Seeking the next gen supply chain technology breakthroughs
You need a name for your business?
One iPhone developer put the task of naming his e-reader out to the crowd through Amazon’s Mechanical Turk, and $27.50 and 500 responses later came up with the name iReadFast.
That’s even cheaper than the Silicon Valley tradition of getting a few friends together with a few cases of beer before godaddy.com crushes your dreams.
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Google has spent a lot of time and money trying to figure out why managers at Google are successful. The results are in–and they are ingeniously simple. Be nice to people and spend a lot of time listening to your direct reports. These are good rules for any company, small or large, to follow.
Thanks to the New York Times for the summary below:
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Well, I admit it. Plenty of other food home delivery options exist for consumers, at least in a few markets like New York City. But when Wal-Mart decides to stick its toe in the space, one must again pay attention. I wrote a few months ago about the very flexible and intelligent home delivery service in Europe, Chronodrive, which allows consumers to easily order on-line and then schedule their delivery.
The steady inroads of Amazon and, yes, Sears into the home delivery market has made the giant Wal-Mart look at whether its customers will pony up for the convenience of not going to the store to shop. Before we get too excited, Wal-Mart is limiting the concept trial, termed Wal-Mart To Go, to one store in San Jose, CA. Perhaps they are seeking to attract all those hi-tech professionals who work 18 hours a day and do not have time to shop. For a $5 and up delivery charge, Wal-Mart To Go will deliver food, health-and-beauty products, medicine and other basic household supplies during user-chosen delivery windows.
Wal-Mart already operates a successful home delivery operation in the United Kingdom via its Asda subsidiary, so it should have the in-house experience to know how to make the operations work in a cost effective manner. It all depends on whether the consumers flock to the offering. On-line only specials and other incentives are likely to be used to drive business. Wal-Mart, with its broader assortment of products than traditional supermarkets may also have an edge in product assortment.
Brad Feld and Jason Mendelson's best seller Venture Deals-Be Smarter than your Lawyer and Venture Capitalist is the best book written so far on the subject of how an entrepreneur can survive the start up fund raising world with their dignity and perhaps their company intact.
If you are an entrepreneur, or plan to be one, buy and memorize this book.
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Are you finding it difficult to raise money to grow your company? According to Xconomy, a new online investment service called MicroVentures might be the answer to your credit crunch troubles.
Austin-based MicroVentures matches companies seeking capital with investors looking to invest anywhere from $250 to $5,000 or more. The online investment service gives companies access to investors across the country and to accredited investors who don’t take the large equity stakes venture capitalists typically demand.
MicroVentures helps companies by facilitating the investment – from creating the proper funding documents, to guiding the securities registration process to handling the end transaction.
To get started, interested companies complete a funding request and pay $100 for an initial review to see if MicroVentures can help raise the capital needed. If MicroVentures determines that it can help with funding, the company moves to the second stage, where a more detailed review, including due diligence, is performed. Following the detailed review, suitable companies are listed on MicroVentures for investors to view and fund.
The investment service is different from crowdfunding sites because investors get equity for their investment – they aren’t just loaning a company money. Investors fill out a questionnaire to join the service and aren’t charged any sign up fees.
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According to Xconomy, California-based thredUP (see earlier post), the online platform for swapping children’s accessories, recently completed a $7 million Series B financing. Redpoint Ventures led the round with Trinity Ventures and former eBay CEO, Brian Swette participating. Tim Haley of Redpoint Ventures will join Patricia Nakache of Trinity Ventures on thredUP’s Board of Directors. Its aggregate fundraising total is $8.7 million to date. Netflix CEO Reed Hastings and Swette are advisors to thredUP, which was launched by Harvard Business School grads James Reinhart, Oliver Lubin, and Chris Homer.
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According to a February 2011 post on Xconomy, there a few platforms that aim to connect investors and startups on the web, including AngelList, but for the most part investment transactions and venture funding is done face-to-face, many times with a hand shake involved.
A new startup, called CapLinked, is hoping to change this by offering a collaborative platform for entrepreneurs, private investors and advisors to find each other, build relationships, and transact business on the site. CapLinked, which was co-founded by PayPal marketing exec Eric Jackson, is announcing a $900,000 round of funding from group of former PayPal execs (a.k.a the PayPal Mafia), including Peter Thiel, Dave McClure’s 500 Startups, Joe Lonsdale (co-founder of Palantir Technologies); Aman Verjee (CFO of Sonos); and David Anderson (not me!). In total, CapLinked has raised over $900,000 in angel funding.
Using CapLinked is fairly simple for entrepreneurs. They can use the platform to raise capital and sell or buy assets, manage and contact investor prospects, centralize document flow on a secure platform and connect with new investors, advisers and companies.
