As AT&T comes under the gun for blocking Google’s new video chat app Hangouts on its cellular network, the company is today hoping to put a better spin on the news by offering a new statement detailing its changing position on support for pre-loaded video chat apps. During the second half of 2013, AT&T says it will begin to enable pre-loaded video chat applications over cellular for all its customers, regardless of the customer’s data plan.

This is a change from the carrier’s current position, which requires that customers pay for AT&T’s Mobile Share or Tiered plans, or soon, unlimited subscriptions (with LTE devices), in order to use pre-loaded video chat apps, like Apple’s FaceTime, for example, or those from Samsung and BlackBerry.

Here’s the revised statement, sent to us this afternoon by AT&T communications, as an update to an earlier inquiry on the block:

“For video chat apps that come pre-loaded on devices, we currently give all OS and device makers the ability for those apps to work over cellular for our customers who are on Mobile Share or Tiered plans. Apple, Samsung and Blackberry have chosen to enable this for their pre-loaded video chat apps. And by mid-June, we’ll have enabled those apps over cellular for our unlimited plan customers who have LTE devices from those three manufacturers.

“Throughout the second half of this year, we plan to enable pre-loaded video chat apps over cellular for all our customers, regardless of data plan or device; that work is expected to be complete by yearend.

“Today, all of our customers can use any mobile video chat app that they download from the Internet, such as Skype.”

From the sounds of it, that means Google won’t have to first “enable” (ask for permission?) in order for Hangouts to work. Even though it’s a pre-loaded app, it will just begin working regardless of the customer’s current data plan.

The problem AT&T had with Hangouts, presumably, is that the app replaces the Google Talk application that shipped by default on Android devices. That means the app is “pre-loaded,” and for pre-loaded applications to run over AT&T’s cellular network, the OS or device maker involved had to first work with AT&T on the matter, per AT&T policy.

And from the statement AT&T released last week, it seems that perhaps Google did not do so:

“All AT&T Mobility customers can use any video chat app over cellular that is not pre-loaded on their device, but which they download from the Internet. For video chat apps that come pre-loaded on devices, we offer all OS and device makers the ability for those apps to work over cellular for our customers who are on Mobile Share, Tiered and soon Unlimited plan customers who have LTE devices. It’s up to each OS and device makers to enable their systems to allow pre-loaded video chat apps to work over cellular for our customers on those plans.” [Emphasis mine]

The situation is not necessarily one of bandwidth concerns at this point, since Apple’s FaceTime is already enabled for MobileShare and Tiered customers following a similar controversy. At the time of its launch, Sprint and Verizon enabled FaceTime, and AT&T rolled out access only to select customers following net neutrality complaints.

In Apple’s case, the company left FaceTime support up to carrier discretion, and apparently Google did the same. And as is par for the course, the app is reportedly working just fine on Verizon, just not on AT&T right now.

That will continue to be the case until later this year when the change is made, though no exact date was given.

Article courtesy of TechCrunch

Woot, the daily deals site that Amazon bought in 2010 for $110 million, built a reputation for its “pile ‘em high, sell ‘em cheap” business model for shifting goods. Now, the company is facing up to a shift of a different kind: that of its own talent. In the last week, TechCrunch has learned that five six key employees are parting ways with the company.

They include Darold Rydl, who had been president of the company and one of its very first employees; CTO Luke Duff, who has been the technical lead for all things Woot since 2005; CFO Rene Gonzalez; Dave Rutledge, who had been the creative lead on all of Woot’s editorial content as president of Woot Workshop; and Jay Johnson, leading both the deals and affiliate marketing divisions at the company as director of deals.woot. Rydl and Gonzalez have already left, and the other three have given notice but will be with the company for another week. Update: after publishing, we found out about another departure: lead developer Shawn Miller is also leaving, with his last day May 17.

This comes 11 months after founder and CEO Matt Rutledge (brother of Dave) also left the company.

No, these six are not banding together for a new startup. Rydl distributed a note to staff and then later posted it on Facebook (we copy it below) describing a desire for a change of scene, and we understand that each is doing his own thing.

(We have reached out to Amazon for a response to this story.)

