Donetta Colboch, director of public relations for NewTek, gives a tour of the San Antonio-based company’s office. The privately held company makes Lightwave 3D software that TV and movie makers use. The software was used in Avatar, Titanic, Monsters Inc. and dozens of other movies. NewTek also makes a portable production studio called a Tricaster that makes broadcast-quality production more affordable and accessible to the masses.
We’ll publish a story later on today interviewing Jim Plant, NewTek’s president, about the company’s growth and its outlook for 2012.
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Susan Strausberg, CEO and co-founder of 9W Search in Austin
Susan Strausberg knows how to dig into financial information and make it accessible to the masses.
She founded Edgar Online in 1995, grew the company to 200 employees, took it public in 1999 and then left in 2007 to pursue other passions.
Two years ago, Strausberg and her husband, Marc, moved from New York to Austin and created a startup called 9W Search, a sophisticated financial search engine primarily for mobile users.
“We’re enabling a huge underserved market to access financial information in the easiest possible way,” Strausberg said during a recent interview and meeting at Lola Savannah coffeehouse in Austin. 9W provides key company information, five years of financial data, people information for each company, a live stock quote as well as footnotes to financial statements.
To illustrate the ease of use, Strausberg showed off 9W Search’s capabilities on her iPad. She compared the financial results of three companies: Rackspace, Dell and IBM. 9W Search’s database contains information on approximately 12,000 US public companies. The tool gave real-time financial results in an easy to understand format. It culled and compiled data like revenue per employee, market capitalization, share price, earnings and more.
What differentiates 9W Search from other financial search engines is its ability to pull select metrics that Strausberg has deemed extremely valuable from vast and incomprehensible amounts of online data. She has selected the metrics based on her years of experience in working with financial data.
9W Search has the ability to sort through all the data because of a new data standard, extensible Business Reporting Language, known as XBRL. The U.S. Securities and Exchange Commission has mandated that companies provide financial statement information in this format which vastly improves the transparency of reported data. Strausberg’s former company, EDGAR Online, played a key role in making the data interactive by creating “sets of definitions, or taxonomies, to enable the automatic extraction and exchange of data. Interactive data taxonomies can be applied — much like bar codes are applied to merchandise — to allow computers to recognize that data and feed it into analytical tools,” according to the SEC.
“Most financial information companies have hand-keyed their data.,” Strausberg said. “This new technology changes the way we can take data and turn it into actionable information.”
That’s the sweet spot for 9W Search.
“9W Search identifies a manageable set of key financial items from the thousands of different data points that are important in accessing a company’s financial picture,” Strausberg said. “We democratize access to financial information and make it usable for the average person.”
Who wants access to this information?
“People who need to see a picture of the market at given moment in time, ” Strausberg said.
Sales people, potential employees researching a company, students, companies, analysts, private
wealth managers, individuals, nonprofit organizations, real estate agents, anyone who needs to
do financial research, she said.
“Data equals information, equals knowledge, equals power,” Strausberg said. “If anything, there is too much data, she said. “It’s difficult to do competitive analysis and complete research easily with most financial search sites. 9W Search culls the gems from the ocean of data and arms our users with actionable information.”
And what exactly does 9W Search mean? It’s an old Vaudeville joke, Strausberg said.
Here’s a version:
“9W is the answer to a question.What is the question?”
Q: “Herr Wagner, does your name begin with a V?”
A: “Nein, W!”
9W Search has four employees currently and is seeking $600,000 in funding to further develop and market its product, Strausberg said. The company has a pilot test of the search engine available on its website. 9W Search plans to first provide a free version and subsequently charge for later releases.
Superconductor Technologies, based in Santa Barbara, Calif. announced Monday plans to move its corporate headquarters to Austin along with a new manufacturing plant.
The company, which makes high performance wires for power systems and cell phones, considered the “technical talent pools, facilities, and energy costs in a number of states” and determined Austin was the best location, said Jeff Quiram, STI’s president and chief executive officer in this news release.
