit and credibility to keep moving forward.

This photography business is quite different from a digital product, but not long ago it took a similar process to get an Internet business off the ground.

Building a startup in the ’90s, you might need to find a friend with a garage for your first office. You might need to forego employment and sell your car to afford servers. You might jeopardize relationships with the people closest to you.

You’d definitely need to build everything from scratch, and it would take a lot of time and money.

All this might continue to pay off in 70 years, like my grandmother’s photography business.

Or, you might take all these risks just to answer the question of whether people want what you’re making, only to learn that they don’t.

Times changed

Beginning in the early 2000s, instead of selling your car to afford hardware, you could sell a coffee table and afford it. Over the past 15 years, many costs associated with building products – servers, databases, all the once-homerolled things that are now available as cheap SaaS products – dropped immensely.

This ushered in an era where startups were lean and could do with $250,000 what a startup in the ’90s could do with $2,500,000. It led to 10 times more products launching, 10 times as fast. It’s been a prosperous and successful era for the Internet. Only a few costs remained high: labor, office space, accounting, legal, marketing, etc.

A few weeks ago, I saw a group of strangers come together on the Internet and launch a business. They were designers, developers, copywriters, and marketers.

The team started from scratch and set out to launch within a week. They worked collaboratively, sharing ownership based on what they’d each put in.

Watching this, it dawned on me that we’re now entering a new era, and all those remaining costs – labor, office space, accounting, legal, marketing, etc. – are dropping to the floor. Just like last time around, it’s going to mean that we see 10 times more products launching, 10 times as fast. It means we can do with $250 what a startup five years ago could do with $250,000.

The product I watched being built was SignupSumo – it’s a simple tool that sends you an alert if someone influential signs up for your service. To make my argument for this new era, I’ll walk through three scenarios:

1998: If you wanted to build SignupSumo in 1998, you’d first need servers. Then you’d need to build a custom mailer to send notifications out. Then you’d need to build an algorithm that determines people’s influence.

Then you’d need to build an API for your customers to send their signups’ contact information to you. You’d need to incorporate the company and hire an accountant. Then, finally, you would spend a fortune getting your product in front of potential customers. And throughout all this, you’d need to pay hefty salaries for a multi-talented team of engineers and designers.

2010: If you wanted to build SignupSumo in 2010, you’d first need computers. Then you’d integrate Heroku. And Sendgrid. You’d bring together a small team, write code, and get a product out the door. You would still need to incorporate and hire an accountant.

Then you’d use Facebook ads and an expensive PR firm with connections with the tech press to get your product to market, where you’d finally start learning if people wanted it. You’d have hefty salary costs, but you’d have gotten to market way faster and cheaper than that 1998 version.

2015: (This is exactly what I saw happen with SignupSumo)

A few developers, designers, and marketers come together. They fire up Heroku, etc. They integrate an API that checks user influence. They design a slick landing page.

They don’t need accounting, because there’s no money. They don’t need to incorporate, because they built it as a community-owned business. They don’t need a cap table, because they’re tracking ownership in the product by leveraging colored coins on the Bitcoin Blockchain, where that data is immutable and permanent.

A week later, they launch. They don’t need a PR firm, because the communities on Hacker News and ProductHunt love the idea and start sharing it to thousands of people across the web. They land their first paying customers.

Spending less than $100, this small team just took an idea, built it, and got it to market. Now they know people want it, so they are continuing to focus on performance and feature improvements to satisfy a growing customer base.

If things keep working, they may be able to quit their jobs and grow this into a multimillion dollar business, but nobody’s mortgage is riding on it.

Like my grandmother in 1945, they had a hunch that people wanted SignupSumo, so they created it. Unlike my grandmother, they hardly had to risk anything to start interacting with the market.

(You can see my live-tweet of the seven day building of SignupSumo here.)

What has actually changed?

In the past 10 years, some billion dollar businesses businesses have gotten there with little or no venture capital, but in this new era they won’t be the exception.

Going from the ’90s to the modern web, the dropping costs (servers, etc) are clear and visible. The recent changes I’m highlighting are less obvious but equally impactful.

Version control and collaborative coding have long existed, but GitHub makes them seamless.

Working on nights and weekends has always been an option, but before there was an API and SDK for every need you might have, it would take years to get a product off the ground without working on it full time.

Launching a product without a PR team has always been possible, but things like ProductHunt are letting the best products reach the masses without a marketing spend.

Sharing ownership with early contributors to a product has always been possible, but today you can use the Blockchain to track it trustlessly and without lawyers.

