Square is announcing an acquisition today–BookFresh. BookFresh is an online scheduling service aimed at small business owners. We’ve described it as an OpenTable for everything but restaurants. Terms of the deal were not disclosed. Read More
Article courtesy of TechCrunch
Editor’s note: Hemant Taneja is a partner at General Catalyst and an investor in Stripe, Snapchat and Tunein. Follow him on Twitter @htaneja.
It’s been an exhilarating time for small business owners. Twenty years ago, they lacked the tools to expand outside of their niche markets. Today, the Internet opens a flourishing global market of consumers ready and willing to engage with businesses of any size. As Patrick Collison, co-founder of Stripe, once told me, the company’s largest customers may not even exist today. Anyone can turn a living room idea into the next Fortune 500 company.
Yet for all of the Internet’s opportunity, small business owners have never felt more overwhelmed. The demands placed on them are mammoth, from effective search engine marketing to online payments, logistics, customer support, and operations. Even today, much of their daily work is done with paper and pencil, even while the world transitions to mobile-first. It’s little wonder that our nation’s small businesses face such tough odds.
That’s why I’m excited about the development of next-generation business platforms that provide small business owners with simple and beautiful tools to compete. We’re finally moving beyond byzantine processes and complicated workflows to mobile-enabled software centered on clarity and accessibility. As a consequence, we are slowly witnessing the genesis of a “new economies of unscale,” in which small businesses aided by these platforms can suddenly defeat even the largest of corporations – and become household names.
We’ve seen this dynamic already in payments with Stripe and Square as well as in the back office with Xero and Expensify. I believe payroll is next for disruption, which is why I invested in ZenPayroll this past week. All of these startups are taking advantage of this new world, offering us a case study on how to leverage economies of unscale to give small businesses a decided marketplace advantage.
For those looking into the small to medium business space, there are three key lessons to focus on. The most prominent is that businesses are rapidly shifting to mobile. Small business owners are used to running their personal lives on Gmail and iCloud, yet when they arrive at work, they are forced to regress 20 years back to clunky desktop software (or worse). They expect the next wave of platforms to scale with their usage of mobile devices, and they are ready to adapt to new workflows.
Square has vigorously taken advantage of this shift, offering a product that not only replaces the legacy of cash registers, but also offers whole new options for small businesses. As anyone walking by the Ferry Building in San Francisco can attest, artists and photographers can now accept credit cards right at their tables. This not only increases convenience for customers, but it also allows these artists to track their sales and easily analyze their profits. In this mobile world, we suddenly have access to a point of sale anywhere, at anytime. And with Expensify mobile, web workers, freelancers and road warriors can now easily create expense reports by snapping pictures of receipts and submitting them on the go.
However, next-generation business platforms shouldn’t just clone ancient systems onto mobile devices. Instead, they must consider seizing the opportunity to expand the dialogue between technology and owners. For instance, we’ve learned a lot over the past few decades about what makes great companies work. The best startup founders understand that owners don’t have the time to consume all of that research, but instead bake those insights directly into the design of their products.
The second lesson then is that these new platforms are focused on the person, and surfacing the human relationships which underlie how we work. ZenPayroll was designed to place employees and employers as equals in the compensation discussion, inculcating a culture of trust within a company. Furthermore, it enables employees to dedicate part of their paycheck to a nonprofit organization. That not only makes contributing to charity easy, but it also encourages a culture of giving, which can have positive ramifications for company performance.
The final lesson is that new business platforms have to be open in order to be most effective. Small and medium businesses hate walled-off data stores and complicated workflows. Given the diversity of small businesses, no service can possibly hope to serve everyone with their own product. Instead, developing platforms for others to build upon is crucial. Take the small business accounting service Xero, which offers dozens of “add-ons” on its platform in categories as diverse as inventory management, time tracking, point of sale, and eCommerce. Xero gets to leverage the efforts of these other developers, while simultaneously building up its core value to business owners.
Any one of the 28 million firms in America today could become a leading company using the economies of unscale created by these next-generation business platforms. Our work, though, is only partly finished. We need better platforms to handle worker training, recruiting, sales management, product development, intellectual property, customer service, and the list goes on. With more open platforms to grow upon, new companies can better grow quickly and sustainably, and that’s not just good for entrepreneurs, but for our nation.
