Monica Selby - 6/16 - Serious Startups

WhatsApp Acquisition: A New Definition of Success?

Days later, we’re all still talking about it.

Of course we are! It was the largest freaking startup acquisition in history. Twitter’s been full of “you could be X for the cost of WhatsApp” tweets. We got in that game with some surprising facts about the WhatsApp acquisition.

Judging from all the tweets, Facebook updates, and blog posts, no one’s quite sure how they feel about it yet. There’s a little awe, a lot disbelief, and more than a lot of jealousy.

For many people, news of the deal came out of nowhere. The founders aren’t exactly tech startups’ poster boys. More than a few people on Twitter didn’t even know what the app did, and suddenly Facebook is paying $19 BILLION for it?!

Remember the good ol’ days when we were shocked by the $1 billion Instagram acquisition? Doesn’t that seem quaint now.

If $19 billion is the new high water mark, where does that leave the other unicorns? Is this the creation of a new class of success–the super unicorn? The pegasus?

The Comparison Trap

With $19 billion as the new high number, what should the rest of us should be shooting for? Will startups be happy with the mere $1 billion they’ve been dreaming about for the last few years?

In the Wall Street Journal today, Box CEO Aaron Levie said that he expects the deal to spur an increase in acquisitions, with every tech giant willing to pay higher and higher prices for startups challenging them.

“It makes you depressed if you’re not selling at $20 billion,” the WSJ quotes him as saying. “I have a lot more work to do.”

Aaron Levie. Whose enterprise-focused cloud storage company will IPO this year in what’s expected to be a multi-billion dollar fashion. Who was named Inc’s Entrepreneur of the Year.

Aaron Levie is now looking at his measly $2 billion company and feeling like things aren’t quite right.

How We Measure Success

The thing about $19 billion deals is that they are very, very rare. (This the first actually.) Maybe M&A deals are only going to continue to grow, and maybe the average acquisition will increase. But in the long run, it’s probably safe to say that 99.99999% of companies will never sell for $19 billion.

WhatsApp built the right product, in the right way, grew in the right areas, at just the right time to make them the perfect acquisition for Facebook. The chances of tons of other companies doing that are slim.

And that’s okay.

Startups are about money. We’re all kidding ourselves if we think the majority of founders are starting companies but don’t care about the money they’ll make doing it.

But how much is enough? And are there other measurements of startup success to consider along with money?

For example, if your software startup sells for enough money to make you, your cofounders, and your first employees multimillionaires, is that enough?

If you build a legacy business that employs hundreds of people and provides outstanding salaries for all of them, will that bring happiness?

Or is it enough to remain a lifestyle business that supports you and maybe one other person for as long as you want it to?

These are questions we all have to ask ourselves. No one can answer them for every founder in the world. The WhatsApp deal should make us all stop and think, “Will I be happy, even if that’s never me?”

Because chances are good it won’t be.

Paul Singh’s Disruption Corporation Solves the Series A Crunch With Data

So much has been written about the Series A crunch. Lower costs of starting up, more streamlined avenues for disruption, and a general sense of optimism about the future of startups has led to increased funding in the early stages of a company. For better or worse, the trend has created more than a few startup orphans between the seed round and Series A.

Paul Singh thinks it’s worse.

“There’s a funding gap between the Seed round and the Series A — and it seems to be getting wider,” he wrote in a blog post yesterday. “Rather than writing it off as the “Series A Crunch,” I believe the investors that can systematically identify the most promising companies are positioned for great returns.”

As a partner at 500 Startups, Singh knows first hand about making tons of seed round deals. But he saw opportunity between the seed round and the Series A. Not every company is ready for a full Series A when they run out of money, but that doesn’t mean they’re doomed to failure yet.

Singh left 500 Startups in the spring of last year and launched Dashboard.io, which spawned Indicate.io. The data product tracks “indicators” for different companies to give entrepreneurs and investors an idea of how those companies are performing.

