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Etsy Valued at Nearly $300 Million

August 27th, 2010

Some big news today for the NYC tech community.  According to TechCrunch, Etsy recently raised $20M at a pre-money valuation of just under $300 million.  That’s a big number.  Other noteworthy stats from the article include that the company is profitable, on-track for $30-50M in revenue this year, and expects to do $400M in gross transactions this year and $1B next year.  In my opinion, from a valuation perspective at least, this places Etsy among the ‘elite’ private tech companies in the country.  It’s nice to see the newest addition to the ‘elite’ list coming from my new backyard (Brooklyn).

This is also good news for SkillSlate team member and former Etsy employee, Kelly, and her fiance Chris, who is an Etsy co-founder.  Despite this not being a liquidity event, it has to be nice to see the massive valuation jump.

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Posted in Startups

The Impact of Groupon on Small Businesses

July 22nd, 2010

I have been a huge fan of Groupon since I first discovered them late last year.  A couple days ago I bought this Groupon for 51% off house cleaning.  I just called the cleaning company to try to book an apartment cleaning, but they are completely booked until the end of August – that’s 5 weeks from now.  Whoa.  Beyond some mild frustration of not being able to have my apartment cleaned sooner, I was completely blown away that one day of promotion on a website could fill a company’s entire bandwidth for more than a month.  The company even said they’re trying to hire more cleaning crews in order to handle the excess demand.

There was an article on TechCrunch the other day that highlights the role of social media in small business marketing and the impact that Groupon seems to be having on small businesses.  One of the case studies in the article focused on a restaurant in San Francisco called Stone Korean Kitchen (coincidentally, one of the owners of the restaurant, Robby Kwok, is a former colleague of mine at Yahoo!).  From the article, here’s another example of my point above:

But what really tipped the scales for Yoo was Groupon.  Yoo says that restaurant saw significant traction in both sales and traffic to its Yelp sites and Facebook page when the restaurant signed up for a Groupon deal in April. Stone Korean Kitchen sold 2600 groupons in one day, and saw a packed house for two months for both lunch and dinner. Now Yoo says that they see around 5 to 10 Groupons per day instead of 30 or 40 but the restaurant is still seeing a good number of repeat customers from the Groupon deal, says Yoo.

One effect of the Groupon deal, besides increased sales, was that there were a flux of Yelp reviews. It took the company six months to accumulate 80 reviews on Yelp and after the deal, the restaurant accumulated 90 reviews within three months. Yoo also says that he’s seen a steady increase in Foursquare check-ins following the Groupon deal.

So Groupon not only generated an instant influx of sales (albeit at a discount), but also drove tremendous ripple effects from the promotion:

  1. Repeat customers
  2. Influx of Yelp reviews – likely increasing exposure on Yelp, leading to more future business
  3. Increase in Foursquare check-ins – again, more exposure

It can be very difficult for new small businesses to stand out from the crowd and get the flywheel going so to speak.  While it is likely hard to measure the value of these ripple effects, they are no doubt beneficial to the business.  Beyond the direct sales and social media benefits listed above, the Groupon model provides other benefits to small businesses:

  1. Favorable cash cycles – the businesses get paid before they have to deliver the service.  That can be pretty powerful for small businesses.
  2. Redemption rates – not everyone who buys a Groupon will redeem it before it expires.  That’s cash directly to the small business’ bottom line.  I would bet that the unredeemed Groupons just about pay for the fee that Groupon takes from the promotion.

In summary, beyond being a great consumer product, Groupon is an exceptional marketing vehicle for small local businesses.  Anytime you can satisfy the needs of both consumers and businesses (and make money in the process, lots of money), you have a great business on your hands.

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Posted in Startups, Technology

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SkillSlate’s New Home

June 22nd, 2010

I haven’t been posting as often as I’d like; I’ve been buried under a rock lately working on SkillSlate.  While starting a company is a ton of work, it is also one of the most rewarding experiences I have ever undertaken.  I’m actually excited to get into the office every day.

Speaking of our office, I thought I post a pic of SkillSlate’s new home now that we’re finally just about settled.  It’s a great space in the Chelsea/Flatiron area with plenty of open space and sunlight.  It’s a pretty cool feeling going from working on SkillSlate from my apartment on the side, to having an actual space to call our own.  Here we are cranking away!