Article courtesy of TechCrunch
The liberal wonderland of the San Francisco Bay Area has one of the highest concentration of wealth in the country. Twitter’s IPO, alone, created an estimated 1,600 millionaires. But, are local residents catching any of the dollar bills being shaken from post-IPO money trees?
It’s been hard to decipher the broader impacts of technology on the average San Franciscan because heart string-tugging anecdotes have clouded the narrative. Critics of tech companies make headlines by protesting Google’s private buses and indirectly linking their existence with the surge in housing evictions. ”There’s a war brewing in the streets of San Francisco,” wrote former San Francisco Mayor Willie Brown.
On the other hand, tech champions like to trot out small business owners who have benefited from re-locating tech HQ’s to blighted areas of the city’s historic Market district. So, to cut through the cherry-picked anecdotes, I asked San Francisco’s local economists what their take is and, as you’d imagine, they fall somewhere between the techno-utopian dreamspeak that you sometimes hear in the industry and the dire descriptions of the activists.
One thing is clear: they believe that the money flowing into SF is a good thing and is bolstering the local economy.
There is a “but” in the economic optimism, and its big enough to need two plane seats: skyrocketing rents are pricing many locals out of the city. Some have managed to fasten themselves to rent-controlled properties, but many have been forcibly evicted from their homes. On balance, tech money has built one of the sturdiest economic shelters from the ravages of recession, but those who get hit, well, they get hit hard.
Local Multipliers Makin’ It Rain
“Our analysis suggests the tech sector is responsible for the vast majority of the economic growth in San Francisco since 2010,” said San Francisco’s Chief Economist, Ted Eagen. “In 2010-2012, the latest year we have complete data, local inflation has been 2.6%, while wages for all workers have increased by 4.5%.” About 2/3rds of those approximately 40,000 new jobs do not require a computer science degree or a closet full of expensive sneakers.
Partly thanks to the tech sector, the San Francisco Bay Area enjoys the 3rd lowest unemployment rate (4.8%) of California’s 58 counties. What accounts for this? Berkeley Economist Enrico Moretti argues that technologists have a special bond with the local economy.
“Anytime there is a job opening for a software engineer at Google In San Francisco, there’s an increase in the demand for local service workers,” he said. On average, Moretti says that every tech job creates five in other industries, as compared to just two from a manufacturing job. In part, because tech jobs just pay more there’s more disposable income to spend on maids, lawyers, and clothing.
“There must be someone who brings in the wealth,” said Moretti. Additionally, unlike the specialized needs of a manufacture, all the hair dresses, car washers, and tax pros that Google brings in for its workers are local. As a result, San Franciscans have seen their paychecks swell about 2x faster than inflation can eat it, (4.6% increase in wages vs. 2.6% inflation). From census data (below), San Francisco has fared slightly better than their surrounding California neighbors during the recession recovery. “So outside of the tech industry, workers have benefitted from increased employment opportunities and rising real wages,” Eagan concludes.
However, It’s not all rainbows and sunshine. I spoke to one local clothing store owner whose story is a microcosm of all the city’s changes. The owner, who preferred to stay anonymous, resides on San Francisco’s Valencia St., the super-hip drag that has become the dividing line between the poverty-stricken Mission St just a half-a-block East.
As chic restaurants with +$20 entrees began to swarm his business, it likewise brought with it new customers willing to shell out their ample recreational budgets on new forms of expensive Bay Area entertainment. “Burning Man, it’s like Christmas for me,” he jokes, referring to the popular drug-friendly arts festival held in the Nevada desert every Fall, especially popular among Googlers.
But, his long-time regular clients were forced to move into cheaper parts of the Bay. “Most of my customer, they drove away,” he notes with a hint of melancholy. Sky-high rents have eroded both his additional income, as well as the regulars that used to grace his store.
And, this is where the otherwise happy tale of tech money gets dark: housing prices.
Home Ownership As Housesitting For Rich People Not Yet Moved In
Technologists are fans of a non-zero sum world, but they have yet to discover an app that can physically expand San Francisco, seasteading notwithstanding. Scarcity in housing has led to a rent-hiking arms race.