Evolving into a fund seemed like the natural next step for Singh. He believes the market is now less about “deal sourcing” and more about “deal selection,” but how do you pick the winners when there’s so much noise around startups these days?

“We’re going to use our own data, tools and research to make fewer wrong decisions about the companies we’re considering for investment,” he said.

VC investing used to be about trusting your instincts and knowing a good deal when you see it. But, with the explosion of data products–including the one created by Singh’s Disruption Corporation–it seems it’s time for VC to catch up with the rest of us.

The Crystal Tech Fund will focus on that sweet spot between the $50k seed round and the $5 million Series A. They’re looking to select companies that have achieved some level of product-market fit, and revenue would make the deal that much sweeter.

Find out more about the Crystal Tech Fund here.

10 Top Accelerators Now Accepting Applications for the Summer

Ah, summer. Time for laying by the pool, sipping a margarita, and letting the day slip by…

Okay, maybe in someone else’s world. But we’re entrepreneurs! Summer isn’t about relaxation. It’s about coming down from the SXSW/spring break high and moving that business forward.

And, if you’re an early stage startup, one of the best places to do that is an accelerator. Pages of digital ink have been spilled on the pros and cons of accelerators, but like anything else in life, you’re the one who can maximize the experience. If your team walks into an accelerator thinking you’ve made the big leagues and it’s easy sailing from here, you’re probably screwed. Go in ready to learn and maximize every opportunity that comes your way, and an accelerator could be just the thing you need.

The question is, which one? There are a lot of things to think about when picking an accelerator:

Where is the accelerator located? If it’s not in your home city, are you able to relocate for a few months?
Is there seed money involved, and if so how much?
How much equity does the accelerator take?
How successful have previous cohorts been?
Will the accelerator’s network be beneficial in reaching your company’s goals?

Once you have a general idea of what you’re looking for, it’s time to pick an accelerator. Here are the top 10 accelerators now accepting applications:

The Brandery–Based in Cincinnati, the Brandery has a great track record. Here’s an inside look at what happens at the Brandery.
Kaplan EdTech Accelerator--Powered by Techstars, this will be the second summer for the Kaplan EdTech Accelerator.
Start Co–Memphis-based Start Co is hosting 3 accelerators this year. The Seed Hatchery will be in its 4th year, and this will be the 2nd year for the women-only Upstart. SparkGap is the newest addition, focusing on logistics technology in one of the largest shipping hubs in the world.
Boom Startup–Based in Utah, Boom Startup boasts mentors from companies as diverse as Cisco and Skull Candy.
NMotion–The Lincoln, Nebraska, accelerator focuses on tech companies disrupting industries like agriculture, healthcare, education, finance/insurance, and sports technology.
Techstars Austin–Going into its second year, Techstars Austin already boasts some great companies like Atlas Wearables.
Seed Sumo–Based in College Station, Seed Sumo does acceleration Aggie-style.
Techstars Chicago–This will be Techstars first year in Chicago, but they’ve teamed up with Excelerate Labs which has graduated 30 companies since 2010.
Disney Accelerator–The newly announced Disney Accelerator brings together Techstars and the Magical Kingdom to accelerate companies focused on new media and entertainment.
Barclays London–Again, powered by Techstars (anyone seeing a pattern), the Barclays accelerator brings fintech companies to London for 15 weeks of acceleration.

See an accelerator you like? Click on the name and check them out.

In the meantime, did we miss anyone?

Articifial Intelligence +Twitter Accurately Predicts Election Outcomes

We all know those annoying polls during election season.

The Democrats are winning by a landslide! (MSNBC)

The Republicans are running away with it! (Fox News)

We don’t know what the hell’s going on. (Normal people)

The polls are as ubiquitous as they are inaccurate, almost every year. In the US we have Nate Silver, of course, but despite the 2012 elections, humans do make mistakes.

Machines,on the other hand.