But we have also been hearing another story about what’s going on at Woot that may have spurred some of these departures, simmering issues with Amazon management that have finally started to boil over. “I don’t think any of us ever envisioned leaving Woot,” one person told me. “I thought I would stay there and grow with the company as the industry changed. But there were a lot of frustrations.”

These, we understand, are connected to a gradual set of changes at the company over the years as it has bedded down at Amazon. “Amazon wanted to come in and do things in a different way, not considering the importance of the other stuff,” I was told.

It seems like one of the thorny points is Woot’s CEO, Garth Mader, who had been put in place by Amazon to work under Matt Rutledge, and was promoted after Rutledge left.

In short order, changes pushed through by Mader have spread to various aspects of Woot’s business.

Turning straw into gold

The site, founded in 2004 by Matt Rutledge when it was first incubated inside Rutledge’s preexisting company Synapse Micro, was one of the pioneers of the “daily deal” model of selling goods online. It did so in an irreverent way aimed at disrupting the relationship between buyer and seller by making it far less formal. The original concept was to sell one “crap” item at a time that was at the end of its line (consumer electronics was a mainstay) at a competition-busting price, and then to launch another product at midnight each day.

Breaking up the pattern of single items for sale until they sold out, once a month Woot also sold a “Bag of Crap,” a group of items for a single price. Frank and funny commentary ran through all of this, along with an attempt to remain transparent with consumers through forums and details about how much of an item was sold.

All this brought a cadre of loyal users to the site — some 5 million per month at its peak, according to Rydl’s letter — rushing to buy things that, in a sense, no one else wanted to buy. Turning straw into gold, as Rydl describes it in his letter below.

Today, things have changed. Woot no longer shares data on how much of a product has sold. If you think about it, that kind of transparency also runs counter to how Amazon is about its own sales numbers for specific products.

Meanwhile, the Bag of Crap stopped getting sold monthly, because it was deemed to be too much of a strain on the system, and the server crashed every time it was sold. “That wasn’t an acceptable customer experience,” the source says Woot was told. “But there were a million people trying to get 1,500 items, of course they would crash.” It didn’t make sense to scale up the hardware to support something we did once per month, he said. The workaround was that the company ended up creating a scavenger hunt to find a (less frequently offered) Bag of Crap, but given that users had to “like” Woot on Facebook to get the first clue, “the perception for many was that it simply went away.”

Another change was more backend but crucial to Woot’s business model. The company made a “big push” to ship products using Amazon’s fulfillment system but this proved inefficient and far less profitable for the kinds of products that Woot sold. The Woot method involved a big palette with the item able to be taken and thrown into a shipping box; the Amazon method was less simple, if perhaps more professional.

“The end result was that our variable costs quadrupled. We used to be able to sell 50,000-100,000 items per day at a lower price point, but now we can’t profitably sell items under $10 because the variable cost for shipping got too high.” It’s unclear whether at some point Woot will revert to what it had been doing in the past.

However, there is more possible pain to come in this area, with wider ramifications. Along with the push to move product into fulfillment by Amazon, Woot scaled down its warehouse operations but has never communicated to the operations staff what the plan is for them. Our source says that “has left the remaining operations staff with an uncertain future and has had a dramatic effect on morale as others across the company wonder if their group will also be shuttered as more Amazon services are used. The fear is that soon, all Woot employees will be asked to move to Seattle [from its current HQ in Carrollton, TX, north of Dallas] or they will be replaced by Amazon services.”

The bigger picture for daily deals

To be fair, there have been other pressures on Woot’s business that have less connection to Amazon’s ownership. Daily deals, as we have seen with Groupon and Living Social, have become less fashionable, partly because of an oversupply of companies working in this space.

“The fact that so many retailers started doing these kinds of promotions and started pushing so many emails I think led to fatigue,” our source says. Woot resisted emails, until two years ago, but “even then a small percentage came from there. Most still came from direct traffic, from people hitting the site every day to be engaged with the content.”

That direct traffic on the site, nevertheless, is down nearly 30 percent year on year, and is continuing to decline.

But ironically, because Woot is selling significantly more items now than it did in the past, this hasn’t impacted business. In fact, Woot’s revenues have been growing at a 20 percent rate over the last two years, and 2013 appears to be shaping up in the same range. Specifically, through Woot Plus, its flash-sales section, the site now offers more than 400 SKUs every day instead of six a year ago.