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Posted in New York, Startups

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SkillSlate Seeking Developer

May 24th, 2010

My start-up, SkillSlate, is seeking a talented and energetic developer to join our core team.  If you know of anyone good, please spread the word.  Job description is below:

We’re a VC and angel funded local start-up looking for a driven developer to build a product that has a meaningful impact on the daily lives of New Yorkers (and beyond). We’re based in Manhattan (Chelsea/Flatiron loft office), and the ideal candidate can start ASAP.

Must Haves:
• Belief in vision of individual empowerment
• Ruby on Rails (RoR) experience (min. 1 year experience) or equivalent (e.g. Django)
• BS/MS in Computer Science
• Entrepreneur-at-heart – thrives in a fast-paced startup environment and has the hunger to succeed and build a product that changes the world
• Demonstrated leadership ability and self-starter mentality
• Passionate about writing agile, elegant, DRY code

Nice-to-Haves:
• Experience with search/vertical search
• Experience with automated testing / continuous integration frameworks
• Experience with database optimization (my.cnf, EXPLAIN, indexes, replication)
• Experience provisioning and managing cloud resources (Engine Yard, Heroku, App Engine, or equivalent)
• Strong user experience design / interaction design reasoning skills

Compensation: Competitive mix of salary and equity. This is a full time, permanent position.

About SkillSlate.com
SkillSlate empowers the 16mm+ individual service providers in the US to market their services directly to consumers. A SkillSlate profile provides detailed professional and personal information including pictures, fees, and reviews, all with the aim of not only showing what the person does, but who the person is. SkillSlate puts these profiles into a searchable directory where consumers can find service providers that fit their specific needs.

SkillSlate is backed by prominent venture capital and angel investors including Canaan Partners, Jason Finger (founder/CEO of SeamlessWeb), Peter Lehrman (co-founder of Gerson Lehrman Group), Dan Ciporin (former CEO of Shopping.com), and other high-impact angels. Learn more at http://www.skillslate.com/about

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Posted in Startups, Technology

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Presenting SkillSlate at Stern Innovates

March 29th, 2010

I was recently invited by my classmate and friend Yoni Argaman (new co-president of the Stern entrepreneurship club) to present my startup SkillSlate at the inaugural Stern Innovates event.  I was humbled to have been asked, and am very excited to formally unveil the first iteration of SkillSlate to the NYU community.  I’ll be joined by my colleague Bartek Ringwelski who is the co-founder and CEO of SkillSlate.

The idea of Stern Innovates is to provide exciting NYU affiliated startups with a venue to present and receive feedback on their ventures from members of the Stern community as well as from venture capitalists, lawyers and other entrepreneurs that will be in the audience.  Each event will also feature a successful entrepreneur that will share his story with the audience. Following the event, we will continue for post-event drinks at a nearby reserved venue (TBD soon).  I look forward to the event,  more details are below.

4:45 – 6:45PM, Wednesday, April 14th, KMC 5-50

Guest Speaker: Itzik Ben-Bassat, former VP at Blizzard Entertainment (World of Warcraft) and the current Founder and CEO of GameGround, a local venture backed gaming start-up will review current business models in the gaming industry.

Pitching Early Stage Ventures:

1. Brian Rothenberg, SkillSlate
SkillSlate connects consumers with trusted individual service providers who charge a fraction of the price of established companies.  SkillSlate empowers the 16mm+ individual service providers in the US to market their services directly to consumers. A SkillSlate profile provides detailed professional and personal information including pictures, fees, and reviews, all with the aim of not only showing what the person does, but who the person is. SkillSlate puts these profiles together into a searchable, sortable directory where consumers can find service providers that fit their specific needs.

2. Dan Leahy and Ben McKean, VillageVines
VillageVines provides a private marketplace where upscale service businesses discount specific hours when they have excess capacity. VillageVines provide businesses with a demand management tool to improve their utilization and enable consumers to book discounted appointments with high-end restaurants, clubs, spas, salons and events. Since discounts on VillageVines are only visible to VillageVines members and cannot be listed by search engines, businesses can discreetly tier their pricing structures to profitably serve more customers without cheapening their brands to the general public.

