One of the most well-documented entrepreneurial sagas out there just got even more interesting.

Rand Fishkin, the co-founder and CEO of Seattle search-marketing firm SEOmoz, has updated his extremely transparent journey toward a possible second venture capital round with a disappointing final note: The $24 million deal fell through at the last moment, after a letter of intent was signed by a New York VC firm, for reasons that sound pretty puzzling.

I’ve updated our Storify timeline of this fascinating story to include the newest entries, but you should really go read the whole thing yourself. It’s a great picture of the inside game around raising venture capital, including screenshots of email exchanges (with names blurred out) and soul-searching about whether Fishkin and company got too cocky planning what they’d do with the money before the check was actually signed.

As we discussed previously, this kind of aggressive transparency is a hallmark of SEOmoz’s company culture—look no further than the blog posts from a few years ago when Fishkin discussed his last unsuccessful fundraising attempt. The first time around was different in one key respect: He was out pitching the company to investors. This time, he was fielding incoming offers from the VCs.

Fishkin is obviously committed to continuing this level of transparency—otherwise, he wouldn’t have blogged his failed round so extensively. And, although some folks have asked whether Fishkin would regret being so open now, I don’t get a sense that conventional embarrassment would put him off this path.

Indeed, Fishkin told me earlier that VCs have been aware of his commitment to sharing as many details as possible; the VC on the other end of this almost-deal even consented to having a redacted email published as part of the analysis and released Fishkin from any non-disclosure agreement restraints so he could discuss it all.

In the end, SEOmoz is a profitable company whose revenues have been doubling year over year, with only about $1 million in VC money from 2007. That’s nothing to be unhappy about. In fact, one of the commenters on Fishkin’s post actually congratulated him for helping out other entrepreneurs by opening up the process so thoroughly.

Here’s the updated Storify timeline, which also appears over here.

Comments | Reprints | Share:          

Sometimes a startup needs to pivot a few times until it finds just the right idea. Similar to chefs trying out new dishes, Gojee co-founder Michael LaValle says his one-year-old company changed its own formula twice before its latest idea caught on this summer. The New York startup curates recipes based on the ingredients its users’ keep in their respective kitchens.

Gojee offers its subscribers links to recipes based on the ingredients they list. LaValle, 31, a West Point grad and a former analyst, says Gojee features dishes from some 80 food bloggers chosen by the staff. “It depends on how much history [the bloggers] have in writing, the quality of their photos, and how easy their recipes are to cook,” LaValle says. Gojee is geared for intrepid cooks who may not be master chefs but are not complete beginners, he says.

So far Gojee is bootstrapped, but LaValle says the company is in talks for its first outside funding, which he hopes to close within the next six weeks. He declined to specify the amount of funding being sought, and LaValle is not in a rush to grow Gojee’s staff of seven. “We’re not trying to expand,” he says. “We need runway to make sure we can keep this trajectory.”

Gojee accidentally called attention to itself this summer, according to LaValle. From March until late June, the company ran an open beta test primarily with friends and family trying out the site. That changed after a Gojee staffer simply asked designer Tina Roth Eisenberg for input, which led to … Next Page »

Comments | Reprints | Share:          

Continuing its strategy of rolling up niche publishing sites into a vertical media network, San Francisco-based Say Media said today that it has acquired Remodelista, a group blog and “sourcebook” on interior design and remodeling. “Remodelista has done an incredible job aligning its brand with clean, timeless and sophisticated style,” Say Media CEO Matt Sanchez said in a statement. “Their editors have established strong relationships with their readers and often use their own homes as laboratories for ideas and inspiration. In short, Remodelista is the epitome of what we look for when we acquire or partner with a new media property: passionate editors with a strong point of view and a vibrant community.” Financial terms of the acquisition were not disclosed.

Comments | Reprints | Share:          

You wouldn’t know it from the weather until yesterday, but summer is on its way. Soon classes will be out of session and students of all ages will be running wild. What that means, besides more Commencement speeches (and, soon, being able to get a seat at a Harvard or Davis Square café), is that millions of American grade-school and high-school kids will be doing their best to forget everything they’ve learned—especially, it seems, in math class.

One local company is trying to do something about that, one classroom at a time. Newton, MA-based TenMarks is a software startup focused on Web-based math education programs. Its personalized software includes interactive online worksheets and video lessons, and targets subjects from third-grade math through high-school algebra and geometry. The idea is to supplement the classroom experience, not replace it. (And yes, the software includes some elements of game mechanics—like rewards for finishing different levels—but it doesn’t go overboard and try to turn the whole lesson into a game or anything.)

Earlier this week, TenMarks released some new programs designed to combat “summer learning loss” and keep kids’ math skills sharp (and improving) when they’re out of school. The company points to a pilot program in California that showed elementary-school kids who used TenMarks dramatically improved their math skills over the summer, as compared to those who didn’t use the software.

Online math lessons are a dime a dozen these days. But what distinguishes TenMarks is its individually-tailored instruction and its “ability to provide help right at the point where the student is answering a question,” says co-founder Andrew Joseph, a veteran of OpenOrders (acquired by IBM in 2000), CommercialWare, Corel, and other tech companies. For students struggling with a question, he says, TenMarks provides hints individually written for that question, as well as video instruction about how to approach it (whether it’s a word problem, long division, or solve for x).