Yesterday St. Louis-based simMachines announced that they used artificial intelligence to accurately predict Costa Rica’s election earlier this month. Traditional polling methods had Luis Guillermo Soli in 4th place, but he actually finished 1st in the preliminary election.

simMachines was able to predict this accurately by using a similarity engine to study the syntax of Tweets about each party. Like traditional polls, they grouped them into classifications just like traditional polls: favorable, unfavorable, and neutral. The study analyzed 12,455 tweets and was able to accurately predict that Soli would finish in first place.

simMachines was founded by Costa Rican native Arnoldo Muller-Molina, PhD and relocated to the United States as part of the St. Louis Arch Grants program. Muller-Molina wanted to conduct the study as a celebration of democracy in his home country.

“The technology was already in place. While some people sing or dance to celebrate, we are data scientists so we decided to analyze the social space,” he said.

That technology isn’t only good for predicting elections, though. Any data can be put through the system: Tweets and other social media, blogs, media publications, and some servers. Brands can use technology like this to more accurately track the tone consumers to use when talking about them or their product.

The company compares similarity search to a “Swiss army knife,” which can be used in a wide range of data science projects.

With interest in data growing, similarity search and other data technology has all the room in the world to grow.

As Nick and I like to tell each other, “If it’s based on data, let’s go with that. If it’s based on opinion, let’s go with mine.”

10 Surprising Facts About the WhatsApp Acquisition

Watching Twitter during a big acquisition is fun. You get absolutely no work done, but the level of intelligence, snark, excitement, and sour grapes that comes across your feed makes it totally worth it.

On the off chance you missed it, today Facebook announced the acquisition of WhatsApp in a $19 billion (BILLION) deal. The messaging app–which has enormous international usage–sold for $4 billion cash, $12 billion in Facebook shares, and $3 billion in restricted stock.

In case your math is as bad as mine, that’s 19 Instagrams. (We always thought Instagram sold too early.)

Here are some other little known facts and stats about the WhatsApp acquisition:

1. WhatsApp’s founders made about $5 billion EACH. (click to tweet)

2. Sequoia Capital, WhatsApp’s only investor, made $2.4 billion or enough to buy 17 of Tom Perkins’ yachts. (click to tweet)

3. At acquisition WhatsApp is worth 2 Staples + 2 Instagrams. (click to tweet)

4. Each employee at WhatsApp created as much value as the entire Washington Post did in 137 years. (click to tweet)

5. In one day, WhatsApp processes 4x as many messages as there are humans on the planet. (click to tweet)

6. In the last 9 months, WhatsApp added 1 million users a day. (click to tweet)

7. WhatsApp has 2.5x more active users than Twitter. (click to tweet)

8. By market cap, WhatsApp is the 200th largest company in America. (click to tweet)

9. WhatsApp is worth the same as Kroger, with 6,000x fewer employees. (click to tweet)

10. NASA’s 2014 budget: $17b. WhatsApp: $19b. (click to tweet)

Bonus fact: WhatsApp is worth more than Southwest, Coach, Chipotle, News Corp, Under Armor, Dr. Pepper & Tiffany. (click to tweet)

The Mount Rushmore of Tech Entrepreneurs

If you follow the NBA or watch ESPN at all (not me, my co-founder) then you know the airwaves and Twitterverse have been flooded with talk of the NBA’s “Mount Rushmore.” Lebron James started the debate when he proclaimed that he will be “on that Mountain” in his exclusive interview with NBA TV. Any list of the greatest will cause debate and ruffle some feathers, like James did with NBA legend Bill Russell.

Blah blah blah. Y’all know I only knew that stuff because of Nick, right? You learn a lot from your cofounders.

Anyway, it got us thinking. Who would be on tech’s Mt. Rushmore–Mt. Techmore, if you will. There will undoubtedly be some debate, but we like a little healthy arguing.

Here’s what we think:

On Mt. Techmore, Steve Jobs takes a prominent spot. Doesn’t he look like he was actually chiseled into that mountain?

Jobs is already the idol of tech. We all quote him like Scripture, and like a politician with Reagan, everyone wants to believe they’re aligned with the Jobs mentality. His company is also the largest tech company in the world, with a $489.76 billion market cap and $159.97 billion in top line revenue in 2013.