(Amazon does not break out how individual businesses are performing in its earnings statements.)

The Zappos fairy tale

The story of how Woot was acquired and subsumed into Amazon can be a cautionary tale for other startups. Our source says that Woot had envisioned it would follow in the path of Zappos, the shoe and fashion e-commerce site that was acquired the year before Woot for $1.2 billion. Into that sale was built the idea that Amazon would stay hands-off. At the time of the acquisition, Zappos CEO Tony Hseih noted in a letter to employees:

“We plan to continue to run Zappos the way we have always run Zappos — continuing to do what we believe is best for our brand, our culture, and our business. From a practical point of view, it will be as if we are switching out our current shareholders and board of directors for a new one, even though the technical legal structure may be different.”

Indeed, while some of Amazon’s acquisitions still do get to do things their own way, more or less, there are others that have been held to more integration.

This is, of course, to be expected: Amazon’s wafer-thin-margin business model is predicated on economies of scale, so it doesn’t make much sense to run different organizations within it in ways contrary to that.

“Maybe because we were only a $110 million transaction, we didn’t have as much leeway in how things worked out for us,” our source said. But that brings a mixed fate: “The core reason we’re all leaving Woot is because we’ve lost the ability to do what’s best for our brand and culture. The business will no doubt continue to grow because Woot can leverage Amazon systems, but Woot will look more and more like Amazon until it is unrecognizable.”

Rydl’s letter:

“In the summer of 2003, a little group of three started kicking around ideas, hoping to let a little wholesale company [to] move a ton of crap. None of us believed the guy in a DeLorean who stood out front yelling “THIS IS WHERE IT ALL BEGINS, YOU GUYS!!!” In retrospect, we probably shouldn’t have called the cops on him. Our bad, guy.

But anyway, that little project soon garnered international acclaim and earned the love and adoration of millions of fanatical customers, all of them begging us for the crap no one else wanted. Every day, I felt fortunate to be around the sort of people who could turn straw into gold.

But today, after lots of soul searching, I’ve decided to take up new challenges. Tomorrow I leave Woot to embark in a new direction. No destination is clear, no course is plotted, but I remember the excitement of starting something from scratch, and I can’t ignore the urge to go create something new.

With my parting words, I want to make it clear: each of you should be proud of your contribution to Woot.com. With the simplest business idea ever (and no advertising dollars to spend) we attracted over 5 million customers, managed well over a billion dollars in sales, and spawned an entirely new industry.. from SCRATCH. We grew from a team of 15 to over 200 people in multiple states, and we even earned the attention of the biggest internet company in the world, a company that decided that it would be safer to flat out buy us instead of trying to compete. Few people in this world have accomplished what we did – always remember to reflect on these wins and celebrate them. In the world of retail, you guys are the freakin’ Justice League.

Please know that I am so incredibly proud of each of you and what we’ve all accomplished together. And understand I didn’t arrive at this decision easily. Nevertheless, I know my decision is right. I leave you all in the capable hands of my hand-picked leadership team – I am 100% certain that they are ready to take the lead. Although you may miss me with your hearts, day-to-day you’ll never feel a thing. And please, keep any tears off the product in the interest of optimizing the customer experience.

More seriously, I still consider my time at Woot to be one of the best things I’ve done, and I’m proud to have worked with all of you over the years. My love for Woot runs deep and eternal. Keep doing great things. After all, you’ve done so many already…..what’s one more?

Woot on,

Darold

Article courtesy of TechCrunch

Shazam and Rdio have offered something wonderful for U.S. users as of fall 2012, providing full track streaming for tagged music via Rdio, thanks to a “Listen Free on Rdio” link within the Shazam app. That means that once you use either the free or paid version of Shazam to identify a song from your device, you can then listen to the entire track, so long as you’re either an Rdio subscriber or have signed up for a free 14-day trial. Now, the service is available to Rdio and Shazam users in Canada, Australia, Brazil, Mexico and the UK in addition to the U.S.

That means it’s now available to a potential combined audience of 120 million users of Shazam’s free app, which is great news for Rdio. Rdio has only around 1 million monthly active users according to AppData, which means it stands to gain a lot from the increased exposure afforded it by getting in front of Shazam users. And of course for Shazam, it offers another incentive for users to access its services.

