The transformation of Dell into a software solutions, services and cloud computing company is underway.
“We needed to go beyond the origins of the company” into areas like data centers and services “to build out a broad portfolio,” Dell Founder and CEO Michael Dell said during a meeting with media and analysts Tuesday afternoon.
The company has invested $10 billion in the last four years to create an end-to-end solutions company, Dell said. Most notably, the company acquired Quest Software for $2.4 billion in July.
Dell Enterprise Solutions and Services now make up $20 billion, or one-third of its revenue.
But the Round Rock-based company still has its personal computer business and it isn’t getting rid of it anytime soon.
In fact, Dell will unveil a next generation workstation and portable entertainment product during his keynote speech at Dell World 2012 Wednesday morning.
This is the second annual Dell World event. It takes place through Thursday at the Austin Convention Center. More than 6,000 Dell customers, partners, media, analysts and employees are expected to attend. Many of them gathered Tuesday evening at Austin City Limits to listen to music and eat from Austin food trucks.
On Wednesday, former President Bill Clinton and Dell will talk about the Clinton Global Initiative, philanthropy and other issues during the morning keynote.
The authors of the Freakonomics and SuperFreakonomics books, Steven Levitt and Stephen Dubner, will deliver the closing keynote address “Think like a Freak.”
Category: Austin (Page 274 of 318)
Geekdom plans to launch the Open Cloud Academy early next year to teach veterans and the public technology skills.
The Open Cloud Academy will be located on the 6th floor of the Weston Centre downtown. Its eight-week classes will begin in the middle of January.
“We’re still working on the plans,” said Nick Longo, director of Geekdom. “It’s very complex when we’re trying to bring in Rackspace, the military, USAA, Red Hat and us.”
Nick Longo, director and co-founder of Geekdom
The classes, valued at $6,000 to $15,000, will cost around $500, and instructors will teach the students to become Linux system administrators in coding languages like PHP, Perl, Ruby and Python. At the end, the students will take a test and receive a certificate as a Linux administrator. Linux is the preferred operating system for hosting providers in the cloud.
Geekdom is working in alliance with USAA on the Open Cloud Academy.
The Open Cloud Academy is one of the latest ventures of the year-old Geekdom, a collaborative co-working space, which will be celebrating its one year anniversary at a party a the Weston Centre on Friday.
In the last year, Geekdom has become the largest co-working space in Texas with 500 members, occupying 45,000 square feet at the Weston Centre. It recently expanded to the 10th floor in addition to the 11th floor. And now it’s taking over the 6th floor for the Open Cloud Academy. Geekdom also expanded to a location in San Francisco and is eyeing further expansion into China.
“We offer a space for the country’s brightest entrepreneurs to connect, work and grow,” Longo said in a news release. “Our focus since day one has been simple: to attract talented startup companies to San Antonio with a dynamic space that offers them an opportunity to think and work creatively with the freedom to explore their business ideas with likeminded companies and mentors. In this way, we can stimulate two things: San Antonio’s economic engine and drive entrepreneurs that will create up to 40 percent of all new jobs in the next 20 years.”
So far, Geekdom has held more than 220 tech events including SparkEd, a program that instills leadership skills in middle school kids while teaching about entrepreneurship, robotics, web design and programming during a weekend workshop. Every weekend, 30 kids participate in a two-day program to build, program, market and sell a robot.
Geekdom co-founder and Rackspace Hosting Chairman Graham Weston
Geekdom co-founder and Rackspace Hosting Chairman Graham Weston called the site a pioneer in San Antonio.
“We created a place for entrepreneurs to inject themselves into a true ecosystem on which they can thrive and take advantage of a powerful network of influencers,” Weston said in a news release. “We want to make San Antonio the “Cloud Capital of the World.” Having a thriving startup community is the foundation of that ecosystem. Our mission to take promising ideas and turn them into fundable ideas is becoming reality faster than any of us could have hoped.”
Geekdom is a sponsor of Silicon Hills News
Julie Huls, president of the Austin Technology Council
But Julie Huls, president of the Austin Technology Council, is most excited Austin is being recognized nationally as a leading tech hub in a new economic development report.
The report, Technology Works: Patterns of High-Technology Employment and Wages in the United States, also highlights the Austin-San Antonio corridor as a well-defined center of high tech employment.
“It’s data driven,” Huls said. “It’s not an opinion piece. This is a snapshot of the local technology economy from a national standpoint. It ranks Austin on a national scale. Austin is now being associated with the likes of Silicon Valley, Boston and Seattle.”
ATC partner Engine Advocacy sponsored the study, which was prepared by the Bay Area Council Economic Institute.
“Engine’s report provides an important validation for companies that choose to grow their products in Austin’s unique environment,” Kevin Callahan, MapMyFitness co-founder, said in a news release. “The elements that originally drew talent and capital are still here and Austin’s tech community is determined to create a new, distinct, and competitive tech ecosystem.”
The report highlights the importance of high-tech jobs to regional employment and income.
“Since the dot-com bust reached bottom in early 2004, employment growth in the high-tech sector has outpaced growth in the private sector as a whole by a ratio of 3 to 1. High-tech sector employment has also been more resilient in the recent recession-and-recovery period…. The unemployment rate for the high-tech sector workforce has consistently been far below the rate for the nation as a whole.”