Even so, the startup found that parents, who pay a subscription fee for the software, were slow to hear about and adopt the product. So, in the past year, the company has shifted from selling its software to families to collaborating with schools and teachers to develop a free version for classroom use. That has led to a lot more exposure, and has led TenMarks to move to a “freemium” model in the past few months, whereby schools and parents can get a basic version of the software for free, and if they like it, they can pay for an upgrade to more sophisticated features.

Thanks to word of mouth referrals among teachers and parents—as well as mentions on blogs, Twitter, and other social media—the company has been pleasantly “surprised at the number of sign-ups,” Joseph says. TenMarks now has content to meet math education standards in all 50 U.S. states and is selling its software from California to Kentucky, North Carolina, and Georgia, he says.

TenMarks, founded in late 2008, is part of a cluster of tech companies in Boston … Next Page »

Comments | Reprints | Share:          

Daniel Ha, CEO and co-founder of Disqus, the San Francisco startup whose commenting system is used by the publishers of 750,000 websites, said in a blog post today that his company has secured $10 million in Series B venture financing from new investors North Bridge Venture Partners and existing investor Union Square Ventures. North Bridge partner Ric Fulop has joined Disqus’ board. The four-year-old startup, which has 16 employees, also shared a few other metrics; Ha said the company is on the verge of reaching 500 million unique users per month and that the sites using Disqus, including BarackObama.com, Time Magazine, IGN, NASDAQ, PCMag, ReadWriteWeb, and Wired Magazine, have 35 million registered members all told. Disqus, formerly known as Big Head Labs, received seed funding from the Y Combinator venture incubator in 2007 and raised a $500,000 in Series A funding from Union Square, Felicis Ventures, and Knight’s Bridge Capital Partners in 2008.

Comments (1) | Reprints | Share:          

Your average doctor who owns his practice doesn’t exactly have time to monitor Twitter, Facebook, Yelp, YouTube, and blogs all day for comments and reviews on his business, says entrepreneur David Lifson.

Yet a busy doctor is just the type of customer that Lifson is targeting with Postling, the startup he co-founded in New York City. The company, which launched in 2009, delivers a daily e-mail summary of what’s being said about a particular business through different social media outlets. A business owner also can get instant notifications of new comments on the business, and can respond instantly via e-mail to post responses on the given social media platform.

“Their email inbox is the one thing they do check every day,” says Lifson, Postling’s CEO. “They can treat these new emails as a to-do list.”

Postling users can also schedule and post social media updates ahead of time from the platform, and manage their news feeds from different social media sites—all in one place. Analytics show Postling customers which social media outlets are most effective for them. The software is designed to be simpler and easier to manage, at least for non-professional marketers, than options like HootSuite or Radian6, says Lifson.

Postling’s founders come from Etsy.com, the Brooklyn-based e-commerce marketplace for handmade and vintage items. Etsy co-founders Chris Maguire and Haim Schoppik left the company in 2008, shortly after Etsy brought on Maria Thomas as chief operating officer in April 2008 and promoted her to CEO that July. (She left the company at the end of 2009.) Lifson, formerly of Amazon.com, started working at Etsy in spring 2008 and left that November to join Maguire and Schoppik in starting a new company.

The trio spent roughly six months trying to develop an Etsy-esque site for independent bed and breakfast inns, taking a percentage of rooms booked through the site, like OpenTable does for restaurants. The site, Waffl.com, is still up and running, but didn’t take off among the not so tech-savvy bed and breakfast owners, Lifson says.

“Convincing innkeepers to use our room inventory management system instead of paper and pencil was not going to happen,” says Lifson.

But it was that group of customers that also told the Postling team that they wanted a tool to help them manage social media all from one place. They said, “We’re so overwhelmed on all of this social media stuff, put it all in one place, and we’ll learn that tool,” Lifson says.

Lifson, Schoppik, and Maguire worked on Postling for about six weeks and launched in August 2009. “What we’re good at it is … Next Page »

Comments | Reprints | Share:          

I learned at least three things over coffee last week with Nathaniel Borenstein, one of the fathers of modern e-mail systems. Sadly, none of them keep me from wanting to set fire to my inbox, which surpassed 30,000 unread messages this weekend.

Borenstein is chief scientist at Mimecast, a U.K.-based e-mail management firm with a strong presence in Boston. He is based in Michigan and has some roots there, as a former faculty member at University of Michigan and a founder of NetPOS, an e-commerce firm in Ann Arbor, MI. He is also a deep thinker on technology and society who isn’t afraid to speak his mind, so I kept my notebook open and ready as we talked about current trends in tech and business.

Here are my three takeaways, from specific to general:

1. Voltage Coffee & Art, the new startup hangout spot near Kendall Square, doesn’t strike out-of-towners like Borenstein as a very inviting place for meetings. It’s not particularly cozy or private, especially for a cafe. (Truth be told, I don’t love its coffee either, but that’s what a couple years in snobby Seattle will do to you.) But it’s still a good place to get work done or have a non-private meeting—and definitely a nice gathering spot for entrepreneurs.

