Business models

Original post by  via YHP

The UK entrepreneurial scene is certainly coming together, with all its inadequacies – Investment, Billion dollar exits etc. It is certainly coming together.

In a year where other businesses have been forced to close down, others have being unable to keep up with competitors. It’s always good to take some time to reflect, praise and encourage those startups that have done a great job in remaining resillient, competitive and profitable.

2012 is already gearing up to be an even more successful and exciting year in the UK startup scene, we are already seeing a lot of exciting companies starting up.

As the year gently comes to an end, I decided to put together a list of companies who I thought came out on top this year.

This is in no particular order.

OneFineStay

OneFineStay

Imagine being able to rent some of central london’s elite houses (which cost up to £1 million) for the price of staying in an luxurious hotel. If you’re someone that prefers that homey feeling whilst travelling then this will certainly appeal to you. Onefinestay allows you to stay in a beautiful home while the owner is out of town, while enjoying all the convenience and comfort of a hotel.

Earlier this month, the company added seven new Central London homes to their growing list of properties.

Onefinestay was founded by Greg Marsh, Demetrios Zoppos and Tim Davey in 2009.

Mixcloud

Themed after their launch as the “YouTube of radio” – Mixcloud allows its users to connect to great radio content and helps content creators promote their radio shows and podcasts.

If you are a DJ, broadcaster or run a podcast show, Mixcloud gives you the platform to reach hungry music and audio content consumers.

The startup was founded by Nikhil Shah and Nico Perez in september 2008.

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Original post by BetaBeat

Soon, there will be no results when we search "wallet" in Google images. (whatsinyourbagnyc.tumblr.com)

Predictions! What do New York techies think will happen to the internet-centric economy in 2012? We asked some smart founders, VCs and members of the startup ecosystem where they think tech, the internet and the New York tech scene are headed in 2012 (assuming the world doesn’t end either due to the apocalypse or SOPA, that is). Without further ado!

The internet, united, will never be defeated

“SOPA and PIPA are both soundly defeated by bipartisan popular support and Congress realizes it shouldn’t tamper with one of the few American industries still creating jobs and out-innovating the world. We in the private sector will innovate solutions for piracy (people will pay for easy access—like Netflix!); the answer is not government intervention that ultimately doesn’t solve the problem and breaks the internet in the process.” -Alexis Ohanian, Reddit, Breadpig and Hipmunk

“2012! The tech community has not really seemed to care much about the upcoming election. SOPA and #Occupy pierced that head-down obliviousness during the last quarter. People will start to care, and not just because Ben Smith is going to Buzzfeed (though that was a signal that, folks, a new market is about to be unleashed). This is the first election year that is truly happening in the age of social media. Hopefully it won’t mean we have to pay attention to Santorum.

“Also! Something very big, or at least highly embarrassing, is going to be captured/disseminated/hive-mind-sleuthed-out/otherwise made horrifically public during this election season. And it will change the game. (Though if it’s that Newt likes to keep his socks on, I don’t want to know.)” -Rachel Sklar, Change the Ratio

New York City rises

“NYC will be recognized with the new distinction as being the world’s “Startup City Incubator”  for smart young people to come and build their new businesses with the proactive support of the world’s largest and easiest to connect to pool of talented mentors. Also looks like 2012 will be the year that the growing startup community begins to connect to the underserved NYC communities who needs support to help get their entrepreneurs up to speed. More syndication between angels, angel groups and VCs to fund more deals faster.” -Brian Cohen, New York Angels

The Facebook effect on NYC tech talent will be a 10 percent lift in compensation for top engineers. Gilt Groupe has a big/surprising exit. Under pressure of thin operating margins, Amazon takes them out (eBay also possible). Marketplaces prove to be superior ecommerce business since no overhead of warehousing inventory.

“$200B online retail market is growing 15 percent per year. 20 percent of that spent on ad tech. Something big is happening in NYC ad tech—maybe just another industry for which NYC is becoming the capital of the universe. Maybe more ad tech startups take root in NYC.” -Dave Carvajal, DavePartners.com

“Deciding year for Foursquare, can it turn on a dime? IAC will continue a mild downward trend.  Barry Diller is done.  The building is still cool. The tide turns in my ongoing war against The New York Times Company (who no longer have courage).” -Josh Harris, Pseudo.com

“SxSW Breakout App. Foursquare was the breakout app at SxSW 2009. GroupMe was the breakout app at SxSW 2011. Sonar will be the breakout app at SxSW 2012.

