Tag Archive | "culture"

Twitter’s Dick Costolo On What It Takes To Be A Good CEO

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dick costolo

2013 was a very good year for Twitter, so it’s only fitting that Twitter’s CEO Dick Costolo took home the award for CEO of the year at the 7th annual Crunchies Awards held this week in San Francisco.

Backstage at the show, TechCrunch co-editor Matthew Panzarino pulled Costolo aside for a quick interview to talk about Twitter’s success over the past year and what it means to be a good CEO. When Panzarino asked Costolo to share his “playbook” for leading Twitter, he had a really thoughtful response. He said:

“I’ll say two things. We had the good fortune to have Adam Silver, the new commissioner of the NBA, in the office the other day, and someone asked him about the culture of the NBA. Adam said, ‘One of the great players in the NBA told me that championships aren’t won on the court, they’re won on the bus.’ And what he was referring to is that sense of team building, and making sure that it feels like a team, and that you’re all pulling for each other and working together. That is what makes something work. And I think that’s something I just really pay very careful attention to.

Someone asked me once in an interview, ‘If you had to describe yourself as a CEO how would you describe yourself?’ And I thought about it for a second, and I said, ‘Well, I think I’m present.’

I try to be really present and there for the team, and to understand what everybody else understands. Because when you have that understanding of what everybody else understands, you can provide the proper context for the decisions that are being made, and help communicate those decisions. And then, it’s easier for everybody else in the company to feel like they have a sense of why decisions are being made…

…If I could sum up my advice in one sentence, it would be to make sure that everybody understands what you understand.”

You can watch that and the rest of the conversation in the video embedded above.

Article courtesy of TechCrunch

How Louis CK And The Hare Krishnas Can Make You A Better Entrepreneur With This One Trick

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Editor’s note: James Altucher is an investor, programmer, author, and several-times entrepreneur. His latest book is “Choose Yourself!” (foreword by Dick Costolo, CEO of Twitter). Follow James on Twitter @jaltucher.

I once wanted to be a stand-up comedian but I was too afraid to even go on a stage. Then I wanted to do a TV show but kept getting rejected. So finally I switched industries and started an Internet business.

Louis CK is my favorite comedian. He is the high priest of understanding our culture. I watch him every day. I watch the same routine over and over. I can spend hours breaking down every line of his routines. I watch him before I give talks because I get to borrow his confidence. I used to watch him before dates. I even watch him before I hang out with my kids.

I first saw him perform live in 1995 or 1996 at the Aspen Comedy Festival. I went two years in a row. One time I bored Dave Chapelle to death. I kept talking and talking and finally he said, “Excuse me, I have to get out of here and find me a girl for tonight!”

Another time there I asked Al Franken if I could interview him. He looked me up and down and said, “No” and walked on. Fair enough. Now he’s a U.S. senator, and I just write random stuff on my Facebook wall.

They both said “no” and moved on. But I needed them to say “yes” and didn’t know how to get them to.

Louis CK did a bit in his last show that was sort of outrageous. It begins with killing kids and ends with justification for slavery. In it, to get laughs, he uses the exact same sales technique that has made the Hare Krishnas billions of dollars and should be used by everybody on a daily basis. He starts off saying “Children who have nut allergies need to be protected… of course, but maybe…if touching a nut kills you…you’re supposed to die.”

Everyone laughs and claps.

He has funny delivery. He says “Of course not, Of course not, but maybe, but maybe,” and then he holds his hand over his eyes and says “if we all do this for a year we’d be done with nut allergies forever.”

Everyone laughs. It’s funny. He has some compassion in it (“of course not, but“), so he’s forgiven. I forgive him. He makes it funny and we clap.

He does a few more. Then he says, “Of course… slavery was bad.” And suddenly he hit a third rail. Everyone stops for a second. They don’t know whether to clap or not. It’s against the rules!

But then he hits the entire point of the joke. The reason the joke is so funny. The entire reason Louis CK is an artist and has risen to the top of his profession. He goes up against that awkward pause from the audience. He then goes past it and brings them with him.

Society (parents, schools, colleagues, government, etc.) builds up walls. Evolution builds up walls. The walls are in our brain. Art bangs against them and forces us to go “OUCH!” or have some other reaction (laughter, creation, innovation, excitement).

When people stop laughing for a second at the word “slavery,” Louis CK stops his joke and unveils the real joke:

“Listen, listen, you all clapped for dead kids and the nuts.” He then mimicked the clapping. In every way he reminds them of how funny they thought kids dying of nut allergies was. And how ludicrous it is but they still laughed.

Then he points out the whole audience: “So you’re in this with me now, do you understand? You don’t get to cherry pick. Those kids did nothing to you.”

And now the audience was laughing again. Even louder than before. Some people were cheering. He was ready now for his joke on slavery.

This was what was funny. The reality is: they did have the right to cherry pick.

But he used a clever psychological technique to make them think they didn’t. And it’s the same trick Hare Krishnas have used to raise billions of dollars.

It’s a trick you need to be aware of if you want to succeed in life — to say “no” when you need to and to help others get to “yes” when you need them to.

When the Hare Krishnas first started preaching in airports they had nothing going for them. Nobody would listen to them.

They raised no money. They were failures. Who would give money to a strange-looking shaved guy dressed in robes with totally different beliefs who had his hand out?

Answer: Nobody.

Then everything changed and they became the fastest-growing religious movement in the United States in the 1970s. They raised billions of dollars.

What did they do? What changed?



The first thing they did when they met you was give you a 5-cent daisy. In fact, since so many people threw out the daisies, they often gave you a used daisy because they would fish them out of the garbage cans.

And yet, once you took that daisy, your brain flipped an evolutionary switch. You were on!

