About this Episode
00:03:00 Jason met Marco Zappacosta of Thumbtack at Open Angel Forum (SFO) and the reaction was obvious they were going to get funding, Jason is an investor
00:06:30 Ask Jason – Max Yankelevich – I allow a Google like atmosphere at my company and a lot of my engineers are coming up with great side projects but lack the skills needed to grow them into a business how can I help?
00:10:15 Answer – A lot of people have ideas but the execution is the hard part, most incubators even fail, incubators like Techstars and Y combinator are more like coaches. Focus on your own company that alone should be enough. If you have a big network and a lot of contacts it’s possible but can be overwhelming. If you are determined to do it pick the best one and don’t be afraid to shut it down quickly.
00:15:00 The Interview
00:16:30 What is Thumbtack? It helps you find day-to-day consumer services, it’s the Amazon for services. Craigslist lacks the safety and peace of mind that people want, we vet the people.
00:18:20 So what is next level of vetting? We will build out the list and a government worker will certify the person’s address
00:20:30 What is DOJ Smart Screen? We manually run every service professional through a government sex offender registry.
00:21:30 When did you launch? Early Dec. 2009, we have 50,000 professional registered, none are srapped. We are taking the slow growth approach and verifying people believing the experience will be better.
00:23:00 So what is the trend in use, do people just find someone? They usually find someone they like and then ask us for more options
00:23:30 How much does it cost to sign professionals? We haven’t had to pay anyone, we reach out to some people to let them know about us and 45% sign up
00:26:00 So who built the site? Right now 2 engineers do it all, we are hiring and looking for talent
00:26:30 When did you come up with the idea? Fall 2007, we worked at an advocacy group in college and knew we wanted to work together in a startup. Aug 2008 we got our first technical founder
00:27:30 The term social proof is being used a lot these days and getting a good domain is part of that. How did you get such a good domain name? We financied the domain name, the guy wanted $36K and on day one we took the plung, we put 1/3 down which was held in escrow so we wouldn’t lose the entire amount after one year we had some protection. We used Moniker
00:30:00 The next step was building a marketplace which takes time, for 6 months it was two of us and then we had 3 marketing guys and 1 engineer which allowed us to focus on marketing and how we could be unique.
00:31:30 The problem was how do we create Network Independent Value, which means how do we create value before you have scale. At the time people were using classifieds or independent sites, we built them a place to create a profile and added on tool to help them run their business (invoicing, schedule management, CRM, etc.)
00:34:30 Our first investors were friends and family, we had 1,000 users, a product and a path to grow, having customers gave us credibility when we went to OAF.
00:36:00 How did you find out about Open Angel Forum (OAF)? your email newsletter
00:36:30 What is the process? You submit a web form, the next step is a web conference that we were nervous the product wouldn’t showcase well, from their 6 were selected and we got 5 minutes to pitch and we focused primarily on the product
00:38:00 The beauty of OAF was that the Angel Investors were really looking to invest and paid attention, they asked good questions, I was nervous but just showed the product and the good thing was they kept looking at the site not at me, the reaction was positive.
00:39:30 What was post event like? It was clear some people were very interested but and a quick follow-up was key.
00:42:00 How did you come up with the valuation? They had a number in mind before coming but it was basically a guess, in the process you are testing demand, not everyone invested some walked away which was ok
00:43:30 How did you get the Angels to commit? Most had a dollar amount in mind and they introduced us to other Angels like AngelList
00:51:00 Have you talked to VCs and what was it like? Yes we have talked to them and it’s good to get our name out there but most institutional investors are wary of local services but RedBeacon is changing that
00:52:00 What was your reaction to RedBeacon winning TechCrunch50? Bitter sweet, it validated the idea but they got first recognition. We are different in that we offer ancillary services
00:53:30 We are looking for developers, we would like one front end, one back end and someone with a little bit of both (email Marco [at] thumbtack.com if interested)
00:57:30 Are you considering an office at a different location in order to find better talent? No, right now we want the people all together but the lack of talent is a bottleneck for us right now.
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01:04:00 The News with Lon Harris
01:05:00 Demand Media IPO – Demand Media filed for an IPO today. According to the filing, Demand revenues reached $114 million for the six months ending in June 2010, an increase of $91.3 million over the same period a year ago. According to Silicon Alley Insider, Demand hopes to raise as much as $1 billion in the fall IPO. Demand’s largest rival, Associated Content, was purchased by Yahoo! for $100 million earlier this year.
Feedback – Yes, they will get their money, half their revenue comes from eHow but they are labeled a content farm which we at Mahalo do not want to be we are somewhere in the middle. The problem is Google is aware of this and may push their site down, algorithms don’t know the quality of content.
01:10:00 HP CEO Mark Hurd Resigns – HP CEO Mark Hurd has resigned on the heels of sexual harassment charges from a former HP contractor. Following an investigation, it was concluded that there was no violation of the company’s sexual harassment policy but Hurd violated the company’s “Standards of Business Conduct.” Hurd acknowledged he had displayed a lack of character and said that stepping down was a painful decision.
“As the investigation progressed, I realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP and which have guided me throughout my career. After a number of discussions with members of the board, I will move aside and the board will search for new leadership.”
The board of directors has formed a committee to find a proper replacement.
Hurd joined the HP board of directors in early 2005 and was named chairman of the board in 2006. Prior to joining HP, he spent 25 years at NCR Corp.