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Bill Gates sits next to Jobs, and he’s another tech luminary you can hardly argue with. Say what you will about Microsoft (and poor Bill not being able to install Windows 8), but he is still the second richest man in the world.

That company he built, the one we all love to hate? Top line revenue of $73.75 billion in 2013 and a market cap of $302.32 billion. If only the rest of us were unsexy like that.

And, finally, the Google founders. Larry Page and Sergey Brin have arguably built the most influential company of our century. Google has changed the way we do the Internet, and the products they roll out, from Gmail to Android, are becoming a daily habit for most of us. The company had revenue of $49.96 billion in 2013 and the hockey stick growth chart we’re all chasing.

And Page and Brin themselves? Worth $23 billion and $22.8 billion respectively. Not bad for two guys whose motto was, “Don’t be evil.”

Every culture has their own idols and heroes, and tech is no different. Without the contributions of the men on Mt. Techmore, the world would be a different place. There are others, of course. For instance, a certain Harvard dropout whose name rhymes with “duckerberg.”

What do you think? Who would be on your Mt. Techmore?

All financial info sourced here.

Hampton Creek Foods: We Are Scalable and Low Cost

Yesterday I wrote about the growing amount of venture capital that is flooding the food industry. $146 million in 2013, to be exact.

One company that is seeing a lot of that money is Hampton Creek Foods, the makers of Just Mayo. This week they announced a $23 million series B led by Khosla Ventures.

I usually question the true healthfulness of manufactured food, and even the term “plant-based” is often a cover for products that technically come from plants but hit the shelves with lots of other chemicals in them. I also questioned the scalability of the experiment and whether or not production costs were low enough.

Well, with Hampton Creek Foods, at least, I stand corrected.

Morgan Oliveira, Director of Communications at Hampton Creek, reached out and explained more about the company.

“We are scalable and low-cost,” she said over the phone. “That’s why VCs are willing to put their money behind us. We don’t consider ourselves niche or super vegan. We really think this could be big and make a real change.”

For those of you skeptics like me, Oliveira explained the process behind making the Just Mayo line. The company sources yellow peas, which when ground into a powder, makes a great substitute for eggs. Then they combine it with typical mayo ingredients like oil, water, apple cider vinegar, etc.

And, voila, plant-based mayonnaise.

Costs are kept low because animal products are typically expensive to raise, and the GMO corn and soy they eat is both unhealthy and expensive. Hampton Creek Foods is certified by the Non-GMO Project, which guarantees that none of their products contain genetically modified organisms.

“We’re not against chickens or eggs,” Oliveira told me. “We’re just against factory farming. It’s 2014. Why are we still sourcing our food the way we did during World War II?”

Why indeed.

I was definitely a skeptic when I wrote the post yesterday. After my discussion with Oliveira, I have to admit I was wrong in some of my assumptions about Hampton Creek. They’ll still have the same scaling and growth challenges as any startup, but at least they have sound, relatively inexpensive products to offer.

To find out more about Hampton Creek Foods, visit their website and check out Just Mayo at Whole Foods.

CommuteStream’s New Ad Network Uses Mass Transit to Serve Up Ads

Today in Chicago, commuters on the Chicago Transit Authority will open up their transit apps and find new ads for businesses along their transit route.

CommuteStream, the company behind the new ads, uses “predictive geo-targeting” to show content based on the rider’s routines and preferences. Does your bus pass by a local bar every day? Chances are good you haven’t noticed, but with CommuteStream’s technology, you’ll soon see ads and perhaps deals served up from local businesses along your route.

Annoying as it might seem, as targeted ad technology gets better, it can actually help consumers by showing them things they’re actually interested in when they’re actually interested in them.

But, that convenience is nothing compared to what the network could do for small businesses.