You would now have to listen and maybe even agree with the rest of their story and give them money.

There are two rules at work here:

1) The law of reciprocity. If someone does something for you, the brain feels obligated to return the favor. Evolution weeded out the people who would not do anything for you. People learned to cooperate like this so they would survive in the jungle.

Robert Cialdini covers this rule in his book “Influence.” That said, I do not believe this rule is applicable here but a slightly different and more critical rule.

The law of reciprocity is really just a subset of the rule that governs almost every transaction and conversation in our lives.

2) Commitment bias. If you say “yes” to something small, your brain has already decided, “this is someone I can trust and say ‘yes’ to.”

For instance, in a study, if someone asks you “Would you be interested in hearing about causes that can help the environment?” (almost everyone says “yes” because that’s an easy “yes”) then you are about 50 percent more likely to donate when a donation is asked for than if you hadn’t been asked that simple first question.

Commitment bias works because you had to know who was reliable in the jungle 100,000 years ago. You had to know if someone was on your side or not. If they demonstrated it once, then chances are they are on your side and were trustworthy.

Do you want to know what the most popular article ever on my blog is? It’s the one where I say nobody should ever own a home again. People hate this article. They hate it because there’s probably nothing else in life with higher commitment bias.

If you just put $100,000 (or $10,000) down on a home and more on maintenance, taxes, etc., you don’t want anyone telling you you made a mistake. You have huge commitment bias as opposed to the second before you put any money down.

Louis CK made use of the second law (the first law is implicit – he is putting on a show for them so he is giving them something) in this joke.

He got them to laugh to a milder version of the joke (peanut allergies, where even he says, “of course not. I have a nephew with peanut allergies and I would be devastated if something were to happen to him, so he shows his compassion. He’s one of us.)

But now they are in. They took the flower. Now they have to hear the more extreme version of the joke (“slavery”) and they even have to laugh (like people would have to donate billions to the Hare Krishnas).

He knew this (“You’re all in this with me now” even though they weren’t really) and their brains were sucked in and, when you listen to the video, they are actually laughing even harder now.

When dealing with people in business or even in relationships, get them to “yes” on something simple. Then they are in.

This is why learning the “Power of No” is so important. It fights our evolutionary tendencies that were important for 500,000 years but are no longer as important.

I love this joke. I laughed. Because he also makes subtle reference to history.

Each major language in the world — English, Spanish, Han Chinese, and Arabic — are the languages of genocidal empires that at one point or another conquered the entire world.

So as much as you like to speak English, and as much as you like our culture and art and everything, it’s the result of centuries of conquest and killing and slavery. And we live in it and order take-out and watch “American Idol” and participate in the culture.

So you’re all in on this now. You can’t cherry pick your history.

Which is what Louis CK’s joke is really about without him explicitly saying it. It turns history upside down. It uses clever psychological tactics that are used (and often abused) in marketing, and he gets people to laugh all at the same time.

That’s why Louis CK is the master. That’s why I love him.

I’ve also lately been really enjoying CK, Daniel Tosh, Marina Franklin, Jim Norton and Anthony Jeselnik. If you have other favorites, please put them in the comments. I need new people to watch.

Article courtesy of TechCrunch

Billion-Dollar M&A Club Admission Guidelines

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Editor’s note: Glenn Solomon is a Partner with GGV Capital. Some of his recent investments include Pandora, Successfactors, Nimble Storage, Isilon, Domo, Square, Zendesk, Quinstreet and AlienVault. His personal blog,goinglongblog.com, focuses on growth-stage entrepreneurs who are thinking big. Follow him on Twitter @glennsolomon.

Average valuations for venture-backed M&A deals typically come in a pretty tight range.  According to the National Venture Capital Association (NVCA), in 2013 there were 377 total M&A exits of venture-backed companies with mean pricing of $161 million. This compares with total deal count of 499 and 488 and mean pricing of $143 million and $173 million in 2011 and 2012, respectively.

Every once in a while, however, a $1 billion or even multi-billion M&A deal for a venture-backed, relatively young company pops up, such as the recent Nest/Google announcement. These deals defy conventional valuation logic since the acquired companies are early in their revenue curve or sometimes even pre-revenue. Where do these billion-dollar deals come from and what factors are involved in their creation? Below I’ve identified three primary drivers that motivate acquirers.

Billion-Dollar M&A Drivers

Rocket Ship Riding. Sometimes a target achieves such incredibly fast early growth that acquirers become enamored with the potential for the future. Particularly in the consumer Internet context, these companies are often pre-revenue, with growth coming in other key metrics. Facebook’s $1 billion acquisition of Instagram is a good example. Facebook clearly saw Instagram’s growth as both a threat to its own popularity and an opportunity to continue to expand engagement among its core constituents. Price didn’t matter as much as this future potential. Google’s near $1 billion acquisition of Waze was similarly driven by the traffic app’s growing popularity and Google’s recognition that it could integrate Waze functionality into Google Maps, further enhancing its own product line.

Fear of Losing Out. In addition to perceived potential, fear is also a very powerful motivator.  Acquisition prices can be driven up to billion dollar levels when an acquirer develops the fear, real or not, that they might lose an opportunity, either to a competitor or to the target itself gaining enough traction that it will remain independent and become a threat to the acquirer over time.

When DoubleClick was acquired by Google for $3.1 billion, Microsoft was widely rumored to be aggressively pursuing the deal, as well. No matter that DoubleClick had been acquired by private equity firms Hellman & Friedman and JMI Equity for approximately a third of that price just a few years earlier. The perception that the inventory DoubleClick controlled was extremely strategic gained footing in Google’s board room, similar to Microsoft, which led to the outsized outcome.