“We believe Austin is an ideal location to initiate the production of our Conductus superconducting wire on a commercial scale,” he said “STI is excited to become a contributor to the region’s continued high-tech success.”
Superconductor Technologies will move into its new headquarters by the end of March next year. It’s moving into a 94,000 square foot plant, previously occupied by Applied Materials. It’s also planning to keep a research and development facility and other operations in California and it does not expect any layoffs associated with the move.
By Susan Lahey
Special Contributor to Silicon Hills News
One of the first stories that ran in The Daily Dot: The Hometown Newspaper of the World Wide Web, was an obituary.
Most obituaries for Angelica Marie Schaaf Rayl talked about her as a wife, a mother, even a soap maker. The Daily Dot focused on her founding Etsy Bitch, a forum for artists and craftspeople who sell their work on the Etsy website. Schaaf Rayl had built an online community of more than 500 people who were passionate—not always in a good way—about Etsy.
That’s what The Daily Dot does.
The new, online, Austin-based paper covers the web like a city full of unique communities whose citizens are intensely engaged with each other. Cities have school districts, development corridors and business communities; the web has Etsy, Facebook, Reddit and World of Warcraft. The Daily Dot covers politics, entertainment, culture and business, like other newspapers. But its focus is exclusively on how these play out online. The fact that the Internet address RickPerry.com was for sale might be a blurb in some papers; but it’s big news in The Daily Dot. A kid who garnered worldwide support from a YouTube video about being bullied was doubly covered by the Dot when he followed that up with a smug video about not really needing peoples’ support. He had played fast and loose with the global community.
It’s written in internet speak, with no apologies for terms like “twee” which, according to the urban dictionary, means excessively sweet. No explanation of ‘spambots’ or ‘uniques. ‘
The Daily Dot is led by CEO Nicholas White, an idealistic, poster child for a liberal arts education. The product of six generations of journalists from a family that now owns 10 newspapers and 12 radio stations, White naturally was committed to do anything but journalism. He studied film, earned a master’s degree in American Studies and recently completed his master’s in positive psychology. He also has two certifications in film, and for awhile that was his career of choice. He studied at Haverford College in Pennsylvania, where he met Joshua Jones-Dilworth, Daily Dot cofounder, who was studying English and philosophy. The pair created Eighty-Watt Theater, a student theater company “dedicated to pushing the bounds of common perceptions about theater.” That turned into Eighty-Watt Cinema where the pair, with other partners, made films to wake people up.
But one day, while on the elliptical machine–“This was all very symbolic” White said—he was struck with a serious doubt.
“I was wondering if it was possible that no matter how much the movies I make are a wake-up call, I am still supporting something, an industry and a culture, that does the opposite.” He’s not sure he thinks that anymore, but it was enough to send him back to his roots, to become a reporter at a family-owned paper, the Norwalk Reflector in Norwalk, Ohio.
He fell in love with journalism, especially the newsroom banter about heroes, villains and the bizarre cast of characters that comprise the newsmaking body of a community, including the amusing behavior of business moguls and favor-currying politicians.
What he didn’t like was the fact that very little of that extremely colorful comedy/drama ever made it to the pages of the paper. He didn’t like the mentality of many journalists that the paper’s job was to publish what people needed to know and turned a blind eye, in some ways, to what people wanted to read about. He thought the industry should change to woo readers back.
He also didn’t like how reluctant newspaper folk were to embrace the internet. Because he pushed his paper to enter the 21st century, he was given the honor to drag it there. He taught himself to program and created interactive media programs first for his paper, and eventually for the whole chain. By the time he left, he held the title of Vice President of Audience Development in the Midwest Division.
Where many newspaper people saw the internet as the usurper of advertising dollars, White saw it as an invitation to evolve. Instead of expecting readers to stick around because it’s the right thing to do, it was the job of newspapers to attract customers and advertisers.
