Disruptive Retail Trend...

Lately we’ve seen the rise of e-commerce and online retailer stertups disrupting the relationship between distributors and the consumer. Etsy comes to mind of course. Meanwhile, Made.com in the UK is leading the charge, and lately Llustre (also UK) has hit on a model of re-connecting designers with consumers. That trend continues today as Urbanara , an online retailer for “high quality home textiles and home wares” supplied direct from the people who make them, secures a significant funding round. TA Venture, together with a group of international investors, including Blumberg Capital and Brain-to-Ventures, has participated in a €3.5 million series A investment round in the startup. Urbanara cuts out the usual costs such as wholesaler margins and warehousing that traditional retailers add on. Originally launched in Germany and Austria last year, Urbanara has broken out to offices in Shanghai and Berlin and now services the UK. TA Venture has a $50 million venture capital fund focusing on seed-stage and early-stage Web companies in Ukraine, Russia and other CIS countries (former Soviet states).

Backstage With The Disr...

The speaker schedule for TechCrunch’s Disrupt NYC conference has been set for a while now, but three brand new presenters were just added to the lineup: The winners announced earlier today at the finale of this past weekend’s 24 hour Disrupt 2012 Hackathon, Thingscription , PoachBase , and PractiKhan . Since the winning apps were so seriously awesome — and we have a very, very small sadistic bent (most of these people had not slept for at least 24 hours at this point , so a video interview with bright lights was especially fun) — we pulled aside all three winning teams for interviews with TechCrunch TV backstage. Embedded above you can see our chat with the people who built the Hackathon’s first place winner, ThingScription, a platform to let people get subscriptions for deliveries of potentially any consumer good. And in the videos below, you’ll first find our interviews with three of the five-person team that built the second-place Hackathon winner PoachBase, a web app for finding the most poach-able potential hires in the tech industry. Below that is the developer behind the third-place winner PractiKhan, an app that lets teachers create online lessons and tests utilizing content from Khan Academy.

The Story Behind Paymen...

Editor’s note:  This guest post is written by  Derek Andersen , who is the founder of  StartupGrind and  Vaporware Labs , and is a former entertainment development manager at Electronic Arts. Paypal created a cost effective way to safely accept payments 10 years ago, but the web has changed dramatically and accepting payments has not. Enter Stripe, a company that in my opinion is going to get very influential over the next few years. At  a recent Startup Grind event  I interviewed 24-year old Irish co-founder Patrick Collison who has raised $18MM from Sequoia Capital and others. Patrick is leading a company poised to completely disrupt the online payment industry starting with your website. Background Patrick has the most valuable of  Valley technology  skillsets. He’s a technical prodigy having won numerous prestigious awards including Ireland’s  41st Young Scientist and Technology Exhibition in 2005 , a national science competition which boasts hundreds of submissions each year from the country’s brightest young scientists. But he also has the personality and presence to be a leader and CEO.  His two brothers are equally impressive.  