Small and local businesses often find themselves priced-out when it comes to mobile ads, stacking the odds in favor of larger competitors. Yet mobile ads are increasing rapidly. If local businesses can’t find a way to compete, they risk losing even more business.

“With smartphones taking over, understanding riders on an individual level, and in the context of the transit system, opens up major hyper-local advertising possibilities and new markets,” CommuteStream co-founder Samuel Pro said. “It puts the power of highly-targeted mobile advertising, traditionally reserved for large brands and agencies, into the hands of businesses that didn’t previously have any affordable or easy to use options.”

Within a month, CommuteStream hopes to offer 1M impressions a month for these hyper local ads.

The problem, however, is that the ads will be served on local transit apps. At launch CommuteStream is partnering with Chicago Transit Tracker Lite, which reaches about 1% of transit riders. The company estimates that 1/3 of transit riders use their mobile phones to plan commutes.

CommuteStream provides potential monetization for those apps, you have to wonder if their usage estimations are right. Locals are used to their stops and know their route.They don’t really need to check an app for figure out their stops.

Tourists, on the other hand, could be a potential boon for the ads, since they are usually unfamiliar with the landscape and don’t know where to go.

Pro told me via email that most of their users are local, and that’s their target market because locals will provide sustainable business for businesses. If CommuteStream can reach the market they’re looking for, it has the potential to be a huge win for everyone.

CommuteStream launches their pilot today in Chicago, with plans to expand to other major cities soon.

Forget Software. VC’s Turn Their Eyes Toward the Food Industry

Yesterday Hampton Creek Foods announced a Series B round of $23 million, led by Horizons Ventures and including previous investors Khosla Ventures and Collaborative Fund as well as several individual investors.

Hampton Creek is looking for alternative, plant-based solutions to meat and meat products. Eggs, for example, are one target for a new, plant-based alternative from Hampton Creek.

Let’s forget for a moment that we’re still talking about processed food, which have been proven to be harmful to the American diet. I get that with the growing global population, we already have unsustainable methods of growing and raising our food. Something has to be done about this problem.

What’s interesting about this story is not the growth of processed food. (Okay, well not interesting for our purposes.)

Rather, it’s interesting to see to such traditionally tech-focused VC firms throwing money at a decidedly expensive, potentially unscalable venture. The whole thing about tech startups is that the cost to entry and scaling is so much lower, which allows for great returns for these investors.

According to CB Insights, that’s a growing trend. In 2013 funding deals to food companies (note: not web/mobile-based food apps or platforms) hit $146 million. This was a 123% increase from their earliest data from 2009.

Investments in food and beverage companies include everything from food tech, like Hampton Creek, to retail outlets, like the recently IPO’d Potbelly Sandwich Shops.

Khosla Ventures is a large backer of early stage food startups. Founder Vinod Khosla had this to say a couple of years ago about investing in food startups:

“As part of our sustainability effort, we’re doing a lot of investing in food.”

“Saving the world” and “sustainability” are awesome goals to shoot for. Without a doubt the pace at which we live life is fast, and it’s hard for the planet to keep up.

We’ve seen this song and dance before in the shape of cleantech. It’s not that cleantech was ever a bad idea. Few thoughtful people will say we need to continue to strip the planet of its natural resources without replenishing them.

But, no amount of knowing it’s a good idea makes development inexpensive. Or makes the outcome profitable at a level to please LPs.

Hack Your Way Through Dyslexia With DCODIA

Dyslexia is a common disability that is getting more attention in recent years. 1 in 5 people have dyslexia, which makes it hard to succeed in classrooms that demand every child be able to read at a certain level and at the same pace as their peers.

Yet, in our technology-centered world, there are no unobtrusive aids to help students with dyslexia. Most of the available products are clunky, drawing attention to the fact that the child using it has “a disability.”

When Kris Parmelee’s middle son was diagnosed with dyslexia, she soon learned the struggles they would face in the classroom. He was often pulled out of class for “special help,” or had to lug around equipment meant for adults with visual impairments.

Not cool, Mom!