When VMWare acquired early-stage Nicira for $1.3 billion, VMWare execs saw this as a move to protect their core server virtualization franchise and extend into network virtualization, as well. When looked at from this vantage point, the price makes more sense.

Lottery Pick on Draft Day. Innovation is rarely a core competency at large tech companies.  In fact, executional excellence, at which large tech companies usually excel, often runs counter to the culture of risk taking required to spawn new, disruptive initiatives. Execs at large tech companies know this and it can be very frustrating. This can motivate the desire to bring in a team of people who are perceived to have skills and abilities to drive innovation that otherwise won’t occur. With this logic, acquisition price becomes a minor issue.

Google’s recent $3.2 billion Nest acquisition must have been driven, at least in part, by Google’s desire to bring in a talented consumer hardware team, headed by Tony Fadell, that can innovate in the connected home area. This is a market Google has identified as important, but without a tiger team like the one from Nest, Google execs recognize they will likely never get from here to there.

Consideration and Considerations

Although entrepreneurs who end up selling for $1 billion or more rarely begin their journeys thinking they sell their companies, there are several issues that should be considered carefully if this becomes an option.

Cash vs Stock. With growing piles of cash on the balance sheets of many large tech companies, the ability to pay cash for some or all of the purchase price in a billion-dollar M&A is more common these days. Cash obviously removes any uncertainty with respect to the ultimate price. Stock prices can plummet, adding possible risk to a stock deal for entrepreneurs, their employees and investors. Especially if you’re being acquired as a lottery pick, expect acquirers to want you and your key team to stay for many years. The purchase price will highly incentivize you to stay, including stock vesting. Each entrepreneur has a very unique and personal situation and needs to weigh the pros and cons carefully.

Certainty of Closure. When an acquirer floats a very large acquisition price, the risk of the deal not going through to completion increases.  Recognize that someone at your potential acquirer is probably staking her or his career on the decision to pay up to acquire your company.  Its human nature to get cold feet.  Pay close attention to who the acquirer is – what’s their reputation is for going through with acquisitions?  what’s the status of the company right now?  how powerful is the board and/or CEO and are they behind the deal?  It’s not atypical for a target to go with a lower price from an acquirer who has a higher perceived certainty of closure versus other higher offers from riskier would-be acquirers.

Fit and Alignment. For entrepreneurs, there’s no rule that you must accept an acquisition price once it hits a certain level. Many potential acquisitions don’t consummate because the perceived cultural fit and/or alignment on the future vision doesn’t completely align.  Most entrepreneurs with whom I’ve spoken who have sold their companies (whether at billion dollar levels or lower) regret the decision later due to poor fit with the acquirer.  It’s critical to get this right.

For many entrepreneurs, their own indomitable will doesn’t waver, even in the face of a billion-dollar M&A offer, and it’s go long and go big or bust.  For example, Snapchat appears to be on this path, at least for now.  For some others, the appeal of taking a billion dollar offer is high enough to veer off the independent path.  Instagram went this route.  There isn’t a right answer.  But, recognizing the motivation of would-be suitors – be it rocket ship, fear of losing out, all-star draft picks, or some combination of the above – can help navigate the waters.

Article courtesy of TechCrunch

What Games Are: Sports And Video Games

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Editor’s note: Tadhg Kelly is a veteran game designer and creator of leading game design blog What Games Are. He has recently moved into managing developer relations at OUYA. You can follow him on Twitter here.

Though I was never a big fan of sports as a kid I’ve often found them to be valuable as a lens to interpret video games. Sports are usually played in real time and under limited conditions, and they require both skill and smarts to succeed. Sports are usually played with abstract goals in mind, such as scoring points. Sports usually have an overriding win condition, and winning is essentially the whole point of playing. So are many video games. 

Traditionally a big difference between sports and video games is that most sports are played multiplayer, but most video games are played single player. To some it’s only a matter of time before that happens but personally I think not. There isn’t and never will be a pressing need for a game like Gone Home to go multiplayer. The world is not crying out for The Stanley Parable to become a team sport.

However another traditional difference between sports and video games is slowly disappearing, and that is whether they are watched or played. Sports have long been a spectator activity, whether in guise of physically going to see a match or watching on TV. But video games were supposed to be about the playing rather than the watching, and so were a private activity. Who would really want to watch you play through a game?

Well it turns out the answer to that question is “everybody”. Live streaming, speed runs, let’s-play, spectator matches, social video sharing and so on have all quickly become big business. According to figures recently released by Twitch.tv, 12 billion minutes of video game coverage was watched on their service in 2013, doubling 2012′s number. 45 million people tuned in to watch video gaming. 6 million videos were broadcast on their service. And, perhaps most incredibly, the average viewer spent 106 minutes per day watching.

Anecdotally I see people all across my Twitter feed talking about games they’re watching or broadcasting. Just as soccer fans often share best-goal clips on Youtube, it’s become a thing in video games to share around best-run clips from games like Spelunky or big battles from League of Legends. I know several friends who have streams open all day long, for example, almost like listening to the radio while they work, and what’s even more fascinating to me is the degree to which their conversation around the games they watch is starting to look like sports chatter.

Streaming of video games creates all sorts of legal gray areas (if I stream-play a narrative-driven game and essentially share the story with 100 other viewers, has the game maker lost 100 sales?) there’s no denying its appeal. But there’s still a distance to go before the participatory culture emerging around video games crosses over into the mainstream. Even though Twitch.tv’s numbers are very impressive, for example, they are dwarfed by real-world sports. Video games have not yet built to that level.

