VentureBeat |
- Israel, you’ve got mojo, but where’s your Instagram?
- Wait, Ashton Kutcher might actually be a smart investor
- The Pirate Party forced to shut down its Pirate Bay proxy today
- VBWeekly: The Instagram Insanity edition
- Book review: “The Speed of Trust”
- After Facebook outbid Twitter for Instagram, Jack Dorsey stopped using it to post photos
- Facebook, Instagram, Twitter: Everyone’s connected in Silicon Valley
- Valve researcher focuses on wearable computing
- 10-year-old makes Quacky’s Quest audio game for his blind grandma
| Israel, you’ve got mojo, but where’s your Instagram? Posted: 15 Apr 2012 08:00 AM PDT  The curse of the small company Israel’s start up economy is hotter than ever. But a question haunts entrepreneurs there: Why are Israeli start-up hits generally so small? Where is their version of Instagram, the Silicon Valley-based photo-sharing company that Facebook just bought for $1 billion within 18 months of its launch? That was the question of debate during my visit to Tel Aviv two weeks ago. It’s not quite as bad as the Curse of the Bambino that haunted the Red Sox for 86 years, but the baseball analogy is apt: Israeli entrepreneurs are hitting base-hits all year long but they can’t seem to get into the World Series. In fact, they’re hitting lots of home runs, and occasional grand slams. Taken as a whole, Israeli entrerpreneurs are an awesome team, perhaps the best in the whole world league. Look at CheckPoint Software, the early security company, now publicly traded and valued at $12 billion. Or ICQ, the early instant messaging service, sold to AOL in the 1990s, and which inspired a generation of IT entrepreneurs. I’ll say more more about Israel’s prowess shortly. But for some reason, the country never hits the big time. Huge successes on the scale of Facebook and Google, as well as amazingly quick viral hits of Instagram’s ilk, continue to elude it. The good news is, Israel’s start-up ecosystem is still very young, especially in the area of the consumer Internet. Many entrepreneurs and investors I talked with vow things will change, but they caution it could take at least five or more years. For now, though, several factors have conspired to keep Israel’s hits relatively small. Local venture capital firms, and some more engrained elements in Israeli culture, play a role here. Several entrepreneurs put it this way to me: The country started out poor, and still has far less wealth than other nations. It’s also small, and is surrounded by hostile neighbors. For Israeli entrepreneurs, these factors have conspired to push entrepreneurs to go for the small, safe bet. Arye Schreiber, an entrepreneur who picked me up at the airport in Tel Aviv during my first visit to Israel (I attended the Innovation Marathon event hosted by BootCamp Ventures), explained to me that many entrepreneurs curtail their aims from the outset. If they can make few million dollars first, that reduces the risk going forward, even if it means continued entrepreneurship. “Ask someone on the street, what’s the Israeli dream?” Sharon Tal, another entrepreneur asked me rhetorically. “They’ll say: It’s to open a start-up, sell it after one or two years, and become a multi-millionaire. Every small kid will say, ‘That’s what we want.’ … People are after the exits here. They’re less interested in building an established company and making money for the long-term.”