Rdio is still getting the better end of the bargain, however, unless Shazam is also taking in referral fees for any subscriptions that come out of tags it sends Rdio’s way. That’s because this provides a big jump start to the customer acquisition and conversion funnel that Rdio has in place, which depends on convincing free trial users into subscribers at either $4.99 per month for the Rdio web plan, or $9.99 per month for the unlimited version which includes mobile apps access and offline storage.

Another recent win for Rdio is being selected as a streaming partner for Twitter #Music, the recently launched app from Twitter based on its acquisition of startup We Are Hunted. Both introduce it to new users, who might not have found the service through other means. Rdio still trails far behind rival Spotify in terms of user base, but its services compare favorably to that company’s in my opinion. Hopefully these new inbound customer streams start paying big dividends for Rdio.

Article courtesy of TechCrunch

Windows 8 launched to mixed reviews just over half a year ago, and Microsoft has dutifully pushed out nearly 740 tweaks and updates over the intervening months. Even so, rumblings of a sizable update (codenamed “Windows Blue”) have been making the rounds for months now, and we’ve finally got a firm idea of when to expect the first public preview.

Microsoft Windows chief Julie Larson-Green confirmed at the Wired Business Conference today that developers would be able to download and install the Windows Blue update preview in late June to coincide with the company’s BUILD developer conference.

The update will be “available to everyone that has Windows 8 in the Windows 8 store,” she noted to Wired senior editor Michael Copeland. “Just click on it like you would any app and it’ll update your system.” It’s hardly a shock considering that a June preview release date has been rumored for over a month now, but it’s likely welcome news for users who haven’t quite fallen with Windows 8 and its dramatic design changes.

At this point, many of Blue’s juiciest details are still shrouded in mystery — we don’t even know what the update will even be called. People are already bandying about the name Windows 8.1 and Larson-Green wouldn’t refer to it as anything the “update to Windows 8,” though she may have just been dodging the question as the onstage conversation was just about to wrap up. Microsoft seems content to keep most of Blue’s changelog under wraps for the time being too — CFO Tami Reller pointed to a slew of necessary (if vague) changes in a Q&A that was recently posted to Blogging Windows:

It will deliver the latest new innovations across an increasingly broad array of form factors of all sizes, display, battery life and performance, while creating new opportunities for our ecosystem. It will provide more options for businesses, and give consumers more options for work and play. The Windows Blue update is also an opportunity for us to respond to the customer feedback that we’ve been closely listening to since the launch of Windows 8 and Windows RT.

That said, it seems very likely that at least two major Windows 8 sticking points will be addressed in the coming update. According to ZDNet’s Mary Jo Foley, the traditional Windows start button is expected to make its triumphant return, as is the ability to boot directly into the Desktop view rather than having to futz around with the UI-formerly-known-as-Metro.

As it happens, June is going to be a pretty busy month for Microsoft and its hardware partners –Larson-Green noted that the era of smaller Windows 8 devices is nearly upon us, and that portability mavens will be able to get their hands on the first such device in June as well.

Article courtesy of TechCrunch

Editor’s Note: Nir Eyal writes about the intersection of psychology, technology, and business at NirAndFar.com. Follow him @nireyal.

How do products tempt us? What makes them so alluring? It is easy to assume we crave delicious food or impulsively check email because we find pleasure in the activity. But pleasure is just half the story.

Temptation is more than just the promise of reward. Recent advances in neuroscience allow us to peer into the brain, providing a greater understanding of what makes us want.

In 2011, Sriram Chellappan, an assistant professor of computer science at Missouri University of Science and Technology, gained unheard of access to sensitive information about the way undergraduates were using the Internet. His study tracked students on campus as they browsed the web. Chellappan was looking for patterns, which not only revealed what students were doing online, but provided clues about who they were.

“We believe that your pattern of Internet use says something about you,” Chellappan wrote in the New York Times. “Specifically, our research suggests it can offer clues to your mental well-being.” Chellappan concluded that there was, in fact, predictive power in the data. He found students with early signs of clinical depression used the Internet differently and he could identify students most likely to face mental health issues simply by looking at how they clicked.

