She started her career as a management consultant, but Aubrie Pagano says she always knew she wanted to be an entrepreneur. And she was particularly energized by fashion.

So Pagano spent her free hours assisting local Boston designer Emily Muller in launching her collection, in exchange for the opportunity to get some firsthand experience in the independent fashion design space. There she discovered that designers face a particular challenge—one that would eventually inspire Pagano to create the e-commerce startup Zoora.

“Its hard for independent designers to scale because there’s a discovery issue,” says Pagano. “[Muller] has a great website buts nobody goes to it.”

And as a shopper, Pagano says she’s felt like she’s had to settle for a piece of clothing that just isn’t quite right. Women like her are the perfect customer base for independent designers, she says.

“Something that a lot of people don’t know about independent designers is that they’re really flexible,” Pagano says.

Just last Monday, Pagano opened the Zoora website to the public, to offer women clothing that they can customize to best fit their measurements and taste. Her hope is that the women who feel underserved by traditional retail will bring independent designers the traffic—and business—they so desperately need.

Zoora joins a booming cluster of Boston companies in the space of mass customization, where e-commerce platforms allow shoppers to select and tailor products to better fit their preferences. As my colleague Greg has pointed out previously, these companies offer shoppers personalized jewelry (Gemvara), bags (F. Rock), girls clothing (FashionPlaytes), men’s dress shirts (Boston’s Blank Label and Proper Cloth in New York), and even bras (Zyrra).

Pagano started working on Zoora (a name inspired by “misura,” the Italian word for measurement) last spring, and made hiring a head buyer her first move. Since then, the company has enlisted about a dozen designers (including Muller) to sell garments on the site with options for customization. Another designer is Althea Harper, a former contestant on the Lifetime show Project Runway. (Worth noting, New York fashion tech startup Send the Trend has Project Runway veteran and winner Christian Siriano on staff.)

The customizations to Zoora garments fall into two baskets, says Pagano: “made-to-measure adjustments” and “ready-to-wear tweaks.” With the first category, customers input their specific measurements, which designers take into account to create a garment that’s a perfect fit. With “ready-to-wear tweaks,” meanwhile, garments come in standard sizes, but offer different options for elements like fabric, necklines, sleeves, and hem length.

The Zoora team now consists of … Next Page »

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Seattle shipping startup EquaShip, which aims to save small and medium-sized businesses big bucks over UPS and FedEx, has hit a big stumbling block. The company is suspending operations to overhaul the way it routes packages in a bid to speed up delivery times.

The change is major—CEO Ron Wiener says it could take a year. Up until now, EquaShip has partnered with another company that funneled packages through trucking companies, who actually delivered packages. But that had been taking too long to get packages delivered, so EquaShip intends to take over the middleman duties itself when it relaunches.

The new version of EquaShip’s service should allow the company to actually offer more options for shippers, including same-day, expedited, and international service, while still offering lower rates than UPS and FedEx, Wiener says. Cutting out the middleman and taking over those duties itself “not only lowers our costs but allows us to pick our own local couriers and long-haul trucking companies, with more direct IT integration.”

EquaShip initially launched its service in October, just in time for the busiest shipping season of the year. Its target customers are mostly e-commerce merchants who spend $100,000 or less a year on shipping—the size of businesses that don’t typically get special rates or deals from the big shipping companies, who are concentrating on offering their best rates to larger customers.

EquaShip has raised $1.5 million from undisclosed angels and strategic investor Newell Rubbermaid, which sells shipping and mailing technology through one of its sub-brands. The new approach will probably take some additional fundraising, Wiener says.

Wiener says the company’s customers, partners, and investors, have been “universally supportive” of the rejiggering—although they’re understandably disappointed at the amount of time it might take to get things fired up again.

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At Xconomy’s event yesterday, New York’s Venture Emergence, members of Gilt Groupe’s founding team fascinated a standing-room-only audience with the tale of how, in just four years, they grew from a scrappy startup to one of the most successful e-commerce sites on the Web. Co-founders Alexandra Wilkis Wilson, who is one of our Xconomists, and Alexis Maybank insisted that one of the keys to their success is their close friendship. “Without our very strong relationship, we could have never gotten this business launched so fast,” Wilkis Wilson told the crowd.

But wait, doesn’t that advice run counter to what just about what every business expert says? One should never work with family or friends, right? Wrong, say the Gilt Girls. In fact, they’re so confident in the mixing of friends and business that they co-wrote a book about their entrepreneurship experience, By Invitation Only: How We Built Gilt and Changed the Way Millions Shop, which will be released in April.

The book’s title is partly a reference to Gilt’s business model: It sells fashions, home décor, and travel services in limited-time “flash sales” to people who are invited to be members on the site. But it’s also an apt description of how the co-founders have managed the business from day one—with a strong focus on making sure they have the right people in place to manage a high-growth startup.

Wilkis Wilson and Maybank have been together through both good times and bad. The good: They’ve raised about $218 million in venture capital and are widely expected to pull off a successful IPO later this year or early next year. The bad: Gilt confirmed last week it was laying off 90 people and embarking on a restructuring.