2. The spam wars continue, albeit more quietly. It seems like all the talk about “spam killing the Internet” peaked about five or six years ago. And, despite my inbox woes—some messages are spam I haven’t deleted yet—I feel like spam isn’t the problem it once was. Not so, says Borenstein. We’ve just reached “homeostasis,” he says, whereby more people work on combating spam when it gets bad, but when they ease up, spammers swoop in and try new things. Borenstein thinks micropayments—a clever way to make spammers pay for sending messages—might be the most effective solution (though micropayments in general still face an uphill climb because banks don’t like the idea, he says). “We’ve barely scratched the surface of countermeasures,” he says. “It makes me think the Internet is not complete.”

3. Timing is everything, especially in the business of technology. This is a well-worn truth, but as the latest examples, Borenstein points to speech recognition (especially on mobile phones), tablet computing (iPad and all its soon-to-be competitors), and the sector du jour, group buying. Each of these is an old idea whose time has come. In particular, daily-deal sites like Groupon are “driven by a good idea that’s not primarily technology,” he says. “That’s also why it’s sustainable.” What’s more, Borenstein predicts there will be more than one or two winners in the sector. “It could be a market with a lot of chimps and no gorilla,” he says.

Lastly, we talked about a darker side of technology that’s been getting a lot of attention lately: the impact of the Web on humankind’s ability to think deeply. Borenstein penned a blog post last week called “The Internet is turning you into a high-tech lab rat.” The title, which references Nicholas Carr’s The Shallows, pretty much says it all. The idea is that dealing with constant e-mails, tweets, blogs, social networks, and addictive games is overloading people’s brains and degrading their ability to think about important things. (This also ties into what my colleague Wade calls “on demand disorder.”)

Borenstein doesn’t totally buy the argument, but he is taking some steps to combat distractions—by doing things like delaying all but his most important incoming and outgoing e-mails. (That reminded me of Baydin, the e-mail tech startup that recently moved from Boston to Silicon Valley, as was first reported by my colleague Erin.)

But perhaps it is telling that several of Borenstein’s friends and colleagues who were Internet pioneers “have become disillusioned and headed for the hills,” he says. Indeed, many who were involved in the early days of the Web, he says, “now think it was a bad idea.”

Comments | Reprints | Share:          

goat-choker (n.) An article of inordinate and suffocating length, produced to gratify the vanity of the author and the aspirations of the publication. (John McIntyre)

I regularly write articles that, by Web standards, are obscenely long. My November article on ShopWell was 6,500 words long, and my series last week on Google’s mobile ambitions ran to almost 7,000 words. Granted, it was broken up into three parts, but the longest section was still 2,600 words, or five Xconomy pages. Which is about five times the length of your average piece in TechCrunch, Mashable, VentureBeat, and the other popular tech blogs.

I wrote 7,000 words about Google because that’s how much space the material demanded. But sometimes I feel like a hypocrite, because the truth is that I don’t like to read long posts on the Web. If I come across an important article that’s more than two pages long (about 1,000 words), I click my browser’s Read Later button. That sends the piece off to Instapaper, a free Web service that reformats text for easy reading on an iPhone, iPad, iPod Touch, or Kindle e-reader.

For me, Instapaper is a real lifesaver. I love curling up with my iPad or Kindle and reading for hours. An article might look like a goat-choker on a Web page—but when it’s shorn of all the distractions of the desktop and the Web and presented on one of Instapaper’s nice, white, folio-style pages, it becomes easily digestible.

But that begs the question: why am I still writing long pieces for the Web? I don’t have the excuse that I used to have, when I worked for magazines like Science and Technology Review—i.e., that my pieces were just the digital reflections of works originally prepared for print.

I guess I’m going on faith. The faith that at least a few readers will be interested enough to click “next page” all the way to the end of a five-page article. Our data shows that there are such people, though not as many as I’d really like. The glass-half-full view is that at least some of my readers are fanatically loyal, sticking with me all the way to the end. The Google article is pretty heavy going, and it seems ungrateful to wish that more people were this attentive.

Then there’s the glass-half-empty view—the one that says it’s futile to make such high demands on readers when there’s such a big supply of short, snackable content just a click or two away. A print magazine on a newsstand might be competing with a few hundred other magazines, at worst, for the prospective buyer’s attention. Blogs must contend with the entire Web, where there are well over a trillion unique URLs, and where short-form content rules. (There’s a reason the average YouTube video is under three minutes long.) On top of all that, I can verify from my own experience that—as The New York Review of Books put it in a 2009 essay—”readers themselves seem allergic to reading extended pieces on computer screens.”

So we have a huge point of friction: The Web is the most flexible, immediate, and pervasive medium ever invented for spreading the written word. By extension, it ought to be a great medium for long-form writing. Yet it’s often a headache, literally, to consume those words on the screen of a personal computer. So people don’t.