“There was just so much opportunity to do cool, interesting stuff….”
The idea for the Daily Dot, though, came from a different direction.
Nova Spivak was a serial entrepreneur and friends with White’s partner-in-film, Joshua Jones-Dilworth. When White went into journalism, Jones-Dilworth went into marketing. In addition to his role on the Daily Dot, he runs a public relations firm that specializes in working with startups. It was Spivak who had the idea, Jones-Dilworth liked it and soon they hit upon the person who would be ideal to run it: Nick White.
They tossed it around for awhile, played with business plans, and soon learned that nobody wants to invest in content. Investors, White pointed out, holding his hands around an imaginary object, want a “thing. ” And they want to know they’ll get their money back. True, Huffington Post just sold for $315 million. But that’s the exception for a content business. Moreover, the founders of The Daily Dot have no plans to sell it. No easy exit plan that helps investors see the payoff.
So instead they did an F Round of financing, meaning friends and family. And about $600,000 later, in August of 2011, The Daily Dot was born.
The Daily Dot lists about 10 communities it covers, including blogs as one community. The company sells banner ads through Federated Media and Martini and lists ad rates of $18 to $40 per thousand impressions. The minimum monthly is $500. The paper had 170,000 unique visitors as of December 9.
Now, White said, he thinks they have a “thing” investors can see as an opportunity. So they’re getting ready to seek financing.
From an editorial perspective, The Daily Dot is still forming. Its founders want it to be the small town newspaper for the web and they talk a lot about old school journalistic standards. But it’s not intuitive, covering this kind of community.
“At first,” said Owen Thomas, founding editor, “we thought we’d have one reporter for Facebook, one for Twitter….. But then you take something like politics, now we’re more interested in how a political community is across these networks. That’s our challenge.”
Daily Dot reader Jason Stoddard thinks it might be too much of a challenge to overcome.
“Any time you try to organize and formalize any kind of a union, because of so many hard preferences, fragmentation is inevitable,” said Stoddard, entrepreneur and founder of Stagira Marketing. The internet is one such union with too many people having hard preferences to be united.
“What a local newspaper is supposed to do is be the hub voice, the central voice of a culture,” Stoddard said. “They say the internet is the last free market on earth, but it’s not really on earth….it’s very difficult to hedge the niche.”
Too much of the paper’s coverage, he believes, is fluffy. It covers the viral blog, but not the back story of the blogger. “It seems a little too glib, almost an apology because they don’t’ want to take themselves too seriously. You can’t go halfway on it. If you’re going to put a stake in the ground, put it in the ground.”
He quoted Arthur Hays Sulzburger: “Obviously, a man’s judgment cannot be better than the information on which he has based it….” The information in a daily paper informs people’s judgments and decisions. The Daily Dot operates in the culture of “Likes” which lends itself to popular information more than valuable information. That makes it too shallow to inform good judgments, Stoddard said.
White has great visions for the social impact of the Daily Dot. He wants the paper to provide a venue for discussing the global issues that the world can’t address without a compassionate dialogue. He paraphrased Karen Armstrong of the Compassion Project saying compassion begins when you’ve put yourself in the other person’s shoes so much that you can say “I can understand saying that” about something you ordinarily would hotly dispute. And The Daily Dot promotes a lot of internet communities’ altruistic side. Various communities raise vast amounts of money for causes both public and private and the paper covers those efforts regularly. But the paper also wants to be “The alternative to Fox News. ” And in the vast compassionate conversation, it seems unlikely Daily Dot staffers can see themselves saying something like “Vote for Perry.” Readers who are not hip, liberal internerds may not feel the love.
David Matthews does, though. A self-proclaimed “startup guy” who is currently working on a startup called Sponsorfied, he’s an active member of the Reddit community. But if he misses a few days, he doesn’t feel lost now, he said, because Digital Dot will be on top of it.
