It’s finally here. The special election for Austin voters to cast their ballots on Proposition One.

A vote yes means the regulations City Council adopted last December to require fingerprinting background checks of all ridesharing drivers get thrown out. And Lyft and Uber and other so called Transportation Network Companies, known as TNCs, will continue to operate business as usual in Austin.

A vote for Proposition One would “replace with an ordinance that would repeal and prohibit required fingerprinting, repeal the requirement to identify the vehicle with a distinctive emblem, repeal the prohibition against loading and unloading passengers in a travel lane, and require other regulations for Transportation Network Companies.” A sample ballot can be found here.

A vote no means the regulations stand and drivers must undergo fingerprint background checks. Lyft and Uber have threatened to shut down operations in Austin and lay off their drivers if that happens.

Many in the tech community want citizens to vote in favor of Proposition One.

A lot is at stake.

Austin is a finalist in the U.S. Transportation Department’s Smart City Challenge. It could win up to $50 million to improve the city’s traffic flow and create smarter transportation options. But Fortune reported that “Last month, U.S. Chamber of Commerce president Amanda Eversole sent a letter to U.S. Transportation Sec. Anthony Foxx that questioned Austin’s eligibility as a finalist in the Transportation Department’s Smart City Challenge.”

“Austin’s current, and more strict regulations, Eversole argued, are not conducive to the program’s goals,” according to Fortune. “Her argument is intended to pressure Austin’s government into backing down on its fingerprinting rule by pointing out the potential financial consequences.”

People in Austin can look up their polling place here.

Full disclosure: I cannot vote in the election because I don’t live in Austin. I’m also a licensed Lyft driver, although I have not given any rides yet.

By Laura Lorek
Reporter with Silicon Hills News

A year ago, Ryan Norton didn’t have a car and he needed to get to the dry cleaner and back from the University of Texas at Austin campus.

“Dry cleaning is really inconvenient,” Norton said. “As we looked at this space we recognized the entire industry is outdated. We figured there had to be a better way to do it.”

So his team built an app and they created Press, what they call “the Uber of laundry and dry cleaning.”

Press is one of 15 startups that pitched Thursday night at Longhorn Startup Lab Demo Day at the Lady Bird Johnson Auditorium at UT. The semester long class, taught by Joshua Baer, founder of Capital Factory, gives students instructions on how to become entrepreneurs by founding and running a startup. The students also learn from a group of volunteer mentors, successful Austin entrepreneurs, who meet with the students once a week. The latest class is the 10th class to go through the program, which started in 2011.

Most of the startups are early stage.

Press launched three months ago and has had more than 600 orders. It is averaging about 40 orders a week, Norton said. They have done $13,000 in revenue so far. The startup is bootstrapped right now and is looking to raise a seed stage round of funding soon.

Norton, a junior majoring in electrical engineering, founded Press along with Nelson Tao, a senior in economics and Tyler Amodio, a sophomore majoring in economics. They are going to have a fleet of independent contractors that pickup and drop off clothes, Amodio said.

While many of the startups that participated in Longhorn Startup have failed, a few have gone on to success. Burpy, co-founded by Aseem Ali, went through the Techstars Austin program and is about to launch a new product. Occipital, based in Boulder, Colorado, acquired 3-D camera maker Lynx Labs. And two of last year’s Longhorn Startups, Cerebri, an artificial intelligence startup, and Beek, a Spanish book review site, are now part of Capital Factory’s accelerator program.

And many of the former students have gone on to work for startups in Austin and beyond. Throughout the years the program has helped to foster an entrepreneurial spirit at the University of Texas that might someday help to inspire the next Michael Dell, who founded his company his freshman year at UT in a dorm room. Dell has spoken to several of the Longhorn Startup classes.

“The program is awesome,” said Tao with Press. “The environment they put you in with all of the other student entrepreneurs lets you know you are not alone in this. And also it brings out the competitive side in you. Friendly competition is always good.”

The mentors have given the startups so much knowledge, Norton said.

“I’ve learned so much in this class about how to raise a seed round,” he said. “I never would have known that before.”

The mentor network helped by providing valuable feedback and advice, Amodio said.