San Francisco is burdened with the least affordable housing in the country. Just 14% of homes are affordable to the middle-class and two bedroom apartments are above $3,200 for families. According to real estate website, Redfin, San Francisco housing is more than 3x as pricey as it’s windy city peer to the East, Chicago ($177K vs. $599,000). With sky-high purchasing prices and rents, housing costs are outstripping the pace of salary for some in San Francisco. “In 2012 average rents paid (as measured by the Census) grew over 7%, which is faster than the wage increases for most non-tech industries,” said Eagan.
However, “The vast majority of rental units in San Francisco are covered by rent control, so workers who did not move out of such units since 2010 will have seen wages growing much faster than their rents.”
Unfortunately, some landlords has found a way to evict long-time residents, and the resulting fight has made the tech industry the target. One local bookstore owner in the Mission District told me the rent hikes have challenged some of the good that the tech industry has brought.
“There’s less crime, which is good; rents are insane, which is very very very bad,” he said. Without rent control, he says, he wouldn’t be able to live in his current neighborhood.
Do We Need Affordable Housing Units?
The mayor is calling for more cheaper units reserved for struggling middle-class families making less than the $72,947 median income (yes, that’s the median income in San Francisco, FML). But, it’s unclear how many are needed, if at all, since government assistance begets bureaucracy, and city bureaucracy tends to slow things to a grinding halt.
Berkeley Economist Enrico Moretti tells me that increased housing supply does relieve rents in “every spectrum” of income. He observed that after Seattle significantly increased construction, rent hikes slowed even during a jobs boon that outpaced San Francisco’s.
Most importantly, the impact is linear, meaning that every single new house affects the price of every other house. The faster we build, the faster rent gets cheaper, and faster techies stop battling locals for coveted rent-controlled units. Unfortunately, there is no plausible economic model under which prices go down, and homes are already beyond the reach of 86% of middle-income families.
Hong Kong, California
We love economists, but sometimes they discount the innumerable parts of life. San Francisco has a long history restricting housing to maintain the quaint Victorian look of the Bay. ”Do we want San Francisco to look like Hong Kong?” asks San Francisco State University Professor and former city planner, Jasper Rubin. He says that the city has never really tried to quantify the demand, but describes it as “tantamount to infinite.”
With enough housing to accommodate the hundreds of thousands of tech workers and wanna be entrepreneurs, San Francisco would be reshaped into a wall of sky-scrappers. Indeed, the good folks at Firstcultural.com simulated what the South Bay’s sky-line would look like if it housed all of the major tech company’s workers. It’s Hong Kong-ish:
Thank A Techie, But Help The Needy
For most San Franciscans, tech’s presence has brought reprieve from a recession that ravaged the rest of the country. But, economists deal in averages; those who fall to the left of the distribution curve are subject to a game of capitalism Russian roulette, where their house and community are left to the whims of wealthier buyers.
The defenseless ought not be discounted in our praise of the tech sector, but we should also not forget that without their presence, San Francisco would likely be much worse off. Illustration: Bryce Durbin
Article courtesy of TechCrunch
Last night, 100 million people (minus Seattle) were disappointed to watch the Seattle Seahawks spank the Denver Broncos in Super Bowl XLVIII. But that doesn’t mean that the night was a waste.
There were more than a few notable events over the course of the evening, including Microsoft’s emotional 4th Quarter ad showing what technology has done for us.
According to USA Today’s Ad Meter, the Microsoft commercial took the number 8 spot on the most popular Super Bowl ads of the night, among commercial kings like Budweiser, Pepsi, Doritos, and Coca-Cola. The rankings are pulled from 6,272 votes.
If you ever thought that technology was outside the realm of emotion, this commercial will prove you wrong. Get some tissues, seriously.
Meanwhile, Tivo reports that the most re-watched Super Bowl advertisement of the game was the Seinfeld reunion during halftime.
There was also an ad for a company called GoldieBlox last night. The 15-person organization builds engineering toys for little girls and only got the ad spot by winning Intuit’s Small Business, Big Game competition. Though the startup’s original version of the commercial got them in some hot water legally, last night’s ad was an interesting push-back against the typically sexist advertisements run during the Super Bowl.
