In The Future, The Busi...

Editor’s note: Adam Rodnitzky is a serial entrepreneur and co-founder of Favo.rs . He programmed his first startup using ColdFusion in 1999. Rodnitzky is based in San Francisco, and you can follow him on Twitter  @rodtwitzky . The entrepreneurial world loves nothing like a good meme. One of the more recent ones making the rounds from Palo Alto to Paris is that a startup simply can’t get off the ground without a technical founder. Investors, entrepreneurs and tech journalists alike will tell you that if you’re not a whiz kid fresh out of Stanford’s CS program, you are essentially not fundable — entrepreneura non grata. Well, I am here to tell you that they are right. For now. Soon, however, I believe we’ll see a marked shift in who holds the cards in the startup world. First, let’s flesh out the current argument a bit more. It starts like this: to be successful, a startup requires a founder with a deep technical skillset. This is so a functioning beta can be built that attracts users and demonstrates traction. In some cases, the driver of new user acquisition may in fact be a unique new technology itself (example: Sphero or Lark ). Users and traction attract investors. Investors inject capital that then accelerates growth. A fast growing startup can eventually be a target for an acquisition or IPO, which completes our argument that a strong technical founder leads to a higher likelihood of startup success. Oh, and if the startup doesn’t grow fast enough? Then the core engineering team forms the foundation for the new exit: the acq-hire. So, for the moment, the technical founder is in the spotlight. So much so, in fact, that they can often be funded without the presence of their natural counterpart: what we call the idea person, the product visionary, the business founder. But, soon enough, the business founder’s time will come. Here’s why. If Moore taught us anything about technology, it’s that it advances at an exponential rate. And that includes the tools that we use to build it too. It’s not a stretch to deduce that there will soon come a time when new development tools and environments eliminate some or all of the technical hurdles required to properly execute a startup in preparation for traction and funding. After all, those technical hurdles are already obscenely low compared to where they were even a decade ago. During the Web 1.0 era of the late ’90s and early ’00s, massive teams of engineers were required to build even a basic content-driven startup, one that could now be built by a single engineer today. Actually, that’s not entirely true. A rich content-driven startup can be created by zero engineers today. Thanks, WordPress ! But who cares about a content-driven startup, you say? Good question. Let’s ignore how the Cheezburger Network , TechCrunch and Groupon all started, and focus on apps instead. A decade ago, your app would have been built using the LAMP stack , Perl or Java. If you were serious (and you raised a ton of capital), you might have even dropped MySQL and used an Oracle database instead (which meant hiring an extremely expensive and extremely crotchety Oracle DB admin). Today? You’ll build a better app in less time and with fewer people using Python with Django or Ruby on Rails. Easier, but still not the domain of the business founder. But this, too, will change. The same leap that took us from LAMP to RoR will happen again, reducing the amount of people, skill and time required to build a robust web or mobile app. I have no doubt that – at this very moment – there is a talented engineering team busily building modular, drag-and-drop development environments so that those without their skill sets can develop with nearly the same ease that they can. In a way, they may be coding themselves into irrelevance. In this future state, where the technical hurdles required to build a robust app are virtually eliminated, we’ll experience even more app overload then we do today. When that happens, what separates the winning startups from those that lose will primarily reside within the domain of the business founder’s traditional areas of expertise: optimizing the user experience, executing innovative marketing, and hacking traffic and traction. Of course, it’s not all doom and gloom for the technical co-founder in the future. For one, many of the most successful technical founders also happen to be great business founders (Drew Houston from DropBox , for instance). And smart business founders will always recognize the benefit of teaming up with an awesome technical partner as well. After all, when any tech-focused startup proves traction and viability, then it needs to ensure that its technical foundation can scale efficiently and reliably to support rapid growth. Then again, if my theory proves to be correct, finding that technical co-founder shouldn’t be nearly as hard in the future as it is now. So take note of the business founders’ plight today. See how they are slighted by the Valley’s tastemakers. Feel their frustration as potential technical co-founders ignore their ideas and instead execute their own. Encourage them as they clumsily try and learn Python the hard way . Most importantly, however, start to pay attention to them. If the past decade is any indication of what the next one will be like, then it won’t be long before the business founder has the advantage that today’s technical founders enjoy. And, when that time comes, they’ll refuse to be ignored. Image excerpt from Leadership Freak

Andreessen Horowitz-Bac...