The report also showed that job creation surrounding Science, Technology, Engineering and Math, known as STEM, jobs exceeds all other sectors.
“Employment growth in STEM occupations has consistently been robust throughout the last decade, outpacing job gains across all occupations by a ratio of 27 to 1 between 2002 and 2011.” The report showed growth in all occupations totaled less than a percent, whereas STEM grew 16.2 percent.
In 2011, Austin/Round Rock, with 10.7 percent of its workforce in tech jobs, claimed the No. 14th spot on the list of the top 25 Metros for high tech employment concentration in the country. The U.S. average is 5.6 percent. In comparison, San Jose had nearly 29 percent and Boston had just over 20 percent.
Austin didn’t make the list of the top 25 Metros with the highest growth in their technology workforce because it already had a large pool of high tech workers. But San Antonio made the list. It increased its high-tech workforce by 8.4 percent from 2010 to 2011, compared to the national average of 2.6 percent. From 2006 to 2011, San Antonio has seen nearly a 24 percent increase in its high-tech workforce.
Lastly, Austin has seen its high tech wages rise nearly 5 percent from 2010 to 2011, with an average wage of $101,000. Wages in San Jose, where nearly 29 percent of the jobs are tech, wages rose nearly 6 percent in the same time period and average wages were $170,000, almost $70,000 more than Austin. San Antonio’s average high-tech wage was $74,254 and 5 percent of its workforce have high-tech jobs. The average high-tech wage in Texas was $95,848, about the same as the national average.
On the 50-foot tall Jumbotron at Cowboys Stadium in Dallas, a handful of Texas startups will get the chance of a lifetime to pitch their companies in front of successful entrepreneurs on Friday.
They’ll be pitching to board members of the Startup America Partnership, including CEO Scott Case, co-founder of Priceline.com, Reid Hoffman, co-founder of LinkedIn, Kevin Plank, founder and CEO of Under Armour and Chairman Steve Case, co-founder of America Online.
The audience will also include Carl Sparks, CEO of Travelocity and Ingrid Vanderveldt, Entrepreneur in Residence at Dell. The event takes place from 1 p.m. to 3 p.m. with a cocktail reception following the company presentations.
Startup Texas is hosting the event, which is open to the public, but requires registration. Founded a year ago, Startup Texas is the regional arm of the Startup America Partnership, founded in January of 2011.
Startup America is a non-profit organization working with the White House Startup Initiative to support entrepreneurs. The Kauffman Foundation just published this report on Startup
Sweb Development’s Slides on the Cowboys Stadium Jumbotron, photo by Magaly Chocano
That’s why Startup America holds regional events, like the one at Cowboys Stadium on Friday.
At that event, HeyRide and Engine will pitch from Austin along with Sweb Development of San Antonio. Other Texas startups presenting include iLumi and PayTap from Dallas and Recycle Match and Hurl from Houston.
The companies will have two minutes and six slides to present their ideas on one of the largest big screens in the world.
“It’s the first time they are doing this type of event,” said Josh Huck, CEO and co-founder of HeyRide. “For us, it’s mostly about the opportunity to meet some of these movers and shakers in the VC world.”
HeyRide provides peer-to-peer transportation in the Austin area. It launched a few months ago and has more than 1,400 users and 100 verified drivers. It has created quite a stir in the local transportation industry with taxicab companies asserting that HeyRide is operating as an unlicensed cab company.
HeyRide will be meeting with Austin city officials soon to explain its business plan, Huck said.
“Ultimately we think HeyRide is beneficial to the community,” Huck said. “Once we communicate our vision, I think it’ll be easier to find common ground and move forward.”
The pitch session is a great place to receive some “edifying advice on growing one’s business,” Huck said.
HeyRide is currently raising a Series A round of funding with Silverton Partners in Austin leading the round. The company has five full time employees and one part employee.
David Johnson, CEO and Founder of Engine Inc. is thrilled for the opportunity to present at Cowboys Stadium.
His company started in January and launched its first version of its software program in October. It recently went through the Central Texas Angel Network and is close to closing on $500,000 in seed stage funding, Johnston said.
Engine has created an intelligent search engine for email that allows people to gather results related to a message in the sidebar of their inbox.
“My inspiration is usually a big pain point,” Johnston said. He had 85,000 emails in his inbox.
“I did some basic calculations,” he said. “I was getting an email every 14 minutes. There was no way I could keep up with all this information.”
So he came up with an idea to link data together in one place to make it more accessible and easier to understand. Johnston went through TechRanch’s Venture Forth 15, an eight-week entrepreneur class for technology startups. Kevin Koym, director and founder of TechRanch, heard about the opportunity and encouraged Johnston to apply for the pitch session.
“What am I going to tell them in 2 minutes?” Johnston said. “Here’s the problem – email overload. Here’s our solution to connect together your different sources of data and make it relevant. Here’s our team that can make it a reality.”
Sweb Development’s Magaly Chocano will be flying up on Friday morning and is excited to have the opportunity to tell the story of her company, which now has 13 employees.
“My goal would be to open the doors to other opportunities and letting people know what we do,” Chocago said. “It’s to let people know San Antonio does have very high quality developers. We want to put our name out there.”
In addition to the pitch session, the group is meeting for the end of the year wrap up of Startup America, which has more than 11,000 startups listed nationwide, including 864 in Startup Texas. They’ll be discussing plans for 2013.