“Brett and team are hard at work on some killer features, with hopes to launch a blockbuster 2.0 in time for SxSW 2012. Their team has had an influx of bright, new talent recently and I’ve spent some time getting to know them. Since they haven’t formally announced anything yet, I won’t say any more than this: look for Sonar to crush it this year in Austin.” -David Kay, freelance mobile developer, Xoogler and Startup Bus veteran

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original post by  via siliconrepublic

The crowfunding revolution kickstarts a new economic hope

The crowfunding revolution kickstarts a new economic hope

Inspired by the success of funds like Kickstarter in the US, the crowdfunding revolution in 2011 broke onto the shores of Europe and for a country like Ireland battling to reinvent itself and fight its way out of recession, the business model has achieved tremendous success in just one year.

I first heard of crowdfunding a year and a half ago when a little known group of software programmers in New York wanted to create a new open social network called Diaspora.

Crowdfunding happens when a new venture puts out a call for support from ordinary people and if it achieves its goal will provide supporters with privileges when the venture goes live. It could be a filmmaker trying to make a movie, a musician trying to record a concept album, or a new web venture trying to get lift off. In the case of Diaspora in just 12 days it raised US$200,000 from 6,000 backers, including Facebook CEO Mark Zuckerberg.

Early this year I became acquainted with an initiative by Business to Arts to create an Irish crowdfunding venture aimed at supporting individual giving to the creative sector, making healthy use of offline and online networks like Facebook in the process.

After just eight months of going live, over €340,000 of new income has been generated by the Fundit.ie initiative for creative projects in Ireland, with contributions from over 7,400 people. In its end of year statement Fundit reported:

  • 94 projects fully funded
  • 141 projects have been live on the site so far
  • €402,000 pledged on the site in total
  • 7,580 pledges
  • Average pledge amount is €53.29 (though this changes all the time and is different for every project!)
  • €340,000 paid out to project creators to date
  • €16,178 commission to Fund it on successful projects
  • Number of failed projects so far is 28

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original post by MedCity

New York City has long been home to the big, brawny business monolith. From Wall Street firms like Goldman Sachs to huge media empires to CBS and Time-Warner, the Fortune 500 has regularly taken a big bite out of the Big Apple.

But at the other end of the dial, small businesses — at least the professional medical and technology companies that drive the growth in the healthcare sector — have been in short supply in New York.

A big part of that is money. It’s not only expensive to live in New York City, it’s even more expensive to start a business there. Onerous taxes, high entry costs, stifling regulations, and the reputation — deserved or undeserved — that financing a professional startup in New York is a high-risk proposition by venture capital firms — all have left a mark on entrepreneurism in New York.To its credit, the city has recognized it has a problem and is taking steps to make improvements.

 The latest example of that “new direction” by New York politicians and business leaders is a new business incubator that should help attract the types of healthcare and technology businesses the city knows it desperately needs.

It’s the NYIT Entrepreneurship Center, which just opened its doors on December 23rd.

The new center, located in the heart of Manhattan at 26 West 61st Street, offers new local professional startups work space, business planning counseling — even a conference room for new entrepreneurs to woo venture financers.

“We’re certainly getting traction to help students interested in pursuing entrepreneurship as a career option,” explains Joanne Scillitoe, director of the center. “They’re trying to get out, meet people, network, and look for mentors.”

For professional class investors, finding financing is at the top of the list of challenges when opening a new startup. But the new NYIT center hopes to give entrepreneurs a leg up.

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original post by  via westfaironline

On the heels of Gov. Dannel P. Malloy’s jobs bill this past fall focused on freeing up funding and support for entrepreneurs, the U.S. Senate is considering a proposed Startup Act that would among other benefits allow new companies to claim a full tax credit on initial profits.

Startups could claim a credit covering 100 percent of the earnings they generate in their first year of profitability and half of their earnings in the two succeeding years. The tax credit would be capped at $5 million of income for all three years.

The Startup Act would also make permanent the 100 percent exemption on capital gains taxes for investments held for at least five years in qualified small businesses, defined as those having less than $50 million in total assets. It would allow immigrants working in the U.S. under an H-1B visa to stay an additional three years if they launch their own business here. And it directs the Department of Commerce to compile a biennial report that analyzes state laws that affect the formation and growth of startups in each state, ranking them on new business creation and economic growth.

New York led all states on a similar index published last summer by researchers at the University of Nebraska, with Massachusetts third, New Jersey fourth and Connecticut dropping four rungs to 17th.

Still, only last month the Connecticut Innovations Inc. venture capital fund lured a Massachusetts company to Putnam in eastern Connecticut with a $1 million investment. RemoteReality Corp. designs cameras that can produce video and thermal imaging across 360 degrees, with military and commercial applications; the company’s technology was originally developed at Columbia University in New York City.

