Tag: startup (Page 4 of 4)

WP Engine Cultivates a Lucrative Niche Hosting WordPress Websites

February 10, 2012 / / 0 Comments

By SUSAN LAHEY
Special contributor to Silicon Hills News

WP Engine co-founder Jason Cohen knew there was a market for what he wanted to build. Because it was exactly what he needed.
The founder of four companies and a dedicated blogger, Cohen often made the front page of Hacker News. And every time he did, his site went down. Having a sudden surge of popularity and traffic, he realized, doesn’t do you a lot of good if it causes your site to crash until the traffic goes away.
It was easy to assume that, with 15 percent of all websites and 22 percent of new websites in WordPress according to WP statistics, others were having the same issues. WordPress is a free and open source blogging tool and one of the web’s most popular content management systems.
“I needed to know what are the root pain points?” Cohen said. “Volume is one. Speed is another. It can often take three or four seconds for a page to come up. What about security? What about support? What about testing? Everything is live right now. Testing is where I can work it out and see it.”
Cohen talked to 50 people before starting the business, asking them: “Would you pay for this? What would you pay for this?” Once 30 people committed to spending $50 a month, he started to build his hosting company for the middle market, people with a lot of traffic “who aren’t CNN.” WP Engine launched in July of 2010. Cohen founded the company with Aaron Brazell, who stepped down last October to do consulting work.
When Matt Halfhill heard about Cohen’s infant company that hosted high volume WordPress sites, he said what so many of WPEngine’s customers say: “That’s exactly what I need!”
“That was my biggest problem ever in business,” Halfhill said. “So few hosts understand the nuts and bolts of how WordPress works. (WPEngine) breaks it down to the point where there are next to no inefficiencies.”
At the time he joined WP Engine, in 2010, Halfhill’s company NiceKicks had more than a million visitors per month. The site, which previews and reviews sneakers, was paying Rackspace $6,000 to $7,000 a month for the bandwidth to handle all its traffic. With WPEngine, it pays closer to $1,000. And its monthly traffic has more than doubled.
Rackspace spokesman Rob La Gesse said “While many providers choose to compete on price, Rackspace differentiates itself on service, which we call Fanatical Support®. With that being said, WPEngine and Rackspace have significantly different business models, products and pricing structures.”
Cohen has always been something of a prodigy. He was fresh out of college with his computer science degree when he was discovered by Jim Woodhill, a famous psychologist and venture capitalist who was on an email list of “random smart people” with Cohen’s dad.
“He is the kind of guy who doesn’t care as much about the idea as the team. He decides ‘I just need to collect certain kinds of people and I want you,’” Cohen said. The company Cohen started, however, didn’t create products but performed services. And though he was bringing in $1 million a year, the venture capital firm lost interest. Soon afterward, he connected with Gerry Cullen, a serial entrepreneur.
“He was young,” Cullen says of Cohen. “You want to know how young he was? He was so young I had to rent cars for him.”
The two created Sheer Genius Software.
“He was the genius software guy and I was the CEO lead developer,” Cullen said. “I was the leg guy and he was the brains….Jason was very fast on his feet. People asked him questions he just answered them, kaboom. I’d lift the flagstone up and all the little snakes would run and we’d get them. It was great happy times.”
For one order, the $750,000 big order, Cullen said, they were brought to London to develop a program for a government office. Cohen wound up having to jerry-rig a modem using ‘doorbell’ wire running from the building’s bathroom. And, because the monitors were so small and the offices so bright it was difficult to see the screens, Cullen created a little hut of foam board to make it dark enough.
“It was like we were showing weird porn in the government offices and we didn’t want anybody to see.”
They got the order.
After Sheer Genius, they started IT WatchDogs, which manufactured climate monitoring devices for server facilities. During that time, Cohen said, Cullen taught him all about the business end of startups. He taught him, for example, about the Stanford Test, a test he made up.
The Stanford Test is this: If you make something, can you give it away for free? Will people want it? Because if they won’t, there’s not much point in charging for it.”
IT WatchDogs demonstrated the Stanford principal. The first climate control monitor plugged directly into the servers. Server companies were horrified.
“They’re like ‘You’re not sticking that thing in my server!’” Cohen recalls. It failed the Stanford Test. Then they created a model that only plugs into the wall outlet and never touches the server. That model people wanted. They’d even pay for it.
Cohen and Cullen wound up selling IT WatchDogs. But about the same time they had started it, Cohen had, almost inadvertently, started Smart Bear Inc. He created a site online whereby programmers could submit code they were working on for peer review. It was an idea he was tinkering with that took off. He ran it until 2009 when he got an offer to buy the company that would give him enough money he never had to work again. After checking with some of his advisors—17 to be exact—he took it.
He took a sabbatical to stay home with his new baby. He began blogging almost obsessively. And then the idea for WPEngine arose.
He and Josh Baer, founder of Capital Factory and a serial entrepreneur in Austin who runs Other Inbox, put in a little bit of seed money and within seven months, the company was profitable. They hired two people and six months later it was profitable again. But all these baby steps were time consuming. So Cohen sought funding and wound up with $1.2 million last November. Silverton Partners from Austin led the round, which included prominent angels investors like Eric Ries, author of the Lean Startup, Loic Le Meur, Dharmesh Shah, Jeremy Benken, Bill Boebel, Rob Walling and others. Automattic, the company behind WordPress.com, also participated with a strategic investment.
WP Engine now has an install base of more than 30,000 personal and professional WordPress blogs. It recently dropped its base hosting price from $50 a month to $29. And it has plenty of room to grow. More than 71 million WordPress sites exist worldwide and WordPress.com hosts about half of them.
WP Engine is always tweaking.
Halfhill said the company is super proactive. They’ll call him to say “You’re definitely sucking up a lot of resources, we might want to reconfigure. There are no charges for that. It just feels like they’re taking care of me as a customer. It’s just like breathing.”
Cohen, though, is a startup guy. He’s constantly percolating with other ideas. Lately he’s been really focused on the idea of honesty, how honesty should be the bedrock of businesses. He might do something with that at some point.
“People asked me, ‘When you had enough money to live off forever, why do a startup?’” Cohen said. “It’s just in you…some people have to do companies.”

