A Wearables Startup Playbook

ChalkboardFew sectors have received as much buzz as the wearables market. From fitness bands and anklet baby monitors, to smartwatches and Google Glass, wearables are fun, cool, and cutting-edge.

The rise of mobile broadband, commodity sensors, smartphone-based companion apps, virtualized manufacturing and supply chain, crowdfunding, and nimble design have converged to make wearables mainstream. With the category now validated as a strategic hotspot for all major corporations and platforms, investors are clamoring to fund wearable tech startups.

In 2013, investors poured $458 million into 49 wearable company deals, according to CB Insights. Year-over-year, deal activity in wearable startups rose 158 percent, while funding grew 80 percent. Companies like Thalmic Labs, InteraXon, Soundhawk, Misfit Wearables, Fitbit, Jawbone and Rest Devices have recently raised significant rounds.Continue Reading

Artisanal Cheese, Cocktails … Now the Artisanal VC?

Reno Martin/Shutterstock

Reno Martin/Shutterstock

Most venture investors say they are hands-on, but now some are taking it a step further and calling themselves “artisanal” VCs. What does this term really mean? Is it just a pretentious moniker that fits into today’s world of “handcrafted” $5 coffee and $4 toast? Or is there actually a new movement happening in the venture community?

While the term “artisanal” may be a bit overhyped, I would argue there is a real change afoot in the early-stage venture industry. There is a curiosity on the part of some VCs to focus on being a part of fewer, higher-quality, handcrafted companies. Investors like myself are now applying the same type of “craftsman” passion and care to help nurture companies from their earliest stages.Continue Reading

A ‘Silver Linings Playbook’ approach to venture capital

Silver liningThe venture capital industry is getting rightsized, with less capital raised and deployed, smaller funds, fewer active venture capital firms, and more regulation. The exit climate has picked up, but is still not at the level required. And valuations are overall more rational, with some exceptions at the later stages or in consumer-facing momentum companies.

However, with the confluence of not one but four big market drivers (discussed below), and the rise of a new technology cycle,  we think this is still a great time to be a venture capitalist or entrepreneur.

Recent VC industry data released by the NVCA confirmed the reality of a welcome flight to quality and rightsizing trend. Key findings include:

  • In 2012, the VC industry raised $20 billion vs. the almost $100 billion in 2000;
  • 92% of this capital went to existing managers (vs. first-time managers) and 48% went to 10 large firms;
  • Overall, about 522 firms are estimated to be active, and some believe this number even lower closer to 100 defined as firms that have made at least 4 investments over the last year;
  • The median fund size for 2012 was $150 million, and the overall deal pace has come down to slightly over 750 investments per quarter;
  • Although some momentum companies are being bid up, valuations are trending lower overall according to Dow Jones Venture Source data.Continue Reading

Rules of the Road for the Era of Simplicity, Mobile and the Social Web


SocialI have been involved in the technology industry for 20 years as a serial entrepreneur, corporate executive and investor. There are some key rules of the road that have guided my journey and these are especially relevant in the current era when the social Web is dominant, mobile platforms are ubiquitous and consumers are demanding simplicity. As an entrepreneur, I believe that living by some core beliefs is key to leading teams and building companies that last. Here are a few of my fundamental beliefs, illustrated with examples from the entrepreneurs that we are working with.

The Customer is Queen:

Actively listening to your customers and rapidly iterating to reflect customer needs has never been so important. From a vendor of cloud-integrated storage appliances to a mobile fashion marketplace, Mayfield Fund entrepreneurs like Ursheet Parikh and Guru Pangal of StorSimple and Manish Chandra of Poshmark, who constantly listen, react and respond to customer feedback, are finding a quick path to customer engagement.Continue Reading

Business process API-ification: The LEGO promise fulfilled

Lego to WorkMy previous post on the API-ification of software focused on the ecosystem of infrastructure-level APIs. Today, I want to discuss companies providing APIs that operate at the business process or application layer, which brings a whole new level of productivity and revenue potential to businesses.