Maybe what’s needed to reduce the friction and rejuvenate long-form journalism online is a more flexible way to send written information across the last one or two feet—or, as Web geeks might put it, a way to decouple the network layer from the presentation layer. I’m encouraged here by news that Dave Winer, the RSS and podcasting pioneer, is working on … Next Page »

Comments (6) | Reprints | Share:          

Giga Omni Media, owner of the GigaOm blog and a network of other tech blogs, has collected $2.5 million in new financing from existing investor True Ventures, where founder Om Malik is a partner. TechCrunch broke the news Friday, and it was later confirmed in a blog post by Malik, who says the funds will be used to expand the company’s GigaOm Pro paid content service, put GigaOm content on more platforms, and expand the company’s coverage in New York City.

Comments | Reprints | Share:          

There are a slew of venture capitalists who populate the blogosphere with their opinions and pearls of wisdom on, well, just about everything. But many of those VC bloggers—predictably—come from the tech side of the house. Fewer are blogging about healthcare investing. And fewer still are women. Now enter Lisa Suennen, a managing member of the venture firm Psilos Group Managers.

Suennen, who is based in the Bay Area (Corte Madera, to be exact), is the author of the blog Venture Valkyrie. The latter part of the name is inspired by a Marvel Comics superhero. (Valkyries are also female demigod figures in Norse mythology, and are central in Richard Wagner’s Ring operas.) To be clear, I had no clue that Suennen wrote a blog when I asked her to talk to me about investing in health IT a few weeks ago. And while she doesn’t claim to have the superpowers of a Valkyrie, her firm has had some super results with its health IT investments (more on those results later).

Suennen’s a regular visitor to San Diego, where she serves on the board of PatientSafe Solutions, a provider of handheld devices to deliver data to nurses that helps reduce or completely nix medical errors in hospitals. Psilos was a lead investor in the $30 million funding round to recapitalize PatientSafe.

New York-based Psilos, which has about $580 million under management, focuses its investments in three basic areas: health IT, healthcare services, and medical technology (including devices and diagnostics—but no therapeutics). While exact figures on Psilos’s returns are tough to come by, Suennen says that her firm performs in the top quarter of venture outfits. How so successful? By investing in firms that can prove that they improve quality, lower costs, and offer products or services that deliver clear value to the customer, she says.

“Our health IT practice is integral to our overall strategy because health IT is the means by which, in many cases, you can improve quality and reduce cost,” Suennen says. In their due diligence, she says, she and her partners make sure that companies can prove to them with customer feedback that the companies can actually improve quality and reduce costs. (Startups in the whiteboard phase and Internet projects need not apply.)

Suennen, 44, has been with Psilos since the firm launched in 1998. She joined the firm after … Next Page »

Comments | Reprints | Share:          

Everyone has their own green environmental “a-ha” moment. Maybe it’s seeing birds drowning in oil, or paying $4 a gallon for gas, or reading about the plastic trash heap the size of Texas swirling around in the Pacific Ocean. For Susan Hunt Stevens, it was discovering her young son had serious food and environmental allergies, which prompted her to examine which ingredients and toxins were causing the health problems.

Her discovery came back in 2007, and it roughly coincided with Stevens and her family moving into a 19th-century Victorian home outside of Boston. So, in part to create a better living environment for her family, she decided to do a major “green renovation.” This effort has included generating electricity from waste energy (boiled water), using light-emitting diodes and compact fluorescent lamps for lighting, buying energy-saving appliances and plywood cabinetry made without formaldehyde glues, insulating the roof with healthy spray foam, installing bamboo shades and cork floors, using low-flow faucets and toilets, composting kitchen waste, and so on.

Along the way, Stevens decided to blog about the experience. She knows a thing or two about online media and consumer marketing, having been a longtime senior executive with The New York Times and Boston Globe, where she oversaw the news site Boston.com, among other things. [Disclosure: Stevens joined Xconomy’s board of directors last month---Eds.]

But when she originally started blogging about green issues, she got questions from readers about the industry that she couldn’t answer. That started her on the road to taking classes at the Boston Architectural College, where she learned cutting-edge green design.

Stevens is now the founder and CEO of Practically Green, a stealthy Web startup based in Boston that combines many of the things she has done in her career. I sat down with her last week to talk about the company and its significance to green sustainability issues, online business models, and technology trends like social networking and videogame mechanics.

The first thing to know about Practically Green is that it’s not just another “green content” site, or how-to blog about sustainability and the environment. Instead, think of it as being like Foursquare or FarmVille for the green lifestyle, mixed with WeightWatchers.com in terms of accessibility and support networks. And throw in a little Amazon.com and TripAdvisor for consumer reviews and e-commerce. The site uses social networks, gaming mechanics, and expert content to help consumers figure out “how green” they are, find reputable green products and services, and connect with other like-minded people so as to stay motivated to live a greener lifestyle. The big idea is to help consumers lead healthier lives, while also aiding the environment—and saving on their electric bill.

It’s also an intriguing example of the “gamification” trend we’ve been reporting on lately, whereby consumer websites and companies are trying to boost traffic, engagement, and customer loyalty … Next Page »

Comments | Reprints | Share:          

[Corrected, see page 2] Publishing on the Web was always supposed to be a many-to-many affair, not a one-to-many lecture like so much of radio, TV, and newspaper content. But much of the burden of keeping the Web bidirectional falls on the familiar comment sections below most news articles and blog posts. And comments, in case you haven’t been following the blogosphere lately, are in poor health.