Startup Texas will also announce the launch of a new statewide co-working space collaborative called “Startup Texas Passport.” That passport will allow members to work at co-working spaces anywhere in the state.
By ANDREW MOORE
Reporter with Silicon Hills News
San Antonio New Tech held its fourth monthly meeting this week — showcasing four new San Antonio start-ups ready to show-and-tell. The ideas ranged from providing discount doctors and creating virtual business cards to creating an online bartering site that reduces the need for currency. And due to their start-up nature, many are still hiring.
“Imagine if you could tell what the price would be of going and visiting a doctor before you actually go visit,” said Gopinath Khandavalli, the presenter for Budgetdoc. “BudgetDoc is like Priceline for doctors.”
BudgetDoc wants to make affordable healthcare available to more people by creating a network of doctors willing to give discounts to patients that pay cash up front. The site was designed primarily for people that can only afford catastrophic care insurance – meaning low cost and very high deductible – and for those who are uninsured. People using the site can research a doctor, what services the doctor offers, how expensive they are, and what discounts the doctor gives for paying in cash. Coupons for the discounts will be on the webpage for customers to print at home. BudgetDoc makes it easy for customers to contact physicians if they have any questions not covered on the site. The site also allows patients to rate doctors and to evaluate them in side-by-side comparisons.
“No competitors are doing price transparency like we are,” said Khandavalli. “Nobody is working towards doctors who offer cash prices at the time of service.”
While Khandavalli acknowledges that patients will probably need additional services at additional costs after the initial check-up, he says the site will endeavor to list prices for all services a doctor provides. Khandavalli hopes that this will empower people who would otherwise not seek healthcare because of the large hidden costs associated with treatment. He also hopes it will help insured patients who cannot find inexpensive or timely healthcare in their healthcare provider’s network and seek services outside that network.
The BudgetDoc network already has around 30 providers — including a pathology lab — and all providers are vetted through information from the Texas Medical Board. BudgetDoc uses the information to insure that doctors have a license and insure that they have had the proper education and training credentials. The network includes both cash-only doctors and those that accept insurance and Medicare. Khandavalli says that doctors accepting insurance can still offer discounts as long as the discounts are restricted to cash-up-front services.
The BudgetDoc site already has around 350 unique visits a month and has been used by 800 patients. BudgetDoc is looking to hire a marketing manager that can do social media outreach as well as blogging and community events. If the site sees success in creating a large network that attracts many patients, it will pay for the increased workload by charging providers a small fee. The site will always be free for patients.
Contact Card is the brainchild of urologist Naveen Kella. It’s a virtual business card – or v-card — sharing app designed to simplify the process of exchanging business cards at conferences and big group events.
“When you do come back home from a conference, you have your suitcase – open it up and there’s like 30 cards in there,” said Kella. “When do you have time to organize all that?”
Contact Card allows the user to quickly create a virtual business card and then share that card through e-mail or a QR code. In a pinch customers can just take a picture of your card as well. The QR code functionality means the app will work even without phone reception or internet access. Contacts you meet can use any other QR reader to download the v-card as well. Kella says the app is ideal for professionals that “wear many hats” and don’t have business cards for all of their services.
Contact Card will also automatically organize v-cards it obtains from other users into a virtual rolodex. From there, the app lets you call or e-mail a contact just by taping on the number or address on their v-card. In the future, Kella hopes to incorporate a feature that organizes business cards based on the location a user received them.
Contact card launched on Nov. 15 and is currently available only for iPhones, iPads, and iPods which are using iOS 5.0 or later. The basic app is free but it will come with a premium card design pack for $1.99. Kella does not have any plans to adapt it for Android, though that may change depending on the app’s reception.
Appfog was founded by CEO Lucas Carlson. It’s a web hosting and platform-as-a-service provider that gives developers a platform to work with so they can create, launch, or improve their mobile app products without spending days on creating the necessary infrastructure. Appfog handles the internet hosting, the IT infrastructure, and any necessary maintenance for the developers — through cloud computing technology – to help them save time and cut costs. Senior Director of Customer Experience Chad Keck claims that Appfog can help a developer deploy an app in less than a day.
“Come to Appfog, pick your technology, choose your provider and region, launch your app and you’ll be home in time for dinner,” said Keck. “We want developers to stay focused on their core competency, which is developing their application, and not on running servers all day.”
Appfog allows developers to work with many different types of code including PHP, Node, Ruby, Python, Java, and .NET. There are also many different regions and mobile providers that you can choose from without getting tied down to a particular one. Appfog has agreements with these providers and gives you a choice of the one you want to use. Appfog also allows developers to switch between providers within minutes – an option Keck says is not available with other companies like Amazon. In fact, Keck says that many of Appfog’s customers come from Amazon because they need more flexibility and features.
Appfog caters mostly to individual developers but works with small and medium businesses as well. It is free for applications that can run within 2 GB of ram – such as a WordPress site or simple blog – and starts at $100 a month for 4 GB of ram. Today Appfog has over 80,000 users and Keck says that around 10 percent of those users are paying for 4 GB and above. Many of the paying customers are enterprises running Appfog: Private Edition, which can run inside corporate firewalls.
Appfog is currently hiring for sales and support positions.