Disclosure: Rackspace is a sponsor of Silicon Hills News

Austin Startup OtherInbox zeroing in on 2 million users

December 29, 2011 / / 0 Comments

Joshua Bear, CEO of Other Inbox

By ISADORA VAIL
Special Contributor to Silicon Hills News

While boasting the free solution to endless and unwanted emails, Austin startup OtherInbox, has had nearly 2 million users since the service began in 2008.
Founded by Austin entrepreneur Joshua Baer, the company offers two ways to instantly organize and prioritize email. The Organizer product looks for lower priority messages, such as newsletters, e-receipts, social media notifications or coupons, into one folder. An email summary is sent to the Organizer user each day, summarizing important and unimportant emails.
The second free product, Unsubscriber, is named quite literally for the product’s duty of automatically removing your personal email from a mailing list. The service works with Gmail, Hotmail, Yahoo and other email providers.
OtherInbox didn’t start with organizing emails, said Hoon Park, client services manager. At first, the company helped protect emails by using other emails to sign up for sites online while protecting the main address.
Park said some email unsubscribe lists create a lot of hoops to get your email removed, and some even require a login. But OtherInbox users place the unwanted emails into an unsubscribe folder and the rest is history. “You will never receive an email from them again,” Park said.
Since 2009, the company has generated revenue by selling market data two different ways: to email marketing companies, and by advertisers who pay to target OtherInbox users that receive specific coupon deals. Park said all user identification is kept private.
OtherInBox has also raised $4 million in funding during two rounds of venture financing, according to its Crunchbase profile.
“It was just a very powerful way to protect emails, but as a startup company that creates products for clients,” Park said. “We think we can be very useful for clients who are getting a ton of unimportant or unwanted emails everyday.”
After the company reached a landmark earlier this year of 1 million users, the numbers continued to quickly rise. Park says they expect to have 2 million users by the first quarter of 2012. Customers of OtherInbox primarily use it personally rather than for business or large corporations.
The company grew from six people when it started in 2008 to 10 employees by 2010, and Park says there are plans to add at least two more to their team. The diverse group of workers have ranging backgrounds from linguistics to human biology to political science majors. There are no plans to move the team from their office space in downtown Austin.
Their operation not only runs concise, but inexpensive — everything is done in The Cloud, Park said. Having servers purely online can also be the source of unavoidable technical issues.
“Sometimes we’ll have a hiccup in our service and we just have to figure out a way around it,” Park said.
With three people for customer support, including Park, he says it is important for them to communicate about the customer’s issues. “That is where we find out something is wrong and through day-to-day collaboration we have to fix the problems,” he said.
One of Park’s favorite perks of working at OtherInbox is the company’s compassion for other startups. He said found Baer reaches out to newbie startups to help them, and often ends up being somewhat of a mentor by offering advice on public relations, branding, marketing, and how to network.
“For about three years we’ve done this thing where we team up with startups, sometimes even letting them work out of our space, and incubate them until they can stand on their own feet. I just enjoy being able to help out the community of my peers,” Hoon said.
As for future email products that may further de-clutter your inbox? Stay tuned. While Park said there is nothing to “officially announce,” he assured us that OtherInbox programmers are always experimenting.