People around the world are launching businesses collaboratively. They’re leverage existing tools and communities to build the big businesses of tomorrow in a brand new way.

It’s exciting.

Austin Smith is the platform evangelist at Assembly, a community that builds software products collaboratively and shares ownership and profits equitably. Previously, he was an early hire at Singly and before that a journalist.


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Shakeup at Google! Bradley Horowitz reportedly now running Google+

Screen Shot 2015-03-01 at 5.26.38 PM
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Bradley Horowitz, the vice president of product for Google+ since 2008, has reportedly been named the head of Google’s social network.

Bradley Horowitz updated his LinkedIn profile.

According to TechCrunch, Horowitz has replaced David Besbris, who has been in charge of Google+ for less than a year.

It’s not clear what Google’s plans are — the company did not immediately respond to a VentureBeat request for comment — but if recent signals are correct, it could be that Google+ will be losing some of its features.

In an interview with Forbes, Google product czar Sundar Pichai suggested that Google+ could be broken up over time. Many people think the search giant has all but lost the social networking battle to Facebook.

 

 

 

 

 

 

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Ellen Pao case puts Silicon Valley boys’ club on trial

Ellen Pao walks to the courtroom before the start of her trial at San Francisco Superior Court in San Francisco, California. San Francisco: The so-called "boys' club" culture of the hi-tech industry has been very publicly put on trial, after an ex-employee of one of its best known internet start-up investors took her firm to court, accusing it of sex discrimination.

The new era of micro-multinationals

global

“How big are you? How many people?”

Wrong answer: “Just eight employees. Many more if you count our consultants.”

Right answer: “Eight employees. Why do you care?”

Gone are the days when headcount at headquarters matters. Nowadays ‘micro-multinationals’ from Toronto (our physical HQ) to Taipei are commonplace. A micro-multi may be small in headcount, yet enormous in growth, servicing global facing organizations. They can be category killers.

Never heard of them? I hadn’t either until an executive at a big company in Brussels told me our company was one. My response was, ‘huh?’ He said, “Have you ever heard the phrase, ‘you are a citizen of the world? You, Sir, are a CEO of a company of the world.”

But lots of founder CEOs (I’m one) – no matter how ‘hot’ the sector – make myriad gaffes when running a micro-multi. You’re dealing with different cultures, virtual teams, online demos, and time zone differences. I have made many such gaffes. I hope readers and prospective founders starting micro-multis can learn from my mistakes, since that’s where the jobs and opportunities of the 21st century are. (Which brings me to a quick side-note: Around the world, governments of different political stripes focus unduly on supporting debt-financed taxpayer-funded accelerators to promote innovation and jobs. It’s a well-intentioned error that is empirically flawed as a tool to create jobs, evidenced through the non-partisan, exhaustive global research by scholars such as Josh Lerner (Harvard Business School) and Vivek Wadhwa (Stanford). Quick test: What’s the fastest-growing startup city in the U.S? Answer: St. Louis; there’s not a government-funded accelerator in site.)

Back to my top advice to micro-multis on avoiding gaffes:

1. Align your teams in other countries with incentives other than money
The Silicon Valley model focuses on options equity or other cash models to incent staff. That can work – but it’s very risky when you’re dealing with partners overseas who you’ll need time to get to know. For example, after time and money spent finalizing that legal agreement, the overseas partners may not turn out to be the “value-added” resellers you hoped for at all, since their enthusiasm can melt away after first-date swooning over Skype. Partners and introducers, for all sorts of reasons, may not work out if you don’t have enough face time with them. Our team in the Mideast is amazing; they run a fantastic small consulting business whose global reach aligns perfectly with ours. That team’s data analytics services look more beautiful to their clients by leveraging our global data platform; we are in a kind of virtual business symbiosis. Other non-cash incentives have included inviting their clients to a hockey game during a rare visit to Toronto. They are therefore highly motivated to sell our product.

2. Pay for better e-connectivity
Pay for the best international phone lines, virtual translators, and video conference feeds. Today, in the early days of micro-multis, clients are forgiving, but that won’t always be the case. A client in Melbourne was especially kind to me, but I’ve learned my lesson.

3. Beware the lawyers
Every entrepreneur gets heart palpitations when he or she sees a legal bill for “email correspondence”. But in a micro-multi model, dealing with lawyers’ bills is especially crucial. Your U.S.-based lawyers – even the best – may deliver you little relative value. Pay for lawyers on the ground wherever you do business. Added benefit: They tend to have more flexible pricing models than North American-based law firms.