Too often, comment sections fill up with spam and anonymous backstabbing—to the point that some online publishers have given up on them, disabling comments entirely. Of course, many valuable comment threads are still generated around the Web every day, but they’re often frustratingly siloed and fragmented: a raging debate about an Xconomy article might be taking place on Slashdot or Y Combinator Hacker News, for example, and visitors to Xconomy itself would never know it.

Holding commenters more accountable for what they write, and connecting them into unified conversations, are two of the goals at Livefyre, a San Francisco startup that’s launching a private beta test of its real-time commenting platform today. On blogs that have turned on Livefyre, comments pop up on the page as soon as they’re submitted, without forcing users to reload an article page. That makes the comment areas of these blogs resemble instant-message logs or Twitter feeds—which isn’t an accident, as Livefyre’s system is built on XMPP, the Extensible Messaging and Presence Protocol, an open protocol originally designed for the IM world.

But in addition to being the only comment system built around instant messaging, Livefyre is also implementing a reputation and rating system designed to reward people who post high-quality comments and push trolls out of view. And on top of all that, Livefyre will optionally notify commenters who have signed up to use Livefyre-powered comment sections (which they can do using their Twitter or Facebook credentials) about conversations that might interest them elsewhere on the Web.

Livefyre, which will be free to individual bloggers and available for a fee to larger publishers, is introducing its service with support for blogs based on WordPress, Tumblr, or any other content management system that allows publishers to customize their templates by dropping in the snippet of JavaScript code needed to call the Livefyre service. The startup’s beta testing program is starting out small, with just five or so publishers using the system on the first day, but the technology will be rolled out to the several hundred publications on the company’s waiting list over the next two months, according to Jordan Kretchmer, Livefyre’s founder and CEO.

Livefyre didn’t actually start out as a commenting tool. Kretchmer—an ad-industry veteran who worked for Mullen Advertising in Boston and Butler Shine Stern in San Francisco—says he first started thinking about online conversations while doing a short stint as vice president of brand at the multiplatform news producer CurrentTV, in San Francisco.

“When I was at CurrentTV, I joined Twitter and started being more active in forums, and what jumped out at me was … Next Page »

Comments (5) | Reprints | Share:          

If you like to spend your spare time crawling the Internet for pictures of cute animals with silly captions or stories of others’ “fails” (i.e. moments of sheer misfortune caught on camera), odds are you’ve stumbled upon I Can Has Cheezburger. It’s grown into a network of 51 sites that have become the viral ‘it spot’ for online humor. The Seattle-based company has been growing fast—both in page views and employees—since it was founded just three years ago. I met up with Cheezburger CEO Ben Huh earlier this week to chat about the future of the online comedy network and all the new talent the company has been recruiting, including just-hired chief financial officer Pearl Chan.

Chan officially joined the team Wednesday after 18 months working as Cheezburger’s part-time CFO. She brings with her more than 20 years of experience with early stage Seattle tech startups, including Picnik, the hit photo editing service  recently acquired by Google. I had the opportunity to chat with Chan on Tuesday about how being a part-time CFO helped her get the job, the company’s secret to monetization, what makes the Cheezburger community so darn special, and how the company is going about becoming “anyone and everyone’s humor network.” Here are some of the highlights from our conversation:

Xconomy: In my interview with Ben, he mentioned that you’ve been working with Cheezburger on a part-time basis for some time now. How did you first get involved with the company, and what was it about Cheezburger that made you want to come on board full-time?

Pearl Chan: The investors at Cheezburger-they are the who’s who as far as angel investors in Seattle…Cheezburger is funded by angel investors as opposed to a traditional venture capital firm. And there were a number of the angel investors that I already knew because I’ve worked with them in other capacities throughout my years in working in Seattle. And when Cheezburger got to a certain size, they needed some more strategic financial help. They [the angel investors] looked around and said, ‘well, who do we know that we could recommend?’ And that’s how my name came up.

At the time I got involved with the company—about a year and a half ago—the company was still fairly early stage. I mean, there were a lot of things that were still yet to be proven, but it was starting to get a lot of buzz and a lot of traction. And it is usually about that time that it’s good to take a look at getting some financial expertise, because prior to that there really wasn’t any internal financial expertise. We had some bookkeeping that was done internally, but not by a certified public accountant or anything.

And I was actually at that time working as a consultant, so I was a part-time CFO. And it’s interesting because there’s quite a need for that in Seattle. We have a very high amount of technology companies. Especially when they’re starting too, instead of funding themselves they take in external money—any kind of external money—from investors. And when you do that it’s important to show your investors and give them comfort that you’re taking good care of their money and doing all the right things with making decisions on how the money is being spent and how it’s being accounted for and that sort of thing. However, most of the companies at that size, they don’t have enough work for a full-time person because they haven’t been able to get big enough to do that. They still need that strategic level of expertise, so a part-time CFO was really ideal. And that’s how I got involved.