For example this weekend the streets of Seattle are filled with an urgent hope. Thousands of flags are flying high, everyone’s wearing indigo-and-green sports jerseys and a chant can be heard in every pub and bar. It starts with one person shouting “Seeeeaaa” and the crowd responding “Haawwwks!”, and then again and again. The big game has come against the rival 49ers (boo hiss) and the winner gets a shot at the Super Bowl.

There’s really no video game equivalent to that kind of cultural ubiquity. Not yet. One missing piece is television. Sports are so influential because they’re on TV, and TV is in homes and bars and everywhere else. TV is focused through channels and so mass attention can still be harnessed through it. Indeed sports are one of the few kinds of programming that can still do that. And while some sports (such as WWE) start to evolve from pure TV shows into more rounded services, TV is still the primary point of access.

Digital game streaming has gained a foothold on TV through devices like gaming consoles and media streamers. They also have tablet apps and so can get to TV via technologies like AirPlay or Chromecast. But as yet there’s no serious coverage on regular TV (in the West at least), no dedicated channels on cable, nothing that could conceivably be easy enough for a sports bar to show. While arguably certain parts of the TV model of doing business are going away anyway, the easy access that TV can provide is still not quite in-reach as of yet.

Another missing piece is familiarity. The NFL is so popular in the U.S. because of its deep roots in schools and communities that keep the passion of the game alive. The same is true of soccer in Europe and many other sports in different parts of the world. People grow up with these sports and so are inducted into their culture from a very early age.

Video games are very different in that respect. For one thing they’re still seen as outsider-enough by the people who don’t consider themselves “gamers” (but play Candy Crush Saga in bed every night) and still believe that games rot the brain despite all the evidence. Set against that backdrop can be hard to see how they cross the gap into acceptance, but in reality those kinds of attitudes are increasingly held by the minority. We’re all geeks about one thing or another these days and we’re slowly allowing ourselves to admit it.

Finally the third piece is the pace at which video games change. Sports are vast and relatively unchanging rule sets that transcend the generations, and their rules often become colloquial terms of reference. A home run is a home run, same as it was 100 years ago, and that has cultural value.

Few are the video games whose appeal lasts five years, never mind 100. There are always new hits, new innovations and new genre kings. This years’s big first-person-shooter becomes last year’s with great regularity. And so to really enjoy a service like Twitch you arguably need to know something about video games in general, to be a part of the constant ever-evolving culture. So there’s an accessibility gap of the kind that TV has great difficulty with. TV is generally unable to broadcast the dorky and the geeky without injecting it full of cringe, and maybe this is why eSports and Twitch and the like have not made it onto ESPN yet. 

But surely that’s only a matter of when, not if. As TV continues to be disrupted regardless and new entrants to broadcasting emerge that don’t play by its rules, it’s entirely conceivable that those blocks will just go away. Will a day come, for example, when Twitch offers a subscription service to gamer bars rather than sports bars, where the establishments themselves change to get in line with where the viewers are going?

Of course it will. One day, maybe sooner than you think, the fans in the streets will be cheering for their digital teams.

Article courtesy of TechCrunch

The ‘Anti-Amazon Law’ Is About To Become A Reality In France, But It’s Not A Bad Thing

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The cultural exception strikes again — France’s National Assembly will most probably pass the so-called ‘anti-Amazon’ law in the coming days. In a few months, Amazon won’t be able to offer free shipping for books in order to protect independent bookstores. It’s a logical evolution of the Lang Law.

Book prices in France are hard to understand from a foreigner’s perspective. Back in 1981, French Minister of Culture Jack Lang established a fixed price for books sold in France. Since then, publishers have been fixing the price, printing it on the back of the book.

Retailers from supermarkets to independent book sellers have had no choice but to sell those books at the official price. If you really wanted to compete on price, you could discount the book 5 percent below the publisher’s price — many bookstores chose to take advantage of this exception, but 5 percent was a reasonable price difference.

When it was created in 1981, the government wanted to protect independent bookstores against supermarket chains. It worked really well, and independent bookstores are still around, for the most part. In fact, similar fixed book price laws started popping up in other European countries, such as Italy, Portugal, Spain or Germany.

But bookstores had no idea that the most serious threat had yet to come — Amazon, Fnac and a few others opened their online stores.

Despite having to wait a couple days before getting your book, the two heavyweights Amazon and Fnac found a way to remain competitive: they priced the books 5 percent below the publisher’s price and they offered free shipping, all the time, for all book orders. Independent bookstores saw that as unfair competition.

Filippetti says that she has nothing against Amazon despite the law’s informal name — but free shipping has to stop.

As Amazon bills from Luxemburg where sales tax is very low, this model was sustainable and allowed the company to gain market share. The company is playing its usual market share game in France as well — profit and margins are not as important as increasing sales. Theoretically, the company can flip a switch any day now, increase prices and start the money-making machine.

Today’s French Minister of Culture Aurélie Filippetti says that she has nothing against Amazon despite the law’s informal name — but free shipping has to stop. In a few months, online retailers will have to choose between free shipping and the 5 percent discount.

If they choose the 5 percent discount, it won’t deduct 5 percent from the book price, but from shipping. For example, a $10 book with $2 of shipping costs can be priced at $9.50 — and consumers will still have to pay $1.50 of shipping costs.

The National Assembly and the Senate both successively passed the law project. The National Assembly now has to vote one last time. But since the text was only slightly modified, it should easily pass.

How Fixed Book Prices Can Actually Increase Competition

When it comes to book pricing, there is another interesting case: the ebook price-fixing case in the U.S. Apple was found guilty of fixing ebook prices with its iBookstore.

When the iBookstore was unveiled in 2010, the so-called agency pricing model took over ebook stores. Apple let publishers fix their prices, but forced them to put the same price tag on the Kindle Store, the iBookstore and every other ebook store.