In a chat with Xconomy after their panel presentation, Maybank and Wilkis Wilson downplayed the bad times. “We scaled this business so quickly from zero employees to 900,” Maybank said. “Internal restructuring is part of the normal process in a fast-growing business.” As for how their friendship has helped them endure the ups and downs of entrepreneurship, Wilkis Wilson said … Next Page »

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After previewing its expansion plans last summer, San Diego’s EvoNexus, the free startup incubator established by the non-profit technology group CommNexus, has opened a newly renovated downtown office space. A dozen early stage companies began moving into the incubator Monday.

CommNexus founded EvoNexus in 2009, when San Diego’s innovation economy was reeling from the Great Recession. The incubator has taken in 14 companies so far, including six that have moved out of the EvoNexus incubator in University City. Office space, utilities, and other services are provided to startups free of charge, and companies leave with no obligations to EvoNexus or CommNexus.

“As far as we know, we’re the only pro bono incubator in the country,” EvoNexus chairman Kevin Hell says in a statement issued late yesterday. “The goal is to grow sustainable tech companies and expand the industry here in San Diego.”

When the EvoNexus incubator first opened in Sorrento Valley, organizers said they wanted to host startups developing advanced communications technologies, including wireless life sciences and smart grid networking.

Since then, CommNexus moved EvoNexus to University City and broadened its criteria. The industry group established the new downtown EvoNexus to host startups that are focused primarily on developing Internet software, Web services, gaming, social networking, and cloud computing technologies. The privately held Irvine Co. made the 15,000-square foot space available to EvoNexus at no cost. The incubator takes up an entire floor of the building at 101 W. Broadway, known locally as the AT&T building.

Hell says he sees parallels in the downtown San Diego locale with San Francisco’s SoMa, the downtown neighborhood South of Market Street that has become a magnet for social media startups and mobile app developers. The nightlife, housing, and amenities available in San Diego’s city center should appeal to young entrepreneurs, Hell says.

CommNexus plans to continue to operate its incubator in University City. The 12 companies in the new downtown space are:

Antengo: Real-time mobile classifieds.

BigSho: Social webcam game show.

Chatmeter: Online reputation management.

Fashioning Change: Shopping experience for eco-friendly apparel.

Saambaa: Social media app for finding things to do.

SwoopThat: Online textbook shopping by course.

TapChow: Cloud-based restaurant experience manger.

Taphunter: Mobile app for locating places that serve craft beer.

UgliApps: Mobile apps focused on food.

Voluware: Saas healthcare information software.

Xpenser: Web-based tracking of business expenses, time, and mileage.

Zambig: Web-based service that provides online outlet for radio ads.

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Slice, the online purchase-tracking site backed by heavy hitters including Google executive chairman Eric Schmidt and Playdom founder Rick Thompson, started as a research project. While looking for a new business venture, company founders and Scott Brady, Harpinder Madan, and Eric Botto took a close look at the e-commerce industry and the massive amount of information that is sent back to consumers after they purchase goods online. In their research and in conversations with consumers, they found that there was a real need for a service that could organize information about purchases from many different companies in a smart, informative way.

“If you’re shopping and trying to remember, ‘What size did I buy my nephew last year?’ it’s just virtually impossible to find,” says Brady, the company’s CEO. “While e-mail is a great place to store and receive this info, it’s just not a good tool for accessing and actually acting on the data.”

The founders set out to build a tool that would organize the information, showing consumers not only where their packages are and when they’re expected to arrive, but also what’s in them, how much time they have to return the goods, and contact information for the retailer. The company partnered with Yahoo Mail to build a tool that Yahoo’s users could use to track the goods they bought online. “The goal was to bring together some of top semantic scientists and build series of algorithms that could extract information from e-mails and give it to users in a very useful format,” Brady says.

While it sounds like a simple service, building the algorithms that could pull important information from a confirmation e-mail from say, Amazon or the Gap, required some complicated engineering, and some time.

“We actually tapped into some of the latest the latest natural language processing and semantic algorithm technology to be able to do this,” Brady says. It took the company 12-13 months—and patient investors—”to create a scalable infrastructure that allowed us to do this in a scalable way.”

They also had to make sure they had “bank-level” security in place to ensure that consumers—and e-mail platforms—felt safe handing over personal data.

Initially, the founders funded Slice themselves, but in May, Slice completed a $9.4 million Series A funding round lead by Lightspeed Venture Partners and DCM.  Michael Birch, Rick Thompson, Eric Schmidt’s Innovation Endeavors and Floodgate Fund also invested.

The next month, Slice and Yahoo Mail started rolling out an app called All My Purchases to the e-mail provider’s 93 million U.S. users. In October, the company launched a standalone product, making Slice available to Gmail customers, and by November the company had already released an app for iPhone, with an Android app to follow shortly (it’s currently in testing).

So far, the free service has already tracked more than 10 million purchases from nearly 2,000 different merchants, and its users have been very vocal about feedback. The company has edited design elements and added features based on the desires of its consumers, including a notification when the price of a product drops after purchase, so users can potentially get a price adjustment. They also add new merchants to the service in response to user requests, and now also track receipts e-mailed from in store purchases.