The first thing that I did [when she joined Cheezburger part-time] was kind of laid a lot of foundation groundwork on basic block-and-tackle financial stuff. But we had immediately—because the company got so much traction so quickly—we immediately went into some financial strategy-type … Next Page »

Comments | Reprints | Share:          

Ben Huh is a very busy man. He’s only 32, yet he’s already spent much of the last few years soaking up the media spotlight due to the almost instant success of his network of humor blogs famous for its eccentric and misspelled name, I Can Has Cheezburger. In the three years since Huh purchased the main Cheezburger site, also known as LOLcats, from two entrepreneurs in Hawaii and built it into a treasure  trove of funny pictures of cute animals with the site’s signature misspelled captions plastered over them, the company has grown to become the largest humor network in the world with 340 million page views per month.

Cheezburger, formerly known as Pet Holdings, has been consistently topping the Seattle 2.0 startup index for the last year (and it’s still no. 1), has won a national webby award, and has been one of the few Seattle-area startups to continue hiring, even through the recession. The network now has over 50 sites, each dedicated to a particular niche of comedy. It would take a few paragraphs to list them all, but some of the more famed in the bunch include FAIL Blog, Babies Making Faces, There I Fixed It, Engrish Funny and Totally Looks Like.

Greg spoke with Huh about the startup’s strategy, rapid expansion and sudden fame in the online world back in October, when Cheezburger had 26 sites, 21 employees and had just exceeded 1 billion cumulative page views. Now, just eight months later, Huh has built a small empire with 51 sites, and 45 employees spread across the world (including one in Poland). According to Huh, Cheezburger has no plans of slowing down.

The company, as it grows, has sought to bring in more seasoned managers to help Huh manage this opportunity. The latest addition to the team is Pearl Chan, who has signed on as Cheezburger’s new chief financial officer among a slew of other titles, including treasurer, controller, director of finance, strategic business analyst, and tax manager.

I swung by Cheezburger’s Lower Queen Anne headquarters yesterday to chat with Huh about the company-turned-Internet phenomenon’s fast start, milestones in its relatively young startup life, where it’s going, what position it will be hiring for next, and the new user-involved “creation of culture” that Huh says makes the company unique. The office had all the trademarks of a startup. The reception area consisted of a small coffee table with a few of Cheezburger’s books strewn across it, and simple wooden chairs, no receptionist. The main room was an open space filled with rows of folding tables lined with computers and editors sifting through the over 19,000 user submissions Cheezburger brings in on a daily basis. Here are the highlights of the conversation, edited for length and clarity as always.

Xconomy: You graduated from Northwestern University with a degree in journalism. Were you planning on being a journalist?

Ben Huh: I was actually, but this was back in—1999 was when I graduated. That was like the heyday of newspaper valuation, so newspapers were going crazy. They were hiring. They were investing in dotcom stuff. They were merging and buying each other. It was pretty exciting. My role was actually on the presentation side/the design side and not so much the reporting. I did go to journalism school to be a reporter, and we didn’t have a visual program, but that’s what I ended up doing actually.

X: So you moved to Seattle in 2005, and in 2007 Andy Liu (also the board member) from BuddyTV helped you buy the original I Can Has Cheezburger site (officially launched in September 2007). How did you come across the site and what made you realize that you wanted to buy it up and eventually launch this massive humor network?

BH: My wife Emily, who also works here—she’s the editor—we started a pet blog because we had a dog—we have a dog—and we’d just moved here and we didn’t really know … Next Page »

Comments (1) | Reprints | Share:          

Where the heck did all these group-buying websites come from? With the rise of Groupon, LivingSocial, BuyWithMe, and dozens of other smaller daily-deal sites, suddenly it seems like every Web entrepreneur and his brother are out to make a quick buck. So maybe the better question is, where is this all going?

Tippr.com is the Seattle representative in this scrum. The local-deals startup—which rolled out its site in February, based on patents purchased from Mercata, an old Paul Allen-backed dot-com—has been on an expansion and acquisition tear recently, punctuated by its purchase of Austin, TX-based FanForce, which was just announced today. Chief executive Martin Tobias says Tippr now has 21 employees (up from four at the start of this year) and 20-25 open positions around the country.

The company has a pretty compelling expansion strategy. It couples consumer-facing deals sites in different geographies (10 U.S. cities and counting) with a technology platform approach that is the focus of its latest acquisition. Tobias, the sometimes controversial entrepreneur and investor, did not mince words about the FanForce deal today. “They realized what they were doing was covered by my patents,” he says. “It’s a great fit, we love the management team. We love their drive. These are serious startup guys.”

Tippr’s and FanForce’s software is targeted at “anyone in the publishing business,” Tobias says. That means everyone from niche blogs and online communities to big newspaper groups, radio and TV companies, and tech companies like Microsoft, Yahoo, and Google. The idea is that these sites can hook up to Tippr’s platform, and quickly start making money on daily deals and collective coupons from local businesses. “They’re all sitting there saying, ‘Hey, Groupon is competing for the local merchant marketing dollars.’ They have all called us,” Tobias says.

While Groupon shares revenue with merchants, Tippr’s approach is to cut in the Web publishers. If the right publishers eventually sign up (think MSN, Hearst, or Viacom, hypothetically), the market could be much larger than that for a single branded site like Groupon. That’s a big “if,” though.