Israel is a country on fire with entrepreneurship. After I got back last week, I read the 2009 book about Israel’s start-up ecosystem, Startup Nation. It lists some amazing stats: There are more entrepreneurs, venture capital investments, and research and development per capita in Israel in than any other country in the world — and by a large margin. A unique mix of the Jewish chutzpah gene, bonding by engineers during service in military units, the high priority on education, a strong Zionist drive, and the influx of diverse talent among Jewish immigrants from Russia and elsewhere — all have created an entrepreneurial culture that is second to none. Israel has more Nasdaq-listed companies than any outside country outside of the U.S. Filed under: VentureBeat        
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| Wait, Ashton Kutcher might actually be a smart investor Posted: 14 Apr 2012 06:31 PM PDT
Ashton Kutcher is a well-known celebrity investor in Silicon Valley, but many see him as just a marketing ploy, an attention-grabbing name. However, Kutcher could be more than the dimples that move product off the shelves. When Kutcher first came on the investing scene, many were skeptical of his Silicon Valley chops. He didn’t have a technical background, other than his unfinished time as an engineering student. He didn’t have a business background. He did, however, have cash, so companies fell in line. Can you blame them? I mean, look at that face. And with That 70s Show and The Butterfly Effect on his resume, he obviously had the perfect recipe for a well-seasoned investor. This past week, payments company Dwolla officially announced Kutcher as an investor in its latest round of funding. Earlier this year, Kutcher invested in Gidsy, a Berlin-based “Etsy for experiences.” He’s also put money into AirBnB as well as Zaarly, Hipmunk, and Kevin Rose’s small startup Milk, which got acqui-hired by Google last month. He’s also an investor in Fab.com, the insanely fast-growing daily deals site. Oh, and he might be playing Steve Jobs in an upcoming movie about the Apple cofounder. In other words, Kutcher gets around Silicon Valley. Founder Ben Milne and the “Two and a Half Men” star sat down for a video interview on Silicon Prairie News (fun fact: both Dwolla and Kutcher were created in Iowa). There, something amazing happened: Kutcher revealed himself to be really smart. Kutcher, who started investing five years ago through his fund AGrade, talked about investing as if he was an entrepreneur straight out of Stanford — like every other person you meet in the Bay Area. More noteworthy than his ability to throw down local jargon,was his honesty about not knowing all of the tech landscape. He explained that he was a consumer guy, a product guy. He looks at each investment from the same angle he looks at his acting roles. “I break down a product the same way I break down a character I’m going to play. I try to get inside the mind of that person — the user, the consumer — and figure out why they’re doing something and what they want from it,” said Kutcher. “I spend a ton of time just using stuff and giving that feedback.” The companies that tickle Kutcher’s fancy are the ones that solve “real-world problems,” things he might face in any given day. He even admitted that enterprise and business-to-business startups really go over his head. It shows. His latest investments have been in Airbnb, Zaarly, Hipmunk, Skype, Fourquare, Fab, and Spotify. It’s also worth noting that you’ve probably heard of every single one of those companies. “If you look at what’s happening with Occupy Wall Street…you go okay, well it’s all fine to carry a poster…but who’s actually doing something to solve that problem?” Kutcher said, “When I was introduced to Dwolla, it actually presented a real world solution to an antiquated architecture. To me that’s a really attractive company.” Kutcher is also active in his companies’ day-to-day. According to Milne, Kutcher talks with him via Skype often. He recalled pitching the actor in his father’s garage one day after reconnecting at a Startup Weekend event. The Dwolla founder came clean and admitted Kutcher’s name popped off the page of 400 potential investors he was given, but believes Kutcher adds more than just celebrity. “Let’s be just honest about something. When [his] name shows up on a list it sticks out,” said Milne. “I know that Ashton as an investor is brilliant, and it took me awhile to understand that because I didn’t know anything about [him].” Milne said he called Bo Fishback, founder of Zaarly, to see “what was the value,” and quickly discovered that “Ashton is absolutely brilliant on product.” During the pitch the two argued about Dwolla’s product and discussed focus using a white board. It seems Kutcher really is just a product guy, wrapped in a actor suit, lined with a lot of money. “My ideas are just ideas like anybody else’s,” said Kutcher. “Some of them may be bad.” Ashton Kutcher photo via Shutterstock Filed under: VentureBeat        
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| The Pirate Party forced to shut down its Pirate Bay proxy today Posted: 14 Apr 2012 03:09 PM PDT