“That’s the value for me,” Matthew said, “they give me a summary of all the things that are going on.”
The Daily Dot’s plan? To become THE Internet newspaper.
“It’s a dauntingly crazy ambition,” acknowledges Executive Editor Owen. “But what other kind of ambition is worth having?”
(White wrote this blog post for PBS Mediashift on 5 Lessons Learned Building The Daily Dot.)
The shortage of technology workers in the Silicon Hills region continues. The Austin American-Statesman today reported that the recent trip technology CEOs from Austin took to California didn’t result in any new employees moving to Texas. Perhaps that’s why San Antonio-based Rackspace recently opened an office in San Francisco. The technology companies have to go where the talent resides. Also on Saturday, Rackspace held a recruiting event called Rackerpalooza at its Austin office. Rackspace also recently expanded its San Antonio headquarters.
On Friday, Dirk Elmendorf, one of the founders of Rackspace, gave a talk at San Antonio’s Startup Ignite’s third monthly Hack-a-thon at the Geekdom in downtown San Antonio.
On Wednesday, Austin-based Portalarium, which makes games for social networks and mobile platforms, announced its first social network game, Ultimate Collector: Garage Sale. Gaming Legend Richard Garriott is developing the game, which will be available for a beta release later this year.
Also on Tuesday, the Austin American-Statesman reported that a group of investors including San Antonio Billionaire Red McCombs has invested $1.75 million in an Austin-startup called Bypass Lane, which has created an app that lets people order food and drinks from their seats in a stadium while watching an event.
On Tuesday, the University of Texas honored 40 inventors including Professor John Goodenough and Professor Adam Heller, pioneers of lithium batteries, according to this post from University President Bill Powers.
On Monday, Gowalla’s founder Josh Williams officially announced that Facebook had acquired the Austin-based start-up, but it didn’t acquire the company’s data. It mainly wanted their development team. The Austin American Statesman had a story on the acquisition and didn’t mention anything about the $10 million Gowalla raised in venture capital. But Michael Arrington at Uncrunched reported that the deal might be a liquidation and it was uncertain if investors would get their money back.
On Monday, Globalscape of San Antonio bought Tappin of Seattle in “a deal worth up to $17 million,” according to this story in TechFlash.
Dirk Elmendorf, one of the founders of Rackspace, talks at Startup Ignite's Hack-a-thon
To start, Elmendorf went to the white board and asked the crowd of about 100 what they wanted to know. People shouted out about a dozen questions including “what was your first entrepreneurial experience, what didn’t you like about school” and “what was your biggest failure?” He wrote down their questions and then spent the next hour answering them and telling stories.
Elmendorf’s first entrepreneurial experience was with his brother selling Xeroxed space invader game sheets for a quarter.
He came from an entrepreneurial family with a lawyer dad and a mom who ran her own catering business. So he thought that was the way of the world.
Elmendorf also worked a whole summer for a company and didn’t get paid. He learned early on about the importance of contracts.
“Lesson number one write shit down and get it signed” Elmendorf said.
When he met Richard Yoo, another co-founder of Rackspace, he presented him with a four-page contract outlining the duties Elmendorf would perform.
In 1998, Yoo, Elmendorf and Pat Condon, all students at Trinity University, formed a web hosting company that became Rackspace. Graham Weston and Morris Miller met with the three later on at a burger joint and they agreed to invest in the company.
Today, Rackspace is a publicly traded company with more than 4,000 employees. Its stock, traded under the symbol RAX, closed at $44.02 share Friday on the New York Stock Exchange.
Back to his crowd-sourced talk, the thing Elmendorf didn’t like about school was it’s linear instruction.
“I can learn non-directionally all the time,” he said. “I’m a pathological learner.”
He loves Reddit and the Internet.
Someone asked him what he does when he is bored. He cooks. He once took a three-day class in meat fabrication.
What is his most important startup advice?