3. Adi Kalderon, PolySolar
PolySolar is a startup company based on an innovative technology in the solar energy field of Organic Photovoltaics (OPV). Developed at the Organic Electronics Lab at Polytechnic Institute of NYU by Professor Kalle Levon and Eduard Nasibulyn Ph.D., our OPV solar cells are polymer based and manufactured using electrochemistry techniques. This unique combination has enabled PolySolar to drastically reduce the overall cost and offer a solar energy source that is efficient, cost-effective, flexible, transparent and lightweight that can operate in low-light intensity and be applied to any shape or surface. With these competitive advantages, PolySolar’s OPV technology is targeted for the portable electronics market to offer a sustainable energy solution. The company’s OPV solar cells will allow devices, such as cell-phones and laptops, to recharge without electricity from grid power

Please RSVP to this event as seating is limited!

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Posted in MBA, Startups

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StartupAtWork.org Has a New Website!

February 17th, 2010

StartupAtWork launched a very clean new website last night, just in time for the first Speaker Series event of the spring season (24/7 Real Media, which was awesome by the way – more to come on that later).  While I provided a bit of input here and there (with Warren Lee and Bartek Ringwelski), our developer Sankho Mallik drove the project and did a terrific job.  While his code and design skills are solid, he stood out from many developers I’ve worked with due to his excellent project management and communication skills.  Cheers Sankho!

The new website has some killer videos from the fall speaker series (including the full interviews).  A few of my favorite clips are:

  1. Being public isn’t as fun as going public – Steve Hafner, CEO/founder of Kayak.com
  2. What Ron looks for in a deal – Ron Conway, angel investor and “Godfather of Silicon Valley”
  3. Bill’s bullshit meter – Founders of About.com
  4. Concept of drag coefficients – Steve Hafner, CEO/founder of Kayak.com
  5. When the fax lady sings -Dave Morgan & Curt Viebranz of TACODA

Check it out and let us know what you think by leaving comments or sending the organizers feedback!

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Posted in New York, Startups

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StartupAtWork Spring Speaker Series: 24/7 Real Media

January 30th, 2010

StartupAtWork is an initiative that I began helping out with last fall through my internship with Canaan Partners (Canaan is a sponsor, and the moderator Warren Lee is a partner at the firm). The organization hosts a series of events that feature prominent guests such as Ron Conway, one of the most prolific angel investors of all time (Google, Facebook, Zappos, Paypal), and Steve Hafner, co-founder of Orbitz and Kayak.com. The first session of the spring 2010 speaker series features two stellar speakers from 24/7 Real Media: David Moore, Chairman/Founder/Former CEO, and Mark Moran, Former EVP/General Counsel.  It is sure to be a fascinating story hearing how 24/7 Real Media raised funding, went public, nearly went bankrupt then ultimately sold to WPP Group for $650 million dollars.  The 24/7 Real Media session will be held Wednesday February 10th (5:45pm registration, 6:00pm pizza & beer, 7:00pm interview) at the New World Stages.

The StartupAtWork speaker series is intended to help foster entrepreneurship in the NYC tech community by bringing in successful entrepreneurs and investors who can share their experiences and impart tangible learnings on the attendees. While the event is invite-only, the vast majority of attendees are entrepreneurs, people working at start-ups, and students interested in the startup/tech space.  It’s a bootstrapped event (though there is free beer and pizza) where a lot of great contacts can be made and ideas can be shared.  In case you missed the fall series, you can view some great video clips of the sessions.

If you’re interested in attending this invite-only event, more details are here, and please contact me (form at the bottom of the page) to request an invite.

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Posted in MBA, New York, Startups, Technology, Venture Capital

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Groupon Is My New Obsession

January 21st, 2010

Groupon LogoI think it’s safe to say that Groupon is my new obsession.  Today I bought a Groupon for $50 worth of tapas and drinks at Poco for just $25, and have bought other Groupons such as $10 for a $20 gift card at Energy Kitchen.  The Groupons range anywhere from meal deals like the previous examples, all the way to experiences such as wine tasting events and even sky diving.