In other news, Sonos also had an interesting Super Bowl commercial, showing just how much the startup has grown. After all, Sonos launched a little over a decade ago, and already has the resources to afford the most coveted advertising airtime in the world. According to Bleacher Report, a 30-second ad spot during this year’s Super Bowl cost around $4 million. Sonos’s ad was a minute long.
On Twitter, the number of tweets sent during the Super Bowl barely broke last year’s record, with 24.9 million tweets total hitting the wires during the game. However, the peak tweets per minute figure saw a significant bump, with tweeters sending 381,605 TPM during Percy Harvin’s 87-yard touchdown return. Last year, Beyonce generated the most buzz with the conclusion of her half-time show bringing in 268,000 TPM.
You’d think, with the game as boring as it was, that folks would send more tweets this year than last year. But then again, last year’s electricity outage stalled the game and offered a great opportunity for folks to get tweeting.
Also worth noting: Joe Namath wore a fur coat that was louder than the Seahawks’ 12th man. The Twitter handle “@JoeNamathsCoat” appeared just moments after the coat was shown on TV.
[Img via Fansided]
Article courtesy of TechCrunch
On the heels of today’s ruling overturning net neutrality, Senator Al Franken aggressively condemned the decision, arguing that it would lead to an unleveling of the economic playing field, tilting the marketplace against small businesses that he represents.
Advocates for an open Internet have expressed open discontent with the ruling. TechCrunch’s own Greg Ferenstein wrote critically of both the decision, and Verizon’s pursuance of an end to the regulatory structure.
Some view the end of net neutrality as a sort of financial shakeup that could lead to great economic benefit. The American Enterprise Institute’s James Pethokoukis phrased that argument in the following way: “But at its core ‘net neutrality’ really is nothing more than an attempt at rent seeking by content providers who want the ISPs to pay the tab for future network upgrades.”
Senator Franken disagrees, making a different economic argument. His statement follows [bolding TechCrunch]:
Anyone who goes online to shop, promote their business, or simply to connect with the world should be worried about today’s opinion. I have been fighting to make sure the Internet is a level playing field for everyone—the website of a Minnesota small business should load as quickly as the website of a large corporation.
Getting rid of net neutrality is bad for consumers and the economy, plain and simple. And it’s a real risk to the Internet as we know it. Net neutrality is the common-sense idea that big corporations like Verizon, Comcast, and Time Warner shouldn’t control who gets to innovate, communicate, or start a business on the Internet. The FCC needs to respond immediately in a way that keeps the internet open to all of us, not just big corporate interests.
There isn’t excessive middle ground between the two perspectives.
If you are unsure which side of the debate you’re on, ask yourself which of the following two statements is more accurate:
As Ferenstein argues, there is significant nuance required in crafting the legal parameters for net neutrality, and we shouldn’t presume that any sort of regulatory outline we can draw is the correct idea. That difficulty, naturally, doesn’t mean that the project isn’t worth the time required to get it right.
But I would argue that granting companies that both deliver and create content the right to decide what is worthy of viewing, and what is not worthy of viewing for their customers, is far more troubling than option No. 1 above.
Top Image Credit: Flickr
Article courtesy of TechCrunch
The DIY revolution means that people can now print their own 3D models, build their own websites and apps, and even build their own mobile devices and custom computers using things like Raspberry Pi. The Modbot team taking part in this year’s TechCrunch Battlefield at CES 2014 wants to do the same for robotics – not hobby robotics, but serious, full-fledged industrial and commercial robot building.
Modbot founders Adam Ellison and Daniel Pizzata identified a problem in prototyping and building robots for use in manufacturing, research and basically any other application: parts were unnecessarily complicated and expensive, when in reality they could be much more affordable and much simpler, too.
Ellison and Pizzata have created a simple system consisting of a servo, a link and a joint component, along with a base upon which to build your projects. The Modbot vision is one where people can combine pre-assembled parts that cost significantly less than their professional industrial counterparts in order to build a wide range of robots for any number of purposes, including small scale production. Imagine, then a future where entrepreneurs could not only create a concept for a hardware device and send that away to a production partner, but also build the thing themselves in-house.
After a week of Yahoo Mail outages that began four days ago, CEO Marissa Mayer has posted an apology to the company Tumblr. In it, she gives some details about the issue, which was apparently related to a hardware failure — and says that the issue affected 1% of Mail users.