“We identified several features of Internet usage that correlated with depression,” wrote Chellappan. “For example, participants with depressive symptoms tended to engage in very high e-mail usage.”

Chellappan developed the technology in hopes of creating an early-warning system to identify struggling students. But his study raised another question, why do people with depression check email more?

Alleviating Pain

The answer may provide clues about why all of us use the products and services we do in our everyday lives. Psychologists believe people with depression feel negative emotions, like anxiety, more frequently than other people do. There is evidence that the depressed students in Chellappan’s study were using the Internet more because they experience negative mental states more often. To try and feel better, they turned to the web to boost their mood.

Finding ways to make ourselves feel better is not something only depressives do. We all seek relief from feeling bad and the brain is primed to help us learn where we can find escape. Just as we might take a Tylenol to relieve a headache, we turn to products to relieve emotional pain. In fact, these two biological processes are so closely linked that taking a Tylenol has been shown to ease both physical and emotional pain. The drug is effective in treating headache and heartache.

Having a pain to cure is a necessary prerequisite to using products. Recent neuroscience reveals the brain even adds pain to things that were previously pleasurable to push us to get what our bodies want. When temptation is activated in the brain, it induces a biological process that not only turns on the pleasure response, but also the body’s physiological stress response.

Consider a 2005 study which looked at the physiological response of women exposed to images of chocolate. Researchers observed that the women experienced a subconscious reaction of alarm similar to seeing a threatening animal in the wild. The women, who had identified themselves as “chocolate cravers,” described feeling not only pleasure at the thought of consuming the chocolate, but also agitation, angst, and a feeling of a loss of control in the face of their desire. For these women’s brains, temptation was stressful.

Since the 1950s, researchers have explored how the brain’s reward system compels behavior. Our understanding of the complex circuitry shows that pleasure and pain work together. Once the brain learns something good is about to happen, it induces a craving we feel as stress. The fastest relief from this discomfort is to get what we want.

Exaggeration and Fear

Companies, of course, are masters of temptation. If marketing is defined as, “the process of communicating the value of a product or service to customers,” then implicit in this practice is accentuating the positive aspects of what being sold. This technique is used not only in hawking goods, but is also found in nature. Animals have been tricking each other by accentuating desirable traits for millennia. The process is called “super-normal stimuli” and it is a key to enticing action by creating the stress of desire.

Another way products induce intense desire is through a certain kind of fear, particularly our innate need to have as much as the next person. The phenomenon is exhibited with a simple experiment conducted by Frans de Waal, a primatologist at Emory University.

In the study, de Waal rewarded two capuchin monkeys with a cucumber when they completed a simple task, in this case, handing a rock to the researcher. When both monkeys were given the same reward, they completed the task as prescribed.

But when the researcher gave one monkey a grape while offering the other the standard cucumber, the results were very different. The stiffed monkey, who was perfectly content just seconds before with his cucumber, began shrieking, baring his teeth, thrashing in his cage, and pounding on the table to show his anger. Known in the vernacular as FOMO, or “fear of missing out”, marketers utilize this inborn trigger to incite pain akin to what the capuchin monkey felt in de Waals cage.

Marketers tasked with increasing consumption of their company’s products have a difficult job; they are often charged with manufacturing desire. To do that, they need to find the customer’s problem, their pain, in order to alleviate it. Without the biological basis spurring our desire, there would be no sales. So marketers must at least accentuate, if not induce, a level of discomfort to make us crave their wares.

Like in the undergraduates in Chellappan’s study exhibiting signs of depression, we all seek to escape feeling bad. The products and services that provide immediate relief are those we come to depend upon most.

Photo Credit: Orofacial

Article courtesy of TechCrunch

Editor’s note: James Altucher is an investor, programmer, author, and several-times entrepreneur. His latest books are I Was Blind But Now I See and 40 Alternatives to College. Please follow him on Twitter @jaltucher.

A few weeks ago I wrote a post about how this was the year you had to quit your job. I gave the reasons why. It wasn’t a gung-ho “you have to be an entrepreneur” article. It was more: bad shit is happening in the corporate world and bit by bit you’re going to feel the urge to quit.

Correctly, many people asked, “Well, what’s next? What should I do?”

I’ve begun asking people who did it. What did they do? How do you quit your job and basically, make a million dollars?