“It’s gratifying to have provided an outlet for these young entrepreneurs,” said Bob Metcalfe, who originally founded the program with Baer, founder of Capital Factory and UT Professor John Butler. “Before they even get here they know they want to do something like this. It’s not like we have to convince them. They volunteer. They show up.”

In February, the Genesis program launched at UT at Austin to provide funding to student entrepreneurs looking to found companies. It’s open to any student in any degree program.

Thursday’s night program kicked off with 15 student run startups pitching for four minutes each. A brief description of each is listed below.

BeepBeep Advertising – The startup provides car wrap advertising on the cars of independent contractors who work for companies like Lyft, Uber, Postmates, Instacart, Favor and others. The average car wrap creates 603 impressions per mile. The outdoor advertising market accounts for $17.4 billion annually. The company is currently in negotiations with advertisers and ridesharing drivers.

Coil – a group messaging tool launching at UT Austin for college courses and organizations. It is moving students away from email and to mobile messaging to communicate about all educational matters. It is going to be integrated with Canvas.

ConcertCam – an app that enhances the sound quality of smartphone video recorded at live concerts. It creates quality content from video clips uploaded to soundcloud and then delivers it back to the fans and bands.

Cal-Me – an alarm clock for student’s upcoming assignments. Students take a picture of their class syllabus and upload it to Cal-Me and the platform sets up reminders for every assignment that is due for the class. Reminders are sent via text messages. One class is free. If a student wants to upload all of their classes they pay an annual fee of $20.

DelegateIt – is a solution for vacation rentals that provides a concierge and short term management service. The on-demand concierge service provides renters with grocery delivery, activity scheduling and transportation.

DrivenATX – is a platform that seeks to provide jobs for exceptionally driven homeless people in Austin. It’s a marketplace for small jobs kind of like TaskRabbit. On the platform, a person can create a job and it will be assigned to a homeless person to complete.

eBik – a smart lock system, mobile application and data sharing service for easy bike sharing programs at university campuses.

Entrée – an application that lets people text their orders to pre-pay and skip the lines at Austin food trucks.

Hey Athena – a voice activated artificial intelligent agent that acts as someone’s personal assistant.

Hylio – has created an autonomous commercial delivery drone called Pegasus that lets anyone deliver goods to consumers. They plan to launch a crowdfunding IndieGoGo campaign in a month.

Infusey – is a device that attaches to a shower and infuses the shower with essential oils to create a spa-like aromatherapy experience. They are currently running a Kickstarter campaign.
KickIt – an app that lets college students connect with their friends for social engagements.

Press – A dry cleaning app that lets people in downtown Austin order pickup and dropoff for laundry services and dry cleaning.

Sanare Solutions – is scheduling software for biotechnology and pharmaceutical companies.

Texas Guadaloop – a team of 30 UT engineers at UT Austin are building the Hyperloop transportation pod in a competition sponsored by SpaceX. They are scheduled to demonstrate their prototype this summer. They currently have a GoFundMe page to raise funds for the project.

By LAURA LOREK
Reporter with Silicon Hills News

Mike Maples Jr., general partner of Floodgate Ventures in Palo Alto, has a golden touch for making early investments into successful tech startups.

That skill earned Maples the 19th spot on Forbes’ 2016 Midas list of the most successful venture capitalists for his astute investments which recently included Cruise Automation, a company that sells software and hardware to turn any car into a self-driving car. General Motors paid $1.2 billion to acquire Cruise and the deal is the process of closing, Maples said.

TwitchTV cofounder Kyle Vogt and Daniel Kan founded the company and Maples wrote them an early check to finance the startup despite vociferous objections from his partners at Floodgate.

On Thursday evening, Bob Metcalfe, inventor of Ethernet and professor of innovation at the University of Texas at Austin, interviewed Maples at the 10th Longhorn Startup Demo Day held at the Lady Bird Johnson Auditorium.

During the discussion, Metcalfe asked Maples about his background as an entrepreneur. Maples worked at Tivoli Systems and founded Motive Inc. in Austin before heading to Silicon Valley to become a venture capitalist.

Maples was an early investor in Twitter, Lyft, TwitchTV, Chegg and several Austin-based startups including SpareFoot, Bazaarvoice and Spiceworks.

Maples also recounted how he begged Evan Williams, the founder of Odeo, a podcasting network, to let him invest in the startup. Williams, who founded Blogger and sold the company to Google, was leaving Google to start Odeo.