The enterprise is moving towards simplicity, and this extends to the data center. Nicira , a stealthy virtualization startup with backing from big-name investors, is pulling the curtains back on its disruptive platform that hopes to change the way server and storage virtualization is done. And Nicira is revealing that it has raised with $50 million in funding to date from Andreessen Horowitz, Lightspeed Venture Partners and New Enterprise Associates, as well as individual investors including VMware co-founder Diane Greene and Benchmark Capital cofounder Andy Rachleff. Nicira’s NVP is a software-based system that creates a distributed virtual network infrastructure in cloud data centers that is completely decoupled and independent from physical network hardware. Nicira says that it is shifting the intelligence and control of the network away from hardware and into software, simplifying the virtualization process. NVP’s platform forms a thin software layer that treats the physical network as an IP backplane. This approach allows the creation of virtual networks that have the same properties and services as physical networks, such as security and QoS policies, L2 reachability, and higher-level service capabilities. According to the company, organizations can provision and deploy services in minutes rather than weeks or months, and you don’t need to change any of your existing hardware or software infrastructure. All enterprises need is IP connectivity. Nicira says that virtualized data centers face limits to what applications they can support and where the workloads can be placed. These limitations result in restricted workload mobility, and leave data centers under utilized. Stephen Mullaney, Chief Executive Officer of Nicira, explained to us that the network hasn’t evolved for the cloud-based data center, and the existing solutions are inflexible and complex. “The solution is to virtualize and create virtual networks that are decoupled from physical networks. The network is transitioning from hardware to software just like every other business. Software is eating the world,” he says. The NVP platform is compatible with any data center network hardware. It can be deployed on any existing network, and it allows for future changes to the network hardware without disruption to the operations of the virtual network platform. The software is delivered through a usage-based, monthly subscription-pricing model, which scales per virtual network port. Customers only pay for what they use, and pricing scales accordingly. The company, which has nabbed a number of executives from Cisco, already counts AT&T, eBay, Fidelity Investments, NTT and Rackspace as customers.

Investors Drive $ZNGA U...

Those of us who have been following the social gaming industry already know that Zynga makes up a big portion of Facebook’s revenues. But lots of public investors only seem to have gotten the memo on Wednesday evening, when Facebook’s S-1 filing revealed that the developer accounts for 12% of its total revenues , or $445 million. In the two days since, Zynga’s stock has gone up more than 26%, to close at $13.39 this evening. This is far more than most analysts had previously projected. The ones who began covering Zynga after its December IPO had pegged its stock well under ten bucks. When analysts at banks who underwrote Zynga entered the fray a couple weeks ago, they were unsurprisingly more bullish . Following the end of the quiet period, Goldman Sachs, Morgan Stanley, J.P. Morgan and Barclays Capital, along with analysts from banks not involved in the IPO, all put their target price above Zynga’s public opening amount of $10. This drove the Street’s average target price up to $11.08, as you can see from the StreetInsider table below. Existing industry research, namely the Inside Virtual Goods report from my previous company, Inside Network , had indicated as of last fall that virtual goods revenue from Facebook applications reached $500 million last year . Facebook’s prospectus more than confirmed this on Wednesday, revealing that a strong fourth quarter had actually put the number a little higher, at $557 million. There are other data points you can use to try to figure out Zynga’s position with that number. AppData traffic shows that it has a dominant traffic position on Facebook’s platform. It gets 90% of its revenue from Facebook, but first Facebook collects 30% of its virtual goods transaction sales, per terms that have been in effect since midway through last year. And, Zynga has since at least 2009 used Facebook ads as a main way to bring in new and returning users. The problem is how to add this up. The Wall Street Journal’s Rolfe Winkler explains the confusion in how to calculate the results: Different assumptions lead to different estimates for Zynga’s fourth-quarter “bookings,” which is the preferred method for measuring Zynga’s top line. Macquarie analyst Ben Schachter’s quick-and-dirty analysis says Facebook’s disclosure implies $268 million for Zynga’s bookings for the fourth quarter, short of the $302 million analysts are expecting. Baird Equity Research analyst Colin Sebastian digs deeper, making more assumptions, and comes out with a number of $315 million. Both analyses included many caveats. Heavy trading volumes indicate high volatility among investors. Zynga will do its first ever earnings call on February 14th. Get ready for some new estimates.

Part Health Tracker, Pa...

