Socializing

The Friend Fund

As I gear up for my move to Boston, I’ve been thinking about how best to keep track of all of my friends and their startups. As a CRM freak, I made a spreadsheet and thought I’d share with you a sampling of the amazing companies my friends have started. If you haven’t heard of some of them, you should add them to your radar. Below I’ve broken it down by region. I’ve included 6 from Austin and SF and 2 from Seattle, NYC and Chicago.

Austin:

H.O. Maycotte Umbel

Eric Falcao/Brian Dainton Mass Relevance

Noah Kagan AppSumo

A.T. Fouty/Rene Pinnell Forecast

Dan Graham BuildASign

Chris Treadaway Polygraph Media

SF:

Dan Street Loku

Cyrus Radfar Kapuno

Anthony Goldbloom Kaggle

Joel Resnicow Rexly

Jeffrey Lu Daily Aisle

Diego May Junar

Seattle:

Jeff Khadavi Go Time

Adam Schoenfeld Simply Measured

NYC:

Michael Constantiner/Matthew Rosenberg Cameo

Andrew Montalenti Parsely

Chicago:

Nirav Batavia Owl Invest

Ethan Austin Give Forward

The Next Chapter

I recently stepped down as CEO of Infochimps. You can read my post on the Infochimps blog here. It has been an incredible experience and I look forward to my continued involvement, though I’m also excited about the next chapter.

My wife, Elizabeth, and I will be moving to Boston in January. Yes, it will be cold, but we will be close to family and the Boston startup scene is thriving with hundreds of startups and ~ 40 active VC funds. In the first week of Decmeber (which isnt even over), six area companies have received a total of $85 million in funding and three have been acquired.* I won’t compare Boston to Austin or the Bay Area because I’m not yet familiar enough with it, but also because as I’ve often said, each market is unique. I plan on diving in and making it my new home, as I did with Austin back in 2003.

Austin was a wonderful place for me and I’ll leave with fond memories. The University of Texas supported me when I was running my first startup while in law school, and the startup community adopted me when I chose to stay in Austin instead of going back to NYC to practice law.

In 2007, Bryan Jones, now at Collider Media, and I brought OpenCoffeeClub to Austin and Damon Clinkscales, the godfather of Austin on Rails, has revived it. Thanks Damon! I feel privileged to have helped Josh Dilworth when he spun out of Portner Novelli to start what’s now by far the best tech PR firm in Austin (not just because my wife heads up new business there), and he in turn introduced me to the guys who would recruit me as a cofounder at Infochimps. Thanks Josh! My transition from law back to a startup was made easier thanks to the support I got from my mentors Matt Lyons at Andrews Kurth, Paull Pellman at Adometry, Bill Boebel who recently left Rackspace, and Rick Wittenbraker and Andy Jenks at Stage 1 Capital. I made plenty of mistakes but would’ve made a lot more if not for these guys.

I’m also glad to have spent the better part of this past year in the Bay Area, where I made a lot of friends and met a lot of people who are building incredible things, as well as those that provide the capital to make that possible. There are really too many to list, but I’d like to give a special nod to Anthony Goldbloom at Kaggle, Semil Shah contributor at Techcrunch, Steve DeWald who founded datamarketplace.com and is now at Square, Mike Olson at Cloudera, Daniel Jacobson at Netflix, Adam d’Augelli at True, Ryan Spoon at Polaris, and Beezer Clarkson and Marta Buliach at DFJ.

I’m taking some time off to decide what to commit myself to next, but to keep myself busy I’m building simple CRM software I could’ve used during our wedding planning process. You can sign up to be notified when it launches at http://signup.weddingrm.com. Katie Rae at Techstars Boston graciously offered me some coworking space, which is where I’ll be hacking away beginning in January. See you in Cambridge and I’m sure I’ll be back to Austin and the Bay Area often!

*Data from VentureFizz

I came across this article in the WSJ yesterday which included a blurb about a company called Liquid Robotics Inc. They make unmanned water vehicles. They recently raised $22 million. This news is fairly interesting to a geek like me, but the thing that really caught my attention was their recent pivot. At Infochimps our data suppliers typically fall into one of two categories: 1) companies in the business of selling data, and 2) companies in the business of selling something else, but that want to monetize their data byproduct. Liquid Robotics is an example of the latter. In the course of making unmanned water vehicles, they recognized their data byproduct was more valuable than what they were selling. As more and more companies recognize the value of their data, they will want to unlock that value, and hopefully come to Infochimps to do so. I’ve added Liquid Robotics to our data supplier queue…

The Lean Startup by Eric Ries

I just finished reading The Lean Startup by Eric Ries and I highly recommend it. We’re an agile development shop but are adopting lean methodologies (continuous development, driven by a simple question: are the dogs eating the dog food?). A few points in the book really stuck with me, and I thought I’d share them here.

The key question in a startup is “Should this product be built?” not “Can this product be built?”. Even if you already have a product, you should continually be asking yourself this question. On a related note, you know when you have product/market fit. If you don’t know you do, then you don’t.
You should build your product for early adopters. Those folks will feel the need most acutely and will provide valuable feedback. If they don’t eat the dog food, then you know your product isn’t going to work.
MVP is not about building the smallest possible product, but getting through the build-measure-learn feedback loop the fastest with the minimum amount of effort.
Do not worry about your idea being stolen. It will be hard enough for you to get customers to use your product, let alone a competitor finding it and copying it before they do (and why would they copy it before you have proven product/market fit).
Do not measure your runway by the equation {cash/monthly burn}. The true measure is how many times you can get through the build-measure-learn feedback loop (eg pivot).
Do not throw everything out every time you pivot; repurpose what has been built and what you have learned to find a more positive direction.
If you plan to grow your business virally, your viral coefficient has to be greater than 1.
As Peter Drucker said, “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Washington Post

My TechCrunch guest post was republished in the Washington Post!