As more and more retailers—including The Gap, Nordstrom and Anthropologie—begin to give customers the option of electronic receipts instead of handing over the paper version, Slice will be able to track a greater percentage of American commerce. “What’s fascinating to us is that when we first looked at this problem we were anticipating 8-10 billion e-mails sent annually, but if you extrapolate this out based on growth of in-store receipts we can expect to see tens of billions of these electronic receipts,” Brady says. Even grocery stores are getting in on the game, which adds the potential for … Next Page »

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When New York-based e-commerce site Totsy raised a $5 million Series A in late 2010, the startup gained the expertise of two of New York’s best-known venture capital groups: Rho Ventures and DFJ Gotham Ventures, which led the round. Since then, the site—which holds limited time “flash sales” of merchandise for parents and children—has grown exponentially. Within a year of the funding, monthly revenues were up 3,000 percent, according to the company, and the number of brands willing to sell on Totsy’s site had grown from 96 to 500.

A source close to Totsy says the company is currently in the process of raising additional funding.

Daniel Shultz, co-founder and managing director of DFJ Gotham (pictured at right), is a member of Totsy’s board of directors, and a key advisor to CEO Guillaume Gauthereau (at left). The company has recruited marketing talent from the likes of FAO Schwartz and 1800FLOWERS.com. Now the management team is gearing up for the next stage of the company’s growth, which will require them to deftly navigate a rapidly expanding and extremely competitive e-commerce environment. In August, Totsy’s top competitor—Seattle-based, mom-friendly site Zulily—raised $43 million in funding. But the explosion of new e-commerce sites has sparked a fair amount of consolidation: In the fall, for example, flash-sales site Gilt Groupe bought struggling daily deals site BuyWithMe.

Shultz and Gauthereau sat down with Xconomy New York last week at the offices of DFJ Gotham to talk about e-commerce strategies, and what it will take to keep Totsy at the top of the pack.

X: The flash-sales category is very crowded, with players such as Gilt Groupe, ideeli, and Rue La La. How was Totsy designed to stand out from the competition?
GG: When we started we went for a very difference audience. We weren’t targeting the woman living in the rich neighborhood in Boston. We were approaching every single mom. From day one we had the vision that we believe every woman in the country is going to buy something in a flash sale at some point. So we went broad. The second element is that we tried from day one to be representative of everything you buy. I would say 70 or 80 percent of the sites are about what you wear. We believed that was part of what we should do, but it should not be the only thing we do.

X: How did Totsy connect with DFJ Gotham, and what made it a good marriage?
GG: We felt we wanted a local partner in New York City because we are based here. And New York is becoming one of the great cities for online retail. We thought that DFJ Gotham really understood our space and had great insights on our vision. When I looked at DFJ Gotham’s investing track record I thought, “they see what’s coming up next.” We want to benefit from that.

DFJ Gotham has been able to connect us to a few interesting companies in their portfolio, like StellaService, which is becoming really big in the consumer space. They’re benchmarking customer service practices. DFJ also has an investment in a company called SailThru. They have an e-mail marketing platform that reacts to behavior. It looks at what time you open your e-mail, when you read it, what articles you look at, and instead of sending you the same e-mail as everyone else, it sends you something personal. The products might be different, or you might receive it later because you don’t open your e-mail until 10 p.m. Now we’re on contract with both SailThru and StellaService.

DS: We’re not only investors in sites like Totsy, but we like e-commerce infrastructure and enablers, as well. SailThru and StellaService are not destination sites, but they enhance the performance of them, or they enable better conversion of customers on e-commerce sites.

X: But there are so many e-commerce companies popping up now, particularly in New York. How does DFJ Gotham predict which ones are likely to rise to the top?
DS: There has to be a certain amount of moxie and bravado coupled with some realism and tactical ability. It’s hard to find that combination. In the case of Totsy, we really tracked the business. We looked at potentially participating in the seed round, but we felt we had our work cut out for us … Next Page »

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I guess Werner Vogels changed his mind. Amazon.com’s chief technology officer told me a couple years ago that his company had no intention of opening a Boston office. MIT engineers, he said, had no problem moving out west to Seattle to join the e-retail technology giant. I thought that was kind of strange, but Amazon has always done things its own way.

Now it appears the company (NASDAQ: AMZN) is about to establish a beachhead in Cambridge, MA. According to a report by Scott Kirsner in Boston.com, Amazon is in the process of hiring engineering and research talent and is looking for about 40,000 square feet of office space in the Kendall Square area, slated to open in February. The company has not confirmed any of this publicly, and will probably try to keep it quiet as long as it can. Kirsner speculates that the timing might have to do with changes in sales tax laws.

We’ll have more on this developing story as details surface. If the report is accurate, the impact on the Boston area, and Kendall Square in particular, could be really significant.

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Holiday shopping season is a fun time of year for a company like Daily Grommet. The Lexington, MA-based Web startup finds unusual consumer products and tells a story about one such “grommet” each day through videos and text.

This week I touched base with founder and CEO Jules Pieri, who shared some info with me on the top-selling grommets of the season so far. As someone who hates holiday commercialism, but likes warm puppies and weird gadgets as much as the next guy, I found the range of items available on the site pretty enlightening.

So in case you’re looking for an unusual-yet-personal gift for that special someone, you might want to browse around the Daily Grommet site, which includes product categories like home, food & drink, health & wellness, and green & eco-living. Sounds pretty standard, but the products you’ll find there are anything but.

Here are some examples of bestsellers (and links to the story behind each item):

—Sugru, a kind of hacking putty for real-world stuff (“fastest Grommet out of the gate, in history,” Pieri says).