That’s when the DOJ wrote an antitrust complaint. But instead of fostering healthy competition by letting ebook sellers set their own prices, competitors stumbled — Nook ebook sales dropped. The same is probably happening for other stores.

Now, Amazon is the undisputed leader. By preventing the agency model, the DOJ created an effective near monopoly. It gives a lot of power to the retailing company when it comes to negotiating profit sharing with publishers.

With France’s ‘anti-Amazon’ law, the government is going in the opposite direction and reiterating the long-standing tradition of protecting independent bookstores and publishers. Yet, is it going too far?

In December, France’s second biggest bookstore chain Chapitre filed for bankruptcy. $12.3 million (€9 million) of public money will be invested in the book industry in 2014 as online competition is increasingly hurting the industry.

So the real question isn’t whether the law is going too far, but whether it will be enough to save the 2,500 independent bookstores in France.

(Image credit: Casey Bisson)

Article courtesy of TechCrunch

Holy Tech Batman! — Can The European Commission Be A Startup Super Hero?

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Screen Shot 2014-01-05 at 16.43.38

What is to be done with Europe? As The New York Times wrote just two days ago, there are not enough people in Europe qualified to fill all the technology jobs available. At the same time, Europe is not producing really big platforms to take on the global players. Too much of European technology has been caught up producing client-driven businesses in enterprise. As it is often said, where are the platforms like Google, Facebook and or Twitter in Europe? We can’t recycle stories about Skype forever. There are some amazing companies coming though. But more are needed.

So it is that the European Commission wants European member states to develop ‘a new generation of web services’, and of course, reap the economic benefits from those.

Of course, the Commission is not the magic bullet, or the super hero to save the day. But it wants to try.

There’s no getting around it. For a long time Europeans have looked with envy upon the sheer scale of technology innovation coming out of places like the USA (in software and internet platforms) and Asia (in hardware). The Commission, quite rightly, wants to help do something about this.

So back in May 2013 it introduce a set of ’6 actions’ by the EC VP for Industry & Entrepreneurship, Antonio Tajani as part of its grandly titled “Entrepreneurship 2020 Action Plan”. The little unit inside the Commission to deliver this is one year old, which, in EU Commission terms, is a teeny tiny baby.

So the question is, can they do it, and what the hell is their action plan?

Well, their Action Plan described as a blueprint for “decisive action to unleash Europe’s entrepreneurial potential, to remove existing obstacles and to revolutionise the culture of entrepreneurship in Europe.” (This was developed after a public consultation process with a number of European entrepreneurs).

The aim is to invest in in changing the public perception of entrepreneurs (typically poor in risk-averse European business culture), in entrepreneurship education and to support groups that are underrepresented among entrepreneurs. The aim is to revitalise an entrepreneurial spirit which has considerably declined in the postwar years. And let’s face it most jobs are created by SMEs and micro-firms that did not exist even 5 years ago.

The Commission wants to under-pin the idea that it is only when a large number of Europeans recognise an entrepreneurial career as a rewarding and attractive option that entrepreneurial activity in Europe will thrive in the long term.

So, what in each is in this “Entrepreneurship 2020 Action Plan”. Well, it has three main pillars: Entrepreneurial education and training; the creation of a business environment where entrepreneurs can flourish and grow; and finally, highlighting role models while also reaching out to specific groups whose entrepreneurial potential is not being tapped to its fullest extent.

Since it issued it’s action plan, the Commission has delivered six initiatives aimed at each of the above actions, which I’ll go into in a moment.

• Setting up a Startup Europe Partnership
• The “Leaders Club” of entrepreneurs
• MOOCs for increasing web talent in Europe
• Accelerators Assembly – A Commission-funded network of tech Accelerators who are asked to share knowledge and information.
• A network of EU investors active in raising venture capital
• An EU crowd-funding network

These activities are, in theory targeted as ‘web entrepreneurship’ (or W.E. as they like to call it) and is all about helping to cultivate more ambitious tech start-ups which, crucially, are also able to scale into full-blown going companies, while boosting overall economic growth and jobs in the internet-based economy.

The EU Commission has a motto for this action plan which is ‘start in Europe and stay in Europe’. Of course, it’s not going to suit every business, but it’s a laudable thought.

In order for this to happen they want to overcome what obstacles there are in Europe to starting up and to work out how they can enhance startups to ‘scale up’ inside the EU and compete internationally.

Here we detect a slight problem in the thinking. Many startups will want to scale internationally from the word go, not just in the EU.

But, of course, it’s only the EU area of member states that the Commission can deal with anyway. That said, if the EU can create some sort of ‘best practise’ there’s nothing to stop nearby non-EU states taking a leaf out of their book.

One area the Commission thinks it is ‘doing OK’ in is the area of the Telecom Single Market legislation – an area championed during Neelie Kroes’ second term in office, with it’s aim to reduce the cost and legislative burden on companies, and the geographical asymmetries that prevent ‘single market’ economies of scale. And to be fair, she has been pummelling the networks to reduce roaming costs – and it does indeed look like those will come down year over the next few years.

So what has the Commission been doing in a concrete manner on the ground, and where do they go next?

The answer is six main initiatives, with a couple of ancillary activities tacked onto the end.

• Startup Europe

They set up the Startup Europe which covers a a wide range of activities and calls on private sector to come together to support European startups. A number of these are listed here.

Confusingly, They have registered, and promote this URL StartupEurope.eu

which simply re-directs to this long URL. Meanwhile, they also have Launch.StartupEuropePartnership.eu which isn’t doing anything right now.