John  is one of Stripe’s co-founders not to mention a Harvard dropout and one of the first engineers at Auctomatic. His youngest brother,  Tommy , is a teenage blogger and writer that probably has more Twitter followers than most of us. Y Combinator and Paul Graham Patrick holds the distinction of literally being the face of Y Combinator. He’s the skinny red headed guy you see on the front of their website. While attending MIT at age 18, he and his brother decided to build a better version of eBay. After applying to YC they merged with Kulveer and Harjeet Taggar to build Auctomatic. They moved to an apartment in San Francisco, raised angel funding, and went to work. After launching and getting initial user traction,  the company was acquired  by Live Current Media and the founders moved to Vancouver to build the product. From start to finish the company’s pre-acquisition life span was just 10-months. Stripe was also eventually funded by YC. Patrick said that YC’s founder network is one of its most valuable assets. “Having all these other people building startups and having them want to help us because we were a fellow YC company, that was super valuable for us.” He added that perhaps the greatest advantage to YC is that,  “Paul and the (other) partners are just really smart. There is no question that they are very top tier.” Because of the sheer quantity of deals and companies that they interact with combined with those smarts, they’re able to offer both specific and strategic feedback that is second to none. What makes Paul special? According to Patrick, Paul Graham is able to make surprising ideas and connections that other investors and advisors simply aren’t able to make. What isn’t Paul Graham so good at? Patrick says, “He’s not good at feigning interest.” Solving Hard Problems  “The most striking example I know of schlep blindness is  Stripe , or rather Stripe’s idea. For over a decade, every hacker who’d ever had to process payments online knew how painful the experience was. Thousands of people must have known about this problem. And yet when they started startups, they decided to build recipe sites, or aggregators for local events. Why? Why work on problems few care much about and no one will pay for, when you could fix one of the most important components of the world’s infrastructure? Because schlep blindness prevented people from even considering the idea of fixing payments. 
 Probably no one who applied to Y Combinator to work on a recipe site began by asking “should we fix payments, or build a recipe site?” and chose the recipe site. Though the idea of fixing payments was right there in plain sight, they never saw it, because their unconscious mind shrank from the complications involved.” - Paul Graham,  SchlepBlindness . John and Patrick first started working on Stripe in early 2010.  The inspiration came when Patrick, who was working on a few side projects, kept complaining about how difficult it was to accept payments on the web.  The two quickly developed a simple solution and within 2-weeks they had processed their first transaction.  Over the next 6-months they showed it to friends, watched people interact with it, and iterated as fast as they could. In the beginning they weren’t sure how big the market was or whether they could accomplish their goal of addressing issues like fraud and non-US payments in a user-friendly way.  They originally partnered with a payments company, but quickly realized that the only way to control the entire experience was to control all aspects of the process. That’s when they brought everything in house. By the fall of 2010, Stripe had become their full-time jobs.  They thought about bootstrapping it, as they had to that point, but soon realized that as a payment startup they would need the kind of institutional credibility that only a top-notch investor could provide. “Even Turkeys Can Fly In A High Wind” Stripe’s most  requested feature  is to expand beyond the United States, which is something he assured me they’re working on. The team also recently moved from Palo Alto to San Francisco to accommodate their rapid expansion. To date the company’s growth has been completely organic. Before they publicly launched last fall they had more than 1,000 developers on a waiting list and have grown almost exclusively by positive word of mouth. For those wondering why they haven’t heard of Stripe, it’s because true to Steve Blank’s Customer Development process, they have planned to turn on the marketing as soon as they were sure the product was right. Quoting from a Kleiner Perkins founder Eugene Kleiner saying, “Even turkeys can fly in a high wind.”  Watch the full interview here .