Even as Connecticut assesses the early returns on Malloy’s jobs bill and Congress considers the Startup Act, in early December, the U.S. Small Business Administration indicated it is moving ahead with a $1 billion early-stage innovation fund in conjunction with Startup America. Connecticut became one of the earliest states to link up with Startup America, whose founder is a former executive with Norwalk-based Priceline.com Inc. The SBA funding will be augmented in another $1 billion in support from more than 50 private-sector institutions, including free software, consulting and legal services. The White House hopes more than 100,000 startups will get help under the program.

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original post by Yi Chen via psfk

A Startup Store is a six-week shopping exhibition by entrepreneur Rachel Shechtman. The store is still in ‘beta’ mode and includes merchandise on display from startup companies like Artspace, Birchbox, Baublebar, Joor, Quirky and Of a Kind.

The beta exhibition is part of a more permanent concept, where every 4-6 weeks the retail store will be changed to suit a ‘story’ theme. Come 1 February 2012, the store will reveal its name, brand logo and feature its first exhibition with the theme ‘Love’.

Shechtman has had a wealth of experience working in fashion and retail, including TOMS Shoes, Gilt Groupe and Bliss Spa. She hopes that her unique retail point of view will be able to attract shoppers to create a ‘living, breathing community’.

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Top 10 Startups of 2011

Posted by | 30 December, 2011 | Business models, Startups

original post by  via Read Write Web

What happened to startups in 2011? E-commerce and mobile payments continued to grow, and group buying startup Groupon went public. Facebook, the biggest social network around, expanded in a huge way, announcing Timelinefrictionless sharing and a settlement (finally) with the FTC. It also swallowed up many promising startups, including group messaging service Belugasocial network-enhancing service Friend.lyand software company WhoGlue.

The mixing of social gaming and mobile payments, social network alternatives to Facebook, consumer cloud storage and apps that actually make you feel productive (read: not like you’re just wasting more time online) came out on top as just a few of the most important startups of this year.

This year’s top 10 startups list is a combination of companies that launched in 2011, and others that gained considerable attention. We chose these startups based on how they’ve changed or disrupted their niches and how they’ve influenced trends this year and for the year to come. They are listed in no particular order. Take a look after the jump.

Fab.com: Social Shopping That Works

Fab.com wasn’t always as glamorous as it is today. The site first launched in April 2010 as Fabulis.com as a “cross between Facebook and Yelp” specifically designed for gay male consumers. Yet by February 2011, the site had come to a serious halt with 130,000 members, only 30,000 of which were active. Co-founders Jason Goldberg and Bradford Shellhammer decided to trash it and start over, retaining only the social graph and a flash sales feature that had already been working quite well called “Gay Deal of the Day.” In the wake of total mainstreamification of the gay market – Glee, Lady Gaga, gay marriage becoming legal in New York and Don’t Ask Don’t Tell finally being repealed – the need for gay niche sites was declining. Instead of closing down the site for good, Goldberg and Shellhammer decided to reinvent it as Fab.com, a flash sales site aimed at the design-conscious shopper (who may or may not be gay and male). The experiment worked.

By September 2011, Forbes reported that member numbers were up to 600,000 and sales were in the six-figure range. Shellhammer handpicks every product that is sold on the site. It doesn’t rely on email blasts or fatigue-inducing daily deals. And unlike other flash sales sites, merchants who sell on Fab.com don’t lose money on their products.

To make the e-commerce experience more social, Fab.com launched its Live Feed, which aggregates everything that the site’s users are buying, liking, tweeting and sharing about on the Web. The new feature is opt-in, meaning that Fab users don’t one day wake up and realize that everyone in their network knows their purchasing habits. As I said in my 2012 predictions post, this social networking-turned-flash sales site will continue to grow. Fab.com’s only real competitor in the flash sales market is Gilt Groupe.

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original post by  via TNW

While living in New York’s tech community this past year has been a wild ride, it’s been a ride alongside a welcoming, supportive and extraordinary group of people. We’ve seen pivots, partnerships, massive hiring, acquisitions and rapid rounds of funding. And we’ve seen more success than failures, which has inspired us to keep running.

We welcomed accelerators like the Entrepreneur Roundtable AcceleratorTechStars and DreamIt Ventures, played with new incubation models like Gramercy Labs Collective and Prehype and raised over $100,000 for local hackers through a fashion-infused tech celebration called Raise Cache. These organizations helped bring together an extraordinary group of mentors within NYC, and established a sense of camaraderie and mentorship within the community. If the years prior we’re about gathering materials and putting the pieces together, 2011 was a year to see the New York tech industry all come together.

For an end of the year, dose of nostalgia, we caught up with 13 entrepreneurs, who all launched companies this year and asked them what their most exciting moment was in 2011.