Steven Quintanilla (Left) and the Kirpeep team photo by Andrew Moore
Kirpeep is a bartering and exchange website where users can exchange goods and services with or without the use of money. CEO Steven Quintanilla created the site in the hopes of reducing societies dependency on currency and helping people get things that they need by using their time and talents.
“Kirpeep is an exchange engine working to empower people who provide value to the community by making it easy to exchange goods and services with and without money,” said Quintanilla. “You can barter, you can buy, you can sell.”
Quintanilla demonstrated how a user could barter a slightly used iPhone for a set of tire rims. He also showed how users could post things they want to sell, barter, or buy on their Kirpeep profiles and then re-post them on social media sites such as Facebook.
Kirpeep is not limited to just bartering goods. Any service or talent can be put up for trade against any other service, talent, or good for sale – as long as it’s not prohibited by Kirpeep’s very specific terms of service. A user could trade a session of calculus tutoring for a dance lesson or a set of DVDs if they wanted.
If users want to use money they can purchase kirpoints from PayPal which have a 1-to-1 ratio to dollars. Kirpoints can be used alone or in combination with other goods and services to negotiate a transaction. The only catch is that users must buy 25 kirpoints at a time and must cash out in 50 kirpoints increments – a decision made to make bartering more attractive than spending money.
Once two users agree to an exchange and complete it, each is given a confirmation code to be used when they are provided with the others good or service. Once the codes have been entered you can rate the other user and impact their reputation.
Kirpeep has received $25,000 from Geekdom to start their business. Their website, and concept, is still in beta and has only been up for a few weeks, so potential difficulties may still lie ahead for the website. The IRS, for instance, will require people to report the value of what they barter — but because Kirpeep sees the value of something as subjective and ever-changing there are no guidelines for users to follow when reporting. Quintanilla says Kirpeep is only viewed as “a connector” by law and reporting the value of transactions is the responsibility of users alone.
As Kirpeep develops, they hope to be able to create a “value graph” for communities to help classify what is valued locally by what people trade the most for. They can then suggest matches and make recommendations to users. According to Quintanilla, once the real value of goods and services are recognized in a community, members of the community can find a better way of getting what they need than by spending money.
“What Google did for search, we want to do for exchange,” says Quintanilla. “There are seven billion of us, it’s crazy that we cannot have the basic human essentials with the 7 billion people we have as resources.”
Kirpeep currently has 7 employees and 5 consultants. They are looking to hire more developers that have experience coding in Ruby.
Disclosure: Geekdom is a sponsor of Silicon Hills News
By ANDREW MOORE
Reporter with Silicon Hills News
Rackspace’s New Offices
The company moved into an 87,000 square foot location next to I-35 in north Austin in October. The offices can accommodate more than 500 employees. The web hosting company currently has 400 people – adding around 100 employees per year for the last two years. Rackspace wants to hire 50 more employees this year.
Rackspace, founded in 1998 in San Antonio, has more than 3,000 employees in San Antonio at its headquarters in the former Windsor Park Mall on Walzem Road. The company also has an office in San Francisco. Rackspace reported revenue of $1.24 billion last year and net income of more than $100 million. The company has a market cap of more than $9 billion.
Rackspace attributes the steady growth over the last few years to its service-oriented business model of web hosting.
Bill Blackstone, Austin Community Outreach Leader for Rackspace
According to Blackstone, the support teams are fully authorized to make important decisions and resolve a customer’s issue without having to check with a supervisor or another department. They are also available at any hour. It all fits into Rackspace’s often touted motto of providing “fanatical support”.
But the support aspect is only one of the four pillars of service to which Rackspace attributes its success. The other three: The security found in physical dedicated servers, the scalability found in virtual servers, and the ability to combine physical and virtual servers to fit a client’s need.
“The combination of those is something that doesn’t exist elsewhere,” says Blackstone.
Rackspace also has an advantage in being the co-founder of the new standard-setting cloud computing platform called OpenStack. Developed in partnership with NASA, Rackspace helped set the standards for OpenStack that are now used industry-wide. The new technology is open-source and available for anyone to use. As a result, over 850 organizations are currently working to further improve the technology. While this means that any competitor can provide OpenStack service, Rackspace hopes to retain the lion’s share of potential new customers due to their reputation for support and their status as a leader in the OpenStack technology.
“We still believe that at the end of the day it’s not necessarily the actual technology, but the service that makes the difference,” said Blackstone.
Rackspace prides itself on “Fanatical Support”
“The folks that were established that were doing this were like, ‘No, I like my physical server,’ even though it was only 6 percent utilized,” says Thoene.
But as the recession hit, companies feeling the pinch were forced to take a look at cloud services for the cost savings that they desperately needed. As a result, many made the big leap to cloud technology within the last few years. Thoene sees it as a glass-half-full situation.
“It really served as a vehicle to get people to kick the tires and look under the hood of cloud a lot more closely than they would have (otherwise),” said Thoene.
In fact, the International Data Corporation (IDC) — a market research firm — has released an often quoted prediction that “80 percent of new commercial enterprise apps will be deployed on cloud platforms” by the end of 2012 – a major swing for the hosting industry since the 2008 recession. Rackspace is second only to
Rackspace Austin Site leader Max Thoene
Rackspace Hosting is also enjoying the advantages of an Austin location. Just one of many tech companies expanding in Austin, Rackspace is experiencing rapid growth due to the city’s educated population and its popularity as a place to relocate talent. The local tech scene provides an ideal recruitment spot for Rackspace.