Not everyone is Mark Zuckerberg or Larry Page. Not everyone is going to drop out of college and create an iPhone or a time machine or a toilet that resizes itself automatically depending on who is sitting on it (although that would be pretty cool).

Some people would simply like to quit their jobs and make a good living. Some people would simply like to quit their jobs and make a million dollars. In that movie (the Justin Timberlake vehicle), JT says, “A million’s not cool. A BILLION is cool.”

Well, actually, very often a million is pretty cool. Not everyone is going to be a VC-funded $100 million hotshot. Sometimes it’s nice to make a million dollars, be your own boss, and use that financial freedom to catapult to success.

So  I called Bryan Johnson, who started a company called Braintree. You might not have heard of Braintree but you’ve heard of their customers. They provide credit card transactions or payment services for companies like  OpenTable, Uber, Airbnb, etc.

I’ve never spoken with Bryan before. I am not an investor in Braintree. As far as I know I’m not even an investor (unfortunately) in any of the clients of Braintree. I like to call people who I think have interesting stories and hear what they have to say. That’s the way I build my network of not only financial contacts but potential friends. I’m shy and ugly and don’t have many friends.

But I knew Bryan had an interesting story of how he set up Braintree and I figured it would fit this category of “what do I do next?”

In 2007, Bryan was a manager at Sears. He quit his job and within two years was making over a million a year. Eventually Braintree grew much bigger and raised $70 million from Accel and others, but that wasn’t what was interesting to me.

“How did you do it?” I asked him. “What are the initial steps.” And he told me. So I will tell you.

“I really disliked my job,” he said, “and I never believed in the idea of getting a fixed wage. I had been a salesman before in the credit card processing business where I would go out and get merchants like restaurants and retailers to switch their business to the company I was selling for. So I figured I could do this but work for myself instead of another company.”

Rule No. 1: Take out the middleman. Instead  of Bryan going back to the company he used to sell for, he cut out the middleman and went straight to a credit card processor, worked out his own reselling agreement with them, and did all of this BEFORE leaving his job at Sears.

Many people ask me, “I”m at a job, should I raise VC money yet?” NO, of course not! First you have to hustle. VCs want to back someone who shows a little oomph!

Rule No. 2: Pick a boring business. Everyone is always on the lookout for “the next big thing.” The next big thing is finding rare earth minerals on Mars. That’s HARD WORK. Don’t do it! Bryan picked a business that every merchant in the world needs and he also knew that it was an exploding business because of all the online stores that were opening up. You don’t have to come up with the new, new thing. Just do the old, old thing slightly better than everyone else. And when you are nimble and smaller than the behemoths that are stuck with bureaucracy, you can often offer better sales and better service, and higher touch to your customers. Customers will switch to you.

Rule No. 3: Get a customer! This is probably the most important rule for any entrepreneur. I’ve written about this before (“The Easiest Way To Succeed As An Entrepreneur”). People want to go the “magical path” – i.e. get VC money, quit their jobs, build a product, and then suddenly have millions of customers. It NEVER works like that.

Bryan found 10 customers (out of the first 12 he approached) who would switch their credit card processing to him. He figured he needed to make $2,100 a month to quit his job. With his first 10 customers he was making $6,200 a month, so he had margin of safety. He quit his job and suddenly he was in business.

Rule No. 4: Build Trust While You Sleep. This rule is often “Make Money While You Sleep.” But Bryan already was making money while he slept. He was making money on every credit card purchase with his first 10 customers.

“I didn’t want to be going up and down the street looking for customers,” Bryan said. “I needed to find a way to get online businesses as customers. Someone suggested that I needed to blog. And to blog well you need to be totally transparent or it won’t work. So I started blogging about what was really happening in the credit card industry, including all the unscrupulous practices and how merchants were being taken advantage of.  Then I’d put my posts on the top social sites at the time: Digg, Reddit, and StumbleUpon, and sometimes the posts would get to the top of these sites and my website would get so much traffic that it would crash.

“But I became a trusted source about credit card processing. So before long all these online sites that had previously had a hard time navigating this industry would start contacting me to switch their payment services.”

So a couple of things there.