—Urban Cheesecraft, which sounds like slang or euphemism but is actually just a handy cheese-making kit.

—Soggy Doggy, a super-absorbent doormat/shammy for dogs.

—Picture Keeper, an elegant way to grab and store photo libraries from your computer.

—Ila Security, a small, portable security-alarm device, like a personal panic button (good for long board meetings).

—Drawer Décor, a custom drawer organizer for kitchen supplies and other goods (mundane but useful if you don’t like clutter).

Good luck with the shopping, readers. I’ll probably see you online.

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As company “announcements” go, this one barely qualifies. Bango, a UK-based provider of mobile billing services, says it has “signed an agreement to provide services to Amazon.” And that’s that. But it actually says a whole lot.

It’s pretty easy to guess what Bango’s providing here—most likely, it’s in-app payments for the Kindle Fire, Amazon’s new color touchscreen tablet device. The Fire was unveiled in late September and started shipping in mid-November. But it’s still not a complete device, at least from a developer’s perspective.

Of course, there are hardware limitations—the Kindle Fire doesn’t have GPS, a camera, Bluetooth capability, and several more features you’d expect to find on most tablets. But perhaps more significant is the fact that the Kindle Fire’s version of Google’s Android operating system doesn’t allow access to Google Mobile Services—a suite that includes Google’s in-app payment service.

Without that capability, app developers lose a big means of making additional money on their app downloads, such as selling premium content for a game.

Amazon’s Q&A site for developers has said for months that the company is “working on a solution that will let you sell digital content in your apps using Amazon’s merchandising and payments technology. Our solution is currently in beta and available by invitation only.”

Amazon clearly needs its own in-app payment structure—why hand that over to Google when your bottom-line business is retail? But it seems a little shocking that a company already processes an ungodly amount of payments online couldn’t figure out a mobile app payment system before its new product hit the streets.

Which brings us back to Bango. The company is publicly traded on the London exchange, and a big player in mobile payments—name-brand clients include Research in Motion and EA Mobile gaming.

And while Bango’s statement on the Amazon deal was only three sentences long, Bango’s website is a font of information about its current offerings, which include payment systems that work with a user’s phone bill, a credit card, or PayPal.

Some others writing about this deal have fixed on the idea that a deal with Bango means Amazon could be heading toward billing app store purchases through a user’s monthly phone bill.

I guess that’s possible. But it seems kind of odd to think that Amazon move into the device market itself just to hand off the payments to the wireless carriers. The Kindle Fire’s wifi-only, after all. And remember, for Amazon’s purposes, it’s not a tablet so much as a portable storefront.

Bango has been expanding its footprint as well. In its recent midyear report, Bango touted its “continued product development to broaden the types of transactions passing through the Bango Payments platform, including optimization for the Android platform, development of a cloud based offering and the launch of HTML5 based products.”

I’d say it’s more likely that Amazon is using partnerships like this to build its own in-app payments system that links directly to an Amazon user account. If Amazon really wanted to fork over all that payment data to someone else, then why wouldn’t it have a Kindle Fire payments system when the product was introduced?

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Just five months after raising $8 million in a Series A funding round, New York-based daily-deals site Fab.com announced it has brought in a $40 million Series B. The funding was led by Andreessen Horowitz, with participation from existing investors Menlo Ventures, First Round Capital, Baroda Ventures, SoftTech VC, and actor Ashton Kutcher’s A-Grade Investments.

The company was founded nearly two years ago as Fabulis and has spent much of this year repositioning itself as a place for consumers to buy well-made items with high visual appeal. The current incarnation of Fab.com went live in June offering deals on high-end furniture, décor, apparel, and accessories.

Fab.com says it plans to use the funds to make new investments in operations, technology, social commerce, and product expansions.

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LivingSocial will skip the IPO and get acquired. Hundreds of smaller daily deals startups will shut their doors. Groupon’s special product offerings will crash and burn.

Those are among predictions for 2012 from Seattle’s Tippr, a daily deals startup that focuses mainly on offering white-label services to publishers that want their own discount brands.

Headed by CEO Martin Tobias, Tippr has taken a pugnacious approach to its competition in the bubbly daily deals sector, unafraid to call out the big names or use its Paul Allen-sourced patent portfolio to wage court battles and takeovers. Not surprisingly, Tobias’s predictions for the year ahead in daily deals reinforce his own position—that standalone consumer brands are hard to build and unsustainable, and partnering with dedicated publishers is the place to be.

So apply that filter when assessing Tippr’s 2012 prognostications. But recall that, with the astronomic ascendance of Groupon (and the whole sector) in the past year or two, there’s going to be plenty to watch in the months ahead—and these guesses are probably as good as anyone’s, if not better:

• LivingSocial Will Be Purchased
In September, it was rumored that the No. 2 daily deals brand behind Groupon (NASDAQ: GRPN) would shelve its IPO ambitions amid a slack market and seek more private fundraising instead. Tippr’s Tobias says that pattern will hold, and LivingSocial—whose investors include Amazon.com—will tie up with “a major e-commerce player. By merging with a company backed by both a large Rolodex and bank account, LivingSocial will be poised to successfully leapfrog Groupon and render it a mere also-ran in the daily deals landscape,” Tippr says.