4. Don’t listen to local-based advisors too much
An “expert” in online “influencer marketing” in Toronto doesn’t know an iota about the same subject in Santiago. Be polite, but ignore them.

5. Don’t play cute with physical virtual offices
Everyone knows a mere address in London isn’t a real physical office. Don’t be afraid to broadcast that the reason you have that London address is because you pay for services such as virtual multi-messaging (e.g. for less costly e-faxing) in foreign cities in order to conserve costs.

6. Price to value
In North America, many companies, especially business-to-consumer Web companies, are more focused on “freemium” models or other different modalities of pricing than is the case in foreign jurisdictions. Stick to one pricing model. If you keep tinkering with your pricing model for different jurisdictions (since you assume a non-profit in Indonesia is different than an NGO in Switzerland), you’ll end up wanting to bang your head with a brick.

7. Beware the channel partners
U.S.-trained management consultants seem to adore the channel partner model. Sometimes it works beautifully. But as strategy and innovation gurus A.G. Lafley and Roger Martin intone in Playing to Win, say no if you suspect you’re being taken advantage of.

8. Laugh a lot. Be prepared to take funny verbal punches from foreign-based players in bigger cities who think the “brand” of their city is more important than yours. One gentleman in London from a global organization emailed me this: “We don’t touch deluded hissy-fitting non-trepreneurs like you, dead right you’re not important at all.” Yes, Toronto’s a smaller city than London. We’re polite and respectful. Yet we’re in common cause with every micro-multi in the world. We form an army to which traditional multinationals should pay attention, not mock. Failing to pay attention to micro-multis would be a major gaffe.

Neil Seeman is founder and CEO of The RIWI Corporation (RIWI), a global Internet data collection company, and a Senior Fellow at Massey College in the University of Toronto.

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Sqore, which holds recruitment challenges for young talent, gets $3.5M from Northzone

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Sweden’s Sqore, a startup that runs a large network of student competitions, has gotten a $3.5 million investment from Northzone, early backers of Spotify, Avito, and iZettle.

Sqore, which was founded in 2010, has built a system of online challenge-based skill testing. To date, more than 15 million students in more than 190 countries have participated in its competitions. The company tries to connect these students with professional opportunities they would otherwise have no chance at.

In a release, Sqore said it lets universities and companies create online skills challenges, and then brings in students around the world to take them.

Sqore is planning a full-scale launch this summer. It says it has already helped thousands of students find professional employment or scholarships. For example, the company explained, an Indian woman used Sqore to secure an aeronautics scholarship at a top European university. Similarly, an Indonesian woman who came up with a new way to sanitize water in her village also won a scholarship to a European university.

The company works with large clients like IBM, Shell, KPMG, Bertelsmann, Ikea, Morgan Stanley, and many others. It will use its new financing to build out product development, and plans on expanding to a broader market.

 








Blackberry takes security, productivity, and communications tools cross-platform

The Blackberry Experience Suite is available for all mobile devices.
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Blackberry said today it will bring its security, productivity, and communications tools to iOS, Android, and Windows.

In an announcement about the Blackberry Experience Suite made at Mobile World Congress in Barcelona, Spain, Canada’s Blackberry said “we want to empower all mobile professionals in order to supercharge their productivity and allow them to work across all their devices in an effortless and secure way.”

The company said the suite of tools will be released later this year.

This isn’t the first time Blackberry has brought its tools to other devices or platforms. It has already done so with its Blackberry Messenger, and Blackberry Blend.

With the Blackberry Experience Suite, the company is extending its “cross-platform strategy of complementing [its] innovative and ultra-secure hardware with software solutions that meet the changing needs of enterprises and mobile professionals – as well as device makers serving those markets,” it said.

The Experience Suite will comprise three individual sets of tools — the Productivity Suite, the Communication & Collaboration Suite, and the Security Suite.

 

 

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Supersonic sees big growth for ‘rewarded video ads’ in mobile games (interview)

Gil Shoham, CEO of Supersonic
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Supersonic specializes in in-app monetization and user acquisition for mobile apps and games. And the company has seen skyrocketing growth for its Rewarded Video ads in 2015.

Gil Shoham, chief executive of Tel Aviv, Israel-based Supersonic, said in an interview with GamesBeat that more and more brands are sponsoring video ads that reward gamers with valuable gear in their favorite apps. And these ads are particularly effective. Click-through rates for the Rewarded Videos are around 20 percent ot 35 percent, according to Supersonic. Finding such alternative monetization to direct in-app purchases is increasingly important in the highly competitive mobile game business, where there are a million other rivals competing for $30 billion in worldwide mobile game revenues.