Rule No. 5: Blogging is not about money. Blogging is about trust. You don’t sell ads on your blog (rarely), you don’t get the big book deal (rarely), but you do build trust and this leads to opportunities. In Bryan’s case it led to more inflow, rather than him going door to door, and it also led to his biggest early opportunity. My own blog has made me a total of zero cents but has created millions in opportunities for me.

“Basically, OpenTable called me and they wanted a software solution to handle storing credit cards, handing the data to restaurants, and being compliant from a regulatory standpoint. I signed a three year deal with them that allowed me to build a team of developers and we built them a solution. We now had more services to sell to customers.”

Rule No. 6: Say YES! He started out just connecting merchants with a credit card processor. Then OpenTable asked him to do software development when he’s never developed software before. He said YES! He got software developers, built a great product, and quadrupled his income or more. And then it put his business in a whole new stratosphere of services he offered customers. Suddenly, word of mouth was spreading and other online companies started using Braintree’s services: Airbnb, Uber, etc. And the VCs started calling because all of their clients were saying Braintree was providing all of their payment services. It’s not that easy for startup online companies to get payment services.

“When I first started, for each new customer we’d put together an entire package for our credit card processor on why we thought the customer could be trusted and would be a legitimate merchant.” Which leads to…

Rule No. 7: Customer Service. You can treat each customer, new and old, like a real human being. “We intuitively sort of knew what we didn’t like in customer service everywhere else: automated calling trees, slow response times, poor problem solving, etc., so we made sure there was as little friction as possible between the customer contacting us and actually getting their problem solved.” When you are a small business, there’s no excuse for having poor customer service. Your best new customers are your old customers, and the best way to touch your old customers is to provide quick help when they need it. Customer service is the most reliable touch point to keep selling your service to them.

By year 2 two, Bryan was making over a million a year and was doubling every year. They couldn’t hire fast enough.

In 2011, after four years in business, Braintree took in its first dime of money – $34 million in a Series A round. And right now, according to CrunchBase, they process over $8 billion worth of credit card transactions annually.

Not bad for someone who quit his job and just wanted to figure out a way to get his bills paid.

–

[See also, "Why Do People Hate Their Jobs", or ...follow me on Twitter @jaltucher]

Article courtesy of TechCrunch

Zoho has a new Card Scanner app for iOS for its SaaS platform that allows a customer to take a photo of a business card and have that data stored in the Zoho CRM or as a new contact. The app scans business cards in English, French, German and Spanish. An Android app is coming soon.

Zoho developed the app to help sales people save time on manual data entry. Cards get left on a desk, never to be looked at again. Automating the process gives the customer a simple way to add to a contact or lead list.

Zoho Evangelist Raju Vegesna said in an email interview that the data is synced to the CRM back end. If a business card contains a Twitter handle, Zoho pulls the photo from the user’s Twitter account and syncs it with the CRM system.

The data can not be exported from Card Scanner but it can be exported in different ways after getting added to the CRM database. Vegesna said they plan to eventually offer exporting directly from Card Scanner.

Tight integration with the Zoho CRM system is what is unique about this app, said Vegesna. He said it’s true there are plenty of apps out there that do card scanning. But it’s not something that gets integrated into CRM platforms, such as Salesforce.com or Sugar CRM.

There are plenty of mobile apps for card scanning. Evernote Hello offers card scanning and tightly integrates it with LinkedIn and the relevant associated services people use every day, including their email and calendar. CamCard is known for its ability to process lots of cards and export to Excel.

It’s true that CRM vendors do not have card scanning integrations and so Zoho’s in-line capability to scan and store data is useful. But existing apps in the market like Evernote provide depth that Zoho will find hard to match.

After bringing on a new global business lead from Google, Square is making another key executive hire today. The payments company is announcing that Alex Petrov, a former PayPal exec , will be the Square’s Vice President of Partnerships.

Petrov was most recently the Vice President of Retail Marketing at PayPal, where he was responsible for merchant marketing and helping launch PayPal into offline retail. He was previously the Vice President of Consumer Brands at Safeway, where he led the marketing and growth of Safeway’s private brands portfolio, including launching over 1,000 new products. Petrov was also a marketing executive at Nestlé.