Users can create a pitch, and invite others via email to check out the idea on the site. Entrepreneurs can upload documents, multimedia and other presentations to make a case for their idea and put all confidential company or deal related information behind a secure “walled garden” platform. Once an entrepreneur has an idea he or she wants to share, he can send a link to the platform to potential investors. And CapLinked has provided start-ups with basic form documents and contracts for investments.
CapLinked provides investors (the site is exclusively for accredited investors) with a Fidelity-like platform to track their portfolio of private companies in one location and encourages investors to build a public profile featuring their portfolio investments, clients, or companies they manage.
The start-up, which launched in October of 2010, already has more than 2,100 companies and 1,000 investors on the platform, and $800 million in potential deals. Jackson, who likens the platform to a LinkedIn-meets-Salesforce for private investing, tells us that the platform isn’t just for tech startups—he has hopes of CapLinked being used to fund movies, commercial real estate deals or other professional products. “We want CapLinked to be the go-to platform for anyone who wants to raise capital for a company or project,” he explains.
Thiel says of CapLinked, “Start-ups are tremendous drivers of economic growth, yet the basic mechanics of investing in new companies can be difficult and inefficient, especially for first-time entrepreneurs or people outside venture capital center…CapLinked is providing—for the first time—an efficient on-line platform that connects entrepreneurs and investors, helps them build relationships, and streamlines the investment process.”
The startup’s founders certainly have experience in both tech startups and the investment world. Jackson, who authored The PayPal Wars, was PayPal’s first Senior Director of U.S. Marketing and served as interim VP of Marketing after acquisition by eBay in 2002. Fellow co-founder Christopher Grey was a managing partner and co-founder of private equity firms Crestridge
Investments and Third Wave Partners as well as a managing director for Emigrant Bank.
Jackson says that he believes CapLinked can succeed because it provides a comprehensive platform for both investors and entrepreneurs. He may be on to something, considering the recent success of AngelList.
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I'm sitting at the gate at Logan waiting for my flight to Harrisburg when the "cancelled" announcement comes over the PA…after a two hour delay. Wonderful. US Airways says they can book me via Philadelphia with a 1230am arrival in Harrisburg, but the Phil-Harris segment is also "delayed", meaning likely cancelled. No thanks. Why do I ever book flights with a 25% on-time percentage and a 25% cancellation rate??
On the way back to the car, I decide to get a shoe shine. The guy is my age and pretty slow, due to a few disabilities. But he is plenty smart. Asks what I do and understands it. I don't remember how we got on the subject but he starts talking about his philosophy of life. All this is in a 5 minute shoeshine remember…
Anyway, he say "I'm a winner every day. Some days, I win more than others, but I am always a winner, every day". At first, I thought it was some hokey Dale Carnegie stuff ( I did see if the idea had proponents on Google-no returns), but the more he talked and the more I thought about it the more I liked the idea. He said it took him a long time to realize that being a winner every day made it possible for him to show up and be a shoe shine guy for 40 years. His parents could not afford college for him, few scholarships were available for minorities and he had to get out and support the family at 16 years old. Some days, he said, he made only a little money. Other days, he made a lot of money. But he always felt successful because he paid his bills, had no debt and no thoughts of retiring. He liked his job too much. It was an inspiring discussion at the end of a bad day for me.
I try and live my life one day at a time, accomplishing various goals depending on the priority at hand. But I had never thought that I was really trying to be a winner every day, like the shoe shine guy.
The "winner every day" philosophy is an interesting way of looking at running a start up. The challenges are huge and the tasks infinite. Why not just try and be a winner every day? That could mean focusing on the highest priorities that need finishing, or doing a task that you know will yield positive results, or doing something you keep putting off, or breaking down a difficult job into manageable segments and completing one or two a day?
What I like best about the "winner every day" philosophy is the postive optimism. No matter how little or how much you get done in a day, you can claim some accomplishments (or you better work a few more hours) and go home happy. Why not?
Image by Earth Class Mail via CrunchBase
I'd thought I would follow up my Megabus/truck musings of last week with a review at some start ups that are looking to beat up on FedEx and UPS. Where have we heard this story before? Plenty of times in the last decade and no serious competitor has emerged. As a matter of fact, they drove DHL out of the US domestic market, after DHL lost millions trying to compete.
Thanks to Curt Woodward, Senior Editor at Xconomy for doing the following interview with the founder of equaship. Note:I corrected the original article since SweetShip has changed its name to equaship.
Remember shelling out big shipping and handling charges for that rotisserie oven you just had to buy from some infomercial? Small retailers sure do—and they remember it fondly.
In fact, when entrepreneurs Ron Wiener and Josh Leichtung were in the catalog business years ago, shipping and handling could actually account for your entire year’s earnings.
“You looked at your 2-to-4 percent at the end of the year, it was all the profit that you made on shipping,” Wiener said. “Amazon’s changed the game.”
Now, to compete with Amazon.com and others offering free and low-cost shipping, small- and medium-sized retailers have had to trim their old reliable revenue stream. That’s been a big win for consumers—another example of computing power and business minds disrupting an old, opaque, inefficient system that was begging to be turned upside down.