E-Commerce

Goodsie

Given Goodsie‘s long path to launch, CEO Jonathan Marcus, who also founded the all-new Flavors.me, gets nostalgic thinking of how much the company achieved in 2011. For Marcus, Goodsie’s public launch in early May 2011 was the most exciting moment of the year. He started working on Goodsie in early 2009 and just days away from launching in late 2010, he made a very difficult decision to part ways with their technical team because of personal chemistry issues, and re-write the entire code base from scratch in a different programming language.

“A core group of the Flavors team spent the next 5 months moving heaven-and-earth to finally bring Goodsie to life. There were countless times where it seemed as though Goodsie would never launch,” says Marcus. “When we launched in May, a full two years after starting this journey, I was incredibly grateful and proud to have finally achieved and realized a vision that had become a multi-year labor of love.”

Today, Goodsie has 1,000 active, paying sellers, and is growing 20% month-over-month. Over the past 30 days, Goodsie’s top 50 retailers generated half a million dollars in sales. Just this week, Goodsie launched an integration with SoundCloud for sellers to import and sell SoundCloud audio. “Given our traction in music, we expect the SoundCloud integration to be very well received,” says Marcus.

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A Startup Store in Beta, New York City

Posted by | 28 December, 2011 | Business models, Startups

Original post by concierge

Part pop-up shop, part interactive exhibition, this Chelsea newcomer provides a brick-and-mortar home for online-only retailers based in New York City. Like the idea? Don’t get too attached to it. This is A Startup Store in Beta, and it will soon evolve.

Every couple of weeks, the shop will remake itself around a new theme (look out for a coffee-oriented surprise in January). For now, BaubleBar and Joor will bling you out with direct designer-sourced jewelry and accessories. Gadget geeks can get their fix from invention incubator Quirky, while Artspace sells affordable pieces from the self-same contemporary artists that you might see at galleries down the street, including Ross Bleckner and Nick Cave. And Birchbox lets you test-drive the products of its prescription beauty service via mini facials. Try to find an app for that.

Photo: Courtesy of A Startup Store in Beta

Original post by LINDSAY ONEAL via tech.li

Just six months after launching, Fab.com announced yesterday the closing of $40 million in Series B financing led by investment firm Andreessen Horowitz.

Fab’s agressive pre-launch strategy helped the flash-sale design site gain traction quickly, acquiring 1.2 million members and earning the title of the “World’s Fastest Growing Ecommerce Company.”

Founded by Jason Goldberg and Bradford Shellhammer, Fab offers members high-brown collection of design sales across a spectrum of categories.To date Fab members have purchased 500,000 products from the site with 100,000 orders being purchased in November alone. Fab’s success is an impressive example of the power of social commerce as more than 50% of Fab.com’s 1.2 million members have come from social sharing.

While membership to Fab is free, the company maintains invitation-only access “in order to maintain exceptional prices.”  In addition to Horowitz, existing investors also contributed to the round including: Menlo Ventures, First Round Capital, Baroda Ventures, SoftTech VC, and Ashton Kutcher.

Video: Bradford Shellhammer, co-founder of Fab.com demos some items for the site’s “100+ Best Design Gifts Under $100″

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Original post by RWC Startup

Within so very little time, internet marketing has created a great enterprise change. Fresh strategies in dealings have been used by firms across the globe. The brand new form of transaction is named as “online video marketing”. Excellent Resources For Online Video Marketing

Firms during the past could have seen Advertising and marketing as being the lone method to campaign their organizations but today, Online Marketing stands out as the valued technique to continue to keep their own company on the move and on the go.

Advertising and marketing firms lately appear to fall out of business a result of the surge of online marketing.Currently, businesses engage in the potential of website marketing which includes those companies that were not convinced of the expertise.

Higher Profit

So many people are reached via online video marketing whilst it does not cost greatly thus it generates better ROI. Classic promotion is more expensive when compared with online video marketing thus more income is gained. Online video marketing really does return more cash as confirmed by internet marketers that had currently tried it. How can online video marketing achieve this specific success?

Bigger Exposure

Behind this task is that it reaches higher number of exposure. On this time where there exists rapid development of modernization, most of us have internet access.The world wide web provides the most recent products and services that this now takes the place of those things which were once not taken over by the world-wide-web such as watching TV and also buying. Internet provides latest details that’s the reason lots of people believe it. Considering that online video marketing easily sends messages across the globe, it is a perfect way to establish interaction throughout the web. For your industry to be interested in your company; you need to simply reach out to them.

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Original post by Scarlett Madison via Techi

The ebb and flow of venture capital, IPOs, angel funding, and private equity investing makes forming a feasible startup challenging at times. It often depends on recent successes; when startup success stories start heating up, the money flows. When things start looking bad or people lose money, the cash often dries up quickly.