Amazon has clearly been leading the way in API-fication by providing a broad range of fundamental software services packaged as APIs. From the basic EC2 compute and S3 storage capabilities, they have expanded to now offer more than 30 services across infrastructure categories of compute, storage, networking, database, deployment/management and messaging. All of these components are incredibly valuable and important, but an application developer still has to construct higher level business processes from these fundamental building blocks. In addition, they have launched the AWS Marketplace, which is a catalog of hundreds of software packages that cover everything from application development to traditional business software. However, this marketplace has only taken the first step in making it easy to install and deploy software applications or stacks as machine images. They haven’t yet enabled third-party companies to provide application components packaged purely as APIs.Continue Reading

The API-ificiation of software – and LEGOs

LegosToday everything has an API. Facebook has hundreds of APIs across such social areas as friends, photos, likes and events. Google has thousands of APIs across search/AdWords, Web analytics, YouTube, maps, email and many more. Amazon has APIs that cover the spectrum from Alexa Web traffic rankings to e-commerce product and pricing information and even the ability to start and stop individual machines. I spent a decade architecting and building component and services based software, and another decade after that evaluating and investing in infrastructure software, I believe this mobile and cloud influenced wave of RESTful service-oriented software may finally live up to its initial promise.

Although the majority of API attention has centered on consumer Web services, an emerging cadre of startups are focused on infrastructure and business processes. These newcomers are providing a broad range of critical services neatly packaged as frameworks or APIs. Some of these companies, such as Salesforce and Google Maps, are next generation SaaS providers that have built solutions to serve both end users and developers. Others, including Mailchimp and Twilio, are pure play offerings that solely target developers as customers.

Open source helped to reignite the open systems movement in the late 1990s, which popularized the idea of creating public projects and actively soliciting community feedback and involvement. Tens of thousands of open source projects have been created, but only those projects that built sizable communities have thrived. Most of the large infrastructure software categories were eventually filled by strong open source projects and some spawned successful commercial software companies, including RedHat, XenSource, Sourcefire, MySQL, JBoss, Talend and Alfresco. These companies span a broad range — from operating systems/hypervisors to security to middleware and database/content management.Continue Reading

The Big Deal On Big Data

In tech circles, the new paradigm of handling massive volumes of information has dominated the discussion about the future of enterprise for a while now. Two years ago, a cover story in The Economist offered tips on how to prepare for the “new world” of Big Data. As recently as February 12, the New York Times reported that data measurement could be the 21st century equivalent of the invention of the microscope.

So, what’s the big deal about Big Data?

Until recently, Big Data has been the darling of the largest companies – Facebook mines 845 million users’ constant stream of comments, links and photo postings to understand user motivation and optimize services; Google analyzes billions of search results to tailor high-value advertising programs. Even outside of the tech world, American Express and Visa have spent billions creating data banks capable of managing immense volumes. Storage and analytics are not an issue for these well-capitalized giants, but most organizations have lacked the technologies and specialized skills needed to harness complex data and extract useful insights.Continue Reading

Big Data Meets Ad Tech

By Tim Chang and Tim Hanlon, CEO, Vertere Group

The brand ad market is massive (multi-multi $B), with 67% of worldwide ad spend in branding.

However only 25% of digital ad spend is in branding and the online brand ad market is still relatively primitive for these reasons:

  • No standards or consistent measures of “success” other than outdated or inadequate metrics like CPM and CTR (clickthrough rate)
  • Limited real-time intelligence
  • Unsuitable display ad formats (still mostly banners)
  • Lack of creativity in formats

Today, marketers and their agencies are overwhelmed by media choices, and departments are not optimized for a data-driven future of real-time bidding in the digital world. Online advertising is driving the need for a new breed of marketer who can handle an exponential blizzard of data sets (external and proprietary) and derive actionable marketing insights/decisions. As a result, CMOs and CIOs are cross-pollinating, driven by CRM/loyalty programs tied to increasingly granular media measures.Continue Reading