Thoughts on this? Did Hurd have no choice but to step down after these allegations? Is stepping down an admission of guilt?
Feedback – He must have done something because he resigned. Guys can be stupid when it comes to women, sometimes women won’t say when something is offensive and maybe just writing it down for later use. At Mahalo Jason doesn’t have an office, if he did it wouldn’t have a door and is very careful so that this situation can never happen.
01:21:30 Deadpool: Google Wave – Way way back in the Fall of 2009, Google Wave was the next big thing. BusinessWeek wondered allowed: Will Google Wave replace e-mail and Facebook? TechCrunch said, after getting a first look at Wave in May of that year, that it “dripped with ambition” and called it a brand new method of communication for this new era. Robert Scoble called it brilliant and said that all it needed to thrive was to be freed of its e-mail interface.
Well, Google announced on Wednesday that it would discontinue development of the real-time collaborative communication tool. To quote the blog post: “Wave has not seen the user adoption we would have liked. We don’t plan to continue developing Wave as a standalone product, but we will maintain the site at least through the end of the year and extend the technology for use in other Google projects.”
Google’s also saying that the development of Wave taught them a lot, and noted that parts of the code – such as drag-and-drop and character-by-character live typing are now open source so the world can enjoy them and continue to innovate on top of them.
Why did Google Wave fail? Was it a flawed idea? Poor execution? Or does Google just have too much on its plate now?
Feedback – I was never a fan, it was too complicated and too much was going on. The metaphor of email to mail works, chat is an analogy to talking, wave was too abstract
01:25:30 Google Buys Slide – Google this week purchased one of the original “social gaming and apps” creators, Slide, for $182 million. Slide, of course, is the company behind the ubiquitous “Super Poke,” along with numerous other, similar apps that live inside Facebook and MySpace.
That’s a nice chunk of change, but it’s important to consider that Slide received a $500 million pre-money valuation back in 2008 and has taken in $78 million in investment to date.
A follow-up post in TechCrunch noted that, though these numbers may sound disappointing, no one actually lost money on Slide, and several people will walk away with a nice payday, particularly founder (and former PayPal executive) Mex Levchin. It’s estimated he’ll walk away with about $39 million, after having invested about $7 million of his own money in the Series A round.
According to the TechCrunch post, Google also agreed to pay $46 million in employee retention bonuses, ballooning the total cost of the deal to $228 million.
How do you think the investors feel about getting their money back? Is this a disappointment or a win?
And once the “preferred shareholders” get their money out, though…is there going to be anything left for the employees who worked building Slide in exchange for stock? Is this a cautionary tale in how startups work?
Feedback – It might not be true or they may not have all the information. When you get a big number like that it pushes the goal post very far out
01:32:00 NYT Story on Net Neutrality – A controversial New York Times piece on August 4th claimed that Google and Verizon were nearing an agreement that would allow Verizon to privilege certain kinds of Internet content in exchange for a fee, essentially attempting to put a stake in the heart of the prized Internet tenet known as “net neutrality.” Net Neutrality, of course, envisions an Internet where no specific content is favored over another. (The NYT envisioned a scenario in which Google could pay Verizon in order to prioritize YouTube views over those of other streaming video providers.)
According to the Times, the deal would basically involve Google (which provides Android operating systems to many Verizon phones) declining to protest Verizon’s attempts to charge content providers for priority service.
Both Google and Verizon have denied the NYT report, Verizon in a post on its public policy blog and Google with a Tweet. And the story did seem kind of fishy considering Google’s long history of supporting net neutrality efforts.
Google CEO Eric Schmidt later said that he was hoping to make some kind of compromise between the hardcore net neutrality advocacy of “open web” proponents and the hardline view of the telcom companies, and also noted a difference between discriminating against different kinds of data and individual sources of the same kind of data. So, in other words, it’d be okay to say we want video prioritized over audio, but not YouTube over Vimeo.
What do you make of all of this? Do you believe the NYT report or the denials? Is Net Neutrality in immediate danger?
Feedback – The New York Times is wrong Google will not sell out but fiber to homes has stopped and I suspect Google will get into that
01:33:30 TechStars Boulder – 11 new startups launched from the TechStars seed accelerator program in Boulder, Colorado, yesterday, and I know that you were there to see the presentations and launches.
Adstruc: an auction marketplace for outdoor billboard advertising
StatsMix: collaborative custom dashboards for displaying and analyzics website and API metrics
GearBox: toy company that builds toys that interact with smartphones
Vacation Rental Partner: Manage your vacation rental home without hiring a management company
Omniar: visual search that would allow you to look up and find information based on photos. (So take a picture of a painting at a museum and get back relevant info about it.)
Spot Influence: search for influencers on specific topics across the web
BlipSnips: easily share specific moments from a long video across your social graph
Kapost: web content marketplace allowing publishers to utilize a crowd-sourced virtual newsroom approach like we have at Mahalo. Manage remote writers through a WordPress-style interface.
RentMonitor: helps landlords to manage multiple properties keep track of rent collection, advertising, tenant screening, maintenance, etc.
ScriptPad: iPad and iPhone app for doctors allowing them to quickly and safely write prescriptions
RoundPegg: ensure scientifically that new hires fit your company’s culture by suggesting interview questions and psychologically analyzing certain answers
01:42:00 Tuesday’s guest will be the guys from fflick
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