Germany’s third most popular political party, The Pirate Party, was ordered to shut down its proxy to The Pirate Bay website today, or face fines of 10,000 euros for every day the proxy is still running. The Pirate Bay allows people to upload and share torrents of content ranging from videos to entire music albums. Dutch anti-piracy group BREIN, supported by Hollywood, is behind the injunction, which was filed in the Court of The Hague yesterday. After being granted the injunction, BREIN told the Pirate Party it had six hours to shut down the proxy or face the hefty fine. Despite calling the request censorship of people’s freedom of speech, the Pirate Party acquiesced. The party isn’t giving up quite so easily, however. According to TorrentFreak, party leaders have contacted lawyers and plan to file a request to overturn the injunction and restore traffic to its proxy to The Pirate Bay. A party chairman also explained that the Pirate Party was not given the opportunity to argue their side of the story before the injunction was issued. Last week, the Pirate Party was named Germany’s third most popular party, overcoming the Green Party. The Pirate Party is gaining attention with German youths, discussing popular issues such as ACTA, and freedom of speech on the Internet. via TorrentFreak; Image via Gravityx9/Flickr Filed under: VentureBeat        
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| VBWeekly: The Instagram Insanity edition Posted: 14 Apr 2012 01:52 PM PDT Happy Saturday, fellow nerds. Here’s our weekly roundup of news, presented with all the fresh candor and zazz the editoral team could muster. We covered quite a bit of top-shelf news for ya this week. Here are the stories that made the cut for our weekly video:
Have an awesome weekend, and we will continue the nerdfest next week. See you soon! Filed under: VentureBeat        
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| Book review: “The Speed of Trust” Posted: 14 Apr 2012 01:14 PM PDT
Trust is so basic to business that it is rarely discussed in an analytical and accessible way. The book “The Speed of Trust” offers critical advice for entrepreneurs on how to actively manage trust in order to accelerate growth and reduce costs, while avoiding missteps. The more trust within a company, the faster it can move with lower costs. Think of the adverse impact 9/11 had on the time and cost of air travel — longer lines and more security — because of the damage it did to trust. The speed at which you can assess and extend trust determines how fast your business can grow because it affects every relationship. That is, relationships with employees, new hires, business partners, investors, and customers. I expect discussion of trust – it's meaning, development and measurement – will rise as social networking begins to dictate who consumers are influenced by. For instance, Ebay was built entirely on community trust through its rating systems. As Seth Godin notes, today Yelp is drives companies to make better products based on customer reviews. Why listen to the author?It's fair to say that Stephen M. R. Covey has spent his life and career studying the principles in this book. He is the son and business partner of Stephen Covey, author of “The 7 Habits of Highly Effective People,” which was named the most influential business books of the twentieth century. The Big Ideas:The author does a masterful job of clearly dividing trust into four core components: integrity, intent, capability, and result. The first two define character; the latter two define competence. Measuring where trust falls short with any of these components provides a road map for how to repair, build, or extend trust. Furthermore, the book articulates how to build trust with more than a dozen concrete actions. Finally, the book provides helpful rules to prioritize your trust investments. Integrity. Without integrity you have no foundation on which to place trust. Covey defines integrity as being honest, telling the truth, and leaving the correct impression. Beyond honesty, integrity requires three things:
Intent. The author defines intent as plan or purpose, and breaks it into three components:
Capability. Do you have the ability to accomplish the required task? This is critical, since you won't deliver without it. The author breaks down capability into four key parts: talent, attitude, knowledge, and style. The more these suit the needs of the situation, the higher the competence. As I assess investment opportunities, I often focus on management team capabilities: can they meet the demands that a company's high growth requires. Results. The most powerful and simplest test for trust is results — not just what the results were, but how they were accomplished. This is critical for entrepreneurs thinking of starting a new venture. In interviewing senior executives, I place the greatest weight on proven results, their contribution to prior successes and its relevance to our company needs. Inspiring/Investing In Trust. The author identifies 13 different initiatives entrepreneurs can take to inspire trust. Since creating trust in your workplace is essential to driving growth, the key issue is how and where to make those trust investments. Ask yourself these questions:
Clearly, the lower the risk, the safer the investment. The higher the risk, the more you need to see strong character, competence, and prior results to justify the investment. Lessons AppliedI felt this book had clear relevance to many of my startups and portfolio companies. As a model for my life – I have always felt the more trust you develop, the more effective you will be as an entrepreneur. The same goes for personal relationships. Most relevant to an investor, our fund places a lot of trust (shown in-part through multimillion dollar investments) in the entrepreneurs in which we invest. As a result, we focus on their track record, capabilities, and how well they manage their money, as a predictor of how they will use our money. We also seek to provide support through a board of advisors consisting of other executives with a track record of success and capital efficiency, to help improve the team's capabilities. At a glance: (Editor's note: Javier Rojas is a managing director leading U.S. investment activities for Kennet Partners. He submitted this story to VentureBeat.) Filed under: Entrepreneur, VentureBeat        
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| After Facebook outbid Twitter for Instagram, Jack Dorsey stopped using it to post photos Posted: 14 Apr 2012 11:50 AM PDT  "Why won't you return my call?" Top venture capitalists and Mark Zuckerberg weren’t the only ones interested in high flying photo sharing app Instagram. Twitter founder Jack Dorsey, an early angel investor in Instagram, was also trying to buy the service in the months before Facebook paid $1 billion for it. Apparently there are some sour grapes. As the NY Times reports, “Mr. Systrom may have lost one connection in the deal: Mr. Dorsey of Twitter. His company, according to several people briefed on the matter, had expressed interest in buying Instagram in recent months. Mr. Dorsey once used Instagram daily to send photos to Twitter, but he has not been back since the deal was announced, perhaps a sign that he is not happy to see it in the hands of a competitor.” Maybe Dorsey has simply been busy being the CEO of Twitter and Square. Who knows. He can always comfort himself with the monster return he surely made on his angel investment, which he gets back many times over in cash and pre-IPO Facebook stock. Instagram has added 10 million users in just ten days since making its service available on Android. But it has yet to crack the riddle of how to make money off its service. Instagram founder Mr. Systrom may have chosen Facebook over Twitter because the social network has had far more success building a business, and could more easily support Instagram in the future. Filed under: deals, mobile, social        
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| Facebook, Instagram, Twitter: Everyone’s connected in Silicon Valley Posted: 14 Apr 2012 11:38 AM PDT
Instagram co-founder Kevin Systrom knew all the right people in Silicon Valley to get take his startup from idea to $1 billion Facebook buyout. But it seems Systrom had connections to the social network throughout his career. The New York Times released a background of Systrom’s career today, which opened on a scene the Instagram co-founder laid out for a group of Stanford students in May 2011 (see the speech here). He retold the night he and co-founder Mike Krieger launched the photo-sharing application, which is where his company had its first connection to Facebook. It happened in the early hours of the morning in October 2010. The two were working off of a small server in Los Angeles, and had no clue that thousands of people would suddenly download and knock the application offline. “There’s no motivation like having people knock at your door saying, “I want to use your product, like, fix your thing,’” said Krieger in the Stanford talk. Panicking, Systrom looked through his phone and found former Facebook chief technology officer Adam D’Angelo in his contacts. He and D’Angelo had met at a Sigma Nu party at Stanford seven years prior, and despite the time passed D’Angelo was happy to help. He walked the small Instagram through its first technological hiccup, in what Systrom said was a half-hour long conversation. Before this night ever took place, Systrom had already experienced a Facebook acquisition. After a post-Stanford stint at Google, Systrom moved on to an internship at Nextstop, a travel company that helped people find things to do around the world through social recommendations. Systrom joined in 2009, the company was then purchased by the social network giant in July 2010. But Systrom had also interned with Facebook’s competitor Twitter. Jack Dorsey was one of Instagram’s early marketing mechanisms, according to the Times report, getting early access to the app and sharing photos through it on Twitter. Dorsey even went so far as to invest in the photo-sharing app. But since the acquisition announcement, Dorsey has not used Instagram on his Twitter, which may be a sign the Twitter founder is upset by the news. “It’s the people sitting next you,” Systrom said of his relationships in Silicon Valley to the crowd at Stanford, “[It's] the people you meet before the event, after the event… chatting with them about the stuff you are doing that end up being the most valuable part of your entrepreneurship experience.” via The New York Times; Photo via LeWEB11/Flickr Filed under: social        