Parenting is already an extremely hard job, let alone the myriad issues tired parents find in trying to track down the best local babysitter and daycare services, schools, and more. Meanwhile, the brain-melting technology that we see employed every day focuses mainly on photo sharing, friend finding, and money managing, but parents are often left holding the short end of the stick. This is according to Dr. Carol Peebles, a co-founder of WeSprout , a graduate of the first batch of startups from healthtech-focused accelerator, Rock Health . Dr. Peebles, a neuroscientist in pediatrics at UCSF, spends much of her residency coaching parents through the different phases of their children’s development and has found that, while doctors are always eager to help, it’s parents themselves that are often the best coaches for other parents. So, in founding WeSprout, Dr. Peebles wanted to ensure that parents have their child’s medical history whenever they need it, can use that information to find the answers they need, both medical and non-medical — and the current services aren’t solving the issues surrounding this need. The co-founder says that parenting sites today are, for the most part, noisy, cluttered, and hard to use. Combining her medical expertise with the product experience of her co-founder (and fiancee) M. Jackson Wilkinson (formerly the head of UX at Posterous) as well as Keith Muth, who worked with Jackson at Viget Labs, WeSprout has been incubating and iterating at Rock Health, and is emerging into the public sphere this week. WeSprout’s goal, beyond giving parents the tools to make better choices for their children, is to find the sweet spot between personal health records and community; in other words, a service that provides a reason to keep your children’s health records up to date, and a community that becomes a multi-purpose tool by leveraging those records. WeSprout wants to make it easy for parents to track their children’s health by way of easy recording of health information, be it medical issues, immunization records, developmental milestones, height, weight, and so on. While those familiar with the space may see some similarities with venture-backed (and TechCrunch Disrupt alumni) like MotherKnows , or another Disrupt alumni like Avado , or AboutOne , Wilkinson tell us that these sites can all be complementary, catering to different parts of the space. And even so, he says, relevance in parenting communities is sorely lacking, and there’s no real reason to keep a stand-alone health record up to date, so that bridge between the two — community and health records — is the secret sauce. WeSprout wants to be a community that takes privacy seriously, while helping parents actually find information that they’ll find useful. No more aimless sifting through the endless content sources on the interwebs for relevant parenting data. It’s not about experts, Wilkinson says, it’s about facilitating parent-to-parent communication, providing advice from the people who are going through the same thing as you. Thus, for WeSprout, it’s about bridging the gap not only between community and health records, but between people and data. When I asked the co-founder about the so-called “health graph,” he said that it’s going to be a big part of where the startup goes next, and the WeSprout team wants to be involved in that data exchange — in pediatrics — going forward. The most relevant Q&A networks provide multiple perspectives from peers and people who are going through the same experiences as you, thus lending the network a P2P credibility and relevancy, which makes them sustainable. WeSprout aims to be both crowdsourced and datasourced in an effort to make its parent-to-parent network more credible and relevant, with parents being a big part of it, and the information shared about their children being the other. Most EMR platforms focus on adults and parents, who clearly have different needs than their children, so WeSprout is focusing not only on the pediatric context, but also on making record-keeping and data entry as simple as possible. Having a strong UX background, the team is trying to reduce the clutter in what is traditionally a friction-saturated activity. And best of all? It’s free. Which means that, in terms of monetizing, WeSprout will launch a premium offering in several weeks that will enable its users to go beyond tracking and simply community, and extend into sharing records, with loved ones, doctors, create groups, and even take advantage of some scrapbooking. (This is where we may see WeSprout begin to move into AboutOne’s territory.) For those TechCrunch readers looking to get early access to WeSprout, head over to the landing page here , where you can get access to the invite-only launch. Just sign in. Once inside the product, readers can invite as many people as they’d like. The team will open all doors by the end of the week. For more, check out WeSprout at home here , and learn more about Rock Health’s most recent batch here .

Mobile Ad Network Mojiv...

Mobile ad startup Mojiva is the latest startup to start throwing around the word “billion” in its press releases. The company says it now reaches one billion unique devices each month. Of those devices, about 224 million are in the United States, Mojiva says. The United Kingdom, Germany, and Italy, account for 33 million, 10.6 million, and 8.7 million devices, respectively. Overall, Mojiva says it’s serving 45 billion ad requests in 190 countries.(When mobile ad network Millennial Media filed for an IPO last month, it said it reached 200 million unique users worldwide and claimed 40 billion ad impressions per month.) Mojiva CEO Dave Gwozdz said via email that 2011 was a big year for the company. The network saw “roughly 350% growth … in many different areas,” including revenue, ads served, and publishers in the network, he said — and the company’s ad serving business, Mocean Mobile, grew even more quickly. Plus, Mojiva raised a $25 million round in July. When asked about 2012, Gwozdz said that the mobile ad industry as a whole will need to start providing better analytics and optimization, as well as more standards around ad serving counts and ad sizes. As for Mojiva itself, not surprisingly Gwozdz said that it will continue to focus on providing opportunities for its advertisers and publishers. More specifically, he said the company will be trying to expand in China.