Under the banner of Startup Europe, the Commission ran “Tech All Stars”, which was basically a European Commission-backed effort to run a startup pitch competition. Except they did not run it. It was a series of two competitions run by AngelsBootcamp and Founders Forum culminating in the overall winner, Trustev, being showcased at the Digital Agenda Assembly in Dublin on the 19th June.

Note that this has a different logo to the StartupEurope Partnership. Confused yet?

Under the list of achievements is the expression of interest and the quality of the corporate ‘pledges’ received so far from companies such as Telefonica, Microsoft, Adobe, Google.

The pledges they are after include things like mentoring, Open office hours, access to office spaces, funding, training, etc etc. All things corporates are famously bad at, of course, but at least it’s something.

They’ve had Telefonica bring Campus Party to Europe. Microsoft pledged to create CoEntrepreneurs.eu as a “a platform, a community and a collection of 2.0 initiatives enabling massive entrepreneurship support by the entrepreneurs themselves” – however, the site re-directs to CoEntrepreneurs.be, a Belgian domain, and a site with a couple of guys taking in French about startups. Not very Microsoft.

There’s also a vague commitment from Microsoft BizSpark to engage with European Institutions, but since this is simply cover for MS to sell software then you’d expect them to do this anyway.

The Leaders Club

“The Leader’s Club” is a group of six successful web entrepreneurs assembled by the Commission to basically come up with a list of things they think Europe should do, which they called the Startup Manifesto.

These are: Daniel Ek (Spotify), Kaj Hed (Rovio), Joanna Shields (Tech City UK), Reshma Sohoni (Seedcamp), Boris Veldhuijzen van Zanten (The Next Web), Zaryn Dentzel (Tuenti), Niklas Zennström (Atomico) and Lars Hinrichs (formely of Hackfwd).

In March last year they met EC VP Neelie Kroes and in September launched their Manifesto of 22 actions needed to boost entrepreneurship for internet-driven economic growth across Europe. They boiled down to five headings: improving tech skills and education in Europe; making it easier to access talent in and outside the EU; increasing access to capital; modernising data laws across the EU; getting European countries to take ‘thought leadership’ in tech.

They tested the interest in the manifesto by subjecting it to public vote, but that garnered a relatively low 3,000 or so votes. That said, the ideas were rock solid. Indeed, the Leader’s Club has probably come up with amongst the best output of any Commission initiative to date – assuming anyone is listening.

If this were to go any further, one might suggest they look at the UK’s Tech City policy of creating a ‘Fast 50′ layer of much larger startups on their way to an IPO.

• Fostering Web Skills

The Commission has put out to tender a project to study the capability of MOOCs to improve web skills in Europe, for EUR 90,000. The study is due to report later in 2014, and will map the supply and demand for these, with the results to be published at a conference Q3 2015. The MOOCs Tender was launched to explore short term and long term objectives in developing massive online courses, such as the ones launched by Stanford’s Coursera, or MIT’s EdX which have had an explosive growth.

Massive Online Courses have clearly aided the development of skills, though, arguably, basic Computer Science combined with trawling the web for the usual coding resources works equally well.

There’s little to say about this initiative other than it’s probably a good idea to get data on MOOC usage in Europe.

• The Accelerators Assembly

This is a network of tech Accelerators which was launched in the first half of 2013. It was set up as an on-line group but has had some offline meetings. It has some 200 active accelerator members who are supposed to be sharing knowledge and information about access to funding opportunities. The Commission has commissioned a report expected Q1 2014 to summarize the overall situation in Europe with respect to the growth of accelerators.

• Web Investors Forum – A network of EU VCs

This is the work to create a network of Venture Capital firms, ongoing since March 2013. Oddly, although this is to “create awareness” about the growth of web services, you can probably agree that they already know this already. However, there is more specific work going on to survey of over 60 VCs and publish the results later this year.

• Crowdfunding Network – the EU crowd funding network

Once again we have a separate web site for a pretty related project. Launched in June 2013 by various Commission departments, the idea here is to make EU member states aware of the movement of Crowdfunding and ‘Crowd-Equity’ financing for startups. Why? Well, to put it bluntly, this who thing has apparently not been noticed at policy-making levels by quite a lot of EU states. This has led to some very non-EU friendly behaviour, such as the fact that legislation in Germany and Italy has a completely different view of what crowd funding actually is. Thus, ‘harmonisation’ – a favourite EU word – of the on-line crowd funding market is very relevant. If EU platforms played by the same rules, then they would be able to raise much bigger sums of funding. The Commission plans to commission a report analysing the policy priorities in the EU and run an event around this issue in the second half of 2014.

Other Activities

Aside from all this, the Commission has started some work on trying to dynamically map what is going on in Europe across the EU ecosystem, but there has not been results of that published yet.

In addition, the Commission has been dabbling in what amounts of PR works for startups.

It created the Europioneers awards to use its media profile to highlight the work of startups, alongside the Techallstars activity.

So there you have it, a long laundry list of things the Commission is planning or already implementing.

The question is, can they achieve what they have set out to do?

And should the Commission even be dabbling in these initiatives at all?

The questions is, are these the right things? Many would argue that the Commission would be better off emphasising that EU Members States invest vastly more into Computer Science and Engineering skills, than dabbling in startup competitions usually better run by the private sector.

With Europe facing a skills and entrepreneurship gap over the next few years, it would seem they have to do something.

Article courtesy of TechCrunch

Facebook looks back at 2013

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Facebook is inviting users to look back at their year, but also reflecting on what happened throughout the social network in 2013. Facebook released a list of the top trends on the site, such as the Royal Baby, Disneyland and Miley Cyrus.