But Wiener says smaller retailers have been mostly left out of the positive side of that revolution. The little guys are still using the big carriers like FedEx and UPS for a lot of their shipping, but are unable to command better discounts on their own costs.
“They fight over Amazon. They fight over the big retailers,” Wiener said of the shipping giants. “And they make money on the little guy.”
That’s where Wiener and Leichtung hope to thrive with their new company, Seattle-based equaship (formerly sweetship), which they’re priming to start operating sometime in the second quarter.
equaship aims to aggregate the front end of package collection, customer service and payments (the “first mile” of parcel travel, in shipping parlance) for small and medium retailers. ShipSweet will take those parcels to the shipping companies—particularly the lesser-known networks of regional and local carriers—and use the economies of scale that come from pooling lots of small orders to deliver both profits for equaship and better rates down the line for small businesses.
“We’ll be competitive in most cases for shippers who are under 150 packages a day,” Leichtung said. “But under 50 packages a day, no one will be able to touch us in terms of price.”
Although I know basically nothing about the mechanics of the shipping industry, I was skeptical after hearing the pitch that a small startup could quickly get in front of enough retailers to make a dent in what Wiener paints as a dominating duopoly of FedEx and UPS, with the U.S. Postal Service thrown in for good measure. After all, small business are a highly dispersed, fragmented market.
equaship says it’s targeting two spots to solve that problem:
—Integrating with providers of shipping software systems, sometimes known as the “shopping carts,” who also could get a chance to take a slice of the action.
—Partnering with retailers to build a network of package drop-off locations for retail clients (and any individuals who want to take advantage). Wiener and Leichtung didn’t have any details on that front, but looked like they wanted to say something exciting about a possible retail partnership.
equaship certainly isn’t alone in trying to build a business out of software-driven efficiencies in the shipping business. Bellevue, WA-based Enroute Systems makes a Web-based software platform that helps businesses choose the cheapest and fastest delivery service for their packages. Open Mile (Note from Dave: run by my buddy Evan Schumacher who just got serious funding from Charles River Associates), a startup with bases in Boston and Chicago, lets shipping companies bid on prospective parcels and uses Web and mobile technologies to line things up.
equaship is different because of its focus on concentrating shipping orders on its own, Wiener said. That makes it a more active middleman and less like a matchmaker. That also sounds harder to pull off, of course—while it’s essentially an IT solution, there’s a lot of touch points at package collection, order processing and so forth.
The strength of equaship lies in large part with the team it’s building, Wiener said. The company’s managers and advisers include veterans of Adobe, UPS, Amazon and the U.S. Postal Service—a variety of experience you’d need to tie together traditional retail, software-heavy routing systems, and blue-collar trucking companies.
equaship is the first company to emerge from of the Seattle office of Venture Mechanics, Wiener’s startup incubator project. Wiener, who is listed equaship’s founder and chief executive, says the startup is wrapping up a $1.5 million round of angel investment after about 20 months of being bankrolled through Venture Mechanics. Leichtung is the chief marketing officer.
I asked Wiener if there are any lessons he took from his experience at an up-and-down digital mail startup that he led for five years until stepping down and being replaced by new CEO Sarah Carr. Earth Class Mail relocated to Oregon and was focusing on a reboot, according to this January update from The Oregonian.
While the Internet is killing off traditional mail, Wiener said, it is also enabling more e-commerce and a resulting rise in parcel traffic. He also said equaship would be much less expensive to establish because it will need less brick-and-mortar infrastructure—he predicted it would take 5 percent of the money that was needed to build Earth Class Mail, and would be profitable in less than a year, as opposed to several years.
I am personally a skeptic when it comes to these start-ups. Logistics is all about scale economies best served up in a proprietary network. When you have to blend together all sorts of other people's networks to make stuff happen, you usually cannot achieve these scale economies.
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I have been watching the rise of the Megabus and BoltBus phenomena with a lot of interest. For the uninitiated, these buses are the beginning of an intercity passenger travel revolution in the US. Business Week had an interesting article in April on the companies and the travel niche they have carved out between cities–ones that are perhaps too far for a car trip and not far enough for a plane ride.
What intrigued me is the potential to haul packages on the buses as well as passengers. You could use the same web-based reservation process to "book" your package, take it to the bus headed to the correct destination city and have it shipped. Granted, since the buses do not have a terminal, someone would have to offload the packages at curbside and store them until your recipient picked it up (or deliver it for an extra charge). My guess, is that the whole process could be cheaper than the fully cost-loaded, highly taxpayer subsidized USPS parcel delivery system, but perhaps not a viable competitor due to the subsidy.
Perhaps it's all crazy thinking, but I believe there could be a disruptive business model for intercity parcel freight lurking in the Megabus/BoltBus revolution. I'll keep thinking about it….let me know if you have any ideas…
A VC in Vacationland 