Maples had never made an angel investment before but he believed in Williams and he was a fan of podcasting.

“A week after my check cleared, Apple decided to give podcasting away on iTunes,” Maples said. “That’s a little bit of a problem when they decide to give it away.” Apple owned 95 percent of the market.

After about a year, Williams said we don’t have a business here and he decided to give investors their money back. Maples agreed to take the money back as long as he could invest in William’s next thing. At the time, Williams was working on a side project called Voicemail 2.0 or Twitter.

He wrote an early check to Williams, the co-founder of Twitter, a micro blogging site in which people write 140 characters or less about what they are doing, even though Williams didn’t have a product road map or revenue model.

Twitter and Cruise both qualify as so-called “Unicorns” or startups with billion dollar valuations, said Metcalfe.

“But you don’t use the term Unicorn,” Metcalfe said. “You use the word Thunder lizard. So what’s the difference between a Unicorn and a Thunder lizard?”

Maples said he’s been using the term Thunder lizard for 20 years.

“My basic theory for how I invest is I look for ideas that are highly exponential. So a metaphor I like to use is Godzilla,” Maples said. “Godzilla for those of you that don’t know was hatched from radioactive atomic eggs, swarm across the Pacific Ocean and started destroying cities, breathing fire on things and eating train cars like they were sausage links. And I just thought that was kind of a good metaphor for a startup. You start out as this tiny radioactive egg and you turn into this Godzilla creature that destroys everything. My job is to spot radioactive eggs and to determine if they have that energy to morph into something, to mutate.”

Another Thunder Lizard Maples invested in early on is Lyft, the ridesharing company. How did that happen? Metcalfe asked.

Lyft had been experimenting with Zimride and they decided to launch Lyft in 2012 to be a ridesharing service that was approachable for women. Lyft featured friendly drivers and pink mustaches on the car, Maples said. There was one caveat, it may not be legal everywhere, he said.

But that didn’t deter Maples.

Lyft is evolving into a brand that feels like Virgin Air, Maples said. Lyft is seen as the friendlier, nicer alternative to Uber, he said.

In the 1980s, people took a product designed by men for men and painted it pink to try to sell it to women, Metcalfe said.

Originally, Logan Green and John Zimmer, Lyft’s co-founders wanted to make Lyft only for women, but Floodgate Partner Ann Miura-Ko told them that they would be eliminating half the market so they shelved that idea, Maples said.

Metcalfe said Maples has become famous in Austin recently for saying he would no longer invest in on demand products in Austin because the government was too hostile to Transportation Networking Companies and others in the on demand economy.

Metcalfe then brought up Proposition One, a special election to be held in Austin on Saturday. A vote yes, which is what both Maples and Metcalfe advocate, would require the Austin City Council to dump an ordinance they passed last year to require all ride-sharing companies to have their drivers undergo fingerprint background checks. Uber and Lyft have threatened to leave Austin if Proposition One is not passed.

To explain his stance, Maples gave a brief history of capitalism. Two hundred years ago no companies with more than 100 employees existed in the United States, Maples said. Then the railroad and the steam engine came out and people like Rockefeller and Vanderbilt created corporations, he said. That has basically caused our standard of living to increase tenfold in the last 150 years, Maples said.

“I believe that there is a new kind of capitalism emerging and it is no longer managerial capitalism that took years, rather it is networked capitalism,” Maples said.

Network capitalism is driven by two forces of nature: Moore’s Law, which states computing processing power doubles every 18 months and Metcalfe’s Law which is about the value of a network being the square of its number of nodes, Maples said.

“My theory is that around 2007-2008 the iPhone, smartphone, made microprocessor intelligence basically ubiquitous and made connectivity basically ubiquitous and when then happens Moore’s Law and Metcalfe’s law no longer define the computer or tech industry they are now the animating forces of the economy.”

“And so I believe the most valuable businesses in the world are going to be networks,” Maples said. “And I believe the big companies of the world today, if they don’t position themselves to be network-centric, they will fail. I believe that Tesla is a network centric car company. I believe Apple is a network centric phone company. I believe that the twin powers of Moore’s Law and Metcalfe’s Law are what is going to bring abundance to the world in the next 10 or 15 years.”