“For many of us, Yahoo Mail is a lifeline to our friends, family members and customers,” reads Mayer’s apology. “This week, we experienced a major outage that not only interrupted that connection, but caused many of you a massive inconvenience — that’s unacceptable and it’s something we’re taking very seriously. “
The issue began on December 9th late in the evening, when a hardware outage alerted the engineering team to an issue with storage that served 1% of Yahoo’s users. The issue, says Mayer, was a ‘particularly rare’ one. Mayer also notes that a confusing ‘scheduled maintenance’ error which some users had seen during the emergency was in error.
Mayer says that, as of this afternoon, Yahoo has restored access to ‘almost everyone’ and delivered the queue of messages that was held up from being delivered. IMAP access has not been completely restored, nor has the complete inbox states of users with folders and ‘star’ statuses. So if you log in to your inbox and see that stuff still missing, it’s theoretically coming. Yahoo says it will be reaching out to individual users on the status of their inboxes.
“Above all else, we’re going to be working hard on improvements to prevent issues like this in the future. While our overall uptime is well above 99.9%, even accounting for this incident, we really let you down this week,” Mayer’s note concludes. “We can, and we will, do better in the future.”
The outage began suddenly and has gone on for an extremely long period of time, especially for a critical service like email. We reported on the issues on Wednesday, noting that the issues were affecting small business owners.
“Yahoo is so overwhelmed they cannot answer phone calls or reply to emails,” one user told TechCrunch. “I’ve been on hold for hours and hours since last Sunday, spoke twice to a real person who in both instances sent me to another number that is absolutely unreachable.”
“They have shut down the websites of countless businesses. The last person I talked with [via phone] acknowledged they have no idea how many people they’ve impacted.”
While we found Yahoo’s recent Mail redesign to be pleasant, and to carry over some nice design cues from its mobile efforts, not everyone felt the same. Many users were irritated by its changes and the loss of some well-liked features. Yahoo Mail SVP of communications products Jeff Bonforte also sent an internal email that noted that the majority of internal Yahoo staffers had not yet switched to the new Mail product.
And just yesterday, Yahoo’s imaging site flickr also suffered an outage, going offline and remaining so for several hours.
Yahoo and Mayer have faced criticism over how they handled this outage, with All Things D’s Kara Swisher calling them out for what she said was poor communication. Mayer also published a brief update to her personal blog on Wednesday with the title Yahoo Mail restored and a link to a help doc, but the restoration had not in fact been completed.
Article courtesy of TechCrunch
Same-day mobile shopping app SixDoors has been iterating on its idea of local product delivery since August, but only with the latest version released just weeks ago has the app really found its footing. Since the new release, SixDoors has doubled its user base, and now offers San Francisco residents a way to shop from their iPhone at over 60 local retailers and have their items delivered in as fast as 90 minutes.
The company has also now closed on $600,000 in seed funding from Kima Ventures, and other angel investors, some of whom had backed founder Pascal Levy-Garboua’s earlier efforts, including founder and CEO of Vente-Privee, Jacques-Antoine Granjon, and others.
Levy-Garboua, who created SixDoors with Thorsten Lubinski (CTO), previously co-founded virtual assistant service VirtuOz which was acquired by Nuance this January. He left the company in 2011, however, to help advise other startups. He sat on the board at Producteev (sold to Jive), for example, and helped get IQ Engines acquired by Yahoo for $30-something million.
Now, he’s focusing on a more local project with this “anti-Amazon” play.
The idea, Levy-Garboua tells us, is to get people to buy from their city’s brick-and-mortar retailers. “Our goal is to support local businesses,” he says.
“I’ve always admired small business owners,” Levy-Garboua adds. “I’m a city person. I love cities, and when you love cities, it’s all the stores, restaurants, cafes, and businesses that surround you that make your city interesting.”
With SixDoors, users can browse through curated collection of goods, or shop by category. And in the newer release, they can also build out their own shopping list through a “gift concierge” feature which offers suggestions and ideas. There is a broad selection of products in SixDoors from a variety of San Francisco-based indie retailers, including those selling items for the home, food, drinks, gifts, as well as items for men, women and children. Clothing, though, is not a focus for the app.