The way it works is that they feature one or two daily Groupons, or ‘deal of the day’ offers, in each city that they operate in (currently 26 cities including New York, San Francisco, Dallas and more).  The deals are local and are usually at steep discounts to regular prices.  In order for each deal to go through, it must reach a ‘tipping point’ in terms of number of purchasers.  For example, the Poco deal that I bought this morning needed at least 200 purchasers to be ‘tipped,’ in which case everyone who orders the deal gets it (at the time of writing, more than 1,500 had been sold).  If the Groupon doesn’t reach it’s tipping point, then no one gets the deal. This pulls in a unique social aspect in which people are incentivized to be viral and spead the word in order to make sure the deal gets tipped.  Groupon does a nice job integrating Facebook, Twitter, and email notifications to let you easily spread the word for each deal.  And if reaching the tipping point isn’t enough incentive, if you refer someone who buys a Groupon, your account is credited with $10 toward your next Groupon purchase.  Super smart.

This model truly creates a win-win for both consumers and local businesses.  Groupon has a great overview of the value they bring to businesses, but as a high-level summary, local businesses get the benefit of great online exposure to hyper-targeted local audiences, guaranteed volume sales (at or above the offer’s tipping point), and a new base of customers that they probably wouldn’t have otherwise reached.  Groupon cites some interesting stats such as 9 out of 10 featured businesses notice Groupon customers coming back as repeat customers, and 97% of Groupon’s featured businesses want to be featured on the site again.

For consumers, Groupon presents some compelling deals which are definitely appreciated [especially when you're a starving student like myself ;-) ].  Groupon also acts very much like a city guide and presents a lot of cool things to do.  As someone who is new to NYC, I really like all the ideas it gives me on restaurants to eat at and events to take advantage of.  Lastly, the social aspect creates a great way to organize groups of friends to take advantage of the same offers. Few new sites have me checking back almost daily, but Groupon is one that definitely gets my thumbs up.

Groupon is a startup to watch with some big name backers (New Enterprise Associates, Accel Partners and angel investor Eric Lefkofsky) that have put $35.8M into Groupon’s coffers so far.

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Posted in New York, Startups

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Cake Financial Acquired by ETrade

January 18th, 2010

Cake FinancialWhile I was home in California over winter break, I had the opportunity to meet Vince Vannelli of KPG Ventures.  Vince was incredibly generous with his time and spent more than an hour talking about VC and technology.  Really sharp guy with serious operating chops, an eye for quality seed-stage opportunities, and a great sense of humor to boot.

I didn’t know it at the time, but I’m sure he was simultaneously working on the sale of his investment, Cake Financial, to ETrade.  Given that ETrade is shutting down the main Cake Financial services, it doesn’t sound like a home run exit, though a single or a double via M&A  is a better outcome than many startups are seeing in today’s environment.  Congrats Vince and the Cake team!

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Posted in Startups, Venture Capital

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VigLink: a Startup to Watch

January 18th, 2010

ViglinkLast week I read about VigLink’s $800K seed round funding by Google Ventures and First Round Capital, as well as several notable individual investors such as Reid Hoffman.  Danny Sullivan has a great write-up on VigLink over at Search Engine Land, but the basic gist is that VigLink helps publishers easily monetize links on their sites by offering an “install and forget” code snippet that automatically secures revenue from the sites they already link to without any visible changes to their sites.  I think there is a huge opportunity here, and part of that is based on my own personal need / pain point.

In January 2009, while doing diligence for my search fund’s acquisition of Sneakerplay.com, I created a list of additional monetization opportunities for Sneakerplay.  Below is a verbatim copy/paste from that document:

  1. Hotlink all user generated ebay, amazon, etc. links throughout the site through those affiliate programs – UPSIDE: $x growth, Level of Effort: Medium/High
  • In the forums and other areas, there are thousands of user links to ebay and other sites.  Like livewords, when a user adds a link to ebay/amazon, dynamically tag our affiliate tracking on the end.  This will add a tracking cookie when the user clicks through and we’ll get CPA revenue if they buy anything on the merchant’s site.

Did we ever implement this?  No.  Why not?

  1. It was difficult to quantify the upside of such an implementation
  2. We would have had to build a custom solution which would have required quite a bit of development

By no means am I claiming to have had the original idea, I just find it funny that I previously documented a need that now looks like it is being filled by VigLink (and to be fair, others like Skimlinks as well, though I hadn’t seen them until the VigLink announcement).

I believe that VigLink is a startup to watch based on the fact that they are solving a real publisher need (help monetizing content, particularly user generated content such as user-posted links) in a market that is potentially HUGE.

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Posted in Startups, Venture Capital

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