Top Life Events 

1. Added a relationship, got engaged or got married
2. Traveled
3. Moved
4. Ended a relationship
5. First met a friend
6. Added a family member, expecting a baby or had a baby
7. Got a pet
8. Lost a loved one
9. Got a piercing
10. Quit a habit

Top Check-Ins Around The World

(Excluding transportation hubs)

Argentina: Puerto Madero, Buenos Aires
Australia: Melbourne Cricket Ground (MCG), East Melbourne, Victoria
Brazil: Parque Ibirapuera, São Paulo
Canada: Rogers Arena, Vancouver, British Columbia
Egypt: Sharm el-Sheikh, South Sinai Governorate, Egypt
France: Disneyland Paris, Marne La Vallée
Germany: Reeperbahn, Hamburg
Hong Kong: 香港迪士尼樂園 | Hong Kong Disneyland
Iceland: Blue Lagoon, Reykjavík, Iceland
India: Harmandir Sahib (The Golden Temple)
Italy: Piazza San Marco, Venice
Japan: 東京ディズニーランド (Tokyo Disneyland), Tokyo
Mexico: Auditorio Nacional, Mexico City
Nigeria: Ikeja City Mall, Ikeja, Lagos, Nigeria
Poland: Temat Rzeka, Warsaw
Russia: Центральный парк культуры и отдыха им. Горького | Gorky Park of Culture and Leisure
Singapore: Marina Bay Sands
South Africa: Victoria & Alfred Waterfront
South Korea: Myungdong Street, Seoul
Spain: Las Ramblas, Barcelona, Catalonia
Sweden: Friends Arena, Solna
Taiwan: 花園夜市Tainan Flower Night Market, Tainan City
Turkey: Taksim Square, Istanbul
United Kingdom: The 02, London
United States: Disneyland, Anaheim, California

Most Talked About Topics

1. Pope Francis
2. Election
3. Royal Baby
4. Typhoon
5. Margaret Thatcher
6. Harlem Shake
7. Miley Cyrus
8. Boston Marathon
9. Tour de France
10. Nelson Mandela

Facebook also released statistics about games and a list of the top games in 2013. Of the top 23 games on Facebook this year:

Out of a total 23 games:

  • 10 come from studios based in Europe or the Middle East
  • 8 are cross-platform, integrating with Facebook on web and mobile
  • 8 were developed by indie studios
  • 7 are mid or hardcore games
  • 5 are arcade games
  • 5 are casino or slots games

Facebook’s game of the year nod went not to Candy Crush Saga, but to Pretty Simple’s Criminal Case. Facebook described the game in a blog post:

This hidden object game from a French indie studio combines crime scene investigation with engaging sharing mechanics to create the most successful Facebook game of the year. As detailed in our case study of the game, Open Graph stories featuring visceral artwork drove organic growth for the game throughout the first half of the year. Content updates and additional cases drove more growth for the game in the second half of the year.

Image courtesy of Disneyland’s Facebook page.

Article courtesy of Inside Facebook

HomeAway Acquires Australian Vacation Rentals Site Stayz For $198 Million Cash

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Nasdaq-listed vacation rental site HomeAway has acquired Stayz, an Australia-based vacation rental service and market leader in the region, for approximately $198 million in an all-cash transaction, the company is announcing today. The move includes Stayz Group sites Stayz.com.auRentahome.com.auTakeABreak.com.au, and YesBookIt, and brings an additional 33,000 Australian vacation rental properties to HomeAway.

HomeAway bought the Stayz Group from Fairfax Digital, a division of
Fairfax Media Limited, owner of The Age and The Sydney Morning Herald, which itself purchased the company in 2005 for $12.7 million. Stayz had generated AU$25.4 million in
revenue in its last fiscal year 2013 (ended in June 2013), the majority of which is generated through its commission-based business model, HomeAway notes.

Stayz’ traffic also outsizes their next largest competitor by almost 8-to-1, making it the leader in the region.

The company’s 40-person team will now continue to operate out of its HQ in Sydney, and will be managed by Anton Stanish, General Manager for Stayz. Its inventory will become integrated into HomeAway’s
pay-per-booking inventory in the U.S. and Europe, to generate additional traffic.

According to HomeAway CEO Brian Sharples, the deal in this case was not only for the 33,000 properties themselves, but also to provide further momentum for his company’s newly-launched pay-per-booking business – “something Stayz has worked over the years to optimize,”  he noted in a statement about the deal. For HomeAway, Stayz was an attractive service because it has been around since 2001, and has a well-established procedures in place.

This is not HomeAway’s first acquisition in the region, but rather comes nearly a month after it acquired a majority stake (55%) in a nearby competitor, Bookabach, based in New Zealand. Also over the course of the past year, HomeAway acquired another smaller service, short-term rental site based in Singapore,
travelmob.com; it set up a distribution partnership with Wego.com; and the company made a minority investment in China-based vacation rental company, Tujia.com.

HomeAway’s growth-through-acquisitions strategy comes at a time when other competitors have been shifting their international focus – for instance, while Airbnb created a new hub for global operations in Berlin this year, it has also purposefully tried to slow down from what could have been otherwise too-rapid expansion. During its earlier years, Airbnb had been fighting clones in Europe and Asia for listings, including Samwer brothers-backed Wimdu GmbH. (Airbnb co-founder Brian Chesky even once considered buying this rival but decided not to, having not been comfortable with the culture and tactics it employed.)

But as Airbnb dialed down its overseas hiring and growth over the past year, others like HomeAway have stepped in to snap up the smaller competitors, like HomeAway has now done with Stayz.

HomeAway itself has had a presence in the Australian region since 2011, following its purchase of the the vacation rental business from REA Group Limited, and subsequent launch of HomeAway.com.au.