Crowdfunding might just be the answer that will allow for a consistent flow of funds for startups. Sites like Kickstarter and IndieGogo give access to investing to those wanting to dabble while startups get access to minor investment money, often enough to seed the ideas. It’s a symbiotic relationship that can keep the money flowing in both directions.

Our friends at GPlus examine the world of crowdfunding, showing how this growing industry is offering more to both businesses and amateur investors. Click to enlarge.

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Who’s Using Google+ Infographic

Posted by | 18 December, 2011 | Business models, Social media

Original post by ANDREW TORBA via tech.li

So Google+ has been live for a few months now, but who’s actually using it?

Over the last several months Google has been integrating Google+ branding and design across the entire Google product lineup. They’ve also been killing off some of their unused products such as Google Buzz, Gears, and Wave. Although Google has been creative with its marketing approach to Google+, at the end of the day everyone’s friends remain on Facebook. Judging by many of the statistics in this infographic Google+ is fighting an uphill battle, but that’s not to say they are out of the game just yet.

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Original post by Antti Vilpponen via  ARCTIC STARTUP

Microtask has been putting in a lot of effort in the recent year or so to expand their operations beyond the Finnish borders. They’ve been restructuring their business this fall by moving all Finnish operations to Tampere and focusing on setting up their US business on the other side of the Atlantic. We thought it might be a good time to talk to the CEO, Ville “Wili” Miettinen, about why they decided to move overseas and how it has gone for them so far.

Microtask is both a service and technology company trying to harness the human cloud online. They take huge manual tasks and split them into, well, micro-sized tasks and then send these out to hundreds of people to work on. The tasks are usually related to digitizing content, think of all the library archives that have been hand written that are impossible to be understood through OCR.

Here’s the interview.

ArcticStartup (AS): What led you to build operations into the US, and more specifically the Valley?

Ville Miettinen (VM): One word: sales. In our case US is by far the most important market (huge, still relying a lot on paper documents, and generally more willing to adopt new technologies). It would be at least equally tedious to enter any single European country (such as Germany). As we are a start-up bringing a novel tech to the market, it’s critical that we have a strict focus.

Obviously fundraising is another aspect: the valuations in SV are much higher than in Europe, and there’s way more funding available.

AS: What’s the track record on those, how are you doing?

VM: So far so good. We’ve now got a sales team of seven people, spread out across four cities: Atlanta, Chicago, Rochester and Los Angeles. We run our PR & marketing from San Francisco. We’ve signed up a number of customers & distribution partners here – expecting to have some 15 or so by the end of the year.

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Original post by Antti Vilpponen via  ARCTIC STARTUP

Microtask has been putting in a lot of effort in the recent year or so to expand their operations beyond the Finnish borders. They’ve been restructuring their business this fall by moving all Finnish operations to Tampere and focusing on setting up their US business on the other side of the Atlantic. We thought it might be a good time to talk to the CEO, Ville “Wili” Miettinen, about why they decided to move overseas and how it has gone for them so far.

Microtask is both a service and technology company trying to harness the human cloud online. They take huge manual tasks and split them into, well, micro-sized tasks and then send these out to hundreds of people to work on. The tasks are usually related to digitizing content, think of all the library archives that have been hand written that are impossible to be understood through OCR.

Here’s the interview.

ArcticStartup (AS): What led you to build operations into the US, and more specifically the Valley?

Ville Miettinen (VM): One word: sales. In our case US is by far the most important market (huge, still relying a lot on paper documents, and generally more willing to adopt new technologies). It would be at least equally tedious to enter any single European country (such as Germany). As we are a start-up bringing a novel tech to the market, it’s critical that we have a strict focus.

Obviously fundraising is another aspect: the valuations in SV are much higher than in Europe, and there’s way more funding available.

AS: What’s the track record on those, how are you doing?

VM: So far so good. We’ve now got a sales team of seven people, spread out across four cities: Atlanta, Chicago, Rochester and Los Angeles. We run our PR & marketing from San Francisco. We’ve signed up a number of customers & distribution partners here – expecting to have some 15 or so by the end of the year.

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Original post by  via TNW 

The magic of startup life is the constant flow of new information; new ways of solving problems with solutions that surface from sleepless nights and wandering minds. Major tech companies like Microsoft and Apple were once startups themselves, small companies with innovative ideas that geared up to expand rapidly.

Microsoft and Apple grew into the powerhouses we know today and knocked IBM off its top shelf, all while constantly being challenged by small, groundbreaking companies that could maneuver much faster than a major corporation.

What happened to IBM can still happen to the likes of Microsoft, Apple and Google, which is why acquisition is their life force and part of every corporation’s recipe for success — bringing in fresh ideas before the whole company goes stale.