“It’s a team sport. It’s never just one person,” he said. “Even at the most primitive level it’s a team sport.”
It’s important to like the team you work with at a startup, Elmendorf said.
“If you don’t like them now, it’s not going to get better,” he said. “It’s like parachuting into a bad marriage.”
Elmendorf got along with Rackspace’s core team so well that he still likes them after 13 years of working together.
Also, it’s important to know what you’re good at, Elmendorf said.
“I’m not a good manager,” he said. He likes coding. “The code doesn’t get mad.”
Today, Elmendorf has a new startup, r26D, which created TruckingOffice.com, a small fleet management system. The company has 1,000 customers.
“I like projects that are targeted at small businesses,” Elmendorf said.
He advised the crowd to find a startup that customers like and are willing to pay for its products.
“You do know you can’t buy your own products,” Elmendorf said. “You need to ask yourself who is the customer and how do I serve them?”
In 2007, Rackspace Hosting moved into the former Windsor Park Mall in Windcrest, a suburb of San Antonio.
Rackspace set up its main headquarters in the old Mervyn’s department store.
Now the global web hosting company has expanded further into the former mall’s food court and the Rackspace culture of fun continues to permeate the new space. Rackspace has added a two-story sleek steel tubular slide, along with colorful Gondolas, repurposed from the old and now defunct skyline ride at Brackenridge Park downtown.
Graham Weston, chairman of Rackspace, says the company has nearly 3,000 employees in San Antonio now. It’s also moving its employees from its former headquarters on Datapoint Drive. The mall headquarters is dubbed “The Castle” after the Britsh monarchy’s Windsor Castle.
Eventually Rackspace plans to convert the entire 1.2 million square foot mall into “Tech Town,” a vibrant technology campus complete with a park for outdoor recreation.
The video posted below was shot by a Racker a few days ago and posted on Youtube.
Chris Mckinzie, co-founder and CEO of Enlyton.me, a new search company in Austin
That’s the opportunity that Chris Mckinzie, co-founder and CEO of Enlyton.me set out to fix.
“Search should be more of a discovery, not queries,” he said. “Our goal is to help people instantly find and consume related information naturally.”
Enlyton.me has patent-pending search technology that uses all of the words in a document or article online and matches those with other related documents.
That eliminates the need for keywords when searching and it saves time, Mckinzie said.
“You shouldn’t search for pages, you should search for objectives,” he said.
Enlyton.me also saves the research in a booklyt that serves as a curation tool online. The booklyt addresses are easy to share with others too on social media sites like Twitter or Facebook or by e-mail.
The market opportunity for simplified search online is $12 billion, Mckinzie said
Mckinzie has been involved in several start-ups including HearMe, Agillion and Fluid Innovation. He also worked for AT&T Internet Services.
With his latest company, Fluid Innovation, Mckinzie created a software platform to manage complex deals. The company licensed the technology to American Express. During that process, he met Mark Johns who had created an algorithm for search technology. Johns went to work for Fluid Innovation for two years. Now Johns and Mckinzie are taking the search technology to the marketplace through Enlyton.me.
“This is something that doesn’t exist at least as we’ve seen in the marketplace,” said Rob Baker, board member of Fluid Innovation.
The site makes aggregative and content curation easy, Baker said.
“The ability of Enlyton.me to aggregate an abundance of relevant information and package that in this booklet and then share it with one click, it’s quite novel and very unique,” Baker said.
Enlyton.me expects to launch a WordPress Plug-in in January. Enlyton.me plans to make money by embedding ads between the pages of a search and to match the ad to the context of the search. It also plans to license the technology to publishers. It is currently working with MedCity News and has other deals in the works, Mckinzie said.
“We’re targeting publishers who are trying to drive additional page views and open up additional communication with their audience,” Mckinzie said.
Enlyton.me’s search technology can produce the most targeted ad possible matched to the content, Baker said. It can bring new life to old stories and create new revenue streams from archives for publishers, he said.
