about this episode
Jason takes a Shark Tank call from a new social tool for vacationers on TWiST this week. Also joining us via Skype is 20 year old CEO of inDinero.com, Jessica Mah. Lon brings you the latest news thanks to our sponsors .CO, GoDaddy, and StormOnDemand.com.
Come to the Launch Conference February 23-24, 2011 for free by checking in 10 times in the live TWiST chat room. The first 100 people to accomplish this level will receive a free ticket to the conference.
Create Your Opportunity – .CO is the new web address that gives you a truly global, recognizable and credible option for branding your online presence.
Tweet a .co name and we’ll choose several we like and pay for them.
Open angel forum coming to SF next week.
Jason and Tyler discuss OAF expansion next year. Austin, Tel Aviv and Shainghai are all discussed as possibilities.
Jessica Mah of InDinero.com
The easiest way for businesses to manage their money online. It’s like Mint for businesses. The problem is that most business owners do nothing to manage their money. InDinero makes it ‘dirt easy’ to start managing their money.
Jason and Jessica discuss how InDinero is different than Quickbooks and how many small businesses don’t use the software.
Jessica discusses the Y Combinator application and the experience of applying and getting chosen. InDinero was non-typical in that they had a product and paying customers when they applied to Y Combinator. Jessica discusses the advantages to joining Y Combinator.
Jessica and Jason discuss how the product is doing today and what the business model is. The Freemium approach is working for them. Jason discusses that way InDinero obtains customers through press/PR. Jessica discusses the specifics of their marketing strategy to get InDinero some press.
Jason, Jessica and Tyler discuss business models and how to charge for services.
Jessica discusses the difficulties of post-funding hiring. Scaling the business and preparing for tax season are the next big steps.
@jordanlyall asks Jessica to describe the InDinero product development strategy. Jessica talks about their current process.
@reloom Why did you get a rejection from TechStars? Jessica discusses that the timing of schooling was a problem for David Cohen. InDinero applied for TechStars and YCombinator and got accepted to both. They chose YCombinator because of the location in SV.
Steven Faulkner of RealTimeTxts.com
Marketing for local small businesses using text messaging. RealTimeTxts.com does text messaging marketing campaigns that can be sent out on demand, or scheduled in advance.
Jason and Tyler discuss the merits of the pitch and the idea. Steven focused on the business experience, and Tyler suggests he should focus on the customer experience. Jason is concerned about some of the operational issues of collecting text numbers.
Steven answers some of the concerns vocalized by Jason and Tyler.
Zynga More Valuable Than EA
Shares of Zynga Game Network Inc., the company behind the smash-hit social games “FarmVille,” “FrontierVille” and “Texas HoldEm Poker” is currently valued at $5.51 billion on SharesPost, an exchange for shares in privately held companies. Electronic Arts, the second-largest game publisher by sales, is currently worth $5.16 billion on the Nasdaq. Meaning that Zynga is potentially now worth more than EA.
Zynga, started four years ago by Mark Pincus, controls an estimated third of the total market for “virtual goods” online, a market that’s worth an estimated $1.6 billion in 2010.
EA, on the other hand, is facing declining retail sales of both gaming hardware and software. In the last six months, EA shares have dropped 7.4% while Zynga’s more than doubled.
Is this a sign of things to come? Is the social-networking entertainment market destined to be bigger than the console market? Or do you see this market as more in flux?
JC: Jason discusses how difficult it is to have friends who are billionaires. Casual games are bigger than console games because everybody has a phone with them. Console game require more of a commitment and they are more difficult to learn.
Ubercab Cease and Desist Order
Ubercab is has received a Cease and Desist order which states that they are operating as an unlicensed taxi service and that they are jeopardizing the livelihood of cab dispatchers (who operate on tips).
Speaking as an investor, is this government stifling innovation or will this all get worked out?
JC: They have changed the name from Ubercab to just Uber, because they are just getting you a private car, which you can do yourself with a phone. This will all get worked out. It’s a naming issue and a perception issue.
PayPal Unveils Micropayments for Digital Goods
At their annual developer conference, PayPal has debuted a new micropayments product which they’re calling an “in-context, frictionless payment solution that lets consumers pay for digital goods and content in as little as two clicks, without ever having to leave a publisher’s game, news, music, video or media site.”
Pricing for the new platform is 5% of the sale, plus 5 additional cents for purchases under $12.
Launch partners for the new product include Facebook, Autosport.com, FT.com, GigaOM, Justin.tv, Tagged and UStream.
Currently, over 50% of daily in-app transactions for virtual goods go through PayPal.
How significant a deal will this be for the online payment giant?
JC: If anyone can make micropayments work, it’s PayPal. We should implement a ‘tip the host’ functionality on This Week In. Jason discusses the value of tipping.
Cloudera Raises Funding
Cloudera makes Hadoop, open-source software that helps websites process large amounts of data. Theirs is a slightly different business model, as the software itself is free. The company makes money by charging for Hadoop training classes and professional services to get the software up and running.
The company has just announced a third round of funding, for $25 million, led by Meritech Capital Partners. This brings the company’s total funding to $36 million.
The company was founded in 2008 by former Google, Yahoo and Facebook engineers, along with one former Oracle executive.
How effective is this strategy going to be? Are they going to have to eventually charge for this software?
JC: MySQL, Red Hat have both done this. Services and support are very high margin businesses. I think this can work. These will be tremendous businesses.
Did Digg Game Itself?
Data mining by a concerned, anonymous user has led to accusations that social news aggregator Digg has been gaming its own results to benefit its publishing partners. The evidence implies that 159 dummy accounts have systematically been helping out submissions from publishing partners, including sites like TechCrunch, The Guardian, College Humor and Boing Boing.
Digg User Lt. Gen Panda gathered the information on these dummy accounts and then privately approached Digg. He then waited an hour and received no response, before going publish on his blog with the data. At around the same time Digg was contacted by Panda, the dummy account activity stopped.
Interesting side note: This story can now be found on the Digg front page.
Think Digg would really stoop to this level? Why not just be transparent about voting up results from certain partners, rather than doing it through sock puppet accounts?
JC: Kevin is a friend of mine, so I’m going to wait for him to comment. But, it doesn’t look good. The guy did a lot of investigation. They need to take out the people who are trying to game the system. I may write an article over the weekend about what I would do if I was Digg.
Thanks to .CO and GoDaddy and StormOnDemand for sponsoring the show.