“We find that there is a great cross section in Austin that has both the technical skill and the service leadership type of skill set that we are looking for,” says Thoene.
According to Austin Technology Council President Julie Huls, this is a common trend for tech companies in the Austin area.
“Companies the size of Rackspace — which are growing at the same pace — are attracted to Austin for its culture. I think we have ample talent as it relates to certain skill sets. We have a very creative workforce here,” says Huls.
In fact, Rackspace enjoys a special symbiotic relationship with the hotbed of tech start-ups in Austin. It works with both the Greater Austin Chamber of Commerce and the Austin Technology Council to invest in new start-ups. They also sponsor fairs – such as Chamberfest – and provide mentoring for new companies trying to get off the ground. In turn, many of those companies can then take advantage of potential cost savings with Rackspace’s cloud services – gaining the company more customers in the long run.
Thoene sees Rackspace’s tech community involvement as something that benefits both the company and the City of Austin by creating a healthy business environment.
“It’s a win-win,” says Thoene. “It’s a win for Rackspace because we get great people and it’s a win for Austin because we keep people employed.”
Story and photos by Andrew Moore
University of Texas cheerleaders turned out to celebrate a group of student entrepreneurs at 1 Semester Startup Demo Day Thursday night.
“We want our entrepreneurs to be as supported and celebrated as our athletes,” said Bob Metcalfe, a 1SS professor, co-inventor of Ethernet, founder of 3Com and the Cockrell School’s Murchison Fellow of Free Enterprise.
That’s why, in part, 1 Semester Startup has changed its name to Longhorn Startup Lab. They’ve also added Longhorn Startup Seminar for students and Longhorn Startup Studio for faculty, Metcalfe said.
Metcalfe teaches the class for undergraduate students interested in entrepreneurship, along with Joshua Baer, co-founder of Capital Factory, serial entrepreneur and professor of computer science and Johnny Butler of the IC2 Institute and professor in the McCombs School of Business.
The program is about mentors, inspiring speakers and course credit, Baer said.
So far, the class has graduated more than 35 startups in three semesters.
At Demo Day, 11 student-run startups pitched their companies to more than 300 people.
The companies included Beehive, Book512, Caysun, Clay.io, CrowdRx, Hoot.me, Lynx Labs, Predictable Data, Servuss, StillOpen and Team Pi.
Lucas Holt, a senior in engineering at UT, has taken the 1SS course for two semesters. Last semester, his group launched BeDJ, an app that let people change the music at a café, but it didn’t take off.
“People just weren’t grasping the concept of this new type of jukebox,” Holt said.
That’s when the five engineers behind BeDJ decided to pivot and turn the company into a marketplace for DJs called Book512. They even found the DJ for the reception event at Demo Day.
“We’re trying to create more gigs for them,” Holt said. “If we can make it cheap enough and simple enough for people they’ll use it.”
Book512 takes a small percentage of each transaction booked. The site has already booked several gigs and generated cash, Holt said.
“One thing that 1 Semester Startup has done for us – our team we’re all engineers – is it taught us that if you’re going to make a product and a startup company, you really need to do the research first,” Holt said.
Damon Clinkscales, a software engineer who has served as a 1SS mentor in the past, liked Clay.io, a platform for HTML game development and Team.Pi, an algorithmic trading and crowdfunding site. He also liked Lynx Labs, which developed a handheld 3-D camera that captures 3-D models of an environment.
Lynx Labs grew organically from a research lab in the electrical engineering department at UT into a commercial company, said Chris Slaughter, its CEO. The company received some initial funding from the National Science Foundation and the Defense Advanced Research Projects Agency, known as DARPA.
“1SS has provided us a cocoon by which we can grow this technology and develop this company,” Slaughter said.
The company just received notification that it has been recommended for a Phase 1 Small Business Innovation Research grant for $150,000. In addition, the five-member team at Lynx is seeking $350,000 in seed stage funding. And in January, they plan to launch a Kickstarter campaign to raise awareness about their product, Slaughter said.
The class has provided valuable connections and advice to Lynx Labs, Slaughter said.
“Josh Baer and Bob Metcalfe aren’t just figure heads,” he said. “They sit down and help us. They’ve been so valuable.”
Lynx Labs shows what’s possible with spinning technology developed at UT into startups, said Kyle Cox, director of wireless and IT at the Austin Technology Incubator and a 1SS mentor. Lynx Labs also helps ignite Austin’s hardware industry, he said. The city’s startups have traditionally been focused on enterprise software, he said.
“They’ve also done a lot of really hard work at assessing multiple marketplaces,” Cox said. They’re focusing on entertainment and architecture marketplaces, he said.
“Longhorn Startup Labs is just a fantastic farm system for the UT and the Austin startup communities,” said Rudy Garza, founder of G-51 Capital Management.
Several of the companies spun out of the program will go on to become viable companies and those entrepreneurs will come back and help the next generation, he said.
“They don’t just have one semester to be successful,” Garza said. “They have a continuum of time to pivot into a commercial company.”
Some of the companies that pitched at the Demo Day will get funded, Garza said.
“The exciting thing is in Austin we have a more developed investment ecosystem,” Garza said. That includes angels, investors, micro-VCs like G-51 and big VCs like Austin Ventures, he said.