The Daily Dot plans to become THE Internet newspaper

December 12, 2011 / / 0 Comments

By Susan Lahey
Special Contributor to Silicon Hills News

Nicholas White, CEO of The Daily DotOne 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.)

Rackspace co-founder Dirk Elmendorf’s crowd-sourced talk

December 9, 2011 / / 1 Comment

Dirk Elmendorf, one of the founders of Rackspace, talks at Startup Ignite's Hack-a-thon

Rackspace co-founder Dirk Elmendorf gave a crowd-sourced talk Friday night during San Antonio Startup Ignite’s third Hack-a-thon at the Geekdom.
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?”

Enlyton.me creates a new way to search for and share information

December 6, 2011 / / 1 Comment

Chris Mckinzie, co-founder and CEO of Enlyton.me, a new search company in Austin

Doing research online can take a lot of time and effort and led to frustration. It can also be difficult to retain the research in an easy to access and share format.
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.

MyLocalReporter connects companies with the media

November 15, 2011 / / 0 Comments

Dave Manzer started Austin-based PROverCoffee.com in 2010. He arranges monthly meet ups with members of the media and the business community.

This interview with Manzer is from Startup Week at the Austin Startup Bazaar. He recently launched MyLocalReporter to help companies in Austin, San Antonio, Houston and Dallas-Fort Worth pitch their companies and products to the right local reporters. The service is primarily aimed at small businesses that might not have their own public relations representative or firm. It costs $89 for a basic pitch up to $189 for a professionally crafted pitch.
“Getting in the news, half the battle is knowing which news reporter to pitch to,” Manzer said. “We connect small business with the news media with hopes of getting more media exposure for small businesses.”

HP uses Calxeda’s technology to power its servers

November 1, 2011 / / 2 Comments

Calxeda introduced its high-performance low power semiconductors Tuesday to power Hewlett Packard’s servers.
The Austin-based start-up held an event in Palo Alto to introduce its new products along with its partner HP.
But in its hometown, employees, customers, analysts and others gathered to watch a live stream broadcast of the event and to celebrate. They met up at the Alamo Drafthouse on South Lamar in downtown Austin at 2 p.m.
Calxeda, formerly Smooth Stone, closed on $48 million in funding a little more than a year ago.
HP’s new server platform, called Project Moonshot, is designed to reduce costs and energy use for data center customers.
The HP Redstone Server Development Platform uses Calxeda EnergyCore ARM Cortex processors. HP plans for future versions to include Intel’s Atom-based processors among others. The platform is expected to be available by June of next year.

Rackspace brings TechStars: a startup incubator program to San Antonio

September 13, 2011 / / 1 Comment

TechCrunch reports that San Antonio-based Rackspace has teamed up with Boulder-based TechStars to bring its innovative startup program to San Antonio.

The program is called the TechStars Cloud. It’s a “themetically focused accelerator that will fund companies working exclusively on cloud computing, cloud infrastructure, and Openstack.”

The program’s mentors include Pat Condon, one of Rackspace’s founders, Jeff Lawson, founder and CEO of Twilio, Brad Feld of Foundry Group, George Karidis of SoftLayer, Rajat Bhargava, founder and CEO of StillSecure and others.

The program runs from January to April next year at Rackspace Hosting’s offices at the Weston Centre on the Riverwalk.

TechStars plans to select 10 companies which will receive seed funding, mentors and other perks. Jason Seats, the founder of Slicehost, which Rackspace acquired in 2008, and Nicole Glaros, managing director of TechStars, will head up the program.

Startups focused on building cloud-based infrastructure must apply to program by Oct. 21st.

A reality show based on TechStars debuts tonight on Bloomberg TV. Here’s a clip of the show, which provides an inside look at the TechStars startup process and some of its high-profile mentors.

TechStars Trailer from Vortex Media on Vimeo.

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