Silicon Valley Can Do B...

Editor’s Note: Alexander Haislip is a marketing executive with cloud-based server automation startup ScaleXtreme and the author of Essentials of Venture Capital . Follow him on Twitter @ahaislip . Congratulations to Facebook for going public. Congratulations to the employees that are now millionaires. Congratulations to the founders who are now billionaires. Congratulations to the bankers, lawyers and investors who have added to their already considerable wealth. You’ve grasped the brass ring we’re all reaching for. Yet the company that’s been created isn’t what I want from Silicon Valley. Let’s lay aside for a minute the foibles of the founders: Mark Zuckerberg’s hacking Harvard’s servers and the email accounts of journalists, his decision to “fuck” the Winklevii “in the ear” and Eduardo Saverin’s ridiculous tax dodge . Let’s forget about the Facebook Beacon “mistake” or the comment censorship thing. Let’s forget about the privacy implications. Just take anything that makes you queasy about the company and put it in a box for one minute to consider Facebook objectively. Facebook sells advertising—it may be the most effective advertising platform since Google, or not—but that’s not the best use of the brightest minds of our generation. Advertising doesn’t improve our balance of trade. It doesn’t lift people out of poverty. It doesn’t employ the modestly skilled. It doesn’t extend life expectancies or take away pain. It doesn’t improve our standard of living. Silicon Valley is at its best when it uses its unique combination of talent and capital to advance society, to create even better tools for creation, to unlock the potential of people not just here, but across the globe. Where Facebook Falls Short There’s an old gambling saying that if you don’t know who is the sucker at the table, it’s you. The same might be said of online businesses these days: if you don’t know what’s been sold, it’s you. Facebook sells your content, your connections, your time, your attention, your personal information to advertisers. The company is only a conduit for what you do. Its value, set by the market on Thursday, is a reflection of the worth of what you’ve contributed and created. Yes, each time you sign in to Facebook, you’re going to work for Mark Zuckerberg. Each time you update your status, post a video, check in or just sit and watch everybody else do it, you line his pockets. And I wouldn’t mind that a bit. In fact, I would applaud it, were the product of these hours more profitable. The fact is that much of the time spent on Facebook is wasted. The company says in its S-1 that users spent an average of 175 million hours per day on Facebook in February 2012. That’s a lot. Compare that to say, the 100 million hours Clay Shirky and a researcher at IBM calculate it took to create all of Wikipedia. What’s Wikipedia worth? I think it’s priceless, but back in 2008, Business Insider estimated that if it were to become a commercial enterprise, Wikipedia would be worth $7 billion. Say it’s just half that—adjust for the Henry Blodget factor—and you’d see that the value of contributions to Facebook, were they as valuable as the time spent contributing to Wikipedia, ought to be worth $6.125 billion per day. But it’s not. Contributing to Wikipedia increases the availability of the world’s knowledge. “Liking” Starbucks contributes only to the knowledge advertisers can use to better target you. It’s much better to watch television. Television, like Facebook, gets paid by advertisers for your time.When advertisers pay TV channels, the money flows to many different pockets. There’s the TV stars, of course, but there’s also the crew: the craft-services, the set designers, the costumers, the line producers, the sound engineers, electricians, gaffers, writers and key grips. All the people who make the TV show get a slice of that advertising dollar and these are good jobs, many unionized, that don’t require a fancy Stanford computer science degree. And each person employed making TV shows pays taxes and pumps their salaries back into the economy. And the product of their work can be exported. When the U.S. sells movies and TV shows abroad it improves our balance of trade and helps make the products we import, such as iPads and oil, less expensive. When advertisers pay Facebook, the money goes into the pockets of Facebook shareholders, employees and computer makers. Most of Facebook’s stock is held by a single person and only a small, select group of highly skilled programmers can secure a spot on the payroll. The wealth created by Facebook gets concentrated into the hands of a few—some of whom have refused to pay taxes on their gains—instead of being recycled into the greater economy. And the computer makers that supply Facebook rely on components imported from other countries, sending capital abroad and weakening our balance of trade. Facebook’s rise is great for Zuck, but unless you’re among a privileged few, it isn’t good for you. There’s one other important difference between television and Facebook. Great television approaches art. I’ll remember the drama of The Sopranos and the laughs from 30 Rock long after I’m done looking at those pictures of your niece’s baby. We Can Do Better The Facebook fans are quick to defend the company’s value. It empowers connection! It brings people closer to each other! You can’t put a price on that! It helped organize the Arab Spring, for goodness sake. Facebook enhances loose connections and keeps you in contact with the people you wouldn’t invest the time to call or write an email to. Seeing pictures of a friend’s ultrasound may be priceless, but the value comes from you, your connection to the friend and the miracle of life, not the service that delivers the image. Facebook did help people organize in advance of the Arab Spring, but so did Twitter, email, SMS and many other vectors. And there certainly were revolutions before Facebook and will likely be revolutions long after Facebook powers down its last server. Facebook isn’t bad. It is just a low-value use of time that doesn’t contribute much to the economy beyond enriching the rich. What more valuable things could be done with the time, energy, effort, creativity and capital invested in its making and daily usage? There are startups doing amazing things here in Silicon Valley still. Sure there are the electric cars, robot butlers, space rockets and a bunch of hyper-ambitious projects. But you can have a positive contribution to the economy and the world without curing cancer or feeding starving people in Africa (there is a venture firm in San Francisco working on sustainable agriculture if you do want to make a difference in the subcontinent). I’m often impressed by people working to prevent outbreaks of nasty viruses with rapid vaccination development or others creating systems to radically improve the energy efficiency of large buildings. These companies’ goals are obtainable, their achievement would be beneficial and the products would be the world’s envy. With Facebook public, perhaps the past half-decade of social networking, casual games, virtual worlds, MMORPGs, app stores, avatars and “pokes” will give way to a renaissance of startup companies that make real products of tangible value that employ regular people. Such a return to Silicon Valley’s roots could reinvigorate the American economy and once again put this unique place at the heart of human progress.

From A TC40 Win To A $1...