Kris’s search for an unobtrusive solution that would allow her son to stay in the classroom with his friends came up empty. Such a solution just didn’t exist.

So, she made one.

Along with partner Mark LaFay, Kris conceived of an app that would read aloud that ONE word a child was struggling with so he could move on. Originally conceived for Google Glass, the app has now also been developed for iOS and Android smartphones. After all, every kid has a phone these days.

The app works like this: a child is reading something, say the instructions on a big test, and comes across a word they aren’t able to figure out. With DCODIA the child can take a picture of the word, sentence, or paragraph and crop it down to the words that are giving him or her trouble. They click “send,” and a few seconds later the word is read through their earbuds.

The paid version of the software also includes word storage, which could be a valuable data point for both individual families and dyslexia researchers.

DCODIA is an elegant solution to a widespread problem. Like I said above, 1 in 5 people have dyslexia. That means many of you have probably struggled with the condition and the stigma that comes with “not being able to read.”

There could be some challenge in adoption because many schools still do not allow kids to use their phones in school, even if the kids are technically allowed to have them. While many high schoolers are happy to flaunt these rules, younger kids have less freedom. Being the one kid allowed to use his phone could be as obtrusive in some situations as current dyslexia aids.

The solution to that problem is–hopefully–only a matter of time, though. It won’t be long before schools begin to utilize the super computers in their students’ pockets.

With adoption obstacles aside, DCODIA is one of those wonderful, change-the-world and help people kind of projects that I’m particularly partial to.

DCODIA is currently in development, and they are crowdfunding on Kickstarter to raise the last bit of money they need.

Warning: Unpaid Internships May Mean You’re Missing the Top Talent

unpaidintern

As the lawsuits against unpaid internships pile up, it’s becoming even more necessary to innovate the way we look for talent. It’s almost impossible to compete with the Googles and Facebooks of the world when you’re a startup. Often the best you can offer is pizza and some equity.

But there are some companies out there getting creative with how they find new employees.

Hacking Your Way to a Job

A couple of weeks ago, we reported on GlobalHack, the quarterly hackathon held in St. Louis.

At GlobalHack 1, teams competed to develop an algorithm for TopOPPS, a new startup by Jim Eberlin. The winning team was awarded $50,000 in exchange for the work they did, and Eberlin was so impressed with the second place team, he threw in an extra $10,000 for them.

But, he didn’t stop there.

After the event, Eberlin invited 18 of the engineers who competed to a private dinner, at which he held impromptu formal interviews. Five of those engineers now work full time for TopOPPS, and more hires are in the works.

“I call it Interviewing 3.0,” Eberlin said. “I spoke to each of them for about 10 minutes and narrowed our talent search down to the people who would make the best fit for TopOPPS.”

Beside the engineers Eberlin discovered at the hackathon, the press from the event has brought TopOPPS attention from developers all over the country, and many have applied separately to work for the company.

“Recruits” Provide Cheap Labor in Exchange for Job Opps

Another take on the recruitment front comes from Gawker media, the parent company of the infamous Valleywag.

It’s well known that paying writers a full time wage with the current economics of digital media is difficult. If The Atlantic can’t afford it, newer media outlets certainly can’t.

Gawker’s solution comes in the form of their new Recruits program. In the program, a writer is granted a short term contract, a small stipend, and their own blog. Each writer is judged on their amount of traffic they bring in, with the potential for a full time gig at Gawker.

I’m no fan of Gawker, and of course the Recruits program undoubtedly has something to do with a lawsuit from several unpaid interns. But considering the economics of online media, it isn’t a bad idea. It’s essentially a more formalized system of freelancing, which is what keeps most media sites in content.

The Future of Hiring

Of course, hiring isn’t the only reason to have unpaid internships, but it is common to bring interns into a full time job if they do great work.

However, shift is happening in the way we identify and recruit top talent. Much like the need for a college degree, unpaid internships are slowly losing popularity.

Companies–especially startups–would do well to look to TopOPPS and Gawker for inspiration on ways to innovate the talent search.

Memphis Startup Proof Positive of the Power of Everywhere Else

Lyme disease vaccine

Earlier this week Memphis-based US Biologic announced the successful field trials of it’s revolutionary Lyme disease vaccine. The vaccine, given to animals orally, creates antibodies that then attack the Lyme disease passed on from a tick bite.

Although the vaccine is being developed for animals, the company sees a connection between stopping the spread of Lyme disease in animals and doing the same for humans.

“The CDC has long-acknowledged a ‘One Health’ approach to preventing infectious diseases by linking animal and human treatments,” says US BIOLOGIC board director Tom Monath, MD. “US BIOLOGIC’s oral bait vaccine is an important example of how a vaccine for animals, in this case the white-footed mouse reservoir of Lyme disease, can break the Lyme disease transmission cycle.”

Lyme disease is no joke. According to the CDC, it affects over 300,000 people in the U.S. each year and can cause severe damage to joints and the neurologic system. The CDC also recently linked Lyme disease with several deaths due to cardiac disease.

What’s unique about US Biologic, though, is that they don’t plan on stopping at Lyme disease. The success of that vaccine proves that stopping diseases in animals will also help curb them in humans. They are essentially creating a platform from which they can develop treatments for any number of common diseases.

“The success of these field trials introduces a technology platform that can break the transmission of many diseases transmitted by animals,” says US BIOLOGIC board member David Williams, former Chairman & CEO of Sanofi Pasteur, the world’s largest vaccine provider. “Because of the large and growing number of cases, the focus on Lyme disease is a logical first step.”

Stories like that of US Biologic are what make “everywhere else” such a special place. We love all the technology that comes from Silicon Valley. Hey, we’re on Secret as much as the rest of you!

But it’s awesome to see what smart people outside the Valley are capable of, even if it’s not the sexiest new consumer app. I probably won’t be bragging to my friends that I just gave my cat the latest Lyme disease drug, but when it keeps my family healthy, I’m sure going to be grateful to US Biologic.

Nashville’s Centresource is the Agency that Does It All

As startup culture grows, development shops are popping up all over the country. Each one typically provides web and/or mobile development for early stage startups, either for cash or equity.

Nashville-based Centresource, though, isn’t your typical dev shop. They do help with development, but they also pitch in at every stage of the process and take on every role there is: marketing, design, product development, and more.

Founded by Populr’s Nicholas Holland in 2004, Centresource initially worked with full grown companies, but branched out to include startups in 2012. Check out our Q&A is Centresource’s Chad Hazlehurst below.

What is Centresource?

Centresource is one of the leading web and mobile product development shops in the Southeast. We have been in the interactive space for 10 years building best-in-class user experiences, developing break-out products, and creating go-to-market strategies to drive adoption.

What do you do for startups?

In 2012, Centresource made the decision to form a separate business unit specifically dedicated to startups. We custom-tailor our solutions based on the challenge, but there are a few key ways we work with startup companies:

1. PRODUCT PLANNING/USER EXPERIENCE

One of the biggest challenges for early stage startups is proving demand for their product. Many of our early-stage clients struggle to show the value of their idea to investors or potential customers. They go to meetings with sketches on napkins and unproven concepts. Investors and customers are asking for something more than an idea – they want to see and touch the product.

Even more importantly, one of the biggest mistakes early stage startups can make is building features users don’t need. Startups need a tool to validate their assumptions.

To address both issues, we have developed a simple, effective process for creating high-fidelity clickable prototypes. We walk the startup through product planning, taking them through all the decision-making that would go into the MVP, then we deliver a prototype that can be demonstrated to users and investors.

Our clients are using the prototypes to pre-sell, for user testing, and to secure investment. Starting with a prototype allows us to take user and investor feedback, easily and quickly pivot if necessary, and then build out the application once more is known about demand. Getting a product in front of users and getting feedback before making large investments can help mitigate risk and avoid costly mistakes.