Google

After developing an impressive competing network, DoubleClick was bought by Google for 3.1 billion in 2007. This acquisition of DoubleClick brought Google into the display advertising market overnight.

Can only startups innovate? A brief history of acquisitionsGoogle Docs was created with the acquisition of Upstartle’s Writely, a web-based wordprocessor, and 2Web Technologies for XL2Web, which led to Google Spreadsheets. Google merged both products together to create a productivity suite that now competes with desktop and cloud offerings from Microsoft Office and Apple’s iWork.

After Google Video failed to gain traction online, it acquired YouTube in 2006 for $1.65 billion. At the time, there was speculation that Google had overpaid; YouTube had zero monetization strategies, and was over-run with copyright infringment. Time has shown that this may be one of the best acquisitions in recent history, with YouTube’s 40% marketshare and successful monetization as outstanding proof.

Android is another high profile innovation, acquired by Google in 2005. Google developed and brought Android to market, from what was a small Palo Alto startup that had run independently for two years.

Since 1998, Google has bought over 100 companies.

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Original post by  via TNW 

The magic of startup life is the constant flow of new information; new ways of solving problems with solutions that surface from sleepless nights and wandering minds. Major tech companies like Microsoft and Apple were once startups themselves, small companies with innovative ideas that geared up to expand rapidly.

Microsoft and Apple grew into the powerhouses we know today and knocked IBM off its top shelf, all while constantly being challenged by small, groundbreaking companies that could maneuver much faster than a major corporation.

What happened to IBM can still happen to the likes of Microsoft, Apple and Google, which is why acquisition is their life force and part of every corporation’s recipe for success — bringing in fresh ideas before the whole company goes stale.

Google

After developing an impressive competing network, DoubleClick was bought by Google for 3.1 billion in 2007. This acquisition of DoubleClick brought Google into the display advertising market overnight.

Can only startups innovate? A brief history of acquisitionsGoogle Docs was created with the acquisition of Upstartle’s Writely, a web-based wordprocessor, and 2Web Technologies for XL2Web, which led to Google Spreadsheets. Google merged both products together to create a productivity suite that now competes with desktop and cloud offerings from Microsoft Office and Apple’s iWork.

After Google Video failed to gain traction online, it acquired YouTube in 2006 for $1.65 billion. At the time, there was speculation that Google had overpaid; YouTube had zero monetization strategies, and was over-run with copyright infringment. Time has shown that this may be one of the best acquisitions in recent history, with YouTube’s 40% marketshare and successful monetization as outstanding proof.

Android is another high profile innovation, acquired by Google in 2005. Google developed and brought Android to market, from what was a small Palo Alto startup that had run independently for two years.

Since 1998, Google has bought over 100 companies.

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Original post by MICHAEL LUCA via HBR

Yelp’s IPO filing comes hot on the heels of successful IPOs and high valuations for Angie’s List and Groupon. Yelp’s timing reflects both a tech-friendly market and the company’s current position as the dominant consumer-review web site. Yelp has 22 million reviews, and the supposedly imminent onslaught of competing review sites has yet to materialize. But is Yelp really poised for long-run success? My research shows that there are points in its favor — but there are others that should raise investors’ concern.

First, the positives:

Yelp works. Yelp is relevant only to the extent that it affects readers’ choices of where to go. The evidence shows that it does. In a recent paper, I combined Yelp ratings with restaurant revenues for every restaurant that operated in Seattle during Yelp’s entire run there. The data suggest that a one-star increase in a restaurant’s Yelp rating leads to a 5% to 9% increase in revenue. How do we know that it is in fact Yelp that matters, and not some other information source? To support the causal inference, I exploited the fact that Yelp rounds ratings to the nearest half-star. I found that restaurants receive a jump in sales after a rating is rounded up. So Yelp is driving sales, at least for independent restaurants. Positive ratings don’t help chain restaurants, which already have strongly established brands.

It gets its content for free. Even more impressive than Yelp’s impact has been its ability to generate 22 million reviews without paying for them. Yelp has been extremely effective at leveraging social incentives to make people work for free. It created a network of “elite” reviewers, whose reviews tend to be less erratic and closer to restaurants’ long-run averages. Yelp hosts special events to reward these prolific reviewers. It’s not clear whether upstart review companies would be able to replicate this excitement about reviewing.

Search is moving away from Google. Google recently acquired Zagat, creating a major competitive threat to Yelp. One concern is that Yelp will be hurt as it falls down the Google search rankings (and Yelp acknowledges that most of its search traffic comes from Google). When Yelp began in 2004, this would have been a devastating prospect. And to some extent, it still is. But new ways of searching for products may start to change this dynamic. For example, many people find restaurants on Yelp using smartphone apps, circumventing the standard Google search process. This trend will only increase with time.

