Startable – Healy Jones’ & Prasad Thammineni’s Blog

A really great startup investor and CFO, Mark MacLeod, recently let me know that his fund, Real Ventures, is hiring for a junior VC.

You want to work there. Click here for access to the entire job description and to apply. I’m not at all involved in the hiring process, so don’t email me your resume or anything. If I was a little younger and not currently having a ton of fun with OfficeDrop I might apply myself! And I’d finally get to use my French language skills in a business context…

Here is a little bit about what they are looking for, from the job description on their site:

Preference for someone with a technical or software programming background

- Strong excel modeling skills a plus

- Bilingual (French / English) a plus

- Strong analytical skills

Ideal Person:

- Excellent communication & listening skills

- Creativity and high energy

- Aggressive, self starter

- Passion for new technologies – an active user of web and mobile applications

At the Associate Level (additional requirements):

- Previous experience (~2 – 4 Years) in a venture backed or private equity / venture capital role. Must have some prior equity based transaction experience

- Thoughtful about the ever changing web and mobile landscapes

- Strong network in the startup World

Microsoft Office 365 launches tomorrow, and now that I see the marketing video I think that the Skype acquisition makes a lot more sense.

Microsoft Office 365 Video

My big question is how open with Office 365 be? Will outside developers be able to write to and interact with all the Office services? I get the feeling MSFT is trying to do everything – file sharing, collaboration, cloud content management & storage, webinar hosting… it’s a lot. I can’t imagine all of it will be best of breed. So many customers will likely want to supplement weaker offerings with outside developed programs. If MSFT if open they may lose a little revenue, but will likely actually grow the pie and increase stickiness… we’ll see how this plays out.

2 quick links

1) The definition of a venture capital fund – from the SEC

The only people who’s definition of a venture capitalist matter are the SEC and investors in private equity funds. And, well, the SEC just decided what a venture capital fund is. I’ve been following Dan Primack as he writes this one up. See the definition here.

2) Apps rule; the web is dead

Scroble has a solid piece on how it is clear that apps are beating the web, yet many tech industry experts are not willing to believe it. His basic point is – look at how normal people use their devices, and you’ll see that it is totally app centric. Ignore users preferences and workflow at your own peril. Check out my last post on app usage surpassing web browsing for more data…

People are now spending more time using mobile apps than they spend surfing the web! According to a report by Flurry released yesterday, a serious platform shift is happening in how people interact with data.

The report says:

…for the first time ever, daily time spent in mobile apps surpasses desktop and mobile web consumption. This stat is even more remarkable if you consider that it took less than three years for native mobile apps to achieve this level of usage, driven primarily by the popularity of iOS and Android platforms.

This is pretty big news. Check out the chart from the post:

Time spent using the internet is only growing at 16% year over year, but mobile app usage minutes is growing over 90% year over year. So it looks like mobile has got a lot more legs to grow on!

Flurry also reports that social networking and games account for almost 80% of the time spent on mobile apps. This stat doesn’t surprise me too much, as mobile gaming is really taking off. I am a little surprised about the social networking thing – what are they using, Facebook’s app? Or LinkedIn? Maybe Twitter, actually. I wonder how this fits with Facebooks HTML5 strategy?

This data fits with how OfficeDrop is seeing growth. Our Android app has really taken off and is now a huge percentage of our recent growth, and I’m excited for our other upcoming mobile offerings. I think this survey should help clear up any thoughts on the importance of mobile apps and consumer preferences.

Dan Primack has a good interview with the CEO of BankRate.com, a company that was public, went private a few years ago, and returned to the public markets recently.

I’m not going to quote the entire interview here, you should just click the link above and read it yourself, but the part that interested me was about how being private with a PE backer let the company make some acquisitions that it would not have been able to make if it was public.

Fortune: Buyout firms often talk about the advantages of being private. Do they exist?
Evans: There definitely were some advantages to being private… We also saw strategic assets available for sale, and that acquiring them could really change the trajectory and competitive position of our company.
We wouldn’t have been able to make those acquisitions if we’d been a public company, both because the private equity backer provided capital and because one wouldn’t have taken our paper.