Austin Emigration

As the top city for young people, Austin seems to be losing a number of them to San Francisco. Have you recently moved or are considered moving? I’d like to maintain a list, so please send me more startups or individuals that you know have recently left Austin for San Francisco.

Here are some startups that have recently moved or are considering moving:

GameSalad (added by @codypo)

HireWired (added by @jacquelineslife)

JobSpice (added 8/10)

Here are some individuals that have recently moved or are considering moving:

Elben Shira (Square)

Cesar Torres (Milk)

As for me, I will go wherever Infochimps needs me to, but Infochimps is still an Austin company.

Capital —> Startups —> Talent

In my 10 or so years in the startup community there have been a number of cities trying to make a name for themselves as startup hubs, most notably (in alphabetical order): Austin, Boise, Boston, Boulder, Chicago, NYC and Seattle. So how do these rank, and how do you make a city that wants to be a startup hub successful as one?

Austin has had a number of recent IPOs, including: Bazaarvoice (about to file), Convio ($200M mkt cap), Demand Media ($1B mkt cap), Freescale Semiconductor ($4B mkt cap), Homeaway ($3.25B mkt cap), Netspend ($800M mkt cap), Newgistics (on file), Solarwinds ($1.65B mkt cap), and Whiteglove (on file). With recent IPOs having a combined mkt cap north of $10B, I think it’s fair to say Austin is the biggest startup hub between the coasts.

Boise isn’t even on the map.

Boston has long been #2 to the Bay Area, anchored by Harvard and MIT and the many VC funds based there. Known for hardware and enterprise software, and more recently clean tech, Boston also has a growing web startup scene anchored by HubSpot. NYC, only 3 hours away, is now challenging Boston as the East Coast’s biggest startup hub.

Techstars and Brad Feld have put Boulder on the map, but you have to squint your eyes to see it. After some lightweight Google searches, I couldn’t find a single IPO (has there ever been one?), and only one recent startup exit north of $100 million, and it was a company based in Douglas County.

Chicago (in which I was a panelist at this week’s Techweek) has been riding Groupon’s coattails and is quickly making a name for itself as a startup hub. Chicago has a short but growing list of VC funds, and the wealth created by Groupon’s up coming IPO will certainly expand this list. Groupon’s mkt cap is anticipated to be north of $20B, double all of Austin’s IPOs combined.

NYC has seen an incredible influx of capital and growth in the number of startups over the last few years as capital and talent moved out of Wall St. and in to the startup scene. It is now neck and neck with Boston as #2 behind the Bay Area.

Seattle has had huge successes with Microsoft and Amazon which have long supported a healthy startup ecosystem.

So what makes a great startup hub? There is a chicken and the egg problem for sure, but I think capital is what drives it. Capital doesn’t really get on planes. Startups do when necessary. And talent will go wherever it has the most potential upside. There is an old joke that Sequoia only invests in companies it can drive to board meetings to within 30 minutes. This driving range doesn’t even extend to San Francisco. Silicon Valley reigns supreme, and will so long as Sand Hill Road is lined with VCs. The other startup hubs need to create and redistribute wealth, and fight tooth and nail to get more capital on the plane.

“One of the things you learn as a college president is that if an undergraduate is wearing a tie and jacket on Thursday afternoon at three o’clock, there are two possibilities. One is that they’re looking for a job and have an interview; the other is that they are an asshole. This was the latter case.”

— Larry Summers, former president of Harvard University (source: Techcrunch)

The fallacy of the long tail, and the super six

According to sources referenced by Mashable, there are over 350 million registered domains and over 1 trillion pages indexed by Google. A search term we optimize for at Infochimps “twitter data” yields over 1 billion hits. That’s a looooong tail.

I keep 6 tabs open in my browser: Gmail (Infochimps and personal), Gcal, Greader, Facebook, and as of recently, Turntable.fm. I monitor my Twitter feed using their native Mac app. I pull up Google or Quora when I need an answer to a question. In a generic sense, these tabs represent what I call the super six: email, calendar, RSS, social, music and search.

This post was inspired by an AdWeek article (full article in print) I read today at Farley’s. The gist of the article is that appx $20 billion is currently being spent on display ads, and industry execs expect that market to grow 10X over the next 5 years to $200 billion. That’s a lot of growth and a lot of ads. While there are over a trillion pages those ads could be displayed on, the best real estate is on the super six.

With Google+, Google now has leading offerings in five of the super six, the only hole being in music. Google quietly launched Google Music, which is in beta, earlier this Spring to little fanfare. Pandora, Turntable.fm and Spotify should keep “tabs” on this project, because I anticipate it will become core to Google’s offering. If Google Music becomes a mainstay in my browser, Google will own all of the ad impressions served to me. That’s a good thing if the ad market indeed becomes $200 billion.

What other tabs do you keep open? I am particularly interested in what tabs people keep open outside of Google properties.

A few things I’ve learned…

*Reading startup blogs is not equivalent to having startup experience.

*You’re not ready to leave your cushy job until you actually do it.

*Start something small before you start something big.

*Don’t scale your team until you can affect your KPIs.

*Trust your informed intuition until you have data that indicates that its wrong. “When the facts change, I change my mind.”

*Outsource as much of your stack as makes sense, but be wary of startups that aren’t well capitalized and open source software that isn’t well documented or actively supported.

*Always build the stuff that’s core.