Now the factors working against Yelp:

It’s easy to write fake reviews. Yelp and Angie’s List follow very different business models. Angie’s List charges readers to view its content, while Yelp’s reviews can be accessed for free (and the company makes money by allowing businesses to advertise). Angie’s List has a strict quality assurance process; Yelp lets virtually anyone review. The ease of leaving reviews on Yelp has led to a larger number of reviews, but it has opened the door for businesses to leave fake reviews — for themselves, their friends, and their competitors. In a world where we know who is writing the reviews (your Facebook friend, for example), this is not a problem. In a world where reviewers are fairly anonymous, it is.

Legitimate reviews may be filtered out. More worrisome than the fake-review problem is Yelp’s solution: It uses a program to filter out seemingly bogus reviews. This is fine, in principle. But it becomes more troubling when you look at the data. In a recent sample, nearly one out of every five reviews was filtered. Looking only at the five restaurants featured on the front page of Yelp’s Boston site, roughly 13% of reviews were filtered out. Worse, the reviews were filtered fairly evenly across the restaurants. This means one of two things: Either all five have been trying to game the system, only to be outfoxed by Yelp, or Yelp’s algorithm is so coarse that it wipes out a lot of legitimate reviews. While fake reviews clearly exist, it is unlikely that all of these restaurants have been trying to game the system. Combine that with allegations of Yelp sales staff’s being overly aggressive in pushing their paid offering, and Yelp’s filter can be all the more frustrating for restaurants. There is no evidence that Yelp favors advertisers, and related lawsuits have been dismissed. However, the filtering process does give credence to concerned business owners who note that legitimate reviews have been filtered from their restaurants.

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Three Ways to Export into New Markets

Posted by | 12 December, 2011 | Business models, Strategy

Original post by JANE PORTER via  Entrepreneur

How three entrepreneurs overcame challenges when exploring global markets, and what you can learn from them.

Given the sluggish U.S. economy, small businesses may have little choice these days but to look abroad for growth and start exporting their products.

“In many ways it’s the only way to grow,” says Mona Pearl, founder of Beyond a Strategy Inc., a Chicago-based global strategic development firm and author ofGrow Globally (Wiley 2011). “We have to start getting to know more about the world.”

The good news: International opportunities are growing, with the U.S. Export-Import Bank having increased small business financing by more than 70% since 2008.

But breaking into the global marketplace takes careful planning. Here is a look at three major export regions and the strategies of some U.S. entrepreneurs doing business there.

China

For Ocilla, Ga.-based Hudson Pecan Co., the need to start exporting became clear more than a decade ago. The problem was simple. “We had more pecans being produced than we consumed domestically,” says Randy Hudson, president. But it wasn’t until 2008, after reaching outside for financial assistance, that the company penetrated the Asian market in a substantial way. The Southern United States Trade Association, a federally funded program, offset half the cost for Hudson to travel and begin selling abroad, while the Ex-Im Bank provided a $2 million lender loan guarantee that ensured the company would be paid for goods sold oversees.

Today, the 10-person company generates 75% of its sales from exports to Hong Kong, its distribution point for Asia. Total sales surged from less than $1 million in 2008 to $7.5 million last year and are expected to approach $15 million this year, Hudson says.

Biggest Challenges: Contracts and standby letters of credit are standard practice in the U.S., but they aren’t so common when selling commodities in China, Hudson says. And without a standby letter of credit attesting to the amount of business he had in the pipeline, Hudson couldn’t obtain a loan from the Ex-Im Bank.

“It almost prohibited us from doing any business there by preventing borrowing significant amounts of money,” he says. Ultimately, Hudson found a way around the problem by setting up his own intermediary company in Hong Kong. He then sold his pecans to the intermediary and used it to issue the necessary papers to secure a loan.

Hudson’s advice: Because deals are sometimes based on personal honor rather than a formal contract, small businesses must be cautious. “If you are doing business with a Chinese businessman for many years, his word is as good as any contract,” says Hudson. But until you develop a relationship of trust, “you have to be extremely careful.” Hudson advises small-business owners to visit prospective customers in person to get to know them and require a larger initial deposit for the first few business exchanges.

hudson-pecan-randy-hudson

Hudson Pecan Co.'s Randy Hudson gives grandson, Nate, his first lesson on growing pecans. Photo Courtesy: Mary Jo Hudson

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Three Ways to Export into New Markets

Posted by | 12 December, 2011 | Business models, Strategy

Original post by JANE PORTER via  Entrepreneur

How three entrepreneurs overcame challenges when exploring global markets, and what you can learn from them.

Given the sluggish U.S. economy, small businesses may have little choice these days but to look abroad for growth and start exporting their products.