I’m more than a bit surprised about this reasoning. Usually companies cite having a public currency with which to make acquisitions as a major reason to IPO… this is totally opposite of what you’d usually consider the norm.

It also leads me to think about what happens when a private company that has shares trading on one of the private secondary markets makes acquisitions with stock. Is the acquired company then able to sell stock right away to third party accredited investors? Or is there the standard lock up language like you’d have when a public company acquires a private company? Or does the fact that the private co can control the sale of share on the secondary market negate the need for such a lock up?

Cool news today, and props to BostInno for breaking the story on Performable being bought by Hubspot.

This deal makes sense if Hubspot customers are looking for deeper analytics, like the ones offered by Performable. It also combines a large and well known engineering team with Performable’s kick butt dev team. It’s good to see that Hubspot is putting some of that monster Series D money to good use.

The only issue I have with the acquistion is that it puts two of the top Boston area seed investors under the same roof. Dharmesh Shah and David Cancel are two really aggressive angel investors… hopefully them being in the same company won’t cause their individual deal flow to decrease as they spend more and more time together…

iCloud is brilliant. My team has had the chance to look through the API, and it’s going to be very useful. But it’s also going to be very good for Apple, because it will really drive hardware processing power escalation. In other words, it’s a totally device focused strategy. Very slick Apple!

iCloud API – Look out Amazon!

First of all, iCloud is a direct challenge to Amazon’s cloud services – actually, just the storage part. This is because iCloud’s API is built to allow applications on the Mac, iPhone, iPad, iWhateverIsNext to store data in the cloud and then sync across the iUniverse. Totally cool. And totally competitive with Amazon S3 (Amazon Simple Storage Service). It’s a cloud based place to store data.

Amazon offers another cloud service – Amazon Elastic Compute Cloud (Amazon EC2). This allows companies (like OfficeDrop) to upload data and have complex computational processing done in the cloud vs. on a customers’ device. This is crazy powerful, because we have not had to build out complex data centers with expensive servers to do computationally complex things like OCR or powering our document search engine.

According to my team, iCloud doesn’t really offer cloud based compute – only storage with the ability to sync an application’s data up and down.

So, if you are building an app on the iPhone and using iCloud, where does the compute happen?

iCloud drives Device Processing Escalation

That’s right, with iCloud, processing has to happen on the device. The device Apple sells you. And if some high demand new app requires serious compute that your older iWhateverWasCoolSixMonthsAgo can’t handle, guess what? You’re in line at the Apple store upgrading your device! Brilliant Apple! It’s like Wintel all over again, but without the Intel part.

Another thing to look out for Amazon!

And it doesn’t stop there. Imagine you are a new iPhone app developer. Historically you’d fire up some Amazon instances for your compute and start using S3 for storing data in the cloud. Well now, you can get “free” storage in iCloud (Ok, well, the consumer ends up paying for it but it’s free to the developer!) So you don’t need to do all that heavy lifting for the online storage part. I know, I know, Amazon is much less lifting that building out your own storage and whatnot, but now you don’t even have to do that. So getting cloud storage, for an upstart app developer, is even easier than it used to be. So are you going to use EC2 for processing stuff? Or are you just going to try to let the device handle it? Well, if you are doing the MVP thing you are probably not going to bother to build any sort of processing on Amazon and are going to see if the device can handle the processing (no ifs, ands or buts, this lowers the barrier to entry for an app startup)… And, maybe it can, maybe it can’t but still, you never had to sign up with Amazon to launch.

And that is the part where iCloud really kicks Amazon in the teeth. Now, startups don’t even have to do anything with Amazon to launch their startups, and may not ever have to use Amazon’s cloud services at all. iCloud could remove entire generations of potentially successful startups from the Amazon web services ecosystem and instead bind them to Apple.

Anyways, this iCloud thing is going to be big.

Also, if you are looking to the OfficeDrop reaction to the iCloud announcement, here it is:

The team here at OfficeDrop was glued to the live updates on Apple’s new iOS and iCloud… and we got pretty excited.