In the meantime, Tobias declined to give any stats on revenue or percentage growth just yet. But he says, “The numbers are big…I’m making a [boatload] of money and I’m growing, and I have too much work to do.” Which is why he says he’s hiring aggressively.

Entrepreneurs I’ve talked to around town seem to think Tippr could be on to something big. But the window of Wild West opportunity—rumor has it a couple guys in a garage can make $300,000 … Next Page »

Comments (9) | Reprints | Share:          

Neil Patel claims he doesn’t know much about the world. “There’s only one thing I’m good at,” he says, “and that is getting traffic from Yahoo and Google.”

It’s a peculiar skill, but it has definitely paid off. Patel taught himself the art of search engine optimization about nine years ago, after he had started his first company (at age 16). He has since co-founded a number of Internet marketing firms—including ACS, Crazy Egg, and KISSmetrics—and is one of the up-and-coming tech angel investors in Seattle. He has invested in a number of Web companies around town, and has served as an advisor to startups like BuddyTV, Cheezburger Network, and LiquidPlanner.

Patel, who moved to town last year from Orange County, CA, gave a tutorial on Internet marketing last night at Twiistup’s “startup session” at Fenwick & West in downtown Seattle. The focus was on how entrepreneurs could optimize their company’s website to rank higher on Google and other search engines’ result pages. But it was the stuff in between the basic SEO lessons that I found the most enlightening. I’ll give a quick summary of it all here.

First of all, everyone wants to know how this 25-year-old whiz kid investor made his money originally. It’s been a well-kept secret for long enough. Suffice to say that doing search engine optimization, especially for online poker companies, was pretty lucrative back in the day (like five years ago). If you want to know more, you’ll have to ask him about it.

In his talk, Patel emphasized the importance of ranking in the top three results in Google (not just the first page), and about choosing “descriptive keywords with few competitors” for your website, rather than focusing just on words that a lot of people will search for. “It’s the long tail that will drive traffic, and conversions,” he said.

He also stressed the need for having compelling, fresh, yet evergreen content on the site that will attract incoming links. As good examples, he mentioned Zappos (now part of Amazon) and Cheezburger Network. Things to avoid: duplicating content from other sites, letting content get old, and adding lots of content and pages all at once. (It turns out search engines track websites’ content-to-links ratio.)

Probably the most interesting comment he made was about how micro-blogging and URL-shortening services like Bit.ly and TinyURL are reshaping the way Web content is linked together. “Twitter and URL shorteners are killing the blogosphere slowly,” Patel said. “Tweets are killing how many links are going to [original content] sites, making it harder to get ranked than before. URL shorteners are getting credit for the links rather than the sites.”

Nevertheless, the key to ranking high on Google is link building—getting relevant, authoritative sites to link to your content. And that’s nothing new. “Links is the thing you want more than anything else,” Patel says. Though people do buy links, they’re still the hardest thing to manipulate in the whole page-ranking scheme of things.

To that end, Patel urges companies to create “buzz in the blogosphere.” Although Twitter and other services may be eroding some of its power, more people will hear about the content on your site, he says. Lastly, he suggests contacting owners of relevant websites and providing constructive feedback about their content, while also asking them to link to your site in a friendly way; expect about a 5 percent hit rate, he says. That last bit feels like downright old-fashioned salesmanship—which is probably something not even Twitter can kill.

Comments (7) | Reprints | Share:          

Michael Arrington, the founder of TechCrunch, the Silicon Valley-based startup and technology blog, said today he has moved his primary residence to Seattle and will split his time between here and the Bay Area. Arrington calls Seattle “the minor leagues of the startup world,” but admits it’s “a hotbed of entrepreneurism.” He cites the desire to “mix things up in my life” and “easy access to awesome skiing” as personal reasons for the move. Seattle tech startups should expect to see a lot more of Arrington starting now, he says.

Comments (1) | Reprints | Share:          

Seattle 2.0 founder Marcelo Calbucci said today he has named television reporter Jennifer Cabala the new president and editor-in-chief of the organization, in charge of business and editorial content. Cabala previously was a TV journalist with KING 5 and Q13 (Fox) based in Seattle. Calbucci says he will continue as a blogger and advisor to the site—which focuses on blogs, features, and events around the local startup community—and will assist in the transition to the new management.

Comments (2) | Reprints | Share:          

Despite official data showing that the U.S. economy is out of recession, leading economics bloggers remain cautious about the nation’s economic prospects, with almost half saying that conditions are worse than the official numbers indicate. But government policies boosting entrepreneurship and allowing more high-skilled immigrants into the country could bolster recovery, bloggers say. That’s all according to a survey of online observers of the U.S. economy (including this reporter), released this morning by the Ewing Marion Kauffman Foundation in Kansas City, MO.

The overall condition of the economy is “mixed,” according to 59 percent of the bloggers surveyed, while 23 percent see the possibility of a double-dip recession and 10 percent believe a second recession is already underway. About half of the survey respondents said conditions for lending to individuals and small and large businesses are bad or very bad, and the group’s overall feeling is that government budget deficits, interest rates, inflation, and poverty rates will all rise substantially over the next three years. But all of that may actually mean more opportunities for innovators: nearly 60 percent of bloggers said conditions for entrepreneurship are either good or fair right now. (You can download the full survey report here.)