“In many ways it’s the only way to grow,” says Mona Pearl, founder of Beyond a Strategy Inc., a Chicago-based global strategic development firm and author ofGrow Globally (Wiley 2011). “We have to start getting to know more about the world.”

The good news: International opportunities are growing, with the U.S. Export-Import Bank having increased small business financing by more than 70% since 2008.

But breaking into the global marketplace takes careful planning. Here is a look at three major export regions and the strategies of some U.S. entrepreneurs doing business there.

China

For Ocilla, Ga.-based Hudson Pecan Co., the need to start exporting became clear more than a decade ago. The problem was simple. “We had more pecans being produced than we consumed domestically,” says Randy Hudson, president. But it wasn’t until 2008, after reaching outside for financial assistance, that the company penetrated the Asian market in a substantial way. The Southern United States Trade Association, a federally funded program, offset half the cost for Hudson to travel and begin selling abroad, while the Ex-Im Bank provided a $2 million lender loan guarantee that ensured the company would be paid for goods sold oversees.

Today, the 10-person company generates 75% of its sales from exports to Hong Kong, its distribution point for Asia. Total sales surged from less than $1 million in 2008 to $7.5 million last year and are expected to approach $15 million this year, Hudson says.

Biggest Challenges: Contracts and standby letters of credit are standard practice in the U.S., but they aren’t so common when selling commodities in China, Hudson says. And without a standby letter of credit attesting to the amount of business he had in the pipeline, Hudson couldn’t obtain a loan from the Ex-Im Bank.

“It almost prohibited us from doing any business there by preventing borrowing significant amounts of money,” he says. Ultimately, Hudson found a way around the problem by setting up his own intermediary company in Hong Kong. He then sold his pecans to the intermediary and used it to issue the necessary papers to secure a loan.

Hudson’s advice: Because deals are sometimes based on personal honor rather than a formal contract, small businesses must be cautious. “If you are doing business with a Chinese businessman for many years, his word is as good as any contract,” says Hudson. But until you develop a relationship of trust, “you have to be extremely careful.” Hudson advises small-business owners to visit prospective customers in person to get to know them and require a larger initial deposit for the first few business exchanges.

hudson-pecan-randy-hudson

Hudson Pecan Co.'s Randy Hudson gives grandson, Nate, his first lesson on growing pecans. Photo Courtesy: Mary Jo Hudson

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Original POST by JOAN MAGRETTA via HBR 

With Cyber Monday, the tablet wars kicked into full swing. Which one is the best? Is it the iPad? The Kindle? Who has the best technology? The best distribution? Who’s the best overall? For most people, “being the best” is what competition is all about. So General Motors CEO Dan Akerson was simply echoing popular sentiment when, on the day the new GM went public, he threw down the gauntlet: “May the best car win!” he told reporters. The phrase reflects an underlying belief about the nature of competition that feels so intuitively correct that it is almost never examined or questioned.

But if you want to win, says Michael Porter, this is absolutely the wrong way to think about competition. In fact, it’s practically a guarantee of mediocre performance. The first problem with the competition-to-be-the-best mindset is that, in the vast majority of businesses, there is simply no such thing as “the best.”

Consider a business as prosaic as seating for airport waiting areas. You would think that there would be a “best” here — standardized, functional seating. Well you would be wrong. Different airports have different needs. Some want waiting passengers to shop. They don’t want seats that are too comfortable. Some need the flexibility to reconfigure waiting areas. They don’t want long rows of fixed seats. Many airports have to watch their spending. But others — airports in the Middle East, for example — have snapped up luxury designs. Some airports value seats built to take extraordinary abuse. London-based OMK makes “prison-worthy” seating, the industry’s highest standard, using self-sealing polyurethane that can withstand a stabbing without showing the knife scar.

If there is no “best” airport seat, now think about all of the industries in the economy. In how many does the idea of “being the best” make real sense? The best hotel for one customer is not the best for another. The best sales encounter for one customer is not the best for another. There is no best car. There is no best art museum. No one best way to promote environmental sustainability.

Yet, it’s a pervasive idea. Management writers — and leaders seeking to inspire — regularly reinforce it by using colorful metaphors from warfare and sports. These lend emotion and drama to business competition. But, they are misleading.

In war, there can be only one winner. Not so in business, where companies like WalMart and Target can thrive and co-exist, each offering a different kind of value to its customers. In sports, there is just one contest with one set of rules. Not so in business, which is more complex and open-ended. Within an industry, there can be multiple contests, not just one, based on which needs are to be served. McDonald’s is a winner in fast food, specifically fast burgers. But In-N-Out Burger thrives on slow burgers. Its customers are happy to wait ten minutes or more (an eternity by McDonald’s stopwatch) for non-processed, fresh burgers cooked to order.

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