• 200 Groupon Clones Will Bite the Dust
Even after a wave of consolidation and continued battles for third place and beyond, Tippr says there are still more than 600 companies in the group-buying sector. That means consolidation will continue. Data from the industry aggregator Yipit pegs the number of failed deal sites this year at more than 170, and Tippr predicts that more than 200 will go down in flames in just the first half of 2012.

• Year of the White Label
Tippr shifted its primary focus to providing white-label services to online publishers earlier this year, and Tobias previously told us about his bullish bet on that approach—lower (or nearly zero) costs to acquire an audience being a big part of the calculation. So it’s no surprise that he thinks next year will be the prime time for providers chasing that model. Tippr says that in 2012, white-label providers could make up about 20 percent of the market.

• Branded Sites’ Futures: Instant Contextualized Deals
Also along the lines of the deals-as-a-service idea articulated above, Tippr says the big-name providers Groupon and LivingSocial will find profitability—but only after they start pairing their discounts with relevant content of other types, rather than building standalone commerce brands. Tobias says that Google, Facebook, and other big-audience players will come at this problem from the other end of the spectrum, adding deals in context with the content they already have.

• Lacking Loyalty, Groupon Goods Will Come to a Dreary Demise
Groupon’s foray into direct e-commerce, Groupon Goods, doesn’t have a very bright future in Tippr’s eyes. Tobias cites research from Forrester that suggests a plurality of customers would buy a given good at full price anyway—hinting that those shoppers aren’t loyal to the Groupon discount, but more to the product. “Merchants, lacking the customer acquisition required to justify the steep discounts, will opt out of the site’s partnerships,” Tobias predicts.

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EquaShip, the Seattle startup that’s aiming to wrangle dramatically cheaper shipping costs for small and medium-sized businesses, has added another $600,000 in financing from undisclosed investors. That pushes the startup’s total funding to $1.5 million, following the announcement of a $900,000 investment in June.

EquaShip rolled out its service in October, targeting the small sellers—many of them doing business on eBay and Amazon—who don’t get big-account treatment fro FedEx and UPS. Founder and CEO Ron Wiener says there are millions of those businesses around the country, and EquaShip says it can offer them rates that are “typically 28 percent to 79 percent below UPS and FedEx residential ground rates.”

EquaShip does that by partnering with smaller carriers, who funnel packages through the U.S. Postal Service for final delivery—what’s known as a consolidator service. EquaShip also offers package tracking and insurance. The company plans to use the new investment to add software features and drop-off locations.

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In the long-running debate over online sales tax laws, one of the most laughable ideas has been that calculating sales tax rates all over the country is somehow a difficult job for big e-commerce companies like Amazon.com.

You know, the same company that adds enough servers every single weekday to run a circa-2000 version of itself. The same company that knows every item I’ve ever perused, and can tell me what fellow shoppers bundle and buy. The same company that gives away streaming movies and takes a loss on full-color touchscreen tablets just to get people in the buying mood.

But that’s been the basic argument against various cash-starved states’ attempts to pass “Amazon laws” deputizing online retailers as new tax collectors. A longstanding U.S. Supreme Court decision, enacted before the Web was a force in retail, held that figuring out sales tax rates for thousands of jurisdictions nationwide would put a burden on interstate commerce. And that is something only Congress is allowed to do.

That could be happening sometime soon. As we’ve discussed, Amazon is putting its weight pretty heavily behind a new online sales tax system being debated in Congress. The latest evidence of the Seattle company’s dedication was on display today, as VP Paul Misener testified at a U.S. House committee hearing on the issue.

In his prepared remarks, Misener acknowledges the obvious fact that software has solved the problems with national sales tax collection: “With today’s computing and communications technology, widespread collection no longer would be an unconstitutional burden on interstate commerce, and Congress feasibly can authorize the states to require all but the very smallest volume sellers to collect.”

He also shouts out Avalara, the Bainbridge Island, WA-based company that has been a leader in supplying online sales tax software to retailers, particularly small and medium-sized sellers. As CEO Scott McFarlane recently told me, all the talk of sales tax collection being some kind of unfathomable dark art is frustrating for the entrepreneurs trying to solve the problem.

“What chafes me is when people say that there’s not a solution out there, it’s too hard. The reality is, it isn’t. It’s a statutory requirement. We have the technology,” McFarlane said.

It’s encouraging to see so much progress being made on an issue that’s lingered, probably needlessly, for so long. Amazon’s sometime foe at the National Retail Federation, which represents a lot of the big brick-and-mortar retailers, also is behind the recent push to enact a national online sales tax system.

The fight for now seems to be over which businesses to exempt from such a system. The bill Amazon’s supporting gives a pass to sellers making less than $500,000 a year in revenue, and Misener’s testimony calls out $150,000 as an even better figure. eBay, in its own testimony today, wants a much bigger small business exemption—eBay’s Tod Cohen threw out several suggested thresholds, from $5 million up to $30 million.

There is the matter of a little election about a year from now, which could see big changes in who’s in charge over in the other Washington. It’s not clear whether this issue will be resolved before the political climate gets hot and heavy—if you were running for re-election, would you want some opponent running ads about how you voted for an Internet sales tax?

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Serial entrepreneur Ric Calvillo had planned to stay away from enterprise customers with his newest venture. He’s now CEO of Nanigans, a Boston-based startup that offers a Facebook advertising platform for enterprise customers with a couple thousand dollars to spend a day on online ads. Oops.