While some pundits have been claiming that iCloud will kill existing document sync, access, collaboration and sharing startups, we think otherwise. OfficeDrop CEO, Prasad Thammineni, was quoted in Macworld and conveyed our excitement about the new announcement. From the Macworld article:

Prasad Thammineni, OfficeDrop’s CEO, said he saw opportunity. Apple’s new service, he said, isn’t necessarily oriented toward business-sized customers—but it could educate those customers about the advantages of cloud storage and expand his company’s market.

“It’s going to educate consumers to say ‘I want my data to go where I go.’ That will prompt customers and small businesses to say they want to do their data the same way,” Thammineni said. He added: “So for us, we see this as a big positive thing.”

We have reason to be so optimistic about Apple’s iCloud. When Microsoft began their “To the Cloud” campaign in November of 2010, we saw our keyword “cloud” related search traffic double from the previous month. And today, this traffic is up 5x what it was before Microsoft began educating the world about the cloud. (Note that while all search traffic for OfficeDrop has grown in that timeframe, it hasn’t grown anything like cloud related traffic. And there was a very distinct, positive change in the cloud related search traffic growth pre and post Microsoft campaign.)

Apple’s iCloud efforts will help propel cloud usage to the masses (or at least beyond the early adopters.) And since Apple is so laser focused on the consumer, OfficeDrop’s target customer base of small business owners will be left searching for a solution that meets their special needs. According to research that we’ve seen, last year only 11% of small businesses were using cloud based SaaS solutions – up from 8% the year before, but still a tiny percentage. And once you go cloud you are 4x more likely to try another cloud solution. If Apple can pull this off they will be the first baby-step into cloud services that our potential customers need!

Finally, our ScanDrop scanning software app thrives on scanning paper into people’s cloud based accounts, and is really designed for customers who use multiple cloud services. So one more strong cloud offering is quite good for ScanDrop, and will help our Mac ScanDrop scanner software revenue grow.

Canada has a new startup generator in Montreal called FounderFuel. FounderFuel will be focused on mobile and web startups.

Besides having a pretty cool name, the incubator is started by the folks at Real Ventures, a new seed/VC fund in Montreal that has some solid partners (in particular I’ve been a fan of Mark MacLeod of StartupCFO fame for a long time.)

The most important thing for a program like this, besides being able to recruit solid startups and supply decent pizza, are the mentors who will be involved in coaching and encouraging the startups. It looks like FounderFuel has gotten some smart people to help on this front: David Cancel, Beyond the Rack people, David Hauser, Ben Yoskovitz and more.

FounderFuel Funding

The group takes a pretty standard equity % for their investment of 6%. From the website: “Each team in the program receives a $10K investment, plus an additional $5K per co-founder in exchange for 6% equity in the company. As an example, a team of 3 will receive a total of $25K.” That seems pretty fair/market rate.

The program looks like a pretty intense twelve weeks.

The one thing I’m not entirely clear on is if a non-Canadian needs any kind of a work permit, but I’m willing to bet that Canada is pretty agreeable to this kind of a thing.

Applications are happening now. Apply to FounderFuel here.

Wow, Google is ready to move people to updated browsers! This is great for the online world, and will hopefully get people off of ancient browsers like IE6 and whatnot.

According to multiple Google blogs:

For web applications to spring even farther ahead of traditional software, our teams need to make use of new capabilities available in modern browsers… Older browsers just don’t have the chops to provide you with the same high-quality experience.
For this reason, soon Google Apps will only support modern browsers. Beginning August 1st, we’ll support the current and prior major release of Chrome, Firefox, Internet Explorer and Safari on a rolling basis. Each time a new version is released, we’ll begin supporting the update and stop supporting the third-oldest version.
As of August 1st, we will discontinue support for the following browsers and their predecessors: Firefox 3.5, Internet Explorer 7, and Safari 3. In these older browsers you may have trouble using certain features in Gmail, Google Calendar, Google Talk, Google Docs and Google Sites, and eventually these apps may stop working entirely.

This is pretty kick butt. It’s time to get people off of older browsers. Supporting old school browsers is a tremendous pain for online services like OfficeDrop. Hopefully the 80 billion users of Google products will upgrade. I wonder what percent of Google users are early adopters who are already using the most updated versions vs the general internet population using outdated browsers. Only 2% of OfficeDrops cloud content management visitors are on IE6, for example. I wonder what it is for the GOOG.