The process of actually purchasing the item is not too different from any other m-commerce experience, except that, after paying, you’re prompted to provide an address and time slot for accepting your delivery.
SixDoors’ couriers are available from 10 AM to 9 PM to make deliveries. (The company uses its own independent contractors as couriers.) SixDoors takes a percentage of the sales and charges an additional $6 per delivery for now, even when you’re ordering from multiple stores. The delivery fee will be waived beginning tomorrow through Christmas as a part of a holiday promotion. SixDoors is also offering email and Skype gift help via email@example.com.
The company currently has seven employees, who also do deliveries themselves. It has partially spent the new funding as the raise took place over a longer time frame than usual, Levy-Garboua explains, saying how he made the mistake of working while raising at the same time, this go-round. Now the focus is on growing the SixDoors footprint, and managing the inbound requests from other stores interested in being on the service, too.
SixDoors joins a number of other local, same-day delivery services operating in the region including Postmates, Instacart, newly launched Lasso, and others, as well as efforts from major players like AmazonFresh, eBay Now, and Google Shopping Express. However, it’s more focused on shopping for gifts, which may or may not include food or drink items. And it’s not necessarily meant for more general purpose needs like office supplies, small electronics purchases, or other things which you would normally consider among your “errands.”
SixDoors is a free download here in iTunes.
Article courtesy of TechCrunch
Intuit, maker of financial products like Quickbooks and TurboTax, has a stated purpose of trying to be “the operating system for small business.” Today, it took another step to solidify that position with its planned acquisition of Docstoc, which over the years has created one of the largest directories of documents for building a small business.
Intuit has been on a bit of an acquisition spree lately, acquiring companies like FullSlate, Level Up Analytics, and GoodApril in the last six months alone. All of those acquisitions are based around providing better technology and more tools to small businesses.
This acquisition is no different, and it wraps up a neat little success story for Docstoc, which has spent the last several years helping small businesses get off the ground. The company was founded way back in 2007, and was one of the first TechCrunch 40 finalists, as a repository for user-submitted documents for small businesses. But while it still has a sizable number of documents provided by users, about 20 million by last count, over the years it’s transitioned to produce its own content.
That includes not just all the documents one might need to get a small business of the ground, but also videos, tutorials, classes, and other educational information. In all, Docstoc now has more than 20,000 pieces of content that it’s produced, and it’s adding more than 300 new pieces each week.
In addition to its main site, which brings in some 16 million uniques and has 40 million registered users worldwide, Docstoc also has a few side businesses. A year-and-a-half ago, it launched a site called License123 to provide businesses with all the licenses they’d need to be compliant with local regulations in their home cities. And earlier this summer it made an acquisition of its own, bringing on professional services and software recommendations company BestVendor, which it combined with its own ExpertCircle business.
All of that provides Intuit with a wealth of information and resources for a customer base that’s largely made up of small businesses. The company has more than 5 million Quickbooks users, many of which are contractors, freelancers, or otherwise businesses of one. According to Intuit VP and GM Alex Chriss, who led the deal, this acquisition will help both companies better serve that audience.
“There’s 28 million small businesses out there and 22 million are really small businesses, businesses of one,” Chriss said. “They have to face a whole bunch of these questions immediately after starting a business, and these guys [Docstoc] have the best content in the world about how to do that.”
For Docstoc CEO Jason Nazar, the acquisition also made a whole lot of sense. The company has been running profitably for years, after raising just $4 million from investors. While it wasn’t totally bootstrapped, Nazar says having the resources of Intuit behind Docstoc will help it to grow and accelerate its pace for launching new products.
“I spent seven years being scrappy,” Nazar said. “I’m looking forward to having big resources behind us, and a big brand like Intuit.” But for Docstoc employees, not much will change. According to Nazar, the entire 50-person team will continue operating in its same office in Santa Monica, Calif.
Even so, he sees a big opportunity to make things easier for other small businesses just starting out. “Both of our goals is to meaningfully change the lives of those 28 million small businesses for the better,” he said.
I wish both of them luck in that. After all, having been a fan of Docstoc and Jason personally for a while, I gotta say – it couldn’t have happened to a better person or a better team.
Article courtesy of TechCrunch