“Everyone’s looking for consumption of information in a very efficient and fast manner,” he said.
To date, the founders have financed Enlyton.me, but now it’s seeking $500,000 in seed stage funding, Mckinzie said. He plans to use the funding to build out Enlyton.me’s mobile platform.
Bob Metcalfe, photo courtesy of the University of Texas
Metcalfe, who moved to Austin in January, serves as professor of electrical engineering and director of innovation at the University of Texas at Austin.
This fall, Metcalfe, who also serves as general partner of Polaris Venture Partners, created a new class, One Semester Startup, along with Joshua Baer, entrepreneur and computer science specialist and John Butler, director of H.K. Entrepreneurship. On Thursday, 75 students pitched 20 startups.
But one of the most interesting ones came from Metcalfe, who halfway through the event, shared his 1980 pitch for 3Com, which sold Ethernet products. Just a few days earlier, Metcalfe had been in Japan receiving an award for his groundbreaking work at 3Com, according to this story in The Daily Texan, the UT newspaper.
A powerpoint slide form One Semester Startup
“3Com’s business plan is in my hand,” Metcalfe said. “It’s about 25 pages of text that was typed on an IBM Selectric typewriter.”
3Com stood for computers, communications and compatibility.
“Three standards and compatibility was our goal” Metcalfe said. “These three standards I’m about to mention were not standards at the time For example, UNIX (operating system), TCP-IP (networking technology) that was quite new. It would take 10 more years for it to be installed on the Internet.”
The last new standard they sought to establish was Ethernet, local area networking technology that allowed computer systems to share information.
“We were going to implement those three standards and sell them to other companies,” Metcalfe said.
But 3Com’s first product was a book. Metcalfe wrote a book outlining his vision for networked computers. Then he got a directory of venture capitalists in the Silicon Valley area and called them one by one and invited them to 3Com’s offices to listen to his pitch about the company. He talked to more than 100 venture capitalists during a two-year period, he said.
“They hated the pitch you are now hearing,” Metcalfe said. “But before I let them out, we got them to buy a copy of the book at $250 a copy. I would sell a book every single time.”
3Com’s second product was the implementation of TCP-IP networking technology on a 10 megabit per second modem. The company made Ethernet adapters for mini-computers and the Fax machines.
“Ethernet had been developed for PCs of which there weren’t any,” Metcalfe said.
The first Ethernet adapter cost $5,000, Metcalfe said.
“We anticipated there would be some price erosion,” Metcalfe said. “Ethernet adapters are now virtually free.”
Sun Microsystem was just getting started and bought 3Com’s multi-bus Ethernet.
“Very soon we were selling hundreds every month – hundreds of them,” Metcalfe said.
Then 3Com created an Ethernet product designed for a new computer called the IBM personal computer.
“Very soon we were shipping millions per month,” Metcalfe said. “This is what they call being in the vortex of the tornado and I recommend it highly.”
3Com decided to sell its product directly to consumers. But that was a really bad idea because the company didn’t have a way to reach those consumers.
“The next day we lucked out and they invented computer stores,” Metcalfe said. “We put our product in computer stores and the business took off.”
3Com had $5.7 billion in revenue in 1999.
“But everyone had $5.7 billion in revenue in 1999,” Metcalfe said.
Last year, 3Com became part of Hewlett Packard.
An audience member asked Metcalfe what would he do differently if he could change anything.
“Not one single thing” Metcalfe said. “It’s very dangerous to mess with the past. I would not change one thing about that outcome. It has all worked out perfectly and let’s not mess with it.”
In the battle of the geolocation apps, Gowalla lost.
Foursquare won.
Now CNN is reporting that Facebook has bought Gowalla and plans to move the entire team from Austin to Facebook’s Palo Alto, Calif.-based headquarters.
I wrote this story about the Foursquare vs. Gowalla battle for the check-ins at South by Southwest Interactive in 2010.