With Disrupt NYC 2012 literally a day away ( tickets here ), it’s hard not to think about the past success of our former Battlefield startups. I’ve taken a close look at quite a few over the past couple weeks, and to be honest none have come as far as Mint.com. The company has rocketed to success since launching at TC40 in September, 2007, and subsequently winning the top prize at the Battlefield. The personal finance service has raised a total of $38.1 million over the course of the past five years, and has gone on to be acquired by Intuit for a whopping $170 million in September of 2009. When I spoke to VP and general manager of Mint, Aaron Forth, he said that two very specific things, the financial crisis of 2008/09 and a launch on the TechCrunch Disrupt stage, were the main factors of the company’s success, both in acquiring users and being acquired themselves. Here’s what else he had to say: TechCrunch: So tell me the story of Mint, from launch until now. Mint.com: It’s been such a great run. We won TC40 in 2007, and that was the first time our product saw the light of day. It was an intense moment, debuting something we had put so much work into. Winning gave us a great start. We hit 20,000 users within the first couple hours of the announcement. We’ve been on a crazy growth trajectory ever since, and we saw TechCrunch as a catalyst for getting out of the gate. It’s a special place to launch, particularly for a service like ours. We were trying to disrupt the personal finance world. We were asking for sensitive information, and credentials to financial accounts. What TechCrunch gave us was access to a young, tech-savvy, comfortable-on-the-web readership that was excited about exploring the service. They didn’t get aggravated by security concerns. It became a very viral growth process for us. We continue to spend very little money in marketing. Our growth is from word of mouth, and the TechCrunch crowd are great amplifiers. TechCrunch: I seem to get really emotional during the Battlefield. People are launching products they’ve been working on for years sometimes, and it’s a huge moment in their lives. How was the experience of launching on stage? Mint.com: We came out with a fairly immature product at TC40. So we realized that we had a ways to go. We were very focused on trying to demonstrate the value of the product and into pulling everything into one place. We wanted Mint to do all the work for you, which was our focus at TechCrunch. But at the time we could only aggregate checking, savings and credit. Over the next two years we worked on rounding out the financial picture, pulling in investments, loan functionality, and adding budgeting features. This type of full view built up quite a lot of data. We knew where consumers were shopping, and during the financial collapse in 2009, we became a huge resource to the media. Our data was anonymized and aggregated, and we could help the media tell a story with real data. It got our name out, and we continued to see really healthy growth during the economic downturn. Then we brought out mobile apps. It’s started to really drive us a lot of new users at a very affective acquisition cost. In fact, 60 percent of our new users come from app stores. By then, interest from Intuit and others started to come our way. As you already know, Intuit acquired us in September 2009 for $170 million, and we’ve continued to grow post-acquisition. TechCrunch: Do you think your TC40 win may have strengthened the argument for you guys, whether it be with investments of with the acquisition? Mint.com: Our win absolutely lent credibility. But then there’s the after effect. The amplifier that TechCrunch provides means that a lot of influential people end up following your service and getting buzz going. That, paired with attention from the media gave nothing but legitimacy to what we’re doing. The idea of aggregated finances has been done before, but it didn’t get traction. We did it substantially differently. Having that kind of platform to be born into the world got our name out there, gave us a lot of users fairly quickly, and made it easy to demonstrate growth. TechCrunch: So if you had to name a few things that led to your success, what would they be? Mint.com: I think TC40 made us. It was the launch at TechCrunch and the work we did to parlay that into making us a reputable service. Another thing that helped was the economic crisis. Being financially conscious was actually cool all of the sudden, and we could help people be cool and not be trapped in the desktop or a legacy personal finance tool. We modernized it and made it mobile. TechCrunch: There are hundreds of entrepreneurs headed to New York right now, if they aren’t already here. As a winner, and a super successful member of the Disrupt alumni clan, what advice would you give to them as they launch their products on stage? Mint.com: I think the demo has to impress, which rests on the strength of the product. the demo just makes it believable. But the thing that really resonates — and you have to realize that the panels are made up of guys who are used to investing and seeing lots of ideas come by — is the value proposition of how your product is going to change lives. If you have that hook, something that makes people believe in your company, then you have a chance. The next thing that you’re sure to be challenged with is how you’ll do it better than other people. Be prepared to speak about it in those terms. “Here’s how we’re different and that’s why we’re going to win.” If you can show the product and communicate a clear value proposition and how you’re going to win relative to competitors you’ll have a successful onstage launch. Disrupt NYC is set to be one of our biggest shows yet, with returns from Michael Arrington and MG Siegler , along with a variety of big names like Marissa Mayer , Sarah Tavel , Fred Wilson , and David Lee and more. It’s going to be huge. If you’re interested in checking out Disrupt and/or the Hackathon yourself, tickets are still on sale here and info on the Hackathon can be found here . Companies who want to join the Battleground can apply for the last remaining spots in Startup Alley . You can find the full agenda here .