“You’re going to see companies get funded and UT’s investment go up,” he said. “We hope to build a better Silicon Valley here in Austin.”
Rony Kahan and his wife spent more than a week hiking from base camp at Mount Everest to Kathmandu without a guide.
The couple didn’t follow a path. Instead, they used a compass and found their own way.
That journey is analogous to the one that Kahan and his co-founder Paul Forster took creating Austin-based Indeed.com, which has become the most popular job site in the world.
“You have to make your own path,” Kahan told more than 300 people attending 1 Semester Startup’s Demo Day at the University of Texas Thursday night. To illustrate his point, he showed a picture of the couple hugging at Mount Everest at the start of their hike.
Kahan kicked off the event as the keynote speaker. He recounted his entrepreneurial journeys and lessons learned from building two companies in Austin. Recruit Co., a Japanese-based provider of human resources and recruitment services, bought Indeed.com in September. Although the terms were not disclosed, the New York Times, an early investor, reported its gain from the sale at more than $100 million. In his introduction of Kahan, Joshua Baer, 1 Semester Startup professor and serial entrepreneur, said news reports puts the sale price at $1 billion.
Indeed.com, founded in November of 2004, has more than 600 employees, including 175 in Austin. It has been profitable since 2007. Its website gets more than 80 million unique visitors every month.
Rony Kahan speaking at 1 Semester Startup at UT
“In my heart, I always wanted to start my own business,” Kahan said.
He moved to Austin in 1997, during the Internet gold rush, and teamed up with Forster to start Jobsinthemoney.com in 1998 focused on the financial jobs niche.
“One piece of advice, don’t choose such a long domain name,” Kahan said.
In 1999, Kahan and Forster tried to raise money to expand Jobsinthemoney.com. But they didn’t succeed.
“At that time, everyone was getting money,” he said.
But investors wanted Kahan and Forster to create a vertical jobs market like Monster.com. That marketplace was too crowded, Kahan said. They knew the financial services industry and saw a need for a niche job site.
“We spent basically all of our savings,” Kahan said.
At the time, Kahan and his wife had a three year old and a one year old and he was working out of his house. Forster also had a toddler and a baby on the way. They took side jobs to support the site.
At 2000, they were at the end of their rope. They were providing job listings for free. They decided to start charging for listings and companies started paying them. They bootstrapped the business and did everything as inexpensively as possible.
“I taught myself to code because we couldn’t afford any outside contractors,” Kahan said. They were still working out of their houses and barely making it.
“Then we got lucky,” Kahan said.
Congress passed the Sarbanes-Oxley Act, in the wake of the Enron implosion, in 2002 requiring companies to hire more accountants and auditors. They went to Jobsinthemoney.com to find them.
In 2003, Jobsinthemoney.com had a dozen employees and was the number one site in the U.S. market for financial jobs. Kahan and Forster sold the site for a few million dollars.
“We thought that was a giant exit,” Kahan said.
The agreement required them to work for the buyer for six months. After that, Kahan and Forster began brainstorming their next venture. They knew that many large job listing sites existed, but that required a job seeker to go to multiple sites instead of just one place. They decided to create an aggregated job site based on algorithms, similar to Google’s search engine.
“We put all of our money into launching Indeed.com,” Kahan said. His wife even drew the logo for the company.
In 2004, they hired part time University of Texas students to code the site, Kahan said. He later hired them on full time. The site started getting traction right away, he said. A year later, venture capitalists started coming to the company.
“We ended up taking $5 million from the New York Times and Union Square Ventures in August of 2005,” Kahan said.
They immediately faced stiff competition. Indeed.com had two fast followers. One in Silicon Valley raised $23 million and another in Seattle got $52 million. That worried Kahan and Forster at first.
“Our competitors are raising all this money,” Kahan said. “We didn’t raise any more money. We’re going to get to profitability or else.”
Indeed.com built its business under the radar.
“The guy who raises $53 million gets all the TechCrunch coverage,” he said. “The guys who raise $5 million don’t. That was OK with us.”
They didn’t seek out publicity. Instead, they promoted the jobs site through Search Engine Optimization and word of mouth marketing. Indeed.com only had a PR agency for six months from 2004 to 2012, Kahan said. In 2007, the company became profitable.
At that point, Indeed.com only aggregated job postings. Companies could not post a job. Job seekers couldn’t post their resume. They only did one thing: job search, but they did it well, Kahan said.
“We noticed all of these clones of Indeed around the world,” Kahan said. “We decided to push out globally.”
Indeed.com is now available in 53 countries in 26 languages.
In 2009, Indeed.com became the number one job site in the U.S. in terms of traffic, Kahan said. In 2010, traffic continued to grow and the site added resumes, job postings and job reviews.
In the beginning, Kahan just wanted to build something. But the site became more of a mission of helping people find jobs. Kahan wore a blue T-shirt with the slogan “I help people find jobs.” That’s the Indeed.com company T-shirt, he said.
“We help people find jobs more than anyone in the world,” he said.
Kahan told the audience that as an entrepreneur a lot of people will give you advice and tell you how to run your business, but you have to make your own path.
“That’s what is going to be successful,” he said. “Do one thing and do that really well and focus on execution.”
Entrepreneurs are also optimists, Kahan said.