Article courtesy of TechCrunch

Custom Goods Marketplace Makeably Rebrands As “Hatch,” Now Updates Pricing As You Go

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Makeably, the New York-based, custom-made goods marketplace that closed on seed funding from Great Oaks, 500 Startups and others earlier this year is now relaunching under a new, easier-to-remember name: Hatch. Alongside the rebranding, the company has also evolved the process by which consumers tweak and “remix” the products offered for sale.

The site, founded by ex-Googlers Ryan Hayward and Anastasia Leng, is similar to CustomMade in that it’s an attempt to connect everyday shoppers with artisans capable of producing custom goods.

But this summer, Hatch (then Makeably), made a slight shift to differentiate itself somewhat from its competitors. Leng explained that the majority of shoppers looking for custom items weren’t reaching out to artisans with detailed requests sprung out of their own minds, but were rather “remixing” existing products with small change requests. Around 90 percent were asking for minor adjustments – like changing the base material used in a product. For example, they might request a necklace in gold instead of silver. They may have also asked for slight changes to designs or sizes, among other things.

To encourage this culture of remixing, the company changed the site to better support user behavior. In a newly added side panel, customers were told to “Make it Yours” and could fill in a form where they selected the changes they wanted to request.

Today, Leng tells us Hatch is evolving things yet again. “Based on what we’ve learned from our buyers and makers, we’ve moved the customization process directly into the photograph,” she says. Users can now interact with hotspots over a product in order to make better decisions about how to modify it, and they’re presented with visuals about what some of their inputs would look like after doing so.

At present, users can select options from visual cues the makers themselves provide (like color or type of wood), they can choose from a drop down menu of options for things that don’t require visual cues (like size), or they can describe what they’d like (e.g. a message they’d like engraved), Leng explains. Soon, they’ll be able to drag their own hotspot over a product to better communicate to a maker what they’d like to personalize, too.

To do customization right, Leng thinks Hatch should make it easier for customers to understand what they can change, see what the change looks like, and immediately see the final pricing. “These are the principles that make your experience with a service like Moo, NikeID or event CustomInk a great one. But it’s not obvious how you visualize customization when you’re dealing with products that are made by a large number of individual artisans and makers around the world, as well as products that have never been created in the exact variation you want (but which easily could be),” she says.

In early tests, the company found user feedback about the new process to be positive. “We kept hearing users describe their behavior as not one of buying, but that of designing and creating,” says Leng. (You can try it here with customizing these 3D letters or these wooden coasters.)

Today, Hatch offers 1,500 live products on its site, on average around two to three per maker, and the average price point has stabilized at $112, which Leng also notes is six times higher than Etsy’s. Eighty-five percent of makers have had at least one inquiry, 40 percent have made one sale or more, and 60 percent are full-time makers not hobbyists.

Meanwhile, on the buyers’ side, 30 percent are repeats, and 98 percent of those make their second purchases from a different category than their first. Since May, Hatch has grown 30 percent month-over-month in new makers and products, and has doubled its user base. The company doesn’t disclose users or revenue, but says that all orders today have come through organic search or referral traffic.

And now that the team is comfortable and has made the sell side of the business work, they’re going to focus on building up the demand side in the months ahead.

However, the question here is whether the maker movement and the market for those in search of custom goods online is large enough today to keep sites like Hatch afloat for as long as it would need to see this thing through. It’s also interesting that they compare themselves to Etsy, a much larger maker marketplace which recently went through growing pains of its own, despite achieving profitability back in 2009. Hatch may have successfully market-tested how custom goods sales can work online, but there’s nothing stopping a larger player from implementing similar technology of their own (or even acquiring Hatch if the startup runs out of runway, perhaps).

In other news, Hatch was previously working out of a maker co-working space in Brooklyn called 3rd Ward, which shut down earlier this month, after giving Hatch less than a week to find a new home. They’ve now put an offer down on a space in Chelsea, which would bring them into Manhattan.

Article courtesy of TechCrunch

Airbnb’s Brian Chesky And Sequoia’s Alfred Lin On The Importance Of Culture And Core Values To A Business

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Airbnb co-founder Brian Chesky and Sequoia Capital partner, Airbnb board member, and former Zappos COO Alfred Lin joined us in the TechCrunch TV studio for a special three-part series on how Chesky and Lin work together on retaining culture, expanding internationally, and maintaining customer service. In this episode, we focus on how Lin and Chesky first met, and what Chesky has learned from the Zappos model in creating a culture at Airbnb.

Founded by Chesky, Joe Gebbia and Nathan Blecharczyk, Y Combinator-incubated Airbnb was founded in 2008 as a marketplace to find a sofa to crash on or a room to rent for a short time. In fact, Sequoia led Airbnb’s seed round back in 2009.

Flash forward five years, and the company has evolved into an international giant in the apartment and home rentals space, reportedly valued at $2.5 billion during its last funding round. To date, Airbnb has helped service over 8.5 million guests, and has more than 500,000 listings in 33,000 cities and 192 countries.

As he explains in the video above, Chesky was obsessed with Airbnb’s culture from the beginning. Shortly after the startup raised funding in 2009 from Sequoia, the founders flew to Zappos to understand how they could apply some of the learnings from the e-commerce company to Airbnb’s own internal operations. One of the things that Lin helped Chesky and the team develop were the core values of Airbnb, and how to extend the culture of a business to the recruitment and hiring process.

Check out the video to hear what Airbnb’s six core values are, and stay tuned for the second video in this series, which addresses the company’s international expansion, how Chesky is approaching the challenges involved with growing globally (with the help of Lin) and more.

Article courtesy of TechCrunch

April 2014
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