Lyft and Uber are basically architected from the ground up from those two forces – Metcalfe’s Law and Moore’s Law, Maples said.

“It’s just a superior model,” he said. “It brings abundance to everybody.”

It gives riders more options and lower prices and it gives drivers extra income and jobs and more flexibility, Maples said.

“Ultimately that approach to riding is just on the right side of history,” Maples said. “The people who are against it they can play whatever politics they want but they are just on the wrong side of history.”

Several people in the crowd broke out into applause.

“Ten years from now does anyone doubt that the TNCs are going to be the mainstream mode of transportation in Austin?” Maples asked. That is unless they are replaced by self-driving cars which is another network capitalism thing, he said.

“It’s just a question of how much friction does the local government want to introduce into that playing out,” Maples said. “I’m just against that.”
Fingerprinting doesn’t obey Metcalfe’s Law or Moore’s Law, it’s just some bureaucratic process designed to impede efficiency and abundance, Maples said.

Maples and Metcalfe ended their talk with a hug in honor of Bill Campbell, a legendary Silicon Valley businessman and adviser to many tech leaders. Campbell died last month at the age of 75 from cancer. He was known as Coach Campbell and formerly served as head football coach at Columbia University. Campbell was a hugger and so Metcalfe and Maples embraced to remember him.

By LAURA LOREK
Reporter with Silicon Hills News

Austin has become a new hotspot for healthcare, technology and startup funding and a conference held downtown this week combined all of those ingredients.

The inaugural HealthCare Texas Innovation Capital Conference held at Brazos Hall Wednesday and Thursday attracted more than 450 attendees including more than 100 companies and 60 investors.

Christopher Kersey, partner of Camden Partners in Baltimore and a member of the board of directors of Johns Hopkins Aramco Healthcare, delivered the keynote address on Wednesday on Global Health Technology.

Johns Hopkins Aramco Healthcare is a recently announced joint venture between Johns Hopkins Medicine International and Saudi Aramco, the Saudi Arabian oil company.

McKinsey & Co. reports healthcare is the world’s largest industry. Kersey said it’s actually food and food processing, followed by healthcare and energy.
But the global healthcare industry is massive and growing in double digits, Kersey said. It’s a $5 trillion industry globally and about half that is U.S. healthcare expenditures, he said. Overall, healthcare makes up 15 percent of the U.S. Gross Domestic Product, compared to 7 percent globally, he said.

Healthcare is seeing double digit growth in a lot of private healthcare sectors around the world, Kersey said. India and Indonesia both present great opportunities along with China.

Healthcare expenditures are going to triple in China between 2008 and 2018, Kersey said.

“It is absolutely booming,” Kersey said.

The mega trend in China is the urbanization of healthcare services, Kersey said.

The Gulf Coast Consortium including the Arabian Peninsula is set to spend two to three times in healthcare including $14 billion on new healthcare facilities, Kersey said.

It’s important what happens in Saudi Arabia, Kersey said. It pours out throughout that entire region, he said. There is liquidity, there is movement and there is a very high demand for healthcare, he said.

Kersey also spent part of his time talking about global trends in healthcare research. In the U.S. funding for medical research was 6.3 percent until 2004-2005, Kersey said. Now the growth rate is less than one percent, he said.

“The private sector has been able to keep up as the government has leveled off its funding,” Kersey said. “So we’re having almost no growth on a year over year basis in the U.S. for medical research.”

Cancer is the big beneficiary globally of research dollars, Kersey said.

Global medical research funding is growing 3.5 percent. China is growing at 17 percent. Other Asian countries are growing at 20 percent.

The Asian countries’ healthcare industries are a lot smaller, but if the trends continue the U.S. is real trouble if it continues to only invest in research at one percent, Kersey said.

“We’re still the source for quality globally for great medical research,” Kersey said. But the dollars need to come in to continue to support it, he said.
China has as many people as we do working in science and tech.

The U.S. is absolutely dominant in patents but it is trailing off a little bit compared to other countries, Kersey said.

When it comes to clinical trials, North America and Europe still dominate the market. Kersey said. The infrastructure is not in China yet, but they are working on it.

Worldwide there is a huge correlation between dollars spent on healthcare and life expectancy. But in the U.S. there is no correlation, Kersey said. U.S. healthcare costs are out of control.

“We are clearly not getting our healthcare dollar value,” Kersey said.