“There’s all these things that come up and come in your face,” he said. “Entrepreneurs believe they can do anything. And you can do anything. It’s a worthy journey to take.”
Mass Relevance held an open house and gave tours of its new downtown office at 800 Brazos St. in Austin.
The company took a 12,000 square foot space and transformed it into a cool high-tech office.
Sam Decker, CEO of Mass Relevance, shared this video on Twitter. It shows the company’s open design for its offices and its kitchen and lounge space with video game consoles and ping pong table.
Mass Relevance has created a social media platform that allows content publishers to create new revenue streams around curated and integrated experiences on TV, the Web, mobile and large screen displays. Its clients include NBC Sports, NFL Football, Cisco, Samsung, and Pepsi and media companies like CNN, Boston Global, New York Times and Washington Post. Sports teams using the platform include the New York Giants, San Francisco Giants and the Boston Celtics.
Back in August, Technology Reporter Lori Hawkins of the Austin American Statesman wrote this story on Mass Relevance’s move downtown. Apparently, it’s part of a trend of high-tech startups moving downtown.
By EHREN FOSS
Special Contributor to Silicon Hills News
What’s the whole story?
The purpose of the rest of this post isn’t to tell the whole story of HelpAttack! We hope, however, to pass along the most valuable wisdom we have accrued.
Sarah Vela came up with the idea that became HelpAttack! during Austin’s “Movember” fundraiser of 2009. Austin’s team had a lot of social media people on it, and Sarah’s feed became noisy with fundraising asks. Why can’t we just give each time we Tweet about other stuff?
Sarah knew David and David knew Ehren and we all got together to talk about the idea, at that point called “Change4Change.” In April of 2010 we paid some lawyers and became a Delaware C Corp. We developed an early version late that spring and early summer, and launched our “Beta” on August 23rd.
The core of the idea – giving each time you send a Tweet, no matter what the Tweet is about – soon grew into a broader concept: Micro donations driven by all kinds of online activity: Facebook posts, blog posts, comments, photo and video uploads, petition signatures, and so on.
Individual Supporters
At first, we focused on building an app that individuals could use to support a cause of their choice. Our goal was to become a place where people could express their good natures online, like a Change.org, Care2, or Jumo but focused on social media. We created “coins” which were like Foursquare badges – rewards for making different kinds of pledges.
A cursory look around the internet reveals a graveyard of companies who tried to build their own social networks and own user bases from scratch. At this point we were also seeing signs that while people want to be good and believe they are good, they usually need more of a push to actually do something good. Sharing a photo (think Instagram) doesn’t cost anything. Donating does, and the psychology of people while they are giving is very complex.
Nonprofits
Our next major release, in early February of 2011, included a Facebook integration (for a second pledge type), and a dashboard for nonprofits to log in, access donor data, and monitor their fundraising efforts.
Shortly afterward, American Red Cross and Best Friends Animal Society gave it a go. To date, they were the most successful nonprofits on our platform.
Restructuring
In May of 2011, Sarah and David left the company but stayed on as valuable and active advisers. In August of that year, Vanessa Swesnik joined to kick butt at business development.
Celebrity Ambassadors
Celebrities have large online audiences. The larger the celebrity, the more people after them to post a link or give a shoutout. On the other hand, many celebrities have strong ambassador relationships with nonprofits, and the PR/talent management industry is well versed in the concept.
We learned a few things. One, IMDB Pro, LinkedIn, and a little creative Googling makes it easy to get the right phone number with about 15 minutes of work. Two, these people are professionals.
Remember the Miley Cyrus campaign we blogged about? We called the nonprofit, and learned that the chairman of their board of directors is also the chairman of the Screen Actor’s Guild. Furthermore, while it was now obvious how they were able to get nearly 100 celebrities onboard, they explained that the participating marquee celebrities would not allow the fundraising totals to be shown, as that could be construed as a stand-in for popularity. Celebrities don’t want to appear less popular in any context.
In another case, we reached a PR firm who was interested, but asked that we reconfigure our platform to allow people to give when their client sent out a specific type of Tweet. For example, every time Liza Minelli tweets a photo of herself, her fans would give $1.
We weren’t able to totally win over the staff of any celebrities. We got close a few times.
Cause Marketers
Like celebs, companies have specific goals and hangups when it comes to social media and supporting nonprofits. Retail firms are tough: they want you to buy their stuff, so they are unlikely to push a campaign where the first priority is direct donations to the nonprofit. Other industries have other challenges: regulatory compliance, privacy concerns, and so on.
In the cases where we were able to make a serious pitch for a cause marketing campaign, it was sunk by too many cooks in the kitchen! Having a national nonprofit, and a national brand, and both of their teams of lawyers, together with a PR firm and us… didn’t make much progress.
Nonprofits Again
Ok, so if celebrity ambassadors and cause marketers… back to nonprofits! We spent the rest of our run attempting to convince nonprofits to run social media fundraising campaigns. We used IRS and other data to identify those who would be likely to have a large online community already. We had some success with PETA, Heifer International, World Food Programme, UNICEF USA, and a few others. Several smaller nonprofits surprised us and ran very successful campaigns (for their size).
Still, the amount of effort required to do the convincing, help craft messaging, talk through the results, convince them to continue the campaign, and so on far outweighed the 4% of donations we were getting back. We did a couple custom apps or consulting engagements for organizations to fund a snazzy redesign in the summer of 2012. Success did not follow.