“Square’s passion for innovation and its relentless focus on the customer experience completely change how retailers can do business,” said Petrov in a release. “I look forward to bringing Square to merchants of all sizes, from local businesses to the largest retailers in the world.”

Square, who just updated its iPad register app to be more restaurant-friendly, says that its adoption amongst merchants is growing at a faster rate on iPads, where customers are using Square as a full point-of-sale system. iPad customers now represent nearly 50% of total payments processed by Square. The average payment volume processed by these customers is also more than double the average volume processed by Square customers using smartphones.

More high-profile brands and partnerships like the Starbucks deal could be helpful for Square when it comes to marketing and branding. We’re told that Petrov will be working on forming these types of partnerships, as well as strategic business development and customer acquisition for Square.

Article courtesy of TechCrunch

Webydo is a cloud-based SaaS for designers who want to be able to sell their website design services without having to get their own hands dirty doing any coding  or hire a developer to do it for them. The system offers a custom CMS where designers can build the website. Once they’re happy with the design, Webydo’s software converts it into web code for them. The company also hosts the published website.

“We can bring any design into life without writing one line of code,” says founder and CEO Shmulik Grizim. ”We have a sophisticated code generator that actually replaces the developer in the equation. You don’t need to manually write the code. You can create any kind of website for your customer’s business.”

Designs, photos, media and other assets can be imported into Webydo’s “online canvas” where the various elements are assembled via a drag and drop interface to create the finished website.

“You just drag and drop your elements to create your own unique design, exactly as you planned it, pixel by pixel. You can insert sophisticated features such as blogs, and forms, and Google maps,” says Grizim. “Whatever you want to create any kind of website. Hundreds of pages, dozens of pages, it doesn’t really matter. We are the only platform on the web that enables the designer full freedom for creating.”

When the designer hits publish, the code is assembled by Webydo’s code generator — which Grizim says is patent-pending. This is also where the payment kicks in: the tools are free at the point of use, but published websites cost $10 per month. The startup says it is hosting more than 50,000 websites created with its tools so far during its closed beta. It opened this up yesterday to the U.S. market — prior to that it was mostly operating in Israel and Europe.

The main competitor he cites when asked about rivals in the space is Adobe Muse. But whereas that’s a desktop application, Webydo is a cloud SaaS offering — and that’s it’s “main advantage”, says Grizim. As well as offering the design studio free at the point of use to designers, Webydo’s CMS is also free for the designer’s customer to use to edit their website.

“In Adobe Muse you only have the editor tool for the designer. But once the business owner wants to edit the content on his website he needs a developer to connect it to a content management system. With Webydo we have a fully integrated content management system on the fly — you don’t need to do anything, everything is included.”

“We are offering our designer partners to build their own business — they get a full business ready to use, and they can create the websites for their customers,” says Grizim. Websites can be created in a few hours “from scratch”, he adds.

The company has raised $1.8 million in seed and Series A funding, from investors in the U.S. and Israel, and has raised $2.6m so far of a $5m target for its Series B.

Article courtesy of TechCrunch

Mowbly, which recently launched and is here at Disrupt NY, takes a counter approach to mobile development platform environments.

Instead of a steady stream of apps, Mowbly uses a single-app approach that it offers through its mobile platform as a service (PaaS), said Co-Founder Vignesh Swaminathan. Mowbly offers third-party app support. But it only processes the data by calling the third party app’s API. Mowbly delivers the data but not the user experience of the app.

At its core is an aggregator that filters data for the customer, employee or partner and presents it through the app. The service has a cross-platform capability, a mobile server for building, managing and deploying apps and a mobile user interface framework. It can be used across multiple mobile platforms and requires no special mobile development skills. It allows IT departments to deploy the apps using browser-based tools rather than hire developers.

The platform is designed to manage multiple identities. IT can use it to provide a finance person with data from the enterprise resource planning suite or a corporate partner with updated information about a channel program. Mowbly is offered as an on-premise software and as a SaaS.

Mowbly is one of a new generation of mobile platform providers that is offering a backend for quick app deployment. It is designed to reduce the costs and the time required to build out native apps. It also helps keep larger companies in compliance with IT policy.

Automating mobile app development is happening. Mowbly represents that. The question is whether the control is too much and if the service just adds more apps in addition to the ones people use every day.

Article courtesy of TechCrunch