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| Valve researcher focuses on wearable computing Posted: 14 Apr 2012 11:37 AM PDT
Valve’s Abrash described the project he is working on in a new employee blog post according to Kotaku. It sounds a lot like Google’s Glasses, but the pie-in-the-sky project could also tap into all sorts of visions of how we will have computing distributed through our own clothing. Abrash stressed the that project won’t be a product anytime soon, if at all. Abrash wrote, “By ‘wearable computing’ I mean mobile computing where both computer-generated graphics and the real world are seamlessly overlaid in your view; there is no separate display that you hold in your hands (think Terminator vision). The underlying trend as we’ve gone from desktops through laptops and notebooks to tablets is one of having computing available in more places, more of the time. The logical endpoint is computing everywhere, all the time — that is, wearable computing — and I have no doubt that 20 years from now that will be standard, probably through glasses or contacts, but for all I know through some kind of more direct neural connection. And I’m pretty confident that platform shift will happen a lot sooner than 20 years — almost certainly within 10, but quite likely as little as 3-5, because the key areas — input, processing/power/size, and output — that need to evolve to enable wearable computing are shaping up nicely, although there’s a lot still to be figured out.” If it were anybody else doing this work, it wouldn’t be as interesting. Abrash, however, has made his mark in the video game industry. He created his first game, Space Strike, in 1982 for the IBM PC. He went on to work on Doom and Quake for id Software in the mid-1990s. As a noted graphics expert, he joined Microsoft to work on advanced technology research for Microsoft’s Xbox team and moved on to co-found (with Mike Sartain) Rad Game Tools which created the Pixomatic software renderer. Pixomatic was later acquired by Intel. Abrash was also a consultant who helped Microsoft pull together the technical specifications for the Xbox 360 game console. Valve hired Abrash in 2011. [via Kotaku] Filed under: games        
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| 10-year-old makes Quacky’s Quest audio game for his blind grandma Posted: 14 Apr 2012 11:14 AM PDT
Viale attends Hidden Valley Elementary School in Martinez, California. He figured out how to make a game by using the free starter version of design app GameMaker. He is part of a growing number of fans who are taking matters into their own hands and using simple tools to create their own video games. His grandmother Sherry has been blind for decades, and that meant that Dylan couldn’t share his favorite pastime with her. So he decided to make a game for her called Quacky’s Quest. In it, you play a duck which is based on a cartoon that Dylan’s father, Dino Viale, created when he was a kid. As Quacky, you weave through a series of mazes to find a Golden Egg. Sound cues help you find your way. If you pick up gems, you hear a cash register “ka-ching” sound. If you hit a wall, you hear a deep unpleasant noise. If you go the wrong way down a passage, you hear spider noises. If you go too far down that passage, you set off dynamite. Dylan needed assistance with the game, browsed GameMaker’s message boards for help, and figured out how to prevent his grandma from getting lost. As her duck traveled through passages, boulders dropped to close off where she had already been, so she couldn’t accidentally backtrack. After a month, Dylan finished the game and entered it in his school’s science fair. He won first place. [Image credit: Kotaku] Filed under: games        
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My stay in Israel, just three days long, was incredible. I met, or saw presentations from, at least 48 companies there (it was back-to-back for two days). I fell in love with the place, as I’m sure many foreigners do: I stayed out late one night in lively Tel Aviv, I explored the architectural and historical wonders of Jerusalem, including running through the underground Hezekiah’s Tunnel, and even got pulled over at a checkpoint in the West Bank and told by an Israeli officer to to delete a photo I’d taken of him. All this, after I was invited, quite by surprise, to a dinner at Ofra, one of Israel’s oldest settlements in the West Bank, specifically at Tanya, a winery partly owned by Benchmark’s Michael Eisenberg. Note: The Chardonnay and Cabernet Sauvignon wines they make there are truly amazing, and I’m saying that as a Napa Valley-frequenting snob (see picture of me next to one of the big bottles below).
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