“We’re scaling right now with large accounts,” he says. “That’s exactly what I didn’t want to do”

Calvillo has twenty-plus years starting and running infrastructure software companies, like Conley, which sold to EMC in 1998. His last venture before Nanigans was Incipient, a company that sold its data storage virtualization and migration software largely to enterprise customers in the financial services space. “I picked financial services at the worst possible time,” says Calvillo. The startup, which raised $95 million in venture capital, struggled to gain traction and sold its intellectual property assets to Texas Memory Systems in 2009. Hence his resistance to the enterprise world.

Nanigans’ big customers aren’t huge financial firms, but companies in the fashion e-commerce, social gaming, and deal-a-day spaces, says Calvillo.

After getting out of Incipient, Calvillo says he spent time thinking about the next software space to play in. Cloud, SaaS, and social all came to mind, he says. Nanigans starting buildings its ad platform code (off of the Facebook Ads application programming interface) in November 2009 and incorporated in 2010.

“There’s a lot of room for innovation in the advertising optimization area in social,” he says.

Part of that optimization is “closed-loop feedback,” says Calvillo. Online ads can be tracked to see how they lead to actions like attracting new fans for a brand’s Facebook page or prompting customer purchases. But that feedback wasn’t being used to inform and adjust future ad spend on Facebook, says Calvillo. And that’s what Nanigans is looking to change.

Nanigans’ product, called Ad Engine, first measures the success of an ad campaign, then uses that information to automate decision making, like how much to spend on an ad bid and which audiences to target. The software can use historical data to determine how much a click on an ad should be worth in the future. And it can decide which Facebook users to put ads in front of based on variables like age, location, and likes on users’ Facebook profiles.

Nanigans is looking to take the human grunt work out of monitoring and optimizing Facebook ads. The engine only requires a person to input the ad graphics, their total budget for a campaign and daily maximum spend, and a genre for their product. “The system knows similar campaigns we’ve run, what are good audiences, and what audiences do we have that are known to work for those genres,” says Calvillo. It uses this information to plug the ad into the feedback loop and constantly optimizes based on the information and predictions it generates.

And Nanigans isn’t just making those predictions and changes based on how many clicks an ad gets, but how … Next Page »

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In a remarkable test of will, I’m going to avoid any Thanksgiving-related puns and just dive straight into this wrapup of the past week in Xconomy Seattle’s tech headlines, covering everything from Black Friday shopping apps to the latest rumblings of possible doom from a local wireless company.

—The crew at Seattle startup Decide made the obvious leap into a full mobile app, released just as bargain-hunters were warming up for the holiday shopping frenzy. Decide is among several sites that help consumers decide whether to buy electronics, or wait for a better price. But the company, co-founded by University of Washington search expert Oren Etzioni, takes things a significant step further by employing a sophisticated price-prediction technology.

—I profiled Avalara, a Bainbridge Island-based company that sells web-based software to help merchants calculate and pay sales taxes. That’s a complicated task, with some 11,000 taxing districts of all shapes and sizes littered around the country. Avalara’s been posting impressive growth numbers, and the trend could continue as Congress, Amazon, and traditional retailers try to hash out a deal over charging sales tax on more online purchases.

—Xconomy’s Greg Huang brought us the scoop on a speech by all-star investor Brad Feld, who told entrepreneurs and angel investors at Microsoft‘s NERD Center in Cambridge, MA, that product and people should be their main focus. Feld is the co-founder of TechStars, a startup bootcamp program with a branch in Seattle. He’s also a board member and investor, through the Foundry Group, in Seattle startups BigDoor Media and Cheezburger Network.

—I looked at a recent tactical shift made by MiNeeds, a Seattle-based site that pairs users up with local service providers who bid for their business. It’s a relatively active area for Web companies to target, but MiNeeds thinks it found a significant edge in the wedding market when it decided to break those services out from the plumbers and carpenters and house painters on the main site. That was something the co-founders resisted—but, as good data geeks, they changed their minds after testing showed it was the right move.

—PaperShare opened up its doors to the public—or at least the cloud computing and virtualization slice of the public. The startup, headed by longtime server computing consultant Doug Brown and former Microsoft virtualization director David Greschler, is a new twist on the sometimes ancient websites that many professionals still use to spread technical info and industry insights.

—And finally, we had some contrasting bits of news: Clearwire, which is trying to simultaneously slow its losses and raise money for a network overhaul, publicly said it would consider delaying a big debt payment. Shares, of course, took a beating. On the other hand, Ignition’s Frank Artale led a $15 million investment in ServiceMesh, a cloud platform company in Santa Monica, CA.

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New York’s Hunch, which uses its technology to provide data insights on what consumers want, said on its blog Monday that it was acquired by online auction heavyweight eBay (Nasdaq: EBAY) in San Jose, CA. Financial terms were not disclosed by the companies. However, reports valued the deal at $80 million.

EBay says it plans to use Hunch’s technology, which uses algorithms and input from the users’ friends via social networks to offer recommendations, to suggest new items to eBay customers.Two-year-old Hunch says it will retain its standalone website, keep its entire staff, and remain in New York. Hunch lets users share and receive recommendations based on their individual tastes in products. Hunch’s investors include Bessemer Venture Partners, General Catalyst, Khosla Ventures, and individual investor Ron Conway.