Surveys of leading economists are plentiful, but this may be the first time anyone has tried to quantify the views of economics bloggers, whose work appears in dozens of online publications (or on their own personal blogs) and ranges across the ideological spectrum. Tim Kane, a senior fellow at the Kauffman Foundation and the author of the survey report, says the foundation plans to repeat the survey each quarter.

“A survey of economic bloggers might seem like an exercise in herding cats, but it honestly struck us as a puzzle why nobody else was conducting one already,” Kane told me. “Here we have a crowd of the most knowledgeable and outspoken analysts of the economic scene, and nobody had bothered to take their pulse.”

Kane developed the survey questions with help from Donald Marron, former acting director of the Congressional Budget Office and a former member of the Council of Economic Advisers. He sent survey invitations to the top 200 economics bloggers as ranked by the Palgrave Econolog, a directory maintained by New York, NY-based academic publisher Palgrave Macmillan. In the end 83 bloggers participated in the survey. I was one of the bloggers surveyed, and I was also on the board of advisors that helped Kane to design the questions. (For full disclosure: The Kauffman Foundation is one of the underwriters of Xconomy’s Startups Channel.)

To me, one of the most striking findings was that most respondents—71 percent, in fact—felt that the federal government is too involved in the U.S. economy. That seems unexpected, given that economists on the left and the right seem to agree that the bank bailouts and aggressive federal stimulus spending, while perhaps unpalatable, saved the economy from disaster. More than half of respondents gave the U.S. Congress a failing grade when it comes to their performance steering the economy; Wall Street firms also got dismal grades. The Congressional Budget Office and other watchdog groups fared much better.

Asked to name the federal policies that would best stimulate economic growth, the bloggers named increasing high-skill immigration (63 percent), increasing legal immigration at all skill levels (57 percent), promoting new firm formation (48 percent), increasing financial regulation (41 percent), and increasing education spending (33 percent).

Kane says the finding that surprised him most was that bloggers have such bleak views about the economy’s near-term future. “Despite the individualistic nature of bloggers, I was shocked to see how pessimistic the group was in general about the 3-year outlook for the U.S. economy, but I attribute that to their ability to see beyond both the headlines and the official statistics,” he says. “I was also heartened by the consensus for cutting payroll taxes and shifting the tax burden to consumption generally and gasoline specifically.”

Comments | Reprints | Share:          

It feels like the dawn of a new era. As of yesterday, Bill Gates is officially on Twitter, where he has already attracted more than 235,000 followers in the first day or so. Gates also just announced a new website, called the Gates Notes, where he will be sharing his thoughts (that extend greater than 140 characters) on what he’s working on and the societal issues he’s passionate about—global health, education, the environment, and so forth.

The Microsoft co-founder and chairman—also the co-chair and trustee of the Bill & Melinda Gates Foundation—has always communicated extensively through memos, speeches, and books. Now he will be using social media and the Web to reach an even bigger, more mainstream audience, and to impart his message on a wide range of global issues he’s dived into since leaving his full-time job at Microsoft in June 2008.

To me, this feels like a big deal—like social media has passed another threshold. Gates being on Twitter means even the world’s richest man cannot hide from this mode of interactive communication. The world’s most influential people can no longer operate solely behind the scenes. I don’t know about you, but I don’t necessarily want to know what Gates is thinking about on a daily basis. Part of what makes certain leaders special is that you don’t know what they’re working on all the time. In any case, let’s hope his Web writings truly reflect his personal views and analysis, and are not just the product of a finely honed advisory staff and PR team.

The Gates Notes site is currently divided into a number of nevertheless intriguing sections: “What I’m thinking about” (including ways to deal with carbon emissions through innovation in transportation and electricity); “What I’m learning” (including references to books by Vaclav Smil, a global energy and population expert); and “My travels” (including his impressions of health care in India).

Gates says the site is an extension of the annual letter he writes for the Gates Foundation—this year’s will be posted on Monday, Jan. 25. “I decided to write an Annual Letter because in 2008, Warren Buffett encouraged me to find a way to share my thinking more broadly about the foundation’s goals and to assess as frankly as possible our progress toward achieving these goals,” Gates writes on his site. “I wrote my first Annual Letter in 2009, and I have to admit I was surprised by the outpouring of interest after it was published.”

For a little more context, Gates’s introductory note on his new site reads, in full:

“Since leaving my fulltime job at Microsoft to dedicate more time to our foundation, a lot of people have asked me what I’m working on. It often feels like I’m back in school, as I spend a lot of my time learning about issues I’m passionate about.

“I’m fortunate because the people I’m working with and learning from are true experts in their fields. I take a lot of notes, and often share them and my own thoughts on the subject with others through e-mail, so I can learn from them and expand the conversation.

“I thought it would be interesting to share these conversations more widely with a website, in the hope of getting more people thinking and learning about the issues I think are interesting and important. So, welcome to the Gates Notes.”

And welcome to a brand-new era of transparency in thought leadership.

Comments | Reprints | Share: