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Some funding notes for today:
Via Mashable: Groupon Competitor LivingSocial Has Now Raised $44 Million This Year
Via TechCrunch: Thinking Screen Media Raises $2 Million To Shift Focus To The iPad
Talk about a startup that offers a solution to a practical problem. Singapore-based Battizer offers a recharger for standard alkaline batteries. It’s got some competition too—ReZap makes the same claim but charges a wider range of batteries, apparently. If these products do what they claim to do, it could be a huge win for the environment.
More on Battizer: Battizer Gives New Power to Old Batteries
Here is an interesting overview on startup Plastic Jungle, which is trying to make the gift card business more liquid through the Internet. The question is, though, does the gift card business have enough potential for this to work? Plastic Jungle is not the only company trying to do something like this with gift cards. StartUp Beat featured company Friendgiftr also sees potential in gift cards: via TechCrunch Can Plastic Jungle Create A Market Around Gift Cards?
It has been a big fundraising week for companies in the marketing/ad technology space.:
Wildfire, a social media viral marketing fbFund company, has raised $4 million in funding led by Summit Partners: via Tech Crunch Wildfire Raises $4 Million For Social Media Marketing Platform
Online video startup FreeWheel announced that it raised a $16.8 million funding round. via VentureBeat: FreeWheel lands $16.8M for online video ads from Disney and others
As a follow-up to its company pitch (eJamming: 3/16/10), StartUp Beat had some questions for eJamming’s Gail Kantor about the company’s technology, how it is marketing its service—which allows musicians to collaborate real-time over the Internet, and about running a startup in this challenging economic environment.
SUB: How have you been able to overcome the inherent issues of lag and connectivity across the Internet to make eJamming work? Because of the precision involved in synching musicians, even in a live, in-person setting, this just seems like a monumental task.
Kantor: The challenge was three-fold: find a way to a) stream CD-quality audio across the Internet without losing packets of audio information; b) make it fast enough so musicians could jam together, even when situated on different continents; and c) synchronize the audio streams from multiple locations together. The audio engine we developed for eJamming AUDiiO 3.0 delivers pristine audio while transmitting these multiple audio streams via our peer-to-peer architecture across the Internet with the lowest possible transmission time. The live interplay among four players within a thousand-mile radius is virtually an “in-the-room” experience—even for the most scrutinizing musician—as long as all the players have 800kbps of upload bandwidth. We have musicians who regularly jam with musicians on other continents—or reconnect with old friends and family who live across the country—and also musicians who connect across town because it’s a lot easier than lugging gear to a band mate’s place.
SUB: Have you entered into, or do you plan in the near future to enter into, any other big marketing alliances like the one with Fender?
Kantor: Yes, there are other significant partnership opportunities on the table right now. It seems our perseverance to develop the strongest possible solution has built our profile among other major brands as a team that plays to win.
SUB: How else are you marketing the service?
Kantor: Marketing with strategically appropriate brands is our primary focus for now. Pack-ins, events, and a variety of promotions will be initiated with our marketing partners’ support, giving us broad reach from the web to retail. Plus we are leveraging the connections among musicians on the social networks as well.
SUB: Do you have any product additions/enhancements planned for the near future?
Kantor: One of our priorities is the release of our Virtual Patch Bay, which will allow musicians to stream pre-recorded audio out of their existing Digital Audio Workstations (like Logic, Reason, Cubase, Garageband…) into eJamming AUDiiO live sessions—and vice versa. This way every player in a live session can jam and record to existing tracks our members have already created.
SUB: Who do you see as your competition?
Kantor: While there are other websites promoting collaboration among musicians with their server-based tools, those sites are not enabling multi-player, live collaboration and real-time communication as we do among members of our community. This is what makes us unique.
SUB: Who are your target (or just ideal) customers?
Kantor: We see musicians and singers at all levels of proficiency, from beginners to avid amateurs to professionals benefiting from this breakthrough technology. For sure, our early adopters tended to be tech savvy. What we’ve expected and what we’re seeing is the gradual initiation of more mainstream players into our community who recognize they can have a blast while saving time and money.
SUB: Do you plan to seek more investors/funding in the short term?
Kantor: We are seeking a Series B round of $3-to-$5 million to increase our ability to exploit our patented technologies and implement not only our marketing plan for eJamming AUDiiO targeting the broad worldwide music-making market, but also to capture the mass music-loving market with our second product release. eJamming AUDiiO and the other products on our development roadmap are realizing our big vision: leveraging our live audio streaming innovations to connect a worldwide community of music makers and music lovers.
SUB: Finally, a question I always ask: what advice do you have for entrepreneurs just starting out, especially in this challenging economic environment?
Kantor: As one of our early-stage investors said to us: “You have to be crazy to be an entrepreneur.” It really does require an irrational level of belief in your vision. Anyone starting out with an idea, an invention that serves the needs of a big market but requires a behavioral shift, must know that the pursuit of that dream calls for the deepest levels of commitment. Once people invest in your invention you have a responsibility not only to yourself and the consumers you serve, but you have a serious responsibility to those investors. The challenge is to sustain your passion while bearing both of those responsibilities. Arrange for as much available credit as you can before starting on your journey as an entrepreneur. And never ever give up if you believe in your vision. Perseverance wins.
eJamming – www.ejamming.com
Lightfleet is doing some interesting work with light and optical technology. The Camas, Washington-based company which was founded in 2003 recently landed a deal with Microsoft Research to deliver a system that enables optical interconnections in the data center environment—with the potential of eliminating the need for cables and switches. Cool stuff.
Here’s the company’s latest announcement about installation of the first commercial alpha unit: Lightfleet Delivers First Optical Interconnect System to Microsoft Research
This is an interesting article from a Fast Company blogger about gender and the startup world. Obviously, female entrepreneurs are underrepresented compared to their male counterparts, but women have made impressive inroads in the startup world. The author, Allyson Kapin, mentions some standout female entrepreneurs, but I wonder how accurate her arguments are about the reasons for the relatively low numbers of female entrepreneurs. Either way, it’s an important topic to consider: Startups: An “Alpha Male Pissing-Contest?”
Hiring at startups, which are traditionally cash-strapped and conservative with new headcount additions, is a good indicator of the economy’s direction. According to numbers from the National Venture Capital Association (NVCA) and job board StartUpHire.com, hiring has increased 16 percent at startups listed by StartUpHire since the end of 2009. There have been good indicators in the tech sector more generally that hiring is picking up—mostly from some of the larger, more notable companies like Google and Twitter.
Here is more on the NVCA/StartUpHire numbers from GigaOm: Hiring Picks Up at Venture-backed Startups
Startup Networked Insights, which provides social media analytics, says it has raised an impressive $5 million in funding from Kegonsa Capital Partners. The Madison, Wisconsin-based company was founded in 2006. Here’s the announcement: Networked Insights Closes $5 Million in Series A Funding
Apparently, a bill that has long been in the works to make it easier for entrepreneurs from abroad to stay in U.S. is causing a bit of a stir in Washington. Known as the “Startup Visa Act,” the bill would basically streamline the visa application and approvals process for foreign entrepreneurs. Here is an excellent roundup from Andrea Patino of Politics Daily that gives the gist of the bill and the potential benefits. See the end of the article for the other side—the “stir,” if you will. The Startup Visa Act and Entrepreneur-Focused American Immigration
In case you haven’t seen the Gizmodo footage of what it claims is a prototype of iPhone 4, here it is. Apparently, the device was left at a bar in Redwood City, CA and they’ve disassembled it to discover what Apple is up to with the next gen of its flagship product. What does this have to do with startups? Not much, but it’s really cool…plus, the iPhone pretty much affects the entire mobile world, including mobile startups.
Here’s the article/video…enjoy: http://gizmodo.com/5520164/
Is “Freemium” a viable model for startups (courtesy of ReadWriteWeb)?: http://bit.ly/9f60qT
I guess time will tell, but several well-known startups have found tremendous success giving away services for free and then adding a premium version, once some kind of value has been established. Ning may just ultimately be a good example of the principle that the pricing strategy matters much less than the business model—if you can’t scale, “Freemium” doesn’t matter. As Audrey Watters of RWW put it: “It may well be then that Ning’s announcements are less a reflection on the freemium model than on the company itself. Despite over $120 million in VC funding, Ning has been unable to develop a sustainable business.”
What do you think about Freemium (and can we come up with a better name for this)?
Dear StartUp Beat Readers,
In an effort to become an expansive platform for and about technology startups, StartUp Beat is now accepting on specific topics that affect technology startups and the entrepreneurial world. The goal is to give experts and entrepreneurs the opportunity to share insights and opinions that are of value and interest to startups, their executives, investors, and even just casual observers of the world of technology startups.
Please email article proposals to me at: brian@startupbeat.com. I look forward to hearing from you! In the meantime, look for another featured company pitch this week!
As a follow-up to its company pitch (Friendgiftr-March 18, 2010), StartUp Beat conducted a Q&A with Friendgiftr CEO Rob Carpenter. The Hollywood, Calif.-based company sells gift cards for major retailers through social media and mobile channels. The company was founded in 2008 and now counts 22 employees.
SUB: Can you explain some more how Friendgiftr allows people to take advantage of social networking platforms like Facebook? Maybe a better way to ask the question is: how does your typical user purchase gift cards through your service…is it as a gift for another Facebook member, for example, or is it something that brands are using to directly monetize platforms like Facebook?
Carpenter: This is a great question, thanks for asking. In terms of how a Facebook user makes a purchase from us, for example, all they have to do is add our app by going to the application directory or by simply searching for “Friendgiftr” in the search box—installation then takes a couple of seconds. Once this is done, a user has a quick, three step process of selecting which gift card they want to send, entering the recipient’s email address, and filling out their credit card information. This process usually takes about 60-to-90 seconds. And that’s it. It’s extremely quick and convenient.
In terms of the monetization of platforms like Facebook, Friendgiftr has been the first company to originate the concept of commercializing multiple social networking sites. In other words, once we built our technology and business model, we approached the more than 145 big brands we have to join our service so that we could monetize social media together in a very innovative and groundbreaking way.
SUB: Do users create an account with Friendgiftr before making purchases? Do you keep an ongoing relationship with individual users?
Carpenter: The great thing is we don’t require users to create an account prior to making a purchase on any of the platforms we operate on. Instead, we ask for their email address in the purchase process to make collecting that rich information much more seamless for them and for us. This allows us to maintain an ongoing relationship with them after they make a purchase, though we don’t and would never spam them.
SUB: In terms of payment, have you developed a proprietary platform or have your partnered with a third party provider?
Carpenter: We have a third party provider, CyberSource, who handles our payment processing. They’re extremely good at what they do so that we can focus on what we need to do, namely expanding our service.
SUB: How are you marketing the service?
Carpenter: We’re using a number of traditional advertising approaches as well as a few new twists. Unfortunately I can’t talk too much about this, as this is where some of the secret sauce is.
SUB: I know you said many of your upcoming product/service offerings are secret, but can you provide some hints as to what directions you’re going to go in the near future?
Carpenter: My lips are closed. What I can say, though, is that we’re moving into some very new territory that people will be able to see in time. Commercializing social media and mobile phones is really only the tip of the iceberg for us.
SUB: Who do you consider your competition?
Carpenter: The unusual thing about the gift card industry is that there are really only a handful of companies that operate in the primary markets, and they mostly do that in the physical retail space. By that I mean, while gift cards are ubiquitous and seemingly a commodity, it’s really not that simple to convince major world class brands to work with you (otherwise you would see a lot more companies trying to do what we’re doing). There’s currently nobody doing anything like what we’re attempting. There are, however, some traditional web 1.0 gift card legacy companies selling on their websites or startups doing auction models with a single website.
SUB: Do you plan to seek more investors/funding in the short term?
Carpenter: Some additional early stage venture capital and private equity firms have approached us for follow-on financing, so we’ve kept a very open mind about it. But the great thing about our company is that from day one we have been a revenue business, so we’re not dependent on huge gobs of money just to break even—we’re already making money. I will say this, however: if you look at companies like Zynga or Facebook, for example, they have waited to take on additional equity investments after they’ve scaled so that they could dictate the terms of the investment (Facebook received a $200 million infusion of funds and only gave up one percent of their company). That’s really the time to accept more funding.
SUB: Finally, what advice do you have for entrepreneurs just starting out, especially in this challenging economic environment?
Carpenter: Entrepreneurs always have to believe—they have to believe in themselves, believe in their company, and believe in the notion that they have the ability to create a better future. As simple as it sounds, this belief is enough to break barriers, move mountains, and redefine reality.
Friendgiftr – www.friendgiftr.com