In a press release, eBay said that Hunch’s co-founders Chris Dixon, Matt Gattis, and Tom Pinckney will stay with the company. Gattis and Pinckney are alums of MIT. CEO Dixon is a co-founder of Founder Collective and previously worked at Bessemer Venture Partners.

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Three quick items from around the Seattle-area tech scene this week:

—Clearwire (NASDAQ: CLWR) shares have fallen sharply again on word from new CEO Erik Prusch that the Kirkland, WA-based wireless provider could skip an upcoming debt payment. Prusch discussed that possible step in an interview with The Wall Street Journal.

The Associated Press and ZDNet quote separate industry analysts’ reports with somewhat contradicting takes on the news: Optimism that majority shareholder Sprint could kick in much-needed cash, and skepticism that Sprint would pay up unless there’s some sort of restructuring.

The math is pretty clear: At the end of the third quarter, Clearwire had about $700 million in cash and about $4 billion in long-term debt. The $237 million payment in question is due Dec. 1, although there is a 30-day grace period.

—Frank Artale of Ignition Partners led a $15 million investment in ServiceMesh, a provider of cloud-computing platforms for businesses. As VentureBeat reports, Santa Monica, CA-based Service Mesh had been self-funded up until the Ignition-led investment.

It’s one of many cloud-computing investments we’ve seen this year from Artale, who has long experience in the sector as an entrepreneur, executive, and investor. Check out this profile I did in July, just before the flurry of announcements about Artale’s investments started hitting the news.

—Seattle-based startup Zoomingo, a new venture by the co-founders of language learning service Livemocha, raised $1.3 million from Naya Ventures, Benaroya Capital, and angels. Zoomingo is building an application and retailer platform that can deliver advertising and sales to consumers on mobile devices.

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When the ex-Microsofties behind local services site MiNeeds thought about expanding their business, they got what seemed like weird advice. They had built their company as a resource to help people connect with service providers like plumbers, painters, accountants, and more. But when they looked to expand into wedding services, they found a niche that didn’t think it should be lumped in with all that other stuff.

“The feedback was very strong, very consistent, and clear: I love this experience, but I need it to be beautiful and I want to feel it,” co-founder Raed Malhas says. “I’m planning my wedding. I don’t want there to be a carpenter there.”

Like typical guys, Malhas and co-founder Deniz Erkan thought that was nuts. We’re trying to build a strong brand name here! Why would we fragment our audience?

Raed Malhas

“Then we said, ‘You know what? We’re very data-driven,’” Malhas says. “We have a philosophy in this company: It’s not my opinion or your opinion. Let’s let the data decide.”

So they tested the idea with a wedding services site that had a special look and feel, and the results were basically a slam dunk. Conversion rates of people coming to the site for wedding services doubled, and MiWeddingNeeds was born. Even after a very quiet debut in February, some 5,000-7,000 brides per month are coming to the site to help plan their big day.

If MiNeeds does its job right, a good chunk of those brides-to-be could become repeat customers. More than a quarter of them are already searching for honeymoon packages to add on after the wedding, Malhas says. And it’s obvious where things go from there.

“Suddenly, she starts to think about the mortgage,” Malhas says. “When she comes back from the honeymoon, she starts looking for home-related services.” Baby-related services might not be too far behind. “The lifetime value of that bride is massive,” he says.

That success is a big part of why MiNeeds sees a bright future for its twist on local services search. The startup lets consumers post the services they want performed and gets professionals to bid for the business, offering up reviews and ratings to help make the choice. Outside of the wedding vertical, the startup still maintains its standalone site for all kinds of services, from photographers to house cleaners to lawyers. Investors include Paul Thelen, founder of Seattle’s BigFish Games, and former Yahoo chief data officer Usama Fayyad.

The company is definitely not alone. There are several other players in the sector, including membership-based service reviews site Angie’s List, which just raised more than $100 million in its public stock-market debut. Other companies like San Mateo, CA-based startup Redbeacon or ServiceMagic, a unit of media conglomerate IAC, use a similar mechanism of letting professionals bid for consumer jobs.

MiNeeds claims more than 50,000 service providers have signed up so far to bid for jobs through its website. Servicemagic claims more than 80,000, and Malhas says Yellow Pages has in the neighborhood of 800,000. But MiNeeds seeing strong growth and should have more than 100,000 professionals signed up by early 2012, Malhas says.

“Once we go over six figures in terms of professionals, we’re no longer a small player. Even today, I’m sure people are eyeing us and thinking, ‘Who are these guys?’” Malhas says. “Once we’re over six figures, it’s at a point where they can no longer ignore us.”

MiNeeds, which has offices in Seattle and New York, is generating revenue but focusing on growth over profitability, Malhas says. The service is free to use for consumers and free to join for service providers, but MiNeeds requires a paid subscription from the skilled professional to actually communicate with possible customers. Prices are tiered, from about $25 to $100 per month.

As for the possibility of other verticals to follow the wedding example, Malhas says MiNeeds has hedged its bets by securing domain names and doing some preliminary research. So far, shopping for home or legal services, for instance, may not require a special site. But they’ll keep their minds open this time.