The video ads — which are provided by a number of big mobile ad networks on Supersonic’s platform — are a good way to keep users engaged, and a great way for developers to drive revenue, said Shoham. They work because the ads are targeted toward the interests of the gamer or app user. The video ads also spur more conversation between non-paying and paying users.

The company is making the announcement about the popularity of the opt-in Rewarded Videos at the Game Developers Conference this week in San Francisco. The growth has enabled Supersonic to triple its revenues every year, and grow to more than 200 employees.

Supersonic’s Rewarded Video platform is being used by publishers such as Electronic Arts, Kongregate, Gre, Pocket Gems, Pretty Simple, Social Point, and DeNA. At GDC, Supersonic’s booth will feature indie game developers showcasing their games. It will rotate and developers will show off the games for an hour or two at a time.

I caught up with Shoham at our VentureBeat Mobile Summit event last week in Sausalito, Calif. We talked about Rewarded Video as well as the overall state of the mobile game industry. Here’s an edited transcript of our interview.

Rewarded Video from Supersonic gives rewards to users who view video ads.

Above: Rewarded Video from Supersonic gives rewards to users who view video ads.

Image Credit: Supersonic

GamesBeat: Please give us a recap about Supersonic.

Gil Shoham: Supersonic is a monetization and marketing platform for mobile app developers. Our main focus is on the gaming space. Most of our clients are in gaming, perhaps 65 or 70 percent. They’re publishers and advertisers or game developers. On the publisher side, around 70 percent are in gaming, and the rest are mainly social networking, messaging, and dating. We help publishers monetize by running ads and helping them support their apps on the monetization side. The advertisers are advertising on the platform.

We have a supply-side platform that works with large publishers like EA, one of our biggest clients. It’s software that helps them manage the different integrations of monetization in their apps. Instead of plugging in multiple ad networks, each one with its own SDK and integration, we try to make it very simple by creating one layer, where you plug in all the different demand sources and ad networks. It eases integration and creates yield optimization. It’ll decide how to auction to each network based on performance. It’s a bidding war for each user and each impression. It’s a bit like Rubicon Project in the desktop world, or even DoubleClick, for the mobile app economy, with a very specific focus on gaming.

The biggest ad format for us is video – some video interstitials, which can be a pop-up with a video, but mainly reward-based video. The users can earn credits in an EA app, like Tetris or Bejeweled Blitz, to progress in the game if they watch a video ad. These videos can be brands – a trailer for a film, anything – but mainly it’s app trailers, a video for another game. You get a reward if you watch the video and then you can install the app, although that’s not rewarded. You can explore other apps.

GamesBeat: Are companies like AdColony or Vungle going to be your partners or your rivals?

Shoham: They’re partners. Well, it’s a mix. Part of our business is that we have our own ad network as well, which is baked into the platform. It’s built for publishers that start with one integration, to add monetization from day one. Then they’ll add AdColony or Vungle. All these guys are supported by our platform. Just for transparency, there’s a level playing field for everyone. It’s two platforms in one – the ad network and the supply-side platform.

Gil Shoham, CEO of Supersonic

Above: Gil Shoham, CEO of Supersonic

Image Credit: Dean Takahashi

GamesBeat: A year or two years ago, how big a part of your business was that?

Shoham: We started on Facebook, on desktop. Our first partners were gaming app developers on Facebook. Zynga was a client back then. They still are today. Same with EA. At some point that business plateaued. We also had a direct partnership with Facebook to do one of their exclusive monetization partners.

Two and a half years ago we migrated and totally transitioned from desktop to mobile. Our mobile business is just under three years old. We’re growing very quickly. We’re tripling our revenue every year. Today we’re nearly 200 employees. We’re backed by Greylock Partners in Israel, and also by SAIF Partners, which is a VC in Beijing. The company is profitable and growing fast.

Our main focus is on video. We’re trying to become the largest in-app video supply-side platform, competing with DoubleClick and other players.

GamesBeat: Where do you feel the opportunities are right now?

Shoham: Hugely in gaming. More and more game developers understand that utilizing video as a way to monetize is users is a safe route to take as far as the user experience. The experience is opt-in. The user isn’t forced to watch a video. The completion rates are very high. There’s no churn, no negative impact, because of the positive rewarding experience. We’re seeing a lot of publishers work with us, like these companies I mentioned, that are rolling out new apps or advertising new apps. Just from existing partners in gaming we’re growing very fast.

New segments are mainly social networking and text messaging apps. They’re implementing credit systems or freemium models, which leans toward this type of advertising as well.

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