Some of the megatrends affecting healthcare globally include Cybersecurity, personalized medicine and biopharmaceutical development, Kersey said.

Healthcare has the most Cybersecurity attacks than any other industry, Kersey said. Healthcare has 44 percent of Cybersecurity breaches, he said. Electronic Medical Record data is hacked five times more than it’s actually accessed by patients, Kersey said. The hackers hack for social security numbers and clinical diagnosis and then they bill third party payers for services, he said.

Ninety percent of healthcare organizations expect to have a data breach within the next year, he said.

OutboundEngine, which makes an online marketing platform for small business owners, announced Wednesday that it has closed a $16 million Series C funding round.

Austin-based S3 Ventures led the round with participation from previous investors Silverton Partners, Noro-Moseley, Harmony Partners, Altos Ventures and Capital Factory. To date, the company has raised $33.8 million.

OutboundEngine plans to use the funds to hire new sales, marketing and product engineering staff at its offices in Austin and Scottsdale, Arizona and on product development and to enter new markets. OutboundEngine has 238 employees with 190 of those in Austin. The company plans to double its workforce in the next few years adding up to 200 employees, said Branndon Stewart, CEO of Outbound Engine.

OutboundEngine, founded in 2012, has grown quickly in Austin. It has local investors as well as investors in the San Francisco Bay area, New York and Atlanta.

“There’s been a lot written about how it’s difficult to raise a growth round in Austin,” Stewart said. “We were able to keep our existing investors happy. We were able to do that in Austin.”

Stewart sees even more opportunity to become an even larger company in the automation marketing industry. It already has more than 8,000 customers in the U.S. and Canada in industries like insurance, real estate, financial services, beauty salons and more. OutboundEngine has created a subscription base service that automates marketing for small business owners. The company has created its own email service and provides social media marketing and content development to small businesses.

Traditionally large organizations have a marketing team that use some kind of platform like Hubspot or Marketo to send email campaigns and manage content, Stewart said. But there are a lot of small business owners and independent businesses like realtors, attorneys, hair stylists and more that don’t have a team. That’s the ideal customer for OutboundEngine’s platform, with prices starting at $179 a month. All of the marketing is done automatically on their behalf, Stewart said. They don’t have to worry about AB testing for email marketing or creating an editorial calendar, he said.

“Basically we make this an autopilot solution for customers,” Stewart said. “For most of our customers it’s table stakes it’s something they know they should be doing they just don’t know how to get it done.”

OutboundEngine has also outgrown its current headquarters at 504 Lavaca Street which it moved into about a year ago. It is moving to a high-rise at Cesar Chavez and San Jacinto. It will be occupying the 12th and 13th floor for a total of about 50,000 square feet.

From the Lady Bird Lake Hike and Bike Trail to Mount Bonnell, Google Maps now provides a virtual view of some of Austin’s remarkable landmarks.

Google Maps announced on Tuesday that more than 80 Texas landmarks are now live for people to explore online through Street View in Google Maps for both Android and iOS devices.

Other notable Austin area landmarks include Zilker Metropolitan Park, McKinney Falls State Park and Hamilton Pool.

Google Maps, through its Trekker Loan Program, partnered with the Austin Convention and Visitors Bureau, Houston Parks Board and Visit El Paso on the project. Google is able to collect the images using its “Street View Trekker,” which is a backpack with a built in camera system that collects pictures to create 360 degree panoramic views seen in Google Maps.

“As Texans, we love the outdoors, and thousands of residents and visitors take advantage of our parks and trails on a daily basis,” Gerardo Interiano, Google’s head of external affairs in Texas, said in a news release. “Today people can take virtual tours of more than 80 locations across our beautiful state right from the Google Maps app on their Android or iOS phones. Now the rest of the world can know, what Texans already know, and what Willie Nelson taught us: there’s no place but Texas.”

“It’s exciting to be able to offer never-before-documented imagery of Texas landmarks,” Austin Mayor Steve Adler said in a news release. “This is a great opportunity to showcase some of our city’s treasures to prospective tourists and to locals planning area outings.”

Google Maps made the announcement during National Travel and Tourism Week, which takes place from May 1st to May 7th.

Chiron Health will represent Austin at the annual Google Demo Day on Wednesday at Google’s headquarters in Mountain View.