“Looking at the data there, it does not seem that we need to have a white label for each of those industries,” Malhas says. “Then again, I might be completely wrong, and it might be worth launching it to see the conversion rates.”

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You’ve really got to feel for people working in the retail trenches this time of year. Not only are they getting ready to deal with a blitz of savings-crazed shoppers, they now have to contend with smarty-pants consumers who can aim their smartphone at any piece of merchandise to see if that holiday deal really is as good as advertised.

One Seattle startup is upping the ante even further. Starting Thursday, Decide is offering its sophisticated price-prediction service for consumer electronics through an iPhone app. And it’s expanding its catalog to include dozens of new products, from tablets and e-readers to headphones and video games (Decide already was predicting prices for TVs, smartphones, cameras, and laptops).

There’s no shortage of ways for scanning barcodes or simply searching for products to see how an in-store price stacks up against the competition. Other startups, including locals like Shopobot and Loottap, are also working on ways to better track retail prices.

But Decide takes things a significant step further by actually using statistical analysis and deep data mining to predict whether prices are going to rise or fall, or whether a newer model of a gadget is coming out soon.

This may sound familiar to anyone who remembers Farecast, a Seattle company that predicted when airline ticket prices were going to change. Farecast was acquired by Microsoft for use in its Bing travel search, and some of the Farecast folks have now taken the technology to consumer electronics shopping with Decide.

(Side note: As someone recently pointed out to me, how in the hell did a startup—much less one that has some Microsoft DNA—manage to get the Decide.com domain name when Bing’s actual slogan is “Bing and Decide”?)

That kind of technical and entrepreneurial pedigree—one of the founders is University of Washington search guru Oren Etzioni—means Decide is not just another e-commerce startup. While their current quarry is gadget shopping, the technology behind Decide actually helps point the way toward the future of search in general, where users might be able to ask questions, get predictions, and find more intuitive answers.

Mike Fridgen

In the meantime, there’s the holiday shopping season. Decide CEO Mike Fridgen says that this year is the prime time for consumers to get even more empowered about finding the best deal. He cites this report by RSR Research, which found that 43 percent of retailers surveyed intended to match, beat, or compete with prices that consumers found by searching with smartphone apps (another 43 percent in that survey said they weren’t even familiar with the concept yet).

“We really feel like this year is going to be the tipping point for people using mobile devices to shop in stores,” Fridgen says.

Decide also has a bit of advice for the after-Thanksgiving shopping frenzy: When it comes to consumer electronics, shoppers might want to avoid the crush of humanity at the door-buster sales and be cautious of early online promotions. Consumer Reports tapped Decide to analyze prices of its recommended laptops, cameras, and TVs during November and December of 2010, and found that the best deals on those models were often found after the Black Friday and “Cyber Monday” promotions that follow Thanksgiving.

“Really, your best strategy when it comes to buying electronics is to sleep in on Black Friday,” Fridgen says. Fridgen also notes that consumers should watch out for rapidly obsolete gadgets, since the new year might bring new models, making could even the cheapest buy you picked up over the holidays seem like a bum deal.

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Looks like Amazon’s pugnacious bet on national sales tax reform is paying off.

The Seattle company (NASDAQ: AMZN) says it is strongly supporting a proposed national law that would force online retailers to collect local taxes on more of their sales, ending a longtime loophole originally meant to help catalog businesses. The National Retail Federation, which has battled with Amazon on the sales tax issue, also is on board with the bipartisan Senate proposal announced today (the federation represents lots of brick-and-mortar retailers).

So how’s that a win? Amazon has gone to some pretty extreme lengths to avoid being deputized as a tax collector for state and local governments, insisting that its shipping centers are different companies and even shutting down entire networks of third-party sellers when state lawmakers pass “Amazon tax” bills.

That behavior has caused a lot of turmoil for the ecosystem of smaller businesses that rely on Amazon. One example is the story of Shopobot, a comparison-shopping startup that relocated from the San Francisco Bay Area to Seattle earlier this year specifically because Amazon axed its affiliate program in California.

But Amazon has said for a long time that it favors a national solution, rather than a hodgepodge of different state rules. Specifically, the company has supported something called the Streamlined Sales Tax project, in which states agree to a common set of sales tax definition and practices.

The common standards are important because each state taxes things differently—sometimes wildly so.

Cue up today’s bipartisan Senate bill, which uses the Streamlined Sales Tax program as a centerpiece of any national tax system for online sales.

So, while any retailer would certainly enjoy the fact that it didn’t have to act as a big tax collector, and could price its products a little better to boot, Amazon clearly knew the days of tax-free Internet sales weren’t going to last forever. It placed its bet on a national system, and made some pretty belligerent moves to reinforce that preference.

And it looks like that strategy is paying off.

There’s no guarantee that this bill will actually become law, of course—the federal lawmaking process is both arcane and volatile, and any tax vote will be a tough one in this economic climate. But it’s got a lot of the hallmarks of something that could pass.

An interesting side note: Shoppers in Washington state already pay sales taxes on Amazon purchases, because the company’s headquarters are here. But the state also says it’s only collecting taxes on about half of the online and mail-order purchases by people living here, and that adds up to some big numbers.

If the new Senate proposal becomes law, Washington officials estimate that state and local government treasuries could raise about $242 million annually. That comes at a time when the state has been cutting billions from spending on education, health care, and other expensive government programs.

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