2. TECH TALENT

Tech talent is hard to find and hard to manage. Some startups have a team of coders, but they need help making business-critical technology decisions. Other clients have an advisor or CTO, but need a team to implement. We can help in both cases.

Some of our most successful projects have involved taking a product from conception to to the point where the startup is revenue-positive and ready to hire their own team (we are now helping them hire). In 2 or 3 years of working with Centresource, the startup has invested a fraction of one developer’s salary. And we’ve played all positions on the team: product strategy, design, front-end, and back-end development.

When a startup’s sole developer is poached or moves on (which happens), the company is put in a serious bind. We have been able to help by providing developers to hit timelines and milestones. This can be critical when speed to market is a factor, or when investor expectations are in play.

3. MARKETING

Some of our clients have a product ready to ship, but they need help driving adoption. In this case, we engage our incredible Go to Market team. Introducing a new product is a completely different challenge than marketing an existing brand. We are employing innovative, smart strategies to help startups identify early adopters and connect with them. The team essentially becomes a snap-on marketing department.

How is your approach different from other agencies?

We’ve positioned ourselves to be able to help at any stage of the startup’s process. Through a custom strategic approach we are going to build what is needed to achieve the next goal. Sometimes clients and agencies get caught up in the big picture, and miss the steps along the way. Clients hire us because we are fast, reliable, and have deep expertise in product development. They trust us because we understand the challenges unique to startups. For us, success is when our clients succeed.

What’s your favorite thing about working with startups?

The passion and determination to change the world and succeed in a brutal, ever changing market.

Where do you see the Nashville tech scene going in the next couple of years?

Nashville is blowing up. This city has momentum and we do not see it stopping any time soon. We feel the Nashville tech scene is on the verge of a huge breakout success. One thing that makes Nashville different is our great sense of community. Everyone here is ready to help and give an attentive ear. We love being a part of this community and helping in any way we can.

How can startups that are interested get in touch with you?

Head to our website at centresource.com and interactiveforstartups.com or contact Ann Howard at ann@centresource.com and Chad Hazlehurst at chad@centresource.com.

Anonymous is The New Black. But Is It Working for Us?

Like everyone else in the tech world, we’ve been wasting hours on Secret in the last week. The new app is taking over, and with the breakout success comes the money. And the jobs.

I saw this secret posted a few days ago, and it sparked some discussion between Nick and me. Y’all know how I feel about women-only things. It’s a little more nuanced than this particular secret, but I get where she’s coming from.

After a few minutes, we moved on and got back to work. But, the “secret” stayed stuck in my head.

I kept wanting to go back to the thread and reach out to the poster. I kept thinking I should leave her this link. Or maybe this one. Or, maybe I could just say, “I totally get it.”

There was some solidarity from other people in that thread. Of course, it had also devolved into an expletive-filled bitchfest, as most threads on Secret seem to. Because apparently anonymity comes without the expectation of basic human kindness.

But, I guess my point is that there was no way to truly connect with someone who shared my opinion on a hot topic–a fairly unpopular opinion that few people are willing to shout from the Twitter rooftops.

Anonymity on the web is nothing new, of course. If anything the last 10 years of Facebook and claiming your real identity is the new thing. Thanks to Facebook we use the web to connect with friends and family and build our reputations and careers. All things that require connecting our online and offline identities.

I understand the allure of Secret and other anonymous gossip apps. They take our need to share every.single.thought and include even those deepest, darkest thoughts we’re most afraid of sharing. That’s cathartic and narcissistic all at the same time. Add in the almost-voyeuristic delight that these secrets are coming from people we know (or probably know), and it’s no wonder Secret has taken over the tech world.

And there’s probably a place for both anonymity and openness. After all, we have Facebook and Twitter, and we all know that everything we see on there is true and not at all fake as we all try to manage our “brands.”

Still, I’m a little sad to have the missed the opportunity to connect with someone who shares both my experiences and my opinion. While a couple of the comments were supportive, a large number just reinforced why that woman probably doesn’t want to share her “secret” with the world.