Vanessa, Holly and I were worn out and tired of not having a sustainable business. We talked with David and Sarah and decided to call it quits in early September of this year.
Other Topics
Legally Transacting Tax Deductible Donations
We didn’t know anything about this topic when we started. It took a long time, and a lot of networking and effort, to find a few people who actually knew the rules.
If you are transacting tax deductible donations on behalf of a nonprofit, there are generally two approaches.
One, you can register as a professional solicitor in each state that requires it. This costs around $10,000 in legal fees, more if you have someone do it for you. The professional solicitor structure was created for people who reel in big fish at galas (and get paid for it) and also for some telemarketers who participate – directly or indirectly – in fundraising.
Two, you can set up a donor advised fund. A donor puts money in the fund, and then the fund is required to distribute the money to nonprofits in accordance with the donors wishes. This is most common with trusts or other structures where the donor doesn’t want to deal with as many of the details, but has a lot of money.
Both of those routes were annoying and expensive from a legal perspective, so we looked for a partner who would transact the funds for us and we found Network for Good. At the time, they were the only such entity in the US, and they were also expensive.
We didn’t know it at the time, but it turns out that nobody really knows how the laws apply to third party online fundraisers like HelpAttack! No case has been brought forward far enough in the internet age. Attorneys General are paying attention, and keeping their eye on various parties, but they aren’t aggressively pursuing startups like ours.
So, did we have to pay all the extra money? Probably not. We’re not advocating that anyone skirt the rules. The point is that knowledge is incredibly potent. If we knew we could get the Excel files of every single nonprofit in the US, for free, from an IRS webpage, that would have helped (you can). If FirstGiving had entered the market sooner, that would have helped too. We could have gotten through our first 18 months spending $10k less and generating more revenue than we did.
Our Competitors
There still aren’t very many companies out there doing similar things. Rt2Give (TwitPay) gave up at least a year ago. Snoball continues (thanks to some nice fundraising rounds in lieu of actual growth) and their model is the closest to HelpAttack! Pledge4Good, Rainmaker App, Charity Swear Jar, Pledgie… there are always a spectrum of new companies and new models out there. Kickstarter-style sites, and team fundraising sites, meanwhile, have done very well in the past few years. So…
Does Social Media Fundraising Work?
This is the $100B question. If you’re reading this you probably already know that Americans donate around $300B per year, but that amount has been flat for the last decade. Online giving has been growing hand-over-fist, but still represents only around 10-15% of the total. Meanwhile, direct mail and fundraising from other channels have likely declined by the same margin. If nonprofits are going to grow overall, and gain more resources to fight the world’s ills, online fundraising has to grow faster. Social networks and social media seem like the most obvious place for that to occur.
Some entrepreneurs confide privately that “nonprofits don’t know what they are doing.” In some cases, with regards to online fundraising, that is absolutely true. There are some organizations out there that will be a lot smaller in 10 years for this reason.
But that’s cynical. What’s really going on is that nonprofits don’t seem to have TIME for anything new. Small nonprofits are stretched extremely thin. Even if the executive director “gets” the internet and social media, how much time can they spend? Can they afford any of the tools that help save time? Can they afford ads to help boost their community growth? Medium and large nonprofits suffer from other maladies: The most common is that the communications team may do a fabulous job managing the website, blog, and social media, but the fundraising department is in another silo. The communications team is driven by engagement: likes, comments, stories, interactions, and community growth. We observed that this environment does not make it easy to create, establish, and sustain a recurring fundraising program within an online community. That’s a whole new ball of wax and although large nonprofits have more resources and staff, they still don’t have enough bandwidth.
Another factor is that after a few years of record growth and constant buzz, financial realities have hit Facebook and other networks, and many nonprofits are disillusioned at their inability to efficiently reach the communities they worked so hard to build.
I still believe social media fundraising absolutely can work. For most who try, it doesn’t, because:
The numbers don’t work out: Not enough people see or spread enough posts to generate enough clicks for the conversion rate to favor viral growth. You either need to start with a very large audience or sacrifice the fundraising potency of a message for viral potency. The solution to this problem is to nurture partners with larger communities and to craft a set of messaging that will spread AND get clicked on.
They only try once. Almost never will a single Facebook post bring in a significant amount of money (natural disasters perhaps the notable exception)
Social media and fundraising practices at most nonprofits are not integrated. Sometimes these teams don’t even talk.
Perhaps we would have been successful if we executed our plans better, or perhaps we would have been successful with different plans, or the same plans in a different order. Who knows. A few people said we were more of a feature than a business, and that may have been true.
What do you think? Good luck to all those working to crack this very tough nut!
About Ehren Foss: “Co-Founder and CEO: has a decade of diverse technical experience with web programming, database administration, and many of the open source tools that help make the web an amazing place to work. He is the founder of Prelude Interactive, a web development firm. Before that he worked at Alchemy Systems an Austin, TX company specializing in professional development and training systems. Ehren is a graduate of the Massachusetts Institute of Technology.”
Editor’s note: This post first was first attributed incorrectly to David J. Neff, co-founder of HelpAttack. It appeared on HelpAttack!’s website and is reprinted here with Neff’s permission. The Austin-based startup shut down in October.