“It’s really great exposure for us,” said Charlie Kolb, co-founder and vice president of business development for Chiron Health. “It gives us exposure to those West Coast VCs. It fosters new connections and the right kind of exposure to people we want to be talking to.”

He founded the company with Andrew O’Hara in 2013 while students in the McCombs School of Business at the University of Texas at Austin. They both dropped out to work full time on Chiron, which is a telemedicine startup that enables physician practices to provide convenient access to patients through secure video visits.

So far, Chiron is working with 200 healthcare providers in 30 states. The company has raised about $3 million in seed stage funding. They have 16 full time employees. And the company will most likely raise a Series A round later this year, Kolb said.

Capital Factory chose Chiron to represent Austin in for Google Demo Day. Chiron will pitch for five minutes to a room full of top investors, VCs and judges. The pitch is followed by a brief question and answer session from the judges. At the end of the event, the judges will declare a favorite. And the livestream audience will also vote for their favorite in the “Game Changer” award. The event is on Wednesday from 10 a.m. to noon. It will be livestreamed on the Google for Entrepreneurs YouTube page.

This year’s judges include Steve Case, Chairman of Revolution and Case Foundation, Bedy Yang, managing partner of 500 Startups and Frank Chen, partner of Andreessen Horowitz.

This is the third annual Google Demo Days. Previous events have helped startups raise awareness and funds. Last year, Loop & Tie from Austin presented and has since raised $850,000 and created eight jobs.

Chiron represents Austin’s fast growing medical technology startup industry. The company focuses on working with small physician practice groups of up to 50 doctors. It works to increase efficiency for the doctors as well as generate additional revenue. Right now, a phone call with a patient is not reimbursable from insurance companies. But a telemedicine conference via smartphone, tablet or computer is. Chiron’s platform works on both Android and iOS devices and on the web. It helps patients who might have a chronic disease like Diabetes manage their health better, Kolb said. It can also save patients a trip into the office just to get a prescription renewed. The doctor can often handle it easily through a telemedicine consultation, Kolb said.

Chiron participated in Capital Factory’s accelerator program.

“We’re really thankful for Capital Factory,” Kolb said. “We’re really excited to be on a national stage.”

Since its founding in 2008, SpareFoot has always tended to have some outrageous marketing projects.

Silicon Hills News reported on its annual pinup calendar.

And its unusual recruiting mockumentary video. (The video no longer seems to exist.)

Now SpareFoot has launched a new series of videos. It’s working with Austin-based ad agency, Titled Chair, to create the videos to promote storing goods with its tag line of “We Can Store That.” SpareFoot, which has raised $49.5 million in seven rounds of funding, runs a storage marketplace that makes it easy for people to find and book storage spaces online.

The three videos are bizarre to say the least. One features an older couple looking to store their sex toys because their adult child is suddenly coming home. Another features “The Brockwells,” a family of wrestlers who need to store some books.

And the final video in the series, launches on Monday, and features “Merpeople” who must find a place to store all of their seashells.

“To SpareFoot, it doesn’t matter if you’re storing sea shells or sex chairs: we’re up to the challenge,” according to a news release.

At South by Southwest this year, Spotify created the biggest and best-ever Spotify House at 1501 E. 6th Street.

But what happened after SXSW is as cool as the immersive, interactive journey created at the Spotify House. Spotify donated all materials from its venue to be recycled to build a recording studio for students of Kealing Middle School in Austin.

Spotify partnered with DPR Construction, MINDPOP, Acoustic Spaces, and Rebuilding Together Austin to create the space. And last Friday, Austin Mayor Steve Adler, Paul Cruz, superintendent of the Austin Independent School District, Kenisha Coburn, principal of Kealing Middle School and Kerry Steib, director of social impact at Spotify and others unveiled the new music studio.

“For us it’s: “How can we make the local Austin community a part of SXSW?’ The community is often not a part of it,” Steib was quoted in an article by Billboard Magazine, “especially when you’re talking about young people in areas like East Austin, where there’s not a lot of access.”

At the ceremony, students performed for the invited guests.

You make beautiful music together @KTXHornets, @Spotify and @MINDPOPaustin! pic.twitter.com/ZtojiAomfh

— Michelle Wallis (@michellekwallis) April 29, 2016